ANNUAL FINA NCIAL REPORT
UNIVERSAL
REGISTRATION
DOCUMENT
2020
CONTENTS
ABOUT CRÉDIT
AGRICOLE S.A.
8
Rankings and key figures
10
Our business model serving sustainable value creation
14
The business lines of Crédit Agricole S.A.
at 31 December 2020
16
Asset gathering
18
Retail banking
20
Specialised financial services
24
Large customers
25
Corporate centre
27
Highlights of 2020
29
History
31
Information on the share capital and shareholders
33
Stock market data
39
NON-FINANCIAL
PERFORMANCE
42
Introduction
44
Non-financial risks
45
ESG strategy: being a committed player
in a socially acceptable climate transition
51
ESG risk management
90
Results
96
Implementation of the Principles for Responsible Banking
106
Cross-reference table
107
Report by one of the Statutory Auditors, appointed
as an independent third party, on the non-financial
information statement included in the management report 109
Independent Limited assurance report on the
indicators relating to the implementation of the
climate strategy presented in Crédit Agricole’s 2020
Management Report
112
CORPORATE
GOVERNANCE
114
Report of the Board of Directors
116
Additional information on Corporate Officers
148
Information on executives and management bodies
173
Reward policy
178
Rules of procedure of the Board of Directors
219
INTERVIEW OF DOMINIQUE LEFEBVRE
AND PHILIPPE BRASSAC
2
REVIEW OF THE 2020
FINANCIAL POSITION
AND PERFORMANCE
226
Operating and financial information
228
Information on Crédit Agricole S.A.’s financial
statements (parent company)
252
RISKS
AND PILLAR 3
254
Risk factors
256
Risk management
269
Pillar 3 Disclosures
318
CONSOLIDATED
FINANCIAL STATEMENTS 408
General framework
410
Consolidated financial statements
416
Notes to the consolidated financial statements
424
Statutory Auditors’ report on the consolidated
financial statements
585
PARENT COMPANY
FINANCIAL STATEMENTS 594
Parent Company Financial statements
596
Notes to the parent company financial statements
599
Statutory Auditors’ report on the financial statements
644
GENERAL
INFORMATION
648
Articles of Association –
updated version on 22 December 2020
650
Information on the Company
658
Statutory auditors’ report on related party agreements
671
Person responsible for the Universal registration
document of Crédit Agricole S.A.
680
Statutory auditors
680
Glossary
681
Cross-reference tables
686
1
2
3
4
5
6
7
8
The English version of the Universal Registration Document was filed on
24 March 2021 with the AMF, as competent authority under Regulation
(EU) 2017/1129, without prior approval pursuant to Article 9 of the said
regulation. The Universal Registration Document may be used for the
purposes of an offer to the public of securities or admission of securities
to trading on a regulated market if completed by a securities note and, if
applicable, a summary and any amendments to the Universal Registration
Document. The whole is approved by the AMF in accordance with Regulation
(EU) 2017/1129.
This is a translation into English of the Annual Financial Report/URD of the
Company issued in French and it is available on the website of the Issuer.
ANNUAL FINANCIAL REPORT 2020
UNIVERSAL
REGISTRATION
DOCUMENT
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
Refer to the glossary on page 681 for the definition of technical terms.
2
In 2020 we experienced an unprecedented crisis – a public
health crisis coupled with a global economic crisis. Did this
lead you to rethink your model?
Dominique Lefebvre
The ongoing crisis, swift and unprecedented, has revealed the value
companies have for citizens and society. For Crédit Agricole, recognized
in France as one the 25 most critical businesses during the crisis, the
value to our clients was demonstrated every day. We have continued to
provide essential services to the general public and helped corporations,
small businesses and farmers get through this crisis by providing them
with massive public measures.
In the face of global pandemic, the first answer of the public authorities
was to strictly curb movements and contacts, leading to the shutdown
of entire parts of the economy and of some public services. There has
been a very strong abidance by these measures, and it was essential
for the Management and the Board of Crédit Agricole S.A. to prevent the
anxiety linked to the health situation from being increased by material
anxiety. Be it the entrepreneur, who from one day to another, had to face
piled up production without being able to distribute it, be it the consumer
seeing his loans’ payment terms coming due while he was temporarily
facing lack of liquidity, we had to be present and help our clients find
the right solutions to these contingencies on which they had no control.
Throughout this period, which required us to act quickly at Crédit
Agricole, we nevertheless continued to focus on what matters leveraging
on our Raison d’Être
(1)
“working every day in the interest of our customers
and society”. Our Raison d’Être
(1)
has guided our action and proves
the relevance of our model based on universal, customer-focused,
global relationship banking. Throughout the past year, Crédit Agricole
has proven its strength, resilience and value for all our stakeholders.
This commitment was embodied through the treatment of 211,000
applications for state-guaranteed loans totalling €31 billion
(2)
in
France and the granting 552,000 moratoria to corporate and small
business customers totalling €4.2 billion in France at its maximum. This
commitment also materialized through decisions specific to the Group
Crédit Agricole, such as the extra-contractual mutualist contribution,
with €239 million dedicated to small businesses policy-holders, even
though pandemic risk is not covered. It also materialized through €70
million donated to solidarity funds in 2020. But beyond the significant
figures, I would like above all to recall that one remembers the strong
mobilization of the Group which not only allowed the continuity of our
activity to be ensured, but also set conditions to ensure the continuity
of the activity of our clients once restrictions are lifted.
(1) Please refer to the glossary for the definition of Raison d’Être.
(2) With a very high acceptance rate of 2.71%.
(3) Source: The Banker, July 2020.
Crédit Agricole Group will continue to support the economy until it
returns to its pre-crisis level. As you can see, neither our model nor our
Raison d’Être
(1)
has been affected by this public health crisis. In fact,
they are more relevant than ever. They are reflected in the daily work
of our 142,000 employees, who are there for our 52 million customers,
providing tailored solutions quickly, effectively and collectively. The
greatest testaments to the relevance of our action is that our customer
satisfaction has increased in our networks in both France and Italy.
Do you think Crédit Agricole can come through this period of
unrest? Many fear there will be a wave of business failures
that could affect banks. What do you think?
Philippe Brassac
2020 was an unusual year, with a global sanitary crisis, and the economic
impact of public-sector responses has been unprecedented. In 2020 GDP
fell 3.4% globally and 8.3% in France. But we must bear in mind this
hasn’t been a “traditional” economic crisis. What we have experienced
is a public health crisis, first and foremost, and the necessary measures
taken to protect the public and stem the pandemic were what impacted
economic activity, especially corporates and small businesses in France.
But the crisis does not reflect any structural economic weaknesses that
would have to be corrected over time.
The impact has been and will remain limited, thanks not only to the
massive and powerful public efforts instituted by governments and central
banks, but also to the resilience and soundness of the Crédit Agricole
Group. And the simple reason for this is that this isn’t anything like what
we experienced during the crises in 2008 and 2011. Our solvency and
liquidity position at the start of the COVID-19 crisis were far stronger
than during the previous crises, and we even managed to strengthen
them over the course of 2020. Crédit Agricole Group’s phased-in CET1
ratio stands at at 17.2% at the end of 2020 – more than 830 basis points
above the regulatory requirement. This high level of solvency meant
we could put all our efforts into supporting our customers during this
period while still increasing our stock of provisions, including those for
performing loans. Most notably, we allocated additional provisions to
sectors considered most at risk, such as transport and tourism. At the
end of 2020, the stock of provisions at Group level totalled €19.6 billion,
equivalent to seven years of average historical cost of risk.
We helped lower risk by working with governments on state-guaranteed
loans and moratoria to provide companies with the liquidity they needed
to come out of the crisis intact, so previously healthy companies could
avoid bankruptcy.
So far, this solution is paying off. At the end of 2020, our rate of doubtful
loans and disputed receivables was just 2.4%, unchanged from 2019.
This does not preclude the possibility that this extraordinary period
will adversely affect businesses in some sectors. However, our strong
position in terms of solvency, liquidity and risk provisioning means that
we can continue to support them until the crisis is over, and in so doing,
help our regions. This is what our Raison d’Être
(1)
, which guides what
we do every day, is all about.
Lastly, as Chairman Dominique Lefebvre pointed out, Crédit Agricole’s
model has proven how resilient it is during these uncertain times because
of the strength of its foundation. First of all, there is our size: we are the
leading retail bank in the European Union in terms of customers and the
tenth largest bank in the world by balance sheet size
(3)
. Our decentralised
model allows each of our business lines to make the decisions that are
Interview
Dominique Lefebvre
Chairman of the Board
of Directors
INTERVIEW OF DOMINIQUE LEFEBVRE
AND PHILIPPE BRASSAC
Refer to the glossary on page 681 for the definition of technical terms.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
3
most appropriate for them while remaining within the guidelines defined
in our Group Project: our customers, personal relationships and society
are the cornerstones of our Raison d’Être
(1)
. This decentralised model
has allowed our Group to remain an example of agility and operational
efficiency. We are forging industrial and commercial partnerships across
all our business lines with players seeking efficiency. We have established
24 partnerships worldwide, allowing us to expand our customer base
indirectly, well beyond our 52 million customers. Our specialised business
lines are all leaders in their fields, such as Amundi, Europe’s leading asset
manager, Crédit Agricole Assurances, which makes us the largest insurer
in France, and Crédit Agricole CIB, the global leader in green and social
bonds. Our universal model, based on revenue synergies between Group
business lines, gives us an enormous potential for organic growth and
significant recurring revenues (in 2020, 76% of revenues are recurring
(2)
).
But most of all, it is the unwavering commitment of our employees that
has allowed us to be there for our customers throughout the crisis and
that will allow us to continue to be there once things pick up again. This
was especially evident in 2020 with the gain of more than 1.5 million new
retail banking customers and an increase in loans outstanding (excluding
state-guaranteed loans) of 4.9%. I have no concerns about Crédit Agricole’s
ability to get through this period or our ability to continue working for our
customers and for society each and every day.
How does the February 2021 announcement make up for the
lack of dividend payment in 2020?
Philippe Brassac
The European Central Bank asked us not to pay dividends in 2020. It was
a political decision to ensure that all banks’ capital could be mobilised to
finance the economy. While this decision was undoubtedly necessary for
some banks, this wasn’t the case for Crédit Agricole, which is one of the
most solvent financial institutions in the world. Consequently, we were
in a position to pay a dividend to our shareholders and wanted to do so.
We nevertheless understood the authorities’ decisions, which were for
the greater good, and we obviously followed and applied their decisions.
On 15 December 2020 the European Central Bank authorised euro
zone banks to pay dividends under certain conditions. The dividend
policy was therefore adjusted in 2020 to account for the exceptional
circumstances. Since Crédit Agricole Group and Crédit Agricole S.A. have
comfortable levels of capital, the Crédit Agricole S.A. Board of Directors
will ask the General Meeting of 12 May 2021 to approve a dividend
payment of €0.80 per share in respect of 2020, with a scrip dividend
payment option. The nominal amount exceeds what would have been
our traditional pay-out ratio of 50% in cash and allows us to offset part
of the dividend against unpaid earnings for 2019
(3)
.
The announced dividend means that all shareholders will receive a
yield of 8%
(4)
, based on a share price of €10. The financial strength
of Crédit Agricole S.A. also means we can continue simplifying the
Group’s capital structure, and we are committed to fully unwinding the
Switch mechanism (our internal guarantee mechanism for weighted
insurance risks) by 2022. This will be accretive to Crédit Agricole S.A.’s
net income but will limit the dilutive impact of the share-based dividend
(1) Please refer to the glossary for the definition of Raison d’Être.
(2)
Recurring revenues, i.e., revenues attached to an inventory item (outstanding loans/customer assets, assets under management) or an insurance policy (property and casualty
insurance, death and disability insurance).
(3)
This amount is made possible by SAS Rue La Boétie’s pledge to subscribe for the option of a share-based dividend payment. The proposed mechanism is in strict compliance
with the ECB’s requirements of 15 December 2020.
(4) Yield calculated based on a share price of €10. Impact on 2020 EPS <-6% assuming zero public participation, taking into account the formal pledge by SAS Rue La Boétie to
subscribe for payment in shares, and assuming that the employee mutual funds (FPCEs) also request the share-based payment option.
payments to approximately -1%. The beneficiaries of this dividend
include Crédit Agricole S.A.’s 800,000 individual shareholders. Most of
all, though, it will boost the strength of the Regional Banks, which account
for 55% of our shareholder base, allowing them to provide regional
financing. The earnings retention ratio at Group level is consequently
more than 80%.
Where do you stand in terms of the future’s major
environmental challenges?
Dominique Lefebvre
The climate emergency is no longer up for debate. We all know it’s
happening. Nevertheless, the ways to tackle it can vary. What we need
to address now is how to manage the economic growth needed to
absorb the declines in GDP we saw in 2020 while reducing the amount
of greenhouse gasses we produce. Our goal is to become the bank of
the ecological transition, especially an equitable transition, because it
will only succeed if we are careful not to sideline the most vulnerable
communities. Inclusion and social justice are crucial in this transition
to a low-carbon economy.
Global climate governance is therefore imperative, not because we
need a supranational entity, but because it would create dialogue,
lead to collaboration and enable ordinary citizens to understand how
different nations are charting a course forward and sharing the change
process together. Instead of waiting for this hypothetical governance
to be installed, the financial sector must pave the way and not allow
this issue of environmental responsibility to be a distinguishing factor
vis-à-vis competitors. The urgency of what’s at stake is such that it isn’t
the time for beauty pageants; it’s time for cooperation, the convergence
of wills and sharing best practices. The French financial industry is
already exploring this avenue. It must continue its efforts in this regard
and maybe even work towards adopting a common course, an objective
alliance whose members all abide by the same rules of conduct when
it comes to combating climate change. At the Crédit Agricole Group,
our decentralised organisational structure is a strength that allows us
to take the most effective action for each of our business lines for deal
with these climate challenges.
Interview
Philippe Brassac
Chief Executive Officer
Crédit Agricole’s end purpose
is to be a trusted partner
to all its customers:
Its solid position and the diversity
of its expertise enable CA to
offer all its customers ongoing
support on a daily basis and for
their projects in life, in particular
by helping them to guard against
uncertainties and
to plan for the long term.
CA is committed to seeking out and
protecting its customers interests
in all it does. It advises them with
transparency, loyalty and pedagogy.
It places human responsibility at the
heart of its model: it is committed
to helping all its customers benefit
from the best technological
practices, while guaranteeing them
access to competent, available local
teams that can ensure all aspects of
the customer relationship.
W
EVERY DAY IN THE INTEREST
OF OUR CUSTOMERS AND SOCIETY
CRÉDIT AGRICOLE GROUP’S RAISON D’ÊTRE
(1)
2020 was marked by an unprecedented and unforeseen global health crisis,
the significant economic effects of which are continuing into 2021. The crisis
has demonstrated the significance and strength of the Group’s Raison d’Être
(1)
.
2020, Our Raison d’Être
(1)
in action
Proud of its cooperative
and mutualist identity
and drawing on a governance
representing its customers,
Crédit Agricole
:
Supporting the economy,
entrepreneurship and innovation
in France and abroad: it is naturally
committed to supporting its regions.
It takes intentional action in societal
and environment fields by supporting
progress and transformations.
It serves everyone: from the most
modest to the wealthiest households,
from local professionals to large
international companies.
This is how Crédit Agricole
demonstrates its usefulness and
availability to its customers, and the
commitment of its 142,000 employees
to excellence in customer relations
and operations.
(1) Please refer to the glossary for the definition of Raison d'Être.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
Refer to the glossary on page 681 for the definition of technical terms.
4
CRÉDIT AGRICOLE GROUP PROFILE
ASSET
GATHERING
RETAIL
BANKING
SPECIALISED
FINANCIAL
SERVICES
LARGE
CUSTOMERS
SPECIALISED
SUBSIDIARIES
Crédit Agricole Group
Crédit Agricole Group includes
Crédit Agricole S.A., as well as
all of the Regional Banks and
Local Banks and their subsidiaries.
30.9%
INSTITUTIONAL INVESTORS
8.0%
INDIVIDUAL SHAREHOLDERS
5.8%
EMPLOYEE SHARE OWNERSHIP PLANS
(ESOP)
N-S
(1)
TREASURY SHARES
FLOAT
44.7%
HOLDING
10.9 Million
MUTUAL SHAREHOLDERS
who hold mutual shares in
2,410
LOCAL BANKS
39
REGIONAL BANKS
jointly holding the majority
of CRÉDIT AGRICOLE S.A.’S
share capital through SAS Rue La Boétie
(2)
HOLDING
55.3%
Sacam
Mutualisation
Fédération Nationale
du Crédit Agricole (FNCA)
Political link
100%
25%
REGIONAL BANKS
(1) Non-significant.
(2) The Regional Bank of Corsica,
99.9% owned by Crédit Agricole S.A.,
is a shareholder of Sacam Mutualisation.
Refer to the glossary on page 681 for the definition of technical terms.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
5
CRÉDIT AGRICOLE GROUP PROFILE
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
Refer to the glossary on page 681 for the definition of technical terms.
6
CRÉDIT AGRICOLE GROUP PROFILE
The objectives of Crédit Agricole S.A. within the Crédit Agricole Group
THE OBJECTIVES OF CRÉDIT AGRICOLE S.A.
WITHIN THE CRÉDIT AGRICOLE GROUP
Central bank of the Crédit Agricole Group
Guarantor for the financial unity of the Group
Financial reconciling of resources
and uses by the Regional Banks
Group cash management
Central body: represents the Credit Agricole Group
before the monetary and banking authorities
Application of laws or regulations pertaining to the Group
Approval of the executives of the Regional Banks and of merger plans
Bank supervision in collaboration with the regulatory authorities (Banque de France, AMF, ACPR, etc.)
Audit of the accounts (accounting approval)
Parent company of the business line subsidiaries
Head of the network: manages the domestic
and international subsidiaries of the Group
Creation of new products, promotion and coordination of commercial policy
Managing the Crédit Agricole brand
IT planning
Monitoring of subsidiaries and of international developments
Refer to the glossary on page 681 for the definition of technical terms.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
7
CRÉDIT AGRICOLE GROUP PROFILE
Our universal customer-focused banking model – a global relationship bank for all
OUR UNIVERSAL CUSTOMER-FOCUSED BANKING MODEL –
A GLOBAL RELATIONSHIP BANK FOR ALL
Crédit Agricole Group’s universal customer-focused banking model is
based on the close association of its retail banks with its specialised
business lines. The Regional Banks are at the heart of this model, based
on recognised know-how in the distribution of all the financial products
and services developed by the Group to all types of customers in France
and internationally.
This model underscores Crédit Agricole Group’s commitment to be
the trusted partner of all of its customers and to cover the full breadth
of their financial and wealth management needs, namely: payment
instruments, insurance, savings management, financing, real estate
and international support.
All of these services and skills are offered in a close relationship based
on the Group’s retail banks in France (Regional Banks, LCL, BforBank) and
internationally (Crédit Agricole Italia, CA Bank Polska, Crédit du Maroc,
CA Egypt, CA Ukraine, etc.). The contacts maintained by employees and
elected representatives of Local and Regional Banks in the field ensure
good knowledge of customers and their problems throughout their lives.
This understanding of the expectations and needs of customers, together
with the size of the Group’s networks, enable Crédit Agricole S.A.’s
specialised business lines to constantly improve their offerings and
their competitiveness.
With its specialised subsidiaries (insurance, asset management, real
estate, wealth management, corporate and investment banking, financial
services for institutional investors and issuers, specialised financial
services, payment instruments), the Group is able to offer comprehensive
and customised solutions to all its customers, in good times and bad
times, within the framework of an enduring relationship.
This universal and customer-focused model demonstrated its strength,
resilience and usefulness to all stakeholders in 2020. The Group was
able to support all its customers through these unparalleled times and
accelerate on the three pillars of the “Group project” presented in 2019,
namely Clients, Human and Societal.
SPECIALISED FINANCIAL
SERVICES
LARGE CUSTOMERS
SPECIALISED
BUSINESSES AND
SUBSIDIARIES
ASSET GATHERING
AND INSURANCE
RETAIL BANKS
52 million customers
ACTIVITIES AND ORGANISATION OF THE REGIONAL BANKS
The Crédit Agricole Regional Banks are co-operative entities and fully-
fledged banks that have a leading position in all their retail banking
markets in France. With 21 million individual customers, the Regional
Banks account for 23.3% of the household bank deposit market and
23.5% of the household credit market (source: Banque de France,
September 2020). They are leaders in the agricultural market (81% share;
source: Adéquation 2018), professionals market (35% share; source:
Pépites CSA 2019-2020) and corporate market (36% share,
tied
with
Banques Populaires; source: Kantar TNS 2019).
The marketing of products and services covering the financial and wealth
management needs of their customers is based on a network of nearly
6,600 branches, about 6,000 in-store servicing points installed at small
retailers and a full range of remote banking services.
Rankings and key figures
10
Business at 31 December 2020
11
Breakdown of revenues in 2020
11
Trends in earnings
11
Ratings at 14 December 2020
13
Index presence and CSR ratings
13
Our business model serving
sustainable value creation
14
The business lines of Crédit Agricole S.A.
at 31 December 2020
16
Asset gathering
18
Insurance
18
Asset management
19
Wealth management
20
Retail banking
20
LCL
20
International retail banking
21
Specialised Financial Services
24
Consumer finance
24
Leasing & Factoring
25
Large customers
25
Corporate and investment banking
25
Asset servicing
26
Corporate centre
27
CACIF – Crédit Agricole Capital Investissement & Finance
27
Crédit Agricole Immobilier
27
Crédit Agricole Payment Services
27
Crédit Agricole Group Infrastructure Platform
28
Uni-médias
28
Highlights of 2020
29
History
31
Information on the share capital
and shareholders
33
Ownership structure at 31 December 2020
33
Change in share ownership over the past three years
33
Recent changes in share capital
34
Information concerning major shareholders
34
Dividend policy
35
Table summarising authorisations in force
and the use made thereof during 2020
35
Purchase by the Company of its own shares in 2020
37
Description of Crédit Agricole S.A. share buyback
programme for 2020 and subsequent years
38
Stock market data
39
Crédit Agricole S.A. share
39
Dividend calendar
41
2021 financial communications calendar
41
Contacts
41
1
ABOUT CRÉDIT
AGRICOLE S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
8
Refer to the glossary on page 681 for the definition of technical terms.
High capital level, exceptional mechanism
for the payment of 2020 dividend
STOCK
MARKET AND
SHAREHOLDERS
€0.80
Net dividend
per share in 2020
(1)
8%
2020
dividend yield
(2)
€30.1bn
Market capitalisation
at end-2020
€13.3
Tangible book-value
per share at end-2020
(3)
(1) With a scrip dividend option. The set-up will be submitted by the board of Crédit Agricole S.A. to the General Assembly of 12 May 2021.
(2) Yield calculated based of a 10€ share price. Impact on the 2020 EPS <-6% assuming zero public opting for the scrip dividend payment, taking into account the formal
commitment of SAS Rue La Boétie to opt for a scrip dividend payment, and assuming that the employee mutual funds (FCPE’s) also opt for the scrip dividend payment.
(3) See definition and calculation method on page 245 of this document.
FINANCIAL
STRUCTURE
Total equity
(in billions of euros)
65.5
70.8
31/12
2018
31/12
2019
31/12
2020
58.8
6.7
62.9
7.9
73.5
65.2
8.3
MINORITY INTERESTS
GROUP SHARE
Fully loaded solvency ratios
(as a percentage)
31/12/2018
17.2%
13.1%
11.5%
18.5%
14.2%
12.9%
31/12/2020
16.9%
13.2%
12.1%
31/12/2019
TOTAL CAPITAL RATIO
OF WHICH TIER 1
RATIO
OF WHICH COMMON EQUITY TIER 1 RATIO
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
9
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
1
RANKINGS AND KEY FIGURES
(Source: The Banker, July 2020)
largest global bank
by balance sheet size
(1)
th
European
Asset Manager
based
on assets under management
at 31 December 2019
(2)
(Source: IPE “Top 500 Asset Managers”,
June 2020)
1
st
provider of financing
to the French economy
(3)
(Internal source: Economic
Research Department)
1
st
insurer in France
based on 2020
premium income
(4)
(Source: L’Argus de l’Assurance,
December 2020)
1
st
52
5
5
5
5
customers
48
countries
10,000
(Regional Banks and LCL)
in France
branches
including
8,200
Retail Bank
in the European Union
based on the number of
retail banking customers
(1) Crédit Agricole was already 10
th
largest bank based on balance sheet size of 2018 (source: The Banker July 2019).
(2) Amundi was already 1
st
European Asset Manager based on assets under management at 31 December 2018 (source: IPE “Top 400 asset managers” June 2019).
(3) Crédit Agricole was already 1
st
provider of financing to the French economy in 2019. Source: unchanged.
(4) CAA was already 1
st
insurer in France based on end of 2018 datas (source:
L’Argus de l’assurance
, December 2019).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
10
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Rankings and key figures
1
BUSINESS AT 31 DECEMBER 2020
(in billions of euros)
31/12/2020
Total assets
1,961.1
Gross loans
(1)
508.7
Customer deposits
(2)
881.9
(1)
Gross value of loans and receivables due from credit institutions and due from customers.
(2)
Including debt instruments issued to customers.
BREAKDOWN OF REVENUES IN 2020
(1) Excluding the Corporate Centre division.
By business line
(1)
Large
customers
30%
Specialised
financial
services
12%
Retail
banking
30%
Asset
gathering
28%
By geographic area
Italy
15%
Rest of
Europe
19%
France
53%
Rest of
the world
13%
TRENDS IN EARNINGS
Condensed income statement
(in millions of euros)
2018
2019
2020
Revenues
19,736
20,153
20,500
Gross Operating Income
7,147
7,392
7,609
Net income
5,027
5,458
3,238
Net income Group share
4,400
4,844
2,692
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
11
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Rankings and key figures
1
Net income Group share 2020
(before CA Italia goodwill impairment)
(in millions of euros)
€
3,470
M
(1)
Underlying return on tangible equity
(underlying RoTE)
(as a percentage)
%
9.3
Breakdown of net income Group share
(2)
by business line
Large
customers
31%
Specialised
financial
services
13%
Retail
banking
17%
Asset
gathering
39%
(1) 2020 stated net income groupe share stands at €2,692 million.
(2) Excluding Corporate Centre.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
12
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Rankings and key figures
1
RATINGS AT 14 DECEMBER 2020
Ratings
LT/ST
counterparty
Issuer/LT senior
preferred debt
Outlook/
Review
ST senior
preferred
debt
Date of last
review
Rating action
S&P Global Ratings
AA-/A-1+ (RCR)
A+
Negative
outlook
A-1
21/10/2020
LT/ST ratings affirmed;
outlook unchanged
Moody’s
Aa2/P-1 (CRR)
Aa3
Stable
outlook
P-1
19/09/2019
LT ratings upgraded (1 notch);
outlook changed from positive
to stable; ST ratings confirmed
Fitch Ratings
AA- (DCR)
A+/AA-
Negative
outlook
F1+
10/11/2020
LT/ST ratings affirmed;
outlook unchanged
DBRS
AA (high)/ R-1
(high) (COR)
AA (low)
Stable
outlook
R-1 (middle)
28/09/2020
LT/ST ratings affirmed;
outlook unchanged
INDEX PRESENCE AND CSR RATINGS
(1)
Crédit Agricole S.A. relies on its ESG strategy and the measures implemented by the entities to strengthen its non-financial performance. Its inclusion
in the main global socially responsible investment indices was confirmed in 2020:
(1) See other CSR ratings in Chapter 2 of this document.
(2) Principles for responsible investment.
Rated A- by CDP in 2020;
Rated A by MSCI (Morgan Stanley Capital International) since 2017;
Rated 63 by Vigeo Eiris since 2019 and included in the NYSE-Euronext
indices since May 2013;
Rated Prime by ISS-ESG since December 2015;
Included in the UK’s FTSE4Good index for several years, confirmed
again in 2020;
PRI
(2)
: Highest rating A+for Amundi.
Signatory:
United Nations Global Compact since 2003;
Principles of Responsible Investment since 2006;
Diversity Charter since 2008;
Responsible Purchasing Charter since 2010;
Charter for the energy efficiency of commercial buildings since 2013;
Science Based Targets since 2016;
RE100 since 2016;
Principles for Responsible Banking and Collective Commitment to
Climate Action since 2019;
Business For Inclusive Growth (B4IG) since 2019;
Poseidon Principles since 2019;
One Planet Sovereign Wealth Fund Asset Manager Initiative since 2019;
Tobacco-Free Finance Pledge since 2020.
Co-founding member:
Equator Principles since 2003;
Green Bonds Principles since 2014;
Portfolio Decarbonization Coalition since 2014;
Mainstreaming Climate Action Within Financial Institutions since 2015;
Catalytic Finance Initiative since 2015;
French Business Climate Pledge since 2015;
Association BBCA (development of low-carbon buildings) since 2015;
Finance for Tomorrow since 2017.
Participant:
Call for carbon pricing initiated by the World Bank Group in 2014;
Montreal Carbon Pledge since 2015;
Paris Appeal on Climate Change since 2015;
IIRC (International Integrated Reporting Council) since 2016;
Task Force on Climate Disclosure since 2017;
Climate Action 100+ since 2017;
AIGCC (Asia Investor Group on Climate Change) since 2020.
Other positions:
Statement on modern slavery since 2017;
Contribution to the Human Resources Without Borders endowment
fund since 2018.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
13
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Rankings and key figures
1
Mutualist and cooperative Group serving all.
Solid majority shareholder
ensuring long-term
commitment.
142,000
Crédit Agricole Group
employees.
OUR DNA
In France:
•
39
Regional Banks, LCL
and BforBank
•
8,200
retail banking
branches
Abroad:
•
48
countries
•
52%
of Crédit Agricole S.A.
employees
Shareholders’ equity
Group share:
•
Group:
€119.6
bn
•
Crédit Agricole S.A.:
€65.2
bn
Single centre of IT expertise
serving all of the Group’s
business lines.
An organic growth model
reinforced by external expertise
and distribution partnerships in
France and abroad.
OUR TALENTS
OUR GEOGRAPHIC
FOOTPRINT
OUR TECHNOLOGICAL
CAPITAL
OUR GOVERNANCE
OUR CAPITAL
OUR MULTI-PARTNERSHIP
MODEL
OUR
ACTIVITIES
OUR FOUNDATION
THE REGIONAL BANKS
OUR
RESOURCES
Utility
at the service
of everyone
•
Sound
and diverse range
of expertise
•
Protecting
our customers’
interests and assets
Human responsibility
at the heart
of our model
•
Supporting
the economy and
social cohesion
•
Supporting
the
transition to other
sources of energy
SOLID COMMITMENTS
Our business model serving
sustainable value creation
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
14
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Our business model serving sustainable value creation
1
SUPPORTING AND ADVISING
OUR CUSTOMERS DURING
THEIR KEY LIFE MOMENTS
PROVIDING FINANCING,
SAVINGS AND
INSURANCE SOLUTIONS
•
1
st
provider of financing to the French economy
(€707bn loans outstanding in retail banking)
•
1
st
European asset manager
(€1,729bn assets under management)
•
1
st
insurer in France
•
Crédit Agricole Group revenues:
€34bn
(1)
•
Crédit Agricole S.A. market capitalisation:
€30.1bn
•
Crédit Agricole S.A. net income:
€3.8bn
(2)
•
€0.80/share
distributed to shareholders,
with a scrip dividend option
(3)
•
Group procurement:
€7.6bn
(5)
•
Group taxes and social security expenses:
€6.8bn
•
€355.9bn
of outstanding ESG multi-criteria
solutions
(6)
•
+57%
outstanding green loans portfolio for
€11.4bn
•
Patronage: almost
€34.4m
for local and regional
initiatives
•
Almost
192,000
subscriptions to EKO and LCL
Essentiel (entry-level offers)
(7)
2020 data.
(1) Underlying revenues. (2) Underlying net income Group share. (3) Subject to
the approval of the General Meeting of 12 May 2021. (4) Crédit Agricole S.A. scope.
(5) External expenses. (6) Assets under management invested by Amundi in funds
with an “ESG integration” investment process. (7) Cumulative data at end-2020.
•
80%
(4)
participation rate in the Engagement
and Recommendation Index (ERI)
•
5,383
(4)
hired on permanent contracts
•
Capital increase reserved for employees
with an exceptional 30% discount
CUSTOMERS
SHAREHOLDERS AND INVESTORS
EMPLOYEES
PUBLIC AUTHORITIES AND PARTNERS
CIVIL SOCIETY AND THE ENVIRONMENT
ELABORATING
INVESTMENT
SOLUTIONS
OUR VALUE
CREATION
PROPOSING
COMPLEMENTARY
FINANCIAL SERVICES,
PAYMENT SERVICES, REAL ESTATE, ETC.
Excellence
in customer relations
•
Empowered
teams
•
Commitment
to society
OUR 3 STRATEGIC PILLARS
Working every day in the interest
of our customers and society.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
15
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Our business model serving sustainable value creation
1
THE BUSINESS LINES OF CRÉDIT AGRICOLE S.A. AT 31 DECEMBER 2020
€
ASSET GATHERING
INSURANCE
MISSION:
As France’s leading insurer
(1)
, Crédit Agricole Assurances is highly
focused on the needs of its customers, whether they are individuals, SMEs
and small businesses, corporates or farmers.
GOAL:
to be useful and effective, from designing solutions and services to
handling claims.
OUR OFFERING:
a full and competitive range, tailored to customers’ needs
in terms of savings/retirement, death & disability/creditor/group and
property & casualty insurance, and backed by the efficiency of the largest
banking network in Europe and international partnerships outside the
Group.
KEY FIGURES:
Turnover
€
29.4
bn
Life insurance
outstandings
€
308
bn
Number of property
and casualty
insurance contracts
14.6
million
ASSET MANAGEMENT
MISSION:
Amundi is the leading European asset manager in terms of
assets under management and ranks in the top 10 worldwide
(2)
. The Group
manages €1,729 billion and has six main management platforms (Boston,
Dublin, London, Milan, Paris and Tokyo).
OUR OFFERING:
Amundi offers its customers in Europe, Asia Pacific, the
Middle East and the Americas a full range of savings and investment
solutions in active and passive management, in traditional or real assets.
It constantly strives to have a positive impact on society and the
environment. Amundi’s customers can also access a full range of high
added value services.
KEY FIGURES:
Assets under
management
€
1,729
bn
No. 1
European
asset management
company
(2)
Present in more than
35
countries
WEALTH MANAGEMENT
MISSION:
Indosuez Wealth Management comprises Crédit Agricole Group’s
wealth management activities
(3)
in Europe, the Middle East, Asia-Pacific
and the Americas. Renowned for the breadth of its offering and its
international reach on a human scale, it operates in 13 territories around
the world.
OUR OFFERING:
the tailored approach of Indosuez Wealth Management
allows individual customers to create, manage, protect and pass on their
wealth in a manner which best fits their aspirations. Embracing a global
vision, its multidisciplinary teams draw on excellence, experience and
expertise to provide customers with appropriate, sustainable solutions.
KEY FIGURES:
Assets under
management
(3)
€
128
bn
3,060
employees
Present in
13
territories
RETAIL BANKING
LCL
MISSION:
LCL is the only domestic network bank in France to focus
exclusively on retail banking and insurance. It covers all markets: individual
customers, SMEs and small businesses, and private and corporate banking.
OUR OFFERING:
a complete range of banking products and services
covering finance, insurance, savings and wealth management, payments
and flow management. With branches nationwide and an online banking
service, the aim is to develop a close customer relationship (mobile app
and website).
KEY FIGURES:
Loans outstanding
€
143
bn
(including €
86
bn
in home loans)
Total customer assets
€
220
bn
≈
6
million individual
customers
INTERNATIONAL RETAIL BANKING
MISSION:
Crédit Agricole’s international retail banks are primarily located
in Europe (Italy, Poland, Serbia, and Ukraine), and in selected countries of
the Mediterranean basin (Morocco and Egypt), where they serve all types
of customers (individuals, small businesses, corporates – from SMEs to
multinationals), in collaboration with the Group’s specialised business lines
and activities.
OUR OFFERING:
the international retail banks offer a range of banking and
specialised financial services as well as savings and insurance products,
in synergy with the Group’s other business lines (CACIB, CAA, Amundi,
CAL&F, etc.).
KEY FIGURES:
Loans outstanding
€
57.2
bn
On-balance sheet
deposits
€
58.5
bn
5.3
million
customers
(1) Source:
L’Argus de l’Assurance,
18 December 2020 (data at end-2019).
(2) Source: IPE “Top 500 Asset Managers” published in June 2020 and based on assets under management at 31 December 2019.
(3) Excluding LCL Private Banking, wealth activities in Regional Banks and International Retail Banking.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
16
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
The business lines of Crédit Agricole S.A. at 31 December 2020
1
SPECIALISED FINANCIAL SERVICES
CONSUMER FINANCE
MISSION:
a major player in consumer finance in Europe, Crédit Agricole
Consumer Finance offers its customers and partners a range of flexible,
responsible solutions, tailored to their needs. Digital is a strategic priority,
particularly through investments, in order to build with the clients a credit
experience which meets their expectations and new consumption trends.
OUR OFFERING:
a complete multi-channel range of financing, insurance
solutions and services available online, in branches of CA Consumer
Finance subsidiaries and at its banking, institutional, distribution and
automotive partners.
KEY FIGURES:
Assets under
management
€
91
bn
Including €
21
bn on
behalf of the Crédit
Agricole Group
Present in
19
countries
LEASING, FACTORING AND FINANCE
FOR ENERGIES AND REGIONS
MISSION:
Crédit Agricole Leasing & Factoring (CAL&F) provides solutions
for businesses of all sizes for their investment plans and the management
of their trade receivables, through its offering of lease financing and
factoring services in France and Europe. CAL&F is also one of France’s
leading providers of finance for energies and regions.
OUR OFFERING:
in lease financing, CAL&F offers financing solutions to
meet property and equipment investment and renewal requirements. In
factoring, CAL&F provides trade receivable financing and management
solutions for corporates, both for their day-to-day operations and for their
expansion plans. Lastly, CAL&F, via its subsidiary Unifergie, helps
corporates, local authorities and farmers to finance renewable energy and
public infrastructure projects.
KEY FIGURES:
1 out of 3
mid-caps
funded by CAL&F
in France
Over
50 years’
experience in leasing
and factoring
No. 2
in
the financing
of renewable
energy
(1)
(1) CAL&F is No. 2 on the Sofergie market (source: CAL&F at end-2019).
LARGE CUSTOMERS
CORPORATE AND INVESTMENT BANKING
MISSION:
Crédit Agricole Corporate and Investment Bank is the corporate
and investment bank of the Crédit Agricole Group and which has chosen
to focus on more financing activities and corporate clients, and which is
based on a powerful and well-coordinated in France and abroad in the
major countries of Europe, Americas, Asia-Pacific and Middle East.
OUR OFFERING:
products and services in investment banking, structured
finance, international trade finance and commercial banking, capital
market activities and syndication, and known worldwide “green” finance
expertise.
KEY FIGURES:
2
nd
largest
bookrunner worldwide
for green, social and
sustainability bonds
(all currencies), both in
volume and market
share
(source: Bloomberg)
3
rd
largest
bookrunner
in syndicated loans
for the EMEA region
(source: Refinitiv)
8,604
employees
ASSET SERVICING
MISSION:
CACEIS, a specialist back-office banking group, supports
management companies, insurance companies, pension funds, banks,
private equity and real estate funds, brokers and companies in the
execution of their orders, including custody and management of their
financial assets.
OUR OFFERING:
thanks to its presence in Europe, in North America, in
South America following the combination with Santander Securities
Services and in Asia, CACEIS offers
asset servicing solutions throughout
the full life cycle of investment products and for all asset classes: execution,
clearing, forex, security lending and borrowing, custody, depositary bank,
fund administration, middle-office solutions, fund distribution support and
services to issuers.
KEY FIGURES:
Assets under custody
€
4,198
bn
Assets under
administration
€
2,175
bn
Assets under
depositary
€
1,585
bn
SPECIALISED BUSINESSES AND SUBSIDIARIES
Crédit Agricole Immobilier
€1bn in annual fees
3 million sq. m. under management at end-2020
1,553 homes sold
Crédit Agricole Capital Investissement & Finance (IDIA CI, SODICA CF)
IDIA Capital Investissement: €1.8 billion in assets under
management – Approximately 100 companies supported by the
Group’s equity capital
SODICA CF: 26 M&A transactions (SME/mid-caps) in collaboration
with the Group’s networks in 2020
Crédit Agricole Payment Services
France’s leading payment solutions provider with a 30% market
share
More than 11 billion payment transactions processed in 2020
21.9 million managed bank cards
Crédit Agricole Group Infrastructure Platform
1,600 employees at 17 sites in France
6 data centres
60,000 open servers + 6 mainframe servers
194,000 workstations
Uni-médias
13 market-leading publications with nearly 2 million subscribers
10 million readers, 12 websites
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
17
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
The business lines of Crédit Agricole S.A. at 31 December 2020
1
ASSET GATHERING
INSURANCE
(1) Source:
L’Argus de l’Assurance,
18 December 2020 (data at end-2019).
(2) Internal source: data at end-2019.
(3) Source:
L’Argus de l’Assurance,
10 April 2020 (data at end-2019).
(4) Source:
L’Argus de l’Assurance,
04 September 2020 (data at end-2019).
(5) Source:
L’Argus de l’Assurance,
23 October 2020 (data at end-2019).
Business and organisation
Crédit Agricole Assurances (CAA) is France’s leading insurer
(1)
in terms
of premium income and the leading bancassurer
(2)
in Europe.
Crédit Agricole Assurances’s positions are supported by a full and
competitive range of products, tailored to the specific requirements of
each domestic market and each local partner, as well as by the power
of Crédit Agricole Group distribution network.
Savings and retirement
In France, Crédit Agricole Assurances is strengthening its position as
market leader in personal insurance
(1)
, a position it has held since 2019.
It offers its customers a wide range of policies for saving, transmitting
capital, financing projects or preparing for retirement.
In France, CAA primarily distributes its products to customers of Regional
Banks and LCL: individual customers, high net worth customers, farmers,
SMEs and small businesses and corporates.
Internationally, Crédit Agricole Assurances is present through the
Crédit Agricole Group entities in Italy, Luxembourg and Poland, where
it continues to export and adapt its bancassurer know-how and is
continuing its development via distribution agreements with external
partners in Italy, Portugal, Japan and Luxembourg.
In addition, it is expanding through alternative networks: independent
wealth management advisers, BforBank online bank, network dedicated
to health professionals.
Death & disability/creditor/group insurance
Crédit Agricole Assurances is the leading provider of individual death &
disability insurance in France
(3)
and second-largest provider of creditor
insurance
(4)
. After five years of operation, group insurance covered
approximately 745,000 individuals at 1 January 2021.
Individual or group insurance solutions cater for customers wishing to:
protect themselves and their families from the financial implications
of a serious personal accident;
repay a loan in the event of short-term disability, long-term disability,
unemployment thanks to guarantees linked to consumer or home
loans;
provide employees with a supplementary group health and death &
disability insurance contract.
The death & disability/health offering works through the banking
networks of Crédit Agricole Group, in France and abroad, supplemented in
metropolitan France by a network of general agents dedicated to health
professionals. In group insurance, CAA and Amundi have joined forces
to become a leading provider of social protection for companies. With
expertise in creditor insurance, CAA offers its services through more
than 50 partners, retail banks and specialised finance companies in
seven countries.
Property & casualty insurance
Crédit Agricole Assurances is the leading car, home and healthcare
bancassurer
(5)
and the fifth-largest insurer of property and liability in
France
(1)
.
It offers a full range of property & casualty insurance policies to individual
customers and SMEs and small businesses: protection of personal
property (car, home, etc.), protection of farming and business assets,
protection of mobile electronic devices in the home, legal protection,
supplementary health insurance, personal accident cover, specialist
policies for the agricultural market, professional liability insurance,
card theft protection (in case of fraudulent use of lost or stolen payment
instruments).
It markets its products to customers of the Regional Banks, LCL and
via a network of general agents for the health professionals sector.
Internationally, CAA is capitalising on the success of its bancassurance
model by also deploying its expertise in property & casualty insurance,
especially in Spain following the partnership formed in 2019 with the
Abanca banking group.
2020 highlights
—
Crédit Agricole Assurances helps its customers and the French economy get through the current crisis through a variety of support
measures and a contribution to solidarity funds totalling close to €350 million for the Crédit Agricole Group.
—
Signature of a strategic partnership agreement with Europ Assistance to provide assistance services in the French market.
—
Launch of property & casualty insurance for corporates in the Regional Banks’ network.
—
Crédit Agricole Assurances continues to expand into international markets by increasing its stake in GNB Seguros to 100%
after signing an agreement with Novo Banco.
•
Introduction of a support system on the “Ma Santé” app to help policyholders during the crisis (COVID-related news,
psychological support). The platform has enabled more than 3,000 medical consultations to be carried out online.
•
Crédit Agricole Assurances continues its commitment to inclusion with the 10
th
edition of its call for “Caregiver” projects.
Since 2010, it has financed 170 local projects for caregivers, with almost €2.5 million distributed.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
18
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Asset gathering
1
ASSET MANAGEMENT
(1) Asian Infrastructure Investment Bank.
Business and organisation
A customer-centric model
Amundi’s customer-centric organisation means that it can offer individual
and institutional investors and corporate customers a broad range of
savings and investment solutions to meet their needs. Present in the main
global financial markets, Amundi disseminates its know-how through
all investment universes: active management strategies, including
so-called alpha management (bonds, equity or multi-asset), passive
management (ETF, index management and Smart Beta), and real assets
management (real estate, private equity, private debt, infrastructure),
as well as services and consulting.
Amundi’s know-how is further enhanced by its unique expertise in
research and financial and non-financial analysis, allowing it to support
its customers in their investment decisions without losing sight of its
goal to have a positive impact on society and the environment.
For its retail customers, Amundi draws on its experience and close
partnerships with distribution platforms and retail bank networks in
Europe, Asia-Pacific and North America to offer tailored solutions,
innovative services and added-value investment advice; these offers
help meet the needs and risk profiles of its individual customers, taking
the market environment into account.
For its institutional and corporate customer base, Amundi draws on its
extensive international expertise and research-based investment culture
to provide a comprehensive and objective approach.
Listed since November 2015, Amundi remains the leading market
capitalisation (€13.5 billion as at 31 December 2020) among traditional
listed asset managers in Europe. In bearish stock markets, Amundi’s
share price closed 2020 at €66.8, a slight drop of -4% from end-2019.
Strategic ambitions
In 2020, the COVID-19 crisis confirmed the soundness of Amundi’s
business model: the company operated normally, continued to provide a
high level of customer service and adapted well to the circumstances. The
impact of the crisis on results has been moderate, with business proving
resilient, profitability remaining high and a robust financial position.
Amundi also pressed ahead with its strategic plan.
In China, the new joint venture with Bank of China was launched, in
line with objectives, and the first wealth management products were
marketed across the Bank of China networks at the end of 2020.
In Spain, the strategic partnership with Banco Sabadell (a 10-year
distribution agreement) got off to a successful start, while the integration
of Sabadell Asset Management (acquired on 1 July 2020) is now well
under way.
With its unique business model, its industrial approach and its customer-
centric organisation, boasting operational efficiency and combining a
local presence with a global reach, the Group is well placed to continue
its profitable growth.
Amundi’s ambition is to become a leader in the worldwide asset
management industry, recognised for its quality of expertise and
services offered to customers, its momentum in terms of development
and profitability, and its positioning as a committed financial player.
2020 highlights
—
Amundi and Bank of China create the first wealth management company in China with a foreign shareholder holding a majority stake.
—
In Spain, Amundi acquired Sabadell Asset Management and signed a 10-year partnership agreement to distribute Amundi
products via the Banco Sabadell network.
—
Société Générale and Amundi renewed their partnership agreement for five more years with the aim of further developing
their relationship in the distribution of investment solutions.
—
CPR AM launched the world’s first “Social Impact” fund dedicated to tackling social inequality.
•
In partnership with the AIIB
(1)
, launch of a reference tool to assess the risks related to climate change in accordance
with the objectives of the Paris Agreement.
•
Launch of Mandat PEA Sélection, an innovative Group wealth management product (online marketing, digitised customer journey
and adviser support).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
19
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Asset gathering
1
WEALTH MANAGEMENT
Business and organisation
Shaped by 140 years of experience in supporting families and
entrepreneurs worldwide, the Indosuez Wealth Management Group
offers a tailored, international approach across 13 territories, allowing
individual customers to manage, protect and pass on their wealth in a
manner which best fits their aspirations.
Embracing a global vision, its 3,060 employees provide expert advice and
first-class services in both private and professional wealth management.
2020 highlights
—
Proactive and targeted support of customers throughout the world during the crisis.
—
Continued expansion of the value proposition for high net worth individuals through easier access to all areas of Crédit Agricole
Group expertise, from asset management to financing.
—
Expansion of the offer in favor of a more sustainable development and more reponsible economy, to address customer expectations
and creation of an international range dedicated to sustainable development and the Societal Project.
—
Implementation of strategic digital projects: roll-out of a new investment proposal tool in Monaco and a new CRM system
in Luxembourg with fully digital new business relationships, launch of new global internet and intranet sites, digitisation
of the management mandate subscription process at the Regional Banks.
—
Substantial increase in solidarity initiatives on top of the joint action of the Indosuez Foundations in Switzerland and France.
—
Ramping up of the dissemination of a culture of innovation: opening of the Innovation Lab in Paris and the
Coeur Collaboratif
(collaborative hub) in Luxembourg, creation of a community of 150 Transformers to act as ambassadors and mouthpieces
for the cultural transformation, and organisation of innovation-related Lunch & Learn events.
—
Launch of an Equal Opportunity Charter within the Indosuez Group and continuation of the action plan to promote gender equality.
RETAIL BANKING
LCL
LCL is a domestic network bank, with a leadership position in cities,
focused exclusively on retail banking and insurance.
As part of its “LCL Demain 2022” Medium-Term Plan, the ambition
of LCL is to be the leading bank and insurance company in the city,
which cultivates and develops its expertise thanks to the excellence
of its customer relations, in a collective dynamic of development to
strengthen its attractiveness and sustainable profitability.
Business and organisation
As a universal bank and insurer, LCL offers its customers solutions that
are tailored to their needs, drawing on its expertise and the wealth of
know-how of Crédit Agricole Group. LCL caters for all kinds of customers,
from individuals and SMEs and small businesses to private banking and
wealth management, corporates and institutional customers.
LCL’s ambition is to offer customers a personalised relationship
experience that is a combination of human contact and remote access.
Its six million individual customers thus have the choice of using the
bank how they want, where they want and when they want via their
preferred channel.
Capitalising on its strategic urban presence, LCL has adapted its approach
and services to cover the whole of mainland France, as well as the West
Indies-French Guiana.
LCL now has a network of nearly 1,600 branches, plus remote “LCL
Mon Contact” customer service centres and digital solutions such as the
“LCL Mes Comptes” app and websites, giving its customers complete
freedom in using its banking services. Whether in-branch or online,
LCL is committed to fully understanding the needs of its customers.
By rethinking and digitising certain processes such as opening an account
or taking out a mortgage loan, a commercial loan or insurance, it seeks
to facilitate subscription to its main products.
LCL Banque Privée has 214,000 private banking clients. Dedicated
advisers work with regional centres of expertise to offer comprehensive,
tailored advice on finance, day-to-day banking and management of real
estate and financial assets. The 73 private banking centres offer peace
and quiet and complete privacy for analysis, advice and decision-making.
The 364,000 SMEs and small businesses – skilled craft workers,
retailers, professionals and other small businesses – also benefit from
the support of 1,275 specialist advisers and the creation of 92 “Espace
Pros” business areas. Advisers serve as a single contact point to help their
customers manage their daily business and achieve their business and
personal projects. LCL is a major player in the financing of professionals,
granting loans of €2.7 billion through its subsidiary Interfimo.
LCL Banque des Entreprises relies on its national network of 62 geographic
locations to provide its 29,900 customers with its full range of expertise
in Paris and throughout the rest of France: corporate finance for SME
takeovers and acquisitions, market activities, international trade and
payments, employee savings. As a player of choice in the mid-cap sector,
LCL is today the bank to nearly half of all mid-caps. LCL Banque des
Entreprises also reaffirms its comprehensive approach and its desire
to assist executives with their wealth management plans by expanding
its Wealth Management teams in Paris and across France.
To assist the networks, the back-office, electronic payments and flow
management and support functions serve all customers and make an
active contribution to operational excellence.
CRÉDIT AGRICOLE S.A.
—
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ABOUT CRÉDIT AGRICOLE S.A.
Retail banking
1
2020 highlights
—
LCL implemented a series of measures to help its customers during the public health crisis:
uninterrupted service
with specific
arrangements for visiting branches, tailored offers (consumer loans, fee caps, etc.), greater operational agility to allow for loan
repayment extensions, and the implementation of state-guaranteed loans (
prêts garantis par l’État — PGE
) with
38,000
applications
totalling €
8 billion
.
•
LCL adapts to the public health crisis by introducing a raft of new digital initiatives available for use by customers:
“LCL Mes Comptes”
app, enhanced with new features such as Apple Pay, new card section, and
“LCL Visio”
, which offers
a new way to make appointments, and for better employee agility (ramping up of softphone systems and chatbot availability).
—
LCL reaffirms the strong positioning of the
“LCL. Ma vie. Ma ville. Ma banque”
brand by continuing to sponsor the “Ma ville,
notre idéal” short TV programmes on France 3 and creating new events (launch of the Ville Makers 2 book and a virtual real estate
trade show).
—
LCL supports local businesses by continuing to create a bond with its customers through
CityStore,
France’s largest urban
shopping network, and by forging new partnerships, particularly with Monoprix. LCL supports its customers in their energy transition
efforts by launching a range of innovative investments called
“LCL Impact Climat”
and by continuing to pursue its
LCL Smart
Business
programme through partnerships with Greenflex, Global Climate Initiatives and Voltalia.
—
LCL continues to refurbish its network: at end-2020 810 branches had been modernised, or almost half the entire network.
INTERNATIONAL RETAIL BANKING
Business and organisation
Within Crédit Agricole S.A., the “International Retail Banking” (IRB) division
is responsible for overseeing and developing IRB entities according to
the Group’s standards and guidelines. It has three main tasks:
to act on behalf of Crédit Agricole S.A. as shareholder and integrator
with the Group’s operations;
to draw up strategic guidelines in consultation with the international
retail banks to optimise their market performance;
to create added value for the international retail banks and deliver
results through synergies with the Group’s business lines, LCL and
the Regional Banks, as well as within the different international retail
banks themselves.
The IRB division is therefore operationally responsible for the smooth
running and performance of these banks and controls and supports
their development. It also ensures that IRB entities properly apply the
Group’s standards, particularly with regard to transaction management
and regulatory aspects, and plays a key role in implementing new
customer service and customer relationship models.
The main activities and characteristics of the international retail banks –
located in Italy, Eastern Europe (Poland, Serbia and Ukraine), Morocco
and Egypt – are as follows:
Crédit Agricole Italia
Retail Banking in Italy integrates the networks of Gruppo Bancario Crédit
Agricole Italia (“CA Italia”), namely CA Cariparma, CA Friuladria and
CA Carispezia (legal merger with CA Italia in July 2019) and the three
banks (Cassa di Risparmio – CR) of Cesena, Rimini and San Miniato that
merged into CA Italia in 2019. They all now operate under the brand
name Crédit Agricole.
CA Italia is active in the Emilia Romagna and Tuscany regions, among
the richest in Italy. It is the masthead for the Group’s presence in Italy,
Crédit Agricole’s second domestic market after France, where all the
Group’s business lines are present (consumer finance, corporate and
investment banking, asset management, insurance, custody and fund
administration, and private banking services).
The close collaboration and synergies developed between the commercial
network of the banks and the business lines enable Crédit Agricole to
offer a wide and integrated product range in Italy, aimed at all economic
players.
Through its distinctive customer-led positioning, Crédit Agricole Italia is a
retail bank covering all market segments: individuals, small businesses,
SMEs, large corporates, agricultural and food processing, and private
banking.
CA Italia has 924 branches and 9,388 employees and serves over
2 million customers, with a balance sheet totalling €75.7 billion.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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ABOUT CRÉDIT AGRICOLE S.A.
Retail banking
1
2020 highlights
—
Programmes totalling €10 billion introduced to support all customers, comprising financing lines for all sizes of company, including
VSEs with fewer than 10 employees, liquidity provisions so businesses can protect their cash flow, and moratoria for corporate and
individual customers (six months renewable).
—
Development of a omni-channel model with new remote sales processes such as Nowbanking, web collaboration, mortgage loans
and electronic signature of contracts for businesses.
—
Rating: Baa1 stable – Moody’s, March 2020
—
Announcement of the launch of a cash voluntary public tender offer for all shares of Credito Valtellinese.
—
Opening of a second Italian Village by CA in Parma, where 18 start-ups, selected from all over Italy, are accommodated.
Prizes and awards
—
Ranked second (among universal banks) on the strategic 2020 Net Promoter Score.
—
Long-term commitment to Plastic Odyssée with the entities of the Crédit Agricole Group.
—
Donations of €2 million made by Crédit Agricole entities in Italy to the Italian Red Cross and various hospitals, mainly to purchase
ambulances and build a temporary hospital.
—
Signature of the Italian Banking Association’s Protocol, which provides for the deferral for up to 18 months of loan repayments for
women who are victims of gender violence as part of its commitment to diversity and inclusion.
Crédit Agricole’s six other international retail banks:
Entity
Number
Total
assets
(in billions
of euros)
Highlights of 2020
Positioning/Rating
CA Bank Polska
321 branches
(1)
1,394,000 customers
3,961 employees
5.9
Opening of the first cashless branch
in Warsaw
Continued expansion of mobile payments
(in-app feature, FitbitPay and Garmin Pay
systems, etc.), online account opening and
appointment booking.
Long-term commitment to Plastic Odyssée
with the entities of the Crédit Agricole Group
Launch of an educational campaign on plastic
waste #mniejplastiku
Purchase of intensive care equipment
for the specialist hospital in Wroclaw
Rating A3- (May 2020)
Customer satisfaction: number 3
in the market in NPS
“Power of attraction” first prize awarded
by Polish newspaper Puls Biznesu
for initiatives aimed at strengthening
employee engagement and loyalty in the
past two years (most notably PowerOn,
#ijatoszanuj
ę
, “New styles of work”
and Power People)
Plain Polish Lab’s “Plain language
standard” certification for its account
agreements and regulations
CA Egypt
83 branches
386,000 customers
2,499 employees
2.7
10 new branches under the “Banki Store”
innovative concept
Number of connections on digital channels up
by 70% to more than 6 million in 2020
Publication of the first integrated sustainability
report for 2017-2019
“Thank You” initiative in recognition
of healthcare professionals
Management bodies 25% female
Inclusion initiatives spearheaded by the
Crédit Agricole Egypt Foundation: initiatives
to promote education and support for
the healthcare sector as well as the
entrepreneurship of young people and women
(partnership with the Ministry of Social
Solidarity)
One of only two banks in the flagship
index of the Cairo Stock Exchange
(EGX 30)
Fitch rating: BB- stable (June 2020)
Best Mobile Banking Adaptive Site and
Best Digital Trade Finance Service
(2)
(1)
Excluding 97 specialist branches.
(2)
Global Finance Award (September 2020).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Retail banking
1
Entity
Number
Total
assets
(in billions
of euros)
Highlights of 2020
Positioning/Rating
CA Ukraine
147 branches
397,000 customers
2,343 employees
1.4
Launch of the new mobile application, CA+
Launch of a leasing business retailed by CAU
and first local agreement with John Deere
Bank
We Care programme singled out from the top
25 CSR programmes in Ukraine and most
notably for its initiatives to help the medical
sector
Signature of the Equality Charter to guarantee
rights and opportunities equivalent to
European standards (Take Care)
The “You can rely on Crédit Agricole”
initiative in light of the pandemic
(new offers and revised processes)
Donation for the purchase of medical
equipment for Ukrainian hospitals
Fitch rating: “B” Local Currency LT Issuer
Default Rating with positive outlook
(April 2020)
No. 1 in car loans with 40% market
share
“Best Leader Development Program”
award for the in-house “Agro School”
educational programme
2
nd
place in the overall rating of
Euromoney’s Private Banking and Wealth
Management Survey – 2020
Crédit du Maroc
323 branches
684,000 customers
2,488 employees
5.2
Inclusion in the United Nations Global
Compact Index
Year of the 90
th
anniversary of Crédit du Maroc
Commitment to Moroccan microfinance with
the Fondation Grameen Crédit Agricole
Laying of the foundation stone for the new Les
Arènes head office, which is aiming for HQE
certification
Contribution of 85 million dirhams
(€8 million) to the special fund for
managing the coronavirus pandemic
Support for the healthcare sector
by subsidising a group of young entrepreneurs
and providing medical equipment
Moody’s rating: Ba2 stable outlook
(March 2020)
Vigeo Eiris “Top Performers 2020”
for CSR (November 2020)
CA Serbia
74 branches
341,000 customers
859 employees
1.3
Launch of the new MBank app which includes
instant payment by QR code
Initiatives to help the medical sector and
customers (dedicated offers, moratoria)
Fitch Rating “B+” (June 2020)
Customer satisfaction: number 1
in the market in NPS
No. 1 in agricultural financing:
Approximately 23% market share
No. 1 in car financing
CA Romania
14 branches
13,000 customers
267 employees
0.5
Reorientation of corporate activity and
agricultural and food processing activities
Sale operation announced in January 2021
Bank focused on companies and the
agricultural and food processing markets
(1) Disposal in January 2021.
Crédit Agricole S.A. also has holdings in other European countries alongside the Regional Banks. It owns 5% of Bankoa
(1)
in the Spanish Basque
region and 5% of Crédit Agricole Next Bank in Switzerland.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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ABOUT CRÉDIT AGRICOLE S.A.
Retail banking
1
SPECIALISED FINANCIAL SERVICES
CONSUMER FINANCE
(1) Consolidated entity.
(2) Entity held for sale.
(3) Equity-accounted entity.
Business and organisation
A key player in consumer finance in Europe, Crédit Agricole Consumer
Finance (CA Consumer Finance) offers its customers and partners a
range of flexible, responsible financing solutions, tailored to their needs.
CA Consumer Finance is composed of the following entities: Agos
(1)
(Italy, 61% owned), Creditplus Bank (Germany), CA Consumer Finance
Nederland (Netherlands)
(2)
, CA Consumer Finance S.A. (activities in
France and Group consolidation, head office services), Credibom
(Portugal), Wafasalaf (Morocco, 49% owned), FCA Bank
(3)
(50/50 joint
venture with Fiat Chrysler Automobiles, present in 19 countries in Europe
and Morocco), GAC-Sofinco AFC
(3)
(50/50 joint venture with Guangzhou
Automobile Group CO in China) and Soyou (Spain, 51% owned).
Present in 19 countries in Europe, as well as in China and Morocco,
CA Consumer Finance draws on its know-how and expertise to improve
its own customer satisfaction, its commercial success and the customer
retention policies of its banking, institutional, distribution, and automotive
partners. Committed to helping its customers balance their budgets,
the Group supports its most vulnerable customers by teaching them
how to manage their finances and avoid taking on too much debt.
CA Consumer Finance is a robust and socially cohesive company, with
a strong customer base, solid and diversified partnerships and modern
tools and processes. It knows how to anticipate new consumer trends
as well as the expectations of its partners. It has been particularly
resilient during the COVID-19 crisis, supporting its customers as well
as its partners and protecting its employees:
A profitable leader in consumer finance in Europe, with employees
fully committed to
customers, partners and society:
-
15 million customers;
-
employee engagement and recommendation index at the record
level of 81% in 2020;
-
€91 billion in gross managed loans at end-2020 with a
comprehensive omni-channel and digital offering to meet new
consumer uses, driver of the Crédit Agricole Group’s development:
-
€42 billion in car loans end 2020 and a contribution to net income
Group share from the automotive joint ventures that rose by 14%
per year between 2014 and 2020.
A robust situation at end-2020, a springboard for major business-
line ambitions
by 2022, supported by digital technology, with
four
levers for development:
-
strengthening of partnerships by digital technology and cross-
selling, set to double in France by 2022 versus 2019;
-
expansion in the mobility sector thanks to expertise in car financing:
an additional +€4.5 billion in loans managed by the automotive
joint ventures by 2022 versus 2018, +€500 million in additional
automotive production in 2022 versus 2019 excluding joint
ventures;
-
roll-out in all countries of the servicing model: +1 percentage
point in additional market share for the Group’s banks in France
in 2022 versus 2018 and 10 new international banking partners
by 2022 versus 2019;
-
leader in green financing, with €1 billion in production per year
in 2022.
Ambitious financial targets for 2023:
-
managed loans up by €20 billion to €108 billion in 2023;
-
cost/income ratio excluding SRF of 46% achievable by 2022;
-
cost of risk assumption at a low level, below 160 basis points;
-
high profitability, with RoNE at 15% achievable by 2022.
2020 highlights
—
Exemplary resilience during the crisis, with production level continuing to show strong momentum (2020 production more than
86% of that of 2019 and a very limited decline (-1%) in loans managed by CA Consumer Finance in 2020 compared with 2019).
—
Strong customer support with 380,000 moratoria granted for more than €1.5 billion in extended maturities.
—
Support recognised by customers: No. 1 or No. 2 in customer recommendations in its markets.
•
A production digitised at 65%.
•
More than 5,000 financially vulnerable customers supported in France.
•
Signature in January 2020 with French government authorities of the “Engagé pour FAIRE” charter to facilitate the financing
of private individuals’ energy-related refurbishment projects.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Specialised Financial Services
1
LEASING & FACTORING
Business and organisation
With €22.5 billion in managed assets, 24% of which is international,
Crédit Agricole Leasing & Factoring (CAL&F) is a major player in leasing,
factoring and the financing of renewable energy in France and in Europe.
CAL&F supports companies of all sizes, both in their investment projects
in equipment and real estate, and in the financing and management of
their trade receivables.
CAL&F works closely with the Group’s retail banks in France and
internationally, as well as with non-banking partners. With its regional
presence, it is close to economic actors and supports its customers
outside France via nine entities in Europe and Morocco.
Lease financing
CAL&F offers lease financing solutions designed to meet the needs of
businesses looking to invest in and replace equipment. These include
equipment lease financing, finance leasing, IT operational leasing and
property lease financing.
Factoring
CAL&F provides trade receivable financing and management solutions
for corporates and small businesses, both for their day-to-day operations
and for their expansion plans, in France and internationally: financing,
dunning and collection of trade receivables, guarantee against insolvency
risk and managed services.
Through its international network, CAL&F supports its customers and
partners in the main European countries and overseas.
Financing for energies and regions
Through its subsidiary Unifergie, CAL&F assists corporates, local
authorities and farmers, actors in the energy transition, with the financing
of renewable energy projects (wind or solar farms, biomass projects,
etc.) or energy efficiency schemes (cogeneration plants, etc.), as well
as public infrastructure projects (funding for local authorities or their
private-sector partners in the context of public/private partnerships or
public service outsourcing).
2020 highlights
—
Implementation of measures to support economic recovery, including the granting of moratoria for equipement and property leases
and new offerings designed specifically to help businesses, such as order financing and an extended range of factoring products.
—
Increased market share in France, despite the COVID-19 situation (+1.2 percentage point in market share), particularly in leasing.
—
The 2020 customer recommendation index was up +12 points, a sharp increase.
—
Signature of a strategic partnership between CAL&F’s Polish entity, EFL, and the DBK group, the leading supplier of products
and services in Poland’s transport, shipping and logistics sector.
•
Creation of Green Solutions, a new range to support the energy transition: offerings in green mobility, lighting renovations
and
solar-powered home consumption.
LARGE CUSTOMERS
CORPORATE AND INVESTMENT BANKING
Business and organisation
Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB)
offers the corporate and financial institution customers of the Crédit
Agricole Group a wide range of products and services in the areas of
investment banking, structured finance, international transaction and
commercial banking, capital markets and syndication. Crédit Agricole CIB
model is based on a predominantly Corporates client base (67% of the
2020 commercial revenues), on revenues driven by financing solutions
(69% of revenues) and a powerful and well-coordinated international
network (57% of the revenues generated outside of France).
Customer relations are the responsibility of Senior Bankers. In 2019, their
regrouping into a single entity marks a new step in the implementation
of a customer-centric organisation. The strengthening of links with the
Investment Banking teams also enables the strategic dialogue with
clients to be intensified.
The main tasks of the
Structured Finance
division include originating
and structuring complex finance deals, mostly backed by collateral,
advising on strategy and financing, and providing global coverage
of the aviation and rail, infrastructure, oil and gas, maritime, utilities
and power, and real estate sectors. In 2020, against a backdrop of a
worsening economy that was having a major impact on certain structured
finance sectors, the division retained its market positioning while actively
managing risks.
The
debt optimisation & distribution
business line is responsible for
originating, structuring and arranging medium and long-term bilateral
and syndicated loans for customers, as well as the underwriting and
primary and secondary distribution of syndicated loans with banks and
non-banking institutional investors. Despite the impact of the public
health crisis on the global syndication and M&A market (significant
drop in volumes to their lowest level since 2012), the business line
held on to its leadership by maintaining its positions while supporting
its customers. At end-December, it was the largest bookrunner in France
and the third largest bookrunner in the EMEA in the syndicated loan
sector. It also rose in the league tables in other regions and sectors.
CRÉDIT AGRICOLE S.A.
—
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ABOUT CRÉDIT AGRICOLE S.A.
Large customers
1
Transaction banking and international trade
mainly assists customers
with managing their international trade and guarantee needs, in their
working capital financing needs, in particular through trade receivables
repurchase solutions (receivable and supply chain finance), and in their
cash management needs. In 2020, business in this sector continued
to grow, thanks mainly to the efforts of all teams and to the roll-out of
new offerings in different geographic regions, despite an environment
severely disrupted by the effects of the public health crisis.
The main mission of the
Investment Bank
is to offer a full range of
high value-added solutions to deal with the strategic issues of our
major customers. A large number of
equity capital market/equity-linked
and M&A transactions took place in 2020, particularly in CACIB’s main
areas of expertise.
Market banking
covers all sales, structuring and trading activities
on the fixed income, foreign exchange, credit and equity derivatives
markets, as well as securitisation and treasury activities. Capital market
activities had a record year in 2020 first position in All French Corporate
bonds, first position woldwide in All Financial bonds, and second position
worldwide in Green, Social and Sustainability Bonds.
2020 highlights
—
Support for customers by financing their cash flow requirements stemming from the public health crisis. All Bank teams were fully
committed to awarding customers
state-guaranteed loans
(prêts garantis par l’État; PGE)
set up by the French government.
—
Combining of the expertise of Crédit Agricole CIB and Indosuez Wealth Management to create
Private Investment Banking
. This new
division aims to help family holding companies and their shareholders implement long-term strategies.
•
Continuation of the
Data Architecture Convergence
programme designed to review data architecture. The programme is central
to the Bank’s long-term digital strategy and enables it to better respond to the challenges of the 2022 Medium-Term Plan.
—
Receipt of several
prestigious awards in the Asia-Pacific region,
where most of the growth in our 2022 Medium-Term Plan is
concentrated. A total of 20 transactions receive awards from The Asset magazine, including a large number of flagship environmental
and socially responsible transactions, demonstrating Crédit Agricole CIB’s strong commitment to building a more sustainable economy
and more sustainable bank in the region. CACIB was also named “RMB House of the Year” at the Asia Risk Awards for its commitment
and leading role in the internationalisation and innovation of the RMB (renminbi).
•
Crédit Agricole CIB remains one of the
global leaders in the structuring and distribution of green, social and sustainability bonds
(all currencies). Crédit Agricole CIB indeed arranged $28 billion of green, social and sustainable bonds in 2020 and accounted for €11
billion of green loans in portfolios at end-2020. Crédit Agricole CIB also supported the issue of the
first blue bonds
in Asia and joined
the
Hydrogen Council,
a global hydrogen energy initiative bringing together more than 80 companies from the energy, transport,
industry and finance sector. By supporting its customers, Crédit Agricole CIB is contributing to the energy transition and, by extension,
to the achievement of the Crédit Agricole Group’s climate objectives, in line with the Paris Agreement.
ASSET SERVICING
Business and organisation
For 69.5% owned by Crédit Agricole S.A. and 30.5% by Santander,
CACEIS is an international banking group and a European market leader
in custodian bank and fund administration services. CACEIS is a major
partner in several Crédit Agricole S.A. Group entities.
With more than 4,500 employees (FTEs) in 15 countries, CACEIS offers
a complete range of Asset Servicing solutions.
The Group’s competence
centres in Europe provide uniform, reliable services to all customers,
regardless of their geographical location. A local commercial team
and local experts are present in each establishment to enhance local
relations with customers.
CACEIS is taking part in a process of innovation and digital transformation
for its customers and employees. It is at the forefront of technological
developments such as artificial intelligence, robotics and big data to
ensure greater security, reliability, efficiency and transparency for its
customers.
2020 highlights
—
Formalisation on 1 November of the merger of KAS Bank and the CACEIS branch in the Netherlands under the name CACEIS Bank
Netherlands Branch.
•
Creation of new features for the TEEPI Market Place platform providing investors with a fully digital solution for opening registered
accounts and placing orders in funds administered by CACEIS.
•
Award of Platinum category, given only to the top 1% of all companies assessed by EcoVadis, the assessment platform
of corporates CSR performances.
—
Completion of major asset migrations in an unprecedented context of teleworking by all teams (Candriam, Groupama,
Popular Asset Management and Popular Pensiones).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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ABOUT CRÉDIT AGRICOLE S.A.
Large customers
1
CORPORATE CENTRE
CACIF – CRÉDIT AGRICOLE CAPITAL INVESTISSEMENT & FINANCE
CACIF holds the investments of Crédit Agricole S.A., the Regional Banks
and LCL in unlisted companies through dedicated funds, most of which
are managed by its subsidiary IDIA Capital Investissement (capital
development supporting French mid-caps and SMEs in all business
sectors, with recognised expertise in food processing, wine-making
and the energy transition).
CACIF also provides services through SODICA Corporate Finance, which
specialises in M&A advisory services and financial and stock market
engineering for medium-sized companies in all business sectors, with
teams based in Paris and regional France. It also has teams specialising in
the food, wines and spirits, health, aeronautics, renewable energy and real
estate sectors. SODICA is the Group’s listing sponsor on Euronext Growth.
2020 highlights
IDIA Capital Investissement:
—
Creation of the Développment Filière Bois fund: an investment fund dedicated to the development of the timber industry’s entire
value chain in France.
SODICA Corporate Finance:
—
Establishment of the SODICA ETI department, dedicated exclusively to upper-mid-cap transactions.
—
e-RIS: LCL joins the Regional Banks’ intermediation network led by SODICA CF. e-RIS supports the handover
of VSE/SMEs (valued between €1 million and €5 million).
—
Launch of the SODICA AGRIMANAGERS business, dedicated to transactions by large companies and farm holdings.
CACIF:
—
Participation in the Aéronautique de Place fund alongside other Group entities (total investment of €100 million). Subscription
at end-2020.
—
Digitisation of contracts and signatures, and wide-scale expansion of teleworking to maintain business despite the public
health crisis.
—
Establishment of sponsorship with “Espérance Banlieues” to support the inclusion and education of young people.
CRÉDIT AGRICOLE IMMOBILIER
As the Group’s real estate specialist, Crédit Agricole Immobilier builds,
sells and manages housing and offices for its territories and customers,
incorporating new urban and environmental constraints.
As a trusted partner, it supports real estate projects of private
individuals through its residential property development and property
administration services (Crédit Agricole Immobilier and Square Habitat),
while businesses, local authorities and institutions benefit from its office
development, property management and commercial property services.
A major player in providing access to housing and regional economic
development, Crédit Agricole Immobilier is shaping the city of tomorrow
by offering innovative and sustainable solutions.
2020 highlights
—
New procedures for holding co-ownership general meetings during the public health crisis: organisation of the first
remote General Meeting at the Nouvel Angle residence in Cergy (95).
—
Signature of the sale of the Campus de l’Aqueduc in Gentilly (94), a 40,000-sq. m. office complex with an ambitious environmental
design, including features that promote wellbeing in the workplace.
•
Deployment of electronic signatures for customers of its Square Habitat property agency network, making it easier for customers
buying or leasing a property to complete administrative formalities.
•
Initiation and support of the process by which Campus Evergreen obtained the BiodiverCity
®
Life label in recognition
of the consideration given to biodiversity on this 8-hectare site located in central Montrouge (92).
CRÉDIT AGRICOLE PAYMENT SERVICES
Payments are central to the customer relationship and a key means of
building loyalty and acquiring new customers. Crédit Agricole Payment
Services (CAPS) designs payment solutions for Crédit Agricole customers,
helps the Group’s banks launch them on the market, and processes
transactions. CAPS develops innovative service offerings that are both
secure and easy to use and meet the highest market standards.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
27
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Corporate centre
1
2020 highlights
—
Management of new payment solutions tailored to the public health crisis situation (contactless up to €50, daily reporting,
hotline for retailers on “CA Mon Commerce”).
—
Launch of Apple Pay.
—
Acquisition of Linxo the French fintech leader for account aggregation services and payment initiation
—
Remote POS offerings developed for retailers: Up2pay by link and Up2pay Mobile.
—
Acquirer Authorisation Server (AAS) certified to Europe’s Nexo standard.
—
Acquisition of payment institution status enabling the Group to complete its payment services offer especially directed
to marketplaces, as well as strengthening its distribution measures by building a service provider of central payments
for the whole Crédit Agricole Group.
—
Alongside the Group’s banks, success in a number of tender bids for major accounts: Décathlon, Total, Thiriet.
CRÉDIT AGRICOLE GROUP INFRASTRUCTURE PLATFORM
Crédit Agricole Group Infrastructure Platform comprises 80% of the
Group’s IT production, infrastructure and technology platforms.
Its goal is to meet the challenges of the digital transformation by
developing new platforms adapted to digital practices while at the
same time guaranteeing a high degree of security and confidentiality
for entities.
The CA-GIP operating model is divided into:
clusters, which handle the production of business applications,
ensuring quality of service and day-to-day operational maintenance.
They also help IT departments and entities implement business projects
and assist with transformations;
shared service hubs, which support CA-GIP’s technological activities,
both operationally (RUN) and in their construction (BUILD). They also
pool technological platforms that are shared throughout the Group.
2020 highlights
—
Increase in teleworkers throughout the Group from 4,000 to 30,000 in March to ensure all essential activities continue uninterrupted
in the unprecedented context of the lockdown. Increase in infrastructure capacity to 80,000 simultaneous connections.
—
Roll-out of the “Webex” videoconferencing solution to 15,000 LCL bank advisers deployment in progress within the Regional Banks.
—
Participation of CA-GIP in the development of the responsible digital technology MOOC offered by France’s Institute for Responsible
Digital Technology (INR).
UNI-MÉDIAS
Uni-médias, a press subsidiary of Crédit Agricole S.A., is one of the top
eight magazine publishers in France (source: Plimsoll) and continues to
be one of the most profitable in the industry, with revenues of €87 million.
Fully integrated with the Group’s Customer Project, in 2020 Uni-médias
accelerated its digital transformation to become the expert media group
for key moments in customers’ lives.
2020 highlights
—
Sustained proactivity and editorial support to help its readers deal with the public health crisis.
—
No. 1:
Santé Magazine, Parents, Maison créative, Détente Jardin, Régal, Détours en France
and
Secrets d’Histoire
.
•
A digital transformation that is getting results:
-
websites outperforming, with 303 million visits in 2020, up +35% from 2019;
-
marketing of titles via the Uni-médias store, with sales doubling in one year.
—
Promotion of brand content through new expertise in videos, podcasts, social media and webinars.
See the detail of operating segment information on page 498.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
28
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Corporate centre
1
HIGHLIGHTS OF 2020
JANUARY
Crédit Agricole S.A. unwinds 35% of the “Switch” guarantee mechanism.
Banco Sabadell and Amundi announce their strategic partnership in Spain and Amundi’s acquisition of Sabadell Asset Management.
APRIL
Proposal to allocate Crédit Agricole S.A.’s 2019 results to a reserves’ account.
Crédit Agricole S.A. group senior executives contribute to Crédit Agricole’s solidarity initiative to help the elderly in the face of the coronavirus.
Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A. group, and Xavier Musca, Deputy Chief Executive Officer, decided to waive half of
their variable compensation due for 2019, contributing it instead to Crédit Agricole’s solidarity initiative, which will pay the corresponding amount
into the Group’s new solidarity fund for the elderly.
MAY
General Meeting of Crédit Agricole S.A.
SEPTEMBER
Crédit Agricole S.A. demonstrates commitment to the Panda market with its second 3-year CNY 1 billion benchmark bond.
Crédit Agricole CIB announces the disposal of its remaining 4.0% stake in Banque Saudi Fransi.
Amundi and BOC Wealth Management launch the first wealth management venture in China with a foreign shareholder holding a majority stake.
OCTOBER
Crédit Agricole S.A. successfully priced its offering of EUR 750m Undated Deeply Subordinated Additional Tier 1 (AT1) Fixed Rate Resettable Notes.
Crédit Agricole Assurances and Europ Assistance sign a strategic partnership agreement for assistance in the French market.
NOVEMBER
Crédit Agricole Italia launches a cash voluntary public tender offer for all shares of Credito Valtellinese.
DECEMBER
Capital: ECB Pillar 2 capital requirement unchanged for 2021;
publication of updated Pillar 3 appendix table of main features of
capital instruments.
€1bn for local, sustainable and inclusive growth in the regions: the
Crédit Agricole Group carries out its first social bond issuances.
Presentation during a dedicated workshop of the mid term ambitions
of the consumer finance business within Crédit Agricole: a modern,
profitable and high-potential business.
Goodwill impairment charge of about €900 million recognised against
CA Italia in Crédit Agricole S.A.’s financial statements, without impact
on solvency or liquidity.
Crédit Agricole Consumer Finance and Banco BPM strengthen their
partnership in consumer credit in Italy.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
29
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Highlights of 2020
1
The following press releases are incorporated by reference in this Universal registration document.
Date of
issuance
Press release title
Annex 1
2019/980
regulations
January 2020
Crédit Agricole S.A. unwinds 35% of the “Switch” guarantee mechanism.
credit-agricole-s.a.-unwinds-35-of-the-switch-guarantee-mechanism
20.1
Banco Sabadell and Amundi announce their strategic partnership in Spain and Amundi’s acquisition of Sabadell Asset
Management.
banco-sabadell-and-amundi-announce-their-strategic-partnership-in-spain-alongside-amundi-s-acquisition-of-sabadell-
asset-management
5.7
April 2020
Proposal to allocate Crédit Agricole S.A.’s 2019 results to a reserves’ account.
proposal-to-allocate-credit-agricole-s.a.-s-2019-results-to-reserves-account
18.5
Crédit Agricole S.A. Group senior executives contribute to Crédit Agricole’s solidarity initiative to help the elderly in the face
of the coronavirus.
Les-dirigeants-du-groupe-credit-agricole-s.a-apportent-leur-contribution-a-l-action-de-solidarite-du-credit-agricole-en-faveur-
des-personnes
13.1
May 2020
General Meeting of Crédit Agricole S.A.
19
Crédit Agricole Group: disclosure on global systemically important banks’ (G-SIBs) indicators.
credit-agricole-group-disclosure-on-global-systemically-important-banks-g-sibs-indicators7
8.1
June 2020
Crédit Agricole S.A. Announces Pricing of its Tender Offers for USD Senior Preferred Notes.
credit-agricole-s.a.-announces-pricing-of-its-tender-offers-for-usd-senior-preferred-notes
8.1
Crédit Agricole S.A. Announces Offer Prices and Final Results of its Tender Offers for EUR and GBP Senior Preferred Notes.
credit-agricole-s.a.-announces-offer-prices-and-final-results-of-its-tender-offers-for-eur-and-gbp-senior-preferred-notes
8.1
September 2020
Crédit Agricole S.A. demonstrates commitment to the Panda market with its second 3-year CNY 1 billion benchmark bond.
credit-agricole-s.a.-demonstrates-commitment-to-the-panda-market-with-its-second-3-year-cny-1-billion-benchmark-bond
8.1
Crédit Agricole CIB announces the disposal of its remaining 4.0% stake in Banque Saudi Fransi.
credit-agricole-cib-announces-the-disposal-of-its-remaining-4.0-stake-in-banque-saudi-fransi
5.7
Amundi and BOC Wealth Management launch the first wealth management venture in China with a foreign shareholder
holding a majority stake.
amundi-et-boc-wealth-management-lancent-la-premiere-societe-de-gestion-de-produits-de-gestion-de-patrimoine-en-chine-
detenue-majoritairement-pa
October 2020
Crédit Agricole S.A. successfully priced its offering of EUR 750m Undated Deeply Subordinated Additional Tier 1 (AT1) Fixed
Rate Resettable Notes.
credit-agricole-s.a.-successfully-priced-its-offering-of-eur-750m-undated-deeply-subordinated-additional-tier-1-at1-
fixed-rate-resettable-notes
8.1
Crédit Agricole Assurances and Europ Assistance sign a strategic partnership agreement for assistance in the French
market.
partnership-agreement-for-assistance-in-the-french-market-f021-94727.html
November 2020
Crédit Agricole Italia launches a cash voluntary public tender offer for all shares of Credito Valtellinese.
credit-agricole-italia-launches-a-cash-voluntary-public-tender-offer-for-all-shares-of-credito-valtellinese
5.7
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
30
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Highlights of 2020
1
Date of
issuance
Press release title
Annex 1
2019/980
regulations
December 2020
Capital: ECB Pillar 2 capital requirement unchanged for 2021; publication of updated Pillar 3 appendix table of main
features of capital instruments.
capital-ecb-pillar-2-capital-requirement-unchanged-for-2021-publication-of-updated-pillar-3-appendix-table-of-main-
features-of-capital-instruments
8.1
€1bn for local, sustainable and inclusive growth in the regions: the Crédit Agricole Group carries out its first social bond
issuances.
financial-press-releases/1bn-for-local-sustainable-and-inclusive-growth-in-the-regions-the-credit-agricole-group-
carries-out-its-first-social-bond-issuances
8.1
Consumer credit at Crédit Agricole: a modern, profitable and high-potential business.
consumer-finance-at-credit-agricole-a-modern-profitable-and-high-potential-business
5.4
Goodwill impairment charge of about €900 million recognised against CA Italia in Crédit Agricole S.A.’s financial
statements, no impact on solvency or liquidity.
goodwill-impairment-charge-of-about-900-million-recognised-against-ca-italia-in-credit-agricole-s.a.-s-financial-
statements-no-impact-on-solvency-or-liquidity
7.1
Crédit Agricole Consumer Finance and Banco BPM strengthen their partnership in consumer credit in Italy.
credit-agricole-consumer-finance-and-banco-bpm-strengthen-their-partnership-in-consumer-credit-in-italy
5.7
2020 capital increase reserved for employees.
financial-press-releases/2020-capital-increase-reserved-for-employees
8.1
HISTORY
1885
Creation of the first Local Bank in Poligny (Jura).
1894
Law authorising the creation of the first “sociétés de crédit agricole”,
later named “Caisses locales de crédit agricole mutuel” (Local Banks
of Crédit Agricole Mutuel).
1899
Law grouping the Local Banks into Crédit Agricole Regional Banks.
1920
Creation of Office National du Crédit Agricole, which became Caisse
Nationale de Crédit Agricole (CNCA) in 1926.
1945
Creation of Fédération Nationale du Crédit Agricole (FNCA).
1959
Decree allowing Crédit Agricole to make home loans, in rural areas, to
non-farm households.
1986
Creation of Predica, life insurance company of the Group.
1988
Law reorganising the CNCA as a mutual company, which became a
employees.
1990
Creation of Pacifica, property and casualty insurance company of the
Group.
1996
Acquisition of Banque Indosuez.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
31
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
History
1
1999
Acquisition of Sofinco and an initial stake in Crédit Lyonnais.
2001
Reincorporation of the CNCA as Crédit Agricole S.A. and listing on the
stock market on 14 December 2001.
2003
Acquisition of Finaref and Crédit Lyonnais (now LCL).
2006
Acquisition of Cariparma, FriulAdria, 202 branches of Banca Intesa in
Italy, and Emporiki Bank in Greece.
2009
Crédit Agricole Asset Management and Société Générale Asset
Management combine to form Amundi.
2010
Creation of Crédit Agricole Consumer Finance (merger between Sofinco
and Finaref) and Crédit Agricole Leasing & Factoring (merger between
Crédit Agricole Leasing and Eurofactor).
2011
Acquisition in Italy of 172 branches from Intesa Sanpaolo S.p.A.
2013
Sale of Emporiki Group to Alpha Bank, disposal of the stockbrokers CLSA
and Cheuvreux as well as Bankinter equity investments.
2014
Sale of the 50% stake in Newedge to Société Générale and
simultaneous acquisition of an additional 5% stake in Amundi’s capital
(from then on 80% owned).
Refocusing with the disposal of Nordic subsidiaries of Crédit Agricole
Consumer Finance, Crédit Agricole Bulgaria and BNI Madagascar.
2015
IPO of Amundi, with a reduction of Crédit Agricole Group’s stake to 75%.
Sale of Crédit Agricole Albania to Corporate Commercial Bank AD.
2016
Announcement and completion of the transaction to simplify the Group’s
ownership structure (Eureka).
2017
Finalisation of Amundi’s acquisition of Pioneer Investments, with a
reduction of the Crédit Agricole Group stake to 70%.
Sale of a part of the stake (16.2% of 31.1%) in Banque Saudi Fransi
to Kingdom Holding Company (KHC).
Acquisition of a stake of more than 95% in the Cesena, Rimini and
San Miniato Savings Banks.
2018
Creation of a joint venture in Spain in consumer credit between Bankia
and Crédit Agricole Consumer Finance.
Creation of Azqore, a joint technological platform between Capgemini
and Indosuez Wealth Management.
Finalisation of the acquisition of Banca Leonardo in Italy by Indosuez
Wealth Management.
Entering into an exclusive partnership agreement in life insurance with
Credito Valtellinese and acquisition of a 5% interest in life insurance.
Announcement of the acquisition of a further 25% in GNB Seguros
by Crédit Agricole Assurances.
2019
Presentation of the Group project and of the 2022 Medium-Term Plan.
Announcement and signing of an agreement between CACEIS and
KAS Bank for a friendly takeover bid by CACEIS for the entire share
capital of KAS Bank.
Signing of a partnership agreement between Abanca and Crédit
Agricole Assurances for establishing a non-life company for the
Spanish and Portuguese markets.
Merger between CACEIS and Santander Securities Services to create
a leading actor in institutional financial services.
Strengthening and extending the partnership between Crédit Agricole
Consumer Finance and Banco BPM for consumer credit in Italy for
15 years.
Finalisation by Crédit Agricole CIB of the sale of 10.9% of Banque
Saudi Fransi to a consortium led by Ripplewood.
Signing of the extension of the joint venture of FCA Bank between
Crédit Agricole Consumer Finance and Fiat Chrysler Automobiles
until December 2024.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
32
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
History
1
INFORMATION ON THE SHARE CAPITAL AND SHAREHOLDERS
OWNERSHIP STRUCTURE AT 31 DECEMBER 2020
SAS rue de la Boétie
55.3%
Employees (ESOP)
5.8%
Institutional investors
30.9%
Individual shareholders
8.0%
Treasury shares
0.0%
CHANGE IN SHARE OWNERSHIP OVER THE PAST THREE YEARS
The table below shows changes in the ownership of Crédit Agricole S.A. over the past three years:
Shareholders
Position at 31/12/2020
Position at
31/12/2019
Position at
31/12/2018
Number of
shares
% of voting
rights
(3)
% of share
capital
(4)
% of share
capital
% of share
capital
SAS Rue La Boétie
(1)
1,612,517,290
55.31
55.29
55.90
56.26
Treasury shares
(2)
1,090,000
0.04
0.02
0.15
Employees (FCPE, PEE)
169,020,958
5.80
5.79
4.68
4.42
Institutional investors
900,713,859
30.89
30.88
32.43
31.90
Individual shareholders
233,346,533
8.00
8.00
6.99
7.27
TOTAL
2,916,688,640
100
100
100
100
(1)
SAS Rue La Boétie is wholly owned by the Crédit Agricole Regional Banks.
(2)
Treasury shares are directly held as part of share buyback programmes, recognised on Crédit Agricole S.A.’s balance sheet, designed to cover stock options and as part of a market-making agreement.
(3)
% of voting rights corresponds to exercisable voting rights.
(4)
% of share capital corresponds to theoric voting rights.
There is no significant difference between theoric voting rights (% of share capital) and exercisable voting rights (% of voting rights), presented in
the above table.
The ownership structure changed slightly in 2020
The Regional Banks maintain their investment in Crédit Agricole S.A. through SAS Rue La Boétie.
Jointly and on a permanent basis, they own the majority of the share capital: 55.29% at end-2020 and 55.90% at end-2019 and 56.26% at end-2018.
Employee profit-sharing through company savings plans (PEEs) and employee share ownership plans (FCPEs) increased in 2020 following the
December 2020 capital increase reserved for employees (32 million new shares). It increased from 4.68% of share capital at end-2019 to 5.79%
at end-2020.
The share of institutional investors posted a sligth decrease to 30.88% compared to 32.43%, at end-2019.
The share of individual shareholders increased; it stood at 8.0% of share capital, compared with 6.99% at end-2019.
Overall, the free float was down slightly over the period, at 38.88% versus 39.42% at end-2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
33
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Information on the share capital and shareholders
1
RECENT CHANGES IN SHARE CAPITAL
The table below shows changes in Crédit Agricole S.A.’s share capital over the past five years:
Date and type of transaction
Total of capital
(in euros)
Number
of shares
12/11/2015
Employee bonus shares
(CEO decision of 12/11/2015)
1,749,240
583,080
Share capital at 31/12/2015
7,917,980,871
2,639,326,957
21/06/2016
Share-based payment of dividend and loyalty dividend bonus
(General Meeting of 19/05/2016)
509,891,574
169,963,858
16/12/2016
Capital increase reserved for employees
110,441,133
36,813,711
Share capital at 31/12/2016
8,538,313,578
2,846,104,526
Share capital at 31/12/2017
8,538,313,578
2,846,104,526
22/05/2018
Capital increase by awarding free shares to eligible shareholders
(Removal of bonus dividend)
19,590,132
+6,530,044
01/08/2018
Capital increase reserved for employees
41,407,758
13,802,586
Share capital at 31/12/2018
8,599,311,468
2,866,437,156
01/08/2019
Capital increase reserved for employees
54,754,668
18,251,556
Share capital at 31/12/2019
8,654,066,136
2,884,688,712
22/12/2020
Capital increase reserved for employees
95,999,784
31,999,928
Share capital at 31/12/2020
8,750,065,920
2,916,688,640
Since 31 December 2020, the share capital of Crédit Agricole S.A. has amounted to €8,750,065,920, divided into 2,916,688,640 shares with a
par value of €3 each.
INFORMATION CONCERNING MAJOR SHAREHOLDERS
There are currently no shareholders’ agreements.
Crédit Agricole S.A. has not issued any securities giving rights to share
capital other than those indicated in the “Recent changes in share
capital” table above. The Company has not issued any securities giving
rights to the potential share capital or shares carrying double voting
rights. Nor has it pledged any of its shares as collateral.
To Crédit Agricole S.A.’s knowledge, no shareholder other than SAS
Rue La Boétie owns 5% or more of the share capital or voting rights.
Control over the issuer
The shareholder relationships between Crédit Agricole S.A. and the
Regional Banks are described in the notes to the financial statements
under “General framework” of this document.
Control over Crédit Agricole S.A. is described in Chapter 3, “Corporate
governance”, of this Universal Registration Document.
The rules governing the composition of the Board of Directors are set
out in Article 11 of the Articles of Association.
Under the terms of the agreement entered into by the Regional Banks
and Crédit Agricole S.A. at the time of the initial public offering, the
Regional Banks, through SAS Rue La Boétie, own the majority of the
share capital on a permanent basis (55.29% at end-2020) and of the
voting rights (55.31% at end-2020) in Crédit Agricole S.A., making it
immune to takeover bids. The composition of the Board of Directors
results from the intention expressed in the listing agreement to ensure
a majority representation of the Regional Banks.
In addition to the Director appointed by joint decree by the Minister
of Finance and the Minister of Agriculture, six seats are allocated to
Directors from outside the Crédit Agricole Group. On the proposal of the
Appointments and Governance Committee, these six outside Directors are
considered by the Board of Directors as independent in accordance with
corporate governance guidelines (AFEP/MEDEF Corporate Governance
Code for listed companies). The outside Directors play an extremely
important role on the Board. Four of them chair the Board’s Special
Committees (Audit, Risk, Risk in the United States, Compensation,
Appointments and Governance).
There are no agreements of which the implementation could, at a
subsequent date, result in a change in the Group’s control.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
34
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Information on the share capital and shareholders
1
DIVIDEND POLICY
The dividend policy is defined by the Board of Directors of Crédit
Agricole S.A. It may take into account, in particular, the Company‘s
earnings and financial position, as well as the dividend policy
practices of leading French and international companies in the sector.
Crédit Agricole S.A. gives no guarantee as to the amount of the dividend
which will be paid in any given financial year.
From 2013 to 2017, certain securities that met the conditions of eligibility
on the payment date were also entitled to a loyalty dividend of 10%.
To comply with a request of the European Central Bank, the General
Meeting of 16 May 2018 voted to remove the statutory loyalty dividend
clause as well as the terms and conditions of the compensation to be
paid to beneficiaries.
For financial year 2018, the Board of Directors proposed a dividend of
€0.69 per share to the General Meeting.
The intention to distribute dividends for financial year 2019 appeared
incompatible with the European Central Bank’s recommendations
related to the public health crisis. Given these circumstances, the
Crédit Agricole S.A. Board of Directors, which was consulted in writing
on 1 April 2020 pursuant to the legal provisions on the functioning of
deliberative bodies during the COVID-19 pandemic, moved to propose
to the Annual General Meeting of 13 May 2020 that the entire profit for
2019 be allocated to a reserves’ account.
For financial year 2020, the Board of Directors of Crédit Agricole S.A.
will propose to the General Meeting on 12 May 2021 to distribute a
dividend of Euro 80 cents per share, with a scrip dividend payment option.
For the last five financial years, Crédit Agricole S.A. distributed the following dividends, as indicated in the table below:
2020
2019
2018
2017
2016
Net dividend per share
(in euros)
0.80
-
0.69
0.63
0.60
Payout ratio
(1)
66%
NA
50%
56%
55%
(1)
Total dividends payable (ex. treasury shares) divided by attributable net income Group share (net of AT1 coupons).
TABLE SUMMARISING AUTHORISATIONS IN FORCE
AND THE USE MADE THEREOF DURING 2020
Type of authorisation
Purpose of authorisation
Validity of authorisation
Ceiling
Use during 2020
Share buyback
Buy
Crédit Agricole S.A. ordinary shares.
General Meeting of
13/05/2020
25
th
resolution
Valid for a term of:
18 months
Effective: 13/05/2020
Expiry: 13/11/2021
10% of the ordinary
shares in the share
capital.
See detailed
information
Capital increase
by means of the issue
of ordinary shares
Increase
share capital by issuing ordinary shares
and/or securities conferring access to ordinary
shares, with pre-emptive subscription rights.
General Meeting of
13/05/2020
28
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
€4.3 billion
€8.6 billion in respect
of debt securities
Those of the 29
th
, 30
th
,
32
nd
and 34
th
resolutions
are offset against
these ceilings.
None
Increase
share capital by issuing ordinary shares
and/or securities conferring access to ordinary
shares, without pre-emptive subscription rights,
through offers to the public referred to in Article
L.411-2-1 of the French Monetary and
Financial Code.
General Meeting of
13/05/2020
29
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
€870 million
€5 billion in respect
of debt securities
That stipulated by the
28
th
and 30
th
resolutions
is offset against
these ceilings.
None
Increase
share capital by issuing ordinary shares
and/or securities conferring access to ordinary
shares, without pre-emptive subscription rights,
through offers to the public other than those
referred to in Article L.411-2 section II of
the French Monetary and Financial Code.
General Meeting of
13/05/2020
30
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
€870 million
€5 billion in respect
of debt securities
That stipulated by the
28
th
resolution is offset
against these ceilings.
None
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
35
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Information on the share capital and shareholders
1
Type of authorisation
Purpose of authorisation
Validity of authorisation
Ceiling
Use during 2020
Capital increase
by means of the issue
of ordinary shares
Increase
the amount of the initial issue in the
case of issuing ordinary shares and/or securities
conferring access to ordinary shares, with or
without pre-emptive subscription rights, decided
pursuant to the 28
th
, 29
th
, 30
th
, 32
nd
, 33
rd
, 36
th
and 37
th
resolutions.
General Meeting of
13/05/2020
31
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
Within the limits of the
ceilings stipulated by the
28
th
, 29
th
, 30
th
, 32
nd
, 33
rd
,
36
th
and 37
th
resolutions.
None
Issue
ordinary shares and/or other securities
conferring access to capital, without pre-emptive
subscription rights, in consideration for asset
transfers to the Company, consisting of equity
securities or other securities conferring access
to capital, other than through a public exchange
offer.
General Meeting of
13/05/2020
32
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
Within the limits of 10%
of the share capital; this
ceiling will be offset
against that stipulated
by the 28
th
and
30
th
resolutions.
None
Set
the price of issue of ordinary shares in
the scope of repayment of contingent capital
instruments (“CoCos”) pursuant to the 29
th
and/or
the 30
th
resolution, up to the annual limit of 10%
of capital.
General Meeting of
13/05/2020
33
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
€3 billion
The total nominal amount
cannot exceed 10% of
the share capital in any
12-month period.
This ceiling is offset
against that stipulated
by the 28
th
resolution.
None
Limit
authorisations of issue, with or without
pre-emptive subscription rights,
as a consequence of the adoption of the
28
th
to 32
nd
resolutions and of the 36
th
and 37
th
resolutions.
General Meeting of
13/05/2020
34
th
resolution
Nominal amount of
capital increase
under the 28
th
to
32
nd
resolutions and the
36
th
and 37
th
resolutions.
None
Increase
the share capital by capitalisation
of reserves, earnings, share premiums
or other items.
General Meeting of
13/05/2020
35
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
€1 billion, autonomous
and distinct ceiling.
None
Transaction reserved
for employees
Increase
the share capital by issuing ordinary
shares, without pre-emptive subscription rights,
reserved for Crédit Agricole Group employees
who subscribe to an employee savings scheme.
General Meeting of
13/05/2020
36
th
resolution
Valid for a term of:
26 months
Expiry: 13/07/2022
€300 million
Autonomous and distinct
from other ceilings
on capital increases.
Issuance of
31,999,928 new
shares with a par
value of €3 each,
carried out on
22/12/2020
Increase
the share capital by issuing ordinary
shares, without pre-emptive subscription rights,
reserved for a category of beneficiaries in the
context of an employee shareholding transaction.
General Meeting of
13/05/2020
37
th
resolution
Valid for a term of:
18 months
Expiry: 13/11/2021
€50 million
Autonomous and distinct
from other ceilings
on capital increases.
None
Award
performance shares, whether already
issued or to be issued, to eligible employees
or Corporate Officers.
General Meeting of
13/05/2020
39
th
resolution
Valid for a term of:
38 months
Expiry: 13/07/2023
0.75% of the share
capital at the date of
the Board of Director’s
decision to award the
shares.
None
Cancellation of shares
Cancel
shares acquired under the share buyback
programme.
General Meeting of
13/05/2020
38
th
resolution
Valid for a term of:
24 months
Expiry: 13/05/2022
10% of the total number
of shares in each
24-month period.
None
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
36
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Information on the share capital and shareholders
1
PURCHASE BY THE COMPANY OF ITS OWN SHARES IN 2020
The twenty-fifth resolution of the Ordinary General Meeting of Crédit
Agricole S.A. of 13 May 2020 authorised the Board of Directors to
trade in Crédit Agricole S.A. ordinary shares, in accordance with the
General Regulation of the French Financial Market Authority (AMF)
and with Articles L.225-209
et seq.
of the French Commercial Code.
The key provisions of this resolution, which is still valid, are as follows:
the authorisation was granted for a period of 18 months;
the Company may not, under any circumstances, hold more than
10% of the share capital;
the number of shares purchased may not exceed 10% of the total
number of ordinary shares at the date on which the said purchases
are carried out;
the maximum purchase price is €20;
in any event, the maximum amount the Company may allocate to the
buyback of its ordinary shares is €4.3 billion.
Information on the use of the share buyback
programme, given to the General Meeting,
in accordance with Article L.225-211
of the French Commercial Code
The Board of Directors informs the General Meeting of the following
activities undertaken in accordance with the share buyback programme
for the period from 1 January to 31 December 2020.
Transactions were carried out as part of the programme in order to:
cover commitments made to employees and Corporate Officers under
stock option and deferred compensation plans;
create an active market for the shares through market-making by an
investment services provider under a market-making agreement that
complies with the AMAFI (the French Association of Financial Markets
Professionals) Code of Conduct.
Number of shares registered in the Company’s name at 31/12/2019
435,000
To cover commitments to employees and Corporate Officers
0
To provide volume to the market in the context of the market-making agreement
435,000
Number of shares bought in financial year 2020
10,682,913
To cover commitments to employees and Corporate Officers
To provide volume to the market in the context of the market-making agreement
10,682,913
Volume of shares used to achieve the purpose set
(1)
Coverage of commitments to employees and Corporate Officers
0
Market-making agreement (purchases + sales)
20,710,826
Number of shares reallocated for other purposes
0
Average purchase price of shares bought in 2020
€8.80
Value of shares bought in 2020 at purchase price
€94,039,159
Trading costs
€136,701
Number of shares sold in financial year 2020
10,027,913
To cover commitments to employees and Corporate Officers
0
To provide volume to the market in the context of the market-making agreement
10,027,913
Average price of shares sold in 2020
€8.87
Number of shares registered in the Company’s name at 31/12/2020
1,090,000
To cover commitments to employees and Corporate Officers
0
To provide volume to the market in the context of the market-making agreement
1,090,000
Gross carrying amount per share
(2)
Shares bought to cover commitments to employees and Corporate Officers (historical cost)
-
Shares bought as part of the market-making agreement (market price at 31/12/2020)
€10.32
Total gross carrying amount of shares
€11,248,800
Par value
€3
Percentage of the share capital held by the Company at 31/12/2020
0.04%
(1)
To cover commitments to employees and Corporate Officers, these are shares sold or transferred to beneficiaries after they exercise options on Crédit Agricole S.A. shares, or sold on the stock market
for the surplus coverage recorded at the closing date of the plans, and shares purchased and delivered or sold under deferred compensation plans as performance shares; shares relating to the
market-making agreement are shares bought and sold under the agreement during the period in question.
(2)
Shares bought to cover commitments to employees and Corporate Officers are recognised as investment securities and valued at acquisition cost, less any impairment; shares purchased under the
market-making agreement are recognised as trading securities and valued at market value at each reporting date.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
37
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Information on the share capital and shareholders
1
DESCRIPTION OF CRÉDIT AGRICOLE S.A. SHARE BUYBACK PROGRAMME
FOR 2020 AND SUBSEQUENT YEARS
Pursuant to Article 241-2 of the AMF General Regulation, this document
constitutes the description of the share buyback programme to be
approved by the Ordinary General Meeting of 12 May 2021.
I.
Number of shares and percentage
of share capital directly owned
by Crédit Agricole S.A.
At 31 January 2021, Crédit Agricole S.A. directly owned 1,600,000 shares,
representing 0.05% of the share capital.
II. Breakdown of targets
by equity securities held
At 31 January 2021, the shares held by Crédit Agricole S.A. broke
down as follows:
No shares earmarked to cover commitments to employees and
Corporate Officers;
1,600,000 shares held under a market-making agreement to create
an active market for the shares.
III. Purposes of the share buyback programme
The authority to be granted by the shareholders at the Combined General
Meeting of Shareholders of 12 May 2021 is designed to allow Crédit
Agricole S.A. to trade in its own shares either on the Stock Market
or over the counter for any purpose permitted or to be permitted by
applicable laws or regulations.
In particular, Crédit Agricole S.A. may use this authorisation:
1.
to implement stock option plans for some or all of the Company’s
employees and/or some or all of the eligible Corporate Officers of
the Company or of the companies or groupings affiliated with it, now
or in the future, under the conditions defined by Article L.225-180
of the French Commercial Code;
2.
to allot or transfer shares to eligible Corporate Officers, employees
and former employees of the Company or of the Group, or to certain
categories thereof, as part of an employee profit-sharing or employee
savings scheme, as provided for by law;
3.
to award bonus shares under a bonus share plan as provided for
by Articles L.225-197-1
et seq
. and Articles L.22-10-59
et seq.
of
the French Commercial Code to some or all categories of eligible
Corporate Officers and employees of the Company, and/or of
companies and economic interest groupings affiliated to it pursuant
to Article L.225-197-2 of the French Commercial Code; and, more
generally, to honour obligations related to the allocation of Company
shares to such employees and Corporate Officers, notably under
variable compensation plans for employees who are financial
market professionals and whose activities have a material impact
on the Company’s risk exposure, in which case such allocations are
contingent upon such employees meeting performance conditions;
4
to ensure coverage of securities granting rights to Company shares;
5.
to ensure an active secondary market or liquidity of shares is
created by an investment services provider under a market-making
agreement, in compliance with market practice permitted by the
French Financial Market Authority;
6.
to proceed with the full or partial cancellation of the shares bought
back.
IV. Maximum percentage of share capital,
maximum number and characteristics
of shares that may be bought back
and maximum purchase price
1.
Maximum percentage of share capital to be bought
back by Crédit Agricole S.A.
Crédit Agricole S.A. is authorised to acquire up to 10% of the total
number of shares forming its share capital at the date of settlement
of the purchases. However, the number of shares purchased by the
Company and held with a view subsequently to exchanging them or
using them to pay for a potential merger, spin-off or asset transfer shall
not exceed 5% of the Company’s share capital.
In addition, the maximum total amount that Crédit Agricole S.A. may
allocate to the buyback of its shares during the term of the share buyback
programme is €4.3 billion.
The Board of Directors shall ensure that these buybacks are carried
out in accordance with regulatory requirements as set by law and
the European Central Bank.
2.
Characteristics of the shares covered
Class of shares purchased: shares listed on Euronext Paris
(Compartment A).
Name: Crédit Agricole S.A.
ISIN Code: FR 0000045072.
3.
Maximum purchase price
The purchase price for Crédit Agricole S.A. shares under the share
buyback programme may not exceed €20 per share.
V. Duration of programme
In accordance with Article L.225-209 of the French Commercial Code
and with the 29
th
resolution to be submitted to the Ordinary General
Meeting of 12 May 2021, this share buyback programme replaces the
unused portion of the programme approved by the Ordinary General
Meeting of 13 May 2020, and may be implemented until it is renewed
by a future General Meeting and, in any event, for a maximum term of
18 months as from the date of the Ordinary General Meeting,
i.e.
until
12 November 2022 at the latest.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
38
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Information on the share capital and shareholders
1
STOCK MARKET DATA
CRÉDIT AGRICOLE S.A. SHARE
Stock market performance
Three-year share performance
02/01/2018
02/03/2018
02/05/2018
02/07/2018
02/09/2018
02/11/2018
02/01/2019
02/03/2019
02/05/2019
02/07/2019
02/09/2019
02/11/2019
02/01/2020
02/03/2020
02/05/2020
02/07/2020
02/09/2020
02/11/2020
02/01/2021
16
14
12
10
8
6
4
2
0
In euros
Crédit Agricole S.A.
CAC 40 Index
DJ Stoxx 600 Banks
All curves are rebased on Crédit Agricole S.A.’s stock price at 2 January 2018.
Monthly change in the share price and in the volume of shares traded
0
100
200
300
400
500
Dec 17
Jan 18
Feb 18
Mar 18
Apr 18
May 18
Jun 18
Jul 18
Aug 18
Sep 18
Oct 18
Nov 18
Dec 18
Jan 19
Feb 19
Mar 19
Apr 19
May 19
Jun 19
Jul 19
Aug 19
Sep 19
Oct 19
Nov 19
Dec 19
Jan 20
Feb 20
Mar 20
Apr 20
May 20
Jun 20
Jul 20
Aug 20
Sep 20
Oct 20
Nov 20
Dec 20
0
3
6
9
12
15
18
Monthly volumes
Average
Volumes
(in millions)
Share price
(in euros)
Min
Max
Between 29 December 2017 and 31 December 2020, the last trading
day of the year, the Crédit Agricole S.A. share price went from €13.8
to €10.32, i.e. a decrease of -25% in three years, underperforming the
CAC 40 index (+4.5%) but outperforming the DJ Stoxx 600 Banks index
(-41% over the period).
In the course of 2020 (between 31 December 2019 and 31 December 2020),
the share price decreased by -20.2%, compared with decreases of -7.1%
for the CAC 40 and -24.3% for the DJ Stoxx 600 Banks Index.
The total number of Crédit Agricole S.A. shares traded between 1 January
and 31 December 2020 on Euronext Paris was 2.15 billion (1.52 billion
in 2019), with a daily average of 8.37 million (6.0 million in 2019). Over
this period, the stock traded at a high of €13.80 and a low of €5.70.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
39
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Stock market data
1
Stock market indexes
Crédit Agricole S.A. shares are listed on Euronext Paris, Compartment A,
ISIN Code: FR0000045072.
They are included in several indexes: the CAC 40 (featuring the 40 most
representative listed companies on the Paris Stock Exchange), the Stoxx
Europe 600 Banks Index (made up of 48 banking institutions in Europe),
and the FTSEurofirst 80 Index (representative of the largest companies
in the eurozone by market capitalisation).
Crédit Agricole S.A. strengthens its global CSR performance and maintains
itself in the main international socially responsible indexes, which bring
together the best performing companies according to strict ESG criteria.
Since 2004, it has also been in the FTSE4Good, and in the NYSE Euronext
Vigeo Eiris, Eurozone 120 and Europe 120 indexes since 2013. Since
2014, it has included the STOXX Global ESG Leaders index, and it rated
Prime since 2015 by ISS-ESG. Crédit Agricole S.A. was also one of the
best-rated French banks by the CDP (Carbon Disclosure Project) for its
climate policy, with a rating of A-, and by MSCI (Morgan Stanley Capital
International) with the rating of A for its overall CSR performance.
Stock market data
31/12/2020
31/12/2019
31/12/2018
31/12/2017
31/12/2016
Number of shares in issue
2,916,688,640
2,884,688,712
2,866,437,156
2,846,104,526
2,846,104,526
Stock market capitalisation
(in billions of euros)
30.1
37.2
27.0
39.3
33.5
Net earnings per share (NEPS)
(in euros)
1.20
1.39
1.39
1.12
1.12
Net book value per share (NBVPS)
(in euros)
19.0
19.0
18.2
17.5
16.8
Price/NBVPS
0.54
0.68
0.52
0.79
0.70
Net Tangible Book Value Per Share (NTBVPS)
(in euros)
13.0
12.8
11.3
10.6
11.4
Price by NTBVPS
0.79
1.01
0.83
1.30
1.03
PER (price/NEPS)
8.6
9.30
6.80
12.28
10.51
The stock’s high and low during the year
(in euros)
High (during trading day)
13.80
13.40
15.54
15.68
12.07
Low (during trading day)
5.70
9.10
9.10
11.06
6.79
Close (closing price at 31 December)
10.32
12.93
9.43
13.80
11.78
Shareholder return
The table below shows the total shareholder return for retail investors
in Crédit Agricole S.A. shares.
The calculation, which is based on the share price at the time of the
investment (initial public offering on 14 December 2001, or the beginning
of the year in other cases), takes into account the reinvestment of
dividends received (until 2005, this included a tax credit for 2004,
which accounted for 50% of the amount distributed), but does not
include the loyalty dividend of €0.035 per share paid for 2014 and
2015. The valuations are based on the closing share price on the day
of the investment.
The calculation also assumes that investors sold their pre-emptive
subscription rights and used the proceeds to take up the rights issued
at the end of October 2003, January 2007 and July 2008. All results
are presented before tax impact.
Holding period
Average annualised return
Cumulative gross return
1 financial year (2020)
-20.2%
-20.2%
2 financial years (2019 and 2020)
+8.0%
16.8%
3 financial years (2018 to 2020)
-5.7%
-16.3%
4 financial years (2017 to 2020)
0.6%
2.3%
5 financial years (2016 to 2020)
3.5%
18.6%
10 financial years (2011 to 2020)
4.1%
50.1%
Since the stock market listing (14/12/2001)
1.7%
39.1%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
40
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Stock market data
1
DIVIDEND CALENDAR
18 May 2021
Ex-dividend date, the amount of the dividend is offset against the opening share price on this date
19 May 2021
Record date, shares must be in bearer’s account on this date to receive the dividend
From 20 May to 3
rd
June 2021
Period in which shareholders can opt to receive dividend in cash or shares
9 June 2021
Dividend paid and shares delivered
2021 FINANCIAL COMMUNICATIONS CALENDAR
11 February
Publication of 2020 full-year results
7 May
Publication of 2021 first-quarter results
12 May
General Meeting of Shareholders
5 August
Publication of 2021 first-half results
10 November
Publication of 2021 nine-month results
CONTACTS
Financial Communication department
Clotilde L’Angevin
Tel.: +33 (0)1 43 23 32 45
Institutional investor relations
Tel.: +33 (0)1 43 23 04 31
investor.relations@credit-agricole-sa.fr
Retail investor relations
Toll-free number: 0 800 000 777 (from France only)
relation@actionnaires.credit-agricole.com
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
41
Refer to the glossary on page 681 for the definition of technical terms.
ABOUT CRÉDIT AGRICOLE S.A.
Stock market data
1
Introduction
44
1. Non-financial risks
45
1.1
Consultation of stakeholders
45
1.2
Materiality matrix
45
1.3
Analysis of non-financial risks
46
2. ESG strategy: being a committed
player in a socially acceptable
climate transition
51
2.1
An ESG strategy driven by the Group Project
51
2.2
Governance
51
2.3
Environmental strategy
56
2.4
Social strategy
70
2.5
Integration of ESG criteria in investment
and asset management policies
88
3. ESG risk management
90
3.1
The ESG risk approach
90
3.2
The integration of ESG issues into the
analysis of SME and mid-cap counterparty risk
91
3.3
TCFD Chapter: climate risk management
91
4. Results
96
4.1
Non-financial performance indicators
96
4.2
Human resources indicators
98
4.3
Recognition of non-financial performance
by stakeholders
104
Implementation of the Principles
for Responsible Banking
106
Cross-reference table
107
Report by one of the Statutory
Auditors, appointed as an independent
third party, on the non-financial
information statement included
in the management report
109
Independent Limited assurance
report on the indicators relating
to the implementation of the climate
strategy presented in Crédit Agricole’s
2020 Management Report
112
2
NON-FINANCIAL
PERFORMANCE
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
42
Refer to the glossary on page 681 for the definition of technical terms.
Methodology
The purpose of this chapter is to present the policies and actions undertaken by the Crédit Agricole S.A. entities and the way in which
corporate social responsibility has been placed at the heart of the value creation model. It presents the expectations of the stakeholders
included in the materiality analysis. The main Crédit Agricole S.A. non-financial risks in accordance with its business model (detailed in
Chapter 1), its business relationships and the services that it provides are detailed in Part 2. The Group has identified these risks using
methods developed by Crédit Agricole S.A.
Risks related to climate issues are analysed and described in Part
3.3 “TCFD Chapter: climate risk management”.
Crédit Agricole’s environmental, social and governance strategies are also presented. For each of these, the policies and actions that respond
to the main risks identified, together with the corresponding performance indicators, are detailed. In addition, and pursuant to the law of
27 March 2017, Crédit Agricole S.A. has established and is implementing a vigilance plan to identify risks and prevent serious violations of
human rights and fundamental freedoms, harm to personal health and safety, and damage to the environment that could potentially result
from the Group’s activities. This vigilance plan is described in Chapter 3.
The Statement of Non-Financial Performance
(DPEF)
allows Crédit Agricole S.A. to present specific social, societal and environmental
information according to how consistent it is with the principle risks or the policies carried out. It helps provide better information
to stakeholders about the management of social and environmental risks.
The DPEF covers the scope of Crédit Agricole S.A. (holding company) and its subsidiaries
(1)
. Where useful, however, we have also chosen to
mention information relating to the policies and action plans of the Regional Banks to inform our stakeholders about the highly integrated
dimension of our operations and present the social, environmental and societal impacts of the Group as a whole.
The DPEF is structured according to a specific plan:
Business model
The business model is the systematic and synthetic representation of the origin of value added by a company as
well as its partition between the various stakeholders in a clearly identified field of business and period.
The Business Model is available in Chapter 1 of this Universal Registration Document.
Key Risks
In order to identify the key non-financial risks for our activities, our business model and the geographical areas
where we operate, we used a methodology based on a three-step approach.
The methodology and key risks are presented on pages 45 to 50 of the Universal Registration Document.
Policies and Action Plans
Building on its ambitious ESG strategy, the Group has put in place policies and action plans that reduce identified
risks while helping to promote socially acceptable and sustained decarbonised growth.
The Policies and Action Plans are presented throughout pages 56 to 89 of the Universal Registration Document.
Results and performance
indicators
To illustrate the ambitious policies put in place, the DPEF presents the key indicators that are monitored rigorously
by the Group.
The performance indicators are presented on pages 96 and 97 of the Universal Registration Document.
(1) Data related to the direct environmental footprint correspond to Crédit Agricole S.A. entities with more than 100 FTEs, excluding Crédit Agricole Vita S.p.A., Sabadell Asset
Management S.A., S.G.I.I.C., CA Indosuez Wealth Italy S.P.A, EFL Finance S.A., Europejski Fundusz Leasingowy (E.F.L), Crédit Agricole CIB AO, and Crédit Agricole Securities Asia
BV (Tokyo).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
43
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
INTRODUCTION
(1) Please refer to the glossary for the definition of Raison d’Être.
The fight against large-scale climate change, environmental degradation
and loss of biodiversity has become an urgent one. We are faced with a
totally new equation, which we are scrambling to solve. In the space of
a few years, we must successfully
disconnect economic growth, the
agent of progress and social integration, from the production of
greenhouse gases, which bring climate chaos and social upheaval
.
In this worldwide race, in which everyone is more or less in agreement
on the solutions to long-term challenges, short-term pressure is an
obstacle. This pressure is nothing new. But the current pandemic has
plunged us into an economic environment of unprecedented harshness.
If a return to growth must be sought out as a prerequisite for a return to
social peace, the scale of climate challenge and our common destiny
must encourage us to start adopting coherent trajectories, with a goal
of bringing global warming under control by the end of the century. To
avoid the “tragedy of the horizons”, the disharmony between the short
and the long term,
we need to fundamentally rethink the nature of
growth and perceptions of progress: we must succeed in building a
sustainable future under duress
. Climate transition requires first and
foremost that we take into account our constraints and interdependencies
and the limits of our planet’s resources.
Faced with this challenge, we are neither pessimistic nor optimistic,
but bearers of our responsibility
to support the metamorphosis of our
economic model while avoiding any brutal disruptions. To be successful,
this metamorphosis must be accepted and supported by society. The
issue of social justice and the climate issue are intimately linked. In the
face of the measures increasingly required by the climate emergency,
we must be very vigilant in maintaining the principles of justice and,
more generally, the values that underpin our social cohesion. We want
to
be the committed player in a just climate transition
.
This is the whole meaning of
our
Raison d’Être
(1)
, which places
usefulness to our customers on the same level as our usefulness
to society
. Our ambition is to integrate corporate social responsibility
into our value creation model. We know that this ambition is a complex
one to realise, and that supporting the transition of the economy also
involves the gradual but necessary transformation of our own business
lines. We must include the issue of climate and social cohesion at the
heart of our value-creating activities.
It is
this ambition that is the foundation of our climate strategy, and
scientific knowledge is its backbone
. The Crédit Agricole Group and,
by extension, Crédit Agricole S.A., is committed to gradually aligning
all of its financing and investment portfolios on a trajectory compatible
with the target adopted by the Paris Agreement in 2015. This target is
based on the rigour of the IPCC’s scientific work, which recommends
rapidly reducing our GHG emissions so that we can hope to limit global
warming and its terrible consequences for life to less than 2°C by the
end of the century.
It is a challenge for any financial institution to succeed in following
this decarbonisation trajectory based on day-to-day financing and
investment decisions,
especially for a customer-focused universal
bank with multiple business lines and an extensive local presence such
as Crédit Agricole. This is why we have chosen to use the International
Energy Agency’s sustainable development scenario, which seems to
us to be both the most ambitious and the most realistic to date, to
determine the reallocation trajectory of our assets in the energy sector
in particular. We have also created a scientific Committee comprised of
independent academic climate experts. This committee assists us in the
choice of our guidelines and major objectives and in the regular revision
of our sector policies, based on the evolution of scientific knowledge.
The Crédit Agricole Group and, by extension, Crédit Agricole S.A.,
wants to fully play its role in supporting the climate transition
and influencing a more sustainable economy.
However, it is only
through coherent action on a global scale that we can hope to respond
collectively tomorrow to the climate and social challenges we face today.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
44
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
Introduction
1. NON-FINANCIAL RISKS
1.1 CONSULTATION OF STAKEHOLDERS
(1) Source: CSA Research.
The needs of stakeholders are constantly changing.
Crédit
Agricole S.A. listens to them in various ways:
regular meetings with civil society actors (professional unions,
associations, NGOs);
customer consultation (including through special questionnaires that
allow us to monitor Net Promoter Score (NPS)) and economic players
(through our participation in national or international working groups);
regular consultation of employees through an annual questionnaire
(Engagement and Recommendation Index - ERI);
the thorough handling of controversies by Crédit Agricole S.A.;
relations with shareholders/investors;
dialogue with the ECB and supervisory authorities;
relations with our commercial partners and suppliers as part of
sustainable partnerships.
Assessment of stakeholder expectations identified through a national
survey. Launched at the end of 2014, this consultation process is carried
out every two years to identify changes in stakeholder expectations and
the possible appearance of new challenges.
Even though Crédit Agricole’s reputation and familiarity remain stable,
its
positive image is growing strongly and it ranks first in the banking
sector
(1)
.
Crédit Agricole’s bonding social capital increased on almost all
of the dimensions tested. Crédit Agricole is identified first and foremost
as a retail bank, accessible to everyone and economically useful. To exit
from the public health crisis and aid economic recovery, French people
expect banks to take action: 92% consider their role to be important,
and 57% even consider it essential.
The fight against climate change
emerges in this context as a real challenge
that French people would
like to see taken on by companies as part of economic recovery (90%
of them consider it to be an important issue).
1.2
MATERIALITY MATRIX
The results of the stakeholder consultation and the analysis of the main non-financial risks enabled us to represent them in a materiality matrix
structured along two axes: the intensity of stakeholder expectations and the impact of the risk determined by Crédit Agricole S.A.
1
2
3
4
5
6
1
2
3
4
5
6
Integrating ESG
into our business lines
Mitigation of
climate changes
Development of
human capital
Sustainable use of
resources
Combatting
corruption
Fair
practices
Involvement with
communities
Combatting
cybercrime
Data
protection
EXPECTATIONS OF
STAKEHOLDERS
IMPACT ON CRÉDIT AGRICOLE’S
ACTIVITIES
Access to essential
services
Responsible
purchasing
Employer/employee
relations
Social dialogue
Working conditions
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
45
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
1. Non-financial risks
1.3
ANALYSIS OF NON-FINANCIAL RISKS
(1) Please refer to the glossary for the definition of Raison d’Être.
(2) As the risk of tax evasion is a requirement in the regulation pertaining to the Statement of Non-Financial Performance, we have published a “2.4.4 Taxation and
responsible lobbying policy” and a related performance indicator.
Methodology
In order to identify the Group’s main non-financial risks with regard to
its activities, business model, geographical locations and stakeholder
expectations, Crédit Agricole’s methodology is based on a structured
step-by-step approach:
Step 1: Formalisation of non-financial areas defined
by the
Raison d’Être
(1)
of the Group
In 2019, the Crédit Agricole Group formalised its Raison d’Être(1), and
on that basis, the Group Project was developed around three pillars
defining a unique relationship model:
excellence in customer relations: becoming the bank of preference
for individuals, entrepreneurs and institutions;
empowered teams for customers: supporting the digitisation of
business lines by offering customers human, responsible and
accessible skills;
commitment to society: amplifying our mutualist commitment by
nurturing our position as the European leader in socially responsible
investment.
Step 2: Complementary procedure to define
a comprehensive scope for non-financial risks
The issues defined in ISO 26000 and the subjects listed in section II,
Article R. 225-105 were combined with the three pillars of our Group
Project, which allowed us to identify some thirty non-financial risks.
Step 3: Identification of non-financial risks
that may affect the Group’s activities
This step enabled us to identify some fifteen significant short-, medium-
or long-term risks for Crédit Agricole. The risks identified were assessed
on the basis of two criteria: their potential severity and their probability
of occurrence. A time dimension was also used for certain risk factors
that are less important today but could become more significant in the
future. The assessment was made using “gross criteria” that did not
include the Group’s risk mitigation mechanisms.
Step 4: Integration of stakeholder expectations
into the analysis
The results of the stakeholder consultation conducted in 2020 enabled us
to add stakeholder expectations to the analysis described in the previous
three steps.
Following this analysis, each of the non-financial themes
was assessed on an intensity scale with six levels and represented
in the materiality matrix here above.
SOCIAL MATERIALITY
Impact of the company’s activities
on its environment
FINANCIAL MATERIALITY
Environmental impact
on the company’s activities
The non-financial themes identified at the end of Step 4 were analysed
using the
principle of double materiality
.
Social materiality
presents the impact of Crédit Agricole S.A. activities on its ecosystem.
Financial materiality
formalises the impact of the ecosystem on Crédit
Agricole S.A. business lines. This work was carried out as part of a
participatory process involving the Group’s CSR, Risk, Compliance and
HR departments
(2)
. It is also used to assess the material risks directly
related to our activities, as part of updating our vigilance plan (see
Chapter 3 “Corporate governance”, part 1.4 “Vigilance Plan”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
46
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
1. Non-financial risks
Key ESG issues
Description of the key ESG risks
Risk
characterisation
Risk management
policy
Contribution
to SDGs
Integrating ESG
risks and
opportunities into
our business lines
SOCIAL MATERIALITY
Financing and investment activities generate environmental and social
externalities that have to be identified and estimated. The financial sector
also has an ability to exert influence through the integration of ESG criteria
in financing and investment decisions, which gradually orients the
economy towards a more sustainable development model.
FINANCIAL MATERIALITY
Climate change and the occurrence of natural events may affect the
financial statements. The integration of ESG criteria helps to provide a
better understanding of the exposure of assets to non-financial risks.
Responsible investment is an opportunity for positive value creation
because it responds to a growing demand from investors and customers,
especially individual customers, who want to direct their savings to support
sustainable economic activities. In addition, supporting corporate
customers in the development of sustainable business models helps to
prevent the deterioration of counterparty risks.
Major risk
with short-,
medium- and
long-term impact
2.5. Integration of
ESG criteria in
investment and
asset management
policies
Mitigation of
climate changes
and adaptation
SOCIAL MATERIALITY
The activities of Crédit Agricole S.A. may have an impact on the climate,
either directly (direct carbon footprint) or indirectly (indirect carbon
footprint related to the financing and investment portfolios). Failure to take
these negative externalities into account may generate an image risk for
Crédit Agricole S.A. in the short, medium and long term.
FINANCIAL MATERIALITY
Climate change is likely to affect Crédit Agricole S.A.’s financial statements
in the long term. Climate risks are mapped as major risks. Understood as
risk factors that influence existing risks (counterparty, market, operational,
etc.), they cover physical and transition risks. These risks are considered
material in the short term for acute physical risks, in the long term for
chronic physical risks, and in the potentially short/medium or long term
for transition risk.
Major risk
with short-,
medium- and
long-term impact
2.3.1 The Group’s
climate strategy
3.2 The integration
of ESG issues into
the analysis of SME
and MID-CAP
counterparty risk
Access to
essential services
SOCIAL MATERIALITY
Access to financial services and products (current accounts, payment
instruments, credit, insurance) is one of the essential levers in the fight
against exclusion. Opening a savings account, for example, is part of
setting up personal or professional projects and makes one more aware
of life’s ups and downs. Because it compensates for the consequences of
damage or loss, insurance contributes to a more resilient society.
FINANCIAL MATERIALITY
In addition to the impact on Crédit Agricole S.A.’s reputation and loss of
attractiveness, the exclusion of the most modest customer groups would
result in a significant loss of customers and, by excluding people from
economic and social life, heighten the fragility of the regions in which the
Group operates.
Major risk
with short-,
medium- and
long-term impact
2.4.1. A universal
approach to our
businesses:
being there for
everyone
Employment
and employer/
employee
relations
SOCIAL MATERIALITY
Crédit Agricole S.A. strives to maintain a working relationship with all of
its employees based on trust, respect, involvement and recognition.
Without these elements, our impact on the labour market in France would
be negative as a leading recruiter in the private corporate market,
particularly among young people.
FINANCIAL MATERIALITY
Against a backdrop of profound change, losing employee engagement is
a risk that can impact the Group’s results. This engagement is essential
to the success of Crédit Agricole S.A.’s organisational and managerial
transformation.
Major risk
with short-,
medium- and
long-term impact
2.4.3. The Human
Resources
ambition: to
strengthen
autonomy and the
assumption of
responsibility
An organisational
transformation to
be closer to
customers
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
47
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
1. Non-financial risks
Key ESG issues
Description of the key ESG risks
Risk
characterisation
Risk management
policy
Contribution
to SDGs
Working
conditions and
social protection
SOCIAL MATERIALITY
Safeguarding the health and safety of its employees is one of Crédit
Agricole S.A.’s priorities. In addition to health and safety, Crédit Agricole S.A.
attaches great importance to the quality of working life and working
conditions, which are major drivers of team performance and commitment.
There are several kinds of risks associated with this: a decline in team
commitment and individual and collective performance; economic risks
related to loss of productivity and the imbalance of existing insurance
schemes; and legal risks related to Crédit Agricole S.A.’s obligation to
provide security for its employees.
FINANCIAL MATERIALITY
The role of private companies in social protection is increasingly important.
Because of the number of our employees, our insurance system has to be
an effective complement to public schemes.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.3. The Human
Resources
ambition: to
strengthen
autonomy and the
assumption of
responsibility
Strengthening the
framework of trust
between employees
and the company
Social dialogue
SOCIAL MATERIALITY
The quality of social dialogue depends on the smooth functioning of
relations (negotiation, consultation or simple exchange of information)
between Crédit Agricole S.A. and all employee representatives. Failure to
comply with the rules in this area presents legal and reputational risks for
Crédit Agricole S.A. and impacts the labour climate and Crédit
Agricole S.A.’s ability to generate employee support and cohesion around
its strategic projects. Strengthening the social compact is one of the
ambitions of the Group’s Human Project, which illustrates the importance
the Group attaches to developing and maintaining a rich social dialogue.
FINANCIAL MATERIALITY
Quality social dialogue can prevent and mitigate the impact of conflicts
that originate outside Crédit Agricole S.A.’s entities.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.3. The Human
Resources
ambition: to
strengthen
autonomy and the
assumption of
responsibility
Strengthening the
framework of trust
between employees
and the company
Development of
human capital
SOCIAL MATERIALITY
Crédit Agricole S.A.’s human capital is one of the key sources for its
business model and its value creation. Inadequate career and skills
management (integration, mobility and career paths, skills management,
etc.) and the loss of key talent and resources could impact Crédit
Agricole S.A.’s business continuity, its performance, and its ability to attract
and retain employees. This dysfunction in HR management would be
detrimental to the labour market in France.
FINANCIAL MATERIALITY
Changing work patterns and digital transformation are reconfiguring the
talent market with increased competition, which can lead to risks for our
company if we do not have an appropriate human capital development
policy.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.3. The Human
Resources
ambition: to
strengthen
autonomy and the
assumption of
responsibility
Encouraging
responsibility
Promotion of
corporate social
responsibility in
the value chain
(responsible
purchasing)
SOCIAL MATERIALITY
An increase in trade and production leads to strong pressures on the
environment and resources. It also creates risks for people in terms of
working conditions and safety, especially in areas where local regulations
do not guarantee respect for human rights.
FINANCIAL MATERIALITY
The supply and subcontracting chains are becoming increasingly long and
complex, which inevitably brings with it a multiplication of risks for Crédit
Agricole S.A. The identification and control of risks in our value chain with
respect to human rights, health, safety, security, fundamental freedoms
and environmental protection are essential in order to create value for our
company and ensure the sustainability of our supplies.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.5. Responsible
purchasing
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
48
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
1. Non-financial risks
Key ESG issues
Description of the key ESG risks
Risk
characterisation
Risk management
policy
Contribution
to SDGs
Combatting
corruption
SOCIAL MATERIALITY
Exposure to the risk of corruption is all the more important as there is a
multiplicity of trades and countries. It must therefore be given particular
attention to control its effects on fair trade practices (violation of
competition rules) or fraud. Commitments in the fight against corruption
strengthen the confidence of customers, employees and institutions.
FINANCIAL MATERIALITY
A presence in some countries where the risks of corruption are high
encourages increased rules of vigilance. The application of the so-called
Sapin II Law therefore requires the strengthening of mechanisms and tools
for the prevention and detection of corruption. Reputational and financial
risk is considerable. Obtaining ISO 37001 certification is a sign of
confidence for stakeholders.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.2. A strong
ethical culture
Fair practices in
marketing,
information and
contracts
SOCIAL MATERIALITY
Customers have high expectations of the bank and insurer as a trusted
partner in climate transition financing and elsewhere. Compliance with
the duty to advise is of paramount importance in banking and insurance
activities, including the consideration of ESG preferences. This advice must
be fair, lest a risk of loss of confidence on the part of customers be created
that impacts approvals for the distribution of financial instruments, which
may result in penalties by regulators.
FINANCIAL MATERIALITY
The training of employees is essential with respect to marketing practices
and advisory duties. The same is true for the need to adapt tools.
Regulations are strict and image and financial damage can be high.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.2. A strong
ethical culture
Protection of
consumer data
and privacy
SOCIAL MATERIALITY
The alteration of customers’ personal data (destruction, loss, theft, misuse,
etc.) is likely to infringe on their rights and privacy. They therefore have a
right to control the use of their personal data with respect to such areas
as information on collection and its purposes; right of access, rectification
and right to erasure.
FINANCIAL MATERIALITY
The image and financial damage resulting from a loss of integrity of
personal data held by an institution can be considerable. Provisions such
as the GDPR and IT security rules are indispensable.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.2. A strong
ethical culture
Exposure to
cybercrime
SOCIAL MATERIALITY
The protection of their data and banking transactions is a major concern
for our customers who, as users of digital tools, are exposed to various
forms of cyber malevolence (phishing, fake sites, fake investments, fake
loans, etc.) used for the purposes of fraud, swindling or identity theft, which
may cause them financial and moral damage.
FINANCIAL MATERIALITY
Any intrusion or attack against Crédit Agricole S.A.’s information systems
and communication networks and/or any resulting disclosure of
confidential information of customers, counterparties or employees could
cause significant losses and could have an adverse effect on Crédit
Agricole S.A.’s reputation, operating results and financial position.
Highly significant
risk with short-,
medium- and
long-term impact
2.4.6. Combatting
cybercrime
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
49
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
1. Non-financial risks
Key ESG issues
Description of the key ESG risks
Risk
characterisation
Risk management
policy
Contribution
to SDGs
Sustainable use of
resources
SOCIAL MATERIALITY
Our planet faces many challenges related to human activities
(overexploitation of natural resources, rising costs of access to drinking
water, air, water and land pollution, soil sealing, loss of biodiversity, etc.),
directly impacting not only the economic activities of companies but also
our food and health security. Through the ecosystem services rendered to
our society (food, wood, pollination, soil formation, water and air quality,
photosynthesis, etc.), the protection and restoration of natural resources
is essential to maintain sustainable economic activities, prevent the
emergence and spread of diseases and fight against global warming.
FINANCIAL MATERIALITY
As an investor, financier and insurer in all sectors of the economy and
agriculture, maintaining biodiversity and natural resources is essential to
Crédit Agricole S.A.’s activities. Their deterioration would impact the
financial results of companies and farmers and foresters, which are Crédit
Agricole S.A.’s customers. The integration of the concept of resource
sustainability in sector policies and ESG criteria, as well as raising
awareness of these subjects among our customers, are essential acts.
Significant risk
with medium-
and long-term
impact
2.3.7. Measures
and targets related
to our direct
environmental
footprint
Involvement with
communities
SOCIAL MATERIALITY
A balanced economic development model based on a region’s assets is a
source of social cohesion, prevents fragility and promotes sustainable
development.
FINANCIAL MATERIALITY
Involvement by Crédit Agricole S.A. with communities is a strong
expectation of its stakeholders, whose absence would have a negative
impact on its attractiveness and reputation and would generate a rejection
of its economic activities by local stakeholders.
Significant risk
with short-,
medium- and
long-term impact
2.4.1. A universal
approach to our
businesses:
being there for
everyone
Economic
development
for all
Developing
preventive
actions
Promoting
social cohesion
and living well
together
Crédit Agricole S.A.’s support for SDGs (Sustainable Development Goals)
is in line with these priority issues. Launched by the United Nations
in 2015, it consists of 17 goals, broken down into 169 targets, to create a fairer and more prosperous world by 2030. To strengthen its actions,
the Group has mapped these links between the SDGs, the main non-financial risks identified and the policies implemented. The Group contributes
directly to the SDGs through concrete actions that appear in each of the parts of this document and are presented in the table above.
The risk linked to tax evasion being a regulatory obligation Non Financial Performance Report, we publish a policy 2.4.4 “Taxation and responsible
lobbying policy” and an associated performance indicator.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
50
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
1. Non-financial risks
2.
ESG STRATEGY: BEING A COMMITTED PLAYER
IN A SOCIALLY ACCEPTABLE CLIMATE TRANSITION
2.1 AN ESG STRATEGY DRIVEN BY THE GROUP PROJECT
(1) Please refer to the glossary for the definition of Raison d’Être.
(2)
Fédération Nationale du Crédit Agricole - Federative organisation of Crédit Agricole Group.
To combat climate change, the social, environmental and governance
components of an economic model must evolve. In this context of
transition, Crédit Agricole’s ESG strategy is to support climate transition
while promoting social cohesion, which is a factor in the resilience of
our society. The Group is implementing this strategy by:
giving support
to all of its individual customers and corporates in
France and abroad;
contributing its expertise and proactive approach
to the various
ecosystems in which it participates, its involvement in the definition
of European standards and its cooperation and transparency in the
dialogue with its stakeholders;
influencing and promoting
the transformation process by integrating
ESG criteria into all of its business lines and developing innovative tools.
This strategy revolves around three axes:
1.
Governance committed to building a solid and sustainable
business model
Conducted at the highest level by the Group’s senior executives, the
deployment of the ESG strategy is driven by a dedicated governance
structure that guarantees long-term commitments.
2.
Consideration of scientific analyses
In 2020, the Crédit Agricole Group established a Scientific Committee
made up of independent experts to support and guide decision-
making and the implementation of its climate strategy. The work of
that Committee contributes to the corporate governance of Crédit
Agricole S.A.
3.
An inclusive approach that promotes social cohesion
Faithful to its mutualist values of solidarity and in line with its
Raison
d’Être
(1)
, Crédit Agricole adopts a universal approach and caters to
all customers, from the most modest to the most affluent.
2.2
GOVERNANCE
2.2.1 Governance that is representative
of the Group’s identity and guarantees
long-term commitments
The governance of Crédit Agricole S.A., which is the central body of the
Crédit Agricole Group, a listed company that is a member of the CAC 40
index and the holding company for the business line subsidiaries, makes
it possible to reconcile the interests of the customers, the consideration
of social and environmental issues, and respect for the mutualist values
that form the basis of Crédit Agricole’s identity.
It is based on a clear separation between executive and non-executive
control and supervisory responsibilities. The Chairman of the Board of
Directors is Chairman of the Regional Bank and also Chairman of FNCA
(2)
.
In addition, the majority representation of the Regional Banks on the
Board of Directors reflects the Group’s cooperative basis and ensures
a sustainable and fair development model for the Crédit Agricole Group
entities for the benefit of all stakeholders: customers, member customers,
shareholders, investors, suppliers and employees. The Chairmen of a
Regional Banks who are Directors of Crédit Agricole S.A. – although
they are not considered independent Directors – contribute to Crédit
Agricole S.A.'s Board of Directors the visions of entrepreneurs with
strong ties to their regions in sectors other than banking.
The Board also benefits from the technical expertise and managerial
skills provided by the six independent Directors who hold or have
held senior positions in major international groups. Added to this is
operational knowledge of the business lines and corporate bodies of the
three employee Directors. Moreover, the Board has incorporated ESG/
sustainable development expertise into the range of skills required for
its proper functioning.
The Board has balanced representation of women (47% of members)
and men. With the exception of the Strategy and CSR Committee, which
is chaired by the Chairman of the Board, the five other Specialised
Committees of the Board are chaired by independent Directors. Detailed
information on corporate governance and the composition of the Board
can be found in Chapter 3 “Corporate Governance”. The Board has
integrated ESG/sustainable development expertise into its grid of skills
permanently necessary for its proper functioning.
2.2.2 Governance of non-financial
performance
At the Company’s highest levels,
the Board of Directors
ensures that
the Group’s strategy and business take its environmental and social
concerns and risks into account. The Board ensures the consistency of
the Company’s commitments and project as part of the monitoring of the
implementation of the Societal Project, which is a major component of
the Group Project set forth in the “Ambitions 2022” Medium-Term Plan.
It takes environmental and social concerns and risks into account in its
strategic decisions. To that end, it relies on the strategic analyses and
risk management policies presented to it and on the review of the risk
strategies submitted for adoption. Finally, it reports on the Company’s
ESG strategy and non-financial performance to the General Meeting
and ensures the transparency and fairness of that communication.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
51
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
2. ESG strategy: being a committed player in a socially acceptable climate transition
In order to facilitate the inclusion of social and environmental concerns
and risks in its decisions, the Board has chosen to entrust the review
of its ESG strategy to a dedicated committee, the Strategy and CSR
Committee, while maintaining a cross-functional approach that involves,
depending on the topic, most of
its Specialised Committees
, in particular
the Appointments and Governance Committee, the Risk Committee and
the Compensation Committee.
The
Strategy and CSR Committee
, chaired by the Chairman of the
Board of Directors, reviews the Group’s ESG strategy and analyses
the results of all policies implemented and actions taken with regard
to the Group’s non-financial performance. It monitors the preparation
of non-financial reporting as well as changes in non-financial ratings.
The
Risk Committee
reviews the overall strategy and risk appetite
of Crédit Agricole S.A. and the Crédit Agricole Group, which includes
social and environmental risks. It analyses the Risk Strategies of the
entities and business lines, in particular the Climate Strategy, before
proposing their adoption to the Board.
The
Compensation Committee
assesses the general principles of the
compensation policy applicable to all Crédit Agricole S.A. entities and
monitors the implementation of that policy to ensure compliance with
regulatory provisions, including the principle of fairness. It ensures
that the Group’s ESG performance criteria are taken into account in
the compensation policy.
The Group’s non-financial performance is supervised by
the Executive
Committee
and
the Management Committee
, which monitor the
definition of the ESG strategy and its operational implementation as part
of the oversight of the Group Project and more specifically the Societal
Project, which is presented quarterly.
The implementation and deployment of the ESG strategy in the business
lines is coordinated within
cross-functional committees
, which are
under the authority of senior executives at the highest levels of the Group.
The Group Societal Project Committee
, which is chaired by a
Regional Bank Chairman, is made up of 12 members, half are Chief
Executive Officers of Crédit Agricole S.A. and the other half of whom
are Regional Bank senior managers. It monitors the implementation of
the Group’s employment-related commitments and the consistency of
its ESG strategy. It meets quarterly and monitors the implementation
of the Group’s climate strategy, relying on the work performed by two
specialised committees: the Scientific Committee and the Climate
Strategy Monitoring Committee.
The Group Risk Committee
, chaired by Crédit Agricole S.A.’s Chief
Executive Officer, approves the risk strategies presented by the entities
and business lines. These strategies require the prior approval of
the Risk department and, in the case of strategies that apply to
business sectors in which the social and environmental impacts are
potentially high, the approval of the CSR department. It approves the
Climate Risk Strategy prepared jointly and reviewed each year by
the Risk department and the CSR department (see Part 3 “ESG risk
management”).
The CSR Committee
, which is chaired by the Crédit Agricole S.A.
Corporate Secretary and made up of representatives of the Executive
Management of the subsidiaries and business lines, proposes the
Group’s ESG strategy, coordinates its deployment and monitors its
progress within Group entities. It is based on the work carried out by
the CSR department, which is made up of ten employees who report
to the Head of CSR, who is a member of the Group Management
Committee. This Committee, with the support of the managers and
a network of 150 CSR contributors (20 CSR officers and reference
persons), is responsible for disseminating the Group’s ESG strategy
to all employees, who all contribute to its implementation.
The human resources devoted to the development of CSR in the Crédit
Agricole S.A. have increased considerably. Accordingly, to actively
contribute to the transformation of a less carbon-intensive economy, the
Group is strengthening the expertise within its teams: Crédit Agricole CIB,
for example, has set up an internal network of 80 experts in
Sustainable
Banking who represent all of the bank’s business lines to expand the
knowledge of ESG culture and increase creation of innovative product
solutions.
To support the 150 CSR experts across the various Group entities,
Crédit Agricole S.A.’s CSR department, which ensures the consistent
implementation of the Crédit Agricole S.A. ESG strategy and is in charge
of the implementation of the societal pillar of the 2022 MTP, has increased
its staff from four to nine experts.
Main ESG strategy and risk bodies
Main cross-business ESG strategy and risk steering bodies
BOARD OF DIRECTORS
EXECUTIVE COMMITTEE
MANAGEMENT COMMITTEE
Strategy
and CSR Committee
Risk Committee
Compensation Committee
Informs and advises
Climate strategy
Authorises, guides and monitors
Group Societal
Project Committee
Climate Strategy
Operational Monitoring
Committee
Group Risk
Committee
CSR
Committee
Scientific
Committee
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
52
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Governance and oversight of non-financial performance
Crédit Agricole S.A. Board of Directors
Group Societal Project Committee
Ensures the consistency and observance of the Group’s societal and environmental commitments
Network of CSR officers and ESG centres of expertise
Crédit Agricole S.A. Executive Committee
Crédit Agricole S.A. Management Committee
CSR Committee
Climate Strategy
Operational
Monitoring Committee
Group
commitment
bodies
Cross-business
steering
bodies
FNCA
(1)
Federal Bureau
Roll-out
and coordination
FReD action plan
Group Non-Financial Reporting Committee
Monitors the development of the non-financial reporting system
2021
Climate strategy governance
The governance of ESG strategy, with a special focus on climate strategy
The Group has established a dedicated governance structure with the specific mission of overseeing the implementation of its climate
strategy. The work of the two Committees created within this framework informs the discussions of the
Group Societal Project Committee,
which is its umbrella committee.
—
The Group Societal Project Committee
is comprised of 12 Chief Executive Officers and Chairmen from the Regional Banks (six) and
Crédit Agricole S.A. Group entities (six). It coordinates the societal pillar of the Group Project and oversees its implementation.
—
The Climate Strategy Operational Monitoring Committee
brings together the entities’ expertise related to the various business
areas. Held
at least
every two months, it ensures the consistent operational implementation of the Crédit Agricole S.A. entities’ climate
commitments.
-
In 2020, the Committee considered the operational consequences of the decisions arising from the climate commitments made in
June 2019. Most of the sessions were devoted to the implementation of the coal policy in the relevant entities and to the verification
of the construction stages of the climate transition rating.
—
The Scientific Committee is a multidisciplinary body composed of 11 external members
who are recognised experts in climate
and environmental issues (academic partners or individuals) and meet on a quarterly basis.
Philippe Drobinski
Professor at the
École Polytechnique
Director of the Dynamic Meteorology Laboratory of the Pierre Simon Laplace Institute (PSLI)
Jean-Charles Hourcade
Researcher at the International Center for Research on Environment and Development (ICRED)
Philippe Ithurbide
Senior Economic Advisor Amundi
Pierre Jacquet
Professor at the
École des Ponts
ParisTech
President of the Global Development Network
Sylvie Lemmet
Senior Advisor to the Court of Auditors
Hervé Le Treut
Member of the Academy of Sciences
Professor at the
École Polytechnique
and at the University of Paris Sorbonne
Emmanuelle Porcher
Deputy Director and Professor, National Museum of Natural History/Center of Ecology and Conservation Sciences
Valérie Quiniou-Ramus
Foresight and Research Executive Director of ADEME (French Environment and Energy Management Agency)
Stéphane Siebert
Director of technological research at the French Atomic Energy and Alternative Energies Commission (CEA)
André Sobczak
Academic and Research Director
Holder of the CSR Chair of Audencia Business School, Nantes
Stéphane Voisin
Head of the interdisciplinary program on green and sustainable finance at LBI (Louis Bachelier Institute)
Its mission is to shed light, through the specific expertise of each of its members, on issues related to the implementation of the
climate strategy and to draft recommendations on its objectives for the Group Societal Project Committee.
-
In 2020, the main tools deployed following the June 2019 climate commitments (the coal policy and the climate transition rating) were
presented to the Scientific Committee. The experts approved the rigour and relevance of the objectives adopted for the implementation
of those tools. The Scientific Committee was also asked to review in the context of the COVID pandemic the doctrinal document
drafted by the Group Societal Project Committee and to analyse the consequences of the crisis for the Group and its climate strategy.
(1)
Fédération Nationale du Crédit Agricole - Federative organisation of Crédit Agricole Group.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
53
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Scientic Committee
Scientific partners
for climate financing
Monitoring Committee
Business Functions
of the Group’s Green
Finance business lines
Group Societal Project Committee
Senior executives of the Regional Banks
and subsidiaries of Crédit Agricole S.A.
In addition to the oversight provided through dedicated governance, the Group’s climate strategy is monitored by the
CSR Committee
and
the Group’s Board of Directors through its
Strategy and CSR Committee
.
Presentations on the Group’s climate strategy are also given to the Executive Committee and the Management Committee on at least a
quarterly
basis. The definition of the strategy as well as its operational implementation are discussed during these presentations.
Finally, the governance of climate risks, which could have a negative impact on the Group’s activities, is treated in a chapter dedicated to
ESG risk management (see Part 3 “ESG risk management”).
Contribution of ESG performance to the compensation
of executive corporate officers
Aligned with the Company’s social interest, the reward policy for
executive corporate officers takes into account the dimensions of
sustainable performance beyond short-term economic results alone.
It integrates non-financial criteria including criteria related to ESG
performance, in particular the criteria for the implementation of the
Societal Project. Moreover, a portion representing 60% of the variable
compensation awarded for one year is deferred over three years to
strengthen the alignment with the Group’s long-term performance. The
acquisition of this deferred portion is subject to the achievement of three
complementary performance targets, which include a target linked to
Crédit Agricole S.A.’s societal performance. This is measured by a target
index to be achieved, which is calculated as part of the internal ESG
performance reporting system (FReD). Detailed information on rewards
for corporate officers is available in Chapter 3 “Corporate governance”,
part 4 “Rewards policy”.
Annual variable compensation criteria
CEO
Deputy CEO
FINANCIAL CRITERIA
60%
Financial performance
Underlying net income Group share
20%
20%
RoTE
20%
20%
Cost/income ratio, excl. SRF
20%
20%
NON-FINANCIAL
CRITERIA
60%
3 pillars of the Medium-Term Plan
Customer Project, excellence in customer relations
9%
7%
Human Project, empowered teams for customers
9%
7%
Societal Project, our commitment to society
9%
7%
Technological transformation
3%
9%
Risk and compliance management
5%
10%
Employee engagement with the Group
5%
0%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
54
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
2.2.3 Monitoring non-financial performance with the new ESG platform
In 2020, the Group established a
new ESG performance monitoring system
to ensure that the commitments made in the context of the
Societal Project are solid in two respects:
—
by establishing quantified, transparent and auditable communication of non-financial performance;
—
by providing a decision-making support tool for entities to monitor strategy, trajectories and non-financial performance.
This system is based on the creation of an ESG Performance Monitoring platform that centralises the collection, intake and processing
of data from internal and external sources. This innovative tool offers a comprehensive vision of the Group’s non-financial performance,
calculating and reporting key indicators to meet the needs of various types of users. It also hosts and calculates a climate transition rating,
which is a dialogue and support tool for customers in the energy transition process, and provides it to users who need it, especially as part
of business relationships (see Part 2.3.3 “Supporting economic sectors on the way to climate transition”).
This platform is a valuable asset for the Group, as it enables us to meet regulatory requirements, measure our societal impact and identify
growth opportunities, strengthen non-financial knowledge of our customers, improve the efficiency and agility of our reporting processes
and give meaning to the daily actions of our employees. Like the financial information production platforms, this non-financial information
production platform is designed to be enhanced with new functionalities as strategic and operational necessities or regulatory requirements arise.
2.2.4 ESG performance tool for employee contribution
(1) Please refer to the glossary for the definition of Raison d’Être.
Implemented in 2012, FReD
is the Crédit Agricole S.A. internal system
for disseminating ESG culture and its measurement.
Since 2019
, with
the definition of the Group’s
Raison d’Être
(1)
and the integration of societal
and environmental challenges in the Group’s “Ambitions 2022” MTP,
FReD has been positioned as a tool for the appropriation and operational
application of the Group’s ESG issues. For those entities that choose
to participate, the approach allows each one to define a set of projects
consistent with the Group Project that are then assigned to one of three
types of respect: for the customer, for the employee and for the planet.
…based on 3 frames
of reference…
A comprehensive
approach…
In relation
to the 3 ESG pillar
FIDES
Strengthening
confidence
Fraud
Customer interest
Ethics
Market balance
Financial security
Economic pillar
Social pillar
RESPECT
Developing people
and the societal ecosystem
Acknowledgement
Equality
Security and Safety
Profit-sharing
Equity
Coherence
Territory
Environmental pillar
DEMETER
Protecting
the environment
Dialogue
Externalities
Markets
Ecosystems
Transport
Energy
Natural resources
Starting in 2020
, the number of actions to be carried out has been
reduced from twelve to six per entity (two for each type of respect) to
improve the clarity of the tool by focusing it around strategic actions
that are more easily identifiable by the stakeholders:
three of these six actions (one for each type of respect) are “Group”
actions: they are defined by Crédit Agricole S.A. with the contribution
of the entities and validated by the tool’s Steering Committee. They
are then assigned to categories by each entity;
the other three of these six actions (one for each type of respect) are
actions unique to each entity.
The progress of each project is measured by an index: projects start
with a rating of 1 and achieve a rating of 4 when completed. Every
year, the FReD index measures the progress made, project by project,
by calculating the change in rating between years Y and Y-1 for each
entity. The indices achieved are then consolidated to arrive at the Group
index. In order to ensure constant and sustained progress each year,
the system provides for a target index to be achieved through the
implementation of an action plan balanced between short-term (one
year), medium-term (two years) and long-term (three years) actions.
Each year, an audit is carried out by an independent firm to ensure the
robustness of the action plans and the reliability of the assessment. The
results are then presented to the Compensation Committee of the Board
of Directors and determine the payment of one-third of the deferred
variable compensation of Crédit Agricole S.A.’s executive managers.
FReD is also used by several entities to calculate incentives and therefore
affects the variable compensation of more than 23,000 employees.
In 2020, 16 entities participated in this system and, for the seventh
consecutive year, Crédit Agricole S.A. is publishing its FReD index, which
was 1.26 in 2020
i.e.
97% of the 1.3 target.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
55
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Group actions to raise
customer awareness of
environmental issues
Launch of green offers
(LCL, CACF, CALF, Crédit
du Maroc, Amundi)
Development of a transition
rating for corporate customers
(Crédit Agricole S.A.)
Introduction of an ESG
questionnaire for corporates
(LCL and Crédit du Maroc )
Development of a calculation
methodology to measure
carbon exposure
(CACIB)
Promotion of the circular
economy
(AVEM, CA Italia)
and reuse of building materials
(CA Immobilier)
Group actions in support
of youth integration
Including work-study hires
(AVEM, CA Italia, CAPS)
Promotion of teleworking
(Crédit Agricole S.A., LCL)
Gender equality action plan
(LCL et CAL&F, CACF)
Disabilities policy
(Crédit du Maroc, CA Bank
Polska, CAA, CACF)
Strengthening and digitisation
of HR information
(Amundi, CA Immobilier)
Group actions in
support of reducing
“customer irritants”
Improvement of postal
communication and customer
documentation
(Amundi, CACIB,
Crédit du Maroc)
Introduction of an excellence
in customer relations programme
(AVEM, Indosuez)
Customer commitment charter
on data processing
(CAL&F)
Integration of a CSR framework
in the offer creation
process
(CAA)
The actions taken in the FReD mechanism
feed into the Group’s ESG strategy
E
in
ESG
Environment –
Direct and indirect footprint
S
in
ESG
Societal–
Direct footprint
S
in
ESG
Societal –
Indirect footprint
Actions taken in 2020
2.3
ENVIRONMENTAL STRATEGY
2.3.1 The Group’s climate strategy
Policy
In 2019, the
Crédit Agricole Group
adopted a
climate strategy
that
is fully integrated into the Group’s “Ambitions 2022” strategic plan.
This strategy aims to make green finance one of its growth levers and
gradually align its financing and investment portfolios with the Paris
Agreement through the gradual transformation of its business lines.
Its main purpose is to understand the impacts of the Group’s activities
on the climate (“environmental materiality” component as defined by the
Non-Financial
Reporting Directive (NFRD)) to
reduce negative impacts
and increase positive impacts, and to identify opportunities related to
climate risks as defined by the TCFD (Task-Force on Climate-related
Disclosure).
The analysis of the potential financial impacts of climate risks on the
Group’s activities (“financial materiality” component as defined by the
NFRD) is dealt with in Chapter 3 “ESG risk management”.
It is structured around several major themes:
1.
Innovative governance and transparent implementation
To ensure that it meets its commitments, the Group has set up adequate
monitoring tools, such as its ESG platform, and a
governance structure
dedicated
to the implementation of its climate strategy. This governance
structure is described in detail in Chapter 2.2.
At the same time, the Group has also adopted a
transparency policy
that involves the annual publication of its coal and thermal coal exposure,
and the annual audit and certification of the implementation of its climate
strategy.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
56
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
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2. ESG strategy: being a committed player in a socially acceptable climate transition
2.
The gradual reallocation of the Group’s loan
and investment portfolios and assets based
on a scenario in line with the Paris Agreement
Crédit Agricole S.A. has commited to gradually reallocate the Group’s
portfolios and put them on a track aligned with Paris’ Agreement goal.
To keep up with this track, this reallocation will follow the evolution of
the global energy mix as projected in the external scenarios selected
by the Group with the advice of the Scientific Committee (namely the
IEA Sustainable Development Scenario and the Climate Analytics report
on coal phase-out (see part 2.3.6 “Measures and targets related to our
indirect carbon footprint”). To achieve this goal, the Group commits to
reduce its loans and investments related to fossil energy (coal mining
and power stations, unconventional oil and gas, including shale oil and
gas) by favoring the most virtuous players in these sectors, as stipulated
in our sector policies and will be expressed in the form of:
The strengthening of the Group’s commitments
to climate transition financing
Objective: finance one in three renewable energy projects in France
by 2022, in order to consolidate the Group’s leading position on the
French market and become a major player in the sector in Europe.
Double the size of the
green loan portfolio
to €13 billion by 2022.
The promotion of sustainable investment policies
Application of ESG criteria to 100% of the open funds actively managed
by Amundi
(1)
and to all voting decisions in 2021. Universal application
of ESG criteria for new investments by Crédit Agricole Assurances.
Increase in the amounts invested, via Amundi, in initiatives relating to
the environment or with a strong social impact: doubling the amounts
to €22 billion.
Investment of €6 billion of the Group’s liquidity portfolio in socially
responsible investment (SRI) products.
Planning for a total divestment of thermal
coal in accordance with a timetable aligned
with the Paris Agreement
The coal exposure of the Group’s financing and investment portfolios
under management will be part of an exit scenario from the coal
industry: by 2030 for EU and OECD countries, by 2040 for the rest
of the world.
We ask corporate customers to provide us with a plan by 2021 detailing
the phasing out of their coal-sector mining and production assets,
in accordance with the 2030/2040 timetable (depending on where
these assets are located).
The Group undertakes to stop working with companies anywhere
in the value chain currently developing or planning to develop new
ways to use thermal coal (mining, production, utilities, and transport
infrastructure).
The Group undertakes to no longer work with companies whose
thermal coal activity (extraction and production of energy from coal)
represents more than 25% of their turnover and whose transition path
is considered incompatible with the Paris Agreement.
The companies affected are placed in a portfolio of companies “under
transition vigilance”, resulting in a reduction of or even freeze on our
financial support.
(1) When an ESG methodology is applicable.
3.
Integration of climate transition challenges
into customer relationships
In light of the climate emergency, business preparedness to mitigate the
effects of climate change is essential. As a major player in the economy,
the Group believes that it is its role to provide support to companies on
this path. To fulfil this role, the Group is putting in place:
a climate transition rating:
a tool for both dialogue and customer
support, it is meant to measure how committed businesses are and
their ability to adapt their business models to the challenges of the
climate transition and the fight against climate change;
support for innovative environmental start-ups and SMEs
,
such
as the proprietary €160 million investment fund dedicated to energy,
agricultural and agri-food transitions;
a range of green financing solutions
for corporate and retail
customers.
The deployment, in 2020, of the Crédit Agricole Group’s climate strategy
is materialized through the following actions:
1.
Innovative governance and transparent implementation:
the
Crédit Agricole Group has set up a governance stucture dedicated
to the implementation of its climate strategy and has deployed an
ESG Platform to define and manage quantitative objectives (energy
mix and coal exposure in particular).
2.
The gradual reallocation of the Group’s loan and investment
portfolios and assets based on a scenario in line with the
Paris Agreement:
the Crédit Agricole Group has strenghthened
its commitments in favor of the energy transition, as well as the
promotion of sustainable investment policies.
3.
Integration of climate transition challenges into customer
relationships:
the Crédit Agricole Group has deployed a climate
transition rating, a tool for dialogue and support for customers in
the energy transition. This tool was co-constructed by the Crédit
Agricole CIB and Amundi teams to first cover their listed corporate
clients.
These action plans and results are audited by PwC, one of our Statutory
Auditors, in accordance with the standards set up by Crédit Agricole S.A.
The conclusions of this audit are presented at the end of this chapter
within the report entitled “Independent Limited assurance report on
the indicators relating to the implementation of the climate strategy
presented in Crédit Agricole’s 2020 Management Report”.
2.3.2 Integration of climate transition
challenges into customer dialogue
Policy
In 2020, Crédit Agricole S.A. developed and implemented tools designed
to give operational expression to the conviction that underpins its climate
strategy. Crédit Agricole believes that, as a major player in the economy,
it has a responsibility to provide support to its corporate customers in
their efforts to adapt to the challenges posed by climate change.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
57
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Climate transition rating
Inspired by this conviction, Crédit Agricole is building a new tool that places climate issues at the heart of customer relations: the “climate
transition rating”.
The transition rating is designed to be both a
measurement tool
(to determine whether or not a company is engaged in a process of
adapting its business model to the changes required by climate transition) and a
dialogue tool
(to encourage our clients to engage in such
a process, regardless of their starting point). It is designed to
support our clients
in the transformations they have to undertake in order
to face
the challenges of climate transition as well as to
facilitate the implementation of the Group’s sectoral policies.
Powered by public data that can be shared between the Group’s various business lines, the Crédit Agricole Group transition rating is,
regardless of the entity using it, a single rating for the same corporate customer.
The tool, was initially jointly built by
Crédit Agricole CIB
and
Amundi
teams for their listed corporate clients. Since the end of 2020, the
methodology of the finalised climate transition rating is tested on the Crédit Agricole CIB and Amundi large customer portfolios. In the
second phase, during 2021, work will begin on building a version that will allow users to rate all of the Group’s counterparties, including
the unlisted clients (mid-caps/SMEs) of the Regional Banks and LCL. Whereas the V1 transion rating was focused on energy challenges,
its second version will include all climate issues.
This rating, ranging from “A” for the most advanced companies in their climate transition trajectory to “G” for the least advanced, is based
on three main dimensions: energy performance to date, commitment to transition and speed of transformation.
Energy
A
G
A
G
A
G
A
G
A
G
A
G
A
G
A
G
Importance
CO
2
intensity
Quality of
governance
Speed of
carbon
transition
Contribution of
revenues to the
climate transition
Means of
transition
Speed of
Business
transition
Performance to date
Commitment
Speed of transition
3
dimensions
8
criteria
Climate transition rating
A
G
2.3.3 Supporting economic sectors
on the way to climate transition
Policy
To support its customers and economic sectors in climate transition, the
Crédit Agricole Group plans to help its business lines and subsidiaries
move forward through the integration of climate transition issues.
Accordingly, in June 2018, the Group created an “Energy Network”
that cuts across the Corporate, Agriculture, Small Business and Public
Sector markets. The three missions of the Energy Network are to create
a community of players involved in this dynamic, increase the skills of
the entities and amplify the financing allocated to climate transition.
By bringing together almost all of the Group’s players in climate transition,
the Energy Network line fully plays its role as a driver of growth and
a means of increasing the expertise of Group entities in climate and
environmental transition. Its network of contacts allows it to work on
these matters as closely as possible with its customers. It is run by
Unifergie, Crédit Agricole’s expert subsidiary and leader in renewable
energy financing. Crédit Agricole S.A. encourages the deployment of
renewable energy, offers investment solutions that promote climate
transition and a range of green offers for the climate transition of
corporate and individual customers.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
58
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
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2. ESG strategy: being a committed player in a socially acceptable climate transition
49
ENTITIES
represented with nearly
all Regional Banks
75
+
1
EMPLOYEES
make up our community of
representatives who, within their
entity, drive the development of
the energy transition for
corporates
,
local authorities
,
farmers
,
small
businesses
, and other customers.
10
PLAYERS MAKE UP
STEERING COMMITTEE
CASA, FNCA, IDIA, RB Centre Est ,
RB Côte d’Armor, RB Languedoc,
RB Nord Est, RB Pyrénées
Gascogne, RB Touraine Poitou,
Unifergie
1
2
3
CREATE
A
COMMUNITY
OF PLAYERS
INCREASE
THE SKILLS OF
GROUP
ENTITIES
AMPLIFY
OUR
LOANS
TO CUSTOMERS
within the Crédit Agricole Group
to stimulate this driver
of growth
in a technical and dynamic
sector
to make the Crédit Agricole Group
a major player in the energy
transition
Action plans and results
Encourage the deployment of renewable energies
Crédit Agricole Leasing & Factoring (CAL&F),
through its subsidiary
Unifergie,
has project finance expertise in the fields of energy and the
environment. Unifergie finances projects for farmers, corporates and
local authorities and climate transition players in the fields of renewable
energies, energy performance, the environment and land use planning.
At 31 December 2020, Unifergie, together with the Group’s banks
(mainly the Regional Banks, LCL and Crédit Agricole CIB), provided €768
million in funding to the energy sector (renewable energies and energy
performance). These investments were equivalent to 1,058 megawatts
(MW). The cumulative power financed by CAL&F at end-November 2020
stood at 8,442 MW.
In 2019, Highlight was the leading institutional investor in the climate
transition in France. At end-2020, its investments in renewable energies
amounted to €1.4 billion.
LCL
is also involved in the financing of renewable energy projects. At
end-December 2020, this financing amounted to €313 million (for a
target of €300 million).
Propose investment solutions for climate transition
To enable its customers to take action against global warming through
their savings, LCL has designed the
innovative “Climate Impact with
LCL” programme
. The first pillar of this programme, the
LCL Placements
Impact Climat
range of products, is built around investment vehicles
designed to combine performance and the active fight against global
warming. This first complete range of asset-based investments provides
each major asset class (listed and unlisted equities, structured products,
real estate) with asset active in the fight against global warming, that
encourage the reduction, neutralisation or offsetting of CO
2
emissions.
Following the launches of the thematic funds
Indosuez Objectif Terre
,
which invest in securities of companies involved in the fight against
global warming and the preservation of natural resources, and
CFM
Indosuez Environnement Développement Durable
, Indosuez now
offers
management mandates for environmental and societal
themes
. Indosuez’s range of structured products was also enhanced
in 2020 with the addition of a number of “green” products issued mainly
by Crédit Agricole CIB and a green structured products mandate. Lastly,
ESG criteria have been integrated into the selection of private equity
fund managers, and they are now used in management processes and
customer portfolio statements.
In 2020,
Amundi
continued its commitment to climate transition and a
low-carbon economy. Fund holdings supporting the climate transition
and green growth thus amounted to €22 billion at 31 December 2020,
up 87% As part of its climate solutions package, Amundi offers a
range of thematic funds dedicated to financing climate transition in
the main classes of assets, thus making the fight against climate change
accessible to all investors.
The
Amundi Valeurs Durables
and
Amundi Equity Green Impact
funds (targeted to international customers): these funds take into
account Amundi’s ESG criteria and exclude companies that produce
fossil and nuclear energy; they are invested in the shares of European
companies that generate at least 20% of their turnover from the
development of green technologies.
Amundi Énergies Vertes:
launched in June 2020, this fund, which
was created in partnership with Crédit Agricole Assurances, is the
first climate transition fund eligible for life insurance policies that
invest directly in green infrastructure. Amundi Energies Vertes came
in third place in the AGEFI Coupoles de la Distribution innovation prize.
CRÉDIT AGRICOLE S.A.
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Funds invested in
green bonds
:
with capitalisations of €3.5 billion
at 31 December 2020, these funds provide investors with access to
bond solutions that contribute to climate transition financing.
In addition to its project financing activities,
Crédit Agricole CIB
contributes to financing the fight against climate change and the
ecological transition through its
green bond arrangement business,
directing capital from bond markets (green bonds) towards environmental
projects. Crédit Agricole CIB has been working in this market since
2010. In 2020, it acted as bookrunner for more than €28.4 billion in
green, social, and sustainability bonds for its major customers (source:
Bloomberg). Global Capital recognised the bank for the sixth consecutive
year (2014 to 2019) for its
green, social, and sustainability bonds
origination activities.
In addition, Crédit Agricole CIB is an issuer since 2013 of Green Notes
dedicated to financing environmental projects.
At 31 December 2020, green bond assets were as follows:
Issuer
Amount
outstanding
(in millions of euros)
Number of
issuances
Crédit Agricole S.A. Green Bond
2,000
2
Crédit Agricole S.A. Social Bond
1,000
1
Crédit Agricole Home Loan SFH Green Covered Bond
1,250
1
Crédit Agricole CIB Green Notes
3,014
400
TOTAL
7,264
404
At 31 December 2020, the green portfolio of Crédit Agricole (excluding Crédit Agricole Home Loan SFH) focused on Crédit Agricole CIB (72%), followed by Regional Banks (25%), LCL (2%) and
CAL&F (1%). Almost half the green portfolio is located in France (47%), and the other half is divided over the rest of Europe (28%), the American continent (14%), and Asia (11%). Renewable
energy is the qualifying category that is most represented in the green portfolio (50%), followed by green real estate (33%), environmental friendly transportation (11%), water and waste
management (3%) and by energy performance (3%).
The Crédit Agricole Green Bond Framework
Crédit Agricole S.A. green bonds are presented according to four core components, as defined by the Green Bond Principles:
use of the funds;
review procedure and project selection;
monitoring the use of funds;
reporting.
The Green Bond Framework of Crédit Agricole consists of six different eligible categories of green loans:
1.
renewable energy;
2.
green real estate;
3.
energy performance;
4.
environmental friendly transportation;
5.
water and waste management;
6.
sustainable agriculture and forest management.
The Green Bond Framework of Crédit Agricole is available on the Crédit Agricole S.A. website at https://www.credit-agricole.com/en/finance/
finance/debt. It has received a second opinion from the non-financial rating agency Vigeo Eiris which was updated in 2019. The experts of
Vigeo Eiris approved the methodology for identifying and selecting green assets included in the green portfolio, as well as the relevance
of the eligible categories selected in the fight against climate change.
Since 2019, Crédit Agricole S.A. publishes a green bond report covering
all green bond issues by entities (Crédit Agricole S.A., Crédit Agricole
Home Loan SFH and Crédit Agricole CIB). The report, which is available
on the Crédit Agricole S.A. website at https://www.credit-agricole.com/
en/finance/finance/debt, describes how the proceeds from the green
bond issues by Group entities have been allocated to Crédit Agricole’s
green portfolio and provides an estimate on the carbon impact of the
green projects financed in this way. For example, the Crédit Agricole S.A.
green bond has financed green projects that will reduce greenhouse gas
emissions by around 359 tonnes of CO
2
eq per million euros per year,
while Crédit Agricole CIB Green Notes have financed green projects that
will reduce emissions by 516 tonnes of CO
2
eq per million euros per year.
Propose a range of green offers for the climate transition
of Corporate and individual customers
LCL’s climate transition offers:
“Sustainable City – Energy Saving Works” loans
have low interest
rates to finance the cost of insulating or outfitting homes to make
them more energy efficient. Such works could involve heating
equipment, thermal insulation or the installation of equipment that
uses a renewable energy source. Loan amounts range from €3,000
to €20,000.
CRÉDIT AGRICOLE S.A.
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“Sustainable City – Green Mobility” consumer loans
are designed to
finance the purchase of new or used vehicles (including pre-financing
of the environmentally friendly car grant) that produce few or no
polluting emissions. Loan amounts vary between €3,000 and €75,000,
which makes it possible to purchase to a wide range of vehicles.
Impact financing:
for its SME and mid-cap customers,
LCL
structures
and arranges “Impact Financing” (“Green Loans” and “Sustainability-
Linked Loans”), which are loans or credits whose margin is indexed
to ESG performance criteria specific to the company being financed.
This offer allows our customers to align their CSR strategy with
their financing and, if they achieve their targets, to benefit from a
subsidised rate.
The
LCL SmartBusiness
programme is designed to support business
customers (SMEs, mid-caps, key accounts) with major changes, in
particular by promoting the energy transition with Greenflex, providing
advice on energy transition, environmental and societal issues, joining
forces with Voltalia through electricity contracts (CPPA), which bring
added value to the heart of our customers’ business, and with Global
Climate Initiatives to measure and reduce the environmental footprint.
Crédit Agricole Consumer Finance’s green credit offers:
credit offers at preferential rates
: a green “auto” offer for the
financing of clean vehicles or the conversion premium and a green
“construction” offer, which focuses on the financing of housing
renovation eligible for the energy transition tax credit (CITE);
a financing offer for photovoltaic panels
designed by Voltalia for
IKEA customers;
a preferential financing offer for soft mobility
(purchase of electric
or non-electric bicycles and scooters) for Décathlon customers.
In 2020, more than €800 million in new green car loans were thus
granted, working towards a production target of €1 billion in 2022.
The foreign subsidiaries of
Crédit Agricole Consumer Finance
are also
involved in developing green offers: Agos, in Italy, has signed partnerships
with players in the photovoltaic sector, such as Enel X and SolarPlay. In
Germany, CreditPlus supports soft mobility companies like Fahrrad.de
and ONO, which market electric bicycles.
The Regional Banks’ offers
The Regional Bank network markets various loans that help finance
work intended to improve home energy performance, such as:
the interest-free eco-loan (Eco-PTZ); since 1 January 2020 and
until the end of September 2020, more than 9,350 loans have been
processed by Crédit Agricole, totalling more than €117 million;
energy savings loans offered by the Group since 2007; for the first
10 months of 2020, the total amount of loans granted by all Regional
Banks reached 900 files and €13.5 million
granted to customers of
the 39 Regional Banks.
2.3.4 Supporting the agri-food sector
on the way to ecological transition
Policy
Agriculture and agri-food are currently at the nexus of various
environmental, climate, economic and social issues. Even though
food and health safety remains the priority, the sector is adapting to
societal expectations regarding issues such as the preservation of
natural environments and biodiversity, the reduction in the use of plant
protection products and antibiotics, the fight against climate change and
animal welfare. This commitment is all the more essential as
agriculture
is one of the first sectors to be affected by climate change
, which
impacts agricultural and food production. It is also one of the solutions
because of its carbon storage capacity (soils, agroforestry, forests,
meadows, etc.).
Supporting the agricultural and agri-food sectors in the ecological
transition goes hand in hand with the
transition to sustainable food
based on diets that are themselves sustainable, which, according
to the FAO, “help protect and respect biodiversity and ecosystems,
are culturally acceptable, economically equitable and accessible,
affordable, nutritionally safe and healthy, and optimise natural and
human resources”. Their regional anchoring makes it possible to address
the issues of relocating the economy, building a food supply with a low
environmental impact based primarily on local natural resources, and
reconnecting citizens with all of the issues involved in the way they feed
themselves, far beyond the simple act of buying food.
Action plans and results
As Bankers nearly 85% of farmers in France, the Crédit Agricole Group
supports all farmers and all forms of agriculture as well as players
in the agri-food sector to
make the ecological transition a source
of economic performance.
In recent years, the various agricultural
and food sectors (milk, meat, field crops, wines and spirits, fruit and
vegetables, etc.) have embarked on development and transformation
policies to meet societal, environmental and animal welfare expectations,
while ensuring the economic and social performance of farms and
businesses. Written policies are in line with plans drawn up following
the French National Food Conference (
États généraux de l’alimentation
;
EGalim), which took place from 20 July to 21 December 2017. The Crédit
Agricole Group entities support the implementation of these commitments
and numerous projects related to ecological transition (sustainable
agriculture, organic farming, short circuits, development of the protein
industry, etc.); climate transition (photovoltaic, methanisation, etc.) and
changes in farming and slaughtering methods to improve animal welfare.
An
organic farming
initiative was launched in 2019 to support farms in
their conversion to organic farming, as part of a more general support
for agricultural transitions. The initiative consists of offering a range
of basic organic farming services that are consistent with the needs
of these customers, and it includes a loan to support farmers during
the conversion phase, as well as training for agricultural advisers to
enable them to better understand the economic models of these farms.
27 Regional Banks
deployed the offer by the end of 2020; 1,320
advisers (more than 50%) were registered for training in 2020 and
712 completed it.
Crédit Agricole S.A.
is also a partner of
Trophées
de l’excellence bio
, organised with Agence Bio and of
Trophées de
l’agroécologie
, with the French Ministry of Agriculture and Food.
The Crédit Agricole S.A. subsidiary
Pleinchamp.com
, an information
website for farmers, was redesigned in 2020 to provide farmers with
the information and support they need to meet the new challenges of
everyday life and the major changes in their business line. In addition to
the editorial content, guides have been put online to support farmers as
they reflect on changes in their business and their transition, installation
or diversification projects. 1.6 million visits per month, 3.3 million page
views.
To support the efforts to upscale, the creation of added value and the
transformation of production systems, the Crédit Agricole Group is
participating in the
National Initiative for French Agriculture
(
Initiative
nationale pour l’agriculture française;
INAF
), which was officially
launched in April 2020 following the signature of the partnership with
the French Ministry of Agriculture and Food and the European Investment
Fund (EIF). This programme has a budget of €625 m and supports
projects to renew agricultural generation by increasing added value,
strengthen high-quality sectors by encouraging links to local communities
CRÉDIT AGRICOLE S.A.
—
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2. ESG strategy: being a committed player in a socially acceptable climate transition
and the use of local distribution networks, support the transformation
of agricultural models to improve their performance and innovation,
diversify farm operations and revenues and upgrade assets to promote
the efficient use of resources such as energy, heat and water. In 2020,
the
39 Crédit Agricole Regional Banks
carried out 1,400 projects for
€187 million in funding.
In 2019,
IDIA Capital Investissement
, with its strong position in
agriculture and agri-food, launched CA Transitions, the first own-
account investment fund dedicated to energy, agriculture and agri-food
transitions. This fund, some of whose investments have been awarded
the “Greenfin Label - France Finance Verte”, is dedicated to supporting
companies in climate transition; cooperatives and agricultural or agri-food
businesses in transition towards more sustainable modes of production
and businesses offering innovative solutions to accelerate the transition
of the agricultural and agri-food sectors.
With the aim of helping consumers and players in the food industry to
“consume better and produce better”,
Crédit Agricole S.A.
became one
of the founding partners of
La Note Globale
in 2020. The ambition of
La Note Globale (a non-profit association) is to construct a benchmark
for the overall performance of food products. The rating is based on six
criteria or issues (animal welfare; environment; human nutrition and
health; origin, equity & contribution to the French economy, traceability
and transparency, and corporate social responsibility). Each of the issues
is broken down into targets to be achieved (40 in total) and 91 action
levers or ways of acting to meet the targets. La Note Globale seeks to
be a support tool for industries for the good of all links in the production
and consumption chain. It aims to improve the societal performance
of products derived from living organisms by helping consumers and
economic players in their choices. 63 products were rated and presented
at the International Agricultural Show 2020. 4,000 products are currently
being rated.
To promote links to local communities in the food sector, Crédit Agricole
supports farmers who are moving towards new marketing methods such
as
short-distance distribution
. This affects 27% of the farmers who are
Crédit Agricole customers (Crédit Agricole 2018 penetration barometer).
This trend resonates perfectly with the expectations of a section of
consumers who want to eat better, healthy, local and responsible food.
The public health crisis of 2020 has highlighted the resilience of short-
distance distribution and supply. In 2020, the Crédit Agricole Group
strengthened its partnership with Bienvenue à la Ferme, a brand of
the Chamber of Commerce of Agriculture, which brings together nearly
8,000 farms in France. It supports these farmers in the development of
their agritourism and short-distance sales activities through a range of
tools, such as an electronic payment system adapted to direct sales,
strengthened cooperation between the territorial networks
and the
Regional Banks,
and multiplication of visibility channels and their online
attractiveness. This initiative was rolled out in July 2020 and will be
supplemented by a short-distance distribution training kit for advisers.
2.3.5 Protecting biodiversity and
improving animal welfare
2.3.5.1
Biodiversity
Policy
Biodiversity is defined as all natural or semi-natural environments and
the living beings that make them up. As successive IPCC reports have
pointed out, the protection of biodiversity plays an essential role in the
fight against climate change and the objective of carbon neutrality.
Because of the links between our health and the health of ecosystems,
the recent COVID-19 pandemic stresses
the urgency of protecting
and restoring natural environments
. The protection and restoration of
biodiversity, as well as the proper functioning of ecosystems, is essential
to strengthening our resilience and preventing the emergence and
spread of diseases in the future.
Aware of the major role played by biodiversity,
Crédit Agricole S.A. is
committed to working with stakeholders who fight on a daily basis
to maintain biodiversity
, and it is involved in research programmes to
gain a better understanding of the risks and impacts of its degradation
and of how to participate in its restoration. Biodiversity issues have
been integrated into a few sector funding policies.
Farmers also play an essential role in preserving biodiversity. Birds
and insects in agricultural environments, especially pollinators, are key
indicators of agro-ecosystem health and are essential for agricultural
production and food security. As the leading banker to farmers and
foresters, the Crédit Agricole Group supports farmers in these initiatives
and works to preserve and develop forest areas in France and abroad,
since 80% of the earth’s biodiversity is found in forests.
Action plans and results
For the third year of the framework agreement signed with the Muséum
national d’Histoire naturelle, Crédit Agricole S.A. confirms its commitment
alongside the
Crédit Agricole Regional Banks
and the
Crédit Agricole
Pays de France Foundation
in support of this leading scientific institution
in terms of biodiversity research and the transmission of knowledge.
Among the 13 sites of the Muséum national d’Histoire naturelle, the
Val Rahmeh-Menton Botanical Garden (Alpes-Maritimes), the Haute-
Touche Zoological Reserve (Indre) and the Harmas de Jean-Henri Fabre
(Vaucluse) received support from Crédit Agricole S.A. in 2020, as did the
Plages Vivantes participatory science programme. Crédit Agricole S.A.
is also continuing to support the research programme for biodiversity in
agriculture. This programme studies the interactions between agriculture
and biodiversity in its two dimensions: the impact of different types of
agriculture on fauna and flora, and the impact of farmers’ participation
in the observatory on changes in agricultural practices.
The Montrouge and Saint-Quentin sites have been awarded the “Refuges
LPO” label, proof of Crédit Agricole’s commitment to preserving and
providing a home for local biodiversity. In February 2020, the International
Biodiversity & Property Council IBPC (CIBI) awarded the BiodiverCity Life
label to Evergreen, the Montrouge campus of
Crédit Agricole S.A. and
its subsidiaries
. Managed by Crédit Agricole Immobilier, Evergreen is
the first French corporate site to be given the BiodiverCity Life distinction.
The Regional Banks and Crédit Agricole S.A. entities are also putting
in place numerous initiatives to support beekeeping. 124 beehives are
being installed on the Group’s various sites for production of more than
2 tonnes of honey per year.
With its “Nature in the City” initiative,
Crédit Agricole Immobilier
brings nature and its benefits back to the heart of our living and working
spaces. In residential developments, nearly 30% of the programmes
delivered this year incorporate a Nature in the City initiative, and this
will be expanded to more than 50% of programmes by 2022. Fruit trees,
shared plots, rooftop gardens and biodiversity refuges will become
standard. One example of this is the Agriville project at the Château de
Paléficat site on the edge of Toulouse: there, Crédit Agricole Immobilier
developed 140 open-market homes and 70 social housing units built
around preserved farmland. As part of its property management business,
Crédit Agricole Immobilier also carried out its first eco-grazing experiment
in a co-owned property in Toulouse. Between March and October, three
sheep occupied an enclosure spanning 3,000 sq. m. An experience to
be repeated and expanded.
Crédit Agricole CIB
has integrated biodiversity issues into several
sector policies and requires from its customers in sensitive sectors
(forestry and palm oil, pulp and paper, mining, transport infrastructure) a
commitment to strict protection of areas with High Conservation Values,
such as Alliance for Zero Extinction sites, wetlands covered under the
Ramsar Convention; IUCN categories I-IV and UNESCO World Heritage
sites. Starting in 2016, Crédit Agricole CIB mapped the sectors and
regions most exposed to the challenges related to water access and
water pollution. Since 2018, customers operating in these sectors have
been subject to special analyses in this regard.
CRÉDIT AGRICOLE S.A.
—
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2. ESG strategy: being a committed player in a socially acceptable climate transition
The protection of ecosystems is one of
Amundi’s
ESG analysis theme,
assessed in the Biodiversity and Pollution criterion. In 2020, the
fundamental principles were reviewed to better integrate biodiversity into
internal analysis and investment processes. Due to the lack of concrete
data on the subject, the first step is to encourage the publication of
information on biodiversity impacts by companies. This year, discussions
have been conducted with mining companies and consumer goods
companies to this end. As part of the same desire to establish relevant
criteria for assessing the biodiversity footprint of the Group’s activities,
in 2020
Crédit Agricole S.A.
joined Club B4B+ (Business for Positive
Biodiversity), whose purpose is to act as an incubator for the Global
Biodiversity Score indicator (GBS™) and the associated biodiversity
footprint method.
Crédit Agricole is a long-standing partner of participants in the forest-
wood sector and is the leading bank for upstream forestry and processing
industries. Crédit Agricole Assurances has a range of property and
casualty insurance solutions dedicated to the forest, which provide
coverage against the effects of fire and/or storms to ensure the long-
term survival of French forests and support the timber industry.
Crédit
Agricole
is also involved in the distribution of the forest investment
and insurance account (CIFA), which enables forest owners to build up
precautionary savings to cope with climate disasters and forestry work.
In 2020,
IDIA Capital Investissement
launched a fund dedicated to
the timber industry to support French production, which currently lacks
capital to develop. The purpose of this fund is to participate in supporting
the sector by optimising the processing and value added in France
of wood from sustainably managed French forests, while favouring
short-distance, carbon-saving distribution.
Forests are the second largest carbon sink after the ocean and are
an essential component of biodiversity. That is why Crédit Agricole
Assurances is committed to reforestation and sustainable forest
management in France. The leading forest insurer in France, Crédit
Agricole Assurances has since 2019 been conducting a programme
that links savings or insurance policy subscriptions to tree planting, in
partnership with Reforest’Action, and since 2018 it has been offsetting
its carbon emissions through a partnership with the
Plantons pour
l’Avenir
endowment fund. To date, more than 1.2 million trees have
been replanted through these two partnerships.
2.3.5.2 Animal welfare
Policy
Societal expectations to think of animals as living beings are constantly
increasing. The World Organisation for Animal Health (OIE) gives a
definition of animal welfare that is currently the standard. It is based
on five fundamental freedoms: freedom from hunger and thirst; freedom
from physical restraint; freedom from pain, injury and disease; freedom
to express normal behaviour; freedom from fear and distress. This
awareness is now reflected in the regulations and action strategies of
French animal production networks. At the national level, in the industry
chain plans drawn up by interprofessional agricultural organisations,
commitments to improve farming conditions and audits are being
rolled out. The egg-laying poultry industry has thus committed itself to
increasing the quantity of eggs produced in alternative conditions to
cages to 50% by 2022. For its part, the beef sector has developed a tool
to help diagnose rearing conditions for breeders, which it integrated into
the best agricultural practices charter in 2019. Several research projects
are currently underway to determine how to assess the welfare of farm
animals more accurately, especially in the European Union. This scientific
research will be used to change French and European animal protection
legislation by making it results-driven rather than means-driven.
As the leading banker to farmers in France,
Crédit Agricole S.A. finances
animal welfare development projects
, in particular the modernisation
of livestock buildings and slaughtering tools. Current discussions focused
on raising awareness of this issue internally and among our customers
and on the search for reliable technical and economic criteria to assess
the cost of animal welfare improvements, their feasibility and financial
support for them, as well as integration of these issues into the analysis
criteria for the financing of agri-food companies.
Action plans and results
Amundi
is already including animal welfare in its non-financial rating
criteria for issuers in the food sector. In 2020, Amundi continued its
work in cooperation with FAIRR, a coalition of investors whose aim is
to engage in dialogue with food sector companies to raise awareness
of (i) the environmental, social and governance risks associated with
intensive livestock farming to change their practices, and (ii) the business
opportunities that new modes of agriculture can represent. Amundi has
joined three engagement campaigns led by FAIRR:
building Sustainable Protein Supply Chains:
supported by 88
institutional investors representing close to US$13.1 trillion in
assets under management, the campaign is asking 25 food sector
companies to diversify their protein sources to stimulate growth,
increase profitability, reduce their exposure to animal proteins and
improve their competitiveness in a world of limited resources;
Meatsourcing: supported by 90 investors representing close to $11.4
trillion, this campaign is asking six companies in the fast food sector to
reduce the risks due to meat and dairy products in their supply chain;
Antimicrobial Resistance: supported by 12 investors representing close
to $7 trillion, in collaboration with the Access to Medicine Foundation,
this campaign was launched in 2020 and will be completed in 2021.
The engagement campaign will be targeted at pharmaceutical
companies to encourage them to implement best market practices
in the development of new antibiotics.
2.3.6 Measures and targets related
to our indirect carbon footprint
Policy
Since 2011, the Group has used a methodology to quantify financial
institution-funded greenhouse gas emissions. The methodology was
developed at its request by the Finance and Sustainable Development
Chair of Paris Dauphine University and École Polytechnique. Dubbed
P9XCA,
this innovative methodology has been recommended for the
corporate and investment banking sector since 2014 by the financial
sector guide, “Quantifying Greenhouse Gas Emissions”, published by
Agence de l’environnement et de la maîtrise de l’énergie (ADEME),
Observatoire sur la responsabilité sociétale des entreprises (ORSE) and
Association Bilan Carbone.
It allows the Group to calculate, with no double-counting, the order
of magnitude of financed emissions and to map those emissions by
sector and geographical area. Greenhouse gas emissions are allocated
to economic players according to their capacity (and economic interest)
to reduce them using a qualified allocation “by issue” as opposed to
the usual allocation “by scope”. Some methodological adjustments
were made in 2018, in parallel with the revision of emission factors.
CRÉDIT AGRICOLE S.A.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
The sectoral and geographical mapping produced using this methodology
has informed which sectors the bank chooses for the development of
sector-based CSR policies and has been used in methodologies and
calculations related to
climate transition risk.
Additionally, issues related to
physical climate risk
are now starting to
be mapped by combining sectoral and geographic vulnerability indexes.
Action plans and results
Indirect energy footprint: indicators and targets
According to the P9XCA method, the estimate of greenhouse gas emissions from all of the Crédit Agricole Group’s investments and financing (scope
3) is as follows (in thousands of tonnes of CO
2
equivalent):
Geographic areas
Industries
TOTAL
Agriculture
Real estate
Energy
Manufacturing
Transport
Waste
management
Public
services
France
20,269
9,338
3,624
4,189
21,311
3,200
1
61,932
Germany
133
212
2,106
458
3,046
1
0
5,956
Spain
8
102
694
129
1,333
28
4
2,298
Italy
274
456
2,298
844
3,711
133
0
7,717
United Kingdom
204
87
582
254
1,477
108
1
2,714
Other Western Europe
332
426
3,997
1,147
4,891
164
131
11,088
Others Europe
24
362
2,058
1,633
2,873
69
0
7,019
Africa and Middle-East
497
107
1,202
760
2,481
1,762
0
6,809
United States
-129
946
2,827
3,148
5,827
14
64
12,697
Others North America
15
58
262
209
4,537
0
0
5,081
South America
364
40
564
910
2,018
202
0
4,098
China
4
283
936
1,945
2,046
0
0
5,215
India
3
13
1,680
266
264
50
0
2,277
Japan
0
107
0
103
800
0
0
1,010
Others Asia
110
426
2,834
1,247
2,731
0
0
7,348
TOTAL
22,109
12,964
25,666
17,241
59,343
5,734
201
143,258
To calculate its carbon footprint, the Crédit Agricole Group follows the recommendations in the sectoral guide for the financial sector
Quantifying Greenhouse Gas Emissions, published by ADEME, ABC and ORSE. Produced in 2014 with the participation of some twenty financial
institutions, NGOs and experts, the guide recommends that corporate and investment banks and universal banks use a macroeconomic
approach (so-called top-down methodologies), which is the only way to guarantee all results are added together and therefore the accuracy
of the resulting order of magnitude.
The methodology used by Crédit Agricole S.A. correlates, by design, the sum of the carbon footprints of all global financial institutions with
total global emissions, unlike other methodologies on the market, such as the one used by the Oxfam study, which arrives at a sum equal
to several times that level (or four to five times global emissions).
The calculated emissions linked to the Group’s investments and financing (scope 3) have increased since 2019. The main reason for this
increase is the sustained growth in the Group’s investment and financing outstandings.
As part of its climate strategy,
the Group is committed to aligning
itself with the Paris Agreement
and gradually orienting its portfolios in
favour of climate transition. To identify the steps to be taken and define
quantified targets, the Group set up a Crédit Agricole Group platform in
2020. On the basis of the indicators created, the Group wants to set goals
that are compatible with climate science, in particular on the basis of
external scenarios (International Energy Agency Sustainable Development
Scenario) and the recommendations of the Scientific Committee. To that
end, it has signed the Science-Based Targets initiative, committing itself
to defining such targets by September 2022.
The Group’s new ESG platform allows us, for the first time this year, to
publish the energy mix of the portfolios of four Group business lines
for 2019 and 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Global energy mix 2019 and IEA SDS 2040 scenario (primary energy demand)
Renewable
energy
36%
Fuel Oil
23%
Gas
23%
Coal
10%
Nuclear
8%
SDS 2040
Nuclear
5%
Renewable
energy
15%
Fuel Oil
31%
Gas
23%
Coal
26%
2019
Global energy mix 2019
Asset management activity
(in million of euros)
2020
2019
TOTAL
10,811
12,597
Gas
2,242
2,675
Fuel oil
2,366
4,114
Coal
719
1,093
Nuclear
2,900
2,613
Energy renewable
2,584
2,102
Nuclear
27%
Renewable
energy
24%
Fuel Oil
22%
Gas
21%
Coal
6%
2020
Nuclear
21%
Renewable
energy
17%
Fuel Oil
32%
Gas
21%
Coal
9%
2019
The 2020 energy mix in this business outperforms the 2019 global energy mix. It also outperforms the energy mix of the International Energy
Agency’s (IEA) 2020 Sustainable Development Scenario (SDS) projected for fossil fuels in 2040.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
65
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Financing activity of corporations
(in million of euros)
2020
2019
TOTAL
17,994
17,969
Gas
5,644
5,210
Fuel oil
7,428
8,520
Coal
326
450
Nuclear
80
72
Renewable energy
4,516
3,717
Nuclear
1%
Renewable
energy
25%
Fuel Oil
41%
Gas
31%
Coal
2%
2020
Nuclear
0%
Renewable
energy
21%
Fuel Oil
47%
Gas
29%
Coal
3%
2019
The 2020 energy mix for this activity outperforms the 2019 global energy mix for coal and renewables. It also outperforms the energy mix of the
International Energy Agency’s (IEA) 2020 Sustainable Development Scenario (SDS) projected in 2040 on the share of coal.
Investments related to life insurance contracts
(in million of euros)
2020
2019
TOTAL
13,225
12,472
Fossils
8,760
8,655
Nuclear
1,870
1,962
Renewable energy
2,595
1,855
Nuclear
14%
Fossils
66%
Renewable
energy
20%
2020
Nuclear
16%
Fossils
69%
Renewable
energy
15%
2019
The 2020 energy mix for this activity outperforms the 2019 global energy mix of the International Energy Agency (IEA).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Financing activity for small and mid-sized companies
(in million of euros)
2020
2019
TOTAL
428
283
Fossils
116
33
Nuclear
-
-
Renewable energy
312
250
Nuclear
0%
Fossils
27%
Renewable
energy
73%
2020
Nuclear
0%
Renewable
energy
88%
2019
Fossils
12%
The 2020 energy mix outperforms the 2019 global energy mix and the International Energy Agency (IEA) 2020 Sustainable Development Scenario
(SDS) energy mix projected in 2040.
Financing and investments in renewable energies are up for 3 out of 4 businesses (for example, +59% between 2019 and 2020 for investments
related to life insurance contracts). For the fourth business line, financing of mid-sized companies, the share of renewable energies is already very
high, since it almost represents the ¾ of the energy mix.
In addition, the coal exposure of the Crédit Agricole CIB and Amundi financing portfolios changed as follows:
Exposure of large customers portfolios
2020
2019
Change
In millions
of euros
% of
outstandings
In millions
of euros
% of
outstandings
In millions
of euros
% of
outstandings
Coal exposure - financing portfolio Crédit Agricole CIB
326
0.33
450
0.46
-28%
-28%
Of which thermal coal exposure -
financing portfolio Crédit Agricole CIB
187
0.19
Not available
Not available
-
-
Coal exposure - investment portfolio Amundi
719
0.07
1,094
0.1
-34%
-30%
Of which thermal coal exposure -
investment portfolio Amundi
670
0.07
Not available
Not available
-
-
The 2019 data for Crédit Agricole CIB and Amundi were updated following efforts to improve data reliability.
Methodological framework
2019 and 2020 data related to coal exposure and energy mix were calculated using the Group’s ESG Platform.
For Amundi: these data were calculated by taking into account indirect exposure (percentage of invested companies revenue generated
in the energy sector). To achieve this, we used publicly available data at the end of 2020. The data relates to passively and actively
managed assets with the exception of delegated management (within the framework of joint ventures or management under private
management mandates) and Amundi Immobilier, representing 73% of total assets. On this perimeter, the Trucost data cover €410 billion
of assets under management.
For Crédit Agricole CIB: these data were calculated by considering both direct financing of dedicated assets and indirect exposures in
energy calculated on the basis of client revenues. To do so, we used publicly available data at the end of 2020, as well as all financing
on Crédit Agricole CIB’s balance sheet. On this perimeter, the Trucost data cover €147.3 billion of financing.
For Crédit Agricole Assurances: these data were calculated by taking into account non-unit-linked funds (percentage of customer
revenues generated in the energy sector). To achieve this, we used public data available at the end of 2020. The data covers listed
investments managed directly, listed investments managed under mandate and unlisted investments managed directly.
For LCL: these data were calculated by considering both direct financing of dedicated assets and indirect exposures in the energies of
small and mid-sized companies. To achieve this, we used NAF coding and data from LCL’s management tools.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
67
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
2.3.7 Measures and targets related
to our direct footprint
Policy
In line with its ambition to support the transformation of the economy
and its customers to encourage climate transition, Crédit Agricole S.A.
intends to adopt an exemplary attitude in terms of direct footprint.
Therefore, following the adoption of several measures, including
the
use of 100% renewable electricity
across its French sites, Crédit
Agricole S.A. has committed to
carbon neutrality
(1)
since 2016 by
(1)
Perimeter: Crédit Agricole holding company, Crédit Agricole CIB, Amundi and Crédit Agricole Italia.
reducing its direct footprint by 15%, encompassing energy (in terms
of square metres) and transportation (in terms of FTEs) for the period
from 2016 to 2020.
In addition, Crédit Agricole S.A. strives to limit the use of resources and
the production of waste and to recycle and recover waste at all of its
locations through innovative infrastructure and investment in property
and equipment. In 2013, it set up a system to monitor its energy, water
and paper consumption and it also runs internal eco-friendly action
campaigns aimed at all its employees.
Action plans and results
Measure and reduce our direct energy footprint
Since 2007,
energy consumption
has been monitored at all Crédit Agricole S.A. entities in France and abroad. Action plans are put in place within
the Group for permanent energy optimisation.
Consumption
(in MWh)
Tonnes CO
2
eq./year)
Estimated coverage rate
2020
2019
2018
2020
2019
2018
2020
2019
2018
Gas
64,531
72,890
79,037
13,263
14,981
16,244
96%
93%
94%
Fuel oil
3,821
4,777
4,511
1,212
1,514
1,430
96%
100%
100%
SCOPE 1
68,352
77,667
83,548
14,475
16,495
17,674
Electricity
284,356
309,699
328,238
59,229
66,032
69,046
96%
93%
93%
District heating
23,725
17,035
20,581
5,305
3,809
4,602
93%
100%
100%
Cooling network
5,180
4,996
5,062
226
218
221
93%
100%
100%
Data centre
electricity
(1)
77,126
77,515
79,876
5,292
2,831
2,917
SCOPE 2
390,387
409,245
433,757
70,052
72,890
76,786
(1)
Only the consumption of data centres that could be isolated from their corresponding office buildings is taken into account. It is therefore confined to the following entities: Greenfield, the
Group data
centre managed by Crédit Agricole Immobilier, Crédit Agricole CIB France, Amundi France, Agos, Credibom, CA Indosuez Switzerland S.A., CA Indosuez Wealth (Europe), CFM Indosuez Wealth and Crédit
du Maroc.
The Group also measures emissions from
business travel
annually to monitor trends on this front. The indicators cover business travel by rail and air.
Rail
Air
TOTAL
2020
2019
2018
2020
2019
2018
2020
2019
2018
Distances travelled
(in thousands of kilometres)
14,586
57,040
52,262
25,276
160,264
184,576
39,862
217,304
236,838
CO
2
emissions
(in tonnes CO
2
eq.
)
657
2,570
2,355
6,638
43,859
54,360
7,295
46,429
56,714
Scope covered: 90% of Crédit Agricole S.A. FTEs.
(in tonnes CO
2
eq.)
2020
2019
2018
Rail
657
2,570
2,355
Air
6,638
43,859
54,360
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
68
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Actions taken
In early 2020,
Crédit Agricole S.A.
launched its carpooling service
in partnership with Klaxit for the employees of the Evergreen site in
Montrouge. This car-pooling application, which was already available
since 2019 for Saint Quentin employees, makes it possible to share
commutes to and from work. This offer is an addition to the mobility
services for employees (fleet of electric bicycles and fleet of shared
vehicles).
In addition, a Group Mobility Steering Committee was set up in September
2020 to address the most cross-functional aspects of business travel
(purchasing, HR, CSR, etc.) and to ensure that the Group’s mobility
ambitions are properly implemented. As regards vehicle policy, a call
for tenders was approved for the implementation of a new catalogue of
low-emission vehicles. A new travel policy will also be put in place: air
travel will only be authorised for journeys exceeding 3.5 hours by rail
(except for return trips during the day), with less use of business class.
In addition, outside the two lockdown periods, the use of teleworking has
been strongly encouraged, thus reducing
emissions from commuting
to and from work.
Crédit Agricole Group Infrastructure Platform (CA-GIP)
initiated
Phase 2 of the Voltaire Project launched in 2019, which consists of
immersing servers in oil to cool them down. The benefits are numerous,
as oil conducts heat 1,500 times better than air, thus naturally capturing
the heat emitted while maintaining a homogeneous temperature.
Furthermore, the machines are protected against thermal shock,
pollutants and oxidants in the air. This technique therefore makes it
possible to considerably reduce overall infrastructure and operating
costs; on air conditioning alone, there has been a 34 % savings on
the energy bill. In 2020, extensive adaptation work was carried out at
the Greenfield
data centre in Chartres to deploy this technical solution
more widely and put more than 400 virtual servers into production at
the beginning of 2021.
(1)
Estimate, pending certification of the credits issued for the Mangrove Senegal project (Oceanium).
Landing of the 2016-2020 target
of a 15% reduction in the footprint
The action plans taken at the various entities have been successful as
the greenhouse gas emissions of scope 1 and scope 2 have decreased
by 3% and 8% between 2016 and 2019.
In 2020, operating emissions fell drastically due to the health crisis, by
12% (scope 1) and 4% (scope 2) respectively compared to 2019, or by
12% (scope 1) and 15% (scope 2) compared to 2016.
Also compared to 2016, emissions on the energy and transport items
having decreased by 16% and 87% respectively, we recorded a drop
of 37% in our total direct emissions.
Following an assessment and identification of additional measures that
can be implemented, the Group will define new targets for reducing
its direct footprint, in line with its commitment to the Science-Based
Targets
initiative.
Offset our residual direct footprint
To offset its residual emissions,
Crédit Agricole S.A.
has invested,
since its launch in 2011, in the
Fonds Carbone Livelihoods
, which
support large-scale projects to sustainably improve the living conditions
of rural communities, restore and protect natural ecosystems with
high agricultural potential, transform corporate value chains through
sustainable agricultural practices, and contribute to climate change
mitigation through CO
2
capture and emissions avoidance. The funds
finance projects for reforestation and restoration of degraded ecosystems,
agroforestry and small-scale rural energy (improved stoves) in Africa,
Asia and Latin America.
Our carbon offsetting scheme: the Livelihoods carbon funds
The methodology used by the Livelihoods Carbon Funds is based on six main principles:
1. REDUCING CO
2
FIRST AND FOREMOST
2. IMPACT
3. LARGE-SCALE PROJECTS
All investors and Livelihoods partner
companies must have an ambitious policy to
reduce CO
2
emissions. Carbon offsetting only
occurs after this reduction.
All Livelihoods projects have a positive
environmental or social impact on the
countries or regions where they are
implemented, and they contribute to the fight
against global warming.
Livelihoods funds provide seed funding to
NGOs seeking to implement large-scale
projects.
4. RISK MANAGEMENT
5. LONG-TERM PROJECTS
6. DIRECT BENEFICIARIES
Livelihoods is not a commercial organisation
and does not buy carbon credits to resell
directly to businesses. It is a mutual fund
created by companies that invest in high-risk
stocks and earn carbon credits.
Livelihoods funds are a long-term investment
vehicle. Contracts are drawn up based on
projects that will be spread over 10 or 20 years.
The value created by Livelihoods Funds stays
in the regions where it works. Livelihoods
does not own any land, trees or crops.
Funding provided by investors pre-finances the projects. Crédit Agricole S.A.
has invested €12 million in two funds (LCF 1 and LCF 2). In 2020, three
projects were verified (Mangrove Senegal Océanium, Rural Energy Kenya
Hifadhi 1, Rural Energy Tiipaalga Burkina Faso).
Crédit Agricole S.A. thus offset 51,643
(1)
tonnes of CO
2
(emissions related
to energy and transport within the scope of Crédit Agricole S.A. holding
company, Amundi, CA Italia and Crédit Agricole CIB.
Crédit Agricole S.A. only offsets its direct footprint (energy and
transportation) for some entities. We have chosen not to offset the
financed emissions but to support the decarbonisation of the economy.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Measure and reduce our paper, waste and water footprint
In 2020,
the paper consumption of Crédit Agricole S.A.
was
21,836 tonnes, with 68% of the paper being PEFC/FSC-certified or
made from recycled fibres.
2020
2019
2018
Total consumption
(in tonnes)
21,836
14,701
15,581
Scope covered: 93% of full-time equivalent employees (FTEs).
Breakdown of paper consumption
(as a %)
Office paper
23%
Marketing (including
customer marketing)
16%
Corporate
communication
(including internal
communication)
2%
Editorial paper
(including account statements)
13%
Magazines
46%
The waste categories covered by reporting include paper and cardboard,
electrical and electronic equipment (WEEE and non-IT waste), and
ordinary industrial waste (OIW – excluding paper and cardboard). Multiple
efforts have been made by the entities to recycle waste. In 2020, 59%
of the waste collected by the Group was recycled.
2020
2019
2018
WEEE – Waste electric and electronic
equipment
(in tonnes)
182
163
87
Paper/cardboard
(in tonnes)
1,331
2,006
2,142
OIW – Ordinary industrial waste
(in tonnes)
1,324
1,848
2,286
Scope covered: 96% of FTEs.
With regard to
computer equipment,
a partner from the sheltered
and disability-friendly sector, ATF Gaia, has been collecting
WEEE
for
some Group entities since 2014. It erases hard drive content using a
software application approved by the Group’s Security division and
assesses the operating status of equipment that is subsequently sent for
sorting. Equipment in working order is reused by the partner for charity
purposes, while equipment that is no longer serviceable is destroyed
in an environmentally-friendly manner.
Along with cheques,
bank cards
remain one of the few banking
services to use a physical medium. Its ecological footprint linked to
its plastic and metal components is therefore very real throughout its
life cycle. In order to reduce this impact and in keeping with a circular
economy, in 2013
Crédit Agricole, in conjunction with Crédit Agricole
Payment Services,
began rolling out the “Environmental Card” service
at 35 Regional Banks. The “Collection and recycling of used bank cards
at the branches” component enjoyed uninterrupted successes every year.
In 2020, over 2.4 million cards, equivalent to 12.2 tonnes, were collected.
Since 2014, more than 18 million bank cards, weighing approximately
101 tonnes, have been recovered. Moreover, since January 2016, all new
chequebooks proposed by the Regional Banks have been printed on PEFC
certified paper. This certification guarantees sustainable management
of forests for paper production,
i.e.
ensuring that forests are managed
according to the highest environmental and social standards.
Crédit Agricole S.A.
water consumption
over the last three years has
changed as follows:
2020
2019
2018
Water consumption
(in m
3
)
686,578
749,322
813,147
Scope covered: 97% of full-time equivalent employees (FTEs).
2.4
SOCIAL STRATEGY
2.4.1 A universal approach to our
businesses: being there for everyone
Our environment is changing. Climate change, technological innovation,
new economic actors and models, increasing use of digital technology
and data and new forms of work are some of the changes affecting
society,
accentuating social, generational or regional disparities
and leading to real
societal crises.
The coronavirus pandemic and its economic impacts are accentuating
inequalities, exacerbating regional and digital isolation and fracture, and
creating increased expectations of commitment on the part of businesses.
In this unique environment, banks have a major role to play, and the
Crédit Agricole Group is strongly committed to supporting its customers
and providing them with personalised solutions, while at the same time
encouraging externalities that are useful to society. In this area, it is
the
Group’s ambition to be able to respond to all the concerns of
all of its customers, from the most modest to the most affluent.
2.4.1.1
Economic development for all
Policy
Crédit Agricole S.A. has a long-standing commitment to regional
development and draws on its regional roots
to promote more shared
economic development.
In this way, Crédit Agricole S.A. supports the
economic development of regions by financing economic activities,
promoting access to health services by supporting the development and
strengthening of that sector, which is so vital for social cohesion, and
promoting access to digital services, which rely on the infrastructure
related to the communication technologies that the Group entities finance.
Crédit Agricole S.A. also promotes entrepreneurship and access for
everyone to financial services, including in emerging countries through
the actions of the Grameen Crédit Agricole Foundation.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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Action plans and examples
Regional development
Crédit Agricole’s commitment to regional economic development is based
on its local roots, namely its 8,200 branches in France and 2,100 abroad.
In addition, Crédit Agricole CIB assisted Crédit Agricole S.A. with the
initial issue of its social bonds. Crédit Agricole S.A.
issued an initial €1
billion
social bond
on 1 December 2020 to support local, sustainable
and inclusive regional growth. It aims to revitalise regions and reduce
social inequalities by promoting employment through financing in the
regions hardest hit by the crisis.
A leading issuer on the green bond market, the Group is today naturally
expanding the scope of its efforts in sustainable finance by operating
in the social bond market. These theme-based issues will feed into the
Group’s ambition, rooted in a Societal Project, to further its mutual-
interest commitment to inclusive development.
Its cooperative and mutual-interest identity gives it the responsibility
to act locally to support economic development that is beneficial to
all. These social bond issues will be geared towards the financing of
our professional customers and small and medium-sized companies
(SMEs) in economically disadvantaged regions. The Regional Banks
and LCL are the Group’s spearhead when it comes to boosting regional
economic development.
With this initial issue, the Group aims to support:
1.
Regional economic development, in particular by financing SMEs to
promote job creation in disadvantaged areas.
2.
Social inclusion and empowerment by financing associations working
to promote sport, access to culture and the development of solidarity
initiatives, and by financing social housing.
3.
Access to health services by financing public hospitals and elderly
support structures, as well as SMEs playing an active role in the
health sector.
Crédit Agricole S.A. has mapped the regions and defined as a priority
those with an unemployment rate higher than the national average.
Crédit Agricole S.A. has made a commitment to report annually on the
social and societal impact of the refinanced asset portfolio.
Supporting our customers during the public health crisis
From the beginning of March 2020, the Crédit Agricole Group has been working to help its small business, corporate and agricultural
customers get through this unprecedented crisis.
The Group has played a major role in the distribution of state guaranteed loans, with
€31.5 billion requested by 210,000 companies. The Group’s customers accounted for 28.1% of the number of requests granted, and 23.9%
of the amount granted. In addition, it has granted over 550,000 moratoriums and extensions. In April 2020, the Group put in place a mutual
support system for small businesses during the spring lockdown period. With a budget of €239 million, this extra-contractual gesture of
solidarity is aimed at all policyholders who have taken out professional multi-risk insurance with business interruption.
Access to healthcare
With a 21% market share in 2019 for healthcare professionals,
Crédit Agricole’s Regional Banks
are structuring their development
in the healthcare sector around three guidelines: e-health, medical
desertification and expert appraisal support. As part of their action plan,
the Crédit Agricole Regional Banks, in partnership with the EIB (European
Investment Bank), are the first banks in Europe to set up a financing
package for self-employed healthcare professionals. This €250 million
package became available in December 2020 and will be used to
support the development of self-employed healthcare professionals,
the installation of new practitioners in areas under stress and throughout
the country, and their placement in nursing homes. Special attention is
being paid to regions and territories affected by medical desertification,
with a minimum of 20% of the total package dedicated to this priority.
LCL supports the
health sector
with the introduction of funding
representing €6 billion in outstanding loans at end-2020. Every day,
LCL and Interfimo – its subsidiary serving independent professionals –
support a large number of independent healthcare professionals
throughout France, facilitating citizens’ access to quality care.
Access to digital technology
In 2020, Crédit Agricole S.A. financed a number of major projects,
including:
With financing of €1.1 billion,
Crédit Agricole CIB
supported the
Vauban Group and Bouygues Telecom through their joint venture
(Development Company for Access to Fibre Infrastructure - SDAIF),
whose aim is to accelerate the deployment of fibre optic cable (FTTH)
in medium-density areas in France. More specifically, the purpose of
this company will be to acquire long-term access rights from Orange,
thereby contributing to the co-financing of optical fibre alongside the
main French operators.
Crédit Agricole CIB
structured €2.35 billion in financing in a joint
venture (Violin) co-owned by Iliad and the French infrastructure fund
Infravia to accelerate the deployment of fibre optic cable (FTTH) in
medium- and low-density areas in France. This dedicated company
will co-finance the construction of the new power points deployed
and subscribe to new tranches of co-financing.
In addition, Crédit Agricole is the first bank through the
Regional
Banks
to offer the France Num guarantee distributed by Bpifrance.
This guarantee makes it possible to cover up to 80% of a loan taken
out by a small businesses-SME with under 50 employees to finance
a project to digitise its activity. In this way, it promotes support for our
customers’ business recovery.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
71
Refer to the glossary on page 681 for the definition of technical terms.
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Promoting entrepreneurship
“Village by CA”
is a network of start-up accelerators. Since 2014, it has
been bringing together start-ups and partner companies to accelerate
innovation and business via a unique network present throughout France
and internationally. The 200 start-ups currently hosted are focused
on making an impact and contributing positively to the economy. At
end-2020, 37 villages had been opened and 1,073 start-ups supported
with the help of over 630 partners (SMEs, mid-caps, major groups, public
and institutional players). Lastly, since the opening of the first Village,
the start-ups have raised €1,035 million.
Working with major business-creation support networks since 2003,
LCL as well as the Regional Banks have once again contributed to
strengthening the network of small businesses throughout France:
Initiative France
offers all entrepreneurs financing via an interest-
free, unsecured loan and upstream and post-creation support. Crédit
Agricole is the leading banking partner for companies supported by
the
Initiative France association
with a 33% market share. The
people assisted include 11,800 jobseekers, 8,000 women, 3,600 rural
revitalisation areas and 758 priority neighbourhoods.
Réseau Entreprendre
is a network made up of business leaders
who volunteer to support and finance entrepreneurs with job creation
potential to help them successfully create, take over or grow their
business via collateral-free loans. Crédit Agricole has a market share
of around 30%.
The purpose of
France Active
is to develop a more inclusive and
sustainable economy and promote access to bank credit for project
leaders and entrepreneurs. Together with Crédit Agricole, 1,712
companies are involved in guarantee activities. Its profile consists
of 88% jobseekers, 26% of whom are long-term jobseekers/5% on
minimum social benefits.
LCL
is also a
partner of France Active Garantie
, in which it has a
5% stake. In 2020, it financed 82 start-up projects, most of them from
people looking for jobs, providing financing of more than €4.3 million.
The Crédit Agricole Group has become a leader in
providing capital
support to young innovative companies
through a strategic fund,
FIRECA, a CAIT technological disruption fund operated by Supernova
Investissement, a joint venture between Amundi and the CEA, a Fintech
FI Venture fund in partnership with Breega Capital and 18 regional
Innovation funds. With more than €400 million of funding and due to
its strong regional presence, the Group has become one of the most
active French investors in Innovation Capital (third-largest player in
terms of number of deals in the Avolta VC/M&A Tech Multiples – France
November 2020 ranking).
Access for everyone to our offers and services
Crédit Agricole S.A.
wants to serve all of its customers, from the most
modest to the wealthiest, and to support its customers in situations of
vulnerability. In this context, its purpose is to facilitate the accessibility
of financial products and services (readability of the offer; adapted
pricing, conditions of sale).
EKO is the entry-level banking offer of the
Regional Banks
launched
at the end of 2017. It is open to all adults who want to have a bank
account that offers the essentials of banking with services that allow
them to manage their budget for €2 a month. At end-December 2020,
close to 155,000 customers had signed up for EKO.
LCL
launched LCL Essentiel to meet the needs of young, budget-
conscious urbanites. For €2/month, customers get an international
payment and withdrawal card, a mobile app, a dedicated in-branch
adviser and a deposit account with no account maintenance fees. At
end-2020, LCL Essentiel had 37,000 subscriptions registered since its
launch in April 2019.
In healthcare, Crédit Agricole offers services that are accessible to
everyone. The
Crédit Agricole Assurances
individual healthcare
offer integrates the changes from the “100% Santé” reform, which
makes it possible to offer optical, dental, and audiology services that
are reimbursed in full. This upgraded offer, accessible to everyone
and with cover that is easier to understand, is enhanced with new
innovative services and useful benefits in order to advise and protect
our customers better. Moreover, to improve access to healthcare for the
most vulnerable and offer a local service to the customers concerned,
Pacifica, a subsidiary of Crédit Agricole Assurances, decided to continue
to manage the
Complémentaire Santé Solidaire
policy, which offers a
single, regulated and free or subsidised level of coverage.
In the area of home ownership, the
Regional Banks
are leaders in
the granting of interest-free loans (PTZ). PTZs finance a portion of a
primary residence for first-time homebuyers with moderate incomes.
As at November 2020, 16,895 applications had been financed for €792
million by the Crédit Agricole Regional Banks and 2,750 applications
for €198 million by LCL. The Crédit Agricole Group has financed more
than 38% of all PTZs.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
72
Refer to the glossary on page 681 for the definition of technical terms.
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The Grameen Crédit Agricole Foundation: a tool tailored to emerging countries
2020 was marked by the COVID-19 public health and economic crisis.
The
Grameen Crédit Agricole Foundation
had to quickly adapt
its activity and tools to meet the needs of the organisations supported during that period. It closely monitored the impact of the crisis on
these organisations and supported them by granting moratoriums on its funding where relevant. New financing granted to microfinance
institutions for populations without banking access was lower than in previous years due to the slowdown in the activity of the institutions
as a result of the crisis. The Foundation ended the year with a solid balance sheet: assets totalling €81.2 million were provided to 75
microfinance institutions (68 institutions financed and seven supported through technical assistance alone) and 12 social enterprises in 39
countries. Women’s entrepreneurship and rural economic development are still a key part of what the Foundation does: 87% of customers
of financed institutions are women and 83% live in rural areas
(1)
.
The Foundation has adopted several measures to address the COVID-19 crisis.
Since March, the Foundation has kept in regular
contact with the organisations financed to understand the effects of the crisis and their needs. The findings of surveys carried out and
other analytical articles are published in the COVID-19 Observatory, a platform listing all articles related to the COVID-19 pandemic. The
Foundation has also spearheaded an international coalition of 30 donors and other key players in inclusive finance to take concerted action
in the face of the economic crisis. The coalition agreed on a set of principles to protect microfinance institutions and their customers in the
COVID-19 crisis. The pooling of information and analyses, as well as the coordinated implementation of decisions, were vital to supporting
the sector. Lastly, the Foundation responded favourably to its partners’ requests for maturity extensions by granting 37 loans worth €7.1
million to 29 beneficiary organisations.
The Foundation worked in close collaboration with its donors
. It received new loans from Agence Française de Développement (AFD)
a €10 million loan, a €900,000 subsidy to launch a multi-insurance technical assistance programme
(2)
and a €5 million COVID-19 financing
package together with another portfolio guarantee – the sixth one since 2011. These new loans will consolidate the Foundation’s action
in support of microfinance. Alongside the European Investment Bank and the Luxembourg Government, the Foundation is stepping up its
support for institutions in West Africa as part of a new technical assistance programme with a €332,000 subsidy
(3)
.
The Foundation also strengthened its ties with the Crédit Agricole Group.
It signed a cooperation agreement with Crédit Agricole
Romania, which will finance local microfinance institutions with the support of the Foundation, which will provide microfinance expertise
and back the loans granted by CA Romania
(4)
. The Foundation also established, with Dai-ichi Life Insurance Company Limited and Crédit
Agricole CIB’s Tokyo branch, an innovative 10-year JPY 2 billion loan scheme to promote the development of microfinance for women in
rural economies in developing countries
(5)
. Banquiers Solidaires, the skills volunteering programme launched with Crédit Agricole S.A. for
the organisations financed, celebrated another year of existence, with 20 missions initiated since its launch in 2018.
In addition, the Foundation has been selected to participate in the SSNUP
(Smallholder Safety Net Upscaling Programme),
a new
programme launched by ADA, a long-standing Luxembourg partner organisation of the Foundation, which aims to support small farmers in
Africa, Latin America and Asia over a 10-year period with a budget of €55 million. As part of this programme, the Foundation will coordinate
technical assistance missions as part of a €1 million package for the organisations it finances
(6)
.
In 2021, the Foundation will consolidate its action around the 2019-2022 Strategic Plan, which aims in particular to grant €200 million to
100 organisations by the end of 2022. Three themes remain central to the Foundation’s action in the next few years: strengthening support
for microfinance institutions, in particular small- and medium-sized institutions (2022 target: 90% of the institutions financed), developing
the resilience of rural economies through social impact companies and promoting social impact in the financial sector, especially through
partnerships with the Crédit Agricole Group.
(1) See the Foundation’s impact report at https://rapport-impact.gca-foundation.org/
(2)
Read the press release published with the AFD: https://www.gca-foundation.org/espace-medias/#le-groupe-agence-francaise-de-developpement-accorde-un-pret-de-10-me-
a-la-fondation-grameen-credit-agricole-pour-favoriser-lacces-des-populations-fragiles-aux-services-financiers
(3) More information on the EIB financing: https://www.gca-foundation.org/espace-medias/#un-programme-dat-pour-renforcer-la-microfinance-en-afrique-de-louest
(4) Read more about the partnership with CA Romania: https://www.gca-foundation.org/espace-medias/#un-partenariat-fondation-grameen-credit-agricole-et-credit-agricole-
roumanie-pour-la-microfinance
(5) Read the press release published with Crédit Agricole CIB here: https://www.gca-foundation.org/espace-medias/#credit-agricole-et-dai-ichi-life-sassocient-pour-soutenir-la-
microfinance-en-faveur-des-femmes
(6) More information about the SSNUP here: https://www.gca-foundation.org/espace-medias/#lancement-du-programme-ssnup-soutenir-durablement-les-petits-exploitants-
agricoles-dans-le-monde
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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SENEGAL
ZAMBIA
2
BURKINA FASO
2
IVORY COAST
2
LUXEMBOURG
FRANCE
GHANA
TOGO
2
BENIN
MOROCCO
KYRGYZSTAN
TAJIKISTAN
2
SIERRA LEONE
2
MOLDOVA
ROMANIA
KOSOVO
2
GEORGIA
AZERBAIJAN
MONTENEGRO
BOSNIA
SRILANKA
JORDAN
PALESTINE
NIGER
2
EGYPT
2
KAZAKHSTAN
INDIA
DRC
2
MALI
2
BANGLADESH
2
MYANMAR
2
CAMBODIA
INDONESIA
HAITI
2
UGANDA
2
SOUTH AFRICA
MALAWI
2
KENYA
2
RWANDA
2
Countries in which the Foundation develops
its activities in partnership with a Crédit Agricole subsidiary
Other countries of intervention
Key figures of the Foundation
ACTIVITY
SUPPORTED ORGANISATIONS
BENEFICIARIES
of organisations funded
as of september 2020
39
countries
100%
€
81.2
M
PORTFOLIO
in fragile countries
(2)
PORTFOLIO
followed by the Foundation
(1)
Sub-saharan Africa
Western Europe
Eastern Europe and
Central Asia
Caribbean
South and South-East
Asia
Middle East and
North Africa
0,01%
5,1%
6,4%
39,2%
28,1%
21,2%
44%
83
%
Financing in
LOCAL CURRENCY
FINANCING WITH
covenants limiting exposure to foreign
exchange risk
7.3
M
BENEFICIARIES
FEMALE
CLIENTS
IN RURAL
AREAS
87%
83%
75
microfinance
INSTITUTIONS
68
7
Institutions
funded
supported
solely with
technical
assistance
12
social impact
ENTREPRISES
Business sectors
(4)
Agribusiness
Essential services
Financial services
Culture & education
37%
18%
9%
36%
Types of institutions
(3)
TIER 1
TIER 2
TIER 3
9%
51%
40%
38
ORGANISATIONS
beneficiaries
MISSIONS IN 2020
53
launched
68
on going
or finalised
TECHNICAL ASSISTANCE
(1) Portfolio breakdown by geographical area
(2) Fragile countries according to the World Bank and OECD lists
(3) Breakdown by number of funded institutions.
Tier 1 : >$100M portfolio);
Tier 2 : $10-100M portfolio; Tier 3 : <$10M portfolio)
(4) Breakdown by social impact enterprises
December 2020
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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2.4.1.2
Developing preventive actions
Policy
Prevention is the implementation of a set of measures designed to avoid
a foreseeable event that is believed to result in harm to the individual
or the community. Its intrinsic vocation is to prevent a risk, misfortune
or situation from spreading or getting worse.
In addition to prevention for its insureds, Crédit Agricole conducts
initiatives to detect financial vulnerability and combat overindebtedness
and promote digital inclusion and in-home care for older adults.
Action plans and results
Detecting financially vulnerable customers
and combatting overindebtedness
In order to meet the specific needs of its customers and detect various
situations of financial vulnerability as quickly as possible, the Crédit
Agricole Group redesigned and broadened its criteria for detecting
situations of financial vulnerability when Article R. 312-4-3 of the French
Monetary and Financial Code (Decree no. 2020-889 of 20 July 2020)
was amended. For the monthly credit flow, the sole regulatory criterion
of automatic detection left to the discretion of the banks, the Crédit
Agricole Group has chosen to use a high threshold, which it defines as
the average monthly net minimum wage in 2020 and the median income
per household (Eurostat),
i.e.
€1,535, to allow a much larger portion of
its customers to benefit from the cap on bank charges.
In addition to this mechanism for automatically detecting situations
of proven financial vulnerability, Crédit Agricole’s
Regional Banks
are strengthening their mechanism for the early detection of potential
financial vulnerability among their customers, to enable advisers to
intervene upstream with an analysis of the financial situation and a
proposal for support tailored to their situation.
In 2020, Crédit Agricole’s
Regional Banks
created a platform to help
customers manage their budgets. The purpose of this platform, which is
open to customers and non-customers alike, is to contribute to financial
information by providing useful information such as day-to-day advice
on budget management, support in the event of hard times, moderately
priced banking solutions (see above) and links to our partners’ inclusive
offers, such as the Orange Group’s “Coup de pouce” offer, “Programme
Malin” for infant nutrition, the Veolia Group’s water vouchers and the
CRIT Group’s job and support offers.
At
LCL,
if a situation of proven or potential financial vulnerability is
detected, the customer in question will receive a letter describing the
advantages of the “LCL Initial” offer, which gives them access to a range
of banking services that will help them manage their account. The national
“LCL Parenthèse”
unit also provides support in certain situations that
are either complex or require coordination with organisations involved in
the fight against over-indebtedness, such as “Points Conseils Budget”.
Crédit Agricole Consumer Finance
, as a major player in consumer
credit in Europe, is committed to preventing and dealing with over-
indebtedness. From 2013 in France, the company created the Customer
Support Agency, which is tasked with:
identifying customers showing signs of budgetary vulnerability;
analysing and assessing their personal and financial situations and
how those situations may change;
looking for and offering customers solutions tailored to their situations,
involving partners like Crédit Agricole’s Points Passerelle, Crésus or
Crédit Municipal de Paris where appropriate;
monitoring the support solution.
In 2020, 5,022 customers in a vulnerable financial situation received
personalised support. In addition,
Crédit Agricole Consumer Finance
continuously supports vulnerable groups through budget education
initiatives rolled out in France, Italy, Germany and Portugal.
The
Points Passerelle
scheme relies on
36 Regional Banks
to help
and support people affected by a life crisis (unemployment, death
of a loved one, divorce, etc.) so they can regain stability. More than
11,000 vulnerable people have been supported by 120 advisers and
800 volunteers (elected representatives and retired Crédit Agricole
employees) spread over 80 reception centres and a network of 400
local partners. Les Points Passerelles have also supported a number
of socio-economic projects through the granting of more than 2,300
personal micro-loans in 2020. Aware of the importance of maintaining
car insurance, particularly for such vulnerable people, Crédit Agricole
Assurances (through its subsidiary Pacifica) helps Points Passerelle
applicants take a “break” from paying car insurance premiums.
Digital inclusion
Digital inclusion is vital to the accessibility of financial services.
Currently, 13 million French people say they are excluded from the
digital world. The COVID-19 crisis is a further illustration of its essential
nature. Digital technology has been a key element in maintaining ties
to one’s environment, whether it be one’s family and friends, work,
school or even one’s bank.
Actions are being carried out by the
Points Passerelle
, especially in
the
Atlantique Vendée and Nord de France Regional Banks
, such as
digital cafés for young people in the second-chance schools network
or the donation of tablets. They were already underway in 2019 and
have sometimes accelerated with the public health crisis. In addition,
since 2019, the Nord de France Regional Bank, through its Foundation,
has been supporting a pilot scheme with Emmaüs Connect and Pôle
Emploi in Roubaix and Béthune to train jobseekers in digital skills. The
association is now in contact with Points Passerelle and is a success
with 400 beneficiaries in Roubaix.
Older seniors and carers
The “Bien Vivre à Domicile” (BVAD) initiative aims to support older
senior and carers (11 million French carers who support at least one
relative, including 4 million on a daily and regular basis). This initiative
is based on a free assessment carried out by a bank adviser using a
tablet application and has several objectives:
recreating links with senior customers
and providing them with
relevant advice on important issues related to ageing well;
better understanding their life projects and their needs
,
to help
them plan ahead with a tool based on 4 main themes: housing comfort
and security of daily life, well-being and social ties, finance, insurance
and inheritance;
Introducing them and their carers to banking, insurance and
service solutions
(including VIAVITA’s personal services, the ViaREN
works management service – both subsidiaries of Crédit Agricole
Assurances – and the Nexecur remote assistance and remote
surveillance).
BVAD was created jointly by
Crédit Agricole Assurances and Crédit
Agricole S.A. with seven Regional Banks.
Delivered at the end of
2019, the results are very encouraging in terms of both customer and
adviser satisfaction. Currently, six Regional Banks have launched the
initiative, ten will conduct a pilot during the first quarter of 2021, seven
during H2 2021, and ten are currently considering the matter. After the
delivery at the end of 2020 of “BVAD by telephone”, which makes an
entirely remote assessment given the situation (lockdown and seniors
unable/unwilling to travel to the branch), new services will be added
to the initiative, especially for carers.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Prevention for our insureds
Prevention is an integral part of our comprehensive approach to
understanding risks and supporting customers to better protect people
and preserve their personal and business assets. Its principles of action
are based on prevention to avoid the risk, protection to reduce it and
minimise its impact, and insurance to compensate for its consequences.
In order to limit accidents and claims,
Crédit Agricole Assurances
shows customers how to take preventive action. This is rounded out by an
offer of protective equipment and specific training solutions. Prevention
advice is provided through several channels (contracts, text messages,
workshops, local networks or among members at general meetings of
the Local Banks, etc.). Increased support for customers is provided on
certain issues: free post-driving licence instruction courses for young
drivers, special prices for protective equipment, verification of electrical
installations, remote monitoring systems against theft or helplines for
older adults, support for customers who have experienced repeated
incidents of the same nature, insurance offers including the provision
of useful assistance services to protect them and their families in the
event of death, dependence, disability, or for funerals.
2.4.1.3
Social cohesion and living well together
Policy
Crédit Agricole continues to be committed to promoting social cohesion.
We consider housing to be one of the foundations for living fully as
a citizen. By supporting social housing, assisting economic players
seeking to create positive social externalities, especially ones connected
to the social and solidarity economy, and pursuing an active policy
of volunteering and employee engagement, Crédit Agricole S.A. is
committed to social cohesion and living well together.
Action plans and results
Social housing
Crédit Agricole is the leading provider of housing financing in France.
It makes major contributions to the development of home ownership
for everyone.
In November 2020,
LCL
signed a partnership with
Action Logement
,
a leading player in social and intermediate housing in France, which
aims to facilitate access to housing to promote employment. With this
partnership, LCL is strengthening its role as an adviser on all aspects
of real estate projects and the promotion of sustainable cities.
Action
Logement
offers a wide range of solutions in the form of grants or loans
for home ownership, the financing of energy renovation, support for
professional and residential mobility (especially for young working people
and people on work-study schemes) and the improvement of housing for
seniors. The aim of this partnership is to provide LCL’s customers with
personalised advice on a wider range of products whatever their project.
Crédit Agricole’s
Regional Banks
are rolling out the social home
ownership offer and programme for low-income households. This “OFS/
BRS” (
organisme foncier solidaire/bail réel solidaire
) programme is based
on a principle of separating the purchase of land from that of the building
to deal with soaring land prices in competitive real estate markets. By
offering purchase prices 15% to 40% lower than market rates, it helps
low-income families access homeownership. This programme was
opened up to social housing bodies under the Elan Law and 44 OFS are
now accredited. More generally, Crédit Agricole’s Regional Banks are
among the banks that distribute regulated social housing loans (PLS,
PLI, PSLA). Apart from Caisse des Dépôts, only three other commercial
bank networks distribute these loans to housing providers who build
housing for a lower-income customer base.
Support for high-impact players
For businesses in the
social and solidarity economy (SSE) sector,
the
goal is to address social challenges such as social integration, housing
and health. Faced with the budgetary constraints of governments or
local authorities, these businesses also need private funds in order to
expand. Under the “Ambitions 2022” strategic plan, the Group entities
strive to support high-impact players: asset management, insurance
(life insurance products, in particular) and investment funds:
for
Amundi
: double SSE investment to €500 million;
for
Crédit Agricole Assurances
: increase the promotion of its “
Contrat
solidaire
” life insurance policy;
for
Crédit Agricole CIB
: strengthen its leadership in arranging
social
bonds;
for
Regional Banks
: create a support system for social impact
start-ups in Villages by CA.
In 2020, the
Amundi
Finance and Solidarity fund was a leading social
impact fund in France, with assets under management of nearly €331
million. In 2020, which was characterised by the global public health
crisis, Amundi focused its efforts on supporting, assisting and monitoring
the companies in its portfolio. As a result, nearly €40 million have been
reinvested to strengthen and develop the economic model of these
companies. The dedicated website (https://amundi.oneheart.fr/) has also
been expanded with a section called “The Solidarity Village”. Following
the creation in 2018 of a fund focused on access to education, CPR
AM – an Amundi subsidiary – launched CPR Invest Social Impact in early
2020. It is the first global equity fund to place inequality reduction at the
heart of its investment process. It combines the equity of companies
that best contribute to inequality reduction. This fund provides investors
with a unique solution to measure and incorporate financial risks related
to inequality, while also contributing (through their investments) to
reducing such inequality.
Crédit Agricole Assurances,
through its subsidiary Predica, offers a
“contrat solidaire”, the first Finansol-certified social multi-vehicle life
insurance policy which combines savings and social good. The year 2020
was marked by increased support for advisers, with a new e-learning
system being one sign of this. For customers, the Essentiel pre-sales
document and a redesigned Facebook feature have been made available.
Each year Predica reports to the policyholders about the social impact
generated by the policy funds (number of jobs created, number of people
re-housed, number of healthcare beneficiaries, number of microcredit
beneficiaries abroad, tonnes of waste recycled, etc.).
LCL
offers ethical, targeted and socials funds in the “Investir Autrement”
(Invest Differently) range. The range includes its Hymnos ethical fund,
which excludes companies that harm people or society and its community
development and sharing fund which it pioneered in the early 1990s
called Solidarité Habitat et Humanisme and Solidarité CCFD Terres
Solidaires.
Crédit Agricole CIB
has been a global leader in
arranging social
bonds.
Accordingly, Crédit Agricole CIB acted as bookrunner for more
than €12.2 billion in social bonds in 2020, representing a market share
of more than 10% (source: Dealogic). Crédit Agricole CIB is very proud
to have helped with the initial issue of social bonds by issuers such
as MunifFin (€500 million issued in September 2020), NRW Bank (€1
billion in June 2020), and UNEDIC (two issues in May and June 2020 of
€4 billion each, as part of the response to the COVID-19 crisis). Crédit
Agricole CIB also assisted Crédit Agricole S.A. with the initial €1 billion
issue of its social bond on 1 December 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Volunteering and employee engagement
In addition to being a major
partner, sponsor and patron,
Crédit Agricole
is also France’s leading bank for non-profit associations. In 2020, Crédit
Agricole S.A. allocated almost
€34.4 million to thousands of local
and national projects.
In addition to financial support in the form of grants, gifts, scholarships,
bursaries, etc., the Crédit Agricole Group entities make donations in kind,
volunteer their skills, and make their facilities and human resources available
to communities throughout the country as well as abroad, especially in Italy.
The projects supported are chosen to optimise their impact.
Supporting inclusion
In 2020, Crédit Agricole S.A. provided financial support of €3.1 million
to inclusion-related associations in France and abroad. In particular,
Crédit Agricole S.A. supports:
The associations
Viens voir mon Taf
and
Un stage et après
,
which
have been supported since 2019, have the mission of finding company
internships for year
10 students in priority education networks (REP
and REP+). They support Crédit Agricole S.A. in organising the hosting
of year 10 internships.
The
Un Avenir Ensemble
Foundation organises the tutoring of
deserving young people from their studies to their professional life.
In 2020, Crédit Agricole S.A. supported it to create a benchmark and
a traceability system for the acquisition of so-called
soft skills by
these young people.
Entourage
helps homeless people by developing a support network
between neighbours and local associations.
Through the development
of the Linked Out project, its purpose is also professional reintegration.
Dons Solidaires
is an association that assists companies in the
redistribution of their unsold new non-food products by distributing
them to the French network of associations. In 2020, Crédit Agricole S.A.
supported several projects on its behalf, such as the consolidation
and extension of regional branches and the completion of its first
impact study.
Stop Illettrisme
fights against illiteracy in the workplace. Over the past
three years, Crédit Agricole S.A. has rolled out a programme across its
campuses in the Paris region to support the employees of maintenance
service providers who take a diploma level course in French.
Entrepreneurs du Monde
supports the economic integration of
families in very precarious situations and facilitates their access to
essential goods and services.
Funds raised to address the COVID-19 public health crisis
An emergency fund called “
Tous mobilisés pour nos aînés
” was created
to fund basic necessities for older people, protect them and enable them
to keep in touch with their loved ones during the public health crisis.
Created by the Crédit Agricole Solidarité et Développement Foundation,
this fund was financed by the Crédit Agricole Regional Banks and the
Crédit Agricole S.A. Group. With its €20 million in resources, it enabled
older adults as well as carers in care homes and in-home carers to
be supplied with personal protective equipment. In total, over 810,000
beneficiaries and nearly 6,000 supported facilities (4,400 residential
care homes (EHPAD) and 1,600 in-home care companies) have benefited
from these funds.
In addition to this “emergency fund”, Crédit Agricole S.A. has undertaken
to contribute €13.5 million to hospital facilities and non-profit associations
in support of social assistance and medical and sanitary equipment
projects in France and abroad. In this context, the Red Cross received
more than €3 million in support from Crédit Agricole entities in Italy and
Amundi in France and abroad. Crédit Agricole CIB provided €300,000
in support to the APHP and the Simplon Foundation as part of the
#Gardonslelien Avec Nos Aînés initiative. These support actions were
crowdfunded by employees. LCL also donated 1.7 million masks to the
Normandy regional health agency.
Employee engagement
Created in 2012, the CA Solidaires programme supports
the engagement
of Group employees
in support of charitable causes of general interest.
Various forms of engagement through skills volunteering or volunteer
work are offered: missions carried out at non-profits, one-day collective
or consultancy missions together with other Group employees, or support
provided to recipients of tutoring services.
The Crédit Agricole S.A. “
Coups de Pouce
” (Helping Hand) programme
supports employees involved in charity work. In 2020, seven entities
(Amundi, CACEIS, CA Immobilier, Crédit Agricole Assurances, Crédit
Agricole CIB, Crédit Agricole S.A. and LCL) took part in this programme.
The principle is that each employee can submit his or her charitable
project to a jury to obtain a grant. In 2020, a total of 98 charities received
€322,000 in financial support.
A
humanitarian banking
programme was set up in conjunction with
the
Grameen Crédit Agricole Foundation
whereby Group employees
were offered the opportunity to take on technical assistance assignments
on behalf of the Foundation’s partners. A total of 128 mission days have
taken place since the creation of this programme.
Cultural sponsorship
Crédit Agricole S.A. is a partner of the European Heritage Days with the
French Ministry of Culture. Crédit Agricole S.A. realises that heritage
is a regional challenge and uses this sponsorship to echo the role
played by the Regional Banks and the Crédit Agricole Pays de France
Foundation in the regions.
In total in 2020, Crédit Agricole S.A. supported cultural sponsorship
projects in the amount of €3.2 million.
Protection of the environment
Crédit Agricole S.A. has been an official partner of the Plastic Odyssey
expedition
since 2019, along with 16 other Group entities, whose
aim is to curb plastic pollution of the oceans and promote recycling
channels. This worldwide awareness and action programme is conducted
from an ambassador ship for the reduction and recycling of plastic
waste. It will set sail in the spring of 2021, first in France and then in
the Mediterranean. The issues for these ports of call: by sharing open
source recycling technologies, encourage the creation of plastic recycling
micro-companies. Crédit Agricole’s financial commitment will last for
five years and total €1.2 million.
Since 2018, Crédit Agricole Assurances has been a partner of the Plantons
pour l’Avenir endowment fund. The fund aims to support the development
of innovative forest management practices tailored to climate change
and to accelerate reforestation in France by providing the necessary
funding for planting projects (in the form of an advance repayable at
0% interest over 30 years), supported by owners committed to the
sustainable management of their forests. Since 2018, more than 666,000
trees have been planted through this partnership.
Under its three-year framework agreement with France’s
Muséum
national d’Histoire naturelle (MNHN)
, Crédit Agricole S.A. will continue
to support the MNHN’s research programme on biodiversity in agriculture
and natural site preservation as part of joint volunteering actions with
other Regional Banks and the CA Pays de France Foundation. In 2020,
the natural sites of Le Harmas de Fabre (Vaucluse) and Parc de la Haute
Touche (Indre) were supported. Crédit Agricole S.A. has also entered into
a partnership with some of the Regional Banks along the coast for the
Plages Vivantes participatory science programme. Since the signature
of the sponsorship framework agreement in 2018, the Crédit Agricole
Group has supported the Muséum national d’Histoire naturelle with
€545,000 in funding.
In total in 2020, Crédit Agricole S.A. supported environmental volunteer
projects in the amount of €835,000 million.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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2. ESG strategy: being a committed player in a socially acceptable climate transition
2.4.2 A strong ethical culture
In line with stakeholder expectations,
a culture of ethics is one of the
foundations of the Crédit Agricole Group’s value creation model
.
The interaction of the Group’s systems, standards and values are all
powerful levers to reinforce, every day, this powerful distinguishing
mark of our Group.
2.4.2.1
A group committed to protecting
the interests of its customers
and the trust of its stakeholders
Policy
The Group Compliance department
defines and implements a Group-
wide non-compliance risk prevention policy. These risks include money
laundering, terrorist financing, international sanctions, fraud, corruption
and failure to follow the rules for protecting customers and personal
data. This system relies in particular on organisations, procedures,
training and awareness programmes, and information systems or tools
used to identify, assess, monitor, control these risks and determine the
necessary action plans.
Action plans and results
Launched in 2019 within the Compliance department for the next three
years, the
Smart Compliance
project is organised around two lines:
the first is defensive, organised around adhering to regulations and
protecting its corporate image;
the second is offensive and targets operational efficiency and fairness
to customers.
Its implementation in 2020 will result in various projects to improve
customer relations, deploy high-performance Group tools, increase
efficiency and productivity and develop the innovation ecosystem, in
particular with the innovation laboratory for compliance: Compliance
Valley.
Smart Compliance, including the
customer protection
system,
is being used for the 2022 Group Project. As a result, in 2020, the
Crédit Agricole Group continued to deploy this system, which is a strong
distinguishing mark of the Customer Project, Societal Project and Human
Project, as part of a continuous improvement approach.
Four pillars of excellence
were defined to achieve the objectives set
for
customer protection
:
a high level of quality of offerings and approaches marketed (product
governance monitored over time, standardised NAP process);
a permanent transparency requirement
,
through improvement
of clarity of information provided to customers (documentation and
pricing);
the implementation of fairness in advising:
delivering fair advice to
all of our customers, including the most vulnerable and disadvantaged.
This challenge takes on its full meaning in the context of the public
health crisis, where the Crédit Agricole Group is putting all the
necessary resources in place, both for its individual and small business
customers, to support them through this exceptional period;
listening to customers
as a tool for the continuous improvement of
the offerings and services marketed by the Group. To that end, the
claims system is at the heart of our actions.
Given the strengthening of legal obligations relating to the
fight against
corruption
, since 2018 Crédit Agricole has taken the necessary steps to
deepen its systems and implement the recommendations of the French
Anti-Corruption Agency. These include updating procedures and operating
methods by defining appropriate governance, preparation of a dedicated
(1) Achievement rate based on e-management, within the Group’s scope (excluding LCL and BPI Romania), calculated based on the workforce present at the time and paid at
31 December 2020 for the reference period (three years).
Anti-Corruption Code, renovation of its training and awareness-raising
programme for employees to highlight the behaviours to be adopted
to avoid any breach of probity. Crédit Agricole is the first French bank
to receive ISO 37001 certification for its anti-corruption management
system, which was renewed in 2019
(1)
.
98% of Crédit Agricole S.A. employees had received anti-corruption
training by the end of 2020.
Fraud prevention
is designed to protect the Bank’s interests and to
safeguard customers. The fraud prevention system has been deployed
in all Crédit Agricole Group entities since 2018. A Compliance/Prevention
of Fraud and Corruption business line structure has made it possible
to strengthen tools, detection and control procedures and employee
training programmes.
At end-2020, 96% of Crédit Agricole S.A. employees had been trained
in fraud prevention.
The Crédit Agricole Group regularly strengthens its measures to
prevent
money laundering and combat the financing of terrorism
. Our system,
which is managed by the Financial Security business line throughout
the Group, is based on the implementation of constant vigilance
measures throughout the business relationship, for both customers
and transactions, in a manner that is adapted and proportionate to the
risks. To this end, IT tools for customer profiling and the detection of
unusual operations assist the Group’s employees. The
fight against
terrorist financing
and
compliance with international sanctions
also require constant cross-referencing of customer files with sanctions
lists and the monitoring of international operations. In addition, general
training is provided to all employees, as well as specialised training for
the most exposed functions. Moreover, as a follow-up to the agreements
signed with the US authorities in October 2015 for actions that date
back to a period between 2003 and 2008, the Group has implemented
a staggered remediation plan that will continue until 2021 and is
designed to significantly strengthen its system for managing the risks
of non-compliance with international sanctions. This plan is regularly
monitored by the Board of Directors.
These preventive measures have been supplemented by the
implementation of a
whistleblower mechanism
whereby employees
are able to alert the entity’s Compliance Officer if they observe an
irregularity in the usual process of reporting non-compliance or if they
feel pressured to do something that would constitute non-compliance,
without going through their direct supervisor. The deployment of a
new
IT platform
throughout the Crédit Agricole Group’s scope to enable all
employees to exercise their whistleblowers’ right in complete safety
and confidentiality was finalised in 2020. It covers over 300 entities
with around 500 employees authorised to use the tool to process alerts.
At this stage, over 100 alerts have been raised and processed via this
new system, which also covers reports of incidents that fall within the
scope of the duty of vigilance.
The Crédit Agricole Group adopted a
Personal Data Code
in 2017. The
Code consists of five core principles (data security, integrity and reliability,
ethics, transparency and education, customer control) designed to inform
customers and to share best practice with employees of Group entities
(2)
.
2.4.2.2
The promotion of ethical culture
among Directors and employees
Policy
Beyond compliance with the regulations and ethics applicable to banking
and financial activities, Compliance:
is an opportunity to convey a positive image of responsible entities
acting in the interests of their customers;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
78
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2. ESG strategy: being a committed player in a socially acceptable climate transition
helps to maintain trust in the bank among all stakeholders (customers,
employees, investors, regulators, suppliers and companies).
The implementation of the Crédit Agricole Group’s culture of compliance
and ethics is based on an internal system of reference documents that,
along with legal and regulatory requirements, is based on three levels
of coverage:
the Code of Ethics
, which was made available to the public in 2017
and is the same for all Group entities, affirms our commitments, our
identity and our values of local presence, responsibility and solidarity.
It also highlights our principles of action, which we follow every day
vis-à-vis our customers, society and our employees by adopting
ethical behaviour;
Codes of Conduct
that translate the principles of the Code of Ethics
into operating standards to be applied operationally in a form adapted
to the specific nature of each entity’s activities, to guide the actions,
decisions and behaviour of each individual on a daily basis. These
Codes of Conduct also include a specific anti-corruption section,
pursuant to the requirements of the Sapin II Law;
the
Corpus Fides
is a collection of standards and procedures that
identify the rules that the Group entities, executives and employees
must follow and reflect compliance-related regulatory changes.
Action plans and results
A programme for instilling a
culture of ethics
was defined in 2019
and implemented in 2020 to acculturate employees to ethics in an
innovative way and to measure, using common indicators, their level of
acculturation. This ethical culture is also shared through a comprehensive
programme of
mandatory training
sessions for all employees in France
and abroad.
An ethics acculturation programme continued in 2020 with the designing
of an ethical communication kit (visual identity,
newsletter template)
and the sending of an “Ethics and you” quiz to the employees of the
entities registered in the FReD initiative. Some entities also have their
own programme to instil an ethical culture, such as Crédit Agricole
Consumer Finance France, which in 2020 launched the distribution of
four podcasts
presenting issues and measures to combat corruption
and implemented “Agora Compliance”, an acculturation programme
for 12 Compliance coaches.
In 2020, the
training programme
for all of the Group’s employees
was maintained
with the obligation to take the five e-learning modules
that make it up: day-to-day compliance, anti-money laundering and
combating the financing of terrorism (AML-CFT), international sanctions,
the prevention of external fraud and the fight against corruption.
The granularisation of “Everyday Compliance” e-learning
continues,
enabling employees to be directed, if necessary, only to the content they
need. Its content has also been strengthened. This new version will be
made available to entities starting in January 2021. The anti-corruption
certificate required by the AFA
(1)
has been natively integrated into the
“Combatting corruption” e-learning module. The signature is collected
at the time of training. We took advantage of this opportunity to update
the
e-learning content to raise employee awareness of the right to alert
and the whistleblower mechanism set up within the Group.
In 2020, 95% of Crédit Agricole S.A. Group employees had received
training in day-to-day compliance (data confidentiality, irregularities,
right to alert, reputational risk, inside information, etc.)
(2)
.
(1) AFA: French Anti-Corruption Agency.
(2) Achievement rate based on e-management, within the Group’s scope (excluding LCL and BPI Romania), calculated based on the workforce present at the time and paid at
31 December 2020 for the reference period (three years).
As part of efforts to professionalise the Compliance business line,
among the 11 in-person training courses offered, the 3.5-day “Fides
Academy Orientation Workshop” in 2020 professionalised nearly 60 new
Compliance hires (France and abroad).
In accordance with European Banking Authority guidelines and the
provisions of the French Monetary and Financial Code,
the Compliance
Officers train Directors and members of the Board of Directors
on
current regulatory issues. For new members of the Boards of Directors
of the entities, material on “Compliance Issues” was made available
to the Group entities to train them in-person. The objectives are to
provide summary information on current regulatory issues relating to
compliance, financial security and international sanctions, as well as
to discuss the practical consequences of this environment on the role
of the Director. Once a year, the Board of Directors is also informed of
regulatory changes during the year.
2.4.3 The Human Resources ambition:
to strengthen autonomy and the
assumption of responsibility
The women and men of Crédit Agricole are central to the success of the
Group. In an increasingly digital society, the direct responsibility that a
company’s empowered employees can offer their customers is key. The
Group places this responsibility at the centre of its Human Project. We
have a strong commitment to our employees as a responsible employer:
to ensure equity and promote diversity with a view to inclusion;
to improve the quality of work life and guarantee the health and
safety of employees;
to maintain an active dialogue with employee representatives.
Our ambition:
To be the preferred employer in France in financial
services and in the Top 5 in Europe.
To that end, the key success
factors are cultivated by the Human Resources Department:
a variety of career paths with opportunities for advancement fostering
employee accountability, with a view to sustainable employability;
an innovative and fulfilling working environment and practices, which
drive performance;
a responsible, high-performance company which fosters customer,
regional and economic development in France and abroad.
2.4.3.1 Encouraging responsibility
Our
Human Project
is focused on
local accountability to offer
customers ongoing access
to a trained, autonomous person with
the authority to take action. This empowerment of all customer-facing
employees will go hand in hand with a change in our managerial culture.
To guarantee progress, we have defined support for everyone from our
managers to our field employees as follows:
leaders who embody the managerial transformation;
entrepreneurial managers who distribute the new codes of behaviour
to all teams;
employees who take an active role in their careers and who get
training on digital, behavioural and cross-disciplinary skills to continue
to develop and adapt to changing business lines.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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2. ESG strategy: being a committed player in a socially acceptable climate transition
In addition to this variation and to drive this transformation among all
employees, Crédit Agricole S.A. has partnered with
Philonomist, a digital
platform that uses a philosophical approach to provide content on
major societal and economic challenges
for the Group. One year after
its launch, there are 5,472 registered employees, more than 23,500
connections to the site, 47 personalised newsletters published, and
users from 23 countries.
Listening to our employees and encouraging engagement
Policy
In a changing environment,
employee engagement is a more
important driver than ever for performance
. Launched in 2016, the
ERI (Engagement and Recommendation Index), an annual anonymous
internal survey was rolled-out simultaneously in the various Group
entities in France and abroad.
Action plans and results
This year, the scope included 19 Crédit Agricole S.A. entities in France
and abroad, as well as 30 Regional Banks and affiliated entities. A total
of 126,015 employees were invited to participate in the survey in
52 countries.
A record participation rate of 80% was achieved, up 3 points since 2019
(and 21 points since 2016). The results highlight areas of strength, which
are on the rise and should be capitalised on, in particular increased
commitment to the initiative (+3 points compared to 2019), pride in
belonging to the Group (+4 points), understanding and adherence to
the Group’s and the company’s strategy (+7 points) and the employer
recommendations (+5 points). The tools and resources made available
to facilitate the work of employees, and the strengthening of support for
managers under heavy pressure in the current public health crisis, are
sources of dissatisfaction where Crédit Agricole S.A. is continuing its
efforts.
Crédit Agricole S.A.
launched an initiative to listen to employees
after the first lockdown. The
Legend
questionnaire was sent in June 2020
to all employees of Crédit Agricole S.A. entities in France and abroad.
Over 50,000 people responded to questions based on five themes: the
experience of the lockdown, work organisation, managerial models,
social ties and corporate culture, and the design of workspaces.
Boost employee skill development in a changing environment
Policy
The evolution and development of our employees’ skills
pose a
major challenge in this time of dramatic and accelerating change. To
support them, the Group focuses on three key areas:
creating an environment that encourages learning new things to
ensure sustainable employability;
promoting continuous skills development and continuous adjustment
to how business lines are changing;
supporting the acquisition of new skills and anticipating change.
Action plans and results
Develop employee skills and adapt HR initiatives to the challenges
of transformation
With the support of
IFCAM
, the training offer is regularly expanded
with a willingness to make this offer even more accessible. In 2020,
76,279 Crédit Agricole S.A. employees completed at least one training
session and 1,825,353 training hours were provided despite the public
health situation. Against the backdrop of the public health crisis, the
Training business line has adapted its offering and training methods by
prioritising the deployment of distance learning and investing in distance
learning solutions and tools.
Adapt business lines and IT skills to technological changes
HR initiatives to develop skills and support integration and mobility for the
8,000 employees of the
IT Business Line
(LMSI) of Crédit Agricole S.A.
have been set up.
Crédit Agricole S.A.
has set up a course that certifies
Data Scientists in partnership with Ecole Polytechnique, as well as
certificate-level training in
Data Science with Python certificate, in
partnership with La Sorbonne, for LMSI employees.
Raise awareness of digital and innovation
After making a digital acculturation platform known as Digitall available
to employees in June 2017, an online platform for evaluating and
documenting digital skills called
PIX
, developed at the initiative of the
Ministries of Higher Education and National Education, was launched
by IFCAM in 2019.
Continuously develop our skills in key areas of expertise
Since September 2020, a page dedicated to
Risk Culture
has been
accessible on the intranet, enabling all CACEIS employees to better
understand the various risks to which CACEIS is exposed.
Amundi
has strengthened the
compliance aspect of management skills
by encouraging every portfolio manager with a grandfathering clause
to train and obtain AMF certification. Amundi has also expanded its
ESG-themed training offer.
Crédit Agricole CIB
has strengthened the development of compliance
culture in line with a new approach to mandatory training, the My
Mandatory Learning Camp. Since 2019, Crédit Agricole CIB has also
deployed a skills sponsorship initiative that offers volunteer employees
the opportunity to enjoy an immersive experience of one to three months
within Village by CA start-ups.
Crédit Agricole Payment Services has set up a development centre for its
payment experts to structure the payments business line and increase
its influence and attractiveness.
Crédit Agricole Payment Services
has set up a
development centre
for its payment experts to structure the payments business line and
increase its influence and attractiveness.
Develop cross-functional behavioural and managerial skills
The increase in the number of training courses relating to these
cross-functional skills continued in 2020 with IFCAM’s rollout of the
“Cross-functional skills course”.
To support the managerial transformation and the evolution of the
managerial culture, the Group has deployed the
“Leadership, Direction
and Empowerment” programme
for managers designed in partnership
with the “Purposeful Leadership” Chair at HEC Paris.
Amundi
coordinates its young talents through the NOVAMUNDI
development programme, in which participants work in sub-groups on
projects that transform the company, with the sponsorship of a member
of the Management Committee.
Promoting employee mobility
Career Pass,
the Group’s mobility service, enhances and creates a link
between all tools available to employees. It makes it possible to find, activate
and promote the various mobility schemes. Thanks to dedicated tools and a
network of dedicated HR representatives, the Career Pass makes it possible
to gain employability throughout one’s career within the Group.
Crédit Agricole S.A.’s internal job exchange,
Myjobs
is an essential tool
for discovering the Group’s employment landscape.
MobiliJobs
, the day
dedicated to mobility employees, is organised once a year. This event
combines business conferences, professional development sessions and
LinkedIn workshops. For the first time, the MobiliJobs was held in 100%
digital format to offer flexible and simple access to mobility and to all of
the Group entities in France and abroad.
MobiliMeetings
are informative,
participative and interactive workshops held every two months that are
open in person or via webinar to all Group employees who are considering
mobility.
Jobmaker
is a digital support tool at all stages of a mobility
programme that makes employees active participants in their career
paths that has been available to all Group entities since September 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Attracting talent, developing our employees
and preparing for the future
Policy
Crédit Agricole S.A. is a major player in employment in France, with
5,383 new hires in 2020, and hosting 1,861 work-study contracts. Crédit
Agricole S.A. has developed an approach
to identify and develop its
talents and managers
based on managerial guidelines and a unique
selection process shared across the Group that gives each person
the same chances of achieving their ambitions and moving forward.
Three priority challenges have also been established: continue to
constitute pools with the aim of providing appropriate people for the
Group’s succession plans and occupations, and develop gender equality
in managerial functions and the internationalisation of our talent pools.
Action plans and results
Promote the employer brand and develop our talents
Crédit Agricole S.A. has continued to develop its 100% digital employer
brand strategy. In particular, the Group was recognised in by Potential
Park in 2020, when it was ranked second (out of the 100 largest
companies in France) for its presence on social networks and third
for its global digital strategy that positions the Group as first in the
banking sector.
Crédit Agricole SA has spoken to as many people as possible by
intensively pre-empting social media on a network of entities, Group,
regional, national and international level. Through the social networks
LinkedIn, Facebook, Twitter and Instagram, and under the employer
signature
“For you, everything starts here”,
Crédit Agricole S.A. has
organised its communications around four themes identified as levers
of attractiveness for our targets: career opportunities, our values and
commitments, sharing experience with our employees and participation
in events.
In 2020, the Group’s employer brand published nearly 600 posts on
social media, representing over 4.8 million impressions. The alternance
employer brand and Finance business line videos received over 2.3 million
views on YouTube in 2020. The Group’s work-study recruitment campaign
led to the receipt of over 14,600 CVs (twice as many as in 2019) and a
cost per CV acquired of 30% less than in 2019. A structuring project was
conducted in 2020:
the total overhaul of the candidate’s career path
on the Crédit Agricole S.A. Group’s recruitment site, which is becoming
a multi-brand, multi-business platform with an international dimension
that incorporates the best practices and functionalities of e-commerce.
2.4.3.2
An organisation to be closer to customers
Policy
The Group stands out by offering its customers
direct access to a
local customer relations manager.
This manager demonstrates good
judgement and has more responsibility to satisfy customer needs quickly.
Internally, this is achieved through greater cross-functionality and
collective agility while adapting to the digital change that is impacting
how we work.
Action plans and results
Greater responsibility and cross-functionality
At the end of 2020, in response to the lessons learned from the public
health crisis and the new expectations and practices of its customers
and employees,
LCL
is deploying a major structuring project in its
development strategy called “LCL Nouvelle Proximité”. The purpose
of this project is to instil more autonomy and more confidence within
employees to take the initiative locally, to offer its customers better
reactivity and support with a contact person capable of making decisions.
This project is also an opportunity to strengthen solidarity and cooperation
between the teams at headquarters and in the network, between the
support and sales functions.
Crédit Agricole Immobilier
has, through co-construction workshops
involving a hundred or so employees, established a new customer
relationship posture to work as closely as possible with customers. The
goal was to make in-depth changes to customer relationship practices
for all employees and all business lines.
More agile and innovative ways of working
In November 2020, to better meet the expectations of its customers,
LCL
launched LCL Visio, a new communication channel accessible to all
Advisers in all of the Bank’s markets, including AngleNeuf and Interfimo.
LCL
has also deployed a conversational assistant for its employees:
the Eureka chatbot, based on an artificial intelligence solution, which
already answers more than 1,000 different types of questions every day.
2.4.3.3
Strengthening the framework of trust
between employees and the company
Social dialogue,
which is one of the fundamentals of the social pact
of Crédit Agricole SA, is one of the Human Pillar aspects of the Group’s
“Ambitions 2022” project. This is illustrated in particular by the vigorous
dialogue within three representative bodies at Group level. The year
2020 was marked by
the deployment of the Group agreements
signed in 2019
, the International Framework Agreement and the
agreements relating to trade union careers, and by
the strengthening
and intensification of social dialogue to support the management
of the COVID pandemic public health crisis.
Furthermore, to
develop leadership, accelerate our managerial transformation,
meet tomorrow’s challenges and attract talent, the Group has made
diversity a priority in its Human Project.
Guaranteeing constructive social dialogue within the Group
Policy
Social dialogue is embodied by two cross-functional organisations
within Crédit Agricole S.A. and the Regional Banks: the European Works
Council and the Group Works Council, and a specific body within Crédit
Agricole S.A. called the Consultative Committee. In 2020, social dialogue
at both Group and entity level was largely devoted to the deployment of
agreements and the management of the public health crisis.
Action plans and results
The European Works Council
met as a Select Committee four times
during 2020 to discuss the Group’s results, the measures taken to
deal with the COVID-19 pandemic and issues specific to the entities.
Furthermore, in October 2020, the study mission to the Netherlands
by the members of the Select Committee, accompanied by an expert,
took place remotely.
In 2020,
the Group Works Council
met once in plenary session (the
one in the first half of the year was cancelled due to the public health
situation) the Economic and CSR Committee met twice. In addition to the
presentation of the 2019 results and the Group’s general progress, these
meetings provided an opportunity to present various Group news items.
The Consultative Committee
met twice in 2020 to examine various
topical issues facing the Group, in particular the measures taken by
the Group to deal with the COVID-19 pandemic, and the return of the
above-mentioned “
Legend
: lockdown and changes in working methods”
survey. The Crédit Agricole S.A. Group
trade union correspondents
are supposed to strengthen social dialogue by sharing information
of a social nature in an informal and constructive manner. They met
11 times during the year. Between March and July, weekly meetings
were set up as a result of the COVID crisis and this pace was resumed
during September.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Created by the job and skills forecast management (“GPEC”) agreement
of 6 July 2012, two complementary bodies are specifically dedicated to
the issue of employment and skills:
the GPEC Committee
is charged
with monitoring the strategy and its foreseeable consequences on
employment; it met twice during 2020, and the mission of the
job trends
watch unit
is to conduct prospective analyses on changes in business
lines and job trends; it met three times during 2020 to follow up on the
agreement and take stock of the first achievements.
Crédit Agricole S.A.’s open-ended agreement on the
career path of
employee representatives
signed in 2019 provides for several types of
action to promote employee representation, a Group-wide harmonised
system for career management and interviews, and special monitoring
of compensation. Actions undertaken in 2020 include:
the drafting of a skills toolkit, 13 mandate sheets, interview materials
for beginning a mandate and ending a mandate, together with a user
guide prepared in consultation with the TU representatives;
an initial webinar on CSR;
a space dedicated to group social dialogue within the Me&CA HR portal.
The Crédit Agricole S.A. Group fixed-term agreement on professional
support for employees who leave their positions as employee
representatives provides that each entity will appoint one HR
representative in charge of repositioning employee representatives
and will set up a support mechanism for employee representatives
who have lost their positions as representatives. By the end of 2020,
all of its provisions were implemented.
Entities in France
The quality of social dialogue within Crédit Agricole S.A. is illustrated
by the implementation through collective agreements of the provisions
resulting from the order of 25 March 2020 on paid leave, working hours
and rest days, which allow companies to impose or organise the taking
of leave, RTT (shorter work week) and CET (time savings account) days
to handle changes in activity.
A Group doctrine has been defined. In essence, it provides for the
possibility of requiring the taking of 10 days of leave or rest by
31 May 2020, with five rest days that may be required if necessary
between 1
June and 31 December 2020.
On the basis of this position, the Group’s 12 main subsidiaries opened
negotiations which led to the signing of 12 collective agreements, nine
of them unanimously.
In preparation for the release from lockdown announced for 11 May,
the CSEs were informed and consulted on the end of lockdown process
and the associated public health protocol. They were also consulted
during phase 2 of the end of lockdown.
The entities in Italy, Poland and Romania
At CA Italia, an agreement allocates five days of online training to sales
network employees. There are ongoing discussions with trade union
organisations on all aspects of the crisis.
At CA Polska, meetings have been held with trade union organisations
since the start of the public health crisis to share information on the new
working conditions and the measures put in place to ensure employee
safety.
At EFL, the trade union organisations were regularly informed whenever
actions were launched and they were involved in them. Regular telephone
updates are being organised. One of these updates was organised
with the members of the Board of Directors to provide answers to their
questions, in particular on the employment situation, strategy and results.
At CA Romania, an employee representative was appointed and is
involved in the measures taken.
At Group level
A meeting with
UNI Global Union
, signatory of the international framework
agreement, was held on 9 April to hear the latest updates on the situation.
Crédit Agricole S.A. was the first French bank that was signatory to an
agreement with UNI to have organised such an exchange.
Building on our diversity for a stronger workplace community
Policy
Defined by a decentralised and entrepreneurial culture where humanity is
what brings us together and share with each other, our Group embodies
diversity. Four priorities for action with concrete commitments have been
set: continue to increase the number of women in our decision-making
bodies, step up the international presence in our talent pools, develop
social diversity, integrate young people and promote the transfer of our
most experienced employees, and amplify our disability commitments
(through the development of recruitment efforts and the implementation
of conditions conducive to encouraging the recognition of employees
with disabilities).
Gender equality at work
Action plans and results
For the past several years, Crédit Agricole S.A. has been committed to
efforts to
promote gender equality at work,
notably through signing
agreements on topics such as equality in recruitment, training, promotion,
compensation and work-life balance. In 2020, 53% of the Group’s
worldwide workforce was women.
Crédit Agricole S.A. has put in place a number of measures to support
work-life balance, such as “reducing the impact of
maternity leave
on
women’s careers — retaining their commitment and developing their
talents”, “responding to the new expectations of employees who are
parents”, “adapting work organisation to allow greater flexibility”, and
“promoting a better balance for the proper management of parenthood”.
With regard to
equal pay for women and men
, the Group and all its
entities carry out regular analysis to monitor the appearance of any pay
differences, and if appropriate, plan remedial measures. The publication
of the gender equality index, established by the French government, helps
demonstrate the effectiveness of the actions taken at the Group with
positive grades of between 75 and 98/100 for the Crédit Agricole S.A.
Group entities. The Group’s proactive diversity policy has been translated
into concrete action through:
the significant increase in the number of women on the Crédit
Agricole S.A. Executive Committee (from 6.5% in 2016 to 25%
currently);
the number of women at the highest decision-making bodies of the
Group entities (24% at 31 December 2020);
the Group has made steady progress in the SBF 120 ranking of women
in decision-making bodies over the past four years. With 46 places
gained between 2015 and 2019, the Group entered the Top 50 in
this ranking.
In order to continue to make progress and accelerate the increase in the
number of women in the decision-making bodies of Crédit Agricole S.A.
entities and among our senior executives, the Group has set up a number
of quantified action levers with:
the integration of a success criterion in the compensation of the
members of the Crédit Agricole S.A. Group Executive Committee
as part of our Strategic Ambition 2022: 30 % women presence on
decision-making bodies by 2022;
the integration of this criterion among the steering indicators of our
Human Project.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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2. ESG strategy: being a committed player in a socially acceptable climate transition
In addition, a specific review of the management teams and succession
plans takes place every year with a point dedicated to the identification
of female talent. Particular attention is always paid to the promotion
of talented women when filling managerial position and appointing
executives and at least one female candidate is included on the list of
candidates.
Various complementary initiatives
translated into specific
development programmes are also being orchestrated to support this
ambition such as:
training in the role of a Director;
a mentoring programme by members of the Group Executive
Committee for our future executives;
a new managerial programme called “Leading@Crédit Agricole” with
a special focus on women.
Paying special attention to the internationalisation
of our talent pools
With more than half of our employees working abroad, the
internationalisation of our talent pools is a major challenge for the
Group. A target of 20% for the “international” presence in succession
plans by 2022 has been set and this criterion has been integrated into
the steering indicators of our Human Project.
Improving employee awareness of gender equality issues
Tolerance and openness to others contribute to the sense of belonging of
our Group’s employees. In order to combat all forms of discrimination and
make diversity a catalyst for corporate transformation and managerial
performance, regular actions to raise awareness about
stereotypes
have
been taken within the Group.
Gender Equality Week,
organised each
year since 2011, represents an important opportunity for communication,
discussion and raising awareness for all employees in the form of
conferences, information materials and events. In 2020, the Group
transformed Gender Equality Week into
Diversity Month
to capitalise
on our diversity and offer a multiplicity of perspectives with words from
members of the Executive Committee and employees around the world
and from outside the Group.
Inclusion of young workers and access to employment
(work-study and internships)
Discovering the diversity of the company’s activities through a work-study
contract or an internship is one of the best ways to acquire skills and
refine one’s career path to be integrated into working life.
Young people from priority education zones:
in 2020, to maintain the
Group’s commitment to 14-15 year old students from priority education
network (REP and REP+) schools, the planned internship required for
year 10 students (
stagiaires de 3
e
) was adapted to COVID-19 public
health constraints.
Apprenticeships:
there are currently 1,861 work-study students
at Crédit Agricole S.A. In 2020, the Group decided to maintain the
2020 work-study recruitment campaign and to generalise remote
recruitment during the lockdown phase.
The “Point de rencontre” programme initiated in 2015 by
LCL
and the
association Apels (Agency for Education through Sport), offers young
adults with few qualifications who are involved in sport the opportunity
to join a training scheme to become Individual Customer Advisers.
In addition, from 21 September to 2 October 2020, LCL organised a
recruitment forum with the association “Nos Quartiers ont du Talent”
(NQT) to enable the integration of young graduates who do not have
a job. Fifteen candidates were selected for the positions of Individual
Customer Adviser and Hospitality Adviser.
Disabilities policy
A sixth agreement for the employment of people with disabilities,
signed with all trade unions representing Crédit Agricole S.A. for the
period 2020-2022, renews the Group’s ambitions in terms of inclusion
by adapting our commitments to regulatory changes that encourage
companies to expand the direct employment of people with disabilities.
The 2020-2022 agreement continues the Group’s ambitious policy,
with a commitment to recruit 145 disabled employees, including 55
on permanent contracts. It also highlights our desire to monitor the
transformation of temporary contracts into permanent contracts, with
a 25% transformation commitment at the end of the agreement. The
year 2020 will have been a special year, impacted by the public health
crisis, which largely imposed a slowdown on all projects and projects
identified in the Group’s disabilities policy roadmap. Crédit Agricole S.A.
recruited 71 employees with disabilities, including 24 on permanent
contracts, in 2020. As every year, Crédit Agricole S.A. was involved in
communication and awareness-raising activities, particularly during the
week for the employment of people with disabilities, which took place
from 16 to 20 November.
Health, safety and quality of work life
Policy
Faced with the new requirements of an environment that is changing
dramatically and changes in the way people work, the Group is convinced
that QWL is a major contributor to economic performance and employee
engagement. The Group’s push through its teleworking charter, which
was renewed in 2018, continues to be defined by the entities themselves,
primarily through the implementation of agreements on these topics
negotiated at each entity and the implementation of actions to promote
and anchor QWL in their company policies.
Action plans and results
As part of the actions provided for in the International Framework
Agreement, a study on maternity leave and insurance arrangements
was conducted by Mercer in 2020 among all the Group entities, which
are present in 50 countries. In December, the monitoring committee
was presented with the results of the maternity study and the 16-week
leave, as well as the audit methodology for the insurance scheme.
The year 2020 was largely devoted to managing the public health
crisis linked to the COVID-19 pandemic, with the setting up of Group
coordination, the deployment of measures to protect employees and
actions to support them throughout this period. From the start of the
crisis, the Group implemented a transformation of work organisation
through the massive use of teleworking during periods of lockdown,
which affected the vast majority of employees, excluding sales networks.
Strict public health measures have been taken in the workplace to
protect the health of employees working on site or in branches.
In
addition, the Group has maintained the compensation of all of its
employees, regardless of their status, and has not made use of
the partial employment scheme.
All Group entities have also worked to update their single occupational
risk assessment document (DUERP) to take into account the risk of
a pandemic as well as the risks associate with work organisation
implemented during periods of lockdown.
Several actions were
implemented to support employees during this period,
such as
medical teleconsultation, psychological units, additional insurance
coverage, teleworking charters or support measures for employees’
children with a tutoring offer.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
83
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
2.4.4 Taxation and responsible
lobbying policy
The tax policy of Crédit Agricole S.A. complies with transparency and
accountability rules that require it to follow the tax laws and regulations
in force in the countries and regions in which it operates.
2.4.4.1 Tax policy
Policy
The Group
pays the taxes legally due in the countries and territories
where it is present. The amounts paid correspond to the underlying
economic value created in those countries or territories as a result
of its activities. Thus, its tax charges are in line with its business
activities.
Crédit Agricole S.A. has developed, under the authority
of its Executive Management
, a set of internal rules that have led it
to withdraw from countries classed as non-cooperating by the OECD.
An internal procedure, which is regularly updated, provides for prior
authorisations for any own-account investment in countries listed by
this procedure.
Action plans and results
In France and abroad, the Group complies with the mechanism
in force to fight tax evasion.
Crédit Agricole S.A. has no entity in
countries on the list of non-cooperative tax countries and territories
established by France and the European Union (Law no. 2018-898 of
23 October 2018 on the fight against fraud).
Crédit Agricole S.A.
is also transparent about its organisation, the location
of its entities, its structure and its operations. Accordingly, it maintains a
professional and cooperative relationship with tax authorities in all countries
in which it operates, and fully, frankly and transparently discloses all
relevant information in compliance with its legal disclosure requirements
whenever disputes arise. Crédit Agricole S.A. publishes a country by country
breakdown of its full-time equivalent employees, revenues generated
locally, its pre-tax income, taxes and profit in each country (distinguishing
between current tax and deferred tax), plus all public subsidies it received
(see pages 660 and 661). Crédit Agricole S.A. also annually publishes a
list of all its subsidiaries and entities, with their name, business type and
geographic location. When the Group operates in countries where income
tax is considerably lower than French income tax, it can prove that it
operates a bona fide banking and finance activity in these countries and
has real economic substance in these locations. It also communicates
transparently on tax audits performed within the Group, any adjustments
notified by the tax authorities and the resulting provisions.
The Crédit Agricole S.A. Tax Department
ensures that the Group’s tax
practices pursue broad goals of responsibility and compliance, not just the
narrower purpose of managing the cost of tax and tax risk. Accordingly,
Crédit Agricole S.A. provides no help or encouragement for customers
in violating tax laws and regulations, nor does it facilitate or support
transactions where tax efficiency for the customer is derived from the
non-disclosure of facts to the tax authorities. Furthermore, in accordance
with the standard on the automatic exchange of information developed by
the OECD to combat tax evasion, adopted by about one hundred countries
and transposed by the European Union, the Crédit Agricole Group entities
identify account holders who are tax residents of the countries with which
an exchange agreement has been signed and sends information about
these customers each year to their local tax authority, which then forwards
it to the tax authority in the relevant country of residence.
In order to demonstrate precisely how Crédit Agricole S.A. applies a policy
of transparency to its organisational structure and locations, it is useful
to note that wherever Crédit Agricole S.A. is present worldwide with
subsidiaries and branches and where it generates significant revenues,
(1) Please refer to the glossary for the definition of Raison d’Être.
it has strong local teams and is subject to local corporate income tax.
Crédit Agricole S.A.
also applies a transfer pricing policy in accordance
with OECD principles: it declares its income and pays the corresponding
taxes in the States in which it carries out its banking or financial activity.
Crédit Agricole S.A.’s effective tax rate in 2020 was 22.23%. The Crédit
Agricole Group’s effective tax rate is 26.51% in 2020.
Lastly, the
Crédit Agricole Group
has publicly undertaken to only conduct
international wealth management activities in countries and territories
that are committed to the automatic exchange of information; to only
deal with customers who provide it with a mandate to automatically
exchange information about such customers with the relevant authorities;
not to create, manage or advise off-shore entities. Indosuez Wealth
Management helps its customers comply with tax requirements and
after the automatic exchange of information with the European Union, the
entity has extended the scope to partner countries. An internal procedure
provides a very strict framework for this commitment.
2.4.4.2 Responsible lobbying
Policy
Crédit Agricole S.A. is
transparent about its lobbying efforts with
legislators and fiscal policymakers
, and its taxes are determined by the
legal tax regime applicable to all other similar taxpayers. It conducts its
lobbying activities in full transparency with all stakeholders and complies
with prevailing best practices. Actions are carried out to enhance the
value of our customer-focused universal banking business model and
to promote our
Raison d’Être
(1)
, “Working every day in the interests of
our customers and society”. In 2020, the major areas concerned the
financing and support of the economy in the unprecedented context of
the COVID-19 pandemic, support for energy transition as well as the
preservation of the special mutually shared values.
Action plans and results
The Group Public Affairs department is responsible for lobbying
on
behalf of the Crédit Agricole Group. With a staff of ten, including three
full-time employees in Brussels, it is supported by contact persons in
the Group’s departments and subsidiaries. Also subject to the
Internal
Code of Business Conduct
and the monitoring of its budget by the
Finance department, the Group Public Affairs department regularly
communicates key messages and positions advocated to internal bodies,
including the Executive Committee, the Management Committee and
the Specialised Committees of the Board of Directors.
Since 1 January 2016, the duties of the Head of Group Public Affairs
have been extended to cover the entire Crédit Agricole Group, including
the Regional Banks, Fédération Nationale du Crédit Agricole and
Crédit Agricole S.A. Many of the issues it deals with involve working
closely with the French Banking Federation (FBF), or the French Insurance
Federation (FIF), as well as the European Banking Federation (EBF),
or Insurance Europe, the Association for Financial Markets in Europe
(AFME) and/or the European Association of Cooperative Banks (EACB)
at the request of Fédération Nationale du Crédit Agricole, of which it
is a member. In addition, the Group contributes to consultations with
French and European authorities on such topics as banking inclusion,
the digital transformation of the banking sector and sustainable finance.
To ensure that its lobbying activities comply with best practices, Crédit
Agricole S.A. adopted a
Lobbying Charter
in 2013. The charter applies
to Crédit Agricole S.A. and all of its entities. Registered since 2009 on
the European Union Transparency Register, Crédit Agricole S.A. has
undertaken to adopt the Code of Conduct for interest representatives.
In France, Crédit Agricole S.A. is registered with the digital register for
interest representatives pursuant to the Sapin II Law of 9 December 2016.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
84
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
2.4.5 Responsible purchasing
Policy
The Crédit Agricole Group has adopted a
Responsible purchasing
policy
to address the major challenges of tomorrow in the regions where
it operates and contribute to the Company’s overall performance. This
policy is included in the
Group Code of Ethics.
This policy was created
together with Group entities and the Regional Banks. The Chief Executive
Officers of Group entities are each committed for their entities and have
signed this policy. The Responsible purchasing policy applies to all
employees, anyone involved in the purchasing process and our suppliers.
Action plans and results
The Responsible purchasing policy is expressed through an
action plan
called “ACTE 2022
”, which is directly linked to the three Ambitions 2022
projects:
Customer/Supplier Project: ensuring responsible conduct in supplier
relations;
Human Project: a changing purchasing business line that develops
the skills of its teams;
Societal Project: integrating environmental and societal aspects into
purchasing.
Crédit Agricole S.A. signed the
Responsible Supplier Relations Charter
in 2011. Furthermore, the
“Supplier relations and responsible
purchasing” label
granted by the French Ombudsman and the French
National Purchasing Board (CNA), was renewed in April 2018 across
a broadened scope to include Crédit Agricole S.A. and its subsidiaries.
The organisation and actions of Crédit Agricole S.A. and its subsidiaries
were certified to be at a “convincing” level compared to the
ISO 20400
normative framework. In terms of
organisation,
a
sixth CSR purchasing
and training division
has been created within the Group Purchasing
department that is tasked with coordinating Responsible Purchasing and
the “Supplier relations and Responsible purchasing” label for purchasing
division directors and purchasing managers within the entities.
The Purchasing Management Committee, which oversees the CSR
performance of suppliers, reviews CSR issues related to the label and the
duty of vigilance on a quarterly basis. The Group Purchasing department
has enriched its approach based on a 360° vision of supplier risk and
compliance with a
KYS (Know Your Supplier) mechanism.
After the
analysis of at-risk suppliers, a decision-making committee was set up at
the beginning of 2020 — the “
Group Supplier Risk Committee
”, whose
purpose is to rule on the continuation or termination of relationships
with suppliers. A
dashboard for the main CSR purchasing indicators
common to all Group entities (including the Regional Banks) is deployed
in the main Crédit Agricole Group entities.
2.4.5.1
Ensuring responsible, sustainable
conduct in supplier relations
Policy
Responsible and sustainable relationships with our suppliers
are
a key part of our Responsible purchasing policy and are based on the
following principles:
strengthen mutual understanding between companies and suppliers
and develop a culture of listening;
ensure financial fairness with our suppliers;
contribute to the development of the local community.
(1)
Crédit Agricole S.A., CAPS, LCL, CA Immobilier, Crédit Agricole CIB, CACF, CALF, CAA, CA-GIP, Amundi, CACEIS, CA Indosuez.
Action plans and results
A
Responsible Purchasing Charter
is attached to all supplier contracts
and is based on reciprocal commitments based on the fundamental
principles of the United Nations Global Compact.
A clause
on the respect
of human rights, environmental protection and the fight against corruption
was added to enhance the contracts in 2018.
A system of
dialogue with our stakeholders
includes
satisfaction
surveys
to gather the views of both suppliers and internal decision
makers with three objectives: measure supplier satisfaction with the
relationship with the Group, measure decision-maker satisfaction with
the pool of supplier by purchasing category, and the purchasing service
and support.
With the COVID-19 public health crisis, exchanges with our suppliers
have been frequent and intense:
a
fourth edition of the
100% digital Supplier Meetings with more
than 300 connected suppliers;
Communications from each of the Crédit Agricole S.A. entities
to their suppliers renewing all of our support and reassuring them of
our desire to maintain the economic fabric, with particular attention
paid to SMEs and VSEs;
daily discussions of buyers
with their suppliers to continue certain
services remotely when possible and to answer their questions
individually.
We have pointed out the role of the
Internal Mediator
for Crédit
Agricole S.A. which can be referred to by suppliers and/or the relevant
internal department, and its scope was extended in 2020 to all Crédit
Agricole Group entities in France and abroad.
Crédit Agricole S.A. actively
monitors its supplier payment deadlines
.
The Crédit Agricole S.A. purchasing business line set itself a target in
2022 to reduce the number of invoices paid late by each entity by 25%,
with only documented disputes being accepted. Numerous actions have
been implemented, including a Group action monitored by the FReD
system. Indicators for reducing lead times by entity and the monitoring
of action plans are presented every six months to the
Group Internal
Control Committee (CCIG).
The average time it took Crédit Agricole S.A.
to pay an invoice in 2020 was 45 days, for 12 consolidated entities
(1)
.
Special attention is also paid to the
economic dependence of suppliers
on the Crédit Agricole Group. Know Your Supplier
(KYS) is an important
element when it comes to the application of the requirements under
the Sapin II Law and the Law on the Duty of Vigilance.
2.4.5.2
A Purchasing business line that is changing
Policy
The
Purchasing business line (PBL)
has more than 250 employees,
including buyers in charge of purchasing categories on behalf of the
Group, and business buyers at the subsidiaries who are on hand to
respond to the needs expressed by the business line. It is tasked with
making responsible purchases, contributing to performance, and playing
an active role in the transformation of the Group and its environment.
The Purchasing business line has three goals:
amplify performance through value creation proposals;
safeguard decisions while turning challenges into opportunities;
promote responsible purchasing to enhance the economic development
of local communities in accordance with our values and our
environment.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
85
Refer to the glossary on page 681 for the definition of technical terms.
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Action plans and results
The Group Purchasing department has initiated
seven key projects
to
be carried out by 2022 to benefit all Group entities. These projects are
designed to address the challenges facing the Purchasing business line
and enhance its role. After the
“purchasing influence”, “purchase
attractiveness”
and
“Know Your Decision-Maker”
projects, four
projects were continued in 2020:
a
cooperation with the Regional Banks
project, which aims to better
distribute roles within the Regional Banks and their subsidiaries;
a
DP4You
project, which aims to get more users to adopt the
computerised purchasing system;
a
KYS
(“Know Your Suppliers”) project, designed to learn more about
suppliers;
a
Being and Becoming
project, which has produced a skills toolbox
that has been reviewed and shared by the entire business line.
At the same time, the
internal professionalisation programme
for new arrivals has been completely revised to ensure continuity
of training during the COVID period with targeted content proposals
(e-learning, interactive videos) and remote group time (virtual classes,
web conferences).
2.4.5.3
Integrating environmental and societal
aspects into our purchasing
Policy
By 2022, the Purchasing business line will be universally rolling out
the integration of the CSR dimension in all of its purchasing accounts
to evaluate the CSR performance of suppliers and their offers (15%
of the overall score since 1
January 2020). The CSR assessment of
suppliers is regularly requested during calls for tenders, with a call for
an independent and specialised third party, EcoVadis (contract renewed
in 2018). Inclusive procurement will be integrated during the purchasing
process and will apply both to purchases aimed at developing jobs in local
communities (including small businesses) and to purchases intended to
boost jobs among vulnerable groups (sheltered and disability-friendly
sector (STPA), independent workers with disabilities and workforce
re-entry associations). The goal is to double the inclusive procurement
volume by 2022. Purchasing has a part to play in raising awareness
among customers and internal users.
Action plans and results
In 2020, we worked to develop a
common methodology that was
jointly constructed
with buyers, representatives of internal decision-
makers, and a few suppliers to help buyers systematically integrate
CSR issues into the act of purchasing. 2,179 of Crédit Agricole S.A.’s
suppliers already had an EcoVadis rating at 31 December 2020 and
461 were in the process of being assessed.
The integration of
inclusive procurement
in calls for tender is considered
an opportunity. When drawing up specifications, buyers automatically
offer decision-makers criteria related to the inclusion of vulnerable
groups. These criteria are reflected, for example, in the use of the
sheltered and disability-friendly sector either directly or via a standard
clause under a joint contract. In 2020, purchases assigned to the
sheltered and disability-friendly sector in France by Crédit Agricole S.A.,
its subsidiaries and Crédit Agricole Technologies et Services stabilised
at
€4.3 million
.
2.4.6
Cybersecurity and combatting cybercrime
Introduction
The digital transformation underway in all sectors of society is bringing
innovation and development to everyone. Nevertheless, this development,
however inevitable it may be, naturally generates new vulnerabilities
and poses threats to individuals, businesses and government.
In recent years, like all major banking groups, Crédit Agricole has noted
an increase in the threat from cybercrime against the integrity of its
information system (IS) in the form of attacks, which are often coordinated
and targeted. Aware of the challenges related to digital security, Crédit
Agricole S.A. deploys a proactive cybersecurity strategy for the prevention
of cyberrisk, which is at the heart of its operational risk management
priorities (see Chapter 5 “Risks and Pillar 3” – 5.1 “Risk factors”; 5.1.3
“Operational risks and related risks”).
Our commitment to protecting the data
of
our customers and employees
Both the Crédit Agricole Group Code of Ethics and the Crédit Agricole S.A.
Code of Conduct commit us to protecting the data of our customers
and employees. The Compliance department ensures respect for the
protection of personal data and supervises the business line of personal
data protection officers (see Chapter 2 “Non-financial performance” –
2.4.2 “An ethical culture”). The Information Systems business line
(LMSI) puts in place a range of measures, including the application of
security rules to protect personal data during the design and development
phases of information system projects, the implementation of advanced
protection measures, the regular verification of the effectiveness of
security measures (intrusion tests, security audits) and the continuous
monitoring of information systems.
Policy
The cybersecurity policy is part of the information systems security
policy framework (PSSI framework) overseen by
Crédit Agricole S.A.
and implemented within the Crédit Agricole Group, which is made up of:
General policies such as the Crédit Agricole Group’s General Information
System Risk Management Policy (PGMRSI) and the Crédit Agricole
Group’s Business Continuity Plan Policy, which are drawn up within
the Group Risk department by the Security and Business Continuity
division;
a Main IS Security Policy (PSSI), which formalises the basic concepts of
cybersecurity, the challenges and objectives, essential principles, risk
control system, methods of application of the PSSI and management
of the dedicated document repository. It is prepared by the Security
and IT Risks unit within the Security, Risks and Cross-Functional
Projects department, which submits it for validation to the Group
Security Committee (CSG). It is reviewed at the request of the CSG
whenever there is a major change in governance (such as changes
in major risk scenarios) and at least every three years;
Domain Policies, each dealing with specific ISS themes and similar
to the result of a risk analysis on a generic system (detection and
treatment of cyber security incidents, vulnerability scans and security
audit, bank card data security, etc.). They are prepared by the IT
Security and Risks unit and then submitted for validation to the
Information Systems Security Operating Committee (COMOP SSI);
procedures and standards that give operational expression to domain
policies. They contain concrete security recommendations to be
implemented within the Crédit Agricole Group.
All of these policies, procedures and standards are published on the
Crédit Agricole S.A.
CRÉDIT AGRICOLE S.A.
—
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Main policy
Procedures & standards
Local frameworks
Domain
policy
Domain
policy
Domain
policy
Domain
policy
Domain
policy
PSSI intranet
General IS
risk management policy
Action plans and results
Our cybersecurity strategy is based on operational governance,
a decentralised organisation based on players present within each
entity, the implementation of security standards and norms to integrate
cybersecurity at all levels of the IS. Cyber risk analysis is systematically
integrated from the design phase of projects, impacting IS in a “Security
by design”
approach. Crédit Agricole S.A. is actively developing an
awareness and culture of “cyber risk” among its employees, customers
and suppliers to change practices and promote the acquisition of reflexive
behaviours, which are essential in terms of cybersecurity.
Risk management system and structure
Controlling the security of information systems and implementing the
cybersecurity policy are part of existing risk management systems (see
Chapter 5 “Risks and Pillar 3” – 5.2 “Risk management”). For example,
the Risk Appetite Statement, which is submitted each year to the Crédit
Agricole S.A. Board of Directors for approval, includes key indicators
relating to IT risk. Control of cyber risks is organised according to the
respective responsibilities of the three lines of defence within the internal
control system (business line, permanent control, Audit-Inspection). The
ISS business line is the first element of this risk management system.
The Group risk department continuously exercises second-level control
over operational risk, in particular the risk of attacks on information
systems, including threats related to cybercrime. A dedicated IT
Permanent Control Supervision team within the Security, Operational
Risks and Permanent Control department leads the network of Information
System Risk Managers (PRSI), who report to the Permanent Control and
Risk Management officers (RCPR), who consolidate the information.
The Compliance department also intervenes at the second level with
regard to non-compliance risks, which include, in particular, the risks
of non-compliance with personal data protection rules (see Chapter 2
“Non-financial performance” – 2.4.2 “A strong ethical culture”).
As a third line of defence, the mission of the Group Control and Audit
department is to assess the processes in place, as well as the associated
controls and governance, to verify compliance with laws and regulations
and, if necessary, to propose areas for improvement in order to strengthen
the systems.
Governance
Cyber risk and cybersecurity strategy are regularly reviewed by the
Crédit Agricole S.A. Board of Directors and closely monitored by the
Risk Committee and the US Risk Committee (see Chapter 3 “Corporate
Governance” – 3.1 “Report of the Board of Directors”).
Crédit Agricole S.A. has set up operational governance to manage the
security of information systems and achieve and maintain the target level
of security. This governance is based on committees whose interactions
reflect the organisation of safety within the Group. The Group Security
Committee (CSG), which reports to the Executive Committee and is
chaired by the Deputy General Manager of the Innovation, Digital
Transformation and IT Group, is the umbrella body for security governance
within the Group. This decision-making executive committee defines the
security strategy and assesses the Group’s level of control in the four
areas within its jurisdiction: business continuity planning, security of
people and property, data protection and information systems security.
Measures for prevention, detection of cyberthreats
and protection of critical information systems and data
Various types of complementary measures (technical, organisational,
behavioural, contractual) make it possible to reduce the probability of
occurrence of cyber risks or to limit their effects. The overall management
of this system is carried out within the Innovation, Digital Transformation
and IT Group (ITD) division. On an operational level, two major initiatives
launched in recent years have led to significant progress in cybersecurity:
IT radar
to assess the situation of information systems with regard
to all essential IT risks, especially in terms of cybersecurity;
the Crédit Agricole Strengthening of Security (CARS) programme
led by Crédit Agricole S.A. is a cyber security programme to improve
the level of IS security throughout the Crédit Agricole Group.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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2. ESG strategy: being a committed player in a socially acceptable climate transition
Cyber risk awareness and culture
All of these actions are also supplemented by an awareness-raising
system that reminds everyone of the best security practices to be
adopted in a concrete and accessible way. The ITD division disseminates
cybersecurity awareness tools. It is also available to Group entities to help
them organise awareness-raising actions. The cybersecurity awareness
system is based on a set of convergent and complementary actions
carried out by each Group entity, including raising awareness among
managers, employee training, internal communications (in 2020, for
example, distribution of IT security recommendations for teleworking
in crisis situations, Surfclean videos “Business travel”, “USB keys”,
“Public networks”, etc.), distribution of themed campaigns (e.g. fake
phishing), publication of a security passport as part of the onboarding of
new hires, and publication of a special security passport for IT support
teams. Awareness-raising activities aimed at customers are also carried
out regularly.
2.5
INTEGRATION OF ESG CRITERIA IN INVESTMENT
AND ASSET MANAGEMENT POLICIES
Policy
A pioneer in responsible investment and a European leader in asset
management,
a signatory to the
Principles for Responsible Investment
(PRI) since 2006 and the UNEP FI since 2014,
Amundi
has placed
ESG (Environment, Social and Governance) analysis at the heart of its
development strategy. Its primary objective is to offer its customers
not only an attractive financial performance while complying with their
chosen level of risk, but also an outperformance of non-financial criteria
in all of its actively open funds. Amundi pays particular attention to
two major contemporary issues: climate transition and the protection
of ecosystems, and the issue of social and societal cohesion. In its
three-year strategic plan launched at the end of 2018, Amundi confirmed
its positioning as a responsible player.
Amundi’s commitments in its 2018 strategic plan
—
Objective to achieve an ESG score higher than their benchmark index or investment universe on all actively managed open-ended
funds as soon as technically possible.
—
Systematic integration of issuers’ ESG performance in Amundi’s voting policy.
—
Continued development of ESG and Climate innovations in passive index funds.
—
Doubling of specific initiatives promoting investment in projects with an environmental or social impact.
—
Development of specific advisory activities aimed at Amundi’s institutional customers and distributors to support them in their ESG
development.
Action plans and results
Promote ESG investments by large
customers and institutions
Amundi
has put in place a triple governance system dedicated to ESG:
the ESG Strategy Committee defines and validates the ESG policy and
strategic orientations of the Amundi Group; the ESG Rating Committee
defines and validates the ESG rating; the ESG Voting Committee reviews
and validates Amundi’s commitments and the exercise of voting rights
and ensures that they are consistent with the key ESG commitment
themes; the Social Impact Committee covers investment strategies on
social and solidarity themes in unlisted companies.
Amundi
has also equipped itself with significant resources to deploy
its ESG policy: a department dedicated to responsible investment with
25 ESG analysis specialists, voting at General Meetings, engaging in
shareholder dialogue with companies, and using 14 external providers
of non-financial data. More than 10,000 issuers can thus be rated on
ESG criteria.
The principles of
Amundi’s
ESG policy are as follows:
an ESG analysis of firms based on documents such as the United
Nations Global Compact, the OECD Guidelines on Corporate
Governance, and International Labour Organization (ILO) policies;
a strict, targeted screening policy; it includes the exclusion of G-rated
issuers (not conforming with Amundi’s ESG principles or international
conventions), and the exclusion of certain activities:
-
coal: Since 2016,
Amundi
has been implementing a specific sector
policy for thermal coal, which is strengthened each year. In 2020, this
excludes companies developing or planning to develop new thermal
coal capacity along the entire value chain; companies earning
more than 25% of their revenues from thermal coal extraction,
or extraction of 100 Mt or more with no intention of reduction;
companies whose revenue from thermal coal extraction and thermal
coal-fired power generation is more than 50% of total revenues
without analysis, or with a threshold between 25% and 50% and
a deteriorated climate transition score,
-
tobacco: In 2018,
Amundi
limited the ESG ratings of companies
in the tobacco sector to E, on a scale of A to G, thereby penalising
investment in this type of companies. In May 2020, Amundi became
a signatory to the Tobacco-Free Finance Pledge and extended its
exclusion policy to tobacco to exclude companies manufacturing
complete tobacco products (application threshold: revenues
above 5%), and to continue the limitation to an ESG rating of E for
companies involved in the manufacture, supply and distribution of
tobacco (application threshold: revenues above 10%);
a proprietary ESG rating;
a Best-in-Class approach as the foundation of its ESG rating
methodology consisting of comparing the players in the same sector
to identify best practices and encourage all issuers to make progress;
attributing ESG ratings to all fund managers in the same way as
financial ratings;
CRÉDIT AGRICOLE S.A.
—
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2. ESG strategy: being a committed player in a socially acceptable climate transition
an engagement policy aimed at getting companies to implement
best practices;
a voting policy that integrates ESG issues.
As proof of the robustness of its ESG policy,
33 Amundi funds have
been awarded the SRI label
by the French Ministry of Finance and
Public Accounts.
Amundi ranked among the top 10 institutions in the report published by ShareAction
, “Voting Matters 2020”,
dedicated to the use of proxy
voting rights to promote climate change and social issues for sixty of the largest asset managers.
Voting campaign at General Meetings (GMs)
2020
2019
2018
Number of GMs concerned
4,241
3,492
2,960
Number of resolutions considered
49,968
41,429
35,285
In 2020, the theme of ESG and responsible investment was addressed
as soon as possible in all the events organised by
Amundi
or in
which
Amundi
participated and spoke. In 2020, educational and
skills development initiatives brought together over 3,000 employees
(individuals, wealth management and Private Banking markets) and
over 18,000 high-net-worth customers have been made directly aware
of responsible investment. Furthermore, to support its institutional
customers in their efforts to promote climate transition, Amundi has
launched, in partnership with AIIB, a reference tool to assess the risks
associated with climate change in line with the objectives of the Paris
Agreement.
Organising the channelling of individual savings
In order to encourage responsible investment,
Crédit Agricole
Assurances
offers SRI (socially responsible investment) unit-linked
policies via its subsidiary
Predica
for most of the multi-vehicle life
insurance policies distributed by its networks. These SRI unit-linked
policies offer either a theme-based or best-in-class approach.
The international subsidiaries of Crédit Agricole Assurances
are
also gradually adopting this approach. Since the launch of the SRI
(socially responsible investment) unit-linked products, several initiatives
have been carried out to promote this type of investment to distribution
networks and customers. These include the creation of an information
packet for distribution networks, network activities during key periods
(e.g., Sustainable Development Week, SRI Week, Social Finance Week,
etc.), and customer communication on SRI. At end-2020, a total of
35 unit-linked policies offered to investors by Predica had been awarded
the SRI certification developed by the French Ministry of Finance, five
with the GreenFin label and 11 with the Finansol label.
Integrating ESG criteria into
the Group’s investment policy
For several years, the Group has been integrating ESG criteria into
investment decisions and encouraging its customers to invest responsibly.
As part of its climate strategy, Crédit Agricole S.A
. has undertaken to
invest €6 billion of its liquidity portfolio in green,
social
and sustainability
bonds by 2022.
As a leading institutional investor and a signatory to the Principles for
Responsible Investment (PRI), the
Crédit Agricole Assurances
Group
is mindful of its responsibilities towards the sectors and issuers in
which it invests. It integrates ESG criteria into all its asset classes by
relying on Amundi’s expertise and its ESG analysis and filter system.
Crédit Agricole Assurances also developed shareholder engagement in
our strategic holdings, with the active participation of our Investment
department on the Boards of Directors of companies in which the insurer
is a shareholder. Since 2017, Crédit Agricole Assurances has applied a
policy of excluding tobacco industry purchases and no longer directly
holds any tobacco assets in its portfolios.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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2. ESG strategy: being a committed player in a socially acceptable climate transition
The consideration of possible negative
environmental and/or social impacts from
financing and investments is based on four pillars
Application of the Equator Principles:
the Equator Principles were
developed in response to limitations and triggers related to project
financing, as defined by the Basel Committee on Banking Supervision.
They constitute a methodological framework for assessing and
preventing the social and environmental impacts of financing once
it is linked to building a specific industrial asset, such as a plant or
transport infrastructure.
Sector policies and exclusion lists:
the purpose of sector policies
is to specify the rules of intervention and ESG principles introduced
into the Group’s financing and investment policies. They reflect the
challenges facing citizens with regard to respect for human rights,
corruption, the fight against climate change and the preservation of
biodiversity. They are applicable to all customers and transactions
of the Group’s subsidiaries. Fourteen sector policies are currently
applied, for which the main sectors affected are armaments, coal-fired
power stations, oil and gas, hydraulics, nuclear, shale oil and gas,
mines and metals.
Sector policies are reviewed one by one on a regular basis based on
the Group’s strategy, changes in regulations and market practices, and
taking into account the research and recommendations of the Scientific
Committee. In 2020, three sector policies were revised (mining,
coal-fired power plants and transport infrastructure) to translate the
Group’s coal exit commitments into operating standards by 2030/2040.
Moreover, following the signature by Crédit Agricole S.A., Amundi,
Crédit Agricole CIB and Crédit Agricole Assurances of the Tobacco-Free
Finance Pledge, which encourages financial players to withdraw
completely from the coal industry, a dedicated sector policy is being
created.
I
Integration of ESG advice into sector risk strategies:
to integrate
climate risk into the Group’s ESG risk management, the CSR
department and the Group climate risk manager jointly issue an opinion
and recommendations on relevant sector risk strategies (Oil & Gas,
Agri-Agro, Commodity Financing, automotive, real estate, aeronautics,
shipping, etc.). These sector risk strategies are reviewed by the Group
Risk Committee in accordance with a schedule prepared annually.
An analysis of the environmental or social sensitivity of the
transactions:
the environmental or social sensitivity of transactions
has been assessed since 2009. This process makes it possible to
ensure compliance with the exclusion criteria defined within the various
sector policies or to analyse or even anticipate potential controversies
with customers or a transaction.
Crédit Agricole CIB
financing files for transactions or customers
presenting a high reputational risk or non-alignment with sector policies
are reviewed by an ad hoc
committee (“CERES”), which is responsible
for issuing an opinion on the transactions. It is chaired by the head of
the Compliance function, with the Crédit Agricole CIB CSR department as
secretary. The other permanent members are the Risk department and
the heads of the relevant business lines within Crédit Agricole CIB. The
invited members are the Crédit Agricole CIB Legal and Communication
3.
ESG RISK MANAGEMENT
3.1 THE ESG RISK APPROACH
Aware of the potential impacts of ESG risks on its activities, the Group has
integrated their consideration into its business strategies and processes
and into its internal governance systems, especially its Vigilance Plan, which
is covered in a report published each year for the year ended 31 December
(see Chapter 3 “Corporate Governance”, part 1.4 “Vigilance Plan”).
ESG risk management in the financing and investment business lines
is taken into account by all of the Group’s employees and is also based
on a set of international commitments.
Policy
Sector policies
and exclusion lists
at Group level
Principles for Responsible
Investment (PRI)
signed by Amundi
Principles for Responsible
Banking (PRB)
signed by the Group
Analysis of the
environmental
or social sensitivity
of transactions
via a dedicated committee
for CACIB
The Equator
Principles
applicable to CACIB
ESG rating system
dedicated to CACIB
ESG questionnaire
LCL, the Regional
Banks and some
international
retail banks
14
1
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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NON-FINANCIAL PERFORMANCE
2
3. ESG risk management
departments, as well as the CSR department and Group Economic
Research. In addition, since 2013,
Crédit Agricole CIB
has been using
an ESG rating system, which it applies to all of its corporate customers.
This rating supplements the system for assessing and managing the
environmental and social risks associated with transactions on a three-
level scale (advanced, compliant, sensitive). It is performed at least
annually and is based in particular on compliance with existing sector
policies, the existence of an image risk for the Bank and the level of
performance recognised by non-financial agencies.
ESG risk governance
ESG risks are dealt with in the same governance bodies as other types
of risk.
The Group Risk Committee
, made up of Crédit Agricole S.A. executives,
examines and validates subsidiary strategies, country strategies, sector
policies and thematic reviews. In particular, the climate risk strategy
prepared by the CSR department and the Risk department in collaboration
with the Group entities is presented annually. This risk strategy and
the associated risk opinion determine the climate risk roadmap for
the coming year.
The Risk Committee of the Board of Directors
reviews the overall
strategy, including climate risk aspects, and risk appetite. A dedicated
presentation of the climate strategy is organised annually, following
its presentation and approval by the Group Risk Committee. This
presentation covers the four chapters proposed by TCFD (Governance,
Strategy, Risk Management, Indicators and Targets), with the double
axis of environmental and financial materiality.
The work performed within this Committee is submitted to the Board
of Directors after examination.
At its plenary meetings,
the Board of Directors
ensures the consistency
of the Company’s commitments and project with regard to social and
environmental issues:
when reviewing strategic projects, especially in the context of the
Group Project, which makes Climate Strategy one of the pillars;
on the occasion of presentations of each entity’s version of the Group
Project;
when reviewing the Risk Strategies submitted for adoption, if the
scope of those strategies justifies it.
Other committees also examine ESG risks:
the Strategy and CSR Committee of the Board of Directors
examines the Group’s strategic thinking in greater depth in its various
business lines, ensures that CSR issues are taken into account when
examining strategic projects and takes stock of the CSR actions
performed;
the Finance & Risk Committee and the Legal & Compliance
Committee of the FNCA
examine at the federal level the risk & CSR
issues handled by the corporate centre.
For the most sensitive cases, governance is supplemented by the
Group-
level Individual Risk Committee (“CRIG”).
This committee meets
weekly and is chaired by Crédit Agricole S.A. Executive Management. Its
purpose is to take decisions on matters relating to Crédit Agricole S.A.
entities that fall within the authority of the Chief Executive Officer of Crédit
Agricole S.A. and also to analyse individual alerts of all types based on
their materiality for the Group. The CRIG is composed, in addition to its
Chairman, of the Executive Management of the entity in question, the
Group Risk department (DRG) and the CSR department on ESG issues.
The DRG functions as secretary, and decisions are formalised at the
meeting by the signing of a decision statement.
The
Crédit Agricole Assurances
Group’s Board of Directors defines
and approves all of the company’s strategic decisions, especially those
related to ESG and climate that may affect company performance.
3.2
THE INTEGRATION OF ESG ISSUES INTO THE ANALYSIS OF SME AND MID-CAP
COUNTERPARTY RISK
Even though ESG is part of the analysis criteria for listed companies,
this is not the case for unlisted companies that do not, or rarely, make
non-financial data available to analysts. It is therefore difficult to include
non-financial parameters when analysing financing or even investment.
In 2020, ESG issues were included for the first time in commercial
relationships with mid-cap and SME customers through the deployment
of an
ESG questionnaire distributed to all investment managers.
Officially launched in March 2020, this pioneering project in the banking
world is currently being rolled out to the Regional Banks, certain
international retail banks and LCL. It is composed of 12 questions relating
to the environment, social/societal matters and governance (plus four
questions specific to the agri-food industry market).
The purpose of this ESG analysis process is to:
raise awareness
of ESG issues on the part of relationship managers:
it is accompanied by training on key ESG issues, the CSR policy of the
relevant entity, the actions of regional players and customers, etc.;
initiate
discussions between investment officers and SMEs/mid-caps
on their ESG procedures: it positions itself as a tool for dialogue
between Crédit Agricole and economic players;
assess
the ESG risk of loan books: the questionnaire generates a
score, which is made known to the delegated manager of the loan
application. This has no impact on the granting of the loan, but may lead
to additional information being sought if the score reveals vulnerability
of the company.
An initial assessment of these procedures is scheduled to be made
in 2021.
3.3
TCFD CHAPTER: CLIMATE RISK MANAGEMENT
The climate risk management policy in this chapter is presented primarily
for the purposes of understanding the potential financial impacts of
climate risks on the Group’s activities (“financial materiality” section
of the
Non-Financial Reporting Directive (NFRD)), as defined by the
Task-Force on Climate-related Disclosure (TCFD). The impacts of the
Group’s activities on the climate (“environmental materiality” section
of the NFRD) and the identification of opportunities related to climate
risks as defined by the TCFD (Task-Force on Climate-related Disclosure)
are addressed in
Chapter 2.3 - “Environmental strategy” of the DPEF.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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NON-FINANCIAL PERFORMANCE
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3. ESG risk management
Definition of climate risks
Climate risks are
classified as major risks
by the Group in its risk
mapping. They are seen as risk factors that influence existing risks
(counterparty, market, operational, etc.) and cover
physical and
transition risks.
They are defined as follows, in line with the approach
of the Task Force on Climate-related Financial Disclosure (TCFD):
Physical risks
resulting from damage directly caused by
meteorological and climate phenomena:
-
acute risks triggered by events such as natural disasters, whose
frequency and severity could increase (storms, hurricanes, floods,
etc.) are a major concern;
-
chronic risks related to longer-term changes in climate patterns and
rising temperatures over the long term (sea level rises, chronic heat
waves, changes in precipitation patterns and increased variability,
disappearance of certain resources, etc.).
Considering the scientific work to date, the Group believes that the
physical risks related to climate change are potentially incurred in the
short term for acute risks, and in the medium/long term for chronic
risks.
Transition risks
resulting from the effects of the introduction of
a low-carbon economic model. Transition risks cover various sub-
categories of risk:
-
regulatory and legal risks: partially related to a change in policies,
such as the introduction of a carbon price or more stringent product
regulations. These may relate either to mitigation policies that
regulate activities that contribute to global warming or to prevention
policies aimed at fostering adaptation; also related to an increase
in claims and litigation as the losses and damages resulting from
climate change increase;
-
technological risks linked to innovations and technological
breakthroughs favourable to the fight against climate change (new
renewable energy technologies, energy storage, carbon capture, etc.);
-
market risks: changes in supply and demand linked to the increasing
consideration of climate risks: variation in the price of commodities, etc.;
-
reputational risks: changing customer and stakeholder perceptions
of an organisation’s contribution to the transition to a low-carbon
economy.
Considering the scientific and economic work to date, the Group
believes that transition risks related to climate change are incurred
in the short , medium and long term.
Climate scenarios used by the Group
Climate scenarios are supplementary analysis tools that provide a better understanding of the impacts of climate risk in the long term, based on
central hypotheses and stressed versions according to defined trajectories. This is a usual risk approach, which however in this case uses long-term
assumptions, contrary to the usual scenarios, which generally consider short projections (about 3 to 5 years). The materialisation of these risks is
indeed more distant, so regulators and supervisors support these approaches, which enable governance bodies to become more aware of these
risks and better understand their quantitative impacts. The TCFD also recommends this approach to assess the sensitivity of assets to climate risks.
Scenario used at
Group level
to
strategy of alignment with the
Paris Agreement.
Target
Understanding the challenges of
a 2°C trajectory and comparing
the energy mixes
of our portfolios.
Type of scenario
Abrupt scenario targeting
the achievement of carbon
neutrality in 2070 and
limiting
the rise in
temperature to 1.65°C
with
50% probability.
Scenarios used over a
large
scope of the Group
to
risk resistance tests.
Target
determine our portfolios’ climate
risk resistance and testing the
portfolios’ resistance
to several types of scenarios.
Types of scenarios
f
A benchmark scenario
(orderly transition
corresponding to the National
Low-Carbon Strategy)
f
An adverse scenario
of accelerated transition
f
A single physical
risk scenario (IPCC’s
“RCP 8.5”)
Scenarios created and used at
entity level
to explore the mate-
riality of climate risks quantita-
tively.
Target
certain Group
entity portfolios in order to better
understand climate issues, and
offering
our customers long-term
support to manage
these transformations.
Example:
CACIB with 4 types of scenarios
f
Business as usual
f
Gradual transition
f
Accelerated transition
f
Medium-term abrupt scenario
The scenario
IEA
SDS
The scenarios
ACPR
The scenarios
ENTITIES
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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NON-FINANCIAL PERFORMANCE
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3. ESG risk management
Defined annually and validated by the governance bodies, the Group’s
climate risk strategy follows the TCFD recommendations in terms
of presentation since it addresses the various issues at Group level:
governance structures, main elements of strategy, risk management and
associated metrics. The impacts from double materiality (environmental
and financial) are now presented, specifying the roles and responsibilities
of each of the players for those impacts.
For
transition risk
, the Group has developed an internal method, known
as P9XCA, which makes it possible to establish projections based on the
emissions attributed to economic players in major sectors and defined
countries in relation to the value added. Valued at the carbon price
used in four scenarios, these emissions provide an initial economic
assessment of the carbon challenge by macro-sectors and countries,
and of the potential vulnerability of companies. On the basis of several
studies concluding that a controlled climate transition would not be
growth-destroying (2017 OECD study “Investing in Climate, Investing in
Growth”, 2016 ADEME study, “
Un mix électrique 100% renouvelables ?
Synthèse technique et synthèse de l’évaluation macro-économique”)
, it
was considered that the carbon issue impacted companies differently
depending on their ability to anticipate and therefore the progressive
nature of the implementation of measures to adapt to this risk. The
calculations make it possible to understand the orders of magnitude and
compare potential impacts on sectors and countries depending on the
scenarios and time scales used. The calculations show the transition risk
in the abrupt climate change scenario as the main medium-term risk,
while emphasising the strong increase in the physical climate risk over
time, particularly in the scenario involving no new mitigation measures.
These calculations thus provide a first macroeconomic framework for
climate risks by highlighting the main risk areas (sectors and countries)
according to the scenarios and time horizons considered.
For
physical risk
, the Group considers an average physical risk index,
which is then related to the outstandings of each entity. This global index
is presented on an increasing risk scale from 1 to 15 and combines
indices of sector sensitivity (vulnerability on a three-level scale for 20
major sectors identified, source KPMG) and geographical sensitivity
(S&P approach based on three variables: share of the population living
below an altitude 5 m, share of agriculture in GDP, vulnerability index
established by the Notre Dame Global Adaptation Initiative).
Analysis on a large scope of the Group
entities: the ACPR climate pilot exercise
In 2020, the Crédit Agricole Group took part in a pilot exercise on climate
risk resistance led by the ACPR. The portfolios on which the simulations
are carried out represent more than 80 % of the Group’s risk-weighted
assets in terms of credit risk. This exercise was also conducted within
the insurance scope, while asset management is excluded from the
scope of analysis. Its purpose is to test the resilience of French credit
institutions and insurers to the effects of the climate transition by 2050,
with no impact, for the time being, on capital planning. It will also make
it possible to prepare for similar exercises conducted by the supervisor,
including the one announced by the ECB in 2022. The three scenarios
developed by the ACPR are based on the Network for Greening Financial
Systems (NGFS) approach, using the work of the IPCC. A central scenario
of orderly transition is proposed, with two opposing variants and a single
physical risk scenario.
This inaugural exercise made it possible to test the Group’s operational
capacity to perform sector-level analyses over long horizons, over a broad
scope, and to initiate a reflection on changes in the usual methods of
credit stress. The absence of a benchmark was one of the difficulties
encountered during this inaugural exercise. However, the governance
mechanism put in place for this exercise made it possible to confirm the
orders of magnitude of the impacts. The lessons learnt mainly involve
the lending activities of the banks as well as the insurance and non-life
insurance activities. Major climate levers were identified as well as
related management decisions that would allow the cost impact of these
climate risks to be mitigated. Their impacts remain contained within
the three scenarios and manageable for the Group over the horizons in
question. Finally, this exercise will feed into internal reflections on the
future sector policies in question.
Analysis at entity level
A medium-term transition risk index has therefore been calculated
since 2017 for
Crédit Agricole CIB's
corporate customer groups using
a combination of three factors:
the extent to which the issues will impact financing in the sector,
as calculated by the P9XCA methodology in the “by issue” version;
the importance the country places on reducing greenhouse gas
emissions within the framework of international negotiations, such
as the Intended Nationally Determined Contributions (INDC);
the maturity of the customer when faced with climate challenges
and its ability to adapt, as evaluated by a non-financial agency or
estimated by geographic average.
For each customer group,
the transition risk index
is calculated by
adding these three factors together. The index is positive when the
counterpart demonstrates above-average preparedness and is negative
if it does not. The more the customer stands out from its peers, the
more the sector is considered to be at risk, and the more the country
has committed to a rapid climate transition, the higher the absolute
value of the index. Thus, an agent in the Energy or Transport sector
in a country committed to significantly lowering emissions will have
more to gain or lose than a player in a sector that is less at risk and in
a country with lower greenhouse gas reduction demands. The extent
to which this agent will be affected will depend on its ability to adapt
its strategy and business model to its new situation. The transition risk
index complements sector-focused policies by making it possible to
identify customers for which additional analyses appear necessary in
view of their exposure to transition risk and management of this risk.
This approach applies to all sectors and all countries.
In 2020, a total of 13 Crédit Agricole CIB financing projects were granted
and classified according to categories A, B and C of the Equator Principles.
As at 31 December 2020, there were 394 projects in the portfolio. The
classification of projects breaks down as follows:
39 projects were classified as A, of which one in 2020;
306 were classified as B, of which 12 in 2020;
49 were classified as C, of which none in 2020.
Crédit Agricole Assurances
is mainly subject to transition risks for its
investment activities. Consequently, Crédit Agricole Assurances continues
to invest in green assets, and at end-September 2020 invested €6 billion
in green bonds.
Through its property and casualty insurance subsidiaries, Crédit Agricole
Assurances is exposed to physical risks related to climate change. In
its main property and casualty insurance group, Pacifica, the risks on
the portfolio and new business must be assessed in such a way that,
in year Y, the claims to be paid directly to policyholders can be met.
Premiums are reassessed annually for year Y+1 based on expected
changes in claim frequency and average cost. For climate-related claims,
these models are produced by looking at the frequency and average cost
of claims in previous years adjusted for an acceleration of anticipated
events. Crédit Agricole Assurances, through its subsidiary Pacifica, must
be able to compensate a large number of insureds following a climate
event, and consequently follows the most pessimistic business-as-usual
scenario.
CRÉDIT AGRICOLE S.A.
—
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NON-FINANCIAL PERFORMANCE
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3. ESG risk management
These climate risks may impact buildings (residential, commercial or
farm), vehicles or crops. The weight of these climate events in the total
claims cost varies from one policy to another. While it is 100% for crop,
forage or forest storm insurance policies, it nevertheless represents
more than a third of the claim cost for policies such as home, car, or
agricultural or professional multi-risk insurance. Conversely, third-party
liability policies are only slightly impacted. In 2020, Pacifica estimated
the weight of climate-related claims at €343.3 million, representing
11.6% of premiums.
In addition, since 2019,
Crédit Agricole S.A.
and several pilot
Regional
Banks
have conducted studies of the impact of physical risks on their
Housing and Agriculture portfolios. Similarly, in 2020,
LCL
conducted
a study of the impact of natural disasters on credit risk, focusing on its
most significant portfolios.
Presentation of the climate risk strategy according to the recommendations of the TCFD
The Group is committed to adopting a transparent approach and following best market practices and has undertaken to follow the
recommendations
of the
Task Force on Climate-related Financial Disclosures (TCFD).
Our responses to these recommendations are summarised in the table
below and detailed in the various chapters of our statement of non-financial performance.
TCFD Sections
Recommendation
Main elements of the Group’s response
Governance
1 – Describe the monitoring
of climate risks and opportunities
by the board
The work performed within the Specialised Committees of the Board of Directors (Strategy
and CSR Committee and Risk Committee of the Board of Directors) is submitted to the Board
of Directors after examination.
At its plenary meetings, the Board ensures the consistency of the Company’s commitments
and project with regard to social and environmental issues:
when reviewing strategic projects, especially in the context of the Group Project,
which makes Climate Strategy one of the pillars;
on the occasion of presentations of each entity’s version of the Group Project;
when reviewing the Risk Strategies submitted for adoption, if the scope of those
strategies justifies it.
See Chapters 2.2.2 and 3.2
2 - Describe the role
of Management in assessing
and managing climate risks
and opportunities
The climate risk strategy prepared by the CSR department and the Group Risk department
with the collaboration of Group entities is presented annually to the Group Risk Committee,
which consists of Group executives, and then to the Risk Committee of the Board of Directors.
This risk strategy and the associated risk opinion determine the climate risk roadmap for
the coming year.
See Chapters 2.2.2 and 3.2
Strategy
3 - Describe the climate risks
and opportunities identified
by the Company in the short,
medium and long term.
Climate risks are mapped as major risks by the Group. Understood as risk factors that
influence existing risks (counterparty, market, operational, etc.), they cover physical and
transition risks.
These risks are considered material in the short term for acute physical risks, in the long term
for chronic physical risks, and in the potentially short/medium or long term for transition risk.
The opportunities linked to the climate challenge are described in the section “Supporting
economic sectors on the way to climate transition”.
See Chapters 1.3, 2.3 and 3.2
4 - Describe the impact
of climate risks and opportunities
on the Company’s business,
strategy and financial planning
Given the stakes involved, the Group has decided to make green finance a key growth driver
for the Group. To that end, it has defined a climate strategy aimed at the progressive
alignment of financing and investment portfolios according to a scenario compatible with
the Paris Agreement and the integration of climate transition issues into the customer
dialogue.
The Group has also put procedures in place to integrate climate risks into its financial risk
management.
See Chapters 2.3 and 3.2
5 - Describe the resilience
of the Company’s strategy,
taking into account various
climate scenarios, including
the scenario of a temperature
increase of 2° or less.
Internal issue assessment tools confirm that:
the Group’s vulnerability to physical risks remains stable and low. Short-term impacts
are integrated and covered by Crédit Agricole Assurances, whose internal modelling
supplements the standard formula valuations;
the impacts of transition risk according to the stress scenarios conducted in the ACPR
pilot exercise are contained at Group level. It demonstrates the Group’s resilience to
adverse scenarios involving an accelerated or delayed climate transition, resulting
in a sharp rise in the price of CO
2
.
See Chapter 3.2
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
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3. ESG risk management
TCFD Sections
Recommendation
Main elements of the Group’s response
Risk management
6 - Describe the Company’s
procedures for identifying
and assessing climate risks
Crédit Agricole S.A. has put the following procedures in place:
central objective of aligning financing and investment portfolios according to the
Paris Agreement;
stress scenarios conducted over a large scope of the Group (ACPR pilot exercise);
scenarios at entity or portfolio level that allow a mapping of issues through internal
methods that assess physical and transition risks.
See Chapter 3.2
7 - Describe the Company’s
procedures for climate risk
management
Sector policies govern the Group’s activities and define the scope of exclusion. The Risk
department issues an opinion on these policies, as well as on the climate strategy and sector
strategies. Moreover:
physical risks are covered by Crédit Agricole Assurances through an annual forecast
of the climate load and the structure of the reinsurance programme;
transition risks are understood through the climate transition rating, which makes
it possible to assess the stakes for large customers.
See Chapter 3
8 - Describe how the procedures
for identifying, assessing and
managing climate risks are
incorporated into the overall risk
management of the company
Climate Governance provides for clear information to the decision-making bodies on the
status and management of climate risks, namely through the Group Risk Committees and
the Risk Committee of the Board of Directors. Ad hoc
risk appetite indicators are
communicated to governance according to the Risk Appetite policy it validates.
See Chapter 3
Metrics and targets
9 - Indicate the measurement
system used by the Company
to assess climate risks
and opportunities in accordance
with its risk management
strategy and procedure
The Group implements a methodology for quantifying greenhouse gas (GHG) emissions said
to be financed by a financial institution. Dubbed P9XCA, this methodology has been
recommended since 2014 by the financial sector guide, “Quantifying Greenhouse Gas
Emissions”, published by Agence de l’environnement et de la maîtrise de l’énergie (ADEME),
Observatoire sur la responsabilité sociétale des entreprises (ORSE) and Association Bilan
Carbone. It allows the Group to calculate, with no double-counting, the order of magnitude
of financed emissions and to map those emissions by sector and geographical area.
Greenhouse gas emissions are allocated to economic players according to their capacity
(and economic interest) to reduce them using a qualified allocation “by issue” as opposed
to the usual allocation “by scope”.
Physical risks are assessed on a scale of 1 to 15 using a method combining indices of
sectoral sensitivity (vulnerability on a three-level scale of 20 major sectors identified) and
geographical sensitivity (based on three variables: share of the population living below an
altitude of 5 m, share of agriculture in GDP, vulnerability index).
See Chapters 2.3.6, 2.3.7 and 3.2
10 - Reporting of Type 1, Type 2
and, where applicable, Type 3
greenhouse gas (GHG) emissions
and associated risks
Emissions related to the Group’s scopes 1, 2 and 3 can be viewed in Chapters 2.3.6 and
2.3.7
11 - Describe the objectives
used by the Company to manage
climate risks and opportunities
and the performance achieved
against the objectives
Concerning Scope 3 (financing and investment portfolio): the Crédit Agricole Group is
committed to aligning itself with a scenario compatible with the Paris Agreement (IEA SDS).
For scopes 1 and 2: Crédit Agricole S.A. is committed to reducing its direct footprint, including
energy (in terms of square metres) and transport (in terms of FTEs), by 15% over the period
2016-2020.
See Chapters 2.3.6 and 2.3.7
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
95
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
3. ESG risk management
4. RESULTS
4.1 NON-FINANCIAL PERFORMANCE INDICATORS
ESG strategy
Policy
Performance indicator
Definition
Unit
2019
2020
Entities
concerned
Environmental
Performance
The Group’s climate
strategy
TCFD Chapter: climate
risk management
Investments in coal
Among the entire Amundi
portfolio, investments in
thermal and metallurgical coal
%
0.1
0.07
Amundi
Financing of coal
Among the entire Crédit
Agricole CIB portfolio,
financing of thermal
and metallurgical coal
%
0.46
0.33
Crédit
Agricole CIB
Progress on specific
initiatives relating
to the environment
Investments in the energy
transition sector
€bn
11.7
21.9
Amundi
Financing of
green activities
Financing of green activities
as defined in the Green
Bond Framework
€bn
7.1
11.14
Crédit
Agricole CIB
Investments in
renewable energies
Investments in renewable
energies
€bn
1.86
2.6
CAA
Financing of REn
Financing of renewable
energies
€m
249.8
311.7
LCL
Financing of REn
projects in France
Financing of renewable
energies in France
%
28
28.1
Unifergie
GHG emissions financing
and investments
GHG emissions related
to all investments and
financing (Scope 3)
MtCO
2
eq
139
143
Crédit
Agricole
Group
Measures and targets
related to our direct
environmental footprint
Energy-related GHG
emissions/sq.m.
GHG emissions related
to the energy consumption
of buildings (direct footprint)
TCO
2
eq/sq.m.
0.03492
0.03046
Crédit
Agricole S.A.
GHG emissions related
to business travel/FTE
GHG emissions related
to employee travel by air
and rail (direct footprint)
TCO
2
eq/FTE
0.636
0.101
Crédit
Agricole S.A.
Social
Performance
A universal approach
for our businesses:
being there for everyone
Assets in the fund
with social and
solidarity impact
Investments in the Social
and Solidarity Economy
sector
€m
256
331
Amundi
Health-related financing
Financing of the health sector
(hospitals, medico-social
accommodation, health-
related services and care)
€bn
5.89
6.9
LCL
Number of vulnerable
customers supported
Monitoring and providing
personalised support to
customers in vulnerable
situations, whether due
to circumstances or the
need for structural support
Number
18,514
21,544
LCL, CACF
and regional
Banks
Assets from Financing
granted to microfinance
institutions
Financing granted to
microfinance institutions
€m
54
74
Grameen
Crédit
Agricole
Foundation
A strong ethical culture
Raising employee
awareness of ethics
Percentage of employees
made aware of ethics
%
16.93
20.3
Crédit
Agricole S.A.
HR strategy: managerial
transformation
for empowerment
Increase in ERI Survey
participation rate
% of women in the highest
decision-making body of each
entity (Executive Committee
when there is one or, failing
that, the Management
Committee)
%
24
24
Crédit
Agricole S.A.
Executives trained in
the new leadership model
Percentage of executives
trained in
the new leadership model
%
42
54.5
Crédit
Agricole S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
96
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
ESG strategy
Policy
Performance indicator
Definition
Unit
2019
2020
Entities
concerned
Social
Performance
HR strategy: an
atmosphere of
trust between employees
and the company
Women in decision-making
bodies
Change (in points)
in employee participation
in the Engagement and
Recommendation Index
In points
7
3
Crédit
Agricole S.A.
HR strategy: an
organisational
transformation
to be closer to customers
Training courses given
Number of hours of training
received by employees
(regardless of the training
theme)
Millions
of hours
2.31
1.83
Crédit
Agricole S.A.
Taxation and responsible
lobbying policy
Effective tax rate
Tax rate paid by Crédit
Agricole S.A.
%
7.37
22.23
Crédit
Agricole S.A.
Responsible purchasing
Suppliers with a CSR
assessment (EcoVadis)
Share of suppliers that
received an assessment
in a call for tenders
%
46.7
67.75
Crédit
Agricole S.A.
Combatting cybercrime
Cyber risk training
for employees
Percentage of employees
trained in cyber risks
% over 3
sliding
years
2018-
2020
N/A
88.5
Crédit
Agricole S.A.
Governance
representative
of the Group’s identity
and guarantor
of long-term
commitments
Non-financial criteria
in the variable
compensation
of managers
Share of non-financial criteria
in the variable compensation
of executives
%
40
40
Crédit
Agricole S.A.
Network of CSR players
Number of CSR Managers
within the Group (full-time
or part-time)
Number
150
175
Crédit
Agricole
Group
ESG Performance
Management Platform
Number of social
and environmental
impact indicators piloted
Number of indicators of impact
of financing or investments
calculated and piloted
Number
N/A
65
Crédit
Agricole
Group
FReD mechanism
Number of employees
whose compensation
is linked to the FReD
mechanism
Number of employees
for whom at least part
of the variable portion
or profit-sharing is linked
to the FReD mechanism
Number
10,000
23,408
Crédit
Agricole S.A.
ESG
performance
ESG development
Outstanding ESG
multi-criteria investment
solutions
Assets under management
invested in funds with an “ESG
Integration” investment process
€bn
310.9
355.9
Amundi
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
97
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
4.2
HUMAN RESOURCES INDICATORS
Workforce
At end-2020, Crédit Agricole S.A. had 73,817 employees (full-time equivalent or FTE) and was operating in 45 countries.
AMERICAS
1,339 FTE
1.9%
AFRICA
5,148 FTE
7.0%
ASIA-PACIFIC
2,666 FTE
3.6%
WESTERN
EUROPE
55,675 FTE
75.4%
EASTERN
EUROPE
8,879 FTE
12.0%
MIDDLE-EAST
110 FTE
0.1%
Headcount by type of contract (full-time equivalent)
2020
2019
France
International
TOTAL
France
International
TOTAL
Active permanent contracts (CDI)
34,815
35,553
70,368
34,367
35,011
69,378
Fixed-term contracts (CDD)
632
2,817
3,449
606
3,053
3,659
Total employees
35,447
38,370
73,817
34,973
38,064
73,037
Non active permanent contract (CDI)
employees
1,066
908
1,974
1,104
1,282
2,386
TOTAL
36,513
39,278
75,791
36,077
39,346
75,423
Beneficiary View.
Breakdown of workforce by gender
Men
46.6%
Scope covered: 99%
Women
53.4%
2019
Men
46.6%
Scope covered: 99%
Women
53.4%
2020
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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NON-FINANCIAL PERFORMANCE
2
4. Results
Breakdown of workforce by level/gender
France
(as a %)
2020
2019
Managers
Non-managers
Managers
Non-managers
Workforce in France
69.9
30.1
68.7
31.3
Women
61.4
38.6
60.1
39.9
Men
80.7
19.3
79.9
20.1
Scope covered - France
99%
99%
International
(as a %)
2020
2019
Senior
managers
Managers
Other
employees
Senior
managers
Managers
Other
employees
International workforce
3.1
25.9
71.0
3.0
25.6
71.4
Women
1.6
20.0
78.4
1.6
19.6
78.8
Men
4.6
32.0
63.4
4.4
31.8
63.8
Scope covered - International
99%
99%
Age structure
Scope covered:
99%
10%
8%
6%
4%
2%
less than 25 years
25 years - 30 years
30 years - 35 years
35 years - 40 years
40 years - 45 years
45 years - 50 years
50 years - 55 years
55 years - 60 years
60 years - 65 years
65 years old and over
0%
2%
4%
6%
8%
10%
WOMEN/INTERNATIONAL
WOMEN/FRANCE
MEN/FRANCE
MEN/INTERNATIONAL
Average age and length of service
2020
2019
France
International
TOTAL
France
International
TOTAL
Average age
43 years and
6 months
43 years and
4 months
43 years and
5 months
43 years and
4 months
43 years
43 years and
2 months
Average length of service
15 years and
10 months
13 years and
4 months
14 years and
7 months
15 years and
11 months
13 years
14 years and
6 months
Scope covered
99%
99%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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NON-FINANCIAL PERFORMANCE
2
4. Results
Departures of permanent contract employees by reason
2020
2019
France
International
TOTAL
%
France
International
TOTAL
%
Resignation
841
1,276
2,117
46.5
1,194
1,705
2,899
50.1
Retirement and
early retirement
520
352
872
19.1
455
478
933
16.2
Lay-off
187
343
530
11.6
223
329
552
9.5
Death
19
30
49
1.1
20
22
42
0.7
Other
489
500
989
21.7
626
734
1,360
23.5
TOTAL PERMANENT
CONTRACT DEPARTURES
2,056
2,501
4,557
100.0
2,518
3,268
5,786
100.0
Scope covered
99%
99%
Mobility/career management
Internal mobility
Mobility within
a same entity
Mobility between
entities
7,993
10,107
738
1,052
2020
Scope covered: 99%
2019
Scope covered
:
99%
Promotions in France
2020
2019
Women
Men
TOTAL
Women
Men
TOTAL
Promotion in the non-manager category
603
302
905
837
311
1,148
Promotion from non-manager to manager
325
198
523
353
178
531
Promotion in the manager category
503
566
1,069
446
520
966
TOTAL
1,431
1,066
2,497
1,636
1,009
2,645
%
57.3
42.7
100.0
61.9
38.1
100.0
Scope covered France
99%
99%
Equal treatment
Proportion of women
(%)
2020
2019
%
Scope covered
%
Scope covered
Among all employees
53.5
100%
53.6
100%
Among permanent contract employees
50.9
100%
53.1
100%
Among management levels 1 and 2
21.7
100%
22.9
100%
Among the Group Executive Committee
4 out of 16
100%
2 out of 16
100%
Among the top 10% of highest-earning employees in each subsidiary (fixed compensation)
29.9
99%
30.0
99%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
100
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
Internships/Work-study contracts
Internships and work-study contracts (average monthly FTE)
Work-study
contracts
Internships
1,861
1,876
1,151
1,251
2020
Scope covered:
99%
2019
Scope covered: 99%
Recruitment
Recruitment by geographic area
2,703
2,797
1,274
839
223
253
87
4
1,183
1,218
449
370
153
11
Africa
Americas
Asia
Pacic
France
Eastern
Europe
Western
Europe
Middle East
2020
Scope covered: 99%
2019
Scope covered: 99%
Training
Number of employees trained
Scope covered: 98%
International
36,714
48.1%
France
39,565
51.9%
2020
Scope
covered
:
98%
International
39,945
49.2%
France
41,242
50.8%
2019
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
101
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
Training topics
2020 (12 months)
2019 (12 months)
TOTAL
%
o/w France
o/w
International
TOTAL
%
Knowledge of Crédit Agricole S.A.
10,471
0.6
1,386
9,085
26,809
1.2
Personnel and business management
62,712
3.4
32,408
30,304
90,483
3.9
Banking, law and economics
267,144
14.6
169,629
97,515
471,488
20.4
Insurance
525,161
28.8
231,435
293,726
367,415
15.9
Financial management (accountancy, tax, etc.)
18,873
1.0
6,084
12,789
32,666
1.4
Risks
72,698
4.0
35,049
37,649
81,579
3.5
Compliance
424,303
23.2
108,248
316,055
472,426
20.4
Methods, organisation, quality
63,461
3.5
10,590
52,871
111,089
4.8
Purchasing, marketing, distribution
51,244
2.8
13,536
37,708
117,048
5.1
IT systems, networks, telecommunications
30,498
1.7
14,687
15,811
56,640
2.4
Languages
88,237
4.8
28,685
59,552
144,251
6.2
Office systems, software, new ICT
23,100
1.3
10,565
12,535
36,357
1.6
Personal development, communication
98,030
5.4
28,200
69,830
202,529
8.8
Health and safety
66,578
3.6
16,475
50,103
72,799
3.1
Human rights and the environment
10,477
0.6
1,553
8,924
13,870
0.6
Human Resources
12,366
0.7
4,008
8,358
16,480
0.7
TOTAL
1,825,353
100.0
712,538
1,112,815
2,313,929
100.0
Scope covered
98%
98%
Compensation
Annual fixed salary scale
FEMALE NON-MANAGERS
FEMALE MANAGERS
MALE MANAGERS
MALE NON-MANAGERS
0
2,000
4,000
6,000
6,000
4,000
2,000
0
<20,000
20,000 to 25,000
25,000 to 30,000
30,000 to 35,000
35,000 to 45,000
45,000 to 60,000
60,000 to 90,000
>90,000
Scope covered France:
99%
Average monthly salary of active permanent contract (CDI) employees in France (gross basic salary)
2020
2019
Women
Men
OVERALL
Women
Men
OVERALL
Managers
4,405
5,377
4,898
4,352
5,294
4,830
Non-managers
2,530
2,526
2,529
2,518
2,515
2,517
TOTAL
3,680
4,827
4,185
3,620
4,735
4,107
Scope covered France
99%
99%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
102
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
Collective variable compensation paid during the year on the basis of the previous year’s results in France
2020
2019
Total amount
(in thousands of euros)
Number of
beneficiaries
Average amount
(in euros)
Total amount
(in thousands of euros)
Number of
beneficiaries
Average amount
(in euros)
Profit-sharing
42,435
31,276
1,357
57,075
32,241
1,770
Incentive plans
203,009
42,693
4,755
181,081
43,865
4,128
Employer’s additional contribution
50,912
33,493
1,520
50,559
33,629
1,503
TOTAL
296,356
288,715
Scope covered France
99%
99%
Health & safety
Absenteeism in calendar days
2020
2019
TOTAL
Average
number of days’
absence per
employee
TOTAL
Average
number of
days’ absence
per employee
Women
Men
Number
of days
%
Number
of days
%
Sickness
511,988
221,149
733,137
51.0
10.1
697,218
52.3
9.4
Accident
12,423
6,513
18,936
1.3
0.3
26,375
2.0
0.4
Maternity, paternity, breast feeding
370,459
15,197
385,656
26.8
5.3
427,244
32.1
5.8
Authorised leave
81,410
54,201
135,611
9.4
1.9
158,790
11.9
2.1
Other
91,753
72,761
164,514
11.4
2.3
23,310
1.7
0.3
TOTAL
1,068,033
369,821
1,437,854
100.0
19.8
1,332,937
100.0
18.0
Absenteeism rate
5.4%
5
%
Scope covered
97%
98%
The number of work or commuting accidents recorded over the year was 800 in 2020. It was 1,311 in 2019.
Work organisation
Proportion of part-time employees
2020
2019
Women
Men
TOTAL
Women
Men
TOTAL
Part-time employees
6,368
789
7,157
6,599
754
7,353
Part-time employees as % of total
16.6
2.4
9.9
17.4
2.3
10.3
Women as % of part-time employees
89.0
89.7
Scope covered
99%
99%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
103
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
Labour relations
Number of company agreements signed during the year by subject
2020
2019
France
International
TOTAL
France
International
TOTAL
Compensation and benefits
54
44
98
60
27
87
Training
0
18
18
0
19
19
Employee representative bodies
10
2
12
32
1
33
Jobs
3
5
8
2
9
11
Working hours
15
14
29
6
8
14
Diversity and gender equality at work
2
3
5
3
1
4
Health & Safety
0
0
0
3
0
3
Other
24
23
47
19
15
34
TOTAL
108
109
217
125
80
205
Scope covered
96%
92%
4.3
RECOGNITION OF NON-FINANCIAL PERFORMANCE BY STAKEHOLDERS
By relying on its ESG strategy and of all the actions implemented by the entities, Crédit Agricole S.A. is consolidating its non-financial performance.
In 2020, it reaffirmed its place on the leading socially responsible investment indexes:
Rated A- by CDP in 2020;
rated A by Morgan Stanley Capital International (MSCI) since 2017;
rating of 63 by VigeoEiris since 2019 and included in NYSE-Euronext
indices since May 2013;
rated Prime by ISS ESG since December 2015;
included for several years in the British FTSE4Good index, re-confirmed
in September 2020.
Signatory of the
—
United Nations Global Compact since 2003;
—
Principles for Responsible Investment since 2006;
—
Diversity Charter since 2008;
—
Sustainable Purchasing Charter since 2010;
—
Charter for the energy efficiency of commercial buildings since 2013;
—
Science-Based Targets since 2016;
—
RE100 since 2016;
—
Principles for Responsible Banking and Collective Commitment to Climate Action since 2019;
—
Business for Inclusive Growth (B4IG) since 2019;
—
Poseidon Principles since 2019;
—
One Planet Sovereign Wealth Fund Asset Manager Initiative since 2019;
—
Tobacco Free Finance Pledge since
2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
104
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
Co-founding member of the
—
Equator Principles since 2003;
—
Green Bonds Principles since 2014;
—
Portfolio Decarbonization Coalition since 2014;
—
Mainstreaming Climate Action Within Financial Institutions since 2015;
—
Catalytic Finance Initiative since 2015;
—
French Business Climate Pledge since 2015;
—
BBCA association (low-carbon building design) since 2015;
—
Finance for Tomorrow since 2017.
Participant in the
—
Call for carbon pricing at the initiative of the World Bank Group in 2014;
—
Montreal Carbon Pledge since 2015;
—
Paris Appeal on Climate Change since 2015;
—
IIRC (International Integrated Reporting Council) since 2016;
—
Task Force on Climate Disclosure since 2017;
—
Climate Action 100+ since 2017;
—
AIGCC
(Asia Investor Group on Climate Change) since 2020.
Other positions
—
Statement on modern slavery since 2017;
—
Contributor to the RH Sans Frontières endowment fund since 2018.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
105
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
2
4. Results
IMPLEMENTATION OF THE PRINCIPLES FOR RESPONSIBLE BANKING
The complete report on the implementation of the “Principles for Rersponsible Banking” is available on credit-agricole.com website.
Reporting and self-assessment point
Relevant reference(s)/Illustrative link(s) to the answer
PRINCIPLE 1: ALIGNMENT
1.1 Crédit Agricole S.A. business model.
See Universal Registration Document, chapter “Presentation
of Crédit Agricole S.A.”
1.2 Alignment of the strategy with the Sustainable Development Goals (SDGs),
the Paris Climate Agreement and successful national and regional
frameworks.
groupe/notre-vision
and Universal Registration Document, chapter “Extra-financial
performance”, paragraphs 1.3 and 2.3.1
PRINCIPLE 2: DEFINITION OF IMPACT AND TARGET
2.1 Group impact analysis
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraphs 1.2 and 1.3
Conclusion on impact analysis: this entire analysis of non-financial risks/issues and their materiality has enabled Crédit Agricole S.A.
to define the corresponding impact and risk management policies.
2.2 Definition of Group target
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraphs 2.3.1 and 1.3
Conclusion on the definition of the target: as part of its Ambitions 2022 medium-term plan, Crédit Agricole S.A. has set itself ambitious objectives in line
with its
Raison d’Être
(1)
.
2.3 Plans for implementation and monitoring of objectives
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraph 2.2.3
Conclusion on the monitoring of objectives: the deployment of the non-financial reporting platform throughout the Group will make it
possible to transparently monitor the implementation of our social and environmental commitments.
2.4 Progress in implementing objectives
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraphs 2.3.6, 2.3.2 and 4
Conclusion on progress made: In a particularly difficult environment in which the bank was mobilised to support its customers, employees
and stakeholders in the face of the pandemic, significant progress was made in 2020 in implementing our environmental and societal strategy.
PRINCIPLE 3: CLIENTS AND CUSTOMERS
3.1 Overview of the policies and practices currently implemented or to be
implemented by the Group to promote responsible relationships with its
customers.
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraph 2.4.2
3.2 Description of the work performed or planned by the Group with its
customers to encourage sustainable practices and enable sustainable
economic activities.
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraphs 1.2., 1.3 and 2.2.4
PRINCIPLE 4: STAKEHOLDERS
4.1 Description of the stakeholders (or groups/types of stakeholders) with
whom the Group has consulted, engaged, collaborated or partnered to
implement these principles and enhance its impact.
lancement-du-collectif-dentreprises-pour-une-economie-plus-
inclusive/
PRINCIPLE 5: GOVERNANCE AND CULTURE
5.1 Description of the governance structures, policies and procedures put in
place or expected to be put in place by the Group to manage significant
positive and negative (potential) impacts and to support the effective
implementation of the Principles.
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraph 2.2.2
5.2 Description of the initiatives and measures implemented or expected to be
implemented by the Group to foster a responsible banking culture among
its employees.
See Universal Registration Document, “Non-Financial Performance”
chapter, paragraph 2.2.4 and paragraph 2.2.2
5.3 Governance structure for the implementation of the principles.
Conclusion: Oversight of the implementation of the PRB is an integral part of Crédit Agricole S.A. ESG governance.
PRINCIPLE 6: TRANSPARENCY AND ACCOUNTABILITY
Progress in the implementation of the principles of banking responsibility.
Universal Registration Document, “Non-Financial Performance” chapter
Conclusion: Crédit Agricole S.A. has made significant progress in the implementation of the PRB, an integral part of its ESG strategy,
during financial year 2020.
(1)
Please refer to the glossary for the definition of Raison d’Être.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
106
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Implementation of the Principles for Responsible Banking
2
CROSS-REFERENCE TABLE
Statement of Non-Financial Performance
Pages
Business model
14
Non-financial risks
46-50
Policies, due diligence procedures and outcomes
56-89
KPIs
96-97
Duty of vigilance
139-147
DPEF 2020
Pages
Global
Compact
SDGs
PRB
ISO 26000
GRI G4
1.
NON-FINANCIAL RISKS
1.1. Consultation of stakeholders
3; 4
6.4.5.
1.2. Materiality matrix
All
principles
1; 3; 5; 6; 7; 8;
10; 11; 12; 13;
14; 15;16
All
principles
6.4.3; 6.4.4; 6.4.5;
6.4.7; 6.5.4; 6.5.5;
6.6.3; 6.6.6; 6.7.3;
6.7.7; 6.8.3
G4-EC1; G4-EC2; G4-EC7; G4-EC8;
G4-EN2; G4-EN3; G4-EN6; G4-EN10;
G4-EN15; G4-EN16; G4-EN17; G4-EN19;
G4-EN27; G4-LA1; G4-LA2; G4-LA9;
G4-LA10; G4-LA11; GA-LA13; G4-LA15;
G4-SO4; GR-PR8
1.3. Analysis of non-financial risks
All
principles
1; 3; 5; 6; 7; 8;
10; 11; 12; 13;
14; 15;16
All
principles
6.4.3; 6.4.4; 6.4.5;
6.4.7; 6.5.4; 6.5.5;
6.6.3; 6.6.6; 6.7.3;
6.7.7; 6.8.3
G4-EC1; G4-EC2; G4-EC7; G4-EC8;
G4-EN2; G4-EN3; G4-EN6; G4-EN10;
G4-EN15; G4-EN16; G4-EN17; G4-EN19;
G4-EN27; G4-LA1; G4-LA2; G4-LA9;
G4-LA10; G4-LA11; GA-LA13; G4-LA15;
G4-SO4; GR-PR8
2.
ESG STRATEGY: TO BE A PLAYER COMMITTED TO LOW-CARBON AND SOCIALLY ACCEPTABLE GROWTH
2.1. An ESG strategy driven
by the Group Project
All
principles
1; 3; 5; 6; 7; 8;
10; 11; 12; 13;
14; 15;16
All
principles
6.2; 6.3.4; 6.3.7;
6.4; 6.5; 6.6.3;
6.6.4; 6.6.5; 6.6.6;
6.7.4; 6.7.5; 6.7.6;
6.7.7; 6.7.8; 6.8.3;
6.8.4; 6.8.5; 6.8.7;
6.8.9
G4-EC1; G4-EC2; G4-EC7; G4-EC8;
G4-EN2; G4-EN3; G4-EN6; G4-EN10;
G4-EN15; G4-EN16; G4-EN17; G4-EN19;
G4-EN23; G4-EN27; G4-LA1; G4-LA2;
G4-LA8; G4-LA9; G4-LA10; G4-LA11;
G4-LA12; GA-LA13; G4-LA15; G4-SO4;
G4-PR5: G4-PR8
2.2. Governance
All
principles
1; 3; 5; 6; 7; 8;
10; 11; 12; 13;
14; 15;16
5
6.2
G4-LA12
2.3. Environmental strategy
7; 8; 9
6; 7; 11; 12; 13;
14; 15
All
principles
6.5
G4-EN2; G4-EN3; G4-EN6; G4-EN10;
G4-EN15; G4-EN16; G4-EN17; G4-EN19;
G4-EN23; G4-EN27; G4-EC2
2.4. Social strategy
All
principles
1; 3; 5; 8; 10; 11;
12; 16
All
principles
6.3.4; 6.3.7; 6.4;
6.5.4; 6.6.3; 6.6.4;
6.6.5; 6.6.6; 6.7.4;
6.7.5; 6.7.6; 6.7.7;
6.7.8; 6.7.9; 6.8.3;
6.8.4; 6.8.5; 6.8.7;
6.8.9;
G4-EC1; G4-EC2; G4-EC7; G4-EC8;
G4-EN2; G4-EN3; G4-EN10; G4-EN23;
G4-EN27; G4-LA1; G4-LA2; G4-LA8;
G4-LA9; G4-LA10; G4-LA11; G4-LA12;
GA-LA13; G4-LA15; G4-SO4
2.5. Integration of ESG criteria
in investment and asset
management policies
All
principles
1; 3; 5; 6; 7; 8;
10; 11; 12; 13;
14; 15;16
1; 2; 3;
5; 6
6.5; 6.8.9
G4-EN23; G4-EN2; G4-EN3; G4-EN6;
G4-EN10; G4-EN15; G4-EN16; G4-EN17;
G4-EN19; G4-EN27; G4-EC1; G4-EC1;
G4-EC2; G4-EC7; G4-EC8
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
107
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Cross-reference table
2
DPEF 2020
Pages
Global
Compact
SDGs
PRB
ISO 26000
GRI G4
3.
ESG RISK MANAGEMENT
3.1. ESG risk approach
All
principles
1; 3; 5; 6; 7; 8;
10; 11; 12; 13;
14; 15;16
1; 2; 5
6.2; 6.3.4; 6.3.7;
6.4; 6.5; 6.6.3;
6.6.4; 6.6.5; 6.6.6;
6.7.4; 6.7.5; 6.7.6;
6.7.7; 6.7.8; 6.8.3;
6.8.4; 6.8.5; 6.8.7;
6.8.9
G4-EC1; G4-EC2; G4-EC7; G4-EC8;
G4-EN2; G4-EN3; G4-EN6; G4-EN10;
G4-EN15; G4-EN16; G4-EN17; G4-EN19;
G4-EN23; G4-EN27; G4-LA1; G4-LA2;
G4-LA8; G4-LA9; G4-LA10; G4-LA11;
G4-LA12; GA-LA13; G4-LA15; G4-SO4
3.2. Focus on climate risk
management
7; 8; 9
7; 11; 13
1; 2; 5
6.5.5.
G4-EC2; G4-EN17; G4-EN19
4.
RESULTS AND IMPACT
4.1. Non-financial performance
indicator
All
principles
1; 3; 5; 6; 7; 8;
10; 11; 12; 13;
14; 15;16
All
principles
6.2; 6.3.3; 6.3.7;
6.4.3; 6.4.4; 6.4.5;
6.4.6; 6.4.7; 6.5;
6.6.3; 6.6.4; 6.6.5;
6.6.6; 6.7.4; 6.7.7;
6.8.7; 6.8.8; 6.8.9
G4-EC1; G4-EC2; G4-EC7; G4-EC8;
G4-EN2; G4-EN3; G4-EN6; G4-EN10;
G4-EN15; G4-EN16; G4-EN17; G4-EN19;
G4-EN23; G4-EN27; G4-LA1; G4-LA2;
G4-LA8; G4-LA9; G4-LA10; G4-LA11
G4-LA12; G4-LA13; G4-LA15; G4-SO4;
GR-PR8
4.2. Human resources indicators
All
principles
1; 3; 5; 8; 10; 11;
12; 16
1; 2;
5; 6
6.3.4; 6.3.7;
6.4; 6.8.8
G4-EC3; G4-LA1; G4-LA2; G4-LA3;
G4-LA5; G4-LA6; G4-LA8; G4-LA9;
G4-LA10; G4-LA12; G4-LA13
The Global Compact is a UN initiative that encourages companies to adopt socially responsible behaviour based on 10 principles.
The UN’s Sustainable Development Goals are a list of 17 targets to be achieved by 2030.
The Principles for Responsible Banking are a UN framework for a more sustainable and inclusive banking system.
ISO 26000 is an international standard which defines how organisations can contribute to sustainable development.
The GRI G4 is the fourth edition of the Global Reporting Initiative that aims to provide indicators for measuring the development of sustainable
development programmes.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
108
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Cross-reference table
2
REPORT BY ONE OF THE STATUTORY AUDITORS, APPOINTED
AS AN INDEPENDENT THIRD PARTY, ON THE NON-FINANCIAL
INFORMATION STATEMENT INCLUDED IN THE MANAGEMENT REPORT
This is a free translation into English of the Statutory Auditor’s report issued in French and is provided solely for the convenience of English
speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards
applicable in France.
For the year ended December 31, 2020
To the shareholders of Crédit Agricole S.A.,
In our capacity as Statutory Auditor of Crédit Agricole S.A. (hereinafter the “entity), appointed as an independent third party and accredited by Cofrac
(accreditation Cofrac Inspection n°3-1060 whose scope is available at www.cofrac.fr), we hereby report to you on the non-financial information
statement for the year ended 31 December 2020 (hereinafter the “Statement”), included in the management report pursuant to the legal and
regulatory provisions of articles L. 225102-1, R. 225-105 and R. 225-105-1 of the French Commercial Code
(Code de commerce).
THE ENTITY’S RESPONSIBILITY
Pursuant to legal and regulatory requirements, the Board of Directors is responsible for preparing the Statement, including a presentation of the
business model, a description of the principal nonfinancial risks, a presentation of the policies implemented considering those risks and the outcomes
of said policies, including key performance indicators.
The Statement has been prepared in accordance with the entity’s procedures (hereinafter the “Guidelines”), the main elements of which are
presented in the Statement (or which are available on request from the entity’s Corporate Social and Environmental Responsibility Department).
INDEPENDENCE AND QUALITY CONTROL
Our independence is defined by the provisions of article L. 822-11-3 of the French Commercial Code and the French Code of Ethics
(Code de
déontologie)
of our profession. In addition, we have implemented a system of quality control including documented policies and procedures regarding
compliance with the ethical requirements, French professional guidance and applicable legal and regulatory requirements.
RESPONSIBILITY OF THE STATUTORY AUDITOR, APPOINTED
AS AN INDEPENDENT THIRD PARTY
On the basis of our work, our responsibility is to provide a report expressing a limited assurance conclusion on:
the compliance of the Statement with the provisions of article R. 225-105 of the French Commercial Code;
the fairness of the information provided in accordance with article R. 225105 I, 3 and II of the French Commercial Code,
i.e.
, the outcomes,
including key performance indicators, and the measures implemented considering the principal risks (hereinafter the “Information”).
However, it is not our responsibility to comment on:
the entity’s compliance with other applicable legal and regulatory provisions, in particular the French duty of care law and anti-corruption and
tax evasion legislation;
the compliance of products and services with the applicable regulations.
NATURE AND SCOPE OF OUR WORK
The work described below was performed in accordance with the provisions of articles A. 225-1
et seq.
of the French Commercial Code determining
the conditions in which the independent third party performs its engagement and with the professional guidance of the French Institute of Statutory
Auditors (“CNCC”) applicable to such engagements, as well as with ISAE 3000 –
Assurance engagements other than audits or reviews of historical
financial information.
Our procedures allowed us to assess the compliance of the Statement with regulatory provisions and the fairness of the Information:
we obtained an understanding of all the consolidated entities’ activities, the description of the social and environmental risks associated with their
activities and, where applicable, the impact of these activities on compliance with human rights and anticorruption and tax evasion legislation,
as well as the resulting policies and their outcomes;
we assessed the suitability of the Guidelines with respect to their relevance, completeness, reliability, objectivity and understandability, with due
consideration of industry best practices, where appropriate;
we verified that the Statement includes each category of social and environmental information set out in article L. 2251021 III, as well as information
set out in the second paragraph of article L. 22-10-36 regarding compliance with human rights and anticorruption and tax evasion legislation;
we verified that the Statement includes an explanation for the absence of the information required under article L. 225-102-1 III, 2;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
109
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Report by one of the Statutory Auditors, appointed as an independent third party,
on the non-financial information statement included in the management report
2
we verified that the Statement presents the business model and the principal risks associated with all the consolidated entities’ activities, including
where relevant and proportionate, the risks associated with their business relationships and products or services, as well as its their policies,
measures and the outcomes thereof, including key performance indicators;
we verified, where relevant with respect to the principal risks or the policies presented, that the Statement provides the information required
under article R. 225-105 II;
we assessed the process used to identify and confirm the principal risks;
we asked what internal control and risk management procedures the entity has put in place;
we assessed the consistency of the outcomes and the key performance indicators used with respect to the principal risks and the policies presented;
we verified that the Statement covers the scope of consolidation,
i.e.
, all the companies included in the scope of consolidation in accordance with
article L. 233-16 within the limitations set out in the Statement;
we assessed the data collection process implemented by the entity to ensure the completeness and fairness of the Information;
for the key performance indicators and other quantitative outcomes that we considered to be the most important, we implemented:
-
analytical procedures to verify the proper consolidation of the data collected and the consistency of any changes in those data,
-
substantive tests, using sampling techniques, in order to verify the proper application of the definitions and procedures and reconcile the data
with the supporting documents. This work was carried out on a selection of contributing entities (Amundi Asset Management, Pacifica, Crédit
Agricole Bank Polska S.A., Crédit Agricole Italia, Crédit Agricole Egypt S.A.E. et Crédit Agricole CIB - UK) and covers between 22% and 100%
of the consolidated data relating to the key performance indicators and outcomes selected for these tests;
we referred to documentary sources and conducted interviews to corroborate the qualitative information (measures and outcomes) that we
considered to be the most important;
we assessed the overall consistency of the Statement based on our knowledge of all the consolidated entities.
We believe that the work carried out, based on our professional judgement, is sufficient to provide a basis for our limited assurance conclusion; a
higher level of assurance would have required us to carry out more extensive procedures.
MEANS AND RESSOURCES
Our work was carried out by a team of 7 people between October 2020 and March 2021 and took a total of 8 weeks.
We were assisted in our work by our specialists in sustainable development and corporate social responsibility. We conducted forty interviews with
sixty people responsible for preparing the Statement.
CONCLUSION
Based on our work nothing has come to our attention that causes us to believe that the non-financial information statement is not in accordance
with the applicable regulatory provisions and that the Information, taken as a whole, is not presented fairly and in accordance with the Guidelines.
Neuilly-sur-Seine, 23
th
of March 2021
One of the Statutory Auditors
PricewaterhouseCoopers Audit
French original signed
Anik Chaumartin
Partner
French original signed
Sylvain Lambert
Sustainable Development Partner
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
110
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Report by one of the Statutory Auditors, appointed as an independent third party,
on the non-financial information statement included in the management report
2
APPENDIX: LIST OF THE INFORMATION WE CONSIDERED MOST IMPORTANT
Selection of qualitative and quantitative information, associated with the policies, measures and outcomes related to the fifteen principal issues
identified for the activity of Crédit Agricole S.A., disclosed in the following sections of the management report:
Main issues ESG
(challenges Crédit Agricole S.A.)
Policies, measures and outcomes reviewed within the framework of our work
Sections of the
management report
Climate change mitigation
and adaptation
Climate Strategy
Climate risk management: response to the 11 TCFD recommendations
Indicators reviewed: Investments in the coal sector in the energy mix (%), Financing in the coal
sector in the energy mix (%), Outstanding amounts of specific environmental initiatives (€bn),
Financing of green activities (€bn), Investments in renewable energies (€bn), Financing of
renewable energies (€m), Financing of renewable energies projects in France (%), GHG emissions
from financing and investments (Mteq CO
2
)
Actions and associated results reviewed: Pilot exercise on climate risk resilience conducted
by ACPR; Physical risks; study on the impact of natural disasters on credit risk (LCL)
2.3.1
3.2
Sustainable use of resources
Measures and targets related to our direct environmental footprint
Indicators reviewed: GHG emissions related to energy/m2 and GHG emissions related to business travel/
FTEs; scope 1 GHG emissions indicators (related to gas and fuel consumption, scope 2 GHG emissions
(related to electricity consumption in buildings/data centres, heating network and cooling network);
scope 3 GHG emissions (related to financing, investments and business travel by plane and train)
Actions and associated results reviewed: carpooling service in partnership with Klaxit; re-use
of construction materials (CA Immo)
2.3.7
Access to essential services
Access for all to our offers and services
Revised indicator: Social and solidarity impact fund outstanding (€M)
Actions and associated results reviewed : Sponsorship programme; Solidarity Bankers programme;
Emergency fund "Tous mobilisés pour nos aînés"; Signature of a partnership with Action Logement
2.4.1.
Community involvement
Economic development for all - Developing preventive actions - Promoting social cohesion
and good living together
Indicators reviewed : Financing granted for the benefit of unbanked populations (M€)
and Health-related financing (M€)
Actions and associated results reviewed: Sponsorship budget; Number of LCL Essentiel
subscriptions
Fight against corruption
A strong ethical culture
Indicator revised: Rate of employees aware of ethics (%)
Actions and associated results reviewed : Development of the innovation ecosystem;
deployment of alert tools
2.4.2
Consumer data and privacy
protection
Fair marketing, information and
contracting practices
Employment and employer/
employee relations
HR strategy: fostering autonomy and responsibility - Framework of trust between
employees and the company
Indicator reviewed: Progression of the participation rate in the IER
Actions and associated results reviewed: Recruitment; Work-study; Social network impressions
2.4.3.
Human capital development
HR strategy: fostering autonomy and responsibility - Managerial transformation to empower
Indicator revised: Percentage of women in the highest management bodies (%)
Actions and associated results reviewed: Data Scientist certification
cours
e; Provision
of the Jobmaker support tool; 100% digital employer brand strategy
Working conditions
and social protection
HR strategy: fostering autonomy and responsibility - Organisational transformation
to be closer to the customer
Revised indicator: Training provided (in millions of hours)
Actions and associated results reviewed : Signature of collective agreements; Creation of a booklet
on the theme of disability; Implementation of a medical teleconsultation system; Implementation
of a psychological unit to deal with the health crisis
Social dialogue
Promotion of social
responsibility in the value chain
(Responsible Purchasing)
Responsible Purchasing
Indicator revised: Percentage of suppliers with a CSR assessment (Ecovadis) during tenders (%)
Actions and associated results reviewed: Group Supplier Risk Committee; Development
of the purchasing IS; Systematic integration of CSR issues in the purchasing act
2.4.5
Combating tax evasion
Tax policy and responsible lobbying
Revised indicator: Effective tax rate (%)
2.4.4
Exposure to Cybercrime
Fight against cybercrime
Indicator revised: Staff training on cyber risks (% over 3 years 2018-2020)
Actions and associated results reviewed: Role and responsibilities of the specialised Security and IT
Risks unit; Operational Committee for Information Systems Security; Plenary
Committee for Technology Security; IS Security Watch Unit
2.4.6
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
111
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Report by one of the Statutory Auditors, appointed as an independent third party,
on the non-financial information statement included in the management report
2
Main issues ESG
(challenges Crédit Agricole S.A.)
Policies, measures and outcomes reviewed within the framework of our work
Sections of the
management report
Integrating ESG risks and
opportunities into our business
Integrating ESG risks and
opportunities into our business
Governance representative of the Group's identity and guaranteeing long-term commitments
Indicators reviewed : Women on the Board of Directors (%), Non-financial criteria in the variable
remuneration of executives (%) and CSR network (number)
Actions and associated results reviewed: ESG Strategy Committee; Sustainable
Banking experts
2.5
ESG performance monitoring platform
Indicator reviewed: Number of social and environmental impact indicators monitored
Actions and associated results reviewed : ESG performance management system
FReD scheme
Indicator reviewed: Number of staff whose remuneration is linked to the FReD scheme
Actions and associated results reviewed: Promotion of the circular economy; External assurance report
ESG Development
Revised indicator: Outstanding ESG multi-criteria solutions (€bn)
Actions and associated results reviewed: Transition Risk Index
INDEPENDENT LIMITED ASSURANCE REPORT ON THE INDICATORS
RELATING TO THE IMPLEMENTATION OF THE CLIMATE STRATEGY
PRESENTED IN CRÉDIT AGRICOLE’S 2020 MANAGEMENT REPORT
This is a free translation into English of the Statutory Auditor’s report issued in French and is provided solely for the convenience of English
speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards
applicable in France.
For the year ended December 31, 2020
To the shareholders of Crédit Agricole S.A.,
At the request of Crédit Agricole S.A. and in our capacity as statutory auditors of the company, we have undertaken a limited assurance engagement
in respect of the indicators relating to the implementation of the climate strategy listed below and reported in the Company’s Management Report
for the year ended 31 December 2020.
The indicators relating to the implementation of the climate strategy selected by Crédit Agricole S.A. are the following:
Creation of a “Group Societal Project Committee” (CASA)
Creation of a “Scientific Committee” (CASA)
Setting up an information system (CASA)
Creation of an “Operational Monitoring Committee” (CASA)
Regular review of sectoral policies (CASA)
Publication of climate reporting according to TCFD recommendations (CASA)
Implementation of a transition note (CASA)
Deployment of a range of green offerings (LCL)
Financing renewable energy in France (UNIFERGIE)
Establishment of an envelope to develop environmental transition projects (LCL)
Financing of green activities (CACIB)
Outstanding ESG multi-criteria solutions (AMUNDI)
Outstanding specific environmental initiatives (AMUNDI)
Amount of cash invested in SRI products (CASA)
GHG emissions financing and investments (CASA)
Investments in renewable energy (CAA)
Renewable energy financing (LCL)
Investments in the coal sector Energy mix (AMUNDI)
Coal Financing Energy Mix (CACIB)
Process for the treatment and phasing out of coal developers (CASA AMUNDI CACIB)
Coal industry exit scenario (CASA)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
112
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Independent Limited assurance report on the indicators relating to the implementation
of the climate strategy presented in Crédit Agricole’s 2020 Management Report
2
These indicators have been prepared under the responsibility of Crédit Agricole S.A.’s Corporate Social Responsibility (CSR) Department in accordance
with the “Indicator sheets - 2020 extra-financial reporting platform” standard, which is available on request from the Corporate Social Responsibility
(CSR) Department.
Our responsibility is to express a limited assurance conclusion on these selected indicators; a higher level of assurance would have required more
extensive verification work. The conclusions expressed below relate to the selected indicators and not to all the CSR information contained in the
management report.
NATURE AND SCOPE OF OUR WORK
We conducted the work described below in accordance with the professional standards of the Compagnie Nationale des Commissaires aux Comptes
(CNCC) relating to this type of engagement, as well as with International Standard on ISAE 3000
(Assurance Engagements other than Audits or Reviews
of Historical Financial Information)
.
We have performed the following procedures to obtain a limited assurance on that nothing has come to our attention that causes us to believe that the
indicators selected by Crédit Agricole S.A. have not, in all material respects, been prepared in accordance with the “Indicator Sheets - Non-Financial
Reporting Platform 2020” standard.
We examined the appropriateness of the reporting procedures drawn up by Crédit Agricole S.A. at Group level with regard to their relevance,
completeness, reliability, neutrality and understandability.
We verified the implementation of a collection, compilation, processing and control process aimed at ensuring the completeness and consistency
of the indicators and understand the internal control and risk management procedures relating to the preparation of these indicators.
We performed analytical procedures and verified, on a test basis, the calculations and consolidation of the data. This work was based on interviews
with the people in Crédit Agricole S.A.’s Corporate Social Responsibility (CSR) Department, who are responsible for preparing and applying the
procedures and consolidating the data.
The non-financial reporting platform includes the carbon intensities of companies, which are taken from a private database prepared by the
supplier Trucost; our procedures did not include a review of the preparation of this database.
We have selected a sample of entities:
-
AMUNDI ASSET MANAGEMENT (AMUNDI)
-
Crédit Agricole S.A. (CASA)
-
LCL
-
Crédit Agricole Assurance (CAA)
-
Unifergie
-
Crédit Agricole CIB (CACIB)
At the level of the selected entities:
-
We verified, based on interviews with the persons in charge of preparing the data, the proper understanding and application of the procedures;
-
We carried out tests of detail, based on samples, consisting of verifying the calculations made and reconciling the data with supporting documents.
These Crédit Agricole S.A. entities represent between 20.4% and 100% of the selected indicators relating to the implementation of the climate strategy.
Our CSR experts assisted us in carrying out this work.
CONCLUSION
Based on our work, nothing has come to our attention that causes us to believe that the indicators relating to the implementation of the climate
strategy selected by Crédit Agricole S.A. and listed above, published in its 2020 management report, taken as a whole, are not presented fairly and
in accordance with the standard used by Crédit Agricole S.A. and applicable in 2020.
Neuilly-sur-Seine, France
23
th
of March 2021
One of the Statutory Auditors
PricewaterhouseCoopers Audit
French original signed
Anik Chaumartin
Partner
French original signed
Sylvain Lambert
Sustainable Development Partner
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
113
Refer to the glossary on page 681 for the definition of technical terms.
NON-FINANCIAL PERFORMANCE
Independent Limited assurance report on the indicators relating to the implementation
of the climate strategy presented in Crédit Agricole’s 2020 Management Report
2
1. Report of the Board of Directors
116
1.1.
Information concerning the Board of Directors’
composition and functioning
116
1.2.
Board ACTIVITY in 2020
129
1.3.
Activities of specialised Committees of the Board 133
1.4.
Duty of vigilance
139
2. Additional information
on Corporate Officers
148
2.1.
Composition of the board of directors
148
2.2.
positions and functions held
by corporate officers
151
3. Information on executives
and management bodies
173
3.1.
Information on executives
173
3.2.
Changes to the governance bodies
175
3.3.
Transactions carried out on Company securities 177
4. Reward policy
178
About the part
178
Interview –
Bénédicte Chrétien,
Head of Human Resources
179
4.1.
Targets and regulatory framework
of the reward policy
180
4.2.
Rewards for all employees
182
4.3.
Rewards for executive managers
187
4.4.
Rewards for Corporate Officers
191
4.5.
Appendix
217
5. Rules of procedure of the Board
of Directors
219
Rules of procedure of the Board of Directors
(updated 5 August 2020)
219
Crédit Agricole S.A. Directors’ Code of Conduct
223
Crédit Agricole Group Code of ethics
224
3
CORPORATE
GOVERNANCE
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
114
Refer to the glossary on page 681 for the definition of technical terms.
Overview of the Board of Directors
Composition of the Board of Directors at 31 December 2020
Dominique
LEFEBVRE
— Raphaël
APPERT
— Pascale
BERGER
— Pierre
CAMBEFORT
— Daniel
ÉPRON
— Jean-Pierre
GAILLARD
Nicole
GOURMELON
— Jean-Paul
KERRIEN
— Christiane
LAMBERT
— Pascal
LHEUREUX
— Gérard
OUVRIER-BUFFET
Louis
TERCINIER
— Philippe
DE WAAL
— Simone
VÉDIE
— Agnès
AUDIER
Caroline
CATOIRE
— Marie-Claire
DAVEU
— Laurence
DORS
— Françoise
GRI
— Monica
MONDARDINI
— Catherine
POURRE
François
HEYMAN
— Bernard
DE DRÉE
47%
WOMEN
ON THE BOARD
21
DIRECTORS
of which
18
members were elected
by the General Assembly
1
Non-voting Director
1
Representative of the Social
and Economic Committee
STRATEGY AND CSR
COMMITTEE
96% ATTENDANCE RATE
4 meetings
7 members
US RISK COMMITTEE
100% ATTENDANCE RATE
4 meetings
3 members
Committees chaired by an independent Director
Committee chaired by the Chairman of the Board of Directors
COMPENSATION
COMMITTEE
93% ATTENDANCE RATE
7 meetings
6 members
& 1 permanent guest
APPOINTMENTS AND
GOVERNANCE COMMITTEE
100% ATTENDANCE RATE
4 meetings
6 members
AUDIT COMMITTEE
100% ATTENDANCE RATE
5 meetings
6 members
RISK COMMITTEE
100% ATTENDANCE RATE
6 meetings
5 members
38
COMMITTEE
MEETINGS
6 SPECIALISED
COMMITTEES
JOINT COMMITTEE
100% ATTENDANCE RATE
8 meetings
9 members
96%
ATTENDANCE RATE
OF MEETINGS IN 2020
12
PLENARY MEETINGS
OF THE BOARD IN 2020
INCLUDING 2 SEMINARS
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
115
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1.
REPORT OF THE BOARD OF DIRECTORS
ON CORPORATE GOVERNANCE TO THE GENERAL MEETING OF SHAREHOLDERS
OF 12 MAY 2021 PURSUANT TO ARTICLES L. 225-37, L. 225-37-4 AND L. 22-10-10
OF THE FRENCH COMMERCIAL CODE
Report on Corporate Governance for financial year 2020
In addition to the management report, this Board of Directors’ Report
on Corporate Governance presented pursuant to Article L. 225-37 of
the French Commercial Code, provides shareholders with the required
information on the Board’s activities in 2020, its composition, and the
conditions under which the Board prepared and organised its work. It also
presents the situation of Crédit Agricole S.A. in respect of the regulated
information required under Articles L. 225-37-4 and L. 22-10-10 within
the Board’s remit, including:
the list of offices held by each Corporate Officer in any company
during the financial year;
the choice of separating executive and non-executive functions
between the Chairman and the Chief Executive Officer;
any agreements which took place either directly or via an intermediary
between, on the one hand, one of the Corporate Officers or a
shareholder holding more than 10% of a company’s voting rights
and, on the other hand, another company controlled by the former
within the meaning of Article L. 233-3, excluding any agreements
concerning ordinary operations signed under normal conditions;
a description of the procedure established by the Board to assess
whether agreements relating to current operations and entered
into under normal conditions do indeed meet these conditions, in
accordance with Article L. 22-10-12 of the French Commercial Code;
a description of the diversity policy applicable to the members of
the Board of Directors with regard to criteria such as age, gender,
qualifications and professional experience, as well as a description
of this policy’s objectives, its implementation procedures, and the
results obtained during the financial year ended; this description
is complemented by information on how the Company pursues a
balanced representation of women and men in the Committee, where
applicable, by Executive Management in order to regularly assist them
in the performance of their general tasks and on the results in terms
of gender balance in the 10% of positions with higher responsibility;
any restrictions imposed by the Board of Directors on the Chief
Executive Officer’s powers;
any areas of non-compliance with the AFEP/MEDEF Code applicable
within Crédit Agricole S.A.
Pursuant to Articles 22-10-8 and L. 22-10-9 of the French Commercial
Code, this Governance Report also includes the draft resolutions on the
compensation policy for each Executive Corporate Officer and Directors,
and the components of the total compensation and the benefits in kind
allocated during the year or awarded in the same financial year to the
Chairman, Chief Executive Officer and Deputy Chief Executive Officer.
The report details the above-mentioned elements of compensation and
specifies that the payment of the variable and exceptional compensation
is subject to approval of these elements of compensation by the Ordinary
General Meeting.
Lastly, excluding the Board of Directors’ powers, in particular concerning
the issuing or buyback of shares presented in this section, certain
information required under Articles L. 225-37-4, L. 22-10-10 and
L. 22-10-11 is presented in other sections of this document:
the table summarising the authorisations in force granted by the
General Meeting of Shareholders concerning capital increases,
pursuant to Articles L. 225-129-1 and L. 225-129-2, mentioning the
use made of such authorisations during the financial year (“Information
on the share capital and shareholders”, page 33);
the terms governing shareholders participation in the General Meeting
as provided for in Articles 21 to 29 of the Articles of Association (General
information pages 655-656), are also available for consultation at
the registered office of Crédit Agricole S.A. and on its website www.
credit-agricole.com.
1.1.
INFORMATION CONCERNING THE BOARD OF DIRECTORS’
COMPOSITION AND FUNCTIONING
1.1.1. General presentation of the Board of Directors
The Chairman
In accordance with the governance model of Crédit Agricole, the office of Chairman of the Board and that of Chief Executive Officer
of Crédit Agricole S.A. are historically separate. Thus, the Company has a long record of compliance with Article L. 511-58 of the
French Monetary and Financial Code, which since 2015, has made this separation a legal principle in the banking sector.
Under Article
L. 512-49
of the French Monetary and Financial Code, the
Chairman is elected by the Board of Directors from among its members
who are Directors of a Crédit Agricole Mutuel Regional Bank. The Articles
of Association state that this Director must also be Chair of a Regional
Bank, in this case for Dominique Lefebvre, the Val de France Regional
Bank. The Chairman’s term of office is set to align with his term of
office as Director, which is three years. The statutory age limit is set
at 67 years for the Chairman and the maximum number of successive
terms of office he may seek is five.
Since November 2015, for the purpose of simplifying the organisation
of Crédit Agricole Group, the Chairman of Crédit Agricole S.A. is also the
Chairman of
Fédération nationale du Crédit Agricole
. In this respect, he
plays an essential coordination role between Crédit Agricole S.A. and
the 39 Crédit Agricole Regional Banks, its majority shareholder via SAS
Rue La Boétie, of which he is also the Chairman.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
116
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
As part of his statutory duties, the Chairman of the Board of Directors
of Credit Agricole S.A.:
approves the agendas for the Board Meetings and ensures that the
information provided to the Directors is adequate to make reasoned
decisions; to this effect, he contributes to the smooth flow of
information between the Board and the Executive Management, and
between the Board and its Committees;
encourages and promotes open, critical discussions and ensures that
all viewpoints can be expressed within the Board;
ensures that the responsibilities held within the Board are clear for
all Directors.
On the Board of Directors, the Chairman is also the Chairman of the
Strategy and CSR Committee, and member of the Appointments and
Governance Committee.
As a part of his relations with employee representative bodies, he chairs
the European Works Council of Crédit Agricole S.A. Group which met twice
in 2020. Each year in January he convenes the Directors representing
employees and the representative of the Social and Economic Committee
on the Board of Directors, to discuss the functioning of the Board of
Directors and, more broadly, any current topic.
In 2020, the Chairman’s schedule was marked by the unprecedented
health crisis caused by the coronavirus pandemic. It was accompanied
by additional Board meetings; in fact, four of these meetings were called
by the Chairman in connection with written deliberations authorised
by the Ordinance of 25 March 2020 relating to the functioning of
decision-making bodies during the COVID-19 pandemic. Furthermore,
the permanent, direct and close regular dialogue maintained with the
Chief Executive Officer of Crédit Agricole S.A. grew stronger during the
crisis, with closer coordination of its management between the Board
and Executive Management. The Group’s crisis management guidelines
were debated at the Coordination Committee (CoCor) made up of the
Chairman, the executives of Crédit Agricole S.A. and the FNCA. The
Chairman also held individual meetings during the year with the Group
Chief Risk Officer, the Group Compliance Officer, the Head of Group
Control and Audit and the Head of Human Resources.
As the sponsor of the Crédit Agricole Group Societal Project, the
Chairman focused on accelerating the implementation in the light of
the consequences of the crisis on the national and local economic and
social fabric. Internally, he headed the Circle of Senior Executives meeting,
dedicated to the Societal Project, and participated in the Crédit Agricole
Science Committee, responsible for working on the climate strategy.
Outside the Group, the Chairman helped to prepare Finance Climate Day,
an annual forum, where major international finance players have been
meeting since 2015 to share views and find financial solutions to global
warming issues. On this occasion, he published a piece on LinkedIn
entitled “
Nous avons impérativement besoin d’une gouvernance mondiale
du climat
” (
“
We absolutely need a global climate governance”). During
the year, he also met with several heads of non-profit organisations or
businesses active in corporate social responsibility. The Chairman gave
several interviews in the written press to explain not just the commitment
and the role of Crédit Agricole during the crisis but also the content of
its Societal Project (mainly
La Croix
and
Les Échos
newspapers).
As in previous years, the Chairman also represented the Group at major
public events such as the Paris International Agricultural Fair, which
was held just before the first lockdown, and at projects supported by
Crédit Agricole S.A. Group, such as the foundation
Un Avenir Ensemble
(a non-profit foundation that helps disadvantaged young people), the
Crédit Agricole Pays de France
foundation, the
Crédit Agricole Solidarité et
Développement
foundation, and CICA, an organisation bringing together
banks from 24 countries for the financing of agriculture.
The Board of Directors
The Board of Directors of Crédit Agricole S.A. comprises
21
Directors, including its Chairman, as follows:
—
eighteen Directors elected by the General Meeting of Shareholders, including:
-
ten Directors who are Chairmen or Chief Executive Officers of a Crédit Agricole Regional Banks,
-
one Director that is a legal entity, SAS Rue La Boétie, represented by a Chief Executive Officer of a Regional Bank who is also Deputy
Chairman of SAS Rue La Boétie and first Deputy Chairman of the FNCA,
-
six Directors from outside Crédit Agricole Group,
-
one Director who is an employee of a Regional Bank;
—
one Director representing professional farming associations,
appointed by joint decree of the Ministers of Economy and
Finance and of Agriculture and Food, pursuant to the Act of 18 January 1988 on the mutualisation of Caisse nationale de Crédit
Agricole, which became Crédit Agricole S.A. on 29 November 2001;
—
two Directors elected by the employees
of Crédit Agricole S.A. Group.
The majority representation of Crédit Agricole’s Regional Banks on the
Board of Directors of Crédit Agricole S.A. was affirmed in the Crédit
Agricole S.A. Listing Memorandum, drawn up between the Regional
Banks and what was then CNCA (Caisse nationale de Crédit Agricole),
published in the Crédit Agricole S.A. Registration Document for financial
year 2001.
Upon recommendation from the Chairman, the Board of Directors may appoint one or more non-voting Directors. Their appointment
follows the review of their candidacy by the Appointments and Governance Committee. They attend Board Meetings in an advisory
capacity. Their appointment takes place in the context of the staggered management of terms of office, thereby allowing the Board to
create a pool of directors who are immediately operational as soon as they take up their positions on the decision-making body.
Non-voting Directors are subject to the same rules as Directors and are remunerated under the same conditions. They are listed as
permanent insiders and the provisions of the Board’s Rules of Procedure, in particular as regards the prevention of conflicts of interest,
apply to them.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
117
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
As part of the planning for the succession of Laurence Dors, whose term
of office expires at the next General Meeting, Agnès Audier joined the
Board as a non-voting Director on 1 January 2020. The plan is to propose
her appointment as a Director to the 12 May 2021 General Meeting,
and at the end of the meeting, to offer her the chair the Compensation
Committee, of which she has been a member for more than one year.
Lastly, a representative of the Social and Economic Committee attends
the meetings of the Board of Directors in an advisory capacity.
With regard to Directors representing employees, their participation in
the Board is ensured by:
two Directors (one manager and one non-manager) elected by the
employees of the Economic and Social Unit of Crédit Agricole S.A. in
accordance with the provisions of Articles L. 225-27 and L. 22-10-6
of the French Commercial Code;
one representative of employees of the Regional Banks, selected under
the collective agreement, under the auspices of
Fédération nationale
du Crédit Agricole
, from within the labour union best representing the
Regional Banks and whose appointment has been submitted to vote
in the General Meeting under the conditions of ordinary law. This
representation, initially recorded in the 2001 Listing Memorandum
is expected to change (see below).
Following the change made by the law of 22 May 2019, known as the PACTE Act, regarding the composition of the Board of Directors, notably
by introducing the mandatory requirement for listed companies, to have a Director representing employee shareholders (
Administrateur
représentant les salariés actionnaires
- ARSA), the Articles of Association of Crédit Agricole S.A. were accordingly amended at the General
Meeting of 13 May 2020. The defined statutory electoral process led to the single candidacy of a main appointee and his or her deputy which
will be submitted to the General Meeting of 12 May 2021 for approval. In order to limit the size of the Board to 21 Directors and maintain
the majority representation of the Regional Banks, the position of Director representing Regional Bank employees will not be renewed as
from the General Meeting of May 2021. In order to preserve this historic and legitimate representation on the Board of Directors, Regional
Bank employees will be represented on the Board of Directors by a non-voting Director.
Without taking into account the three Directors representing
employees, 33% of the Directors on the Board are independent, in
line with the recommendation of the aforementioned AFEP/MEDEF
Code for companies controlled by a majority shareholder.
In addition to the above-mentioned provisions of the Articles of
Association, it is specified, pursuant to Article L. 22-10-11 of the French
Commercial Code, that the rules applicable to the appointment and
replacement of members of the Board of Directors of Crédit Agricole S.A.
are the ordinary-law rules laid down in the French Commercial Code and
the French Monetary and Financial Code (in particular Article L. 511-51).
As Crédit Agricole S.A. is an institution under the direct supervision of the
European Central Bank, its Board of Directors is also covered by the Single
Supervisory Mechanism (SSM Framework Regulation of 16 April 2014).
To this effect, after the appointment (or re-appointment) of Directors by
the General Meeting, the European Central Bank issues a notice after a
review of each appointee’s repute, expertise and availability. To date, no
opposition notice has ever been issued by the European Central Bank
in respect of a Director of Crédit Agricole S.A.
Changes within the Board and Committees in 2020
There was a significant change in the composition of the Board of
Directors in 2020.
Four new directors were elected at the General Meeting of 13
May 2020:
Marie-Claire Daveu,
independent Director to replace Christian Streiff,
who has reached the statutory age limit;
Pierre Cambefort,
Chief Executive Officer of the Regional Bank of
Nord Midi-Pyrénées, who was already on the Board of Directors as
non-voting Director, to replace Véronique Flachaire, who has claimed
her pension rights;
Pascal Lheureux,
Chairman of the Regional Bank of Normandie Seine
to replace François Thibault, who has reached the statutory age limit;
Philippe de Waal,
Chairman of the Regional Bank of Brie Picardie,
already on the Board of Directors as non-voting Director, to replace
Philippe Boujut who has reached the statutory age limit.
At the General Meeting, the terms of office of six Directors were renewed
for a period of three years:
Caroline Catoire,
independent Director;
Laurence Dors,
independent Director;
Françoise Gri,
independent Director;
Catherine Pourre,
independent Director;
Daniel Épron,
Chairman of the Regional Bank of Normandie;
Gérard Ouvrier Buffet,
Chief Executive Officer of the Regional Bank
of Loire Haute-Loire.
Furthermore,
Renée Talamona,
Chief Executive Officer of the Regional
Bank of Lorraine, Director at Crédit Agricole S.A. since March 2016,
claimed her pension rights
on 1 October 2020. The Board, after
receiving the opinion of the Appointments and Governance Committee,
co-opted Nicole Gourmelon,
Chief Executive Officer of the Regional
Bank of Atlantique-Vendée as of 1 October 2020, to the position vacated
by Renée Talamona, for the remaining period of her term of office,
i.e.
,
until the General Meeting of May 2021 convened to approve the 2020
financial statements. This co-optation will be submitted to the General
Meeting of Shareholders of 12 May 2021 for ratification. Anticipating
this succession, Nicole Gourmelon was appointed non-voting Director
by the Board of Directors’ meeting of 25 May 2020, with effect from
1 June 2020.
As a result, the composition of Specialised Committees changed as
follows:
Marie-Claire Daveu
joined the Risk Committee and the Compensation
Committee to replace Christian Streiff;
Catherine Pourre
joined the Strategy and CSR Committee, also to
replace Christian Streiff;
Louis Tercinier
also joined this Committee to replace François Thibault;
Pierre Cambefort
joined the Risk Committee and the US Risks
Committee to replace Véronique Flachaire;
Jean-Paul Kerrien
joined the Risk Committee to replace François
Thibault, as Mr Kerrien left his position on the
Compensation
Committee to Pascal Lheureux.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
118
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Shareholder dialogue
Since 2017, conference calls with principal institutional investors in Crédit
Agricole S.A.’s capital and with proxy advisors are organised prior to
General Meetings,
i.e.
15 to 20 individual contacts. These communication
moments, dedicated to governance and the explanation of the main
resolutions that will be proposed to the General Meeting, are perceived
by investors as a very distinct moment of financial roadshows. They are
led by the Head of Financial Communication, the Head of Compensation
and Benefits and the Head of the Board Secretariat. The presentation
used as material for discussions is published on the website of Crédit
Agricole S.A. The main questions and comments made on these
occasions by investors and proxy advisors are communicated to the
relevant Specialised Committees, which analyse them in the light of
market practices, taking into account the Group’s corporate governance
principles. The Committees report to the Board of Directors.
In 2020, telephone interviews held with proxy advisors and investors
provided the opportunity for transparent and constructive dialogue.
The conversations focused on the size of the Board and the number of
independent Directors and more particularly boards that do not comply
with the AFEP/MEDEF code and which apply voting policies that include
employee representative Directors in calculating the third of independent
Directors required in controlled companies. The performance criteria
taken into account in the compensation of Executive Corporate Officers
are a traditionally recurring theme for these interviews during which
the Company is increasingly questioned about its CSR policy and the
Board’s involvement in these areas.
With respect to individual shareholders,
dialogue is maintained
through daily phone calls, monthly emailing to provide information
and the organisation of meetings together with the Regional Banks,
in the presence of members of Crédit Agricole S.A. Management. In
2020, face-to-face meetings were replaced by six videoconferences.
Discussions mainly focused on the financial news of Crédit Agricole S.A.,
with time dedicated to answering questions from individual shareholders.
In 2020, the traditional time for discussion offered by the Crédit
Agricole S.A. General Meeting of Shareholders was organised in
closed session in application of government-mandated measures
against the coronavirus pandemic. Despite this exceptional format,
Crédit Agricole S.A. ensured that shareholders were able to submit their
queries in writing. The answers to queries were read out at the General
Meeting and placed online two days prior to the meeting. In the event
that the General Meeting of May 2021 must be held in closed session
again, Crédit Agricole S.A. will strive to find ways of ensuring interactive
dialogue with shareholders.
Conflict of Interest Policy
Board members are subject to the applicable legal and regulatory
obligations regarding conflicts of interest. Each of the Directors of Crédit
Agricole S.A., as well as the non-voting Directors, adhere to the Group’s
values and commitments described in its Code of Ethics and Code of
Conduct, which illustrates these commitments through numerous case
studies. The Code of Conduct can be accessed through the website of
Crédit Agricole Group and is the standard of ethical and professional
conduct for the Group’s Directors, Executives and employees.
In addition, the functioning of the Board is governed by its Rules of
Procedure as well as by the Crédit Agricole S.A. Directors’ Code of
Conduct, which state that “
Directors must inform the Board of any conflict
of interest, including potential conflicts of interest, in which they could
be directly or indirectly involved. Accordingly, they must refrain from
taking part in the discussions and voting in respect of such matters.”
1.1.2. Operating Principles of the Board of Directors and Specialised Committees
Functioning
The functioning of the Board of Directors is governed by the legal provisions in force, the Board’s Rules of Procedure and the Articles of Association.
In carrying out its duties, the Board is supported by six Board Committees.
The Board’s Specialised Committees are the following:
—
Risk Committee;
—
US Risks Committee;
—
Audit Committee;
—
Compensation Committee;
—
Appointments and Governance Committee;
—
Strategy and CSR Committee.
The Board’s Rules of Procedure, to which are appended the Directors’
Code of Conduct and, since December 2016, the Code of Ethics, are
appended to this report in the latest version of these documents updated
in August 2020. They are accessible online on the Crédit Agricole S.A.
website, together with the Committees’ Rules of Procedure:
https://
.
The Board of Directors of Crédit Agricole S.A. is entirely composed of
non-executive Directors, and no severance benefit is payable to Board
members upon termination of their office, irrespective of the reason.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
119
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Directors’ compensation
The members of the Board of Directors receive compensation for their attendance. The conditions for allocating Directors’ fees, as described below,
are determined by the Board on the recommendation of the Compensation Committee.
Compensation of Board members is based entirely on their attendance at Board Meetings. Directors receive the same compensation
for attending strategic seminars and special meetings,
i.e.
those not on the annual calendar, and scheduled meetings, up to a maximum
of the total amount approved.
Members of the Specialised Committees are entitled to additional
compensation: the Chairmen of the Board’s Specialised Committees
receive an annual flat-rate fee, with a differentiation according to
Committee. Committee members receive a fee per meeting based on
their actual attendance at Committee meetings.
Non-voting Directors receive the same compensation for attending Board
Meetings and, when they are members, Specialised Committee Meetings.
The compensation package for Directors
totalled €1,650 million in
2020.
This is a maximum expenditure ceiling and the unused portion
is returned to the budget of Crédit Agricole S.A.
The Board, on the recommendation of the Compensation Committee,
decided on its distribution as follows:
€4,000 per Board meeting;
€2,700 per Committee meeting;
an annual fixed amount of €20,000, allocated to the Chairs of the
Compensation Committee, Appointments and Governance Committee,
and United States Risk Committee, respectively;
€35,000 flat fee for the Risk Committee Chairwoman;
€35,000 flat fee for the Audit Committee Chairwoman.
The Chairman of the Board of Directors, Dominique Lefebvre, waived all
compensation other than compensation for his role as Chairman, despite
sitting on the Strategy and CSR Committee and the Appointments and
Governance Committee.
Renée Talamona waived her compensation both for attending Board
meetings and meetings of the Strategy and CSR Committee, on which
she has sat since 1 October 2020.
The three Directors representing employees on the Board do not receive
their compensation. Instead, these are paid to their unions.
The Board has also set up a system for reimbursing Board members for
travel expenses, based on costs incurred by each member for attending
Board and Committee Meetings. This mechanism, adopted pursuant to
Article R. 225-33 of the French Commercial Code, is renewed annually
by the Board.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
120
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Directors
2019
Net amount received in 2020
(1)
Net amount
received from
Crédit Agricole S.A.
in 2019
(1)
Crédit
Agricole S.A.
(1)
Crédit Agricole
CIB
LCL
Amundi
Total +
other Group
subsidiaries
Grand total
2020
DIRECTORS ELECTED BY THE GENERAL MEETING
Dominique Lefebvre
(2)
0
0
-
-
0
0
Raphaël Appert
43,121
48,720
0
48,720
Pascale Berger
(3)(4)
29,808
39,744
-
-
0
39,744
Pierre Cambefort*
28,000
48,720
0
48,720
Caroline Catoire
56,350
60,060
-
-
0
60,060
Marie-Claire Daveu
-
38,500
0
38,500
Laurence Dors
72,241
74,060
-
-
0
74,060
Daniel Épron
45,011
54,390
-
-
20,255
74,645
Jean-Pierre Gaillard
58,241
60,060
-
15,400
15,400
75,460
Nicole Gourmelon*
-
20,580
8,400
8,400
28,980
Françoise Gri
94,850
102,340
28,770
-
28,770
131,110
Jean-Paul Kerrien
39,341
50,610
-
24,200
74,810
Pascal Lheureux
-
27,160
0
27,160
Monica Mondardini
(5)
45,344
52,320
-
-
0
52,320
Gérard Ouvrier-Buffet
46,900
52,500
-
-
38,338
90,838
Catherine Pourre
(5)
76,038
91,211
55,968
55,968
147,179
Louis Tercinier
37,450
46,830
0
46,830
Philippe de Waal*
28,000
33,600
-
-
0
33,600
Philippe Boujut**
28,000
14,000
-
-
0
14,000
Véronique Flachaire**
53,550
25,340
-
-
0
25,340
Christian Streiff**
57,331
27,230
-
-
0
27,230
Renée Talamona
(6)
**
0
0
0
0
0
François Thibault**
54,461
23,450
28,770
-
28,770
52,220
DIRECTORS ELECTED BY THE EMPLOYEES
François Heyman
(3)(4)
43,222
55,393
-
-
-
0
55,393
Simone Védie
(3)(4)
33,120
36,432
0
36,432
DIRECTOR REPRESENTING PROFESSIONAL
FARMING ASSOCIATIONS
Christiane Lambert
8,400
16,800
0
16,800
NON-VOTING DIRECTOR
Agnès Audier
(7)
-
44,940
0
44,940
978,779
1,144,990
113,508
23,800
0
220,101
1,365,091
TOTAL GROSS AMOUNT CONSUMED: €1,566,200 out of €1.65 million allocated.
*
Became Directors in May and October 2020.
**
Outgoing Directors in May and August 2020.
(1)
After the following deductions from the sums payable to individual beneficiaries resident in France: income tax prepayment (12.8%) and social contributions (17.2%).
(2)
See Board of Directors’ compensation policy page 203.
(3)
The three Directors representing employees on the Board do not receive their compensation; instead these are paid to their unions.
(4)
After deductions of social contributions (17.2%).
(5)
12.8% withholding tax (non-resident in France).
(6)
Did not receive compensation.
(7)
Appointed in capacity of non-voting Director in January 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
121
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
1.1.3. Governance and diversity policy
Given the size of Crédit Agricole S.A., the Board of Directors is required
to comply with the provisions of the French Commercial Code governing
the diversity policy it pursues within the Company, as well as to ensure
that a similar policy exists within the management bodies.
Board’s diversity policy
Gender balance
Crédit Agricole S.A. is subject to the provisions of Article L. 22-10-3 of
the French Commercial Code, under which
“the proportion of Directors
of each gender may not be less than 40% in companies whose shares
are admitted to trading on a regulated market”.
The only exclusion provided by law concerns
“Directors elected by
employees”,
i.e.
two Directors out of twenty-one. Pascale Berger –
representing the employees of the Regional Banks under the collective
agreement but having been elected directly by the shareholders at a
General Meeting – is taken into account in the calculation of the 40%
threshold. The same applies to Christiane Lambert – representative
of the professional farming associations – who was appointed by the
French Ministers of Economy and Finance and of Agriculture and Food,
and is thus not covered by the legal exclusions.
At 31 December 2020, nine out of the 19 members of the Board of Directors of Crédit Agricole S.A. included in the count by law
were women, in other words a ratio of 47%. This concerns Pascale Berger, Caroline Catoire, Marie-Claire Daveu, Laurence Dors,
Nicole Gourmelon, Françoise Gri, Christiane Lambert, Monica Mondardini and Catherine Pourre.
Irrespective of the legal provisions, with the presence of Simone Védie
the ratio remains the same, taking into account the Directors elected
by employees,
i.e.
10 women out of 21 Directors.
With the exception of the Strategy and CSR Committee – chaired by
Dominique Lefebvre who is also Chairman of the Board of Directors – the
five other Specialised Committees are chaired by women:
Specialised Board Committees
Chair
Risk Committee
Françoise Gri
US Risks Committee
Françoise Gri
Audit Committee
Catherine Pourre
Compensation committee
Laurence Dors
Appointments and Governance Committee
Monica Mondardini
Strategy and CSR Committee
Dominique Lefebvre
Age and term renewal
As at 31 December 2020 the average age of Directors was 60 years.
The age limit to carry out the duties of a Director is set by law at 65 years,
the age being measured at the date of the nearest General Meeting after
a Director’s 65th birthday. The age limit for the Chairman is 67 years.
The Board of Directors does not have a policy in terms of minimum
age or age balance, although regulatory requirements in terms of the
profiles and expertise of Directors in the banking sector do lead to the
choice of candidates with proven professional experience. In its May
2017 Guide on the assessment of the good repute and competence of
managers and Directors of banking institutions, the European Central
Bank considers, for example, that the presumption of competence is
acquired for persons with
“three years of recent practical experience
in high-level management positions and theoretical experience in the
banking sector”.
By adopting senior management experience as a
criterion for approving appointments of Directors, the supervisor guides
the choice towards Directors with a mature profile.
For its part the Board of Directors, under the guidance of the Appointments
and Governance Committee, ensures that the renewal of Directors elected
by the General Meeting is carried out such as to promote, in as far as
possible, a balanced scheduling of the expiry dates of their terms of
office. Given the average age of the members of the Board of Directors,
the main reason for leaving is reaching the age limit.
The term of office of Crédit Agricole S.A. Directors as natural persons is fixed at three years by the Articles of Association. Directors
may not serve for more than four consecutive terms. The table below shows the expiry dates of the terms of office of Directors
elected by the General Meeting of Shareholders for the next three years.
The expiry of the terms of office of the two Directors elected by the
employees of Crédit Agricole S.A. is governed by an electoral protocol.
Their renewable three-year term of office expires in June 2021.
The term of office of the representative of the Professional Farming
Associations on the Board of Directors, Christiane Lambert, appointed
by order of the Minister of Economy and Finance and the Minister of
Agriculture and Food on 28 August 2017 was renewed by order on 2
November 2020 for three years.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
122
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Expiry of the terms of office of Company Directors
elected by the General Meeting
(General Meeting of Shareholders to approve the annual financial
statements)
Name
GM 2021
GM 2022
GM 2023
Dominique Lefebvre
√
SAS Rue La Boétie represented
by Raphaël Appert
√
Pascale Berger
o
Pierre Cambefort
√
Caroline Catoire
X
Marie-Claire Daveu
√
Laurence Dors
X
Daniel Épron
√
Nicole Gourmelon
√
Jean-Pierre Gaillard
√
Françoise Gri
X
Pascal Lheureux
√
Jean-Paul Kerrien
√
Monica Mondardini
X
Gérard Ouvrier-Buffet
X
Catherine Pourre
X
Louis Tercinier
√
Philippe de Waal
X
√: renewable term of office.
o: non renewable.
X: end of term of office, age limit.
Knowledge and expertise
To better meet its legal obligation to assess the expertise required for
its proper functioning, the Board of Directors of Crédit Agricole S.A.
has defined its desired diversity policy with regard to the experience
and profiles of its members in a procedural memorandum, adopted on
7 November 2017. The Board considers that the addition of individual
professional experience of the Directors forms the basis of the collective
competence of the Board of Directors, which French law recognises as
a collegial body. This diversity contributes to the richness of discussions
within the Board in key areas of the Group’s banking and insurance
activities, as well as in their environment, and is a guarantee of its
proper functioning.
The definition of the required profiles and experiences was adopted
by the Board of Directors on the proposal of the Appointments and
Governance Committee, to which the French Monetary and Financial
Code (Article L. 511-98) has entrusted the task of “
assessing the balance
and diversity of knowledge, expertise and experience of the members
of the Board of Directors individually and collectively
”.
The Committee is committed to identifying the knowledge that must be
permanently present within the Board of Directors in order to enable
it to carry out its duties under the best conditions. Above all, it has
adopted the knowledge and experience recommended by the European
banking authorities and has supplemented these with a requirement
for permanent expertise within the Board in the areas of Corporate
Social Responsibility.
In terms of knowledge, the following were adopted:
—
an overall vision of the Company’s activities and the risks associated with them;
—
a precise vision of each of the Company’s key activities and their environment;
—
a sectoral vision of certain activities (financial markets, capital markets, insurance, solvency, and models);
—
financial accounting and auditing;
—
risk management, compliance and internal audit;
—
IT and security;
—
local, regional or global economic dimensions;
—
applicable laws and regulations;
—
Corporate Social Responsibility.
The experience aspect encompasses:
—
company management, including experience in human resource management, marketing and distribution;
—
the management of international groups;
—
strategic planning.
By combining this approach of knowledge and experience, the
Appointments and Governance Committee was able to rank each item
in order of importance for the proper functioning of the Board, defining
for each item the required permanent percentage of Directors with the
necessary expertise to ensure the Board functions correctly, by adding
individual expertise the Board’s collective expertise. The indicative grid
resulting from this work is shown below.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
123
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Indicative grid concerning the desired balance of individual expertise required
for the Board of Directors’ collective expertise
> 50%
(1)
Between 30% and 50%
(1)
10% to 30%
(1)
1)
Knowledge of the Company’s activities and associated risks
√
2)
Knowledge of each of the Company’s key activities
√
3)
Sectoral knowledge of certain activities
√
Retail banking
√
Asset management and insurances
√
Corporate and investment banking
√
Specialised financial services
√
4)
Knowledge of financial accounting
√
5)
Knowledge in the fields of risk management, compliance and internal audit
√
6)
Knowledge in the field of IT and security
√
7)
Knowledge of local, regional or global economic environments
√
8)
Knowledge of laws and regulations
√
9)
Experience in company management
√
10) Experience in the management of international groups
√
11) Experience in strategic planning
√
12) Knowledge in the field of Corporate Social Responsibility
√
(1)
Permanent percentage of Directors within the Board required having good or very good knowledge in the fields mentioned.
The criteria for knowledge and experience used in this grid are included
in the individual evaluation questionnaire for members of the Board of
Directors each year.
This annual procedure allows the Appointments and Governance
Committee to ensure that the required expertise is always represented
in the Board of Directors in the proportions defined in its procedural
memorandum.
It is also an opportunity for the Committee to assess, based on the
responses of the Directors, whether or not it is useful to change the
indicative grid in terms of expertise and/or the proportion of this expertise
within the Board.
Based on the review of results of the individual and collective expertise of the Board of Directors by the Appointments and Governance
Committee held in 2020, the collective expertise of the Board of Directors of Crédit Agricole S.A. remain similar to the profile identified
in the previous financial year and are characterised by:
—
the predominance of banking, finance and insurance expertise, with a high level of expertise in audit and risk;
—
expert knowledge of local economies, the bedrock of the Group’s business, more often combined with strong commitments to local,
or even, national communities;
—
experience as Directors of large corporates, mainly multinationals, in the service, technology and industrial sectors;
—
recognised players in the fields of governance and CSR.
Based on the results of the expertise assessment campaign conducted
in 2020, the Board of Directors of Crédit Agricole S.A. concluded that, in
each of the areas examined, the Board permanently has several members
with adequate knowledge of the subjects, and that all essential aspects
of its collective expertise, as defined in its procedural memorandum,
were covered.
Diversity policy within the management bodies
The issue of gender balance in Executive bodies is discussed every year
by the Appointments and Governance Committee, and subsequently by
the Board of Directors, during the review of the policy on gender equality
at work. This policy is the subject of an annual review by the Board,
as provided for in Article L. 225-37-1 of the French Commercial Code.
It covers both the general gender policy of Crédit Agricole S.A. Group
as well as any information on how the Company seeks a balanced
representation of women and men in its management bodies, including
its feminisation rate. The results of the gender equality index within
the Crédit Agricole S.A. Group, introduced by the Government in 2019,
helped to underline the effectiveness of actions implemented. The scores
obtained in 2020 were highly positive overall and ranged from 77/100 for
the lowest to 93/100 for the highest. UES Crédit Agricole S.A. obtained
a score of 84/100. Action plans are initiated in those entities with the
lowest scores.
With regard to increasing the number of women on management bodies,
the figures for 2020 show significant progress at the level of the Crédit
Agricole S.A. Executive Committee and on the Executive Committees
and Management Committees of entities.
The proportion of women
on the Crédit Agricole S.A. Executive Committee rose from 12.5%
in 2019 to 23.5% in 2020, which now has four women out of the
17 members: the Group Chief Risk Officer, the Group Head of
Compliance, the Corporate Secretary and the Group Head of Human
Resources are all women.
Within “Circle 1”, which represents around
150 executives in charge of major Divisions of Crédit Agricole S.A. or
its main subsidiaries,
i.e.
10% of the Group’s most senior positions, the
proportion of women increased year-on-year from 16.5% to 17%. Over a
consecutive 12-month period, 27% of women joined “Circle 1”.
Looking
ahead to 2024, the Executive Management of Crédit Agricole S.A. has
set quantified targets that are shared with the Board, to increase
the proportion of women in Circle 1 up to 30%.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
124
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
This increase in the number of women in decision-making bodies is
accompanied upstream by specific action plans to strengthen women’s
talent pools. For the entire Crédit Agricole S.A. Group, a Diversity Action
Plan has been in place since 2016. It integrates four levels of action.
The first level includes awareness-raising actions for all employees, with
both the distribution of a “Diversity Guide” to all employees of Crédit
Agricole Group as well as activities to promote and support women’s
networks (more than 2,600 members in the Group), currently consisting
of 18 networks, including 8 in France and 10 abroad. The second level
of action concerns the identification of talent and the implementation of
the “Female Talent” programme, the objectives of which are to prepare
young female talent to find the keys to their career development and
support them in their development. In this context, 150 women were
trained in 2018, assisted by an external firm.
The third level, launched in September 2017, is the deployment of
mentoring by members of the Executive Committee and the Chief Executive
Officers of the Regional Banks for women with potential to reach the levels
of either Circle 1 or Deputy General Managers of the Regional Banks. The
program is carried out in a formalised framework with the objective, in
particular, of assisting beneficiaries in their career choices, and also to
assist them to assert their leadership and build a network. In spite of the
health constraints, the third class was launched in mid-November, with a
distance learning format. A total of 87 cross-mentoring pairs have been
created since the beginning of the Mentoring Programme.
Finally, among the executives and members of Circle 1, in 2020
14 women and five men attended the corporate Director IFA/Sciences-
Po certification training set up in 2017, with the target of creating a
pool of directors capable of serving on the Group’s boards, as well as
representing it on external boards.
The normal procedure for identifying female talent and assisting in their
development and promotion when management positions are to be filled
also includes the rule of systematically including a female candidate for
management positions and as a member of Circle 1. Pursuant to Article
L. 225-53 of the French Commercial Code as amended by the Law of
22 May 2019, the Board of Directors has adopted a procedural note
relating to the process for appointing Deputy Chief Executive Officers
stating, notably, that this rule applies to them.
The transition from a Gender equality policy to a Diversity policy now
entails broadening the scope of talent pools to include international
candidates with the target of including 20% of international profiles into
succession plans by 2022. A first symbolic stage was crossed with a first
executive hired from abroad, specifically from Italy, who has completed
his Chief Executive Officer onboarding programme.
Lastly, in accordance with the provisions of the French law of
5 September 2018 on professional prospects, the Group and all its
entities strive to conduct routine diagnostics to monitor the appearance
of any compensation gaps and, if necessary, plan measures and budget
packages to eliminate such gaps.
Lastly, in 2020 a new impetus was given to the Youth Plan by doubling
the number of students accepted on work-study programmes within
the Group, with the aim of reaching 6,000 by 2022.
Directors’ independence
Crédit Agricole S.A. refers to the AFEP/MEDEF Corporate Governance
Code for listed companies, in its latest revised version as published in
January 2020 (the “AFEP/MEDEF Code”). Crédit Agricole S.A. does not
comply – or does not fully comply – with certain recommendations of
the Code as set out in a table appended to this section (see below).
The process for assessing the independence of Crédit Agricole S.A.
Directors is implemented under the auspices of the Appointments and
Governance Committee. This principle is assessed both in terms of
the criteria of the AFEP/MEDEF Code and in terms of the specific texts
as applicable to the banking sector, such as the European Banking
Authority’s Guidelines for the assessment of members of the Board of
Directors, which came into effect in June of 2018. These two standards
overlap to a very wide extent.
In anticipation of the General Meeting of 12 May 2021, the Appointments
and Governance Committee individually reviewed the situation of each
Director, and more particularly the independent Directors, whom it had
previously requested to present any significant change in their situation
that could affect their independence and to confirm compliance with
each criterion of the AFEP/MEDEF Code. The Committee also reviewed
the situations of Agnès Audier, Senior Advisor at Boston Consulting
Group, Mariane Laigneau, Chairwoman of the Enedis Management Board,
and Alessia Mosca, International Trade professor at the Paris Institute
of Political Studies (
Institut d’Études Politiques
), whose appointments
as independent Directors will be proposed to the General Meeting of
12 May 2021.
On 10 February 2021, at the Committee’s recommendation and subject
to changes which must be communicated to the Board, the Board of
Directors recognised them as independent Directors.
The six criteria of independence as defined by the AFEP/MEDEF Code are:
1.
not being, or not having been, in the last five years:
-
an employee or Executive Corporate Officer of the Company,
-
an employee, Executive Corporate Officer or Director of a company consolidated by the Company,
-
an employee, Executive Corporate Officer or Director of the parent company or of a company consolidated by this parent company;
2.
not being an Executive Corporate Officer of a company in which the Company, directly or indirectly, acts as a Director or in which
an employee designated as such or an Executive Corporate Officer of the Company (currently or in the last five years) is a Director;
3.
not being a customer, supplier, corporate banker, investment banker, consultant (or be related to persons in this capacity):
-
who plays a significant role in the Company or its Group,
-
for whom the Company or its Group represents a significant proportion of business;
4.
not having any close family ties with a Corporate Officer;
5.
not having been a Statutory Auditor of the company in the last five years;
6.
not being a director of the company for more than 12 years; as the status of independent director expires after 12 years.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
125
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
The Board, upon the advice of the Appointments and Governance
Committee, noted that the representatives of the Regional Banks on the
Board of Directors of Crédit Agricole S.A. (Chairpersons, Chief Executive
Officers) cannot be considered as independent with respect to the
principle stated and the above criteria, to the extent where the Directors
representing the Regional Banks hold positions in the Company’s parent
company or in a company consolidated by such parent company.
Furthermore, the Director representing Regional Bank employees, who is
an employee of an entity with a controlling interest in Crédit Agricole S.A.
cannot be considered as independent. Irrespective of the fact that, due
to their employment contract, they would not meet criterion 1, the two
Directors representing Crédit Agricole S.A. employees on the Board
come under a specific regulatory framework, and cannot, under the
AFEP/MEDEF Code, be included in the calculation of the percentage of
independent Directors.
Lastly, with regard to the representative of the professional farming
associations, Crédit Agricole’s position as the leading financier of
agriculture in France excludes said Director de facto from compliance
with criterion 3, even if said Director’s appointment by the Minister of
the Economy and Finance and the Minister of Agriculture and Food is
part of a regulatory process in which Crédit Agricole S.A. is not involved.
With respect to the Chairpersons of the Regional Banks who sit on the
Crédit Agricole S.A. Board, the Board has reiterated, as it does every
year, that they are not employees of the Regional Banks and that they
legitimately hold this office by election, in accordance with the Regional
Banks’ cooperative status. The Board recalled that Chairpersons of
Regional Banks, with a background in mutual insurance and banking,
have the dual qualities of being extremely knowledgeable about the bank
and its functioning and, for most of them, being heads of non-financial
companies.
Upon the advice of the Appointments and Governance Committee, the Board of Directors at its meeting of 10 February 2021
found that six Directors meet the independence criteria of the AFEP/MEDEF Code:
—
Caroline Catoire;
—
Marie-Claire Daveu;
—
Laurence Dors;
—
Françoise Gri;
—
Monica Mondardini;
—
Catherine Pourre.
The Board’s composition, with one-third independent Directors, not
including employee Directors, fulfils the recommendations of the AFEP/
MEDEF Code on controlled companies.
In addition to a formal review of their individual situation, updated
by each interested party for each criterion, the assessment was also
based, after the recommendation of the Appointments and Governance
Committee, on the findings of an analysis concerning existing business
relations between Crédit Agricole Group and the companies in which the
independent Directors hold positions (in accordance with Chapter 2.2
“Positions held by Corporate Officers”). The analysis of these business
relations is carried out with the support of experts from the Group
Risk department, which is based on the consolidated data available
to it on the Group’s relationship with its counterparties. It excludes the
assets structures of the persons concerned as well as those through
which they may carry out advisory activities, none of them carrying out
assignments for the Group in this capacity pursuant to the rules relating
to conflicts of interest.
As banking is, by definition, at the heart of the financing of the economy
and in view of the characteristics of the French banking market, whenever
the companies concerned are based in France, the probability that these
companies are customers of a Crédit Agricole Group entity is obviously
high, often increasing with the size of the company.
Consequently, in order to assess the “significant” nature of the business
relationship, the following are taken into account:
the amount and nature of the commitments, their maturity, their
significance within the company’s debt, and the refinancing capacity
of the company in question;
the quality of the relationship with the company in question, in particular
its financial position as demonstrated by its results and ratings (Banque
de France and internal rating), in order to check whether it depends
on Crédit Agricole for financing or whether it would be able to obtain
financing from other banks or through other means – including via
the market – in the event of Crédit Agricole’s withdrawal.
By making sure that the business relationship is balanced,
i.e.
that neither
of the parties is in a position of power over the other, this last phase
adds a determining qualitative dimension to the overall assessment.
In anticipation of the General Meeting of 12 May 2021, analyses were
performed for each of the independent Directors of Crédit Agricole S.A.
concerning business relations with companies in which they hold
positions or have ties. These were:
Caroline Catoire
Latécoère Group
Maurel & Prom
Roquette Group
Macquarie France
Marie-Claire Daveu
Kering Group
Albioma
Ponant
Laurence Dors
Capgemini
Latécoère Group
EGIS Group
Françoise Gri
Edenred S.A.
WNS Services
INSEEC-U (business school)
Monica Mondardini
CIR Group
Catherine Pourre
SEB
Bénéteau
CPO Services
Unibail Rodamco NV
Based on the results of this analysis, on the recommendation of the
Appointments and Governance Committee, the Board has deemed that
the Group’s commitments vis-à-vis these companies:
were either not significant enough to qualify as situations of
dependence on Crédit Agricole;
or, after further analysis of these companies’ financial position, revealed
a balanced business relationship with these counterparties, with
neither of the parties having the ability to exert influence over the other.
The Appointments and Governance Committee reiterated that, under
all circumstances, should the Directors concerned be called upon to
give an opinion on a matter in which there is a potential conflict of
interests, said Directors must abstain from attending the debate and
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
126
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
taking part in the vote, as required by the rules of good governance of
Crédit Agricole S.A. and the Directors’ Code of Conduct.
Assessment of the Board of Directors
Each year, the Board of Directors assesses its composition and functioning
on the basis of responses to two questionnaires:
one on its composition, organisation and functioning, recommended
by the AFEP/MEDEF Code and for the banking sector meeting a legal
obligation as defined in Article L. 511-100 of the French Monetary
and Financial Code;
the other on the knowledge, expertise and experience of the members
of the Board of Directors, both individually and collectively, still in
accordance with the aforementioned article of the French Monetary
and Financial Code (see “Diversity policy” above).
Under the AFEP/MEDEF Code, the Board of Directors delegates these
tasks to an external firm once every three years. In 2020, the meetings
were conducted by the Spencer Stuart firm in April and May 2020, by
teleconference, given the mandatory lockdown measures required by
the public health crisis.
With regard to the functioning of the Board, financial year 2020 confirmed
the generally positive assessment already made by its members in 2019.
The assessment highlighted the Board’s strengths in the light of current
affairs, such the capability, maturity and commitment it demonstrated in
its response to the COVID-19 crisis, by proposing constructive support
to Executive Management which was on the front line.
All members stressed the Chairman’s role as moderator at meetings,
encouraging debate and the expression of different viewpoints, with
open, lively discussions and free speech as well as the Chief Executive
Officer’s open-minded and transparent attitude towards the Board.
The assessment also emphasised the commitment of all Directors and
their strong bond, gradually forged between the different components
of the Board of Directors, built on mutual trust and appreciation of each
member’s valuable contribution.
The Board appreciates the greater place given to strategy, in particular
regarding the two half-days of strategic session and the quality and
diversity of training programmes proposed to Directors, considered as
useful and suitable to their needs.
While stressing that the Board received a very positive assessment
for its functioning, there were areas where respondents felt the Board
could do even better, such as:
the organisation of Board proceedings to devote more time to strategy,
considering the already significant time given to regulations in the
Board’s agendas;
striking the right balance between detailed reporting and putting
important elements in perspective, in the Board’s files.
Concerning the assessment of expertise, at the individual level, 84% of
Directors consider that they adequately understand the business lines and
issues at stake at Crédit Agricole S.A., compared to 16% who consider
that they could improve their understanding. Collectively, expertise in the
aforementioned 12 areas are still fulfilled. (See below “Knowledge and
expertise”) with a strong point being knowledge of the Group’s activities
and the associated risks, knowledge of the main key activities: regulation
and CSR issues. Although proportions are respected with regard to the
reference grid concerning the desired expertise balance on the Board,
the two sectors in which Directors recognise their weaker expertise
include IT and management of international groups.
Training of the Board of Directors
Article L. 511-53 of the French Monetary and Financial Code provides that
credit institutions and finance companies must set aside the necessary
human and financial resources for Director training. For collective training
sessions, the programme is set after consultation of Directors on their
wishes. Individual training sessions answer to requests or needs of
Directors at the moment of annual self-assessment campaign.
In 2020, all Board members took at least one of the trainings below on:
new monetary theories and strengths and weaknesses of global
banking models in the face of new global paradigms;
cryptocurrencies, blockchain and central bank digital currencies
followed by the annual review of regulatory updates, with particular
focus on international sanctions and green finance;
cyber security.
The Board training programme for 2021 includes, in addition to
personalised courses and Committees, group sessions on:
GAFA/BATX/FINTECHs: competitors or partners?;
two sequences: the positioning of banks’ CSR policies, followed by
a review of regulatory updates and Compliance;
two sequences: first review of public stimulus plans in France and in
Europe; Global Markets business lines.
1.1.4. Other information required under
Articles L. 225-37-4 and L. 22-10-10
of the French Commercial Code
Restrictions imposed by the Board of Directors
on the Chief Executive Officer’s powers
The Chief Executive Officer is vested with the broadest powers to act in
all circumstances on behalf of Crédit Agricole S.A. and to represent the
Bank toward third parties. He exercises his authority within the limits of
the Company’s object and subject to that authority expressly assigned
by law to Meetings of Shareholders and to the Board of Directors.
The only limitation that the Board of Directors places on the powers of
the Chief Executive Officer, as set out in its Rules of Procedure of the
Board, is that the Chief Executive Officer must obtain its prior approval
for the following transactions:
the creation, acquisition or disposal of any subsidiaries and equity
investments in France or abroad for total amounts exceeding
€150 million;
any other investment of any kind for amounts exceeding €150 million.
Agreements between Corporate Officers and subsidiaries
No agreements other than those entered into under normal conditions or
relating to ordinary transactions and related-party agreements covered
by Articles L. 225-38
et seq.
of the French Commercial Code (see below),
have been entered into, directly or through an intermediary, between, on
the one hand, one of the Corporate Officers or one of the shareholders
holding more than 10% of the voting rights of a company and, on the
other hand, another corporation controlled by the former within the
meaning of Article L. 233-3.
Procedure for auditing related-party agreements
and agreements relating to current operations
and concluded under normal conditions
In accordance with Article L. 225-39 of the French Commercial Code,
the Board has established an internal procedure for qualifying the
agreements entered into between the Company and the individuals or
legal entities referred to in Article L. 225-38 of the French Commercial
Code. It is available on the Crédit Agricole S.A. website (section on
Governance).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
127
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
This procedure defines the criteria used by Crédit Agricole S.A. to
determine which agreements are subject to the legal regime of
prior authorisation of related-party agreements in accordance with
the provisions of Article L. 225-38 of the French Commercial Code
and those subject to the unregulated agreement regime. The criteria
were adopted by the Board at its meeting of 13 February 2020. In the
absence of any commercial activity, they take into account both its legal
duties as the corporate centre of Crédit Agricole, as defined in Articles
L. 511-30
et seq.
and L. 512-47
et seq
.
of the French Monetary and
Financial Code, and its role as the holding company for the business
line subsidiaries of Crédit Agricole S.A. Group.
The procedure provides for an annual review of unregulated agreements
entered into during the year by the Audit Committee, which reports to the
Board of Directors on the implementation of the procedure for regularly
assessing whether agreements relating to current operations and entered
into under normal conditions meet these conditions.
Principles and rules laid down by the Board of
Directors to determine the compensation and
benefits in kind awarded to Corporate Officers
This information can be found in the section on “the reward policy” of
this Universal Registration Document.
Areas of non-compliance with the AFEP/MEDEF Code
The areas of non-compliance with the AFEP/MEDEF Code are shown in the summary table below. Such areas of non-compliance are not mentioned
when they stem from the implementation of banking laws or regulations.
Recommendation of the Code
Comment by the Company
ASSESSMENT OF THE BOARD OF DIRECTORS
11.3 It is recommended that a meeting be held each
year without the presence of Executive Corporate
Officers.
The Board of Directors of Crédit Agricole S.A. does not hold any plenary meetings without the
presence of Executive Corporate Officers but reserves the right to do so if Directors express the
need for such a meeting. As a reminder, the Board of Crédit Agricole S.A. is exclusively composed
of non-executive Directors.
However, the Risk Committee and the Audit Committee each hold an annual meeting without
the presence of Executive Corporate Officers and Statutory Auditors. In 2020, the two committees
held a joint meeting.
It should be recalled that the individual and collective performance of Executive Corporate Officers
is evaluated in detail on an annual basis by the Compensation Committee as part of the system
governing Corporate Officer compensation approved by the Board. The presentation to the Board
by the Committee Chairwoman of the findings of this assessment, along with the Board’s discussion
on the elements of the Executive Corporate Officers’ compensation, take place in the absence of
the Executive Corporate Officers, in accordance with Article 18.3 of the AFEP/MEDEF Code.
THE COMMITTEE IN CHARGE OF
SELECTION OR APPOINTMENTS
17.1 Composition:
“(It) should have a majority of independent Directors.”
The Appointments and Governance Committee is chaired by an independent Director. It comprises
six members, including the non-executive Chairman of the Board of Directors, the Deputy
Chairman, two Regional Bank Chairpersons and two independent Directors,
i.e.
a proportion of
one-third independent members. The shareholding structure (existence of a majority shareholder)
is reflected in the composition of this Committee. Every year, the composition of the Committee
is included in the Board assessment questionnaire and does not raise any reservations about
its proper functioning.
SHARE OWNERSHIP BY DIRECTORS
AND EXECUTIVE CORPORATE OFFICERS
20. Ethical standards applicable to Directors
“… the Director should personally be a Company
shareholder and, in accordance with the provisions
of the Articles of Association or Rules of Procedure,
hold a minimum number of shares that is material
in relation to the allocated compensation.”
23. Obligation to hold shares
“The Board of Directors sets the minimum number
of shares that Executive Corporate Officers are required
to hold as registered shares until the end of their term
of office. This decision is reviewed at least every time
they are reappointed. (…) So long as the shareholding
target has not been reached, Executive Corporate
Officers allocate that portion of their option exercises
or performance share awards as determined
by the Board for this purpose. This information
is included in the Company’s annual report.”
The Company’s Articles of Association set the minimum holding of Crédit Agricole S.A. shares
by a Director at one share. No provision is made in this regard for Executive Corporate Officers.
The number of shares held by each Director is disclosed in this report, in the section “Positions
and offices held by Directors and Corporate Officers”. The average number of shares held is
around 1,138. At an annual average share price of €9.90, this amounts to a value close to the
net amount paid for 10 annual Board meetings.
As regards Executive Corporate Officers more specifically, it should be borne in mind that:
since 2020, the Executive Corporate Officers of Crédit Agricole S.A. are eligible for
performance share awards. As applicable, the Chief Executive Officer and the Deputy
Chief Executive Officer are required to retain, until the end of their functions, 30% of
the shares vested each year;
under current regulations, a significant portion of their variable compensation is deferred
and paid in the form of instruments linked to the Crédit Agricole S.A. share price.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
128
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
22. TERMINATION OF EMPLOYMENT CONTRACT
IN THE CASE OF A CORPORATE POSITION
“It is recommended, when an employee becomes
a Company Executive Corporate Officer, to terminate
their employment contract with the Company or a Group
company, either by means of contractual termination
or resignation
(1)
.
This recommendation applies to the Chairman, Chairman
and Chief Executive Officer, and Chief Executive Officer
in companies with Boards of Directors [...].”
Upon the appointment of Philippe Brassac as Chief Executive Officer of Crédit Agricole S.A. from
20 May 2015, the Board of Directors authorised, at its meeting of 19 May 2015, the maintenance
of his employment contract and its subsequent suspension during his term of office.
The termination of his employment contract would have deprived him of the rights arising from
the performance of his employment contract that were progressively built up over the course of
his 33-year career with the Group and, in particular, benefits obtained by virtue of seniority and
length of service, notably in terms of long-term benefits – such as membership in group
schemes – and the right to termination payments. The overall amount of such payments would
not, in any event, exceed two years of gross compensation in accordance with the
recommendations of the AFEP/MEDEF Code.
The Board considered that this is an appropriate approach to give Group employees who have
made a major contribution to its development the opportunity to access high-standing offices,
thereby fostering the sustainable management of the Group’s human resources.
25. COMPENSATION OF EXECUTIVE
CORPORATE OFFICERS
25.5.1 Departure of Executive Corporate Officers –
General Provisions
Termination payments:
“The law gives a major role to shareholders since the
predefined termination payments granted to Executive
Corporate Officers are subject to the procedure
applicable to related-party agreements. The law imposes
total transparency and makes termination payments
conditional upon performance conditions.
The performance conditions set by Boards for these
payments must be assessed over at least two financial
years. They must be stringent and solely allow the award
of termination payments in the event of the forced
departure of an executive, irrespective of its form.”
For the Deputy Chief Executive Officer:
his term of office contract, also approved
by the General Meeting in respect of related-party agreements, does not provide for
performance conditions, insofar as the termination payments for which he would be
eligible in the event of his contract being terminated would not be due under his term
of office contract, but under his employment contract, which is suspended during the
exercise of his term and would be reactivated in the event of termination of his term
of office contract. The introduction of performance conditions would, in this case, be
contrary to labour law.
(1)
“Where the employment contract is upheld, it is suspended in accordance with case law”.
1.2. BOARD ACTIVITY IN 2020
1.2.1. Board activity
The Board was very active in 2020, with 12 plenary meetings,
including two strategic seminars, the first on 22 January 2020,
dedicated to the Group’s strategic approach and the second on
16 June on the impacts of and lessons learned from the public
health crisis. Starting from March 2020, most meetings were held
through audio and video conference pursuant to the exceptional
legislation passed to fight the coronavirus pandemic.
Directors’ attendance rate remained high, averaging 96% (see attendance
table below) reflecting the strong commitment of all Directors, which
has not waned from one year to the next.
Bodies
Attendance
rate
Number of
meetings
in 2020
Board of Directors
96%
12 (of which
2 seminars)
Risk Committee
100%
6
Audit Committee
100%
5
Joint Risk/Audit Committees
100%
8
US Risks Committee
100%
4
Compensation Committee
93%
7
Strategy and CSR Committee
96%
4
Appointments and Governance Committee
100%
4
The Board’s relations with management bodies
and succession planning for key functions
Under the authority of the Chief Executive Officer, the organisation of
Crédit Agricole S.A.’s management is structured around an Executive
Committee and a Management Committee (see pages 175-176). The
relationship between the Board of Directors and Executive Management
is expressed foremost in the regular and numerous contacts between the
Chairman and the Chief Executive Officer. In addition, the latter, as well
as the Deputy Chief Executive Officer, the Deputy General Manager, Chief
Financial Officer and the Corporate Secretary, attend all Board meetings.
In addition, members of Management have frequent discussions with
the Board, which stresses the ease of access to information and
management, during the annual assessment of its functioning, both
for the Board itself and for its Specialised Committees. In 2020, all
members of the Executive Committee had the opportunity to access
the Board of Directors or its Specialised Committees. Depending on the
topic, the heads of technical Divisions may also have access to Directors.
In accordance with banking regulations and pursuant to its Rules of
Procedure, the Board interacts on a very regular basis with the three
Heads of control functions who are also members of the Executive
Committee. The latter have regulatory and, if necessary, direct access
to the management body in its oversight functions. All three are
appointed after consulting the Board and may not be removed without its
agreement. In 2020, as in previous years, the Heads of control functions
reported very regularly on their activities and the results related to their
responsibilities to the Board and its Specialised Committees. Within this
framework, and in addition to systematic attendance at Risk Committee
Meetings, the Group Chief Risk Officer attended nine out of 12 Board
CRÉDIT AGRICOLE S.A.
—
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1. Report of the Board of Directors
meetings, the Group Compliance Officer attended two Board meetings,
while the Head of Group Control and Audit, in charge of periodic control,
attended three Board meetings. The Head of Group Control and Audit
notably presented the work of the Control and Audit department in April
2020, the implementation plan for the Control and Audit department’s
IT recommendations in October 2020 following the SREP letter, and in
December, the department’s Audit Plan for 2021, previously reviewed by
the Risk Committee and, for financial projects, by the Audit Committee.
The organisation of Executive Management and changes in its
composition meet the Group’s strategic needs. To date, the Executive
Committee is composed of 16 members, including the Chief Executive
Officer, the Deputy Chief Executive Officer, the three Deputy General
Managers in charge of the three Central Support Functions, the four
Deputy General Managers of the business lines, as well as the Directors
in charge of digital transformation and IT, of Italy and Human Resources,
the three Heads of Control Functions and the Corporate Secretary.
The main modifications within the Executive Committee were:
Jean Paul Mazoyer
was appointed with effect from 1 May 2020 as
Deputy General Manager for Group Innovation, Digital Transformation
and IT to replace Serge Magdeleine who has moved on to Executive
Management duties at a Regional Bank;
Bertrand Corbeau
claimed his pension rights on 1 January 2021;
lastly,
Véronique Faujour
was appointed Corporate Secretary of
Crédit Agricole S.A. on 1 January 2020, replacing Jérôme Brunel,
who claimed his pension rights.
The Board of Directors remains attentive to the existence of succession
plans for all functions identified as
“key functions”
of Crédit Agricole S.A.
Group, namely the functions present within the Executive Committee
but also within the Management Committee. The identification process
is carried out by the Human Resources department with the support of
Career Committees. In 2020, the review of succession plans focused
on members of the Executive Committee relying on the internal pool
of Chief Executive Officers of the Regional Banks and the managers
of subsidiaries or business lines, as well as through possible external
recruitments.
The Board meeting of 3 November 2020 formalised in a Procedural
note, which will be appended to its Rules of Procedure but not
published, the succession process of the Chairman and Chief
Executive Officer. The note also stated the role of the Board and
the Appointments and Governance Committee with respect to the
key functions represented on the Executive Committee.
Topical debates
In 2020, debates and exchanges between the Board and Executive
Management, which was on the front line in dealing with the crisis,
revolved around the unprecedented environment marked by a global
health crisis that required shutting down the economy followed by
recovery phases dependent on contamination statistics.
For this reason, the Board focused particular attention on the following:
the impacts of the health crisis and the massive support measures
rolled out by public authorities to cope with the crisis, with a concern for
optimising the role of Crédit Agricole Group in relaying these measures
to its customers as well as adopting the individual arrangements
necessary for these customers, and for society as a whole;
the capacity of banks to absorb the shock of the pandemic on the
economy and changes to prudential regulations;
implementing the European Central Bank recommendation to banks
against dividend payments in 2020 for financial year 2019 then, for
2021, implementing the framework, made more flexible by the ECB’s
15 December recommendation;
provisioning efforts conducted internally, the update of economic
scenarios and lessons learned from the crisis, particularly in terms
of changes to processes and adapting to new requirements;
banking consolidation in Europe and its potential effects on its
partnerships.
Strategic orientations
As part of its responsibilities related to the strategic orientations of the
Company’s activities, the Board organised its work around adapting to
the effects of the health crisis and the consequences of the resulting
changes and accelerations, particularly in digital habits. The Board also
discussed the start of new banking consolidations in Europe, mainly in
Spain and in Italy, coupled with a change in ECB doctrine, now willing
to recognise negative goodwill on acquisitions.
With regard to external growth, Crédit Agricole focused on strengthening
its competitive positioning in Italy, its second domestic market. This was
achieved through a takeover bid by Crédit Agricole Italia, a subsidiary
of Crédit Agricole S.A. (CASA), on Credito Valtellinese, approved by the
Board on 20 November 2020. The Board considered that the acquisition
of Credito Valtellinese by Crédit Agricole Italia, with which an insurance
partnership already exists, will result in the creation a stronger Italian
banking group, thanks to its financial strength, support, expertise and
extensive product range of one of the largest and most renowned banking
groups in Europe, and will have substantial positive impacts on the
territories concerned, in the interest of all stakeholders.
Results and risk monitoring
The rapid unfolding of the impacts of the pandemic and the
unprecedented measures taken to deal with it, especially the serious
economic consequences and the situational review of the coronavirus-
related crisis and its effects on the Group, have been closely monitored
by the Board of Directors and have influenced the Board’s perspective
in handling its legal missions.
The quarterly review of the consolidated financial statements of Crédit
Agricole Group and Crédit Agricole S.A. Group provided the Board of
Directors with an opportunity to assess the Group’s resilience and its
prudent management. In spite of the crisis, the results reported for
each quarter have highlighted the Group’s ability to further enhance its
financial strength. The results demonstrate the ability of Crédit Agricole
Group to absorb the impacts of the crisis as a committed player having
recorded cost of risk and kept its expenses under control.
In accordance with Article L. 228-40 of the French Commercial Code, the
Board gave its consent for the 2020 bond issue programme, approving
the related authorisations and receiving regular progress reports.
During each quarterly review, but also at each meeting of the Risk and
Audit Committees, the Board closely monitored the Group’s regulatory
prudential ratios, both in terms of solvency and liquidity. The Crédit
Agricole Group remains one of the best capitalised systemic institutions
in Europe, with a prudent risk profile.
The quarterly review of the risk position has been enhanced with interim
status reports with the introduction of new reporting on going concern or
again changes in loan book, provisions and RWAs
(Risk-Weighted Assets).
Upon the recommendation of the Risk Committee, it regularly reviewed
and approved the strategies and policies governing risk-taking, as well
the management, monitoring and reduction of the risks to which the
Group is, or could be, exposed.
On this basis, it reviewed and/or approved risk management and control
tools and systems as well as their consistency, in particular consistency
between instruments such as the Annual Internal Control Report (RACI),
the Risk Appetite Statement examined each year in parallel to the budget,
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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1. Report of the Board of Directors
the Internal Capital Adequacy Assessment Process (ICAAP) and the
Internal Liquidity Adequacy Assessment Process (ILAAP) statements.
The Board also examined the Resolution Plan and the Recovery Plan,
of which it approved the update.
Given the rapidly changing environment, the budget trajectory in 2020
was closely monitored, notably with regard to economic scenarios revised
during the year. The budget for 2021 was adopted on 15 December 2020
and regular updates on its trajectory will be provided. The Board
requested a review of the Risk Appetite Statement (RAF) in the light of
the new priorities generated by the crisis.
The Board was kept informed – either directly or through the Chairwomen
of the Risk and Audit Committees of the results of the various oversight
tasks conducted by the ECB within the Group and/or the requests sent
by the supervisory authority to the Executive Management of Crédit
Agricole S.A.
In the context of relations with the supervisor, the Board held a specific
meeting with the microprudential II surveillance Executive Management
and its joint supervisory team. Representatives of the joint supervision
team also summoned the Chairwomen of the Risk and Audit Committees
to two hearings during the year.
In the field of Corporate Social Responsibility, the Board was informed by
the Chairman of the Strategy and CSR Committee of the 2020 highlights
in this area, as well as the main changes envisaged in the commitment
of Crédit Agricole S.A. to Climate Financing.
Lastly, based on the Compensation Committee’s report, the Board
approved the principles of changes in the 2021 variable compensation
policy for Executive Corporate Officers, as well as their overall
compensation conditions. In their absence, and following the report
from the Chairwoman of the Compensation Committee, the Executive
Corporate Officers’ individual variable compensation and its elements,
as well as the 2020 compensation and total variable compensation
available to identified employees, were approved by the Board on
10 February 2021 in light of the General Meeting of 12 May 2021.
Regulated agreements
Pursuant to Articles L. 225-38
et seq.
of the French Commercial Code,
the Board authorised a new regulated agreement, amendments to three
former agreements and the renewal of four tax consolidation agreements.
The first agreement is a loan agreement between Crédit Agricole S.A. and
its subsidiary Crédit du Maroc, in response to the Moroccan supervisory
authority’s request for the institutions under its supervision to retain
the 2019 dividend. As this request was made after the Crédit du Maroc
General Meeting which gave Crédit Agricole S.A. an irrevocable right
to the dividend, the response was this loan agreement for an amount
corresponding to the dividend amount received.
The second agreement comprised an amendment to the Shareholders’
Agreement, signed on 8 June 2018 and authorised by the Board on
14 May 2018, stating the governance rules for Crédit Agricole Group
Infrastructure Platform.
The amendment to the agreement to transfer the Banking Services
department of Crédit Agricole S.A. to Crédit Agricole CIB, authorised
by the Board on 19 March 2017, amends the scope of the goodwill
disposal made between Crédit Agricole S.A. and Crédit Agricole CIB
on 1 January 2018.
Lastly, an amendment to the Eureka loan agreement authorizing the
exercise of the option of partial early repayment of the loan granted in
2016 to the Normandy Regional Bank.
With regard to the renewed tax agreements, that they concern:
the tax consolidation agreement signed on 21 January 2010 between
Crédit Agricole S.A. and the Regional Banks;
the tax consolidation agreement signed by Crédit Agricole S.A. and
SACAM Mutualisation, stipulating that the tax savings generated
within the Group by intragroup dividends received by this entity are
to be fully allocated to that entity;
the tax consolidation agreements between Crédit Agricole S.A. and
SAS Rue La Boétie, SAS Ségur and Miromesnil and lastly, several
SACAMs under the same conditions as those signed in 2016 for a
period of five years;
the tax consolidation agreement signed in 1996 between the CNCA and
Indosuez, now Crédit Agricole S.A. and Crédit Agricole CIB respectively,
renewed for the 2020 to 2024 period.
Moreover, in accordance with the provisions of Article L. 225-40-1 of the
French Commercial Code, in its meeting of 15 December 2020, the Board
conducted an annual review of all the agreements signed and authorised
in previous financial years and which remained in effect in 2020:
1.
the Shareholders’ Agreement, signed on 8 June 2018 and authorised
by the Board on 14 May 2018 stating the governance rules for Crédit
Agricole GIP;
2.
the Liability Guarantee Agreement granted to SILCA on 21 November 2018,
authorised by the Board of Directors on 6 November 2018, for a period
of 36 months;
3.
the amendment signed on 10 October 2017 authorised by the
Board of Directors on 2 August 2017 to the senior loan agreements
underwritten by the Regional Banks with Crédit Agricole S.A. in the
context of Operation Eureka;
4.
the framework agreement guaranteeing equity-accounted values,
signed on 16 December 2011 by Crédit Agricole S.A. and the
Regional Banks (the so-called “Switch Guarantee”, including CCA/CCI
and Insurance), which was the object of a first supplemental
agreement authorised by the Board on 10 December 2013,
revisited by the Board when authorising its second amendment
on 17 February 2016 and its third amendment on 19 May 2016;
5.
the agreement to transfer Crédit Agricole S.A.’s MSI business to
Crédit Agricole CIB, authorised by the Board on 19 March 2017
within the disposal of part of its IT business, which continues to
take effect during the transitional period and the guarantee clause;
6.
the tax consolidation agreement signed by Crédit Agricole S.A. and
SACAM Mutualisation, authorised by the Board on 19 May 2016,
stipulating that the tax savings generated within the Group by
intragroup dividends received by this entity are to be fully allocated
to that entity;
7.
the tax consolidation agreements authorised by the Board on
21 January 2010 and renewed by the Board on 17 December 2015
between Crédit Agricole S.A. and SAS Rue La Boétie, SAS Ségur,
SAS Miromesnil and, lastly, several SACAMs, which were also the
object of amendments authorised by the Board of Directors at its
meeting on 19 December 2016;
8.
the tax consolidation agreement signed in 1996 between the CNCA
and Indosuez, now Crédit Agricole S.A. and Crédit Agricole CIB
respectively, renewed on 22 December 2015, which was the object
of an amendment authorised by the Board of Directors at its meeting
on 7 November 2016;
9.
the agreement on the increase in the capital of Crédit Agricole CIB,
authorised by the Board on 9 March 2004, under which Crédit
Agricole S.A. subscribed to an issue of deeply subordinated notes
(TSS) that were partially redeemed in 2014;
10.
the temporary distribution agreement between Crédit Agricole S.A.
and Crédit Agricole CIB for payment of the Euribor fine of
€114,654,000, authorised by the Board of Directors in its Meeting
of 20 January 2017 and signed on 27 February 2017 between
Crédit Agricole S.A. and Crédit Agricole CIB, pursuant to which
Crédit Agricole S.A., pending the appeal decision, will pay the full
amount of the fine that the two companies were jointly and severally
ordered to pay;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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CORPORATE GOVERNANCE
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1. Report of the Board of Directors
11.
the Billing and Collection Agreement (“Billing Mandate”) entered into
between Crédit Agricole S.A. and Crédit Agricole CIB in connection
with the transfer of Crédit Agricole S.A.’s IT activities (MSI) to the
Global IT (GIT) activity of Crédit Agricole CIB under the terms of which
Crédit Agricole S.A. will invoice and collect payments for Services
performed by GIT on behalf of certain entities.
1.2.2. Summary of the main subjects
reviewed by the Board in 2020 after
review by, advice from and/or on the
recommendation of the Specialised
Committees
1.
After analysis by the Audit Committee:
-
approval of the annual financial statements and review of the half-
yearly and quarterly financial statements of Crédit Agricole S.A.,
Crédit Agricole S.A. Group, and Crédit Agricole Group; at each
reporting date, the Board heard from the Company’s Statutory
Auditors who, having presented the findings of their work to the
Audit Committee, then presented them to the Board, together
with their reports for each interim reporting date; the Board also
looks at and, where necessary, approves the draft press releases
published by the Company;
-
particular attention has been paid to the effects of regulatory
changes;
-
the Group’s goodwill position, notably on CA Italia;
-
the budget for Crédit Agricole S.A. Group and the additional
unwinding of 15% of the “Switch” insurance.
2.
After analysis by the Risk Committee:
-
the support measures implemented by the authorities to address
the impacts of the COVID-19 pandemic and the payment continuity
mechanism;
-
developments in the situation of Crédit Agricole S.A. and Crédit
Agricole Group with regard to own funds and solvency, with the
approval of the internal capital adequacy assessment process
(ICAAP) and that of internal liquidity adequacy assessment process
(ILAAP);
-
the results and effects of the annual SREP (Supervisory Review
and Evaluation Process) adapted to the pandemic situation;
-
the Crédit Agricole Group Risk Appetite Statement;
-
developments in the Group’s liquidity situation, the Group Liquidity
Emergency Plan and the US Liquidity Emergency Plan, the short-term
half-yearly limits, as well as the monitoring of the implementation
of the financing programme of Crédit Agricole Group;
-
Group limits in respect of GIRR, foreign exchange, VaR (Value
at Risk) limits and limits for capital market activities and their
update against the backdrop of the health crisis;
-
management of the Crédit Agricole S.A. Group securities portfolio;
-
the Annual Internal Control Report and half-year interim information
on internal control, coordinated by the Group Risk Management
department;
-
letters sent to the Company by regulators mentioning the obligation
to inform the Board and measures taken to respond to their
observations;
-
developments in terms of credit risk, market risk, and operational
and security risks, as well as the risk dashboard;
-
the update of the Group’s recovery plan;
-
the monitoring of the OFAC Remediation Plan and its timetable;
-
the update of the audit plan for health constraints;
-
approval of risk strategies;
-
in compliance/legal matters, semi-annual and annual compliance
reports, the guidelines of the Sapin II anti-corruption mechanism,
the status of ongoing litigation and administrative investigations.
3.
After analysis by the US Risk Committee:
-
the Emergency Liquidity Plan for Group businesses in the United
States, as well as the framework for liquidity and credit risk
appetite;
-
the update of the organisation and management framework for the
consolidated risk management of the entities in the United States;
-
the results of ROCA (Risk, Operations, Compliance and Asset
Quality) supervision exercises of the U.S. entities subject to it
updated in 2020 to the pandemic context.
4.
After analysis by the Strategy and CSR Committee:
-
proposed acquisitions and disposals;
-
the establishment of a Board procedural note on recognising the
corporate social and environmental challenges of its activities,
jointly analysed with the Appointments and Governance Committee;
-
monitoring the work started on the social and environmental
aspect of the medium-term strategic plan;
-
the integrated report, Company’s 2020 CSR performance, as well
as the update of the Vigilance Plan and the annual statement to
the UK authorities under the “Modern Slavery Act”.
5.
After analysis by the Compensation Committee:
-
the fixed compensation, annual personal variable compensation,
and the terms and conditions and criteria used to determine the
annual variable compensation of the Executive Corporate Officers
(Chairman, Chief Executive Officer and Deputy Chief Executive
Officer), taking into account regulatory provisions;
-
the update of the compensation policy of Crédit Agricole S.A.
Group;
-
under regulatory provisions, the report on the compensation
practices for members of the executive body as well as identified
employees whose professional activities have a significant impact
on the Company’s risk profile;
-
capital increase reserved for employees.
6.
After review by the Appointments and Governance Committee:
-
the results of the self-assessment of the operation of the Board
and its individual and collective expertise, and possible ways of
improving governance;
-
the procedure for electing a Director representing employee
shareholders;
-
independence of Directors under the AFEP/MEDEF Code and
areas of non-compliance with this Code;
-
the statement of works carried out on the succession plans of
key Crédit Agricole S.A. functions;
-
the Board training programme for 2021;
-
the policy on gender equality at work and equal pay within Crédit
Agricole S.A. and initiatives undertaken at Crédit Agricole S.A.
Group level to promote gender equality, diversity, and equal
representation in the management bodies.
7.
Other issues reviewed by the Board include:
-
in the context of the legal work of Crédit Agricole Group corporate
centre, the approval of the Chief Executive Officers of Regional
Banks and Deputy General Managers;
-
the authorisation of regulated party agreements (see below).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
132
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1. Report of the Board of Directors
1.3.
ACTIVITIES OF SPECIALISED COMMITTEES OF THE BOARD
1.3.1. Operating principles of the Committees
Six Committees are in place within the Board of Directors:
the Risks Committee, the US Risks Committee
(1)
established in 2016,
the Audit Committee, the Compensation Committee, the Appointments and Governance Committee and the Strategy and CSR
Committee.
(1)
The US Risks Committee was set up in response to a US regulatory requirement applicable, as from 1 July 2016, to foreign banks operating in the United States and meeting
certain asset threshold criteria.
Committee members are appointed by the Board, on the Chairman’s
recommendation. The Board may terminate the appointment of a
Committee member at any time. A Committee member may resign
from office at any time. All Committee members, and all other persons
who attend Committee Meetings, are bound by confidentiality and
professional secrecy.
The functioning of each Committee is governed by Rules of Procedure. In
the course of their work, Board Committees may interview any executive
or employee of Crédit Agricole S.A. Group or experts from outside the
Company in areas that fall within the Committees’ remit.
In accordance with the provisions of the French Monetary and Financial
Code and the recommendations of the European banking authorities,
the Committee members have the knowledge, skills and expertise
necessary for their role. These competences are assessed annually
after review by the Appointments and Governance Committee at the
same time with respect to:
the results of the annual evaluation provided for in Article L. 511-100
of the French Monetary and Financial Code;
the qualities necessary to chair and serve on Committees, as described
in the Board’s procedural memorandum adopted on 7 November 2017;
the guidelines of 27 September 2017 on the assessment of the skills
of members of management bodies established by the European
Banking Authority.
Members of the Specialised Committees receive a brief on the different
items on the agenda, generally three to five days prior to each meeting,
depending on the Committee.
Just as Board members are paid for attending Board Meetings, members
of Committees are paid for their presence based on a scale set by the
Board on the recommendation of the Compensation Committee.
The four Committee Chairwomen and the Chairman of the Strategy and
CSR Committee play a key role in the organisation and functioning of
the Committees and in the coordination of their work.
The Chairwomen
hold regular meetings with the Directors in charge of activities within
the scope of their area of expertise, in particular the heads of the three
control functions, the Deputy General Manager, Chief Financial Officer and
the heads of the departments in charge of accounting and consolidation,
subsidiaries and equity investments, Group human resources and the
Corporate Secretary. The Chairs of the Risk Committee and the Audit
Committee also hold regular bilateral meetings with the Statutory Auditors.
They also attended several meetings with the ECB Joint Supervisory
Team (JST), notably in the framework of the SREP process but also
through interviews conducted by the JST, alone or with members of
these two Committees.
1.3.2. Risk Committee
At 31 December 2020, the Risk Committee had five members, including
three independent Directors. One of the members chairs the Committee.
Members
Attendance rate
Françoise Gri, Committee Chairwoman
and independent Director
100%
Marie-Claire Daveu, independent Director
100%
Catherine Pourre, independent Director
100%
Pierre Cambefort, Chief Executive Officer
of a Crédit Agricole Regional Bank
100%
Jean-Paul Kerrien, Chairman of a Crédit Agricole
Regional Bank
100%
The Group Chief Risk Officer, the Head of Group Control and Audit, the
Group Compliance Officer, the Deputy General Manager, Chief Financial
Officer, the Head of Accounting and Consolidation, and the Head of Group
Financial Steering attend meetings of the Risk Committee.
The functioning and duties of the Committee are set out in Rules of
Procedure as approved by the Board of Directors. The Committee performs
its duties under the responsibility of the Board of Directors, in the areas
defined by provisions of the French Monetary and Financial Code, in
particular, as arising from the CRD 4 directive of 20 February 2014
and the Decree of 3 November 2014 on the internal control of banks.
Minutes are prepared for each Committee Meeting and, after approval
by its Chair, are distributed first to all members of the Committee and
then to all members of the Board.
The work of the Committee is subject to annual programming, adapted
according to needs and current events. In the autumn of each year, the
Risk Committee organises a work meeting, excluding executives, to
decide on its general agenda for the following year and the individual
and collective training requested by its members. It also examines any
areas where it might improve. Against the backdrop of the pandemic,
the Audit and Risks Committees held joint meetings to assess their
common needs and carry out the necessary coordination.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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1. Report of the Board of Directors
The Risk Committee met six times in 2020, in addition to the eight
sessions held jointly with the Audit Committee (see above).
The Risk Committee’s fixed schedule is mainly structured around the
regulatory issues provided for in the French Decree of 3 November 2014
on internal review, those arising from the requirements of supervisors,
the review of Risk Strategies and subjects involving risk issues, in
particular IT and cyber security which the Committee reviews at least
twice a year. The Committee is attentive to the growing importance of
CSR risks, particularly reputation risk but also climate risk for which the
regulatory environment is being organised, including prudential aspects.
In 2020, the agenda of the Risks Committee; was adapted to the
public health context with special monitoring of impacts on credit,
market and operational risks as well as solvency and liquidity
situations.
The Committee reviewed the following:
the adaptations implemented in the light of the public health crisis
(new developments in committee procedures, reporting, etc.) and the
thorough review of scheduling;
the risk appetite statement, which constitutes a decisive framework for
the Committee’s control and monitoring of risks, and, more generally,
governance;
the Group’s liquidity position, emergency liquidity plan, semi-annual
short-term limits and ILAAP, solvency position and monitoring of the
solvency trend;
the update of limits in the light of COVID-19;
the organisation, functioning and resources allocated to each of the
three control functions (risk, compliance, internal audit);
the situation regarding key outsourced services and the status of the
Business Continuity Plan (BCP);
the update of the audit plan due to health constraints;
quarterly risk position reports;
limits on the securities and sovereign portfolio, VaR limits, GIRR limits,
foreign exchange limits;
monitoring the Group’s preparation for Brexit;
internal models and internal model risks;
the Supervisory Review and Evaluation Process (SREP), the
recommendations of the supervisor, notably on the Group’s operational
capacity to manage struggling debtors in the context of the COVID-19
pandemic;
the measures implemented by the Group to identify capital
requirements under Pillar 2 as part of the Internal Capital Adequacy
Assessment Process (ICAAP);
the follow-up letters given to the ECB and ACPR missions or
recommendations, particularly for IT;
regular periodic monitoring of the implementation of the OFAC
Remediation Plan;
Control and Audit function audits, including audits conducted in
Regional Banks, and the Control and Audit function audit plan, ECB
audits and follow-up of recommendations;
periodic information on administrative procedures and ongoing
proceedings;
all Risk Strategies previously discussed by the Risk Committee, which
it then proposes for adoption by the Board of Directors.
1.3.3. Audit Committee
At 31 December 2020, the Audit Committee had six members, including
four independent Directors.
Members
Attendance rate
Catherine Pourre, Committee Chairwoman
and independent Director
100%
Caroline Catoire, independent Director
100%
Laurence Dors, independent Director
100%
Françoise Gri, independent Director
100%
Gérard Ouvrier-Buffet, Chief Executive Officer
of a Crédit Agricole Regional Bank
100%
Jean-Pierre Gaillard, Chairman of a Crédit Agricole
Regional Bank
100%
The Deputy General Manager, Chief Financial Officer, the Head of
Accounting and Consolidation, the Group Chief Risk Officer and the
Group Head of Control and Audit attend meetings of the Audit Committee,
as do, on an as-needed basis, the Head of Financial Communications,
the Head of Subsidiaries and Equity Investments and the Head of Group
Financial Steering.
The functioning and duties of the Committee are set out in Rules of
Procedure approved by the Board of Directors (see above). Once a year,
the Audit Committee organises a work meeting without management
presence in order to decide on its general agenda for the following year
and to examine any areas where it might improve. Against the backdrop
of the pandemic, the Audit and Risks Committees held joint meetings to
assess their common needs and carry out the necessary coordination.
It also reserves a part of one of its meetings during the year for a
discussion with the Statutory Auditors without senior management
being present.
During the last financial year, the Audit Committee held five
meetings. The attendance rate was 100%.
A substantial part of the Committee’s work involved an in-depth review,
in view of their presentation to the Board, of the annual, half-yearly and
quarterly financial statements and an examination of the consolidated
results and the results of each Group business line, their regulatory
position and the lines and integrity of financial communication.
At each reporting date, the Committee pays particular attention to the
accounting options (provisioning for liabilities, treatment of CVA/DVA/FVA,
issuer spread on securities issued, employment-related commitments,
ALM, etc.). On this occasion, it hears from the Statutory Auditors on the
conditions under which the financial statements were prepared and the
points to which the latter would like to draw the Committee’s attention.
At each half-yearly reporting date, in addition to their reports including
the specific annual report to the Audit Committee, the Statutory Auditors
submit their programme of work for the coming months to the Committee.
Changes in regulations and standards are systematically reviewed on
a quarterly basis.
In addition, each year, the Committee reviews the goodwill situation,
which, in 2020 resulted in advising the Board of Directors to record an
impairment for the value of CA Italia.
In accordance with the Rules of Procedure of the Audit Committee,
the Head of Group Control and Audit presented to the Committee the
elements of the Control and Audit department’s Audit Plan within its area
of expertise,
i.e.
essentially the missions of the Internal Audit business
line relating to financial risks for 2021.
Following the European audit reform transposed into French law by
the Order of 17 March 2016, the Committee also continued to monitor
Services other than the certification of financial statements performed
by the Statutory Auditors of Crédit Agricole S.A. and subject to its
authorisation under the conditions as renewed each year.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
134
Refer to the glossary on page 681 for the definition of technical terms.
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1. Report of the Board of Directors
1.3.4. The Joint Risk and Audit Committee
The Rules of Procedure of the Risk Committee and the Audit Committee provide for the possibility of uniting these two Committees. When
the Audit and Risk Committee was split into two Committees in 2015, in order to meet the new requirements of banking regulations, it
seemed useful for members of the Audit and Risk Committee to have, in certain fields, and a fortiori in areas where financial and prudential
information are interrelated, the same level of information and the opportunity to discuss with one another. The context of the 2020 crisis
strengthened this requirement. When regulations expressly require the Risk Committee to issue an opinion to the Board of Directors on the
information reviewed, this opinion is given by the Committee Chair. This practice of a Joint Committee is fully satisfactory to the members
of both Committees and can now be regarded as a permanent arrangement.
The Joint Risk and Audit Committee was composed of nine members
as at 31 December 2020:
Members
Attendance rate
Françoise Gri, co-chair of the Committee
and independent Director
100%
Catherine Pourre, co-chair of the Committee
and independent Director
100%
Caroline Catoire, independent Director
100%
Marie-Claire Daveu, independent Director
100%
Laurence Dors, independent Director
100%
Pierre Cambefort, Chief Executive Officer
of a Crédit Agricole Regional Bank
100%
Jean-Pierre Gaillard, Chairman of
a Crédit Agricole Regional Bank
100%
Jean-Paul Kerrien, Chairman of
a Crédit Agricole Regional Bank
100%
Gérard Ouvrier-Buffet, Chief Executive
Officer of a Crédit Agricole Regional Bank
100%
In 2020, the Risk Committee and the Audit Committee met eight
times in a joint meeting.
This large number of meetings takes into account the growing number of
areas in which accounting and prudential approaches are interconnected.
The entry into force on 1 January 2018 of IFRS 9, which, by substituting
the notion of “incurred loss” for that of “expected credit loss”, combines
an accounting and prudential approach to the assessment of risk and
its provisioning method. At the same time, reporting requirements
aggregating risk and accounting data are multiplying and led to the
creation in 2019 within the Accounting Department of a “Group Data
and Risk Finance Reporting” department made up of a mixed team.
As far as possible, legal risk, which has hitherto been dealt with in the
Risk Committee, is now dealt with in the Joint Committee so that the
members of the Audit Committee who examine the related provisions
for risks and charges have the same information.
As in previous years, the review of the budget for Crédit Agricole Group,
the results of the stressed budget and the risk appetite statement,
which are essential guidance for members of the two Committees,
were covered at a joint meeting.
In 2020, the Committee reviewed the crisis governance put in place
on 4 March 2020. The Committee was very attentive to simulations
of the impacts of the health crisis and in particular changes to the
profile, cost of risk and their translation in the provisions. For the
committee, the performed stress tests represented a first exercise
on the basis of the assumptions to be updated.
The following were also discussed in the Joint Committee meetings:
the Annual Internal Control Report and half-year interim information
on internal control;
structural IT projects such as the PALMA project (an ALM Group
Architecture project);
the findings of financial roadshows which, through the feedback
of questions and points of attention from investors, provide useful
information to both Committees to guide their work;
depending on the date of the meetings, shared information on the
Group’s solvency and liquidity positions, with a review of various
related ratios.
1.3.5. United States Risk Committee
At 31 December 2020, the US Risk Committee had three members,
including two independent Directors.
Members
Attendance rate
Françoise Gri, Committee Chairwoman
and independent Director
100%
Pierre Cambefort, Chief Executive Officer of a Crédit
Agricole Regional Bank
100%
Caroline Catoire, independent Director
100%
With a presence in the United States through Crédit Agricole CIB, Amundi
(the scope of which has increased with the acquisition of Pioneer) and
the activities of Wealth management, Crédit Agricole Group is subject
to Section 165 of the Dodd-Frank Act. This regulation requires foreign
banks operating in the US, and whose total consolidated assets do not
justify the creation of a holding company to head up its businesses, to
have a Board of Directors’ Committee dedicated to monitoring US risks.
It was within this framework that the United States Risk Committee was
established at the end of the first half of 2016.
US regulations recommend that this Committee should have at least
three Directors, one of whom is independent. Crédit Agricole S.A. has
opted for mostly independent members, including its Chairwoman, who
is also Chairwoman of the Risks Committee.
It holds four meetings a year, one of which is in the United States, in
accordance with a US Federal Reserve recommendation.
In 2020, the
health context was not conducive to organising the annual meeting
in the United States.
The Committee organises its work on the basis of an operational
note, which became a Group procedural note in 2017. This defines
the organisation and framework for consolidated risk management of
Group entities in the United States. This document, on which the Rules
of Procedure of the United States Risk Committee is based, is updated
on a regular basis in order to take into account the requirements of
the American supervisor and must be formally approved by the Board
of Directors.
Each United States Risk Committee Meeting is an opportunity for a
detailed review of credit risks, market risks and operational risks from the
Group’s activities in the United States.
Cyber risk,
which is the subject
of a specific regulation of the FED of New York, is closely monitored.
In addition, there are systematic reviews of ongoing audits by the US
supervisor(s) and the Control and Audit department, and an update on
legal and compliance risks.
The liquidity position,
which is a major focus area for the US authorities,
is discussed at each meeting. Once a year, following a review by the
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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1. Report of the Board of Directors
Committee, this leads to the approval by the Board of Directors of the
Liquidity Emergency Plan for the Group’s activities in the United States
and the Liquidity Risk Appetite Framework, includes credit risks. Similarly,
the Committee paid particular attention to the implementation of the
recommendations made by the American supervisor as part of its annual
“ROCA” (Risk, Operations, Compliance and Asset Quality) review. The
US Risks Committee Chairwoman is summoned to a hearing by the FED
supervisory team every year.
Along with recurring topics, at the Committee’s request an in-depth
report is presented on Group entities in the United States and on
the activities and/or business lines in that country.
In 2020, electoral year in the US, the Committee remained very
attentive to the health and social context in which it operates in
the country and reviewed:
the impacts of the COVID-19 pandemic;
the situation of Crédit Agricole CIB New York, CAIWM Miami and
Amundi Pioneer entities;
activities in Central and Latin America;
cyber security risks;
the situation of non-compliance risks in CUSO;
new products and activities.
1.3.6. Compensation Committee
At 31 December 2020, the Compensation Committee had six Directors,
including three independent Directors and one Director representing
employees and a permanent guest (Agnès Audier, non-voting Director).
Members
Attendance rate
Laurence Dors, Committee Chairwoman
and independent Director
100%
Marie-Claire Daveu, independent Director
100%
Daniel Épron, Chairman of a Crédit Agricole
Regional Bank
100%
Françoise Gri, independent Director
100%
François Heyman, Director representing employees
100%
François Lheureux, Chairman of a Crédit Agricole
Regional Bank
100%
The composition of the Committee complies with legal provisions and
the recommendations of the AFEP/MEDEF Code, with a majority of
independent Directors, one of whom is the Committee Chair, and the
presence of an employee representative.
The Crédit Agricole Group Head of Human Resources attends
Compensation Committee Meetings accompanied by the Head of
Compensation and Employee Benefits.
The functioning and duties of the Committee are set out in Rules of
Procedure as approved by the Board of Directors. The Committee
performs the duties conferred upon it by the AFEP/MEDEF Code and
the French Monetary and Financial Code (particularly Article L. 511-102),
as well as preparing compensation-related tasks for which the Board of
Directors is responsible under the French Commercial Code (particularly
Article L. 22-10-8).
In addition, in accordance with the provisions of Article L. 511-91
of the French Monetary and Financial Code and the decision of the
Board of Directors of 17 December 2013, the functions assigned to
the Compensation Committee under the aforementioned article are
performed by the Compensation Committee of Crédit Agricole S.A. for the
following subsidiaries: LCL, Crédit Agricole Assurances, Crédit Agricole
Consumer Finance, Crédit Agricole Leasing & Factoring and CACEIS.
The Compensation Committee met seven times in 2020. Its Chairwoman
reported to the Board on the work accomplished by the Committee at
each of its meetings and submitted the Committee’s recommendations
on matters subject to approval by the Board.
Although the Committee’s agenda is mainly in line with the regulatory
calendar, the debates within the Committee are guided by the concern for
reconciling transparency requirements and the alignment of market place
best practices with the general philosophy of the compensation policy of
Crédit Agricole which strives to find a balance between attractiveness
and moderation.
Its work is in line with the roadmap which was first confirmed in 2019
by the adoption of structuring measures with:
the introduction of a combined mechanism of insurance policy known
as Article 82 and AGA to replace the defined-benefit pension scheme
and which strengthens the alignment of the long-term interests of
executives and shareholders;
the modifications made to financial and non-economic criteria of the
variable compensation of Executive Corporate Officers.
The work continued in 2020 with in particular, two major ongoing projects
pertaining to:
the integration into the deferred variable compensation structure
for Executive Corporate Officers of the consequences of the Capital
Requirements Directive V which changes the minimum vesting period
from three to five years;
the revised CSR performance criteria of deferred compensation plans,
currently based on the FReD indicator, innovative when launched but
whose construction and legibility are no longer considered by the
Committee as suitable to market expectations.
The project resulted in proposals approved by the Board of Directors of
15 December 2020, integrating both compliance with the new regulatory
measures and adaptations to the deferred variable compensation
structure, bringing it closer to that of its peers.
In addition to its annual programming, the Committee dedicated three
special meetings to the project on revising the CSR performance criteria
for deferred compensation plans, thus making much progress and
expecting to complete it in 2021. The project still needs to be adjusted
with respect to the orientations to be taken by the Strategy and CSR
Committee on the priorities that Crédit Agricole intends to assign itself
under the CSR Pillar of its Group Project. The projects seek to arrive
at proposals that can be presented to the General Meeting of 2022.
Since the entry into force of the “say on pay” reform, the Committee
was particularly aware that the transparency of information pertaining
to the compensation of Executive Corporate Officers and identified
employees was aligned with the highest standards. As every year, after
the General Meeting, the Committee examined, in the presence of the
Head of Financial Communication, the results of the vote on resolutions
relating to the compensation of Executive Corporate Officers in order to
draw conclusions for the next General Meeting and for the governance
roadshows held prior to the meeting.
In anticipation of the General Meeting on 12 May 2021, the Committee
in its meetings reviewed all resolutions on the compensation of the
Executive Corporate Officers approved by the Board at its meeting on
10 February 2021.
As part of the Board’s regulatory obligations, the Committee also examined
the compensation of individuals with supervisory responsibilities (Risk,
Control & Audit, Compliance), the budget for the variable compensation
of identified employees and individual variable compensation over
€1 million.
It also considered the “compensation” section of this Board report on
Corporate Governance prior to the Board’s approval of the entire current
Corporate Governance Report on 10 February 2021.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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1. Report of the Board of Directors
In addition to the work described, other matters examined by the
Committee in 2020 included:
the update of Crédit Agricole S.A. Group’s Compensation policy,
submitted for the Board’s approval, and the results of the annual
audit on the Compensation policy;
the overall budget for variable compensation within the Group, by entity
and according to the appropriate schemes (bonus pool or individual
variable compensation);
the report in respect of 2020 on the compensation policy and practices
of members of the executive body, as well as individuals whose
professional activities have a significant impact on the Company’s
risk profile.
1.3.7. Appointments and Governance Committee
Pursuant to the provisions of the AFEP/MEDEF Code, the Committee is chaired by an independent Director. However, the proportion of
independent Directors on the Appointments and Governance Committee is below AFEP/MEDEF recommendations but reflects the capital
structure of Crédit Agricole S.A., which is controlled by a majority shareholder and where the Chief Executive Officer is from one of the
39 Crédit Agricole Regional Banks that control it. This situation is reported in the table of non-compliance with the AFEP/MEDEF Code.
At 31 December 2020, the Appointments and Governance Committee
comprised six members.
Members
Attendance rate
Monica Mondardini, Committee Chairwoman,
independent Director
100%
Raphaël Appert, Deputy Chairman of the Board
of Directors, Chief Executive Officer of a Crédit
Agricole Regional Bank
100%
Laurence Dors, independent Director
100%
Jean-Pierre Gaillard, Chairman of a Crédit Agricole
Regional Bank
100%
Dominique Lefebvre, Chairman of the Board
of Directors, Chairman of a Crédit Agricole Regional
Bank
100%
Louis Tercinier, Chairman of a Crédit Agricole
Regional Bank
100%
The functioning and duties of the Committee are set out in Rules of
Procedure as approved by the Board of Directors.
The Corporate Secretary of Crédit Agricole S.A. and Secretary of the Board
of Directors take part in meetings of the Appointments and Governance
Committee. The Chairwoman of the Appointments and Governance
Committee reports to the Board on its work and on the Committee’s
opinion on matters referred to it for approval.
The Committee met four times in 2020.
Prior to the General Meeting, the Appointments and Governance
Committee examined the situation of Directors whose terms of office
were up for renewal with regard to the criteria of availability, competence
and good repute.
it defined the selection process for future independent Directors and its
schedule, taking into account the fact that at the General Meeting of 12
May 2021, four directors, three of whom are independent Directors, will
leave the Board of Directors of Crédit Agricole S.A., either because they
have reached the age limit or because they have required the maximum
number of four terms of office legally allowed over a period of 11 years.
In this respect, the Committee proposed to the Board the candidacy of
Agnès Audier
, former Associate Director at the Paris office of Boston
Consulting Group to replace Laurence Dors affected by the age limit
at the 12 May 2021 General Meeting and the candidacy of
Marianne
Laigneau
, Chairwoman of Enedis to replace Monica Mondardini who
will leave the Board at the 12 May 2021 General Meeting, as she has
reached the maximum number of four terms of office legally allowed
over a period of 11 years. It also proposed the candidacy of
Alessia
Mosca
, Professor at the Paris Institute of Political Studies to replace
Caroline Catoire, who has reached the statutory age limit. The Committee
reviewed their situation with respect to the independence criteria of the
AFEP/MEDEF code and noted that the relations between Crédit Agricole
Group and Boston Consulting Group and Enedis cannot be considered as
situations of dependence. The Committee, subject to a review of their
situation after the General Meeting of 12 May 2021, recognised them
as independent Directors. The same applies to Alessia Mosca who does
not hold a term of office in any business corporation.
The Committee also recommended to the Board the co-optation of
Nicole Gourmelon
, Chief Executive Officer of the Regional Bank of
Atlantique-Vendée as of 1 October 2020, to the position vacated by Renée
Talamona, for the remaining period of her term of office,
i.e.
, until the
General Meeting of May 2021. This co-optation will be submitted to the
General Meeting of Shareholders of 12 May 2021 for ratification, at the
end of which a proposal will also be made for its renewal for three years.
The Committee also reviewed the candidacy of Olivier Auffray, Chairman
of the Regional Bank Ille-et-Vilaine, proposed as a replacement for
Philippe de Waal who has reached the age limit.
It organised the self-assessment campaign on the functioning and
competences of the Board of Directors and, in the light of the results and
suggestions, proposed concrete measures to address them (see below).
In 2020, the Committee heard the Chief Executive Officer regarding the
succession process for key functions and the Group Human Resources
Director on the measures to promote gender equality at work, including
in decision-making bodies. Upon the proposal of the Chief Executive
Officer, the Committee played an advisory role in the succession process
of the Chief Executive Officer of Amundi, Deputy General Manager of
Crédit Agricole S.A., Head of Savings Management and Property.
It was kept informed of governance-related regulatory changes.
The Committee monitored the process for electing a Director representing
employee shareholders, for which it defined the regulation in accordance
with the law of 22 May 2019.
It also defined two procedural notes of the Board as required by the law
of 22 May 2019, including on the recognition of the CSR issues of its
activity and another on current agreements. The Committee formalised
the succession process of the Chairman and Chief Executive Officer
in a Board procedural note which will be appended to its Rules of
Procedure but not published. This note addresses a marketplace best
practice as well as the requests expressed by some Directors during
the 2020 Board review.
Lastly, it reviewed the scores as well as the opposition rate of the
resolutions submitted to the 2020 General Meeting, in particular those
with the highest opposition rate. When it approved this Report on
corporate governance submitted to the Board on 10 February 2021,
the Committee reviewed all resolutions on governance in view of the
12 May 2021 General Meeting.
At the end of the Governance roadshows conducted in January 2021,
the Committee began thinking about a potential report on the statutory
age limit of 65 years that several investors now consider as too low.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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1. Report of the Board of Directors
While aware of its inherent drawbacks, the Committee suggested to
the Board to maintain it considering that it continues to be leverage
for generational review.
1.3.8. Strategy and Corporate Social
Responsibility (CSR) Committee
At 31 December 2020, the Committee comprised seven members.
Members
Attendance rate
Dominique Lefebvre, Chairman of the Board
of Directors, Chairman of a Crédit Agricole Regional
Bank
100%
Raphaël Appert, Deputy Chairman of the Board
of Directors, Chief Executive Officer of a Crédit
Agricole Regional Bank
100%
Daniel Épron, Chairman of a Crédit Agricole
Regional Bank
100%
Nicole Gourmelon, Chief Executive Officer
of a Crédit Agricole Regional Bank
100%
Françoise Gri, independent Director
100%
Catherine Pourre, independent Director
67%
Louis Tercinier, Chairman of a Crédit Agricole
Regional Bank
100%
The establishing of this Committee was decided by the Board of Directors
in 2003, first as the Strategy Committee and then, from 2015 on, as the
Strategy and CSR Committee, with an extension of its area of expertise.
While the AFEP/MEDEF Code for a long time provided that strategic
guidelines could be examined by an
ad hoc
Committee, without issuing
a recommendation on how this Committee should operate, the inclusion
of Corporate Social Responsibility into the Board’s area of expertise
was incorporated in the revised version of the Code in 2018. In respect
of the information provided in this field, Crédit Agricole S.A. meets
the recommendations of the French Financial Market Authority (AMF),
which, in its November 2016 report on Corporate Social Responsibility,
recommends that detailed guidelines be given regarding the frequency
at which sustainable development and corporate social responsibility
matters should be included on the Committee’s agenda, while also
specifying its duties and results and its interaction with other Board
Committees.
The functioning and duties of the Strategy and CSR Committee is
described in its Rules of Procedure, amended in 2016 to allow it to
meet whenever the need arises, rather than according to an annual
schedule. This method of operation was in response to a request from
its members, made as part of the annual evaluation of the Board and
to the wishes of the Chairman and the Chief Executive Officer. This
flexibility renders it possible to involve the Board as early as possible
in the process of considering disposals and acquisition transactions.
In its January 2020 revised version, the AFEP/MEDEF Code adds
monitoring of non-financial information drafting to the area of expertise of
the Audit Committee. As this task is already carried out within the Board
of Directors of Crédit Agricole S.A. by the Strategy and CSR Committee,
in coordination with the Appointments and Governance Committee, it
was decided that non-financial information and non-financial ratings
would remain within the area of expertise of this Committee. Similarly,
(1) Please refer to the glossary for the definition of Raison d’Être.
the non-financial risks that the AFEP/MEDEF Code assigns to the Audit
Committee, remain within the area of expertise of the Risk Committee,
a mandatory committee in the banking sector and not listed in the
committees recommended by the AFEP/MEDEF Code.
While the review of Crédit Agricole S.A. Group’s CSR policy is primarily the
responsibility of the Strategy and CSR Committee, the Board of Directors
has also adopted a cross-functional approach involving, depending on
the subject, most of the Specialised Committees.
The Committee held four meetings in 2020, including two that mainly
focused on actions carried out in the areas of CSR and strengthening
social cohesion.
The Committee monitored the tangible progress made in the structuring
and the achievements of the Societal Project, enshrined in the Group’s
purpose
(Raison d’Être
(1)
)
“Working every day in the interest of our
customers and society”.
Finally, under employment-related commitments, Crédit Agricole has
taken measures to promote the integration of young people and access
to employment. A new impetus was given to the Youth Plan in 2020,
by doubling the annual number of students accepted on work-study
programmes within the Group, with the aim of reaching 6,000 by 2022.
In 2020, across Crédit Agricole Group as a whole, 750 Year 10 pupils
from disadvantaged areas were offered work experience placements;
including 300 in Crédit Agricole S.A.
Other actions included in the assessment reviewed by the Committee
are, e.g. the partnership with the National Museum of Natural History
to support actions to protect and conserve sites and support scientific
research on biodiversity.
For 2021, the objectives set by Executive Management and the
Strategy and CSR Committee are to expand the various initiatives and
commitments, in particular the need to:
strengthen the societal dimension of the Medium-Term Plan through
an ambitious Group governance already in place and find the right
balance to drive momentums at Crédit Agricole S.A.;
provide the CSR department with the capacity to monitor, steer or
coordinate initiatives inherent in its remit through the reference
memorandum on Group employment-related commitments;
set up a non-financial reporting Platform capable of addressing the
challenge of implementing the Group’s societal targets and in particular
the recognition by the Board of the environmental and societal issues
of its activity;
improve communication on the Group’s actions on energy transition
issues.
The Committee also monitored the drafting and application of a Board
procedural note on recognising the social and environmental challenges
of its activities, analysed together with the Appointments and Governance
Committee.
For the record, the Strategy and CSR Committee is also monitoring
the preparation of the Integrated Report, which will be the fourth such
report in 2020, providing a strategic and forward-looking vision of the
Company, integrating financial and CSR data.
(For strategic files and disposals and acquisitions that are publicly
available and were presented to the Board in 2020, see sub-section
1.2.2.: “Summary of matters examined by the Board in 2020 further to
review by, advice from and/or on the recommendation of the Specialised
Committees”.)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
138
Refer to the glossary on page 681 for the definition of technical terms.
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1. Report of the Board of Directors
1.4. DUTY OF VIGILANCE
Legal framework
Law No. 2017-399 of 27 March 2017 on the duty of vigilance of parent
companies and contracting companies applies to Crédit Agricole S.A.
As a parent company, Crédit Agricole S.A. corporate entity has opted for
preparing a vigilance plan and reporting on its effective implementation
for Crédit Agricole S.A. corporate entity and the companies it directly
or indirectly controls. These are together being referred to as “Crédit
Agricole S.A.”.
The vigilance plan includes, in accordance with the law, reasonable
measures to identify risks and prevent serious violations of human rights
and fundamental freedoms, the health and safety of persons and the
environment, which could potentially result from the activities of Crédit
Agricole S.A. corporate entity and of the consolidated companies over
which Crédit Agricole S.A. corporate entity exercises control, as well
as from the activities of sub-contractors or suppliers with whom an
established commercial relationship is maintained, when such activities
are related to that relationship.
Our commitments
Our vigilance measures are in line with the fundamental principles to
which we adhere and the applicable international rules and regulations,
in particular with regard to respect for human rights, the fight against
modern slavery, the prevention of attacks on human health and safety,
the protection of the environment and, in particular, the development of
“climate finance” (see Chapter 2, part 4.3 “Recognition of Non-Financial
Performance by Stakeholders”).
Beyond the applicable regulatory base, our commitments are based
on our purpose: “Acting every day in the interest of our customers and
society”. Thus, environmental, social and societal issues are at the heart
of the Group 2022 strategic project, which will guide our actions in the
coming years through three flagship projects: the customer project, the
human project and the societal project (https://www.credit-agricole.
com/notre-groupe/notre-projet-de-groupe/notre-vision).
To carry out these projects while exercising its banking-insurance
business in a responsible manner, Crédit Agricole Group has chosen to
promote a strong culture of compliance and ethics. Particular attention
is paid to the impact of our activities on people and the environment in
order to achieve our goals and meet our commitments to customers,
employees, partners and society.
Our ethical principles
Our commitments are reflected in policies that formalise the principles
of compliance and ethics as applicable within our Group and in our
relationships with our customers, suppliers, service providers and
employees (see Chapter 2, part 2.4.2 “A Strong Culture of Ethics”).
The Code of Ethics
shared by Crédit Agricole Group since 2017, sets
the framework for the Group’s principles regarding business action
and conduct. The principles described in this charter also include
measures to prevent corruption and are intended to be integrated
into the internal control procedures of the entities.
Codes of Conduct
implemented by the entities of Crédit Agricole S.A.
operationally describe the principles of the Code of Ethics. These Codes
of Conduct have been presented to the Boards of Directors of each
entity for consideration. Their implementation is part of the process
of controlling the risks of non-compliance.
The Board of Directors of Crédit Agricole S.A. is strongly involved in
promoting an ethical culture within the Group. It approved and monitored
the deployment of the Code of Ethics and its implementation in the
form of Codes of Conduct. The Board integrates the examination of CSR
issues and policies within the remit of its Strategy and CSR Committee,
which, in conjunction with the Appointments and Governance Committee,
monitors ethical issues within the Group.
In 2020, a programme to foster a culture of ethics was implemented
with the aim of educating the employees of Crédit Agricole S.A. on ethics
and assessing their level of ethical culture using common indicators.
Managing and monitoring the vigilance plan
The vigilance plan is managed and monitored at the highest level of Crédit
Agricole S.A. The Board of Directors has been informed of the procedures
for implementing the vigilance plan in its meeting of 13 May 2020.
With regard to social and environmental issues and risks, the Board
has adopted a cross-functional approach involving, depending on the
subject, most of its Specialised Committees, primarily the Strategy and
CSR Committee, but also the Appointments and Governance Committee,
the Risk Committee and the Compensation Committee, which enables
the Board to be fully informed and facilitates the inclusion of these
matters in its deliberations (see Chapter 3, part 1.2 “Activity of the Board
in 2020” and 1.3 “Activities of the Board’s Specialised Committees”).
The CSR Committee of Crédit Agricole S.A., chaired by the Corporate
Secretary, member of the Executive Committee, approves the guidelines
and monitors the implementation of the vigilance plan and the associated
action plans. Twice per year it is responsible in the capacity of “Committee
on the duty of vigilance” and keeps the Executive Committee updated.
The management of the vigilance plan is entrusted to the CSR
department, under the responsibility of the Corporate Secretariat, in
collaboration with the Group departments overseeing Purchasing, Legal,
Risk, Compliance, Human Resources, Safety and Security, as well as
with the Crédit Agricole S.A. subsidiaries.
Our approach
For financial year 2020, the Crédit Agricole S.A. vigilance plan consisted
of:
the process of risk mapping for the identification, analysis and
prioritisation of risks of serious violations that its activities could
potentially cause to fundamental human rights and freedoms, the
health and safety of persons, and the environment. This approach
is reflected in the description of the methodology used as well as a
summary of the risks identified and the associated areas of vigilance;
prevention or mitigation measures and assessment procedures
implemented within Crédit Agricole S.A. to prevent these risks;
a mechanism for alerting and receiving alerts relating to the existence
or realisation of such risks;
a system for monitoring the actions implemented and evaluating their
performance. This mechanism, which includes monitoring indicators,
is presented in the report on the implementation of the vigilance plan.
More detailed information on policies and action plans is given in the
non-financial performance statement (see Chapter 2, “Non-Financial
Performance”).
Pursuant to the regulations, the report on the effective implementation
of the vigilance plan is published each year for the financial year ending
31 December.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
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The approach of the Vigilance plan is based on the principle of continuous
improvement. As a result, the tools used to identify and manage risks
and the measures implemented to prevent these may change in the
light of the results of risk mapping approaches, changes in the activities
financed and those induced by the operations of Crédit Agricole S.A.,
as well as priority CSR issues. In this light, the indicators for monitoring
the implementation of the vigilance plan, which were defined in 2020,
may change or be supplemented with new indicators for subsequent
financial years.
Methodology for identifying and managing
the risks referred to in the current vigilance
system
Identification of risks
In line with the law, the scope of the vigilance plan of Crédit Agricole S.A.
includes employees, suppliers and sub-contractors with whom it has
an established relationship, and covers the main activities of Crédit
Agricole S.A. in the exercise of its business as banker and insurer,
i.e.
its
financing and investment activities as well as the distribution of financial
and insurance products and services to its customers.
The risk identification process is based on two steps:
a first step to identify generic risks with regard to the areas of vigilance
covered by the law and the commitments of the Group;
a second step to identify the risks of major impacts specific to our
activities that require particular vigilance.
With regard to the areas of vigilance covered by the law and the
commitments of Crédit Agricole S.A. with regard to CSR, the generic
risks of serious violations of human rights, fundamental freedoms and
the health and safety of individuals that we have identified are:
the use of forced labour, slavery and child labour;
the violation of the rights of indigenous peoples, including their right
to property;
discrimination and harassment in the workplace;
failure to respect freedom of association and the principle of collective
bargaining;
violations of the health and safety of persons;
the lack of decent working conditions, compensation and social
protection;
violating the right to privacy.
In terms of environmental protection, the identified serious risks of
damage are:
the worsening of climate change and associated climate risks;
excessive consumption of natural resources;
pollution and degradation of soil, air and water quality;
the loss of biodiversity;
the proliferation and non-treatment of waste.
In order to identify and assess the significant risks directly related to our
activities, in the areas covered by the law on the duty of vigilance, our
approach is based on priority CSR issues (deemed to have major impacts
for stakeholders and the Group) which contain both opportunities and risks.
In 2020, the risks thus identified were also assessed in light of the
methodological framework for identifying social and environmental risks
presented in the non-financial performance statement, which covers
a broader scope than the scope of application defined by the law on
the duty of vigilance. This approach is structured in four stages: the
formalisation of four non-financial areas corresponding to the Group’s
purpose, the cross-referencing with the areas of action defined in
ISO 26000, which made it possible to identify some 30 non-financial
challenges and then, with regard to these challenges, the identification
of some fifteen significant potential non-financial risks and the inclusion
of the perception of the stakeholders on the challenges deemed to be
the most significant. The consultation of our stakeholders, carried out
every two years, enables us to analyse the significant risks that we
identify with regard to their expectations and the non-financial issues
that they perceive to be the most significant (nearly 1,800 individuals
representing customers and the general public were consulted as part of
a CSR barometer in 2020). See Chapter 2, part 1 “Non-financial risks”.
In this context, Crédit Agricole S.A. has identified the main areas in which
its activities have a major socio-economic impact and could therefore
carry significant direct risks to respect for human rights and fundamental
freedoms, human health and safety and environmental impact.
This approach made it possible to identify the following areas of vigilance:
Relationships with the customers of Crédit Agricole S.A.:
-
preventing risks related to cybercrime and ensuring the security of
customers’ personal data and transparency of their use;
-
preventing discrimination in access to financial services offered
by entities of Crédit Agricole S.A.
Relationships with employees of Crédit Agricole S.A.:
-
maintaining occupational health and ensuring equity in social
protection;
-
ensuring the safety and security of employees;
-
combating discrimination;
-
maintaining a social dialogue within the Group.
Relationships with suppliers and sub-contractors of Crédit
Agricole S.A.:
-
ensuring that suppliers and sub-contractors with whom we have
an established relationship accept commitments related to the
vigilance system of Crédit Agricole S.A.;
-
assessing and managing significant environmental, societal and
governance (ESG) risks in our purchasing.
Financing and investment activities of Crédit Agricole S.A.:
-
assessing and managing major direct environmental, social and
governance (ESG) risks in financing and investments;
-
paying particular attention to climate risk management in financing
and investing.
Risk management systems
The Group exercises vigilance within the framework of existing risk
management systems (see Chapter 5, “Risk management” and Chapter 2,
part 3 “ESG risk management”).
In order to achieve its strategic orientations while managing and
mitigating its risks appropriately, the Group has established a risk appetite
framework, consisting of two main elements: the Risk Appetite Statement
and all the instruments declaring and ensuring compliance with the risk
appetite statement. These include key indicators for each type of risk. The
Risk Appetite Statement, submitted annually to the Board of Directors of
Crédit Agricole S.A. for approval, is a decisive element for the control and
monitoring of governance risks. This statement includes a key indicator
relating to climate risk. In addition to quantitative indicators, the Group’s
risk appetite is also expressed through qualitative indicators based on
the Group’s CSR strategy and policies with the aim of controlling all
risks, including non-financial risks.
CRÉDIT AGRICOLE S.A.
—
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The overall strategy and risk appetite of Crédit Agricole S.A. and the
Crédit Agricole Group is reviewed by the Board of Directors, which relies
on the work carried out by its Specialised Committees, in particular
the Risk Committee. It analyses the Risk Strategies of the entities and
business lines before proposing their approval to the Board.
Prior to review by the Board, the Group Risk Committee chaired by
the Chief Executive Officer of Crédit Agricole S.A. approves the Risk
Strategies presented by the entities and business lines. These strategies
require the prior opinion of the Risk Department and, an opinion of the
CSR Department for strategies applying to business sectors in which
the social and environmental impacts are potentially high. In particular,
it approves the Climate Strategy developed jointly and reviewed each
year by the Risk Department and the CSR Department (cf. Chapter 2,
part 2.2.2 “Governance of non-financial performance” and part 3 “ESG
risk management”).
In accordance with the Decree of 3 November 2014, a dedicated
procedure is in place to control the risks related to the Group’s activities,
describing in particular the respective responsibilities of its three lines
of defence within the internal control system (business lines in the
first place, permanent control exercised by the Risk Management and
Compliance business lines in the second place, Audit-Inspection in
the third).
Moreover, the prevention of ESG risks as part of the operational risk
management system, which includes the risk of non-compliance, legal
risk, the risk of internal and external fraud and the risks generated by
the use of key outsourced services (PSEE), is formalised in a set of
common standards and procedures.
The identification and qualitative assessment of risks is carried out
through risk mapping, carried out annually by the business lines and
entities in accordance with the specific characteristics of their business
sector. Risk indicators are set up for processes with major impact risks
and, if necessary, improvement action plans are defined.
Compliance standards and the system for monitoring non-compliance
risks are described in an
ad hoc
body of rules
(Corpus Fides).
Finally,
a dedicated control system, incorporating a procedure for managing
irregularities and reporting alerts, ensures that non-compliance risks
are managed, particularly with regard to non-compliance with rules
relating to financial and banking activities, professional and ethical
standards, instructions, ethics in professional conduct, as well as in
the fight against money laundering, corruption or terrorist financing,
and respect for the integrity and transparency of the markets. Within
the Compliance business line, each Compliance Manager updates a
mapping of non-compliance risks, consolidated by the Group Compliance
department.
Report of the implementation of measures
to prevent or mitigate these risks
Relationships with the customers of Crédit Agricole S.A.
In its business of distributing financial and insurance products and
services to its customers, Crédit Agricole S.A. has identified two areas
requiring particular attention.
Preventing the risks associated with cybercrime
and ensuring the protection of personal data
and transparency in their use
Crédit Agricole S.A. is particularly attentive to strengthening the
Group’s resilience in the light of the magnitude of IT risks, particularly
cyber-threats, in terms of governance, organisation and IT projects. Our
cyber security strategy is based on operational governance, dedicated
policies and a decentralised organisation that relies on stakeholders
present within each entity, the implementation of security standards and
regulations to integrate cyber security at all levels of the information
system (IS). The analysis of cyber risks is carried out systematically
from the design phase of projects impacting IS with a “Security by
design” approach. Crédit Agricole S.A. is actively raising awareness
and developing a “cyber risk” culture among its employees, customers
and suppliers in order to change practices and promote the acquisition
of habitual behaviours, which are essential in terms of cyber security.
These provisions of various and complementary natures (technical,
organisational, behavioural) make it possible to reduce the probability of
occurrence of cyber risks or limit their effects. They are described in detail
in Chapter 2, part 2.4.6 “Cyber security and combating cyber-crime”.
The Group has adopted a normative framework for the protection of
personal data by implementing, in 2017, a personal data Charter, co-
created with customers. It is based on five key principles (data security,
utility and loyalty, ethics, transparency and pedagogy, customer control).
The commitments made in that charter ensure that customers have
control over their data and their use and are fully consistent with the
implementation of the European regulation on the protection of personal
data.
In 2018, a set of standards and procedures relating to the management
and protection of personal data, including employee data, was distributed
to all Crédit Agricole S.A. A comprehensive programme of mandatory
compliance training is deployed for all employees in France and abroad
(see Chapter 2, part 2.4.2 “A Strong Ethical Culture”).
Avoiding discrimination in the access to financial
and insurance products and services by supporting
the most financially vulnerable customers
In order to be useful to all its customers and to prevent the risk of
discrimination in access to financial and insurance services, Crédit
Agricole has been committed for several years to a process of financial
inclusion and support for the most financially vulnerable customers.
The Group shows its commitment to this approach by committing
to preventing over-indebtedness and improving access to credit and
insurance for those customers. To illustrate, the Group offers products
that are accessible to all, such as LCL Essentiel.
To prevent and manage situations of over-indebtedness, specific support
measures (personalised support agency, national unit and adapted offer)
have been set up by Crédit Agricole Consumer Finance and LCL; these
can be offered to customers when a situation of financial vulnerability
is found.
Within Crédit Agricole Assurances, in the area of health insurance Pacifica
offers a Complementary Solidarity Health offer (resulting from the merger
in 2019 of the ACS and CMU-C schemes) with a regulated and free or
subsidised single level of cover. Crédit Agricole Assurances also abides
by the AERAS agreement, which facilitates access to insurance and loans
for persons who currently have or have had serious health problems,
and offers adapted policies through its subsidiary, CACI, a loan insurer.
As France’s leading provider of housing finance, the Crédit Agricole Group
contributes more specifically to social housing. In November 2020, LCL
signed a partnership with Action Logement, a leading player in social
housing, which will give its customers access to personalised advice
and a wider range of services.
In 2020, the Crédit Agricole Group is specifically committed to supporting
its SMEs and small businesses, corporates and farmers at a time of health
crisis, notably by ensuring the distribution of State-guaranteed loans, with
a total amount of €26.9 billion granted to more than 178,000 customers.
In addition, it has awarded up to more than 550,000 moratoriums and
extensions. From April 2020, at the time of the first lockdown, the Group
CRÉDIT AGRICOLE S.A.
—
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also set up a €200 million mutual support scheme for professionals,
aimed at all policyholders who have taken out professional multi-risk
insurance with a cover for business interruption (Chapter 2, part 2.4.1
“A universal approach to our businesses: being there for everyone”).
Relationships with employees of Crédit Agricole S.A.
On 31 July 2019 Crédit Agricole S.A. has signed an International
Framework Agreement with the global union federation for the private
services industry, UNI Global Union. This global agreement covers human
rights, fundamental labour rights and the development of social dialogue.
It reinforces the commitments of Crédit Agricole S.A. by offering the
same social basis to all its employees, regardless of where they work,
and by helping to improve working conditions. This agreement provides
a frame of reference for Crédit Agricole S.A.’s 75,000 employees in the
47 countries where it operates.
Maintaining occupational health and ensuring equity
in social protection
Crédit Agricole S.A. ensures that its facilities provide a working
environment that protects the health of its employees and provides
prevention, information and support services for employees (free
screening campaigns and vaccination, ergonomic advice, nutrition and
stress management, personalised support for employee carers, etc.).
Measures to prevent psycho-social risks (toll-free numbers, listening
units) are deployed throughout Crédit Agricole S.A. In addition, specific
attention is paid to the situation of employees in light of organisational
transformations and, if necessary, accompanying measures are put in
place (training, awareness-raising, collective agreements).
Crédit Agricole S.A. is also actively involved in the social protection of all
its employees, particularly in matters related to health, retirement, death,
short and long-term disability. Accordingly, in 2017, a supplementary
hospitalisation scheme was implemented at the Crédit Agricole S.A. level
in France. In 2020, the implementation of the Take Care programme
was completed for all the entities concerned. It made it possible to
strengthen health and provident schemes (death, short and long-term
disability coverage) in four countries of the International Retail banking
business line (Egypt, Morocco, Serbia and Ukraine).
The International Framework Agreement of 31 July 2019 includes a
strong commitment to parenthood as it sets out the principle of 16
weeks paid maternity leave for all employees of Crédit Agricole S.A. as
of 1 January 2021. It also recommends that entities introduce adoption
or paternity leave in order to take into account the different situations
of parenthood.
Lastly, the Agreement includes a major commitment to employee benefits
(short and long-term disability, death and health); it calls for an inventory
of all employee benefits systems in effect in the entities, in order to
map current practices in relation to their national and professional
context. This mapping was carried out in 2020 and showed the absence
of any failure to comply with the legal obligations required locally in
terms of health and welfare. It will be updated in 2021 (see Chapter 2,
part 2.4.3.3 “Strengthening the framework of trust between employees
and the company”).
Ensuring the safety and security of employees
Crédit Agricole S.A. ensures the safety and security of its employees
and persons on its premises.
In 2020, following the health crisis caused by the COVID-19 outbreak,
the Group’s attention was particularly focused on the measures to be
taken to protect the health and safety of the Company’s employees and
their working conditions. The Group has taken numerous measures
in this regard, working in conjunction with occupational health
services and employee representatives, in line with the decisions and
recommendations of the public authorities (see Chapter 2, part 2.4.3.3
“Strengthening the framework of trust between employees and the
company”).
In addition, specific measures are also deployed to ensure the safety of
employees during business travel as well as for expatriate employees.
Risk prevention actions specific to employees in contact with customers
or who travel frequently by road are implemented.
A procedure describing the general framework, organisation and operation
of the Physical Security and Safety Business Line and recalling the tasks
entrusted to the Physical Security and Safety Department (
Direction
sécurité-sûreté
—DSS) was published in 2018 and distributed within the
Crédit Agricole Group. It will be updated in 2021 and supplemented by
incorporating operational policies (security of non-commercial buildings,
business travellers and expatriates, events organised by the Group,
protection of executives, crisis monitoring and management, physical
security and safety controls), in line with the ongoing review of the
Group’s operational policies and security standards.
In 2018 and 2019, as part of the implementation of Crédit Agricole S.A.’s
Individual Security Plan, e-learning training on what to do in the event
of a terrorist attack was offered to all employees. In addition, “first
response team members” have been trained in the containment strategy
The reasons and practical details of this approach were presented to
the Consultation Committee, which includes all the representative trade
unions within Crédit Agricole S.A.
The Safety and Security Department ensures compliance with regulatory
obligations and the implementation of the Group’s security policy at
all Crédit Agricole S.A. sites, in particular by ensuring that employees
are trained in fire safety. In this context, with the support of IFCAM and
other Crédit Agricole S.A. entities, it has designed an e-learning training
course on what to do in the event of security incidents such as fire or
rescue. This training, which has been approved by the Group Safety
Committee, has been mandatory since the end of 2020 for all Crédit
Agricole S.A. entities and is offered to the Regional Banks.
Combating discrimination
Crédit Agricole S.A. is a signatory of the Diversity Charter and it has
already been committed to an approach aimed at promoting diversity
and gender balance for several years. This diversity policy, which is
based on the principles of non-discrimination and the integration of
career and age diversity, takes the form of agreements on topics such
as non-discrimination in recruitment, training, promotion, compensation
and the life-work balance. Training and awareness-raising activities are
regularly implemented within Crédit Agricole S.A. and annual indicators
make it possible to monitor the results of the measures implemented.
CRÉDIT AGRICOLE S.A.
—
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Refer to the glossary on page 681 for the definition of technical terms.
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Furthermore, in order to help reduce unjustified wage gaps between
women and men, a gender equality index has been created pursuant
to the Law of 5 September 2018 on the freedom to choose one’s
professional future. This index allows companies to measure their
progress in this area and, if necessary, to implement corrective actions.
After several years of commitment and initiatives in the area of gender
equality at work, at 31 December 2019, Crédit Agricole S.A. once again
scored well above regulatory requirements:
83/100 for Crédit Agricole S.A. corporate entity;
between 75 and 98/100 for the other entities of Crédit Agricole S.A.
The International Framework Agreement of 31 July 2019 also provided
for concrete measures applicable at each career path stage designed
to ensure gender equality.
Lastly, employment and integration of people with disabilities have
been the subject of a proactive policy since 2005 under three-year
Disability agreements. The number of newly-hired people with disabilities
and the volume of purchase contracts signed with the sheltered and
disability-friendly sector are among the indicators measured annually. On
23 December 2019, Crédit Agricole S.A. and employee representatives
signed a sixth three-year agreement (2020-2022) on the employment
of people with disabilities. With this agreement, Crédit Agricole S.A.
undertakes, in particular, to employ new people with disabilities at
its entities by 2022. Since the first agreement was signed in 2005,
the employment rate of disabled people within Crédit Agricole S.A.
has doubled, reaching 3.88% at the end of 2019, and the volume of
purchases from inclusive companies has increased sixfold. For the
period 2017-2019, the recruitment target has been achieved with
51 individuals recruited on permanent contracts. The International
Framework Agreement also confirms the importance of this commitment
to disabilities (see Chapter 2, part 2.4.3.3 “Strengthening the framework
of trust between employees and the company”).
Maintaining a social dialogue within the Group
Crédit Agricole S.A., through its Group Human Resources Department
and representatives of the Human Resources function within each entity,
maintains a dynamic dialogue with all stakeholders in the social dialogue.
This dialogue is organised at several levels to take into account the
multiplicity of Crédit Agricole Group’s locations in Europe. Fourteen
countries (representing more than 90% of Crédit Agricole’s employees)
are represented on the European Works Council, which meets annually;
similarly, in France twice a year, employee representatives and
management discuss the Group’s strategy and social and economic
situation.
Moreover, two other bodies within Crédit Agricole S.A. also facilitate
maintaining the social dialogue: a Consultation Committee in which
executives can present their projects and engage in discussions with
employee representatives; meetings of union representatives are also
organised on a monthly basis to foster exchanges, maintain a local
dialogue and explain strategic developments in the Group’s business
lines.
The importance of the trade unions, whose role is an integral part of the
Group’s life, has been reinforced. On 8 March 2019 Crédit Agricole S.A.
signed an Agreement on the career path of staff representatives which
aims to promote engagement in staff representation and to enhance the
mandate of staff representatives in their career development. Through
this agreement, Crédit Agricole S.A. is committed to promoting the
attractiveness of trade union and elected positions among employees
wishing to become involved in social dialogue within its entities. Crédit
Agricole S.A. also undertakes to promote and respect equal access
for women and men to trade union and elective office and to combat
all forms of discrimination based on the exercise of such office (see
Chapter 2, part 2.4.3.3 “Strengthening the framework of trust between
employees and the company”).
Relationships with suppliers and sub-contractors
Ensuring that suppliers and sub-contractors with whom
we have an established relationship accept commitments
related to the vigilance system of Crédit Agricole S.A.
Crédit Agricole S.A. has a “Responsible Purchasing” policy that applies to
the entire Crédit Agricole Group. Shared by all employees and suppliers,
it aims to promote, in case of a purchase, the consideration of the
right need and of economic, societal and environmental aspects. This
policy is accompanied by a “Responsible Purchasing Charter” that
formalises the reciprocal commitments between Crédit Agricole S.A. and
its suppliers, based on the fundamental principles of the United Nations
Global Compact. In particular, it specifies the level of vigilance expected
in terms of respect for human rights and labour law, environmental
impact, business ethics and transparency. The Charter is systematically
attached to all supplier contracts.
Moreover, a specific clause titled “Respect for human rights, protection
of the environment and fight against corruption” was included in all the
standard supplier contract models of Crédit Agricole S.A., under which
suppliers declare and guarantee that they will respect and enforce in their
supply chains all their obligations to identify risks and prevent serious
violations of human rights and fundamental freedoms, the health and
safety of individuals and the environment resulting from their activities,
in accordance with laws and/or regulations relating to respect for human,
social and environmental rights. At the end of 2019, a permanent control
indicator was set up at Crédit Agricole S.A. corporate entity to ensure that
this clause was included in all supplier contracts. This control system is
gradually being extended to the different entities of Crédit Agricole S.A.
In 2018, the “Supplier Relations and Responsible Purchasing” label
awarded by France’s Mediator of the Republic has been renewed
and extended to all Crédit Agricole S.A. subsidiaries, including the
requirements of ISO 20400 standard. In 2020, a CSR purchasing and
training division was created within the Group Purchasing Department
tasked with monitoring actions related to this label and coordinating
Responsible Purchasing within the entities. The Purchasing Management
Committee, which monitors the CSR performance of suppliers, reviews
CSR issues related to the label and the duty of vigilance on a quarterly
basis.
In order to strengthen mutual knowledge between Crédit Agricole S.A.
companies and their suppliers and to involve suppliers in our responsible
purchasing approach, meetings are organised on a regular basis. Thus,
the fourth edition of the Supplier Meetings, held in 2020 for the first
time in 100% digital format, brought together more than 300 suppliers.
CRÉDIT AGRICOLE S.A.
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Refer to the glossary on page 681 for the definition of technical terms.
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Assessing and managing significant Environmental,
Social and Governance (ESG) risks in our Purchasing
The requirements of the law on the duty of vigilance are included in the
Purchasing procedural memorandum that applies to all employees. In
addition, a free e-learning module entitled “Responsible Purchasing”
is available to all employees of the Group via the common platform of
the Crédit Agricole training institute.
In 2018, the Group Purchasing Department finalised the introduction of
its risk mapping by identifying, analysing and prioritising the categories
of purchases presenting risks based on ethical, social and environmental
criteria.
This approach has made it possible to prioritise purchasing categories
according to four levels of CSR risk based on the intrinsic gravity of a
risk and its probability of occurrence. For categories with the highest
levels of risk (real estate projects, promotional items, IT hardware and
servers), the Group Purchasing department has decided to strengthen
its CSR assessment system and apply specific risk prevention measures
(diagnosis, recommendations and CSR issues specific to the offer) in
addition to the general measures taken as part of the “Responsible
Purchasing” policy.
The three categories identified are the subject of a progress plan drawn
up with our suppliers and specifiers and then broken down into specific
actions to address different issues related to the level of maturity of
suppliers with regard to CSR:
For the “Real estate projects” category,
in which the players are
numerous and complex to grasp, the Group Purchasing Department,
in collaboration with the buyers of the two main entities most active
in this category, Crédit Agricole Immobilier and LCL, have undertaken
actions focused on two areas for improvement:
-
continued the project initiated in 2019 to identify the key players
in the sector and then to engage in a dialogue with these suppliers
to raise their awareness of the risks involved and together identify
avenues for improvement;
-
to improve the relevance of the analysis grids in our calls for tender
on the environmental and social impacts in the responses from
suppliers. To this end, the Group Purchasing department was able
to benefit from a tool developed by a sector-based approach with
the support of experts and of the real estate trade federation, to
support real estate players in implementing CSR criteria in the
course of their projects.
For the “Promotional items” category,
a listing of Crédit Agricole
Group suppliers that includes numerous questions on social,
environmental and ethical issues is a first step towards mitigating CSR
risks. Three of the four distributors listed have a very good EcoVadis
(gold) rating, while the fourth has embarked on an improvement plan
and is expected to improve its rating at the next evaluation. Suppliers
outside the panel who can meet the specific needs of certain Group
entities on an occasional basis for local purchases will also submit
a CSR assessment. At the same time, actions have been carried out
with specifiers and users to raise their awareness of CSR issues
related to purchasing and to invite them to systematically go through
the panel’s suppliers.
For the “IT hardware and servers” category,
the Group Purchasing
department organises meetings dedicated to CSR with the main
suppliers. As this sector is fairly mature on societal issues, the
approach makes it possible to exchange views on each party’s
responsible purchasing policies and on the actions implemented
within the companies. In addition, within Crédit Agricole S.A., the
Group’s Innovation, Digital Transformation and IT division has drawn
up an “IT White Paper” in 2020, including a section devoted to the
Green IT and CSR strategy and roadmap. The conclusions of this work
will be shared and implemented from 2021. The Group Purchasing
department is fully involved in the process and has provided an initial
deliverable by formalising three CSR rating grids covering the IT
Purchasing category: P2i, Hardware, Software that can be used with
the Tier 1 suppliers of the Group, and which can also be employed
throughout the supply chain.
The CSR performance of the suppliers and that of the offer are
evaluated during the tender phase. The evaluation covers the CSR
performance of the supplier as well as that of the offer and is based on
a documentary audit. The evaluation of the supplier’s CSR performance
has been entrusted since 2012 to an independent and specialised third
party, EcoVadis. The score obtained on the CSR criteria is an integral
part of the selection of a product or service in the allocation of the
contract to the supplier. It represents 15% of the overall rating since
1 January 2020. This year, a guide was also co-created by buyers as
well as representatives of internal specifiers and suppliers) to help
buyers incorporate CSR criteria into their calls for tenders.
In 2020, the Group Purchasing department also completed this system
by working with three other banks and a third-party evaluator to launch
an on-site CSR audit process for common purchasing categories.
The Group Purchasing department has also broadened its approach to
evaluating risk and compliance of suppliers. The KYS (Know Your Supplier)
system was described in an umbrella procedure note and broken down
into three technical notes covering scoring, screening and identification
of suppliers. Scoring makes it possible to prioritise risk levels and,
for suppliers that present the highest level of risk, results in a closer
frequency of adverse news screening (negative information relating
particularly to the environment, respect for human rights, employee
health and safety) (weekly frequency). The results of these analyses are
presented to the Group Supplier Risk Committee formed at the beginning
of 2020, which is responsible for determining whether to continue – or
terminate – the relationship with the supplier.
Additional elements relating to the approach taken by the Group
Purchasing department are presented in the non-financial performance
statement (see Chapter 2, part 2.4.5 “Responsible purchasing”).
Financing and investment activities of Crédit Agricole S.A.
Assessing and managing major direct climate,
environmental, social and governance (ESG) risks
in our financing and investments
For several years, Crédit Agricole S.A. has been committed to an approach
that integrates environmental, societal and governance (ESG) risks into
its decision-making criteria.
Investments
As a signatory to the Principles for Responsible Investment (PRI)
since their launch in 2006, Amundi includes environmental, social
and governance (ESG) criteria in its analysis process and investment
decisions, in addition to financial criteria. Accordingly, Amundi’s ESG
policy is as follows:
a strict exclusion policy for issuers (companies and States) that do
not meet the ESG criteria adopted by the Group;
a systematic ESG analysis of companies, summarised by a proprietary
ESG rating, consisting of several criteria based on both international
standards and the assessments of recognised rating agencies, which
takes into account major environmental, social and governance issues
such as climate change, child labour and transparency in business
conduct;
distribution of ESG ratings to all managers;
a commitment policy aimed at developing companies towards best
practices;
a voting policy that integrates ESG issues.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
144
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Amundi has set itself the objective of systematically taking ESG
considerations into account in its voting policy, based on a three-year
Investment/Un-plan-d-actions-ESG-a-3-ans) and a department dedicated
to responsible investment.
The Crédit Agricole Assurances Group has also been a signatory to
the Principles for Responsible Investment (PRI) since 2010. In 2017,
it developed and published a CSR policy, based on a mapping of the
CSR risks associated with its activities, which defines its framework for
action and is divided into its three business lines: insurer, investor and
employer. This policy describes its approach to integrating non-financial
criteria into its investment processes.
Crédit Agricole Assurances applies the same exclusion policy for issuers
that do not meet the Group’s ESG criteria, based on the list of excluded
issuers maintained by Amundi. Government debt securities issued by the
countries on that list are therefore excluded from investments. Except
in justified cases, private issuers domiciled in those countries are also
excluded (see Chapter 2, part 2.5 “Incorporating ESG criteria into the
investment and asset management policies.
Financing
In the area of project financing, Crédit Agricole CIB has developed a system
for assessing and managing risks resulting from the environmental and
social impacts of transactions and customers, which is described in
its CSR Policy published in 2017 and codified in a governance rule.
Since 2003, Crédit Agricole CIB has been guided by the Equator Principles,
to which it adhered from the onset. These principles are a voluntary
commitment to carry out a detailed analysis of the environmental and
social aspects of each new project financing and to require that projects
be developed and operated in accordance with the environmental and
social standards of the International Finance Corporation (IFC).
This ESG risk management system is based on three pillars:
the application of the Equator Principles provides an appropriate
methodological framework for assessing ESG risks for operations
directly related to a project;
the CSR sectoral policies published by the Group, which specify the criteria
for analysis and exclusion in all transactions for sectors where social and
environmental issues have been identified as the most important: arms,
energy, mining, transportation, transport infrastructure, construction,
agriculture and forestry (https://www.credit-agricole.com/responsable-
et-engage/notre-strategie-rse-etre-acteur-d-une-societe-durable/
nos-politiques-sectorielles);
an analysis of the environmental or social sensitivity of transactions
or customers regarding the management of the environmental and
social impacts related to the projects financed or the customers’ CSR
approach, which is assessed in accordance with the principles of the
sectoral policies of the Bank.
This system for assessing and managing environmental and social
risks is supervised by an umbrella committee, the Committee for the
Evaluation of Transactions presenting an Environmental or Social Risk
(CERES), chaired by the Head of Crédit Agricole CIB’s Compliance function
(see Chapter 2, part 3 a “ESG Risk Management”).
Paying particular attention to climate risk
management in financing and investing
Aware of the increase in global warming caused by greenhouse gas
(GHG) emissions, Crédit Agricole aims at strengthening its action and
commitments in favour of energy transition and the integration of climate
risks by adopting a Group climate strategy in 2019. All Crédit Agricole S.A.
entities shall apply this strategy, in line with the 2015 Paris Agreement,
which obliges signatory States to limit global warming to +2°C by
2100, based on the recommendations of the Intergovernmental Panel
on Climate Change (IPCC). It will enable a gradual reallocation of its
financing and investment portfolios and assets under management to
support our customers in the energy transition (see Chapter 2, part
2.3.1 “Group’s climate strategy”).
In 2019, the Group set up a dedicated governance structure to steer
its climate strategy, with the mission of reconciling the economic
development of territories and the climate trajectory (see Chapter 2,
part 2.2.2 “Governance of non-financial performance”).
For a number of years, the Group has undertaken work designed to better
understand and manage climate risks and aims to continue to do so:
quantifying the carbon footprint of its financing and investment
portfolio;
drawing up sector policies for the sectors covering over 80% of this
footprint;
gradually introducing an analysis linked to the consideration of global
warming issues and a carbon price in the analysis of credit files. The
goal is to determine the most relevant climate risk or risks for the
Bank and to develop a methodology to assess them.
Particular attention paid to climate risk management has also resulted
in the revision of the Group’s sectoral policy on energy in the oil and
gas sector, excluding the financing of the least efficient hydrocarbons.
This development is in addition to the general policy of withdrawing
funding from coal-related activities, which has been in place since 2015.
In 2019 the Group decided to strengthen its commitments in financing
the energy transition: to exit from thermal coal in 2030 in the EU and
the OECD (no development of relationships with companies whose coal
activity represents more than 25% of their business except with those
that have announced plans to phase out their thermal coal activities
or which intend to announce such plans by 2021. No commercial
relationship with companies developing or planning to develop new
thermal coal capacity).
A detailed description of approaches to integrating ESG and climate risks
into financing and investment activities is presented in the non-financial
performance statement (see Chapter 2, part 2.5 “Integration of ESG
criteria in investment and asset management policies”).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
145
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Alert and notification system
The Group’s body of procedures in the area of Compliance includes a
procedure on the right to alert. In order to strengthen risk prevention,
the centralised system for reporting alerts and collecting notifications
made available to all Group employees as part of the fight against fraud
and corruption was extended in 2018 to allow facts falling within the
scope of the Group’s duty of vigilance and ethical commitments, as
defined in its Code of Ethics and in the Codes of Good Conduct adopted
by each entity.
This system, the development of which has been shared with Crédit
Agricole S.A.’s representative trade unions, is now open not only to
employees but also to third parties. An awareness-raising message
on the right to alert was sent by the Chief Executive Officer of Crédit
Agricole S.A. to all employees of the Group. In order to facilitate alerts
relating to, among other things, human rights, health and safety or the
environment, these can now be made via a digital reporting and the
alert processing tool that is accessible through a link on our website:
lanceur-d-alerte, or at the convenience of the person wishing to issue
an alert, by any written means. Confidentiality about the identity of
persons filing a report is standard rule for alerts in accordance with
European regulations.
This alert processing tool was implemented within Crédit Agricole S.A.
corporate entity in September 2018 and its deployment was finalised
in Crédit Agricole S.A.’s entities in 2020. It is available in 11 languages
(French, English, German, Spanish, Italian, Dutch, Portuguese, Polish,
Ukrainian, Serbian and Romanian). It facilitates the quantitative and
qualitative analysis of alerts (number and type of alerts) which contributes
to the assessment of the risks of non-compliance and the evolution
of the prevention measures implemented. As part of this deployment,
support measures have been made available to the entities: creation
of a MOCCA documentation area, distribution of guides for employees
responsible for alerts, training of users of the BKMS alert processing
tool (see Chapter 2, part 2.4.2 “A strong ethical culture”).
An Alert Management Committee was also set up in October 2019,
which intervenes as necessary depending on the sensitivity of an alert
and will meet at least once a year to analyse the Alert Launcher system
(statistical elements, analysis of the reason for the alerts as well as their
geographic area of emission).
System for monitoring the actions
implemented and evaluating their
performance
Crédit Agricole S.A.’s vigilance plan is the sum of complementary
risk prevention policies, each with its own governance, processes
and associated action plans, which respond to the areas of vigilance
determined by Crédit Agricole S.A. and are monitored by global
coordination at the highest level of the company. The monitoring of
the actions implemented is based on indicators of means or results to
ensure that they effectively meet the objectives of the law. A summary
of these indicators is presented at the end of the report on the 2020
vigilance plan.
In addition, environmental, social and governance issues are at the
heart of “Ambitions 2022”, the strategic project of the Group. Each of
the three major projects make up this strategic plan includes policies
and action plans to address the main risks identified, with corresponding
performance indicators that are detailed in the non-financial performance
statement (see Chapter 2, part 1.3 “Analysis of non-financial risks”).
The management of non-financial risks in the Group covers a broader
scope than Crédit Agricole S.A.’s due diligence plan, notably due to our
voluntary commitments, which go beyond the legal framework and
extend throughout Crédit Agricole Group. Consequently, the indicators
mentioned in the non-financial performance statement may supplement
the vigilance plan monitoring indicators mentioned in this report.
Finally, FReD is the internal system for promoting and assessing the
ESG culture of Crédit Agricole S.A. The average of each entity’s progress
evaluation provides an index: the “Group FReD index” which has an
impact on the variable compensation of executives throughout the
Group (see Chapter 2, part 2.2.4 “System for employee contribution
to ESG performance”).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
146
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
Area of vigilance
Means/results indicator
2020
Scope
2019
Scope
Preventing the risks
associated with cybercrime
and ensuring the security of
customers’ personal data
and the transparency of
their use
Percentage of Crédit Agricole S.A. entities participating
in the FReD approach that have communicated
the Group Code of Ethics to their employees
100
Crédit
Agricole S.A.
100
Crédit
Agricole S.A.
Number of Crédit Agricole S.A. entities participating in the
FReD approach that have circulated a Code of Conduct
16
Crédit
Agricole S.A.
15
Crédit
Agricole S.A.
Percentage of employees trained in cyber risks
(over a three-year rolling period)
88.5
Crédit
Agricole S.A.
N/A
Preventing discrimination in
access to financial services
and insurances
Number of financially vulnerable customers supported
11,290
LCL, CA
Consumer
Finance France
6,336
LCL, CA
Consumer
Finance France
Maintaining occupational
health and ensuring equity
in social protection
Average number of days of absence per employee
19.8
Crédit
Agricole S.A.
18
Crédit
Agricole S.A.
Including average number of days of absence
per employee as a result of an industrial accident
0.3
0.4
Including average number of days of absence
per employee related to parenthood
5.3
5.8
Including average number of days of absence
per employee for other reasons
14.3
11.8
Number of countries qualifying for the “Take Care”
programme
4
Crédit
Agricole S.A.
4
Crédit
Agricole S.A.
Number of employees qualifying for the “Take Care”
programme
8,326
8,326
Ensuring the safety and
security of employees
Percentage of entities having trained their employees
in safety habits (practice)
100
Crédit
Agricole S.A.
100
Crédit
Agricole S.A.
Percentage of employees trained in safety habits
(e-learning)
50.67
Crédit
Agricole S.A.
(France)
50.67
Crédit
Agricole S.A.
(France)
Percentage of expatriate employees in countries identified
as “high risk” registered in the PLANIS monitoring tool
85.71
Crédit
Agricole S.A.
100
Crédit
Agricole S.A.
Combating discrimination
Percentage of women in the highest decision-making
bodies (
i.e.
the highest decision-making body of each
entity, namely the Executive Committee when there
is one or, failing that, the Management Committee)
24
Crédit
Agricole S.A.
23.9
Crédit
Agricole S.A.
Employment rate of people with disabilities in France
(as a %)
4.99
Crédit
Agricole S.A.
(France)
3.58
Crédit
Agricole S.A.
(France)
Maintaining a social
dialogue within the Group
Number of collective agreements entered into
by the entities of Crédit Agricole S.A. Group:
Crédit
Agricole S.A.
Crédit
Agricole S.A.
in France
108
125
outside France
109
80
Ensuring that suppliers and
sub-contractors with whom
we have an established
relationship accept
commitments related to the
Group’s vigilance system
Percentage of contracts of the types made available
by Crédit Agricole S.A. to its subsidiaries that include
the “Duty of vigilance” clause
100
Crédit
Agricole S.A.
100
Crédit
Agricole S.A.
Percentage of contracts with active suppliers (>€50K)
that include the “Duty of Vigilance” clause
Methodology: sampling
Number of entities carrying out this control
79
Crédit
Agricole S.A.
Corporate entity
72
Crédit
Agricole S.A.
Corporate entity
Assessing and managing
significant environmental,
social and governance
(ESG) risks in our
purchasing
Percentage of buyers of the Crédit Agricole S.A. Group
who have completed the “Responsible Purchasing”
training
85
Crédit
Agricole S.A.
77
Crédit
Agricole S.A.
Percentage of suppliers with a CSR assessment
by EcoVadis in calls for tenders
67.7
Crédit Agricole
Group
46.7
(1)
Crédit Agricole
Group
ESG strategy (Financing)
Percentage of corporate customers evaluated
on
CSR criteria
100
Crédit Agricole
CIB
100
Crédit Agricole CIB
ESG strategy (Investments)
Outstandings incorporating an ESG filter
(in billions of euros)
355.9
Amundi
310.9
Amundi
Climate strategy
Scope 3 GHG emissions
(in MMtCO
2
e
)
143
Crédit Agricole
Group
139
Crédit Agricole
Group
Alert follow-up
Number of alerts per year in the BKMS tool
83 (of which 7
concerning the lack
of respect for human
and environmental
rights)
Crédit
Agricole S.A.
24
Crédit Agricole S.A.
(entities in which
the tool was
deployed in 2019)
(1)
The percentage published in 2019 (cumulatively since 2014) was 59%. The percentage for 2019 alone is 46.7%.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
147
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
1. Report of the Board of Directors
2. ADDITIONAL INFORMATION ON CORPORATE OFFICERS
2.1.
COMPOSITION OF THE BOARD OF DIRECTORS
At 31 December 2020:
Dominique Lefebvre
Chairman of the Board of Directors
Chairman of the Regional Bank of Val de France
Chairman of Fédération nationale du Crédit Agricole
Chairman of SAS Rue La Boétie
Raphaël Appert
representing SAS Rue La Boétie
Deputy Chairman of the Board of Directors
Chief Executive Officer of the Regional Bank Centre-est
First Deputy Chairman of Fédération nationale du Crédit Agricole
Deputy Chairman of SAS Rue La Boétie
Pascale Berger
Crédit Agricole Regional Banks Employee Representative
Pierre Cambefort
Chief Executive Officer of the Regional Bank Nord Midi-Pyrénées
Caroline Catoire
(1)
Independent Director
Marie-Claire Daveu
Independent director
Executive Officer of Sustainable Development and International Institutional Affairs of Kering
Laurence Dors
(1)
Independent Director
Daniel Épron
Chairman of the Regional Bank of Normandie
Nicole Gourmelon
Chief Executive Officer of the Regional Bank of Atlantique-Vendée
Jean-Pierre Gaillard
Chairman of the Regional Bank Sud Rhône-Alpes
Françoise Gri
Independent Director
Jean-Paul Kerrien
Chairman of the Regional Bank Finistère
Pascal Lheureux
Chairman of the Regional Bank Normandie-Seine
Christiane Lambert
Chairwoman of the National Federation of Agricultural Holders’ Unions (
Fédération nationale des syndicats
d’exploitants agricoles
; FNSEA), representing professional farming associations
Monica Mondardini
Independent Director
Chief Executive Officer of CIR S.p.A.
Gérard Ouvrier-Buffet
Chief Executive Officer of the Regional Bank Loire Haute-Loire
Catherine Pourre
Independent Director
Manager of CPO Services (Luxembourg)
Louis Tercinier
Chairman of the Regional Bank Charente-Maritime Deux-Sèvres
Philippe de Waal
(1)
Chairman of the Regional Bank Brie Picardie
François Heyman
Representing the employees (UES Crédit Agricole S.A.)
Simone Védie
Representing the employees (UES Crédit Agricole S.A.)
Agnès Audier
Non-voting Director
Bernard de Drée
Representative of the Social and Economic Committee
(1)
Age limit, term of office ends May 2021.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
148
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
Risk Committee:
Risks
5 members
Compensation Committee
COREM
6 members &
1 permanent guest
US Risk Committee:
US
3 members
Appointments and Governance Committee
CNG
6 members
Audit Committee:
Audit
6 members
Strategy and CSR Committee:
Strat/CSR
7 members
Presentation of the Board of Directors
as at 31 December 2020
Origin
Age
1
st
term of
office / Term
of office ends
Attendance
Areas
of expertise
Committees
Chairman: green
Member: black
DOMINIQUE LEFEBVRE
Chairman of the Board of Directors
Chairman of the Regional Bank Val de France, FNCA,
and SAS Rue La Boétie
59
2015
(1)
/2022
100%
Strat/CSR
; CNG
RAPHAËL APPERT
Representing SAS Rue La Boétie
Deputy Chairman of the Board of Directors
Chief Executive Officer of the Regional Bank Centre-est
First Deputy Chairman of FNCA
Deputy Chairman of SAS Rue La Boétie
59
2017/2021
100%
CNG; Strat/CSR
PASCALE BERGER
Crédit Agricole Regional Banks Employee Representative
59
2013/2021
100%
PIERRE CAMBEFORT
Chief Executive Officer of the Regional Bank Nord
Midi-Pyrénées
56
2020*/2022
100%
Risks; US
CAROLINE CATOIRE
Independent Director
65
2011/2023
(2)
100%
US; audit
MARIE-CLAIRE DAVEU
Independent director
Executive Officer of Sustainable Development
and International Institutional Affairs of Kering
49
2020/2023
100%
Risks; COREM
LAURENCE DORS
Independent Director
64
2009/2023
(2)
100%
COREM
; Audit; CNG
DANIEL ÉPRON
Chairman of the Regional Bank of Normandie
64
2014/2023
100%
COREM; Strat/CSR
JEAN-PIERRE GAILLARD
Chairman of the Regional Bank Sud Rhône-Alpes
60
2014/2022
100%
Audit; CNG
NICOLE GOURMELON
Chief Executive Officer of the Regional Bank
of Atlantique-Vendée
57
2020*/2021
100%
Strat/CSR
FRANÇOISE GRI
Independent Director
63
2012/2023
100%
Risk
;
US
; Audit;
COREM; Strat/CSR
JEAN-PAUL KERRIEN
Chairman of the Regional Bank Finistère
59
2015/2022
100%
Risks
CHRISTIANE LAMBERT
Chairwoman of the FNSEA (Fédération nationale des syndicats
d’exploitants agricoles)
59
2017/2023
50%
PASCAL LHEUREUX
Chairman of the Regional Bank Normandie-Seine
58
2020/2023
100%
COREM
MONICA MONDARDINI
Independent Director
Chief Executive Officer of CIR S.p.A.
60
2010/2021
(2)
83%
CNG
GÉRARD OUVRIER-BUFFET
Chief Executive Officer of the Regional Bank Loire Haute-Loire
63
2013/2023
100%
Audit
(1)
Chairman since 2015 (2007-2009: Director as natural person; 2009-2015: representing SAS Rue La Boétie).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
149
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
Presentation of the Board of Directors
as at 31 December 2020
Origin
Age
1
st
term of
office / Term
of office ends
Attendance
Areas
of expertise
Committees
Chairman: green
Member: black
CATHERINE POURRE
Independent Director
Manager of CPO Services (Luxembourg)
63
2017/2023
100%
Audit
; Risk;
Strat/CSR
LOUIS TERCINIER
Chairman of the Regional Bank Charente-Maritime
Deux-Sèvres
60
2017/2021
100%
CNG; Strat/CSR
PHILIPPE DE WAAL
Chairman of the Regional Bank Brie Picardie
65
2020*/2021
(2)
100%
FRANÇOIS HEYMAN
Employees representative
61
2012/2021
100%
COREM
SIMONE VÉDIE
Employees representative
60
2018/2021
92%
AGNÈS AUDIER
Non-voting Director
56
2020/2021
100%
COREM
BERNARD DE DRÉE
Representative of the Social and Economic Committee
ESC
66
2012/2022
100%
KEY INDICATORS
AVERAGE
60
96%
(2)
Age limit – term of office ends May 2021.
*
Appointment as Director.
Legend for the above table
Director, Chief Executive Officer of Crédit Agricole Regional Bank, representing SAS Rue La Boétie.
Directors who are the Chairmen or Chief Executive Officers of a Crédit Agricole Regional Bank.
Director who is an employee of a Regional Bank.
Independent Directors.
Non-voting Director.
Representing farming organisations, appointed by joint order of the Ministers of Agriculture and Finance.
Directors elected by the staff of Unité Économique et Sociale (UES) of Crédit Agricole S.A.
ESC
Representative of the Social and Economic Committee.
Bank, Finance.
Elected mutualist.
Management of major organisations.
International.
CSR.
Expertise related to the exercise of a mandate as employee representative.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
150
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
2.2.
POSITIONS AND FUNCTIONS HELD BY CORPORATE OFFICERS
Crédit Agricole S.A. Board of Directors at 31 December 2020
DOMINIQUE
LEFEBVRE
Main office within the Company:
Chairman of the Board of Directors
Chairman of the Strategy and CSR Committee
Member of the Appointments and Governance Committee
Business address
:
Regional Bank Val de France – 1, rue Daniel-Boutet – 28002 Chartres
BIOGRAPHY
Dominique Lefebvre has held numerous positions within professional farming
associations. He got involved in Crédit Agricole’s working bodies very early
on and, in 1995, was elected Chairman of Crédit Agricole de la Beauce et
du Perche, now Crédit Agricole Val de France (1997). He also holds several
national positions. Initially elected member of the Bureau of the Fédération
nationale du Crédit Agricole – FNCA – in 2004, he became Deputy Chairman
thereof in 2008, then Chairman in 2010. In this capacity he also was Chairman
of SAS Rue La Boétie, Crédit Agricole S.A.’s majority shareholder, before being
elected Chairman of Crédit Agricole S.A. in November 2015.
AREAS OF EXPERTISE
Banking, finance;
Elected mutualist;
Management of
major organisations;
CSR.
Age
:
59
French nationality
Date first appointed
:
November 2015
(1)
Term of office
:
2022
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
4,273
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: Regional Bank Val de France, Fédération
nationale du Crédit Agricole – FNCA, SAS Rue
La Boétie, Sacam Participations, Sacam International,
Fondation Crédit Agricole Solidarité et Développement
(CASD)
Chairman of the Management Committee: GIE Gecam
Deputy Chairman: Sacam Développement
Manager: Sacam Mutualisation
Director: Crédit Agricole Foundation – Pays de France,
SCI CAM
In other listed companies
–
In other non-listed companies
–
Other positions
Chairman: Finance Commission of the Chamber of
Agriculture
(Chambre d’agriculture)
of Eure-et-Loir
Deputy Chairman: CNMCCA
Director: Un Avenir Ensemble Foundation
Member: French Agricultural Council
(Conseil de l’agriculture française)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
Manager: EARL de Villiers-le-Bois (2018)
(1)
Chairman since 2015 (2007-2009: Director as natural person; 2009-2015: representing SAS Rue La Boétie).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
151
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
Representative
of SAS Rue La Boétie:
RAPHAËL
APPERT
Main office within the Company:
Deputy Chairman of the Board of Directors
Member of the Strategy and CSR Committee –
Member of the Appointments and Governance Committee
Business address
:
Regional Bank of Centre-est – 1, rue Pierre-de-Truchis-de-Lays –
69410 Champagne-au-Mont-d’Or
BIOGRAPHY
Aged 59 and a graduate of EDHEC (Lille 1983), Raphaël Appert has spent
his entire career at Crédit Agricole. Having joined the network of branches
of Crédit Agricole du Nord-Est in 1983, he subsequently became Manager
of the Commercial Network of Crédit Agricole de la Sarthe in 1995,
then Finance and Marketing Manager of Crédit Agricole de l’Anjou et du
Maine in 1998. He has been Deputy General Manager of Crédit Agricole
Centre-est since 2002. In 2005, the Board of Directors of Crédit Agricole
Val de France chose him as Chief Executive Officer. He has been the Chief
Executive Officer of Crédit Agricole Centre-est since 2010. Elected as an
Officer of the Bureau of the Fédération nationale du Crédit Agricole in 2012,
he became Deputy Corporate Secretary in 2015, then First Deputy Chairman
in May 2017. Within the Crédit Agricole Group, Raphaël Appert’s positions
notably include those of Chairman of Sacam Développement and member
of the Management Committee of Fondation Grameen Crédit Agricole.
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
CSR.
Age
:
59
French nationality
Date first appointed
:
May 2017
(SAS Rue La Boétie)
Term of office
:
2021
FCPE (employee share
ownership plan) units
held invested in Crédit
Agricole S.A. shares
at 31/12/2020
:
7,337
(personally owned)
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chief Executive Officer: Regional Bank Centre-est;
Sacam International
Deputy Chairman: SAS Rue La Boétie
First Deputy Chairman: Fédération nationale
du Crédit Agricole – FNCA
Chairman: Sacam Développement,
Chief Executive Officer of SACAM INTERNATIONAL
Director: Crédit Agricole Next Bank (Suisse),
Fondation du Crédit Agricole – Pays de France,
Sacam Participations, SAS Carvest
Management Committee member: GIE Gecam,
Fondation Grameen Crédit Agricole
Manager: Sacam Mutualisation
In other listed companies
–
In other non-listed companies
Director: Siparex Associés
In Extenso Supervisory Board member
Other positions
Association of the Founders and Protectors of the
Catholic Institute of Lyon (
Association des fondateurs
et protecteurs de l’Institut catholique de Lyon
; AFPCIL)
Chairman of the Club of Fine Art Museums
(Club des
musées des Beaux-Arts)
PREVIOUS POSITIONS AND FUNCTIONS
(2016-2020)
In Crédit Agricole Group companies
Chairman: Pacifica (2017), Crédit Agricole
Assurances (2017)
Director: Predica (2017)
Supervisory Board member: Crédit Agricole
Bank Polska (2017)
Deputy Corporate Secretary: Fédération nationale
du Crédit Agricole – FNCA (2017)
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
PASCALE
BERGER
Main office within the Company:
Director representing Crédit Agricole Regional Banks employees
Business address
:
Regional Bank of Franche-Comté – 11, avenue Élisée-Cusenier – 25000 Besançon
BIOGRAPHY
Pascale Berger holds a DEA
(diplôme d’études approfondies)
in business law
and a DESS
(diplôme d’études spécialisées)
in rural law. She spent most of
her career at the Regional Bank of Franche-Comté, first as Portfolio Manager
in the Litigation department (1988-1992), then Business Manager in the
Training department (1992-2005). She subsequently joined the Permanent
Control department, then became an Internal Auditor. In 2014, she joined the
Innovation and Transformation division, with responsibility for the documentary
database. In April 2017, she became Communications Officer. (2012-2019)
She was elected Assistant Secretary and became Chairwoman of the Mutuelle
(Health insurance) Commission of the Regional Bank of Franche-Comté
Works Council.
AREAS OF EXPERTISE
Banking, finance;
CSR;
Expertise related to the
exercise of a mandate as
employee representative.
Age
:
59
French nationality
Date first appointed
:
May 2013
Term of office
:
2021
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
10
FCPE (employee share
ownership plan) units
held invested in Crédit
Agricole S.A. shares at
31/12/2020
:
1,811
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Communications Officer: Regional Bank
of Franche-Comté
Treasurer, Social and Economic Committee
of Franche-Comté
In other listed companies
–
In other non-listed companies
–
Other positions
Member of the Board of Directors at the MSA
of Franche-Comté
Delegate to the Statutory General Meeting
of the Mutualité Sociale Agricole central bank
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Deputy Secretary: Social and Economic Committee
of Franche-Comté (2019)
Chairwoman of the Mutuelle Commission: Franche-
Comté Works Council (2019)
Advisor: Chorale Doc (Regional Bank of Franche-Comté
documentary database, 2017)
Activity Manager in the Innovation Department (2017)
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
PIERRE
CAMBEFORT
Main office within the Company:
Director
Member of the Risk Committee – Member of the US Risk Committee
Business address
:
Regional Bank Nord Midi-Pyrénées – 219, avenue François-Verdier – 81000 Albi
BIOGRAPHY
Pierre Cambefort graduated from Stanford University and holds an
Engineering degree from
École supérieure de physique et de chimie
of Paris.
He began his career as a research and development engineer in the chemicals
industry (1989). He was a volunteer under the National Service for Companies
(
service national en entreprise
) programme in Frankfurt (1990-1991). In
1991 he joined Caisse Nationale de Crédit Agricole as Inspector. In 1995 he
started his career within the Crédit Agricole Regional Bank of Île-de-France,
where he held various positions, first as Head of the Risk Management Unit
and later in the Credit Development business, of which he became Head in
2000. From 2002 he headed the Marketing and Communications department.
In 2004 he joined Crédit Agricole S.A. as Head of Private Individual Markets
department. He became Deputy General Manager of the Regional Bank
Centre-est in 2006. Pierre Cambefort was appointed Deputy Chief Executive
Officer of Crédit Agricole CIB (2010-2013). He has been Chief Executive
Officer of the Regional Bank Nord Midi-Pyrénées since September 2013.
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
International;
CSR.
Age
:
56
French nationality
Date first appointed
:
May 2020 (Director)
Term of office
:
2022
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
62
FCPE (employee share
ownership plan) units
held invested in Crédit
Agricole S.A. shares at
31/12/2020
:
448
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chief Executive Officer: Regional Bank Nord
Midi-Pyrénées
Chairman of the Board of Directors: SA INFORSUD
Gestion
Director: SAS EDOKIAL
Supervisory Board member: SNC CA Technologies
et Services (CATS)
In other listed companies
–
In other non-listed companies
–
Other positions
Director: Youth Action
(Fond'actions jeunes)
Endowment Fund of Crédit Agricole Nord
Midi-Pyrénées
Director (physical representative of the Regional Bank
Nord Midi-Pyrénées): SA Grand Sud-Ouest Capital,
GSO Innovation, GSO Financement
Chairman (physical representative of the Regional
Bank Nord Midi-Pyrénées): SAS NMP Immo
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Chairman of the Board of Directors: SAS Crédit Agricole
Payment Services (2020)
Director: GIE Coopernic (2019); FIA-NET Europe
(2019); SAS CA Chèques (2018); GIE CA Technologies
et Services (2018); SA COPARTIS (2017); SAS CA
Paiement (2016); IFCAM (2016)
Supervisory Board member: SNC CA TITRES (2018)
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
CAROLINE
CATOIRE
Main office within the Company:
Director
Member of the Audit Committee – Member of the US Risks Committee
Business address
:
Crédit Agricole S.A. – 12, place des États-Unis – 92120 Montrouge
BIOGRAPHY
Former student of
École Polytechnique
, Caroline Catoire held various positions
in the Total group from 1980 to 1998: within the Economic Research
department, the Oil Trading department, and then the Finance department
as Head of Management Control and Head of Corporate Finance. She then
joined Société Générale and served as the Head of Management Audit of its
investment bank (1999-2002). She broadened her experience in the financial
sector, serving as CFO in various companies: Sita France, then Saur Group
and Metalor Group. Since December 2015, she has been a consultant in
the financial sector.
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
International.
Age
:
65
French nationality
Date first appointed
:
May 2011
Term of office
:
2023
(1)
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
1,139
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
–
In other listed companies
Director: Latécoère
Independent Director of Maurel & Prom: Chairwoman
of the Investment and Risk Committee, Member
of the Audit Committee
In other non-listed companies
Independent Director, Chairwoman of the Ethics
and Sustainable Development Committee,
Member of the Audit Committee: Roquette Group
Other positions
Chairwoman: C2A Conseil
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
Non-voting Director: Roquette Group (2018)
Other positions
–
(1)
Age limit, term of office ends: 2021.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
MARIE-CLAIRE
DAVEU
Main office within the Company:
Director
Member of the Risk Committee – Member of the Compensation Committee
Business address
:
Kering – 40 rue de Sèvres – Paris 75007
BIOGRAPHY
Marie-Claire Daveu began her career as a technical advisor in the Office of
Prime Minister Jean-Pierre Raffarin and subsequently was Chief of Staff to
Serge Lepeltier, Minister of Ecology and Sustainable Development. In 2005
she became Director of Sustainable Development of the Sanofi-Aventis
group. Between 2007 and 2012 she served as Chief of Staff of Nathalie
Kosciusko-Morizet, in various Offices of Secretaries of State, and then at
the Ministry of Ecology, Sustainable Development, Transport and Housing.
In 2012 she was appointed Director of Sustainable Development and
International Institutional Relations at Kering. She defined an ambitious
strategy and targets and implemented a set of best practices within the
Group andits Maisons. Today, Kering is a recognised pioneer and leader in
the field of sustainable development.
Marie-Claire Daveu is a graduate of
École nationale du génie rural, des
eaux et des forêts
(ENGREF, part of IPEF). She also holds a DESS (
diplôme
d'études supérieures spécialisées
) in public management from Université
Paris Dauphine.
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
International;
CSR.
Age
:
49
French nationality
Date first appointed
:
May 2020
Term of office
:
2023
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
1
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
–
In other listed companies
Executive Officer of Sustainable Development and
International Institutional Affairs; member of the Kering
Executive Committee.
In other non-listed companies
–
Other positions
Supervisory Board member of Ponant
Member of the Board of Directors of Albioma
and Chairwoman of the Corporate Social
Responsibility Committee
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Director and Compensation Committee member:
Crédit Agricole CIB (2020)
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
LAURENCE
DORS
Main office within the Company:
Director
Chairwoman of the Compensation Committee
Member of the Audit Committee – Member of the Appointments and Governance Committee
Business address
:
Crédit Agricole S.A. – 12, place des États-Unis – 92120 Montrouge
BIOGRAPHY
A former senior civil servant in the French Ministry of Finance and the Ministry
of the Economy's Staff (1994-1995), and later the Prime Minister’s Staff
(1995-1997), Laurence Dors has spent much of her professional career in
executive management positions of international groups (Lagardère, EADS,
Dassault Systèmes, Renault), then as Cofounder and
Senior Partner of the
consulting firm Theano Advisors (2012-2018), she is a specialist in governance
issues and an independent Director. She sits on the Board of Directors of
the French Institute of Directors (
Institut français des administrateurs
; IFA),
where she chairs the Foresight and Research Commission.
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
International;
CSR.
Age
:
64
French nationality
Date first appointed
:
May 2009
Term of office
:
2023
(1)
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
1,126
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
–
In other listed companies
Independent Director; Capgemini: Chairwoman of the
Compensation Committee; member of the Ethics and
Governance Committee; member of the Audit and Risk
Committee;
Chairwoman of the Audit and Risk Committee:
Latécoère
In other non-listed companies
Independent Director; Chairwoman of the
Appointments and Compensation Committee;
Member of the Commitments Committee: EGIS SA
Other positions
Director:
Institut français des administrateurs
(IFA); Chairwoman of the Foresight and Research
Commission
Member: Advisory Committee of the Institute of Higher
Studies of Latin America (
Institut des hautes études de
l’Amérique latine
; IHEAL); Franco-German Economic
Club (
Club économique franco-allemand
; CEFA)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
Senior Partner: Theano Advisors (2018)
Other positions
Director: National Institute of Higher Studies of Security
and Justice (
Institut national des hautes études de la
sécurité et de la justice
; INHESJ) (2016)
(1) Age limit, term of office ends: 2021.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
DANIEL
ÉPRON
Main office within the Company:
Director
Member of the Strategy and CSR Committee – Member of the Compensation Committee
Business address
:
Regional Bank of Normandie – 15, esplanade Brillaud-de-Laujardière – CS 25014 –
14050 Caen Cedex 4
BIOGRAPHY
Daniel Épron is a retired farmer in the Orne region. He has held a number
of elected positions, especially in the agricultural sector: He was Deputy
Corporate Secretary of the Young Farmers’ Centre
(Centre national des
jeunes agriculteurs)
(1989-1992), a member of the Economic, Social and
Environmental Council of Basse-Normandie
(Conseil économique, social et
environnemental régional de Basse-Normandie)
(1989-2013), Chairman
of the Regional Chamber of Agriculture of Normandy
(Chambre régionale
d’agriculture de Normandie)
(1995-2007), and a Regional Councillor for
Basse-Normandie (2001-2004). Chairman of the local bank of Crédit Agricole
de l’Aigle (1990-2005), he chaired the Regional Bank of l’Orne from 1995 to
1997, and has chaired the Regional Bank of Normandie (post merger) since
2006. He is Deputy Chairman of Fédération nationale du Crédit Agricole – FNCA
and has been a member of the Economic, Social and Environmental Council
(Conseil économique, social et environnemental)
since the end of 2015.
AREAS OF EXPERTISE
Banking, finance;
Elected mutualist;
CSR.
Age
:
64
French nationality
Date first appointed
:
May 2014
Term of office
:
2023
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
874
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: Regional Bank Normandie, Sofinormandie
Deputy Chairman: Fédération nationale
du Crédit Agricole – FNCA
Director: SAS Rue La Boétie, Cariparma, SCI CAM
Management Committee member: GIE Gecam;
SACAM Participations
In other listed companies
–
In other non-listed companies
–
Other positions
Partner: SCI Samaro
Director: Normandy Development Agency (
Agence
pour le développement de la Normandie
; ADN)
Member: Economic, Social and Environmental Council
(
Conseil économique, social et environnemental
; CESE)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Chairman CA’INNOV (2019)
Director: Crédit Agricole Technologies et Services
(2019)
In other listed companies
–
In other non-listed companies
–
Other positions
Manager: GFA de Belzaise (2018)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
JEAN-PIERRE
GAILLARD
Main office within the Company:
Director
Member of the Audit Committee – Member of the Appointments and Governance Committee
Business address
:
Regional Bank Sud Rhône-Alpes – 12, place de la Résistance – 38000 Grenoble
BIOGRAPHY
A winegrower, manager of a tourist attraction and town councillor of Saint-
Jean-le-Centenier, Jean-Pierre Gaillard has been Chairman of the Crédit
Agricole Local Bank of Villeneuve-de-Berg since 1993. After having sat on
the Board of the Regional Bank of Ardèche, then of the Regional Bank Sud
Rhône-Alpes, he was elected Chairman of the latter in 2006. Being particularly
committed to local development and environmental economics, he chairs
Crédit Agricole Group’s Energy and Environment Committee. He holds a
number of offices within national bodies, including in the Bureau fédéral of
the Fédération nationale du Crédit Agricole – FNCA.
AREAS OF EXPERTISE
Banking, finance;
Elected mutualist;
CSR.
Age
:
60
French nationality
Date first appointed
:
May 2014
Term of office
:
2022
Number of Crédit
Agricole S.A. shares
held at 28/11/2020
:
2,246
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: Regional Bank Sud Rhône Alpes, Adicam;
Energy and Environment Committee (FNCA)
Deputy Chairman: Management Committee of
Fomugei; Association of CR Chairs (FNCA)
Director: SAS Rue La Boétie
Director and Audit Committee member: LCL
In other listed companies
–
In other non-listed companies
–
Other positions
Municipal Councillor: Saint-Jean-le-Centenier
(Ardèche)
Director: Banque de France de l’Ardèche
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Supervisory Board member: CA Titres (2020)
Fédération nationale du Crédit Agricole – FNCA (2018)
Chairman: Amicale Sud (2017)
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
NICOLE
GOURMELON
Main office within the Company:
Director
Member of the Strategy and CSR Committee
Business address
:
Regional Bank Atlantique-Vendée – Route de Paris – 44949 Nantes
BIOGRAPHY
A graduate of HEC and ITB, Nicole Gourmelon has spent her entire career
with the Crédit Agricole group, where she joined the Regional Bank of the
Finistère in 1982. Appointed as the Commercial, Corporate, Marketing and
Communication Director of the Regional Bank Charente-Périgord in 1999,
she joined the Regional Bank of Aquitaine in 2002 as Financial, Strategic
Marketing and Communications Director. Promoted in 2004 to Deputy General
Manager at the end of the internal career path for executive managers,
she became Deputy General Manager at the Regional Bank of Normandie,
before joining PREDICA in 2009 as Deputy General Manager. In 2010, she
was appointed Chief Executive Officer of the Regional Bank of Normandie,
which she left in 2018 to take over as Chief Executive Officer of the Regional
Bank Atlantique Vendée, a position she currently holds.
Former Chairwoman of CA Assurances (2019-2020) and Pacifica (2017-2020),
Nicole Gourmelon has been Chairwoman of the Regional Committee of the
Pays de la Loire French Banking Federation (
Fédération Bancaire Française
)
since September 2020.
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
CSR.
Age
:
57
French nationality
Date first appointed
:
October 2020 (Director)
Term of office
:
2021
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
186
FCPE (employee share
ownership plan) units
held invested in Crédit
Agricole S.A. shares at
31/12/2020
:
2,529
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chief Executive Officer of the Regional Bank
Atlantique-Vendée
Director: LCL; CATS
Director for the Regional Bank Atlantique-Vendée
at UNEXO – ACTICAM – CAPS
In other listed companies
–
In other non-listed companies
–
Other positions
Chairwoman of the Pays de la Loire FBF Regional
Banking Committee (September 2020)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Chief Executive Officer of the Regional Bank Normandie
(2018)
Chairwoman: Pacifica Assurances (2020);
CA Assurances (2020)
Director: CA Egypt (2016); CA Protection
Sécurité (2019); Predica (2020); Pacifica (2020);
CA Assurances (2020)
Director and member of the Risk Committee:
Crédit Agricole CIB (2019)
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
FRANÇOISE
GRI
Main office within the Company:
Director
Chairwoman of the Risk Committee and Chairwoman of the US Risk Committee
Member of the Audit Committee – Member of the Compensation Committee –
Member of the Strategy and CSR Committee
Business address
:
Crédit Agricole S.A. – 12, place des États-Unis – 92120 Montrouge
BIOGRAPHY
Françoise Gri is a graduate of
École nationale supérieure d’informatique et
de mathématiques appliqués
in Grenoble. She began her career in the IBM
Group and was appointed Chairwoman and CEO of IBM France in 2001. 2007
saw her move to Manpower as Chairwoman and CEO of its French subsidiary,
before going on to become Manpower Group
Executive Vice President for
Southern Europe (2011). An accomplished senior manager with extensive
international experience, she then took up the position of Chief Executive
Officer of the Pierre & Vacances-Center Parcs Group (2012-2014). She is
a specialist in IT and Corporate Social Responsibility. Françoise Gri has
published two books:
Women Power, Femme et patron
(2012);
Plaidoyer
pour un emploi responsable
(2010).
AREAS OF EXPERTISE
Management of
major organisations;
International;
CSR.
Age
:
63
French nationality
Date first appointed
:
May 2012
Term of office
:
2023
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
5,089
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Independent Director, Member of the Risks Committee:
Crédit Agricole CIB
In other listed companies
Independent Director: Edenred S.A.
Director and Audit Committee member: WNS Services
In other non-listed companies
Manager: F. Gri Conseil
Other positions
Chairwoman of the Supervisory Board: INSEEC-U
(business school)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
Chairwoman: Viadeo (2016)
In other non-listed companies
–
Other positions
Independent Director: 21 Centrale Partners (2019)
Director: Audencia Business School (2019)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
JEAN-PAUL
KERRIEN
Main office within the Company:
Director
Member of the Risk Committee
Business address
:
Regional Bank of Finistère – 7, route du Loch – 29555 Quimper
BIOGRAPHY
A farmer specialising in organic vegetable production, Jean-Paul Kerrien
has been Chairman of the local bank Taulé since 1996. He has been
Director of the Regional Bank of Finistère since 2006, where he became
Deputy Chairman in 2009 then Chairman in 2012. Reflecting his strong
investment in the Group’s agriculture, he has developed several cooperative
production and distribution structures. He was a member of the Finistère
Chamber of Agriculture
(Chambre d’agriculture du Finistère)
(2006-2012),
for which he chaired the Agronomy Commission. Jean-Paul Kerrien also has
responsibilities in the area of innovation. Chairman of Investing in Finistère
(
Investir en Finistère
) from 2014 to 2017 and again in 2020, he is committed
to developing the economic attractiveness of the Finistère region. He is also
involved in setting up an organisation that aims to raise awareness of CSR
among companies: Managers responsible for the West of France (
Dirigeants
Responsables de l’Ouest
; DRO)
AREAS OF EXPERTISE
Banking, finance;
Elected mutualist;
CSR.
Age
:
59
French nationality
Date first appointed
:
November 2015 (Director)
Term of office
:
2022
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
1,411
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: Regional Bank of Finistère, Fireca
Director: Cofilmo, BforBank, Crédit Agricole
en Bretagne, Crédit Agricole Egypt
In other listed companies
–
In other non-listed companies
Partner: Earl de Kererec, Sarl photovoltaïque
de Kererec
Director: SCIC Finistère mer vent
Other positions
Chairman: Investir en Finistère
Board member: DRO Finistère
(Dirigeants
Responsables de l’Ouest)
Director: YNCREA Ouest
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
Chairman: Investing in Finistère
(Investir en Finistère)
(2017)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
CHRISTIANE
LAMBERT
Main office within the Company:
Director
Business address
:
FNSEA – 11, rue de la Baume – 75008 Paris
BIOGRAPHY
Born to a family of farmers, Christiane Lambert has been managing her own
farm since 1980. She started in Massiac, in her native Cantal region, with
a herd of dairy cows and some 40 sows. At the same time, she joined the
union of young farmers (
Jeunes Agriculteurs
; JA), making her way up the
various regional ranks: Chairwoman of the Young Farmers’ Cantonal Centre
(
Centre cantonal des jeunes agriculteurs
; CCJA) of Massiac (1981-1984),
then Deputy Chairwoman of the Young Farmers’ Departmental Centre (
Centre
départemental des jeunes agriculteurs
; CDJA) of Cantal (1982-1988), she
was also the first woman to chair the Young Farmers’ Regional Centre (
Centre
régional des jeunes agriculteurs
; CRJA) of Auvergne in 1986. In 1989, she
moved to Maine-et-Loire to take over her parents-in-law’s pig farm with
her husband. She continued her trade union activities and became the first
Chairwoman of the Young Farmers’ National Centre (CNJA) (1994-1998). She
has been a Director of the National Federation of Agricultural Holders’ Unions
(
Fédération nationale des syndicats d’exploitants agricoles
; FNSEA) since
March 2002, and then a Board member since 2005, becoming the First Deputy
Chairwoman in 2010. She is also Deputy Chairwoman of several organisations
such as the Environment Commission
(Commission environnement)
and
the Institute of Training for Agricultural Settings (
Institut de formation des
cadres paysans
; IFOCAP) and also chaired the Forum of Farmers that Respect
the Environment (
Forum des agriculteurs responsables respectueux de
l’environnement
; FARRE) from 1999 to 2004 and VIVEA, the Fund for Ongoing
Training of Living Products Entrepreneurs
(Fonds de formation continue des
entrepreneurs du vivant)
from 2005 to 2017. In April 2017, she became the
first woman to chair the National Federation of Agricultural Holders’ Unions
(
Fédération nationale des syndicats d’exploitants agricoles
; FNSEA).
AREAS OF EXPERTISE
Management of
major organisations;
CSR.
Age
:
59
French nationality
Date first appointed
:
September 2017
Term of office
:
2023
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
295
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
Chairwoman: National Federation of Agricultural
Holders’ Unions (
Fédération nationale des syndicats
d’exploitants agricoles
; FNSEA)
Chairwoman: Committee of Professional Farming
Organisations (
Comité des organisations
professionnelles agricoles
; COPA)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
163
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
PASCAL
LHEUREUX
Main office within the Company:
Director
Member of the Compensation Committee
Business address
:
Regional Bank of Normandie-Seine – Cité de l'Agriculture CS 70800 - 76238
Bois-Guillaume Cedex France
BIOGRAPHY
Holder of a BTS (
Brevet de technicien supérieur
) in farm management,
Pascal Lheureux began more than 35 years ago with his brother in the
expansion of the family farm, which today supports 14 families. He initiated
its diversification, including into export-oriented activities. Very early on,
he incorporated the environmental impact of the activity of the farm in
an ISO 14001 certification (an international environmental management
standard) and, for its fruit and vegetable sector, the international
Global
Gap certification, obtained in 2008. As a member of the “Demain La Terre”
collective, he works on a commitment to zero waste in fruit and vegetables.
He is also a Director of Crédit Agricole’s association Handicap et Emploi. He
has more than 30 years of experience at Crédit Agricole, where he has been
Chairman of the Regional Bank of Normandie-Seine since 2014, and is a
Director of Unigrains, a leading private equity player in the agri-food sector.
AREAS OF EXPERTISE
Banking, finance;
Elected mutualist;
CSR.
Age
:
58
French nationality
Date first appointed
:
May 2020
Term of office
:
2023
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
378
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: Regional Bank of Normandie-Seine;
Member of the Board of Directors and Officer
of the Board of Directors: SAS Rue La Boétie
Member of the Board of Directors HECA, Unigrains
and all subsidiaries on behalf of Foncaris
In other listed companies
–
In other non-listed companies
–
Other positions
Managing Partner of S.C.E.A. de Beaulieu (farming);
SNC Prestasol; Agrirecolte (agricultural company);
SARL Agri Holding (financial holding company
owning shares in agricultural companies)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
164
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
MONICA
MONDARDINI
Main office within the Company:
Director
Chairwoman of the Appointments and Governance Committee
Business address
:
CIR S.p.A. – Via Ciovassino, 1 – 20121 Milano – Italy
BIOGRAPHY
Graduate in economics and statistics from the University of Bologna (Italy),
Monica Mondardini has held several executive positions within the publishing
(Hachette) and then the insurance (Generali) sectors in Italy, Spain and France.
In 2009 she joined one of the biggest Italian publishing groups, the Gruppo
Editoriale L’Espresso, currently named GEDI Gruppo Editoriale, as Deputy
Director. Since 2013 she has been the Managing Director of CIR S.p.A., a
major industrial holding company listed on the Milan Stock Exchange, which
controls GEDI Gruppo Editoriale in particular, Sogefi, a company operating in
the
automotive sector, and KOS, in the healthcare sector.
AREAS OF EXPERTISE
Banking, finance;
International;
Management of
major organisations.
Age
:
60
Italian nationality
Date first appointed
:
May 2010
Term of office
:
2021
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
519
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
–
In other listed companies
Deputy Director: CIR S.p.A.
Chairwoman: Sogefi S.p.A. (CIR Group)
Director HERA S.p.A.
In other non-listed companies
Director: Kos (CIR Group)
Director: HERA.COMM S.p.A. (HERA Group)
Other positions
–
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
Deputy Director: GEDI Gruppo Editoriale (CIR Group)
(2018)
Deputy Chairwoman GEDI Gruppo Editoriale (2020)
Independent Director Trevi Finanziaria Industriale S.p.A.
(2018)
Independent Director Atlantia S.p.A. (2019)
In other non-listed companies
Chairwoman: Aeroporti di Roma S.p.A (Atlantia Group)
(2017)
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
GÉRARD
OUVRIER-BUFFET
Main office within the Company:
Director
Member of the Audit Committee
Business address
:
Regional Bank Loire Haute-Loire – 94, rue Bergson – BP 524 –
42007 Saint-Étienne Cedex 1
BIOGRAPHY
Gérard Ouvrier-Buffet has spent almost his whole career at the Crédit Agricole
Group. He acquired comprehensive expertise in all aspects of retail banking
working in the Regional Bank of Haute-Savoie (1982-1992), and Regional
Bank of Midi (1992-1998). Appointed Deputy General Manager of Crédit
Agricole Sud Rhône-Alpes in 1998, he has served as Chief Executive Officer
of the Regional Bank Loire Haute-Loire since 2002. At the same time, he
was Chairman of Predica and Crédit Agricole Assurances until 2013. He then
spearheaded the launch and development of the real estate business line.
Today, he is Chairman of Crédit Agricole Immobilier. He is Deputy Chairman
of the Fédération nationale du Crédit Agricole – FNCA.
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
CSR.
Age
:
63
French nationality
Date first appointed
:
August 2013
Term of office
:
2023
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
2,694
FCPE (employee share
ownership plan) units
held invested in Crédit
Agricole S.A. shares at
31/12/2020
:
4,811
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chief Executive Officer: Regional Bank Loire
Haute-Loire
Chairman of the Board of Directors: SA Crédit Agricole
Immobilier, SA Cofam, SAS Sircam, SAS Locam
Chairman of the Audit and Risks Committee and
Supervisory Board member: SA Crédit du Maroc
Deputy Chairman: Fédération nationale du Crédit
Agricole – FNCA
Director: SAS Rue La Boétie, SAS Square Habitat Crédit
Agricole Loire Haute-Loire, SAS Edokial, SA Défitech,
SA Chêne Vert, SCI CAM; SACAM Participations
Management Board member: SAS Uni-Médias
Management Committee member: GIE Gecam
In other listed companies
–
In other non-listed companies
Director: Sacicap Forez-Velay
Board Chairman: SAS Le Village by CA Loire
Haute-Loire
Founding Director: Corporate foundation Crédit
Agricole Loire Haute-Loire pour l’innovation; Solidarity
Gateway space
Other positions
Treasurer: University Jean-Monnet in Saint-Étienne
Foundation
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
166
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
CATHERINE
POURRE
Main office within the Company:
Director
Chairwoman of the Audit Committee
Member of the Risk Committee – Member of the Strategy and CSR Committee
Business address
:
CPO Services – 13, rue d’Amsterdam – 1126 Luxembourg
BIOGRAPHY
Graduate of ESSEC, Certified Accountant, with a degree in business law
from the Catholic University of Paris, Catherine Pourre has extensive
experience in audit and organisation consulting, particularly as a partner
at PricewaterhouseCoopers (1989-1999) then at Capgemini Ernst & Young
France, where she became Executive Director in 2000. She joined Unibail-
Rodamco in 2002 as Deputy Chief Executive Officer. She carried out various
executive management functions as member of the Executive Committee,
then member of the Management Committee. She has been the Manager and
Director of CPO Services (Luxembourg) since June 2013. Catherine Pourre
is also an experienced navigator. She is a
chevalier de la Légion d’honneur
and a
chevalier de l’Ordre national du mérite
.
AREAS OF EXPERTISE
Banking, finance;
International;
Management of
major organisations;
CSR.
Age
:
63
French nationality
Date first appointed
:
May 2017 (Director)
Term of office
:
2023
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
50
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Independent Director; Member of the Audit and Risk
Committee: Crédit Agricole CIB
In other listed companies
Chairwoman of the Audit Committee, representing
the Strategic Investment Fund in the Board
of Directors: Seb
Independent Director, Chairwoman of the Audit
Committee and member of the Compensation
Committee: Bénéteau
In other non-listed companies
Manager: CPO Services
Other positions
Director and Treasurer: Association Class 40
Member: Royal Ocean Racing Club (RORC)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Non-voting Director: Crédit Agricole S.A., Crédit Agricole
CIB (2017)
In other listed companies
Director, member of the Audit Committee and
Chairwoman of the Compensation Committee:
Neopost (2018)
In other non-listed companies
–
Other positions
Member: Board Women Partners (2019)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
167
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
LOUIS
TERCINIER
Main office within the Company:
Director
Member of the Appointments and Governance Committee –
Member of the Strategy and CSR Committee
Business address
:
Regional Bank of Charente-Maritime Deux-Sèvres – 14, rue Louis-Tardy – 17140 Lagord
BIOGRAPHY
After technical studies in agronomy and management, Louis Tercinier pursued
a number of professional training courses, primarily in the fields of economics
and auditing. A farmer specialising in both grains and vineyards, he is part
of a family of producers and traders (cognac and pineau des Charentes)
going back five generations. Louis Tercinier is Chairman of SICA Atlantique,
France’s second-largest grain and oilseed export site with six units built around
the original grain terminal activity. Chairman of local bank of Saintes since
2005, he was elected Director of the Regional Bank of Charente-Maritime
Deux-Sèvres in 2006, of which he became Deputy Chairman in 2010, and
then Chairman in 2015.
AREAS OF EXPERTISE
Banking, finance;
Elected mutualist;
CSR.
Age
:
60
French nationality
Date first appointed
:
May 2017
Term of office
:
2021
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
3,375
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: Regional Bank Charente-Maritime
Deux-Sèvres
Director: Local Bank of Crédit Agricole Mutuel
de Saintes, Cofisa, CA Home Loan SFH
Member: Executive Managers Commission of
Fédération nationale du Crédit Agricole – FNCA
Chairman: Finance and Risk Committee – FNCA
In other listed companies
–
In other non-listed companies
Member of the Executive Committee: John Deere
Financial SAS
Other positions
Chairman: SICA Atlantique; Crédit Agricole CMDS
patronage endowment fund
Director: Océalia
Director: Société Développement Atlantique (Sodevat)
Manager: GFA des Forges
Partner: EARL Tercinier
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
Chairman: Local bank of Crédit Agricole Mutuel
de Saintes (2018)
In other listed companies
–
In other non-listed companies
–
Other positions
EARL Tercinier (2017)
Deputy Chairman: Océalia (2018)
Director: Unicognac S.A. (2018)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
168
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
PHILIPPE
DE WAAL
Main office within the Company:
Director
Business address
:
Regional Bank of Brie Picardie – 500, rue Saint-Fuscien – 80095 Amiens
BIOGRAPHY
Philippe de Waal holds a degree from the University of Technology
(Université
de technologie)
of Compiègne and is a farmer specialising in cereals (with
the exception of rice). He is Manager of the Civil Society of the Castle of Poix
(Société civile du château de Poix)
in Bouillancy (1981-2016) and held several
municipal offices such as Municipal councillor (1983-2008) and Mayor of
Bouillancy (2008-2014). In 1995 he was appointed Director within the Local
Bank of Nanteuil-le-Haudouin (1995-2000) of which he became Chairman
(2000-2017). He sat on the Board of the Regional Bank of Oise (2005-2007),
which became the Regional Bank of Brie Picardie as the result of a merger,
where he remained Director (2007-2014). He was then appointed Deputy
Chairman (2014) and Chairman (since 2015).
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
CSR.
Age
:
65
French nationality
Date first appointed
:
May 2020 (Director)
Term of office
:
2021
(1)
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
50
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: Regional Bank Brie Picardie
Deputy Chairman of the local bank
of Nanteuil-le-Haudoin
Director: SAS Rue La Boétie
Member of the Federal Bureau of FNCA
Manager of SCI de l’Oise
Treasurer: VIVEA Confédération nationale
de la mutualité, de la coopération
et du Crédit Agricole – CNMCCA
Director: representing CNMCCA: National Centre
of Agricultural Exhibitions and Competitions
(
Centre national des expositions et concours agricoles
;
CENECA)
In other listed companies
–
In other non-listed companies
Manager: EARL des Buttes
Other positions
Director: Beauvais Technova; Capital Investissement
LaSalle Beauvais
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
Member: Agricultural Chamber (Chambre d’agriculture)
of Oise (2018)
(1)
Age limit, term of office ends: 2021.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
169
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
FRANÇOIS
HEYMAN
Main office within the Company:
Director representing the employees
of UES Crédit Agricole S.A.
Member of the Compensation Committee
Business address
:
Crédit Agricole S.A. – SGL/DCG/DI – 12, place des États-Unis – 92120 Montrouge
BIOGRAPHY
François Heyman has been a research and communication campaigns officer
in the Group Communication division of Crédit Agricole S.A. since 2009.
Alongside his banking career, he has served a number of national trade
union mandates as representative of the Agribusiness General Foundation
(Fédération générale agroalimentaire)
of the French Democratic Confederation
of Labour (CFDT), a member of the Economic, Social and Environmental
Council
(Conseil économique, social et environnemental)
, Co-Chairman of
Agrica (a supplementary retirement and social security body), Director of
Arrco, and a member of the Upper Council of Farming Social Security and
member of Higher Council of the Social protection in agriculture.
AREAS OF EXPERTISE
Banking, finance;
CSR;
Expertise related to the
exercise of a mandate as
employee representative.
Age
:
61
French nationality
Date first appointed
:
June 2012
Term of office
:
2021
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
66
FCPE (employee share
ownership plan) units
held invested in Crédit
Agricole S.A. shares at
31/12/2020
:
2,890
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Research and Communication Campaigns Officer
in the Group Communication department:
Crédit Agricole S.A.
In other listed companies
–
In other non-listed companies
–
Other positions
–
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
SIMONE
VÉDIE
Main office within the Company:
Director representing the employees
of UES Crédit Agricole S.A.
Business address
:
Crédit Agricole S.A. – DCI/RCI 12, place des États-Unis – 92120 Montrouge
BIOGRAPHY
Simone Védie began her career as a Secretary at TPE specialising in import-
export, then in advertising, publishing and creative design. In 1984, she joined
Caisse nationale de Crédit Agricole, which later became Crédit Agricole S.A.,
where she held various positions, first as text processing operator at the
General Inspectorate (1984-1989), then Secretary at the Private and Business
Markets Department, which became the Marketing and Communications
department. In May 2018 she became Secretary to the Board within the
Customer Relations and Innovation Division.
In June 2018 she was elected Director representing the employees of UES
Crédit Agricole S.A. (technical employees).
AREAS OF EXPERTISE
CSR;
Expertise related to the
exercise of a mandate as
employee representative.
Age
:
60
French nationality
Date first appointed
:
June 2018
Term of office
:
2021
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
65
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Executive Secretary: Crédit Agricole S.A.
In other listed companies
–
In other non-listed companies
–
Other positions
–
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
AGNÈS
AUDIER
Main office within the Company:
Non-voting Director
Permanent guest of the Compensation Committee
Business address
:
Crédit Agricole S.A. – 12, place des États-Unis – 92120 Montrouge
BIOGRAPHY
Agnès Audier is an alumna (
ingénieure en chef
) of France's Corps des Mines,
holds a degree in Physics and Chemistry and a DEA (
Diplôme d'Études
Approfondies
) in Materials Science and is a graduate of IEP Paris. She began
her career at the Prefecture of the Île-de-France region. She previously
worked with Simone Veil at the Ministry of Social Affairs and Health, then of
with Jean-Pierre Raffarin at the Ministry of SMEs, Trade and Crafts, where
she was Head of Office. She joined the Vivendi Universal group in 1997.
There, she held the positions of Director of Strategy and Development and of
Director of the VUnet division, which brought together all the group's Internet
activities, before joining the Havas Group as Executive Vice President, Chief
Performance Officer in 2003.
After one year at the Inspectorate General of Finance in 2006, she joined the
Boston Consulting Group where she was a Managing Director and Partner in
the Paris office for 11 years. There she specialised in digital transformation
in particular.
Agnès Audier, who has been heavily involved in the social field for 30 years,
is Chairwoman of SOS Seniors, a social economy company with 75 EHPADs
(care and nursing homes).
AREAS OF EXPERTISE
Banking, finance;
Management of
major organisations;
International;
CSR.
Age
:
56
French nationality
Date first appointed
:
January 2020
Term of office
:
2021
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
5,000
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
–
In other listed companies
Independent Director and member of the CSR
Committee; Worldline
Director representing the Strategic Participation
Fund; member of the Audit Committee and the
Compensation Committee: Eutelsat
In other non-listed companies
Senior Advisor: Boston Consulting Group
Independent Director: HIME (Holding
company of SAUR)
Other positions
Chairwoman of the Board of Directors: SOS Seniors
(not-for-profit charitable company)
President of the Impact Tank, a new
think tank
dedicated to social impact (not-for-profit association)
PREVIOUS POSITIONS
AND FUNCTIONS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
Independent Director; Chairwoman of the Audit and
Risk Committee: Ingenico Group (2020)
In other non-listed companies
Associate Director: Boston Consulting Group (2018)
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
172
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
2. Additional information on Corporate Officers
3.
INFORMATION ON EXECUTIVES AND MANAGEMENT BODIES
3.1. INFORMATION ON EXECUTIVES
PHILIPPE
BRASSAC
Main office within the Company:
Chief Executive Officer
Member of the Executive Committee
Business address
:
Crédit Agricole S.A. – 12, place des États-Unis – 92120 Montrouge
BRIEF BIOGRAPHY
Graduate of the Paris School of Economics, Statistics and Finance (ENSAE),
Philippe Brassac joined Crédit Agricole du Gard in 1982. He held several
executive offices there before being appointed, in 1994, Deputy General
Manager of Crédit Agricole Alpes-Maritimes, now Crédit Agricole Provence
Côte d’Azur. In 1999, he joined National Bank of Crédit Agricole as Director
of Relations with Regional Banks. In 2001, he was appointed Chief Executive
Officer of Crédit Agricole Provence Côte d’Azur. In 2010, he also became
Corporate Secretary of the Fédération nationale du Crédit Agricole – FNCA
and Deputy Chairman of the Board of Directors of Crédit Agricole S.A. In
May 2015, he was appointed Chief Executive Officer of Crédit Agricole S.A.
AREAS OF EXPERTISE
Banking, finance;
International;
Management of
major organisations;
CSR.
Age
:
61
French nationality
Date first appointed
:
May 2015
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chief Executive Officer: Crédit Agricole S.A.
Chairman and Member of the Compensation
Committee: Crédit Agricole CIB
Chairman: LCL
Director: Crédit Agricole Foundation – Pays de France
In other listed companies
–
In other non-listed companies
–
Other positions
Chairman of the Executive Committee: French Banking
Federation
(Fédération bancaire française)
OTHER OFFICES HELD IN PREVIOUS
YEARS (2016-2020)
In Crédit Agricole Group companies
–
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
173
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
3. Information on executives and management bodies
XAVIER
MUSCA
Main office within the Company:
Deputy Chief Executive Officer
Member of the Executive Committee
Business address
:
Crédit Agricole S.A. – 12, place des États-Unis – 92120 Montrouge
BRIEF BIOGRAPHY
Graduate of the Institute of Political Studies
(Institut d’études politiques)
in Paris
and the National School of Administration
(École nationale d’administration)
,
Xavier Musca began his career at the General Finance Inspectorate
(Inspection
générale des finances)
in 1985. In 1989, he joined the Treasury Directorate,
where he became Head of the European Affairs in 1990. In 1993, he was
called to the Prime Minister’s Cabinet, then returned to the Treasury Directorate
in 1995. Between 2002 and 2004, he was Principal Private Secretary to
Francis Mer, Minister for the Economy, Finance and Industry, then appointed
Treasury Director in 2004. He became Deputy Secretary General to the French
President in 2009, in charge of economic affairs, then Secretary General to the
French President in 2011. In 2012, Xavier Musca was appointed Deputy Chief
Executive Officer of Crédit Agricole S.A., responsible for International retail
banking, Asset management and Insurance. Since May 2015, he has been
Deputy Chief Executive Officer of Crédit Agricole S.A., as second Executive
Director of Crédit Agricole S.A.
AREAS OF EXPERTISE
Banking, finance;
International;
Management of
major organisations;
CSR.
Age
:
60
French nationality
Date first appointed
:
July 2012
Number of Crédit
Agricole S.A. shares
held at 31/12/2020
:
18,192
OTHER CURRENT
POSITIONS AND FUNCTIONS
In Crédit Agricole Group companies
Chairman: CA Consumer Finance, Amundi
Deputy Chairman: Predica; CA Italia
Director: Crédit Agricole Assurances, Cariparma
Director, permanent representative of Crédit
Agricole S.A.: Pacifica
In other listed companies
Director and Chairman of the Audit Committee:
Capgemini
In other non-listed companies
–
Other positions
–
OTHER OFFICES HELD IN PREVIOUS
YEARS (2016-2020)
In Crédit Agricole Group companies
Director: Amundi (2016); Crédit Agricole Creditor
Insurance (2017)
Member of the Compensation Committee:
Cariparma (2017)
In other listed companies
–
In other non-listed companies
–
Other positions
–
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
174
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
3. Information on executives and management bodies
3.2.
CHANGES TO THE GOVERNANCE BODIES
Composition of the Executive Committee as of 31 December 2020
Chief Executive Officer
Philippe Brassac
Deputy Chief Executive Officer
Xavier Musca
Deputy General Manager, Head of Insurance
Philippe Dumont
Deputy General Manager, Head of Development, Client and Human
Michel Ganzin
Deputy General Manager, Chief Financial Officer
Jérôme Grivet
Deputy General Manager, Head of Retail Banking Subsidiaries
Michel Mathieu
Deputy General Manager, Group Head of Innovation, Digital Transformation and IT
Jean-Paul Mazoyer
Deputy General Manager, Head of Savings Management and Property
Yves Perrier
Deputy General Manager, Head of Specialised Financial Services
Stéphane Priami
Deputy General Manager, Head of Major Clients
Jacques Ripoll
Group Chief Risk Officer
Alexandra Boleslawski
Group Head of Compliance
Martine Boutinet
Group Head of Human Resources
Bénédicte Chrétien
Corporate Secretary
Véronique Faujour
Group Head of Internal Audit
Michel Le Masson
Head of Crédit Agricole S.A. Group for Italy
Giampiero Maioli
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
175
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
3. Information on executives and management bodies
Composition of the Management Committee as of 1
st
March 2021
The Management Committee consists of the Executive Committee and the following:
Chief Executive Officer of CACEIS
Jean-François Abadie
Head of Group Public Affairs
Alban Aucoin
Deputy General Manager of Crédit Agricole CIB
Jean-François Balaÿ
Global Head of Institutional division & Chief Investment Officer of Amundi
Pascal Blanqué
Head of CSR and Deputy Chief Executive Officer of Grameen Crédit Agricole Foundation
Eric Campos
Head of the Institutional and Corporate Clients Division of Amundi
Dominique Carrel-Billiard
Head of Payment Systems
Bertrand Chevallier
Head of International Retail and Commercial Banking
François-Édouard Drion
Head of Strategy
Meriem Echcherfi
Head of Group Financial Monitoring
Paul Foubert
Chief Operating Officer of LCL – Retail Banking Development
Laurent Fromageau
Head of Global Coverage and Investment Banking and Deputy General Manager of Crédit Agricole CIB
Didier Gafnel
Head of Regional Banks Relations
Catherine Galvez
Head of Global Markets Division and Deputy Chief Executive Officer of Crédit Agricole CIB
Pierre Gay
Global Head of Retail Division of Amundi
Fathi Jerfel
Chief Economist
Isabelle Job-Bazille
Chief Executive Officer of Pacifica
Thierry Langreney
Chief Executive Officer of Caci
Henri Le Bihan
Chief Operating Officer of Amundi
Guillaume Lesage
Deputy Chief Executive Officer of Crédit Agricole CIB
François Marion
Head of Crédit Agricole S.A. Group Communications
Denis Marquet
Group Senior Country Officer, Poland
Jean-Bernard Mas
Group Marketing Director
Pierre Metge
Head of Legal Affairs
Pierre Minor
Chairman Investment Banking of Crédit Agricole CIB in Dubai
Régis Monfront
Group Senior Country Officer, Morocco
Bernard Muselet
Head of Corporate, Institutional, Wealth Management and Private Banking Division of LCL
Olivier Nicolas
Chief Executive Officer of Crédit Agricole Immobilier
Marc Oppenheim
Chief Executive Officer of AgosDucato
Dominique Pasquier
Senior Regional Officer Americas of Crédit Agricole CIB
Marc-André Poirier
Head of Private Banking
Jacques Prost
Senior Regional Officer Asia-Pacific of Crédit Agricole CIB
Michel Roy
Senior Country Officer Group, Egypt
Jean-Pierre Trinelle
Chief Executive Officer of Crédit Agricole Leasing & Factoring
Hervé Varillon
Head of the Steering and Control of Amundi
Bernard de Wit
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
176
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
3. Information on executives and management bodies
3.3.
TRANSACTIONS CARRIED OUT ON COMPANY SECURITIES
Summary of securities transactions in the Company’s shares by members of the Board of Directors, the Chief Executive
Officer, the Deputy Chief Executive Officer and any person having the authority to make decisions concerning the
development and strategy of Crédit Agricole S.A. and any person mentioned in Article L. 621-18-2 of the French Monetary
and Financial Code, during financial year 2020, for transactions exceeding an aggregate ceiling of €20,000 (pursuant to
Article L. 621-18-2 of the French Monetary and Financial Code and Article 223-23 of the General Regulations of the French
Financial Market Authority (AMF)).
Pursuant to Article L. 621-18-2 of the French Monetary and Financial Code and Article 223-23 of the General Regulation of the AMF, transactions in
financial instruments issued by Crédit Agricole S.A. of a cumulative amount exceeding €20,000 are the subject of specific statements to the AMF.
Name and title
Transactions carried out by executives
in a personal capacity and by related persons
Stéphane Priami
Chief Executive Officer of Crédit Agricole Consumer Finance
Subscription of 3,080 shares at a price of €6.4940 per unit
Jacques Ripoll
Deputy General Manager, Head of Large customers
Subscription of 25,445 FCPE units at a price of €7.8202 per unit
Subscription of 807,2495 FCPE units at a price of €5.0900 per unit
Jérôme Grivet
Deputy General Manager, Chief Financial Officer
Subscription of 4,500 FCPE units at a price of €13.5000 per unit
Françoise Gri
Independent Director
Subscription of 3,013 shares at a price of €7.5780 per unit
Specific provisions relating to the restrictions
and interventions of the Directors on
transactions on Company securities
Each of them being, by definition, a “permanent insider”, apply the rules
relating to the subscription/prohibition “windows” that apply to the
Directors to carry out the transaction on the Crédit Agricole S.A. security.
The dates corresponding to these windows will be communicated to
the Directors at year-end for the following financial year.
There is no
service contract
linking the members of the administrative
or management bodies to Crédit Agricole S.A. or to any of its subsidiaries
and providing for the granting of benefits under the terms of this contract.
To the knowledge of the Company, there is no family connection between
the Corporate Officers, Directors, Chief Executive Officer and Deputy
Chief Executive Officers of Crédit Agricole S.A.
Crédit Agricole S.A. complies with the
corporate governance system
in
force in France, as indicated in the Board of Directors’ report on corporate
governance at the General Meeting of Shareholders of 12 May 2021,
featuring in this Reference Document. The AFEP/MEDEF code revised
in January 2020 is that to which the Company refers in preparing the
report set out in Article L. 225-37, L. 225-37-4 and L. 22-10-10 of the
French Commercial Code
(Code de Commerce)
.
To the knowledge of the Company, no conviction for fraud has been
delivered in the past five years, up to the present time, against a member
of the administrative or management bodies of Crédit Agricole S.A.
To the knowledge of the Company, no notice of bankruptcy, due to
sequestration or liquidation, has been served in the past five years,
up until the present time, against a member of the administrative or
management bodies of Crédit Agricole S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
177
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
3. Information on executives and management bodies
4. REWARD POLICY
ABOUT THE PART
This part has been prepared with the assistance of the Compensation Committee. The Committee was particularly involved in the definition of the
report’s guidelines and the presentation of the changes to the compensation policy.
Targets
The elements below are intended to explain the compensation policy of
Crédit Agricole S.A. and outline the changes to this policy as of 2021 –
subject to approval at the General Meeting with regard to Corporate
Officers. They highlight the Group’s particular approach, based on a
common framework and specific rules adapted to the positions and
responsibilities held. This part thus highlights the alignment of executive
compensation with the Group’s employee compensation policy on the
one hand, its purpose and the 2022 Medium-Term Plan on the other
hand. Lastly, it complies with Crédit Agricole S.A.’s regulatory obligations
in terms of publication of the compensation policy and elements of
compensation of its Corporate Officers. To that extent, it was revised
in 2020 to meet the new CRDV requirements.
Main changes to reporting in 2020
This year the main changes include:
changes that require shareholder approval relate to the 2021
compensation policy, in line with regulations (CRDV);
the extended use of infographics and a more streamlined plan, in
accordance with the Compensation Committee’s aim to enhance the
readability and understanding of Crédit Agricole S.A.’s reward policy.
Coordination with other media
Annual report relating to the
policy and to the compensation
practices for identified
employees
Integrated report
Notice of meeting
Video and presentation
to the General Meeting
Investor roadshows
Detailed information
of the compensation policy
for identified employees
Summary of the Group’s
compensation policy
Detailed presentation of the
resolutions on say on pay
Summary of the resolutions
on say on pay
Presentation of the
changes to the
compensation policy
for Executive
Corporate Officers
Main content
4.1
Targets and regulatory framework of the reward policy
p. 180
Crédit Agricole S.A.’s reward policy is in line with a common framework structured by regulations and shared targets.
4.2
Rewards for all employees
p. 182
Rewards for employees serves the Group's purpose, the 2022 Medium-term Plan and more specifically the Group’s Human Project.
4.3
Rewards for Executive Managers
p. 187
Rewards for executive managers are fully in line with those for Executive Corporate Officers, both in terms of structure and vesting
conditions.
4.4
Rewards for Corporate Officers
p. 191
Strictly conditioned to the Group’s MTP targets and performance, rewards for Executive Corporate Officers are in line
with value creation for shareholders.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
178
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Compensation policy
Integration of CSR criteria
in the variable compensation
of executive managers,
annual and long term
1
Capital increase
reserved for employees every year
5.8%
of share capital
held by Group employees
or former employees
7
meetings
of the Compensation
Committee in 2020
Alignment of annual variable compensation
with the Medium-Term Plan
MTP FINANCIAL OBJECTIVES
CUSTOMER, HUMAN-CENTRIC AND SOCIETAL PROJECTS OF MTP
OTHERS
Executives
managers
Deputy Chief
Executive Officer
Chief Executive
Officer
60%
60%
60 %
50%
50%
18%
22%
24%
16%
Common long-term compensation
structure for all employees
1/3
Societal
performance
1/3
Group's economic
performance
1/3
Performance in relation
to the Crédit Agricole S.A.
share
LONG TERM
GROUP
PERFORMANCE
The structure of the compensation for executive managers is fully in line with that of the Executive Corporate Officers,
in respect of annual and long-term components.
INTERVIEW – BÉNÉDICTE CHRÉTIEN, HEAD OF HUMAN RESOURCES
As part of the Medium-Term Plan
for 2022, Crédit Agricole S.A. launched
its Human Project in June 2019. What
impact did the health crisis have on
the implementation of this project?
The crisis revealed, as if it were necessary,
the Bank’s usefulness and our employees’
engagement to support private individual,
business, VSEs and SMEs and large
corporate clients. This usefulness is in
line with our purpose, “Acting every day in
the interest of our customers and society”,
which guides our day-to-day activities.
The crisis also demonstrated the relevance of our Medium-Term Plan and
Human Project: step up, secure and augment digital through increased
human accountability to provide more value to clients, accessible
throughout the relationship. A project which particularly resonates
with the health crisis and is strongly adhered to by our employees.
The record ERI Survey participation rate of 80%, up by 21 percentage
points compared to 2016 clearly demonstrates this.
We also confirmed our trajectory and all our commitments for 2022.
This is concretely reflected in the reward plan through our variable
compensation targets which remained unchanged. Despite the crisis,
we have kept the same level of requirement and ambition for the
implementation of our Human Project.
What action was taken to support employees during the crisis?
First, let me recall an important decision made by the Group, which
reflects its socially responsible doctrine: maintain 100% of our employees
compensation without using partial activity.
While facing the crisis, our priority was to provide on-site safety and
protection for our employees. Accordingly, we set up a code of conduct
and rolled out, together with the Group’s university, a mandatory
e-learning
course on protective behaviours.
We also sought to intensify social dialogue in relationships, in particular
through the establishment of a crisis unit with trade unions once a
week, which enabled – in an unprecedented time frame – to conclude
collective bargaining agreements on leave for all entities.
A new organisation for work was set up in less that two weeks, under
which 70% of Group employees were able to work from home. This
organisation was based on a group of supporting measures for our
employees: telemedecine consultations, 24/7 psychological help centre,
learning resources platform, tutoring for our employees’ children, “well-
being” offer to raise awareness on the harm caused by screens and
inactivity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
179
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
What were the main developments of the Human Project and more
specifically regarding rewards in 2020?
Concerning gender equality and diversity, this year our commitment
resulted in a greater number of women within our decision-making
bodies: +18.5 points since 2016, bringing the proportion of women
on the Executive Committee of Crédit Agricole S.A. to 25%, and also
+5 points since 2016, bringing the percentage of women on the Executive
Committees and the Management Committees of the 11 Group entities
to 24%. To support this policy, we carried out a review of the decision-
making teams and succession plans, placing a particular focus on
identifying female talents. A genuine transformation of the Executive
Career Path was also conducted to make the onboarding of international
executives central to this system which is key to the Group’s culture.
Regarding rewards, despite the health crisis and to thank our employees
for their exceptional commitment towards our clients, we decided to
maintain the capital increase reserved for employees. Above all, we
offered an exceptional 30% rebate on the share price, thereby making
Crédit Agricole S.A. one of the first CAC 40 companies to allow employees
to benefit from this new provision of the PACTE law. Overall, more than
47,000 employees took part in the subscription, increasing employee
ownership in the capital from 4.7% to 5.8% at end-2020.
The first stage of our People Project placed the cornerstones for a
more entrepreneurial management model by extending the scope of
responsibilities of the teams thereby giving them more autonomy. The
second stage started and has three targets: testing new organisation and
management methods based on new codes of conduct for managers,
streamlining our organisations and lastly, strengthening relations with
the Customer Project.
Because it works together with the Customer Project, our Human project
is strategic. It is aimed at helping our employees make informed decisions
while best meeting the needs of our clients. Being the bank for everyone,
but above all the bank for every individual person, also hinges on our
reward policy.
Key figures
—
+21 pp:
increase in ERI Survey participation rate compared to 2016;
—
No. 1
French financial services in the
“Diversity Leaders 2020”
(Financial Times)
ranking;
—
47,000:
number of participants in the capital increase reserved for employees.
4.1.
TARGETS AND REGULATORY FRAMEWORK OF THE REWARD POLICY
Important to know
—
Reward combines elements of compensation in the strict sense of the word, that have been submitted to the vote of shareholders,
as well as social benefits and peripheral compensation.
—
Bearer of the values of the Group, the reward policy is based on
fairness
and common rules for all employees, in compliance with
the
regulatory
corpus specific to the financial sector.
4.1.1. Approach and targets
of the reward policy
Faithful to its mutualist values and founding cooperative principles,
Crédit Agricole S.A. has defined a responsible reward policy, serving
its purpose: “Working every day in the interest of our customers and
society” and its 2022 Medium-Term Plan. It strives to reconcile the
expectations of all its stakeholders – customers, employees, service
providers, associations, public authorities, shareholders – with the
demands of a competitive market in order to position us as the leader
in the customer-focused universal banking model.
The Group bases the compensation of employees and executive
managers on objective foundations, which reflect the performance
and long-term responsibility of the organisation.
Its policy participates in the three founding principles of the Human-
centric Project: empowering employees, strengthening our customer
focus and developing a framework of trust; and meets targets that
are shared by all employees, supplemented by specific objectives for
executive managers and Executive Corporate Officers.
Targets of Crédit Agricole S.A.’s reward policy
ALL EMPLOYEES
EXECUTIVE MANAGERS
EXECUTIVE CORPORATE
OFFICERS
• Attracting, motivating and retaining
the talent
that the Group needs
• Recognising
individual and collective performance
over time
• Aligning the
interests of employees
with those of Crédit Agricole S.A.
and its
shareholders
• Promoting sound and efficient risk
management
• Correlating their compensation levels
with
actual long-term
performance
• Aligning the interests of management
with the success of the Group’s Project
and
Medium-Term Plan 2022
• Recognizing the
long-term
performance
and successful
implementation of the
strategic plan
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
180
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
4.1.2. Regulatory corpus shaping
compensation policies
Crédit Agricole S.A.’s compensation policy must be seen within a closely
regulated environment specific to its sector.
Through its universal customer-focused banking model, the Group is
responsible for three different regulatory corpora corresponding to its
three activities. It ensures that its compensation policy complies with
the applicable national, European and international legal and regulatory
frameworks. It also includes the provisions of the Volcker Rule, France’s
law on the separation of banking and finance activities, the MIF Directive
and the Insurance Distribution Directive.
Regulations governing the compensation policies
of Crédit Agricole S.A. entities
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AIFM: Alternative Investment Fund Managers
UCITS: Undertakings for collective Investment in Transferable Securities
The compensation policies of Crédit Agricole S.A. entities are governed
by three distinct sets of regulations:
those applicable to credit institutions and investment companies
(the “CRD 4” package);
those applicable to asset management companies and alternative
investment funds (hedge funds and private equity funds) under the European
Alternative Investment Fund Managers directive (Directive 2011/6 of
8 June 2011, or “AIFMD”) and to UCITS management companies under
the European UCITS V directive (Directive 2014/91/EU of 23 July 2014);
those applicable to insurance and reinsurance companies that come
under the Solvency framework.
This regulatory framework clarifies the definition of “identified
employees” who are subject to more stringent compensation rules.
Identified employees
These regulations involve in particular the identification of employees who
have an impact on the risk profile of the Group or of their entity through
their function, their level of delegation or their level of compensation,
hereinafter “identified employees”.
The scope is defined by a joint decision-making process between Group
and entity Human Resources functions and Risk Management and
Permanent Controls and Compliance functions. The criteria applied are
summarised on page 217. The compensation of identified employees
is part of a reinforced regulatory context that imposes rules in the
structuring of their compensation. The general principles are described
in 4.2.2.
Executive Corporate Officers
In addition to the regulatory corpus specific to the banking sector, the
compensation of Executive Corporate Officers of Crédit Agricole S.A.
complies with:
the recommendations and principles of the Corporate Governance
Code for listed companies, as revised in January 2020 (the AFEP/
MEDEF Code) with the exception of certain recommendations listed
in the areas of non-compliance with the AFEP/MEDEF code page 128;
The provisions of the French Commercial Code (Code de Commerce).
In 2021, the compensation policy for all identified employees, including
Executive Corporate Officers, will be brought into compliance with the
CRDV European Directive, which provides for a vesting period of five
years for deferred compensation.
Find out more
Definition of identified employees: detailed on page 217.
Definition and characteristics of the compensation of identified
employees: Annual report relating to the compensation policy
and practices of identified employees (in accordance with
Articles 266
et seq.
of the Decree of 3 November 2014 relating to
internal controls of credit institutions and investment companies and
with Article 450 of (EU) Regulation No. 575/2013 of 26 June 2013).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
181
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
4.2. REWARDS FOR ALL EMPLOYEES
(1) Please refer to the glossary for the definition of Raison d’Être.
Important to know
—
The reward policy is at the service of the
Group's Raison d'Être
(1)
, of its Group Project and 2022 Medium-Term Plan
and,
in particular, of its
Human-centric Project
, providing its customers direct access to a local customer relations manager.
Through the implementation of
free share grants and the annualisation of capital increases reserved for employees
, the
reward policy supports the three founding principles of the Human-centric Project: empowerment, outreach and initiative-taking.
—
In 2020, Crédit Agricole S.A. decided to maintain
the capital increase reserved for employees
, despite the health crisis,
by offering an exceptional discount of 30% on the share price.
4.2.1 Governance of the compensation policy
In order to guarantee compliance with the guiding principles of the reward policy and their rigorous application, the Group has implemented
governance of compensation policies and procedures for all entities and employees. In 2020, this governance focused in particular on employee
rewards amid the health crisis.
Process of defining the compensation policy
Governance of employee compensation policy of Crédit Agricole S.A.
01
02
03
04
05
06
(1) The shareholders’ vote relates in particular to the compensation policy and the elements of compensation for Executive Corporate Officers, as well as the proposed increases
of capital reserved for Group employees.
1 POLICY CREATION
2 REVIEW
6 ADJUSTMENT
3 APPROVAL
3 APPROVAL
5 MONITORING
4 IMPLEMENTATION
The
Remuneration Committee formulates an
opinion
on employee compensation policy.
It ensures its compliance and monitors the
implementation of
this policy, globally and
by major sectors.
The
Board of Directors
approves the policy.
The
shareholders
at the General
Meeting decide on certain elements
(1)
of the remuneration policy.
The
Group Finance Department ensures
the consistency
of the methods used to determine the
variable compensation budgets in relation to the Group’s
risks and financial capacity.
The
Human Resources Department oversees
the implementation
of the compensation policy.
The
Group Human Resources Department
draws up and adjusts the employee
remuneration policy
and submits it to the
operating divisions of the Remuneration Policy
Control Committee (RPCC) for their opinion.
The Remuneration Committee proposes the
remuneration policy to the Board of Directors.
The Human Resources Department
and the Remuneration Committee
take into account the conclusions
of the RPCC, the internal audit, the vote
shareholders to
adjust, if necessary
remuneration policy.
The changes agreed upon will be applied
from the following year.
The
Remuneration Committee
with the support of
internal management, monitors the implementation of
policies and ensures their compliance. The
Risk
Committee reviews the compliance
of compensation
policies with risk strategies.
The Group Control and Audit Department conducts a
periodic audit
subsequent
to the definition and
application of the remuneration policy of the identified
staff in accordance with the regulations.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
182
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Functions involved in the process of defining the compensation policy
Governance bodies and shareholders
BOARD OF
DIRECTORS
01
02
05
06
Considers and approves:
the update to the compensation policy for
employees and its application note;
fixed compensations, as well as the terms
and criteria for determining variable
compensation for Executive Corporate
Officers in accordance with the 2022
Group Project and Medium-Term Plan;
the report on compensation practices
for members of the executive body and
identified employees;
capital increases reserved for employees.
REMUNERATION
COMMITTEE
Prepares the proposals and
recommendations to be submitted to the
Board of Directors, in particular regarding
the general principles of the employee
remuneration policy, compensation
of Corporate Officers, planned capital
increases reserved for employees and
related resolutions to be submitted to the
General Meeting;
oversees the total variable compensation
for all employees and the annual variable
compensations exceeding a threshold
agreed by the Board;
reviews the entities’ implementation of
compensation policies;
reviews the decisions of the
Compensation Policy Control Committee;
adjusts the compensation policy in line
with the Group’s performance and results;
analyses French and international
regulatory changes.
RISK COMMITTEE
Ensures that the Group’s compensation policies
and practices are in line with proper and
effective risk management practices.
SHAREHOLDERS
01
02
05
06
Vote on resolutions that may concern planned
capital increases reserved for employees, the
compensation of identified employees, the
compensation policy for Corporate Officers and
the elements of compensation allocated in
respect of the previous financial year.
Group operations departments
GROUP HUMAN
RESOURCES
DEPARTMENT
Prepares the work of the Compensation
Committee and drafts the compensation
policy to be submitted to the Committee
for review in connection with the 2022
Medium-Term Plan;
manages the compensation policy and
coordinates the various players involved;
adjusts the compensation policy, largely
based on the conclusions of the RPCC.
REMUNERATION
POLICY CONTROL
COMMITTEE (RPCC)
Three departments represented: Risk
Management and Permanent Control,
Compliance and Human Resources
departments.
Issues an opinion on the remuneration
policy, focusing on the information relating
to the general policies – fulfilment
sine
qua non
of the duty to alert – and on
the validity of the principles applied
to implement the remuneration policy
within the Group, in light of the regulatory
requirements;
appraises the implementation of the
regulations within the entities, in particular
for identified employees;
coordinates the actions to be introduced in
the entities by the Risk Management and
Compliance functions.
GROUP FINANCES
Approves the terms for determining the
total variable compensation budget;
confirms the adequacy of the total amount
of compensation in view of the Group’s
ability to strengthen its own equity.
CONTROL AND AUDIT
DEPARTMENT
Conducts an audit subsequent to the definition
and implementation of the remuneration policy
for identified staff within the meaning
of regulations.
Find out more
Governance of the reward policy for Corporate Officers: 4 “Reward
policy”, part 4.4.
Involvement of shareholders in the compensation policy for Corporate
Officers: Universal Registration Document, part 3.3 “Information on
executives and management bodies”.
Involvement of shareholders in the compensation policy for identified
employees: Annual report relating to the policy and to the compensation
practices for identified employees.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
183
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
4.2.2. Reward policy
The reward of Crédit Agricole S.A. employees is composed of fixed, variable and peripheral elements, corresponding to the various targets – notably
in terms of compensation for short, medium and long-term performance, consistent with the 2022 Medium-Term Plan (MTP). All or part of these
elements may be offered to each employee, according to their level of responsibility, skills and performance.
Remuneration structure of Crédit Agricole S.A. employees
ALL EMPLOYEES
EXECUTIVE MANAGERS
DMS
Fixed
compensation
Annual variable
compensation
Collective variable
compensation
Qualifications
and level
of responsibility
of the employee
Performance
criteria
Individual objectives
and/or collective
objectives aligned
with the MTP
Annual
performance
of the entity
Long-term
variable compensation
(1)
Peripheral compensation
The Group’s economic, stock market and societal
performance over three years
(1) Also open to key employees (high potentials or rare expertises).
Rules for determining elements of reward
The Group has set common rules for all employees to guide the
determination of compensation elements:
within each of its various business lines, Crédit Agricole S.A. regularly
compares its practices to those of other financial groups at the national,
European and international level;
performance is assessed by precise measurement of the results
obtained relative to specific annual targets (how much), taking into
account the conditions in which the objectives were achieved (how);
it takes into account intrinsic financial performance, the Group’s
non-financial performance and its performance compared to that of
other European banks;
the compensation systems are differentiated according to level of
responsibility within the organisation;
peripheral compensation is governed by Group or entity agreements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
184
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Procedures for determining elements of reward
Elements of compensation
System
People eligible
FIXED COMPENSATION
Targets
Offering competitive and
attractive compensation
Base salary
All employees
Skills and responsibility level are rewarded by a base salary in line with the specific characteristics of each business line
in its local market.
ANNUAL VARIABLE
COMPENSATION
Targets
Linking the interests of
employees with those of
the Group and
shareholders, as part of
the deployment of the
2022 Medium-Term Plan
Variable compensation
All employees
Crédit Agricole S.A. has put in place
two annual
variable compensation systems – depending on the business lines
and consistent with market practices:
an
individual variable compensation (RVP)
system based on the calculation of benefits that is the sum of target
individual variable compensation adjusted by a performance rate;
a
“Bonus
Pool”
system based on the calculation of benefits directly linked to the entity’s financial results and
defined according to a percentage of the “Contribution” to Group results. The contribution represents an entity’s
capacity to fund bonuses, taking into account the cost of risk, the cost of capital and the cost of liquidity.
It is defined as:
Revenues
(1)
– direct and indirect expenses before bonuses
– cost of risk
– cost of capital before tax
–––––––––––––––––––––––––-–-–––––––
= Contribution
The payout ratio represents the portion of the Contribution that the entity wants to pay out in bonuses. It is dependent on
the entity’s financial performance and the practices of competing companies operating in comparable businesses.
The individual award
of variable compensation is defined in compliance with regulatory principles. The amounts must not
hamper the ability of Group entities to strengthen their equity as necessary. As well as economic and financial criteria,
the performance assessment takes all risks into account, including liquidity risk, as well as the cost of capital.
Variable compensation is related directly to annual performance. Unsatisfactory performance, failure to comply with rules
and procedures or at-risk behaviour have a direct impact on variable compensation.
Individual variable compensation (RVP)
Employees and executive managers:
central support functions;
retail banking;
specialised financial services;
insurance;
real estate;
other.
Individual variable compensation (RVP) reflects the employee’s individual performance, assessed by line management
on the basis of the attainment of individual and/or collective targets.
The targets are described precisely and measurable over the year. They systematically take into account the customer,
employee and societal aspects of activities.
The degree of attainment or exceeding of targets is the principal criterion for the award of RVP. It is supplemented by a
qualitative assessment of how these targets were achieved (assuming responsibility, discernment, autonomy, cooperation,
commitment, management, etc.).
Bonus
Employees and executive managers:
corporate and investment banking;
wealth management;
asset management;
capital investment.
The award of a bonus is decided upon by line management based on a formal annual individual performance appraisal,
which looks at the achievement of both quantitative and qualitative targets. There is therefore no direct and automatic link
between the level of financial results of an employee and their variable compensation level. Employees are evaluated
on their results, those of their activity and the conditions under which such results have been achieved.
Similarly to individual variable compensation, targets are clearly defined and measurable over the year. Qualitative targets
are individualised, related to the professional activity and to the level of responsibility. They include the quality of risk
management, resourced allocated, the behaviours (assuming responsibility, discernment, autonomy, cooperation,
commitment, management, etc.) implemented to achieve results.
Guaranteed variable compensation restrictions
Employees
Executive managers
Guaranteed variable compensation is strictly limited to new hires, for a period that may not exceed one year. Guaranteed
variable compensation is awarded subject to the deferred compensation plan applicable to the financial year. Accordingly,
all rules on variable compensation for identified employees (deferred payment schedule, performance conditions
and reporting) also apply to guaranteed bonuses.
(1)
It is understood that, by definition, revenues are calculated net of the cost of liquidity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
185
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
System
People eligible
LONG-TERM VARIABLE
COMPENSATION
Targets
Rewarding the long-term
collective performance
of the Group and its
entities
Long-term incentive plan
Executive managers
Key Group executives
This aspect of variable compensation, which is unifying, motivating and encourages loyalty, completes the annual variable
compensation mechanism.
It is characterised by compensation in Crédit Agricole S.A. shares and/or cash, indexed to the Crédit Agricole S.A. share price,
with long-term performance conditions based on economic, financial and societal criteria consistent with the long-term
strategy of the Group and its entities.
COLLECTIVE VARIABLE
COMPENSATION
Profit sharing and incentive plans
All employees in France
Profit sharing
All employees of certain international entities
Targets
Linking all employees to
the Group’s results to
enable the collective
sharing of value created
Collective variable compensation plans are defined separately for each entity in order to reflect value creation as closely
as possible. In France, Group companies therefore negotiate their own profit-sharing and incentive plan agreements,
complemented by contribution matching systems through their Employee savings scheme (PEE) and Collective Retirement
Savings Plan (PERCO).
Employee shareholding
All employees with the exception of a few countries
Employee shareholding, rooted in the corporate culture of Crédit Agricole S.A., has grown over the years, in the context
of capital increases reserved for employees and retirees, to be carried out annually in 2018. At end-2020, Group
employees and former employees held 5.8% of share capital.
Peripheral compensation
System
People eligible
PERIPHERAL COMPENSATION
Targets
Covering/Supplementing health care reimbursements
in the event of employee illness
Protecting employees against all life’s uncertainties
Private healthcare insurance scheme
All employees
Supplementary pension scheme
Executive managers
In addition to direct compensation, peripheral compensation in terms of retirement, healthcare
and pensions are put in place within collective schemes specific to each entity.
Support to employees in dealing with the health crisis
In 2020, Crédit Agricole S.A. chose to maintain the compensation of all its employees, without seeking State assistance in providing
short-time work benefits for the reduced activity imposed in response to the health crisis.
The Group introduced a new work organisation in less than two weeks, where 70% of employees were able to work from home. All the
necessary measures were taken to ensure safety on the site and to protect employees. The Group maintained local dialogue with trade union
representatives and implemented measures to support employees through several HR offers all year long. These included telemedicine,
psychological unit, a dedicated health and provident scheme, a remedial classes platform and tutoring for young employees.
Compensation of identified employees
In accordance with regulatory obligations, Crédit Agricole S.A. has defined
strict rules surrounding the compensation policy for identified employees:
A remuneration policy that promotes sound and efficient risk
management:
the amounts and distribution of variable compensation
must not impair the institutions’ ability to strengthen their equity as
required.
A balance between fixed and variable compensation:
for any
employee of a credit institution or investment firm, the variable
component of their compensation cannot be greater than 100% of
the fixed component; nevertheless, each year, the General Meeting of
Shareholders can vote to apply a higher maximum ratio provided that the
total variable component never exceeds 200% of the fixed component for
any employee. In May 2020, the General Meeting approved the resolution
raising this maximum ratio to 200% for compensation awarded for the
2020 financial year and then for subsequent financial years until a new
decision by the General Meeting.
A variable compensation partly deferred and paid in the form of
instruments:
40% to 60% of variable compensation is deferred over three years. The
deferred portion vests no faster than pro rata in three instalments in
Y+1, Y+2 and Y+3, subject to continued employment and performance
conditions;
each instalment is granted in Crédit Agricole S.A. shares or instruments
linked to Crédit Agricole S.A. shares. (credit institution, investment
companies, insurance and reinsurance company) or by a portfolio of
funds representative of the activity (management company);
for credit institutions and investment companies employees,
there is a six-month lock-up period after each deferred variable
compensation instalment has vested. A portion of the non-deferred
variable compensation is also paid in Crédit Agricole S.A. share-linked
instruments, at 10% of the total variable compensation, at the end of
a six-month lock-up period.
Risk-adjusted variable compensation:
a monitoring system for at-risk
behaviour by identified employee is deployed at Crédit Agricole S.A.
subsidiaries in cooperation with the Group Risk Management and
Permanent Controls and Compliance business lines. This system
specifically includes annual monitoring and assessment of the system
by the governance body as well as an arbitration procedure at Executive
Management level for observed cases of at-risk behaviour.
Crédit Agricole S.A. has also put in place two systems that enable
adjustment or even restitution to the Group of variable compensation,
in the event of at-risk behaviour:
a malus clause:
in the event of observing non-compliant behaviour,
the variable compensation initially awarded may be reduced in full or
in part in accordance with Article L. 511-84 of the French Monetary
and Financial Code;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
186
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
a clawback clause:
if it is discovered within a period of five years
after payment that an employee is responsible for or has contributed
to significant losses to the detriment of the Group or has demonstrated
particularly serious at-risk behaviour, the Group reserves the right,
subject to local laws in force, to demand the restitution in full or in
part of amounts already paid.
Communication:
compensation paid during the financial year to all
identified employeess of credit institutions or investment companies is
subject to a resolution submitted each year to the Crédit Agricole S.A.
General Meeting.
Find out more
The Human Resources ambition : Universal Registration Document,
Chapter 2, part 2.4.3.
Rules and specific procedures for determining the compensation of
executive managers: Universal Registration Document, Chapter 3,
part 4.3.
Rules and specific procedures for determining the compensation
of Executive Corporate Officers: Universal Registration Document,
Chapter 3, part 4.4.
4.2.3. Amount of reward
In 2020, total employee expenses amounted to €7.2 billion for Crédit Agricole S.A. The overall total distributed, including profit-sharing and the
employer contribution matching of employee savings plans, was €296 million.
Exceptional discount for the 2020 employee shareholding campaign
Since its initial public offering in 2001, Crédit Agricole S.A. has carried out seven capital increases reserved for employees and retirees.
Since 2018, the Group has been committed to making this an annual arrangement.
In 2020, the Board of Directors of Crédit Agricole S.A. set the discount of the share price at 30% (compared with 20% previously), in recognition
of the mobilisation of employees since the beginning of the health crisis. Crédit Agricole S.A. is thus one of the first CAC 40 companies to
have allowed its employees to benefit from this new provision of the PACTE law, which makes it possible to offer an exceptional discount.
The capital increase reserved for employees involved nearly 32 million newly issued shares. The number of subscribers more than doubled:
over 47,000 subscribers (compared with 20,500 in 2019) invested nearly €162.9 million in Crédit Agricole S.A. shares. At end-2020, Group
employees and former employees held 5.8% of share capital.
By valuing the contribution of each individual to the success of the collective, the development of employee shareholding is part of the new
confidence pact desired by the Group through its Human-centric Project.
Find out more
Human resources indicators: Universal Registration Document,
Chapter 2, part 4.2.
Amount of compensation of executive managers: Universal Registration
Document, Chapter 3, part 4.3.2.
Amount of compensation of Executive Corporate Officers: Universal
Registration Document, Chapter 3, part 4.4.3.
Amount of average and median compensation of employees in France:
Universal Registration Document, Chapter 3, part 4.4.3.
4.2.4. Comparative approach
to compensation
Crédit Agricole S.A. is committed to respecting equality between
women and men, particularly in terms of compensation, notably through
regular diagnostics carried out by the Group and its entities. In 2021,
Crédit Agricole S.A. published its Gender Equality Index, which shows
very positive scores for the Group as a whole: 86/100 for the Crédit
Agricole S.A. economic and social unit and between 80 and 99/100
for the other entities.
Find out more
Gender equality at work: Universal Registration Document, Chapter 2,
part 2.4.3.
Rewards for Corporate Officers, comparative approach to compensation,
Universal Registration Document, Chapter 3, part 4.4.3.
4.3. REWARDS FOR EXECUTIVE MANAGERS
Important to know
—
Variable compensation for executive managers is based on
mutual targets and aligned with Group strategy
in order to unite
them around shared challenges.
—
The alignment of the compensation structure of executive managers with that of Executive Corporate Officers
was
reinforced in 2020 by adjusting targets and bringing them in line with those of the 2022 Medium-Term Plan, both in terms of
financial and non-financial criteria.
—
This group of employees also qualifies for the allocation of free shares under the
long-term incentive plan
in order to align the
interests of executive managers with those of shareholders and the Group’s long-term performance, with the same performance
conditions as for Executive Corporate Officers. In 2020, owing to the health and economic context, the Group
decided not to grant
free shares
, in line with the decision not to pay out dividends to shareholders.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
187
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
The Group’s executive managers are members of the management teams and break down into two management circles:
executives in the first circle prepare the definition of strategy for their business line or a Group cross-cutting function and steer implementation,
in line with Group strategy;
in the second circle, executives are responsible for defining functional or operational policies that have a strategic impact on their businesses.
4.3.1. Reward policy applicable to executive managers
Executive managers receive elements of fixed, variable and peripheral compensation, adapted to their specific targets, in line with the Group’s
compensation policy.
Elements of compensation
System
People eligible
FIXED COMPENSATION
Base salary
All executive managers
The fixed compensation of executive managers is determined using the same rules as those of all employees.
ANNUAL VARIABLE
COMPENSATION
All executive managers of Crédit Agricole S.A. are eligible for the Group’s variable compensation schemes, for which
the structure of targets is common regardless of the entity.
This means that their individual variable compensation comes either from the individual variable compensation plan
(RVP) or from the bonus system. As for all employees, the system on which they are dependent is defined according
to their home entities.
Individual variable compensation/bonus
All executive managers
Annual variable compensation is calculated based on two sets of criteria:
50% on the basis of financial criteria, in line with those of the 2022 Medium-Term Plan, with criteria based
on Crédit Agricole S.A.’s scope of responsibility in terms of underlying Net income Group share, cost/
income ratio excluding SRF and RoTE- and on the scope of responsibility of the executive manager;
50% on non-financial criteria, in line with the Group’s Customer, Human-centric, and Societal Projects and
which measure value creation:
-
customer: satisfaction with the services and advice provided, adaptation of offers to new uses,
innovation engagement,
-
human: ability to attract, develop and retain employees, and to initiate managerial transformation to
create a framework of greater trust and confidence,
-
social: mutualist and societal commitment, respect for values beyond legal obligations, development of
green finance.
Annual variable compensation criteria applicable to executive managers
10 to 20%
Human-centric
Project
10 to 20%
Customer Project
10 to 20%
Societal Project
50%
Financial objectives
from MTP
INDIVIDUAL
PERFORMANCE
N
O
N
-
F
I
N
A
N
C
I
A
L
C
R
I
T
E
R
I
A
F
I
N
A
N
C
I
A
L
C
R
I
T
E
R
I
A
2022 Medium-Term Plan: integration of gender diversity in the variable compensation of the Executive
Committee
Crédit Agricole S.A. has set itself the target of reaching 30% of women in the decision-making bodies of its
entities by 2022. At end-2020, the percentage of women in the highest decision-making bodies of Crédit
Agricole S.A. entities was 24%.
Since 2019, the progression of this target has had a direct impact on the annual variable compensation of
members of the Executive Committee, for which it now is one of the non-financial criteria. The increase in the
number of women in decision-making bodies and the development of female talent is one of the priorities of
the Human-centric Project, and is included in the management indicators, to amplify the gender diversity policy
applied by the Group for several years now.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
188
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
System
People eligible
LONG-TERM VARIABLE
COMPENSATION
Long-term incentive plan
Executive Committee Members
Senior executives
The Group established a long-term incentive plan in 2011 to reward long-term performance. Accordingly, taking an
entity’s societal impact into consideration strengthens the link between compensation and long-term performance.
The long-term variable compensation plan for executive managers takes the form of share-based or cash
compensation indexed to the Crédit Agricole S.A. share price.
Amounts are deferred over three years and vest subject to performance conditions and according to the following
criteria:
Crédit Agricole S.A.’s intrinsic economic performance;
Crédit Agricole S.A.’s stock performance;
Crédit Agricole S.A.’s societal performance.
The members of the Crédit Agricole S.A. Executive Committee and the Group’s senior executives are eligible for this
long-term incentive plan, whose grant is determined on an annual basis by the Group Chief Executive Officer.
In 2020, the Group did not allocate any free shares, in line with the non-payment of dividends to shareholders.
Vesting conditions of the long-term variable compensation of executive managers
1/3
Societal
performance
1/3
Group's economic
performance
1/3
Performance in relation
to the Crédit Agricole S.A.
share
LONG TERM
GROUP
PERFORMANCE
COLLECTIVE VARIABLE
COMPENSATION
Profit sharing and incentive plans
All executive managers in France
Profit sharing
All executive managers of certain international entities
Employee shareholding
All executive managers with
the exception of a few countries
Executive managers are eligible for profit-sharing, incentive plans and employee share ownership plans
under the same conditions defined by their entity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
189
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Peripheral compensation
System
People eligible
PERIPHERAL COMPENSATION
Private healthcare insurance scheme
All executive managers
Executive managers benefit from the same private healthcare insurance schemes as other employees.
Supplementary pension scheme
Executive managers
From 2010 to 2019, the supplementary pension scheme consisted of a combination of defined-contribution pension
schemes and a defined-benefit scheme
(the rights to the defined-benefit scheme are determined after the rights
paid under the defined-contribution scheme).
In any event, at retirement, the total retirement annuity of all schemes is capped at 70% of the reference
compensation in accordance with the supplementary retirement regulations for executive managers of Crédit
Agricole S.A.
In accordance with the PACTE Act and the provisions of Order no. 2019-697 of 3 July 2019, the defined benefit
top-up scheme was permanently closed as of 4 July 2019, and the conditional rights it provides have been
consolidated at 31 December 2019.
The rights established by the Group prior to the effective date of the applicable rules of 2010 are maintained in
accordance with the rules and, if applicable, are added to the rights resulting from the application of those rules,
particularly when calculating the maximum annuity that can be paid.
Since 1 January 2020, Crédit Agricole S.A. has set up a new retirement savings scheme that will enable employees
to progressively build up capital with the company’s help. This plan is made up of an Article 82 defined-contribution
scheme and free share allocations. Part of this capital will thus follow the Group’s performance, thereby reinforcing
the alignment with the strong and sustainable growth targets of our corporate strategy.
4.3.2. Amount of reward of executive managers
At 31 December 2020, the reward of members of the Board of Directors and the Executive Committee paid by Crédit Agricole S.A. amounted to
€27.5 million, of which €3.6 million in post-employment benefits.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
190
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
4.4. REWARDS FOR CORPORATE OFFICERS
Important to know
A 2021 compensation policy revisited against a backdrop of regulatory changes
As part of its roadmap, the Board of Directors decided to review the annual variable compensation with the entry into force of the Capital Requirements
Directive V (CRDV) on 1 January 2021.
Changes
(1)
Targets
Weightings of the performance criteria
for annual variable compensation
Assets, at fair value and in all circumstances the capacity for anticipation and adjustment in the
management of the company in the face of a much greater degree of uncertainty in the years to come.
Terms of vesting of annual and
long-term variable compensation
Bring the scheme in line with the new regulatory context (CRDV).
Continue the positioning of the annual variable compensation as a tool for implementing
the Medium-Term Plan.
(1)
Subject to the approval of shareholders at the General Meeting of 12 May 2021.
Achievement rates that reflect the Group’s solidity
The performance of the various criteria used to assess variable compensation is in line with the Group’s results and the progress of the MTP in 2020.
€3,849bn
Underlying NIGS
-16%
Ì
€59,6bn
C/I ratio excluding
SRF
-1,4 pp
Æ
9,3%
RoTE
-2,6 pp
Æ
+ 7 pts
Ê
Increase in Net Promoter Score (NPS)
in Retail banking in France
+ 6 pts
Increase in employee engagement
and recommendation index
Chief Executive Officer
Deputy Chief Executive Officer
Weighting
Achievement rate
Weighting
Achievement rate
FINANCIAL CRITERIA
60%
58.8%
60%
58.8%
Underlying Net Income Group Share
20%
17.7%
20%
17.7%
Cost/income ratio excl. SRF
20%
22.8%
20%
22.8%
Return on tangible equity
20%
18.4%
20%
18.4%
NON-FINANCIAL CRITERIA
40%
49.1%
40%
47.2%
Customer Project, excellence in customer relations
9%
11.7%
7%
9.1%
Human-centric Project, empowered teams for customers
9%
11.7%
7%
9.1%
Societal Project, commitment to society
9%
10.4%
7%
8.1%
Technological change
3%
3.3%
9%
9.9%
Risk management and compliance
5%
5.5%
10%
11.0%
Collective momentum with the Group
5%
6.5%
na
na
TOTAL
107.9%
106.0%
Compensation consistent with the 2022 Medium-Term Plan and value creation
The annual and long-term components of variable compensation of Executive Corporate Officers is in line with the 2022 Medium-Term Plan and
the interests of shareholders.
Annual variable
Long-term variable
Medium-Term Plan
Financial targets
x
x
Customer Project, excellence in customer relations
x
Human-centric Project, empowered teams for customers
x
Societal Project, commitment to society
x
x
Stock performance
x
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
191
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Balanced and moderate compensation over time
Thanks to the balance between performance conditions or non-performance conditions and exposure or non-exposure to the market, the compensation of
Credit Agricole S.A. Executive Corporate Officers is in line with the principles of long-term moderation applied to the Group’s compensation management.
Dominique Lefebvre*
Chairman of the Board of Directors
2018
2019
2021
(1)
2020
(1)
€560,000
€560,000
€560,000
€560,000
FIXED AND BENEFITS OF ALL KINDS
(1) Subject to the approval of shareholders at the General Meeting of 12 May 2021.
100% cash,
without performance conditions
2021
Philippe Brassac
Chief Executive Officer
DEFERRED ANNUAL VARIABLE COMPENSATION
LONG-TERM COMPENSATION
FIXED AND BENEFITS OF ALL KINDS
ANNUAL NON-DEFERRED VARIABLE COMPENSATION
(1) Subject to the approval of shareholders at the General Meeting of 12 May 2021.
(2) Amounts before waiver by Executive Corporate Officers of 50% of their variable compensation in respect of 2019.
(3) Amounts after waiver by Executive Corporate Officers of 50% of their variable compensation in respect of 2019.
Without
performance
conditions
42%
With
performance
conditions
58%
2021
2018
Max
2020
Max
2021
(1)
Allocated
2020
(1)
€2,214,767
€2,357,300
(2)
€1,728,650
(3)
€2,456,562
€2,646,326
€2,646,326
2019
Xavier Musca
Deputy Chief Executive Officer
DEFERRED ANNUAL VARIABLE COMPENSATION
LONG-TERM COMPENSATION
FIXED AND BENEFITS OF ALL KINDS
ANNUAL NON-DEFERRED VARIABLE COMPENSATION
(1) Subject to the approval of shareholders at the General Meeting of 12 May 2021.
(2) Amounts before waiver by Executive Corporate Officers of 50% of their variable compensation in respect of 2019.
(3) Amounts after waiver by Executive Corporate Officers of 50% of their variable compensation in respect of 2019.
With
performance
conditions
58%
2021
Without
performance
conditions
42%
2021
2018
Max
2020
Max
2021
(1)
Allocated
2020
(1)
€1, 311,000
€1,331,700 €
(2)
€1,015,850
(3)
€1,403,478
€1,685,937
€1,685,937
2019
*
In order to guarantee his independence, the Chairman of the Board of Directors does not receive any variable compensation.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
192
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Crédit Agricole S.A. has historically opted for the separation of the duties
of direction and control in executive functions in accordance with Article
L. 511-58 of the French Monetary and Financial Code.
Corporate Officers are the Group’s directors, as well as the three
Executive Corporate Officers:
Dominique Lefebvre, as Chairman of the Board of Directors since
4 November 2015;
Philippe Brassac, as Chief Executive Officer since 20 May 2015;
Xavier Musca, as Deputy Chief Executive Officer and second in
command since 20 May 2015.
The Chief Executive Officer and Deputy Chief Executive Officer, Executive
Corporate Officers, have decided upon a shared responsibility, which
is reflected in their solidarity regarding the performance criteria used.
4.4.1. Compensation policy for Executive Corporate Officers awarded for 2021
submitted for shareholder approval
Specific governance to Executive Corporate Officers
The Board of Directors and its Compensation Committee play a key role in the governance of the related policy. The same applies to shareholders
who vote each year at the General Meeting on the policy and on the elements paid in or awarded for the financial year by a binding vote.
Process of defining the compensation policy
Governance of the compensation policy for Executive Corporate Officers of Crédit Agricole S.A.
01
02
03
04
05
06
1 POLICY CREATION
2 REVIEW
6 ADJUSTMENT
3 APPROVAL
3 APPROVAL
5 MONITORING
4 IMPLEMENTATION
The
Remuneration Committee formulates an
opinion
on employee compensation policy.
It ensures its compliance and monitors the
implementation of
this policy, globally and
by major sectors.
The
Board of Directors
approves the policy.
The
shareholders
at the General
Meeting decide on certain elements
(1)
of the remuneration policy.
The
Group Finance Department ensures
the consistency
of the methods used to determine the
variable compensation budgets in relation to the Group’s
risks and financial capacity.
The
Human Resources Department oversees
the implementation
of the compensation policy.
The
Group Human Resources Department
draws up and adjusts the employee
remuneration policy
and submits it to the
operating divisions of the Remuneration Policy
Control Committee (RPCC) for their opinion.
The Remuneration Committee proposes the
remuneration policy to the Board of Directors.
The Human Resources Department
and the Remuneration Committee
take into account the conclusions
of the RPCC, the internal audit, the vote
shareholders to
adjust, if necessary
remuneration policy.
The changes agreed upon will be applied
from the following year.
The
Remuneration Committee
with the support of
internal management, monitors the implementation of
policies and ensures their compliance. The
Risk
Committee reviews the compliance
of compensation
policies with risk strategies.
The Group Control and Audit Department conducts a
periodic audit
subsequent
to the definition and
application of the remuneration policy of the identified
staff in accordance with the regulations.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
193
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Functions involved in the process of defining the compensation policy
Governance bodies and shareholders
BOARD OF
DIRECTORS
Defines the remuneration policy
for Executive Corporate Officers
by taking into consideration the conditions
for compensation and employment
of employees.
Determines their fixed and variable
compensation.
Sets the upper and lower limits, criteria
and performance conditions for variable
compensation for the upcoming
financial year, consistent with the targets
of the Medium-Term Plan.
Determines the elements of compensation
for the previous financial year.
Decides the total compensation allocated
to the position of Director.
Reviews the policy on an annual basis
to take account of changes in the general
and competitive environment, as well as
feedback from shareholders and investors.
REMUNERATION
COMMITTEE
Drafts proposals covering fixed and
variable compensation for Corporate
Officers, any other benefits offered and
the decisions to be submitted to the
General Meeting on these subjects.
Measures the performance of Executive
Corporate Officers in relation to the
targets set.
SHAREHOLDERS
Provide annual recommendations on
the remuneration policy for Executive
Corporate Officers and their elements of
compensation for the previous financial
year.
Review the remuneration policy during
discussions with the Human Resources
and Investor Relations departments.
Group Operations department
GROUP HUMAN
RESOURCES
DEPARTMENT
Prepares the work of the Compensation
Committee.
May, with the consent of the
Compensation Committee, participate
in its meetings.
Oversees the implementation of the policy.
Work of the Board of Directors
In 2019, the Board of Directors focused in particular on aligning the remuneration policy for Executive Corporate Officers with the 2022 Medium-Term
Plan and its Customer, Human-centric and Societal Projects, while rigorously deploying the new legal and regulatory framework. In 2020, it modified
the annual variable compensation to take into account new regulatory requirements related to the coming into effect of the Capital Requirements
Directive V (CRDV). The Board also launched a project for the revision of CSR performance criteria which would result in a proposal to the 2022
General Meeting.
All these projects are in line with the Reward Policy, which guides the work of the Board of Directors and its Remuneration Committee until the
end of the 2022 Medium-Term Plan. This roadmap aims to align executive compensation with the interests of shareholders and with the overall
performance of Crédit Agricole S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
194
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
2020-2022 roadmap of the Board of Directors and Remuneration Committee
Ensuring compliance with the reward
policy and the regulatory requirements
1
2
3
Strengthening the alignment of long-term
interests with shareholders
Enhancing
the CSR approach
Policy
2020
• Ensuring compliance of pension schemes
with the PACTE Act
Policy
2021
Policy
2022
• Aligning compensation systems
with the Capital Requirements Directive V - CRDV
• Strengthening the alignment between variable compensation, reward policy and market practice
• Emphasis on the “Pay for performance”
approach of the reward policy
• Introduction of long-term share-based
compensation (allocation of free shares)
• Strict alignment of Executive
Corporate Officers targets with
the 2022 Medium-Term Plan
and in particular with the Human-
centric and Societal projects
• Revision of CSR
performance criteria
Work of the Remuneration Committee in 2020
Work specific to 2020
Recurrent work
• Review of the annual variable compensation
system, as part of the compliance
with
Capital Requirements Directive V -
CRDV
on 1 January 2021
• Initiation of a review of
CSR
performance
criteria for deferred compensation
plans, up to 2022
• Consideration of the results of the vote
on the resolutions relating to Executive
Corporate Officers compensation
at the
2020 GM
• Consideration of all the resolutions
relating to Executive Corporate Officers
compensation submitted to the
2021 GM
• Review of the compensation of the heads
of
audit functions
• Study of the variable compensation
budget for
identified employees
• Analysis of individual variable
compensation in excess of €1 million
• Review of the
“Compensation” section
of this Board’s Report
on corporate governance
• Update of the
Groups Compensation
Policy
• Review of the
overall budget
for variable compensation
within the Group
• Preparation of the
report
, in respect of 2020,
on the compensation policy and practices
of
identified employees
Find out more
Work of the Compensation Committee: Universal Registration Document, Chapter 3, part 1.3.6.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
195
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Shareholder dialogue
As part of the dialogue with its shareholders, Crédit Agricole S.A.
organises meetings with investors prior to the General Meeting and
throughout the year on topics related to corporate governance and
executive compensation. Each year, the Group reviews its policy in the
light of this feedback.
In 2020, these meetings provided an opportunity to present changes in
the compensation policy for Executive Corporate Officers to approximately
10 investors and proxies of Crédit Agricole S.A., which will be submitted
for shareholder approval at the General Meeting of 12 May 2021, and to
take note of their voting policy. The meetings with investors were also the
occasion to discuss the place of CSR in compensation (this has already
been taken into account in the annual variable compensation criteria)
as well as in the vesting conditions of long-term variable compensation.
The Compensation Committee is currently considering how to increase
the CSR dimension in performance conditions as from 2022.
The quality of the shareholder dialogue, reported to the Compensation
Committee, has resulted in regular shareholder support for the
compensation policy, which is proposed to the General Meeting for
approval.
Rate of approval of resolutions on compensation policy at the General Meeting
GM 2018
GM 2019
GM 2020
Compensation policy for the Chairman of the Board of Directors
99.9%
99.9%
99.9%
Compensation policy for members of the Board of Directors
na
na
99.9%
Compensation policy for the Chief Executive Officer
92.6%
91.9%
88.3%
Compensation policy for the Deputy Chief Executive Officer
94.4%
92%
88.3%
Reminder:
in the event of a negative vote at the General Meeting on
the compensation policy, the policy of the previous year will apply. The
Board of Directors meets within a reasonable time period following the
General Meeting to review the reasons for this vote in order to propose
a new compensation policy in line with the expectations expressed by
shareholders.
Principles
Executive Corporate Officers receive fixed, variable and peripheral
elements of compensation, adapted to their specific targets, in line
with the Group’s reward policy.
They are decided by the Board of Directors, on the advice and/or
recommendations of the Compensation Committee, in accordance
with the principles defined by Crédit Agricole S.A. compensation policy
reviewed and adopted by the Board of Directors on 10 February 2021
and the regulations and legislation in force.
The Board endeavours to strike a balance between the various
components of compensation and to take market practices into account.
Thus, each year studies are carried out with the assistance of an outside
consultant, Willis Towers Watson for financial year 2020-2021, on the
positioning of Executive Corporate Officers’ compensation in relation
to other CAC 40 companies and the financial sector. They rely on these
companies’ annual reports and press releases to ensure consistency
in compensation principles and levels.
2021 remuneration policy for the
Chairman of the Board of Directors
The annual fixed compensation of the Chairman of the Board of Directors
has been €520,000 since 4 November 2015. There are no plans to
change this in 2021.
In order to guarantee complete independence in the performance of
his term of office, the Chairman of the Board of Directors is not eligible
for any variable compensation, including long-term incentive plans,
stock-options or performance share award plans, or any other long-term
compensation schemes existing within Crédit Agricole S.A.
The Chairman of the Board of Directors also waived any compensation
due in respect of his position as a Director in Crédit Agricole S.A.
companies during and at the end of his term of office as Chairman of
the Board of Directors.
He is entitled to a housing allowance of €40,000 granted on his
appointment.
The Chairman of the Board of Directors does not benefit from any
severance payment or non-competition compensation, nor any
supplementary pension scheme or private healthcare insurance in
force within the Crédit Agricole S.A.
2021 remuneration policy for Executive Corporate Officers
Fixed compensation
The amount of annual fixed compensation is decided by the Board of
Directors acting on the recommendation of the Remuneration Committee,
taking into account:
the experience and scope of responsibilities of Executive Corporate
Officers;
market practices and compensation packages observed for the same
or similar functions in other major listed companies.
Fixed compensation accounts for a significant proportion of total
compensation.
The fixed annual compensation of the Chief Executive Officer has been
€1,100,000 since May 2018.
The annual fixed compensation of the Deputy Chief Executive Officer
has been €700,000 since 19 May 2015.
On the proposal of the Remuneration Committee, the Board of Directors’
meeting of 10 February 2021 decided to maintain the fixed compensation
of the Executive Corporate Officers unchanged.
Annual variable compensation
The variable compensation policy for the Chief Executive Officer
and the Deputy Chief Executive Officer changed in 2020 to ensure
its alignment with the 2022 Medium-Term Plan. Allocation principles
remain unchanged in 2021. The Group has thus decided to maintain
the targets assigned to its Executive Corporate Officers for their annual
variable compensation, despite the continued health and economic
crisis. However, the Board of Directors wished to take into account the
much higher degree of contingency planning by adjusting the weighting
of the performance criteria and by introducing the concept of agility in
the face of unforeseen external events.
This policy is part of the framework established for the variable
compensation of the Group’s executive managers.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
196
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Variable compensation is expressed as a percentage of annual fixed
compensation. In accordance with the AFEP/MEDEF Code, variable
compensation is capped and may not exceed the maximum levels set
out in the compensation policy:
it can vary from
0% to 100%
(target level) of fixed compensation for
the
Chief Executive Officer,
if all objectives are attained, and up to
a maximum of
120% (maximum level)
of fixed compensation for
exceptional performance;
for the
Deputy Chief Executive Officer,
variable compensation
can vary from
0% to 80%
(target level) of fixed compensation if all
objectives are attained and up to a maximum of
120% (maximum
level)
of fixed compensation for exceptional performance.
The overall performance of each Executive Corporate Officer is assessed
on the basis of a balance between economic, financial and non-financial
performance. Their annual variable compensation is
60% based on
financial criteria
and
40% based on non-financial criteria,
defined
each year by the Board of Directors, on the recommendation of the
Remuneration Committee.
Breakdown of variable compensation criteria
RoTE
20%
Cost/income ratio excl. SRF
20%
Underlying
net income
Group share
20%
FINANCIAL CRITERIA
60%
40%
Collective
dynamics
and agility
in the face
of unforeseen
external events
8%
Client Project
6%
Risk management
5%
40%
NON-FINANCIAL CRITERIA
NON-FINANCIAL CRITERIA
Chief Executive Officer
Deputy Chief Executive Officer
Technological and digital change
3%
Societal Project
8%
Human Project
8%
Client Project
8%
Collective
dynamics
and agility
in the face
of unforeseen
external events
3%
Risk management
10%
Technological and digital change
9%
Societal Project
6%
Human Project
6%
The performance of the Chief Executive Officer and the Deputy Chief
Executive Officer is evaluated for each indicator, by comparing results
achieved with the annual targets defined by the Board of Directors
(confidential information). The evaluation of the Deputy Chief Executive
Officer’s performance is proposed by the Compensation Committee to
the Board of Directors, for decision, after consultation with the Chief
Executive Officer.
The financial criteria relate to the scope of Crédit Agricole S.A. For each
of these, the target is set on the basis of the budget approved by the
Board of Directors with regard to the 2022 objectives announced. For
the aggregate of these criteria, the maximum achievement rate cannot
exceed 150%. For the financial criteria, reaching the trigger threshold
leads to a realisation rate of 60%. Below this level, the achievement
rate will be considered nil. The calculation of the performance between
the different limits is linear.
Terms of vesting of annual variable compensation
Following the assessment of the annual performance, a portion of the
variable compensation awarded by the Board of Directors for a year is
deferred, subject to approval by the General Meeting of Shareholders,
in the interests of aligning the compensation of Executive Corporate
Officers with the Group’s long-term performance and to comply with
regulations of the branch.
The coming into effect of the Capital Requirements Directive V (CRDV)
on 1 January 2021 has extended the vesting period of deferred variable
compensation from three to five years. This regulatory change was
an opportunity for Crédit Agricole S.A. to review the annual variable
compensation system: the Board of Directors upon proposal of its
Remuneration committee decided to review the structure of this
compensation, in view of both the extension of the vesting period of
the deferred compensation and the introduction of a long-term variable
compensation scheme. Target: continue the positioning of annual variable
compensation as a tool for implementing the Medium-Term Plan, by
seeking the optimum balance between the share exposed to the market
and the share paid immediately in cash.
Subject to approval by shareholders, as from financial year 2021,
annual variable compensation will be paid half in cash and half in
Crédit Agricole S.A. share-linked instruments. The vesting period
of deferred compensation has been extended to five years and the
instrument retention period has been extended to one year. The portion
paid immediately in cash dropped from 30% to 20% of annual variable
compensation.
The target variable compensation remains unchanged for 2021, as is
the share of deferred compensation, at 60%.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
197
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
These changes, which bring the Groups compensation policy in line with
the new regulatory requirements, are included in the Board of Director’s
road map to align compensation with overall performance. The extension
of the vesting period of the annual variable compensation and the lock-up
period of instruments is a guarantee that the interests of executives are
aligned with that of shareholders. With a right proportion of compensation
exposed to markets, the changes proposed also promote sustainable
governance, which contribute to long-term value creation. Lastly, they
are in line with the principles of long-term moderation applied by the
Group to its compensation management.
Changes in compensation policy: annual variable compensation conditions
Main changes
Summary of the 2020
compensation policy
2021 compensation policy submitted
to shareholders for approval
Terms of vesting of annual
variable compensation
Rebalancing of the division
between cash compensation
and share-linked instruments
Extension of the vesting period
of deferred compensation, in
accordance with the CRDV
Reduction of the immediate
cash portion
Extension of the retention period
of instruments
60% of variable compensation
deferred over three years
Deferred share allocated in
share-linked instruments,
subject to the meeting of
performance targets
Immediate share paid 30
points in cash and 10 points in
share-linked instruments
Six-month retention period, with
the first release in September of
the current year
60% of variable compensation
deferred over five years
Deferred share allocated half in
share-linked instruments and half
in cash, subject to the meeting of
performance targets
Immediate share paid 20 points in
cash and 20 points in share-linked
instruments
12-month retention period, with
the first release in March of the
following year
Deferred portion of annual variable compensation,
accounting for 60% of the total
The annual variable compensation is awarded half in Crédit Agricole S.A.
share-linked instruments and half in cash.
Vesting is contingent on achieving three complementary performance
targets, whose overall achievement rate cannot exceed 100%:
the intrinsic financial performance of Crédit Agricole S.A. defined as
growth of its operating income increased by the Group share of net
income of equity-accounted entities;
the relative performance of Crédit Agricole S.A. shares compared with
the share price trend in relation to a composite index of European
banks (Euro Stoxx Banks);
annual societal performance of Crédit Agricole S.A. as measured by the
FReD index. The assessment of the growth of this index is measured
through progress points in the CSR projects. This assessment is audited
by an independent firm, see description in Chapter 2.
If an Executive Corporate Officer leaves the Group before the vesting
of a given instalment of deferred compensation, the payment of this
instalment of deferred compensation is excluded, except in the event
of retirement or exceptional circumstances, the grounds for which
must be substantiated by the Board of Directors. In such cases,
unaccrued instalment of deferred variable compensation are delivered
at their planned vesting date depending on the level of achievement of
performance conditions.
If it is found within a period of five years after payment that an Executive
Corporate Officer: (i) is responsible for or has contributed to significant
losses to the detriment of the Group or (ii) has demonstrated particularly
serious risky behaviour, the Board of Directors reserves the right to
demand the restitution in full or in part of amounts already paid subject
to French law in force (clawback clause).
Non-deferred portion of total variable compensation, account-
ing for 40% of the total
Non-deferred variable compensation approved by the General Meeting
is paid in part (50%) after it is approved by shareholders in May (
i.e.
20% of annual variable compensation), and the other half in March the
following year. The second payment is pegged to the change in the
Crédit Agricole S.A. share price. (March of the current financial year to
March the next financial year).
Long-term variable compensation
Since 2020, the Chief Executive Officer and the Deputy Chief Executive
Officer qualify for the free allocation of performance shares, within the
framework of a budget strictly limited to 0.1% of share capital, in order
to strengthen their contribution to the creation of long-term value of
Crédit Agricole S.A.
As from financial year 2021, with the coming into effect of the Capital
Requirements Directive V (CRDV), the Board of Directors has decided to
extend the vesting period of shares to five years. The disposal of shares
may only take place after a one-year retention period, as from the date
of acquisition. The number of shares granted each year by the Board of
Directors, valued on the basis of the Crédit Agricole S.A. share weighted
average price during the 20 business days prior to the Board meeting,
is capped at 20% of the annual fixed compensation.
Changes in compensation policy: terms of vesting of long-term variable compensation
Main changes
Summary of the 2020
compensation policy
2021 compensation policy submitted
to shareholders for approval
Vesting conditions
Extension of the vesting period of
shares, in compliance with the CRDV
100% of shares acquired at the end
of a three-year period
100% of shares acquired at the end of
a five-year period
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
198
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Terms of vesting of long-term variable compensation
Vesting of long-term variable compensation is contingent on achieving three complementary performance targets, whose overall achievement rate
cannot exceed 100%. As with the vesting of deferred annual variable compensation, these performance conditions take into account the Group’s
intrinsic performance, its relative and its societal performance, but with more demanding targets.
Weighting
Trigger
Achievement
rate: 80%
Target
Achievement
rate: 100%
Ceiling
Achievement
rate: 120%
Crédit Agricole S.A.’s intrinsic economic performance; Crédit Agricole S.A.’s
underlying Net income Group share accumulated over the reference period
33.3%
80% of budget
100% of budget
120% of budget
The relative performance of the Crédit Agricole S.A. share price compared
with a composite index of European banks (Euro Stoxx Banks), on a
cumulative basis over the reference period
33.3%
Median
positioning
1
st
quartile
positioning
Rank 5 of the
positioning
Annual societal performance of Crédit Agricole S.A.
as measured by the FReD index
33.3%
+0.65 FReD
points
+1.3 FReD points
+1.95 FReD
points
Each of these conditions accounts for one-third of the overall performance
assessment. For each condition:
the maximum achievement rate cannot exceed 120%;
a trigger threshold is applied, below which the achievement rate will
be considered zero.
For each year, the overall performance is equal to the average
achievement rate for each performance criterion, which is capped at
100%. Performance between the trigger threshold and target as well
as between the target and ceiling is calculated on a straight-line basis.
If an Executive Corporate Officer leaves the Group before the vesting of
the long-term variable compensation, the vesting of Crédit Agricole S.A.
shares is excluded, except in the event of retirement or exceptional
circumstances, the grounds for which must be substantiated by the
Board of Directors. In such cases, the shares not yet vested are delivered
at their scheduled vesting date depending on the level of achievement
of performance conditions.
If it is found within a period of five years after delivery of shares that an
Executive Corporate Officer: (i) is responsible for or has contributed to
significant losses to the detriment of the Group or (ii) has demonstrated
particularly serious risky behaviour, the Board of Directors reserves
the right to demand the restitution in full or in part of shares already
delivered subject to French law in force (clawback clause).
The Chief Executive Officer and the Deputy Chief Executive Officer are
required to retain, until the end of their functions, 30% of the shares
vested each year.
They are also prohibited from implementing hedging or insurance
strategies over the vesting and holding periods of performance shares.
Structure of compensation over time
Fixed
compensation
40%
immediate
60%
deferred
100%
cash
Y+2
Y+1
Y
Y-1
Y+6
Y+5
Y+4
Y+3
Annual
variable
compensation
Long-term
variable
compensation
50%
cash
50%
instruments
20%
cash
20%
instruments
50%
cash
50%
instruments
6%
cash
6%
cash
6%
instruments
6%
instruments
6%
instruments
6%
instruments
6%
instruments
100%
shares
6%
cash
6%
cash
6%
cash
Amounts subject to clawback.
For the deferred portion in the form of instruments and long-term variable compensation, amounts
vested subject also to the satisfaction of continued employment and performance conditions.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
199
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
Peripheral compensation
Private healthcare insurance
The Chief Executive Officer and Deputy Chief Executive Officer are covered
by the same private healthcare insurance schemes as employees.
Post-employment benefits
Under the commitments authorised by the Board of Directors on
19 May 2015, the Chief Executive Officer and the Deputy Chief Executive
Officer receive:
severance payment if their term of office is terminated by Crédit
Agricole S.A.;
non-competition compensation if a non-competition clause is triggered,
for a period of one year from the termination of his term of office,
regardless of the cause;
the supplementary pension scheme for executive managers of Crédit
Agricole Group, which supplements the collective and mandatory
pension and death & disability schemes.
The benefit represented by this supplementary pension scheme was
taken into account by the Board of Directors in determining the total
compensation of Executive Corporate Officers.
Retirement
From 2010 to 2019, the supplementary pension scheme, also applicable
to the Chief Executive Officer and Deputy Chief Executive Officer,
consisted of a combination of defined-contribution pension schemes
and a defined-benefit top-up scheme, the rights of which are defined
by 2010 rules.
In accordance with the provisions of the PACTE Act and Order No. 2019-
697 of 3 July 2019, the defined-benefit scheme, which falls under
the provisions of Article L. 137-11 of the French Social Security Code,
was permanently closed as of 4 July 2019, and the conditional rights
it provided were frozen on 31 December 2019. Consequently, no new
additional rights were allocated under this scheme for periods of
employment after 1 January 2020. The information given below about
the defined-benefit scheme therefore only concerns rights accrued up
until 31 December 2019.
These rights, equal to 1.20% of the reference compensation for every
year of service (capped at 36%), are determined after the rights paid
under the defined-contribution schemes.
Contributions to defined-contribution pension schemes (still in force)
equal 8% of gross salary capped at eight times the French social security
cap (of which 3% paid by the Executive Corporate Officer).
The reference compensation is determined as the average of the three
highest gross annual compensations received over the last ten years
of activity within the Crédit Agricole Group, including fixed and variable
compensation, the latter being taken into account with a maximum of
60% of fixed compensation.
In any event, at retirement, the total pension annuity is capped, for all
company pension schemes and mandatory basic and complementary
schemes at 16 times the annual French social security cap for the Chief
Executive Officer and the Deputy Chief Executive Officer, and at 70% of
the reference compensation in application of the supplementary pension
rules for Crédit Agricole S.A. executive managers.
The supplementary defined-benefit pension scheme complies with
the recommendations of the AFEP/MEDEF Code as well as the former
provisions of Article L. 225-42-1 of the French Commercial Code
(Code de Commerce), which for the periods in question, restricted the
vesting rate of defined-benefit schemes at 3% per year (text repealed
by Order 2019-1234 of 27 November 2019):
the group of potential beneficiaries was substantially broader than
Executive Corporate Officers alone;
minimum length of service: five years (the AFEP/MEDEF Code requires
only two years’ service);
vesting rate of 1.2% of the reference compensation per year of service;
estimated supplementary pension below the AFEP/MEDEF Code ceiling
of 45% of fixed and variable compensation due for the reference period;
obligation for the beneficiary to be a Corporate Officer or an employee
when claiming their pension entitlements.
The Board of Directors Meeting on 19 May 2015 approved the membership of
Philippe Brassac and Xavier Musca in the Crédit Agricole S.A. supplementary
pension schemes prior to the date of publication of Law No. 2015-990
of 6 August 2015 for growth, activity and equal economic opportunities;
therefore the provisions of this law, which makes the vesting of annual
supplementary pension entitlements subject to performance conditions,
do not apply.
The management of this defined-benefit scheme has been outsourced
to an organisation governed by the French Insurance Code.
Funding of the outsourced assets is accomplished via annual premiums
entirely paid for by the employer and subject to the 24% contribution
required by Article L. 137-11 of the French Social Security Code.
The rights established by the Group prior to the effective date of the 2010
rules are maintained in accordance with these rules and, if applicable,
are added to the rights resulting from these rules, particularly when
calculating the maximum annuity that can be paid.
As from 1 January 2020 Crédit Agricole S.A. set up an Article 82 defined-
contribution scheme enabling executive managers to build up savings
for retirement with the help of the Company.
Having satisfied his entitlements under the scheme that falls under
Article L. 137-11, Philippe Brassac will not be entitled to benefits from
the Article 82 defined-contribution scheme.
Xavier Musca is entitled to benefits from the Article 82 defined-
contribution scheme. This scheme provides for the payment of an annual
company premium on the portion of his annual fixed compensation at
a rate of 20%.
In accordance with the AFEP/MEDEF Code, annual contributions for any
given year are subject to performance conditions. These are identical to
the conditions for the vesting of deferred annual variable compensation,
i.e.
the achievement of three complementary performance targets
related to the intrinsic economic performance of Crédit Agricole S.A.,
the stock market performance of Crédit Agricole S.A. share, and the
Group’s societal performance.
Termination payments for the Chief Executive Officer and
the Deputy Chief Executive Officer of Crédit Agricole S.A.
Philippe Brassac and Xavier Musca qualify for the retirement termination
payments scheme that applies to all employees under the terms of the
Crédit Agricole S.A. collective agreement. This can amount to six months’
fixed salary plus variable compensation capped at 4.5% of fixed salary.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
200
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
Severance payment
Chief Executive Officer
In the event of termination of the Chief Executive Officer’s term of
office, his employment contract will be reinstated under compensation
conditions equivalent to the average annual compensation paid to
the members of the Management Committee of Crédit Agricole S.A.,
excluding Corporate Officers, during the 12 months preceding the date
of termination of his term of office.
The Chief Executive Officer will receive severance payment if his term
of office is terminated by Crédit Agricole S.A., under the following
conditions and in accordance with the current recommendations of
the AFEP/MEDEF Code.
If, on termination of the Chief Executive Officer’s term of office, Crédit
Agricole S.A. is unable, within three months, to offer an equivalent
or comparable position to that currently held by the members of the
Management Committee of Crédit Agricole S.A. in the form of an offer
for at least two positions, he will be eligible, if termination of the office
was initiated by Crédit Agricole S.A. and a result of a change in control
or strategy, to severance payment as follows.
The severance payment will be calculated based on twice the total
gross annual compensation received for the calendar year preceding
the year of termination of Mr Brassac’s term of office. Note that such
severance payment includes all other compensation including, notably,
the redundancy pay due for Mr Brassac’s employment contract with
Crédit Agricole S.A. under the collective agreement, the severance
payment described in Article 10 of his suspended employment contract,
any other severance pay of any type whatsoever due for any reason and,
potentially, compensation in application of the non-competition clause.
The severance payment, excluding the compensation granted to him
by his employment contract, will depend on budget targets set for each
business line of the Crédit Agricole S.A. over the two financial years
preceding the termination date. The goals are based on the following
indicators that take into account the internal growth of these activities
as well as the cost of risk:
revenues of operational business lines (excluding Corporate Centre);
operating income from operational business lines (excluding Corporate
Centre).
In any event, it is agreed by Mr Brassac and the Company that, in the
event that a severance payment is made and he is able to retire on his
full pension, he may not claim his retirement rights before a period of
12 months as of the date the severance payment is made. Otherwise,
Mr Brassac will be required to waive the severance payment.
Deputy Chief Executive Officer
In the event of termination of the Deputy Chief Executive Officer’s term of
office, his employment contract will be reinstated under compensation
conditions equivalent to the average annual compensation paid to
the members of the Management Committee of Crédit Agricole S.A.,
excluding Corporate Officers, during the 12 months preceding the date
of termination of his term of office. The Company undertakes to offer
him at least two positions corresponding to the duties of members of
Crédit Agricole S.A.’s Management Committee.
If his employment contract is subsequently terminated, the Deputy
Chief Executive Officer will receive severance payment, calculated
on a base corresponding to twice the annual gross compensation
(excluding benefits in kind) received during the 12 months preceding
the termination of his office, including any other compensation and, in
particular, traditional redundancy pay and any applicable non-competition
compensation. If he becomes eligible for post-employment benefits, no
severance payment will be made.
In accordance with the AFEP/MEDEF Code, the Chief Executive Officer and
the Deputy Chief Executive Officer are not entitled to a specific increase
in their compensation during the period preceding their departure.
Non-competition clause
The Chief Executive Officer and the Deputy Chief Executive Officer are
subject to a non-competition clause forbidding them from accepting
employment in France in a company with an activity which competes
with that of Crédit Agricole S.A. This commitment applies for a term of
one year from termination of the employment contract. In exchange,
they will be paid monthly compensation equal to 50% of their last fixed
salary for the duration of the obligation.
In accordance with the French AFEP/MEDEF Code, the aggregate
compensation paid in respect of a severance payment and non-
competition compensation may not exceed two years of annual
compensation.
The Board of Directors reserves the right to partially or fully lift the
non-compete obligation on the departure of the Chief Executive Officer
or Deputy Chief Executive Officer. In any event, in accordance with
the legal provisions and the AFEP/MEDEF Code, no non-competition
compensation will be granted should the Chief Executive Officer or
Deputy Chief Executive Officer claim retirement benefits, or should they
leave after their 65th birthday.
Benefits of any kind
The Board of Directors, on the recommendation of the Remuneration
Committee, has validated the use of company cars, also for private use,
for the Chief Executive Officer and the Deputy Chief Executive Officer.
This benefit will be reported in accordance with the applicable social
and tax regulations.
Compensation for Director’s term of office
The Chief Executive Officer and the Deputy Chief Executive Officer
waived their right to receive any compensation for serving as Directors
of Group companies for the duration of their terms of office.
Exceptional compensation
The Board of Directors does not provide for the granting of exceptional
compensation to Executive Corporate Officers.
Arrival of a new Executive Corporate Officer
In the event that a new Executive Corporate Officer is appointed, their
compensation will be determined by the Board of Directors:
either in accordance with compensation policy as approved by the
General Meeting;
or in accordance with existing practices for the same role, adapted
as appropriate when this person exercises new functions or holds a
new position without equivalent in the previous financial year.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
201
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
4.4.2. Director compensation policy submitted to shareholders for approval
System
ALLOCATED COMPENSATION
Acknowledging the involvement
and attendance of Directors
on the Board
Compensation for Director’s term of office
The compensation of Board members is based entirely on their attendance at Board meetings and their assumption of
responsibility within its Committees. Directors receive the same compensation for attending strategic seminars and
special meetings,
i.e.
those not on the annual calendar, and scheduled meetings, up to a maximum of the total amount
approved.
Training sessions, preparatory meetings of Committee Chairwomen with management and meetings of Chairwomen
and/or Committees with the supervisor are not compensated.
Board members receive additional compensation for attending meetings of the Specialised Committees: the Chairwomen
of the Board’s Specialised Committees receive an annual flat rate compensation, which differs according to the
Committee. Committee members receive a set amount for each Committee Meeting they attend.
Non-voting Directors receive the same compensation for attending Board Meetings and, when they are members,
Specialised Committee Meetings.
To deal with the increase in the number of meetings, the departure of a director who had waived her compensation
and in view of the arrival of two non-voting directors who will replace current directors in 2022, it is proposed to the
General Meeting of 12 May 2021 to increase the remuneration package for directors from €1.65 million to €1.75 million.
The breakdown of the package will remain unchanged and will be carried under the same conditions as before,
i.e.
:
€4,000 per Board meeting;
€2,700 per Committee meeting;
an annual fixed amount of €20,000, allocated to the Chairs of the Compensation Committee, Appointments
and Governance Committee, and United States Risk Committee, respectively;
€35,000 flat fee for the Chairmanship of the Risk Committee;
€35,000 flat fee for the Chairmanship of the Audit Committee.
Board and Committee meetings are scheduled on an annual basis, in addition to exceptional meetings, depending on
current events or specific matters. On average, the Board meets between 10 and 12 times a year and the Specialised
Committees meet between 35 and 40 times a year. Year on year, Directors’ compensation varies within a narrow range,
depending on attendance and the number of meetings attended (by way of example, see table of compensation paid
out in 2020).
SPECIAL CASES
The Chairman receives only a flat rate compensation.
The three Directors representing employees on the Board do not receive any compensation for their position as Director.
These compensations are paid to their unions.
Irrespective of attendance and the situations mentioned above, the cases of non-payment of Directors’ compensation
are those provided for by law.
EXPENSES
Reimbursement of expenses
The Board has also set up a system for reimbursing Board members for travel expenses, based on costs incurred by
each member for attending Board and Committee Meetings. This system, which complies with the provisions of Article
R. 225-33 of the French Commercial Code, is renewed annually by the Board.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
202
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
4.4.3. Report on the compensation of Corporate Officers for 2020 submitted for shareholder
approval
Taking into account the expectations of investors
and shareholders
As part of the dialogue with its investors and shareholders, Crédit
Agricole S.A. organised some ten of meetings in 2019, which provided
an opportunity to discuss compensation policy and the elements allocated
to its executives. These meetings provided an opportunity to review
the changes made to the 2020 compensation policy, in response to
growing expectations of transparency, alignment with performance
and the company’s contribution to society.
The high approval rates for the resolutions concerning the elements of
compensation allocated to Executive Corporate Officers attest to the
quality of this dialogue.
Rate of approval of resolutions on elements allocated at General Meetings
GM 2018
GM 2019
GM 2020
Compensation for the Chairman of the Board of Directors
99.9%
99.9%
99.9%
Compensation for the Chief Executive Officer
96.2%
96.5%
96.6%
Compensation for the Deputy Chief Executive Officer
96.2%
96.6%
96.6%
Report on the compensation of Corporate Officers and Directors
na
na
97.3%
Reminder:
in the event of a negative vote on individual elements of
compensation at the General Meeting, the variable compensation
awarded for the past financial year to the Corporate Officer concerned
by the resolution will not be paid. It should be noted that since the 2020
General Meeting, a resolution on the elements allocated to all Corporate
Officers will be proposed for shareholder approval. If this resolution is
not approved, the payment of compensation to the Directors in respect
of their term of office will then be suspended.
Furthermore, if a resolution is rejected, the Board of Directors meets
within a reasonable time period following the General Meeting to look
into the reasons for such vote, and the expectations expressed by
shareholders.
Chairman of the Board of Directors
Elements of compensation paid in financial year 2020 or awarded for financial year 2020
to Dominique Lefebvre, Chairman of the Board of Directors, subject to approval by shareholders
Amount
Presentation
Fixed compensation
€520,000
Dominique Lefebvre receives annual fixed compensation of €520,000. This compensation was
set by the Board of Directors at its meeting on 4 November 2015; it has not changed since.
Annual variable compensation
No payment
for 2020
Dominique Lefebvre is not entitled to any variable compensation.
Long-term variable compensation
PERIPHERAL COMPENSATION
Exceptional compensation
No payment
for 2020
Dominique Lefebvre is not entitled to any exceptional compensation.
Compensation for Director’s term
of office
No payment
for 2020
Dominique Lefebvre has waived the right to receive any compensation in respect of offices
held in Crédit Agricole S.A. companies for the duration of his term of office or at the end of his
term.
Benefits of any kind
€40,000
Dominique Lefebvre receives a housing allowance.
Supplementary pension scheme
No payment
for 2020
Dominique Lefebvre is not entitled to the supplementary pension scheme in place
within the Crédit Agricole S.A.
Commitments of any kind made by the Company and that were voted on by the General Meeting
as part of the procedure governing related party agreements and commitments
Amount
Presentation
PERIPHERAL COMPENSATION
Severance payment
No payment made for 2020
Dominique Lefebvre is not entitled to any severance payment.
Non-competition compensation
No payment made for 2020
Dominique Lefebvre is not entitled to any non-competition compensation.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
203
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
Executive Corporate Officers
Rate of achievement of variable compensation criteria awarded for 2020 for Executive Corporate Officers
At its meeting on 10 February 2020, the Board of Directors amended the criteria for assessing the annual variable compensation for the 2020
financial year for Executive Corporate Officers, in order to ensure their alignment with the 2022 Medium-Term Plan.
In accordance with compensation policy as approved by the General Meeting of 13 May 2020, they possess the following characteristics:
Financial criteria, accounting for 60% of variable compensation awarded
The Board of Directors of 10 February 2021 has noted the following performances:
Financial criteria
Weighting
Actual performance
2020
Financial performance
Underlying net income Group share
20%
17.7%
Return on Tangible Equity (RoTE)
20%
18.4%
Cost/income ratio excl. SRF
20%
22.8%
TOTAL
60%
58.8%
In the context of a health crisis, Crédit Agricole S.A. attained an
achievement level of 98.1% for its economic objectives:
the increase in the cost of risk reflects prudent provisioning of the
crisis’s effects weighed against the results (88.4%) as well as against
RoTE (92.0%);
however, the good resilience of the NBI associated with enhanced
control of expenses lead to a significant improvement in cost/income
ratio (113.8%).
Non-financial criteria, accounting for 40% of variable compensation awarded
Non-financial criteria
Weighting-CEO
Actual performance
2020-CEO
Weighting
Deputy-CEO
Actual performance
2020 Deputy-CEO
Three pillars of the Medium-Term Plan
Customer Project, excellence in customer relations
9%
11.7%
7%
9.1%
Human-centric Project, empowered teams for customers
9%
11.7%
7%
9.1%
Societal Project, commitment to society
9%
10.4%
7%
8.1%
Technological change
3%
3.3%
9%
9.9%
Risk management and compliance
5%
5.5%
10%
11.0%
Collective momentum
5%
6.5%
na
na
TOTAL
40%
49.1%
40%
47.2%
The Board of Directors meeting of 10 February 2021, upon proposal by the Remuneration Committee, set the Chief Executive Officer’s performance
at 123% and the Deputy Chief Executive Officer’s performance at 118% in relation to the achievement of the non-financial targets defined at the start
of the financial year, which include a specific weighting applied to each of their duties. It thus notes specific successes for the Medium-Term Plan:
Client Project
+7 pts
Net Promoter Score (NPS)
in Retail banking in France
+3.3 pts
utilisation rate of Group apps
in Regional Banks
+7.1 pts
utilisation rate of Group apps
in LCL
The crisis confirms the relevance of the Group project, and especially
its Customer Project.
In 2020, the Group ramped up the digitalisation of its offerings in the
interests of customer satisfaction. Thus, the utilisation rate of Group apps
sharply increased, posting a rise in both bank networks – the Regional
Banks and LCL (+3.3 percentage points compared to end-2019 to 68.2%
and +7.1 percentage points to 53.4% respectively). Likewise, the Group
rolled out new digital tools intended for its customers to make their
activities easier during lockdown, such as the Up2Pay Range (enabling
remote payment through a digital loyalty program) and Click & Collect
to support retailers in the new methods of consumption. Innovative
non-banking services were also set up for young people and small
businesses (Youzful, Blank, Agilauto).
This digital transformation, accompanied by the full commitment of
employees who closely supported customers throughout the year,
translated into a sharp improvement in the Group’s positioning in terms
of customer satisfaction: the Group is thus the only bank among the
25 brands which have proven their utility during the lockdown, while
the Net Promoter Score (NPS) was up in 2020 compared to 2019, both
in the Regional Banks and at LCL (+7 points, to +8 and +2 respectively)
and at CA Italia (+8 points compared to 2019), which this year became
the second Italian bank in terms of customer satisfaction.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
204
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
Human Project
+6 pts
Employee Engagement and
Recommendation Index
55%
Managers trained in the
new leadership model
24%
Share of women in the
decision-making bodies
In an environment undergoing profound change, employee engagement is
more than ever an essential driver of Crédit Agricole S.A.’s performance.
In 2020, the fifth edition of the Engagement and Recommendation Index
shows a record participation rate of 80% (+3 points) and an engagement
rate up +6 points.
To support managerial transformation at the service of the Human Project,
programmes aimed at transforming leadership to move towards greater
individual and collective responsibility and sustainable performance,
designed in partnership with the “Purposeful Leadership” chair at HEC
Paris and the Crédit Agricole Group University, have been introduced.
55% of the executives of Crédit Agricole S.A. will have benefited from
this programme by 2020.
Convinced that diversity is a key entry point for changing current
leadership codes, accelerating managerial transformation and attracting
the talent needed to achieve the Human Project, the Executive Corporate
Officers have been pursuing a proactive policy for several years, which
this year has resulted in a significant increase in the number of women
on the Group’s Executive Committee, from 6.5% in 2016 to 25% in
2020. In addition, all of the top decision-making bodies of the Group’s
11 business lines have been women since 2019, with an average female
representation rate of 24%, an increase of 5 points since 2016. The
Group has thus made its entry into the Top 50 in the SBF 120 ranking
of women executives.
The year 2020 was also marked by the roll-out of the Group agreements
signed in 2019 (the International Framework Agreement, the disability
agreement, agreements relating to trade union careers) and by the
strengthening and intensification of social dialogue to support the
management of the health crisis linked to the COVID-19 pandemic.
Societal Project
57%
of outstanding Green Loans
87%
Size of funds of Green Assets
In full transparency, the climate strategy is presented in Chapter 3.2
following TCFD’s (Task force on Climate-related Financial Disclosure)
recommendations and its first implementation is certified by PWC.
The Group’s commitment to the energy transition continued with
the launch of new offers between 2019 and 2020 (LCL Placements
Impact Climat, the first complete range of asset investments in the
fight against global warming, a green offer of zero-interest consumer
credit, etc.). At the end of 2020, the Group had €11.14 billion in Green
Loans, outstandings, an increase of +57% vs. 2019, and 21.9 billion
in euros in Green Assets.
In addition, work has been carried out to introduce a Group transition note
to measure the adaptation of client companies to the energy transition
and to dialogue with them to support them in their transition.
The Group also continued its action in favour of inclusive finance, notably
through the enhancement of its entry-level offers, the launch of the
first international equity fund that places the reduction of inequalities
at the heart of its investment process, and the response to more than
211,000 requests from small business and corporate clients for €31.5
billion euros in state-guaranteed loans.
Technological transformation
Key technological transformation projects were launched in 2020 to
develop the “data centric” for the information systems of the Group
entities. Technological innovation also continued in 2020, notably with
the creation of the Knowledge Management Metabot, a real virtual
assistant for customer representatives.
Risk and compliance managemen
The management of the Risk and Compliance departments has
enabled the Group to monitor and make a strategic contribution to the
various regulatory projects and to secure the Group’s development and
support for its clients. The implementation of the Smart Compliance has
continued, developing a new way of approaching compliance, more fluid,
closer to the ground, simpler, more innovative, positioning compliance
as a real differentiating factor in customer relations.
Collective dynamics
The year 2020 marks the strongest increase in employee engagement
scores, demonstrating the Group’ strong support for its employees in
coping with the health crisis experienced this year. The collective dynamic
is also supported by the alignment of targets between the members
of the Executive Committee and the Executive Corporate Officers, thus
amplifying the balance and convergence of Group and Entity orientations.
As a result, the variable annual compensation of the Chief Executive
Officer amounts to 1,186,900 euros, corresponding to an overall
performance rate of 107.9% and the annual variable compensation of
the Deputy Chief Executive Officer of 593,600 euros, corresponding to
an overall performance rate of 106.0%.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
205
Refer to the glossary on page 681 for the definition of technical terms.
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4. Reward policy
Terms of vesting of annual variable compensation
Deferred portion of annual variable compensation,
accounting for 60% of the total
In accordance with the remuneration policy approved at the General
Meeting of 13 May 2020, up to 60% of annual variable compensation
for 2020 is awarded in instruments linked to the Crédit Agricole S.A.
share price. Vesting is contingent on achieving three complementary
performance targets, whose overall achievement rate cannot exceed
100%:
Non-deferred portion of total variable compensation,
accounting for 40% of the total
The non-deferred variable compensation for 2020 approved by the
General Meeting and accounting for 40% of the total, is paid in part
(30 points) on the approval by the shareholders in May, and with an
amount equal to 10 points paid in September. The latter payment is
indexed to the change in the Crédit Agricole S.A. share price between
March and September.
Rate of achievement of the performance conditions determining the variable compensation paid in 2020
to Executive Corporate Officers
Weighting
Trigger
Achievement
rate: 80%
Target
Achievement rate:
100%
Ceiling
Achievement rate:
120%
Actual
performance
2017 plan
Actual
performance
2018 plan
Actual
performance
2019 plan
Intrinsic financial
performance
33.3%
80% of budget
100% of budget
120% of budget
106%
106%
106%
Relative Crédit Agricole S.A.
share performance
33.3%
3
rd
quartile
positioning
Median positioning
1
st
quartile
positioning
120%
120%
120%
Societal performance
33.3%
+0.75 FReD points
+1.5 FReD points
+2.25 FReD points
105%
105%
105%
TOTAL
100%
100%
100%
100%
In view of the performance recorded in respect of the three criteria, the final percentage vested is 100% for the variable compensation instalment
awarded in 2017, 2018 and 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
206
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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4. Reward policy
Elements of compensation paid in financial year or awarded for financial year 2020 to Philippe Brassac, Chief Executive Officer,
subject to approval by shareholders
Elements of compensation paid in or awarded for financial year 2020
Amount
Presentation
Fixed compensation
€1,100,000
Since 16 May 2018, Philippe Brassac has received a fixed annual compensation of €1,100,000.
This compensation was set by the Board of Directors on 13 February 2018 and approved by the General
Meeting of 16 May 2018.
Annual variable
compensation
Non-deferred variable
compensation
356,070 euros
At its meeting of 10 February 2021, the Board of Directors, on the recommendation of the Compensation
Committee, set the amount of the variable compensation of Philippe Brassac for financial year 2020, subject
to its approval by the General Meeting of 12 May 2021. In view of the achievement of financial and non-
financial objectives decided by the Board at its meeting of 13 February 2020 and approved by the General
Meeting of 13 May 2020, the amount of variable compensation has been determined on the following basis:
achievement level of financial objectives: 98.1;
achievement level of non-financial objectives: 123%.
Details of the achievement of these objectives can be found on page 204 of the Universal Registration
Document.
Variable compensation earned by Xavier Musca for financial year 2020 was set at 1,186,900 euros, reflecting
a target achievement rate of 107.9%. This is equivalent to 107.9% of his fixed reference compensation. As
a reminder, the annual variable compensation is capped at 120% of the reference fixed compensation, with
a target of 100%.
30% of the variable compensation, namely 356,070 euros, will be paid in May 2021, subject to approval by
the General Meeting of 12 May 2021.
Variable compensation
linked to the Crédit
Agricole S.A. share
price
118,690 euros
10% of the variable compensation, namely 118,690 euros, is linked to the Crédit Agricole S.A. share price
and will be paid in September 2021 subject to approval by the General Meeting of 12 May 2021.
Deferred and
conditional variable
compensation
712,140 euros
60% of the variable compensation, or 712,140 euros at the grant date, subject to the approval of the General
Meeting of 12 May 2021, are awarded in Crédit Agricole S.A. share-linked instruments. Their final vesting is
deferred progressively over three years, subject to achieving three performance targets and to a clawback
clause.
Details of the vesting conditions of the deferred variable compensation are set out on page 206 of the Universal
Registration Document.
Long-term variable
compensation
163,336 euros
(Valued in
accordance with
IFRS 2 as of 9
February 2021).
This amount
corresponds to
an allocation of
22,110 shares
In accordance with the 2020 compensation policy that introduces a long-term compensation package for
Executive Corporate Officers, the Board of Directors’ meeting of 10 February 2021 decided to award
22,110 shares to Philippe Brassac.
This long-term profit-sharing plan awarded for 2020 has the following characteristics:
allocation capped at 20% of the fixed annual compensation;
allocation of 22,110 shares vested at the end of a period of 3 years followed by a lock-up period of
2 years after vesting, bringing the indexation period to 5 years;
the allocation is subject to the approval of the Annual General Meeting of 12 May 2021;
the final vesting is subject to the fulfilment of the continued employment and performance conditions
described on page 199 of the Universal Registration Document;
the allocation is made pursuant to the 39
th
resolution of the Annual General Meeting of 13 May 2020.
It represents less than 0.001% of the share capital.
PERIPHERAL COMPENSATION
Exceptional
compensation
No payment
for 2020
Philippe Brassac has received no exceptional compensation for 2020.
Compensation for
Director’s term of office
No payment
for 2020
Philippe Brassac has waived the right to receive compensation for his duties as a Director of Group companies
for the entire duration of his term of office.
Benefits of any kind
€6,326
Philippe Brassac has a company car.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
207
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Amount
Presentation
Supplementary pension
scheme
No payment
for 2020
No supplementary pension amount is payable to Philippe Brassac for financial year 2020. Philippe Brassac’s
annual and conditional individual supplementary pension entitlements as at 31 December 2020 include:
a life annuity under a defined-contribution supplementary pension scheme, for an estimated gross
amount of €6,000;
a life annuity under a defined-benefit supplementary pension scheme, for an estimated gross
amount of €532,000.
The estimated total of these supplementary pension entitlements, taken together with estimated pensions
from mandatory retirement schemes, corresponds to the application of the contractual cap of 16 times the
annual social security cap as of the closing date, for all schemes.
In accordance with the PACTE Act and the provisions of Order of 3 July 2019, the rights of this defined-benefit
pension scheme were consolidated at 31 December 2019. No additional rights will be granted for periods of
employment after 1 January 2020, and the benefit of these past rights remains uncertain and subject to
continued employment at retirement.
The uncertain entitlements under the defined-benefit supplementary pension scheme are estimated on the
basis of 37 years’ service recorded at 31 December 2019, after capping corresponding to 31% of the reference
compensation at 31 December 2020.
The published estimated amounts are the gross amounts before taxes and social security charges applicable
at the reporting period end date, particularly income tax payable by individuals and supplementary contributions
of 7% and 14%, payable by the beneficiary, which are deducted from the life annuities payable under the
defined-benefit supplementary pension scheme.
The reference compensation, vesting rate and other characteristics of these schemes can be found on
page 200 of the Universal Registration Document.
Elements of compensation paid in 2020
In addition to his fixed compensation, Philippe Brassac received the
following variable compensation:
Variable compensation paid in 2020 for 2019
In accordance with the amounts approved by the General Meeting of
13 May 2020, Philippe Brassac received €230,715 in non-deferred
variable compensation in 2020 for 2019.
Deferred variable compensations vested and paid in 2020
In view of the performance recorded in respect of the three criteria set
out on page 206, the final percentage vested in 2020 for deferred variable
compensation was established at 100% for the variable compensation
instalments awarded in 2017, 2018 and 2019.
Therefore, €467,454 was paid to Philippe Brassac in 2020. This amount
represents:
the first year of payment of the deferred variable compensation
awarded in 2019 for 2018 in the amount of €196,486;
the second year of payment of the deferred variable compensation
awarded in 2018 for 2017 in the amount of €127,100;
the third year of payment of the deferred variable compensation
awarded in 2017 for 2016 in the amount of €143,868;
These payments result from the application of the compensation policies
approved by the General Meetings of 2016, 2017 and 2018 and the
amounts of variable compensation granted approved by the General
Meetings of 2017, 2018 and 2019.
Commitments of any kind made by the Company and that were voted on by the General Meeting
as part of the procedure governing related party agreements and commitments
Amount
Presentation
PERIPHERAL COMPENSATION
Severance payment
No payment
made for 2020
Philippe Brassac will receive a severance payment if Crédit Agricole S.A. terminates his term of
office under the conditions approved by the Board of Directors at its meeting on 19 May 2015 and
ratified by the General Meeting of 19 May 2016. Details of these payments can be found on
page 201 of the Universal Registration Document.
Non-competition compensation
No payment
made for 2020
In the event of termination of his position as Chief Executive Officer, on any grounds whatsoever,
Philippe Brassac may be bound by a non-competition clause for a period of one year from the
date of termination of his term of office, as approved by the Board at its meeting on 19 May 2015
and ratified by the General Meeting of 19 May 2016.
Details of these payments can be found on page 201 of the Universal Registration Document.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
208
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Elements of compensation paid in or awarded for financial year 2020 to Xavier Musca, Deputy Chief Executive Officer,
subject to approval by shareholders
Elements of compensation paid in or awarded for financial year 2020
Amount
Presentation
Fixed compensation
€700,000
Xavier Musca received annual fixed compensation of €700,000 in 2019. This compensation remains
unchanged since May 2015.
Annual variable compensation
Non-deferred variable
compensation
178,080 euros
At its meeting of 10 February 2021, the Board of Directors, on the recommendation of the
Compensation Committee, set the amount of the variable compensation of Xavier Musca for financial
year 2020, subject to its approval by the General Meeting of 12 May 2021.
In view of the achievement of financial and non-financial objectives decided by the Board at its
meeting of 13 February 2020 and approved by the General Meeting of 13 May 2020, the amount of
variable compensation has been determined on the following basis:
achievement level of financial objectives: 98.1%;
achievement level of non-financial objectives: 118%.
Details of the achievement of these objectives can be found on page 204 of the Universal Registration
Document.
Variable compensation earned by Xavier Musca for financial year 2020 was set at 593,600 euros,
reflecting a target achievement rate of 106%. This is equivalent to 84.8% of his fixed reference
compensation. As a reminder, the annual variable compensation is capped at 120% of the reference
fixed compensation, with a target of 80%.
30% of the variable compensation, namely 178,080 euros, will be paid in May 2021, subject to
approval by the General Meeting of 12 May 2021.
Variable compensation linked to
the Crédit Agricole S.A. share
price
59,360 euros
10% of the variable compensation, namely 59,360 euros, is linked to the Crédit Agricole S.A. share
price and will be paid in September 2021 subject to approval by the General Meeting of 12 May 2021.
Deferred and conditional
variable compensation
356,160 euros
60% of the variable compensation, or 356,160 euros at the grant date, subject to the approval of
the General Meeting of 12 May 2021, are awarded in Crédit Agricole S.A. share-linked instruments.
Their final vesting is deferred progressively over three years, subject to achieving three performance
targets and to a clawback clause.
Details of the vesting conditions of the deferred variable compensation are set out on page 206 of
the Universal Registration Document.
Long-term variable
compensation
103,941 euros
(Valued in
accordance with
IFRS 2 as of 9
February 2021).
This amount
corresponds to
an allocation of
14,070 shares
In accordance with the 2020 compensation policy that introduces a long-term compensation
package for Executive Corporate Officers, the Board of Directors’ meeting of 10 February 2021
decided to award 14,070 Crédit Agricole S.A. shares to Xavier Musca.
This long-term profit-sharing plan awarded for 2020 has the following characteristics:
allocation capped at 20% of the annual fixed compensation;
allocation 14,070 shares at the end of a period of 3 years followed by a lock-up period of
2 years after allocation, thus increasing the indexation period to 5 years;
the allocation is subject to the approval of the General Meeting of 12 May 2021;
final vesting is subject to the fulfilment of the continued employment and performance
conditions described on page 199 of the Universal Registration Document;
the grant is made in accordance with the 39
th
resolution of the General Meeting
of 13 May 2020. It represents less than 0.001% of the share capital.
PERIPHERAL COMPENSATION
Exceptional compensation
No payment
for 2020
Xavier Musca received no exceptional compensation for 2020.
Compensation for Director’s term
of office
No payment
for 2020
Xavier Musca has waived the right to receive compensation for his duties as a Director of Group
companies for the entire duration of his term of office.
Benefits of any kind
€5,937
Xavier Musca has a company car.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
209
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Amount
Presentation
Supplementary pension scheme
Contribution to
the
supplementary
pension scheme
(Article 82):
134,053 euros
Xavier Musca’s annual and conditional individual supplementary pension entitlements as at
31 December 2020 include:
a life annuity under a defined-contribution supplementary pension scheme, for an estimated
gross amount of €5,000;
a life annuity under a defined-benefit supplementary pension scheme, for an estimated
gross amount of €96,000.
In accordance with the PACTE Act and the provisions of Order of 3 July 2019, the rights of this
defined-benefit pension scheme were consolidated at 31 December 2019. No additional rights will
be granted for periods of employment after 1 January 2020, and the benefit of these past rights
remains uncertain and subject to continued employment.
The uncertain entitlements under the defined-benefit supplementary pension scheme are estimated
on the basis of 7.5 years of service recognised and consolidated on 31 December 2019, corresponding
to 8.6% of the reference compensation. The published estimated amounts are the gross amounts
before taxes and social security charges applicable at the reporting period end date, particularly
income tax payable by individuals and supplementary contributions of 7% and 14%, payable by the
beneficiary, which are deducted from the life annuities payable under the defined-benefit
supplementary pension scheme.
As of 1 January 2020, Crédit Agricole S.A. has set up an Article 82 defined contribution scheme
enabling executive managers to build up savings for retirement with the help of the Company.
For the Deputy Chief Executive Officer, annual contributions in respect of 2020 are subject to the
satisfactory achievement of the performance conditions for the vesting of the deferred annual variable
compensation. For the financial year 2020, the rate of achievement of these performance conditions
being 95.8%, the contribution for 2020 amounts to 134,053 euros.
The reference compensation, vesting rate and other characteristics of these schemes can be found
on page 200 of the Universal Registration Document.
Elements of compensation paid in 2020
In addition to his fixed compensation, Xavier Musca received the following
variable compensation:
Variable compensation paid in 2020 for 2019
In accordance with the amounts approved by the General Meeting of 13
May 2020, Xavier Musca received €115,917 in non-deferred variable
compensation in 2020 for 2019.
Deferred variable compensations vested and paid in 2020
In view of the performance recorded in respect of the three criteria set
out on page 206, the final percentage vested in 2020 for deferred variable
compensation was established at 100% for the variable compensation
instalments awarded in 2017, 2018 and 2019.
Therefore, €266,164 was paid to Xavier Musca in 2020. This amount
represents:
the first year of payment of the deferred variable compensation
awarded in 2019 for 2018 in the amount of €103,870;
the second year of payment of the deferred variable compensation
awarded in 2018 for 2017 in the amount of €75,847;
the third year of payment of the deferred variable compensation
awarded in 2017 for 2016 in the amount of €86,447;
These payments result from the application of the compensation policies
approved by the General Meetings of 2016, 2017 and 2018 and the
amounts of variable compensation granted approved by the General
Meetings of 2017, 2018 and 2019.
Payment of a Article 82 premium
From 1 January 2020, Xavier Musca is entitled to benefits from the
Article 82 defined-contribution scheme. This scheme provides for the
payment of an annual bonus by the company on the part of his annual
fixed compensation at a rate of 20%. A share of the bonus was paid
in 2020 for an amount of €105,000. The balance will be paid in 2021.
Commitments of any kind made by the Company and that were voted on by the General Meeting
as part of the procedure governing related party agreements and commitments
Amount
Presentation
PERIPHERAL COMPENSATION
Severance payment
No payment
for 2020
Xavier Musca will receive severance payment if Crédit Agricole S.A. terminates his employment
contract under the conditions approved by the Board of Directors at its meeting on 19 May
2015 and ratified by the General Meeting of 19 May 2016. Details of these payments can
be found on page 201 of the Universal Registration Document.
Non-competition compensation
No payment
for 2020
In the event of termination of his office as Deputy Chief Executive Officer, on any grounds
whatsoever, Xavier Musca may be bound by a non-competition clause for a period of one year
from the date of termination of his term of office, as approved by the Board at its meeting on
19 May 2015 and ratified by the General Meeting 19 May 2016. Details of these payments can
be found on page 201 of the Universal Registration Document.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
210
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Non-executive Corporate Officers or Directors
Elements of compensation paid or allocated for the financial year 2020 to each non-executive Corporate Officer of the Company
Under the principles detailed on page 202, non-executive Corporate Officers received the following amounts in 2020:
Directors
2019
Net amounts received in 2020
(1)
Net amount
received from
Crédit Agricole S.A.
in 2019
(1)
Crédit
Agricole S.A.
(1)
Crédit
Agricole CIB
LCL
Amundi
Total +
other Group
subsidiaries
Grand total
2020
DIRECTORS ELECTED BY
THE GENERAL MEETING
Dominique Lefebvre
(2)
0
0
-
-
0
0
Raphaël Appert
43,121
48,720
0
48,720
Pascale Berger
(3)(4)
29,808
39,744
-
-
0
39,744
Pierre Cambefort*
28,000
48,720
0
48,720
Caroline Catoire
56,350
60,060
-
-
0
60,060
Marie-Claire Daveu
-
38,500
0
38,500
Laurence Dors
72,241
74,060
-
-
0
74,060
Daniel Épron
45,011
54,390
-
-
20,255
74,645
Jean-Pierre Gaillard
58,241
60,060
-
15,400
15,400
75,460
Nicole Gourmelon*
-
20,580
8,400
8,400
28,980
Françoise Gri
94,850
102,340
28,770
-
28,770
131,110
Jean-Paul Kerrien
39,341
50,610
-
24,200
74,810
Pascal Lheureux
-
27,160
0
27,160
Monica Mondardini
(5)
45,344
52,320
-
-
0
52,320
Gérard Ouvrier-Buffet
46,900
52,500
-
-
38,338
90,838
Catherine Pourre
(5)
76,038
91,211
55,968
55,968
147,179
Louis Tercinier
37,450
46,830
0
46,830
Philippe de Waal*
28,000
33,600
-
-
0
33,600
Philippe Boujut**
28,000
14,000
-
-
0
14,000
Véronique Flachaire**
53,550
25,340
-
-
0
25,340
Christian Streiff**
57,331
27,230
-
-
0
27,230
Renée Talamona
(6)
0
0
0
0
0
François Thibault**
54,461
23,450
28,770
-
28,770
52,220
DIRECTORS ELECTED
BY THE EMPLOYEES
François Heyman
(3)(4)
43,222
55,393
-
-
-
0
55,393
Simone Védie
(3)(4)
33,120
36,432
0
36,432
DIRECTOR REPRESENTING
PROFESSIONAL FARMING ASSOCIATIONS
Christiane Lambert
8,400
16,800
0
16,800
NON-VOTING DIRECTORS
Agnès Audier
(7)
-
44,940
0
44,940
978,779
1,144,990
113,508
23,800
0
220,101
1,365,091
TOTAL GROSS AMOUNT CONSUMED: €1,566,200 out of €1.65 million allocated.
*
Became Directors in May and October 2020.
**
Outgoing Directors in May and August 2020.
(1)
After the following deductions from the sums payable to individual beneficiaries resident in France: income tax prepayment (12.8%) and social contributions (17.2%).
(2)
See 2020 Compensation of the Chairman of the Board of Directors on page 203.
(3)
The three Directors representing employees on the Board do not receive their compensation; instead these are paid to their unions.
(4)
After deductions of social contributions (17.2%).
(5)
12.8% withholding tax (non-resident in France).
(6)
Do not receive any compensation.
(7)
Appointed in capacity of non-voting Director in January 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
211
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Comparative approach to compensation
In accordance with the provisions of Article L. 22-10-9.of the French
Commercial Code, Crédit Agricole S.A. publishes the comparative change
in total gross compensation due or awarded to Executive Corporate
Officers with the average total gross compensation of employees from
the holding company and the Group’s performance (measured by the
underlying Net income Group share), over five years.
Calculation method
In accordance with the AFEP/MEDEF guidelines on compensation
multiples dated February 2021 and with a view to ensuring the
representativeness of the data, the Group has chosen, beyond regulatory
obligations, to calculate the ratios shown below also for France, which is
considered more relevant (approximately 35,000 employees,
i.e.
almost
half of the Group’s workforce, compared with approximately 1,700 for
the scope of the holding company). These ratios thus compare the
total gross compensation due or awarded to each Executive Corporate
Officer in respect of each financial year with that of the employees of
Crédit Agricole S.A. in France.
The employees under consideration are those with permanent
employment contracts as at 31 December of each financial year.
Employee compensation includes fixed annual compensation, bonuses
and benefits for the year, variable annual and long-term compensation for
the year, and profit-sharing and incentive bonuses for the year. For the
calculations for the year 2020, the elements of variable compensation
(annual and long-term variable compensation and profit-sharing and
incentive bonuses) are estimated on the basis of the previous financial
year’s budgets and elements known at the time. The 2019 ratios have
therefore been updated to take into account the actual budgets for
the year. In the same way, the 2020 ratios will be updated next year.
The compensation of Executive Corporate Officers corresponds to
their fixed compensation and valued benefits in kind, annual variable
compensation for the year and the fair value of long-term variable
compensation. This information corresponds to the elements already
presented in this report, especially in tables 1 and 2 on pages 214
and following.
Comparative changes in the compensation of Executive Corporate Officers
Indicators
2016
2017
2018
2019
2020
Variations
2016-2020
Underlying net income Group share
(in millions of euros)
3,190
3,925
4,405
4,582
3,849
+21%
Total compensation Chairman
€560,000
€560,000
€560,000
€560,000
€560,000
0%
Total compensation Chief Executive officer
€1,964,258
€2,020,744
€2,214,767
€2,357,300
(1)
€2,456,562
25%
€1,728,650
(2)
Total compensation Deputy Chief Executive officer
€1,292,100
€1,321,700
€1,311,000
€1,331,700
(1)
€1,403,478
9%
€1,015,850
(2)
Holding company perimeter
Average Crédit Agricole S.A. employee compensation
€89,642
€92,282
€99,059
€100,531
€98,394
+10%
Median Crédit Agricole S.A. employee compensation
€70,377
€71,589
€74,123
€75,344
€73,407
+4%
France perimeter
Average employee compensation France
€60,914
€63,064
€64,595
€66,714
€66,751
+10%
Median employee compensation France
€46,410
€47,943
€48,985
€50,605
€50,965
+10%
(1) Total remuneration before Philippe Brassac and Xavier Musca waived 50% of their variable compensation for 2019.
(2) Total remuneration after Philippe Brassac and Xavier Musca waived 50% of their variable compensation for 2019.
Equity ratio between the level of compensation of each Executive Corporate Officer and the average and median compensation
of the employees of the Crédit Agricole S.A. corporate entity
2016
2017
2018
2019
2020
Chairman of the Board of Directors
Ratio to average employee compensation
6
6
6
6
6
Ratio to median employee compensation
8
8
8
7
8
Chief Executive Officer
Ratio to average employee compensation
22
22
22
23
(1)
25
17
(2)
Ratio to median employee compensation
28
28
30
31
(1)
33
23
(2)
Deputy Chief Executive Officer
Ratio to average employee compensation
14
14
13
13
(1)
14
10
(2)
Ratio to median employee compensation
18
18
18
18
(1)
19
13
(2)
(1)
Ratios before Philippe Brassac and Xavier Musca waived 50% of their variable compensation for 2019.
(2)
Ratios after Philippe Brassac and Xavier Musca waived 50% of their variable compensation for 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
212
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Equity ratio between the level of compensation of each Executive Corporate Officer and the average and median compensation
of the employees in France
2016
2017
2018
2019
2020
Chairman of the Board of Directors
Ratio to average employee compensation in France
9
9
9
8
8
Ratio to median employee compensation in France
12
12
11
11
11
Chief Executive Director
Ratio to average employee compensation in France
32
32
34
35
(1)
37
26
(2)
Ratio to median employee compensation in France
42
42
45
47
(1)
48
34
(2)
Deputy Chief Executive Director
Ratio to average employee compensation in France
21
21
20
20
(1)
21
15
(2)
Ratio to median employee compensation in France
28
28
27
26
(1)
28
20
(2)
(1)
Ratios before Philippe Brassac and Xavier Musca waived 50% of their variable compensation for 2019.
(2)
Ratios after Philippe Brassac and Xavier Musca waived 50% of their variable compensation for 2019.
4.4.4. Summary tables in line with AFEP/MEDEF recommendations
Dominique Lefebvre, Chairman of the Board of Directors
Table 1 – Compensation, shares and stock options awarded to Executive Corporate Officers of Crédit Agricole S.A.
Gross amount
(in euros)
2019
2020
Compensation awarded for the financial year
(1)
560,000
560,000
Value of options awarded for the financial year
(2)
-
-
Value of performance shares awarded for the financial year
(2)
-
-
(1)
The compensation shown in this table represents amounts awarded for the year indicated. The itemised tables below show compensation awarded for a given year and compensation received during
that year.
(2)
No Crédit Agricole S.A. stock options were awarded to Corporate Officers in 2020.
Table 2 – Summary of gross compensation
(in euros)
2019
2020
Amount awarded
for 2019
Amount paid
in 2019
Amount awarded
for 2020
Amount paid
in 2020
Fixed compensation
520,000
520,000
520,000
520,000
Non-deferred variable compensation paid in cash
-
-
-
-
Non-deferred variable compensation linked to the Crédit Agricole S.A. share price
-
-
-
-
Deferred and conditional variable compensation
-
-
-
-
Exceptional compensation
-
-
-
-
Compensation for Director's term of office
(1)
-
-
-
-
Benefits of any kind
40,000
40,000
40,000
40,000
TOTAL
560,000
560,000
560,000
560,000
(1)
Net amounts, after the following deductions from the sums payable to individual beneficiaries resident in France: income tax prepayment (12.8%) and social contributions (17.2%).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
213
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Philippe Brassac, Chief Executive Officer
Table 1 – Compensation, shares and stock options awarded to Executive Corporate Officers of Crédit Agricole S.A.
Gross amount
(in euros)
2019
2020
Compensation awarded for the financial year
(1)
1,728,650
(4)
2,293,226
Value of options awarded for the financial year
(2)
-
-
Value of performance shares awarded for the financial year
(3)
-
163,336
(1)
The compensation shown in this table represents amounts awarded for the year indicated. The itemised tables below show compensation awarded for a given year and compensation received during that year.
(2)
No Crédit Agricole S.A. stock options were awarded to Corporate Officers in 2020.
(3)
This scheme is detailed in the chapter devoted to the compensation of Corporate officers on pages 198 and following.
(4)
Amounts recorded by the Board of Directors following Philippe Brassac’s decision to waive half of his variable compensation in respect of 2019.
Table 2 – Summary of gross compensation
(in euros)
2019
2020
Amount awarded
for 2019
Amount paid
in 2019
Amount awarded
for 2020
Amount paid
in 2020
Fixed compensation
1,100,000
1,100,000
1,100,000
1,100,000
Non-deferred variable compensation paid in cash
188,595
(3)
346,740
356,070
188,595
Non-deferred variable compensation linked to the Crédit Agricole S.A.
share price
62,865
(3)
115,580
118,690
42,120
Deferred and conditional variable compensation
(1)
377,190
(3)
442,468
712,140
467,454
Exceptional compensation
-
-
-
-
Compensation for Director's term of office
(2)
-
-
-
-
Benefits of any kind
-
-
6,326
6,326
TOTAL
1,728,650
2,004,788
2,293,226
1,804,495
(1)
The amounts paid correspond to the amounts vested, detailed in Table 2A and indexed to changes in the share price as stated in Notes 1, 2, 3 and 4 of the same table.
(2)
Net amounts, after the following deductions from the sums payable to individual beneficiaries resident in France: income tax prepayment (12.8%) and social contributions (17.2%).
(3)
Amounts recorded by the Board of Directors following Philippe Brassac's decision to waive half of his variable compensation in respect of 2019, subject to the approval of the General Meeting
of 13 May 2020.
Table 2A – Details of deferred variable compensation
Total amount
awarded
(1)
2018
2019
2020
Amount
awarded
(1)
Amount
vested
(2)
Amount
awarded
(1)
Amount
vested
(3)
Amount
awarded
(1)
Amount
vested
(4)
Plan awarded in 2017
591,240
197,080
197,080
197,080
197,080
197,080
197,080
Plan awarded in 2018
625,080
-
-
208,360
208,360
208,360
208,360
Plan awarded in 2019
-
-
-
-
231,160
231,160
(1)
The share value at the grant date was €11.94 for the 2017 plan, €14.19 for the 2018 plan and €10.19 for the 2019 plan.
(2)
The share value at the payment date was €11.97 for the 2017 plan.
(3)
The share value at the payment date was €10.22 for the 2017 plan and €10.21 for the 2018 plan.
(4)
The share value at the payment date was €8.67 for the 2017 plan and €8.63 for the 2087 and 2019 plans.
Deferred variable compensation vested in 2020
(Table 2A above)
Philippe Brassac received €636,600 in deferred variable compensation
for previous years. At the payment date this was equivalent to €467,454
after indexation to the Crédit Agricole S.A. share price. This amount
represents:
the first year of payment of deferred variable compensation awarded
in 2019 for 2018, instalment for which €231,160 were awarded, with
a share price on the grant date of €10.19;
the second year of payment of deferred variable compensation
awarded in 2018 for 2017, instalment for which €208,360 were
awarded, at a share price on the grant date of €14.19;
the third year of payment of deferred variable compensation awarded
in 2017 for 2016, instalment for which €197,080 were awarded, at
a share price on the grant date of €11.94.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
214
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Xavier Musca, Deputy Chief Executive Officer
Table 1 – Compensation, shares and stock options awarded to Executive Corporate Officers of Crédit Agricole S.A.
Gross amount
(in euros)
2019
2020
Compensation awarded for the financial year
(1)
1,015,850
(4)
1,299,537
Value of options awarded for the financial year
(2)
-
-
Value of performance shares awarded for the financial year
(3)
-
103,941
(1)
The compensation shown in this table represents amounts awarded for the year indicated. The itemised tables below show compensation awarded for a given year and compensation received during
that year.
(2)
No Crédit Agricole S.A. stock options were awarded to Corporate Officers in 2020.
(3)
This scheme is detailed in the chapter devoted to the compensation of Corporate officers on pages 198 and following.
(4)
Amounts recorded by the Board of Directors following Xavier Musca’s decision to waive half of his variable compensation in respect of 2019.
Table 2 – Summary of gross compensation
(in euros)
2019
2020
Amount awarded
for 2019
Amount paid
in 2019
Amount awarded
for 2020
Amount paid
in 2020
Fixed compensation
700,000
700,000
700,000
700,000
Non-deferred variable compensation paid in cash
94755
(3)
183,300
178,080
94,755
Non-deferred variable compensation linked to the Crédit Agricole S.A. share
price
31585
(3)
61,100
59,360
21,162
Deferred and conditional variable compensation
(1)
189510
(3)
301,818
356,160
266,164
Exceptional compensation
-
-
-
-
Compensation for Director's term of office
(2)
-
-
-
-
Benefits in kind
-
-
5,937
5,937
TOTAL
1,015,850
1,246,218
1,299,537
1,088,018
(1)
The amounts paid correspond to the amounts vested, detailed in Table 2A and indexed to changes in the share price as stated in Notes 1, 2, 3 and 4 of the same table.
(2)
Net amounts, after the following deductions from the sums payable to individual beneficiaries resident in France: income tax prepayment (12.8%) and social contributions (17.2%).
(3)
Amounts recorded by the Board of Directors following Xavier Musca’s decision to waive half of his variable compensation in respect of 2019.
Table 2A – Details of deferred variable compensation
Total amount
awarded
(1)
2018
2019
2020
Amount
awarded
(1)
Amount
vested
(2)
Amount
awarded
(1)
Amount
vested
(3)
Amount
awarded
(1)
Amount
vested
(4)
Plan awarded in 2017
355,260
118,420
118,420
118,420
118,420
118,420
118,420
Plan awarded in 2018
373,020
-
-
124,340
124,340
124,340
124,340
Plan awarded in 2019
-
-
-
-
122,200
122,200
(1)
The share value at the grant date was €11.94 for the 2017 plan, €14.19 for the 2018 plan and €10.19 for the 2019 plan.
(2)
The share value at the payment date was €11.97 for the 2017 plan.
(3)
The share value at the payment date was €10.22 for the 2017 plan and €10.21 for the 2018 plan.
(4)
The share value at the payment date was €8.67 for the 2017 plan and €8.63 for the 2087 and 2019 plans.
Deferred variable compensation vested in 2020
(Table 2A above)
Xavier Musca received €346,960 in deferred variable compensation for
previous years. At the payment date this was equivalent to €266,164 after
indexation to the Crédit Agricole S.A. share price. This amount represents:
the first year of payment of deferred variable compensation awarded
in 2019 for 2018, instalment for which €122,200 were awarded, with
a share price on the grant date of €10.19;
the second year of payment of deferred variable compensation
awarded in 2018 for 2017, instalment for which €124,340 were
awarded, at a share price on the grant date of €14.19;
the third year of payment of deferred variable compensation awarded
in 2017 for 2016, instalment for which €118,420 were awarded, at
a share price on the grant date of €11.94.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
215
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Table 3 – Compensation received by Directors
for their position as Directors
of Crédit Agricole S.A.
See page 211.
Table 4 – Stock options granted to Executive Corporate
Officers in financial year 2020 by Crédit Agricole S.A.
and other Group companies
No stock options were awarded to Executive Corporate Officers in 2020.
Table 5 – Stock options exercised by Executive Corporate
Officers in financial year 2020
No Crédit Agricole S.A. stock options were exercised by Executive
Corporate Officers in 2020.
Table 6 – Performance shares awarded to Executive
Corporate Officers in financial year 2020
Crédit Agricole S.A. did not offer a performance share plan.
Table 7 – Performance shares made available over
financial year 2020 to Executive Corporate Officers
Not applicable. Crédit Agricole S.A. did not offer a performance share
plan in 2020.
Table 8 – History of stock option awards
Not applicable.
Table 9 – History of performance share awards
Not applicable.
Table 10 – Summary of multi-annual variable
compensation of each Executive Corporate Officer
Not applicable.
Table 11 – Employment contract/Supplementary pension scheme/Severance payment/Non-competition clause
Executive Corporate Officers
Employment
contract
(1)
Supplementary pension
scheme
Allowances and benefits due
or likely due to termination
or to change of functions
Allowances under a
non-competition clause
Dominique Lefebvre
Chairman
Term of office commenced: 04/11/2015
No
No
No
No
Philippe Brassac
Chief Executive Officer
Term of office commenced: 20/05/2015
Yes
Yes
Yes
Yes
Xavier Musca
Deputy Chief Executive Officer
Term of office commenced: 19/07/2012
Yes
Yes
Yes
Yes
(1)
The AFEP/MEDEF recommendation against holding a corporate office while being covered by an employment contract applies to the Chairman of the Board of Directors, the Chairman and Chief
Executive Officer and the Chief Executive Officer. The employment contract of Xavier Musca, Deputy Chief Executive Officer, was, however, suspended by an amendment. It will take effect again
at the end of his corporate office, at the updated compensation and role conditions applicable prior to his term of office.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
216
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
4.5. APPENDIX
Definition and characteristics of the compensation of identified employees
Credit institutions and investment companies
(1)
Asset management companies
Insurance companies
Reference
regulatory corpus
Decree of 3 November 2014 on internal control of credit
institutions and investment companies.
Delegated Act of the European Commission No. 604/2014.
AMF position 2013-11 under AIFM
European Directive 2011/6 of
8 June 2011 and AMF Decree of
6 April 2016 under UCITS V Directive
2014/91/EU.
Delegated Act 2015/35
of 10 October 2014.
Insurance and reinsurance
companies are excluded
from the scope of
application of European
Commission Delegated
Regulation (EU)
No. 604/2014.
Identified
employees by
virtue of their role
Within Crédit Agricole S.A.
Within other entities
Corporate Officers;
members of the Board
of Directors;
members of the Executive
Committee;
Heads of Central Support
functions responsible
for finance, legal affairs,
taxation, human resources,
compensation policy,
information technology,
Management Control and
economic analysis;
Heads of the three control
functions: Risk Management
and Permanent Controls,
Compliance and Audit;
employees reporting directly to
the Head of Risk Management
and Permanent Controls,
Compliance and Audit;
employees heading a
Committee responsible for
managing operational risk for
the Group.
Corporate Officers
or Chief Executive
Officers;
members of the
Executive Committee
or employees
reporting directly
to Chief Executive
Officers;
Heads of the three
control functions:
Risk Management
and Permanent
Controls, Compliance
and Audit;
employees who chair
the “new activities/
new products”
committees of these
entities.
Executive managers;
investment managers;
decision-making managers;
Heads of the three control
functions: Risk Management
and Permanent Controls,
Compliance and Audit;
Heads of the support functions:
Legal, Finance, Administration
and Human Resources.
Corporate Officers
or executive managers;
members of the
Executive Committee
of CA Assurances;
employees performing
the key functions
referred to in
Articles 269 to 272 of
Delegated Act 2015-35:
Risk management,
Compliance audit,
Internal audit, Actuarial
function;
employees responsible
for underwriting and
business development;
investment managers.
Identified
employees by
virtue of their
level of authority
or compensation
Employees with authority or powers to take credit risk
of more than 0.5% of Common Equity Tier 1 (CET1)
capital in the subsidiary to which they belong and of at
least €5 million, or with authority or powers to structure
this type of product with a significant impact on the risk
profile of the subsidiary to which they belong;
employees who can take market risks of more than 0.5%
of the CET1 capital or 5% of the Value at Risk (VaR) of the
subsidiary to which they belong;
the hierarchical managers of employees who are not
individually identified but who are collectively authorised
to take credit risks of more than 0.5% of CET1 capital
in the subsidiary to which they belong and at least
€5 million, or to take market risks of more than 0.5% of
the CET1 capital or 5% of the Value at Risk (VaR) of the
subsidiary to which they belong;
employees who have earned total gross compensation of
more than €500,000 in the previous financial year;
employees who are not identified under any of the
previous criteria but whose total compensation puts
them in the 0.3% top earners in the entity in the previous
financial year (for entities with a balance sheet of more
than €10 billion or with equity of more than 2% of their
parent company’s equity).
Additional condition:
Those who
earn variable compensation of more
than €100,000.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
217
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
Credit institutions and investment companies
(1)
Asset management companies
Insurance companies
Characteristics of
deferred
compensation
In view of the proportionality principle, employees whose bonus
or variable compensation is less than €120,000 are excluded
from the scope of application of rules on deferred compensation
in all Group entities, unless otherwise stipulated by the
regulatory authorities in the countries in which the Group’s
subsidiaries are located.
The deferred portion is determined based on the overall variable
compensation awarded for the financial year.
Total variable
compensation
for year Y
Deferred
portion
The characteristics of
deferred compensation are
the same as those of credit
institutions and investment
firms except for the vesting
in the form of Crédit
Agricole S.A. shares or
equity-linked instruments of
part of the non-deferred
variable compensation, as
well as the application of a
retention period at the end
of the vesting period, which
is not required.
<€100,000
Not applicable
€100,000
– €600,000
50% from the
first euro
>€600,000
60% from the
first euro with
minimum
non-deferred
amount of
€300,000
Total variable
compensation
for year Y
Deferred portion
<€ 120,000
Not applicable
€120,000
– €400,000
40% from the first euro
€400,000
– €600,000
50% from the first euro with minimum
non-deferred amount of €240,000
>€600,000
60% from the first euro with minimum
non-deferred amount of €300,000
Payment in securities or equivalent instruments
The deferred variable compensation and a percentage of the
non-deferred portion carried for six months are granted in the
form of Crédit Agricole S.A. shares or share-linked instruments.
As a result, at least 50% of variable compensation for identified
employees is awarded in shares or equivalent instruments.
Any hedging or insurance strategies limiting the scope of
alignment provisions on risks contained in the compensation
scheme are prohibited.
Performance conditions
The deferred portion is vested in thirds: for an award in year Y,
one third in year Y+1, one third in year Y+2 and one third in
year Y+3, provided the vesting criteria are met. Each vesting
date is followed by a six-month retention period.
The performance conditions for executive managers and
identified employees are aligned with those for long-term
variable compensation as indicated in the “Long-Term Variable
Compensation” paragraph of Chapter 3, section 4.3.1, “Reward
policy of executive managers”.
The performance conditions for the other identified employees
are calculated in relation to the net income Group share of the
entity, determined during the year of allocation of the variable
compensation in question.
(1)
The credit institutions and investment firms concerned are those falling within the scope of the Decree of 3 November 2014 on the internal control of credit institutions and investment companies.
For the Group, these are Crédit Agricole S.A. as well as all entities with a balance sheet of more than €10 billion or with equity of more than 2% of their parent company’s equity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
218
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
4. Reward policy
5.
RULES OF PROCEDURE OF THE BOARD OF DIRECTORS
RULES OF PROCEDURE OF THE BOARD OF DIRECTORS (UPDATED 5 AUGUST 2020)
Preface
At its meeting of 5 August 2020, and on the recommendation of its
Chairman and Appointments and Governance Committee, the Board of
Directors of Crédit Agricole S.A. approved its updated Rules of Procedure
including the revised Corporate Governance Code applicable to listed
companies published by the AFEP/MEDEF in January 2020 as well as
current laws and regulations.
Article 1:
Organisation of the Board of Directors.
Article 2:
Powers of the Board of Directors and of the Chief Executive
Officer.
Article 3:
How the Board of Directors operates.
Article 4:
Board Committees.
Article 5:
Crédit Agricole S.A. Directors’ Code of Conduct.
Crédit Agricole S.A. is a company with a Board of Directors that separates
the roles of Chairman and Chief Executive Officer, in accordance with
Group practice and current regulations, namely the separation of
planning, decision-making and control functions from executive functions.
Pursuant to the provisions of the AFEP/MEDEF Code, Corporate Officers
include the Chairman of the Board of Directors, the Chief Executive
Officer and the Deputy Chief Executive Officer of Crédit Agricole S.A.
Pursuant to the provisions of the French Monetary and Financial Code,
the Board of Directors must ensure that Crédit Agricole S.A. has a
sound governance system, comprising in particular a clear organisation,
resulting in responsibilities being shared in a well-defined, transparent
and coherent manner; effective procedures for identifying, managing,
monitoring and reporting risks to which the Company is or may be
exposed; an adequate internal control system; sound administrative
and accounting procedures; and compensation policies and practices
enabling and facilitating sound and effective risk management.
It should also be recalled that the Chief Executive Officer and Deputy Chief
Executive Officer of Crédit Agricole S.A. effectively run the Company’s
operations.
Article 1: Organisation of the Board of Directors
1.1.
Chairman of the Board of Directors
The Chairman of the Board of Directors guides and organises the Board’s
work. He/she is responsible for ensuring that the Board as well as its
Committees operate properly.
For this purpose, he/she ensures that the information provided to the
Directors gives them sufficient insight for the decisions they make;
he/she therefore makes sure that information flows properly between
the Board and Executive Management and between the Board and its
Committees.
He/she encourages and promotes open discussion and ensures that it
is possible to express all points of view within the Board.
He/she calls Board Meetings and sets the agenda.
1.2.
Officers of the Board of Directors
The Board of Directors may appoint the Chairman and Deputy Chairman
as Officers of the Board. The Chief Executive Officer of Crédit Agricole S.A.
takes part in the Board’s work.
The Officers of the Board are responsible for preparing the Board’s
work. They meet when called by the Chairman, as and when needed.
The Chairman may invite any person whose opinion he/she would like
to canvass to assist the Officers of the Board.
The Secretary to the Board of Directors fulfils the role of Secretary to
the Officers of the Board.
1.3.
Composition of the Board
1.3.1
Members of the Board of Directors
Directors are appointed or reappointed to their office by the Ordinary
General Meeting of Shareholders.
In accordance with the Company’s Articles of Association, the Board of
Directors is made up of at least 3 and at most 18 members elected by
the Ordinary General Meeting of Shareholders.
Directors have a term of office of three years; the term expires at the
end of the Ordinary General Meeting of Shareholders called to vote on
the financial statements for the previous year and held in the year in
which the term expires.
1.3.2
Non-Voting Directors
The Board of Directors, on the Chairman’s recommendation, may appoint
one or more Non-Voting Directors who may attend Specialised Committee
meetings in the same manner as Directors.
Non-Voting Directors are appointed for three years. They attend meetings
of the Board of Directors in an advisory capacity.
They are subject to the same rules as Directors with respect to
confidentiality and the prevention of conflicts of interests.
1.4
Specialised Committees of the Board
The Board of Directors has established six Specialised Committees
tasked with preparing Board meetings and/or providing it with their
opinions and recommendations. These include the:
Risks Committee;
Audit Committee;
US Risks Committee;
Compensation Committee;
Strategy and CSR (Corporate Social Responsibility) Committee;
Appointments and Governance Committee.
The Board of Directors draws up the Rules of Procedure for these
Specialised Committees and determines their duties and composition
in accordance with current laws and regulations.
The remit of these Committees is defined in Article 4 below.
The Chairman or the Board of Directors may canvass the opinion of any
Committee on any matter within its remit.
The Rules of Procedure of each Committee are appended to these Rules
of Procedure of the Board of Directors.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
219
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
5. Rules of procedure of the Board of Directors
Article 2: Powers of the Board and of the
Chief Executive Officer
2.1.
Powers of the Board of Directors
The Board of Directors exercises the powers granted to it by law and by
the Company’s Articles of Association. It sets out the guidelines for the
Company’s business and ensures that they are applied, in accordance
with its social purpose, while incorporating the social and environmental
issues relating to its line of business. As such:
the Board approves the annual individual financial statements (balance
sheet, income statement, notes), the management report detailing
the Company’s position during the past financial year or current
financial year, and its outlook, along with its forecasts. It approves
the consolidated financial statements of the Crédit Agricole S.A. Group
and takes note of its interim financial statements;
the Board approves the consolidated financial statements of the Crédit
Agricole Group;
the Board decides to call the Company’s General Meeting of
Shareholders. It sets the agenda and prepares the draft resolutions;
the Board:
-
elects and dismisses the Chairman of the Board of Directors,
-
appoints and dismisses the Chief Executive Officer, on the
Chairman’s recommendation,
-
temporarily fills one or more Director or Non-Voting Director positions
in the event of a vacancy, death or resignation, in accordance with
the provisions of Article 14 of the Articles of Association,
-
appoints and dismisses Deputy General Manager(s), on the Chief
Executive Officer’s recommendation;
the Board decides on how to distribute the total compensation package
allocated to Corporate Officers;
the Board must first authorise any agreement that falls under articles
L.225-38
et seq.
of the French Commercial Code and, in particular,
any agreement between the Company and any Corporate Officer;
the Board presents the corporate governance report attached to the
management report during the General Meeting. Besides including
information on the compensation of Corporate Officers and on any
agreements reached between Corporate Officers and the Company,
the report presented by the Board also provides details about its
composition, its organisation, how it operates, the work accomplished
the previous financial year, and the diversity policies implemented
both within the Board and within the Company’s management bodies.
The Board also:
determines the Group’s strategic priorities, on the recommendation
of the Chairman and Chief Executive Officer;
gives prior approval to strategic investment plans and any transaction,
specifically any acquisition or disposal, that is likely to have a material
effect on the Group’s earnings, the structure of its balance sheet or
its risk profile;
defines the general principles applicable to the Crédit Agricole Group’s
internal financial organisation;
decides or authorises the issuance of Crédit Agricole S.A. bonds;
grants the Chief Executive Officer the necessary powers to implement
the decisions set out above;
approves and regularly reviews the risk appetite profile along with
the strategies and policies governing risk taking / management /
monitoring / reduction for the risks to which Crédit Agricole S.A. and the
Group are or may be exposed, including social and environmental risks;
notably approves the various commitment and risk limits for the Crédit
Agricole S.A. Group and, where applicable, for the Crédit Agricole
Group;
issues an opinion, after having canvassed those of the Risks Committee
and Appointments and Governance Committee, on the appointment
as recommended by the Chief Executive Officer of each Group Head
of an internal control function,
i.e.
the Chief Risk Officer, Head of
Internal Audit and Head of Compliance. Where necessary, the Board
will follow the same process when making a decision to dismiss any
of the managers referred to above, who cannot be removed from their
position without the prior approval of the Board;
determines and regularly reviews the general principles of the
compensation policy in place at the Crédit Agricole S.A. Group, in
particular that regarding employee categories whose activities have
a material impact on the Group’s risk profile;
reviews the governance system, periodically evaluates its effectiveness
and ensures that corrective steps have been taken to remedy any
identified deficiencies;
determines the guidelines and ensures that the
dirigeants effectifs
(persons effectively running the undertaking,
i.e.
the Chief Executive
Officer and Deputy General Manager(s)) implement the monitoring
systems in place to ensure effective and prudent management of
the activities of Crédit Agricole S.A. and, in particular, the separation
of functions within the organisation and the prevention of conflicts
of interests;
ensures that a code of conduct or similar and effective policies exist
and are enforced to identify, manage and mitigate any potential or
proven conflicts of interest and to prevent and identify any instances
of corruption or influence peddling;
ensures that Executive Corporate Officers enforce a non-discrimination
and diversity policy, for instance with respect to gender representation
within management bodies;
defines the criteria used to assess the independence of Directors;
is notified in advance by the
dirigeants effectifs
(persons effectively
running the undertaking) of changes in the Group’s organisation and
management structures;
conducts any inspections or audits it deems necessary.
With respect to the role of central body assigned to Crédit Agricole S.A.
by the French Monetary and Financial Code:
the Board authorises:
-
any foreign expansion of the Regional Banks,
-
any creation, by a Regional Bank, of a financial institution or
insurance company, as well as the acquisition of any interest in
any such company,
-
any financial support for any Regional Bank in difficulty,
-
the establishment of a Committee responsible for the interim
management of a Regional Bank;
the Board decides to:
-
give Crédit Agricole S.A.’s approval for the appointment of Chief
Executive Officers of Crédit Agricole Mutuel Regional Banks.
The Chief Executive Officer also asks the Board for its opinion prior to
any decision by the former to dismiss a Chief Executive Officer of a
Regional Bank.
2.2.
Powers of the Chief Executive Officer
The Chief Executive Officer has the fullest powers to act in the Company’s
name in all circumstances and to represent it with respect to third parties.
He/she must, however, secure the Board of Directors’ approval prior to
the following transactions:
the creation, acquisition or disposal of any subsidiaries and equity
investments in France or abroad for total amounts exceeding
€150 million;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
220
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
3
5. Rules of procedure of the Board of Directors
any other investment of any kind for amounts exceeding €150 million.
If, due to the urgency of the situation, the Board cannot be called to
deliberate on a transaction that exceeds this ceiling, the Chief Executive
Officer will do everything in his/her power to canvass all Directors or,
at the very least, the Officers of the Board and the members of the
relevant Specialised Committee prior to making any decision. Where
this is not possible, the Chief Executive Officer may, with the Chairman’s
approval, take any decisions that are in the Company’s interest in the
areas set forth above. He/she reports such decisions to the Board at
its subsequent meeting.
Article 3: How the Board of Directors
operates
3.1.
Meetings of the Board of Directors
The Board is convened by its Chairman, or any person authorised for
that purpose by the Board of Directors, and meets as often as required
by the Company’s interests and at least six times each year. Should the
Chairman be unable to attend, the Board meeting is chaired by the Deputy
Chairman or the eldest Director, who is thus authorised to convene it.
The Board of Directors may hold its meetings by video conference or
audio conference, in accordance with the provisions of Article 3.3 below.
Directors with an interest in matters deliberated by the Board shall
abstain from voting on such matters.
The Chief Executive Officer, Deputy General Manager(s) and Secretary
General participate in Board meetings but do not have the right to vote.
The Chief Executive Officer designates representatives of Executive
Management to participate in Board meetings.
Non-Voting Directors participate in meetings of the Board and of its
Specialised Committees but do not have the right to vote.
3.2.
Provision of information to Board members
The Chairman and the Chief Executive Officer are required to provide
each Director with all the documents and information needed for the
Director to fulfil his/her duties.
Pursuant to the provisions of the French Monetary and Financial Code,
the Board of Directors is informed by the
dirigeants effectifs
(persons
effectively running the undertaking) of all material risks, risk management
policies and any changes made thereto.
The Group Chief Risk Officer, Head of Internal Audit and Head of
Compliance may report directly to the Board and, where necessary,
to the Risks Committee.
Prior to Board meetings, Directors will in good time receive a file
including the agenda items that require particularly close analysis
and consideration ahead of the meeting, provided that confidentiality
guidelines allow such information to be communicated.
Board members receive all relevant information on the Company, in
particular the press releases issued by the Company.
Board members may also seek information directly from the Chief
Executive Officer, the Deputy General Manager(s) and the Secretary
General of Crédit Agricole S.A., after having informed the Chairman
that they intend to do so.
In the course of their work, Specialised Committees may consult
Group employees or experts in areas that fall within the remit of said
Committees.
3.3.
Participating in Board meetings by means
of video conference or audio conference
Except in circumstances in which the Board is convened to conduct any
of the transactions referred to in articles L.232-1 and L.233-16 of the
French Commercial Code (approval of the annual financial statements
and management report for the previous financial year), the Board may
at the Chairman’s discretion hold its meeting by video conference or
audio conference.
In this case, the video conference or audio conference system will be able
to identify the Directors in attendance and ensure their full participation.
For this purpose, the system used shall at least transmit participants’
voices and meet the technical requirements to ensure that the Board’s
deliberations are transmitted continuously and simultaneously.
Directors attending a meeting by video conference or audio conference
are deemed present with their full rights taken into consideration (for the
purpose of calculating the quorum and majority, Directors’ fees, etc.).
The attendance records and minutes must indicate the names of the
Directors having participated in the meeting by video conference and
audio conference. The minutes must also record any technical incident
that may have affected the proceedings.
Consultation methods used by the Board
Besides taking decisions in the presence of the Directors attending the
meeting, whether in person or by audio or video conference, the Board
may also take the following decisions by consulting Directors in writing:
to temporarily appoint Board members, including Non-Voting Directors;
to enforce compliance of the Articles of Association with current laws
and regulations;
to convene a General Meeting;
to transfer the registered office within a same
département.
3.4.
Procedural Notes of the Board of Directors
The Board’s operations are governed by the present Rules of Procedure
and by current laws and regulations.
The Board of Directors may also issue Procedural Notes describing the
way in which it applies and organises its governance, in accordance with
the aforementioned rules, particularly in response to orders received
from its supervisory authorities to formalise its processes.
These Procedural Notes are established on the recommendation of the
Appointments and Governance Committee; once approved by the Board
of Directors, they apply to all its members. They may be amended or
revoked by the Board of Directors at any time, after the aforementioned
Committee has issued its opinion, on the grounds that they may no
longer be meaningful or that regulations have changed.
Article 4: The Board’s Specialised
Committees
4.1.
Strategy and CSR Committee
Under the responsibility of the Board of Directors, the Strategy and CSR
Committee’s key duty is to conduct in-depth reviews of the Group’s
strategic planning for its various business lines in France and abroad.
In particular, the Committee examines M&A or strategic investment
plans and issues opinions on them.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
221
Refer to the glossary on page 681 for the definition of technical terms.
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5. Rules of procedure of the Board of Directors
It carries out a review, at least every 12 months, of the corporate social
and environmental responsibility actions taken by the Crédit Agricole S.A.
Group and Crédit Agricole Group. As such, it supervises the preparation
of the integrated report and, in general, of the non-financial information
published by the Group, particularly that published by Crédit Agricole S.A.
The Board receives reports on the work and opinions of the Strategy
and CSR Committee from the Committee Chairperson or a Committee
member designated by him/her.
4.2.
Risks Committee
Under the responsibility of the Board of Directors and in accordance with
the provisions of the French Monetary and Financial Code and Decree
of 3 November 2014, the Risks Committee is tasked with:
reviewing the overall strategy and risk appetite of Crédit Agricole S.A.
and of the Crédit Agricole Group, along with their risk strategies,
including social and environmental risks, and advising the Board of
Directors on such matters;
helping the Board of Directors verify that this strategy is being
implemented by the
dirigeants effectifs
(persons effectively running
the undertaking) and by the Chief Risk Officer;
examining, without prejudice to the role of the Compensation
Committee, whether the incentives built into the compensation policy
and practices of Crédit Agricole S.A. are consistent with the Group’s
position as regards the risks to which it is exposed, its capital, its
liquidity and the probability and phasing of its expected profits.
The Board receives reports on the work and proposals of the Risks
Committee from the Committee Chairperson or a Committee member
designated by him/her.
4.3.
US Risks Committee
Under the responsibility of the Board of Directors and in accordance
with US regulations, the US Risks Committee is tasked with:
reviewing the policies in place to manage the risks pertaining to the
operations of Group entities in the United States;
ensuring these risks are managed with appropriate oversight; and
submitting all decisions on such matters to the Board for approval.
4.4.
Audit Committee
Under the responsibility of the Board of Directors and in accordance
with the provisions of article L.823-19 of the French Commercial Code,
the Audit Committee is tasked with:
reviewing the separate and consolidated financial statements of Crédit
Agricole S.A. prior to their submission to the Board of Directors;
reviewing documents or reports within its area of expertise that are
intended for the Directors;
monitoring the financial reporting process and, where appropriate,
making recommendations to guarantee its integrity;
monitoring the effectiveness of internal control, risk management
and, where appropriate, internal audit systems concerning procedures
for preparing and processing accounting and financial information,
without undermining its independence;
making a recommendation on the Statutory Auditors submitted to the
General Meeting of Shareholders for approval. This recommendation,
which is made to the Board of Directors, is prepared in accordance
with the provisions of Article 16 of Regulation (EU) No. 537/2014;
it also makes a recommendation to the Board when any Statutory
Auditor is being considered for reappointment in the manner provided
for in article L.823-3-1;
monitoring the completion of the Statutory Auditors’ inspection; it takes
into account the observations and conclusions of the High Council of
Auditors following checks made pursuant to articles L.821-9
et seq.
;
ensuring that the Statutory Auditors meet the independence criteria
set out in the French Commercial Code. If necessary, it will liaise with
the Statutory Auditors to draw up measures that would safeguard their
independence, in accordance with the provisions of the aforementioned
EU regulation;
approving the provision of services mentioned in article L.822-11-2
of the French Commercial Code.
The Board receives reports on the work and proposals of the Audit
Committee from the Committee Chairperson or a Committee member
designated by him/her.
4.5.
Compensation Committee
Under the responsibility of the Board of Directors and in accordance
with the provisions of the French Monetary and Financial Code, the
Compensation Committee is tasked with making proposals and offering
opinions to be submitted to the Board concerning:
the general principles of the compensation policy applicable to
all Crédit Agricole S.A. Group entities, and, in particular:
-
the establishment of pay structures, distinguishing between fixed
and variable compensation in particular,
-
the principles for determining total amounts of variable
compensation, taking into account the impact of the risks and
capital requirements inherent to the business activities concerned,
-
the application of regulatory provisions concerning identified staff
within the meaning of European regulations.
As such, the Committee in particular:
-
issues an opinion on the compensation policy of the Crédit
Agricole S.A. Group, prior to any Board decision,
-
monitors implementation of this policy, at Group level and by each
major business line, by means of an annual review, to ensure
regulatory compliance;
the remuneration of corporate officers,
ensuring compliance with
applicable laws and regulations;
the total compensation package and its distribution among
Directors and Non-Voting Directors;
plans for capital increases reserved for Group employees
and,
where applicable, stock option or share buyback plans as well as
free share allocation plans to be submitted to the General Meeting
of Shareholders, along with the terms and conditions for carrying out
these capital increases and plans.
The Board receives reports on the work and proposals of the
Compensation Committee from the Committee Chairperson or a
Committee member designated by him/her.
4.6.
Appointments and Governance Committee
Under the responsibility of the Board of Directors and in accordance
with the provisions of the French Monetary and Financial Code, the
Appointments and Governance Committee is tasked with:
identifying candidates suitable for the position of Director and Non-
Voting Director and recommending them to the Board with a view to
submitting their names to the General Meeting;
periodically – at least annually – assessing the balance and diversity
of knowledge, expertise and experience of Board members. This
assessment is carried out individually and collectively;
specifying the role and necessary qualifications of Board members
and calculating the time they need to devote to their duties;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
222
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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5. Rules of procedure of the Board of Directors
reviewing the diversity policy applied to Board members based
on criteria such as age, gender or qualifications and professional
background, and setting out the targets of this policy, the methods
implemented, and the results obtained over the previous financial year;
periodically – at least annually – assessing the Board’s structure,
size, composition and effectiveness as regards its role, and making
any helpful recommendations to the Board;
periodically reviewing the Board’s policies regarding the selection and
appointment of
dirigeants effectifs
(persons effectively running the
undertaking), Deputy General Managers and the Chief Risk Officer,
and making recommendations in this regard.
The Committee’s work and proposals are reported to the Board by the
Committee Chairperson or a Committee member designated by him/her.
Article 5: Credit Agricole S.A. Directors’
Code of Conduct
Each member of the Board of Directors of Crédit Agricole S.A., regardless
of whether they have the right to vote, fully subscribes to the provisions
of the Code appended to these Rules of Procedure, of which it forms an
integral part and every Board member has received a copy.
Article 6: Group Code of ethics
Each member of the Board of Directors of Crédit Agricole S.A., regardless
of whether they have the right to vote, fully subscribes to the provisions of
the Crédit Agricole Group Code of ethics and undertakes to respect them.
CRÉDIT AGRICOLE S.A. DIRECTORS’ CODE OF CONDUCT
The purpose of this Code of Conduct is to improve the quality of the work carried out by Directors by encouraging effective application of the
principles and best practices in the area of corporate governance.
Each member of the Board of Directors of Crédit Agricole S.A., regardless of whether they have the right to vote, undertakes to observe the guidelines
contained in the present Code of Conduct and to apply them.
Article 1 – Administration and social purpose
Each member of the Board of Directors of Crédit Agricole S.A., regardless
of whether they have the right to vote, must consider themselves a
representative of all shareholders and other stakeholders and must, in
all circumstances, act in their best interests and those of the Company.
Article 2 – Compliance with laws and Articles
of Association
On taking up their duties and throughout their term of office, each member
of the Board of Directors of Crédit Agricole S.A., regardless of whether they
have the right to vote, must acknowledge the full extent of their general
and/or specific rights and obligations. They must familiarise themselves
with and observe the laws and regulations applicable to the Company and
to their own duties, all applicable governance codes and best practices,
and the Company’s own rules as per its Articles of Association and rules
of procedure.
Article 3 – Availability and diligence
The Director must devote the time, attention and availability necessary
to fulfil his/her duties.
The Director must observe the laws and regulations applicable to any
Director of a credit institution.
As such, on taking up their duties, the Director must inform the Chairman
of the Board of all offices and duties exercised in any company, along
with the names and corporate forms of the entities in which they exercise
these offices and duties.
The Director must, in good time, inform the Chairman of the Board of
any changes (termination, resignation, non-reappointment, dismissal,
new offices and duties) made to the list of offices and duties declared.
The Director undertakes to resign from their duties if they no longer
consider themselves apt to fulfil their role within the Board and the
Specialised Committees of which they are a member.
Barring exceptional circumstances, they must be diligent and active
participants in all Board meetings and all meetings of the Committees
of which they are a member, where applicable.
Article 4 – Information and training
The Chairman ensures that Directors receive, in good time, the information
and documents they need to fulfil their duties in full. Similarly, the
Chairperson of each of the Board’s Specialised Committees ensures that
the members of their Committee receive, in good time, the information
they need to fulfil their duties.
The Director, however experienced, must continuously strive to remain
informed and adequately trained. They are duty bound to stay informed
so that they can usefully contribute to discussions on items on the
Board’s agenda.
For this purpose, Crédit Agricole S.A. devotes the necessary human and
financial resources to provide training for its Directors, and Directors
are duty bound to devote the necessary time to any training courses
offered to them by Crédit Agricole S.A.
Directors are kept informed of any changes made to laws and regulations,
including those pertaining to the regime applicable to inside information.
Article 5 – Exercising duties: guidelines
The Director will exercise his/her duties in a spirit of independence,
integrity, fairness and professionalism.
Article 6 – Independence and duty to
disclose
The Director ensures that their independence and freedom to make
judgements and decisions and to take action are safeguarded in all
circumstances. They must remain impartial and free from influence
peddling from any source uninvolved with the social purpose they are
duty bound to safeguard.
They inform the Board of anything they are aware of that might be
detrimental to the Company’s interests.
They are duty bound to express their doubts and opinions. In the event
of a disagreement, they ensure that it is explicitly documented in the
meeting’s minutes.
Article 7 – Independence and conflicts
of interest
Board members are subject to the legal and regulatory requirements
applicable in matters relating to conflicts of interest. Each member of
the Board of Directors of Crédit Agricole S.A., regardless of whether
they have the right to vote, informs the Board of any actual or potential
conflict of interest in which they may be involved either directly or
indirectly. They will refrain from attending the debate and voting on
the corresponding decision.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
223
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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5. Rules of procedure of the Board of Directors
Article 8 – Integrity, fairness
and good character
The Director acts in good faith in all circumstances and takes no initiative
that might be detrimental to the interests of the Company or of other
companies within the Crédit Agricole Group.
He/she personally undertakes to ensure that the information they receive,
the debates in which they participate, and the decisions taken are kept
fully confidential.
The Director shows the honesty, integrity and independence required
to assess and, if necessary, question the decisions taken by Executive
Management and to ensure that any management decisions taken are
supervised and monitored effectively.
Article 9 – Inside information –
Transactions in securities
The Director refrains from using the inside information to which they
are privy for their own personal benefit or for the benefit of anyone else.
Crédit Agricole S.A. shares and related
financial instruments
When a Director is privy to information that has not been made public
on the company in which he/she exercises a term of office as Director,
they refrain from using it to carry out themselves or by a third party any
transactions in Crédit Agricole S.A. securities. Their name is accordingly on
the list of “Permanent Insiders” with respect to Crédit Agricole S.A. securities,
and the AMF (French Financial Markets Authority) has access to this list.
They undertake to observe the rules stipulating, for instance, that
“Permanent Insiders” may trade in Crédit Agricole S.A. securities within
intervals of six (6) weeks following publication of quarterly, half-yearly or
annual results, provided they are not privy during this time to information
on the company that has not been made public.
They are informed of these obligations in a letter from the Crédit
Agricole S.A. Compliance Department; they will acknowledge receipt
of this letter.
(1) Please refer to the glossary for the definition of Raison d’Être.
(2) These include the principles set out in the Universal Declaration of Human Rights published by the UN in 1948, the ten principles of the United Nations Global Compact, the
OECD Guidelines for Multinational Enterprises, the OECD anti-corruption guidelines and recommendations, and the International Labour Organization (ILO) conventions.
Crédit Agricole S.A. may find itself obliged to forbid trading in any Crédit
Agricole S.A. financial instrument, including during these periods.
In accordance with legal and regulatory requirements, the Director must
disclose any transactions carried out in shares in the Company and in
any related financial instruments, either for their own account or on
behalf of persons closely related to them.
Persons subject to the reporting requirement must send their disclosures
to the AMF (French Financial Markets Authority), by electronic means
only, within three (3) trading days following the transaction date. Each
disclosure is published on the AMF’s website.
The General Meeting of Shareholders is informed of all transactions
carried out over the previous financial year; these transactions
are presented in a summary statement included in the Company’s
management report.
In addition, the Director’s name may also be on a list of “Deal/Event-
Specific Insiders” due to the nature of their activities within Crédit
Agricole S.A. They are duty bound to comply with the associated
requirements and will be informed of them, particularly their duty to
refrain from trading in Crédit Agricole S.A. securities during the course
of a project.
Financial instruments other than those issued
by or relating to Crédit Agricole S.A.
In addition, the Director is duty bound to inform Crédit Agricole S.A.
of any transactions carried out in financial instruments other than
those issued by or relating to Crédit Agricole S.A., whether for their
own account or on behalf of persons closely related to them, if
they consider that they may potentially create a conflict of interests
or if they hold confidential information that may be deemed inside
information which they became privy to during the course of their
duties as a Director of Crédit Agricole S.A. Crédit Agricole S.A.
may find itself obliged to forbid trading in any financial instrument (list of
“Deal/Event-Specific Insiders”) on which specific information, not made
public, is discussed during the course of a meeting held by the Board
of Directors of Crédit Agricole S.A. (a strategic transaction, acquisition,
creation of a joint venture, etc.).
CRÉDIT AGRICOLE GROUP CODE OF ETHICS
This new Code of ethics expresses Crédit Agricole Group’s commitment
to behaviour that reflects all its values and working principles vis-à-vis
its customers, mutual shareholders, shareholders, as well as its suppliers
and all stakeholders with whom it engages. It acts as a responsible
employer.
It is the responsibility of Directors and executives to respect the values
set out in this Code and to set an example. Executives must ensure
that these values are applied and shared by all Crédit Agricole Group
employees, regardless of their level of responsibility, business line or
place of work.
Besides applying all the legal, regulatory and industry rules governing
our various businesses, our Code of ethics reflects our desire to do
even more to better serve our customers who have been our
Raison
d’Être
(1)
since day one.
All Directors and employees are made aware of our Code of ethics.
It is applied by each entity in a form that reflects its specific characteristics
and is incorporated into its internal control procedures.
The compliance principles are compiled into a set of rules
(Fides).
Our working principles and behaviour comply with the fundamental
principles found in the various international documents
(2)
.
Our identity and values
Crédit Agricole Group is built around regional cooperative and mutual
banks, with a European calling and open to the outside world.
Thanks to its universal customer-focused retail banking model – which
is based on close cooperation between its retail banks and their related
business lines –, Crédit Agricole Group aims to build multi-channel
relationships with its customers, streamlining and facilitating their plans
in France and worldwide, helping them make optimal decisions, and
supporting them over time, in a spirit of determination, flexibility and
innovation.
Crédit Agricole Group works to help its customers and meet their needs
by providing them with a range of expertise and know-how: day-to-day
banking, lending, savings, insurance, asset management, real estate,
lease financing, factoring, corporate and investment banking, etc.
Our long-standing values, close customer relationships, responsibility
and solidarity mean that people drive our actions and are central to
our purpose.
Crédit Agricole promotes the cooperative values of democratic governance,
relationships of trust, and respect for and between its members. It
relies on each person’s sense of responsibility and entrepreneurial
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
224
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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5. Rules of procedure of the Board of Directors
spirit. Customer satisfaction, regional development and the search for
long-term performance inform its actions.
Our identity and values require each person to act in an irreproachable
and ethical manner. Each Group entity shares the belief that these values
drive strength and growth.
Built on its sense of ethics and fairness and true to its cooperative
culture, compliance helps enhance customer trust and the Group’s
image. It is central to our business lines and to the governance of
Crédit Agricole Group.
Crédit Agricole Group undertakes to ensure that its working principles
help it achieve its goal of being a bank that is fair, open to everyone
and multi-channel, providing each person with support over time and
with the ability to make fully informed decisions.
Our working principles apply
Vis-à-vis our customers
Respect and support for customers, and fairness towards them
Each employee brings his/her experience and expertise to bear in being
attentive to and serving our customers and mutual shareholders, and
in supporting them over time, all in a multi-channel environment. They
listen to and provide customers with fair advice, and help them make
decisions by offering solutions that are tailored to their profile and
interests while informing them of the related risks.
Solidarity
Built on the Group’s mutual background, the relationships we establish
with our customers, mutual shareholders and all our stakeholders
embody solidarity and adherence to the commitments we have made.
Usefulness and convenience
Our Group is committed to its universal customer-focused bank model,
which is a fount of values and beneficial for our customers, who are
able to access the expertise and know-how of all the Group’s business
lines. It remains true to its culture of local engagement by spurring
regional development.
Personal data protection and transparency
The Group has established a standard framework by means of a personal
data code to ensure our customers’ data is protected.
Vis-à-vis society
Fundamental rights
The Group operates worldwide in compliance with human rights and
basic social rights.
Corporate social responsibility (CSR)
The Group upholds its sense of corporate social and environmental
responsibility across all its business lines and corporate operations. Its
approach is built on a value-creating CSR strategy and is designed to
support France’s regions and strive for excellence in our dealings with
our customers, partners, mutual shareholders and employees.
Vis-à-vis our employees
A responsible human resources policy
For the Group, being a responsible employer means ensuring non-
discrimination and equal treatment, encouraging personal development
in particular through training, promoting gender equality, diversity of
backgrounds and profiles, helping people with disabilities, encouraging
social dialogue and quality of life in the workplace, and creating a safe
working environment in which all employees are treated with dignity
and respect.
Through ethical behaviour
Professionalism and expertise
Directors, executives and employees, regardless of their entity or
geographic area, must be aware of and apply the laws, regulations,
rules and professional standards as well as the procedures applicable
to their entity, in order to ensure they are observed and implemented
in a responsible manner.
Responsible behaviour
Each Director, executive and employee reflects the Group’s image.
Responsible and ethical behaviour is required at all times and in all
circumstances: no action is permitted that may harm the Group’s
reputation and integrity.
Confidentiality and integrity of information
Group Directors, executives and employees are subject to the same duty
of secrecy and are forbidden from improperly disseminating or using any
confidential information they may be privy to, for their own account or
on behalf of third parties. Employees must endeavour to provide reliable
and accurate information to our customers, shareholders, supervisory
authorities, the financial community and stakeholders in general.
Prevention of conflicts of interests
Group Directors, executives and employees must be free of all conflicts
of interest in order to ensure that the interests of our customers take
precedence at all times.
Diligence
Everyone, whether a Director, executive or employee, must work
to safeguard the interests of customers, combat money laundering
and terrorist financing, comply with international sanctions, combat
corruption, prevent fraud and safeguard market integrity. Each individual
must exercise due diligence with respect to the Group’s business lines
and, if necessary, make use of the whistleblowing mechanism, in
accordance with current regulations and procedures.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
225
Refer to the glossary on page 681 for the definition of technical terms.
CORPORATE GOVERNANCE
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5. Rules of procedure of the Board of Directors
Operating and financial information
228
Presentation of the consolidated financial statements
of Crédit Agricole S.A.
228
Economic and financial environment
228
Crédit Agricole S.A. operations and consolidated results
230
Operations and results by business segment
234
Crédit Agricole S.A. consolidated balance sheet
246
Recent trends and outlook
248
Information on Crédit Agricole S.A.’s
financial statements (parent company) 252
Analysis of Crédit Agricole S.A.’s results (parent company)
252
Five-year financial summary
253
4
REVIEW OF THE 2020 FINANCIAL
POSITION AND PERFORMANCE
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
226
Refer to the glossary on page 681 for the definition of technical terms.
A balanced business mix
Breakdown of underlying net income Group share
(excl. Corporate Center)
Specialised
financial
services
13%
Large
customers
29%
Retail
banking
17%
Asset
gathering
41%
Increase in underlying gross operating income
2019
2020
€7.6bn
€8.0bn
Solid underlying net income Group share
€
6.1
bn
Crédit Agricole Group
€
3.8
bn
Crédit Agricole S.A.
Underlying RoTE
9.3%
2022 MTP underlying cost/income ratio (excl. SRF)
target achieved in 2020
2019
2020
61.0%
59.6%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
227
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
4
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
228
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
OPERATING AND FINANCIAL INFORMATION
PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS
OF CRÉDIT AGRICOLE S.A.
(1) Rate cut of 100 basis points (Fed funds range at [0; 0.25%]) of the marginal lending facility rate (discount window of 1.5% to 0.25%), lower reserve requirement rate, asset
purchase program ($500 billion in Treasuries and $200 billion in mort-gage-backed securities, MBS), liquidity for specific segments (Commercial Paper Funding Facility, Money
Market Mutual Fund Liquidity Facility), forward guidance (no interest rate hike until the public health crisis is overcome and the economy evolves in line with its inflation and
employment targets).
(2) 2020 fiscal year ended in September.
Changes to accounting policies and principles
Changes to accounting policies and principles are described in Note 1 to the
consolidated financial statements for the year ended 31 December 2020.
Changes in the scope of consolidation
Changes in the scope of consolidation are described in Notes 2 and 12 to the
consolidated financial statements for the year ended 31 December 2020.
ECONOMIC AND FINANCIAL ENVIRONMENT
Overview of 2020
The year 2020, initially marked by an orderly slowdown in the global
economy, financial markets made to feel optimistic by the reduction
in uncertainties (including a China-US trade agreement) and lasting
accommodative monetary policies, will obviously be marked by the effects
of the COVID-19 epidemic. COVID-19 is a shock unprecedented in nature
firstly due to its disruption of the real economy: an external event that has
impacted the economy globally and affects both supply and demand by
forcing entire business sectors into inactivity, while at the same time causing
consumption to contract with the resulting unintentional accumulation of
extensive savings. The magnitude of the shock is another point of difference,
being much greater than the 2008-2009 crisis. As early as April, the IMF
thus delivered a forecast of a contraction of world GDP of -3% in 2020
(compared to a -0.1% decline in 2009). In June, the IMF stated that it
expected a recession of -4.9% in 2020 followed by a recovery of 5.4% in
2021. In October, the forecasts of a recession followed by global recovery
were both slightly revised (-4.4% followed 5.2%) to finally be revised
favourably in January 2021 (-3.5% and 5.5%).
To cushion the anticipated recession and prevent the public health
and economic crisis from being coupled with a financial crisis, we
have thus witnessed the rapid and generalised implementation of
monetary and budgetary support policies unprecedented in terms
of size and capacity to overcome constraints.
In monetary matters,
central banks have had recourse to diverse combinations of various tools,
while pursuing similar targets: easing of financing conditions, efficient
transmission of monetary policy, better functioning of the financial and
credit markets and, in the case of the ECB, easing of tensions on the most
vulnerable sovereign bond spreads in the Eurozone. Thanks to massive
support plans (partial unemployment, aid to the most vulnerable populations,
temporary reduction in social contributions, deferral of tax charges and
social security costs, public guarantees on loans to companies, government
equity investments), the budgetary policies have sought to soften the shock
by limiting the destruction of jobs and production capacities in order to
ensure the best possible restart, once the pandemic has passed. While
monetary and budgetary policies have made it possible to avoid a financial
crisis and attenuate the recessionary effect of the pandemic, its effect
has nonetheless been considerable but of varying magnitude by country
depending, notably, on the countries’ structural features (structure of GDP,
employment, weight of different sectors), how robust they were pre-crisis,
their public health strategies and how much leeway they had.
In the United States, in mid-March, the Federal Reserve took a series
of radical easing measures
(1)
, some of which were then extended and
supplemented in order to ensure a supply of liquidity to banks and markets
(unlimited asset buying, expansion of the universe of purchasable securities).
This accommodative stance was also reinforced by the adoption of average
inflation targeting which explicitly allows the inflation target to be exceeded
after periods in which inflation has been consistently below 2%. After its
December meeting, the Federal Reserve made it clear that it would maintain
an accommodative stance and its key rates at zero for an extended period
as evidenced by the “dot plot”, in which the median projection of members
of the FOMC shows unchanged rates until at least 2023. While feeling
comfortable with the current set up, the Fed has said it was ready to do
more (more bond purchases and/or maturity extensions) if necessary.
The US budgetary response was also rapid (March) and massive, in
the form of a support plan known as the Coronavirus Aid, Relief, and
Economic Security (CARES) Act
(totalling nearly $2,200 billion (
i.e.
10%
of GDP) aimed at providing financial assistance or relief to households and
businesses, but also to hospitals and states. The flagship measures included
the direct stimulus payment to low and moderate income households, an
unemployment insurance assistance plan (authorising the extension of
unemployment benefits which normally fall under the competence of the
states), financial support to SMEs ($350 billion), loans to large corporates, to
states and local governments ($500 billion), the release of loans to hospitals
($150 billion). An additional budget plan ($484 billion
i.e.
just over 2% of
GDP), aimed at strengthening the CARES Act of March and “lengthening”
the loan program for SMEs, was adopted in April.
In 2020
(2)
, the US budget deficit therefore widened by nearly 10 points to
14.9% of GDP, while the debt grew by +20 percentage points to reach
100% of GDP. Activity nonetheless fluctuated throughout the year. After
a decline of -1.3% in the first quarter (non-annualised quarterly change),
the decline in GDP in the second quarter was violent (-9%) but followed
by a more sustained rebound than expected (+7.5 % in the third quarter).
Owing to the resurgence of the pandemic, the improvement in the labour
market came to a halt in December (after peaking at 14.8% in May, the
unemployment rate reached 6.7% against 3.5% before the crisis). In
the fourth quarter, economic activity grew only +1%.
Despite massive
monetary and budgetary support, the recession in the end stood at
-3.5% (-2.5% in 2009); GDP was 2.5% below its pre-crisis level (end
of 2019) and inflation reached 1.4% at end December.
In the Eurozone, from March onwards, the ECB deployed aggressive
accommodative measures which it then adapted to prevent any
undesirable tightening of financial conditions:
increase in Quantitative
Easing (additional envelope of €120 billion), launch of a new temporary
purchasing program (Pandemic Emergency Purchase Program or PEPP
of €750 billion, initially until the end of 2020, purchases not constrained
by the limit of holding no more than 33% of any one bond or issuer,
which makes for easier compliance with the capital distribution key),
introduction of transitional Long Term Refinancing Operations (LTRO) until
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
229
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
June 2020 (with more favourable conditions as well as less stringent
rules for collateral), easing of the TLTRO III conditions, new long-term
refinancing operations Pandemic Emergency Longer-Term Operations
(PELTRO) and, lastly, measures to alleviate the solvency and liquidity
constraints on the banking sector. At the end of December, faced with the
more severe impact of the second wave of the pandemic on the short-term
scenario and the high uncertainties about growth (for which it revised
the 2021 forecast downwards from 5% to 3.9%), the ECB sent a very
clear signal of substantial and, above all, lasting presence; it renewed its
incentive to lend to banks and its commitment to limit pressure on the
risk premiums of vulnerable sovereigns: recalibration of the third series
of targeted longer-term refinancing operations (TLTRO III, extension until
June 2022 of the period during which very favourable conditions adopted
in terms of interest rates
(1)
and easing of collateral apply), three additional
operations planned for 2021 (June, September, December), increase in the
total amount that the counterparties will be authorised to borrow during
TLTRO III, four additional refinancing operations (PELTRO, from March to
December 2021 for a period of one year), additional budget of €500 billion
dedicated to the PEPP (a total of €1,850 billion), extension of the horizon
for net purchases to the end of March 2022, reinvestment of principal
repayment of maturing securities extended at least until the end of 2023.
The Eurozone’s fiscal policy also quickly took an expansionary turn
with national measures
(support for the healthcare system, businesses
and employment, public guarantees on new business loans). By easing
constraints on national policies through the suspension of budgetary rules,
the European Commission enabled the countries to respond immediately to
the crisis. Faced with such diverse national latitudes that posed the risk of
a detrimental fragmentation to the market and to the single currency, the
pooling of resources was essential. The existing funds were first mobilized
(2)
.
As the scale of the crisis became clear, new pooled resources financed
by debt emerged:
the SURE fund (support to mitigate unemployment
risks, €100 billion), investment guarantees by the EIB (€200 billion),
a
proposal from the European Commission in favour of a recovery and
reconstruction support fund, redistributing in favour of the poorest
countries and those most affected by the crisis: the Recovery Fund
(
i.e.
€750 billion raised by bond issue guaranteed by the EU budget).
In 2020, the boost to the economy provided by fiscal policy was slightly
less than 4 percentage points of GDP on average in the Eurozone. Coupled
with the cyclical deterioration of the budget balance (4 percentage points of
GDP), the public deficit widened by almost 9.3% on average in the Eurozone
and led to a sharp increase in public debt (almost 18 points on average to
reach just over 104% of GDP). Despite monetary and fiscal arrangements,
the economy nonetheless evolved with the pandemic and the mobility
restriction measures it imposed. After an already substantial decline in the
first quarter (-3.7% quarter-on-quarter), GDP fell by -11.7% in the second
quarter before recording a spectacular rebound that was more robust
than expected (+12.5%). In the last quarter, the decline was less severe
than expected (-0.7%).
While inflation fell back (-0.3%, year-on-year
in December; 0.3% on average), the recession thus reached 6.8% in
2020 (compared to -4.5% in 2009), leaving GDP down -5.1% on its
level at end 2019 and showing significant differences between the
large Eurozone countries.
For example, in Germany, after almost zero
growth in the fourth quarter, GDP recorded an average contraction of 5.3%
over 2020, which remains “limited” notably in view of the financial crisis
of 2009 (a -5.7% decline).
(1)
50 basis points (bp) below the refinancing rate for all outstandings and 50 bp below the deposit rate for any net outstandings equal to the level of outstandings granted between
October 2020 and December 2021. The precondition for benefiting from this strong incentive to lend is therefore clear: the existing support must not be reduced
(2)
Reorientation of unused cohesion funds from the EU budget in the amount of €37 billion, guarantees to SMEs provided by the European Investment Bank (EIB), use of funds still
available from the European Stability Mechanism (ESM) in the amount of €240 billion (or 2% of the area’s GDP).
In France, after a sharp rebound, the lockdown in November led to a
smaller-than-expected contraction in GDP (-1.3% in the fourth quarter),
less than estimated. Over full year 2020, GDP fell by -8.3%, a shock
much greater than that of the 2009 crisis (-2.9%), but ultimately lower
than what had been anticipated in the scenario of December or by the
economists ‘scenario which planned a contraction by around 9%. With a
less maturity and extent, the second lockdown has been less negative for
the economy than the spring’s one. Thus, the level of activity in the fourth
quarter is lower by 5% compared to the fourth quarter 2019, last quarter
with a “normal” level of activity, whereas the second quarter 2020 was
lower by 18.8%. In the fourth quarter, the contraction of activity is mainly
due to the decline in consumption, caused by administrative closures and
curfew measures. On the other hand, the investment continues its recovery
thanks to the continuation of the activity in sectors such as building, and
capital goods production.
By posting even moderate growth (around 2.3%), China was ultimately
the only G20 economy not to have suffered a recession in 2020.
After a
historically low first quarter, Chinese activity was revived thanks to a policy
focused on supply (support for companies through public orders and lines
of credit). A two-speed recovery has thus started with, on the one hand, a
V-shaped recovery for industrial production, exports and public investment
and, on the other hand, a more gradual rebound in consumption, private
investment and imports. Despite the recovery, almost a year after the public
health crisis, some stigmas are still visible: retail sales, just like certain
service activities (requiring a physical presence) have not caught up to
their 2019 level and job creation is still insufficient to offset the destruction
that took place in early 2020 and absorb new entrants.
In 2020, monetary activism made it possible to prevent the economic
crisis from being coupled with a financial crisis: a clear success in
view, on the one hand, of the shock to the real economy and, on the
other hand, of the threats that hovered at the beginning of the year,
particularly within the Eurozone.
In the wake of a powerful wave of risk
aversion, in March, the German ten-year interest rate plunged to -0.86%,
a low quickly followed by a violent widening of risk premiums paid by the
other countries. Risk premiums offered by France, Spain and Italy peaked
at 66 basis points (bp), 147 bp and 280 bp, respectively, in mid-March.
Completed by the European Recovery Fund, the monetary policy measures
rolled out by the ECB made it possible, if not to significantly raise German
rates, then to avoid a fragmentation of the Eurozone and to encourage the
appreciation of the euro against the dollar (9% over the full year). At end
December, while the Bund stood at -0.57%, French, Italian and Spanish
spreads were only 23 bp, 62 bp and 111 bp respectively. US rates (10-year
US Treasuries), which started from 1.90% at the beginning of the year, fell
back to 0.50% in March and then moved within a relatively narrow range
(0.60%-0.90%). At its 15-16 December meeting, the Fed opted for the
status quo but confirmed that it was still possible, if necessary, to increase
its bond purchases and extend their maturity. Rates therefore rose slightly
before quickly easing off. Having followed a slow upward trend since the
summer, rates ended the year at 0.91%. Finally, the abundance of liquidity
and the commitment to maintain accommodative monetary conditions
provided by central banks supported riskier markets. Thus, for example,
while American and European equities posted declines of respectively
-30% and -37% in mid-March compared to their level at the beginning
of January, they ended the year with a respectable rise (+14%) and a
limited decline (-6.5%).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
230
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
CRÉDIT AGRICOLE S.A. OPERATIONS AND CONSOLIDATED RESULTS
(1) See details of the calculation of the EPS in slide 244.
(2)
See details on the calculation of the business lines’ RoTE (Return on Tangible Equity) par presented in page 245 in the appendices. The reported RoTE for 2020 was 6.2%, and
the RoTE excluding the amortisation of the goodwill on CA Italia comes to 8.3%.
In full-year 2020,
reported net income, Group share, reached €2,692 million,
compared with €4,844 million in 2019, representing a decrease of -44.4%.
2020 specific elements had a negative impact for -€1,157 million
on
the stated net income group share. They encompass CA Italia goodwill
impairment for -€778 million, Crédit Agricole Consumer Finance NL goodwill
impairment for -€55 million, the reclassification as held for sale operations
for Credit Agricole Consumer Finance NL (-€135 million), CA Bank Romania
(-€7 million), the ongoing sale within Wealth Management (-€23 million), the
provision recovery on FCA bank fine for +€89 million, Liability management
upfront payment for -€28 million, support to insured clients in relation with
COVID-19 for -€98 million, the exceptional contribution on supplementary
health insurance premiums for -€15 million, COVID-19 donation -€52 million,
Kas Bank and Santander Securities Services (S3) acquisition costs for -€9
million, exceptional contribution to the Italian banks rescue plan -€6 million.
In addition, there are some recurrent specific elements, namely DVA for
+€8 million, Large Corporate loan portfolio hedges for +€7 million, and
home purchase saving plans for -€53 million.
Specific items in 2019 had an impact of +€262 million on reported net
income Group share. This includes the favourable decision of the French
Council of State on the dispute over the tax treatment of Emporiki shares
for +€1,038 million, the costs of the integration and acquisition by CACEIS
of Santander and Kas Bank (-€15 million in net income Group share), a
write-down of assets in the process of being disposed of for -€46 million
in income on activities in the process of disposal. The acquisition of Kas
Bank by CACEIS resulted in a badwill of +€22 million and the goodwill of
LCL was partially impaired for -€611 million. In addition, there are recurring
accounting volatility elements, namely DVA (Debt Valuation Adjustment,
i.e.
gains and losses on financial instruments related to changes in the
Group’s issuer spread), plus the Funding Valuation Adjustment (FVA) portion
associated with the change in the issuer spread, which is not hedged, for
-€15 million net income Group share, the hedge on the Large Customers
loan book for -€32 million, and the change in the provision for home
purchase savings for -€79 million net income Group share.
Excluding these specific items,
underlying net income Group share
stood at €3,849 million,
down
-16.0%
compared to 2019.
Underlying earnings per share
(1)
for 2020 amounted to €1.20, down
-13.4% compared to 2019.
Underlying RoTE
(2)
net of coupons on Additional Tier 1 securities (return
on equity Group share excluding intangible assets) was 9.3% in 2020.
The RoNE (Return on Normalised Equity) of the business lines was down
in 2020 compared to 2019, due to the lower results for the year and the
increase in RWA since December 2019.
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
20,500
(264)
20,764
20,153
(186)
20,339
1.7%
2.1%
Operating expenses excl. SRF
(12,452)
(86)
(12,366)
(12,421)
(15)
(12,405)
+0.3%
(0.3%)
SRF
(439)
-
(439)
(340)
-
(340)
29.1%
29.1%
Gross operating income
7,609
(351)
7,959
7,392
(201)
7,594
2.9%
4.8%
Cost of credit risk
(2,606)
0
(2,606)
(1,256)
-
(1,256)
x2.1
x2.1
Equity-accounted entities
413
89
324
352
-
352
17.5%
(7.9%)
Net income on other assets
75
-
75
54
(6)
60
39.7%
25.2%
Change in value of goodwill
(903)
(903)
-
(589)
(589)
-
53.2%
N/A
Income before tax
4,588
(1,164)
5,752
5,952
(797)
6,749
(22.9%)
(14.8%)
Tax
(1,129)
96
(1,225)
(456)
1,103
(1,559)
x2.5
(21.4%)
Net income from discontinued
or held-for-sale operations
(221)
(221)
(0)
(38)
(46)
8
N/A
N/A
Net income
3,238
(1,289)
4,527
5,458
260
5,198
(40.7%)
(12.9%)
Non-controlling interests
(546)
133
(679)
(614)
2
(616)
(11.1%)
10.2%
NET INCOME GROUP SHARE
2,692
(1,157)
3,849
4,844
262
4,582
(44.4%)
(16.0%)
EARNINGS PER SHARE
(€)
0.80
(0.40)
1.20
1.48
0.09
1.39
(45.8%)
(13.4%)
COST/INCOME RATIO EXCL. SRF
(%)
60.7%
59.6%
61.6%
61.0%
-0.9 pp
-1.4 pp
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
231
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Underlying revenues
increased by
+2.1%
compared to 2019, thanks
to strong growth in the revenues of the Large Customers business line
(+10.7%), while the other business lines showed resilience overall: -1.4%
in Retail Banking, -3.0% for Asset Gathering, and -7.0% in Specialised
Financial Services for the underlying figure or -4.3% at constant scope
(1)
.
In detail, the French retail banking presented a growth in revenue over the
year (+1.4%) thanks to its good mix between commissions and net interest
income (boosted by favorable refinancing conditions) , the international retail
banking (-4.9%) was penalized by the decrease in interest rates observed on
all its markets, asset gathering prove resilient despite the negative market
effect, specialized financial services succeeded in presenting a limited
decrease in their revenues thanks to the relative resistance of its production
(Crédit Agricole Consumer Finance credit production in 2020 reached 86%
of the 2019 production). Last, Large Corporates presented revenues boosted
by the strong activity on the bond market. Overall, recurring revenues,
i.e.
revenues attached to an inventory item (outstanding loans/customer
assets, assets under management) or an insurance policy (property and
casualty insurance, death and disability insurance), accounted for 76% of
Crédit Agricole S.A.’s underlying revenues. Interest income contributed to
37% of underlying revenues for the year, vs. 41% for commissions, 10%
for other revenues (including trading) and 12% for insurance.
Underlying
operating expenses
excluding the Single Resolution Fund
(SRF)
(2)
were stable (-0.3%), the contribution to the SRF having increased
significantly, by +29,1% to €439 million in 2020 compared to €340 million
in 2019. Expenses were stable thanks to the very good operational efficiency
of the business lines: Asset Gathering reduced expenses by -2.4% compared
to 2019, Retail Banking by -2.1% and Specialised Financial Services by
-5.6% on the underlying scope and 0.0% without scope effect. The Large
Customers business line reported a +6.0% increase in expenses over
the year, but this was mainly due to a scope effect (with Kas Bank and
S3 integrated into Institutional financial services). The
underlying cost/
income ratio excluding SRF stood at 59.6% for the year,
which is a
1.4 percentage point improvement on 2019, and
below the target set in
the Medium-Term Plan presented in June 2019,
i.e.
60%.
(1) Excluding Crédit Agricole Consumer Finance NL.
(2)
The Single Resolution Fund (SRF) was created in 2014. It is a supranational fund financed by Eurozone member states, notably enabling the pooling of financial resources to be
used for banking resolution.
The Single Resolution Fund will be gradually built up by contributions from national resolution funds for a period of eight years from 2016, to reach a target of at least 1% of the
covered deposits of all approved credit institutions of the participating member states combined by 2023.
(3)
The cost of risk/outstandings is calculated on the basis of the cost of risk recorded in the year over the average of the outstandings at the start of all four quarters of the year.
Cost of risk increased significantly during the period (x2.1/-€1,350 million to
-€2,606 million, versus -€1,256 million in 2019). Cost of risk/outstandings
reached 62 basis points in 2020
(3)
. 77% of the increased cost of risk versus
2019 was due to additional provisioning for performing loans (Stages
1 and 2), related for the most part to prudent provisioning in sensitive
sectors (such as aerospace, cruises, hotels, tourism, restaurants and certain
profes-sionals). The -€2,606 million charge for 2020 breaks down into
provisioning for performing loans (Stages 1 and 2) for -€817 million (vs. a
reversal of €216 million in 2019) and provisioning for proven risk (Stage 3)
for -€1,765 million (vs. -€1,449 million in 2019). This increase in the cost
of risk is visible across all credit businesses. LCL recorded a cost of risk
of -€390 million (+80% vs. 2019) and a cost of risk/outstandings of 29
basis points over 2020; CA Italia’s cost of risk was -€428 million in 2020,
up +70% compared to 2019, with a cost of risk/outstandings
(3)
of 93 basis
points in 2020; the cost of risk of Crédit Agricole Consumer Finance stood
at -€732 million in 2020, up by +47% compared to 2019, and its cost
of risk/outstandings
(3)
was 179 basis points in 2020. Lastly, in financing
activities, the cost of risk in 2020 stood at -€829 million, 5.2x higher than
in 2019, with the cost of risk/outstandings
(3)
at 67 basis points in 2020.
The contribution to the underlying amount of equity-accounted entities
decreased slightly by -7.9%, to €324 million, with the Specialised financial
services partnerships being the main contributors. Net income on other
assets amounted to €75 million, up by +25.2% (+€15 million) in 2020.
Underlying income before tax, discontinued operations and non-controlling
interests were therefore down -14.8%, at €5,752 million. The income tax
charge was €1,225 million, down 21.4%, with an underlying effective
tax rate of 22.6%, down by -1.8 percentage points compared to 2019.
The underlying net income before non-controlling interests was therefore
down -12.9%. Non-controlling interests stood at -€679 million in 2020,
up +10.2%, notably due to a change in the recognition methods used for
RT1 subordinated debt coupons (with no impact on net earnings per share),
after CACEIS shared non-controlling interests with Santander in 2020.
Underlying net income Group share was down -16% to €3,849 million.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
232
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
The specific elements that had an impact on Crédit Agricole S.A.’s accounts in 2020 and 2019 are as follows:
2020
2019
(in millions of euros)
Gross impact
(1)
Impact on
net income
Gross impact
(1)
Impact on
net income
DVA (LC)
11
8
(21)
(15)
Loan portfolio hedges (LC)
10
7
(44)
(32)
Home Purchase Savings Plans (FRB)
(14)
(9)
(31)
(20)
Home Purchase Savings Plans (CC)
(64)
(44)
(90)
(59)
Liability management upfront payment (CC)
(41)
(28)
-
-
Support to insured clients COVID-19 (LCL)
(2)
(1)
-
-
Support to insured clients COVID-19 (AG)
(143)
(97)
-
-
Exceptional contribution on supplementary health insurance premiums (AG)
(22)
(15)
-
-
Total impact on revenues
(264)
(179)
(186)
(126)
COVID-19 donation (AG)
(38)
(38)
-
-
COVID-19 donation (IRB)
(8)
(4)
-
-
COVID-19 donation (CC)
(10)
(10)
-
-
S3/Kas Bank integration costs (LC)
(19)
(9)
(15)
(11)
Exceptional contribution to the Italian banks rescue plan (IRB)
(11)
(6)
-
-
Total impact on operating expenses
(86)
(68)
(15)
(11)
Triggering of the Switch 2 (AG)
65
44
-
-
Adjustment on Switch 2 activation (GEA)
(28)
(19)
-
-
Better fortune adjustment on Switch 2 (AG)
(38)
(26)
-
-
Total impact on cost of credit risk
-
-
-
-
Provision recovery on FCA bank fine (SFS)
89
89
-
-
Total impact equity-accounted entities
89
89
-
-
Santander/Kas Bank acquisition costs (LC)
-
-
(6)
(5)
Total impact Net income on other assets
-
-
(6)
(5)
Impairment LCL goodwill (CC)
-
-
(611)
(611)
Badwill Kas Bank (LC)
-
-
22
22
Impairment CA Italia goodwill (CC)
(903)
(778)
-
-
Total impact on change of value of goodwill
(903)
(778)
(589)
(589)
Emporiki litigation (CC)
-
-
-
1,038
Total impact on tax
-
-
-
1,038
Reclassification of held-for-sale operations (IRB)
(7)
(7)
(46)
(46)
Reclassification of held-for-sale operations (SFS)
(135)
(135)
-
-
Impairment on goodwill (CC)
(55)
(55)
-
-
Ongoing sale project (WM)
(24)
(23)
-
-
Total impact on Net income from discounted or held-for-sale operations
(221)
(221)
(46)
(46)
TOTAL IMPACT OF SPECIFIC ITEMS
(1,385)
(1,157)
(843)
262
Asset Gathering
(227)
(174)
-
-
French Retail Banking
(16)
(10)
(31)
(20)
International Retail Banking
(27)
(18)
(46)
(46)
Specialised Financial Services
(45)
(45)
-
-
Large Customers
3
6
(65)
(40)
Corporate Centre
(1,074)
(915)
(701)
368
(1)
Impact before tax and before minority interests.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
233
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Solvency
At 31 December 2020, Crédit Agricole S.A.’s financial position remained
very solid, reflected by its phased-in CET1 ratio of 13.1%, up 1 percentage
point compared to 31 December 2019. The non-phased CET1 ratio at
31 December 2020 was 12.9%.
Crédit Agricole S.A. did not pay a dividend in 2020 on 2019 earnings,
in accordance with the ECB´s requirement. Accordingly, putting these
dividends in reserves had a positive impact of +61 basis points on
the CET1 ratio in Q1 2020. In Q4 2020, Crédit Agricole S.A. set up an
exceptional mechanism for the payment of the 2020 dividend, considering
that there was no 2019 dividend payment. Since Crédit Agricole Group
and Crédit Agricole S.A. boast very comfortable levels of capital, Crédit
Agricole S.A.’s Board of Directors will submit to the 12 May 2021 General
Assembly a 2020 dividend of 80 centimes per share, with a scrip dividend
payment option, totalling €2.3 billion, of which €0.9 billion in cash
(1)
.
The nominal amount exceed what would have implied our traditional
payout ratio of 50% in cash, and allows us to compensate a portion
of the unpaid 2019 dividend. This amount is made possible by SAS
La Boétie’s commitment to subscribe to the scrip dividend payment
option. The proposed mechanism is in strict compliance with the ECB’s
15 December 2020 recommendation. The overall impact of the dividend
payout on Crédit Agricole S.A.’s CET1 ratio is therefore -28 basis points.
Retained earnings (after distribution) had a +73 basis points positive
impact on the CET1 ratio over the year.
Moreover, the unwinding of 35% of the Switch mechanism in Q1 2020
had a negative impact on the CET1 ratio of -48 basis points.
At the same time, the OCI reserves contributed +1 basis point to the
increase in CET1. The stock of OCI reserves in the CET1 ratio at end-
December 2020, net of the effect of the risk-weighted assets of insurance
reserves, thus stands at 48 basis points.
Furthermore, the CET1 ratio also recorded positive regulatory impacts in
2020 of a total of +34 basis points, notably including a positive effect from
the application of the IFRS 9 phasing (+24 basis points), the deduction
of irrevocable payment commitments to the SRF and DRGF
(2)
(+10 basis
points), “prudent valuation” (+8 basis points), taking into account the
measures relating to new software processing (+14 basis points) and the
SME supporting factors (+16 basis points), partially offset by a negative
effect linked to the targeted review of internal models (TRIM) (-20 basis
points).
Lastly, M&A transactions contributed negatively to CET1 by -12 basis
points, with in particular the acquisition of Sabadell AM (-9 basis points).
At end-December 2020, risk-weighted assets were €336 billion, compared
to €324 billion at end-December 2019. This increase (+€12.4 billion) is
primarily concentrated in insurance activities (+€11.7 billion) due notably
to the unwinding of 35% of the Switch mechanism in Q1 2020.
At 13.1%, the
phased-in CET1 ratio
remains above the target set at 11%
in the framework of the Crédit Agricole S.A. 2022 Medium-Term Plan and
contains a substantial buffer of +5.2 percentage points compared to the
SREP requirements.
(1)
Assuming zero public opting for the scrip dividend payment, taking into account the formal commitment of SAS La Boétie to opt for a scrip dividend payment, and assuming that
the employee mutual funds (FCPE’s) also opt for the scrip dividend payment.
(2)
Judgment of the General Court of the European Union of 9 September no longer requiring the deduction of payment commitments to the SRF and DRGF.
(3) Excluding Bankoa and FCA Bank.
(4)
The numerator of the LCR ratio at the end of the period was €332.7 billion for Crédit Agricole Group and €296.1 billion for Crédit Agricole S.A.
(5) Gross amount before buy-back and amortisation.
(6) Excluding EUR AT1 issuance.
The
phased-in Tier 1 ratio
was 14.9% and the
total phased-in capital
ratio
was
19.2%
at 31 December 2020.
Lastly, Crédit Agricole S.A.’s
phased-in leverage ratio
stood at
4.9%
at
end-December 2020.
Liquidity
Liquidity is measured at Crédit Agricole Group level.
The liquidity position of Crédit Agricole Group is solid. Standing at
€1,500 billion at 31 December 2020, the Group’s banking cash balance
sheet shows a surplus of stable funding resources over stable application
of funds of €265 billion, up €139 billion compared to December 2019.
In the context of the COVID-19 crisis, the Group took part in the TLTRO 3
refinancing transactions of the European Central Bank in 2020, which
contributed to increasing its level of stable resources. Total TLTRO 3
outstandings for the Crédit Agricole Group came to €133 billion
(3)
at
31 December 2020.
The Group’s liquidity reserves, at market value and after haircuts, amounted
to €438 billion at 31 December 2020, up by +€140 billion compared with
end-December 2019. They covered short-term debt more than four times
over (excluding the replacements with Central Banks).
At end-December 2020, the numerator of the LCR ratio (including the
HQLA securities portfolio, cash and Central Bank deposits, excluding
mandatory reserves), calculated as an average over 12 months, stood
respectively at €314.3 billion for Crédit Agricole Group and at €283.1 billion
for Crédit Agricole S.A.
(4)
. The denominator of the ratio (representing net
cash outflows), calculated as an average over 12 months, stood respectively
at €211.0 billion for Crédit Agricole Group and at €191.0 billion for Crédit
Agricole S.A.
The average LCR ratos over 12 months of Crédit Agricole Group and of Crédit
Agricole S.A. stood at 149.0% and 148.2%, respectively, at end-December
2020. They exceeded the Medium-Term Plan target by around 110%. The
LCR ratios at 31 December 2020 were 178.5% for Crédit Agricole Group
and 169.4% for Crédit Agricole S.A. respectively. Credit Institutions are
subject to a threshold for this ratio, set at 100% from 1 January 2018.
The Group continues its prudent MLT funding policy, with highly diversified
market access, in terms of investor base and products.
In 2020, the Group’s main issuers raised the equivalent of €31.0 billion in
medium/long-term debt on the markets
(5)(6)
, 41% of which was issued by
Crédit Agricole S.A. Note that:
Crédit Agricole next bank (Switzerland) completed an inaugural issue
in September of CHF 200 million nine-year in Covered bond format;
Crédit Agricole Assurances (CAA) issued a €1 billion 10-year Tier 2 bond
in July to refinance intra-group subordinated debt.
In addition, €4.4 billion was also borrowed from national and supranational
organisations or placed in Crédit Agricole Group’s retail networks (Regional
Banks, LCL and CA Italia) and other external networks in 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
234
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
In 2020, Crédit Agricole S.A. completed 105% of its €12 billion medium-
to-long-term market funding programme for the year. The bank had
raised the equivalent of €12.6 billion
(1)(2)
, of which €6.2 billion in senior
non-preferred debt and €2.2 billion in Tier 2 debt, as well as €4.0 billion in
senior collateralised debt and €0.2 in senior preferred debt. The financing
is diversified in both format and currency (EUR, USD, AUD, JPY, CNY, CHF):
To be noted the inaugural Social bond issuance in senior non-preferred
format of €1 billion for seven years in December 2020.
(1) Gross amount before buy-back and amortisation.
(2) Excluding EUR AT1 issuance.
Crédit Agricole S.A. also repurchased €3.4 billion of preferred senior notes
denominated in EUR, USD and GBP via a public offer launched at the end
of May 2020, in order to optimise its balance sheet structure and debt
management and to provide liquidity to holders of these bonds.
Furthermore, in October 2020 Crédit Agricole S.A. completed a €750 million
PNC7.5 AT1 issuance at the initial rate of 4% to allow Crédit Agricole Group
to maintain its high flexibility in the management of its Tier 1 capital.
OPERATIONS AND RESULTS BY BUSINESS SEGMENT
Crédit Agricole S.A.’s businesses are housed in five business lines:
Asset Gathering;
French Retail Banking – LCL;
International Retail Banking;
Specialised Financial Services;
Large Customers;
plus the Corporate Centre.
The Group’s business lines are described in Note 5 to the consolidated
financial statements for the year ended 31 December 2020 – “Operating
segment information”. The organisation and activities are described in
section 1 of this document.
Contribution of business lines to net income Group share of Crédit Agricole S.A.
(in millions of euros)
2020
2019
French Retail Banking – LCL
537
570
International Retail Banking
207
333
Asset Gathering
1,706
2,034
Specialised Financial Services
559
815
Large Customers
1,330
1,538
Corporate Centre
-1,647
-445
TOTAL
2,692
4,844
Asset Gathering (AG)
This core business encompasses Insurance (Crédit Agricole Assurances), Asset management (Amundi) and Wealth management (Indosuez Wealth Management).
Asset Gathering (AG) – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
5,734
(165)
5,899
6,078
-
6,078
(5.7%)
(3.0%)
Operating expenses
(2,864)
(38)
(2,826)
(2,896)
-
(2,896)
(1.1%)
(2.4%)
SRF
(6)
-
(6)
(7)
-
(7)
(15.2%)
(15.2%)
Gross operating income
2,864
(203)
3,067
3,174
-
3,174
(9.8%)
(3.4%)
Cost of risk
(55)
0
(55)
(19)
-
(19)
x2.8
x2.8
Equity-accounted entities
66
-
66
46
-
46
+43.5%
+43.5%
Net income on other assets
3
-
3
32
-
32
(89.5%)
(89.5%)
Change in value of goodwill
-
-
-
-
-
-
n.m.
n.m.
Income before tax
2,878
(203)
3,081
3,233
-
3,233
(11.0%)
(4.7%)
Tax
(770)
52
(822)
(881)
-
(881)
(12.6%)
(6.7%)
Net income from discontinued or held-for-sale
operations
(24)
(24)
-
8
-
8
n.m.
n.m.
Net income
2,084
(174)
2,259
2,360
-
2,360
(11.7%)
(4.3%)
Non controlling interests
(379)
1
(379)
(326)
-
(326)
+16.1%
+16.2%
NET INCOME GROUP SHARE
1,706
(174)
1,879
2,034
-
2,034
(16.1%)
(7.6%)
COST/INCOME RATIO EXCLUDING SRF
(%)
50.0%
47.9%
47.7%
47.7%
+2.3pp
+0.3pp
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
235
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
At 31 December 2020, the business line’s assets under management totalled
€2,219 billion, a year-on-year increase of +3.7%. Net inflows totalled
+€44.7 billion (excluding the scope effect of Sabadell Asset Management:
€20.7 billion) for full year 2020, with a record in asset management inflows.
Over the year 2020 the market downturn contributed very positively to
the evolution of assets under management (market and exchange rate
effect at +€21.4 billion over the period, including +€9.5 billion for Amundi).
Assets under management excluding double counting amounted to
€1,895.0 billion at 31 December 2020, an increase of +5.6% compared
to 31 December 2019.
For all of 2020, the business line’s contribution to the underlying net income
Group share decreased by -7.6% compared to the same period in 2019
and was €1,879 million. The good commercial performance of the Asset
Gathering division enabled the drop in revenues to remain contained at
-3.0% year-on-year. Expenses were down, as was the case for operating
income (-3.4%) and pre-tax income (-4.7%).
The cost-to-income ratio deteriorated slightly by -0.3 percentage point
to 47.9%.
The Asset Gathering activity had a positive contribution of 41% to the
underlying net income Group share of the business lines of Crédit
Agricole S.A. (excluding the Corporate Centre) in 2020 and 28% to underlying
revenues excluding the Corporate Centre.
At 31 December 2020, capital allocated to the business line was
€10.6 billion, including €1.0 billion for Asset Management, €0.5 billion for
Wealth Management and €9.1 billion for Insurance. As for risk-weighted
assets, those allocated to the core business totalled €43.0 billion, of which
€10.7 billion to Asset Management, €5.0 billion to Wealth Management
and €27.3 billion to Insurance.
The calculation of the risk weighted assets took into account the “Switch”
guarantee, allowing Crédit Agricole S.A. to save €22 billion in risk-weighted
assets on the prudential treatment of the Insurance business line, but it
generated a negative impact of around -€140.6 million on its net income
Group share in 2020. This impact was -26% less than in 2019 due to the
partial unwinding of Switch, by 35%.
Insurance (CA Assurances)
The Insurance business line reflects the results of Crédit Agricole Assurances, a wholly-owned subsidiary of Crédit Agricole S.A., which covers all insurance
businesses: savings/retirement, property & casualty, death & disability, creditor and group insurance.
Insurance – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
2,392
(165)
2,557
2,617
-
2,617
(8.6%)
(2.3%)
Operating expenses excluding SRF
(800)
(38)
(761)
(754)
-
(754)
+6.0%
+0.9%
SRF
-
-
-
-
-
-
n.m.
n.m.
Gross operating income
1,593
(203)
1,796
1,863
-
1,863
(14.5%)
(3.6%)
Income before tax
1,593
(203)
1,796
1,864
-
1,864
(14.6%)
(3.7%)
Tax
(456)
52
(509)
(541)
-
(541)
(15.6%)
(5.9%)
Net income from discontinued or held-for-sale
operations
-
-
-
8
-
8
n.m.
n.m.
Net income
1,136
(151)
1,287
1,332
-
1,332
(14.7%)
(3.4%)
Non controlling interests
(80)
-
(80)
(3)
-
(3)
x27.5
x27.5
NET INCOME GROUP SHARE
1,056
(151)
1,207
1,329
-
1,329
(20.5%)
(9.2%)
COST/INCOME RATIO EXCLUDING SRF
(%)
33.4%
29.8%
28.8%
28.8%
+4.6 pp
+1.0 pp
At end-December 2020, the business line’s total premium income reached
€29 billion, a decrease of over -20% compared to full-year 2019.
Over 2020, the premium income of the savings/retirement segment totalled
€20.4 billion, compared to. €28.5 billion in 2019, a -28% drop due mainly
to the context of the coronavirus health crisis.
Crédit Agricole Assurances continued to adapt its strategy to the interest
rate environment, and successfully carried out its rebalancing toward UL.
Crédit Agricole Assurances continues to increase its profit-sharing reserves
(
provision pour participation aux excédents
– PPE), at €11.6 billion at
31 December 2020 (+€0.8 billion compared to December 2019), or 5.6%
of euro-denominated policies outstanding, which represents several years
of rates paid out to policyholders. The average rate of return on assets of
the Crédit Agricole Assurances group was 2.13% in 2020, down slightly
on 2019 by -0.33 of a percentage point, due in particular to the drop of
the CAC 40 index (-7%) and the 10-year bond (OAT) (-0.46 percentage
point) over the same period. The average rate of return on assets is still
well above the average minimum guaranteed rate (0.27% at the end of
2020) and the average profit-sharing rate in euro-denominated policies
of 1.28% at end-2020 (Predica rate). In the low interest rate environment,
the adjustment of the latter rate, from 1.44% in 1.28%, would enable a
significant spread to be maintained between the return on assets and the
rate paid on liabilities.
Assets under management continued to expand and stood at €308 billion at
end-December 2020, an increase of +1.4% year-on-year. Unit-linked assets
amounted to €74.5 billion and were up +7.5% compared to end-December
2019, as a result of the shift in the asset gathering policy by Crédit Agricole
Assurances operated over the past year. Euro outstandings amounted to
nearly €234 billion (-0.5%). At end-December 2020, unit-linked contracts
represented 24.2% of assets under management, a historical high level,
up +1.4 percentage point compared to end-December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
236
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Underlying revenues came in at €2.557 billion, down -2.3%, underlying
operating expenses at €761 million (+0.9%), taxes decreased by -5.9%
year-on-year in 2020, despite a sharp rise in the fourth quarter (+57.0%)
due to the booking of non-deductible provisions. The underlying cost/
income ratio for 2020 was 29.8%, which is a slight deterioration of 1.0 point
compared to 2019.
In 2020, the underlying net income Group share was €1.207 billion, down
-9.2% from 2019, notably due to a change in the recognition methods
used for RT1 subordinated debt coupons (with no impact on net earnings
per share). Excluding this impact, the decline in net income Group share
would have been smaller (-3.4% compared to 2019).
Insurance contributed to 26% of the underlying net income Group share of
the business lines of Crédit Agricole S.A. (excluding the Corporate Centre)
in 2020 and 12% to their underlying revenues.
At 31 December 2020, capital allocated to Insurance was €9.1 billion and
risk-weighted assets totalled €27.3 billion.
Moreover, Crédit Agricole Assurances proved solid and resilient,
with a Solvency 2 prudential ratio that remained high at 227% as of
31 December 2020.
Asset management (Amundi)
Asset management comprises the results of Amundi, a subsidiary 69.7% owned by Crédit Agricole Group, including 67.9% held by Crédit Agricole S.A.
Since the third quarter of 2017, the financial statements include the contribution of Pioneer, UniCredit’s asset management company, which was acquired
on 3 July 2017.
From the first quarter of 2019 on, the integration costs related to this acquisition are no longer identified as specific items. In the first quarter 2018 these
costs amounted to €9 million before tax, i.e. €4 million in net income Group share. In the second quarter 2018 the amounts were €8 million and €4 million,
respectively. In third quarter 2018, the net income Group share amounts were -€12 million and -€6 million, respectively. In the fourth quarter 2018 these
costs amounted to €27 million before tax, i.e. €14 million in net income Group share and €56/€29 million in full-year 2018.
Sabadell Asset Management is integrated into Amundi´s consolidated scope since the third quarter of 2020 with AUM of €20.7 billion.
Asset management – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
2,522
-
2,522
2,636
-
2,636
(4.3%)
(4.3%)
Operating expenses excluding SRF
(1,367)
-
(1,367)
(1,402)
-
(1,402)
(2.5%)
(2.5%)
SRF
(3)
-
(3)
(3)
-
(3)
(1.8%)
(1.8%)
Gross operating income
1,152
-
1,152
1,231
-
1,231
(6.4%)
(6.4%)
Cost of risk
(23)
-
(23)
(11)
-
(11)
x2.1
x2.1
Equity-accounted entities
66
-
66
46
-
46
+43.5%
+43.5%
Income before tax
1,195
-
1,195
1,267
-
1,267
(5.6%)
(5.6%)
Tax
(307)
-
(307)
(326)
-
(326)
(5.8%)
(5.8%)
Net income
888
-
888
941
-
941
(5.6%)
(5.6%)
Non controlling interests
(288)
-
(288)
(302)
-
(302)
(4.8%)
(4.8%)
NET INCOME GROUP SHARE
600
-
600
638
-
638
(5.9%)
(5.9%)
COST/INCOME RATIO EXCLUDING SRF
(%)
54.2%
54.2%
53.2%
53.2%
+1.0 pp
+1.0 pp
Amundi posted assets under management of €1,729 billion at end-
December 2020, up +4.6% compared to end-December 2019, despite
a global environment which remained affected by the coronavirus. Net
inflows were +€45.1 billion in 2020.
AUM benefited from the good market conditions, with a market effect
of +€9.5 billion in 2020, and scope effect of €20.7 billion related to the
consolidation of Sabadell Asset Management (in Amundi’s accounts since
1 July 2020). Growth in net inflows mainly stemmed from treasury products
excluding JVs for +€28.2 billion, despite the outflows in the first and second
quarters of 2020 (-€11.3 billion) and thanks to strong net inflows in the
third and fourth quarters (+€39.5 billion).
2020 was marked by important strategic initiatives, in particular the renewal
of the partnership with Société Générale (for five years), the finalisation of
the acquisition of Sabadell AM and the 10-year strategic partnership for
the distribution of Amundi products through the Banco Sabadell network in
Spain, the creation of a new subsidiary with Bank of China (the fourth-largest
Chinese bank), the first management firm in China with a foreign majority
shareholder, and the creation of Amundi Technology, a new business line
dedicated to technological services.
In 2020, underlying net income Group share came to €600 million, a
decrease of -5.9% compared to 2019. Underlying revenues totalled
€2,522 million, down -4.3% compared to the same period in 2019. The
underlying operating expenses excluding SRF reached €1,367 million,
and were down over the period (-2.5%). 2020 includes a contribution
to the Single Resolution Fund (SRF) of €3 million, a decrease of -1.8%
compared to 2019.
The contribution from equity-accounted entities, which notably include
Amundi’s JVs in Asia, recorded a strong increase of +43.5% compared
to 2019, despite the exit in the fourth quarter of low-margin products
(mainly institutional mandates in India and the business channel in China).
The underlying cost-to-income ratio deteriorated slightly by 1.0 point and
operating income was down -6.4% from 2019.
Asset management contributed 13% to the underlying net income Group
share of the business lines of Crédit Agricole S.A. (excluding the Corporate
Centre) in 2020 and 12% of their underlying revenues.
At 31 December 2020, capital allocated to Asset management was
€1.0 billion and risk-weighted assets totalled €10.7 billion.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
237
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Wealth management (CA Indosuez Wealth Management)
The assets under management referred to in the business activities figures only include those of the Indosuez Wealth Management group. As a reminder,
LCL’s private banking customer assets amounted to €54.1 billion at end-December 2020, up 5.5% compared to end-December 2019.
The results generated by LCL’s private banking business are recognised under LCL.
Wealth management – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
820
-
820
824
-
824
(0.6%)
(0.6%)
Operating expenses excluding SRF
(698)
-
(698)
(740)
-
(740)
(5.7%)
(5.7%)
SRF
(3)
-
(3)
(4)
-
(4)
(26.6%)
(26.6%)
Gross operating income
119
-
119
80
-
80
+48.5%
+48.5%
Cost of risk
(32)
-
(32)
(10)
-
(10)
x3.3
x3.3
Net income on other assets
3
-
3
32
-
32
(89.2%)
(89.2%)
Income before tax
90
-
90
102
-
102
(12.1%)
(12.1%)
Tax
(6)
-
(6)
(15)
-
(15)
(56.4%)
(56.4%)
Net income from discontinued or held-for-sale
operations
(24)
(24)
-
-
-
-
n.m.
n.m.
Net income
60
(24)
83
87
-
87
(31.4%)
(4.5%)
Non controlling interests
(11)
1
(11)
(21)
-
(21)
(47.8%)
(45.3%)
NET INCOME GROUP SHARE
49
(23)
72
66
-
66
(26.3%)
+8.4%
COST/INCOME RATIO EXCLUDING SRF
(%)
85.2%
85.2%
89.8%
89.8%
-4.7 pp
-4.7 pp
CA Indosuez Wealth Management saw its assets under management
decrease slightly by -3% year-on-year (-€4.1 billion), to €128.0 billion
at end-December 2020, due mainly to a negative currency effect of
-€3.6 billion). Assets under management still remained close to the historical
peak of end-September 2019 (€133.6 billion).
Overall, assets under management in Wealth Management stood at
€182.2 billion at end-December 2019, stable year-on-year.
Note that, in January 2021, an agreement was signed between Azqore,
a subsidiary of CA Indosuez Wealth Management, and Société Générale
relating to the execution of back-office transactions and a large
part of the IT services of Société Générale’s international private
banking activity.
In full-year 2020, underlying net income Group share of Wealth
management was €72 million, an increase of +8.4% compared with
the same period in 2019.
Underlying revenues were stable, despite the effects of the health crisis.
Underlying charges decreased by -5.7%, thanks notably to reinforced
cost-savings measures. Gross operating income increased by +48.5%
and underlying pre-tax income was down by -12.1%, notably impacted
by the cost of risk. Income tax was sharply down by -56.4% year-on-year
thanks notably to an improvement in the Swiss rate in Q1 as well as tax
income recorded in Q2 2020 for an amount of +€3 million.
Overall, the underlying net income Group share of the business lines
increased by +8.4% over the year. It should be noted that in 2020, a loss
recorded in relation to a planned disposal which is under way for the Miami
and Brazil entities, with an impact of €23 million on net income Group
share, was the only factor behind the difference between the underlying
and reported net income Group share figures. The underlying cost/income
ratio improved significantly, by 4.7 percentage points to 85.2%.
Wealth management contributed to 2% of the underlying net income
Group share of the business lines of Crédit Agricole S.A. (excluding
the Corporate Centre) in 2020 and 4% to their underlying revenues.
At 31 December 2020, capital allocated to Wealth management was
€0.5 billion and risk-weighted assets totalled €5.0 billion.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
238
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Retail Banking in France (LCL)
(1)
The cost of risk/outstandings is calculated on the basis of the cost of risk recorded in the year over the average of the outstandings at the start of all four quarters of the year.
Retail Banking in France (LCL) – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
3,521
(16)
3,537
3,457
(31)
3,488
+1.9%
+1.4%
Operating expenses excluding SRF
(2,277)
-
(2,277)
(2,340)
-
(2,340)
(2.7%)
(2.7%)
SRF
(42)
-
(42)
(32)
-
(32)
+32.4%
+32.4%
Gross operating income
1,203
(16)
1,218
1,086
(31)
1,117
+10.8%
+9.1%
Cost of risk
(390)
-
(390)
(217)
-
(217)
+79.9%
+79.9%
Net income on other assets
2
-
2
2
-
2
+19.5%
+19.5%
Change in value of goodwill
-
-
-
-
-
-
n.m.
n.m.
Income before tax
814
(16)
830
870
(31)
901
(6.4%)
(7.9%)
Tax
(252)
5
(257)
(274)
11
(285)
(8.2%)
(9.9%)
Net income from discontinued or held-for-sale
operations
-
-
-
-
-
-
n.m.
n.m.
Net income
563
(11)
573
596
(20)
617
(5.7%)
(7.0%)
Non controlling interests
(25)
0
(26)
(27)
1
(28)
(5.5%)
(6.9%)
NET INCOME GROUP SHARE
537
(10)
548
570
(20)
589
(5.7%)
(7.1%)
COST/INCOME RATIO EXCLUDING SRF
(%)
64.7%
64.4%
67.7%
67.1%
-3.0 pp
-2.7 pp
LCL continues to grow with a high level of customer acquisition (+300,000
individual and small business and corporate customers in 2020, representing
a net increase in the customer base of +14,000 customers since the
beginning of the year. Equipment recorded growth, with a stock of home,
vehicle and health insurance up by +3.6% and a stock of premium cards
up by +1.7% in 2020.
Inflows
grew by +6.5% year-on-year to €219.8 billion at end-December
2020. On-balance sheet deposits rose by +11.5%, totalling €138.3 billion,
in connection with the increase in household precautionary savings and the
deposit of a part of the State-guaranteed loans, which positively impacted
companies’ liquidity. In this context, individual demand deposits increased
(+15.5%) as did small business and corporate demand deposits (+51.9%).
Off balance sheet assets totalled €81.5 billion and were down slightly (by
-1.1%) notably in life insurance (-1.6%) due to the market effects relating
to the health crisis that are still negative year-on-year.
Loans outstanding
were still at a high level at €143.4 billion at end-
December 2020, recording a +10.5% increase year-on-year. State-
guaranteed loans totalled €8 billion for LCL. Loans outstanding excluding
the State-guaranteed loans therefore also increased year-on-year for
LCL (+4.4%) driven by the business (+11.8%) and home loans (+4.5%)
segments. In France, renegotiations on LCL home loans continued to drop
in 2020, to €2.0 billion outstanding, compared with €2.7 billion in 2019,
remaining well below the high point of €11.9 billion in 2016.
During 2020,
changes in the home purchase savings plans and support
for SME and small business policyholders in the context of the COVID-19
crisis were the two specific items in LCL’s financial statements explaining
the difference between the reported result and the underlying result. The
respective impacts were -€14 million (vs. -€31 million in 2019) and
-€2 million in terms of revenues (respectively -€9 million and -€1 million
on net income Group share).
LCL’s
underlying revenues
totalled €3,537 million, up compared to the
previous financial year (+1.4%). The low interest rate environment is still
restrictive, but interest income was buoyed by favourable refinancing
conditions, and recorded a +2,1% increase in 2020. Fee and commission
income rose slightly from 2019 (+0.6%) despite the electronic payment
segment suffering from the effects of the health crisis. As a result, while
fees for the management of accounts and means of payment decreased
by -6.7% in 2020 to €837 million, insurance commissions rose +7.8% to
€680 million year-on-year.
Underlying costs excluding the Single Resolution Fund (SRF)
continued
to decrease, thanks notably to ongoing improvement in external expenses,
totalling €2,277 million at end-December 2020, down -2.7% compared to
end-December 2019. The
underlying cost-to-income ratio excluding the
SRF
came to 64.4%, an improvement of 2.7 percentage points compared
to 2019. Lastly, the contribution to the Single Resolution Fund (SRF) was
up 32.4%, or +€10 million compared to 2019. In this context,
underlying
gross operating income
increased by +9.1% to €1,218 million in 2020.
The cost of risk increased (+79.9% to €390 million), but this rise was
mainly related to the provisioning for performing loans (+€191 million).
The
cost of risk
/outstandings
(1)
reached 29 basis points at end-December
2020 compared to 17 basis points at end-December 2019. The coverage
ratio remained at a high level, at 86.2% at 31 December 2020, and was
up from end-2019 (+12.1 percentage points). Lastly,
underlying net
income Group share
was €548 million at end-December 2020, down
-7.1% compared to 2019.
LCL contributed to
12% of the underlying net income Group share of
the business lines
of Crédit Agricole S.A. (excluding the Corporate Centre)
in 2020 and
17% of their underlying revenues.
At 31 December 2020,
capital
allocated to LCL came to
€4.9 billion
(14%
of the total) and
risk-weighted assets
were
€52.0 billion
(15% of the total).
LCL’s
underlying
return on normalised equity
(RoNE)
was
9.7%
in 2020
and 10.8% in 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
239
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
International Retail Banking (IRB)
(1) Percentage owned at 31 December 2020.
International Retail Banking encompasses the local banking networks in Italy, grouped under the name “Gruppo Bancario Crédit Agricole Italia” (hereafter
referred to as “CA Italia”), including CA Cariparma, CA Friuladria and CA Carispezia (legally merged with Crédit Agricole Italia in July 2019), and the three
banks acquired in late December 2017 (Cassa di Risparmio – CR), di Cesena, di San Miniato) acquired at end 2017 and merged into CA Italia, now
operating under the Crédit Agricole brand name, as well as all of the Group’s retail banks abroad, mainly Crédit Agricole Poland (wholly owned
(1)
), Crédit
Agricole Ukraine (100%
(1)
), Crédit Agricole Egypt (60.2%
(1)
) and Crédit du Maroc (78.7%
(1)
).
International Retail Banking (IRB) – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
2,659
-
2,659
2,796
-
2,796
(4.9%)
(4.9%)
Operating expenses excluding SRF
(1,728)
(19)
(1,708)
(1,731)
-
(1,731)
(0.2%)
(1.3%)
SRF
(25)
-
(25)
(22)
-
(22)
+14.2%
+14.2%
Gross operating income
906
(19)
925
1,042
-
1,042
(13.1%)
(11.2%)
Cost of risk
(569)
-
(569)
(335)
-
(335)
+70.2%
+70.2%
Net income on other assets
72
-
72
2
-
2
x30.3
x30.3
Income before tax
408
(19)
428
710
-
710
(42.5%)
(39.8%)
Tax
(101)
6
(107)
(199)
-
(199)
(49.1%)
(46.2%)
Net income from discontinued or held-for-sale
operations
(8)
(7)
(0)
(46)
(46)
(0)
n.m.
n.m.
Net income
299
(21)
320
465
(46)
511
(35.6%)
(37.3%)
Non controlling interests
(92)
3
(95)
(132)
-
(132)
(30.1%)
(27.8%)
NET INCOME GROUP SHARE
207
(18)
225
333
(46)
379
(37.8%)
(40.6%)
COST/INCOME RATIO EXCLUDING SRF
(%)
65.0%
64.3%
61.9%
61.9%
+3.0 pp
+2.3 pp
In 2020, the underlying net income Group share of
International Retail
Banking
came to €225 million, down -40.6% compared to 2019 following
the tension on the low policy rates in all countries that is impacting revenues
as well as the macroeconomic context, which led to a rise in the cost of
risk, notably on performing outstandings. Excluding the contribution of CA
Italia to the Italian guarantee fund (-€25 million in 2020 and -€22 million in
2019), the underlying cost/income ratio for the year worked out at 64.3%,
a 2.3 percentage point deterioration compared to 2019, as the reduction in
expenses did not offset the slowdown in revenues linked to the pandemic.
Note in the second quarter of 2020 a realised capital gain on real estate
of +€65 million before tax in Italy booked under gains or losses on other
assets, as well as, in the 2019 and 2020 stated results, the impact of the
disposal of our activities in Romania, booked according to IFRS 5 under net
income from discontinued or held-for-sale operations in specific items, for
-€7 million for 2020 and -€46 million for 2019. The specific items for both
these years also include in 2020 -€8 million related to COVID donations
in the first quarter of 2020 and the exceptional contribution of France’s
support plan for banks for -€11 million.
International Retail Banking contributed
5% to the underlying net income
Group share of the business lines
of Crédit Agricole S.A. (excluding the
Corporate Centre) in 2020 and
13% to their underlying revenues.
At 31 December 2020, capital allocated to the International Retail Banking
division was €3.8 billion (11% of the total allocation); and risk-weighted
assets stood at €39.5 billion (12% of the total).
In Italy,
Crédit Agricole Italia fully played its role in supporting the economy
and its activity remained robust throughout the year. The impact of the
second lockdown in Q4 was more limited than in Q2 and the rebound in
commercial activity was confirmed at the end of the year.
Loan production over the year amounted to €8.2 billion for CA Italia,
representing growth of +33.7% on 2019, of which €2.4 billion in State-
guaranteed loans. Excluding the State-guaranteed loans, production declined
by -6.2% in Italy, although home loan production was strong (up +5.1%
year-on-year).
Loans outstanding stood at €45.5 billion at end-December 2020, up
by 5.0% and stable (+0.5%) from end-December 2019 excluding the
State-guaranteed loans. Thus, at end-December 2020, outstanding loans
to individuals, at €22.4 billion, grew +5.2% year-on-year, supported by
home loans, and loans to corporates and SMEs also posted strong growth
with the support to the economy and State-guaranteed loans (+8.8% to
€13.5 billion). Outstandings were also impacted in the fourth quarter by a
disposal of doubtful loans for a gross amount of €450 million.
Total customer assets were up +8.9% compared to 31 December 2019,
totalling €84.8 billion at end-December 2020, excluding assets under
custody. Off-balance sheet assets increased by +8.8% in 2020, to
€39.9 billion at end-December 2020, excluding assets under custody.
On-balance sheet deposits totalled €44.9 billion at end-December 2020,
up +8.9% compared to 31 December 2019, mainly thanks to sight deposits
from individual customers and companies.
Commercial action during the year was highly focused on the quality of the
customer relationship on all levels and in all customer segments, notably
with an analysis of customer “irritants” and the development of digital
journeys. Accordingly, CA Italia improved in terms of NPS in 2020 by more
than 8 points compared to 2019, ranking second place for strategic NPS
among the Italian banks.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
240
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
The 2020 financial statements include, under specific items, the exceptional
contribution to the safeguard plan for Italian banks of -€11 million in
operating expenses (-€6 million in net income Group share). These items
are detailed on page 230 of this document. The 2019 financial statements
do not include any specific items.
The underlying net revenues of CA Italia stood at €1,827 million, down by
-3.0% compared to 2019.
Underlying expenses excluding SRF stood at €1,170 million, down -0.9%
compared to end-December 2019. As charges decreased less rapidly than
revenues, the underlying cost/income ratio excluding the SRF for the year
was 64.0%,
i.e.
a deterioration of 1.4 percentage point.
The cost of risk worked out at -€428 million at end-December 2020, up
+70.4% compared to end-December 2019, notably including additional
provisions on the portfolio of receivables sold.
Cost of risk/outstandings
(1)
stood at 93 basis points, down +36 basis points year-on-year (57 basis
points in 2019). The rate of doubtful loans stood at 6.5% compared to 7.8%
at end-December 2019. The coverage ratio increased to 60.8% compared
to 59.4% in December 2019.
The business division’s underlying net income Group share came to
€144 million, an increase of -33.3% compared to 2019.
Crédit Agricole Italia, the Group’s second largest domestic market after
France, accounted for more than two-thirds of revenues and four-fifths
of the loans and on-balance sheet deposits of the International Retail
Banking business line, followed by Poland and Morocco. Although CA Italia is
75.6% owned by Crédit Agricole S.A., it accounted for 64% of the division’s
underlying net income of the International Retail Banking business line.
More broadly, the
net income Group share of all Crédit Agricole S.A.
entities in Italy
excluding Corporate Centre was
€571 million,
down -11%
compared to 2019. The contribution of the Italian Group was
12.4% of net
income Group share
(2)
.
International Retail Banking excluding Italy
(Other IRB) continued to
deliver strong business momentum. Results were nevertheless impacted
this year by the drop in key rates in all markets and the provisioning
(1)
The cost of risk/outstandings is calculated on the basis of the cost of risk recorded in the year over the average of the outstandings at the start of all four quarters of the year.
(2) Underlying income of the Crédit Agricole S.A. business lines.
(3) Excluding the currency effect.
of healthy loans. Total on- and off-balance sheet assets increased by
12.2%
(3)
(excluding assets under custody) between end-December 2019
and end-December 2020, to €15.9 billion. On-balance sheet deposits
totalled €13.6 billion at end-December 2020, a year-on-year increase of
12.5%
(3)
in 12 months, buoyed by a good performance in Poland (13.3%
(3)
).
Loans outstanding stood at €11.7 billion at end-December, a year-on-year
increase of 4.7%
(3)
.
The surplus of deposits over loans remained at €1.8 billion at
end-December 2020.
Crédit Agricole S.A. also announced in January 2021 the disposal of its
activities in Romania, thereby pursuing its refocus on its main international
entities. The impacts of this disposal are accounted for under discontinued
or held-for-sale operations in specific items for 2020 (-€7 million) and
2019 (-€46 million). The 2020 financial statements also include, under
specific items, COVID-19 donations of -€8 million under operating expenses
(-€4 million in net income Group share). These items are detailed on page 230
of this document.
In full-year 2020, net banking income was down -8.8% compared to 2019
at €833 million. It was impacted by the drop in key interest rates and
concerns all the subsidiaries (Poland -12%
(3)
, Morocco +0%
(3)
, Egypt -12%
(3)
,
Ukraine -11%
(3)
). Underlying operating expenses decreased by -2.3% over
the same period, illustrating the efforts made to adapt the structures to
the interest rate environment. The underlying cost-to-income ratio came
to 64.7%, an improvement of 4.3 percentage points compared to 2019.
Underlying gross operating income thus decreased by -18.7% in 2020.
The cost of risk increased (+69.6%) and stood at -€142 million with
provisioning of performing outstandings. The doubtful loan coverage ratio
stood at 109%, on a still very low ratio of doubtful loans.
In 2020, the business division’s underlying net income Group share came
to €81 million, a decrease of -50.3% compared with 2019.
This business accounted for
2% of Crédit Agricole S.A.’s underlying net
income Group share of the business lines (excluding the Corporate
Centre)
in 2020 and
4% of its underlying revenues.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
241
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Specialised Financial Services (SFS)
Specialised Financial Services includes the Consumer finance (CA Consumer Finance – Crédit Agricole Consumer Finance) and leasing and factoring (CA
Leasing & Factoring – CAL&F) activities.
Specialised Financial Services (SFS) – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
2,526
-
2,526
2,716
-
2,716
(7.0%)
(7.0%)
Operating expenses excl. SRF
(1,268)
-
(1,268)
(1,343)
-
(1,343)
(5.6%)
(5.6%)
SRF
(20)
-
(20)
(18)
-
(18)
7.9%
7.9%
Gross operating income
1,238
-
1,238
1,354
-
1,354
(8.6%)
(8.6%)
Cost of risk
(732)
-
(732)
(497)
-
(497)
47.3%
47.3%
Equity-accounted entities
344
89
255
295
-
295
16.4%
(13.9%)
Net income on other assets
(3)
-
(3)
0
-
0
N/A
N/A
Change in value of goodwill
-
-
-
-
-
-
N/A
N/A
Income before tax
847
89
757
1,152
-
1,152
(26.5%)
(34.3%)
Tax
(69)
-
(69)
(233)
-
(233)
(70.4%)
(70.4%)
Net income from discontinued or held-for-sale
operations
(135)
(135)
-
-
-
-
N/A
N/A
Net income
643
(45)
688
919
-
919
(30.1%)
(25.1%)
Non-controlling interests
(84)
-
(84)
(104)
-
(104)
(19.3%)
(19.3%)
NET INCOME GROUP SHARE
559
(45)
604
815
-
815
(31.4%)
(25.9%)
COST/INCOME RATIO EXCL. SRF
(%)
50.2%
50.2%
49.5%
49.5%
+0.7 pp
+0.7 pp
(1) Excluding the contribution of Crédit Agricole Consumer Finance NL in 2019. Crédit Agricole Consumer Finance NL was booked under “Non-current assets held for sale and
discontinued operations” in the third quarter of 2020. Net income reclassified under “Net income from discontinued operations” includes the partial amortisation of goodwill as
well as the estimated loss on this transaction.
(2)
The cost of risk/outstandings is calculated on the basis of the cost of risk recorded in the year over the average of the outstandings at the start of all four quarters of the year.
At end-December 2020,
Crédit Agricole Consumer Finance
’s gross
managed loans €90.9 billion, virtually stable compared to end-December
2019 (-1.3%). This trend is explained by the context of the health crisis,
which notably slowed production volumes in the second quarter of 2020
at the start of the crisis (production levels were down -40% in the second
quarter of 2020 compared to the second quarter of 2019). However, over
the rest of the year, the level of production picked up and the second
lockdown in November had a more limited impact, with Q4 production
returning to the 2019 average (production in the fourth quarter of 2020
down -3% compared to the fourth quarter of 2019), and the resumption
of post-moratorium payments reached 98% at end-December 2020 (both
retail and corporate customers). Overall, for the year as a whole, 2020
production represented 86% of 2019 production. Over the same period,
consolidated outstandings recorded a moderate decline of -4.8%, for a
total of €33.2 billion at 31 December 2020. Excluding the Crédit Agricole
Consumer Finance NL entity, which is being sold, consolidated outstandings
are stable (+0.2 billion).
Overall, this led Crédit Agricole Consumer Finance to defer to 2023 its
target set for gross managed loans in the Group’s Medium-Term Plan and
initially announced for 2022, while the cost/income ratio and RoNE targets
remain achievable as of 2022.
Crédit Agricole Consumer Finance’s net income Group share came to
€458 million for 2020, down -29.0% compared to 2019. It includes
two specific items: the reversal of a provision for the fine by the Italian
Competition Authority (AGCM) applied to FCA Bank for +€89 million under
equity-accounted entities, and a negative impact of -€135 million on
discontinued or held-for-sale operations relative to the current disposal
project of Crédit Agricole Consumer Finance NL. Adjusted to factor in these
two specific items, Crédit Agricole Consumer Finance’s underlying net
income Group share works out at €503 million for 2020, down -21.9%
from 2019.
Revenues stood at €1,993 million for 2020, down -7.1%, although the
decline was more moderate at constant scope
(1)
(-3.7%), due to a drop in
activity during the periods of lockdown as well as an unfavourable product
mix in a context of increased pressure from competition. Over the same
period, expenses excluding the SRF contribution were recorded down
-7.6%, or -0.7% at constant scope. Overall, for 2020, the cost/income
ratio stood at 49.0%, marking a 0.3 percentage point improvement. Cost
of risk reached €637 million, compared to 451 million in 2019, an increase
of below 50% in the context of the health crisis (+41.3%), and the cost of
risk over average outstandings
(2)
was 179 basis points. The contribution
of equity-accounted entities was €255 million, compared to. €295 million
in 2019, down -13.9% from the previous year, which is explained notably
by a lower contribution from Wafasalaf, impacted by the effects of the
health crisis, as well as higher provisioning on FCA Bank, while the Chinese
activities were resilient and grew slightly over the year.
Over 2020,
CAL&F
recorded growth in lease financing outstandings of
+3.2%, to €15.5 billion at end-December 2020. The level of production
in the second half-year held up very well, after a first half that was heavily
impacted by the lockdown, notably in France. Overall, commercial leasing
production in 2020 (€5.7 billion) represented 98% of 2019 production. In
factoring, the level of activity remained strong despite the context, notably
in the fourth quarter of 2020, and commercial production rose +6.8% to
€13.7 billion from 2019, driven by the international activity (Germany and
Spain). At €21.5 billion in the fourth quarter of 2020, factored revenues
recorded a 4.4% increase on the fourth quarter of 2019, buoyed by France
and Germany.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
CAL&F’s underlying net income Group share came to €101 million,
a decrease of -40.8% compared with 2019. Net revenues came to
€534 million, down -6.7% on 2019, impacted by the contraction in
factored revenues due to the lower financing needs of customers, given the
exceptional schemes implemented by the governments to meet companies’
cash flow needs (impact of the State-guaranteed loans). Expenses excluding
the SRF contribution stood at €292 million, up +2.0% year-on-year, and
were concentrated on IT and telecoms expenses. The cost to income ratio
came to 54.6%, in 2020 a deterioration of 4.6 percentage points compared
to 2019. The cost of risk reached €96 million, 2.1x the 2019 figure, sharply
impacted by the provisions related to the health crisis.
(1)
€2.4 billion in State-guaranteed loan applications by Crédit Agricole CIB’s customers as at 15 January 2021.
(2) Source: Dealogic.
(3) Source: Refinitiv N11.
(4) Source: Bloomberg.
(5) Source: Refinitiv.
(6) Source: Refinitiv R17.
The Specialised Financial Services activity contributed 13% to the underling
net income Group share of the business lines of Crédit Agricole S.A.
(excluding the Corporate Centre) in 2020 and 12% to their underlying
revenues (excluding the Corporate Centre).
Underlying RoNE of the business line was 11.7% in 2020, compared with
16.0% in 2019. At 31 December 2020, capital allocated to the Specialised
Financial Services division was €4.9 billion (14% of the total allocation),
and risk-weighted assets stood at €51.8 billion (15% of the total).
Large Customers (CIB and Asset Servicing)
The Large Customers division includes the Capital Markets, Investment Banking, Structured Finance and Commercial Banking business lines housed
within Crédit Agricole Corporate & Investment Bank (Crédit Agricole CIB), as well as Asset Servicing, hosted within CACEIS.
Large Customers (LC) – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
6,297
22
6,276
5,603
(65)
5,668
+12.4%
+10.7%
Operating expenses excluding SRF
(3,523)
(19)
(3,504)
(3,321)
(15)
(3,305)
+6.1%
+6.0%
SRF
(260)
-
(260)
(177)
-
(177)
+46.7%
+46.7%
Gross operating income
2,514
3
2,511
2,105
(80)
2,185
+19.4%
+14.9%
Cost of risk
(829)
-
(829)
(160)
-
(160)
x5.2
x5.2
Equity-accounted entities
7
-
7
4
-
4
+66.8%
+66.8%
Net income on other assets
1
-
1
6
(6)
12
(85.1%)
(92.7%)
Change in value of goodwill
-
-
-
22
22
-
(100.0%)
n.m.
Income before tax
1,693
3
1,690
1,978
(65)
2,042
(14.4%)
(17.2%)
Tax
(278)
(1)
(277)
(407)
23
(431)
(31.8%)
(35.7%)
Net income from discontinued or held-for-sale
operations
-
-
-
-
-
-
n.m.
n.m.
Net income
1,415
2
1,413
1,570
(42)
1,612
(9.9%)
(12.3%)
Non controlling interests
(85)
4
(88)
(32)
1
(33)
x2.6
x2.7
NET INCOME GROUP SHARE
1,330
6
1,325
1,538
(40)
1,579
(13.5%)
(16.1%)
COST/INCOME RATIO EXCLUDING SRF
(%)
55.9%
55.8%
59.3%
58.3%
-3.3 pp
-2.5 pp
In
Corporate and investment banking,
business was particularly strong
over the entire year, with a very strong capital markets activity. In the first
quarter of 2020, capital markets recorded good commercial momentum,
in a context of high volatility. This momentum continued into the second
quarter of 2020, as Crédit Agricole CIB provided support to its customers
during the health crisis with the granting of the State-guaranteed loans
(€2.4 billion
(1)
) and for their hedging needs. Over this period, the drawdown
rates on revolving credit facilities (RCF) increased sharply, reaching 32%
in April 2020, compared to 18% pre-crisis, which they returned to at the
end of the year.
In all, 2020 confirmed Crédit Agricole CIB’s leading position (#1 in the All
French Corporate bonds
(2)
category, #1 in All Financial Bonds
(3)
, #2 worldwide
for Global Green and Sustainability bonds
(4)
). Crédit Agricole CIB also
maintained very good positions in syndicated loans: leader in France
(5)
and #3 on the EMEA market
(6)
. Lastly, Crédit Agricole CIB maintained its
very prudent risk profile, and the regulatory VaR as at 31 December 2020
remained at a very low level (€9.2 million at 31 December 2020, average
regulatory VaR of €14.2 million for the full year 2020).
The
Corporate and Investment banking
business reported revenues of
€5,168 million in 2020. They include the specific accounting items relative
to the loan portfolio hedges for +€10 million recorded by the investment
bank and to the DVA (debt valuation adjustment) for +€11 million booked
on the capital markets and investment banking activities. Adjusted to
reflect these items, underlying revenues came to €5,147 million, up +8.8%
compared to 2019.
Underlying
Financing activities
revenues reached €2,541 million, up
very slightly from 2019 (+0.9% and +2.6% excluding the currency effect),
thanks notably to:
good performance in
corporate banking
(+6.2%) thanks to a rise
in outstandings related to the health crisis (greater consumption of
liquidity between April and September, then a normalisation of these
drawdowns before a return to pre-crisis levels from Q4) and growth in
acquisition financing activities; and to a slight increase in the revenues
of the International Trade and Transaction Banking activity;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
this mitigated the drop in revenues (-4.7% in 2020 from 2019) observed
in
structured finance,
impacted by the slowdown in new production in
the context of the health crisis. However, the business was more dynamic
in Q4 in the telecoms and energy/infrastructure sectors.
The underlying revenues of the
Capital Markets and Investment banking
business totalled €2,606 million in 2020, up +17.7% on 2019 (+18.6%
excluding the currency effect), thanks to a favourable market context on
the one hand and strong commercial activity on the other:
capital markets
revenues recorded a +19.1% increase to €2,299 million
in 2020, buoyed by the dynamic FICC activities, due to a very good level
of activity on the primary bond market in all sectors, and Crédit Agricole
CIB having supported its customers in their hedging needs during the
crisis, notably in the context of the ECB’s accommodative policy;
investment banking
revenues also posted a +8.2% rise, to €307 million:
they notably benefited from the high volumes of activity on the capital
markets.
Operating expenses excluding the contribution to the SRF was €2,650 million,
up just very slightly from 2019 (+2.1%), notably due to IT investments. Thus,
the rise in revenues, combined with this good cost control, generated a
positive scissor effect of +6.7 points, as well as improvement in the cost/
income ratio (excluding SRF), which stood at 51.5% for 2020 (vs. 54.8% in
2019), below the target of the Medium-Term Plan (below 55% in 2022). The
contribution to the SRF increased significantly in 2020, totalling €232 million
(+43.6% compared to 2019). Cost of risk increased by 5.3x year-on-year
to €824 million. In corporate banking specifically, it reached €796 million
and the cost of risk/outstandings
(1)
came to 67 basis points. This was a
six-fold increase compared to 2019, and 86% of this rise was explained by
the provisioning for performing outstandings. In all, underlying net income
Group share came to €1,195 million, down -16.8% compared with 2019.
Asset servicing (CACEIS)
recorded a very good level of activity during
the year, thanks to new customer gains and growth on the existing
customer base Assets under custody exceeded €4 trillion (which was
one of the targets of the Medium-Term Plan 2022, now achieved), totalling
€4,198 billion at 31 December 2020, a notable rise of +8.2% compared to
end-December 2019. Assets under administration stood at €2,175 billion,
up +6.3% year-on-year.
(1)
The cost of risk/outstandings is calculated on the basis of the cost of risk recorded in the year over the average of the outstandings at the start of all four quarters of the year.
Net income Group share, stated for CACEIS totalled €121 million over
2020. It included -€19 million in integration costs on acquisitions made
by CACEIS in 2019 (Kas Bank and Santander Securities Services, impact
on net income Group share of -€9 million). In 2019, specific items had a
net impact of +6 million and also included the integration and acquisition
costs of these new entities as well as the positive impact of the badwill
booked on Kas Bank. Revenues totalled €1,129 million, up +20.5%, due
notably to the scope effect, but also thanks to a strong level of activity (entry
of new major customers and growth in the activity of existing customers)
and growth in cash revenues. Underlying operating expenses, excluding
the SRF, increased by +20.2% to €854 million, beyond the scope effect,
due mainly to the effect of IT development and investments, some of
which are related to the arrival of new large customers. Underlying gross
operating income was thus up a sharp +17.1% compared to 2019, and the
cost/income ratio (excluding SRF) came to 75.7%, a slight improvement
of 0.2 percentage point. Net income for the year was thus up a strong
+34.5% in 2020 from 2019. After €63 million of non-controlling interest
attributed to Santander, the business line’s contribution to underlying net
income Group share recorded a drop of -9.1% year-on-year to €130 million.
As at 31 December 2020, the equity allocated to the Large Customers
division totalled €11.7 billion (33% of the total), including €7.0 billion for
Corporate banking, €3.9 billion for Capital Markets and Investment banking
and €0.8 billion for Asset servicing.
The Large Customers division’s risk-weighted assets totalled €123.6 billion,
including €73.6 billion for Corporate banking, €41.4 billion for Capital
Markets and Investment banking and €8.5 billion for Asset servicing. They
increased €4.0 billion compared to the previous year, mainly in Corporate
and investment banking (+€5.2 billion), notably under the regulatory impact
of TRIM and securitisations for +€10 billion, partially offset by the currency
effect (-€3.5 billion), with the effects of the portfolio ratings due to the
crisis having been virtually offset by the decrease in organic growth of
the business lines over the year.
The business line’s return on normalised equity (RoNE) was 10.7% in
2020, vs. 12.7% in 2019.
The Large Customers division contributed to 29% of net income Group
share of the business lines of Crédit Agricole S.A. (excluding the Corporate
Centre) in 2020 and 30% of underlying revenues.
Corporate Centre (CC)
This division comprises three types of so-called structural activities:
Crédit Agricole S.A.’s central body function, asset and liability management and management of debt connected with acquisitions of subsidiaries or
equity investments and the net impact of tax consolidation for Crédit Agricole S.A.;
the results of the private equity business and of various other Crédit Agricole S.A. companies (including CA Immobilier, Uni-médias, Foncaris, etc.);
the results of resource companies carrying out dedicated activities on behalf of the Crédit Agricole Group and its subsidiaries: IT production (CAGIP),
payment activities (CAPS) and real estate operations (SCI).
This segment also includes other non-structural items, such as the volatile technical impacts of intragroup transactions.
The 2020 financial statements include several specific items with a total impact of -€733 million on net income Group share, which essentially concern
the amortisation of the goodwill on CA Italia for -€778 million in net income Group share, the amortisation of the goodwill on AHM for -€55 million in net
income Group share, the home purchase savings plan provision for -€44 million, liability management balance for -€28 million, the solidarity COVID-19
donations for -€10 million.
The 2019 financial statements contain several specific items having a total positive impact of +€262 million on net income Group share, including the
settlement of the Emporiki litigation for +€1,038 million in net income Group share, the amortisation of the goodwill on LCL for -€611 million and the
provision for home purchase savings for -€59 million.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Corporate Centre (CC) – Contribution to results, stated and underlying 2020
(in millions of euros)
2020
stated
Specific
items
2020
underlying
2019
stated
Specific
items
2019
underlying
Δ
2020/2019
stated
Δ
2020/2019
underlying
Revenues
(238)
(105)
(133)
(497)
(90)
(407)
(52.0%)
(67.3%)
Operating expenses excluding SRF
(792)
(10)
(782)
(789)
-
(789)
+0.4%
(0.9%)
SRF
(86)
-
(86)
(83)
-
(83)
+3.0%
+3.0%
Gross operating income
(1,116)
(115)
(1,001)
(1,369)
(90)
(1,279)
(18.5%)
(21.8%)
Cost of risk
(29)
-
(29)
(28)
-
(28)
+3.8%
+3.8%
Equity-accounted entities
(4)
-
(4)
6
-
6
n.m.
n.m.
Net income on other assets
0
-
0
12
-
12
(99.7%)
(99.7%)
Change in value of goodwill
(903)
(903)
-
(611)
(611)
-
+47.8%
n.m.
Income before tax
(2,052)
(1,018)
(1,034)
(1,991)
(701)
(1,290)
+3.1%
(19.9%)
Tax
341
34
307
1,539
1,069
470
(77.8%)
(34.7%)
Net income from discontinued or held-for-sale
operations
(55)
(55)
0
(0)
-
(0)
n.m.
n.m.
Net income
(1,766)
(1,040)
(726)
(452)
368
(820)
x3.9
(11.4%)
Non controlling interests
119
125
(6)
7
-
7
x16.7
n.m.
NET INCOME GROUP SHARE
(1,647)
(915)
(733)
(445)
368
(813)
x3.7
(9.9%)
In 2020, the business division’s underlying net income Group share came to -€733 million (compared to -€813 million for 2019). This includes a contribution
to the Single Resolution Fund (SRF) of -€86 million, a deterioration of +3.0% compared to 2019.
(in millions of euros)
2020
2019
Δ 2020/2019
Δ 2020/2019
(%)
Of which structural net income
(763)
(877)
+113
(12.9%)
Balance sheet & holding Crédit Agricole S.A.
(745)
(933)
+187
(20.1%)
Other activities (CACIF, CA Immobilier, etc.)
(15)
51
(66)
ns
Support functions (CAPS, CAGIP, SCI)
(3)
5
(8)
ns
Of which other elements of the division
31
64
(33)
(51.6%)
The “structural” contribution improved by +€113 million to -€763 million
over 2020, thanks mainly to an improvement in the contribution of the Crédit
Agricole S.A. central body activities and functions. (the negative contribution
was reduced by €187 million between the two periods) notably thanks to
a gradual reduction in the cost of debt and temporary gains related to the
TLTRO 3s recorded the second half of 2020.
Conversely, the other items of corporate center deteriorated by -€33 million
compared to 2019, totalling +€31 million for 2020. These other items are
related to the seasonal effect of inflation and the impact of intragroup
eliminations of securities held by Predica and Amundi.
As at 31 December 2020, risk-weighted assets stood at €26.2 billion.
Earnings per share
Earnings per share represent a company’s net profit divided by the average number of shares outstanding excluding treasury shares. It indicates the
portion of profit attributable to each share (not the portion of earnings paid out to each shareholder, which is the dividend). It may decrease, with total
profit unchanged, if the number of shares increases.
Crédit Agricole S.A. – data per share
(in millions of euros)
2020
2019
Δ 2020/2019
Net income Group share – stated
2,692
4,844
(44.4%)
Interests on AT1, including issuance costs, before tax
(373)
(587)
(36.5%)
NIGS attributable to ordinary shares – stated
[A]
2,319
4,257
(45.5%)
Average number shares in issue, excluding treasury shares (m)
[B]
2,885.3
2,873.4
+0.4%
Net earnings per share – stated
[A]/[B]
€0.80
€1.48 €
(45.8%)
Underlying net income Group share (NIGS)
3,849
4,582
(16.0%)
Underlying NIGS attributable to ordinary shares
[C]
3,476
3,995
(13.0%)
NET EARNINGS PER SHARE – UNDERLYING
[C]/[B]
€1.20
€1.39
(13.4%)
Reported earnings per share were down -45.8% in 2020 to €0.80 and underlying earnings per share were down -13.4% to €1.20.
CRÉDIT AGRICOLE S.A.
—
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Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
Crédit Agricole S.A. – RoTE
(in millions of euros)
31/12/2020
31/12/2019
Shareholder's equity Group share
65,217
62,921
AT1 issuances
(5,888)
(5,134)
Unrealised gains and losses on OCI – Group share
(3,083)
(2,993)
Payout assumption on annual results
(1)
(914)
(3)
(2,019)
Net book value (NBV), not revaluated, attributable to ordinary shares
[D]
55,333
52,774
Goodwill & intangibles
(2)
– Group share
(17,488)
(18,011)
Tangible NBV (TNBV), not revaluated attributable to ordinary shares
[E]
37,844
34,764
Total shares in issue, excluding treasury shares (period end, m)
[F]
2,915.6
2,884.3
NBV PER SHARE, AFTER DEDUCTION OF DIVIDEND TO PAY
(in euros)
[D]/[F]
€19.0
(4)
€18.3
+ DIVIDEND TO PAY
(in euros)
[H]
€0.31
(5)
€0.70
NBV PER SHARE, BEFORE DEDUCTION OF DIVIDEND TO PAY
(in euros)
€19.3
€19.0
TNBV PER SHARE, AFTER DEDUCTION OF DIVIDEND TO PAY
(in euros)
[G]=[E]/[F]
€13.0
(4)
€12.1
TNBV PER SHARE, BEFORE DEDUCTION OF DIVIDEND TO PAY
(in euros)
[G]+[H]
€13.3
€12.8
(1)
Dividend proposed by the Board of Directors pending distribution.
(2)
Including goodwill in the non-controlling interests.
(3)
€914 million correspond to the share of the distribution of the dividend made in cash assuming zero public opting for the scrip dividend payment.
(4)
The NBV per share after deduction of dividend to pay and the TNBV per share after deduction of dividend to pay are calculated based on the total number of shares as of 31 December 2020.
(5)
€0.31 correspond to the cash distribution.
RoTE
RoTE (Return on Tangible Equity) measures the return on tangible equity
(the net assets restated to eliminate intangibles and goodwill).
Reported RoTE was lower than at end-2019 at 6.2%. Underlying RoTE
decreased to 9.3% compared to 11.9% in 2019. Lastly, RoTE excluding
the amortisation of the goodwill on CA Italia came to 8.3% in 2020.
(in millions of euros)
2020
2019
Net income Group share attributable to ordinary shares
[H]
2,319
4,257
Tangible NBV (TNBV), not revaluated attributable to ordinary shares – average
(1)
[I]
37,314
(2)
33,525
Stated RoTE
(%)
[H]/[I]
6.2%
12.7%
Net income Group share attributable to ordinary shares excluding CA Italia goodwill impairment
[J]
3,097
Stated RoTE
(%) excl CA Italia impairment
[J]/[I]
8.3%
Underlying Net income attributable to ordinary shares (annualised)
[K]
3,476
3,995
UNDERLYING RoTE
(%)
[K]/[I]
9.3%
11.9%
(1)
Including assumption of dividend for the current exercise.
(2)
Average of the TNBV not revaluated attributable to ordinary shares calculated based on 31 December 2020 figures and 31 December 2019 restated figures as presented in the table above.
RoTE
(%)
11.9%
9.3%
2019
2020
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
246
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
CRÉDIT AGRICOLE S.A. CONSOLIDATED BALANCE SHEET
Crédit Agricole S.A. – Consolidated balance sheet
(in millions of euros)
Notes
31/12/2020
31/12/2019
Variation
Cash, Central Banks
6.1
194,269
93,079
108.7%
Financial assets at fair value through profit or loss
3.1-6.2-6.6-6.7
432,462
399,477
8.3%
Held for trading financial assets
261,968
230,721
13.5%
Other financial assets at fair value through profit or loss
170,494
168,756
1.0%
Hedging derivative Instruments
3.2-3.4
21,745
19,368
12.3%
Financial assets at fair value through other comprehensive income
3.1-6.4-6.6-6.7
266,072
261,321
1.8%
Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
263,856
258,803
2.0%
Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
2,216
2,518
-12.0%
Financial assets at amortised cost
3.1-3.3-6.5-6.6-6.7
953,900
906,280
5.3%
Loans and receivables due from credit institutions
463,169
438,581
5.6%
Loans and receivables due from customers
405,937
395,180
2.7%
Debt securities
84,794
72,519
16.9%
Revaluation adjustment on interest rate hedged portfolios
7,463
7,145
4.5%
Current and deferred tax assets
6.10
4,304
4,300
0.1%
Accruals, prepayments and sundry assets
6.11
40,307
38,349
5.1%
Non-current assets held for sale and discontinued operations
6.12
2,734
475
475.6%
Deferred participation
6.17
-
-
-
Investments in equity-accounted entities
6.13
7,650
7,232
5.8%
Investment property
6.14
6,522
6,576
-0.8%
Property, plant and equipment
6.15
5,779
5,598
3.2%
Intangible assets
6.15
3,196
3,163
1.0%
Goodwill
6.16
14,659
15,280
-4.1%
TOTAL ASSETS
1,961,062
1,767,643
10.9%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
4
(in millions of euros)
Notes
31/12/2020
31/12/2019
Variation
Central banks
6.1
864
1,896
-54.4%
Financial liabilities at fair value through profit or loss
6.2
265,173
246,669
7.5%
Held for trading financial liabilities
229,265
206,708
10.9%
Financial liabilities designated at fair value through profit or loss
35,908
39,961
-10.1%
Hedging derivative Instruments
3.2-3.4
15,218
13,293
14.5%
Financial liabilities at amortised cost
1,146,854
989,962
15.8%
Due to credit institutions
3.3-6.8
264,919
142,041
86.5%
Due to customers
3.1-3.3-6.8
719,388
646,914
11.2%
Debt securities
3.3-6.8
162,547
201,007
-19.1%
Revaluation adjustment on interest rate hedged portfolios
10,380
9,183
13.0%
Current and deferred tax liabilities
6.10
3,334
3,766
-11.5%
Accruals, deferred income and sundry liabilities
6.11
52,941
49,285
7.4%
Liabilities associated with non-current assets held for sale and discontinued operations
6.12
1,430
478
199.2%
Insurance company technical reserves
6.17
363,124
356,107
2.0%
Provisions
6.18
4,197
4,364
-3.8%
Subordinated debt
3.3-6.19
24,052
21,797
10.3%
Total Liabilities
1,887,567
1,696,800
11.2%
Equity
73,495
70,843
3.7%
Equity – Group share
65,217
62,920
3.7%
Share capital and reserves
28,323
27,368
3.5%
Consolidated reserves
32,037
27,865
15.0%
Other comprehensive income
2,175
2,843
-23.5%
Other comprehensive income on discontinued operations
-10
-
-
Net income (loss) for the year
2,692
4,844
-44.4%
Non-controlling interests
8,278
7,923
4.5%
TOTAL LIABILITIES AND EQUITY
1,961,062
1,767,643
10.9%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Operating and financial information
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Main changes in the consolidated balance sheet
At 31 December 2020, the consolidated balance sheet of Crédit Agricole S.A.
amounted to €1,961.1 billion, up +€193.4 billion (+10.9%) compared with
the 2019 balance sheet.
This increase mainly stemmed from:
the increase in financial assets at amortised cost totalling €47.6 billion;
the rise in cash and Central banks for €101.2 billion;
the rise in financial assets at fair value through profit or loss of €33.0 billion.
Analysis of the main items
Loans and receivables from customers and credit institutions
totalled €869.1 billion at end-December 2020, an increase of +4.2% or
+€35.3 billion compared with 2019.
Loans and receivables due from customers (including lease financing
operations) totalled €405.9 billion at 31 December 2020, compared with
€395.2 billion a year earlier, an increase of +2.7%. The increase was
attributable chiefly to growth in customer transactions at LCL in the amount
of +€10 billion.
Loans and receivables due from credit institutions also increased, to
€463.2 billion (+5.6%) at 31 December 2020 compared with €438.6 billion
at end-2019. The increase was primarily due to the centralisation of
Livret A
and
Livret de Développement Durable et Solidaire
passbooks at CDC as
well as unsecured loans to finance the Regional Banks’ lending activity
(+€20 billion).
Amounts due to credit institutions and customers
totalled €984.3 billion
at end-2020, up +24.8% or +€195.4 billion compared with end-2019.
Amounts due to credit institutions rose +€122.9 billion, to €264.9 billion
(+86.5%), as a result of the TLTRO 3 drawings during the year.
Amounts due to customers rose +€72.5 billion (+11.2%) to €719.4 billion.
This increase is notably explained by the inflows into regulated savings at
Crédit Agricole S.A. (+€16 billion, of which €7 billion for the Livret A) and
customer transactions carried out by Crédit Agricole CIB for +€15.7 billion.
(1)
Referring to article R. 511-16-1 of the Monetary and Financial Code, profitability of assets is obtained by dividing the net accounting income with the total balance-sheet, on a
consolidated basis.
(2) Target range of the Federal funds at 0-0.25%; net purchases of securities at $120 billion per month,
i.e.
2/3 Treasury securities and 1/3 MBS; forward guidance on key rates
consisting of tolerating a “moderate” overshoot of the inflation target for “some time”; forward guidance on asset purchases indicating that they will continue at least at the
current pace until “substantial progress” is made towards employment and inflation targets.
Financial assets at fair value through profit or loss
amounted to
€432.5 billion at 31 December 2020, a rise of +8.3% year-on-year,
i.e.
+€33.0 billion.
Financial liabilities at fair value through profit or loss
amounted to
€265.2 billion at 31 December 2020, up +€18.5 billion year-on-year
(+7.5%).
Financial assets at fair value through other comprehensive income
stood at €266.1 billion at end-December 2020,
i.e.
a +1.8% increase
year-on-year.
Debt securities
totalled €84.8 billion at end-December 2020 compared
to €72.5 billion in 2019, a +€12.3 billion increase.
The amount of
investments in equity-accounted entities
stood at
€7.7 billion at end-2020, an increase of +5.8%.
Hedging derivatives
recorded respective increases of +12.3% under
assets and +14.5% under liabilities.
Underwriting reserves for insurance contracts
increased by 2% in
2020 from 2019, reaching €363.1 billion. This rise is notably explained
by the increase in liabilities relating to insurance and financial contracts
at Predica (+€3.7 billion).
Debt securities
were down -19.1% year-on-year, to €162.5 billion at
end-2020.
Equity
amounted to €73.5 billion at 31 December 2020, a year-on-
year increase of +3.7%. Equity – Group share was also up (+3.7%) to
€65.2 billion at end-2020.
Capital management and regulatory ratios
The amendment to IAS 1 adopted by the European Union on 11 January 2006
requires quantitative and qualitative disclosures on the issuer’s capital
and management of its capital
i.e.
objectives, policies and processes for
managing capital. This information is provided in Note 3.6 to the financial
statements and in “Pillar 3 disclosures”, provided below. For financial
year 2020, return on assets
(1)
was 0.14%, down from financial year 2019.
RECENT TRENDS AND OUTLOOK
The economic outlook is still clouded by major uncertainties related to
problems in exiting the public health crisis (persistent virulence of the
pandemic, more contagious virus mutations, a new rise in infections, and
ongoing uncertainty about whether vaccination will lead to immunity). The
profile and pace of growth will therefore continue to be impacted by the
pandemic and the delicate trade-off between growth and public health
safety. After a lacklustre first half, recovery should be very modest and very
disparate, despite monetary and budgetary infusions. The major economies
will continue to be helped out by massive budgetary support, highly
accommodating monetary policies and favourable financial conditions.
While some key markers may still fall (as in the scenario of negative interest
rates in the UK, which cannot be ruled out), it seems that easing exercises
have come to an end (in the sense that there will be no new tools) and
reliance will now have to be on improving/extending existing mechanisms.
Budgetary policy will be decisive in delivering short-term support and then
stimulating the economy once the situation is “normalised”. As is being
demonstrated in Japan, where monetary innovation seems highly advanced,
budgetary policy is playing a more direct role in reducing the output gap.
This has the support of Bank of Japan, which is acting as an “integrated
stabiliser” of long rates by controlling the yield curve.
In the
United States
, at a time when the resurgence of the virus poses a
risk of sharp deceleration in first half 2021, the election of Joe Biden as
President and the control of both houses of Congress by the Democrats is
expected to result in additional stimulus measures on top of the $900-billion
deal negotiated at the end of 2020. In fact, Joe Biden has already proposed
a new stimulus bill worth $1.9 trillion. However, political constraints make
it unlikely that a bill of that size will pass (a stimulus of around $1 trillion is
more likely). In January, the Federal Reserve, with its wait-and-see attitude,
extended its status quo
(2)
, while noting that the economy was slowing,
that its scenario for boosting economic recovery in the second half was
contingent on the progress of immunisation and that rumours of tapering
were premature. Consequently, while budgetary support could contribute
1 percentage point to US growth, growth will not start to accelerate until the
second half, once the vaccine rollout is more wide-spread and restrictions
are eased, at which point it should be close to 4% (as an annual average).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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In the
Eurozone
, uncertainty as to when the pandemic will be under control
and the lack of a clear view of the economic situation will continue to weigh
on spending decisions, both by consumers (risk of precautionary savings)
and investors, throughout 2021. The risk of a massive and early withdrawal
of budgetary support measures seems to be ruled out for 2021: the risk
(including of business failures and increased unemployment) is expected
to materialise later, once business activity begins to return to normal. Our
scenario assumes growth in 2021 close to 3.8% (with a now-downward
bias). Depending on structural characteristics (sectoral composition of
supply and employment, services weighting, export capacity, adequacy of
exported products, etc.) and national strategies (health/economy trade-offs,
abundance and effectiveness of support measures), there will be enormous
diversity in both the impact of the crisis and the speed and strength of the
recovery. Our scenario assumes average growth rates close to 2.5% in
Germany, 5.9% in France and 4% in Italy. At end 2021, the Eurozone’s GDP
is expected to be 2.4% below its pre-crisis level (
i.e.
at end 2019). While
this gap should be limited to 2% in Germany, it is expected to be close to
7.4% in Spain and around 2.2% and 3.9% in France and Italy respectively.
The announcements made by the ECB in December removed any prospect
of normalised monetary policy. The ECB has offered reassurance that there
will be no early rise in interest rates while additional budgetary efforts
are being rolled out and guaranteed its presence in the sovereign market
until 2023. It is working to maintain the credit supply provided in recent
months, ensuring banks have favourable conditions. In the medium term,
the key issues are therefore less about the sustainability of public debt
than about governance and the ability to mobilise public funds to organise
a response to the crisis.
The
United Kingdom
left the single market and customs union on
1 January 2021, with a last-minute free-trade agreement. This avoids
customs duties and quotas (subject to compliance with fair competition rules
and rules of origin) but involves significant non-tariff barriers. Frictionless
trade in goods and services has therefore come to an end, as has the free
movement of people. In addition to the disruptions associated with setting
up a new post-Brexit relationship, there are also the consequences of the
pandemic: following a major contraction in 2020 estimated at -11.1%,
growth is expected to be close to 4.5% in 2021, leaving GDP at the end
of 2021 3.8% below its 2019 pre-crisis level.
In
emerging markets
, after a contraction of just under 3% in 2020, recovery
looks to be close to 5.5%. However, this figure masks substantial diversity:
an optical illusion that conceals both the immediate effects of the crisis,
mostly the result of monetary and budgetary constraints that are more
severe in emerging markets than in the developed world, and its lasting
consequences in the form of a widening of the structural gap between
the emerging markets in Asia and the others. Asia (particularly North Asia)
has suffered less and is getting ready to rebound, led by China. At the fifth
plenum, the Chinese authorities made public the initial objectives of the
country’s 14
th
Five-Year Plan. The plan aims for “sound and sustainable
development” promoting “quality growth” with no formal economic growth
target, perhaps to allow for more flexibility in economic policymaking.
China is expected to rebound strongly in 2021 (+8%) before returning to
its projected trajectory in 2022 (+5.1%). However, it seems unrealistic to
count on China’s momentum to invigorate Asia and promote the recovery
of the rest of the world given the experience of 2009. With most of the
catching-up now done, growth in China has slowed, and the country no
longer has the means to tow the rest of the world in its wake. And nor does
it want to. Its latest so-called “dual circulation” strategy, aimed at limiting
its dependence on overseas markets, is proof of this.
(1) Refer to the glossary for a definition of our
Raison d’Être
.
A slow, uncertain and probably chaotic recovery, multiple uncertainties
and monetary easing are all conditions conducive to maintaining
extremely low interest rates.
It will be necessary to wait until favourable
news finally emerges, in terms of public health as well as the economy,
before recovery can start to take shape – a start limited by the absence
of inflation and excess capacity. In the meantime, progress made by the
Eurozone can be judged by past interest rate changes: clear solidarity has
avoided fragmentation, risk premiums paid by the so-called “peripheral”
countries have been tightened, and the euro has put in a solid performance.
Our scenario therefore assumes US and German 10-year sovereign rates
of close to 1.50% and -0.40% respectively at end 2021, coupled with
spreads of 20 basis points (bp), 50 bp and 100 bp above the Bund for
France, Spain and Italy where it is assumed that political tensions will ease.
In keeping with a scenario where recovery might even be slow, timid
and unsynchronised, the dollar could depreciate very slightly against
the euro and currencies that are more procyclical or driven by risk
appetite.
The dollar’s depreciation would, however, be tempered by the
resurgence of Sino-American tensions that weigh on Asian currencies in
particular: the current crisis has only temporarily overshadowed the dissent
between the United States and China. While the timetable is uncertain (the
US still has to install the new administration, manage its domestic problems
and rebuild its global alliances), and despite the fact that Joe Biden’s
presidency augurs a change in tone, the roots of the conflict remain. The
rise of protectionism and political risk hampered hyper-globalisation: the
crisis should favour greater regionalisation of growth centres, as evidenced
by the signing of the Regional Comprehensive Economic Partnership uniting
China, ASEAN member countries and key US allies (Australia, South Korea,
Japan and New Zealand).
Recent events
Main objectives of the 2022 Medium-Term Plan
On 6 June 2019, Crédit Agricole Group announced its Group Project and
Medium-Term Plan toward 2022, set out jointly with the Regional Banks
and Crédit Agricole S.A.
The Group’s Project expressed the
Raison d’Être
(1)
of Crédit Agricole for
the first time. It serves as the foundation for its unique relational model
and is at the heart of its universal community banking model. Looking to
the future while remaining faithful to the daily translation of the Group’s
utility, this
Raison d’Être
(1)
guides the transformation and development
of the Group and carries the values of utility and universality. It can be
summed up as follows: “Acting every day in the interest of our customers
and society”. Furthermore, in order to reinforce its action and commitments
in favour of the energy transition, Crédit Agricole has adopted a Group
climate strategy, aligned with the Paris Climate Agreement. This climate
strategy was published on 6 June 2019 and was hailed by all stakeholders,
notably the NGOs such as Oxfam France and
Les Amis de la Terre,
and
was certified by an independent organisation.
Within this new long-term framework, the Strategic Plan 2022 is a blueprint
for profitable growth for Crédit Agricole. It is in line with the previous
Medium-Term Plan, “Strategic Ambition 2020”, most of which’ financial
results have been achieved a year ahead of schedule. It aims to amplify
and accelerate the Group’s trajectory in an uncertain environment marked
by increasing societal demands.
CRÉDIT AGRICOLE S.A.
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2020 Universal Registration Document
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The strategic ambition of the plan
The 2022 Medium-Term Plan has also set financial objectives for 2022,
including CET1 for the Crédit Agricole Group and for Crédit Agricole S.A.
of above 16% and 11%, respectively, and a cost/income ratio for Crédit
Agricole S.A. of below 60%.
Crédit Agricole S.A. – 2022 financial objectives
Growth of Net income Group
>+3% per year (CAGR 2018-2022)
>€5 billion
RoTE
11%
Cost/Income ratio (without SRF)
<60%
Cost of Risk Assumption
~40 basis points
CET1
11%
>16% for Crédit Agricole Group
Distribution rate
50% in cash
Unwinding of SWITCH mechanism
50%
Having exceeded its end-2022 target set in June 2019 to unwind by the end
of 2022 50% of Switch Insurance, a guarantee mechanism granted by the
Regional Banks to Crédit Agricole S.A., with a positive impact on the latter’s
earnings per share, Crédit Agricole S.A. announced on 11 February 2021
its intention to take a new step towards the simplification of the Group’s
capital structure via the full unwinding of Switch Insurance by the end of
2022, with 50% already achieved in Q1 2021.
The Group has based its development on a unique relationship model, which
it intends to strengthen through this Group Project based on three pillars:
relational excellence at the heart of the Customer Project.
The Group’s
objective is to become the preferred bank for individuals, entrepreneurs
and businesses, and to increase by +20 percentage points the number
of customers using its digital applications in France and in Italy. The
Group is investing in an innovative strategy of banking and non-banking
services platforms, operated directly or with partners;
responsibility in proximity at the heart of the Human Project.
The
Group stands out by always offering its customers direct access to a local
customer relations manager. Transformations in terms of organisation and
management are planned to give employees a sense of responsibility as
close as possible to the customer. The Group aspires to be the preferred
employer in financial services in France and in the Top 5 in Europe;
a strong mutualist commitment to society at the heart of the Societal
Project.
Crédit Agricole Group will continue its mutualist commitment to
development for all, and make green finance one of the Group’s keys to
growth. The Group thus intends to become the leading European player
in responsible investment.
The Medium-Term Plan is based on three levers:
growth in all our markets.
This lever requires intensifying customer
relationships for individual and wealthy clients, knowing how to respond
to the singular needs of professionals and farmers, being the strategic
partner for SMEs/ITEs, and extending the range of offers for large
corporates and institutions. Payments are becoming a major lever
for loyalty and customer acquisition. Lastly, within the framework of
international development, priority is given to Europe, and the extension
of the universal banking model in Europe and Asia is being achieved
through partnerships;
(1)
Equipment rate: percentage of individual banking customers holding at least one insurance product (Pacifica estimate). Scope: auto, home, health, life accidents, legal protection
insurance and all mobile phones.
(2)
Study Brand Asset Valuator, October 2020, all sectors, only one bank in the top.
(3) Net Promoter Score, internal sources 2020.
development of revenue synergies.
The Group aims to increase
revenue synergies by +€1.3 billion to reach €10 billion in 2022. Insurance
(+€800 million) and specialised financial services (€300 million in
consumer finance and leasing) are the two main levers;
technological transformation for enhanced efficiency.
The Group
is allocating €15 billion to IT over four years. It wants to bring the
technological fundamentals up to the best market standards, accelerate
and better anticipate the adoption of new technologies and finally improve
operational efficiency (reduce the operating ratio of Crédit Agricole S.A.
by more than 2 percentage points to achieve under 60% by 2022).
The crisis confirms the relevance of the Group Project
and the differentiating nature of the global relationship
model
Firstly, as part of the Customer Pillar of its Group Project, presented in
June 2019, the Group ramped up the digitisation of its offerings in the
interests of customer satisfaction. Thus, the utilisation rate of Group apps
(active profile on the apps or connection on the website in the last month)
sharply increased, posting a rise in both banks of the Regional Banks
and LCL (respectively +3.3 percentage points compared to end-2019
to 68.2% and by +7.1 percentage points to 53.4%). Likewise, the Group
rolled out new digital tools intended for its customers to make their
activities easier during lockdown, such as the Up2Pay Range (enabling
remote payment through a digital loyalty program) and Click & Collect
to support retailers in the new methods of consumption. Innovative
non-banking services were also set up for young people and small
businesses (Youzful, Blank, Agilauto). Innovation remains at the core of
Crédit Agricole’s strategy: more than 800 start-ups have received the
support of Villages By CA. The network currently consists of 37 Villages
By CA in France and Italy, with four new Villages to be created in 2019.
In this context, the Group has reinforced its customer-focused universal
banking model with dynamic customer acquisitions in France and Italy
(1,500,000 new customers, growth in business customers by 150,000 in
2020) and an equipment rate for individual customers
(1)
that continued to
increase in the networks of the Regional Banks (41.7% at end-December
2020,
i.e.
a +1.0 percentage point increase since December 2019) and
LCL (25.5% at end-December 2020,
i.e.
a +0.5 percentage point increase
since December 2019), as well as at CA Italia (17.1% at end-December
2020,
i.e.
a +1.7 percentage point increase since December 2019). This
translated into a sharp improvement in the Group’s positioning in terms
of customer satisfaction: the Group is thus the only bank among the
25 brands which have proven their utility during the lockdown
(2)
, while
the Net Promoter Score (NPS) was up in 2020 compared to 2019, both in
the Regional Banks and at LCL (+7 points, to respectively +8 and +2
(3)
)
and at CA Italia (+8 points compared to 2019), which became this year
the second Italian bank in terms of customer satisfaction.
This success was made possible as a result of the full commitment of
Group employees and to strengthened local customer relations. The sharp
increase in the participation rate of employees in the ERI (Engagement
and Recommendation Index) survey to 80% (+3 points compared to
2019 and +21 points compared to 2016) illustrates this well. In addition,
the Group launched innovative initiatives in managerial transformation,
supported by organisational transformation, to ramp up our employee
empowering process, aimed at creating more value for customers.
CRÉDIT AGRICOLE S.A.
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The Group supports societal transitions, and is more
than ever committed for regions and for climate
Green finance and SRI
As part of the human and societal pillars of the Group Project, the Group
supports the societal transitions that its customers have requested and
are experiencing. Accordingly, thanks to its leading position in SRI matters,
through its various entities, the Group is able to offer its customers all the
green and social solutions that they may need.
Accordingly, 100% of the funds opened by Amundi present a SRI score that
is higher than their benchmark; at year-end 2020, Amundi exceeded its
target for “green solutions” funds, which increased from €12.3 billion to
€21.9 billion at year-end 2020. (2022 target: €20bn). In addition, Amundi
has been selected to manage a eurozone equity index fund aligned with the
Paris Agreement on climate change, on behalf of 12 institutional investors
on the Paris stock exchange who are launching an unprecedented initiative
to promote climate issues. It is the first investment solution that is fully
eligible for the future European “Paris Aligned Benchmark” label. Crédit
Agricole Assurances and Amundi launched “Energies Vertes”, the first
energy transition fund eligible for life-insurance policies.
Crédit Agricole CIB saw its green loan outstandings increase from €7.1 billion
to €11.7 billion in one year (2022 targets: €13bn). Crédit Agricole CIB also
ranks second worldwide in terms of green, social and sustainable bonds
($28 billion arranged in 2020). This year, the Federal Republic of Germany
has entrusted the emission of its first green bond, for €6.5 billion, to the
Crédit Agricole Group. It represents approximately 10% of the volume of
sovereign green bonds outstanding and will be used to finance Germany’s
climate and environmental strategy. Crédit Agricole CIB took part in this
historic transaction as associate bookrunner and also acted as exclusive
adviser for Germany in the structuring of its Green Bonds program published
in August 2020. Meanwhile LCL rolled out a green investment range, LCL
Impact Climat. Finally, the Group reached its medium term objective in
terms of green social or sustainable outstandings in the liquidity portfolio
(€6 billion), with €9.3 billion outstandings end 2020 (vs €5.6 billion end
2019).
These efforts were rewarded. The Group received two positive assessments
from agencies in 2020: the international climate reference agency, the
Carbon disclosure project (CDP) raised the Group’s rating from C to A-,
and the annual evaluation of the Principles for Responsible Investment
(PRI) led to Amundi being awarded a maximum rating of A+ for its SRI
strategy and management.
As it committed to do under the Medium-Term Plan as launched in June of
2019, the Group has set up a global governance to drive its extra-financial
performance. It is supported by a scientific committee of high-level experts.
A SRI steering platform was developed in 2020. Unique in its kind, it
enables the collection of external and internal extra-financial data in order
to calculate the main societal impact indices for all Group entities. Based
on public data, it generates a unique climate transition rating for listed
companies. Amundi and Crédit Agricole CIB have been using this rating as
a commercial tool for dialogue since 2020. In 2021, the transition rating
will be expanded to include unlisted companies.
To monitor the extra-financial performance of unlisted companies, the
Group also set up a standard SRI questionnaire that is currently being
rolled out at LCL, the Regional Banks and in some international entities.
(1)
Total hires in 2020, including permanent contracts, fixed-term contracts and work-study contracts.
(2) Source Universum 2020.
(3) FT European ranking, No. 1 position in France in financial services.
(4) €15 billion planned for the entire duration of the MTP.
Inclusive finance
The Group also demonstrated its inclusive commitment by supporting
regions and the young. For example, in 2020, the Group recruited
18,000 new employees
(1)
, 30% of whom are under 30 years of age, as
well as 4,700 work-study students (
i.e.
+50% in two years). The Group
also posted a sharp increase in its attractiveness in higher education
institutions for the last three years (ranked 47
th
out 130 (+23)) in business
schools and 85
th
out of 130 (+17) in engineering schools
(2)
. Thus, the Group
ranked 1
st
place in financial services in France among Diversity Leaders,
the FT’s European ranking (ranking 133
rd
out of 700
(3)
).
The Group also supports the solidarity economy through several initiatives:
the Amundi Solidarité fund recorded €331 million at end 2020 and this
year, Amundi launched CPR invest social impact, the first global equity
fund to place reducing inequalities at the center of its investment process;
lastly, Crédit Agricole Assurances created
“Contrat solidaire”
, the first
Finansolcertified social multi-vehicle life insurance policy. Crédit Agricole S.A.
also completed its first social bond issue, for local, sustainable and inclusive
growth in the regions. For the amount of €1 billion and subscribed 2.5 times,
this bond is designed to finance businesses in areas with unemployment
rates that exceed the national average, digital tools for the regions,
development of the health sector, and the improving social cohesion.
The Group strengthens its universal customer-focused
banking model, open to multi-business partnerships
The Group strengthened its universal customer focused banking model
through the rollout of several internal projects. Thus, LCL sold to Crédit
Agricole Assurances a home loan book for €445 million, making it possible
to optimise the refinancing of LCL and to diversify the investment portfolio
of Crédit Agricole Assurances; Crédit Agricole CIB and CA Indosuez Wealth
Management in turn created a joint team to assist high net worth customers
and family holding companies. Finally, a Group level multi-business Group
division was created for mid-cap corporates, and will be managed by Crédit
Agricole CIB. Synergies continued to be deployed within the Crédit Agricole
Group, generating €9.1 billion in 2020, which is stable on 2019 despite
the health crisis. In the area of IT expenses, in 2019 and 2020 the Group
allocated to the technological transformation €8 billion
(4)
, of which 38%
in investments notably for datacentricity or information system overhaul.
The Group continued to open its universal customer-focused banking
model in Europe through multi-business line partnerships in Europe
and in Asia. In Europe, Amundi, number one asset manager in Europe,
finalised in January the Sabadell AM acquisition and entered into a strategic
partnership with Banca Sabadell; in October, Crédit Agricole Assurances
finalised the acquisition of 100% de GNB Seguros and along with this came
the signature of a 22-year distribution partnership for non-life insurance
products with Novo Banco in Portugal; Crédit Agricole Italia announced
at the end of November the launch of a cash takeover bid for Credito
Valtellinese and CACF announced in December the strengthening of its
partnership agreement with Banco BPM. Furthermore, CACF printed an
agreement with Bankia to buy back the 49% of capital owend by Bankia in
their joint-venture in Spain. Lastly, Azqore, a subsidiary of Indosuez Wealth
Management, signed an agreement with Société Générale, in January
2021, to perform the back-office operations and a large percentage of the
IT services internationally for the private bank Société Générale.
CRÉDIT AGRICOLE S.A.
—
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In Asia, Amundi and Bank of China created in September the first Wealth
Management company in China with an international shareholder holding
a majority stake. Furthermore, Amundi signed a technological alliance
with BNY Mellon January 2021 in the field of asset management and the
custody of securities.
Furthermore, the Group continued its refocusing outside the non-strategic
entities. Thus, Crédit Agricole CIB finalised the sale of its remaining stake in
the capital of Banque Saudi Fransi in September; Crédit Agricole Consumer
Finance announced the sale in progress of its subsidiary in the Netherlands;
CA Indosuez Wealth Management initiated a planned sale of its private
banking activities in Miami and Brazil, and Crédit Agricole S.A. announced
the signature of an agreement to sell its Romanian subsidiary Crédit Agricole
Bank Romania S.A. to Vista Bank Romania S.A.
INFORMATION ON CRÉDIT AGRICOLE S.A.’S FINANCIAL STATEMENTS
(PARENT COMPANY)
ANALYSIS OF CRÉDIT AGRICOLE S.A.’S RESULTS (PARENT COMPANY)
At 31 December 2020, Crédit Agricole S.A.’s revenues stood at
€1,496 million, down by
-€5 million
on 2019.
This change was attributable to:
an increase in the interest margin of
+€327 million,
mainly related
to the dismantling of 35% of the Switch guarantee (positive impact of
+€85 million), and a drop in the interest paid to deposit products, notably
the
Livret A
savings and PEL home-savings passbooks for +€174 million,
as a result of the drop in the offered rates. In addition, the decrease in the
provisions for the home purchase savings plan between the two financial
years had a positive impact of +€25 million. This change in provisioning
is due to the update of the calculation parameters;
a
-€760 million
fall in revenues from variable-income securities (primarily
dividends from subsidiaries and equity stakes) explained by a drop in the
dividends received, with no payout by certain subsidiaries with a public
offering, in compliance with the recommendations of the government and
the ECB. In 2020, Amundi, CACEIS, CA Italia and Crédit Logement notably
did not pay a dividend, whereas in 2019 Crédit Agricole had received
€399 million, €178 million, €97 million and €39 million, respectively.
Lastly, the dividends received by CA Assurances decreased by €61 million
between the two years;
a
+€238 million
increase in net fees and commissions, mainly
attributable to a +€179 million increase in commissions received under
the mechanism to pool funds held in special savings accounts collected
by the Regional Banks (mainly home purchase savings schemes) and
then reinvested by Crédit Agricole S.A. with the CDC. There was also a
+€20 million change in liquidity commissions during the financial year,
following a reduction in the Regional Banks’ cash surpluses;
a
+€165 million
increase in net income from the trading book, mainly
due to a +€173 million change in gains on foreign exchange positions
of Additional Tier 1 securities issued in foreign currency, as well as
the capital losses realised on the disposal of treasury shares held in
connection with the liquidity contract for €10 million;
a change in the investment and similar portfolios of
+€46 million
corresponding mainly to the capital gain of +€54 million generated in
2020 following the early redemption by Crédit Agricole Assurances of
Tier 2 deeply subordinated notes as part of its own funds management;
a
-€21 million
decrease in other banking income, mainly related to
security issue costs.
At 31 December 2020, Crédit Agricole S.A. recognised €770 million in
operating expenses, down
-€8 million
compared to 2019 (-€778 million).
As a result of these changes, gross operating income recorded a gain of
€719 million at 31 December 2020, up
+€3 million
compared to financial
year 2019.
The cost of risk amounted to -€4 million for 2020, down by
-€9 million
compared to financial year 2019 (-€13 million).
“Net gains (losses) on fixed assets” amounted to a loss of -€715 million
in 2020 down
-€423 million
year-on-year, following the discounting of
impairment losses on equity investments, mainly related to:
a charge of €635 million on CA Italia following the decision of the Crédit
Agricole S.A. Board of Directors meeting of 15 December 2020 to amortise
the goodwill of the subsidiary due to the drop in interest rates impacting
its interest margin;
a positive effect of +€496 million following the amortisation booked
on LCL in 2019;
a negative effect of -€92 million on CA Polska (charge of -€56 million in
2020 compared to a reversal of +€36 million in 2019);
a negative effect of -€50 million on CA Ukraine (reversal of +€10 million
in 2020 compared to a reversal of +€60 million in 2019);
a negative effect of -€35 million on Crédit du Maroc (charge of -€38 million
in 2020 compared to a charge of -€3 million in 2019).
Moreover, a change was recorded following the disposals of equity
investments made in 2019, including Visa Inc. and Indosuez holding, which
generated capital gains of €33 and €9 million, respectively. In addition, the
payment by JC Decaux in 2019 of the proceeds from the conversion of the
bonds exchangeable in Eurazeo shares (activation of the immunisation)
resulted in a variation of -€25 million from one year to the next.
The income tax charge stood at €286 million, down
-€1,358 million
from
2019. This difference was attributable to the end of the dispute between
Crédit Agricole S.A. and the tax administration relating to the litigation on
Emporiki, which in 2019 had generated a gain of €1,067 million.
The tax integration schemes in France, where Crédit Agricole S.A. is Group
head, enabled it to generate a gain of €312 million in 2020, -€321 million
lower than in 2019.
Overall, the net income of Crédit Agricole S.A. amounted to
€245 million
at 31 December 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
253
Refer to the glossary on page 681 for the definition of technical terms.
REVIEW OF THE 2020 FINANCIAL POSITION AND PERFORMANCE
Information on Crédit Agricole S.A.’s financial statements (parent company)
4
FIVE-YEAR FINANCIAL SUMMARY
2016
2017
2018
2019
2020
Equity at year end
(in euros)
8,538,313, 578
8,538,313, 578
8,599,311, 468
8,654,066, 136
8,750,065, 920
Number of shares outstanding
2,846,104, 526
2,846,104, 526
2,866,437, 156
2,884,688, 712
2,916,688, 640
OPERATIONS AND NET INCOME FOR THE PERIOD
(in millions of euros)
Gross revenues
15,112
14,296
15,138
13,410
12,976
Earnings before tax, employee profit-sharing, depreciation,
amortisation and provision expense
12,916
815
2,172
963
780
Employee profit-sharing
2
2
1
2
1
Income tax charge
(213)
(255)
(638)
(1,644)
(286)
Earnings after tax, employee profit-sharing, depreciation,
amortisation and provision expense
13,819
1,564
2,740
2,016
245
Earnings proposed for distribution at the date
of the General Meeting of Shareholders
1,718
1,804
1,978
2,019
2,332
EARNINGS PER SHARE
(in euros)
Earnings after tax and employee profit-sharing but before
depreciation, amortisation and provision expense
4.462
0.375
0.980
0.903
0.365
(1)
Earnings after tax, employee profit-sharing, depreciation,
amortisation and provision expense
4.855
0.550
0.956
0.822
0.084
Ordinary dividend
0.60
0.63
0.69
0.70
0.80
Loyalty dividend
0.66
0.693
-
-
-
EMPLOYEES
Average headcount
(2)
2,238
2,148
1,776
1,685
1,700
Total payroll for the period
(in millions of euros)
186
190
171
165
160
Cost of benefits paid during the period (costs and social welfare)
(in millions of euros)
145
133
92
111
100
(1)
Calculated based on the number of shares issued as at the date of the General Meeting of Shareholders on 13 May 2020, or 2,916,688,640 shares.
(2)
Refers to headquarters employees.
1. Risk factors
256
A.
Risk factors related to Crédit Agricole S.A.
and its activity
256
2. Risk management
269
2.1
Risk appetite, Governance and organisation
of risk management
269
2.2
Stress testing
272
2.3
Internal control and risk management
procedures
273
2.4
Credit risk
279
2.5
Market risks
288
2.6
Asset and liability management
294
2.7
Insurance sector risks
302
2.8
Operational risks
310
2.9
Developments in legal risks
312
2.10
Non-compliance risks
315
3. Pillar 3 Disclosures
318
3.1
Composition and management of capital
318
3.2
Main sources of differences between
regulatory exposure amounts and carrying
values in financial statements (LI2)
338
3.3
Outline of the differences in the scopes
of consolidation (LI3: entity by entity)
339
3.4
Composition and changes
in risk-weighted assets
341
3.5
Asset encumbrance
400
3.6
Liquidity Coverage Ratio (LCR)
403
3.7
Compensation policy
404
3.8
Cross-reference tables
405
5
RISKS AND
PILLAR 3
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
254
Refer to the glossary on page 681 for the definition of technical terms.
SOLVENCY
RATIOS
13.1%
CET1 solvency ratios
(1)
25.5%
TLAC excluding senior debt
178%
Financial conglomerate ratio
4.9%
Phased-in leverage ratio
(2)
(1) Phased-in CET1 ratio.
(2) Before the neutralisation of ECB exposures.
RISK-WEIGHTED
ASSETS
Breakdown by type of risk
(as a percentage)
Credit risk
86.9%
Operational risk
10.1%
Market risk
3.0%
Breakdown by business lines
(as a percentage)
Asset
gathering
13%
Large
customers
37%
Retail
banking
27%
Specialised
financial
services
15%
Corporate
Center
8%
Changes over one year
(in billions of euros)
324
347
336
DECEMBER
2019
JUNE
2020
DECEMBER
2020
A constrained regulatory context,
effective risk control
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
255
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. RISK FACTORS
This part of the Universal Registration Document sets out the main types of risks to which Crédit Agricole S.A. is exposed, as well as
certain risks related to holding Crédit Agricole S.A. securities. Other parts of this chapter discuss Crédit Agricole S.A.’s risk appetite and
the policies employed to manage these risks. The information on Crédit Agricole S.A.’s risk management is presented in accordance with
IFRS 7, relating to disclosures on financial instruments.
The term “Crédit Agricole S.A.” used in this part shall be defined as, taking together, Crédit Agricole S.A. as a corporate entity (
i.e.
parent
company of the Crédit Agricole Group, listed on the stock exchange) and all its directly and indirectly held subsidiaries within the meaning
of Article L.233-3 of the French Commercial Code (hereafter individually a “subsidiary” or collectively the “subsidiaries”).
A. RISK FACTORS RELATED TO CRÉDIT AGRICOLE S.A. AND ITS ACTIVITY
(1) The cost of risk on outstandings is calculated based on the cost of risk on commercial loans recorded over the full year divided by the average outsandings as for the
beginning of the four quarters of 2020.
Risks specific to Crédit Agricole S.A.’s business are presented in this
section under the following categories: (i) credit risks and counterparty
risks, (ii) financial risks, (iii) operational risks and associated risks, (iv)
risks related to the environment in which Crédit Agricole S.A. operates,
(v) risks related to strategy and transactions of Crédit Agricole S.A., and
(vi) risks related to the structure of Crédit Agricole Group.
Within each of the six categories, the risks that Crédit Agricole S.A.
currently considers to be most significant, based on an assessment
of likelihood of occurrence and potential impact, are presented first.
However, even a risk that is currently considered to be less important
could have a significant impact on Crédit Agricole S.A. if it were to
materialise in the future.
These risk factors are described below.
1.
Credit and counterparty risks
a)
Crédit Agricole S.A. is exposed to the credit risk
of its counterparties
The risk of insolvency of its customers and counterparties is one of
the main risks to which Crédit Agricole S.A. is exposed. Credit risk
impacts Crédit Agricole S.A.’s consolidated financial statements
when counterparties are unable to honour their obligations and when
the carrying amount of these obligations in the bank’s records is
positive. Counterparties may be banks, financial institutions, industrial
or commercial enterprises, governments and their various entities,
investment funds, or individuals. The level of counterparty defaults may
increase compared to recent historically low levels; Crédit Agricole S.A.
may be required to record significant charges and provisions for possible
bad and doubtful loans, affecting its profitability.
While Crédit Agricole S.A. seeks to reduce its exposure to credit risk
by using risk mitigation techniques such as collateralisation, obtaining
guarantees, entering into credit derivatives and entering into netting
contracts, it cannot be certain that these techniques will be effective
to offset losses resulting from counterparty defaults that are covered
by these techniques. Moreover, Crédit Agricole S.A. is exposed to the
risk of default by any party providing the credit risk coverage (such as a
counterparty in derivatives) or to the risk of loss of value of the collateral.
In addition, only a portion of Crédit Agricole S.A.’s overall credit risk
is covered by these techniques. Accordingly, Crédit Agricole S.A. has
significant exposure to the risk of counterparty default.
As at 31 December 2020, the exposure of Crédit Agricole S.A. to credit
and counterparty risks (including dilution risk and settlement delivery
risk) was €1,599.5 billion before taking into account risk mitigation
methods. This is distributed as follows: 15% retail customers, 28%
corporates, 22% governments and 30% credit institutions and investment
firms. Moreover, the amounts of risk-weighted assets (RWAs) relating to
credit risk and counterparty risk to which Crédit Agricole S.A. is exposed
were €257.2 billion and €22.1 billion, respectively, as at 31 December
2020. At that period-end, the gross amount of loans and receivables in
default was €14.0 billion.
b)
Any significant increase in provisions for loan
losses or changes in Crédit Agricole S.A.’s
estimate of the risk of loss in its loan and
receivables portfolio could adversely affect its
results of operations and financial position
In connection with its lending activities, Crédit Agricole S.A. periodically
recognises doubtful loan expenses, whenever necessary, to reflect
actual or potential losses in respect of its loan and receivables portfolio,
which are recognised in profit or loss account under “cost of risk”.
Crédit Agricole S.A.’s overall level of such asset impairment provisions
is based upon its assessment of prior loss experience, the volume and
type of lending being conducted, industry standards, statement of loans,
economic conditions and other factors related to the recoverability
of various loans, or scenario-based statistical methods applicable
collectively to all relevant assets. Although Crédit Agricole S.A. seeks
to establish an appropriate level of provisions, its lending businesses
may cause it to have to increase its provisions for doubtful loans in
the future as a result of increases in non-performing assets or for
other reasons (such as macroeconomic or sectorial evolutions), such as
deteriorating market conditions or factors affecting particular countries
or industry sectors notably in the current environment of crisis. Any
significant increase in provisions for doubtful loans or a significant
change in Crédit Agricole S.A.’s estimate of the risk of loss inherent in
its portfolio of non-impaired loans, as well as the occurrence of loan
losses in excess of the charges recorded with respect thereto, could
have an adverse effect on Crédit Agricole S.A.’s results of operations
and financial position.
As at 31 December 2020, the gross outstanding loans, receivables and
debt securities of Crédit Agricole S.A. were €999.7 billion. With regard
to credit risk, the amounts of reserves, accumulated impairments and
related adjustments amounted to €10.2 billion. The cost of risk on
outstandings of Crédit Agricole S.A. for the year 2020
(1)
at 62 basis points.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
256
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
c)
A deterioration in the quality of corporate
debt obligations could adversely impact
Crédit Agricole S.A.’s results of operations
The credit quality of corporate borrowers could experience a deterioration,
primarily from increased economic uncertainty and, in certain sectors,
the risks associated with trade policies of major economic powers. The
risks could be exacerbated by the recent practice by which lending
institutions have reduced the level of covenant protection in their loan
documentation, making it more difficult for lenders to intervene at an
early stage to protect assets and limit the risk of non-payment. If a trend
towards deterioration in credit quality were to appear, Crédit Agricole S.A.
may be required to record asset impairment charges or to write off
the value of its corporate debt portfolio, which would in turn impact
Crédit Agricole S.A.’s profitability and financial position.
As at 31 December 2020, Crédit Agricole S.A.’s gross exposure to
sectors other than general government, banking, insurance and private
individuals amounted to €424.5 billion (of which €8.2 billion in default)
and was provisioned for nearly €6.5 billion.
d)
Crédit Agricole S.A. may be adversely affected
by events impacting sectors to which
it has significant exposure
Crédit Agricole S.A.’s exposures are very diversified due to its
comprehensive customer-focused universal retail banking activities
through the Regional Banks, LCL and CA Italia’s network.
At end-December 2020, the share of retail customers in
Crédit Agricole S.A.'s total portfolio of commercial lending was 24%,
or €232.6 billion. Moreover, Crédit Agricole S.A. is subject to the risk
that certain events may have a disproportionately large impact on a
particular industrial sector to which it is significantly exposed. As at
31 December 2020, 28% of Crédit Agricole S.A.’s commercial loan book
involved borrowers in the public sector, (including local authorities),
representing an amount of approximately €268.9 billion, and 6% of
borrowers in the energy sector, representing an amount of approximately
€61.3 billion. Public sector borrowers can be affected by national and
local budgetary policies and spending priorities. Energy sector borrowers
are subject to risks relating to volatility in energy prices. If these or
other sectors that represent a significant share of Crédit Agricole S.A.’s
portfolio were to experience adverse conditions, Crédit Agricole S.A.’s
profitability and financial position could be adversely affected.
e)
The soundness and conduct of other financial
institutions and market participants could
adversely affect Crédit Agricole S.A.
Crédit Agricole S.A.’s ability to engage in financing, investment and
derivative transactions could be adversely affected by the soundness
of other financial institutions or market participants. Financial services
institutions are interrelated as a result of trading, clearing, counterparty,
funding or other relationships. As a result, defaults by, or even rumours
or questions about, one or more financial services institutions, or the
loss of confidence in the financial services industry generally, may lead
to market-wide liquidity contractions and could lead to further losses
or defaults. Crédit Agricole S.A. has exposure to many counterparties in
the financial industry, including brokers and dealers, commercial banks,
investment banks, mutual and hedge funds, and other institutional
customers with which it regularly executes transactions. Many of these
transactions expose Crédit Agricole S.A. to credit risk in the event of
default or financial distress. In addition, Crédit Agricole S.A.’s credit risk
may be exacerbated when the collateral held by Crédit Agricole S.A.
cannot be disposed of or is liquidated at prices not sufficient to recover
the full amount of the loan or derivative exposure due to it.
As at 31 December 2020, the total amount of Crédit Agricole S.A.'s
gross exposure to counterparties that are Credit institutions and related
entities was €481.4 billion (including for the Regional Banks), of which
€441.3 billion was using the internal ratings-based method.
f)
Crédit Agricole S.A. is exposed to country
risk and may be vulnerable to concentrated
counterparty risk in certain countries
where it operates
Crédit Agricole S.A. is subject to country risk, meaning the risk that
economic, financial, political or social conditions in a given country in
which it operates will affect its financial interests. Crédit Agricole S.A.
monitors country risk and takes it into account in the fair value adjustments
and cost of risk recorded in its financial statements. However, a significant
change in political or macroeconomic environments may require it
to record additional charges or to incur losses beyond the amounts
previously written down in its financial statements. Crédit Agricole S.A.
is especially exposed in absolute value to the country risk for France
and Italy. At 31 December 2020, Crédit Agricole S.A.’s commitment
amounted to €529 billion in France and €106 billion in Italy, representing
respectively 56% and 11% of Crédit Agricole S.A.’s total exposure as
of 31 December 2020.
Adverse conditions that particularly affect these countries would have a
significant impact on Crédit Agricole S.A. In addition, Crédit Agricole S.A.
has significant exposures in countries outside the OECD, which are
subject to risks that include political instability, unpredictable regulation
and taxation, expropriation and other risks that are less present in more
developed economies.
At end-2020, commercial lending (including to bank counterparties)
to Crédit Agricole S.A. customers in countries with ratings below A3
(Moody’s) or A- (Standard & Poor’s), excluding countries in Western
Europe (Italy, Spain, Portugal, Greece, Cyprus and Iceland), totalled
€63.3 billion.
g)
Crédit Agricole is subject to counterparty
risk in the conduct of its market activities
Crédit Agricole S.A. could suffer losses in the event of a counterparty
defaulting in its securities, currency, commodities and other market
activities. When Crédit Agricole S.A. holds portfolios of debt securities,
including in the context of its market making activities, it is subject
to the risk of deterioration in the credit quality of issuers or default.
As part of its trading activities, Crédit Agricole S.A. is exposed to the
risk of a counterparty defaulting in the execution of its transaction
settlement obligations. Crédit Agricole S.A.’s derivatives activities are
also subject to the risk of a counterparty default, as well as to significant
uncertainty regarding the amounts due in the event of such a default. The
risk-weighted assets (RWAs) corresponding to the counterparty risk on
derivatives and deferred settlement transactions and indicated in Pillar 3
were €10.3 billion at 31 December 2020. Although Crédit Agricole S.A.
often obtains collateral or makes use of compensation rights to deal with
these risks, these techniques may not be sufficient to ensure complete
protection, and Crédit Agricole S.A. may incur significant losses due to
the failure of major counterparties.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
257
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
2.
Financial risks
a)
Crédit Agricole S.A. may generate lower
revenues from its insurance, asset management,
brokerage and other businesses during market
downturns
In the past, market downturns have reduced the value of customer portfolios
with Subsidiaries specialised in asset and wealth management and
increased the amount of withdrawals, thus reducing Crédit Agricole S.A.’s
revenues from these businesses. Over the course of 2020, 16% and
12% of the revenues of Crédit Agricole S.A. were generated from its
asset and wealth management and insurance businesses, respectively.
Crédit Agricole S.A. is the leading insurer in France, through Crédit Agricole
Assurances
(1)
. Amundi’s assets under management stand at €1,729 billion
end of year 2020, CAA’s assets under management stand at €308 million
end of year 2020. Future downturns could have similar effects on the
results and financial position of Crédit Agricole S.A.
In addition, financial and economic conditions affect the number and
size of transactions for which Crédit Agricole S.A. provides securities
underwriting, financial advisory and other investment banking services.
Crédit Agricole S.A.’s revenues, which include fees from these services,
are directly related to the number and size of the transactions in which
Crédit Agricole S.A. participates and can thus be significantly affected
by market downturns. Moreover, because the fees that the Subsidiaries
charge for managing their customers’ portfolios are in many cases based
on the value or performance of those portfolios, any market downturn that
would reduce the value of the portfolios of Crédit Agricole S.A.’s customers,
would reduce the revenues that Subsidiaries receive for these services.
Even in the absence of a market downturn, any below-market performance
by Crédit Agricole S.A.’s mutual funds and life insurance products may
result in increased withdrawals and reduced inflows, which would reduce
Crédit Agricole S.A.’s revenues from its asset management and insurance
businesses.
b)
Crédit Agricole S.A. is exposed to the low
interest rate environment and any significant
change in interest rates could adversely affect
Crédit Agricole S.A.’s consolidated revenues
or profitability
Crédit Agricole S.A. is among the leaders
(2)
in retail banking in France
through its LCL retail banking network and is thus exposed to variation
in interest rates.
The amount of net interest income earned by Crédit Agricole S.A. during
any given period significantly affects its overall consolidated revenues
and profitability for that period. Interest rates are highly sensitive to many
factors beyond Crédit Agricole S.A.’s control. Changes in market interest
rates could affect the interest rates charged on interest-earning assets
differently than the interest rates paid on interest-bearing debt. Any adverse
change in the yield curve could cause a decline in Crédit Agricole S.A.’s
net interest income from its lending activities. Over the course of 2021, a
100 basis point decrease in interest rates in the Eurozone would imply a
potential loss for Crédit Agricole S.A. of €44 million on the banking portfolio
at 31 December 2020, amounting to a decline of 0.2% of 2020 revenues
(compared to a decrease of €41 million, or 0.2% of 2019 revenues).
The cumulative impact over the next 30 years of a 200 basis point rate
decrease corresponds to a positive impact of €15 million, or 0.02% of
the regulatory capital of Crédit Agricole S.A. after deduction of equity
(1) Source :
Argus de l’assurance,
December 2020.
(2) Internal sources, ECO studies
investments.
In addition, increases in the interest rates at which short-
term funding is available and maturity mismatches may adversely affect
Crédit Agricole S.A.’s profitability.
The above impacts are calculated based on a static balance-sheet
i.e.
they do not capture the future production and the potential dynamic
impact on the net banking income of Crédit Agricole S.A. of a variation
in interest rates.
c)
Adjustments to the carrying amount
of Crédit Agricole S.A.’s securities and
derivatives portfolios and Crédit Agricole S.A.’s
own debt could have an impact on its net
income and shareholders’ equity
The carrying amount of Crédit Agricole S.A.’s securities and derivatives
portfolios and certain other assets, as well as that of its own debt, in
its balance sheet are adjusted as at each financial statement date. The
carrying amount adjustments reflect, among other things, the credit risk
inherent in Crédit Agricole S.A.’s own debt. Most of the adjustments are
made on the basis of changes in fair value of the assets or liabilities
of Crédit Agricole S.A. during an accounting period, with the changes
recorded either in the income statement or directly in shareholders’
equity. Changes that are recognised in the income statement, to
the extent not offset by opposite changes in the fair value of other
assets, affect the consolidated net income of Crédit Agricole S.A. All
fair value adjustments affect shareholders’ equity and, as a result, the
capital adequacy ratios of Crédit Agricole S.A.. The fact that fair value
adjustments are recognised in one accounting period does not mean
that further adjustments will not be necessary in subsequent periods.
As at 31 December 2020, the gross outstanding debt securities held
by Crédit Agricole S.A. were €120.3 billion. Accumulated impairments
and reserves and negative fair value adjustments due to credit risk
were €110 million.
d)
Crédit Agricole S.A. may suffer losses in
connection with its holdings of equity securities
Equity securities held by Crédit Agricole S.A. could decline in value,
causing losses for Crédit Agricole S.A. Crédit Agricole S.A. bears the
risk of a decline in value of equity securities in connection with its
market-making and trading activities, mainly with respect to listed
equity securities, in its private equity business, and in connection
with transactions in which it acquires strategic equity investments
in a company with a view to exercising control and influencing the
management policies of Crédit Agricole S.A. In the case of strategic equity
investments, Crédit Agricole S.A.’s degree of control may be limited,
and any disagreement with other shareholders or with management
may adversely impact the ability of Crédit Agricole S.A. to influence the
policies of the relevant entity. If Crédit Agricole S.A.’s equity securities
decline in value significantly, Crédit Agricole S.A. may be required to
record fair value adjustments or recognise asset impairment charges
in its consolidated financial statements, which could negatively impact
its results of operations and financial position.
As at 31 December 2020, Crédit Agricole S.A. held close to €42.6 billion
in equity instruments, of which €34.2 billion were recorded at fair value
through profit or loss; €6.2 billion were held for trading purposes and
€2.2 billion in equity instruments recognised at fair value through equity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
258
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
e)
Crédit Agricole S.A. must ensure that its
assets and liabilities properly match in order
to control the exposure to losses. Prolonged
market downturns could reduce liquidity,
making it more difficult to dispose of assets
and could result in significant losses.
Crédit Agricole S.A. is exposed to the risk that the maturity, interest rate
or currencies of its assets might not match those of its liabilities. The
timing of payments on many of Crédit Agricole S.A.’s assets is uncertain
and, if Crédit Agricole S.A. receives lower revenues than expected at
a given time, it might require additional funding from the market in
order to meet its obligations on its liabilities. While Crédit Agricole S.A.
imposes strict limits on the gaps between its assets and its liabilities
as part of its risk management procedures, it cannot be certain that
these limits will be fully effective to eliminate potential losses arising
from asset and liability mismatches.
Crédit Agricole S.A.’s primary objective in managing liquidity is to ensure
that it has sufficient resources to meet its requirements in the event of
any type of severe, prolonged liquidity crisis. As at 31 December 2020,
Crédit Agricole S.A.’s LCR (Liquidity Coverage Ratio - the prudential
ratio to ensure the short-term resilience of the liquidity risk profile) was
169.4%
(1)
, higher than the regulatory minimum of 100%, and exceeding
the goal of 110% under the medium-term Plan.
In some of Crédit Agricole S.A.’s business activities, notably its market,
asset management and insurance activities, it is possible that protracted
market movements, particularly asset price declines, reduce the level
of activity in the market or reduce market liquidity. Such developments
can lead to material losses if Crédit Agricole S.A. cannot close out
deteriorating positions in a timely manner. This may especially be the
case of not very liquid assets held by Crédit Agricole S.A. Assets that
are not traded on stock exchanges or other public trading markets,
such as derivatives contracts between banks, may have values that
Crédit Agricole S.A. calculates using models other than publicly-quoted
prices. Monitoring the deterioration of prices of assets like these is
difficult and could lead to non-anticipated losses.
f)
Crédit Agricole S.A. is exposed to risks
associated with changes in market prices
and volatility with respect to a wide number
of market parameters
Crédit Agricole S.A.’s businesses are materially affected by conditions
in the financial markets, which in turn are impacted by current and
anticipated future economic conditions in France, Europe and in the
other regions around the world where Crédit Agricole S.A. operates.
Adverse changes in market, economic or geopolitical conditions could
create a challenging operating environment for financial institutions.
In particular, the risks to which Crédit Agricole S.A. is therefore highly
exposed include fluctuations in interest rates, security prices, foreign
exchange rates, the specific yield premium on a bond issue and the
prices of oil, precious metals and other commodities.
For example, Crédit Agricole S.A. is sensitive to the potential market
volatility that would be generated by a concerted action of investors using
social networking platforms to inflate the share price of certain issuers
or commodities. Such activities, whether the Crédit Agricole SA share
is the target or not, may create valuation uncertainty and unpredictable
market conditions, and could adversely affect Crédit Agricole SA and
its counterparties. If the financial conditions of Crédit Agricole SA or its
counterparties were to deteriorate, Crédit Agricole SA could suffer losses
(1) Year-end LCR.
on its financing and transactions with its counterparties, in addition to
other independent adverse effects.
Crédit Agricole S.A. uses a “Value at Risk” (VaR) model to quantify
its exposure to potential losses related to market risks. The VaR of
Crédit Agricole S.A. as at 31 December 2020 was €9 million.
It also carries out stress tests in order to quantify its potential exposure
in extreme scenarios, as described and quantified in paragraphs 2.5.III.1
(Methodology for measuring and managing market risks – Indicators) and
2.5.IV (Exposures) in Chapter 5 (Risks and Pillar 3) on pages 289-291
and pages 291-294, respectively, of the 2020 Universal Registration
Document. However, these techniques rely on statistical methodologies
based on historical observations, which may turn out to be unreliable
indicators of future market conditions. Accordingly, Crédit Agricole S.A.’s
exposure to market risk in extreme scenarios could be greater than the
exposures predicted by its quantification techniques.
The amount of risk-weighted assets (RWAs) relating to the market
risk to which Crédit Agricole S.A. is exposed was €9.8 billion as at
31 December 2020.
g)
Future events may be different from those
reflected in the management assumptions
and estimates used in the preparation of
Crédit Agricole S.A.’s financial statements,
which may cause unexpected losses in the
future
Under the IFRS standards and interpretations in effect as of
31 December 2020, Crédit Agricole S.A. is required to use certain
estimates in preparing its financial statements, including accounting
estimates to determine loan loss impairment charges, reserves related
to future litigation, and the fair value of certain assets and liabilities,
among other items. Should Crédit Agricole S.A.’s determined values for
such items prove substantially inaccurate, or if the methods by which
such values were determined are revised in future IFRS standards or
interpretations, Crédit Agricole S.A. may experience unexpected losses.
Crédit Agricole S.A. has reported on the first-time adoption of IFRS 9
as from 1 January 2018.
h)
Crédit Agricole S.A.’s hedging strategies
may not eliminate all risk of losses
If any of the variety of instruments and strategies that Crédit Agricole S.A.
uses to hedge its exposure to various types of risk in its businesses is
not effective, Crédit Agricole S.A. may incur losses. Many of its strategies
are based on historical trading patterns and correlations. For example, if
Crédit Agricole S.A. holds a long position in an asset, it may hedge that
position by taking a short position in an asset where the short position
has historically moved in a direction that would offset a change in the
value of the long position. Crédit Agricole S.A. may only be partially
hedged, however, or these strategies may not be fully effective in
mitigating its risk exposure in all market environments or against all
types of risk in the future. Unexpected market developments may also
reduce the effectiveness of Crédit Agricole S.A.’s hedging strategies. In
addition, the manner in which gains and losses resulting from certain
ineffective hedges are recorded may result in additional volatility in
Crédit Agricole S.A.’s reported earnings.
At 31 December 2020, the notional amount of protection bought
in the form of credit derivatives was €6.8 billion (€6.4 billion at
31 December 2019), the notional amount of short positions was zero
(the same at 31 December 2019).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
259
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
3.
Operational risks and associated risks
The
operational risk
of Crédit Agricole S.A. includes non-compliance
risk, legal risk and the risks generated by key outsourced services
(
Prestations Externalisées
).
Over the period from 2018 to 2020, operational risk incidents for
Crédit Agricole S.A. were divided as follows: the “Implementation,
delivery and process management” category represents 17% of the
operational loss, the “Customers, products and business practices”
category represents 24% of the operational loss, and the “External fraud”
category represents 39% of the operational loss. Other operational risk
incidents can be broken down into employment and safety practice
(7%), internal fraud (9%), business disruptions and system failures (3%).
In addition, the amount of risk-weighted assets (RWAs) relating to
operational risk to which Crédit Agricole S.A. is exposed was €34.2
billion as at 31 December 2020.
a)
Crédit Agricole S.A. is exposed to the risk
of fraud
Fraud is defined as an intentional act carried out with the aim of obtaining
a material or immaterial advantage to the detriment of a person or an
organization perpetrated by violating laws, regulations or internal rules
or by infringing the rights of others or by concealing all or part of an
operation or set of operations or their characteristics.
At the end of 2020, the amount of proven fraud for Crédit Agricole S.A.
was €342 million.
Excluding exceptional fraud cases at Crédit Agricole CIB and Amundi,
standing at €279.8 million (including €206.4 million as for credit risk)
fraud would amount to €62 million, compared to €87 million in 2019
(
i.e.
a decrease by -29%).
Excluding exceptional files, the risk breakdown for fraud is as follows:
fraud in means of payment (electronic payment, transfers and checks):
24%;
identity and documentary fraud: 32%;
robery: 12%;
PSA/NPAI: 20%;
others: 12%.
In a context of increasing attempts at external fraud and of more complex
operating methods (notably via cybercrime), the main challenges now lie
in the proactivity of banking players. Fraud prevention thus aims to protect
the interests of the Bank and protect customers. The consequences of
these fraud risks could prove to be significant.
b)
Crédit Agricole S.A. is exposed to risks related
to the security and reliability of its information
systems and those of third parties
Technology is at the heart of the activity of the banks in France,
and Crédit Agricole S.A. continues to deploy its multichannel model
as part of a lasting relationship with its customers. In this context,
Crédit Agricole S.A. is subject to cyber risk, which is the risk caused
by a malicious and/or fraudulent act, perpetrated digitally in an effort
to manipulate data (personal, banking/insurance, technical or strategic
data), processes and users, with the aim of causing material losses to
companies, their employees, partners and customers. Cyber risk has
become a top priority in the field of operational risks. A company’s data
assets are exposed to new, complex and evolving threats which could
have material financial and reputational impacts on all companies, and
specifically on banking institutions. Given the increasing sophistication
of criminal enterprises behind cyber-attacks, regulatory and supervisory
authorities have begun highlighting the importance of risk management
in this area.
As with most other banks, Crédit Agricole S.A. relies heavily on
communications and information systems throughout the Group to
conduct its business. Any failure or interruption or breach in security
of these systems could result in failures or interruptions in its customer
relationship management, general ledger, deposit, servicing and/or loan
organisation systems. If, for example, Crédit Agricole S.A.’s information
systems failed, even for a short period of time, it would be unable to serve
in a timely manner certain customers’ needs and could thus lose business
opportunities. Likewise, a temporary shutdown of the information
systems of Crédit Agricole S.A., even though it has back-up recovery
systems and contingency plans, could result in considerable costs
required for information retrieval and verification. Crédit Agricole S.A.
cannot provide assurances that such failures or interruptions will not
occur or, if they do occur, that they will be adequately addressed. The
occurrence of any failures or interruptions could have an adverse effect
on its financial position and results of operations.
Crédit Agricole S.A. is also exposed to the risk of an operational failure
or interruption of one of its clearing agents, foreign exchange markets,
clearing houses, custodians or other financial intermediaries or external
service providers that it uses to execute or facilitate its securities
transactions. It is also at risk in case of a failure of an external information
technology service provider, such as a cloud data storage company. As
its interconnectivity with its customers grows, Crédit Agricole S.A. may
also become increasingly exposed to the risk of operational failure of its
customers’ information systems. Crédit Agricole S.A.’s communications
and information systems, and those of its customers, service providers
and counterparties, may also be subject to failures or interruptions
resulting from cybercrime or cyber terrorism. Crédit Agricole S.A. cannot
guarantee that failures or interruptions in its systems or in those of other
parties will not occur or, if they do occur, that they will be adequately
resolved. Over the period from 2018 to 2020, operational losses due
to the risk of business disruptions and system failures accounted for
3% of operational losses.
c)
Crédit Agricole S.A.’s risk management policies,
procedures and methods may leave it exposed
to unidentified or unanticipated risks,
which could lead to material losses
Crédit Agricole S.A.’s risk management techniques and strategies may
not be fully effective in mitigating its risk exposure in all types of market
environments or against all types of risk, including risks that it fails to
identify or anticipate. Furthermore, the risk management procedures
and policies used by Crédit Agricole S.A. do not guarantee effective risk
reduction in all market configurations. These procedures may not be
effective against certain risks, particularly those that Crédit Agricole S.A.
has not previously identified or anticipated. Some of the qualitative tools
and metrics used by Crédit Agricole S.A. for managing risk are based
upon its use of observed historical market behaviour. Crédit Agricole S.A.
applies statistical and other tools to these observations to assess its risk
exposures. The tools and metrics may fail to predict future risk exposures
of Crédit Agricole S.A. These risk exposures could, for example, arise
from factors it did not anticipate or correctly evaluate in its statistical
models or from unprecedented market movements. This would limit its
ability to manage its risks and affect its results. Crédit Agricole S.A.’s
losses could therefore be significantly greater than those anticipated
based on historical measures.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
260
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
In addition, certain of the processes that Crédit Agricole S.A. uses to
estimate risk exposure are based on both complex analysis and factors
that could lead to uncertain assumptions. Both qualitative and quantitative
models used by Crédit Agricole S.A. may not be comprehensive and could
lead Crédit Agricole S.A. to significant or unexpected losses. While no
material issue has been identified to date, risk management systems
are also subject to the risk of operational failure, including fraud.
As at 31 December 2020, Crédit Agricole S.A. had own capital
requirements of €2.7 billion to cover the estimated loss relating to its
operating risks.
d)
Any damage to Crédit Agricole S.A.’s reputation
could have a negative impact on Crédit
Agricole S.A.’s business
Crédit Agricole S.A.’s business depends in large part on the maintenance
of a strong reputation in compliance and ethics. If Crédit Agricole S.A.
were to become subject to legal proceedings or adverse publicity relating
to compliance or similar issues, Crédit Agricole S.A.’s reputation could
be affected, resulting in an adverse impact on its business. These issues
include inappropriately dealing with potential conflicts of interest, legal
and regulatory requirements, competition issues, ethics issues, money
laundering laws, information security policies and sales and trading
practices. Crédit Agricole S.A.’s reputation could also be damaged
by an employee’s misconduct or fraud or embezzlement by financial
intermediaries. Any damage to Crédit Agricole S.A.’s reputation might
lead to a loss of business that could impact its earnings and financial
position. Failure to address these issues adequately could also give rise
to additional legal risk, which might increase the number of litigation
claims and expose Crédit Agricole S.A. to fines or regulatory sanctions.
Reputational risk is a significant risk for Crédit Agricole S.A. and is
managed by the Compliance department of Crédit Agricole S.A., which
notably ensures the prevention and control of the risks of non-compliance
with, in this context, the prevention of money laundering, the fight
against the financing of terrorism, the prevention of fraud and corruption,
compliance with embargoes and the obligations to freeze assets.
e)
Crédit Agricole S.A. is exposed to the risk of
paying higher compensation for damages or
fines as a result of legal, arbitration or regulatory
proceedings
Crédit Agricole S.A. has in the past been, and may in the future be,
subject to significant legal proceedings (including class action lawsuits),
arbitrations and regulatory proceedings. When determined adversely
to Crédit Agricole S.A., these proceedings can result in awards of high
damages, fines and penalties. Legal and regulatory proceedings to which
Crédit Agricole S.A. has been subject involve issues such as collusion
with respect to the manipulation of market benchmarks, violation of
international sanctions, inadequate controls and other matters. While
Crédit Agricole S.A. in many cases has substantial defences, even where
the outcome of a legal or regulatory proceeding is ultimately favourable,
Crédit Agricole S.A. may incur substantial costs and have to devote
substantial resources to defending its interests.
Organised as a business line, the Legal Affairs Department has two
main objectives: to control legal risk, which can give rise to disputes and
liabilities, whether civil, disciplinary or criminal, and to provide the legal
support needed by entities to enable them to carry out their activities.
Provisions for litigation amounted to €583 million at 31 December 2020,
versus €607 million at 31 December 2019.
f)
The international scope of Crédit Agricole S.A.’s
operations exposes it to legal and compliance
risks
The international scope of Crédit Agricole S.A.’s operations exposes it to
risks inherent in foreign operations, including the need to comply with
multiple and often complex laws and regulations applicable to activities
in each of the countries where Crédit Agricole S.A. is active, such as
local banking laws and regulations, internal control and disclosure
requirements, data privacy restrictions, European, U.S. and local anti-
money laundering and anti-corruption laws and regulations, international
sanctions and other rules and requirements. Violations of these laws
and regulations could harm the reputation of Crédit Agricole S.A., result
in litigation, civil or criminal penalties, or otherwise have a material
adverse effect on its business.
To illustrate, in October 2015, Crédit Agricole S.A. and its subsidiary Crédit
Agricole Corporate and Investment Bank (Crédit Agricole CIB) reached
agreements with the US federal and New York State authorities that
had been conducting investigations regarding US dollar transactions
with countries subject to US economic sanctions. The events covered by
this agreement took place between 2003 and 2008. Crédit Agricole CIB
and Crédit Agricole S.A., which cooperated with the US federal and New
York State authorities in connection with their investigations, agreed to
pay a total penalty in the amount of $787.3 million (
i.e.
€692.7 million).
Despite the implementation and improvement of procedures designed
to ensure compliance with these laws and regulations, there can be no
assurance that all employees or contractors of Crédit Agricole S.A. will
follow its policies or that such programs will be adequate to prevent
all violations. It cannot be excluded that transactions in violation of
Crédit Agricole S.A.’s policies may be identified, potentially resulting
in penalties. Crédit Agricole S.A. furthermore does not have direct or
indirect majority voting control in certain entities with international
operations, and in those cases its ability to require compliance with its
policies and procedures may be even more limited.
At end-2020, Crédit Agricole S.A. had operations in 48 countries. This
includes the parent entity, its subsidiaries and their branches. It does
not include held-for-sale and discontinued operations, nor any entities
consolidated using the equity method. Note that at end-2020, 68%
of the net banking revenues (excluding intercompany disposals) of
Crédit Agricole S.A. came from its two main locations (France and Italy).
4.
Risks relating to the environment in
which Crédit Agricole S.A. operates
a)
The ongoing coronavirus (COVID-19)
pandemic may negatively affect the business,
operations and financial performance
of Crédit Agricole S.A.
In December 2019, a new coronavirus strain (COVID-19) appeared in
China. The virus spread to many countries around the world, leading
the World Health Organisation to describe the situation as a pandemic
in March 2020. The pandemic has had, and is expected to continue to
have, significant negative impacts on the world economy and financial
markets.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
261
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
The spread of COVID-19 and resulting government control and travel
restrictions implemented around the world have caused disruption to
global supply chains and economic activity. The outbreak has led to
supply and demand shocks, resulting in a marked slowdown in economic
activity, due to the impact of containment measures on consumption, as
well as production difficulties, supply chain disruptions and a slowdown
of investment. Financial markets have been significantly impacted, with
increased volatility, stock market indices declining precipitously, falls
in commodity prices and credit spreads widening for many borrowers
and issuers. The extent of the adverse impact of the pandemic on the
global economy and markets over the long term will depend, in part, on
its length and severity, and on the impact of governmental measures
taken to limit the spread of the virus and its impact on the economy.
For this reason, in December 2020 the French Ministry of the Economy
and Finance revised its GDP growth forecasts for 2021 downwards to
5.0% versus 7.4% previously announced.
The pandemic and its impact on the global economy and financial
markets have had and are likely to continue to have a material adverse
impact on the results of the business lines and financial position of
Crédit Agricole S.A. This impact included, and could include in the
future, (1) a deterioration in Crédit Agricole Group's liquidity (affecting
its short-term liquidity coverage ratio - LCR) due to various factors,
including in particular an increase in corporate customer drawdowns
on credit lines (drawing rate on RCF went from 15% to 32% between
end of February 2020 and end of April 2020), (2) a decrease in revenues
due notably to (a) a slowdown in production in activities such as real
estate lending and consumer finance, (b) a decrease in revenues from
fees and commissions, notably caused by lower asset management
inflows and a drop in insurance and banking commissions, and (c)
lower revenues in asset management and insurance, (3) an increase
in the cost of risk due to a deterioration in the macroeconomic outlook,
the granting of moratoria and, more generally, the deterioration in the
repayment capacity of businesses and consumers, (4) increased risk
of a ratings downgrade following the sector reviews of certain rating
agencies and following internal reviews of Crédit Agricole S.A. models,
and (5) higher risk-weighted assets (RWAs) due to the deterioration
of risk parameters, which in turn could impact the capital position of
Crédit Agricole S.A. (and in particular its solvency ratios).
The health crisis and its consequences on the French, European and
International economies have had an impact on the activity levels of the
Group’s various business lines. During the year 2020, several lockdowns
were imposed in many countries around the world, notably in France
and Italy, Crédit Agricole Group's two main domestic markets. This had
the following consequences:
1.
Retail banking activities were strongly impacted by the lockdowns.
As a result, the production of home loans in retail banking in France
(LCL and Regional Banks) in 2020 was 96% of 2019 production,
while CA Italia's production reached 102% of the 2019 production.
Similarly, Crédit Agricole Consumer Finance credit production in 2020
was 86% of its 2019 production, and CAL&F's leasing production
was 98% of its 2019 production;
2.
Insurance activities were also impacted by the lockdowns. Due to
savers' risk aversion in the context of volatile financial markets, total
net inflows were +€1.0 billion, versus +€9.5 billion in 2019, and
new business in property and casualty insurance in 2020 reached
91% of 2019 production;
(1)
Exposure at default: Crédit Agricole S.A.'s exposure in the event of counterparty default. The EAD includes on- and off-balance sheet exposures. Off-balance sheet exposures
are converted into balance sheet equivalents using internal or regulatory conversion factors (draw-down scenarios).
3.
Clients drew heavily on credit lines with drawdown rates of up to
32% during the second quarter of 2020; however these drawdowns
slowed from the end of June 2020.
The cost of risk was affected in 2020 by the deterioration in the
repayment capacity of companies (fragile companies, frauds revealed by
the crisis) and consumers, the downgrading of ratings of counterparties
whose receivables were downgraded from "Stage 1" to "Stage 2", the
sensitivity of certain sectors, particularly:
1.
as a result of restrictions on movement or gatherings of people,
i.e.
for air transportation, cruises, restaurants, international tourism and
events;
2.
for which the level of demand remains below normal,
i.e.
for the
non residential real estate (decrease in the volume of investments,
linked to the unfavorable impact of the development of e-commerce
and generalized work from home); or, lastly
3.
which remain fragile due to the weight of the global recession on
demand,
i.e.
the non-food retail. Moreover, the commercial property
sector is a sector to watch, as the health crisis has accelerated
pre-existing conditions in some segments, such as shopping
malls being undermined by online shopping and the office building
segment facing structural change if teleworking trends continue.
At 31 December 2020, Crédit Agricole S.A.'s exposure to sectors
considered “sensitive” was as follows: (a) aviation, with EAD
(Exposure at Default
(1)
) of €16.1 billion, of which 6.4% in default,
(b) tourism, hotels, restaurants, with EAD of €7.6 billion, of which
3.7% in default, (c) non-food retail, with EAD of €13.0 billion, of
which 3.7% in default, (d) automotive, with EAD of €22.5 billion,
of which 0.8% in default, (e) shipping, with EAD of €13.0 billion,
of which 4.6% in default, and (f) Oil & Gas, with EAD of €22.7
billion, of which 2.3% in default. Additional provisions in 2020 have
been made for these sectors to take into account their increased
sensitivity. In the fourth quarter of 2020, the economic scenarios,
revised downwards in relation to the third quarter of 2020, also
generated an additional burden of Stage 1 and Stage 2 cost of risk
due in particular to deteriorated GDP growth forecasts for 2021.
As a result, the underlying results for 2020 amounted to €3,849 million,
down -16.0% compared to 2019, mainly explained by the increase in
the cost of risk, +€1,350 million compared to 2019, reaching €2,606
million at the end of 2020.
The health crisis had a greater impact during the lockdown periods
observed in France and Italy during the second and fourth quarters. In
the second quarter: (1) home loan production was down in the second
quarter of 2020 at LCL (-9.8% compared with the second quarter of
2019), while it was virtually flat for CA Italia (-0.8%). Similarly, consumer
credit production at Crédit Agricole Consumer Finance recorded a 40%
decline in the second quarter of 2020 compared with the second quarter
of 2019. CAL&F also recorded a -23.9% decline in leasing production;
(2) Insurance activities were also impacted by the lockdown. Total net
inflows were negative at -€0.9 billion in the second quarter of 2020,
and Property & Casualty revenues were slightly down by 0.9% in the
second quarter of 2020 compared to the second quarter of 2019; (3)
Corporate and Institutional activities remained dynamic in the second
quarter of 2020, but customers drew heavily on credit lines.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
262
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
In the fourth quarter of 2020, a new lockdown imposed in France
as well as in various European countries, which, while having a less
significant impact on the economy than the first lockdown, had the
following consequences for Crédit Agricole S.A.:
1.
activities related to retail banks were not significantly affected
through the production of loans to individuals (notably home loans
and consumer finance). Indeed, for LCL and the Regional Banks,
home loan production was stable in the fourth quarter of 2020,
reaching 104% of home loan production over the same period in
2019. CAL&F recorded stable leasing production in the fourth quarter
of 2020, at 101% of production in the fourth quarter of 2019. But
for Crédit Agricole Consumer Finance, production of consumer loans
in the fourth quarter of 2020 represented 97% of the production in
the fourth quarter of 2019.
2.
Insurance inflows remained stable, amounting to +€1.0 billion in
the fourth quarter of 2020 compared to +€1.0 billion in the fourth
quarter of 2019.
Uncertainties continue to weigh on developments in the health situation
in Europe, with the introduction of new restrictive measures in France and
other European countries (curfews, border closures, new lockdowns) and
the emergence of variants of the virus. Additional measures are therefore
likely to be deployed depending on the evolution of the pandemic.
Although vaccines were announced at the end of 2020, and several
countries have begun their phased roll-out, the timing of this process
also remains highly uncertain, reducing visibility on the speed of the
exit from the crisis. Finally, there is considerable uncertainty about the
pace of development and implementation of the economic support
measures of the governments (particularly the French and Italian States)
and central banks (notably the European Central Bank).
Lastly, in terms of solvency, the main impact of the crisis on
Crédit Agricole S.A.'s CET1 ratio, in addition to a more modest level
of retained earnings, was an increase in risk-weighted assets due
to rating downgrades, mainly in corporate and investment banking
(€5.4 billion in 2020). Crédit Agricole S.A.'s non-phased CET1 ratio
had thus deteriorated at 31 March 2020 (11.4% versus 12.1% at
31 December 2019) and 30 June 2020 (11.7%), before returning to
higher levels at 30 September 2020 (12.4%) and 31 December 2020
(12.9%). This increase is not in any way an indication of the level of the
CET1 ratio over the next few quarters. In particular, there is still great
uncertainty regarding the unemployment rate, the use of accumulated
savings, the health scenario and the timetable of the deployment and
then withdrawal of government measures, and, more generally, about
the consequences of the economic growth trend on retained earnings,
risk-weighted assets and regulatory decisions.
b)
Adverse economic and financial conditions
have in the past had and may in the future
have an impact on Crédit Agricole S.A.
and the markets in which it operates
The businesses of Crédit Agricole S.A. are specifically and significantly
exposed to changes in the financial markets and to the development of
the economic conditions in France, Europe and the rest of the world. In
the financial year ended 31 December 2020, 53% of Crédit Agricole S.A.’s
revenues were generated in France, 15% in Italy, 19% in the rest of
Europe and 13% in the rest of the world. A deterioration in economic
conditions in the markets where Crédit Agricole S.A. operates could
have one or several of the following impacts:
adverse economic conditions would affect the business and operations
of customers of Crédit Agricole S.A., which could decrease revenues
and increase the rate of default on loans and other receivables;
a decline in the prices of bonds, equities and commodities could impact
a significant portion of the business of Crédit Agricole S.A., including
in particular trading, investment banking and asset management
revenues;
macro-economic policies adopted in response to actual or anticipated
economic conditions could have unintended effects, and are likely to
impact market parameters such as interest rates and foreign exchange
rates, which in turn could affect the businesses of Crédit Agricole S.A.
that are most exposed to market risk;
perceived favourable economic conditions generally or in specific
business sectors could result in asset price bubbles, which could in
turn exacerbate the impact of corrections when conditions become
less favourable;
a significant economic disruption (such as the global financial crisis
of 2008 or the European sovereign debt crisis of 2011) could have a
severe impact on all of the activities of Crédit Agricole S.A., particularly
if the disruption is characterised by an absence of market liquidity that
makes it difficult to sell certain categories of assets at their estimated
market value or at all.
In relation to this, in the current context of decreasing global growth
and in 2020 very accommodative monetary policies, a deterioration
in economic conditions would increase the difficulties and failures
of businesses and the unemployment rate could start rising again,
increasing the probability of customer default. The heightened uncertainty
could have a strong negative impact on the valuation of risky assets, on
the currencies of countries in difficulty, and on the price of commodities.
A deterioration in the global landscape, could lead to further easing
of monetary policies, which combined with a revival of risk aversion,
would lead to a prolongation of very low interest rates in the countries
deemed to be risk free (Germany, the US).
The political and geopolitical context – more conflictual and tenser –
induces greater uncertainty and increases the overall level of risk. This
can lead, in the event of rising tensions or the materialisation of latent
risks, to major market movements and can weigh on economies. Such
risks include trade war, Brexit, tensions in the Middle East, social or
political crises around the world, etc.
In Italy, a political crisis, against the backdrop of already low growth
and high public debt, would have a negative impact on confidence
and the economy, and could also cause a rise in interest rates and
in the cost of refinancing for the government and the banks. It could
also lead to losses on the sovereign portfolios of banks and insurers.
In France, there could also be a significant drop in confidence in the
event of a more marked deterioration of the social context which could
lead households to consume less and save more as a precaution, and
companies to delay investments, which could be harmful to growth
and to the quality of private debt, which has increased more than in
the rest of Europe.
The very low level of interest rates leads investors, seeking yield, to
move towards riskier assets; it could lead to the formation of bubbles
in financial assets and in certain real estate markets. It also leads
private customers and governments to go into debt and debt levels
are sometimes very high. This increases the risks in the event of a
market downturn.
It is difficult to predict when economic or financial market downturns
will occur, and which markets will be most significantly impacted. If
economic or market conditions in France or elsewhere in Europe, or global
markets more generally, were to deteriorate or become significantly
more volatile, Crédit Agricole S.A.’s operations could be disrupted, and
its business, results of operations and financial position could as a result
experience a material adverse effect.
CRÉDIT AGRICOLE S.A.
—
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RISKS AND PILLAR 3
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1. Risk factors
c)
Crédit Agricole S.A.’s profitability and financial
position may be impacted by either the
continuation or the end of the current low
interest rate environment
In recent years, global markets have been characterised by low interest
rates. If the low interest rate environment continues, Crédit Agricole S.A.’s
profitability could be materially affected. During periods of low interest
rates, interest rate spreads tend to tighten, and Crédit Agricole S.A.
may be unable to lower funding costs sufficiently to offset reduced
income from lending at lower market interest rates. Efforts to reduce
the cost of deposits may be restricted by the prevalence, particularly
in Crédit Agricole S.A.’s home market of France, of regulated savings
products (such as the home savings plan (Plan d’Épargne Logement –
PEL) with interest rates set above current market levels. Low interest
rates may also negatively affect the profitability of the insurance activities
of the Subsidiaries, which may not be able to generate an investment
return sufficient to cover amounts paid out on some of their insurance
products.
Over 2020, the share of the insurance business in the revenues of
Crédit Agricole S.A. was 12%. Low interest rates may also affect
commissions charged by the Subsidiaries specialised in the management
of money market assets and other fixed income products. Over 2020,
the share of the asset management business in the revenues of
Crédit Agricole S.A. was 12%. In addition, due to the lower interest rates,
the subsidiaries of Crédit Agricole S.A. have experienced an increase
in early repayment and refinancing of mortgages and other fixed-rate
consumer and corporate loans as customers look to take advantage of
lower borrowing costs. As at 31 December 2020, the gross exposure to
home-loans in France granted by Crédit Agricole S.A. were €86 billion.
If interest rates remain low, a similar trend of early repayments could
occur again. This, along with the issuance of new loans at the low
prevailing market interest rates, could result in an overall decrease in
the average interest rate of loan books. A reduction in credit spreads
and a decline in retail banking revenues resulting from lower portfolio
interest rates may have a material adverse effect on the profitability
of the retail banking operations of the affiliated members of the Credit
Agricole Network and the overall financial position of Crédit Agricole S.A.
An environment of persistently low interest rates can also have the
effect of flattening the yield curve in the market more generally, which
could reduce the revenues generated by the financing activities of
Crédit Agricole S.A. and have a negative effect on their profitability and
financial position. A flattening yield curve can also influence financial
institutions to engage in riskier activities in an effort to earn the desired
level of returns, which can increase overall market risk and volatility.
Crédit Agricole S.A.’s operations could as a result be significantly
disrupted, and, consequently, its business, results of operations and
financial position could experience a material adverse effect.
On the other hand, the end of a period of prolonged low interest rates
carries risks. If market interest rates were to rise, a portfolio featuring
significant amounts of lower interest loans and fixed income assets as
a result of an extended period of low interest rates would be expected
to decline in value. If Crédit Agricole S.A.’s hedging strategies are
ineffective or provide only a partial hedge against such a change in
value, Crédit Agricole S.A. could incur significant losses.
Moreover, any rate increase that is sharper or more rapid than expected
could threaten economic growth in the European Union, the United States
and elsewhere. With respect to the loans granted by Crédit Agricole S.A.,
this could test the resistance of the loan and bond portfolios, which
could lead to an increase in doubtful loans and defaults. More generally,
the ending of accommodative monetary policies may lead to severe
corrections in certain markets or assets (e.g., non-investment grade
corporate and sovereign borrowers, certain sectors of equities and real
estate) that particularly benefited from the prolonged low interest rate
and high liquidity environment. Such corrections could potentially be
contagious to financial markets generally, including through substantially
increased volatility. Crédit Agricole S.A.’s operations could as a result
be significantly disrupted, and, consequently, its business, results of
operations and financial position could experience a material adverse
effect.
d)
Crédit Agricole S.A. operates in a
highly regulated environment, and its
profitability and financial position could be
significantly impacted by ongoing legal and
regulatory changes
A variety of regulatory and supervisory regimes apply to Crédit Agricole S.A.
in each of the jurisdictions in which Crédit Agricole S.A. operates.
To illustrate, such regulations pertain to, in particular:
regulatory and prudential requirements applicable to credit institutions,
including prudential rules in terms of adequacy and minimum capital
and liquidity requirements, risk diversification, governance, restrictions
in terms of equity investments and remunerations as defined in
particular by Regulation (EU) No. 575/2013 of the European Parliament
and of the Council of 26 June 2013 on prudential requirements for
credit institutions and investment firms (as amended, in particular,
by Regulation (EU) 2019/876 of the European Parliament and of
the Council of 20 May 2019 and by Regulation (EU) 2020/873 of
the European Parliament and the Council of 24 June 2020) and
Directive 2013/36/EU of the European Parliament and of the Council
of 26 June 2013 on access to the activity of credit institutions and
the prudential supervision of credit institutions and investment
firms as transposed into domestic law (as modified by the Directive
(EU) 2019/878 of the European Parliament and of the Council of
20 May 2019); under these regulations, credit institutions such as
Crédit Agricole S.A. must meet the requirements regarding minimum
capital ratio, risk diversification and liquidity, monetary policy, reporting/
disclosures, as well as restrictions on equity investments. As at 31
December 2020, Crédit Agricole S.A.’s fully loaded CET1 ratio was
12.9% and its total non-phased ratio was 18.5%;
the rules applicable to bank recovery and resolution transposing
into domestic law the provisions of Directive 2014/59/EU of the
European Parliament and of the Council of 15 May 2014 establishing
a framework for the recovery and resolution of credit institutions and
investment firms, as amended by Directive (EU) 2019/879 of the
European Parliament and of the Council of 20 May 2019 as regards
the loss-absorbing and recapitalization capacity of credit institutions
and investment firms (the “BRRD”); in particular, Crédit Agricole S.A.
is placed under the supervision of the ECB to which a Crédit Agricole
Group recovery plan is submitted each year in accordance with
the applicable regulations (for more information, see the “Risk
Management” section of the 2019 Universal Registration Document).
In addition, the contribution of Crédit Agricole S.A.to the annual
financing of the Single Resolution Fund can be significant. Thus, in
2020, Crédit Agricole S.A.'s contribution to the SRF showed a sharp
increase, to €439 million, or +29.8% compared to 2019, concentrated
in the first two quarters of 2019 and 2020;
CRÉDIT AGRICOLE S.A.
—
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RISKS AND PILLAR 3
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1. Risk factors
the regulations applicable to financial instruments (including shares
and other securities issued by Crédit Agricole S.A.), as well as the rules
relating to financial reporting, information disclosure and market abuse
(Regulations (EU) No. 596/2014 of the European Parliament and of the
Council of 16 April 2014 on market abuse), which in particular increase
the obligations of Crédit Agricole Group in terms of transparency and
reporting;
monetary, liquidity, interest rate and other policies of central banks
and regulatory authorities;
the regulations governing certain types of transactions and investments,
such as derivatives and financing operations on securities and money
market funds (Regulation (EU) No. 648/2012 of the European Parliament
and of the Council of 4 July 2012 over-the-counter derivatives, central
counterparties and trade repositories);
regulations of market infrastructures, such as trading platforms,
central counterparties, central securities depositories and securities
settlement systems;
tax and accounting legislation in the jurisdictions where Crédit Agricole
Group operates, as well as the rules and procedures relating to internal
control, risk management and compliance.
As a result of some of these measures, Crédit Agricole S.A. was notably
forced to reduce the size of some of its activities in order to comply with the
new requirements created by them. These measures have also increased
compliance costs and it is likely that they will continue to do so. In addition,
some of these measures may also significantly increase Crédit Agricole S.A.’s
funding costs, particularly by requiring Crédit Agricole S.A. to increase the
portion of its funding consisting of capital and subordinated debt, which
carry higher costs than senior debt instruments.
Failure to comply with these regulations could have important
consequences for Crédit Agricole S.A.:significant intervention by
regulatory authorities and fines, international sanctions, public reprimand,
reputational damage, enforced suspension of operations or, in extreme
cases, withdrawal of authorisation to operate. Moreover, regulatory
constraints could significantly limit the ability of Crédit Agricole S.A. to
expand its business or to pursue certain existing activities.
In addition, legislative and regulatory measures have entered into force
in recent years or may be adopted or modified to introduce or strengthen
a number of changes, some of which are permanent, in the overall
financial environment. While the objective of these measures is to avoid
a recurrence of the global financial crisis, the new measures have
changed substantially, and may continue to change, the environment in
which Crédit Agricole S.A. and other financial institutions operate. The
measures that have been or may be adopted include more stringent
capital and liquidity requirements (particularly for large global institutions
such as Crédit Agricole S.A.), tax on financial transactions, caps or
tax on employee compensation over specified levels, limits on the
types of activities that commercial banks can undertake (particularly
proprietary trading and investment and ownership in private equity
funds and hedge funds), ring-fencing requirements relating to certain
activities, restrictions on the types of entities permitted to conduct
swaps activities, restrictions on certain types of activities or financial
products such as derivatives, mandatory write-downs or conversions
into equity of certain debt instruments, enhanced recovery and resolution
regimes, revised risk-weighting methodologies (particularly with respect
to insurance businesses), periodic stress testing and the creation of new
and strengthened regulatory bodies.
Some of the new measures adopted after the financial crisis may soon
be modified, affecting the predictability of the regulatory regimes to
which Crédit Agricole S.A. is subject and requiring rapid implementation
likely to mobilise significant resources within Crédit Agricole S.A. In
addition, the adoption of these new measures could increase the
constraints on Crédit Agricole S.A. and require a strengthening of
the actions carried out by Crédit Agricole S.A. presented above in
response to the existing regulatory context.
In addition, the general political environment has evolved unfavourably
for banks and the financial industry, resulting in additional pressure on
legislative and regulatory bodies to adopt more stringent regulatory
measures, despite the fact that these measures can have adverse
consequences on lending and other financial activities, and on the
economy.
Given the continuing uncertainty linked to new legislative and regulatory
measures, the scale and scope of which are largely unpredictable, it is
impossible to predict their real impact on Crédit Agricole S.A., but its
impact could be very significant.
Moreover, some regulatory adjustments and new regulations (as well
as the postponement in the application date of certain rules, regarding,
notably prudential requirements) were implemented by the national
and European authorities during the first half-year 2020 in the context
of the COVID-19 health crisis. The permanent or temporary nature of
these adjustments and novelties, as well as the evolution of the new
regulation in relation with the health crisis are still uncertain: it is thus
impossible to determine or measure their impact on Crédit Agricole S.A.
5.
Risk related to the strategy and
transactions of Crédit Agricole S.A.
a)
Crédit Agricole S.A. may not achieve the
targets set out in its medium-term Plan
On 6 June 2019, Crédit Agricole S.A. announced its medium-term plan
up to 2022 (the “
Medium-Term Plan
”). The Medium-Term Plan provides
for several initiatives, including a strategic ambition based on three pillars
(i) growth in all of Crédit Agricole S.A.’s markets, with the objective of
being first in customer acquisition, (ii) revenue synergies to reach €10
billion in 2022, and (iii) technological transformation to increase the
efficiency of cumulative IT spending by €15 billion over four years.
The Medium-Term Plan includes a number of financial targets relating to
revenues, expenses, net income and capital adequacy ratios, among other
things. These financial targets were established primarily for purposes
of internal planning and allocation of resources, and are based on a
number of assumptions with regard to the economic climate and the
activity of the business lines of the Crédit Agricole Group. The financial
targets do not constitute projections or forecasts of anticipated results.
The actual results of Crédit Agricole S.A. are likely to vary (and could vary
significantly) from these targets for a number of reasons, including the
materialisation of one or more of the risk factors described elsewhere in
this section. For example, by the end of 2022, Crédit Agricole S.A. expects
to achieve a net profit in excess of €5 billion, to reduce the cost/income
ratio to below 60%, to post a return on tangible equity (RoTE) in excess
of 11%, to have a solvency of 11% and to dismantle 50% of Switch.
The plan’s success depends on a very large number of initiatives (both
significant and modest in scope) within different Crédit Agricole S.A.
entities. While many of these could be successful, it is unlikely that all
targets will be met, and it is not possible to predict which objectives
will and will not be achieved. The Medium-Term Plan also provides for
significant investments, but if the objectives of the plan are not met, the
return on these investments will be less than expected.
CRÉDIT AGRICOLE S.A.
—
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RISKS AND PILLAR 3
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1. Risk factors
If Crédit Agricole S.A. fails to achieve the targets of its 2022 medium-term
Plan, its financial position and results of operations could be materially
adversely affected.
Crédit Agricole S.A. has committed to a global approach to its Corporate
Social Responsibility (CSR) policy in the Group Project & MTP, including
the financing of one out of three renewable energy projects in France;
as well as the aspiration of developing a range of green leasing
products, doubling the size of the green loan portfolio to €13 billion of
outstanding loans; strengthening the Green Liquidity Factor mechanism
within Crédit Agricole Group; the attribution of a transition rating to each
large corporate customer; the incorporation of Environmental, Social
and Governance (ESG) criteria in 100% of financing to large corporates
and gradually to SMEs; and, lastly, aligning the sector policy with the
Paris Climate Agreement (programmed exit of thermal coal in the EU
and OECD, with a threshold of 25% as from 2019).
b)
Claims made to the Subsidiaries of Crédit
Agricole S.A. in the exercise of their insurance
activities could be inconsistent with the
assumptions they use to price their insurance
products and the fees for obligations related to
claims experience and technical reserves
Revenues from the insurance activities of the Subsidiaries specialising in
this field depend significantly upon the extent to which the actual claims
experience is consistent with the assumptions they use in setting the
prices for their products and establishing technical provisions. Crédit
Agricole Assurances uses both its own empirical analysis and industry
data to develop its products and estimate future policy benefits, including
information used in pricing the insurance products and establishing the
related actuarial liabilities. However, there can be no assurance that the
claims experience is not higher than the assumptions used for pricing
and provisioning, and unanticipated risks such as pandemic diseases
or natural disasters could result in loss experience inconsistent with
the relevant assumptions related to the pricing of these products and
the establishment of reserves. To the extent that the actual claims
paid by Crédit Agricole Assurances to policyholders are higher than the
underlying assumptions used in initially establishing the future policy
reserves, or if events or trends cause Crédit Agricole Assurances to
change the underlying assumptions, Crédit Agricole Assurances may
be exposed to greater liabilities than expected, which may adversely
affect Crédit Agricole S.A.’s insurance business, results of operations
and financial position.
Crédit Agricole Assurances continues to adapt its strategy to the low
interest rate environment, in particular by strengthening its policy of
redirecting funds to Unit-linked policies and by increasing its profit-
sharing reserves (
provision pour participation aux excédents
– PPE),
which was €11.6 billion at 31 December 2020 (compared with €10.8
billion at 31 December 2019),
i.e.
5.6% of outstanding euro-denominated
policies, which represents several years of rates provided to policyholders
(based on the rates provided in 2019 and 2020) and which constitutes a
level of coverage higher than the market average in France. Moreover,
the unit-linked portion in assets under management of Crédit Agricole
Assurances reached 24.2% at 31 December 2020, up 1.4 points year-
on-year. In Property and Casualty insurance the combined ratio remained
well under control. It was up by 1.7 percentage points compared with
31 December 2019 to 97.6% and includes the cost of the mutual and
voluntary support system for the business interruption guarantee.
Finally, Crédit Agricole Assurances maintains a high level of solvency,
posting a ratio of 227% at 31 December 2020.
c)
Adverse events may affect several
of Crédit Agricole S.A.’s businesses
simultaneously
While each of Crédit Agricole S.A.’s principal activities are subject to
risks specific to them and are subject to different market cycles, it is
possible that adverse events could affect several of Crédit Agricole S.A.’s
activities at the same time. For instance, a decrease in interest rates
could simultaneously impact the interest margin on loans, the yield and
therefore the commission earned on asset management products, and
the returns on investments of the insurance subsidiaries. In such event,
Crédit Agricole S.A. might not realise the benefits that it otherwise would
hope to achieve through the diversification of its activities. For example,
adverse macroeconomic conditions could impact Crédit Agricole S.A. in
multiple ways, by increasing default risk in its lending activities, causing
a decline in the value of its securities portfolios and reducing revenues
in Crédit Agricole S.A.’s commission-generating activities. Where an
event adversely affects multiple activities, the impact on the result
and financial position of Crédit Agricole S.A. is all the more important.
d)
Crédit Agricole S.A. is subject to risks
associated with climate change
While Crédit Agricole S.A.’s activities generally are not exposed directly
to climate change risks, Crédit Agricole S.A. is subject to a number of
indirect risks that could have a significant impact. Climate change risks
are indeed risk factors influencing existing risks, in particular counterparty
risk. For instance, when Crédit Agricole S.A. lends to businesses that
conduct activities that produce greenhouse gases, Crédit Agricole S.A.
is subject to the risk that more stringent regulations or limitations on
the borrower’s activities could have a material adverse impact on its
credit quality, causing Crédit Agricole S.A. to suffer losses on its loan
portfolio. This can also be related to physical risks - such as natural
disasters - negatively impacting Crédit Agricole S.A. counterparties in
their activities. As the constraints of the transition accelerate to address
climate change, as well as strong climate phenomenons strengthen,
Crédit Agricole S.A. will have to adapt its activities appropriately in
order to achieve its strategic objectives and to avoid suffering losses.
With the Medium-Term Plan and its climate strategy, the Credit Agricole
Group is committed to completely moving away from thermal coal by
2030, in the European Union and OECD countries, and by 2040 in the
rest of the world.
e)
Crédit Agricole S.A., along with its corporate
and investment banking subsidiary, must
maintain high credit ratings, or their business
and profitability could be adversely affected
Credit ratings have an important impact on the liquidity of
Crédit Agricole S.A. and the liquidity of each of its Subsidiaries individually
that are active in financial markets (principally its corporate and
investment banking subsidiary, Crédit Agricole CIB). A downgrade in credit
ratings could adversely affect the liquidity and competitive position of
Crédit Agricole S.A. or Crédit Agricole CIB, increase borrowing costs, limit
access to the capital markets, trigger obligations in Crédit Agricole S.A.’s
hedged bond program or under certain bilateral provisions in some
trading, derivative and collateralised financing contracts, or adversely
affect the market value of the bonds.
Crédit Agricole S.A.’s cost of obtaining long-term unsecured funding from
market investors, and that of Crédit Agricole CIB, is directly related to their
credit spreads (the amount in excess of the interest rate of government
CRÉDIT AGRICOLE S.A.
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RISKS AND PILLAR 3
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1. Risk factors
securities of the same maturity that is paid to debt investors), which
in turn depend to a certain extent on their credit ratings. Increases
in credit spreads can significantly increase Crédit Agricole S.A.’s or
Crédit Agricole CIB’s cost of funding. Changes in credit spreads are
continuous, market-driven, and subject at times to unpredictable and
highly volatile movements. Credit spreads are also influenced by market
perceptions of Crédit Agricole S.A. creditworthiness. In addition, credit
spreads may be influenced by movements in the acquisition cost of
credit default swaps indexed to Crédit Agricole S.A.’s or Crédit Agricole
CIB’s debt securities, which are influenced both by the credit quality of
those securities, and by a number of market factors that are beyond
the control of Crédit Agricole S.A. and Crédit Agricole CIB.
Of the three rating agencies solicited by Crédit Agricole Group, Moody’s
found that the outlook is stable and S&P Global Ratings and Fitch Ratings
modified their outlook to negative due to uncertainty about the economic
and financial impact of the health crisis. Credit Agricole Group’s ratings
according to Moody’s, S&P Global Ratings and Fitch Ratings are Aa3,
A+ and A+, respectively.
f)
Crédit Agricole S.A. faces intense competition
Crédit Agricole S.A. faces intense competition in all financial services
markets and for the products and services it offers, including retail
banking services. To illustrate, the French Regional Banks, which are
in charge of the distribution of Crédit Agricole S.A.’s financial products,
will have a market share of nearly 23%
(1)
.
The European financial services markets are mature, and the demand for
financial services products is, to some extent, related to overall economic
development. Competition in this environment is based on many factors,
including the products and services offered, pricing, distribution systems,
customer service, brand recognition, perceived financial strength and the
willingness to use capital to serve customer needs. Consolidation has
created a number of firms that, like Crédit Agricole S.A., have the ability
to offer a wide range of products, from insurance, loans and deposit
taking to brokerage, investment banking and asset management services.
In addition, new rivals that are more competitive (including those
utilising innovative technology solutions), which may be subject to
separate or more flexible regulation, or other requirements relating
to prudential ratios, are also emerging in the market. Technological
advances and the growth of e-commerce have made it possible for
non-bank institutions to offer products and services that traditionally
were banking products, and for financial institutions and other companies
to provide electronic and Internet-based financial solutions, including
electronic securities trading. These new players exert downward price
pressure on Crédit Agricole S.A.’s products and services and can succeed
in winning market share in areas that have been historically stable
and dominated by traditional financial institutions. In addition, new
applications, particularly in payment processing and retail banking, new
currencies, such as bitcoin, and new technologies facilitating transaction
processing, such as blockchain, have been gradually transforming the
financial sector and the ways in which customers consume banking
services. It is difficult to predict the effects of the emergence of such new
technologies, for which the regulatory framework is still being defined,
but their increased use may transform the competitive landscape of
the banking and financial industry. Crédit Agricole S.A. must therefore
strive to maintain its competitiveness in France and in the other major
markets in which it operates by adapting its systems and strengthening
its technological footprint to maintain its current market share and
level of results.
(1) This market share applies to household bank deposits and household loans (source: Banque de France, September 2020).
6.
Risks related to the structure
of Crédit Agricole Group
a)
If any member of the Crédit Agricole Network
encounters future financial difficulties,
Crédit Agricole S.A. would be required to
mobilise the resources of the Crédit Agricole
Network (including its own resources)
to support such member
Crédit Agricole S.A. is the corporate centre of the Crédit Agricole Network,
consisting of Crédit Agricole S.A., the Regional Banks and the Local
Banks, pursuant to Article R. 512-18 of the French Monetary and Financial
Code, as well as of the affiliate members Crédit Agricole Corporate and
Investment bank and Bforbank (the
“Network”
).
Under the legal internal financial solidarity mechanism enshrined in
Article L. 511-31 of the French Monetary and Financial Code (MFC),
Crédit Agricole S.A. as the corporate centre must take all measures
necessary to ensure the liquidity and solvency of each institution member
of the Network, as well as the Network as a whole. As a result, each
member of the Network benefits from and contributes to this internal
financial solidarity. The general provisions of the French Monetary and
Financial Code are transposed into internal provisions setting out the
operational measures required for this legal mechanism for internal
financial solidarity. More specifically, they have established a Fund for
bank liquidity and solvency risks (
fonds pour risques bancaires de liquidité
et de solvabilité
– FRBLS) designed to enable Crédit Agricole S.A. to
fulfil its role as corporate centre by providing assistance to any Network
member that may be experiencing difficulties.
Although Crédit Agricole S.A. is not currently aware of circumstances
likely to require recourse to the FRBLS to support a member of the
Network, there can be no assurance that it will not be necessary to use
the Fund in future. In such a case, if the resources of the FRBLS were to
be insufficient, Crédit Agricole S.A., under its tasks as corporate centre,
will be required to make up the shortfall by mobilising its own resources
and, where appropriate, those of the other members of the Network.
As a result of this obligation, if a member of the Network would face
major financial difficulties, the event underlying these financial difficulties
could impact the financial position of Crédit Agricole S.A. and that of the
other members of the Network that are relied upon for support under
the financial solidarity mechanism.
The European banking crisis management framework was adopted
in 2014 by EU Directive 2014/59 (known as the “Bank Recovery
and Resolution Directive – BRRD”), incorporated into French law by
Order 2015-1024 of 20 August 2015, which also adapted French law
to the provisions of European Regulation 806/2014 of 15 July 2014
establishing uniform rules and a uniform procedure for the resolution
of credit institutions and certain investment firms in the framework
of a Single Resolution Mechanism and a Single Resolution Fund.
Directive (EU) 201/879 of 20 May 2019, known as “BRRD2”, amended
the BRRD and was incorporated into French law by Order 2020-1636
of 21 December 2020.
This framework, which includes measures to prevent and to resolve
banking crises, is intended to preserve financial stability, to ensure the
continuity of activities, services and operations of institutions whose
failure could significantly impact the economy, to protect depositors,
and to avoid or limit the use of public financial support as much as
possible. In this context, the European Resolution Authorities, including
the Single Resolution Board, have been granted extensive powers to
take all necessary measures in connection with the resolution of all or
part of a credit institution or the group to which it belongs.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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1. Risk factors
For cooperative banking groups, the ”extended single point of entry”
(“extended SPE”) resolution strategy is favoured by the resolution
authorities, whereby resolution tools would be applied simultaneously
at the level of Crédit Agricole S.A. and the affiliated entities. In this
respect, and in the event of a resolution of the Crédit Agricole Group, the
scope comprising Crédit Agricole S.A. (in its capacity as the corporate
centre) and its affiliated entities would be considered as a whole as
the expanded single entry point. Given the foregoing and the solidarity
mechanisms that exist within the network, a member of the Crédit
Agricole network cannot be put individually in resolution.
The resolution authorities may initiate resolution proceedings against
a credit institution where it considers that: the institution has failed or
is likely to fail, there is no reasonable prospect that another private
measure will prevent the failure within a reasonable time, a resolution
measure is necessary, and a liquidation procedure would be inadequate
to achieve the resolution objectives mentioned above.
The resolution authorities may use one or more resolution tools, as
described below, with the objective of recapitalising or restoring the
viability of the institution. The resolution tools should be implemented
in such a way that equity holders (shares, mutual shares, CCIs, CCAs)
bear losses first, with creditors following up immediately, provided that
they are not excluded from bail-in legally speaking or by a decision of
the resolution authorities. French law also provides for a protective
measure when certain resolution tools or decisions are implemented,
such as the principle that equity holders and creditors of an institution
in resolution may not incur greater losses than those they would have
incurred if the institution had been liquidated in the context of a judicial
liquidation procedure under the French Commercial Code (NCWOL
principle referred to in Article L. 613-57-I of the French Monetary and
Financial Code). Thus, investors are entitled to claim compensation if
the treatment they receive in a resolution is less favourable than the
treatment they would have received if the institution had been subject
to normal insolvency proceedings.
In the event that the resolution authorities decide to put the Crédit Agricole
Group in resolution, they will first write down the CET1 instruments
(shares, mutual shares, CCI and CCA), additional Tier 1 instruments, and
Tier 2 instruments, in order to absorb losses, and then possibly convert
the additional Tier 1 instruments and Tier 2
(1)
instruments into equity
securities. Then, if the resolution authorities decide to use the bail-in
tool, the latter would be applied to debt instruments
(2)
, resulting in the
partial or total write-down of these instruments or their conversion into
equity in order to absorb losses.
With respect to the corporate centre and all affiliated entities, the
resolution authorities may decide to implement, in a coordinated manner,
impairment or conversion measures and, where applicable, internal
bailouts. In such an event, the impairment or conversion measures and,
where applicable, internal bailout measures would apply to all entities
within the Crédit Agricole network, regardless of the entity in question
and regardless of the origin of the losses.
(1)
Articles L. 613-48 and L. 613-48-3 of the MFC.
(2)
Articles L. 613-55 and L. 613-55-1 of the MFC.
The creditor hierarchy in resolution is defined by the provisions of
Article L. 613-55-5 of the MFC, effective as at the date of implementation
of the resolution.
Equity holders and creditors of the same rank or with identical rights in
liquidation will then be treated equally, regardless of the Group entity
of which they are creditors.
The scope of this bail-in, which also aims to recapitalise the Crédit
Agricole Group, is based on capital requirements at the consolidated level.
Investors must then be aware that there is therefore a significant risk that
holders of shares, mutual shares, CCI and CCA non-voting certificates
and holders of debt instruments of a member of the network will lose
all or part of their investment if a resolution procedure is implemented
on the Group, regardless of the entity of which they are a creditor.
The other resolution tools available to the resolution authorities are
essentially the total or partial transfer of the activities of the institution
to a third party or to a bridge institution and the separation of the assets
of the institution.
This resolution framework does not affect the legal internal financial
solidarity mechanism enshrined in Article L. 511-31 of the French
Monetary and Financial Code, which applies to the Crédit Agricole
network, as defined in Article R. 512-18 of the same Code. Crédit
Agricole S.A. considers that, in practice, this mechanism should be
implemented prior to any resolution procedure.
The implementation of a resolution procedure to the Crédit Agricole
Group would thus mean that the legal internal solidarity mechanism
had failed to remedy the failure of one or more network entities, and
hence of the network as a whole.
b)
The practical advantage of the 1988 Guarantee
issued by the Regional Banks may be limited by
the implementation of the resolution regime that
would apply prior to liquidation
The resolution regime provided for by the BRRD could limit the practical
effect of the
1988 Guarantee
(as defined below) on the Regional Banks.
This resolution regime does not affect the legal internal financial solidarity
mechanism provided for under Article L. 511-31 of the French Monetary
and Financial Code, which applies to the Crédit Agricole Network (as
defined in French law) and its affiliated members. This mechanism must
be applied prior to any resolution action.
However, the application to Crédit Agricole Group of resolution procedures
could limit the occurrence of the conditions for implementing the 1988
Guarantee, it being specified that the 1988 Guarantee can only be
called if Crédit Agricole S.A. assets prove to be insufficient to cover
its obligations at the end of its liquidation or dissolution. Due to this
limitation, bondholders and creditors of Crédit Agricole S.A. may not
be able to benefit from the protection afforded by the 1988 Guarantee.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
268
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
1. Risk factors
2. RISK MANAGEMENT
(1) These disclosures are an integral part of the consolidated financial statements as at 31 December 2018 and, as such, are covered by the Statutory Auditors’ report.
This section of the management report presents the Group’s risk
appetite, the nature of the main risks to which the Group is exposed,
their magnitude and the measures implemented to manage them.
The information presented under IFRS 7 on financial instrument
disclosures covers the following main types of risks
(1)
:
credit risks;
market risks;
structural balance sheet risks: global interest rate risk, foreign
exchange risk and liquidity risk, including risks associated with the
insurance industry.
In order to cover all risks inherent in the banking business, additional
information is provided concerning:
operational risks;
legal risks;
non-compliance risks.
In accordance with legislation and best business practices, risk
management within Crédit Agricole S.A. Group is reflected by a form
of governance in which the roles and responsibilities of each individual
are clearly identified, as well as by effective and reliable risk management
methodologies and procedures which make it possible to measure,
monitor and manage all the risks to which the Group is exposed.
2.1 RISK APPETITE, GOVERNANCE AND ORGANISATION OF RISK MANAGEMENT
Concise statement on risks
(Statement prepared in compliance with Article 435-(1)-(f) of
Regulation (EU) No. 575/2013)
The Board of Directors of the Crédit Agricole Group makes a formal
statement every year regarding its risk appetite. The Board of Directors of
the Crédit Agricole Group makes a formal statement every year regarding
its risk appetite. The Group's Risk Appetite Statement is prepared in
line with the risk identification process. The statement is an integral
and strategic part of the governance framework which covers strategy,
business targets, risk management and global financial management
for the Group. The strategic orientations of the Medium-Term Plan, the
Risk Appetite Statement, the budgetary process and the allocation of
resources to the business lines are mutually coherent.
The Risk Appetite
of the Crédit Agricole Group is the type and aggregate
amount of risk that the Group is ready to take on, in the framework of
its strategic targets.
The Group’s risk appetite is determined by particular reference to the
financial policy and the risk management policy, which are based on:
a policy of selective and responsible financing that takes account of
a prudent lending policy framed by the risks strategy, the corporate
social responsibility policy and the authorisation system;
the objective of keeping market risk exposure low;
the strict management of operational risk exposure;
limits on non-compliance risk to exposures, which are strictly managed;
management of the growth of risk-weighted assets;
management of risks related to asset and liability management.
The formal definition of risk appetite allows Executive Management
and the Board of Directors to define the Group’s development direction
consistent with the Medium-Term Plan and translate it into operational
strategies. This results in a consistent approach shared by the Strategy,
Finance, Risk and Compliance departments.
The Risk Appetite Statement is coordinated with the Operational
departments of the various entities and aims to:
engage Directors and senior Management in reflection and dialogue
on risk taking;
formalise, standardise and make explicit the acceptable level of risk
for a given strategy;
fully integrate risk/return considerations into the strategic planning
and decision-making processes;
define advance indicators and alert thresholds so that Management
can anticipate excessive deteriorations in strategic indicators and
improve resilience by taking action as soon as alerts for risk appetite
standards are triggered;
improve external communications to third parties on financial strength
and risk management.
The Group’s risk appetite is defined through:
key indicators:
-
Crédit Agricole S.A.’s external rating
, which has a direct impact
on refinancing terms, the Group’s image in the market and the
price of its securities,
-
solvency
which guarantees the Group’s sustainability by ensuring
it has sufficient capital to back the risks it is taking on,
-
liquidity
, the management of which aims to prevent the Group’s
sources of finances drying up with the consequent threat of default
on payments, or even resolution,
-
business risk
, which provides a measure of progress towards the
strategy laid down by the Group, thereby guaranteeing its long-term
sustainability,
-
profit
, because it is a direct source of future solvency and
shareholder dividends and therefore constitutes a key part of the
Group’s financial communications,
-
credit risk
of the Crédit Agricole Group, which constitutes its main
risk;
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
269
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
limits, alert thresholds and risk envelopes
defined in line with
these indicators: credit, market, interest rate and operational risks;
qualitative priorities
, inherent to the Group’s strategy and businesses,
essentially looking at risks which are not currently quantified.
The qualitative criteria are largely based on the Corporate Social
Responsibility (CSR) policy of the Company, which embodies the
Group’s concern with supporting sustainable development and
controlling all risks including non-financial risks.
The key indicators reflect three levels of risk:
appetite
is used for managing normal everyday risk. It is expressed
in budget targets framed by operational limits, any breach of which
is immediately flagged up to Executive Management, which decides
on corrective action;
tolerance
is used for exceptional management of a deteriorated
level of risk. Breach of tolerance thresholds in key indicators or limits
triggers an immediate report to the Chairman of the Risk Management
Committee, which is then, if necessary, referred up to the Board of
Directors;
capacity
is the maximum risk that the Group could theoretically
take on without infringing its operational or regulatory constraints.
The Group’s risk appetite system is based on the risk identification
process which aims to list as exhaustively as possible the Group’s major
risks and to apply a uniform classification to placing them in categories
and sub-categories.
Overall risk profile
The Group’s business is built around the customer-focused universal
banking model in Europe with a low level of defaults and prudent
provisioning. The market risk profile has also considerably reduced, as
a result of a change in the Group’s strategy since 2007.
The Group’s risk profile is monitored and presented at least every quarter
to the Group Risk Committee and to the Board of Directors. Breach of
tolerance levels for central indicators or limits on the system are reported
and corrective actions proposed to the Board of Directors. The executive
Directors and the supervisory body are thus kept regularly informed of
how the risk profile corresponds to the risk appetite.
The main components of the Group’s risk profile at 31 December 2020
are broken down in the “Risk Management” and “Pillar 3” sections,
respectively, of this Registration Document:
Credit risk: Part 2.4 (Risk management) and Part 3.2 (Pillar 3);
Market risk: Part 2.5 (Risk management) and Part 3.4 (Pillar 3);
Financial risks (interest rate, exchange rate, liquidity and financing):
Part 5 (Risk factors) and Parts 4 and 5 (Pillar 3);
Operational risk: Part 2.8 (Risk management) and Part 3.6 (Pillar 3).
At 31 December 2020, the indicators of the Group's risk appetite in
terms of solvency, earnings, cost of risk and impairment of receivables
were within the risk appetite levels defined by the Group. They have
not reached the tolerance thresholds. Certain indicators were exceeded
in view of the health crisis and in particular the support measures.
Adequacy of the institution’s risk management
arrangements pursuant to Article 435.1 (e)
of Regulation (EU) No. 575/2013
Organisation of risk management
Risk management, which is inherent in banking activities, lies at the
heart of the Group’s internal control system. All staff involved, from the
initiation of transactions to final maturity, play a part in this system.
Measuring and monitoring risk is the responsibility of the dedicated Risk
Management business line (headed by the Group Risk Management
department –
Direction des risques Groupe
(DRG)), which is independent
from Group functions and reports directly to Executive Management.
Although risk management is primarily the responsibility of the business
lines which oversee their own business development, DRG’s task is to
ensure that the risks to which the Group is exposed are consistent with
the risk strategies defined by the business lines (in terms of global and
individual limits and selection criteria) and compatible with the Group’s
growth and profitability targets.
DRG performs consolidated Group-wide monitoring of risks using a
network of Risk Management and Permanent Controls Officers who report
hierarchically to the Head of Risk Management and Permanent Controls
and functionally to the executive body of their entity or business line.
To ensure a consistent view of risks within the Group, the DRG has the
following duties:
it coordinates the risk identification process and the implementation of
the Group’s risk appetite framework in cooperation with the Finance,
Strategy and Compliance functions and the business lines;
it defines and/or validates methods and procedures for analysing,
measuring and monitoring credit, market and operational risks;
it takes part in the critical analysis of the business lines’ commercial
development strategies, focusing on the risk impact of these strategies;
it provides independent opinions to Executive Management on risk
exposure arising from business lines’ positions (credit transactions,
setting of market risk limits) or anticipated by their risk strategy;
it lists and analyses Group entities’ risks, on which data is collected
in risk information systems.
The Financial Steering unit of the Group Finance department (
Direction
des finances Groupe
– FIG) is responsible for the management of
structural asset/liability risk (interest rate, exchange rate and liquidity)
as well as for the refinancing policy and for the management of capital
requirements.
Supervision of these risks by Executive Management is carried out
through Liquidity and ALM (Asset Liability Management) Committee
meetings, in which the DRG takes part.
The DRG keeps the executive Directors and the supervisory body informed
of the degree of risk control in Crédit Agricole S.A., presents various
risk strategies of the major business lines of the Group for validation,
and warns them of any risk of deviation from risk strategies or policies
approved by executive bodies. It informs them of the outcomes and
performance of prevention measures, whose organisational principles
are approved by them. It makes suggestions for any improvement of
such measures that may be required as a result of changes to business
lines and their environment.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
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RISKS AND PILLAR 3
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2. Risk management
At consolidated level, this action falls within the remit of governance
bodies, in particular:
the Risk Management Committee (a Board of Directors sub-committee,
eight meetings per year): it analyses key factors in the Group’s risk
appetite statement defined by Executive Management, regularly
examines the Group’s risk management and internal control issues,
reviews the half-yearly information and annual report on internal
control and risk measurement and monitoring;
the Group Internal Control Committee (
Comité de contrôle interne Groupe
(CCIG) – chaired by the Chief Executive Officer of Crédit Agricole S.A.,
four meetings per year): it examines internal control issues common
across the Group, looks at cross-functional actions within the Group,
approves the annual report and half-yearly information on internal
control, and coordinates the three control functions;
the Group Risk Committee (
Comité des risques Groupe
– CRG) chaired
by the Chief Executive Officer of Crédit Agricole S.A.: it approves the
risk strategies and commitment decisions at Crédit Agricole S.A. level,
on the advice of the Risk Management business line within the risk
appetite framework approved by the Board of Directors, reviews major
risks and sensitive issues, and provides feedback on Group entities’
processes and rating models;
the Liquidity and ALM Committee (Crédit Agricole Group Asset-Liability
Management and Capital Liquidity Committee, chaired by the Chief
Executive Officer of Crédit Agricole S.A., four meetings per year): it
analyses the financial risks facing the Crédit Agricole Group (interest
rate, exchange rate and liquidity risks) and validates the guidelines
for their management;
the Group Compliance Management Committee (
Comité de
management de la conformité Groupe
(CCMG) – chaired by the Chief
Executive Officer of Crédit Agricole S.A. – minimum four meetings
per year): it defines the Group’s Compliance policy, examines all
draft compliance-related standards and procedures, prior to their
implementation, examines all significant irregularities and approves
corrective measures, makes all decisions related to remedial action for
deficiencies, takes note of the main compliance-related conclusions
of audits conducted, approves the annual compliance report;
the Group Security Committee (
Comité sécurité Groupe
– CSG),
chaired by the Deputy General Manager in charge of Operations and
Transformation is a decision-making committee that defines the
strategy and assesses the Group’s level of control in the following four
areas: business continuity plans, data protection, security of people and
property and IT systems security. It reports to the Executive Committee;
the Group Risk Monitoring Committee chaired by the Chief Executive
Officer of Crédit Agricole S.A. is a committee that reviews loans for
which the level of risk is deteriorating significantly. It also examines
as early as possible warnings regarding risks of all types reported
by the business lines or control functions that may have a negative
impact on the Group’s profile or level of cost of risk.
Main Group-level committees dealing with risk
BOARD OF DIRECTORS
EXECUTIVE COMMITTEE
Strategy and CSR
Committee
Risks Committee
US Risks Committee
Audit Committee
Compensation
Committee
Informs and consults
Informs
Authorises, directs and monitors
Human Resources
Committee
(1)
Cross-functional decision-making committees chaired by
the Chief Executive Ofcer or Deputy Chief Executive Ofcer
Crédit Agricole Group
Acquisitions and Disposals
Committee (CCAG)
Crédit Agricole Group
Compliance Management
Committee (CMCG)
OFAC Remediation
Plan Steering
Committee
(OFAC Committee)
Crédit Agricole Group
Asset-Liability Management
and Capital Liquidity
Committee (ALM Committee)
Crédit Agricole Group
Internal Control
Committee (CCIG)
Legal Risk
Monitoring
Committee (LRMC)
Crédit Agricole Group
Risk Management
Committee (CRG)
Group
security
Committee
Regional Banks
Risk Monitoring
Committee
Risk
Monitoring
Committee
(2)
Group Market
Liquidity Committee
(1) Committee organised by the Crédit Agricole S.A. Executive Committee.
(2) Committee that reports to the Crédit Agricole Group Risk Committee.
In addition, each Group operating entity defines its own risk appetite
framework and sets up a Risk Management and Permanent Controls
function. Accordingly, within each business line and legal entity:
a Permanent Controls and Risk Management Officer (
Responsable du
contrôle permanent et des risques
– RCPR) is appointed;
the RCPR supervises all the last-line control units within their areas
of responsibility, covering oversight and permanent control of risks
falling within the remit of the relevant business line; and
has access to appropriate human, technical and financial resources.
RCPRs must be provided with the information required by their role and
have systematic and permanent access to any information, document,
body (Committees, etc.), tools or even IT systems across their entire
area of responsibility. They are associated with entity projects far
enough in advance to be able to play their role effectively.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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RISKS AND PILLAR 3
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2. Risk management
This principle of decentralising the Risk management function to operating
entities aims to ensure that the business lines’ risk management and
permanent controls systems operate efficiently.
Group risk management is also reliant on a certain number of tools which
enable the DRG and the Group’s executive bodies to fully comprehend
the risks that present themselves:
a robust IT and global risk consolidation system, within the trajectory
defined by the Basel Committee on Banking Supervision for global
systemically important banks (BCBS 239);
generalised use of stress testing methodologies in Group credit,
financial or operational risk procedures;
formalised and up-to-date control standards and procedures, which
define lending systems, based on an analysis of profitability and risks,
monitoring of geographical, individual and sectoral concentrations, as
well as limits on interest rate, foreign exchange and liquidity risks;
a Group recovery plan is updated on an annual basis, in accordance
with the provisions of EU Directive 2014/59 of 15 May 2014, which
establishes a framework for the recovery and resolution of credit
institutions.
Risk culture
The risk culture is disseminated across the Group via diverse and
effective channels:
career and talent Committees within the Risk Management business
line, which plan the succession to key posts, facilitate the mobility of
both men and women with the relevant expertise and thus enhance
their future career paths by diversifying their skill sets;
highly valued careers and experience sought after by other business
sectors as a result of time spent within the Risk Management business
line;
a range of training on risk comprising modules tailored to the needs
of employees within and outside the Risk Management business
line. This includes awareness training for all Group employees with,
in particular, an e-learning component, to better understand the risks
inherent in the bank’s business lines;
communication efforts to foster the spreading of the risk culture, under
way since 2015. They are designed to increase the knowledge and
involvement of all employees, in order to turn risk into a day-to-day
advantage.
Consolidated risk monitoring
Every quarter, the Board of Directors’ Risk Management Committee and
the Group Risk Management Committee examine the risk dashboard
produced by the Group Risk Management and Permanent Controls
department. The dashboard provides a detailed review of the Group’s
risk position across all business lines and on a consolidated basis.
The Group’s consolidated alert procedures are coordinated by the Risk
Monitoring Committee by reviewing all the risk alerts centralised by the
Group Risk Management department.
2.2 STRESS TESTING
Stress tests, crisis simulations and resistance tests, form an integral
part of the Crédit Agricole Group’s risk management system. Stress tests
play a role in proactive risk management, the assessment of capital
adequacy and meeting the regulatory requirements. In this regard, by
measuring the economic, accounting or regulatory impact of severe
but plausible economic scenarios, stress testing provides a measure
of the resilience of a portfolio, business, entity or of the Group used as
inputs for the ICAAP and the Risk Appetite. Stress testing covers credit,
market and operational risks as well as liquidity risk and risks related
to interest rates and exchange rates. Stress testing used to manage
the Crédit Agricole Group risks involves a range of different exercises.
Different types of stress tests
Using stress testing for proactive risk management
: specific
exercises that are recurring or carried out upon request are performed
centrally to supplement and enhance the various analyses performed
to properly monitor risks. This work is presented to Executive
Management at Group Risk Management Committee Meetings. In
this respect, stress testing focused on market risk or liquidity risk is
periodically undertaken.
In the case of credit risk, stress tests were performed in 2017 to
measure the risk stemming from economic changes in certain major
Group risks. The exercises underpin the decisions taken by the Group
Risk Management Committee on aggregate exposure limits.
Budget stress testing or ICAAP stress testing
: (Internal Capital
Adequacy and Assessment Process): the Crédit Agricole Group
undertakes an annual exercise as part of the budgetary process,
with the results of this stress testing being incorporated into the
ICAAP. It plays a part in capital requirements planning and makes it
possible to estimate the Group’s profitability over a three-year period,
under various economic scenarios. The goal of this stress testing in
the budgetary process and the ICAAP is to measure the effects of
the economic scenarios (baseline and adverse) on the businesses,
entities and the Group as a whole and the sensitivity of their results.
It is necessarily based on an economic scenario (change in a series of
economic variables) from which the impact on the various risks and
geographic regions are determined. This scenario is supplemented to
reflect operational risks and the risk of improper conduct.
The goal of this exercise is to estimate a solvency ratio by measuring
the impact on the income statement (cost of risk, interest margin,
fees and commission, etc.), risk-weighted assets and own funds and
to compare it against the Group’s tolerance and capacity thresholds.
Regulatory stress testing
: this stress testing encompasses all
requests from the ECB, the EBA or other supervisor.
In 2018, the Group was particularly successful in managing the global
stress test organised by the EBA. In this regard, the Crédit Agricole
Group was among the leading European systemic banks in terms of
the CET1 solvency ratio level in the stress scenario at the end of 2020.
Governance
In line with the guidelines of the EBA (European Banking Authority), the
stress test programme for the Group and major entities clearly details
the governance and responsibilities of each party involved in the stress
testing encompassing credit, market, operational and liquidity risks and
structural risks related to interest rates and exchange rates.
The scenarios used in the ICAAP processes, Risk Appetite or for regulatory
purposes are prepared by the Economic Department (ECD) and are
presented to the Board of Directors. These economic scenarios show
central and stressed fluctuations in macroeconomic and financial
variables (GDP, unemployment, inflation, interest rates and exchange
rates, etc.) for all countries to which the Group is exposed.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
272
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RISKS AND PILLAR 3
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2. Risk management
2.3 INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
(1) Article L. 511-41.
Crédit Agricole Group’s internal control organisation reflects an
architecture in line with legal and regulatory requirements, as well as
the recommendations of the Basel Committee.
The internal control system and procedures are defined within the Crédit
Agricole Group as all systems designed to control activities and risks of
all kinds and to ensure regularity (in the sense of compliance with laws,
regulations and internal standards), safety and efficiency of operations,
in accordance with the references presented in Section 1 below.
The internal control system and procedures are characterised by the
objectives assigned to them:
application of Executive Management instructions and guidelines;
financial performance, through the efficient and appropriate use of
the Group’s assets and resources, as well as protection against the
risk of loss;
comprehensive, accurate and regular knowledge of the data needed
for decision making and risk management;
compliance with legal and regulatory requirements and internal
standards;
prevention and detection of fraud and errors;
accuracy, completeness of accounting records and the timely
preparation of reliable accounting and financial information.
These procedures have, nonetheless, the inherent limitations of any
internal control system, due in particular to technical or human failures.
In accordance with the principles in force within the Group, the internal
control system applies over a broad scope aimed at supervising and
controlling activities, as well as measuring and monitoring risks
on a consolidated basis. This principle, applied by each entity of
Crédit Agricole S.A. and its subsidiaries to its own subsidiaries, makes
it possible to apply the internal control system according to a pyramidal
logic and to all entities. The system implemented by Crédit Agricole S.A.,
which is in line with the standards and principles set out below, is thus
deployed in a manner adapted to the different business lines and risks
at each of the Crédit Agricole Group’s levels in order to best meet the
regulatory obligations specific to banking activities.
The resources, tools and reports implemented in this normative
environment provide regular information, in particular to the Board
of Directors, the Risk Committee, to Executive Management and to
management, on the functioning of internal control systems and their
adequacy (permanent and periodic control system, reports on risk
measurement and monitoring, corrective action plans, etc.).
I.
References in terms of internal control
References to internal control are based on the provisions of the French
Monetary and Financial Code
(1)
, the Decree of 3 November 2014 on
internal control of companies in the banking, payment services and
investment services sector subject to control by the French Regulatory
and Resolution Supervisory Authority (ACPR), the General Regulation of
the AMF and the recommendations on internal control, risk management
and solvency issued by the Basel Committee.
These national and international standards are supplemented by Crédit
Agricole’s own internal standards:
a corpus of communications of a permanent, regulatory nature (external
regulations and internal Group rules) and of mandatory application,
relating in particular to accounting (Crédit Agricole’s accounting plan),
financial management, risks and permanent controls, applicable to
the entire Crédit Agricole Group;
Code of Conduct of the Crédit Agricole Group;
recommendations of the full Committee on Internal Oversight of the
Regional Banks;
the aggregate of “procedural notes”, applicable to Crédit Agricole S.A.
relating to organisation, operation or risks. In this context,
Crédit Agricole S.A. adopted a set of procedural notes in 2004 to
monitor compliance with laws and regulations. This procedural
system has since been adapted to regulatory changes and deployed
in the Group’s entities, particularly in the areas of financial security
(prevention of money laundering, fight against terrorist financing,
freezing of assets, compliance with embargoes, etc.) or detection
of malfunctions in the application of laws, regulations, professional
standards and standards of conduct, for example. The procedural
notes are updated regularly, as necessary, in particular in the light
of the changes in regulations and in the scope of supervision on a
consolidated basis.
II. Principles for the organisation
of the internal control system
In order to ensure that internal control systems are effective and
consistent between the Group’s various organisational levels, the Crédit
Agricole Group has adopted a set of common rules and recommendations
based on the implementation of and compliance with fundamental
principles.
Thus, each entity of the Crédit Agricole Group (Regional Banks,
Crédit Agricole S.A., subsidiaries of credit institutions or investment
firms, insurance companies, other, etc.) must apply these principles
at its own level.
Fundamental principles
The organisational principles and components of the internal control
systems of Crédit Agricole S.A., which are common to all Crédit Agricole
Group entities, include obligations in terms of:
informing the supervisory body (risk strategies, limits set on risk
taking, internal control activity and results, significant incidents);
direct involvement of the management body in the organisation and
operation of the internal control system;
exhaustive coverage of activities and risks, liability of all actors;
a clear definition of tasks, effective separation of engagement and
control functions, formalised and up-to-date delegations;
formalised and updated standards and procedures.
These principles are complemented by:
risk measurement, monitoring and control systems: credit, market,
liquidity, financial, operational (operational processing, quality of
financial and accounting information, IT processes), non-compliance
and legal risks;
a control system, as part of a dynamic and corrective process, including
permanent controls carried out by the operational units or by dedicated
employees, and periodic controls (carried out by the units of the Group
Control and Audit department or by the Audit units);
the adoption of the Group’s compensation policies (following the
deliberations of the Board of Directors of 9 December 2009 and
23 February 2011) and internal control procedures – in accordance with
applicable national, European or international regulations, in particular
those relating to Capital Requirements Directive 4 (CRD 4), the AIFMD,
UCITS V and Solvency 2, the provisions relating to the Volcker Rule, the
French banking separation act (
Loi de séparation bancaire
) and MiFID,
as well as the professional banking recommendations relating to, on
the one hand, the adequacy between the compensation policy and
the risk control objectives, the adequacy between the compensation
CRÉDIT AGRICOLE S.A.
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2. Risk management
policy and the risk control objectives, and on the other hand the
compensation of the members of the executive bodies and that of
the risk takers (see Part I of this report).
System monitoring
Since the amendments to Regulation 97-02 on internal control relating
to the organisation of control functions, elements included in the decree
of 3 November 2014 repealing the regulation became effective, an
obligation has been imposed on each entity or business line manager,
each manager, each employee and each Group body to be able to report
and justify, at any time, the proper control of its activities and the risks
involved, in accordance with the standards for the exercise of banking
and financial professions, in order to ensure the long-term security of
each activity and each development project and to adapt the control
measures to be implemented to the intensity of the risks incurred.
This requirement is based on organisational principles and an architecture
of responsibilities, operating and decision-making procedures, controls
and reporting to be implemented in a formal and effective manner at
each level of the Group: central functions, business lines, subsidiaries,
operational units and support functions.
Group Internal Control Committee
The Internal Control Committee of the Group and of Crédit Agricole S.A.,
the umbrella body for steering the systems, met regularly under the
chairmanship of the Chief Executive Officer of Crédit Agricole S.A.
The objective of this Committee is to strengthen the transversal actions
to be implemented within the Group. Its purpose is to examine internal
control issues common to the entire Group (Crédit Agricole S.A.,
subsidiaries of Crédit Agricole S.A., Regional Banks, common resource
structures) and to ensure the consistency and effectiveness of internal
control on a consolidated basis. The Internal Control Committee,
a decision-making body with binding decisions, is composed of
Crédit Agricole S.A. employee executives. As such, it is distinguished
from the Risk Committee, which is a division of the Board of Directors, and
is responsible for coordinating the three control functions: Audit-Control,
Risks, and Compliance.
Three functions operating throughout the Group
The Group Chief Risk Officer, the Group Head of Internal Audit and the
Group Head of Compliance report directly to the Chief Executive Officer
of Crédit Agricole S.A. and have access to the Risk Committee and the
Board of Directors of Crédit Agricole S.A.
In addition, under the Decree of 3 November 2014 on the internal control
of companies in the banking, payment services and investment services
sector that are subject to the supervision of the French Regulatory
and Resolution Supervisory Authority, the Group Chief Risk Officer
has been designated as the person in charge of risk management for
Crédit Agricole S.A. as well as for the Crédit Agricole Group.
The audit functions are responsible for supporting the business lines
and operational units to ensure the regularity, safety and efficiency of
operations. In this capacity they carry out:
the management and control of credit, market, liquidity, financial and
operational risks by the Group Risk Management department, which
is also responsible for the ultimate control of accounting and financial
information and for monitoring deployment by the Group IT Security
Officer of information systems security and business continuity plans;
the prevention and control of non-compliance risks by the Group
Compliance department, which ensures in particular the prevention of
money laundering, the fight against terrorist financing, the prevention
of fraud, compliance with embargoes and asset freezing obligations;
independent and periodic control of the proper functioning of all entities
of the Crédit Agricole Group by the Group Control and Audit department.
In addition to the involvement of the various control functions, the other
central functions of Crédit Agricole S.A. and its divisions and business
lines contribute to the implementation of internal control systems on a
consolidated basis, whether within specialised committees or through
actions to standardise procedures and centralise data.
Organised as a business line, the Legal Affairs department has two
main objectives: to control legal risk, which can give rise to disputes
and liabilities, whether civil, disciplinary or criminal, and to provide
the legal support needed by entities to enable them to carry out their
activities, while controlling legal risks and minimizing associated costs.
With regard to Crédit Agricole S.A. and its subsidiaries
The functions, departments and business lines are themselves supported
by decentralised mechanisms within each of the legal entities, which
are first-tier subsidiaries and are part of the consolidated supervisory
scope of Crédit Agricole S.A., and include:
quarterly Internal Control Committee meetings, which are decision-
making and binding in nature, consisting of the Chief Executive Officer
of the entity and representatives of the control functions of the entity
and of Crédit Agricole S.A., responsible in particular for steering the
internal control system implemented in the entity, examining the main
risks to which the entity is exposed, critically evaluating the internal
control systems and the audit action, monitoring missions and taking
any necessary corrective measures;
special Committees that are specific to each entity;
a network of correspondents and authorities dedicated to each
business line.
With regard to the Regional Banks of Crédit Agricole
For the Regional Banks, the application of all the Group’s rules is made
possible by the dissemination of national recommendations on internal
control by the plenary Internal Control Committee of the Regional Banks
and by the activity of the central control functions of Crédit Agricole S.A.
The Plenary Committee is responsible for strengthening the management
of the Regional Banks’ internal control systems and is composed of Chief
Executive Officers, senior managers and heads of the Regional Banks’
audit functions, as well as representatives of Crédit Agricole S.A. Its
activities are extended through regular regional meetings and working
and information meetings between the heads of the audit functions
of Crédit Agricole S.A. and their counterparts in the Regional Banks.
The role of Crédit Agricole S.A. as a corporate centre requires it to be
very active and vigilant in terms of internal control. In particular, specific
monitoring of the risks and controls of the Regional Banks is carried
out at Crédit Agricole S.A. by the Steering and Coordination unit of the
Risks France functions of the Group Risk Management department and
by the Group Compliance department.
Role of the Board of Directors
The Board of Directors of Crédit Agricole S.A. is aware of the Company’s
general organisation and approves its internal control system. It approves
the Group’s general organisation and internal control system and defines
the Group’s risk appetite in an annual statement. It is informed of the
organisation, activity and results of internal controls. Other than the
information it regularly receives, it has access to the Annual Report and
the half-yearly presentation on internal controls, such in accordance
with banking regulations and standards defined by Crédit Agricole S.A.
The Chairman of the Board of Directors of Crédit Agricole S.A. receives
detailed summary notes presenting the conclusions of the Group Control
and Audit department’s missions.
CRÉDIT AGRICOLE S.A.
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2. Risk management
The Board is informed, through the Risk Committee, of the main risks
incurred by the Company and the significant incidents revealed by the
internal control and risk management systems.
The Chairman of the Risk Committee of Crédit Agricole S.A. reports to
the Board on the work of the Committee, and in particular on the annual
report on internal controls and on risk measurement and monitoring.
By the date of the General Meeting, the Annual Report will have been
presented to the Risk Committee, forwarded in due course to the French
Regulatory and Resolution Supervisory Authority (
Autorité de contrôle
prudentiel et de résolution
– ACPR), and to the Statutory Auditors. It will
also have been presented to the Board of Directors.
Role of the Chief Executive Officer in internal control
The Chief Executive Officer (CEO) defines the general organisation of
the Company and ensures its efficient implementation by qualified
and competent persons. He is directly and personally involved in the
organisation and operation of the internal control system. In particular,
the CEO sets out the roles and responsibilities for internal control and
allocates appropriate resources to it.
The CEO ensures that the risk strategies and limits are compatible with
the financial position (equity levels, results) and the strategies adopted
by the Board of Directors, as part of the Group’s Risk Appetite Statement.
The CEO ensures that risk identification and measurement systems,
adapted to the Company’s activities and organisation, are adopted.
The CEO also ensures that the main information from these systems is
regularly reported to him.
The CEO personally assures that the internal control system is constantly
monitored to ensure its adequacy and effectiveness. The CEO is informed
of any malfunctions that the internal control system would identify and
of the corrective measures proposed. In this respect, the Chief Executive
Officer receives detailed summary notes presenting the conclusions of
the Group Control and Audit department’s missions.
III.
Specific internal control systems and
risk control and monitoring systems
of Crédit Agricole S.A.
Crédit Agricole S.A. implements processes and mechanisms for
measuring, monitoring and controlling its risks (counterparty, market,
operational, financial and other risks) adapted to its activities and
organisation, which are an integral part of the internal control system
and are periodically reported to the management body, the supervisory
body and the Risk Committee, in particular via reports on internal control
and risk measurement and monitoring.
Detailed information on risk management is presented in the chapter
“Risk Management” and in the notes to the consolidated financial
statements dedicated to these (Note 3).
Risk Management and Permanent Controls function
The Risk Management business line was created in 2006 pursuant to
amendments to Regulation 97-02 (repealed and replaced by the Order
of 3 November 2014 on the internal control of companies in the banking,
payment services and investment services sector subject to the supervision
of the French Regulatory and Resolution Supervisory Authority).
The Risk Management business line is responsible for both the overall
management and the permanent control of the Group’s risks: credit,
financial and operational risks, in particular those related to the quality of
financial and accounting information, physical security and information
systems, business continuity and the supervision of outsourced essential
services.
Risk management is based on a Group system whereby the strategies of
the business lines, including in the event of the launch of new activities
or new products, are the subject of a risk notice, and risk limits are
formalised in the risk strategies for each sensitive entity and activity.
These limits are reviewed at least once a year or in the event of a change
in an activity or risks and are validated by the Group Risk Committee.
They are accompanied by cross-Group limits, particularly on major
counterparties. The mapping of potential risks, the measurement and
monitoring of proven risks are regularly adjusted with regard to the
activity.
Audit plans are adapted to changes in the activity and the risks, to which
they are proportionate.
The business line is placed under the responsibility of the Group Chief
Risk Officer, who is independent of any operational function and reports
to the Group Chief Executive Officer. It brings together the cross-group
functions of Crédit Agricole S.A. (Group Risk department) and the
decentralised Risk Management and Permanent Controls functions, as
close as possible to the business lines, at the level of each Group entity,
in France or abroad. The Risk Management business line employed
around 2,904 people at end-2019 (in full-time equivalent) within the
scope of the Crédit Agricole Group.
The business line operates through structured governance bodies,
including the Internal Control Committees, the Group Risk Committee,
under which executive management approves the Group’s strategies
and is informed of the level of its risks, the Regional Banks’ Risk
Monitoring Committee, the Group Security Committee, the Standards
and Methodology Committee, the Basel Recommendations Steering
Committee, the Business Line Monitoring Committees, which include
the Group Risk department and subsidiaries at predefined intervals, and
various committees in charge of rating systems and information systems.
The Group Risk Monitoring Committee, chaired by the Group Chief
Executive Officer, meets twice a month and is responsible for monitoring
the emergence of risks in order to identify appropriate guidelines.
Central Risk Management and Permanent Controls
functions of Crédit Agricole S.A.
Within Crédit Agricole S.A., the Group Risk department is responsible
for the overall management of the Group’s risks and permanent control
systems.
Global Group risk management
The consolidated measurement and management of all Group risks
is carried out centrally by the Group Risk department, with units
specialised by risk type that define and implement consolidation and
risk management measures (standards, methodologies, information
systems).
The Group Risk department also has a “business line risk management”
function in charge of the global and individualised relationship with
each of the subsidiaries of Crédit Agricole S.A. The supervision of the
Regional Banks’ risks is carried out by a specific department of the
Group Risk department.
Group risks are monitored by the business line risk management units,
in particular through the Group Risk Committee and the Regional Banks’
Risk Monitoring Committee.
It is also carried out through an alert procedure applied to all entities and
which allows the most significant risks to be presented to a Management
Committee on a bi-monthly basis (Group Risk Monitoring Committee).
Crédit Agricole S.A. measures its risks in an exhaustive and precise
manner, namely by integrating all categories of commitments (on-
and off-balance sheet) and positions, consolidating commitments on
companies belonging to the same group, aggregating all portfolios and
distinguishing risk levels.
This is supplemented by ad hoc measurements of risk profile distortion
under stress scenarios and a regular assessment based on various
scenario types.
CRÉDIT AGRICOLE S.A.
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In addition to regulatory exercises, from an internal management
viewpoint, stress tests are carried out at least once a year by all entities.
This work is performed in particular as part of the annual budgetary
process to strengthen the practice of measuring the sensitivity of the
Group’s risks and income statement and its various components to
a significant downturn in the economy. This global stress testing is
supplemented by sensitivity tests on the main portfolios.
Risk monitoring by Crédit Agricole S.A., its subsidiaries and the Regional
Banks on an individual or collective basis requires a system to monitor the
overruns and their regularisation, the operation of accounts, the correct
classification of receivables in accordance with current regulations (in
particular impaired loans), the adequacy of the level of provisioning for
risks under the supervision of the Risk Committees, and the periodic
review of the main risks and portfolios, in particular for sensitive business.
In a context of contrasting and uncertain risk, Crédit Agricole S.A. pursues
a policy of actively reviewing the risk policies and strategies applied by
its subsidiaries. Moreover, the Group’s main cross-functional portfolios
(housing, energy, professionals and farmers, consumer finance, private
equity, etc.) have been analysed by the Group Risk Committee (CRG).
The scope of risks covered in the risk strategies reviewed by the CRG
also includes model risks, operational risks and conglomerate risks.
Alert and escalation procedures are in place in the event of a prolonged
anomaly, depending on its materiality.
Permanent control of operational risks
The Group Risk department coordinates the Permanent Control system
(definition of key control indicators by type of risk, deployment of a single
software platform integrating the assessment of operational risks and
the results of permanent controls, organisation of reporting of control
results to the various consolidation levels concerned within the Group).
Decentralised Risk Management and Permanent Controls
functions, at the level of each of the Group’s business lines
Within Crédit Agricole S.A.
The function operates using a hierarchical organisation, with a Risk
Management and Permanent Controls Officer (RCPR) appointed at each
subsidiary or business line. The business line RCPR reports hierarchically
to the Group Chief Risk Officer, and functionally to the management body
of the relevant business line. This positioning ensures the independence
of the local Risk Management and Permanent Controls departments.
Each subsidiary or business line, under the responsibility of its RCPR,
obtains the necessary resources to ensure the management of its
risks and the compliance of its permanent control system, in order to
implement a full-fledged function (exhaustive and consolidated vision
of risks, likely to guarantee the sustainability of the entity over its entire
scope of supervision on a consolidated basis).
The relationship between each subsidiary or business line and Group
Risk department is organised around the following main elements:
implementation by each subsidiary or business line of the Group’s
cross-functional standards and procedures, developed by the Group
Risk department;
determination for each subsidiary or business line of a risk strategy,
validated by the Group Risk Committee on the advice of the Group Risk
department, specifying in particular the entity’s overall commitment
limits;
principle of delegation of powers from the Group RCPR to the business
RCPRs that are hierarchically linked to it in the performance of their
duties, subject to transparency and alerting the latter to the Group
Risk department.
Within the scope of the Regional Banks
Banking regulations relating to risks apply to each of the Regional
Banks individually. Each is responsible for its own permanent risk and
control system and has a Risk Management and Permanent Controls
Officer – who reports to its Chief Executive Officer – in charge of risk
management and permanent controls. The RCPR may also be responsible
for the duties of the Compliance Officer. If this is not the case, the
Compliance Officer reports directly to the Chief Executive Officer.
Moreover, as the corporate centre, Crédit Agricole S.A., via the Group Risk
department, consolidates the risks carried by the Regional Banks and
manages the Risk Management business line in the Regional Banks, in
particular by disseminating the necessary standards to them, in particular
for the implementation of a permanent control system at Group level.
In addition, the significant credit risks taken by the Regional Banks are
presented for partial guarantee to Foncaris, a credit institution and wholly
owned subsidiary of Crédit Agricole S.A. The obligation imposed on the
Regional Banks to request a counter-guarantee from Foncaris on their
main operations (above a threshold defined between the Regional Banks
and Foncaris) thus provides the corporate centre with an effective tool
enabling it to assess the associated risk before accepting it.
Internal control system for business continuity
and information system security plans
The internal control system implemented makes it possible to provide
the Group’s security governance bodies with periodic reporting on the
position of the main entities with regard to risk monitoring relating to
business continuity plans and information system security.
Business continuity plans
With regard to IT backup plans, the IT productions of most of the
subsidiaries of Crédit Agricole S.A. and of the 39 Regional Banks hosted
on the Greenfield secure bi-site structurally benefit from backup solutions
from one site to another.
These solutions are tested on a recurring basis for Crédit Agricole S.A.
and its subsidiaries. The Regional Banks follow the same process in
terms of testing.
The subsidiaries of Crédit Agricole S.A. for which IT is not managed
by Greenfield have IT backup solutions that are regularly tested with
reasonable assurance of restart in the event of a disaster.
With regard to user back-up plans, the Group has the Eversafe solution,
which provides high security in the event of the unavailability of buildings,
campuses or even neighbourhoods in the Paris region. This solution
is operational and proven, with two sites dedicated to the Group. The
Group is thus equipped with workspaces available in the event of a
major disaster in the Paris region.
In addition, and in accordance with Group policy, most entities are able
to cope with a massive viral attack on workstations by focusing on the
use of user backup sites.
Information Systems Security
The Crédit Agricole Group continued to reinforce its resilience to the
scale of IT risks, particularly cyber threats, in terms of organisation
and projects.
CRÉDIT AGRICOLE S.A.
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2. Risk management
Group security governance has been implemented with a Group Security
Committee (CSG) which is the decision-making and executive body
that defines the Group’s security strategy by domain, integrating
the orientations of Group security policies into it, determines Group
security projects, supervises the execution of the strategy on the basis
of indicators for managing Group projects and applying policies, and
finally assesses the Group’s level of control in the four areas falling within
its competence: business continuity plan, data protection, personal and
property security and information system security.
The Information Systems Risk Management (
Pilote des risques systèmes
d’information
– PRSI) and Chief Information Security Officer (CISO)
functions are now deployed in most of the Group’s entities: the PRSI,
which is part of the RCPR (Permanent Controls and Risk Management
Officer), consolidates the information enabling it to take a second look.
Specific internal control systems and risk control
and monitoring systems of Crédit Agricole S.A.
Internal control system for accounting
and financial information
In keeping with the applicable rules within the Group, the organisational
principles and responsibilities of the Group Finance department functions
are set out in an operational note.
The Finance function is organised as a business line within
Crédit Agricole S.A. The Group’s business line and/or subsidiary heads
report hierarchically to the head of the business line or subsidiary and
functionally to the Deputy General Manager, Chief Financial Officer. The
central Finance function defines the financial strategy, in conjunction
with other departments within Crédit Agricole S.A. where necessary, and
determines and/or validates the standards and methods applicable in the
Group in terms of accounting and regulatory information, solvency and
the management of liquidity, interest rate and foreign exchange risks.
It also ensures that these standards and methods are disseminated to
and implemented by all the Group's entities.
At business line/subsidiary level, the Finance department acts as a relay
among subsidiaries, circulating the Group's standards and principles in
these areas, in line with each business line's specific attributes. In some
cases, it also constitutes an intermediate level for preparation of the
business line’s accounting and business management information. Each
Risk Management and Permanent Controls department in a business line
or subsidiary within the Group is also responsible for producing the risk
data used to prepare financial information and for implementing controls
to ensure that this information is accurately reconciled to accounting data.
Each business line and/or entity is equipped with the means to ensure
the quality of the accounting, management and risk data transmitted
to the Group in line with consolidation requirements, in particular, with
regard to the following aspects: compliance with the standards applicable
to the Group, consistency with the parent company financial statements
approved by its supervisory body, reconciliation of accounting and
management reporting figures.
Within the Group Finance department, the reported accounting and
financial information is prepared by three main functions: Accounting,
Management Control and Financial Communication.
Accounting
The main purpose of the Accounting function is to draw up the parent
company financial statements of Crédit Agricole S.A., the consolidated
financial statements of Crédit Agricole S.A., its subsidiaries and Crédit
Agricole Group, including segment information for Crédit Agricole S.A.
based on the definition of the business lines for financial reporting
purposes and in compliance with IFRS 8. To fulfil this purpose, the
Accounting function, in accordance with applicable regulations, defines
and circulates the accounting standards and principles that apply
to the Group. It oversees the accounting framework, lays down the
rules governing the architecture of the accounting information and
regulatory reporting system, and manages the accounting processes
for consolidation of the financial statements and regulatory reporting.
Management Control
For the preparation of financial information, the Group Management
Control function, within the Financial Steering department, defines
the rules for allocating economic capital (definition, allocation policy),
consolidates, prepares and quantifies the budget and the Medium-Term
Plan for Crédit Agricole S.A., and monitors the budget. To meet this
objective, Group Management Control defines the management control
procedures and methods and the structure and management regulations
for the Group management control system.
Financial Communication
Crédit Agricole S.A.’s Financial Communication function ensures message
consistency across all investor categories. It is responsible for information
published in press releases and presentations to shareholders, financial
analysts, institutional investors, rating agencies, as well as information
contained in documents subject to approval by the French financial
market authority (AMF). In this respect, working under the responsibility
of the Chief Executive Officer and Crédit Agricole S.A.’s Deputy
General Manager, Chief Financial Officer, the Financial Communication
function provides the materials used as the basis for presentations
of Crédit Agricole S.A. results, financial structure and changes in
business lines, as needed to enable third parties to formulate an opinion,
particularly on the Group’s financial strength, profitability and outlook.
Procedures for the preparation and processing
of accounting and financial information
Each Group entity has responsibility, vis-à-vis the Group and the
regulatory authorities to which it reports, for its own financial statements,
which are approved by its supervisory body. Depending on the entity’s
size, these financial statements are subject to prior review by the entity’s
Audit Committee, if it has one.
As for the Crédit Agricole Regional Banks, once their financial statements
are drawn up, they are approved by the Accounting and Regulatory
Information department of Crédit Agricole S.A.; this is one of its
responsibilities as corporate centre. The Crédit Agricole S.A. Group’s
consolidated financial statements are submitted to the Audit Committee
and approved by the Board of Directors of Crédit Agricole S.A.
Most published financial information is based on accounting data and
on management and risk data.
Accounting data
Figures for each individual entity are drawn up in accordance with
the accounting standards applicable in the country in which the entity
operates. For the purposes of preparing the Group’s consolidated financial
statements, local financial statements are restated to be conforming
with IFRS policies and principles, as adopted by Crédit Agricole S.A.
Management data
Management data is produced by the Group Finance department or
the Group Risk Management department. The data are reported in
anticipation of definitive accounting data in accordance with the same
definition and granularity standards and are used as inputs to the Group’s
internal management reporting.
Furthermore, external sources of information (such as the European
Central Bank and Banque de France) may be used for management
data, particularly for calculating market shares.
CRÉDIT AGRICOLE S.A.
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In accordance with AMF and ESMA (European Securities and Markets
Authority) recommendations, the use of management data for preparing
published financial information must comply with the following guidelines:
classification of the types of financial information published: historical
information, pro forma data, projections or trends;
a clear description of the sources from which the financial information
was drawn. When published data are not extracted directly from
accounting information, the sources and definition of calculation
methods are mentioned;
comparability of figures and indicators over time, which implies ongoing
use of the same sources, calculation methods and methodologies.
Description of the Permanent Accounting Control system
The Group’s Permanent Accounting Controls function’s objective is to
provide adequate coverage of major accounting risks that can alter
the quality of accounting and financial information. This function is
provided by the Accounting Control department, which reports to the
Group Risk Management department. The Group’s Permanent Accounting
Controls function is based on a network of accounting controllers in
the subsidiaries and Regional Banks where it operates its support and
oversight missions.
The unit has the following roles in this area:
to define and circulate standards pertaining to the organisational and
operational principles of permanent accounting controls within the
Crédit Agricole Group;
to prepare notes on methodology regarding new accounting standards
or regulatory changes;
to support, oversee and coordinate the permanent accounting control
systems implemented within the Group’s subsidiaries and Regional
Banks;
to issue assessments of accounting risks for entities presenting a
risk management strategy to the CRG, based on the analysis of the
entities’ permanent accounting control processes.
Work conducted by the Permanent Accounting Control team, which is
responsible for second-level accounting controls in the Accounting and
Regulatory Information department of Crédit Agricole S.A., showed a
generally satisfactory level of maturity in the processes. Ad hoc studies
were carried out and did not reveal any major irregularities. Action plans
aimed at better managing the risks of the controlled processes were
recommended. Follow-up of these plans has been set up.
Work on updating the Accounting Control Guide (
Guide du contrôle
comptable
) began in 2020. This reference document for all the 2.1 and
2.2 accounting controllers of Crédit Agricole Group, which was drawn
up in 2010, is being updated to reflect the new regulations and new
reports requested by the regulatory authorities. The work is expected
to be completed in Q4 2021.
Relations with the Statutory Auditors
The Universal Registration Document, its updates, the securities notes
and the prospectuses prepared for new debt or share issues, which
contain comprehensive financial information, are subject to approval
by or registration with the AMF.
In accordance with applicable professional standards, the Statutory
Auditors perform those procedures they deem appropriate on published
accounting and financial information:
audit of the parent company and consolidated financial statements;
review of interim consolidated financial statements;
read through of quarterly financial information and materials used
as a basis for presenting financial information to financial analysts.
As part of the duties assigned to them by law, the Statutory Auditors
submit to Crédit Agricole S.A.’s Audit Committee their overall work
programme, the various spot checks they have carried out, the
conclusions of their work on the accounting and financial information
they have reviewed in carrying out their assignment, as well as any
significant weaknesses of the internal controls, with regards to the
procedures used for the preparation and processing of accounting and
financial information.
Non-compliance risk prevention and controls
See Part 2.10 “Non-compliance risks” below.
Periodic control
The Group Control and Audit department, which reports directly to the
Chief Executive Officer of Crédit Agricole S.A., is the highest level of
control within the Crédit Agricole Group. Its sole responsibility is to
ensure the Crédit Agricole Group’s periodic control through the missions
it carries out, the management of Crédit Agricole S.A.’s Audit-Control
function, which is hierarchically attached to it, and the management of
the internal audit units of the Regional Banks.
Based on an updated risk mapping approach resulting in an audit cycle
generally lasting between two and five years, it conducts on-site and
documentary audits in the Regional Banks, units of Crédit Agricole S.A.
and its subsidiaries, including when they have their own internal audit
and control units, as part of a coordinated approach to audit plans.
These periodic audits include a critical review of the internal control
system put in place by the audited entities. These procedures are
designed to provide reasonable assurance on the effectiveness of the
system in terms of operational safety, risk control and compliance with
external and internal rules.
Within the audited entities, they consist in particular in ensuring
compliance with external and internal regulations, assessing the safety
and effectiveness of operating procedures, ensuring the adequacy of
systems for measuring and monitoring risks of all kinds and verifying
the reliability of accounting information.
Thanks to its specialised audit teams, the Group Control and Audit
department conducts several IT assignments each year on the
information systems of the Group’s entities as well as current issues,
largely related to IT security, or in the field of models in the context of
calculating the entities’ or the Group’s capital requirements. Finally, as
required by regulations, the Group Control and Audit department carries
out audits of outsourced essential services of interest to the Group or
to the financial community.
The Group Control and Audit department also provides a centralised
monitoring of the Audit-Control function for all subsidiaries and
leads the periodic control of the Regional Banks, thereby enhancing
the effectiveness of controls by harmonising audit practices at their
best level, to ensure the security and regularity of operations in the
various Group entities and to develop common areas of expertise. At
end-2020, the business line had approximately 1,210 full-time equivalent
employees within Crédit Agricole S.A. (including the Group Control and
Audit department) and the Regional Banks.
Joint audit engagements of the Group Control and Audit department and
the audit departments of subsidiaries are regularly carried out, which
contributes to exchanges on best audit practices. Particular importance
is given to thematic and transversal investigations.
In addition, the Group Control and Audit department ensures, within the
framework of the Internal Control Committees of the relevant Group
subsidiaries – in which the Executive Management, the Head of Internal
Audit, the Head of Risk Management and Permanent Controls and the
Compliance Officer of each entity participate – that audit plans are
CRÉDIT AGRICOLE S.A.
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properly carried out, that risks are properly controlled and, more generally,
that each entity’s internal control systems are adequate.
The assignments carried out by the Control and Audit department
of Crédit Agricole S.A., the audit-control units or any external audit
(regulatory authorities, external firms where applicable) are subject
to a formal monitoring system for regulatory controlled monitoring
assignments, which are included in the audit plan on a minimum half-
yearly basis. For each of the recommendations made at the end of these
assignments, the system makes it possible to ensure the progress of
the planned corrective actions, implemented according to a precise
timetable, according to their priority level, and for the Head of the Group
Control and Audit department to exercise, if necessary, the duty to alert
the supervisory body and the Risk Committee pursuant to Article 26 b)
of the Order of 3 November 2014 on the internal control of companies in
the banking, payment services and investment services sector subject
to the supervision of the French Regulatory and Resolution Supervisory
Authority.
In accordance with Article 23 of this Order, the Head of the Group
Control and Audit department reports to the Board of Directors of
Crédit Agricole S.A. regarding the performance of the engagements.
2.4 CREDIT RISK
A credit risk is realised when a counterparty is unable to honour its
obligations and when the carrying amount of these obligations in the
bank’s books is positive. The counterparty may be a bank, an industrial or
commercial enterprise, a government and its various controlled entities,
an investment fund, or an individual person.
Definition of default
The definition of default used in management, which is the same as
the one used for regulatory calculations, changed in 2020 in line with
the regulatory requirements relating to the new default in the various
Group entities.
A debtor is, therefore, considered to be in default when at least one of
the following conditions has been met:
a payment arrear of more than 90 days past due and above the
regulatory materiality thresholds, unless specific circumstances
demonstrate that the delay is due to reasons independent of the
debtor’s financial situation;
the entity believes that the debtor is unlikely to settle its credit
obligations unless it avails itself of certain measures such as
enforcement of collateral security right.
The exposure may be a loan, debt security, deed of property, performance
exchange contract, performance bond or unutilised confirmed
commitment. The risk also includes the settlement risk inherent in any
transaction entailing an exchange of cash or physical goods outside a
secure settlement system.
Restructured loans
Restructuring as defined by the EBA (forbearance) consists of all changes
made to one or more credit agreements, as well as to refinancings,
agreed to by virtue of a customer’s financial difficulties.
Once the restructuring as defined by the EBA has been carried out, the
exposure continues to be classified as “restructured” for at least two
years, if the exposure was performing when restructured, and three
years if the exposure was in default when restructured. These periods
are extended when certain events covered by the Group standards occur
(further incidents for example).
In this respect, Group entities have put in place solutions to identify
and manage these exposures, tailored to their specificities and
to their business lines, depending on the circumstances: based on
expert judgement, algorithmic solutions or a combination of these two
approaches. These solutions have been maintained and tailored as
necessary to the public health crisis situation, in compliance with EBA
guidelines. These mechanisms also make it possible to satisfy the
requirement to produce quarterly regulatory statements on this matter.
The volume of loans in forbearance under the ITS 2013-03 definition
are given in the accompanying Note 3.1. The accounting policies and
principles applicable to receivables are specified in Note 1.2 to the
Group’s financial statements.
I.
Objectives and policy
Credit risk-taking by Crédit Agricole S.A. and its subsidiaries is subject to
the risk appetite of the Group and entities and risk strategies confirmed
by the Board of Directors and approved by the Group Risk Committee,
a sub-committee of Crédit Agricole S.A. Executive Committee chaired
by the Chief Executive Officer. Risk strategies are adjusted to each
business line and its development plan. They set out overall limits,
intervention criteria (types of eligible counterparties, nature and maturity
of eligible products, collateral required) and arrangements for delegating
decision-making authority. These risk strategies are adjusted as required
for each business line, entity, business sector or country. Business lines
are responsible for complying with these risk strategies, and compliance
is controlled by the Risk Management and Permanent Controls Officers.
Crédit Agricole Corporate and Investment Bank also carries out active
portfolio management, in order to reduce the main concentration
risks borne by the Crédit Agricole S.A. Group The Group uses market
instruments, such as credit derivatives or securitisation mechanisms,
to reduce and diversify counterparty risk and enable it to optimise
its use of capital. Similarly, potential risk concentration is mitigated
by syndication of loans with external banks and use of risk hedging
instruments (credit insurance, derivatives).
Crédit Agricole S.A. and its subsidiaries seek to diversify their risks in
order to limit their exposure to credit and counterparty risks, particularly
in the event of a crisis affecting a particular industry or country. To this
end, Crédit Agricole S.A. and its subsidiaries regularly monitor their
total exposures by counterparty, by trading portfolio, by business sector
and by country, using different internal calculation methods depending
on the type of exposure (see in particular Section II.2.2 “Credit risk
measurement”).
To reduce the risk associated with the deterioration of the quality of
its exposure to credit and counterparty risks, the Group may apply a
hedging strategy consisting notably of the purchase of credit derivatives
(see Credit risks under paragraph 2.4.II.4.3 “Use of credit derivatives”,
Market risks under Section 2.5.III.2. “Use of credit derivatives” and Asset
and liability management Part 2.6.V “Hedging policy”).
When the risk is proven, an individual or portfolio-based impairment
policy is implemented.
In particular, with respect to counterparty risk on market transactions,
the Group’s policy on credit reserves constitution on this type of risk is
similar to credit risk, with a credit valuation adjustment (CVA) for sound
customers that is economically comparable to a collective provision, and
for defaulted counterparties, an individual provision sized in accordance
with the derivative instrument position, taking into account the CVA
amount already provisioned prior to the default.
CRÉDIT AGRICOLE S.A.
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RISKS AND PILLAR 3
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In case of default, the impairment is assessed in accordance with the
same principles as those governing the credit risk provisioning policy:
expected loss amount depending on the derivative instrument rank
in the waterfall. But it takes into account the CVA process, with two
possible outcomes: either derivatives are left in place (CVA or individual
impairment), or they are unwound (individual impairment).
II.
Credit risk management
1.
General principles of risk-taking
All credit transactions require in-depth analysis of the customer’s ability to
repay the debt and the most efficient way of structuring the transaction,
particularly in terms of security and maturity. This analysis must comply
with the risk strategy of the business line or entity concerned and with
all limits in force, both individual and aggregate. The final commitment
decision is based on an internal rating and is taken by the commitment
units or by the Credit Committees, on the basis of an independent opinion
given by a representative of the Risk Management and Permanent
Controls business line as part of the authorisation system in place. The
Group Risk Management Committee and its Chairman constitute the
Group’s ultimate decision-making authority.
Each lending decision requires a risk-return analysis. For the Corporate
and Investment bank this means an ex ante calculation of the profitability
of the transaction.
In addition, the principle of an individual risk limit applies to all types of
counterparty, whether corporates, banks, financial institutions, public
sector or semi-public sector entities.
2.
Risk measurement methods and systems
2.1
Internal rating systems and credit risk
consolidation systems
The internal rating systems cover all of the methods, procedures and
controls used for assessment of credit risk, rating of borrowers and
estimation of losses given default by the borrower. Governance of
the internal rating system relies on the Standards and Methodology
Committee (
Comité des normes et méthodologies
– CNM),
chaired by the Head of Group Risk Management and Permanent
Controls, who is responsible for the validation and circulation of
risk measurement and control standards and methodologies within the
Crédit Agricole Group. In particular, the CNM reviews:
the rules for identifying and measuring risks, in particular, counterparty
rating methods, credit scoring and Basel risk parameter estimates
(probability of default, credit conversion factor, loss given default) and
related organisational procedures;
the segmentation between retail customers and large customers, with
related procedures such as risk consolidation information system
data entry;
the performance of rating and risk assessment methods by reviewing
back-testing results at least once a year;
the use of ratings (validation of common syntaxes, glossaries and
benchmarks).
For retail customers, including loans to individuals (in particular, home
loans and consumer finance) and small businesses, each entity is
responsible for defining, implementing and substantiating its rating
system, in accordance with the Group standards established by
Crédit Agricole S.A.
LCL and the consumer finance subsidiaries (Crédit Agricole Consumer
Finance) have their own rating systems. Crédit Agricole Regional
Banks have shared risk assessment models which are managed at
Crédit Agricole S.A. level. Procedures for back-testing the parameters
used in calculating the regulatory capital requirements have been defined
and are operational in all entities. The internal models used by the Group
are based on statistical models established on explanatory behavioural
variables (e.g. average current account balance) and identifying variables
(e.g. business sector). The approach taken can be either customer-
centred (individual customers, farmers, small businesses and very small
enterprises), or product-centred. The estimated one-year probability of
default, to which the rating relates, is updated on a yearly basis.
For the large customer category, a single fifteen-grade rating scale has
been established on the basis of a segmentation of risk so as to provide
a uniform view of default risk “over a full business cycle”. It has 13
ratings (A+ to E-) categorising counterparties not in default and two
ratings (F and Z) categorising counterparties in default.
Comparison between the Group ratings and the rating agencies
Crédit Agricole Group
A+
A
B+
B
C+
C
C-
D+
D
D-
E+
E
E-
Indicative Moody’s
rating equivalent
Aaa
Aa1/
Aa2
Aa3/A1
A2/A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1/B2
B3
Caa/
Ca/C
Indicative Standard
& Poor’s rating
equivalent
AAA
AA+/AA
AA-/A+
A/A-
BBB+
BBB+
BBB-
BB+
BB
BB-
B+/B
B-
CCC/
CC/C
One-year probability
of default
0.001%
0.01%
0.02%
0.06%
0.16%
0.30%
0.60%
0.75%
1.25%
1.90%
5.0%
12.00%
20.00%
Within Crédit Agricole Group, the large customer category comprises
primarily sovereigns and central banks, corporates, local authorities,
specialised financings as well as banks, insurance companies, asset
management companies and other financial companies. An internal
rating method tailored to each specific risk profile, based on financial
and qualitative criteria, is applied to each type of large customer. For
large customers, Crédit Agricole Group entities have common internal
rating methodologies. Counterparties are rated, at the latest, when they
apply for support and the rating is updated with each renewal or upon
any event that could affect risk quality. The rating assigned must be
approved by a unit independent of the Front Office. The rating is reviewed
at least annually. To ensure that each counterparty has a unique Crédit
Agricole Group rating, a single Group entity is responsible for rating
said counterparty on behalf of all the entities providing it with support.
CRÉDIT AGRICOLE S.A.
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Whether relating to large customers or retail customers, the rating
oversight system implemented by Crédit Agricole S.A., its subsidiaries
and the Regional Banks across the entire rating process concerns:
the rules for identifying and measuring risks, in particular, the methods
used;
the uniformity in the handling of default events on a consolidated basis;
the proper utilisation of the internal rating methodologies;
the reliability of data substantiating the internal rating.
The Standards and Methodology Committee, amongst others, ensures that
these principles are respected, in particular, when rating methodologies
are approved and during annual back-testing.
Furthermore, Crédit Agricole S.A. and its subsidiaries continue to focus
on improving the risk-tracking system for:
the risk management of third parties and groups which is designed to
ensure accurate identification of third parties and groups presenting a
risk within the entities and to improve cross-functional risk information
management on third parties and groups, which is crucial to ensuring
rating uniqueness and consistent allocation of exposures to Basel
portfolios;
the closing process, which aims to guarantee the quality of the process
of production of the solvency ratio.
The French Regulatory and Resolution Supervisory Authority (ACPR) has
authorised the Crédit Agricole Group to use internal rating systems to
calculate regulatory capital requirements for credit risk of its retail and
large customer portfolios on the greater part of its scope.
Having internal rating systems deployed throughout the Group enables
it to implement counterparty risk management based on risk indicators
compliant with current regulatory rules. For large customers, the single
rating system (identical tools and methods, shared data) which has been
implemented for several years now, has helped to improve counterparty
monitoring, in particular, for counterparties common to several Group
entities. The system has also made it possible to have a common
reference framework on which to base standards and procedures,
monitoring tools, alert procedures and risk provisioning policies.
Finally, in the corporate and investment banking businesses, expected
loss, economic capital and risk-adjusted return measurements are
used in the processes for making loan approval decisions, defining risk
strategies and setting risk limits.
2.2
Credit risk measurement
The measurement of credit risk exposures includes both drawn facilities
and confirmed unutilised facilities.
To measure counterparty risk on market transactions, Crédit Agricole S.A.
and its subsidiaries use different types of approaches to estimate the
current and potential risk of derivative instruments (such as swaps and
structured products).
Crédit Agricole CIB uses an internal methodology to estimate the risk
in relation to such instruments, using a net portfolio approach for each
customer:
current risk corresponds to the sum the counterparty would owe in
the event of instantaneous default;
the potential future risk corresponds to the estimated maximum Crédit
Agricole CIB’s exposure for a given confidence interval.
The methodology used is based on “Monte-Carlo”-type simulations
making it possible to assess the risk related to the changes in the
market value of a portfolio of derivatives over the derivatives’ residual
maturity on the basis of a statistical modelling of the change in underlying
market parameters.
This model considers the different risk reduction factors, such as
the use of offsetting and collateralisation in agreements negotiated
with counterparties prior to transactions taking place. It includes also
exchanges of collaterals on initial margin for derivative instruments
which are not cleared under regulatory thresholds.
Situations of specific risk of unfavourable correlations (risk that an
exposure to a derivative is positively correlated with the counterparty’s
probability of default as a result of a legal tie between this counterparty
and the underlying of the derivative) are monitored regularly to identify
and integrate such risks in the exposure measurement as recommended
by regulations. Situations of general risk of unfavourable correlations
(risk that market conditions have a correlated effect on a counterparty’s
credit quality and derivative exposures with this counterparty) were
monitored by means of ad hoc exercises in 2020.
The internal model is used to manage internal limits on transactions
with each counterparty and to measure Basel 3 Pillar 2 economic capital
by determining the average risk exposure (Expected Positive Exposure)
across the portfolio.
As allowed by this regulatory framework, the French Regulatory and
Resolution Supervisory Authority (ACPR) authorised Crédit Agricole CIB
as of 31 March 2014 to use the internal model method to calculate its
capital requirements in respect of counterparty risk. The model uses
the Effective Expected Positive Exposure (EEPE) and is applied to all
derivatives. The same method is used to calculate credit exposure at
default for capital requirement purposes to address the risk of credit
value adjustment (CVA).
For the calculation of capital requirements for counterparty risk for
repo transactions and derivative transactions at its subsidiaries, Crédit
Agricole CIB uses the standardised approach.
Credit risk on these market transactions is managed in accordance with
rules set by the Group. The policy on setting counterparty risk limits is
as described above in Section II.1 “Credit risk management – General
principles of risk-taking”. The techniques used to reduce counterparty
risk on market transactions by Crédit Agricole CIB are described in
“Credit risk mitigation mechanisms”.
The Group includes a Credit Valuation Adjustment (CVA) in its calculation of
the fair value of derivative assets. This valuation adjustment is described
in the accompanying consolidated Note 1.2 on accounting policies and
principles and Note 11.2 on information about financial instruments
measured at fair value of the consolidated financial statements.
The positive gross fair value of the contracts, as well as the gains from
the offsetting and the guarantees held, and the net exposure on derivative
instruments after the impact of offsetting and guarantees are discussed
in the accompanying consolidated Note 6.9 on Offsetting – Financial
Assets of the consolidated financial statements.
At other Group entities, the base for counterparty risk on market
transactions is either calculated by the Crédit Agricole CIB tool under
an internal provision of services agreement or based on the regulatory
approach.
3.
Supervision system of commitments
Rules for dividing and limiting risk exposures, along with specific
processes relating to commitments and grant criteria, are used to
prevent any excessive concentration of the portfolio and to limit the
impact of any underperformance.
3.1
Process for monitoring concentrations by
counterparty or group of related counterparties
The consolidated commitments of all Crédit Agricole Group entities are
monitored by counterparty and by group of related counterparties. A
group of counterparties is a group of French or foreign legal entities that
are connected, regardless of their status and economic activity, enabling
the total exposure to the risk of default of this group to be measured on
the basis of the exposure of one or more of these entities. Commitments
CRÉDIT AGRICOLE S.A.
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to a counterparty or group of related counterparties include all loans
granted by the Group as well as corporate finance transactions, bond
portfolios, financing commitments and counterparty risks relating to
capital market transactions. Exposure limits for counterparties and
groups of related counterparties are recorded in the internal information
systems of each subsidiary or business line. When several subsidiaries
have a counterparty in common, a Group-level aggregate limit is set
on the basis of commitment authorisation limits that depend on the
internal rating.
Each operating entity reports the amount of its commitments by risk
category on a monthly or quarterly basis to the Group Risk Management
and Permanent Controls department. Exposures to major non-bank
counterparties,
i.e.
those on which the aggregate commitments of
Crédit Agricole Group exceed €300 million after offsetting, are reported
separately to the Group Risk Management Committee.
At end-2020, the commercial lending commitments of Crédit Agricole S.A.
and its subsidiaries, to their ten largest non-sovereign, non-bank
customers, amounted to 6.30% of the total non-bank commercial
lending portfolio (compared with 5.77% at 31 December 2019). The
diversification of the portfolio on an individual basis is satisfactory.
3.2
Portfolio review and sector monitoring process
Periodic portfolio reviews conducted by entity or business line strengthen
the monitoring process, thus serving to identify counterparties that are
underperforming, update counterparty ratings, monitor risk strategies
and check on changes in concentration ratios, for instance, by business
sector.
Moreover, the Corporate and Investment Bank has a portfolio modelling
tool that it uses to test how well portfolios hold up under stress scenarios.
3.3
Process for monitoring counterparties in default
and on credit watch
Counterparties in default and on credit watch are monitored closely by the
business lines, in collaboration with the Risk Management and Permanent
Controls Officers. They are also the object of formal monitoring by the
entities’ Sensitive Exposure Committees and of quarterly monitoring by
the Group Risk Committee and the Risk Committee on a consolidated
basis.
3.4
Consolidated credit risk monitoring process
The Group’s credit risk profile is monitored and presented at least every
quarter at the Group Risk Committee and the Board of Directors’ Meetings
using the “Group risk dashboard”.
In addition, detailed periodic reviews of banking risks, country risks and
the main non-banking risks are conducted during Group Risk Committee
Meetings.
3.5
Country risk monitoring and management system
Country risk is the risk that economic, financial, political, judicial or social
conditions in a country will affect the Bank’s financial interests. This
risk does not differ in nature from “elementary” risk (credit, market and
operational risks), but is an aggregate of risks resulting from vulnerability
to a specific political, social, macroeconomic and financial environment.
Country risk covers the assessment of the overall risk environment in a
country as opposed to sovereign risk, which refers to a government’s
counterparty risk.
The system for assessing and monitoring country risk within Crédit
Agricole Group is based on its own rating methodology. Internal country
ratings are based on criteria relating to the financial strength of the
government, the banking system and the economy, criteria relating to
ability and willingness to pay, governance and political stability.
Annually reviewed limits and risk strategies are applied to each country
whose business volume justifies it, with a few exceptions.
This approach is supplemented by scenario analyses aimed at testing
the impact of adverse macroeconomic and financial assumptions. These
tests provide the Group with an integrated view of the risks to which it
may be exposed in situations of extreme tension.
The Group manages and controls its country risks according to the
following principles:
acceptable country risk exposure limits are determined through reviews
of country strategies, depending on the portfolio’s vulnerability to
country risk. The degree of vulnerability is determined by the type
and structure of transactions, the quality of counterparties and the
term of commitments. The exposure limits may be reviewed more
frequently if developments in a particular country make it necessary.
The strategies and limits are validated according to the level of risk
by Crédit Agricole CIB’s Strategy and Portfolio Committee (
Comités
stratégies et portefeuilles
– CSP) and by Crédit Agricole S.A.’s Group
Risk Committee (CRG);
the Corporate and Investment bank maintains a system for regular
assessment of country risk and for updating the country risk rating
quarterly for each country in which the Group operates. This rating
is produced using an internal country rating model based on various
criteria (structural solidity, governance, political stability, ability and
willingness to pay). Specific events may cause ratings to be adjusted
before the next quarterly review;
Crédit Agricole CIB’s Country and Portfolio Risk department validates
transactions whose size, maturity and degree of country risk could
affect the quality of the portfolio.
Country risk exposure is monitored and controlled in both quantitative
(amount and term of exposure) and qualitative (portfolio vulnerability)
terms through regular specific reporting on all exposures to countries.
Western European countries with an internal rating (below B) qualifying
them for close country risk monitoring undergo a separate ad hoc
monitoring procedure. Segment information by geographic area is
provided in note 5.2 of the notes to the consolidated financial statements.
Moreover, exposures to other countries rated below B are detailed in
Chapter III paragraph 2.4 “Country risk” below.
CRÉDIT AGRICOLE S.A.
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3.6
Credit risk stress testing
Credit risk stress testing is primarily based on satellite models that
link changes in credit risk parameters to macroeconomic and financial
variables. These models are independently reviewed and approved by the
Standards and Methodology Committee in the same way as the Basel
models. In addition, the quantitative stress testing system is back-tested
each year. Moreover, since 1 January 2018 these models contribute
to the calculation of ECLs according to IFRS 9 (see Part IV 1. below).
In line with EBA methodology, the credit risk stress tests employ Basel
parameters (PD, LGD, EAD) and aim to estimate changes in the cost
of risk including provisions for assets not in default and the impact on
risk-weighted assets.
For the purposes of credit risk monitoring and management, the Group
Risk Management department carries out a series of stress tests in
cooperation with the relevant business lines and entities.
A global credit risk stress test is carried out at least once a year as part
of the budgetary process. The works, coordinated by the DRG, involve all
Crédit Agricole Group entities and all Basel portfolios, whether they are
treated for regulatory purposes using the IRB or standardised method.
The period examined is set at three years. The stress process is part of
corporate governance and aims to improve dialogue between risk and
finance on the sensitivity of the cost of risk and capital requirements
to a downturn in the economic climate. In addition to being used for
budgetary purposes and to manage capital requirements, the results
of global credit risk stress tests are used to calculate economic capital
(Pillar 2). They are reviewed by the Executive Committee and are also
reported to Crédit Agricole S.A. Board of Directors.
4.
Credit risk mitigation mechanism
4.1
Collateral and guarantees received
Guarantees or collateral are intended to provide partial or full protection
against credit risk.
The principles governing the eligibility, utilisation and management of
collateral and guarantees received as security are defined by Crédit
Agricole Group’s Standards and Methodology Committee (CNM), (in
accordance with the CRR/CRD 4 system for the calculation of the
solvency ratio).
This common framework, defined in Group standards, ensures
a consistent approach across the various Group entities. It notably
documents the conditions for prudential recognition, and the valuation
and revaluation methods of all the credit risk mitigation techniques
that are used: collateral (notably for the financing of assets: property,
aircraft, ships, etc.), personal guarantees, public export credit insurers,
private credit insurance policies, financial guarantee insurance, credit
derivatives, and cash collateral.
The entities are in charge of implementing this framework at the
operational level (management, monitoring of valuations, implementation).
Details of collateral commitments received are provided in Notes 3.1 and 9
to the consolidated financial statements.
Regarding financial assets obtained by enforcement of guarantees or
credit enhancement measures, the Group’s policy is to sell them as
soon as possible.
4.2
Use of netting agreements
If a “master” agreement has been signed with a counterparty
and said counterparty defaults or enters bankruptcy proceedings,
Crédit Agricole S.A. and its subsidiaries apply close out netting, enabling
them to terminate current contracts early and to calculate a net balance
on the debts and debt obligations in respect of this counterparty. They
also use collateralisation techniques to enable securities or cash to be
transferred in the form of collateral or transfer of full ownership during
the lifetime of the hedged transactions, which can be offset, in the event
of default by one of the parties, in order to calculate the net balance of
reciprocal debt and debt obligations resulting from the master agreement
signed with the counterparty.
4.3
Use of credit derivatives
In managing its corporate financing portfolio Crédit Agricole CIB uses
credit derivatives together with a range of risk-transfer instruments,
including, in particular, securitisation (see Information under Pillar 3 of
Basel 3). The aim is to reduce concentration of corporate credit exposure,
diversify the portfolio and reduce loss levels.
At 31 December 2020, the notional amount of protection bought
in the form of credit derivatives was €6.8 billion (€6.4 billion at
31 December 2019), the notional amount of short positions was zero
(the same at 31 December 2019).
Crédit Agricole CIB processes its derivatives through ten leading,
competent and regulated bank counterparties. Furthermore, 60% of
these derivatives are processed through clearing houses (62% at 31
December 2019).
These credit derivative transactions carried out as part of credit risk
mitigation transactions are subject to adjustment calculation under
Prudent Valuation, to cover market risk concentrations.
The outstanding amounts of credit derivatives are shown in the
accompanying consolidated Note 3.2 “Derivative instruments: total
commitments”.
III.
Exposures
1.
Maximum exposure
Crédit Agricole S.A.’s maximum exposure to credit risk corresponds
to the net carrying amount of financial assets (loans and receivables,
debt instruments and derivative instruments) before the effect of non-
recognised netting agreements and collateral. It is shown in Note 3.1
to the financial statements.
At 31 December 2020, Crédit Agricole S.A.’s maximum exposure to credit
and counterparty risk amounted to €1,445 billion (€1,387 billion at 31
December 2019), an increase of 4.2% compared to 2019.
2.
Concentration
An analysis of credit risk on commercial lending commitments
excluding Crédit Agricole Group internal transactions and collateral
given by Crédit Agricole S.A. as part of repurchase agreements (loans
and receivables to credit institutions, loans and receivables to customers,
financing commitments given, and guarantee commitments given for
€962.1 billion) is presented below. This scope excludes in particular
derivative instruments, which are mainly monitored in VaR (see market
risks) and financial assets held by insurance companies (€245 billion
excluding unit-linked policies and UCITS – see Insurance sector risks).
2.1
Portfolio diversification by geographic area
On the commercial lending portfolio (including bank counterparties), the
breakdown by geographic area covers a total portfolio of €937.2 billion at
31 December 2020, compared with €868.3 billion at 31 December 2019.
The breakdown reflects the country in which the commercial lending
risk is based.
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Breakdown by geographic area of commercial
lending of Crédit Agricole S.A.
Geographic area of exposure
2020
2019
Africa and Middle East
3%
4%
Central and South America
1%
1%
North America
6%
8%
Asia and Oceania excluding Japan
5%
5%
Eastern Europe
2%
3%
Western Europe excluding Italy
12%
14%
France (retail banking)
16%
16%
France (excluding retail banking)
41%
32%
Italy
11%
12%
Japan
3%
5%
TOTAL
100%
100%
The breakdown of commercial lending by geographic area was overall
unchanged. At end-2020, lending in France accounted for 56% of the
total, versus 49% at end-2019. Commercial lending in Italy, the Group’s
second largest market, stood at 11%, versus 12% at end-2019.
Note 3.1 to the financial statements presents the breakdown of loans and
receivables and commitments given to customers and credit institutions
by geographic area on the basis of accounting data.
2.2
Portfolio diversification by business sector
On the commercial lending portfolio (including bank counterparties
outside the Group) the scope broken down by business sector stood
at €950.3 billion at 31 December 2020, versus €843.9 billion at
31 December 2019. These breakdowns reflect the business sector in
which the commercial lending risk to customers is based.
Breakdown by business sector of commercial
lending of Crédit Agricole S.A.
Business sector
2020
2019
Air/Space
1.9%
2.1%
Agriculture and food processing
2.0%
2.2%
Insurance
1.2%
1.1%
Automotive
2.9%
2.7%
Other non-banking financial activities
8.5%
10.5%
Other industries
1.5%
1.6%
Other transport
1.4%
1.4%
Banks
2.7%
3.1%
Wood/Paper/Packaging
0.3%
0.3%
Building and public works
1.7%
1.9%
Retail/Consumer goods industries
1.9%
1.8%
Other
3.2%
3.4%
Energy
6.4%
7.3%
o/w Oil and Gas
4.2%
4.9%
o/w Electricity
2.2%
2.4%
Real estate
3.0%
3.5%
Heavy industry
2.1%
2.3%
IT/Technology
1.0%
1.4%
Shipping
1.5%
1.8%
Media/Publishing
0.3%
0.4%
Healthcare/Pharmaceuticals
1.1%
1.1%
Non-trading services/Public sector/Local
authorities
28.3%
20.8%
Telecom
1.4%
1.7%
Tourism/Hotels/Restaurants
0.9%
0.8%
Utilities
0.3%
0.3%
Retail banking customers
24.5%
26.5%
TOTAL
100%
100%
The commercial lending portfolio by business sector is well diversified
and remained overall unchanged in 2020. Only two sectors accounted
for more than 15% of business, as in 2019: the “Non-trading services/
Public sector/Local authorities”, which was the largest at 28.3% (20.8%
in 2019) and the “Retail banking customers” business, the second largest,
for which the share was down to 24.5% from 26.5% of total in 2019.
The decrease in our commitments to banks is largely due to the
significant decline in Crédit Agricole CIB's deposit activity with the
Central Bank of Japan.
The “Oil and gas” sector is the main component of the “Energy” exposure.
This sector comprises a wide diversity of underlyings, players and
types of financing, including a number of sub-segments such as RBL
(Reserve-Based Lending, managed laddered maturities in the United
States), are usually secured by assets.
Most of the exposure in the oil sector relates to players that are
structurally less sensitive to the drop in oil prices (public sector
companies, large international companies, transportation/storage/refinery
companies). Conversely, clients focused on exploration/production and
those dependent on industry investment levels (oil services) are the most
sensitive to market conditions. After a severe crisis that affected the oil
sector in 2016, and despite an unprecedented fall in barrel prices in the
first half of 2020, customers performed well and our portfolio showed
good resilience. Reinforced monitoring of the sector is maintained in
the context of the significant drop in prices recorded at the beginning of
2020 (prices recovered well in the second half of the year). Guided by a
risk-based strategy and due to price volatility, the “Oil and Gas” sector
is subject to a very selective approach to projects and any significant
new transactions are subject to an in-depth analysis of credit and CSR
risk where necessary.
The "Electricity" sector is another component of the exposure to "Energy”
but with its own characteristics, without contagion to the sensitive oil
and gas segments. Half of the exposure focuses on large integrated
or diversified groups.
The "Real Estate and Tourism" portfolio consists mainly of specialised
financing of quality assets to real estate investment professionals;
other financing on a corporate basis is mainly granted to large real
estate companies and is often accompanied by interest rate hedges.
The context of the health crisis has significantly slowed investments
and leases, shops have been hit hard due to the consequences of the
lockdowns, and the tourism industry has been strongly impacted on
an international scale.
The “Aviation” sector financing involves either financing of very high-
quality assets, or financing of some of the world’s leading aircraft or
equipment manufacturers.
The “Automotive” portfolio has been the focus of particular attention
since the end of 2018. It is still deliberately focusing on the major car
manufacturers, with limited development in terms of the main equipment
manufacturers.
The current position of the “Shipping” sector is the result of the expertise
and background of Crédit Agricole CIB in mortgage financing for ships,
which it provides to its international ship-owning customers. After 10
difficult years, maritime transport is showing signs of recovery that
are still moderate and varied depending on the sector. Against this
background, the strategy of progressively reducing exposure, effective
since 2011, continued. However, this portfolio is relatively protected by
its diversification (financing of oil and gas tankers, offshore vessels, bulk
carriers, container ships, cruise ships, etc.), as well as by the quality
of ship financing structures, secured by mortgages and coverage from
credit insurers.
The “heavy industry” sector mainly comprises large global steel, metal
and chemical groups. Within the sector, commitments in the Coal segment
have decreased significantly, in line with the Crédit Agricole Group’s
CSR policy.
CRÉDIT AGRICOLE S.A.
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2.3
Breakdown of loans and receivables
outstanding by customer type
Concentration by customer type of loans and receivables and
commitments given to credit institutions and customers are presented
in Note 3.3 to the consolidated financial statements.
The gross amount of loans and receivables outstanding, including accrued
interest, was €508.7 billion at 31 December 2020, compared with
€508.9 billion at 31 December 2019, a very slight decrease from 2019.
It is split mainly between Corporates and retail customers (respectively,
45.0% and 34.8%).
2.4
Exposure to country risk
At 31 December 2020, commercial lending (including to bank
counterparties) to Crédit Agricole S.A. customers in countries with ratings
below B according to the Group’s internal ratings, excluding countries
in Western Europe (Italy, Spain, Portugal, Greece, Cyprus and Iceland),
totalled €63.3 billion versus €67.6 billion at 31 December 2019. Most of
these commitments come from Crédit Agricole CIB, UBAF (47%-owned
by Crédit Agricole CIB) and International retail banking. They include
guarantees received which are deducted (export credit insurance, cash
deposits, securities pledged, etc.).
The concentration of total exposures in these countries was generally
stable in 2020: the top twenty countries accounted for 94% of the lending
portfolio at end-2020, compared with 93% at end-2019.
Three geographic areas are dominant: Middle East/North Africa (36%),
Asia (25%) and Central and Eastern Europe (26%).
Changes in commercial lending for countries with a credit rating lower than B
(in millions of euros)
Date
Northern Africa/
Middle East
Sub-Saharan
Africa
Americas
Asia
Central and
Eastern Europe
TOTAL
2020
22,975
1,643
6,231
16,027
16,456
63,332
2019
23,389
1,914
6,911
16,299
19,041
67,554
The Middle East and North Africa
Cumulative commitments in countries in the Middle East and North Africa
totalled €23.0 billion at 31 December 2020, down 2% on end-2019.
Morocco, Saudi Arabia, United Arab Emirates, Egypt and Qatar accounted
for 87% of commitments in the Middle East and Northern Africa area.
Central and Eastern Europe
Cumulative commitments in central and Eastern Europe were down 14%
from the previous year. The Group’s commitments remain concentrated
in four countries: Poland, Russia, Ukraine and Serbia, which together
represented 92% of the total in this region.
Asia
Commitments in Asia were down 2% to €16.0 billion from 31 December 2019.
China remains the largest regional exposure (at €11.7 billion) ahead of
India (€3.2 billion).
Latin America
At end-December 2020, exposure to this region represented 10% of all
exposure to countries rated lower than “B”. The decrease in commitments
recorded was 10% compared to end-2019, mainly due to an decrease
in commitments to Brazil and Mexico. Exposure to both these countries
made up 90% of the Latin America total, as was the case at end-2019.
Sub-Saharan Africa
The Group’s commitments in Sub-Saharan Africa totalled €1.6 billion at
31 December 2020,
i.e.
3% of the total for countries with a rating below B,
as was the case at end-2019. Exposure to South Africa accounted for
28% of commitments in this region.
3.
Credit quality
3.1
Analysis of loans and receivables by category
The breakdown of loans and receivables to credit institutions and
customers is presented as follows:
Loans and receivables
(in millions of euros)
31/12/2020
31/12/2019
Neither past due nor impaired
487,677
487,569
Past due but not impaired
7,197
7,649
Impaired
13,814
13,638
TOTAL
508,688
508,856
The portfolio of loans and receivables at 31 December 2020 was 95.9%
made up of amounts that were neither past due nor impaired, compared
with 95.8% at 31 December 2019.
Under IFRS 7, a financial asset is past due when a counterparty has
failed to make a payment when contractually due. The Group considers
there to be no identified credit risk on loans and receivables that are
less than 90 days past due, which account for 99.8% of receivables
past due but not impaired (99.9% at end-2019).
Details of financial assets that were past due or impaired are presented
in Note 3.1 to the consolidated financial statements.
3.2
Analysis of outstanding amounts by internal rating
The internal rating policy used by Crédit Agricole S.A. aims to cover the
entire Group customer portfolio,
i.e.
retail customers, corporates, banks
and financial institutions, government agencies and local authorities.
On the performing commercial lending portfolio excluding retail
customers (€723.3 billion at 31 December 2020, compared with €657.5
billion at 31 December 2019), internally-rated borrowers accounted for
90.2% of the total, compared with 84.4% at end-2019 (€652.4 billion at
31 December 2020, compared with €554.7 billion at 31 December 2019).
The breakdown of this portfolio is presented according to the Standard
& Poor’s equivalents of the Group’s internal ratings:
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Change in the performing non-retail commercial lending
portfolio of Crédit Agricole S.A. by indicative S&P
equivalent of 2018 internal rating
31/12/2020
31/12/2019
AAA
42.0%
33.7%
AA
12.7%
14.1%
A
9.9%
12.5%
BBB+
22.8%
27.6%
BB
10.3%
10.2%
B
1.2%
0.9%
On credit watch
1.1%
1.0%
TOTAL
100.0%
100.0%
This breakdown reflects a high-quality loan book, with a risk profile showing
an increase of nearly 9 points in AAA ratings. At 31 December 2020, 87%
of lending was to borrowers with investment-grade ratings (ratings equal
to or greater than BBB, 88% at 31 December 2019), and only 1.1%
pertained to borrowers on credit watch.
3.3
Impairment and risk coverage
3.3.1
Impairment and risk hedging policy
The policy for hedging loan loss risks is based on two kinds of value
adjustments for credit losses:
impairment allowances on an individual basis intended to cover
probable losses on impaired loans;
impairment allowances for credit losses, pursuant to IFRS 9, following
a significant decline in the loan quality for a transaction or loan
book. These impairments are designed to cover the risk profile of
commitments in certain countries, business sectors or counterparties,
not because they are in default but because their ratings have been
downgraded. Loan book-based impairments are also performed in
retail banking. These impairments are for the most part calculated
on a statistical basis, based on the expected loss amount up to the
transaction’s maturity, using Basel criteria to estimate the probability
of default (PD) and the loss given default (LGD).
3.3.2
Impaired loans and receivables
At 31 December 2020, total individually impaired commitments amounted
to €13.8 billion, compared with €13.6 billion at 31 December 2019. These
consist of commitments for which the Group sees potential non-recovery.
Individually impaired outstandings represent 2.7% of the Group’s gross
book value, as was the case at 31 December 2019.
Restructured loans
(1)
totalled €8.91 billion at 31 December 2020.
4.
Cost of risk
The main factors that had an impact on the level of impairment observed
during the year:
4.1
Main economic and industry-specific factors of 2020
A description of the overall environment and macroeconomic outlook
is detailed in Chapter 1 “Management report”, section “Economic and
financial environment” above.
2020 was shaped by the consequences of the health crisis that had very
variable effects depending on the portfolios. In an environment where
the recovery remains very uncertain and will depend on the evolution
(1) The definition of restructured loans is detailed in Note 1.2 “Accounting policies and principles” to the consolidated financial statements.
of the pandemic and the ability of authorities to control it, the pace at
which support plans are discontinued and the time it takes to return to
normal economic conditions will be key in 2021.
The main sectors to watch will be: tourism and transport, automotive,
aerospace, distribution and retail, shipping and commercial real estate.
4.2
Figures and facts
In a year significantly impacted by the health and economic crisis,
Crédit Agricole S.A.’s cost of risk was €2.61 billion at 31 December 2020,
compared to a pre-crisis level of €1.26 billion in 2019, which is a
107% increase (x2.07). All the Group’s business lines were affected to
various degrees by the crisis, resulting in significant adjustments to
provisions other than for default, primarily in order to take account of the
deterioration in the economy reflected in the macroeconomic indicators,
and increased hedging for the subsidiaries most exposed to the crisis.
Thanks to the various economic support plans, notably implemented
through the Banks in the form of State-guaranteed loans and deferred
repayment, the actual cost of risk proved to be resilient with a relatively
limited increase of 20% at the Crédit Agricole S.A. level in 2020, given
a particularly difficult reference year for certain business lines.
At LCL, the French retail banking network of Crédit Agricole S.A., cost
of risk increased by 80% to €390 million, from €217 million in 2019.
At Crédit Agricole Italia, cost of risk increased by 70% to €428 million,
versus €251 million. The Corporate and Investment Bank, after a very
favourable year in 2019 in terms of risk (€165 million) was highly exposed
in 2020 with a cost of risk totalling €856 million (x5.2), affected in sectors
exposed to the crisis, particularly outside France, with increased default
and fraud cases identified during the crisis. Within the Specialised
Financial Services division, the change primarily concerns the consumer
finance business (the Crédit Agricole Consumer Finance group), where
the cost of credit risk increased by 41% to €637 million, particularly for
its Italian subsidiary Agos Ducato (85%), which was affected to a greater
extent than the French branch (13%), where aid was more widespread
and offered better protection.
Details of the movements that affected the cost of risk are presented in
Note 4.9 to the consolidated financial statements. This is broken down
by business line in Note 5.1 to the consolidated financial statements.
5.
Counterparty risk on derivative instruments
The counterparty risk on derivative instruments is established according
to market value and potential credit risk calculated and weighted in
accordance with regulatory standards. The measure relating to this
credit risk is presented below in Part 2.2 “Credit risk measurement” of
Section II “Credit risk management”.
IV.
Application of IFRS 9
1.
Credit risk rating measurement
The Group used four scenarios for calculating IFRS 9 provisioning
parameters with projections for 2022.
These four scenarios incorporate differentiated assumptions of the
impacts of the COVID-19 crisis on the economy in terms of the speed
and extent of the return to normality of travel, business activity and
consumption, and largely depend on how the health situation develops,
which is still very uncertain today (taking into account a second lockdown,
but also favourable prospects related to the discovery of vaccines at
the end of the year). The level of confidence of economic agents is
also decisive which – depending on health, economic and employment
expectations – results in different levels of wait-and-see and cautious
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behaviour. This in turn determines the propensity of households to
consume the abundant savings they accumulated during the lockdown
and the capacity of businesses to invest. The scale, effectiveness and
timing of government stimulus support programmes also have a
significant impact on the development of activity.
The rebound in Q3 2020, enabled by the lifting of lockdowns in most
European countries, was stronger than expected. In France, GDP
rebounded by 18.2% in Q3 versus Q2, after a -13.7% decline in Q2
versus Q1. The extent of the second wave led to significant restrictions
in Europe in Q4. In France, it seemed likely that the second lockdown
would be extended beyond early December, in order to control levels as
the virus started to circulate again (target of maximum 5,000 infections
per day). With an assumption of a lockdown until mid-December, France’s
GDP was expected to drop by about -8% in Q4 vs. Q3. Average annual
growth in 2020 was not expected to be affected much (-10.1% decline
vs. -9.1% forecast in September), but the carry-over effect (
i.e.
2021
annual growth if quarterly GDP is equal to that of Q4 2020, therefore
zero quarterly growth) for 2021 is negative (-1.6%).
The
first scenario
describes a gradual but not synchronised recovery
from the crisis, with the growth profile strongly dependent on
health assumptions, for which uncertainty is high. Moreover, health
developments and measures taken are not identical among European
countries.
Scenario 1 assumes the pandemic will persist in 2021 with a ‘stop
and go’ scenario during Q1 and Q2 (alternating relaxation, restrictions
and short lockdown periods), but less detrimental than in 2020 (better
control of epidemic flows, fewer restrictions on mobility). Even with
a vaccine on the market, we assume that a large roll-out would not
take place until mid-2021.
For 2021, a GDP growth forecast for France of 4.6%, compared to
the 7.3% forecast used for late June, including a fairly clear rebound
for Q1 2021, but more moderate than for Q3 2020, due to a cautious
lifting of the lockdown – with ongoing restrictive curfew-type measures
likely – and in Q2 2021 a third wave (particularly related to weather
conditions and insufficient effectiveness of the testing strategy)
is assumed to result in a new, shorter episode of lockdown and a
decline in GDP. Lastly, in H2 2021 a rebound (lockdown measures
lifted again) and an improvement in the situation due to vaccination
campaigns. But a cautious recovery, despite support measures: some
sectors will remain markedly weakened (aeronautics, automotive,
trade, tourism, hotels, restaurants, culture, etc.); uncertainty about a
resumption of investments despite the stimulus plan; bankruptcies;
continued high precautionary savings by households in light of rising
unemployment, limiting the use of the savings accumulated during
successive lockdowns.
As a result, the ECB would move towards more easing and more
purchases of sovereign debt securities. Indeed, with the outlook
for growth and inflation still bleak, future sovereign debt issuance
should induce the ECB to do more. We do not expect a rate cut in the
foreseeable future. Net asset purchases under the PEPP (€750 billion
in March to €1,350 billion in June) are due to end in June 2021.
This scenario assumes that the ECB will increase its purchasing
programmes during H2 2021 as well as 2022 (via an extension and
expansion of the PEPP or a simple increase in the APP).
Since the peak of risk aversion in March, the yield on the 10-year
Bund did try to recover but has been systematically reduced to
-0.50%/0.60%. No view on the evolution of the pandemic, on the
growth profile of 2021 and, more generally, a very high degree of
uncertainty. Also, the Bund remains at a very low level.
The
second scenario
involves more negative health developments
and more stringent restrictive measures.
The second scenario uses identical forecasts to those of the first
scenario for the year 2020. The profile for 2021 is assumed to be
fairly comparable to Q1 2021 (cautious lifting of the lockdown), but
in Q2 2021, a stronger and faster third wave is assumed, resulting
in a more serious lockdown of about two months, versus a month
in the central scenario. Scenario 2 would result in a much sharper
decline in GDP in Q2, but also followed by a stronger rebound in Q3.
In this scenario, for 2021: there would be an average GDP increase
expected at 3% vs. 4.6% in Scenario 1.
The
third scenario
is slightly more favourable than scenario 1 and
assumes a significantly stronger recovery in 2021 (GDP growth in
France of 7.1% due to faster control of the health situation).
The
fourth scenario
, the least likely, is characterised by a slightly
stronger decline in activity in 2021 and an additional shock in France
that would involve rekindled social tensions, blockages, and strikes.
In France, in this scenario, domestic demand will fall sharply in H1
2021. There is a persistent circulation of the virus. State support
measures are not renewed in 2021 and, lastly, an increase in
unemployment and bankruptcies is observed.
With no visibility and with excess capacity, there is a marked downward
revision of investments.
Households remain very cautious with few major purchases.
There are also renewed social tensions and a freezing of the reform
programme. Lastly, the country’s credit rating is downgraded by a
notch.
In this scenario, in France, the gradual recovery is postponed in 2021
(average growth of just 1.9% in GDP), with the activity trend level
weighed down by a sharper increase in unemployment (12.5% in
2021 after 10% in 2020).
In addition, concerning:
the inclusion of support measures in IFRS 9 projections: the process
was revised in 2020 to better reflect the impact of government
programmes in IFRS 9 forecasts. The effect of this revision is to
mitigate the sudden intensity of the crisis and the strength of the
recovery, and to spread these over a longer period (three years).
The variables relating to the interest rates level, and more generally
all the variables linked to the capital markets, have not been modified,
because their forecasts already structurally include the effects of the
support policies;
sector and local scenarios: as noted above, sector complements
established at the local level ("forward looking local") by some
Group entities can supplement the centrally defined macroeconomic
scenarios.
At the end of December 2020, including local forward looking scenarios,
the share of Stage 1/Stage 2 provisions on the one hand (provisioning
for performing loans) and Stage 3 provisions on the other hand
(provisioning for proven risks) represented 28% and 72%, respectively,
of Crédit Agricole S.A.’s total stock of provisions.
At the end of December 2020, net additions to provisions for Stage 1/
Stage 2 represented 32% of the Crédit Agricole Group’s annual cost of
risk and 68% for the Stage 3 share of proven risks and other provisions.
CRÉDIT AGRICOLE S.A.
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Sensitivity analysis of ECL amounts for IFRS 9
provisions (Stages 1 and 2)
Scenario 1 was weighted at 55% for the calculation of IFRS ECL
amounts for Q4-2020. By way of example, a 10-point reduction in the
weighting of scenario 1 in the calculations at Q4-2020 in favour of the
more unfavourable scenario 2, leads to a rise in the ECL stock under
“forward looking central” of around 0.8% for the Crédit Agricole SA
Group. However, such a change in the weight would not necessarily
have a significant impact due to “forward looking local” adjustments,
which could mitigate the effect.
Criteria used to assess the disapearance
of a significant deterioration in credit risk
They are symmetrical to those determining entry into Stage 2. In the event
that this has been triggered by restructuring due to financial difficulty,
the disappearance of the significant deterioration implies the application
of a probationary period according to the methods described in the
appendices of the financial statements (see CA financial statements at
the end of 2020 § 1.2 Financial instruments) descibing the conditions
for exiting a restructuring situation due to financial difficulties.
2.
ECL trends
Changes in the structure of outstanding amounts and ECL during the
period are detailed in section 3.1 of the consolidated financial statements
as at 31 December 2020.
The comments below pertain to the scope of financial assets at amortised
cost (loans and receivables from customers), which represent around
90% of the value adjustments for losses.
Loan structure
2020 was a particularly atypical year with continued momentum in loan
activity, notably with the support through the granting of State-guaranteed
loans (€12 billion for Crédit Agricole S.A.). Crédit Agricole S.A.´s exposures
increased by €11.0 billion during the year, including €12.5 billion for the
French retail banking network and €2.6 billion outside France. Conversely,
exposures decreased, particularly in Large Customers, down by -€1.4
billion, including a negative currency effect, and in specialised business
lines down by -€2.3 billion.
Despite the crisis, changes observed in the portfolio structures were
limited during the year: the weighting of performing loans with lowest
risk (Stage 1) remained very close to the pre-crisis level, at 87.3% versus
86.8% at the beginning of the year, with growth of €2.4 billion (0.7%).
The share of performing loans showing signs of a significant deterioration
in credit risk (Stage 2) increased during the year (9.4% versus 7.4% at
the beginning of the year), corresponding to an €8 billion increase in
the total (27.2%), mainly for the Corporate and Investment Bank and
the leasing business, reflecting the deterioration observed in certain
targeted portfolios (either via ratings or additional hedges resulting in a
lower rating). Conversely, the LCL French retail banking network posted
a reduction in this category (-€1.7 billion).
Impaired loans (Stage 3) remained relatively stable despite the crisis
(up by only 2.1%, or €0.3 billion), including targeted increases in
Large Customers (+€0.8 billion, or 22%) and the Consumer Finance
business (+€0.2 billion, or 8%), partially offset by a reduction in defaulted
outstandings for LCL (5%) and the International Banking Network (10%
effect from the disposal of a portfolio of non-performing loans in Italy).
ECL trends
Value adjustments on the best-rated counterparties (Stage 1) increased
sharply (23%) due to increased outstandings, but mainly with the
incorporation of the macroeconomic scenarios designed during the
crisis into the ECL calculation parameters. The hedging ratio increased
to 0.25% versus 0.21%.
Stage 2 ECLs also rose, due to the increase in outstandings, the update
of the macroeconomic scenarios in the calculation parameters, as well
as increased local hedging on the sectors most affected by the crisis. The
Stage 2 coverage ratio averaged at 4.40% at Group level compared to
4.14% at the beginning of the year. Furthermore, parameter adjustments
were made in the fourth quarter to factor in the new definition of default.
The hedge ratio for impaired loans (Stage 3) decreased for the
Crédit Agricole S.A. Group (51.8% versus 54.8% at end-2019), reflecting
the use of the new definition of default within the Group from Q3 2020,
with in particular, the introduction of the notion of an observation period
for impaired loans. This segment has lower provision ratios than the
rest of Stage 3 due to its types of exposures, which should ultimately
be reclassified to Stage 2.
2.5
MARKET RISKS
Market risk is the risk of a negative impact on the income statement or
balance sheet of adverse fluctuations in the value of financial instruments
following changes in market parameters, particularly:
interest rates: interest rate risk is the risk of a change in the fair value
of a financial instrument or the future cash flows from a financial
instrument due to a change in interest rates;
exchange rates: foreign exchange risk is the risk of a change in the
fair value of a financial instrument due to a change in exchange rates;
prices: price risk is the risk of a change or volatility in the price of
equities, commodities, baskets of equities or stock market indices. The
instruments most exposed to this risk are, in particular, variable-income
securities, equity derivatives and commodity derivatives;
credit spreads: credit risk is the risk of a change in the fair value of a
financial instrument resulting from movement in the credit spreads
on indices or issuers. For more complex credit products there is also
the risk of a change in fair value arising from a change in correlation
between issuer defaults.
I.
Objectives and policy
Crédit Agricole S.A. has a specific market risk management system
with its own organisation independent of operational hierarchies, risk
identification and measurement methods, monitoring and consolidation
procedures. In terms of scope, this system hedges all market risk.
In a market context marked by the health crisis, unprecedented global
recession, the US elections, Brexit, highly volatility on the financial
markets and the massive government and central bank support to fight
against the effects of the economic crisis, the Group continued to apply
a prudent market risk management policy, in line with its risk appetite.
CRÉDIT AGRICOLE S.A.
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2. Risk management
II.
Risk management
1.
Local and central organisation
Crédit Agricole S.A. has two distinct and complementary levels of market
risk management:
at the central level, the Group Risk Management and Permanent
Controls department ensures coordination on all subjects related
to the management and control of cross-functional market risks. It
standardises data and data processing to ensure consistency of both
consolidated risk measurement and controls. It keeps the executive
bodies (Executive Management of Crédit Agricole S.A.) and decision-
making bodies (Board of Directors and Risk Management Committee)
up-to-date on the market risk position;
at the local level, for each Crédit Agricole S.A. entity, a Risk
Management and Permanent Controls Officer manages the monitoring
and control of market risks arising from the entity’s businesses. Within
the Crédit Agricole Corporate and Investment Bank subsidiary, the Risk
Management and Permanent Controls department includes the Market
and Counterparty Risks (MCR) department which is responsible for
identifying, measuring and monitoring market risks. This department
provides assistance in monitoring the market risks of international
retail banks in addition to the local risk teams, as well as for the trading
portfolios of the Financial Steering department of Crédit Agricole S.A.,
whose transactions are managed in the IT system of Crédit Agricole
Corporate and Investment bank.
Within the MCR department, these various activities break down as
follows:
a)
risk management, to monitor and control market risk for all product
lines worldwide: limit proposals, which are approved by the Market
Risk Committee and monitored for their compliance, analysis of
limit breaches as well as significant variations in results which are
brought to the attention of the Market Risk Committee;
b)
monitoring of activity: in charge of producing daily management
income and risk indicators for all activities held to market risk limits
and of monitoring and validating the market parameters used to
produce profit and loss account and risk indicators. This ensures
an autonomous production process based on a market database
updated daily, which is independent of the Front Office.
Lastly, the process is used in conjunction with the Finance department
during monthly procedures to align net management income and
net accounting income;
c)
cross-functional teams, responsible for coordinating the methods
and processes between product lines and units. These teams
are responsible for reporting regulatory indicators produced
independently by the MCR department. This includes the following:
-
the team responsible for validating pricers,
-
the team in charge of the internal model (VaR, stressed VaR,
stress scenarios, IRC, etc.),
-
the Market Data Management team, which controls market data
independently,
-
the International Consolidation team, primarily tasked with
producing the department’s consolidated information;
d)
the COO (Chief Operating Officer) and his/her team, responsible for
coordinating Group-wide issues: projects, new activities, budgets,
reports and committees.
The IT architecture put in place within Crédit Agricole Corporate and
Investment bank for market risk management is based on sharing the
platforms used in the Front Office, on which risk indicators are calculated.
The independence of the process is based on the selection of market
data and the validation of valuation models by the Risk department.
Group procedures define the level of information, format and frequency
of the reports that entities must transmit to Crédit Agricole S.A. (Group
Risk Management and Permanent Controls department).
2.
Decision-making and Risk Monitoring
Committees
Four governance bodies are involved in the management of market risk
at Crédit Agricole S.A. level::
the Group Risk Committee, chaired by the Chief Executive Officer of
Crédit Agricole S.A., approves the aggregate limits (VaR and Stress) on
each entity’s market risks when it presents its risk strategy and makes
the main decisions in the matter of risk containment. It examines the
market situation and risks incurred on a quarterly basis, in particular
through the main indicators for monitoring market risk, the utilisation
of limits and any significant breaches of limits and incidents;
alerts in connection with market risk are reported to Executive
Management during Executive Committee meetings, potentially
every two weeks;
the Alert Monitoring Committee, chaired by the Head of Group Risk
Management and Permanent Controls reviews all reported alerts on
a monthly basis;
the Standards and Methodology Committee, chaired by the Head of
Group Risk Management and Permanent Controls, is in particular
responsible for approving and circulating standards and methodologies
concerning the supervision and permanent control of market risks.
Crédit Agricole Corporate and Investment Bank is in charge of validating
the prudential standards and models implemented within the scope
of market activities.
In addition, each entity has its own Risk Committee. The most important
of these is Crédit Agricole Corporate and Investment Bank’s Market Risk
Committee (CRM), which meets once monthly and is chaired by the
Management Committee member in charge of risks. It is made up of
Crédit Agricole Corporate and Investment Bank’s head of capital market
activities and the market risk managers. This Committee reviews Crédit
Agricole Corporate and Investment Bank’s positions and the profit and
loss account of its capital market activities and verifies compliance
with the limits assigned to each activity. It has the authority to make
decisions on requests for increases in operational limits.
III.
Market risk measurement
and supervision methodology
1.
Indicators
The market risk measurement and supervision system is based on
a combination of several indicators, most of which are subject to
global or specific limits. It relies principally on Value at Risk (VaR),
stressed VaR, stress scenarios and complementary indicators (risk
factor sensitivity, combined qualitative and quantitative indicators) and
a process that values all positions in each entity giving rise to market
risks. The permanent control process includes procedures to validate
and back-test models.
1.1
VaR (Value at Risk)
The central element of the market risk measurement system is the
historical Value at Risk (VaR). VaR can be defined as the maximum
theoretical loss on a portfolio in the event of adverse movements
in market parameters (interest rates, exchange rates, asset prices,
etc.) over a given time frame and for a given confidence interval.
Crédit Agricole S.A. uses a confidence interval of 99% and a time frame
of one day using one year of historical data. In this way, market risks
incurred by Crédit Agricole S.A. in its trading activities can be monitored
on a daily basis by quantifying the estimated maximum level of loss in
99 out of 100 cases, after inclusion of a number of risk factors.
CRÉDIT AGRICOLE S.A.
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2. Risk management
The process of measuring a historical VaR for risk positions on a given
date is based on the following principles:
compilation of a historical database of risk factors on positions held
by the entities of Crédit Agricole S.A. (interest rates, share prices,
foreign exchange rates, commodity prices, volatilities, credit spreads,
correlation, etc.);
determination of 261 scenarios corresponding to one-day changes
in risk factors, observed over a rolling one-year period;
adjustment of parameters corresponding on the date according to
the 261 scenarios;
remeasurement of the day’s positions based on the 261 scenarios.
The 99% VaR figure based on the 261 scenarios is equal to the average
of the second and third worst results observed.
The offsetting figure is defined as the difference between total
VaR and the sum of VaRs by risk factor. It represents the effects of
diversification among positions held simultaneously on different risk
factors. A procedure known as back-testing (comparing each day’s
result against VaR estimated the day before) is used to confirm the
relevance of the methodology.
The internal VaR model of Crédit Agricole Corporate and Investment
Bank, which is the main contributor to the VaR of Crédit Agricole S.A.,
has been approved by the regulatory authorities.
The VaR calculation methodology undergoes constant improvement
and adjustment to take into account, among other things, the changing
sensitivity of positions to risk factors and the relevance of the methods
to new market conditions. For example, efforts are made to incorporate
new risk factors and to achieve finer granularity on existing risk factors.
This indicator is used for steering purposes for all entities, and for Crédit
Agricole CIB only for calculating the capital charge (the other entities
use the standardised approach).
Limitations of the historical VaR calculation
The main methodological limitations of the VaR model are the following:
the use of daily stress testing assumes that all positions can be
liquidated or covered in one day, which is not always the case for
certain products or in certain crisis situations;
the use of a 99% confidence interval excludes losses that could occur
outside of that interval: VaR is therefore an indicator of risk under
normal market conditions and does not take into account movements
of exceptional magnitude.
Back-testing
A back-testing process is applied to check the relevance of the VaR
model for each of Crédit Agricole S.A.’s entities that has capital market
activities. This process verifies a posteriori whether the number of
exceptions (days when actual losses exceeded estimated VaR) was
within the 99% confidence interval (a daily loss should statistically
exceed the calculated VaR only two or three times a year).
At 31 December 2020, within the regulatory scope of Crédit Agricole
Corporate and Investment bank (see chart below) was subject to seven
12-month rolling VaR exceptions. Consequently, the multiplier, used to
calculate capital requirements, is at its minimum level of 4. This takes
account of the decisions made by the ECB regarding the calculation of
capital requirements in respect of VaR during the crisis.
Back-testing of the regulatory VaR of Crédit Agricole Corporate and Investment Bank for 2020
(in millions of euros)
-25
-20
-15
-10
-5
0
5
10
15
20
25
Jan. 20
Feb. 20
Mar. 20
Apr. 20
May 20
Jun 20
Jul 20
Aug. 20
Sep. 20
Oct. 20
Nov. 20
Dec. 20
THEORETICAL P&L
1% VAR
99% VAR
CLEAN P&L
In millions of euros
1.2
Stress scenarios
Stress scenarios complement the VaR measure, which does not capture
the impact of extreme market conditions. Stress scenarios are calculated
following Group principles to simulate extreme market conditions and
are the result of different complementary approaches:
historical scenarios, which consist in replicating the impact on the
current portfolio of major crises observed in the past. The past crises
used in historical stress scenarios are the 1987 stock market crash,
the 1994 bond market crisis, the 1998 credit market crisis, coupled
with falling equity markets, sharply rising interest rates and declining
emerging-country currencies; the 2008 crisis following the failure
of Lehman Brothers (two stress scenarios measuring the impact of
market movements after the failure);
hypothetical scenarios anticipating plausible shocks, which are
developed in conjunction with economists. The hypothetical scenarios
used are economic recovery with rising equity and commodity markets,
flattening yield curves, appreciation of the USD and narrowing credit
spreads; liquidity crunch, with flattening yield curves, widening
spreads, falling equity markets; and international tensions (scenario
CRÉDIT AGRICOLE S.A.
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RISKS AND PILLAR 3
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2. Risk management
representing economic conditions in a context of international tensions
between China and the United States: rising volatility and falling prices
on the equity markets, falling futures prices and rising volatility on the
commodities market, flattening yield curves, fall of the USD against
other currencies, widening credit spreads).
In addition, other types of stress tests are performed:
at the level of the entities, adverse stress tests enabling evaluation
of the impact of major and unfavourable market movements on the
different business lines;
at the level of Crédit Agricole Corporate and Investment bank, extreme
adverse stress tests are used to measure the impact of even more
severe market shocks.
The stress scenarios are calculated weekly.
1.3
Complementary indicators
Other complementary indicators are also produced by the entities and
can, as part of the risk containment system, be subject to limits. These
include indicators of sensitivity to various risk factors, loss alerts, stop-
loss indicators, nominal amounts, receivables and remaining terms. These
indicators provide fine-grained measurements of exposure to different
market risk factors, serve to identify atypical transactions and fill out the
summary picture of risks supplied by VaR and global stress scenarios.
1.4
Indicators related to the CRD 4 directive
Stressed VaR
The so-called “stressed” VaR is intended to correct the pro-cyclical
nature of historical VaR. This is calculated over the one-year period
preceding the measurement date, and where the associated market
parameters reflect calm market conditions with low volatility, it can
display a low level.
Stressed VaR is calculated using a 99% confidence interval of one day
and over a period of tension corresponding to the worst period observed
for the most significant risk factors and is remeasured every year.
At end-2020, for Crédit Agricole Corporate and Investment Bank it
corresponds to the period 13 November 2007 to 12 November 2008.
In addition to the VaR capital requirement, there is now a stressed VaR
capital requirement.
Incremental Risk Charge
The IRC (Incremental Risk Charge) is an additional equity requirement
related to the risk of default and migration on so-called linear credit
positions (
i.e.
not including credit correlation positions), required by
the CRD 4 directive.
Its purpose is to quantify any unexpected losses caused by credit events
on the issuers,
i.e.
default and migration of rating (the case of either a
fall or a rise in credit rating).
The IRC is calculated with a confidence interval of 99.9% over a risk
period of one year, by Monte Carlo simulations of migration scenarios
based on three sets of data:
1.
a one-year transition matrix provided by S&P and adapted to the
internal rating system of Crédit Agricole Corporate and Investment
Bank. This matrix gives the transition probabilities for an issuer
based on its initial credit rating to higher or lower credit ratings, as
well as its probability of default;
2.
the correlation of issuers with systemic factors;
3.
average spread curves by rating from which the shocks resulting
from migrations are deducted.
These simulated credit default and migration scenarios then make
it possible to value positions using the Crédit Agricole Corporate and
Investment Bank models.
Comprehensive Risk Measure
The Comprehensive Risk Measure (CRM) measures the risk of default,
the risk of a rating change and market risks on the credit correlation
portfolio.
Since end-2016, Crédit Agricole has not had any activities subject to
capital requirements with respect to the Comprehensive Risk Measure.
Credit Value Adjustment
(CVA)
The value adjustment linked to the counterparty’s quality (CVA) aims
to integrate in derivatives’ valuation credit risk associated with the
counterparty (risk of non-payment of sums due in the event of default).
It is calculated on an aggregate basis by counterparty according to the
future exposure profile of the transactions after deducting any collateral.
This adjustment is always negative and is deducted from the fair value
of the financial assets on the balance sheet.
CRD 4 brought in a new capital charge to cover volatility in the CVA. Under
the directive, banks authorised to calculate their capital requirements
using their internal models for both counterparty risk and specific rate
risk must calculate their CVA risk capital charge using the advanced
approach (“CVA VaR”). The size of these capital requirements is calculated
using the same methodology and tools as for market VaR in respect of
specific interest rate risk.
The ACPR has validated the CVA VaR model used by Crédit Agricole
Corporate and Investment Bank and the additional capital required to
cover CVA risk (VaR and stressed VaR) has been measured since 2014.
2.
Use of credit derivatives
CDS (Credit Default Swaps) are used for hedging purposes in the
following cases:
management of credit exposure from the loan book or derivatives
portfolio (CVA);
hedging of bond portfolio exposure;
hedging of the exposure of hybrid derivatives portfolios (e.g. to hedge
the issuance of credit-linked notes sold to investor customers).
IV.
Exposures
VaR (Value at Risk)
Crédit Agricole S.A.’s total VaR is representative of Crédit Agricole S.A.’s
VaR on the capital markets activities.
The Crédit Agricole S.A. VaR is calculated by incorporating the impacts
of diversification between the different entities.
The scope considered for capital market activities of Crédit Agricole
Corporate and Investment Bank is the regulatory VaR (measured through
an internal model approved by the ACPR).
CRÉDIT AGRICOLE S.A.
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RISKS AND PILLAR 3
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2. Risk management
The change in VaR on the capital markets activities of Crédit Agricole S.A. between 31 December 2019 and 31 December 2020, broken down by
major risk factor, is shown in the table below:
Breakdown of VaR (99%, 1 day)
(in millions of euros)
31/12/2020
Minimum
Maximum
Average
31/12/2019
Fixed income
8
6
16
11
6
Credit
4
3
12
7
4
Foreign exchange
5
1
13
3
3
Equities
2
1
3
2
1
Commodities
0
0
0
0
-
Offsetting
-9
-
-
-8
-5
VaR of Crédit Agricole S.A.
9
7
24
14
9
For reference: Sum of the VaRs of all entities
10
8
25
15
10
Averaged over the full year, VaR for 2020 was €14 million, versus €7 million for 2019. This increase is mainly attributable to the exceptional large
shocks in connection with the health crisis. The average VaR remains nevertheless to a non-significant level and below its binding limit.
The following graph shows VaR over the course of 2020:
Crédit Agricole S.A. VaR between 31/12/2019 and 31/12/2020
0
5
10
15
20
25
31/12/2019
31/01/2020
29/02/2020
31/03/2020
30/04/2020
31/05/2020
30/06/2020
31/07/2020
31/08/2020
30/09/2020
30/11/2020
31/10/2020
31/12/2020
In millions of euros
Impacts associated with
stress scenarios
The risk levels of Crédit Agricole S.A. assessed through historical and hypothetical stress scenarios at end-2020 are presented below. As an illustration,
the “1994 Crisis” scenario, which had a negative impact at end-2019 (loss of €55 million), had a positive impact at end-2020 (gain of €15 million).
CRÉDIT AGRICOLE S.A.
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2. Risk management
-200
-150
-100
-50
0
50
100
150
200
31/12/2020
31/12/2019
+101.6
+88.1
-59.1
+150.5
+34.9
+67.1
-12.8
+132.3
-41.4
-32.5
+15.1
-0.3
-157.6
+18.9
+22.1
-55.1
1998
Octobre
2008
1994
Liquidity
1987
International
tensions
Economic
recovery
November
2008
In millions of euros
Stressed VaR
The stressed VaR is calculated on the scope of Crédit Agricole Corporate and Investment bank.
The table below shows the change in regulatory stressed VaR on the capital market activities of Crédit Agricole CIB, between 27 December 2019
and 25 December 2020:
(in millions of euros)
25/12/2020
Minimum
Maximum
Average
27/12/2019
Crédit Agricole CIB stressed VaR
12
11
26
18
16
Change in stressed VaR (99%, 1 day)
The graph below shows the change in regulatory stressed VaR of Crédit Agricole Corporate and Investment bank over the course of 2020.
27/12/2019
24/01/2020
21/02/2020
20/03/2020
17/04/2020
15/05/2020
12/06/2020
10/07/2020
07/08/2020
04/09/2020
30/10/2020
27/11/2020
25/12/2020
02/10/2020
In millions of euros
0
5
10
15
20
25
30
At end-December 2020, stressed regulatory VaR of Crédit Agricole Corporate and Investment bank was €12 million, a decrease of €4 million as at
31 December 2019. On average over the year, stressed VaR (€18 million) was stable compared to the 2019 average.
Capital requirement related to Incremental Risk Charge (IRC)
IRC is calculated on the so-called linear credit positions (
i.e.
excluding correlation positions) scope of Crédit Agricole Corporate and Investment Bank.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
2. Risk management
The table below shows the change in regulatory stressed VaR on the capital market activities of Crédit Agricole Corporate and Investment Bank,
between 31 December 2019 and 31 December 2020:
(in millions of euros)
31/12/2020
Minimum
Maximum
Average
31/12/2019
IRC
116
116
231
143
148
V.
Equity risk
1.
Trading portfolios and
banking book
The different types of business are exposed to equity risk. The equity
risk incurred by the market activities of Crédit Agricole CIB is hedged by
the overall management through VaR (see section IV above). The other
outstandings exposed to equity risk correspond to portfolios that are
invested partly in equities and structured products whose market value
depends on prices of underlying equities and equity indices.
2.
Equity risk from other activities
A number of Crédit Agricole S.A. entities hold portfolios that are invested
partly in equities and structured products whose market value depends
on prices of underlying equities and equity indices.
Note 1.2 “Accounting policies and principles” to the financial statements
presents the various valuation methods for equity instruments measured
at fair value. At 31 December 2020, outstanding amounts exposed to
equity risk amounted to €36.4 billion, including portfolios of insurance
companies for €31.2 billion.
Note 6.4 to the financial statements shows in particular the outstanding
amounts and the unrealised gains and losses on shares recorded at
fair value non-recyclable through equity. Information on market risk
(including equity risk) on the portfolios held by the insurance companies
is presented below in the section on “insurance sector risks”.
3.
Treasury shares
In accordance with the provisions of Articles L. 225-209 et seq. of
the French Commercial Code and European Commission Regulation
2273/2003 of 22 December 2003, the Combined General Meeting
of Shareholders of Crédit Agricole S.A. may grant authority to the
Board of Directors of Crédit Agricole S.A. to trade in its own shares.
Crédit Agricole S.A. uses such an authorisation mainly to cover its
commitments to employees under stock options or to stimulate the
market in a market-making agreement.
Details of 2020 transactions carried out under the share buyback
programme are provided in Chapter 1 of this Document, in the section
“Purchase by the Company of its own shares”.
At 31 December 2020, the outstanding amounts of treasury shares amounted
to 0.04% of the share capital, versus 0.02% at 31 December 2019 (Note 6.20
to the consolidated financial statements).
Details of share buyback programme are provided in Chapter 1 of this
document, under “Purchase by the company of its own shares”.
2.6 ASSET AND LIABILITY MANAGEMENT
I.
Asset and liability management –
Structural financial risks
Crédit Agricole S.A.’s Financial Management department defines the
principles of financial management and ensures their consistent
application within Crédit Agricole S.A. The department is responsible for
organising financial flows, defining and implementing refinancing rules,
performing asset and liability management and managing prudential
ratios.
Optimising financial flows within Crédit Agricole S.A. is an ongoing
objective. Pooling of surplus resources and making it systematically
possible to hedge the associated risks contribute to this objective.
Thus, the principles of the Crédit Agricole S.A. ALM approach ensure that
any surpluses and shortfalls in terms of customer resources, in particular
resources collected by the Regional Banks, are centralised in the books
of Crédit Agricole S.A. This resource pooling helps in refinancing other
Group entities as needed (including Crédit Agricole Leasing & Factoring
and Crédit Agricole Consumer Finance).
The system for centralising the management of liquidity at
Crédit Agricole S.A. serves to control and optimise cash management,
especially since it is accompanied by partial interest rate matching.
Consequently, Crédit Agricole S.A. has a high level of financial cohesion,
with limited spreading of financial risks, particularly liquidity risk.
Nevertheless, the various entities are responsible for managing the
risk that remains at their level, within the limits assigned to them.
Limits are defined by the Chief Executive Officer of Crédit Agricole S.A.
within the framework of the Group Risk Committee, approved by
the Board of Directors of Crédit Agricole S.A., and apply throughout
Crédit Agricole S.A.:
subsidiaries that carry asset and liability risks comply with limits set
by the Crédit Agricole S.A. Risk Committee;
methods of measuring, analysing and managing Crédit Agricole S.A.
assets and liabilities are defined by Crédit Agricole S.A. Regarding
the retail banks’ balance sheets in particular, a consistent system of
run-off conventions and models has been adopted for the Regional
Banks, LCL and the foreign subsidiaries;
Crédit Agricole S.A. consolidates the subsidiaries’ measurements
of their asset and liability risks. Results of these measurements are
monitored by Crédit Agricole S.A.’s Treasury and ALM Committee;
Crédit Agricole S.A.’s Financial Management department and Risk
Management and Permanent Controls department take part in
meetings of the ALM Committees of the main subsidiaries.
II.
Global interest rate risk
1.
Objectives
The objective of global interest rate risk management is to stabilise the
future profits of Crédit Agricole S.A. entities against the impact of any
adverse interest rate movements.
Changes in interest rates impact the net interest margin by creating
mismatches in timing or in the type of indexation between assets and
sources of funds. Interest rate risk management uses balance sheet
or off-balance sheet transactions to limit the resulting volatility in this
income.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
2. Risk management
The scope for monitoring the global interest rate risk is made up of
entities whose business generates an interest rate risk:
Regional Banks;
LCL Group;
Crédit Agricole S.A.;
International retail banks, in particular the Crédit Agricole Italia Group;
Crédit Agricole Corporate and Investment bank;
Crédit Agricole Consumer Finance Group;
Crédit Agricole Leasing & Factoring Group;
CACEIS;
Amundi.
The interest rate risk borne by the Insurance business is monitored
using indicators specific to this business line. An assessment of the
impact of an instantaneous rate shock on the level of own funds under
Solvency 2 is performed on the Crédit Agricole Assurances scope. This
indicator is incorporated within an alert threshold.
2.
Governance
2.1
Interest rate risk management – Entities
Each entity manages its exposures under the supervision of its ALM
Committee, in accordance with the Crédit Agricole S.A. limits and
standards. The limits of Crédit Agricole S.A.’s subsidiaries are reviewed
annually and validated by the Group Risk Committee.
The Group’s Financial Steering department and Risk department are
represented on the main subsidiaries’ ALM Committees. They ensure the
harmonisation of methods and practices across the Group and monitor
compliance with the limits assigned to each of the subsidiaries’ entities.
Each Regional Bank’s situation as regards global interest rate risk is
reviewed quarterly by the Regional Banks’ Risk Management Committee.
2.2
Interest rate risk management – Crédit Agricole S.A.
The Crédit Agricole S.A. exposure to global interest rate risk is monitored
by Crédit Agricole S.A.’s ALM Committee.
This Committee is chaired by the Chief Executive Officer of
Crédit Agricole S.A. and includes several members of the Executive
Committee along with representatives of the Risk Management and
Permanent Controls department:
it examines the individual positions of Crédit Agricole S.A. and its main
subsidiaries, along with consolidated positions for each quarterly
closing;
it examines compliance with limits applicable to Crédit Agricole S.A.
and to entities authorised to bear global interest rate risk;
it validates the guidelines for the global interest rate risk of
Crédit Agricole S.A. proposed by the ALM department.
Limits approved by Crédit Agricole S.A.’s Board of Directors govern the
Group’s exposure to global interest rate risk.
3.
Measurement and management system
3.1
Measurement
The rate risk measurement is mainly based on the calculation of interest
rate gaps.
This methodology consists of staggering outstandings over time (laddering
of maturities) at known rates and inflation-indexed outstandings
according to their contractual terms (maturity date, amortisation profile)
or by modelling out flows of outstandings where:
the maturity profile is not known (products with no contractual maturity,
such as demand deposits, passbook accounts or capital);
implicit or behavioural options sold to customers are incorporated
(early loan repayments, home purchase savings, etc.).
These models are usually defined based on a statistical analysis of past
customer behaviour coupled with a qualitative analysis (economic and
regulatory context, commercial strategy, etc.).
Consistency between the models used by the various Group entities is
ensured through adherence to the modelling principles approved by the
Standards and Methodology Committee. They are approved by the entity’s
ALM Committee and their relevance is monitored on an annual basis.
The gaps are consolidated quarterly at Crédit Agricole S.A. level. When
their management requires it, some entities, particularly the major ones,
measure their gaps more frequently.
The rules that apply in France to the setting of the Livret A index a portion
of the interest to average inflation over a rolling six-month period. The
interest on the Crédit Agricole S.A. other retail banking passbooks is
also correlated with the same half-yearly average inflation rate. As a
result, the Group hedges the risk associated with these balance sheet
items using instruments (carried on or off the balance sheet) for which
the underlying is an inflation rate.
Option risks are included in the gaps using a delta-equivalent measure.
A portion of these risks may be hedged using option-based products.
This measurement system is applied to all significant currencies (mainly
USD, GBP and CHF).
An approach through income supplements this balance sheet picture
with the projection of net interest income simulations over three years.
The methodology corresponds to that of the EBA stress test,
i.e.
a
picture at constant assessment and identical renewal of operations
reaching maturity.
These simulations are carried out based on four scenarios:
realisation of forward rates (central scenario);
shocks of more or less 200bp on interest rates;
shock of 100bp on inflation.
They are calculated on the scopes of the main Group entities and on
a consolidated basis.
These indicators are not subject to a framework but contribute to the
measurement of the assessment of the internal capital need for interest
rate risk.
3.2
Limitation system
The limits set at Group and entity levels put bounds on the extent of the
maximum discounted loss over the next 30 years and the maximum
annual loss over each of the next 15 years in the event of a rate shock.
The rules for setting limits are intended to protect the Group’s net asset
value in accordance with Pillar 2 of the Basel 3 regulations regarding
global interest rate risk and to limit the volatility, over time, of net interest
margins by avoiding sizeable concentrations of risk on certain maturities.
As well as being validated by the Group Risk Committee, these limits
must be approved by each entity’s decision-making body.
Each entity (including Crédit Agricole S.A.) hedges the interest rate
risks generated by this method of financial organisation at its own
level, by means of financial instruments (on- and off-balance sheet,
futures or options).
3.3
Assessment of internal capital requirements
Internal capital requirements with respect to the interest rate risk
are measured using a dual approach combining economic value and
revenues-based metrics.
The economic value impact is measured by taking into account:
the directional interest rate risk (calculated based on gaps);
the option rate risk (mainly gamma effect on caps);
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
295
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
2. Risk management
the behavioural risk (such as early fixed-rate loan repayments);
interest rate risk exposure limits.
This measurement is performed using a set of internal scenarios
incorporating interest rate curve distortions that are calibrated using a
method consistent with that used to assess the other risks measured
under Pillar 2.
The impact on revenues is calculated using net interest margin
simulations (see above).
4.
Exposure
The Crédit Agricole S.A. interest rate gaps are broken down by type of
risk (nominal rate/real rate) in the various currencies. They measure the
surplus or deficit on sources of fixed-rate funds. By convention, a positive
(negative) figure represents a downside (upside) risk on interest rates
in the year considered. The figure indicates the economic sensitivity to
a change in interest rates.
The results of these measures for Crédit Agricole S.A. at 31 December 2020
are as follows:
Gaps in euros (at 31 December 2020)
(in billions of euros)
2021
2022-2026
2027-2031
>2031
Gaps in euros
(1)
4.4
4.9
0.4
(1.7)
(1)
The gaps are presented excluding the TLTRO III operation (which is not exposed to interest
rate risk due to its optional nature).
Over the course of 2021, a 100 basis point decrease in interest rates
in the Eurozone would imply a potential loss for Crédit Agricole S.A. of
€44 million on the banking portfolio at 31 December 2020, amounting
to a decline of 0.2% of 2020 revenues (compared to a decrease of €41
million, or 0.2% of 2019 revenues).
The cumulative impact over the next 30 years of a 200 basis point rate
decrease corresponds to a positive impact of €15 million, or 0.02% of
the regulatory capital of Crédit Agricole S.A.
The above impacts are calculated based on a static balance-sheet ,
i.e.
they do not capture the future production and the potential dynamic
impact on the net banking income of Crédit Agricole S.A. of a variation
in interest rates.
Other currency gaps (at 31 December 2020)
(in billions of euros)
2021
2022-2026
2027-2031
>2031
Other currency gaps
(1)
9.0
0.7
0.3
0.1
(1) Sum of all gaps in all currencies in absolute values countervalued in billions of euros.
On other currencies, a decrease of 100 basis points of the interest rates
in the Eurozone in each currency would imply for the Group a loss of
€90 million in 2021 on the banking portfolio at 31 December 2020,
corresponding to a decrease of 0.4% in 2020 revenues. After the euro,
the main currencies to which Crédit Agricole S.A. is exposed are USD,
CHF, JPY, PLN and MAD.
III. Foreign exchange risk
Foreign exchange risk is treated differently depending on whether it
relates to structural foreign exchange positions (revalued through OCI)
or to operational foreign exchange positions (revalued through P&L).
1.
Structural foreign exchange risk
Crédit Agricole S.A.’s structural foreign exchange risk arises from
long-term investments by the Group in assets denominated in foreign
currencies (equity of the foreign operating entities, whether resulting
from acquisitions, transfers of funds from the head office, or capitalisation
of local earnings), with the Group’s reference currency being the euro.
At 31 December 2020, Crédit Agricole S.A.’s main structural foreign
exchange positions, on a gross basis before hedging, were in US dollars
and currencies pegged to the dollar (in particular the Hong-Kong dollar),
in Swiss francs, pounds sterling, Chinese yuan, Polish zloty, Moroccan
dirham, Japanese yen and Egyptian pounds.
The main principles of the management of structural foreign exchange
positions are:
over the next year, the coverage of the portion of structural positions
that are expected to become operational positions (results in the
process of being formed that are expected to be distributed, shares
that are expected to be sold in the near future);
over a more medium/long term horizon, an adjustment to the level of
hedging of structural foreign exchange positions in order to immunise
the Group’s CET1 ratio against exchange rate fluctuations. This should
include the implementation of new coverage in the event of over-
immunisation or the termination of existing coverage in the event of
under-immunisation. An entity may, however, choose not to hedge a
position denominated in a currency that is over-immunised if the cost
of the hedge is considered too high in relation to the profit earned or
the amount of the position in question is not material.
Five times a year, the Crédit Agricole S.A. structural foreign exchange
positions are presented to Crédit Agricole S.A. ALM Committee, which
is chaired by the Chief Executive Officer. General decisions on how to
manage positions are taken during these meetings.
2.
Operational foreign exchange risk
Operational foreign exchange risk arises from income and expenses of all
kinds that are denominated in currencies other than the euro (provisions,
net income generated by foreign subsidiaries and branches, dividends
in foreign currencies, etc.), and from balance sheet imbalances.
Crédit Agricole S.A. manages the positions affected by foreign currency
income and expenses that appear on its books, as does each entity
within the Group that bears significant risk. The Treasury departments
of foreign subsidiaries’ manage their operational foreign exchange risk
in their local currency.
The Group’s general policy is to limit its operational foreign exchange
positions and not to hedge revenues that have not yet materialised,
unless there is a strong probability that losses will materialise and
unless the impairment risk is high.
In accordance with the foreign exchange risk monitoring and management
procedures, operational foreign exchange positions are updated monthly
or daily for foreign exchange trading operations.
IV. Liquidity and financing risk
Like all credit institutions, the Group is exposed to liquidity risk,
i.e.
the risk of not having sufficient funds to honour its commitments. This
risk could materialise if, for instance, there were a general crisis of
confidence among investors in the money and bond markets or massive
withdrawals of customer deposits.
1.
Objectives and policy
The Group’s primary objective in managing liquidity is to ensure that it
has sufficient resources to meet its requirements in the event of any
type of severe, prolonged liquidity crisis.
To manage this, Crédit Agricole S.A.uses an internal liquidity risk
management and control system whose objectives are:
to maintain liquidity reserves;
to match these reserves with future liabilities coming due;
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
to organise its refinancing (to achieve an appropriate short and long-
term refinancing time frame and diversify sources of refinancing);
to ensure a balanced development between customer loans and
deposits.
The system includes indicators, limits and alert thresholds. These are
calculated and monitored for all Group entities and consolidated to allow
monitoring of liquidity risk across the whole Crédit Agricole Group scope.
It also incorporates compliance with regulatory liquidity constraints.
The short-term liquidity ratio (LCR – Liquidity Coverage Ratio), along
with the Additional Liquidity Monitoring Metrics (ALMM), calculated on
a company or sub-consolidated basis for the Group entities in question
and on a consolidated basis for the Group, are disclosed in a monthly
report to the ECB.
2.
Methodology and governance of the internal
liquidity risk management and control system
Crédit Agricole Group’s liquidity risk management and control system
is built around indicators defined in a standard and divided into four
separate groups:
short-term indicators derived largely from simulations of crisis
scenarios. The purpose of these is to schedule maturities and volumes
of short-term refinancings as a function of liquidity reserves, cash
flow from commercial activity and repayment of long-term debt;
long-term indicators used to assess and schedule long-term debt
maturities: limits on maturity concentrations, allowing the Group to
anticipate its refinancing needs and avoid any risk of difficulties with
refinancing on the markets;
diversification indicators, which allow the Group to monitor and manage
concentrations of sources of market refinancing (by refinancing
channel, type of debt, currency, geographic area, investor);
cost indicators used to measure the short-term and long-term trends
in the Group’s issue spreads and their impact on the cost of liquidity.
The Standards and Methodology Committee is responsible for validating
the definition of these indicators and any changes in them proposed by
Crédit Agricole S.A.’s Group Finance department, on the advice of the
Group Risk Management and Permanent Controls department.
The Crédit Agricole S.A. Board of Directors approves the general policy
for Group liquidity risk management and sets limits for key indicators in
light of the Group’s liquidity risk tolerance. The Group Risk Committee,
which proposes these limits to the Board of Directors, determines how
they are translated to each of the Group’s constituent entities.
Accordingly, each subsidiary of Crédit Agricole S.A. and each Regional
bank is notified of the limits for the indicators controlled at Group level.
In addition to this translation of the Group system, the asset-liabilities
committees (or their equivalent) of these entities define a specific set of
limits for the risks relating to their own business. They are also free to
decide locally to apply a stricter control than that required by the Group.
3.
Liquidity management
Crédit Agricole S.A. controls the management of liquidity risk. The Finance
department is responsible, in respect of short-term refinancing, for:
setting spreads on short-term funds raised under the various
programmes (mainly negotiable certificates of deposit – NCDs);
centralising assets eligible for refinancing by the central banks of
Group entities and specifying the terms and conditions of use in the
framework of tenders;
monitoring and forecasting cash positions.
And in respect of long-term refinancing, for:
assessing needs for long-term funds;
planning refinancing programmes to meet these needs;
executing and monitoring these programmes over the course of the
year;
reallocating the funds raised to Group entities;
setting prices for liquidity in intragroup flows.
Long-term refinancing programmes comprise various instruments (see
below). The body in charge of these tasks at an operational level is the
Group’s Treasury and Liquidity Committee, which reviews all matters
relating to liquidity issues ranging from intraday to medium/long-term.
It proposes policy directions for the Group’s Asset-Liability Management
and Capital Liquidity Committee.
The Asset-Liability Management and Capital Liquidity Committee, chaired
by the Chief Executive Officer of Crédit Agricole S.A. (who is also informed
of the Group’s liquidity positions) is responsible for all key decisions
concerning the management of funding programmes, the launch of
new programmes, the validation of funding budgets and management
of the balance between loans and deposits.
If funding markets tighten, a Committee is set up by the Executive
Management, the Group Risk Management and Permanent Controls
department and the Group Finance department in order to keep a close
watch on the Group’s liquidity situation.
4.
Quantitative information
4.1
Cash balance sheet at 31 December 2020
Liquidity is measured at Crédit Agricole Group level.
In order to provide simple, pertinent and auditable information on the
Group’s liquidity position, the cash balance sheet long-term sources
surplus is calculated quarterly.
The cash balance sheet is derived from Crédit Agricole Group’s IFRS
financial statements. It is based on the definition of a comparison table
between the Group’s IFRS financial statements and the sections of the
cash balance sheet, the definition of which corresponds to that commonly
accepted in the market.
It relates to the banking scope, with insurance activities being managed
in accordance with their own specific regulatory constraints.
Further to the breakdown of the IFRS financial statements in sections
of the cash balance sheet, netting calculations are carried out. They
relate to certain assets and liabilities that have a symmetrical impact
in terms of liquidity risk. Deferred taxes, fair value impacts, collective
impairments, short-selling transactions and other assets and liabilities
were netted for a total of €71 billion at end-December 2020. Similarly,
€96 billion in repos/reverse repos were eliminated insofar as these
outstandings reflect the activity of the securities desk carrying out
securities borrowing and lending operations that offset each other.
Other nettings calculated in order to build the cash balance sheet – for
an amount totalling €169 billion at end-December 2020 – relate to
derivatives, margin calls, adjustment/settlement/liaison accounts and
to non-liquid securities held by the corporate and investment banking
division (CIB) and are included in the “Customer-related trading assets”
section.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
Note that deposits centralised with
Caisse des dépôts et consignations
are not netted in order to build the cash balance sheet; the amount of
centralised deposits (€65 billion at end-December 2020) is booked to
assets under “Customer-related trading assets” and to liabilities under
“Customer-related funds”.
In a final stage, other restatements reassign outstandings that accounting
standards allocate to one section, when they are economically
related to another. As such, senior issues placed through the banking
networks as well as financing by the European Investment Bank, the
Caisse des dépôts et consignations
and other refinancing transactions of
the same type backed by customer loans, which accounting standards
would classify as “Long-term market funds”, are reclassified as
“Customer-related funds”.
(1) Excluding Bankoa and FCA Bank.
Note that for Central Bank refinancing transactions, outstandings related
to the TLTRO (Targeted Longer-Term Refinancing Operation) are included
in “Long-term market funds”. In fact, the TLTRO II and TLTRO III operations
do not allow for early redemption by the ECB and given their four- and
three-year contractual maturity respectively are equivalent to long-term
secured refinancing, identical in liquidity risk terms to a secured issue.
Medium-to-long-term repos are also included in “Long-term market
funds”.
Finally, the CIB’s counterparties that are banks with which we have a
commercial relationship are considered as customers in the construction
of the cash balance sheet.
Crédit Agricole Group cash balance sheet before
netting
at 31 December 2020
NETTINGS
NETTING
96
152
108
17
10
30
9
65
321
937
71
382
134
53
382
199
135
90
984
71
126
184
€2,218bn
ASSETS
LIABILITIES
Transition to the prudential scope
(mainly subtraction of the insurance business)
Transition to the prudential scope
(mainly subtraction of the insurance business)
Tangible and intangible assets
Customer assets
(excluding customer trading assets)
Equity and similar
Customer deposits
MLT market deposits
ST market deposits
Accruals and deferred income - liabilities
Customer trading assets
Securities portfolio
(excluding reverse repos and other ST)
Reverse repos and other ST
Interbank assets
Cash and Central Bank deposits
(incl. mandatory reserves)
Derivative instruments - assets, and other
items necessary for the activity
Derivative instruments - liabilities, and other
items necessary for the activity
Reverse repos
Reverse repos
Other balance sheet items subject to netting
Other balance sheet items subject to netting
€2,218bn
Accruals and deferred income - assets
Centralisation CDC
Standing at €1,500 billion at 31 December 2020, the Group’s cash
balance sheet shows a surplus of stable funding resources over stable
application of funds of €265 billion at end-December 2020.
In connection with the COVID-19 health crisis, in 2020 the Group took
part in the TLTRO III medium-to-long-term refinancing operations of the
European Central Bank, thereby increasing its level of stable resources.
Total TLTRO III outstandings for the Crédit Agricole Group amounted to
€133
(1)
billion at 31 December 2020. (Note that the bonus applicable to
the refinancing rate for these operations is accrued over the drawdown
period and the additional bonus over the period from June 2020 to
June 2021 is accrued over one year, as the Group already meets the
lending trigger).
Furthermore, the Group saw a significant increase in net inflows during
the financial year (deposits were up €82 billion, while loans were up
€52 billion), also contributing to the improvement of stable resources.
This surplus of €265 billion, called the stable resources position, allows
the Group to cover the LCR deficit generated by long-term assets and
stable liabilities (customer, tangible and intangible assets, long-term
funds and own funds). Internal steering does not factor in the temporary
surplus of stable resources resulting from the increase in TLTRO 3
financing, in order to secure the Medium-Term Plan target of more than
€100 billion independently of the future repayment strategy. The ratio
of stable resources over long-term applications of funds was 123.5%
at 31 December 2020.
Furthermore, given the excess liquidity, the Group posted a short-term
lending position at 31 December 2020 (central bank deposits exceeding
the amount of short-term debt).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
298
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
2. Risk management
Crédit Agricole Group cash balance sheet at 31 December 2020
LIABILITIES
31/12/2020
31/12/2019
1,331
Surplus:
€265bn
ASSETS
31/12/2019
31/12/2020
19
113
82
932
11
120
1,500
937
321
108
INTANGIBLE ASSETS AND PP&E
CUSTOMER ASSETS
CUSTOMER TRADING ASSETS
SECURITIES PORTFOLIO
EQUITY AND SIMILAR
CUSTOMER DEPOSITS
LT MARKET RESOURCES
(1)
ST MARKET RESOURCES
REVERSE REPOS (NET) AND OTHER ST
INTERBANK ASSETS
CASH AND CENTRAL BANK DEPOSITS
(including mandatory reserves)
(1) LT market resources include T-LTRO drawings.
54
134
1,500
30
135
90
984
199
53
9
1,331
855
210
137
129
Medium-to-long-term market resources were €321 billion at 31 December 2020
Long-term market funds increased by €111 billion over the financial year.
The increase in senior secured debt is explained by the Group taking part in the TLTRO III operations of the European Central Bank. Moreover, the
increase in senior non-preferred debt (+€5 billion) is aimed at meeting future resolution requirements.
Changes in long term market resources of the Crédit Agricole Group
31/12/2019
31/12/2020
19
18
0
5
82
€321bn
€210bn
91
Tier 1
(1)
Senior
non-preferred
Senior
preferred
Tier 2
(1)
(1)
Notional amount.
Accounting view (excluding solvency prudential adjustement).
AT1
AT1
Senior secured
24
19
0
6
199
79
4.2
Change in Crédit Agricole Group’s liquidity reserves
Liquidity reserves after haircuts totalled €438 billion at 31 December 2020. They covered short-term debt more than four times over (excluding
the replacements with Central Banks).
The high level of central bank deposits was the result of the replacement of significant excess liquidity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
299
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
2. Risk management
Liquidity reserves of the Crédit Agricole Group at 31 December 2020
298
438
31/12/2019
31/12/2020
94
48
22
14
108
106
8
15
135
186
DEPOSITS WITH CENTRAL BANK
(excl. cash (€4bn) & mandatory reserves (€9bn))
HQLA SECURITIES
(High Quality Liquid Assets) PORTFOLIO
(2)
OTHER NON-HQLA SECURITIES
(2)
SHARE OF SELF-SUBSCRIBED SECURITISATIONS ELIGIBLE WITH CENTRAL BANKS
(1)
ASSETS ELIGIBLE TO CENTRAL BANKS
AFTER HAIRCUT (immediate access)
(1)
(1) Eligible for central bank refinancing for potential LCR coverage.
(2) Available securities at market value after haircut.
Available liquidity reserves at end-2020 comprised:
€94 billion in loans and receivables eligible for central bank refinancing
operations after the ECB haircut;
€8 billion in treasury shares held by the bank and eligible for central
bank refinancing operations, after haircut;
€186 billion in central bank deposits (excluding cash and mandatory
reserves);
a securities portfolio amounting to €150 billion, consisting of HQLA
securities that were market-linkable and also eligible for central bank
refinancing for €135 billion, and other market-linkable securities for
€15 billion after haircut.
Liquidity reserves in 2020 averaged €396 billion.
The allocation of limits arising from Crédit Agricole Group’s liquidity risk
management and control system to each Crédit Agricole S.A. subsidiary
and Regional bank ensures that local liquidity risks are matched by
adequate coverage from reserves.
4.3
Regulatory ratios
Since March 2014, Eurozone credit institutions have been obliged to
report to their supervisory authorities their Liquidity Coverage Ratio (LCR),
as defined by the EBA (European Banking Authority). The aim of the LCR
is to boost the short-term resilience of banks’ liquidity risk profile by
ensuring that they have sufficient unencumbered High Quality Liquid
Assets (HQLA) that can be converted into cash easily and immediately,
on private markets, assuming a liquidity crisis lasting 30 calendar days.
Credit institutions are subject to a threshold for this ratio, set at 100%
from 1 January 2018.
12-month average at 31/12/2020
(in billions of euros)
Crédit Agricole
Group
Crédit Agricole
S.A.
Liquidity buffer
314.3
283.1
Total net cash outflows
211.0
191.0
Liquidity Coverage Ratio (LCR)
149.0%
148.2%
The average LCR ratios over 12 months for Crédit Agricole Group
and Crédit Agricole S.A. were respectively 149.0% and 148.2% at
end-December 2020. They exceeded the Medium-Term Plan target
of around 110%.
At 31 December 2020, the end-of-period LCR ratios were respectively
€178.5% for the Crédit Agricole Group and 169.4% for Crédit Agricole S.A.
Unlike the LCR, which is a ratio of flows, the NSFR (Net Stable Funding
Ratio) is a ratio that compares the stock of assets with an effective
or potential maturity of longer than one year to liabilities with similar
effective or potential maturity. The definition of the NSFR assigns each
balance sheet item (and certain off-balance sheet items) a weighting
reflecting its potential to mature in longer than one year.
The Crédit Agricole Group is subject to applicable European legislation
(Regulation 575-2013 amended by Regulation 2019-876 of 20 May 2019).
Accordingly, the Crédit Agricole Group must comply with an NSFR ratio of
at least 100% as from 28 June 2021. The Group believes that is already
able to comply with this requirement.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
300
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
5.
Refinancing strategy and conditions in 2020
Against a background of declining interest rates, record amounts were
issued in new bonds on the primary market in January. The COVID-19
epidemic did not affect the funding market until February, and then the
market started to realise that the epidemic was spreading to Europe
and would impact the global economy, which in an initial stage brought
the market to a halt at end-February and early-March.
In March, the global outbreak of the COVID-19 virus and lockdown
measures taken by governments triggered a collapse of the equity
markets, a rise in volatility, a drop in interest rates, and a very rapid
widening of spreads, magnified by waves of sell-offs to counter liquidity
outflows.
To address the situation, the central banks and supervisory authorities,
notably the ECB and EBA, took strong measures to support the markets
and the economy, such as asset purchase plans (the Pandemic Emergency
Purchase Programme, PEPP), financing lines, decreases in key interest
rates (Fed), and regulatory adjustments and arrangements, including an
immediate reduction in counter-cyclical buffers, the early application
of Article 104a of CRD V, arrangements for NPLs or moratoriums, the
postponement of the 2020 EBA stress tests, the recommendation to
cancel dividend payments on shares, the implementation of the “CRR
quick fix”.
At the same time, the governments launched economic stimulus plans
and measures to support companies and individuals, with in particular
in France the introduction of State-guaranteed loans for an amount of
up to €300 billion.
These measures, decided in response to pressing needs and of
unprecedented magnitude, enabled the markets to stabilise as of the
end of March and partially reduce spreads.
On 30 April, the ECB announced new measures with the launch of a
new series of pandemic emergency longer-term refinancing operations
(PELTROs) aimed at supporting the liquidity conditions of the financial
system of the Eurozone. The ECB also announced the terms and
conditions of the TLTRO III with an interest rate that, under certain
conditions, can be as low as 1% during the first year (50bp below the
deposit rate).
Eurozone financial institutions, which had managed to access the market
under secured conditions in March, were able to issue unsecured senior
debt in April and subordinated debt as from May.
In June, the ECB decided to increase the asset purchases carried out
under the PEPP by €600 billion, bringing the programme to an overall
amount of €1,350 billion. 724 European banks borrowed €1,308 billion
during the first drawdown period of the TLTRO III,
i.e.
€548 billion net
of the repayments of previous TLTRO drawdowns.
Against this background, the easing of lockdown measures in most
regions during the second quarter enabled a new reduction in spreads
in May and June, and sustained primary activity.
After the usual slowdown in business during the summer, primary activity
increased again in September and October, due to surplus liquidity and
the support measures of the central banks, while spreads widened with
the deteriorating health conditions and expectations of new restrictions.
It should be noted that there was a change in the type of issues from
the second quarter, with an increase in the number of issues eligible
for resolution and solvency ratios, and a decrease in refinancing-only
issues due to lower demand for refinancing.
In November, refinancing conditions improved significantly following the
US elections and the prospect of a more efficient roll-out of vaccines
than anticipated by the markets.
(1)
In accordance with a decision made by the Group, Crédit Agricole S.A. chooses not to apply the “hedge accounting” option of IFRS 9, as allowed by the standard. All hedging
relationships continue to be documented in accordance with the rules in IAS 39, until, at the latest, the date of application of the regulations on fair value macro hedges
when adopted by the European Union. However, hedge accounting under IAS 39 uses the classification and measurement principles of IFRS 9 to decide which financial
instruments qualify.
On 10 December, the ECB announced a new €500 billion increase in the
overall amount of the PEPP, which was also extended to March 2022
following the revision of its growth and inflation forecasts due to the
resurgence of COVID-19. Regarding the TLTRO, the ECB announced an
extension for an additional 12 months. The most favourable interest rate
of -1% was maintained for an additional year until June 2022, provided
that there is an increase in eligible refinancing granted by the bank.
On 24 December a Trade and Cooperation Agreement was entered into
between the United Kingdom and the European Union, effective as of
1 January 2021 on a provisional basis.
V. Hedging policy
Within Crédit Agricole S.A., derivative instruments are used for three
main purposes:
to meet demand from Group customers;
to manage the Group’s financial risks;
to take positions for the Group’s own account (as part of specific
trading activities).
Derivatives not held for hedging purposes (as defined by IAS 39
(1)
) are
classified as derivative instruments held for trading and are monitored
for market risk as well as counterparty risk, where applicable. Certain
derivative instruments may be held for the economic hedging of financial
risks, without however meeting the IAS 39 criteria. They are also classified
as derivative instruments held for trading.
In all cases, the intent of the hedge is documented at the outset
and verified quarterly by appropriate tests (forward-looking and
backward-looking).
Each Group entity manages its financial risks within limits set by
the Group Risk Committee chaired by the Chief Executive Officer of
Crédit Agricole S.A.
The charts in Note 3.4 to the consolidated financial statements give the
market values and notional amounts of hedging derivatives.
1.
Fair value hedges and cash flow hedges
Global interest rate risk management aims to reconcile two approaches:
1.1
Protection of the Group’s net asset value
This first approach requires matching balance sheet and off-balance
sheet items that are sensitive to interest rate variations (
i.e.
fixed rate
items, for the sake of simplicity) against instruments that are also fixed-
rate, so as to neutralise the variations in fair value that occur when
interest rates change. If the matching is done by means of derivative
instruments (mainly fixed-rate swaps, inflation swaps and market caps),
the derivatives are classified as fair value hedges if the instruments
(micro FVH) or groups of instruments (macro FVH) identified as the hedged
items (fixed-rate assets and inflation: customer loans, fixed-rate liabilities
and inflation: demand deposits and savings deposits) are eligible under
IAS 39 (otherwise, as mentioned above, these derivatives are classified
as held for trading, even though they hedge risk).
To check macrohedging suitability, hedging instruments and hedged
items are grouped by maturity using contract characteristics or, for certain
balance sheet line items (particularly deposits), using assumptions based
on the financial characteristics of the products and historical behaviour.
The comparison between the two maturity schedules (hedges and hedged
items) means that hedging can be documented in a forward-looking
manner for each maturity and each generation.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
301
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
For each macrohedging relationship, the prospective effectiveness of
the hedge is measured at year-end, thereby ensuring that for each
maturity group, the principal amount of the hedged items is greater than
the notional amount of the derivative financial instruments used. The
retrospective effectiveness is therefore measured while ensuring that
the change in the hedged outstanding amount at the beginning of the
period does not indicate any
a posteriori
overhedging. Other factors of
ineffectiveness are also measured: BOR/OIS difference, Credit Valuation
Adjustment (CVA)/Debit Valuation Adjustment (DVA) and Funding Valuation
Adjustment (FVA).
1.2
Protection of the interest margin
This second approach requires neutralising variations in future cash
flows associated with instruments or related balance sheet items that
are affected by interest rate resets on the instruments, either because
they are indexed to interest rate indices that fluctuate or because they
will be refinanced at market rates at some point in the future. If this
neutralisation is done using derivative instruments (mainly interest rate
swaps), the derivative instruments are classified as cash flow hedges
(CFH).This neutralisation can also be carried out for balance sheet
items or instruments that are identified individually (micro CFHs) or
portfolios of line items or instruments (macro CFHs). As is the case for
fair value hedges, the documentation and effectiveness assessment
of these hedging relationships are based on provisional maturities. For
each hedging relationship, the prospective effectiveness of the hedge
is measured at year-end, thereby ensuring that for each maturity group,
the principal amount of the hedged items is greater than the notional
amount of the derivative financial instruments used.
The table below shows the cash flows, broken down by projected maturity
date, for Crédit Agricole S.A., of the cash flow hedging derivatives:
Remaining time to maturity
(in millions of euros)
At 31/12/2020
<1 year
1 to
5 years
≥ 5
years
TOTAL
Cash flows of hedging
derivatives
63
105
28
196
2.
Net investment hedges in foreign currencies
A third hedging category relates to the hedging of investments made
in the entities (mostly international subsidiaries and branches) whose
functional currency is different than that of the Group. The level of hedging
is adjusted by currency, primarily in order to immunise the Group’s CET1
ratio against exchange rate fluctuations. These hedging derivatives used
for international investments (mainly currency bonds and exchange rate
swaps) are subject to net investment hedge documentation. The changes
in hedge value associated with the hedged risk (
i.e.
exchange rate risk)
are recorded, for the effective portion, through other comprehensive
income that can be reclassified, where the amount of the hedged foreign
currency asset is greater than or equal to the nominal (or notional)
amount of the hedging instrument. Any ineffectiveness is recognised
directly through profit or loss.
2.7 INSURANCE SECTOR RISKS
The information in this section supplements Note 4 to the consolidated
financial statements in the Universal Registration Document of Crédit
Agricole Assurances and is covered by the Statutory Auditors’ Report
on the consolidated financial statements.
In view of the predominance of its savings and retirement activities,
the Crédit Agricole Assurances Group is more particularly exposed to
market risks (equity risk, spread risk) and asset/liability risks (liquidity
and interest rate risk). The Crédit Agricole Assurances Group also
faces insurance risks. Lastly, it is exposed to operational risk linked to
non-compliance risk and to legal risk particularly in process execution.
I.
Governance and organisation of risk
management in the Crédit Agricole
Assurances Group
The risk governance system of the Crédit Agricole Assurances Group is
based on the following principles:
it is within the remit of the control function mechanism at
Crédit Agricole S.A. level that includes the Group Risk Management
and Permanent Control Division, which is responsible for steering
(supervision and prevention) and second-degree control, the Internal
Audit business line, which is responsible for periodic control, and
the Compliance business line. In addition to these functions is the
Actuarial Function at the Crédit Agricole Assurances level, as required
by insurance company regulations;
it is overseen by the Risk Management department of the Crédit
Agricole Assurances Group, which heads the “Risk Management”
business line, supervises procedures and ensures that subsidiary
risk management systems are compliant with Group standards and
principles. It is supported by experts for each major risk category;
it is based on the principle of subsidiarity. Each Crédit Agricole
Assurances Group entity is responsible for defining and implementing
its solo risk management policy, in accordance with Crédit Agricole S.A.
principles and rules, the principles and rules for the management of
Crédit Agricole Assurances Group, and local regulations for international
subsidiaries.
Risk governance falls on:
Executive Management (the CEO and second Executive Directors
as defined by Solvency 2) and the Board of Directors, ultimately
responsible for the Crédit Agricole Assurances Group’s compliance
with all applicable regulations and legislation;
the Crédit Agricole Assurances Executive Committee, which is the
primary strategic body of the Group’s Executive Management and the
Group committees (in particular the Finance Committee, the Risks
and Internal Control Committee, the ALM and Investment Committee
and the Reinsurance Strategy Committee);
the four key functions (Risks, Compliance, Actuarial function, Internal
Audit), whose representatives have been appointed by the Chief
Executive Officer. Their appointment is validated by the Board of
Directors and notified to the competent national supervisory authority.
The four key functions are coordinated by the Risk and Internal Control
Committee of the Crédit Agricole Assurances Group. The heads of the
key functions have direct access to the Board of Directors, to whom
they present the results of their work at least once a year;
an internal control system, defined as the framework designed to
manage and control all types of operations and risks and to ensure
that all transactions are carried out in a manner that is proper (in
compliance with regulations), secure and effective. Crédit Agricole
Assurances asks its Board of Directors to validate its risk policies;
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
the internal process for evaluating Crédit Agricole Assurances Group’s
solvency and risks (Organisational Readiness Self-Assessment –
ORSA), synchronised with the other MTP/Budget strategic processes,
capital planning and the updating of the Risk strategy and function
policies. Prospective assessments completed within this framework
make it possible to analyse the consequences of adverse situations
on the Group’s management indicators and to take the necessary
action, where appropriate.
1.
Organisation of risk management
The risk management system of the Crédit Agricole Assurances Group
is managed by the Head of the Risk Management function, who reports
operationally to the Crédit Agricole Assurances Chief Executive Officer
and hierarchically to the Group Chief Risk Officer of Crédit Agricole S.A.
The Head of the function relies on the Chief Risk Officers of the entities
who report to him/her. The Insurance Risk business line operates like
a matrix, combining entity-level organisations with Group approaches
by type of risk.
The hierarchical reporting line guarantees independence, with a “second
pair of eyes” role (to issue a recommendation) to back the operating
functions, which manage risks day-to-day, make decisions and exercise
first-level controls to ensure their processes are performed properly.
2.
Risk management system
At Crédit Agricole Assurances Group level
In order to achieve its strategic orientations while managing and
mitigating its risks appropriately, the Crédit Agricole Assurances Group
established a risk appetite framework. This consists of key indicators
for each risk category that constitute the core of its Risk management
strategy.
The Risk management strategy implemented by the Crédit Agricole
Assurances Group is based on the overall risk management framework
and the limits and alert thresholds for the range of different risks it is
exposed to through the implementation of its strategy.
It is reviewed and validated at least annually, along with the Risk Appetite
Statement, by the Crédit Agricole Assurances Board of Directors, following
a review by the Crédit Agricole S.A. Risk Committee (a sub-committee
of Crédit Agricole S.A. Executive Committee, chaired by its Chief
Executive Officer) of the indicators and major limits. Crédit Agricole
Assurances’ Executive Management and Board of Directors or even
the Crédit Agricole S.A. Risk Committee, depending on the scope of its
authority, are notified of any breaches of alert thresholds or limits and
any resulting corrective measures.
The quarterly risk dashboard of Crédit Agricole Assurances, supplemented
by a monthly report, is used to monitor the Group’s risk profile and
identify potential deviations.
The Board of Directors of Crédit Agricole Assurances receives regular
updates on compliance with the risk appetite framework.
Dedicated bodies have been established to manage risk consistently at
Group level: the Risk Monitoring Committee, which meets bi-monthly,
and the Financial Risk Committee, which meets monthly; portfolios are
reviewed by asset type and current risks are reported monthly to the
Executive Committee.
Moreover, a Committee on Insurance Models at the level of the Crédit
Agricole Assurances Group, steered by the Risk Management business line,
approves the methodologies underpinning the models and indicators used
to address major risks for Crédit Agricole Assurances Group or presenting
cross-sector challenges for the Crédit Agricole Assurances Group.
At entity level
In accordance with the Group framework, companies define their own
processes and systems to measure, supervise and manage risks: process
and risk mapping resulting in a risk strategy that defines, according to
their risk appetite, the Crédit Agricole Assurances Group global limits
in accordance with a process coordinated by the holding company,
accompanied if necessary by limits to manage their specific risks.
The entities also draw up formal policies and procedures providing a
strict framework for risk management (including the rules for accepting
risk when insurance policies are taken out, provisioning and hedging of
technical risks by reinsurance, claims management, etc.).
For its international subsidiaries, Crédit Agricole Assurances has drawn
up a set of standards to be implemented by each entity, which sets out
the scope and rules for decentralised decision-making and specifies
the rules to follow during the decision-making process.
Operational risk management is supervised in each entity by committees
that meet periodically (investment, ALM, technical, reinsurance and
others) in order to monitor developments in the risk position, based
on reporting by business lines, present analyses to support the risk
management process, and, if necessary, draw up proposals for action.
Significant incidents and limit breaches lead to alerts being triggered and
notified either to the Crédit Agricole S.A. Risk Management department
(for Crédit Agricole Assurances group-level limits), or to Crédit Agricole
Assurances Executive Management or the entity’s management.
Corrective measures are implemented accordingly.
The risk management system is examined during meetings of the Risk
Management and Internal Control Committees of each subsidiary, in light
of the permanent control reports, the analysis of their risk dashboard
and the conclusions of periodic controls.
II. Market risk
In view of the predominance of savings activities in the French and
international (Italy mainly) life insurance subsidiaries, and therefore
the very large volume of financial assets held to cover policyholder
liabilities, the Crédit Agricole Assurances Group is particularly concerned
by market risks.
Market risk is the risk of loss that can result from fluctuations in the
price of financial instruments in a portfolio.
The Crédit Agricole Assurances Group is exposed to several types of
market risk:
interest rate risk;
equity risk;
foreign exchange risk;
spread risk. This risk is fully described in a specific section.
In particular, these risks have an impact on the valuation of portfolio
assets and their long-term yield, and must be managed closely with
matching liabilities and, particularly for Life Insurance, with guarantees
granted to policyholders (minimum guaranteed rate, floor guarantee, etc.).
Liquidity risk is monitored specifically.
Thus, the Crédit Agricole Assurances Group’s financial policy provides
for an asset/liability framework aimed at reconciling objectives of
seeking yield for policyholders, conserving ALM balances and delivering
shareholder value. This framework is based on “risk/yield” analyses
and “stress scenarios”, to identify the characteristics of the amounts to
invest, the limitations and objectives over short/medium and long-term
horizons, with market analysis, supported by economic scenarios, to
identify opportunities and limitations in terms of the environment and
the market.
The Investment department of Crédit Agricole Assurances is involved in
developing and monitoring implementation of the investment policies
of Crédit Agricole Assurances Group and of the subsidiaries (taking
into account individual ALM limitations and financial targets), which
are submitted to their respective Board of Directors for approval. It
is responsible for oversight of the investment management services
provided by Amundi (management mandates granted by the companies).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
Moreover, it makes investments directly (without a mandate) on behalf
of the Crédit Agricole Assurances Group companies (in real estate in
particular), as part of the policy of diversification.
1.
Interest rate risk
Type of exposure and risk management
Interest rate risk refers to the risk of a change in the value of the bond
portfolio due to upward or downward movements in interest rates.
The Crédit Agricole Assurances Group bond portfolio, excluding unit-
linked policies, amounted to €245 billion at 31 December 2020, up from
€242 billion at end-2019.
Interest rate risk for the life insurance companies is linked to interactions
between assets (financial management) and liabilities (policyholder
behaviour). Management of this risk requires a global approach combining
financial strategy, the constitution of reserves and sales and income
policies. Crédit Agricole Assurances’ framework for managing interest
rate risk sets out the limits on risks and the related (ALM Committee,
presentation of stress scenarios to the Board of Directors, etc.).
A low interest rate environment puts pressure on the profitability of
the life insurance activities of Crédit Agricole Assurances: it creates
a situation in which returns from securities in the portfolio are lower
than the rates paid out on life insurance contracts. Risks related to the
minimum guaranteed returns in France are handled at regulatory level
by means of prudential provisions.
Crédit Agricole Assurances has a range of levers to tackle the risk of
falling rates:
no longer issuing policies that feature guaranteed return (since 2000
for the main French life insurance company), so that the overall average
return has steadily fallen;
moderation of the profit-sharing paid;
hedging using bond assets and swaps/swaptions to manage
reinvestment risk;
adaptation of ALM and investment policies to the very low interest
rate environment;
prudent diversification of investment assets;
adaptation of the sales policy in favour of deposits to unit-linked
policies.
A risk arising from an increase in interest rates could occur if there is a
gap between the rate of return delivered by the insurer (related to bond
yields) and the rate expected by policyholders in a high-rate environment,
or the rate achieved by other savings vehicles. This could result in a wave
of early redemptions by policyholders, forcing the insurer to dispose of
assets, notably bonds, with unrealised losses (which would generate
losses). In turn, the yield on the portfolio would be reduced, with the
risk of triggering new waves of policy redemptions.
Crédit Agricole Assurances thus implements measures to manage the
risk of a rise in rates:
adjustment of duration according to projected outflows of liabilities;
retention of liquidities or liquid investments with a low risk of loss;
dynamic management of the investment portfolio and setting aside
reserves to provide the capacity to increase the return (capitalisation
reserve, and profit-sharing reserves);
upward interest rate hedging through derivatives;
building customer loyalty to limit early redemptions.
The Crédit Agricole Assurances Group’s dashboard, presented to the
Executive Committee, includes indicators to monitor the nature of this
risk: average guaranteed minimum rate, bond portfolio coverage ratio,
allocation to reserves, etc.
Analysis of sensitivity to interest rate risk
Technical liabilities
The Crédit Agricole Assurances Group’s technical liabilities are largely
insensitive to rate risks for the following reasons:
savings provisions (over 90% of technical reserves, excluding unit-
linked policies): these technical reserves are based on the pricing
rate which is constant over time for a particular policy. As a result,
a change in interest rates will have no impact on the value of these
commitments;
property and casualty reserves: these technical reserves are not
discounted to present value and changes in interest rates therefore
have no impact on the value of these commitments;
mathematical reserves for benefits (personal injury, disability): the
discount rate used in calculating these reserves is based on the
interest rate in force at the calculation date. Therefore, the size of these
commitments varies with interest rates. However, given the limited
amount of these technical commitments, they pose no material risk
for the Crédit Agricole Assurances Group.
Financial investments
The sensitivity to rate risk of Crédit Agricole Assurances Group’s bond portfolio is used to assess the impact of a rate movement. It is calculated by
assuming a 100-basis point rise or fall in interest rates (net of policyholders’ deferred profit-sharing and tax):
(in millions of euros)
31/12/2020
31/12/2019
Impact on
net income
Impact
on equity
Impact on
net income
Impact
on equity
100 bps rise in risk-free rates
(53)
(2,194)
(61)
(2,040)
100 bps decline in risk-free rates
89
2,198
86
2, 043
This table provides the immediate mechanic impact on the asset portfolio based on a static balance sheet, i.e. not including the future production. Thus it does not integrate the impact over time on yield
and insurance revenue of any variation in interest rates.
The impacts presented above take the following elements into account:
the profit-sharing rate for the entity holding the financial investments;
the tax rate in force.
Where securities are recognised as assets at fair value through equity,
the impacts are presented in the “Impact on equity” column. Where they
are recognised as assets at fair value through profit or loss, the impacts
are presented in the “Impact on net ncome” column.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
304
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
To reiterate, Crédit Agricole S.A. uses the overlay approach for financial
assets held for the purpose of an activity involving insurance contracts,
which are designated in accordance with the option provided by the
amendments to IFRS 4 (this approach is explained in Note 1 to the Crédit
Agricole Assurances consolidated financial statements). The sensitivity
of designated assets is recorded in shareholders’ equity.
Financing debt
Borrowings arranged by the Crédit Agricole Assurances Group mainly
pay fixed rates; interest is therefore not very sensitive to changes in
interest rates.
2.
Equity and other diversification assets risk
Type of exposure and risk management
Exposure to the equity markets and other so-called diversification assets
(private equity and listed or unlisted infrastructures, real estate and
alternative management) is intended to capture yield in these markets
(notably with a low correlation between real estate and other asset
classes). Market risk on equities and other diversification assets is
defined as a risk of volatility in terms of valuation and therefore, an
accounting provisioning risk that could have an impact on policyholder
benefits (provision for permanent impairment, provision for liquidity
risk). To limit this effect, particularly for the life insurance portfolios,
allocations are analysed to determine a ceiling for the share of these
diversification assets and a maximum volatility level.
Equities and other diversification assets are held directly or via
dedicated Crédit Agricole Assurances Group UCITS to provide regional
diversification, in accordance with the relevant risk policies. Exposure
to these assets is managed by a series of limits (by asset class and
overall for the diversification) and concentration rules.
Compliance with these limits is monitored on a monthly basis.
The main asset classes in the global portfolio are presented in Note
6.4 to the consolidated financial statements. The fair value of financial
assets and liabilities recognised at acquisition cost in the balance sheet
is disclosed in Note 6.5.1 to the consolidated financial statements.
Both items can be found in the Crédit Agricole Assurances Universal
Registration Document.
Analysis of sensitivity to equity risk
A quantified measurement of equity risk can be expressed by the sensitivity calculated by assuming a 10% rise or fall in equity markets (impacts
are shown net of policyholders’ deferred profit-sharing and tax):
(in millions of euros)
31/12/2020
31/12/2019
Impact on
net ncome
Impact
on equity
Impact on
net ncome
Impact
on equity
10% rise in equity markets
123
151
115
174
10% decline in equity markets
(127)
(151)
(118)
(174)
The impacts presented above take the following elements into account:
the profit-sharing rate for the entity holding the financial investments;
the tax rate in force.
These sensitivity measurements include the impact of changes in the
benchmark equity index on assets measured at fair value, reserves for
guaranteed minimum return and reserves for the right to withdraw from
unit-linked policies as well as any additional impairment provisions
required by a decline in equity markets.
Changes in the fair value of equity instruments at fair value through
profit or loss impact net income; changes in the fair value of equity
instruments classified as non-recyclable under the fair value option
impact unrealised gains and/or losses.
Moreover, Crédit Agricole Assurances uses the overlay approach for
financial assets held for the purpose of an activity involving insurance
contracts, which are designated in accordance with the option provided
by the amendments to IFRS 4 (this approach is presented in Note 1 to
the consolidated financial statements). The sensitivity of designated
assets is recorded in shareholders’ equity.
3.
Foreign exchange risk
Foreign exchange risk is defined as the risk of loss due to movements in foreign exchange rates against the euro. For Crédit Agricole Assurances,
this risk is marginal, as shown by the sensitivity to foreign exchange risk, calculated by assuming a 10% rise or fall in each currency relative to the
euro (impacts are shown net of policyholders’ deferred profit-sharing and tax):
(in millions of euros)
31/12/2020
31/12/2019
Impact on
net ncome
Impact
on equity
Impact on
net ncome
Impact
on equity
Exchange rate sensitivity on financial instruments:
+10% for each currency relative to the euro
(0.1)
0.1
0.1
0.2
Exchange rate sensitivity on financial instruments:
-10% for each currency relative to the euro
0.1
(0.1)
(0.1)
(0.2)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
305
Refer to the glossary on page 681 for the definition of technical terms.
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2. Risk management
Crédit Agricole Assurances’s exposure to foreign exchange risk falls
into two categories:
limited structural exposure: in yen for the CA Life Japan subsidiary,
with a hedging ratio of 90% (low net exposure of JPY1.2 billion at
end-2020, equivalent to €9.7 million) and in PLN for the CA Insurance
Poland subsidiary, with a hedge ratio of 91% (net exposure of PLN8.8
million, equivalent to €2.0 million);
operational foreign exchange exposure arising from a mismatch
between the asset’s currency and that of its liabilities: the Crédit
Agricole Assurances Group’s global portfolio, representing
commitments in euros, is primarily invested in euro-denominated
financial instruments. However, to achieve the aim of optimising risk/
return and diversification, the Group seeks to profit from projected
growth and interest rate differentials between major geographic
areas, in dedicated funds and fixed-income mandates. The general
foreign exchange risk hedging strategy is not to hedge exposure to the
currencies of emerging economies, regardless of the asset class, and,
in contrast, to hedge exposure to the currencies of mature countries,
with the option of limited tactical exposure to the US dollar. Crédit
Agricole Assurances Group’s overall foreign exchange exposure is
bound by a maximum market value limit relative to the total portfolio,
and two sub-limits for emerging currencies and the US dollar.
Actual exposure is measured monthly and compared to the exposure
limits. At end-2020, it was not material (0.5% of the global portfolio).
4.
Liquidity risk
Type of exposure and risk management
For Crédit Agricole Assurances, liquidity risk essentially corresponds to
its ability to meet its current liabilities.
From this perspective, the companies combine several approaches.
On the one hand, liquidity is an investment selection criterion (majority
of securities listed on regulated markets, limits on assets in markets
that lack depth, such as private equity, unrated bonds, and alternative
management, etc.).
On the other hand, systems for managing liquidity are consistent across
the Crédit Agricole Assurances Group, and are defined by the companies
as part of their ALM policy:
for life insurance companies, these systems have the goal to ensure a
match between the maturities of assets and those of liabilities under
normal and stressed conditions (wave of buybacks/deaths, see below
the liquidity monitoring indicator). The objective is to ensure liquidity
in the long-term (monitoring and limiting of annual cash run-off gaps),
medium term (so-called “reactivity” ratio described below), and, in
case of uncertainty regarding net inflows, short-term (one-week
and one-month liquidity, with daily monitoring of redemptions).
Temporary liquidity management mechanisms also exist for exceptional
circumstances where markets are unavailable (repurchase agreements
with collateral in cash or ECB-eligible assets);
for non-life insurance companies, liquidities or assets with low
reactivity are retained, and the share is calculated to respond to a
shock to liabilities.
The “reactivity” ratio measures the ability to mobilise current assets of
less than two years or variable-rate assets by limiting the impacts in
terms of capital loss; it is measured and compared against a threshold
set by each life insurance company.
The liquidity monitoring indicator, introduced in 2018, measures the ratio
between stressed liquid assets (appreciation of a discount) and a liquidity
requirement generated by a 40% buyback rate over a one-year period.
Profile of financial investment portfolio maturities
Note 6.6 to the consolidated financial statements of Crédit Agricole
Assurances, which can be found in Part 6 of the Universal Registration
Document, contains the bond portfolio maturity schedule (excluding
unit-linked contracts).
Breakdown of financial liabilities by contractual maturity
Note 6.23 to the consolidated financial statements of Crédit Agricole
Assurances, which can be found in Part 6 of the Universal Registration
Document, provides information on the estimated schedule for Crédit
Agricole Assurances insurance liabilities (excluding unit-linked policies
for which the risk is borne by policyholders).
Financing
As a holding company, Crédit Agricole Assurances is responsible for
subsidiary refinancing enabling them to meet their solvency requirements
and operational cash needs. It is refinanced through its shareholder
Crédit Agricole S.A. and, since 2014, through issuing subordinated debt
directly in the market.
The structure of the financing debt and its breakdown by maturity is
shown in Note 6.21 to the consolidated financial statements of Crédit
Agricole Assurances (Part 6 of the Universal Registration Document).
III.
Counterparty risk
Credit risk is the risk of loss due to default by an issuer. For debt
securities, this risk translates as a decrease in value.
This section deals only with counterparty risk on financial instruments.
Exposure to counterparty risk on reinsurers’ receivables is covered in
the section on “insurance risk”.
Amundi’s risk management teams perform the analysis of counterparty
risk for issuers and for OTC market transactions (derivatives) under the
management mandates granted to them by the insurance companies.
Counterparty risk is contained overall for Crédit Agricole Assurances
Group and at portfolio level for each entity on the basis of limits in terms
of ratings, issuer and sector concentration.
Hence, aggregate limits are defined to manage the breakdown of
issues between rating classes. The rating used is the “Solvency 2”
rating corresponding to the second best of the three Standard & Poor’s,
Moody’s and Fitch ratings. The share of “high-yield” issues held directly or
indirectly via funds, is subject to strict limits. Only issues with a minimum
BB rating are authorised for purchase in mandates. Issuers that have not
been rated by an external agency but have an internal Crédit Agricole S.A.
rating are selected according to a rigorous process and account for
a limited percentage of the portfolio (2.4% at end-December 2020).
The breakdown of the bond portfolio by financial rating makes it possible
to assess its credit quality.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
The bond portfolio (excluding unit-linked policies and UCITS) by credit rating breaks down as follows:
2020
2019
11%
45%
25%
19%
10%
49%
22%
18%
1%
0%
1%
0%
BBB
NR
AAA
A
AA
BB ou < BB
Concentration in a single issuer (equities and interest rate instruments)
may not exceed a given percentage of the global portfolio, which is
determined according to issuer type and quality. Furthermore, limiting
the relative weighting of the top ten issuers ensures diversification within
rating levels A and BBB. Exposure is reviewed quarterly with the Amundi
Risk teams and the Risk Management department of Crédit Agricole S.A.
Concentration in sovereign debt and similar is subject to individual limits
according to debt-to-GDP ratio and the country’s internal credit rating.
The exposure to sovereign debt in Italy, Spain, Portugal and Ireland
is subject to authorisations by the Crédit Agricole S.A. Group Risk
Committee. Such exposure is concentrated in Italian sovereign debt
held by the Italian subsidiary of Crédit Agricole Assurances. The purchase
of Greek issuers’ debt remains prohibited.
Cash collateral contracts are used to manage counterparty risk for
over-the-counter derivatives used by companies to hedge exposure to
rate risk on their balance sheets.
IV.
Insurance risk
The Crédit Agricole Assurances Group is exposed to insurance risk
through the insurance business. Such risk primarily relates to the
underwriting, valuation of provisions and reinsurance processes.
Each entity implements an approach in collaboration with all the operating
departments concerned, as well as Risk, Compliance, Actuarial functions
and Legal Affairs, to manage risks when new insurance products are
created or substantial changes are made to the features of an existing
product. Products are approved by an ad hoc committee (New Business
and New Product Committee).
1.
Insurance underwriting risk
Insurance underwriting risk takes different forms depending on the
whether the insurance is life or non-life:
Life insurance underwriting risk
Through its Savings, Retirement and Death & Disability activities and
life insurance guarantees in respect of its creditor insurance, Crédit
Agricole Assurances is exposed to biometric risks (longevity, mortality,
incapacity, long-term care and disability risks), loading risk (insufficient
loading to cover operating expenses and fees paid to distributors), but
most of all to behavioural risk for redemptions (for example, due to an
increase in interest rates that reduces the competitiveness of certain
investments, a deterioration in trust in Crédit Agricole Group, or a legal
development, such as the
Bourquin
amendment to the
Sapin II
law).
Life insurance technical reserves, recognised in the main by French
companies, are chiefly constituted from savings denominated in euro or
unit-linked (UL) policies. For the majority of UL policies, the risk of fluctuation
in the value of the underlying is borne directly by the policyholder. Some
policies may include a floor guarantee in the event of the death of the
insured, which exposes the insurer to a financial risk determined by the
value of the policies’ UL and the probability of death of the insured. A
specific technical reserve is recognised for this floor guarantee.
In savings, redemption rates are monitored for each life insurance
company and compared with the structural redemption rates established
on the basis of historic and market data.
In death and disability, creditor insurance and yields, the underwriting
policy, which specifies the risks covered, the underwriting conditions
(target customers, exclusions) and pricing standards (notably the
statistical tables established either from national or international statistics
or from experience tables) helps to control risk in this area.
“Catastrophe” risk, related to a mortality shock (e.g. a pandemic) is
likely to impact the results for individual or group death & disability
insurance. The French life insurance subsidiary benefits from BCAC
(
Bureau Commun des Assurances Collectives
) cover, both on group
death benefits and individual death and disability benefits, as well as,
in part, supplementary cover of disability risk.
Non-life insurance underwriting risk
For property and casualty insurance and non-life benefits included in
creditor insurance policies, the underwriting risk can be defined as
the risk that the premiums collected are insufficient compared to the
claims to be settled. Crédit Agricole Assurances is specifically exposed
to frequency risk and exceptional risk, whether originating from a
catastrophe risk (particularly climatic) or the occurrence of individual
incidents for significant amounts.
For distribution partners, underwriting policy defines the framework for
accepting risk (to ensure appropriate selection of risks and the spread
within the policy portfolio to optimise technical margins). Formal rules
and procedures for pricing are also drawn up.
The ratio of claims paid to premiums earned is compared to targets that
are reviewed annually. This claims ratio is the key indicator for monitoring
risk and is used to identify priorities for improving the technical result,
where necessary.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
Concentration risk in non-life insurance relates to an aggregation of
liabilities in respect of a single claim, arising from:
underwriting concentration in which insurance policies are written
by one or more Group entities on the same risk;
claim concentration, where policies are written by one or more Crédit
Agricole Assurances Group entities on risks that are different, but liable
to be triggered by a single covered event or the same primary cause.
This type of risk is hedged, first, by a policy of diversifying the risks written
in a single region and, second, by reinsurance to limit the financial impact
of major event (storms, natural disasters, etc.), under a reinsurance
policy (see reinsurance risk below) that incorporates this dimension.
2.
Provisioning risk
Provisioning risk is the risk of a gap between the provisions set aside
and those required to meet liabilities. It may be related to risk valuation
(volatility introduced by discount rates, regulatory changes, or new
risks for which statistical depth is inadequate, etc.) or a change in risk
factors (population ageing, for example, leading to increased long-term
care risks or health issues, stricter laws governing professional liability
insurance, personal injury compensation, and others).
The objective of the provisioning policy established in each of the
companies is to guarantee a prudent assessment of loadings for past
and projected claims to ensure a high probability that the accounting
provisions set aside will be sufficient to cover the ultimate load.
The methods used to constitute provisions (on a case-by-case basis)
for property and casualty insurance, according to the products and
benefits affected, are documented and the management rules applied
by claims managers are set out in the manuals.
The choice of statistical methodology to calculate accounting provisions
(including provisions for late payment) is justified at each reporting date.
The local permanent control plan encompasses control of provisioning
policy.
The Statutory Auditors perform an actuarial review of provisions as part
of the review of the annual financial statements.
The breakdown of technical reserves relating to life and non-life
insurance contracts is presented in Note 6.23 to the Crédit Agricole
Assurance consolidated financial statements.
3.
Reinsurance risk
Reinsurance risks are of three types:
inappropriate reinsurance (insufficient cover or, on the other hand,
payment of too high a premium, which erodes technical margins and
competitiveness);
risk of a reinsurer defaulting and not being able to pay its share of
the claims;
no or virtually no reinsurance on a given activity or guarantee given
(reinsurance offer, amounts that can be covered and the cost of cover,
depending on market conditions that are liable to vary significantly).
Each company draws up its own reinsurance plan aimed at protecting
equity in case of systemic or exceptional events and at limiting volatility
in the Company’s results, based on the principles of Crédit Agricole
Assurances Group’s strategy for common and uniform risks limitation,
namely:
selecting reinsurers that meet minimum financial strength criteria,
with reinsurers’ ratings monitored at the Crédit Agricole Assurances
Group level;
ensuring adequate dispersion of premiums across reinsurers;
monitoring the adequacy of reinsurance cover relative to the
commitments to policyholders and of results on each reinsurance
agreement.
The reinsurance plans are reviewed annually by the Board of Directors
in each subsidiary.
Net outstandings ceded to reinsurers (ceded reserves and current
accounts with reinsurers net of cash deposits received and excluding
securities accounts pledged as collateral) totalled €0.9 billion at
31 December 2020.
Their breakdown by reinsurer rating is as follows:
0%
0%
4%
14%
70%
7%
3%
9%
20%
53%
11%
3%
1%
1%
0%
0%
4%
1%
0%
0 %
A+
A
BBB
NR
A-
AAA
AA-
AA+
AA
2019
2020
BBB+
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
308
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
4.
Emerging risks
The Risk department is responsible for the ongoing monitoring of
insurance risk, in cooperation with other business line departments
and the Legal department.
The Risk Monitoring Committee, which meets twice monthly and is
attended by all Risk Management and Permanent Controls Officers, is
also tasked with anticipating developments in the regulatory and legal
environment and identifying emerging risks.
This monitoring comes from many sources (economic research, internal
and external analysis, in particular by consulting firms and research
published by the French Regulatory and Resolution Supervisory Authority
(ACPR), the European regulator – EIOPA, etc.).
V.
Operational risk
Operational risk is the risk of loss resulting from shortcomings or failure
in internal procedures, human error, information systems or external
events. It includes non-compliance risk, legal risk and the risks generated
by key outsourced services (PSEE).
The Crédit Agricole Assurances entities apply Crédit Agricole S.A.
directives on operational and compliance risk management.
The operational risk management system in each entity, including the
holding company, is thus comprised of the following components:
a mapping of risk events, periodically updated to incorporate
organisational changes, new activities and even changes in the cost
of risk. It is based on a breakdown of activities into processes and
the seven risk categories of the Basel 2 classification. The financial
and non-financial (regulatory, image) impacts of these identified risk
events, whether actual or potential, are assessed as well as their
probability of occurrence, based on business expertise. Internal control
is assessed on the basis of the results of controls at the different
levels defined in the local control plans and standardised controls
defined by Crédit Agricole S.A.’s Risk Management department and
the findings of periodic controls to highlight the most critical net risks
and prioritise actions plans to reduce them;
a process of collecting data on risk-related incidents and operating
losses, backed by an early-warning system, is used to monitor
identified risks and use them to introduce remedial measures and
ensure consistency with mapping. The amount of collected losses is
compared each quarter to an annually defined alert threshold.
Crédit Agricole Assurances and its subsidiaries have prepared a Business
Continuity Plan (BCP) focusing on essential activities in order to cover a
failure of information systems, operational sites and staff. The business
continuity plan meets Crédit Agricole S.A.’s standards, with the adoption
of Crédit Agricole S.A.’s solution for the user fall-back site, and an IT
back-up plan based on Crédit Agricole S.A.’s shared IT operating and
production site ; it is regularly tested. IT system security is an inherent
component of the Group’s security policies. A three-year programme of
security projects (including accreditation, intrusion tests, and IT system
failure scenarios) is being implemented.
A Crédit Agricole Assurances Group-wide general subcontracting policy,
describing amongst others the monitoring and control system associated
with outsourcing, has been rolled out by Group entities.
VI.
Non-compliance risks
Non-compliance risks refer to a potential lack of adherence to rules
governing financial activities. These rules may be laws, regulations
(Solvency 2, securities regulations, data protection, customer protection,
or requirements to combat money laundering and the financing of
terrorism, fighting of corruption, etc.), professional or ethics standards,
and instructions from the executive body. These risks are identified in the
operational risk mapping of each Crédit Agricole Assurances Group entity.
In each entity, the Compliance Officer is responsible for adapting Group
procedures issued by Crédit Agricole S.A.’s Compliance department
(Fides Corpus) and for developing procedures specific to that business.
The Compliance Officer is also responsible for training and for the
dedicated control system aimed at controlling these risks, preventing
the risk of fraud and limiting potential impacts as an ongoing goal
(financial losses, legal, administrative or disciplinary sanctions), while
protecting the reputation of the Crédit Agricole Assurances Group. In
this respect, the launch of new business activities and the creation of
new products, are subject to enhanced security by referral to the New
Activities and New Products Committees, established in each entity
to review in particular the contractual and marketing documents for
products, as well as the training materials and sales aids intended for
distributors.
The management and supervision of their compliance system is
carried out by the Crédit Agricole Assurances Group Compliance Officer.
Coordination for the Insurance business is carried out through exchanges
with the subsidiaries.
In all areas of compliance, from the prevention of money laundering
and financing of terrorism to protecting customers, the Group has
strengthened coordination with distributors (Regional Banks, LCL, other
international networks) to ensure implementation of the controls to
guarantee correct application of procedures by all parties.
The Crédit Agricole Assurances Group has realigned its organisation and
its risk management policy to ensure compliance with the Solvency 2
regulation, as detailed in the Corporate governance section of the Crédit
Agricole Assurances Universal Registration Document.
VII.
Legal risks
Responsibility for legal management, regulatory monitoring and
consulting with the various Business line departments lies with the
companies’ Legal departments. There are currently no governmental,
legal or arbitration proceedings (or any proceedings known by the
Company, suspended or threatened) that could have or has had, in the
previous 12 months, any material effect on the financial position or
profitability of the Company and/or of the Crédit Agricole Assurances
Group.
To Crédit Agricole Assurances’ knowledge, there is no significant litigation
to note.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
309
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
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2. Risk management
2.8
OPERATIONAL RISKS
Operational risk is the risk of loss resulting from shortcomings or failure
in internal procedures, staff, information systems or external events.
It includes legal risk, non-compliance risk, internal and external fraud
risk, the model risk and risks generated by the use of outsourced
services, including those that are key (
prestations de service essentielles
externalisées
– PSEE).
I.
Organisation and supervision system
The operational risk system, adjusted to each Group entity, comprises
the following components common to the entire Group.
Organisation and governance of the
Operational Risk Management function
Supervision of the system by Executive Management (via the
Operational Risk Committee or the operational risk unit of the Group
Risk Management Committee and the Internal Control Committee);
tasks of the Risk Management Officers (Crédit Agricole S.A. and its
subsidiaries) and the Operational Risk Managers at local level in
terms of management of the operational risk management system;
responsibility of the entities in managing their own risks;
set of standards and procedures;
circulation of Crédit Agricole’s Group risk tolerance policy implemented
in 2015 and incorporating operational risk.
Identification and qualitative assessment
of risks through risk mapping
Risk mapping is done annually by the entities and is used by each
entity with a validation of the results and associated action plans by
the Operational Risk Committee (operational risk unit of the Internal
Control Committee) and a presentation to the Risk Committee of the
Board of Directors.
This mapping is supplemented by the establishment of risk indicators
to monitor the most sensitive processes:
collection of operational loss data and an early-warning system to
report significant incidents, which are consolidated in a database
used to measure and monitor the cost of risk.
The reliability and quality of the data collected are submitted to
systematic audits both at the local and central levels;
the calculation and regulatory reporting of capital for operational risk
at the consolidated and entity levels;
the quarterly production of an operational risk dashboard at entity
level, accompanied by a Crédit Agricole Group summary, taking into
account the main sources of risks affecting the business lines and
associated action plans for major incidents.
Tools
The RCP (Risk Management and Permanent Controls) platform
contains the four essential elements of the system (collection of loss
data, operational risk mapping, permanent controls and action plans)
sharing the same framework and thus making it possible to establish
a connection between the risk mapping systems and risk management
system (permanent controls, action plans, etc.).
Regarding the IT system component used for the calculation and
allocation of regulatory capital, the upgrade plan was continued along
with a rationalisation of the databases, enhanced information granularity
and the automation of the controls on data taken from COREP’s regulatory
statements to bring IT into line with best management principles defined
by the Basel Committee.
These components are subjected to consolidated verifications at the
central level.
The risks associated with key outsourced services are incorporated into
each component of the Operational Risk system and are the subject
of a specific report, as are the consolidated controls that are centrally
communicated. The Crédit Agricole Group system adaptation is currently
being finalised in accordance with the EBA guidelines on outsourcing
arrangements, published in February 2019 and the outsourced services
base should be brought into compliance by 31 December 2021.
II.
Methodology
The main entities of Crédit Agricole S.A. use the advanced measurement
approach (AMA): Crédit Agricole Corporate and Investment bank, Amundi,
LCL, Crédit Agricole Consumer Finance and Agos. The use of the AMA for
these entities was approved by the French Regulatory and Resolution
Supervisory Authority (ACPR) in 2007. These entities currently represent
69% of the capital requirement for operational risks.
For the entities that use the standardised approach (TSA), the regulatory
weighting coefficients used in calculating the capital requirement are
those recommended by the Basel Committee (percentage of revenues
according to business line).
AMA regulatory capital requirement calculation
The AMA method for calculating capital requirements for operational
risk has the following main objectives:
increase control over the cost of operational risk, and prevent
exceptional risks across the various Group entities;
determine the level of capital needed for the measured risks;
promote improvements in risk management through the monitoring
of action plans.
The systems implemented within the Group aim for compliance with
all qualitative criteria (integration of risk measurement into day-to-day
management, independence of the Risk function, periodic disclosure
of operational risk exposures, etc.) and Basel 3 quantitative criteria
(99.9% confidence interval over a one-year period; incorporation of
internal data, external data, scenario analyses and factors reflecting
the operating environment; incorporation of risk factors that influence
the statistical distribution, etc.).
The AMA model for calculating capital requirements is based on a unique
actuarial model called the
Loss Distribution Approach
.
Internal factors (change in the entity’s risk profile) are considered
according to:
changes within the entity (organisational, new business activities, etc.);
changes in risk mapping;
an analysis of the history of internal losses and the quality of the risk
management system, in particular via the permanent controls system.
For external factors, the Group uses:
the ORX Insight external consortium database to monitor incidents
recorded in other institutions;
the SAS OpRisk and ORX News external public databases for:
-
raising awareness among the entities of the main risks that have
impacted other institutions,
-
assisting experts in the valuation of the main Group vulnerabilities
(key scenarios).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
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RISKS AND PILLAR 3
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The model was designed and developed according to the following
principles:
it must form an integral part of the risk policy;
it must be pragmatic,
i.e.
the methodology must be applicable to real
operating conditions;
it must have educational value, in order to be endorsed by Executive
Management and the business lines;
it must be robust,
i.e.
it must be able to provide estimates that are
realistic and stable from one financial year to the next.
An annual committee for back-testing the Advanced Measurement
Approach (AMA) model analyses the model’s sensitivity to changes
in the risk profile of the entities. Every year, this committee identifies
areas where improvements are possible, and draws up corresponding
action plans.
The operational risk system and methodology have been subject to
external audits by the ECB in 2015, 2016 and 2017. These missions
made it possible to note the Group’s progress, but also to complete the
prudential approach relating to emerging risks (cyber risk, compliance/
conduct risk).
III.
Exposure
Breakdown of operational losses
by Basel risk category (2018 to 2020)
External fraud
39%
Execution, delivery and
process management
17%
Dysfunction
business
and systems
3%
Damage
to physical assets
0%
Employment and
security practices
7%
Customers, products,
commercial practices
24%
Internal fraud
9%
Generally, the exposure profile in terms of the operational risks
identified over the last three years reflects the principal activities at
Crédit Agricole S.A.:
an exposure to external fraud that remains significant, mainly in
connection with credit boundary operational risk (document fraud,
fraudulent invoices, etc., as well as one-off defaults in 2020 associated
with suspected fraudulent bankruptcies) and payment instruments
fraud (bank cards, fraudulent transfers);
execution and delivery risks, process management risks due to
processing errors (absent or incomplete legal documentation, collateral
management, litigation with suppliers, input errors, etc.);
exposure to the Customer category, notably marked by the decision
of the Dutch mediator regarding the conditions for the review of the
interest rates of revolving loans marketed by Crédit Agricole Consumer
Finance Nederland BV.;
to be noted in 2020, the rise in the share of the Internal Fraud category
due to one-off incidents, and in the Employment and Safety Practices
category due to additional costs connected to the COVID-19 health
crisis (health protection kits, cancellation of travelling and events).
Remedial and preventive action plans at local or Group level were
introduced to reduce the exposure of Crédit Agricole S.A. to operational
risk. Periodic monitoring of action plans for incidents with an impact
higher than €5 million has been implemented since 2014 within the
Group Operational Risk Committee and since 2016 in the Group Risk
Management Committee.
Breakdown of risk-weighted assets
by Basel risk category (2020)
Internal fraude
37%
Execution, delivery
and process
management
12%
Dysfunction business
and systems
5%
Customers, products,
commercial practices
35%
Damage
to physical
assets
1%
Employment
and security practices
in the workplace
2%
External fraud
8%
IV.
Insurance and coverage
of operational risks
Crédit Agricole S.A. has obtained insurance coverage for its operational
risks to protect its assets and profits. For high-intensity risks,
Crédit Agricole S.A. has taken out insurance policies to cover itself
and its subsidiaries with major insurance companies. These policies
harmonise the transfer of personal and property risks and the setting
up of specific professional liability and fraud insurance programmes
for each business line. Lower intensity risks are managed directly by
the relevant entities.
In France, third-party civil liability risks are covered by operating civil
liability policies. It should be noted that property and casualty insurance
for operating assets (property and IT equipment) also includes third-party
liability coverage for all property exposed to this risk.
Insurance policies for operating losses, fraud and securities risks, Group
professional liability, and civil liability for Executives and Non-Executive
Corporate Officers were renewed in 2020.
“Basel 2 eligible” policies contribute to reducing the capital requirement
for operational risks (within the 20% authorised limit).
High-frequency and low-intensity risks that cannot be insured on
satisfactory financial terms are retained in the form of deductibles or
are pooled within Crédit Agricole S.A., ultimately through its captive
insurance subsidiary (Crédit Agricole Risk Insurance) and represent
around 7% of all Group insurance programmes.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
311
Refer to the glossary on page 681 for the definition of technical terms.
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2.9
DEVELOPMENTS IN LEGAL RISKS
The main legal and tax proceedings outstanding at Crédit Agricole S.A. and its
fully consolidated subsidiaries are described in the 2019 management report.
The cases presented below are (i) those that have evolved since
25 March 2020, the date on which Registration Document n° D.20-0168
was filed with the AMF and (ii) the pending cases which have not evolved
since that date.
Any legal risks outstanding at 31 December 2020 that could have
a negative impact on the Group’s net assets have been covered by
adequate provisions, which correspond to Executive Management’s
best estimates, based on the information available to it, see Note 6.18
of Financial statements.
To date, to the best of Crédit Agricole S.A.’s knowledge, there is no other
governmental, judiciary or arbitration proceeding (or any proceeding
known by the Company, in abeyance or that threatens it) that could have
or has had, in the previous 12 months, any substantial effect on the
financial situation or the profitability of the Company and/or the Group.
Litigation and exceptional events
Strauss/Wolf/Faudem
US citizens and members of their families who were victims of terrorist
attacks attributed to Hamas and committed in Israel between 2001 and
2004 have brought proceedings against Crédit Lyonnais and another
bank before a New York court.
They claim that these banks gave support to terrorists as they each
kept an account opened (in 1990 in the case of Crédit Lyonnais) by
a charity providing aid to Palestinians. The plaintiffs allege that the
account was used to transfer funds to Palestinian entities accused
of financing Hamas. The plaintiffs, who have not put a figure on the
damages they have suffered, are claiming compensation for “injury,
anguish and emotional pain”.
As the matter and the proceedings currently stand, the plaintiffs have not
provided proof that the charity was actually linked to terrorists, nor that
Crédit Lyonnais was aware that its customer could have been involved
(if it were to be proven) in financing terrorism. The Court nonetheless
demanded that this be demonstrated by the plaintiffs if they are to win
their case. Crédit Lyonnais vigorously denies the plaintiffs’ allegations.
Under a ruling made on 28 February 2013, the judge issued a Summary
Judgement referring Crédit Lyonnais and the plaintiffs to a jury trial on
the merits.
In February 2018, Crédit Lyonnais filed a new motion for summary
judgement based on recent case law so that the plaintiffs’ claims can
be dismissed without such a jury trial.
In January 2019 the plaintiffs tried to modify their briefs in order to add
new plaintiffs before their action was time-barred. The judge refused
the request and two new actions (Fisher and Miller) were filed in the
same court as the one in charge of the Strauss/Wolf proceedings. They
are similar to the pending actions, their legal analysis is identical and
their result will depend on the outcome of the motion for summary
judgement filed by Crédit Lyonnais in February 2018. From a procedural
standpoint, they will remain suspended until then.
On 31 March 2019 the court upheld in its entirety the “motion for
summary judgment” filed by Crédit Lyonnais in February 2018. It
considered that no reasonable jury could find in favour of the plaintiffs and
dismissed all their claims. The plaintiffs appealed against this decision.
CIE case (Cheque Image Exchange)
In March 2008, LCL and Crédit Agricole S.A. and ten other banks were
served notice of grievances on behalf of France’s Competition Council
(
Conseil de la concurrence
) (now the French Competition Authority –
Autorité de la concurrence
).
They are accused of colluding to implement and apply interchange
fees for cashing cheques, since the passage of the Cheque Image
Exchange system,
i.e.
between 2002 and 2007. In the opinion of the
French Competition Authority, these fees constitute anti-competitive
price agreements within the meaning of Articles 81 paragraph 1 of the
treaty establishing the European Community and Article L. 420-1 of the
French Commercial Code, and allegedly caused damage to the economy.
In their defences, the banks categorically refuted the anticompetitiveness
of the fees and contested the legality of the proceedings.
In a decision published on 20 September 2010, the
Autorité de la
concurrence
stated that the Cheque Image Exchange fee (CEIC) was
anti-competitive by its very aim and that it artificially increased the costs
borne by remitting banks, which resulted in an unfavourable impact on
the prices of banking services. Concerning one of the fees for related
services, the fee for cancellation of wrongly cleared transactions (AOCT),
the
Autorité de la concurrence
called on the banks to revise their amount
within six months of the decision notification.
The accused banks were sanctioned for a total amount of €384.92 million.
LCL and Crédit Agricole were respectively sentenced to pay €20.7 million
and €82.1 million for the CEIC and €0.2 million and €0.8 million for
the AOCT.
All of the banks appealed the decision to the Paris Court of Appeal.
By a decree of 23 February 2012, the Court overruled the decision,
stating that the
Autorité de la concurrence
had not proven the existence
of competition restrictions establishing the agreement as having an
anti-competitive purpose.
The
Autorité de la Concurrence
filed an appeal with the Supreme Court
on 23 March 2012.
On 14 April 2015, the French Supreme Court (
Cour de cassation
) overruled
the Paris Court of Appeal’s decision dated 23 February 2012 and remanded
the case to the Paris Court of Appeal with a change in the composition
of the Court on the sole ground that the Paris Court of Appeal declared
the UFC-Que Choisir and ADUMPE’s interventions in the proceedings
devoid of purpose without having considered their arguments.
The Supreme Court did not rule on the merits of the case and Crédit
Agricole has brought the case before the Paris Court of Appeal.
The Paris Court of Appeal issued a decree on on 21 December 2017.
It confirmed the decision of the
Autorité de la concurrence
dated
20 September 2010 but reduced from €82,940,000 to €76,560,000
the sanction on Crédit Agricole. LCL’s sanction remained unchanged,
at an amount of €20,930,000.
As well as the other banks parties to this procedure, LCL and Crédit
Agricole filed an appeal with the Supreme Court.
On 29 January 2020, the French Supreme Court
(Cour de cassation)
overruled the Paris Court of Appeal’s decision dated 21 December 2017
and referred the case to the same Court with a different composition
on the ground that the Paris Court of Appeal had not characterized the
existence of restrictions of competition by object.
Office of Foreign Assets Control (OFAC)
In October 2015, Crédit Agricole S.A. and its subsidiary Crédit Agricole
Corporate and Investment Bank (Crédit Agricole CIB) reached agreements
with the US and New York authorities that had been conducting
investigations regarding US dollar transactions with countries subject
to US economic sanctions. The events covered by this agreement took
place between 2003 and 2008.
CRÉDIT AGRICOLE S.A.
—
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Crédit Agricole CIB and Crédit Agricole S.A., which cooperated with the
US and New York authorities in connection with their investigations,
have agreed to pay a total penalty in the amount of $787.3 million (
i.e.
€692.7 million). The payment of this penalty has been allocated to the
pre-existing reserve that had already been taken and, therefore, has
not affected the accounts for the second half of 2015.
The agreements with the Board of Governors of the Federal Reserve
System (Fed) and the New York State Department of Financial Services
(NYDFS) are with Crédit Agricole S.A. and Crédit Agricole CIB. The
agreement with the Office of Foreign Assets Control (OFAC) of the US
Department of the Treasury is with Crédit Agricole CIB. Crédit Agricole
CIB also entered into separate deferred prosecution agreements (DPAs)
with the United States Attorney’s Office for the District of Columbia
(USAO) and the District Attorney of the County of New York (DANY), the
terms of which are three years. On October 19, 2018, the two deferred
prosecution agreements with USAO and DANY ended at the end of
the three year period, Crédit Agricole CIB having complied with all its
obligations under the DPAs.
Crédit Agricole continues to strengthen its internal procedures and its
compliance programs regarding laws on international sanctions and
will continue to cooperate fully with the US and New York authorities,
with its home regulators, the European Central bank and the French
Regulatory and Resolution Supervisory Authority (ACPR), and with the
other regulators across its worldwide network.
Pursuant to the agreements with NYDFS and the US Federal Reserve,
Crédit Agricole’s compliance program is subject to regular reviews
to evaluate its effectiveness, including a review by an independent
consultant appointed by NYDFS for a term of one year and annual
reviews by an independent consultant approved by the Federal Reserve.
Euribor/Libor and other indices
Crédit Agricole S.A. and its subsidiary Crédit Agricole CIB, in their capacity
as contributors to a number of interbank rates, have received requests
for information from a number of authorities as part of investigations
into: (i) the calculation of the Libor (London Interbank Offered Rates)
in a number of currencies, the Euribor (Euro Interbank Offered Rate)
and certain other market indices; and (ii) transactions connected with
these rates and indices. These demands covered several periods from
2005 to 2012.
As part of its cooperation with the authorities, Crédit Agricole S.A. and
its subsidiary Crédit Agricole CIB carried out investigations in order
to gather the information requested by the various authorities and in
particular the American authorities – the DOJ (Department of Justice)
and CFTC (Commodity Future Trading Commission) – with which they
are in discussions. It is currently not possible to know the outcome of
these discussions, nor the date when they will be concluded.
Furthermore, Crédit Agricole CIB is currently under investigation opened
by the Attorney General of the State of Florida on both the Libor and
the Euribor.
Following its investigation and an unsuccessful settlement procedure, on
21 May 2014, the European Commission sent a statement of objection to
Crédit Agricole S.A. and to Crédit Agricole CIB pertaining to agreements
or concerted practices for the purpose and/or effect of preventing,
restricting or distorting competition in derivatives related to the Euribor.
In a decision dated 7 December 2016, the European Commission jointly
fined Crédit Agricole S.A. and Crédit Agricole CIB €114,654,000 for
participating in a cartel in euro interest rate derivatives. Crédit Agricole S.A.
and Crédit Agricole CIB are challenging the decision and have asked the
European Court of Justice to overturn it.
The Swiss competition authority, COMCO, has conducted an investigation
into the market for interest rate derivatives, including the Euribor, with
regard to Crédit Agricole S.A. and several Swiss and international
banks. This investigation was closed following a settlement under
which Crédit Agricole S.A. agreed to pay a penalty of CHF4,465,701
and proceedings costs amounting to CHF187,012, without any admission
of guilt.
Moreover, in June 2016 the South Korean competition authority (KFTC)
decided to close the investigation launched in September 2015 into
Crédit Agricole CIB and the Libor index on various currencies, Euribor and
Tibor indices. The investigation into certain foreign exchange derivatives
(ABS-NDF) has been closed by the KFTC according to a decision notified
to Crédit Agricole CIB on 20 December 2018.
Concerning the two class actions in the United States of America in which
Crédit Agricole S.A. and Crédit Agricole CIB have been named since 2012
and 2013 along with other financial institutions, both as defendants in
one (“Sullivan” for the Euribor) and only Crédit Agricole S.A. as defendant
for the other (“Lieberman” for Libor), the “Lieberman” class action is at
the preliminary stage that consists in the examination of its admissibility;
proceedings are still suspended before the US District Court of New York
State. Concerning the “Sullivan” class action, Crédit Agricole S.A. and
Crédit Agricole CIB introduced a motion to dismiss the applicants’ claim.
The US District Court of New York State upheld the motion to dismiss
regarding Crédit Agricole S.A. and Crédit Agricole CIB in first instance.
On 14 June 2019, the plaintiffs appealed the decision.
Since 1 July 2016, Crédit Agricole S.A. and Crédit Agricole CIB, together
with other banks, are also party to a new class action suit in the United
States (“Frontpoint”) relating to the SIBOR (Singapore Interbank Offered
Rate) and SOR (Singapore Swap Offer Rate) indices. After having granted
a first motion to dismiss filed by Crédit Agricole S.A. and Crédit Agricole
CIB, the New York Federal District Court, ruling on a new request by
the plaintiffs, excluded Crédit Agricole S.A. from the Frontpoint case
on the grounds that it had not contributed to the relevant indexes. The
Court considered, however, taking into account recent developments
in case law, that its jurisdiction could apply to Crédit Agricole CIB, as
well as to all the banks that are members of the SIBOR index panel. The
allegations contained in the complaint regarding the Sibor/USD index
and the SOR index were also rejected by the court, therefore the index
Sibor/Singapore dollar alone is still taken into account. On 26 December,
the plaintiffs filed a new complaint aimed at reintroducing into the scope
of the Frontpoint case the alleged manipulations of the Sibor and SOR
indices that affected the transactions in US dollars. Crédit Agricole CIB,
alongside the other defendants, objected to this new complaint at the
hearing held on 2 May 2019 before the New York Federal District Court.
On July 26, 2019, the Federal Court granted the defendants’ motion
to dismiss. The plaintiffs filed a notice of appeal on August 26, 2019.
These class actions are civil actions in which the plaintiffs claim that
they are victims of the methods used to set the Euribor, Libor, Sibor and
SOR rates, and seek repayment of the sums they allege were unlawfully
received, as well as damages and reimbursement of costs and fees paid.
Banque Saudi Fransi
Crédit Agricole Corporate Investment Bank (Crédit Agricole CIB) had received
in 2018 a request for arbitration submitted by Banque Saudi Fransi (BSF)
before the International Chamber of Commerce (ICC). The dispute related
to the performance of a technical services agreement between BSF and
Crédit Agricole CIB that is no longer in force. BSF had quantified its claim
at SAR 1,023,523,357, the equivalent of about €242 million. Crédit Agricole
CIB and BSF have entered into an agreement effectively ending the ICC
arbitration proceedings. This agreement has no significant impact on Crédit
Agricole CIB’s Financial Statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
313
Refer to the glossary on page 681 for the definition of technical terms.
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2. Risk management
Bonds SSA
Several regulators requested information to Crédit Agricole S.A. and to
Crédit Agricole CIB for investigations relating to the activities of different
banks involved in the secondary trading of Bonds SSA (Supranational,
Sub-Sovereign and Agencies) denominated in American dollars. Through
the cooperation with these regulators, Crédit Agricole CIB proceeded
to internal inquiries to gather the required information available. On
20 December 2018, the European Commission issued a Statement
of Objections to a number of banks including Crédit Agricole S.A. and
Crédit Agricole CIB within its inquiry on a possible infringement of rules
of European Competition law in the secondary trading of Bonds SSA
denominated in American dollars. Crédit Agricole S.A. and Crédit
Agricole CIB became aware of these objections and issued a response
on 29 March 2019, followed by an oral hearing on 10-11 July 2019.
Crédit Agricole CIB was included with other banks in a putative
consolidated class action before the United States District Court for
the Southern District of New York. That action was dismissed on 29
August 2018 on the basis that the plaintiffs failed to allege an injury
sufficient to give them standing. However, the plaintiffs were given an
opportunity to attempt to remedy that defect. The plaintiffs filed an
amended complaint on 7 November 2018. Crédit Agricole CIB as well as
the other defendants filed motions to dismiss the amended complaint. An
order issued on 30 September 2019 dismissed the class action against
Crédit Agricole CIB for lack of jurisdiction and, in a subsequent ruling,
the Court held that the plaintiffs had in any event failed to state a claim
for violation of US antitrust law. In June 2020, the plaintiffs have taken
an appeal from both of the Court’s orders.
On 7 February 2019, a second class action was filed against Crédit
Agricole CIB and the other defendants named in the class action already
pending before the United States District Court for the Southern District
of New York. In July 2020, the plaintiffs voluntarily discontinued the
action but the claim could be revived.
On 11 July 2018, Crédit Agricole S.A. and Crédit Agricole CIB were
notified with other banks of a class action filed in Canada, before the
Ontario Superior Court of Justice. Another action has been filed before
the Federal Court of Canada. The action in the Ontario Superior Court
of Justice was dismissed on 19 February 2020.
It is not possible at this stage to predict the outcome of these
investigations, proceedings or class actions or the date on which they
will end.
O’Sullivan and Tavera
On 9 November 2017, a group of individuals (or their families or
estates), who claimed to have been injured or killed in attacks in Iraq,
filed a complaint (“O’Sullivan I”) against several banks, including
Crédit Agricole S.A., and its subsidiary Crédit Agricole Corporate
Investment Bank (Crédit Agricole CIB), in US District Court for the District
of New York.
On December 29, 2018, the same group of individuals, together with
57 new plaintiffs, filed a separate action (“O’Sullivan II”) against the
same defendants.
On 21 December 2018, a different group of individuals filed a complaint
(“Tavera”) against the same defendants.
All three complaints allege that Crédit Agricole S.A., Crédit Agricole CIB,
and other defendants conspired with Iran and its agents to violate US
sanctions and engage in transactions with Iranian entities in violation of
the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism
Act.
Specifically, the complaints allege that Crédit Agricole S.A., Crédit
Agricole CIB, and other defendants processed US dollar transactions on
behalf of Iran and Iranian entities in violation of sanctions administered
by the US Treasury Department’s Office of Foreign Assets Control, which
allegedly enabled Iran to fund terrorist organisations that, as is alleged,
attacked plaintiffs. The plaintiffs are seeking an unspecified amount of
compensatory damages.
On 2 March 2018, Crédit Agricole CIB and other defendants filed a
motion to dismiss the O’Sullivan I complaint. On 28 March 2019, the
Court granted defendants’ motion to dismiss. On 22 April 2019, the
plaintiffs filed a motion to amend their complaint. Defendants submitted
an opposition to that motion on 20 May 2019 and plaintiffs filed a reply
on 10 June 2019. On 25 February 2020 the plaintiffs’ motion to amend
their complaint was denied and their original complaint dismissed with
prejudice.
On 28 May 2020, plaintiffs filed a motion requesting that the court enter a
final judgment against defendants to allow an appeal. On 11 June 2020,
the defendants filed an opposition to plaintiffs’ motion, and plaintiffs filed
a reply brief on 18 June 2020. The court has not yet decided the motion.
Italian Competition Authority
On 5 October 2018, Crédit Agricole Consumer Finance S.A. (“CACF”)
and its subsidiary FCA Bank S.p.A. owned at 50% received – together
with several other banks and certain car manufacturers – a statement
of objections from the
Autorità Garante della Concorrenza e del Mercato
(Italian Competition Authority).
It was alleged in this statement of objections that several banks
offering financing solutions for vehicles commercialised by certain car
manufacturers have restricted competition as a result of information,
in particular within two professional associations.
In a decision notified on 9 January 2019 the
Autorità Garante della
Concorrenza e del Mercato
considered that FCA Bank S.p.A. had
participated in this alleged infringement and this infringement was
also attributable to CACF.
FCA Bank S.p.A. was fined €178.9 million. FCA Bank S.p.A. and CACF
appealed against this decision before the Administrative Regional Court
(TAR) of Lazio. On 4 April 2019, the TAR of Lazio issued an interim relief
order staying the execution of the obligation to pay the fine imposed
on FCA Bank S.p.A. subject to the provision by FCA Bank S.p.A. of a
guarantee covering the amount of the fine.
On 24 November 2020 the TAR of Lazio annuled the decision of the
Autorità Garante della Concorrenza e del Mercato
.
On 23 December 2020
the
Autorità Garante della Concorrenza e del Mercato
appealed against
this decision before the Italian Counsil of State.
Intercontinental Exchange, Inc. (“ICE”)
On 15 January 2019 a class action (“Putnam bank”) was filed in a
federal court in New York (US District Court for the Southern District
of New York) against the Intercontinental Exchange, Inc. (“ICE”) and a
number of banks, including Crédit Agricole S.A., Crédit Agricole CIB and
Crédit Agricole Securities-USA. The action has been filed by plaintiffs
who allege that they have invested in financial instruments indexed to
the USD ICE LIBOR. They accuse the banks of having collusively set the
index USD ICE Libor at artificially low levels since February 2014 and
thus made illegal profits.
On 31 January 2019 a similar action (“Livonia”) has been filed before
the US District Court Southern District of New York, against a number
of banks including Crédit Agricole S.A., Crédit Agricole CIB and Crédit
Agricole Securities-USA. On 1 February 2019, the two class actions
were consolidated for pre-trial purposes.
On 4 March 2019 a third class action (“Hawaii Sheet Metal Workers
Retirement Funds”) was filed against the same banks in the same court
and consolidated with the two previous actions on 26 April 2019. On 1
July 2019, the plaintiffs filed a “Consolidated Class Action Complaint”.
On 30 August 2019, the Defendants filed a motion to dismiss against
this consolidated complaint.
CRÉDIT AGRICOLE S.A.
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2. Risk management
On 26 March 2020, a judgment granted the Defendants Motion to
Dismiss. On April 24, 2020, the plaintiffs filed a notice of appeal.
On November 30, 2020, during briefing of the appeal, Plaintiffs’ lawyers
informed Defendants that all of the named Plaintiffs wished to withdraw
from the case and, on December 1, 2020, Plaintiffs’ counsel filed the
motion to stay the appeal, which Defendants opposed. The court denied
the motion on December 7, 2020 and Plaintiffs filed their reply brief
on December 15, 2020.
On 28 December 2020, DYJ Holdings Inc. filed a motion for leave to
intervene to replace the currents named plaintiffs. On January 7, 2020,
Defendants filed a brief in opposition to DYJ Holdings’ motion and also
filed a motion to dismiss the appeal.
Crédit Agricole Consumer Finance Nederland B.V.
The conditions for the review of the interest rates of revolving loans
marketed by Crédit Agricole Consumer Finance Nederland BV, a fully
owned subsidiary of Crédit Agricole Consumer Finance SA, and its
subsidiaries are the subject of borrowers’ claims relating to the criteria
for revising these rates and possible overpayments of interests.
On 21 January 2019, in two individual cases concerning two subsidiaries
of Crédit Agricole Consumer Finance Nederland B.V., the Appeals
Committee of the KIFID (the Financial Services Complaints Authority) in
the Netherlands decided that in case the consumers had no or insufficient
information on the specific factors that determine the interest rate,
the individual interest rate needed to follow the movement of market
interest rates on consumer loans.
Crédit Agricole Consumer Finance Nederland BV implemented a
compensation plan for the benefit of the borrowers in May 2020 which
takes into account the aforementioned decisions of KIFID.
CACEIS Germany
CACEIS Germany has received from the Bavarian tax authorities a
claim for the repayment of the dividend tax refunded to a number of
its customers in 2010.
This claim amounts to €312 million. It is accompanied by a demand
for the payment of €148 million of interest (calculated at the rate of
6% per annum).
CACEIS Germany strongly contests the challenge this claim that it finds
to be totally unfounded. CACEIS Germany filed an appeal against it and
requested a stay of enforcement of the payment obligation pending a
final decision on the substance.The stay of enforcement was granted for
the payment of €148 million of interests and rejected for the repayment
of the amount of €312 million. CACEIS appealed against the decision
to reject. The rejection being enforceable, the sum of €312 million was
paid by CACEIS which, given the ongoing appeal proceedings, recorded
a claim for an equivalent amount in its accounts.
Amundi – AMF procedure
Following a special enquiry conducted between 2017 and 2019,
the
Autorité des Marchés Financiers
(“AMF”), the French regulatory
body, notified Amundi of various complaints on June 12
th
2020. These
grievances relate to a number of transactions executed in 2014 and 2015
by two employees of Amundi, and will be reviewed by the Rapporteur
appointed by the AMF Enforcement Committee for the examination of the
case. Amundi fully cooperates with the regulatory authority to address
this issue. As of today, no sanction has been imposed on Amundi.
Possible dependencies
Crédit Agricole S.A. does not depend on any industrial, commercial or
financial patent, license or contract.
2.10 NON-COMPLIANCE RISKS
Compliance is defined as a set of rules and initiatives aimed at ensuring
compliance with
all laws and regulations
specific to banking and
financial activities,
professional and ethics standards and practices
,
the fundamental principles set out in the Group’s
code of ethics
and
the instructions,
codes of conduct
and procedures internal to Group
entities in relation to the areas covered by Compliance. These include in
particular, client protection, compliance with financial market integrity,
the fight against money laundering and terrorist financing, compliance
with international sanctions (embargoes, asset freezes, etc.), prevention
of internal and external fraud, the fight against corruption and the
exercise of whistleblowing rights, respect for the integrity of financial
markets, customer protection, tax compliance rules and the protection
of personal data.
In addition to meeting regulatory requirements and the expectations of
all its stakeholders (customers, members, shareholders, employees),
the Crédit Agricole Group has the objective of
making Compliance
a differentiating asset in the service of customer satisfaction,
development and sustainable performance
. To this end, the
Compliance department has launched its Smart Compliance strategic
road map, aimed at giving the Compliance function, which is now
organised and structured, a
more operational mandate in terms of
serving the departments
and entities,
while maintaining its key
control role
. The vision of Smart Compliance has two thrusts, a defensive
thrust aimed at protecting the Group from regulatory and image risk,
and an offensive thrust whereby all internal stakeholders, from back
office to front office, commit to providing customers with quality and
loyalty. Three vectors contribute to the success of this approach: an
organisation and governance vector, in the broadest sense, including
communication, a “Human” vector, which includes making employees
accountable and providing them with training opportunities and, lastly,
a vector that leverages innovation, technology and data use for the
benefit of Compliance.
The Crédit Agricole Group has defined and implemented an updated,
adequate and proportionate
non-compliance risk management system
that involves all Group stakeholders (employees, management, control
functions including Compliance). This system is based in particular
on organisations, procedures, information systems or tools used to
identify, assess, monitor and control these risks and to determine the
necessary action plans. A dedicated monitoring plan that enables to
ensure that these risks are controlled and that their impact in terms
of financial losses, or legal, administrative or disciplinary sanctions, is
minimised, with the ongoing goal to preserve the Group’s reputation.
Regular reports on the system are provided to the governance bodies
of the entities and the Group.
The system is structured and deployed by the Crédit Agricole Group’s
Compliance business line. It is placed under the authority of the Group
Head of Compliance, who reports directly to the Chief Executive Officer
of Crédit Agricole S.A. To develop
integration of the sector and
guarantee the independence
of its roles, the Compliance Officers of
Crédit Agricole S.A. subsidiaries report hierarchically to the Group Head
of Compliance, unless prevented by local law. A functional coordination
link was also implemented with the Regional Banks, either at Compliance
Control Officer (CCO) level, when he or she reports directly to the entity’s
Executive Management, or at Risk Management level when Compliance
falls within its scope. At end-2020, these positions were held by 1,700
full-time equivalent employees within Crédit Agricole S.A., its subsidiaries
and the Regional Banks.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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The Group Compliance department (
Direction de la conformité
– DDC)
of Crédit Agricole S.A. is responsible for developing
Group policies
with
respect to observance of laws and regulations and ensures they are
properly disseminated and applied. To this end, it has
teams specialised
by area of expertise
: financial market compliance, customer protection,
financial security, fraud and corruption. A project team is also dedicated
to managing the deployment of all commitments made by the Crédit
Agricole Group under the OFAC remediation plan (see below). As part of
the entry into force of the European General Data Protection Regulation
(GDPR), the Group Data Protection Officer (DPO) reports directly to the
Head of Group Compliance and is in charge of managing the
DPO
division of Crédit Agricole
.
The DDC also
leads and supervises the Compliance division
. The
control of non-compliance risks is in particular based on a system that
integrates permanent indicators and controls deployed within the entities.
GDC therefore provides Group-level supervision (including analyses of
compliance failures).
The system is organised around a
governance structure that is
fully integrated
into the Group’s internal control framework.
The
Group Compliance Management Committee
, chaired by Executive
Management, holds a meeting every two months. It makes the decisions
required to prevent non-compliance risks and to implement and monitor
corrective measures following the reporting of irregularities to the
Committee. Non-compliance risks and the decisions taken to control
them are regularly presented to the Risk Committee of the Board of
Directors and the Board of Directors of Crédit Agricole S.A.
The system for controlling non-compliance risks is based primarily
on the dissemination of a solid
culture of ethics and compliance
among all Group employees and managers. The culture of ethics and
compliance, underpinned by the Group’s
Code of ethics,
is common to
all Group entities and promotes the Group’s values of customer focus,
accountability and solidarity. The spreading of this culture of ethics
also relies on
awareness-raising and training activities
with regard
to the challenges and risks of non-compliance that strongly mobilise
the Compliance department, and more broadly all Group stakeholders:
employees, managers and Board members. Training modules and
materials – general or intended for employees who are at a higher
risk of exposure – cover all areas of day-to-day compliance, fraud
prevention and detection, personal data protection, the fight against
money laundering and the prevention of terrorist financing, as well as
international sanctions.
In an extension of the Code of ethics, the entities have a
Code of
Conduct
, which disseminates the principles of the Code of Ethics at
an operational level. The Code of Conduct applies to everybody – Board
members, executive officers and employees of the entity, regardless
of their situation and function. The Code of Conduct is designed to
guide everyone’s actions, decisions and behaviour on a daily basis
by incorporating behavioural rules to deal with ethical issues that
anyone might encounter during their professional and non-professional
assignments. As part of the approach to controlling the risks of non-
compliance, it also includes a specific “anti-corruption” component in
application of the obligations arising from the Sapin II law, relating to
the prevention of corruption and influence peddling.
The system also has a
whistleblowing
procedure whereby employees
are able to notify the entity’s Compliance Officer if they observe an
irregularity in the usual process of reporting non-compliance or if they
feel pressured to do something that would constitute non-compliance,
without going through their direct superior. By launching a
new computer
platform
, Crédit Agricole Group has demonstrated its support for
employees who want to use the whistleblowing mechanism securely.
The tool guarantees the strict confidentiality of the whistleblower, the
facts reported, the persons involved and the exchanges between the
whistleblower and the person in charge of processing the alert. The
deployment of the new computer system was completed in 2020 across
the entire Crédit Agricole Group scope and covers more than 300 entities.
At this stage, one hundred or so alerts have been reported and processed
through the new system, which also covers events falling within the
scope of the Group’s duty of vigilance.
Customer protection is a top priority for the Crédit Agricole Group and is
fully aligned with the “Relationship Excellence” and “Social Engagement”
components of the 2022 Group Project. In 2020 the Crédit Agricole
Group furthered its action within a continuous improvement approach.
Accordingly, the banking inclusion mechanism of the Crédit Agricole
Group was strengthened to better detect financially vulnerable clients
and provide them specific assistance to prevent them from falling into
insecurity or to help them recover.
The Group put
“product” governance
at the centre of its measures for
achieving relationship excellence, turning it into a major instrument for
loyalty and transparency of the offers and services provided to customers,
through and with the development of customer focus. To achieve this,
complaints monitoring is central to the system.
Due to stricter legal obligations in respect of the
fight against corruption
,
in 2018 Crédit Agricole launched the necessary actions to strengthen
its systems and implement the recommendations of the French anti-
corruption authority (
Agence française anticorruption
). Accordingly, the
Group updated its processes and operating procedures by defining an
appropriate governance, setting up an Anti-corruption Code to redesign
its training programme and raise awareness among all its employees to
emphasise the appropriate behaviour to avoid breach of integrity. Crédit
Agricole is therefore one of the first French banks to obtain ISO 37001
certification for its anti-corruption management system. This certification
was renewed in 2019.
Fraud prevention
is designed to protect the Bank’s interests and to
safeguard customers. The fraud prevention system has been deployed
in all Crédit Agricole Group entities since 2018. An organisation with a
Compliance/Fraud and Corruption Prevention business line is in place.
Tools have been deployed to combat fraud in means of payment and
fraudulent transfers. Governance was also strengthened at the entity
level with greater management involvement. Action has been taken to
update the training tools made available to entities in 2018. In 2020,
the COVID-19 health crisis and the disruption that it caused was an
opportunity for various types of fraudsters, in particular for organised
criminal groups. Crédit Agricole Group immediately addressed this issue
from all angles and across all sectors. Steps of action were taken and
are continuously updated to protect the bank’s clients.
Controlling risks related to financial security requirements
, and in
particular international sanctions, is a high priority for the Group. They
are part of a major project to strengthen the international sanctions
management system, the
OFAC remediation plan
, as a result of
agreements signed with the American authorities on 19 October 2015
following breaches of the “OFAC Sanctions” regime for USD transactions
between 2003 and 2008. This remediation plan was approved by the
Fed on 24 April 2017 and is subject to close monitoring and regular
reporting to the Group’s governance and the US authorities. Criminal
proceedings against Crédit Agricole Corporate and Investment bank
were terminated on 19 October 2018. Crédit Agricole Corporate and
Investment bank, like the entire Crédit Agricole Group, remains fully
committed to ensuring the success of the Group’s OFAC programme
vis-à-vis the Fed by April 2021. Application of the civil component of
the agreements continues, with work under way throughout the entire
Crédit Agricole Group. In 2020 major milestones in the development of
the plan were achieved: all Group entities reviewed, and where necessary
updated, their customer data required to identify any potential risk
related to international sanctions. The projects for the centralisation of
the platforms managed by the Group, the screening of payment flows
and the names of customers, suppliers and other third parties were
completed. Accordingly, thanks to this work, over 63 million customers
are now screened on these Group platforms. Lastly, the control system for
international trade finance activities was strengthened and automated.
CRÉDIT AGRICOLE S.A.
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RISKS AND PILLAR 3
5
2. Risk management
Customer knowledge and anti-money laundering and terrorist
financing prevention
systems are the subject of ongoing action plans
to take into account changes in risks, regulatory requirements and
supervisory authorities. In accordance with the roadmap, 2020 saw
the setting up of new periodical review of KYC standards KYC and the
implementation of a comprehensive assistance programme for entities
which will be rolled out from the beginning of 2021. The aim is to have
a review process covering all Group entities and all customer segments.
The operational implementation will be backed by indicators designed
to ensure regular monitoring and steering. In addition, the reliability
of customer databases continues to be improved in order to ensure
the quality of essential identity data and allow effective screening of
these databases. This project must also improve the level of customer
knowledge over the long term to make it a loyalty factor and prevent
and detect risks, especially money-laundering and terrorist financing.
Lastly, and thanks to the work on standardisation, in 2020 the Group
launched an initiative aimed at strengthening the sharing of KYC.
Several tests were launched in 2020 and will gradually be generalised.
The roadmap for 2021 is fully in line with the initiatives conducted in
previous years: continuing to improve the quality of onboarding, pursue
the initiative aimed at improving data reliability to ensure remediation
over the long term, managing and monitoring periodical KYC reviews,
increase the sharing of KYC information across Group entities and, lastly,
providing assistance to the entities in their works to include KYC in all
the commercial actions of account mangers.
Lastly, in 2020 the Group consolidated its programme related to the
European
General Data Protection Regulation
(GDPR). The programme
deployed in 2018 in compliance with the new requirements was scaled
up and adjusted appropriately, while Privacy by Design was incorporated
as part of the Group’s data and project governance.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
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RISKS AND PILLAR 3
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2. Risk management
CRÉDIT AGRICOLE S.A.
—
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RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3. PILLAR 3 DISCLOSURES
Key metrics at Crédit Agricole S.A. level (KM1)
Phased-in Key metrics at group level –
Crédit Agricole S.A. (KM1)
(in millions of euros)
31/12/2020
Available own funds
(amounts)
1
Common Equity Tier 1 (CET1) capital
44,180
2
Tier 1 capital
50,027
3
Total capital
64,489
Risk-weighted exposure amounts
4
Total risk-weighted exposure amount
336,044
Capital ratios
(as a percentage of risk-weighted exposure amount)
5
Common Equity Tier 1 ratio
(%)
13.1%
6
Tier 1 ratio
(%)
14.9%
7
Total capital ratio
(%)
19.2%
Additional own funds requirements
based on SREP
(as a percentage of risk-weighted exposure amount)
EU 7a
Additional CET1 SREP requirements
(%)
0.8%
EU 7b
Additional AT1 SREP requirements
(%)
0.3%
EU 7c
Additional T2 SREP requirements
(%)
0.4%
EU 7d
Total SREP own funds requirements
(%)
9.5%
Combined buffer requirement
(as a percentage of risk-weighted exposure amount)
8
Capital conservation buffer
(%)
2.5%
EU 8a
Conservation buffer due to macro-prudential
or systemic risk identified at the level
of a Member State
(%)
0.0%
9
Institution specific countercyclical capital buffer
(%)
0.0%
EU 9a
Systemic risk buffer
(%)
0.0%
10
Global Systemically Important Institution buffer
(%)
EU 10a
Other Systemically Important Institution buffer
11
Combined buffer requirement
(%)
2.5%
EU 11a
Overall capital requirements
(%)
12.0%
Leverage ratio
13
Leverage ratio total exposure measure
1,018,588
14
Leverage ratio
4.9%
Liquidity Coverage Ratio
15
Total high-quality liquid assets (HQLA)
(weighted value – average)
283,133
16
Total net cash outflows (adjusted value)
191,032
17
Liquidity coverage ratio
(%)
148.2%
3.1
COMPOSITION AND
MANAGEMENT OF CAPITAL
Within the framework of Basel 3 agreements, (EU) regulation No. 575/2013
of the European Parliament and of the Council of 26 June 2013 (the Capital
Requirements Regulation, or “CRR”) modified by CRR No. 2019/876
(“CRR2”) requires relevant financial institutions (notably credit institutions
and investment firms) to disclose quantitative and qualitative information
on their risk management activities. The risk management system and
exposure levels of Crédit Agricole S.A. are presented in this section and in
the section entitled “Risk management”.
The Basel 3 agreements are categorised into three pillars:
Pillar 1
sets the minimum capital adequacy requirements and level of
ratios in accordance with the current regulatory framework;
Pillar 2
completes the regulatory approach with the quantification of a
capital requirement covering the major risks to which the bank is exposed,
on the basis of internal approaches (see part “Economic Capital Adequacy”);
Pillar 3
introduces standards for financial disclosure to the market, with
the requirement to give details of the regulatory capital components and
risk assessments, both for the regulations applied and the business
during the period.
Crédit Agricole S.A. has chosen to disclose its Pillar 3 information in a
separate section from its Risk Factors and Risk Management in order
to isolate the items that meet the regulatory prudential publication
requirements.
The main purpose of solvency management is to assess Crédit Agricole S.A.’s
own funds and to verify that they are sufficient to cover the risks to which
Crédit Agricole S.A. is or could be exposed, given its activities.
The objective is to secure its customers’ deposits and allow the Group
access to the financial markets under the desired conditions.
To achieve this objective, the Group measures regulatory capital
requirements (Pillar 1) and conducts regulatory capital management, by
relying on both short- and medium-term prospective measures that are
consistent with the budgetary projections, based on a central economic
scenario.
Moreover, the Group relies on an internal process, named ICAAP (Internal
Capital Adequacy and Assessment Process), which has been developed in
accordance with the interpretation of the main regulatory texts specified
below. More specifically, the ICAAP includes:
the governance of capital management, adapted to the specificities of
the Group’s subsidiaries, which enables centralised and coordinated
monitoring at Group level;
a measurement of economic capital requirements based on the risk
identification process and quantification of capital requirements using
an internal approach (Pillar 2);
conducting ICAAP stress test exercises that aim to simulate the destruction
of capital after a three-year adverse economic scenario;
the management of economic capital (see part on “Economic Capital
Adequacy”);
a qualitative ICAAP mechanism that formalises, amongst other items,
the major areas for risk management improvement.
The ICAAP is highly integrated within the Group’s other strategic processes,
such as the ILAAP (Internal Liquidity Adequacy and Assessment Process),
the Risk Appetite Framework, the budgetary process, the recovery plan
and the risk identification process.
In addition to solvency, Crédit Agricole S.A. also manages leverage and
resolution ratios (MREL & TLAC) on behalf of Crédit Agricole Group.
CRÉDIT AGRICOLE S.A.
—
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RISKS AND PILLAR 3
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3. Pillar 3 Disclosures
Lastly, the solvency and resolution ratios are an integral part of the risk
appetite framework applied within Crédit Agricole Group (described in the
chapter on “Risk Factors and Risk management”).
3.1.1. Applicable regulatory framework
Tightening up the regulatory framework, Basel 3 agreements enhanced
the quality and level of regulatory capital required and added new risk
categories to the regulatory framework.
In addition, a specific regulatory framework, allowing an alternative to
bank default, has entered into force following the 2008 financial crisis.
The legislation concerning the regulatory requirements applicable to credit
institutions and investment firms was published in the Official Journal of
the European Union on 26 June 2013. It includes directive 2013/36/EU
(Capital Requirements Directive, known as “CRD 4”) and regulation
575/2013 (Capital Requirements Regulation, known as “CRR”) and entered
into force on 1 January 2014, in accordance with the transitional provisions
specified in the legislation.
Directive 2014/59/EU, the Bank Recovery and Resolution Directive (known
as “BRRD”), was published in the Official Journal of the European Union on
12 June 2014 and has been in effect in France since 1 January 2016. The
European Single Resolution Mechanism Regulation (known as “SRMR”,
Regulation 806/2014) was published on 15 July 2014 and came into
effect on 19 August 2016, in accordance with the transitional provisions
specified in the legislation.
On 7 June 2019, four pieces of legislation constituting the banking package
were published in the Official Journal of the European Union:
CRR2:
Regulation (EU) 2019/876 of the European Parliament and of
the Council of 20 May 2019 amending Regulation (EU) No. 575/2013;
SRMR2:
Regulation (EU) 2019/877 of the European Parliament and of
the Council of 20 May 2019 amending Regulation (EU) No. 806/2014;
CRD 5:
Directive (EU) 2019/878 of the European Parliament and of the
Council of 20 May 2019 amending Directive 2013/36/EU;
BRRD2:
Directive (EU) 2019/879 of the European Parliament and of the
Council of 20 May 2019 amending Directive 2014/59/EU.
Regulations SRMR2 and CRR2 entered into force 20 days after their
publication,
i.e.
on 27 June 2019 (although not all the provisions are
immediately applicable). The CRD 5 and BRRD2 directives were both
transposed into French law on 21 December 2020 by Decrees 2020-1635
and 2020-1636 and came into force seven days after their publication,
i.e.
,
on 28 December 2020.
Regulation 2020/873, known as “Quick-Fix”, was published on 26 June
2020 and came into force on 27 June 2020, amending Regulations
575/2013 (“CRR”) and 2019/876 (“CRR2”).
Under the CRR2/CRD 5 regime, four levels of capital requirements are
calculated:
the Common Equity Tier 1 (CET1) ratio;
the Tier 1 ratio;
the total capital ratio;
the leverage ratio (which is to become a Pillar 1 regulatory requirement
from June 2021).
A phasing-in period of calculation for these ratios shall permit to take
into account:
the transition from Basel 2 calculation rules to Basel 3 rules (the
transitional provisions applied to own funds until 1 January 2018 and
apply to hybrid debt instruments until 1 January 2022);
the eligibility criteria defined by CRR2 (until 28 June 2025 as equity
investments are concerned);
the impacts related to the application of the IFRS 9 accounting standard.
A fully loaded view of the ratios, as if the regulatory changes were of
immediate application, is also published.
In addition, two ratios are used to assess the adequacy of loss absorption
and recapitalisation capacities in the context of bank resolution. These two
requirements are applicable at Crédit Agricole Group level:
the TLAC (Total Loss Absorbing Capacity) ratio, defined for Global
Systemically Important Institutions (G-SII) and applicable in the European
Union through its integration into the CRR2;
the MREL (Minimum Requirement for Own Funds and Eligible Liabilities)
ratio, applicable to all banking institutions in the European Union and
defined in the BRRD.
The minimum requirements applicable to Crédit Agricole S.A. and to Crédit
Agricole Group are met.
3.1.2 Supervision and regulatory scope
Credit institutions and certain investment activities referred to in Annex 1
of Directive 2004/39/EC are subject to solvency ratios, resolution ratios
and large exposure ratios on an individual, and where applicable, sub-
consolidated basis.
The French Regulatory and Resolution Supervisory Authority (ACPR)
has accepted that certain subsidiaries of the Group may benefit from
individual exemption or, as necessary, on a sub-consolidated basis under the
conditions specified by Article 7 of the CRR. Accordingly, Crédit Agricole S.A.
has been exempted by the ACPR from application on an individual basis.
The transition to single supervision on 4 November 2014 by the European
Central Bank did not call into question the individual exemptions previously
granted by the ACPR.
The detailed list of entities concerned by a difference between the
accounting and prudential scopes is detailed in the part on “Appendix to
the regulatory capital”.
3.1.3 Capital Policy
The Group unveiled its financial trajectory for the Group Project and the
2022 Medium-Term Plan during the Investors’ Day on 6 June 2019. Targets
in terms of results and scarce resources were explained on this occasion.
3.1.3.1 Crédit Agricole Group
Crédit Agricole Group aims to remain among the most capitalised global
systemically important institutions (G-SII) in Europe by reaching and
maintaining a CET1 ratio of more than 16% by 2022. This objective will
be achieved by retaining more than 80% of its results, bringing its core
Tier 1 capital (CET1) to €100 billion by the end of 2022.
Crédit Agricole Group aims to achieve a subordinated MREL ratio (excluding
eligible senior preferred debt) of 24% to 25% of risk-weighted assets by the
end of 2022 and to maintain a subordinated MREL ratio (excluding preferred
senior debt) of at least 8% of TLOF (Total Liabilities and Own Funds).
Achieving these two targets will confirm the robustness and strong financial
position of Crédit Agricole Group, thus reinforcing the security of its clients’
assets, its market access conditions, and its rating in respect of ratings
agencies.
CRÉDIT AGRICOLE S.A.
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RISKS AND PILLAR 3
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3. Pillar 3 Disclosures
3.1.3.2 Crédit Agricole S.A.
Crédit Agricole S.A. has set itself the objective of a CET1 ratio of 11% over
the plan period. It is committed to a payout ratio of 50% in cash (in 2020,
this distribution policy had to be adjusted due to exceptional circumstances,
with a dividend payment for 2020 of 80 cents per share with a scrip dividend
payment option, or €2.3 billion, of which €0.9 billion in cash, thanks to the
formal commitment of SAS La Boétie to opt for a scrip dividend payment
(1)
,
and scrupulously respecting the recommendation of 15 December 2020
of the European Central Bank).
In an uncertain economic and regulatory context, this capital policy makes
it possible to achieve a balance between an attractive distribution policy
for the shareholder and an agile allocation of capital.
3.1.3.3 Regional banks
Through their financial structure, the Regional Banks have a strong ability
to generate capital by retaining most of their earnings. Capital is also
strengthened by the issuance of mutual shares by the Local Banks.
3.1.3.4 Subsidiaries
Subsidiaries under Crédit Agricole S.A. exclusive control and subject to
compliance with capital requirements are capitalised at a consistent level,
taking into account local regulatory requirements, capital requirements
necessary to finance their development and a management buffer adapted
to the volatility of their CET1 ratio.
3.1.4 Governance
The Capital Management Committee meets quarterly, chaired by the Deputy
General Manager, Chief Financial Officer; it includes in particular the Group
Chief Risk Officer, the Head of Group Financial Management, the Director
of Financial Communication and the Group Head of Treasury and Funding.
This Committee has the following main tasks:
to review the short- and medium-term solvency, leverage ratio and
resolution projections for Crédit Agricole Group and for Crédit Agricole S.A.
as well as the ratios monitored by rating agencies;
to approve the structuring assumptions with an effect on solvency in
line with the Medium-Term Plan;
to set the rules for capital management and distribution within the Group;
to decide on liability management transactions (subordinated debt
management);
to keep up to date with the latest supervision and regulatory news;
to examine the relevant problems relating to the subsidiaries and to
the Regional Banks;
to prepare the decisions to be submitted if necessary to the Asset-Liability
Management Committee and the Board of Directors;
to study any other subject affecting solvency and resolution ratios at
Group level.
The management of regulatory capital is performed using a process called
capital planning.
Capital planning is designed to provide projections for capital and rare
resource consumption (risk-weighted assets and size of the balance sheet)
over the current Medium-Term Plan, covering both scopes of consolidation
(the listed entity Crédit Agricole S.A. and Crédit Agricole Group, a global
systemically important institution), with a view to determining the trajectories
for solvency ratios (CET1, Tier 1, total ratio and leverage ratio) and resolution
ratios (MREL and TLAC, if applicable).
(1)
And on the assumption that the employee mutual funds (FCPE) will also opt for the scrip dividend payment and that the other minority shareholders will opt for payment in cash.
(2) Solvency 2 is a European regulatory reform of the insurance industry.
It covers the budgetary components of the financial trajectory, including
organisational transaction projects, regulatory accounting and prudential
changes, as well as model effects against risk bases. It also reflects the
issuance policy (subordinated debts and eligible TLAC and MREL debts)
and distribution with regard to the capital structure targets defined in line
with the Group’s strategy.
It determines the leeway available to the Group for development. It is also
used to set various risk thresholds used for risk appetite. It thus ensures
compliance with the various regulatory requirements and is used to calculate
the Maximum Distributable Amount (MDA), as defined by CRD 5.
Capital planning is submitted to various governance bodies and is
communicated to the competent authorities, either in the context of regular
discussions or for specific transactions (such as authorisation requests).
The subsidiaries subject to regulatory requirement compliance and the
Regional Banks also perform this forecast exercise at a sub-consolidated
level.
3.1.5 Financial conglomerate
3.1.5.1 Overall system
The European Directive of 16 December 2002 imposes supplementary
consolidated supervision on “financial conglomerates”, in particular for
those carrying out both banking and insurance activities.
This Directive notably requires the financial conglomerates to have
appropriate risk management procedures and internal control framework
for overall risk monitoring.
The conglomerate approach is appropriate to Crédit Agricole Group, as it
corresponds to the Group’s natural scope, which combines banking and
insurance activities, as well as to its internal governance (reflected in
particular through the Risk Appetite framework). Furthermore, the ICAAP
approach of Crédit Agricole Group is based on a conglomerate approach
to define both the economic capital requirement and the internal capital
available at Group level to cover this requirement.
For the conglomerate supervision, Crédit Agricole Group relies on three
regulatory scopes:
the banking scope (Basel 3) – banking ratios;
the insurance scope (Solvency 2
(2)
) – insurance solvency ratio;
the conglomerate scope – financial conglomerate ratio.
Financial
conglomerate ratio
=
Total Conglomerate Own Funds
> 100%
Banking requirements
+ Insurance requirements
The conglomerate ratio is defined as the ratio of the phased-in total
conglomerate own funds to the sum of banking and insurance capital
requirements:
a restatement is made in both the numerator and the denominator for
the intragroups related to equity investments;
the financial conglomerate’s own funds include the insurance subsidiary’s
own funds raised outside of the consolidation scope;
the denominator includes the banking and insurance activities according
to their respective regulatory solvency requirements, thus taking into
account the actual specific risks related to each of these two business
segments.
CRÉDIT AGRICOLE S.A.
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3. Pillar 3 Disclosures
The conglomerate ratio must at all times be greater than 100%. The
100% threshold remains a binding requirement, the non-compliance with
which would be detrimental: in the event of non-compliance or risk of
non-compliance with the financial position of a conglomerate, the necessary
measures must be taken to address the situation as soon as possible (as
defined in the European FICOD Directive 2002/87).
As at 31 December 2020, Crédit Agricole S.A.’s phased-in financial
conglomerate ratio, which includes the Solvency 2 requirement relating
to the equity interest in Crédit Agricole Assurances, was 178%. The ratio
included the consideration of the French Decree of 24 December 2019
authorising the integration of the Policyholder Participation Reserve (PPE) in
the equity of insurance companies, up to the amount required to cover the
risks beared by the insurance company (Solvency Capital Requirement, or
SCR). The level of Crédit Agricole S.A.’s financial conglomerate ratio as at
31 December 2020 corresponds to a surplus of own funds of the financial
conglomerate of Crédit Agricole S.A. of €35 billion.
This situation follows logically from compliance with the solvency
requirements of each of the two sectors, banking and insurance.
3.1.5.2 Prudential requirements with respect
to insurance in banking ratios
Financial conglomerates may, with the authorisation of the competent
authority, use the option not to deduct their equity holdings in insurance
companies from their prudential own funds but to treat them as risk-
weighted assets. This provision, known as the “Danish compromise” (or
Article 49-(1) of the CRR) has not been amended by CRR2 (Regulation (EU)
2019/876 of the European Parliament and of the Council of 20 May 2019
amending Regulation (EU) No. 575/2013).
On 18 October 2013, Crédit Agricole Group and Crédit Agricole S.A. received
the authorisation from the ACPR to apply this treatment to Crédit Agricole
Assurances Group entities.
Risk-weighted assets include the equity-accounted value of insurance
investments for the validated conglomerate scope, pursuant to Article 49-(1)
of the CRR. Due to the unlisted status of Crédit Agricole Assurances (CAA),
the weighting given to this value is 370%.
The table below shows the amount of holdings covered under Article 49-(1)
of the CRR.
Non-deducted equity holdings in insurance companies
(INS1)
(in millions of euros)
31/12/2020
Holdings of own funds instruments of a financial sector
entity where the institution has a significant investment
not deducted from own funds (before risk weighting)
9,268
Holdings of own funds instruments of a non-financial
sector entity belonging to the general assets of the
insurance and consolidated using the equity-accounted
method where the institution has a significant investment
not deducted from own funds (before risk weighting).
4,074
TOTAL RISK WEIGHTED EXPOSURE AMOUNT (RWA)
49,364
Since 2 January 2014, the regulatory prudential requirements for this
investment have been subject to a transfer of risk to the Regional Banks
through a specific guarantee (Switch).
When announcing the results at 31 December 2020, Crédit Agricole S.A.
undertook to increase the dismantling of the Switch guarantee to 100%
by the end of the Medium-Term Plan at end-2022, compared to the 50%
initially announced. More precisely, 50% will be completed in the first quarter
of 2021, following the partial completion of 35% in March 2020. The total
unwinding by 2022 will have a positive impact of +€141 million on Crédit
Agricole S.A.'s net income Group share (+€190 million on revenues) on a
full-year basis, and approximately 4% on earnings per share, resulting in
an impact of around -90 basis points on the CET1 of Crédit Agricole S.A.
(of which -20 basis points related to the unwinding of the additional 15%
in the first quarter of 2021).
At 30 June 2020, in the context of the COVID-19 crisis, the Switch guarantee
had been activated for an amount of €38 million. With the improvement
in market conditions in the second half of the year, a full return to better
fortunes was observed at 31 December 2020, perfectly neutralising the
activation of the guarantee over the year.
The guaranteed amount initially totalled €9.2 billion, or €33.9 billion in
risk-weighted assets. In first quarter 2021, after the additional 15% is
unwound, this will amount to €4.6 billion, or €17 billion of risk-weighted
assets.
3.1.5.3 Crédit Agricole Group’s ICAAP approach
In order to assess and permanently maintain the adequate capital level to
cover the risks to which it is (or may be) exposed, the Group supplements
its framework for the regulatory perspective of capital adequacy with an
economic internal perspective. Economic capital requirement (Pillar 2)
therefore supplements regulatory capital requirement (Pillar 1). Economic
capital requirement is based on the risks identification process and on an
evaluation using internal approaches. The economic capital requirement
must be covered by internal capital which is the Group’s internal view of
its available own funds.
The assessment of the economic capital requirement is one of the ICAAP
components, which also covers the stress test programme – with the
objective to introduce a forward-looking view of the impact of more
unfavourable scenarios on the Group’s risk level and solvency.
The monitoring and management of the economic perspective of capital
adequacy has been developed in accordance with the interpretation of
the main regulatory texts:
Basel agreements;
CRD 5 through its transposition into French regulations by the Decree
of 21 December 2020;
the guidelines of the European Banking Authority;
the guide to the ICAAP and ILAAP and the harmonised collection of
information on the subject.
ICAAP is first and foremost an internal process, and it is up to each
institution to implement it in a proportionate and credible way. Thus, the
implementation as well as the update of ICAAP process are the responsibility
of each subsidiary.
3.1.6 Regulatory capital and internal capital
3.1.6.1 Regulatory capital
Basel 3 defines three levels of capital:
Common Equity Tier 1 (CET1);
Tier 1 capital, which consists of Common Equity Tier 1 and Additional
Tier 1 (AT1) capital;
total capital, consisting of Tier 1 capital and Tier 2 capital.
All the tables and remarks below include the retained earnings of the period.
CRÉDIT AGRICOLE S.A.
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3. Pillar 3 Disclosures
3.1.6.1.1 Common Equity Tier 1 (CET1)
This includes:
share capital;
reserves, including share premiums, retained earnings, income net of tax
after dividend payments as well as accumulated other comprehensive
income, including unrealised capital gains and losses on financial assets
held to collect and sale purposes and translation adjustments;
non-controlling interests, which are partially derecognised, or even
excluded, depending on whether or not the subsidiary is an eligible
credit institution; this partial derecognition corresponds to the excess
capital compared to the amount required to cover the subsidiary’s capital
requirements and applies to each tier of capital;
deductions, which mainly include the following items:
-
CET1 instruments held under liquidity contracts and buyback
programmes,
-
intangible assets, including start-up costs and goodwill,
-
prudent valuation which consists of adjusting the amount of the
institution’s assets and liabilities if, in accounting terms, it does not
reflect a valuation that is deemed to be prudent by the regulations,
-
deferred tax assets (DTA) that rely on future profitability arising from
tax losses carried forward,
-
expected losses shortfall in relation to the credit exposures monitored
using the internal ratings-based (IRB) approach, as well as anticipated
losses related to equity exposures,
-
capital instruments held in financial sector equity investments of less
than or equal to 10% (non-significant investments), for the amount
exceeding a ceiling of 10% of the CET1 capital of the subscribing
institution, up to the proportion of CET1 instruments in the total capital
instruments held; items not deducted are included in risk-weighted
assets (variable weighting depending on the nature of instruments
and the Basel methodology),
-
deferred tax assets (DTAs) that rely on future profitability arising from
temporary differences for the amount exceeding an individual ceiling of
10% of the institution’s CET1 capital; items not deducted are included
in risk-weighted assets (weighting at 250%),
-
CET1 instruments held in financial sector equity investments of more
than 10% (significant investments) for the amount exceeding an
individual ceiling of 10% of the institution’s CET1 capital; items not
deducted are included in risk-weighted assets (weighting at 250%),
-
the total of deferred tax assets (DTAs) dependent on future profits
related to temporary differences and CET1 instruments held in financial
sector equity investments greater than 10% (“significant investments”)
for the amount exceeding an individual ceiling of 17.65% of the
institution’s CET1 capital; components not deducted are included in
risk-weighted assets (weighting at 250%).
Reconciliation of accounting and phased-in regulatory CET1 capital
(in millions of euros)
31/12/2020
31/12/2019
EQUITY – GROUP SHARE
(1)
65,217
62,920
(-) Expected dividend
(914)
(2,019)
(-) AT1 instruments accounted as equity
(5,888)
(5,134)
Minority interests (accounting value)
(1)
8,278
7,923
(-) Components excluded from regulatory capital
(3)
(4,269)
(3,504)
Eligible minority interests
(2)
4,009
4,419
(-) Equity value increases resulting from securitized assets
(260)
(314)
Cash flow hedge reserves
(828)
(552)
(-) Cumulative gains and losses attributable to changes in own credit risk for liabilities measured at fair value
271
170
(-) Fair value gains and losses resulting from the institution's own credit risk related to derivative instruments in liabilities
(13)
(15)
(-) Prudent valuation
(649)
(914)
Prudential filters
(1,477)
(1,625)
Goodwill
(15,353)
(16,000)
Intangible assets
(2,175)
(2,678)
(-) Deduction of goodwill and intangible assets
(17,528)
(18,678)
Deferred tax assets that rely on future profitability excluding those arising from temporary differences
(129)
(137)
Shortfall in adjustments for credit risk relative to expected losses under the internal ratings-based approach
(237)
(164)
Amount exceeding thresholds
-
-
Other CET1 components
1,128
(371)
COMMON EQUITY TIER 1 (CET1)
44,180
39,211
(1)
Information covered by the Statuary Auditors' Opinion.
(2)
This item can be found in the hereunder table of simplified prudential equity capital.
(3)
Of which hybrid securities issued by Crédit Agricole Assurances.
CRÉDIT AGRICOLE S.A.
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RISKS AND PILLAR 3
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3. Pillar 3 Disclosures
3.1.6.1.2 Additional Tier 1 (AT1) capital
This includes:
eligible AT1 capital, which consists of perpetual debt instruments without
any requirements or incentives to redeem (in particular step-up clauses);
direct deductions of AT1 instruments (including market making);
deductions of capital instruments held in financial sector equity
investments of less than or equal to 10% (non-significant investments),
for the amount exceeding a ceiling of 10% of the CET1 capital of the
subscribing institution, up to the proportion of AT1 instruments in the total
capital instruments held; items not deducted are included in risk-weighted
assets (variable weighting depending on the nature of instruments and
the Basel methodology);
deductions of AT1 instruments held in equity investments in the financial
sector of more than 10% (significant investments);
other AT1 capital components or other deductions (including AT1 eligible
non-controlling interests).
AT1 instruments eligible under CRR No. 575/2013 as amended by CRR
No. 2019/876 (CRR2) include a bail-in mechanism that is triggered when the
CET1 ratio is below a threshold that must be set at no lower than 5,125%
for Crédit Agricole S.A. and 7% for the CET1 ratio of the Crédit Agricole
Group. Instruments may be converted into equity or suffer a reduction
in their nominal value. Payments must be totally flexible: no automatic
compensation mechanisms and/or suspension of coupon payments at
the issuer’s discretion are permitted.
The amount of AT1 instruments used in fully loaded ratios corresponds to
AT1 capital instruments eligible under CRR No. 575/2013, as amended
by CRR No. 2019/876 (CRR2).
The AT1 instruments issued by Crédit Agricole S.A. have two loss absorption
mechanisms that are triggered when at least one of these two following
conditions is met:
Crédit Agricole S.A.’s CET1 ratio drops below 5,125%;
Crédit Agricole Group’s CET1 ratio drops below 7%.
At 31 December 2020, the phased-in CET1 ratios of Crédit Agricole S.A.
and of Crédit Agricole Group were 13.1% and 17.2%, respectively. These
ratios represent capital buffers of €27.0 billion for Crédit Agricole S.A. and
€57.6 billion for the Crédit Agricole Group relative to the bail-in thresholds
of 5.125% and 7% respectively.
At 31 December 2020, there were no applicable restrictions on the payment
of coupons.
At the same date, the distributable items of Crédit Agricole S.A. entity
totalled €38.8 billion, including €26.2 million in distributable reserves and
€12.6 million in share premiums.
The CRR2 regulation adds eligibility criteria. For example, instruments
issued by an institution established in the European Union that are subject
to the law of a third country must include a bail-in clause in order to be
eligible. These provisions apply to each category of AT1 and Tier 2 capital
instruments.
These instruments are published at https://www.credit-agricole.com/en/
finance/finance/financial-publications in Appendix II “Main characteristics
of equity capital instruments” and correspond to Super Subordinated
Notes (SSN).
3.1.6.1.3 Tier 2 capital
This includes:
subordinated debt instruments, which must have a minimum maturity
of five years and for which:
-
early redemption incentives are prohibited,
-
a haircut applies during the five-year period prior to their maturity date;
deductions of directly held Tier 2 instruments (including market making);
the surplus provisions relative to expected eligible losses determined
in accordance with the internal ratings-based (IRB) approach, limited
to 0.6% of risk-weighted assets under IRB;
deductions of capital instruments held in financial sector equity
investments of less than or equal to 10% (non-significant investments),
for the amount exceeding a ceiling of 10% of the CET1 capital of the
subscribing institution, up to the proportion of Tier 2 instruments in
the total capital instruments held; items not deducted are included in
risk-weighted assets (variable weighting depending on the nature of
instruments and the Basel methodology);
deductions of Tier 2 instruments held in financial sector equity investments
of more than 10% (significant investments), predominantly in the insurance
sector;
Tier 2 capital components or other deductions (including Tier 2 eligible
non-controlling interests).
The amount of Tier 2 instruments used in fully loaded ratios corresponds to
Tier 2 capital instruments eligible under CRR No. 575/2013, as amended
by CRR No. 2019/876 (CRR2).
These instruments are published at https://www.credit-agricole.com/en/
finance/finance/financial-publications in Appendix II “Main characteristics
of capital instruments”. They correspond to undated subordinated notes
(
titres subordonnés à durée indéterminée
– TSDI), equity investments
(
titres participatifs
– TP) and dated subordinated notes (
titres subordonnés
remboursables
– TSR).
3.1.6.1.4 Transitional implementation
To facilitate compliance by credit institutions with CRR2/CRD 5, less stringent
transitional provisions have been provided for, notably with the gradual
introduction of new prudential treatment of capital components.
All these transitional provisions ended on 1 January 2018, with the exception of
those concerning hybrid debt instruments, which will end on 1 January 2022.
Hybrid debt instruments that were eligible as capital under CRD 3 and are
no longer eligible as capital following the entry into force of CRD 4 may be
eligible, in certain circumstances, under the grandfather clause:
any instrument issued after 31 December 2011, which does not comply
with the CRR regulation has been excluded since 1 January 2014;
instruments issued prior to that date may, under certain conditions, be
eligible for the grandfather clause and are then gradually excluded over
an eight-year period, decreasing by 10% per annum. In 2014, 80% of
the total stock declared on 31 December 2012 was recognised, then
70% in 2015, and so on;
the unrecognised part can be included in the lower level capital
components (from AT1 to Tier 2, for example) if it meets the corresponding
criteria.
CRR2 complements these provisions by introducing a new grandfather
clause: ineligible instruments issued before 27 June 2019 will remain
eligible under transitional provisions until 28 June 2025.
CRÉDIT AGRICOLE S.A.
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3. Pillar 3 Disclosures
During the transitional phase, the amount of Tier 1 included in the ratios
corresponds to the sum of:
additional Tier 1 capital eligible under CRR2 (AT1);
additional Tier 1 capital instruments eligible for CRR issued before
27 June 2019;
a fraction of the CRR ineligible Tier 1 issued before 1 January 2014,
equal to the lower of:
-
the regulatory amount of ineligible Tier 1 instruments at the end of
the reporting period (after amortisation, any calls, redemptions, etc.),
-
20% (regulatory threshold for 2020) of the Tier 1 stock at 31 December 2012,
which stood at €9,329 million,
i.e.
a maximum recognisable amount of
€1,866 million,
-
the amount of Tier 1 capital exceeding this regulatory threshold is
included in phased-in Tier 2, up to the regulatory threshold applicable
to Tier 2.
During the transitional phase, the amount of Tier 2 included in the ratios
corresponds to the sum of:
CRR2 eligible Tier 2;
CRR eligible Tier 2 capital instruments issued before 27 June 2019;
a fraction of the CRR ineligible Tier 2 issued before 1 January 2014,
equal to the lower of:
-
the regulatory amount of ineligible Tier 2 securities at the reporting
period-end and, as applicable, the remainder of Tier 1 securities
exceeding the 20% threshold (threshold for 2020) of ineligible Tier 1
securities,
-
20% (threshold for 2020) of the CRR ineligible Tier 2 stock at
31 December 2012; the CRR ineligible Tier 2 stock at 31 December 2012
stood at €4,121 million, or a maximum recognisable amount of
€824 million.
Finally, the “Quick Fix” regulation of 26 June 2020 extended until 2024
the transitional provisions set out in the CRR, by allowing to include the
impacts associated with the application of the IFRS 9 accounting standard
in the solvency ratios. Crédit Agricole S.A. and the Crédit Agricole Group
had not opted for this provision when IFRS 9 was first applied in 2018.
Following the publication of the “Quick Fix” regulation, it was decided to
opt for this provision as from June 2020.
During the transitional phase (until 2024), the impacts related to the
application of the IFRS 9 accounting standard can be included in the
CET1 equity, according to a calculation composed of several components:
a static component making it possible to neutralise, in shareholders'
equity, part of the impact of the first-time application of IFRS 9. In 2020,
neutralisation is achieved on the basis of a rate of 70%;
a dynamic component, making it possible to neutralise part of the
net increase in provisions recorded between 1 January 2018 and
1 January 2020 on performing outstandings (Stages 1 and 2 of IFRS 9).
In 2020, neutralisation is achieved on the basis of a rate of 70%;
a second dynamic component, making it possible to neutralise part of
the net increase in provisions recorded between 1 January 2020 and
the balance sheet date on performing loans (compartments 1 and 2 of
IFRS 9). In 2020, neutralisation is achieved on the basis of a rate of 100%.
CRÉDIT AGRICOLE S.A.
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3. Pillar 3 Disclosures
3.1.6.1.5 Position at 31 December 2020
Phased-in simplified regulatory capital
(in millions of euros)
31/12/2020
31/12/2019
Phased-in
Fully loaded
Phased-in
Fully loaded
Capital instruments eligible as CET1 capital
21,309
21,309
21,147
21,147
Retained earnings and other reserves
35,250
35,250
32,066
32,066
Accumulated other comprehensive income
2,310
2,310
2,740
2,740
Minority interests (amount allowed in consolidated CET1)
4,009
4,009
4,419
4,419
Capital instruments and reserves
62,878
62,878
60,372
60,372
Prudential filters
(1,477)
(1,477)
(1,625)
(1,625)
(-) Deduction of intangible assets
(17,528)
(17,528)
(18,678)
(18,678)
Amount exceeding thresholds
(1)
-
-
-
-
Other CET1 components
307
(543)
(858)
(858)
Regulatory adjustments
(18,699)
(19,549)
(21,161)
(21,161)
COMMON EQUITY TIER 1 (CET1)
44,180
43,330
39,211
39,211
Eligible AT1 capital instruments
4,335
4,335
3,816
3,816
Ineligible AT1 capital instruments qualifying under grandfathering clause
1,670
-
1,908
-
Holdings by the institution of the AT1 instruments of financial sector entities
where the institution has a significant investment in those entities
(1)
(1)
(1)
(1)
Other Tier 1 components
(158)
(158)
(623)
(323)
ADDITIONAL TIER 1 CAPITAL
5,847
4,177
5,100
3,492
TIER 1 CAPITAL
50,027
47,506
44,311
42,703
Eligible Tier 2 capital instruments
17,089
17,089
15,882
15,882
Ineligible Tier 2 capital instruments under grandfathering clause
53
-
134
-
Surplus provisions relative to expected losses eligible under the internal
ratings-based approach(2)
298
298
100
100
Holdings by the institution of the T2 instruments and subordinated loans of financial
sector entities where the institution has a significant investment in those entities
(2,733)
(2,733)
(3,738)
(3,738)
Other Tier 2 components
(243)
(244)
(179)
(173)
TIER 2 CAPITAL
14,463
14,410
12,199
12,071
TOTAL CAPITAL
64,489
61,917
56,510
54,774
(1)
Financial-sector CET1 instruments in which the institution holds a significant stake account for €1,871 million, and the deferred taxes that rely on future profitability arising from temporary
differences amount to €996 million as of the 31 December 2020.
(2) The transfer to
Tier 2
of the surplus provisions relative to eligible expected losses determined in accordance with the infernal ratings-based approach is limited to 0,6% of risk-weighted to assets
under IRB.
For clarity, the full table of the composition of capital is presented under
Pillar 3, available at https://www.credit-agricole.com/en/finance/finance/
financial-publications.
Changes during the period
Non-phased Tier 1 capital (CET1) amounted to €43.3 billion at
31 December 2020, an increase of €4.1 billion compared to year-end 2019.
Details of changes are shown under detailed ratios categories:
capital instruments and reserves were €62.9 billion, up €2.5 billion
compared with end-2019, mainly stemming from the appropriation to
reserves of the dividend for the 2019 financial year in the amount of
€2 billion, following the recommendation of the European Central Bank
issued on 27 March. The 2020 result amounts to €2.7 billion and the
estimated dividend to be distributed in cash is €0.9 billion. Minority
interests were down €0.4 billion, the impact of unrealised capital gains
and losses was also negative at €0.4 billion and AT1 coupons weighed
on CET1 at €0.4 billion;
prudential filters decreased compared with the end of 2019, with a
positive impact of €0.1 billion;
deductions for goodwill and other intangible assets amounted to
€17.5 billion, down €1.2 billion, mainly as a result of the positive impact
of taking into account the €0.9 billion write-down of the goodwill of CA
Italy and the new prudential treatment of software in the amount of
€0.5 billion. These items were partially offset by the negative impact of
€0.4 billion related to Amundi's acquisition of the entire capital of Sabadell
Asset Management, Banco Sabadell's asset management subsidiary;
CET1 instruments held in financial sector holdings of more than 10%
amounted to €1.9 billion, down -€0.1 billion compared with the end of
2019; deferred tax assets dependent on future profits and resulting from
temporary differences amounted to €1 billion, down -€0.1 billion; these
two items benefit fully from the deductible amount and are therefore
treated as weighted assets at 250%; overall, the corresponding deduction
in shareholders' equity is nil at 31 December 2020 (as at 31 December
2019);
the other elements of CET1 have a positive impact of €0.3 billion.
Phased-in core Tier 1 (CET1) capital
stood at €44.2 billion at
31 December 2020, showing an increase of €0.9 billion compared to the
fully-loaded core Tier 1 (CET1). This increase is entirely due to a measure in
the “Quick Fix” regulation of 26 June 2020 mentioned above, in the paragraph
on transitional provisions, which extended until 2024 the possibility to take
into account in the solvency ratios the impacts related to the application of
the IFRS 9 accounting standard. During this transitional phase, the impacts
CRÉDIT AGRICOLE S.A.
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2020 Universal registration document
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RISKS AND PILLAR 3
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3. Pillar 3 Disclosures
related to the application of this standard can therefore be included in CET1
equity, which the Group has chosen to do as from the June 2020 decree.
Fully loaded Tier 1 capital
was €47.5 billion, or an increase of €4.8 billion
compared to 31 December 2019, with an increase in additional Tier 1
capital of €0.7 billion, mainly as a result of the issuance of an €0.8 billion
additional Tier 1 instruments in October 2020.
Phased-in Tier 1 capital
amounted to €50.0 billion, up €5.7 billion
compared to 31 December 2019, with an increase in additional Tier 1
capital of €0.8 billion.
Non-eligible AT1 capital
instruments benefiting from a grandfathering
clause decreased by €0.2 billion, mainly due to two partial repurchase
operations. In addition, the total amount of securities benefiting from a
“grandfather” clause defined by CRR remains below the grandfathering,
which makes it possible to retain, in addition to the instruments eligible
for CRR, an amount of debt corresponding to a maximum of 20% of the
stock at 31 December 2012.
Fully loaded Tier 2 capital
amounted to €14.4 billion, up €2.3 billion
compared to 31 December 2019. This change was attributable to:
paid-in capital instruments eligible as Tier 2 capital amounted to
€17.1 billion, an increase of €1.2 billion compared to 31 December 2019
due to issuances during the period totalling €2.7 billion and the impact
of prudential haircuts and redemptions of approximately €1.6 billion;
the surplus provision relative to expected losses eligible under the internal
ratings-based approach was up €0.2 billion;
subordinated loans and receivables from banks and insurance companies,
all representative of Tier 2 instruments, were deducted in full from Tier 2
in the amount of €2.7 billion on a fully loaded basis, down €1 billion
compared to 31 December 2019;
other Tier 2 components were down €0.1 billion.
Phased Tier 2 capital amounted to €14.5 billion, up €2.3 billion compared
with 31 December 2019 and shows the same total change as the non-
phased view.
In addition, the total amount of securities benefiting from a “grandfather”
clause defined by CRR remains below the grandfathering, which makes
it possible to retain, in addition to the instruments eligible for CRR, an
amount of debt corresponding to a maximum of 20% of the stock at
31 December 2012.
In all, fully loaded total capital stood at €61.9 billion, up €6.8 billion compared
to 31 December 2019.
Phased-in total capital was €64.5 billion, which was €8.0 billion more than
at 31 December 2019. This regulatory capital does not take into account the
non-preferred senior debt issuances, which are discussed in item 3.1.7.3
“Resolution ratios” below.
Changes in phased-in prudential capital
(in millions of euros)
31/12/2020 vs. 31/12/2019
Common Equity Tier 1 capital at 31/12/2019
39,211
Capital increase
162
Accounting attributable net income/loss for the year before dividend
(1)
2,319
Expected dividend
(914)
Other comprehensive income
(430)
Eligible minority interests
(410)
Prudential filters
148
Goodwill and other intangible assets
1,150
Amount exceeding the exemption thresholds
-
Other CET1 components
2,944
COMMON EQUITY TIER 1 CAPITAL AT 31/12/2020
44,180
Additional Tier 1 capital at 31/12/2019
5,100
Issuances
750
Redemptions and foreign currency impact on the debt stock
(2)
(468)
Other Tier 1 components
465
ADDITIONAL TIER 1 CAPITAL AT 31/12/2020
5,847
TIER 1 CAPITAL AT 31/12/2020
50,027
Tier 2 capital at 31/12/2019
12,199
Issuances
2,721
Redemptions and foreign currency impact on the debt stock
(2)(3)
(1,620)
Other Tier 2 components
1,162
TIER 2 CAPITAL AT 31/12/2020
14,463
TOTAL CAPITAL AT 31/12/2020
64,489
(1)
Before exclusion of goodwill impairment, which doesn't have any impact on CET1 ratio.
(2)
Including the impact, if any, of the applicable cap to these instruments.
(3)
Tier 2 instruments are subject to a haircut during the five years prior to their maturity date.
CRÉDIT AGRICOLE S.A.
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2020 Universal Registration Document
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RISKS AND PILLAR 3
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3. Pillar 3 Disclosures
3.1.6.2 Internal capital
The Group has defined the internal capital (an internal view of own funds),
which is compared to the economic capital requirement. Internal capital is
based on a conglomerate approach, given the importance of the insurance
businesses for the Group and takes into account the going concern principle.
3.1.7 Capital adequacy
The regulatory perspective of capital adequacy is ensured through the
monitoring of solvency, leverage and resolution ratios. Each of these ratios
reports the amount of regulatory capital and/or, when applicable, eligible
instruments, to the risk, leverage or size of the balance sheet exposures.
These exposures are defined and calculated in section “Composition
of and changes in risk-weighted assets”. The regulatory perspective is
supplemented by the economic internal perspective of capital adequacy,
which is ensured by the monitoring of the economic capital requirements’
coverage ratio.
3.1.7.1 Solvency ratios
Solvency ratios are intended to check the adequacy of the various categories
of capital (CET1, Tier 1 and total capital) to cover risk-weighted assets arising
as a result of credit risk, market risk and operational risk. The risk-weighted
assets are computed using either a standardised approach or an internal
approach (see section “Composition of and changes in risk-weighted
assets”).
3.1.7.1.1 Regulatory requirements
The CRR regulation governs the requirements with regard to Pillar 1. The
supervisor also sets, on a discretionary basis, the minimum requirements,
within the framework of Pillar 2.
Minimum requirements with regard to Pillar 1
The capital requirements established under Pillar 1 since 2015 are as
follows:
Pillar 1 minimum requirement
CET1
4.50%
Tier 1
6.00%
Own funds
8.00%
Minimum requirements with regard to Pillar 2
The European Central Bank (ECB) annually notify Crédit Agricole Group
and Crédit Agricole S.A. their minimum capital requirements following the
results of the Supervisory Review and Evaluation Process (SREP).
Since 2017, the ECB has changed the methodology used, splitting the
prudential requirement into two parts:
a “Pillar 2 Requirement” (P2R) which applies to all levels of equity capital
and automatically results in restrictions on distributions (additional
Tier 1 capital instrument coupons, dividends, variable compensation);
accordingly, this requirement is public.
As from 12 March 2020 and considering the impact of the COVID-19
crisis, the European Central Bank brought forward the effective date of
application of Article 104a of CRD 5 and allowed institutions under its
supervision to use Tier 1 and Tier 2 capital to meet their additional P2R
capital requirement. Overall, the P2R can now be met with 75% Tier 1
capital including as a minimum 75% CET1 capital;
a Pillar 2 Guidance (P2G), which is not public and must be met with
Common Equity Tier 1 capital.
Combined buffer requirement and restriction
on distributions threshold
The regulator provides for the establishment of capital buffers, which are
gradually being implemented:
the capital conservation buffer (2.5% of the risk-weighted assets since
1 January 2019);
the countercyclical buffer (in principle a rate set within a range of 0%
to 2.5%), with the buffer at the institution’s level calculated using the
weighted average of the buffers defined for each country in which the
institution operates applied to the relevant exposures at default (EAD);
when the countercyclical buffer rate is calculated by one of the national
authorities, the application date should be no later than 12 months from
the publication date, except for the exceptional circumstances;
the buffers for systemically important institutions (0% to 3% in general,
up to 5% after agreement from the European Commission and more
exceptionally above that figure); for global systemically important
institutions (G-SII), between 0% and 3.5%, or for other systemically
important institutions (O-SII), between 0% and 2%. These buffers are
not cumulative, and in general, with some exceptions, the highest buffer
rate applies. Only Crédit Agricole Group is a G-SII and has a buffer of
1% since 1 January 2019. Crédit Agricole S.A. is not subject to these
requirements.
These buffers must be covered by Common Equity Tier 1 capital.
To date, counter-cyclical buffers have been activated in six countries
by the relevant national authorities. Many countries have relaxed their
counter-cyclical buffer requirement in the wake of the COVID-19 crisis. As
for French exposures, the High Council for Financial Stability (
Haut Conseil
de stabilité financière
– HCFS) lowered the countercyclical buffer rate from
0.25% to 0% on 2 April 2020.
With respect to Crédit Agricole S.A.’s exposures in these countries, Crédit
Agricole S.A.’s countercyclical buffer rate was 0.013% at 31 December 2020.
CRÉDIT AGRICOLE S.A.
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2020 Universal registration document
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5
3. Pillar 3 Disclosures
Details of the countercyclical buffer calculation (CCYB1)
31/12/2020
(in millions of euros)
General credit
exposures
Trading book exposure
Own funds requirements
Countercyclical
capital buffer
rate
(%)
31/12/2020
Countercyclical
capital
buffer rate
forecast
(%)
31/12/2021
(2)
Standard
approach
IRB
approach
Sum of long
and short
position of
trading book
Value of
trading book
exposure
for internal
models
General
credit
exposure
Trading
book
exposure
Securi-
tisation
exposure
Total
Breakdown
by country
(%)
Belgium
3,757
3,494
-
-
158
-
-
158
0.75%
0.00%
0.00%
Bulgaria
1
17
-
-
1
-
-
1
0.00%
0.50%
0.50%
Czech Republic
22
147
-
-
7
-
-
7
0.03%
0.50%
0.50%
Denmark
159
699
-
-
23
-
1
24
0.11%
0.00%
0.00%
France
42,074
226,334
124
1,451
10,091
126
217
10,434
49.46%
0.00%
0.00%
Germany
3,597
15,151
-
-
597
-
55
653
3.09%
0.00%
0.00%
Hong Kong
482
4,543
-
-
124
-
-
124
0.59%
1.00%
1.00%
Iceland
3
-
-
-
0
-
-
0
0.00%
0.00%
0.00%
Ireland
65
4,003
-
-
93
-
1
94
0.45%
0.00%
0.00%
Lithuania
28
-
-
-
2
-
-
2
0.01%
0.00%
0.00%
Luxembourg
2,466
12,646
-
-
467
-
2
468
2.22%
0.25%
0.50%
Norway
9
1,291
-
-
33
-
1
34
0.16%
1.00%
1.00%
Slovakia
3
3
-
-
0
-
-
0
0.00%
1.00%
1.00%
Sweden
84
1,850
-
-
56
-
1
57
0.27%
0.00%
0.00%
United-Kingdom
1,493
15,326
-
-
492
-
33
525
2.49%
0.00%
0.00%
Other countries
(1)
60,677
158,930
40
-
8,116
3
394
8,514
40.36%
0.00%
0.00%
TOTAL
114,921
444,434
164
1,451
20,260
129
705
21,094
100%
0.013%
0.019%
(1)
For which no countercyclical buffer has been defined by the competent authority.
(2)
The Group’s countercyclical capital buffer rate expected at 31 December 2021 is calculated by using the buffer rates known to date and applicable no later than in 12 months and the breakdown of
capital requirements by country as of 31 December 2020.
Requirements for the countercyclical buffer calculation (CCYB2)
31/12/2020
31/12/2019
Total risk exposure
336,044
323,678
Institution-specific countercyclical buffer
0.013%
0.166%
Institution-specific countercyclical buffer
44
538
Summarised:
Combined buffer requirement
31/12/2020
31/12/2019
Phased-in capital conservation buffer
2.50%
2.50%
Phased-in systemic buffer
0.00%
0.00%
Countercyclical buffer
0.01%
0.17%
Combined buffer requirement
2.51%
2.67%
The transposition of Basel regulations into European law (CRD) has
established a distribution restriction mechanism applicable to dividends,
AT1 instruments and variable compensation. The principle of the Maximum
Distributable Amount (MDA), the maximum amount that a bank can allocate
to distributions, aims at restricting distributions where they would result in
non-compliance with the combined buffer requirement.
The distance to the MDA trigger is the lowest of the respective distances
to the SREP requirements in CET1 capital, Tier 1 capital and total capital.
With the early application of Article 104a of CRD 5, P2R can now be met
with 75% Tier 1 capital including as a minimum 75% CET1 capital. The
CET1 requirement of Crédit Agricole S.A. has thus decreased by -66 basis
points since first quarter 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
329
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
CET1 SREP
requirement
Tier 1 SREP
requirement
Overall
capital SREP
requirement
Pillar 1 minimum requirement
4.50%
6.00%
8.00%
Pillar 2 requirement (P2R)
0.84%
1.13%
1.50%
Conservation buffer
2.50%
2.50%
2.50%
Countercyclical buffer
0.01%
0.01%
0.01%
SREP requirement (a)
7.86%
9.64%
12.01%
31/12/2020 Phased-in solvency ratios (b)
13.1%
14.9%
19.2%
Distance to SREP requirement (b)-(a)
529 bp
525 bp
718 bp
Distance to MDA trigger threshold
525 bp (€18 bn)
At 31 December 2020, Crédit Agricole S.A. posted a buffer of 525 basis points above the MDA trigger,
i.e.
approximately €18 billion in CET1 capital.
After taking into account Pillar 1, Pillar 2 and the combined buffer requirement, the overall capital requirement reaches the following level:
SREP own funds requirement
31/12/2020
31/12/2019
Pillar 1 minimum CET1 requirement
4.50%
4.50%
CET1 additional Pillar 2 requirement (P2R)
0.84%
1.50%
Combined buffer requirement
2.51%
2.67%
CET1 requirement
7.86%
8.67%
Pillar 1 minimum AT1 requirement
1.50%
1.50%
AT1 component of P2R
0.28%
Pillar 1 minimum Tier 2 requirement
2.00%
2.00%
Tier 2 component of P2R
0.38%
Overall capital requirement
12.01%
12.17%
Crédit Agricole S.A. must therefore comply with a minimum CET1 ratio of 7.86%. This includes the requirements under Pillar 1, Pillar 2 (P2R), plus the
combined buffer requirement (based on the decisions known to date).
3.1.7.1.2 Position at 31 December 2020
Summary of the key figures
Key metrics
(in millions of euros)
31/12/2020
31/12/2019
Phased-in
Fully loaded
Requirements
Phased-in
Fully loaded
Requirements
Common Equity Tier 1 (CET1)
44,180
43,330
39,211
39,211
Tier 1 capital
50,027
47,506
44,311
42,703
Total capital
64,489
61,917
56,510
54,774
Total risk weighted assets
336,044
335,491
323,678
323,678
CET1 RATIO
13.1%
12.9%
7.9%
12.1%
12.1%
8.7%
TIER 1 RATIO
14.9%
14.2%
9.6%
13.7%
13.2%
10.2%
TOTAL CAPITAL RATIO
19.2%
18.5%
12.0%
17.5%
16.9%
12.2%
The applicable minimum requirements are fully met; the phased-in CET1 ratio of Crédit Agricole S.A. was 13.1% as at 31 December 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
330
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Changes in CET1 over 2020
12.1%
13.1%
-48 bp
+61 bp
-17 bp
+34 bp
+73 bp
DECEMBER
2019
DECEMBER
2020
Switch
unwind.
2019
dividend
Retained
earnings
Methodo.
& rgtr.
Other
The CET1 ratio improved by 1 percentage point over the year in 2020. The
unfavourable impact of the 35% dismantling of the Switch mechanism
(-0.5 percentage points) was amply offset by various favourable effects.
The ratio thus benefited from the allocation of the 2019 dividend to reserves
in accordance with European Central Bank recommendation ECB/2020/19,
generating a positive impact of +0.6 percentage points.
In addition, the retained earnings for 2020 allow for an increase in the
CET1 ratio of +0.7 percentage points, taking into account a provision
for a dividend of 80 cents per share with the option of payment of the
dividend in shares (thanks to the formal commitment of SAS Rue La Boétie
to elect payment of the dividend in shares and on the assumption that
the employee shareholding funds (FCPEs) will also opt for payment of the
dividend in shares).
Various methodological and regulatory effects observed in 2020 also had
an overall positive impact on the CET1 ratio of +0.3 percentage point. The
implementation of the IFRS 9 phasing (+24 basis points), the application of
the SME supporting factor (+16 basis points), the decision of the European
Court of Justice to no longer require the deduction of irrevocable payment
commitments issued by the ECB (+10 basis points) and the application
of the new Delegated Regulation 2020/2176 relating to the prudential
treatment of software (+14 basis points), notably offset the effects of the
new regulatory methodology for securitisations (-21 basis points) and the
review of internal models (TRIM -20 basis points).
The item “Other” notably includes various effects of acquisitions and
disposals of entities (-12 basis points), including the acquisition of Sabadell
Asset Management by Amundi (-9 basis points) and the ongoing disposal
of Crédit Agricole Consumer Finance Nl (-4 basis points). It also includes
changes in business lines, which were favourable over the year (+21 basis
points), linked in particular to a favourable exchange rate trend, the capping
of minority interests (-16 basis points) and changes in unrealised reserves,
which were broadly neutral over the year (+1 basis point).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
331
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Impact of the application of the transitional provisions IFRS 9
The transitional provisions of IFRS 9 have been applied for the first time as from the Decree of 30 June 2020.
Quantitative model
31/12/2020
30/06/2020
Available capital
(amounts)
1
Common Equity Tier 1 (CET1) capital
44,180
41,530
2
Common Equity Tier 1 (CET1) capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied
43,330
40,590
3
Tier 1 capital
50,027
46,759
4
Tier 1 capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied
49,177
45,818
5
Total capital
64,489
60,978
6
Total capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied
63,639
60,037
Risk-weighted assets
(amounts)
7
Total risk-weighted assets
336,044
347,406
8
Total risk-weighted assets as if IFRS 9 or analogous ECLs transitional arrangements had not been applied
335,491
346,913
Capital ratios
9
Common Equity Tier 1
(as percentage of risk exposure amount)
13.1%
12.0%
10
Common Equity Tier 1
(as percentage of risk exposure amount)
as if IFRS 9 or analogous ECLs transitional arrangements
had not been applied
12.9%
11.7%
11
Tier 1
(as percentage of risk exposure amount)
14.9%
13.5%
12
Tier 1
(as percentage of risk exposure amount)
as if IFRS 9 or analogous ECLs transitional arrangements had not been applied
14.7%
13.2%
13
Total capital
(as percentage of risk exposure amount)
19.2%
17.6%
14
Total capital
(as percentage of risk exposure amount)
as if IFRS 9 or analogous ECLs transitional arrangements had not been applied
19.0%
17.3%
Leverage ratio
15
Leverage ratio total exposure
1,018,588
1,186,268
16
Leverage ratio
4.9%
3.9%
17
Leverage ratio as if IFRS 9 or analogous ECLs transitional arrangements had not been applied
4.8%
3.9%
3.1.7.2 Leverage ratio
3.1.7.2.1 Regulatory framework
The objective of the leverage ratio is to help preserve financial stability by
acting as a safety net to supplement risk-based capital requirements and
by limiting the accumulation of excessive leverage in times of economic
recovery. The Basel Committee, in the context of Basel 3 agreements,
defined the leverage ratio rule, which was transposed into European
law via Article 429 of the CRR, amended by Delegated Act 62/2015 of
10 October 2014 and published in the Official Journal of the European
Union on 18 January 2015.
The leverage ratio is defined as the Tier 1 capital divided by the leverage
exposure measure,
i.e.
balance sheet and off-balance-sheet assets after
certain restatements of derivatives, transactions between Group affiliates,
securities financing transactions, items deducted from the numerator, and
off-balance-sheet items.
Since the publication of European Regulation CRR2 in the Official Journal
of the European Union on 7 June 2019, the leverage ratio has become a
minimum Pillar 1 requirement applicable as from 28 June 2021:
the minimum leverage ratio requirement will be 3%;
from 1 January 2023, a leverage ratio buffer, defined as half of the
entity’s systemic buffer, will be added to this level for global systemically
important institutions (G-SII),
i.e.
for Crédit Agricole Group;
lastly, failure to comply with the leverage ratio buffer requirement will
result in a distribution restriction and the calculation of a maximum
distributable amount (L-MDA).
As of 1 January 2015 publication of the leverage ratio is mandatory at
least once a year; institutions can choose to publish a fully loaded ratio or
a phased-in ratio. If the institution decides to change its publication choice,
at the time of first publication it must reconcile the data for all of the ratios
previously published with the data for the new ratios selected for publication.
Crédit Agricole S.A. has opted to publish a phased-in leverage ratio.
At the beginning of 2019, Crédit Agricole Group received authorisation
from the ECB (with application retroactive to 2016) to exempt from the
calculation of its leverage ratio, the exposures related to the centralisation
of deposits at
Caisse des Dépôts et Consignations
(CDC).
3.1.7.2.2 Position at 31 December 2020
The leverage ratio of Crédit Agricole S.A. was 4.9% on a phased-in Tier 1
basis. This ratio is calculated taking into account the provision of the “Quick
Fix” Regulation 2020/873 which allows the neutralisation of Central Bank
exposures. This provision has been applicable since Q3 2020 following
the ECB's declaration of the existence of exceptional circumstances. The
application of this measure makes it possible to neutralise Central Bank
exposures of €161.3 billion at 31 December 2020.
The intra-quarter phased-in leverage ratio for Crédit Agricole S.A., which
refers to the average end-of-month exposures for the first two months
of the last quarter, was 4.8%, including the neutralisation of the ECB's
exposures. Excluding the neutralisation of the Central Bank's exposures,
the phased-in intra-quarter leverage ratio is 4.0%.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
332
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Leverage ratio – Common disclosure (LRCom)
CRR Leverage ratio exposures
(in millions of euros)
31/12/2020
31/12/2019
On-balance sheet exposures (excluding derivatives and SFTs)
1
On-balance sheet items (excluding derivatives, SFTs and fiduciary assets, but including collateral)
1,275,458
1,135,758
2
(Asset amounts deducted in determining Tier 1 capital)
(18,775)
(21,535)
3
TOTAL ON-BALANCE SHEET EXPOSURES (EXCLUDING DERIVATIVES, SFTS AND FIDUCIARY ASSETS)
(SUM OF LINES 1 AND 2)
1,256,683
1,114,223
Derivative exposures
4
Replacement cost associated with all derivatives transactions (
i.e.
net of eligible cash variation margin)
22,715
15,123
5
Add-on amounts for PFE associated with all derivatives transactions (mark-to-market method)
39,789
39,473
EU-5a
Exposure determined under Original Exposure Method
-
6
Gross-up for derivatives collateral provided where deducted from the balance sheet assets pursuant
to the applicable accounting framework
5,044
4,586
7
(Deductions of receivables assets for cash variation margin provided in derivatives transactions)
(19,094)
(18,936)
8
(Exempted CCP leg of client-cleared trade exposures)
(4,622)
(4,210)
9
Adjusted effective notional amount of written credit derivatives
13,631
14,844
10
(Adjusted effective notional offsets and add-on deductions for written credit derivatives)
(5,980)
(6,099)
11
TOTAL DERIVATIVE EXPOSURES (SUM OF LINES 4 TO 10)
51,482
44,781
SFT exposures
12
Gross SFT assets (with no recognition of netting), after adjusting for sales accounting transactions
272,534
227,673
13
(Netted amounts of cash payables and cash receivables of gross SFT assets)
(117,583)
(101,704)
14
Counterparty credit risk exposure for SFT assets
6,568
3,134
EU-14a
Derogation for SFTs: counterparty credit risk exposure in accordance with Article 429b-(4) and 222 of Regulation (EU)
No. 575/2013
-
-
15
Agent transaction exposures
-
-
EU-15a
(Exempted CCP leg of client-cleared SFT exposure)
-
-
16
TOTAL SECURITIES FINANCING TRANSACTION EXPOSURES (SUM OF LINES 12 TO 15A)
161,520
129,103
Other off-balance sheet exposures
17
Off-balance sheet exposures at gross notional amount
280,049
280,486
18
(Adjustments for conversion to credit equivalent amounts)
(130,054)
(129,731)
19
OTHER OFF-BALANCE SHEET EXPOSURES (SUM OF LINES 17 TO 18)
149,995
150,755
Exempted exposures in accordance with Article 429-(7) and (14) of Regulation (EU) No. 575/2013
(on and off balance sheet)
EU-19a
(Intragroup exposures (solo basis) exempted in accordance with Article 429-(7) of Regulation (EU) No. 575/2013
(on and off balance sheet))
(375,211)
(338,902)
EU-19b
(Exposures exempted in accordance with Article 429-(14) of Regulation (EU) No. 575/2013 (on and off balance sheet))
(1)
(225,880)
(55,316)
Capital and total exposures
20
TIER 1 CAPITAL
50,027
44,311
21
TOTAL LEVERAGE RATIO TOTAL EXPOSURE MEASURE (SUM OF LINES 3, 11, 16, 19, EU-19A AND EU-19B)
1,018,588
1,044,644
Leverage ratio
22
LEVERAGE RATIO
4.91%
4.24%
22.A
LEVERAGE RATIO (EXCLUDING THE IMPACT OF TEMPORARY EXEMPTION OF CENTRAL BANK EXPOSURES
IN ACCORDANCE WITH ARTICLE 500
TER
OF REGULATION (EU) NO. 873/2020)
4.24%
4.24%
Choice on transitional arrangements and amount of derecognised fiduciary items
EU-23
Choice on transitional arrangements for the definition of the capital measure
Transitory
Transitory
EU-24
Amount of derecognised fiduciary items in accordance with Article 429-(11) of Regulation (EU) No. 575/2013
-
-
(1)
Including the exposures exempted in accordance with Article 500
ter
of Regulation (EU) No. 873/2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
333
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Summary reconciliation of accounting assets and leverage ratio exposures (LRSum)
Applicable Amount
(in millions of euros)
31/12/2020
31/12/2019
1
Total assets as per published financial statements
1,961,062
1,767,643
2
Adjustment for entities which are consolidated for accounting purposes but are outside
the scope of regulatory consolidation
(387,617)
(381,906)
3
(Adjustment for fiduciary assets recognised on the balance sheet pursuant to the applicable accounting
framework but excluded from the leverage ratio total exposure measure in accordance with Article 429-(13)
of Regulation (EU) No. 575/2013)
-
-
4
Adjustments for derivative financial instruments
(91,556)
(79,230)
5
Adjustments for securities financing transactions (SFTs)
6,569
3,135
6
Adjustment for off-balance sheet items (
i.e.
conversion to credit equivalent amounts of off-balance sheet
exposures)
149,995
150,755
EU-6a
(Adjustment for intragroup exposures excluded from the leverage ratio total exposure measure in accordance
with Article 429-(7) of Regulation (EU) No. 575/2013)
(375,211)
(338,902)
EU-6b
(Adjustment for exposures excluded from the leverage ratio total exposure measure in accordance
with Article 429-(14) of Regulation (EU) No. 575/2013)
(1)
(225,880)
(55,316)
7
Other adjustments
(18,775)
(21,535)
8
LEVERAGE RATIO TOTAL EXPOSURE MEASURE
1,018,588
1,044,644
(1)
Including the exposures exempted in accordance with Article 500 ter of Regulation (EU) No. 873/2020.
Breakdown of balance sheet exposures (excluding derivatives, SFTs and exempted exposures) (LRSpl)
CRR leverage ratio exposures
(in millions of euros)
31/12/2020
31/12/2019
EU-1
Total on-balance sheet exposures (excluding derivatives, SFTs, and exempted exposures), of which:
683,163
746,287
EU-2
Trading book exposures
33,560
34,545
EU-3
Banking book exposures, of which:
649,602
711,742
EU-4
Covered bonds
5,624
5,891
EU-5
Exposures treated as sovereigns
113,861
188,572
EU-6
Exposures to regional governments, MDB, international organisations and PSE
not treated as sovereigns
3,686
4,440
EU-7
Institutions
49,174
45,593
EU-8
Secured by mortgages of immovable properties
110,473
7,208
EU-9
Retail exposures
99,911
192,204
EU-10
Corporate
205,415
201,306
EU-11
Exposures in default
11,420
10,588
EU-12
Other exposures (e.g. equity, securitisations, and other non-credit obligation assets)
50,039
55,940
The qualitative elements (LRQua) required by Implementing Regulation
(EU) 2016/200 of 15 February 2016 are as follows:
the leverage ratio is not sensitive to risk factors and, on this basis,
is considered to be a measurement that supplements the solvency
(solvency ratio/ resolution ratio) and liquidity risk management, which
already limit the size of the balance sheet. Under the excessive leverage
monitoring framework, The Groupe dispose controls and sets limits on
the size of the balance sheet for businesses with low consumption of
risk-weighted assets;
the leverage ratio is up 0.7 percentage points over 2020, mainly due to
the neutralisation of the Central Bank's exposures. Excluding this, the
ratio was stable over the year, as the increase in Tier 1 capital made it
possible to cover the increase in exposures.
3.1.7.3 Resolution ratios
The TLAC and MREL requirements described below are applicable at the
level of the Crédit Agricole Group.
3.1.7.3.1 TLAC ratio
The TLAC ratio, whose modalities were indicated in a Term Sheet published
on 9 November 2015, was established by the Financial Stability Board
(FSB) at the request of the G20. The FSB thus defined the calculation of a
ratio aimed at estimating the adequacy of the bail-in and recapitalisation
capacities of global systemically important banks (G-SII). The Total Loss
Absorbing Capacity (TLAC) ratio provides resolution authorities with the
means to assess whether G-SIIs have sufficient bail-in and recapitalisation
capacity before and during resolution. As a result, the resolution authorities
will be able to implement an ordered resolution strategy that minimises
impacts on financial stability, ensures the continuity of the G-SIIs’ critical
economic functions and limits the use of taxpayers’ money. This ratio
applies to global systemically important financial institutions, and therefore
to Crédit Agricole Group.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
334
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
The components that could absorb losses consist of equity, subordinated
notes and debt to which the resolution authority can apply the bail-in.
The TLAC ratio requirement has been transposed into European Union
law via CRR2 and has been applicable since 27 June 2019. As from that
date, Crédit Agricole Group must comply with the following requirements
at all times:
a TLAC ratio above 16% of risk-weighted assets (RWA), plus – in
accordance with CRD 5 – a combined buffer requirement (including, for
Crédit Agricole Group, a capital conservation buffer of 2.5%, a systemic
buffer of 1% and the countercyclical buffer). Considering the combined
capital buffer requirement, Crédit Agricole Group must comply with a
TLAC ratio of above 19.5% (plus the countercyclical buffer);
a TLAC ratio of above 6% of the Leverage Ratio Exposure (LRE).
The minimum TLAC ratio requirements will increase as from 1 January 2022,
to 18% of risk-weighted assets – plus the combined buffer requirement
at that date – and 6.75% of the leverage ratio exposure.
TLAC Requirements at Resolution Group Level – Crédit Agricole Group
EU KM2: Own funds and eligible liabilities, ratios and components
(in millions of euros)
31/12/2020
30/09/2020
30/06/2020
31/03/2020
31/12/2019
1
Own funds and eligible liabilities
(1)
143,073
139,045
136,125
128,906
126,474
2
Total risk exposure amount of the resolution group (TREA)
(2)
562,059
560,348
572,833
571,503
559,009
3
Own funds and eligible liabilities as a percentage of TREA
25.46%
24.81%
23.76%
22.56%
22.62%
4
Total exposure measure of the resolution group
(2)
1,684,937
1,723,918
1,826,763
1,773,829
1,657,519
5
Own funds and eligible liabilities as a percentage of the total
exposure measure
8.49%
8.07%
7.45%
7.27%
7.63%
6a
Does the subordination exemption in Article 72b-(4) of the CRR apply?
(5% exemption)
No
No
No
No
No
6b
Pro-memo item – Aggregate amount of permitted non-subordinated
eligible liabilities instruments
if the subordination
discretion as per
Article 72b-(3) CRR is applied (max 3.5% exemption
)(3)
0
0
0
0
0
6c
Pro-memo item: If a capped subordination exemption applies under
Article 72b-(3) CRR, the amount of funding issued that ranks pari passu
with excluded liabilities and that is recognised under row 1, divided
by funding issued that ranks pari passu with excluded Liabilities
and that would be recognised under row 1 if no cap was applied
(%)
N/A
N/A
N/A
N/A
N/A
(1)
Total loss absorbing capacity.
(2)
For the purpose of computing resolution ratios, the Total Exposure Risk Amount (TREA) of the resolution group is equivalent to the Risk Weighted Assets (RWA) at Crédit Agricole Group level; the Total
Exposure Measure (TEM) of the resolution group is equivalent to the Leverage Ratio Exposure (LRE) at Crédit Agricole Group level.
(3)
As part of its annual resolvability assessment, Crédit Agricole Group has chosen to waive the possibility offered by Article 72b-(3) of the Capital Requirements Regulation to use senior preferred debt
for compliance with its TLAC requirements in 2021.
As at 31 December 2020, Crédit Agricole Group’s TLAC ratio was 25.5%
of risk-weighted assets and 8.5% of leverage exposure, excluding eligible
preferred senior debt. It is higher than the respective requirements of
19.5% of risk-weighted assets (according to CRR2/CRD 5, to which must
be added the countercyclical buffer of 0.01% as at 31 December 2020)
and 6% of the leverage exposure, even though it is possible at that date to
include up to 2.5% of risk-weighted assets as eligible preferred senior debt.
Achieving the TLAC ratio is supported by an annual issuance program
on the market in 2020 of approximately €6 to €8 billion of TLAC debt. At
31 December 2020, €8.4 billion equivalent had been issued in the market;
the amount of the Crédit Agricole Group senior non-preferred debt taken
into account in the computation of the TLAC ratio was €23.9 billion. Over the
year 2020, the TLAC ratio increased by 290 basis points, also in line with
the strengthening of the CET1 and very moderate growth in risk-weighted
assets (increase in the CET1 ratio from 15.9% to 17.2%).
Crédit Agricole Group’s TLAC items, which rank from the most senior to
the most junior, include senior non-preferred debt securities, subordinated
securities not recognised as prudential capital (prudentially amortised
portion), Tier 2 instruments, additional Tier 1 items and common equity
Tier 1 capital items.
All these eligible liability items and their characteristics can be consulted
in Appendix II, “Main characteristics of regulatory capital instruments and
other eligible TLAC instruments”, available at https://www.credit-agricole.
com/en/finance/finance/financial-information.
3.1.7.3.2 MREL ratio
The MREL (Minimum Requirement for Own Funds and Eligible Liabilities)
ratio is defined in the European “Bank Recovery and Resolution Directive”
(BRRD). More generally, the BRRD establishes a framework for the resolution
of banks throughout the European Union and with the aim to provide
resolution authorities with instruments and common powers to prevent
the occurrence of banking crises, preserve financial stability and reduce
taxpayers’ exposure to losses. Directive (EU)
2019/879 of 20 May 2019,
known as “BRRD2”, amended the BRRD and was transposed into French
law by Decree 2020-1636 of 21 December 2020.
The MREL ratio corresponds to an own funds and eligible liabilities
buffer required to absorb losses in the event of resolution. The required
minimum levels are decisions taken by the resolution authorities and then
communicated to each institution, then revised periodically.
In 2020, Crédit Agricole Group was notified of the revision of its total
consolidated MREL requirement and of a new subordinated MREL
requirement (from which senior debt is generally excluded in line with
the TLAC standards). These two requirements were already met by the
Group at the time they were notified. Calibrated under BRRD, they are
applicable until the next notification which will integrate the changes in
the European regulatory framework (
i.e.
BRRD2).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
335
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Under BRRD, the MREL ratio is calculated as the amount of own funds
and eligible liabilities expressed as a percentage of the institution’s total
liabilities and capital, after certain regulatory adjustments, Total Liabilities
and Own Funds (TLOF) or expressed as Risk-Weighted Assets (RWA).
Regulatory capital, subordinated notes with a residual maturity of more
than one year, non-preferred senior debts with a residual maturity of more
than one year and certain preferred senior debt instruments with residual
maturities of more than one year are eligible for the numerator of the MREL
ratio. MREL eligible preferred senior debt is subject to the appreciation of
the Single Resolution Board (SRB).
The MREL ratio calibrates an eligible liabilities requirement but does not
specify which debt would be called upon to absorb losses in the event
of resolution.
Crédit Agricole Group’s objective is to reach a subordinated MREL
ratio (excluding eligible senior preferred debt) of 24%-25% of the
RWA by the end of 2022 and to maintain the subordinated MREL
ratio above 8% of TLOF.
This level would enable recourse to the Single
Resolution Fund (subject to the decision of the resolution authority) before
applying the bail-in to senior preferred debt, creating an additional layer
of protection for investors in senior preferred debt.
At 31 December 2020, Crédit Agricole Group posted an estimated MREL
ratio
(1)
of around 11% of TLOF and 8.5% excluding eligible senior preferred
debt. Expressed as a percentage of risk-weighted assets, Crédit Agricole
Group’s estimated MREL ratio was approximately 33% at end-December
2020. It was 25.5% excluding eligible senior preferred debt, up 290 basis
points over the year. The MTP target regarding subordinated MREL has
been met since end-September 2020.
3.1.7.4 Economic Capital Adequacy
The Group’s approach for measuring economic capital requirement has
been implemented at Crédit Agricole Group, Crédit Agricole S.A., and within
the Group’s main French and foreign entities.
The primary aim of the risk identification process is to accurately identify
all major risks that are likely to impact the Group’s balance sheet, income
statement, prudential ratios, or the reputation of an entity or the Group and
to apply a Group-wide, standard approach to placing them in categories and
sub-categories. As a second stage , the risk identification aims to assess
the importance of these risks in a systematic and exhaustive manner in
order to establish the final list of major risks.
The risk identification process brings together several sources: an internal
analysis based on the information gathered from the Risk department and
other control functions, and additional information obtained from external
sources. The process is formalised by each entity ; for the Group it is
coordinated by the Risk department and approved by the Board of Directors.
(1)
Calculation carried out in accordance with the BRRD applicable to the requirements in force. Included are items eligible for the MREL issued by all Group entities.
For each of the major risks, the economic capital requirement is quantified
as follows:
the risk measurements already covered by Pillar 1 are reviewed and,
where necessary, completed by economic capital adjustments;
the risks absent from Pillar 1 are subject to a specific calculation of
economic capital needs, based on internal approaches;
generally, the measures for economic capital needs are carried out
with a calculation horizon of one year, and with a quantile (probability of
default occurrence) for which the level is set on the basis of the Group’s
appetite in terms of external rating;
lastly, the economic capital needs measurement takes into account,
with caution, the impacts of diversification resulting from the broad
spread of business activities within the same Group, including between
banking and insurance.
A specific governance within the Group ensures the coherence of all risk
quantification methodologies for the economic capital requirement.
The measurement of the economic capital requirement is supplemented
by a projection over the current year, consistent with capital planning
forecasts at that date, in order to integrate the impact of changes in activity
on the risk profile.
At 31 December 2020, all the major risks identified during the risk
identification process were taken into account for assessing economic
capital requirement. The Group notably measures: interest rate risk on
the banking book, issuer risk, business and strategic risk, credit risk, and
liquidity price risk.
The Group ensures that its internal capital covers the economic capital
requirements. At Crédit Agricole Group level, the internal capital covered
more than 180% of the economic capital requirement at 31 December 2020.
Crédit Agricole S.A. entities subject to the requirement to measure their
economic capital requirement are responsible for doing so in accordance
with standards and methodologies defined by the Group. In particular, they
must ensure that their ICAAP approach is appropriately organised and
governed. The economic capital requirement computed by the entities is
reported in detail to Crédit Agricole S.A.
In addition to the quantitative aspect, the Group’s approach relies on a
qualitative component that supplements the calculation of the economic
capital requirement with indicators of the business lines’ exposure to risk
and their permanent controls. The qualitative component meets three
objectives:
evaluation of the risk management system and the control of entities
within the scope of deployment along different axes, this assessment
is a component of the risk identification system;
if required, identification and formalising of points for improvement of
the risk management and permanent control system, in the form of an
action plan formalised by the entity;
identification of any elements that are not adequately captured in
quantitative ICAAP measures.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
336
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.1.8 Appendix regarding regulatory capital
3.1.8.1 Differences in the treatment of equity investments between the accounting and regulatory scopes
Exposure type
Accounting treatment
Fully loaded Basel 3 regulatory treatment
Subsidiaries with financial
operations
Fully consolidated
Full consolidation generating capital requirements for the subsidiary’s operations.
Jointly held subsidiaries
with financial operations
Equity method
Proportional consolidation.
Subsidiaries with insurance
operations
Fully consolidated
Regulatory treatment of these equity investments using equity accounting method, since the
Group is identified as being a “financial conglomerate”:
CET1 instruments weighted at 370% (for non-listed entities), with expected loss
calculation at 2.4%, subject to approval by the banking supervisor; otherwise, deduction
of the subsidiary’s CET1 financial instruments from the Group’s total CET1 instruments;
AT1 and Tier 2 instruments deducted from the total of corresponding financial instruments
of the Group.
In turn, as in previous years, Crédit Agricole S.A. and Crédit Agricole Group are subject to
additional capital requirements and capital adequacy ratios applying to financial conglomerates.
Equity investments of >10%
with operations that are financial
in nature
Equity method
Equity investments
in credit institutions
Deduction of CET1 instruments from CET1, beyond an exemption threshold of 17.65%
of CET1. This exemption threshold, applied after calculation of a 10% threshold of
CET1, is common to the non-deducted portion of deferred tax assets that rely on future
profitability arising from temporary differences.
AT1 and Tier 2 instruments deducted from the corresponding class of instruments of
the Group.
Equity investments of ≤ 10% with
financial or insurance operations
Equity investments
and securities held
for collection and sale
Deduction of CET1, AT1 and Tier 2 instruments, beyond an exemption threshold of 10% of CET1.
Investments ≤10% in a global
systemically important
institution (G-SII)
Financial assets
Deduction of eligible elements, or where not available in a sufficient quantity, deduction of Tier 2
instruments, beyond an exemption threshold of 10% of CET1 (for global systemically important
institutions).
ABCP (Asset-backed commercial
paper) business securitisation
vehicles
Fully consolidated
Risk weighting of the equity-accounted value and commitments on these structures (liquidity
facilities and letters of credit).
3.1.8.2
Difference between the accounting
and regulatory scopes of consolidation
Entities consolidated for accounting purposes, but excluded from the
regulatory scope of consolidation of credit institutions on a consolidated
basis predominantly comprise insurance companies and several
ad hoc
entities that are equity-accounted for regulatory purposes. In addition,
entities consolidated on an accounting basis using proportional consolidation
at 31 December 2013 and now equity-accounted in accordance with
IFRS 11, are still consolidated proportionally for regulatory purposes.
Information on these entities and their consolidation method for accounting
purposes is provided in the notes to the consolidated financial statements,
“Scope of consolidation at 31 December 2020”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
337
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Differences between accounting and regulatory scopes of consolidation and correspondence between financial statements
and regulatory risk categories (LI1)
31/12/2020
(in billions of euros)
a
b
c
d
e
f
g
Carrying
values as
reported in
published
financial
statements
Carrying
values
under scope
of regulatory
consolidation
Carrying values of items
Subject to
credit risk
framework
Subject to
counterpar-
ty credit risk
framework
Subject
to the
securitisation
framework
Subject
to the
market risk
framework
Not
subject to capital
requirements
or subject to
deduction from
capital
ASSETS
Cash, central banks
194
195
195
-
-
-
-
Available-for-sale financial assets
262
264
-
239
-
147
0
Other financial assets at fair value through profit or loss
170
7
7
-
-
-
-
Hedging derivative instruments
22
21
-
21
-
-
-
Accounted debt's instruments at fair value through recyclable own funds
264
41
35
4
2
-
0
Accounted own funds' instruments at fair value through non recyclable
own funds
2
2
2
-
-
-
0
Loans and receivables due from credit institutions
463
461
450
11
-
-
-
Loans and receivables due from customers
406
419
416
4
-
-
-
Held-to-maturity financial assets
85
76
67
9
-
-
-
Revaluation adjustment on interest rate hedged portfolios
7
7
-
-
-
-
7
Deferred tax assets
4
5
5
-
-
-
-
Accruals, prepayments and sundry assets
40
36
32
5
-
1
0
Non-current assets held for sale
3
0
0
-
-
-
-
Investments in equity-accounted entities
8
16
15
-
-
-
1
Investment property
7
0
0
-
-
-
-
Property, plant and equipment
6
6
6
-
-
-
-
Intangible assets
3
3
-
-
-
-
3
Goodwill
15
14
-
-
-
-
14
TOTAL ASSETS
1 961
1 573
1 228
292
2
148
26
LIABILITIES
Central banks
1
1
-
-
-
-
1
Available-for-sale financial liabilities
229
230
-
83
-
-
147
Financial liabilities at fair value through options
36
35
-
-
-
-
35
Hedging derivative instruments
15
15
-
-
-
-
15
Due to credit institutions
265
247
-
10
-
-
238
Due to customers
719
736
-
2
-
-
734
Debt securities
163
152
-
-
-
-
152
Revaluation adjustment on interest rate hedged portfolios
10
10
-
-
-
-
10
Current and deferred tax liabilities
3
3
3
-
-
-
0
Accruals, deferred income and sundry liabilities
53
46
6
-
-
-
40
Liabilities associated with non-current assets held for sale
1
(0)
-
-
-
-
(0)
Insurance company technical reserves
363
-
-
-
-
-
-
Provisions
4
4
-
-
-
-
4
Subordinated debt
24
21
-
-
-
-
21
Total liabilities
1 888
1 502
9
94
-
-
1 399
Equity
73
72
-
-
-
-
72
Equity, Group share
65
65
-
-
-
-
65
Share capital and reserves
28
28
-
-
-
-
28
Consolidated reserves
32
32
-
-
-
-
32
Other comprehensive income
2
2
-
-
-
-
2
Other comprehensive income on non-current assets held
for sale and discontinued operations
(0)
-
-
-
-
-
-
Net income/(loss) for the year
3
3
-
-
-
-
3
Non-controlling interests
8
6
-
-
-
-
6
TOTAL EQUITY AND LIABILITIES
1 961
1 573
9
94
-
-
1 470
The carrying amounts for the regulatory scope of consolidation (column b) are not equal to the sum of their breakdown by the risk (coloumns c to g) as an exposure may be subject to several types of risk.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
338
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.2
MAIN SOURCES OF DIFFERENCES BETWEEN REGULATORY EXPOSURE
AMOUNTS AND CARRYING VALUES IN FINANCIAL STATEMENTS (LI2)
31/12/2020
(in billions of euros)
a
b
c
d
e
TOTAL
Items subject to :
Credit risk
framework
Counterparty
credit risk
framework
Securitisation
framework
Market risk
framework
(1)
1
Asset carrying value amount under the scope of regulatory consolidation
(as per template EU LI1)
(2)
1 547
1 228
292
2
148
2
Liabilities carrying value amount under the regulatory scope of consolidation
(as per template EU LI1)
103
9
94
-
-
3
Total net amount under the regulatory scope of consolidation
1 444
1 219
199
2
148
4
Off-balance-sheet amounts
(3)
676
125
-
43
5
Differences in valuations
-
-
-
6
Differences in netting rules
(125)
(125)
7
Difference due to consideration of provisions
8
8
-
8
Differences due to the use of credit risk mitigation techniques (CRMs)
(20)
(17)
(3)
9
Differences due to credit conversion factors
(99)
10
Differences due to Securitisation with risk transfer
11
Other adjustments
27
16
11
-
12
Exposure amount considered for regulatory purposes
1 477
1 351
81
45
(1)
Exposures related to market risk include the exposures subject to the calculation of counterparty risk on the derivatives.
(2)
The “Total” column includes the assets deductible from the prudential capital.
(3)
In line item “Off-balance sheet amounts”, the amounts shown in the Total column, which relates to exposures pre-CCF, do not equal the sum of the amounts shown in the remaining columns, as
these are post-CCF
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
339
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.3
OUTLINE OF THE DIFFERENCES IN THE SCOPES OF CONSOLIDATION
(LI3: ENTITY BY ENTITY)
(1)
Name of the entity
Method of
accounting
Method of regulatory consolidation
Description of the entity
Full
consolidation
Proportional
consolidation
Equity
method
Crédit Agricole – Group Infrastructure
Platform
Equity
method
X
Information and Communication
Crédit Agricole Immobilier
Equity
method
X
Specialised, scientific and technology activities
Crédit Agricole Immobilier Promotion
Equity
method
X
Construction activities
Crédit Agricole Immobilier Services
Equity
method
X
Real Estate Activities
SO.GI.CO
Equity
method
X
Real Estate Activities
BforBank S.A.
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
SCI D2 CAM
Equity
method
X
Real Estate Activities
Uni-medias
Full
X
Information and Communication
Crédit Agricole Assurances (CAA)
Full
X
Financial and Insurance Activities – Insurance
Crédit Agricole Life Insurance Company
Japan Ltd.
Full
X
Financial and Insurance Activities – Insurance
CA ASSICURAZIONI
Full
X
Financial and Insurance Activities – Insurance
Crédit Agricole Créditor Insurance (CACI)
Full
X
Financial and Insurance Activities – Auxiliary activities
of financial and insurance services
Spirica
Full
X
Financial and Insurance Activities – Insurance
Crédit Agricole Assurances Solutions
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
PREDICA
Full
X
Financial and Insurance Activities – Insurance
Médicale de France
Full
X
Financial and Insurance Activities – Insurance
PACIFICA
Full
X
Financial and Insurance Activities – Insurance
Via Vita
Full
X
Other activities of services
IRIS HOLDING FRANCE
Full
X
Real Estate Activities
HOLDING EUROMARSEILLE
Full
X
Real Estate Activities
Crédit Agricole Life Insurance Europe
Full
X
Financial and Insurance Activities – Insurance
GNB SEGUROS (Anciennement BES
SEGUROS)
Full
X
Financial and Insurance Activities – Insurance
Crédit Agricole Life
Full
X
Financial and Insurance Activities – Insurance
Crédit Agricole Vita S.p.A.
Full
X
Financial and Insurance Activities – Insurance
ASSUR&ME
Full
X
Financial and Insurance Activities – Auxiliary activities
of financial and insurance services
VAUGIRARD INFRA S.L.
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
SAS ALTA VAI HOLDCO P
Full
X
Real Estate Activities
Predica Infrastructure S.A.
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
UBAF
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
CAIRS Assurance S.A.
Full
X
Financial and Insurance Activities – Insurance
Atlantic Asset Securitization LLC
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
LMA S.A.
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
(1)
The scope of consolidation is described in full in Note 12 to the consolidated financial statements.
UCITS, UL and SCI (non-trading real estate investment company) funds held by the insurance entities and detailed in Note 12 to the consolidated financial statements follow the
same accounting and regulatory treatment as their holding entity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
340
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Name of the entity
Method of
accounting
Method of regulatory consolidation
Description of the entity
Full
consolidation
Proportional
consolidation
Equity
method
Héphaïstos Multidevises FCT
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Eucalyptus FCT
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Pacific USD FCT
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Shark FCC
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Pacific EUR FCC
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Pacific IT FCT
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Triple P FCC
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
ESNI (compartiment Crédit Agricole CIB)
Full
X
Financial and Insurance Activities – Auxiliary activities
of financial and insurance services
La Fayette Asset Securitization LLC
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
TSUBAKI ON (FCT)
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
TSUBAKI OFF (FCT)
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
La Route Avance
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
FCT CFN DIH
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
S3 Latam Holdco 1
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Santander CACEIS Brasil
Participações S.A.
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Banco Santander CACEIS México, S.A.,
Institución de Banca Múltiple
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
SANTANDER CACEIS COLOMBIA S.A.,
SOCIEDAD FIDUCIARIA
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
S3 Latam Holdco 2
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Santander CACEIS Brasil D.T.V.M., S.A.
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
ARES Reinsurance Ltd.
Full
X
Financial and Insurance Activities – Auxiliary activities
of financial and insurance services
FCA Bank S.P.A
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
Crédit Agricole Consumer Finance
BANKIA sa
Equity
method
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
FINAREF RISQUES DIVERS
Full
X
Financial and Insurance Activities – Insurance
CACI Reinsurance Ltd.
Full
X
Financial and Insurance Activities – Auxiliary activities
of financial and insurance services
SPACE HOLDING (IRELAND) LIMITED
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
SPACE LUX
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
CACI LIFE LIMITED
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
CACI NON LIFE LIMITED
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
FCT compartment LCL
Full
X
Financial and Insurance Activities – Activities of financial
services, excluding insurance and pension funds
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
341
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4
COMPOSITION AND CHANGES IN RISK-WEIGHTED ASSETS
3.4.1
Summary of risk-weighted assets
3.4.1.1
Risk-weighted assets by type of risk (OV1)
The risk-weighted assets in respect of credit risk, market risk and operational risk were €336.0 billion at 31 December 2020 vs. €323.7 billion at
31 December 2019.
(in millions of euros)
RWA
Minimum capital
requirements
31/12/2020
31/12/2019
(1)
31/12/2020
1
Credit risk (excluding CCR)
257,200
245,450
20,576
2
Of which the standardised approach
94,862
99,137
7,589
3
Of which the foundation IRB (FIRB) approach
27,445
24,787
2,196
4
Of which the advanced IRB (AIRB) approach
97,528
94,668
7,802
5
Of which equity IRB under the simple risk-weighted approach or the IMA
37,365
26,858
2,989
6
CCR
22,085
20,619
1,767
7
Of which mark to market
7,096
7,540
568
8
Of which original exposure
-
-
-
9
Of which the standardised approach
-
-
-
10
Of which internal model method (IMM)
10,313
8,937
825
11
Of which risk exposure amount for contributions to the default fund of a CCP
348
403
28
12
Of which CVA
4,328
3,739
346
13
Settlement risk
1
15
-
14
Securitisation exposures in the banking book (after the cap)
8,755
7,671
701
15
Of which SEC-IRBA approach
2,370
1,880
190
16
Of which SEC-ERBA (including IAA)
5,214
4,237
417
17
Of which SEC-SA approach
1,171
1,020
94
18
Of which 1250%/ deduction
-
-
-
Of which securitisation transactions expired at 31/03/2020
-
534
-
19
Market risk
9,753
11,595
781
20
Of which the standardised approach
4,420
4,665
354
21
Of which IMA
5,333
6,930
427
22
Large exposures
-
-
-
23
Operational risk
34,167
33,972
2,733
24
Of which basic indicator approach
-
-
-
25
Of which standardised approach
10,513
10,300
841
26
Of which advanced measurement approach
23,654
23,672
1,892
27
Amounts below the thresholds for deduction (subject to 250% risk weight)
4,083
4,356
327
28
Floor adjustment Basel 1
-
-
-
29
TOTAL
336,044
323,678
26,885
(1)
Proforma on 2019 securitisation exposures following the valuation of the entire securitisation stock on 1 January 2020 under the new regulatory framework (EU) 2017/2401.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
342
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.1.2
Operating segment information
31/12/2020
Credit risk
Credit risk
Credit
valuation
adjustment
risk
Operational
risk
Market
risk
Total
risk-weighted
assets
(in millions of euros)
Standardised
approach
Weighting
approach
IRB
IRB
Approach
(1)
Contributions
to a CCP
default fund
French Retail Banking
7,998
1,885
39,217
-
49,100
10
2,895
3
52,008
International Retail Banking
30,217
964
4,244
3
35,428
5
4,042
74
39,549
Asset Gathering
6,571
28,003
768
-
35,342
343
7,212
60
42,957
Specialised Financial Services
29,372
1,189
17,815
-
48,376
21
3,391
3
51,791
Large Customers
19,820
1,316
75,631
344
97,111
3,949
15,804
6,700
123,564
Corporate Centre
5,852
8,091
8,496
-
22,439
-
823
2,914
26,176
TOTAL RISK-WEIGHTED
ASSETS
99,830
41,448
146,171
347
287,796
4,328
34,167
9,754
336,044
(1)
Advanced IRB or Foundation IRB approach depending on business lines.
31/12/2019
Credit risk
Credit risk
Credit
valuation
adjustment
risk
Operational
risk
Market risk
Total
risk-weighted
assets
(in millions of euros)
Standardised
approach
Weighting
approach
IRB
IRB
Approach
(1)
Contributions
to a CCP
default fund
French Retail Banking
8,298
1,689
39,092
-
49,078
11
2,669
6
51,763
International Retail Banking
31,836
1,003
4,411
9
37,258
5
4,061
281
41,606
Asset Gathering
6,749
16,304
801
-
23,854
314
6,845
63
31,076
Specialised Financial Services
32,687
1,202
17,800
-
51,689
24
3,040
3
54,756
Large Customers
19,951
2,530
69,524
394
92,399
3,384
15,019
8,796
119,598
Corporate Centre
4,595
8,485
7,012
-
20,093
-
2,339
2,447
24,879
TOTAL RISK-WEIGHTED
ASSETS
104,115
31,213
138,640
403
274,371
3,739
33,973
11,595
323,678
(1)
Advanced IRB or Foundation IRB approach depending on business lines.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
343
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.1.3
Changes in risk-weighted assets
The table below shows the changes in Crédit Agricole S.A.’s risk weighted assets in 2020:
(in millions of euros)
31/12/2019
Foreign
exchange
Organic change
and optimisation
Equity-
accounted
value
Insurance
Scope
Method and
regulatory
changes
Total variation
2020
31/12/2020
Credit risk
274,372
(4,194)
(1,623)
11,717
168
7,357
13,425
287,796
of which Equity risk
31,213
-
(1,482)
11,717
-
-
10,235
41,448
CVA
3,739
-
590
-
-
-
590
4,328
Market risk
11,595
-
(1,841)
-
-
-
(1,841)
9,754
Operational risk
33,973
-
101
-
93
-
194
34,167
TOTAL
323,678
(4,194)
(2,773)
11,717
261
7,357
12,368
336,044
Risk-weighted assets totalled €336 billion at 31 December 2020, an
increase of €12.4 billion (+3.8%) mainly due to the 35% Switch dismantling
in March (+€11.9 billion). Except for this, risk-weighted assets are stable,
methodology and regulatory impacts (+€7.4 billion) being offset by the
decrease of business lines (-€2.8 billion) and positive forex (-€4.2 billion):
decrease of business lines (-€2.8 billion), in particular in the Large
Customers division (-€2.4 billion) and Financial Services (-€3 billion),
whereas Retail Banking (+€1 billion) and Corporate Centre (+€1.7 billion)
increase;
methodological and regulatory effects (+€7.4 billion), including a
regulatory effect on securitization at Crédit Agricole CIB (+€5.5 billion),
review of internal model at Crédit Agricole CIB (+€4.5 billion) and LCL
(+€0.7 billion), partly offset by a positive effect on the extension of SME
factor (-€4.1 billion);
+€11.7 billion increase in the equity stake in Insurance companies mainly
due to the dismantling of 35% of the Switch guarantee (+€11.9 billion)
in March 2020;
a positive M&A effect (+€0.3 billion) mainly with the acquisition of Sabadell
Asset Management S.A. by Amundi and the acquisition of Hama by EFL.
3.4.2
Credit and counterparty risk
Definitions:
probability of default (PD):
the probability that a counterparty will
default within a period of one year;
exposure at default (EAD):
the exposure amount in the event of default.
The concept of exposure encompasses balance sheet assets plus a
proportion of off-balance sheet commitments;
loss given default (LGD):
ratio between the loss experienced on an
exposure on a counterparty at default and the size of the exposure at
default;
gross exposure:
amount of the exposure (balance sheet + off-balance
sheet), after the impacts of offsetting and before the application of any
credit risk mitigation techniques (guarantees and collateral) and the
credit conversion factor (CCF);
credit conversion factor (CCF):
ratio between the unused portion of
a commitment that will be drawn and at risk at the time of default and
the unused portion of the commitment calculated on the basis of the
authorised limit or, where applicable, the unauthorised limit if higher;
expected losses (EL):
the amount of the average loss the bank expects
to have to recognise in its loan book within one year;
risk-weighted assets (RWA):
risk-weighted assets are calculated by
applying a weighting ratio to each exposure at default. The ratio is a
function of the characteristics of the exposure and the calculation method
used (IRB or standardised);
valuation adjustments:
impairment losses on a specific asset due to
credit risk, recognised either through a partial write-down or a deduction
from the carrying amount of the asset;
external credit ratings:
credit ratings provided by an external credit
rating agency recognised by Regulation (EC) No. 1060/2009.
A general overview of the change in credit and counterparty risk can be
found in part I, followed by a more detailed look at credit risk in part II,
by regulatory approach: the standardised method and using the IRB
approach. Counterparty risk is covered in part III followed by part IV
which covers the credit and counterparty risk mitigation techniques.
3.4.2.1
General overview of credit
and counterparty risk
3.4.2.1.1 Exposures by type of risk
The table below shows Crédit Agricole S.A.’s exposure to global risk (credit,
counterparty, dilution and settlement and delivery) by exposure class for the
standardised and internal ratings-based approaches at 31 December 2020
and at 31 December 2019.
The 16 exposure classes under the standardised approach are grouped
together to ensure the presentation aligns with the IRB exposures.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
344
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Overall risk exposure (credit, counterparty, dilution, settlement and delivery) at 31 December 2020
31/12/2020
(in billions of euros)
Standardised
IRB
TOTAL
Gross
exposure
(1)
Gross
exposure
after
CRM
(2)
EAD
RWA
Gross
exposure
(1)
Gross
exposure
after
CRM
(2)
EAD
RWA
Gross
exposure
(1)
Gross
exposure
after
CRM
(2)
EAD
RWA
Capital
require-
ment
Central governments
or Central Banks
93.5
94.8
94.7
5.8
265.1
279.7
277.4
1.8
358.6
374.5
372.1
7.6
0.6
Institutions
40.1
58.6
54.8
7.9
441.3
447.7
444.6
9.9
481.4
506.3
499.4
17.8
1.4
Corporates
121.0
97.2
70.8
53.6
326.7
297.2
237.8
84.0
447.7
394.4
308.6
137.6
11.0
Retail customers
35.2
30.5
27.9
17.9
197.5
197.5
196.0
42.8
232.7
228.0
223.8
60.7
4.9
Loans to individuals
22.2
20.8
19.1
12.9
163.5
163.5
162.2
31.8
185.7
184.3
181.3
44.7
3.6
o/w secured by
real estate assets
4.4
4.3
4.2
1.6
100.8
100.8
100.8
9.4
105.2
105.1
105.1
11.0
0.9
o/w revolving
3.0
2.9
1.4
1.1
11.9
11.9
10.5
3.4
14.9
14.8
11.9
4.4
0.4
o/w other
14.8
13.7
13.5
10.2
50.7
50.7
50.9
19.0
65.6
64.5
64.4
29.3
2.3
Loans to small and
medium businesses
12.9
9.6
8.7
5.0
34.0
34.0
33.8
11.0
47.0
43.7
42.5
16.1
1.3
o/w secured by
real estate assets
0.4
0.4
0.4
0.1
6.4
6.4
6.4
1.5
6.8
6.7
6.7
1.7
0.1
o/w other
12.6
9.3
8.4
4.9
27.6
27.6
27.4
9.5
40.2
36.9
35.8
14.4
1.1
Shares
0.9
0.9
1.1
16.6
10.7
37.4
17.6
11.6
38.5
3.1
Securitisations
5.6
4.4
1.2
40.6
40.6
7.6
46.2
45.0
8.8
0.7
Assets other than credit
obligation
15.3
15.3
12.3
-
-
-
15.3
15.3
12.3
1.0
TOTAL
311.6
268.8
99.8
1,287.9
1,207.0
183.5
1,599.5
1,475.8
283.4
22.7
(1) Initial gross exposure.
(2)
Gross exposure after credit risk mitigation (CRM).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
345
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Overall risk exposure (credit, counterparty, dilution, settlement and delivery) at 31 December 2019
31/12/2019
(in billions of euros)
Standardised
IRB
TOTAL
Gross
exposure
(1)
Gross
exposure
after
CRM
(2)
EAD
RWA
Gross
exposure
(1)
Gross
exposure
after
CRM
(2)
EAD
RWA
Gross
exposure
(1)
Gross
exposure
after
CRM
(2)
EAD
RWA
Capital
require-
ment
Central governments
or Central Banks
59.0
59.1
58.9
6.3
196.5
206.9
204.8
1.5
255.5
265.9
263.7
7.8
0.6
Institutions
44.4
64.3
61.3
7.9
404.4
409.0
405.3
8.5
448.8
473.4
466.5
16.5
1.3
Corporates
124.5
100.5
72.1
57.9
312.9
287.5
226.9
78.0
437.4
388.0
299.0
135.9
10.9
Retail customers
36.7
32.3
29.1
18.7
186.7
186.7
183.1
44.0
223.4
219.0
212.2
62.7
5.0
Loans to individuals
23.6
22.2
19.9
13.4
158.5
158.5
155.1
33.4
182.0
180.7
175.1
46.8
3.7
o/w secured by
real estate assets
4.8
4.5
4.5
1.8
97.5
97.5
97.5
11.1
102.3
102.1
102.1
12.9
1.0
o/w revolving
4.1
3.9
1.9
1.4
11.7
11.7
8.3
3.4
15.7
15.5
10.2
4.9
0.4
o/w other
14.7
13.8
13.6
10.2
49.3
49.3
49.3
18.8
64.0
63.1
62.9
29.0
2.3
Loans to small and
medium businesses
13.1
10.1
9.2
5.3
28.2
28.2
28.0
10.6
41.4
38.3
37.1
15.9
1.3
o/w secured by
real estate assets
0.5
0.4
0.4
0.2
5.9
5.9
5.9
1.2
6.4
6.4
6.4
1.4
0.1
o/w other
12.7
9.6
8.7
5.1
22.3
22.3
22.0
9.4
35.0
31.9
30.8
14.5
1.2
Shares
0.9
0.9
1.1
17.3
7.9
26.9
18.1
8.8
27.9
2.2
Securitisations
1.2
0.9
0.6
39.8
39.8
5.0
41.0
40.7
5.6
0.4
Assets other than credit
obligation
14.0
14.0
11.1
-
-
-
14.0
14.0
11.1
0.9
TOTAL
280.7
237.1
103.6
1,157.7
1,067.8
163.9
1,438.4
1,304.9
267.5
21.4
(1) Initial gross exposure.
(2)
Gross exposure after credit risk mitigation (CRM).
Measured in terms of gross exposure, the Group’s total outstanding amounts
were up 11.2%, reflecting the favourable business climate in the main
business lines.
The main portfolio remains the “Institutions” category with total gross
exposure of €481.4 billion. This included €371.6 billion in exposures
linked to Crédit Agricole group internal transactions at 31 December 2020
(€335.8 billion at 31 December 2019).
Excluding these internal transactions, gross exposure for the total loan
portfolio was €1,227.9 billion at 31 December 2020, up +11.4% compared
to end-2019.
The “Central governments and Central Banks” portfolio rose +40.34% due
mainly to the increase in Central Bank deposits and State-guaranteed loans.
RWA density (defined as the ratio of risk-weighted assets/EAD) was 27% on
average for retail customers and 45% for Corporates at 31 December 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
346
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Total net amount and average of exposures (CRB-B)
(in millions of euros)
31/12/2020
31/12/2019
Net value of
exposures at
the end of the
period
Average net
exposures over
the period
(1)
Net value of
exposures at
the end of the
period
Average net
exposures over
the period
(2)
1
Central governments or Central Banks
265,090
260,972
196,439
181,909
2
Institutions
440,989
436,184
404,042
398,173
3
Corporates
322,936
325,606
309,744
302,692
4
Of which: Specialised lending
61,174
62,436
64,567
63,052
5
Of which: SMEs
6,210
5,938
5,268
5,087
6
Retail
193,992
189,307
183,157
178,488
7
Secured by real estate property
106,735
105,465
103,028
99,881
8
SMEs
6,267
6,055
5,839
5,673
9
Non-SMEs
100,468
99,411
97,188
94,207
10
Qualifying revolving
11,584
11,370
11,301
11,035
11
Other retail
75,673
72,472
68,828
67,572
12
SMEs
26,673
24,602
21,317
20,573
13
Non-SMEs
49,000
47,870
47,511
47,000
14
Equity
16,615
16,321
17,270
17,102
15
Total IRB approach
1,239,623
1,228,423
1,110,653
1,078,363
16
Central governments or Central Banks
88,554
73,098
55,764
45,638
17
Regional governments or local authorities
707
719
600
596
18
Public sector entities
3,661
3,519
2,717
1,912
19
Multilateral development banks
333
314
79
33
20
International organisations
1,092
1,094
828
786
21
Institutions
38,444
46,383
42,244
45,669
22
Corporates
92,181
92,150
94,087
93,367
23
Of which: SMEs
17,839
18,178
18,298
14,558
24
Retail
28,820
28,690
29,920
29,905
25
Of which: SMEs
12,170
11,748
12,286
11,880
26
Secured by mortgages on immovable property
6,627
6,755
6,878
6,735
27
Of which: SMEs
1,475
1,417
1,314
1,155
28
Exposures in default
1,871
2,000
2,059
2,405
29
Items associated with particularly high risk
705
964
1,100
385
30
Covered bonds
664
897
1,044
637
31
Claims on institutions and corporates with a short-term
credit assessment
-
-
-
-
32
Collective investments undertakings
22,596
24,965
24,007
24,750
33
Equity exposures
941
932
856
861
34
Other exposures
15,292
13,985
13,979
13,638
35
Total standardised approach
302,487
296,465
276,162
267,316
36
TOTAL
1,542,110
1,524,888
1,386,815
1,345,679
(1)
The 2020 average is calculated on the basis of data recorded at the end of each quarter 2020.
(2)
The 2019 average is calculated on the basis of data recorded at the end of each quarter 2019.
NB: Of which €371,593 million in Crédit Agricole internal transactions at 31 December 2020.
Of which €335,796 million in Crédit Agricole internal transactions at 31 December 2019.
Net exposures totalled €1,542.1 billion at 31 December 2020, 80.4% of which are subject to an internal ratings-based regulatory treatment.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
347
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.1.2 Exposures by geographic area
The breakdown by geographic area includes all Crédit Agricole S.A. exposures except for securitisation transactions and “Assets other than credit obligations”.
At 31 December 2020
France (incl. overseas departments
and territories)
64.46%
Italy
7.58%
Japan
2.18%
Africa and Middle East
2.01%
Central and South America
0.99%
North America
4.78%
Asia-Pacific excluding Japan
3.60%
Western Europe excluding Italy
14.40%
2020
At 31 December 2019
France (incl. overseas departments
and territories)
60.40%
Italy
7.73%
Japan
3.42%
Africa and Middle Eastt
2.32%
Central and South America
1.18%
North America
5.40%
Asia-Pacific excluding Japan
3.84%
Western Europe excluding Italy
15.71%
2019
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
348
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Geographic breakdown of exposures (CRB-C)
31/12/2020
(in millions of euros)
Europe
France
Italy
Luxembourg
United
Kingdom
Germany
Switzerland
Netherlands
Others
1
Central governments
or Central Banks
185,744
752
5,952
2,253
7,469
2,273
132
10,690
2
Institutions
397,576
573
2,378
5,330
2,183
4,541
4,220
6,949
3
Corporates
101,607
11,692
12,202
18,377
12,672
8,011
10,599
31,353
4
Retail
140,335
36,959
996
322
4,365
948
22
6,135
5
Equity
15,994
277
37
40
3
32
5
42
6
Total IRB approach 31/12/2020
841,256
50,252
21,565
26,321
26,692
15,805
14,978
55,169
Total IRB approach 31/12/2019
712,182
47,662
18,197
26,069
22,820
14,950
13,447
55,543
7
Central governments
or Central Banks
47,925
22,411
8,805
20
1,243
938
449
4,769
8
Regional governments
or local authorities
389
120
-
-
1
-
-
-
9
Public sector entities
865
112
-
-
752
-
-
1,751
10
Multilateral development banks
-
-
262
-
-
-
-
50
11
International organisations
-
-
1,092
-
-
-
-
-
12
Institutions
15,368
4,988
186
4,884
3,617
487
1,029
2,915
13
Corporates
51,122
20,042
2,623
857
1,634
257
582
6,199
14
Retail
6,854
9,134
5
739
2,263
191
1,301
6,626
15
Secured by mortgages
on immovable property
949
3,069
22
8
3
9
2
1,262
16
Exposures in default
772
708
5
11
34
4
34
187
17
Items associated with
particularly high risk
392
313
-
-
-
-
-
-
18
Covered bonds
142
-
-
-
-
-
-
-
19
Claims on institutions and
corporates with a short-term
credit assessment
-
-
-
-
-
-
-
-
20
Collective investments
undertakings
16,888
3,692
1,120
-
2
-
-
9
21
Equity exposures
581
88
10
17
2
1
64
105
22
Other exposures
10,566
1,916
297
80
87
456
88
977
23
Total standardised approach
31/12/2020
152,813
66,590
14,428
6,616
9,636
2,342
3,549
24,856
Total standardised approach
31/12/2019
125,340
59,593
9,446
13,225
8,561
1,956
4,181
29,519
24
TOTAL 31/12/2020
994,068
116,846
35,993
32,937
36,327
18,146
18,527
80,028
TOTAL 31/12/2019
837,523
107,256
27,642
39,294
31,381
16,906
17,628
85,058
NB:
Of which €371,593 million in Crédit Agricole internal transactions at 31 December 2020.
Of which €335,796 million in Crédit Agricole internal transactions at 31 December 2019.
At 31 December 2020, total exposure for the scope defined above was €1,542.1 billion (of which €371.6 billion in Crédit Agricole S.A. internal transactions),
compared with €1,386.8 billion at 31 December 2019.
For all supervisory approaches (
i.e.
based on internal ratings and standardised), concerning Retail customers, the Group’s exposure is concentrated on
two countries: France and Italy represent 86.7% of exposures. The other portfolios are more geographically diversified. For example, 30.2% of exposures
in the Corporates portfolio are located outside Europe, primarily in North America and Asia.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
349
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Asia and Oceania
North America
Central and
South America
Africa and
Middle East
TOTAL
Japan
Others
USA
Others
22,947
8,150
7,946
2,723
749
7,309
265,090
2,225
8,164
2,425
488
150
3,786
440,989
6,596
33,479
51,356
4,148
12,175
8,670
322,936
180
2,548
20
38
246
877
193,992
6
11
117
-
34
16
16,615
31,953
52,352
61,865
7,397
13,353
20,660
1,239,622
44,770
49,218
62,544
7,098
14,612
21,540
1,110,652
71
65
194
2
113
1,546
88,554
-
-
-
197
-
-
707
-
13
165
-
-
4
3,661
-
1
-
-
-
19
333
-
-
-
-
-
-
1,092
857
1,166
1,315
193
341
1,094
38,444
43
1,556
914
619
1,051
4,684
92,182
5
67
29
88
374
1,141
28,820
-
-
3
2
-
1,292
6,627
-
5
-
-
19
91
1,871
-
-
-
-
-
-
705
-
25
-
496
-
-
664
-
-
-
-
-
-
-
604
246
23
-
-
12
22,596
3
3
3
5
-
61
941
28
90
219
2
24
461
15,292
1,610
3,240
2,865
1,605
1,926
10,412
302,487
2,650
4,019
3,775
1,495
1,722
10,677
276,162
33,563
55,589
64,730
9,002
15,279
31,072
1,542,110
47,420
53,235
66,319
8,594
16,334
32,217
1,386,815
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
350
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.1.3 Exposures by business sector
The breakdown by business sector is calculated on the total amount of Crédit Agricole S.A. exposures for the scope covering Central governments and
Central Banks, Institutions, Corporate and Retail customers. A focus on the Corporate portfolio is shown below. A breakdown of the Retail customers
portfolio is also provided by Basel sub-portfolio (home loans, revolving credit, other loans to microenterprises, farmers and professional customers, other
loans to individuals).
Breakdown of the Corporate portfolio 2019-2020
14.7
12.9
11.7
14.6
12.0
21.2
16.3
7.9
26.3
2.1
8.3
14.8
21.9
47.8
8.1
2.5
9.0
0.8
10.9
7.3
2.2
24.4
10.4
0.2
0
10
20
30
40
50
14.7
13.7
10.5
14.4
8.7
18.9
16.8
7.4
0.4
27.3
2.1
9.0
13.9
46.3
22.8
9.7
2.8
8.3
0.7
11.0
6.2
2.1
22.9
8.4
Utilities
Media/publishing
Real estate
Energy
Retail/consumer goods industries
Building and public works
Wood/paper/packaging
Other non-banking financial activities
Banks
Other industries
Heavy industry
Automotive
Insurance
Agriculture and food processing
Other transport
Shipping
Aeronautics/aerospace
IT/technology
Healthcare/pharmaceuticals
Non-trading services/
public sector/local authorities
Telecom
Tourism/hotels/restaurants
Other
Not broken down
Amounts in EAD
(in billions of euros)
2020
2019
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
351
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Retail customers at 31 December 2020
Loans to small and medium businesses
secured by real estate assets
2.9%
Retail loans secured
by real estate assets
45.2%
Other retail loans
28.2
%
Revolving retail loans
6.4%
Other loans to small
and medium businesses
17.3%
2020
Retail customers at 31 December 2019
Loans to small and medium businesses
secured by real estate assets
2.9%
Retail loans secured
by real estate assets
45.8%
Other retail loans
28.7%
Revolving retail loans
7.0%
Other loans to small
and medium businesses
15.7%
2019
Breakdown of the Retail customers portfolio
The chart above shows a breakdown of the Crédit Agricole S.A.’s Retail
customers portfolio exposures by Basel sub-portfolio (outstanding amounts
of €232.7 billion at 31 December 2020 compared with €223.4 billion at
31 December 2019, an increase of 4.1% on an annual basis).
Within the “Retail customers” portfolio, the relative share of “loans to
individuals secured by real estate assets” remains the largest (45.2% in
2020, compared with 45.8% in 2019). The share of “revolving exposures
to individuals” fell further in 2020 to 6.4% of outstanding retail customer
loans from 7.0% in 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
352
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Concentration of exposures by industry or counterparty types (CRB-D)
31/12/2020
(in millions of euros)
Agriculture,
forestry and
fishing
Mining and
quarrying
Manufac-
turing
Production
and
distribution
Construction
Wholesale
trade
Retail
trade
Transport
and storage
Accommo-
dation and
food service
activities
Information and
communication
Education
and
Instruc-
tion-Training
1
Central governments
or Central Banks
202
138
-
2
Institutions
30
461
52
11
1
125
41
1
26
1
3
Corporates
1,038
21,428
82,532
26,035
10,374
23,164 10,458
33,914
5,404
18,543
260
4
Retail
1,530
15
828
20
659
484
659
206
436
99
30
5
Equity
172
34
131
13
12
68
2
64
13
23
1
6
Total IRB approach
31/12/2020
2,770
21,477
83,952
26,120
11,258
23,717 11,244
34,363
5,854
18,691
292
Total IRB approach
31/12/2019
2,812
20,720
80,099
23,720
10,984
24,890
9,991
33,613
4,676
20,951
298
7
Central governments
or Central Banks
99
-
-
8
Regional governments
or local authorities
-
-
-
-
9
Public sector entities
1
-
1
1
5
39
-
48
-
-
23
10
Multilateral
development banks
1
11
International
organisations
12
Institutions
545
1
-
-
2
-
45
-
13
Corporates
1,612
367
14,404
2,659
2,099
5,001
5,061
1,971
768
1,297
70
14
Retail
978
363
1,308
105
1,047
600
792
939
306
221
87
15
Secured by mortgages
on immovable property
222
2
181
8
15
64
50
32
266
13
2
16
Exposures in default
45
4
250
8
216
91
68
47
57
13
3
17
Items associated with
particularly high risk
8
88
-
2
-
18
Covered bonds
19
Claims on institutions
and corporates with a
short-term credit
assessment
20
Collective investments
undertakings
-
7
21
Equity exposures
30
-
46
4
5
-
20
7
-
22
Other exposures
3
1
8
3
14
7
21
58
1
4
-
23
Total standardised
approach 31/12/2020
2,899
836
16,697
2,831
3,488
5,815
5,996
3,115
1,398
1,600
185
24
Total standardised
approach 31/12/2019
2,845
859
16,401
2,802
3,717
6,581
6,580
3,197
1,105
1,534
165
24
TOTAL 31/12/2020
5,669
22,313
100,649
28,951
14,746
29,532 17,240
37,478
7,252
20,291
477
TOTAL 31/12/2019
5,657
21,579
96,500
26,522
14,701
31,471 16,571
36,810
5,781
22,485
463
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
353
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
31/12/2020
(in millions of euros)
Real
estate
activities
Finance
and
Insurance
Company
Mana-
gement
financial
participa-
tions
Professional,
scientific
and
technical
activities
Adminis-
trative and
support
service
activities
Public
adminis-
tration and
defence,
compulsory
social
security
Human
health
services and
social work
activities
Other
personal
services
outside
public
administration
Private
persons
Arts,
entertain-
ment and
recreation
Other
services
TOTAL
1
Central governments
or Central Banks
121
214,166
284
48,953
876
341
9
265,090
2
Institutions
647
435,165
107
-
71
3,667
54
20
11
498
440,989
3
Corporates
19,068
46,686
8,322
4,608
4,523
230
5,099
316
49
885
-
322,936
4
Retail
1,852
1,115
241
549
113
-
179
213
182,117
61
2,586
193,992
5
Equity
59
3,363
331
103
58
1
22
-
2
12,143
16,615
6
Total IRB approach
31/12/2020
21,747
700,495
9,285
5,260
4,765
52,851
6,230
890
182,166
959
15,237
1,239,623
Total IRB approach
31/12/2019
22,013
597,069
8,167
4,631
3,495
46,414
5,802
448
172,911
1,016
15,933
1,110,653
7
Central governments
or Central Banks
66,189
14,787
-
-
7,479
88,554
8
Regional
governments
or local authorities
-
636
4
-
-
67
707
9
Public sector entities
25
864
-
9
6
523
125
15
14
1,962
3,661
10
Multilateral
development banks
330
2
-
333
11
International
organisations
270
822
-
1,092
12
Institutions
-
32,637
3
-
-
-
-
-
5,211
38,444
13
Corporates
15,321
26,494
1,786
950
998
153
706
159
63
264
9,978
92,181
14
Retail
671
81
124
422
198
9
319
217
19,933
100
-
28,820
15
Secured by
mortgages on
immovable property
1,014
26
23
23
10
38
8
4,235
6
389
6,627
16
Exposures in default
307
18
17
21
12
1
3
6
597
14
73
1,871
17
Items associated
with particularly
high risk
339
7
261
705
18
Covered bonds
664
-
664
19
Claims on institutions
and corporates with
a short-term credit
assessment
-
-
20
Collective
investments
undertakings
7
19,210
3,372
22,596
21
Equity exposures
96
57
4
1
-
671
941
22
Other exposures
40
3
15
2
3
1
1
-
-
15,107
15,292
23
Total standardised
approach 31/12/2020
17,820
146,850
1,972
1,428
1,227
16,934
1,196
405
24,828
398
44,569
302,487
Total standardised
approach 31/12/2019
16,587
121,198
1,625
1,221
1,256
12,495
1,071
386
24,543
392
49,602
276,162
24
TOTAL 31/12/2020
39,567
847,345
11,257
6,688
5,992
69,785
7,426
1,295
206,994
1,357
59,806
1,542,110
TOTAL 31/12/2019
38,600
718,267
9,792
5,852
4,751
58,909
6,873
834
197,454
1,408
65,535
1,386,815
NB:
Of which €371,593 million in Crédit Agricole internal transactions at 31 December 2020.
Of which €335,796 million in Crédit Agricole internal transactions at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
354
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.1.4 Exposures by residual maturity
Maturity of exposures (CRB-E)
31/12/2020
Exposures net of impairment
(in millions of euros)
On demand
≤1 year
>1 year
≤5 years
>5 years
No stated
maturity
TOTAL
1
Central governments or Central Banks
137,003
73,222
29,648
25,207
10
265,090
2
Institutions
4,078
153,482
162,095
120,833
501
440,989
3
Corporates
4,017
125,676
152,417
40,825
1
322,936
4
Retail
825
-
-
193,167
-
193,992
5
Equity
-
457
16,158
16,615
6
Total IRB approach 31/12/2020
145,923
352,380
344,161
380,489
16,670
1,239,623
Total IRB approach 31/12/2019
101,455
313,312
303,034
369,141
23,711
1,110,653
7
Central governments or Central Banks
65,409
2,457
10,732
2,477
7,479
88,554
8
Regional governments or local authorities
3
55
200
389
60
707
9
Public sector entities
18
163
1,250
270
1,960
3,661
10
Multilateral development banks
23
310
-
333
11
International organisations
-
1,092
-
1,092
12
Institutions
2,312
18,421
9,676
2,834
5,201
38,444
13
Corporates
4,757
43,029
22,523
12,657
9,215
92,181
14
Retail
522
600
66
25,254
2,378
28,820
15
Secured by mortgages on immovable property
7
44
497
5,691
388
6,627
16
Exposures in default
234
457
233
873
74
1,871
17
Items associated with particularly high risk
33
111
181
119
261
705
18
Covered bonds
224
440
-
664
19
Claims on institutions and corporates
with a short-term credit assessment
-
-
20
Collective investments undertakings
7,392
5,333
6,522
3,349
22,596
21
Equity exposures
4
-
18
919
941
22
Other exposures
68
102
6
15,116
15,292
23
Total standardised approach 31/12/2020
73,296
73,048
52,634
57,110
46,399
302,487
Total standardised approach 31/12/2019
39,574
65,548
61,335
62,765
46,940
276,162
24
TOTAL 31/12/2020
219,219
425,428
396,796
437,598
63,069
1,542,110
TOTAL 31/12/2019
141,028
378,860
364,370
431,906
70,651
1,386,815
NB:
Of which €371,593 million in Crédit Agricole internal transactions at 31 December 2020.
Of which €335,796 million in Crédit Agricole internal transactions at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
355
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.1.5 Defaulted exposures and value adjustments
Credit quality of exposures by exposure class and instrument (CR1-A)
31/12/2020
Gross carrying values of
Provisions/
Impairment
Net values
(in millions of euros)
Defaulted
exposures
Non-defaulted
exposures
1
Central governments or Central Banks
51
265,085
46
265,090
2
Institutions
372
440,977
360
440,989
3
Corporates
5,850
320,845
3,759
322,936
4
Of which: Specialised lending
1,898
59,909
632
61,174
5
Of which: SMEs
267
6,139
197
6,210
6
Retail
4,623
192,886
3,518
193,992
7
Secured by real estate property
983
106,240
487
106,735
8
SMEs
231
6,152
116
6,267
9
Non-SMEs
752
100,088
372
100,468
10
Qualifying revolving
336
11,563
315
11,584
11
Other retail
3,304
75,084
2,715
75,673
12
SMEs
1,184
26,456
967
26,673
13
Non-SMEs
2,121
48,628
1,748
49,000
14
Equity
-
16,615
-
16,615
15
Total IRB approach 31/12/2020
10,897
1,236,408
7,683
1,239,623
Total IRB approach 31/12/2019
10,131
1,107,723
7,202
1,110,653
16
Central governments or Central Banks
-
88,577
23
88,554
17
Regional governments or local authorities
-
708
-
707
18
Public sector entities
-
3,661
1
3,661
19
Multilateral development banks
-
333
-
333
20
International organisations
-
1,093
-
1,092
21
Institutions
-
38,449
5
38,444
22
Corporates
-
92,771
590
92,181
23
Of which: SMEs
-
17,987
147
17,839
24
Retail
-
29,144
324
28,820
25
Of which: SMEs
-
12,219
49
12,170
26
Secured by mortgages on immovable property
-
6,660
33
6,627
27
Of which: SMEs
-
1,475
-
1,475
28
Exposures in default
4,104
-
2,233
1,871
29
Items associated with particularly high risk
-
739
35
705
30
Covered bonds
-
665
1
664
31
Claims on institutions and corporates with a short-term credit assessment
-
-
-
-
32
Collective investments undertakings
-
22,628
31
22,596
33
Equity exposures
-
941
-
941
34
Other exposures
-
15,348
56
15,292
35
Total standardised approach 31/12/2020
4,104
301,716
3,333
302,487
Total standardised approach 31/12/2019
4,497
274,980
3,314
276,162
36
TOTAL 31/12/2020
15,001
1,538,125
11,016
1,542,110
TOTAL 31/12/2019
14,629
1,382,702
10,516
1,386,815
NB:
Of which €371,593 million in Crédit Agricole internal transactions at 31 December 2020.
Of which €335,796 million in Crédit Agricole internal transactions at 31 December 2019.
Defaulted exposures stood at €15.0 billion at 31 December 2020, an increase of +2.5% compared to 31 December 2019.They represent 1.0% of total
gross exposures, the same as at end-2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
356
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Quality of credit exposures by industry or counterparty types (CR1-B)
31/12/2020
Gross carrying values of
Provisions/
depreciation
Net values
(in millions of euros)
Defaulted
exposures
Non-defaulted
exposures
1
Agriculture, forestry and fishing
175
5,642
148
5,669
2
Mining and quarrying
751
21,777
215
22,313
3
Manufacturing
1,295
100,416
1,062
100,649
4
Production and distribution
91
28,957
97
28,951
5
Construction and water supply
737
14,468
459
14,746
6
Wholesale trade
644
29,388
500
29,532
7
Retail trade
630
16,882
272
17,240
8
Transport and storage
1,693
36,383
598
37,478
9
Accommodation and food service activities
321
7,224
293
7,252
10
Information and communication
63
20,328
100
20,291
11
Education
9
475
7
477
12
Real estate activities
896
39,159
488
39,567
13
Finance and insurance companies
736
847,261
652
847,345
14
Financial holding companies
236
11,217
196
11,257
15
Professional, scientific and technical activities
88
6,666
66
6,688
16
Administrative and support service activities
127
5,951
86
5,992
17
Public administration and defence, compulsory social security
56
69,785
56
69,785
18
Human health services and social work activities
121
7,359
54
7,426
19
Other personal services
15
1,289
9
1,295
20
Private persons
6,020
204,791
3,817
206,994
21
Arts, entertainment and recreation
68
1,343
54
1,357
22
Other services
229
61,364
1,787
59,806
23
TOTAL 31/12/2020
15,001
1,538,125
11,016
1,542,110
24
TOTAL 31/12/2019
14,629
1,382,702
10,516
1,386,815
NB:
Of which €371,593 million in Crédit Agricole internal transactions at 31 December 2020.
Of which €335,796 million in Crédit Agricole internal transactions at 31 December 2019.
Quality of credit exposures by geographic area (CR1-C)
31/12/2020
Gross carrying values of
Provisions/
depreciation
Net values
(in millions of euros)
Defaulted
exposures
Non-defaulted
exposures
1
Europe
11,656
1,330,029
8,813
1,332,872
2
France
5,132
993,068
4,131
994,068
3
Italy
4,068
115,565
2,788
116,846
4
United Kingdom
134
32,982
179
32,937
5
Germany
335
36,312
320
36,327
6
Luxembourg
64
36,056
127
35,993
7
Switzerland
98
18,090
42
18,146
8
Netherland
696
18,036
205
18,527
9
Others (Europe)
1,129
79,920
1,021
80,028
10
Asia and Oceania
696
88,750
293
89,153
11
Japan
296
33,349
82
33,563
12
Others (Asia and Oceania)
400
55,401
211
55,590
13
North America
317
73,830
415
73,732
14
USA
276
64,814
360
64,730
15
Others (North America)
41
9,016
55
9,002
16
Central and South America
1,173
14,635
527
15,280
17
Africa and Middle East
1,159
30,881
968
31,072
18
TOTAL 31/12/2020
15,001
1,538,125
11,016
1,542,110
TOTAL 31/12/2019
14,629
1,382,702
10,516
1,386,815
NB:
Of which €371,593 million in Crédit Agricole internal transactions at 31 December 2020.
Of which €335,796 million in Crédit Agricole internal transactions at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
357
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Ageing of past-due exposures (CR1-D)
31/12/2020
Gross carrying values
(in millions of euros)
≤30 days
>30 days
≤60 days
>60 days
≤90 days
>90 days
≤180 days
>180 days
≤1 year
>1 year
1
Loans
5,431
845
637
712
783
2,152
2
Debt securities
577
313
-
-
-
-
3
Total exposures
6,008
1,158
637
712
783
2,152
31/12/2019
Gross carrying values
(in millions of euros)
≤30 days
>30 days
≤60 days
>60 days
≤90 days
>90 days
≤180 days
>180 days
≤1 year
>1 year
1
Loans
4,501
1,124
1,192
883
578
2,615
2
Debt securities
914
348
9
-
-
-
3
Total exposures
5,415
1,472
1,201
883
578
2,615
Exposures up to 60 days past due account for 63%of total past-due exposures at 31 December 2020 and 57% on 31 December 2019.
Non-performing and forborne exposures (CR1-E)
31/12/2020
(in millions of euros)
Gross carrying amount of performing and non-performing exposures
Accumulated impairment and
provisions and negative fair value
adjustments due to credit risk
Collaterals
and financial
guarantees received
Of which
perfor-
ming but
past due
>30 days
and
≤90 days
of which
performing
forborne
Of which non-performing
On performing
exposures
On non-performing
exposures
On
non-
perfor-
ming
exposures
of which:
forborne
exposures
of which:
defaulted
of which:
impaired
of which:
forborne
of which:
forborne
of which:
forborne
10
Debt
securities
120,301
314
-
51
51
-
-
(68)
-
(42)
-
-
-
20
Loans and
advances
879,420
1,236
3,649
14,445
13,970
-
5,269
(2,711)
(337)
(7,428)
(2,367)
3,491
3,873
30
Off-balance
sheet
exposures
676,149
-
118
3,474
3,417
-
64
(585)
(4)
(325)
(31)
236
22
31/12/2019
(in millions of euros)
Gross carrying amount of performing and non-performing exposures
Accumulated impairment and
provisions and negative fair value
adjustments due to credit risk
Collaterals and
financial guarantees
received
Of which
perfor-
ming but
past due
>30 days
and
≤90 days
of which
performing
forborne
Of which non-performing
On performing
exposures
On non-performing
exposures
On
non-
perfor-
ming
exposures
of which:
forborne
exposures
of which:
defaulted
of which:
impaired
of which:
forborne
of which:
forborne
of which:
forborne
10
Debt
securities
104,549
368
12
110
80
80
-
(61)
-
(18)
-
-
-
20
Loans and
advances
945,159
2,214
2,865
15,104
13,861
13,861
5,958
(2,033)
(202)
(7,796)
(2,533)
3,662
2,794
30
Off-balance
sheet
exposures
467,922
-
149
4,612
3,576
-
71
(489)
(13)
(422)
(9)
278
38
The information on non-performing and renegotiated exposures includes the gross carrying amount, impairment, provisions and related valuation
adjustments, as well as the value of collateral and financial guarantees received.
The definitions of defaulted, impaired, renegotiated or forborne exposures are given in the financial statements at end-2020 in part 1.2 “Accounting
policies and principles”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
358
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Credit quality of forborne exposures (CQ1)
31/12/2020
(in millions of euros)
Gross carrying amount/nominal amount
of exposures with forbearance measures
Accumulated impairment,
accumulated negative
changes in fair value due to
credit risk and provisions
Collateral received
and financial
guarantees received on
forbone exposures
Performing
forbone
Non-performing forbone
On performing
forbone
exposures
On non-
performing
forbone
exposures
Of which
collateral
and financial
guarantees
received on
non-performing
exposures with
forbearance
measures
of
which
defaulted
of which
impaired
005
Cash balances at Central Banks
and other demand deposits
-
-
-
-
-
-
-
-
010
Loans and advances
3,649
5,269
5,181
5,181
(337)
(2,367)
3,873
1,250
020
Central Banks
-
-
-
-
-
-
-
-
030
General governments
17
4
3
3
(1)
(3)
-
-
040
Credit institutions
-
45
45
45
-
(26)
-
-
050
Other financial corporations
4
37
37
37
(1)
(27)
6
1
060
Non-financial corporations
2,542
3,516
3,490
3,490
(231)
(1,534)
3,006
999
070
Households
1,086
1,666
1,606
1,606
(104)
(777)
861
250
080
Loans and advances
-
-
-
-
-
-
-
-
090
Loan commitments given
118
64
64
64
(4)
(31)
22
15
100
TOTAL
3,767
5,333
5,245
5,245
(341)
(2,398)
3,895
1,265
31/12/2019
(in millions of euros)
Gross carrying amount/nominal amount
of exposures with forbearance measures
Accumulated impairment,
accumulated negative changes
in fair value due to credit
risk and provisions
Collateral received and
financial guarantees received
on forbone exposures of
which collateral and financial
guarantees received on
non-performing exposures
with forbearance measures
Performing
forbone
Non-performing forbone
On performing
forbone
exposures
On non-
performing
forbone
exposures
of
which
defaulted
of which
impaired
1
Loans and advances
2,865
5,958
5,283
5,300
(202)
(2,533)
2,794
2
Central Banks
-
-
-
-
-
-
-
3
General governments
26
4
3
3
(1)
(3)
4
4
Credit institutions
-
51
51
51
-
(26)
-
5
Other financial corporations
3
46
44
44
-
(30)
5
6
Non-financial corporations
2,087
4,038
3,862
3,856
(129)
(1,825)
2,163
7
Households
749
1,818
1,322
1,346
(73)
(649)
623
8
Debt securities
12
-
-
-
-
-
-
9
Loan commitments given
149
71
64
64
(13)
(9)
38
10
TOTAL
3,025
6,029
5,348
5,365
(216)
(2,542)
2,832
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
359
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Credit quality of performing and non-performing exposures by number of past due days (CQ3)
31/12/2020
(in millions of euros)
Gross carrying amount/nominal amount
Performing exposures
Non-performing exposures
Not past
due or
past due
≤30 days
Past due
>30 days
≤90 days
Unlikely to
pay that are
not past-due
or past-due
≤90 days
Past due
>90 days
≤180 days
Past due
>180 days
≤1 year
Past due
>1 year
≤2 years
Past due
>2 year
≤5 years
Past due
>5 years
≤7 years
Past due
>7 years
Of which
defaulted
005
Cash
balances at
Central Banks
and other
demand
deposits
202,039
201,993
46
15
-
15
15
010
Loans and
advances
864,976
863,739
1,236
14,445
5,840
963
1,614
1,166
2,530
1,130
1,200
13,970
020
Central Banks
461
461
030
General
governments
9,248
9,202
46
61
23
-
-
-
37
-
61
040
Credit
institutions
451,651
451,632
19
393
102
-
2
272
18
393
050
Other financial
corporations
16,111
16,109
2
406
180
-
22
3
11
23
168
405
060
Non-financial
corporations
222,953
222,264
689
9,198
3,734
756
808
660
1,808
665
765
8,931
070
Of which
SMEs
59,981
59,735
246
3,477
852
91
218
304
1,117
358
538
3,403
080
Households
164,552
164,072
480
4,387
1,802
207
784
502
672
171
250
4,180
090
Debt
securities
120,250
119,936
314
51
29
22
51
100
Central Banks
5,428
5,428
110
General
governments
57,565
57,565
-
-
120
Credit
institutions
31,476
31,476
1
1
1
130
Other financial
corporations
16,545
16,232
314
-
-
-
140
Non-financial
corporations
9,236
9,236
51
29
22
51
150
Off-balance
sheet
exposures
672,675
3,474
3,417
160
Central Banks
288,250
170
General
governments
11,441
180
Credit
institutions
104,242
23
23
190
Other financial
corporations
71,935
2,153
2,153
200
Non-financial
corporations
177,609
1,221
1,194
210
Households
19,197
77
46
220
TOTAL
1,859,939
1,185,669
1,596
17,986
5,870
963
1,614
1,181
2,530
1,130
1,222
17,454
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
360
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
31/12/2019
(in millions of euros)
Gross carrying amount/nominal amount
Performing exposures
Non-performing exposures
Not past
due or
past due
≤30 days
Past due
>30 days
≤90 days
Unlikely to
pay that are
not past-due
or past-due
≤90 days
Past due
>90 days
≤180 days
Past due
>180 days
≤1 year
Past due
>1 year
≤5 years
Past due
>5 years
Of which
defaulted
1
Loans and
advances
930,055
927,841
2,214
15,104
5,445
1,312
1,497
5,214
1,635
13,861
2
Central Banks
114,466
114,466
3
General
governments
10,230
10,158
72
114
39
1
-
52
23
114
4
Credit institutions
413,583
413,482
101
509
326
80
-
102
509
5
Other financial
corporations
17,042
17,024
18
456
58
-
3
27
367
453
6
Non-financial
corporations
212,827
211,348
1,479
9,280
3,197
817
548
3,876
842
8,692
7
Of which SMEs
42,567
42,371
196
3,436
677
148
273
2,138
200
3,249
8
Households
161,908
161,363
545
4,746
1,825
415
946
1,259
301
4,093
9
Debt securities
104,439
104,072
368
110
107
3
80
10
Central Banks
4,651
4,651
11
General
governments
47,211
47,211
2
2
12
Credit institutions
26,614
26,614
1
1
1
13
Other financial
corporations
17,186
16,829
358
81
81
53
14
Non-financial
corporations
8,776
8,766
10
26
23
3
26
15
Off-balance sheet
exposures
463,310
4,612
3,576
16
Central Banks
136,450
17
General
governments
13,356
31
31
18
Credit institutions
50,614
48
48
19
Other financial
corporations
65,713
1,993
1,993
20
Non-financial
corporations
177,685
2,375
1,458
21
Households
19,492
166
47
22
TOTAL
1,497,804
1,031,913
2,582
19,826
5,552
1,312
1,497
5,214
1,639
17,517
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
361
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Performing and non-performing exposures and related provisions (CR1)
31/12/2020
(in millions of euros)
Gross carrying amount/nominal amount
Accumulated impairment, accumulated negative
changes in fair value due to credit risk and provisions
Accu-
mulated
partial
write-
off
Collateral and
financial
guarantees
received
Performing exposures
Non-performing exposures
Performing exposures –
accumulated impairment
and provisions
Non-performing exposures
– accumulated impairment,
accumulated negative
changes in fair value due to
credit risk and provisions
On
perfor-
ming
expo-
sures
On
non-per-
forming
expo-
sures
Of which
Bucket 1
Of which
Bucket 2
Of which
Bucket 2
Of which
Bucket 3
Of which
Bucket 1
Of which
Bucket 2
Of which
Bucket 2
Of which
Bucket 3
005
Cash balances
at Central
Banks and
other demand
deposits
202,039
202,039
-
15
15
(1)
(1)
(15)
(15)
3,228
010
Loans and
advances
864,976
825,482
39,344
14,445
466
13,965
(2,711)
(999)
(1,712)
(7,428)
(40)
(7,388)
183,887
3,491
020
Central Banks
461
461
-
-
-
030
General
governments
9,248
8,508
740
61
61
(8)
(6)
(2)
(28)
(28)
185
-
040
Credit
institutions
451,651
451,590
61
393
393
(30)
(29)
-
(343)
(343)
29
050
Other financial
corporations
16,111
15,881
222
406
1
405
(44)
(31)
(13)
(332)
-
(332)
3,022
7
060
Non-financial
corporations
222,953
193,300
29,653
9,198
266
8,926
(1,704)
(548)
(1,156)
(4,441)
(19)
(4,422)
96,422
2,803
070
Of which
SMEs
59,981
51,285
8,696
3,477
74
3,403
(640)
(230)
(410)
(1,801)
(3)
(1,798)
30,770
1,227
080
Households
164,552
155,743
8,668
4,387
198
4,180
(926)
(385)
(541)
(2,283)
(20)
(2,263)
84,228
681
090
Debt securities
120,250
115,273
1,010
51
47
(68)
(58)
(10)
(42)
(42)
100
Central Banks
5,428
5,049
379
(6)
(4)
(2)
110
General
governments
57,565
57,298
267
-
(38)
(35)
(4)
120
Credit
institutions
31,476
31,419
1
1
(14)
(14)
(1)
(1)
130
Other financial
corporations
16,545
12,334
314
-
-
(3)
(2)
(1)
140
Non-financial
corporations
9,236
9,174
50
51
47
(7)
(3)
(4)
(42)
(42)
150
Off-balance
sheet
exposures
672,675
659,925
12,749
3,474
57
3,417
(585)
(244)
(341)
(325)
(5)
(320)
23,173
236
160
Central Banks
288,250
288,250
-
-
170
General
governments
11,441
10,692
748
(3)
(1)
(2)
1,469
180
Credit
institutions
104,242
104,210
32
23
23
(5)
(4)
(1)
(21)
(21)
192
190
Other financial
corporations
71,935
71,310
625
2,153
2,153
(8)
(8)
-
(31)
(31)
1,702
-
200
Non-financial
corporations
177,609
166,731
10,879
1,221
27
1,194
(498)
(189)
(308)
(243)
(243)
15,592
231
210
Households
19,197
18,732
465
77
30
46
(72)
(42)
(29)
(30)
(5)
(25)
4,217
4
220
TOTAL
1,859,939
1,802,720
53,103
17,986
523
17,445
(3,365)
(1,302)
(2,063)
(7,810)
(44)
(7,766)
210,288
3,727
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
362
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
31/12/2019
(in millions of euros)
Gross carrying amount/nominal amount
Accumulated impairment, accumulated
negative changes in fair value due
to credit risk and provisions
Collateral
and
financial
guarantees
received
Performing exposures
Non-performing
exposures
Performing exposures –
accumulated impair-
ment and provisions
Non-performing
exposures – accumulated
impairment, accumulated
negative changes in fair
value due to credit
risk and provisions
On non-
performing
exposures
Of which
Bucket 1
Of which
Bucket 2
Of which
Bucket 2
Of which
Bucket 3
Of which
Bucket 1
Of which
Bucket 2
Of which
Bucket 2
Of which
Bucket 3
1
Loans and
advances
930,055
899,214
30,316
15,104
1,214
13,861
(2,033)
(832)
(1,201)
(7,796)
(108)
(7,689)
3,662
2
Central Banks
114,466
114,466
0
-
-
-
(14)
(14)
-
-
-
-
-
3
General
governments
10,230
10,051
180
114
0
114
(11)
(8)
(3)
(32)
-
(32)
77
4
Credit institutions
413,583
413,556
27
509
-
509
(30)
(30)
(0)
(392)
-
(392)
-
5
Other financial
corporations
17,042
16,878
156
456
2
453
(30)
(23)
(6)
(370)
(1)
(369)
11
6
Non-financial
corporations
212,827
194,764
17,716
9,280
588
8,692
(1,096)
(428)
(668)
(4,573)
(45)
(4,528)
2,641
7
Of which: SMEs
42,567
38,455
4,112
3,436
187
3,249
(372)
(154)
(217)
(1,858)
(38)
(1,820)
794
8
Households
161,908
149,499
12,238
4,746
624
4,093
(852)
(329)
(524)
(2,430)
(62)
(2,368)
933
9
Debt securities
104,439
100,400
1,189
110
-
80
(61)
(46)
(15)
(18)
-
(18)
-
10
Central Banks
4,651
4,105
546
-
-
-
(3)
(2)
(2)
-
-
-
-
11
General
governments
47,211
46,874
262
2
-
-
(27)
(25)
(2)
-
-
-
-
12
Credit institutions
26,614
26,579
-
1
-
1
(12)
(12)
-
(1)
-
(1)
-
13
Other financial
corporations
17,186
14,101
360
81
-
53
(13)
(3)
(10)
-
-
-
-
14
Non-financial
corporations
8,776
8,741
21
26
-
26
(4)
(3)
(1)
(17)
-
(17)
-
15
Off-balance sheet
exposures
463,310
454,578
8,696
4,612
1,036
3,576
(489)
(219)
(270)
(422)
(25)
(398)
278
16
Central Banks
136,450
136,449
0
-
-
-
(0)
(0)
-
-
-
-
-
17
General
governments
13,356
13,113
243
31
-
31
(1)
(1)
(1)
(0)
-
(0)
9
18
Credit institutions
50,614
50,550
28
48
-
48
(4)
(3)
(1)
(22)
-
(22)
-
19
Other financial
corporations
65,713
65,659
54
1,993
-
1,993
(9)
(8)
(1)
(26)
-
(26)
1
20
Non-financial
corporations
177,685
170,127
7,559
2,375
917
1,458
(377)
(155)
(221)
(338)
(20)
(318)
255
21
Households
19,492
18,680
811
166
119
47
(98)
(52)
(46)
(35)
(5)
(31)
14
22
TOTAL
1,497,804
1,454,192
40,202
19,826
2,251
17,517
(2,583)
(1,097)
(1,486)
(8,237)
(132)
(8,104)
3,940
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
363
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Collateral obtained by taking possession and execution processes (CQ7)
(in millions
of euros)
Collateral obtained by taking possession
Value at initial recognition
Accumulated negative changes
1
Property, plant and equipment (PP&E)
3
2
Other than PP&E
201
(136)
3
Residential immovable property
1
(1)
4
Commercial Immovable property
76
(40)
5
Movable property (auto, shipping, etc.)
124
(95)
6
Equity and debt instruments
7
Other
8
TOTAL
204
(136)
Changes in the stock of specific credit risk adjustments (CR2-A)
31/12/2020
(in millions of euros)
Bucket 1
Bucket 2
Bucket 3
TOTAL
1
Opening balance at 1 January
864
1,324
7,690
9,878
2
Increases due to origination and acquisition
749
1,170
-
1,919
3
Decreases due to derecognition
(529)
(756)
(796)
(2,082)
4
Changes due to change in credit risk (net)
22
94
2,764
2,881
5
Changes due to modifications without derecognition (net)
3
(3)
(5)
(4)
6
Changes due to update in the institution's methodology for estimation (net)
-
-
-
-
7
Decrease in allowance account due to write-offs
-
-
(1,882)
(1,882)
8
Other adjustments
(52)
(68)
(340)
(460)
9
Closing balance
(1)
1,057
1,761
7,431
10,249
10
Recoveries of previously written-off amounts recorded directly to the statement of profit or loss
-
-
(224)
(224)
11
Amounts written-off directly to the statement of profit or loss
-
-
190
190
(1)
Differences in total provisions between CR2-A, CR1-A and CR1-C tables are mainly due to divergences in scope. Impairment of fixed assets and equity investments and provisions for guarantee
commitments given are only included in the CR1-A and CR1-C statements.
31/12/2019
(in millions of euros)
Bucket 1
Bucket 2
Bucket 3
TOTAL
1
Opening balance at 1 January
908
1,453
7,863
10,223
2
Increases due to origination and acquisition
457
580
-
1,037
3
Decreases due to derecognition
(433)
(516)
(549)
(1,498)
4
Changes due to change in credit risk (net)
(52)
(195)
1,833
1,586
5
Changes due to modifications without derecognition (net)
4
0
13
18
6
Changes due to update in the institution's methodology for estimation (net)
-
-
-
-
7
Decrease in allowance account due to write-offs
-
-
(1,389)
(1,389)
8
Other adjustments
(21)
2
(82)
(100)
9
Closing balance
(1)
864
1,324
7,690
9,878
10
Recoveries of previously written-off amounts recorded directly to the statement of profit or loss
-
-
(392)
(392)
11
Amounts written-off directly to the statement of profit or loss
-
-
231
231
(1)
Differences in total provisions between CR2-A, CR1-A and CR1-C tables are mainly due to divergences in scope. Impairment of fixed assets and equity investments and provisions for guarantee
commitments given are only included in the CR1-A and CR1-C statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
364
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Changes in the stock of defaulted and impaired loans and debt securities (CR2-B)
31/12/2020
(in millions of euros)
Gross carrying value
defaulted exposures
31/12/2020
31/12/2019
1
Opening balance
13,941
13,723
2
Loans and debt securities that have defaulted or impaired since the last reporting period
3,980
2,976
3
Returned to non-defaulted status
(459)
(369)
4
Amounts written off
(1,782)
(1,336)
5
Other changes
(1,644)
(1,052)
6
Closing balance
14,037
13,941
3.4.2.2
Credit risk
Since late 2007, the ACPR has authorised Crédit Agricole S.A. to use its
internal rating systems to calculate regulatory capital requirements for
credit risk on Retail and Large customer exposures throughout almost all
of its scope. The main recent developments regarding the Group’s rollout
plan are the switch to the Advanced IRB approach for all “Retail banking”
portfolios in the Cariparma and FriulAdria entities in Italy in 2013 as well
as the IRB validation of the “Corporates” portfolios of the Crédit Agricole
Regional Banks and of LCL effective 1 October 2014.
The main Group entities or portfolios still using the standardised approach
for measuring credit and/or operational risk at 31 December 2020 were
as follows:
the not-yet-validated CA Italia portfolios (non-retail customers portfolios
and Carispezia scope) as well as all other entities in the International
retail banking division;
the Crédit Agricole Leasing & Factoring Group;
some portfolios and foreign subsidiaries of the Crédit Agricole Consumer
Finance Group;
the real estate professionals portfolio.
Pursuant to the Group’s commitment to phase in the advanced approach,
agreed with the Supervisor (rollout plan), work on the main entities or
portfolios still under the standardised approach continues. An update of
the rollout plan is sent annually to the competent authority.
3.4.2.2.1 Exposures under the standardised approach
The exposure classes under the standardised approach are classified
by counterparty type and financial product type, in one of the 17 classes
set out in Article 112 of Regulation (EU) 575/2013 of 26 June 2013. The
weightings applied to these same assets are calculated in accordance
with Articles 114 to 134 of said Regulation.
For the “Central governments and Central Banks” and “Institutions” exposure
classes, Crédit Agricole S.A. has chosen to use Moody’s ratings to evaluate
the risk under the standardised approach.
Accordingly, when the counterparty’s credit valuation from the rating
agency is known, it is used to determine the applicable weighting. With
respect to the counterparties in the “Institutions” or “Corporates” exposure
categories for which the credit valuation is not known, the weighting used
is determined having regard to the credit valuation of the jurisdiction of the
central government in which this counterparty is established, in accordance
with the provisions of Articles 121 and 122 of the aforementioned Regulation.
With respect to exposures on debt instruments in the banking portfolio, the
rule is to apply the issuer’s weighting ratio. This rate is determined using
the rules described in the foregoing paragraph.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
365
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Standardised approach – Credit risk exposure and credit risk mitigation (CRM) effects at 31 December 2020 (CR4)
31/12/2020
Exposure classes
(in millions of euros)
Exposures before CCF
and before CRM
Exposures post CCF
and post CRM
RWA and RWA density
On-balance-
sheet
exposures
Off-balance-
sheet
exposures
On-balance-
sheet
exposures
Off-balance-
sheet
exposures
RWA
RWA
density
(%)
1
Central governments or Central Banks
82,875
116
84,245
35
5,777
6.86%
2
Regional government or local authorities
641
66
642
31
99
14.74%
3
Public sector entities
3,599
39
3,607
21
126
3.48%
4
Multilateral development banks
331
2
339
-
19
5.61%
5
International organisations
1,092
-
1,092
-
-
-
6
Banks (Institutions)
21,817
6,006
40,805
3,896
6,459
14.45%
7
Corporates
66,415
22,003
47,209
7,244
44,423
81.58%
8
Retail
25,203
3,613
22,142
664
15,638
68.57%
9
Secured by mortgages on immovable property
6,592
35
6,591
11
2,620
39.68%
10
Exposures in default
1,799
69
1,402
23
1,715
120.37%
11
Exposures associated with particularly high risk
675
206
671
102
1,158
150.00%
12
Covered bonds
664
-
664
-
140
21.13%
13
Institutions and corporates with a short-term credit assessment
-
-
-
-
-
-
14
Collective investment undertakings
3,457
19,140
3,457
6,260
3,225
33.19%
15
Equity
935
6
935
6
1,140
121.20%
16
Other items
15,292
-
15,292
-
12,323
80.58%
17
TOTAL
231,387
51,299
229,092
18,293
94,862
38.35%
Standardised approach – Credit risk exposure and credit risk mitigation (CRM) effects at 31 December 2019 (CR4)
31/12/2019
Exposure classes
(in millions of euros)
Exposures before CCF
and before CRM
Exposures post CCF
and post CRM
RWA and RWA density
On-
balance-
sheet
exposures
Off-balance-
sheet
exposures
On-
balance-
sheet
exposures
Off-balance-
sheet
exposures
RWA
RWA
density
(%)
1
Central governments or Central Banks
53,160
147
53,160
46
6,312
11.86%
2
Regional government or local authorities
535
65
535
32
109
19.22%
3
Public sector entities
2,660
37
2,664
25
147
5.47%
4
Multilateral development banks
79
-
120
-
21
17.50%
5
International organisations
828
-
828
-
-
-
6
Banks (Institutions)
20,829
4,254
41,864
2,669
6,427
14.43%
7
Corporates
67,637
22,302
48,331
7,494
47,559
85.19%
8
Retail
25,827
4,078
23,103
639
16,271
68.53%
9
Secured by mortgages on immovable property
6,825
53
6,672
17
2,778
41.53%
10
Exposures in default
1,929
126
1,468
57
1,819
119.28%
11
Exposures associated with particularly high risk
938
162
938
84
1,533
150.00%
12
Covered bonds
1,044
-
1,044
-
169
16.19%
13
Institutions and corporates with a short-term credit assessment
-
-
-
-
-
-
14
Collective investment undertakings
2,927
21,079
2,927
6,400
3,820
40.96%
15
Equity
851
6
851
6
1,048
122.29%
16
Other items
13,979
-
13,979
-
11,123
79.57%
17
TOTAL
200,048
52,309
198,484
17,468
99,137
45.91%
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
366
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Exposures by asset class and by risk weight at 31 December 2020 (CR5)
31/12/2020
Exposure classes
(in millions of euros)
Risk weight
0%
2%
4%
10%
20%
35%
50%
70%
75%
100%
150%
250%
370%
1,250%
Others
Deduc-
ted
Total
o/w
unrated
1
Central
governments
or Central
Banks
79,827
-
-
-
6
-
334
-
-
3,114
3
-
-
-
-
996
84,280
84,279
2
Regional
government
or local
authorities
177
-
-
-
496
-
-
-
-
-
-
-
-
-
-
-
672
672
3
Public sector
entities
3,254
-
-
-
292
-
29
-
-
53
-
-
-
-
-
-
3,628
3,600
4
Multilateral
development
banks
321
-
-
-
-
-
-
-
-
19
-
-
-
-
-
-
340
340
5
International
organisations
1,092
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,092
1,092
6
Banks
(Institutions)
25,507
1,784
-
-
10,319
-
5,546
-
-
1,461
83
-
-
-
-
-
44,700
36,223
7
Corporates
-
-
-
-
4,971
-
8,692
-
-
39,223
1,567
-
-
-
-
-
54,453
31,059
8
Retail
-
-
-
-
-
-
-
-
22,805
-
-
-
-
-
-
-
22,805
22,805
9
Secured by
mortgages
on immovable
property
-
-
-
-
-
4,186
2,052
-
364
-
-
-
-
-
-
-
6,602
6,602
10
Exposures
in default
-
-
-
-
-
-
-
-
-
844
580
-
-
-
-
-
1,425
1,425
11
Exposures
associated
with particularly
high risk
-
-
-
-
-
-
-
-
-
-
772
-
-
-
-
-
772
772
12
Covered bonds
-
-
-
269
352
-
-
-
-
43
-
-
-
-
-
-
664
-
13
Institutions
and corporates
with a
short-term credit
assessment
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Collective
investment
undertakings
4,471
-
-
13
1,507
-
1,785
-
-
1,761
179
-
-
-
-
-
9,716
9,018
15
Equity
-
-
-
-
-
-
-
-
-
808
-
133
-
-
-
-
941
941
16
Other items
1,998
-
-
-
1,214
-
-
-
-
12,080
-
-
-
-
-
-
15,292
14,739
17
TOTAL
116,646
1,784
-
282
19,157
4,186
18,438
-
23,169
59,407
3,185
133
-
-
-
996
247,385
213,567
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
367
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Exposures by asset class and by risk weight at 31 December 2019 (CR5)
31/12/2019
Asset classes
(in millions of euros)
Risk weight
0%
2%
4%
10%
20%
35%
50%
70%
75%
100%
150%
250%
370%
1,250%
Others
Deduc-
ted
Total
o/w
unrated
1
Central
governments
or Central Banks
48,234
-
-
-
99
-
376
-
-
3,418
8
-
-
-
-
1,070
53,206
53,205
2
Regional
government
or local
authorities
23
-
-
-
543
-
-
-
-
1
-
-
-
-
-
-
567
567
3
Public sector
entities
2,294
-
-
-
292
-
29
-
-
74
-
-
-
-
-
-
2,689
2,661
4
Multilateral
development
banks
98
-
-
-
-
-
-
-
-
21
-
-
-
-
-
-
120
120
5
International
organisations
828
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
828
828
6
Banks
(Institutions)
24,857
2,275
-
-
10,391
-
5,491
-
-
1,442
77
-
-
-
-
-
44,533
35,622
7
Corporates
-
-
-
-
4,669
-
9,295
-
-
40,410
1,450
-
-
-
-
-
55,825
32,947
8
Retail
-
-
-
-
-
-
-
-
23,742
-
-
-
-
-
-
-
23,742
23,742
9
Secured by
mortgages
on immovable
property
-
-
-
-
-
4,323
1,780
-
570
16
-
-
-
-
-
-
6,688
6,688
10
Exposures
in default
-
-
-
-
-
-
-
-
-
937
588
-
-
-
-
-
1,525
1,525
11
Exposures
associated
with particularly
high risk
-
-
-
-
-
-
-
-
-
-
1,022
-
-
-
-
-
1,022
1,022
12
Covered bonds
-
-
-
651
360
-
-
-
-
32
-
-
-
-
-
-
1,044
-
13
Institutions and
corporates with
a short-term
credit
assessment
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Collective
investment
undertakings
4,060
-
3
17
788
-
1,720
-
-
2,617
122
-
-
-
-
-
9,327
8,634
15
Equity
-
-
-
-
-
-
-
-
-
728
-
128
-
-
-
-
857
856
16
Other items
1,923
-
-
-
1,166
-
-
-
-
10,890
-
-
-
-
-
-
13,979
13,979
17
TOTAL
82,318
2,275
3
669
18,309
4,323
18,691
-
24,312
60,586
3,268
128
-
-
-
1,070
215,952 182,397
Exposures to the asset classes “Central government and Central Banks” and “Banks (institutions)” treated under the standardised approach were mainly
risk-weighted at 0% at end-2020 and at end-2019. This reflects the quality of the activities carried out with these types of counterparties.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
368
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.2.2 Credit risk – internal ratings-based approach
Outstanding loans are classified by counterparty type and financial product
type, based on the seven exposure classes shown in the table below and
set out in Article 147 of Regulation (EU) 575/2013 of 26 June 2013 on
capital requirements for credit institutions and investment firms:
in addition to exposures to “Central governments and Central Banks”,
the Central government and Central Banks class includes exposures to
certain regional and local authorities and public sector agencies that
are treated as central government agencies, as well as multilateral
development banks and international organisations;
the “Institutions” class comprises exposure to credit institutions and
investment companies, including those recognised in other countries.
It also includes some exposures to regional and local authorities, public
sector agencies and multilateral development banks that are not classified
under central governments;
the “Corporates” class is divided into large corporates and small and
medium-sized companies, which are subject to different regulatory
treatments;
the “Retail customers” class is broken down into loans secured by real
estate granted to individuals and to small and medium businesses,
revolving credit, other loans granted to individuals and to small and
medium businesses;
the “Equity” class comprises exposures that convey a residual,
subordinated claim on the assets or revenues of the issuer or have a
similar economic substance;
the “Securitisation” class includes exposures to securitisation transactions
or structures, including those resulting from interest rate or exchange
rate derivatives, independently of the institution’s role (whether it is the
originator, sponsor or investor);
the “Assets other than credit obligations” class does not currently include
any assets using the IRB approach.
In accordance with the regulatory rules in effect, risk-weighted assets in
the “Central governments and Central Banks”, “Institutions”, “Corporates”
and “Retail customers” classes are calculated by applying a regulatory
formula, the main parameters of which are the EAD, PD, LGD and the
maturity associated with each exposure:
for exposures to Large Customers (Central governments and Central
Banks, Institutions and Corporates), the formula is given in Article 153
of EU Regulation 575/2013 of 26 June 2013;
for exposures to Retail customers, the formula is given in Article 154 of
EU Regulation 575/2013 of 26 June 2013.
Risk-weighted assets in the “Equities” category are calculated by applying
standardised weightings to the carrying amount of the exposures.
These weightings, set out in Article 155 of EU Regulation 575/2013 of
26 June 2013, depend on the nature of the equities involved: 190% for
private equity exposures in sufficiently diversified portfolios, 290% for
exchange traded equity exposures and 370% for all other “Equity” exposures
excluding equity investments of over 10% in financial firms used in the
calculation of the exemption threshold (250% weighting).
The calculation of risk-weighted assets in respect of “Securitisation”
exposures is set out in the dedicated section below.
Risk-weighted assets of “Assets other than credit obligations” exposures
are calculated in accordance with Article 156 of Regulation (EU) 575/2013
of 26 June 2013. The parameters of the formulas cited above are estimated
using historical default and loss data collected internally by Crédit
Agricole S.A. Note that the definition of default used for the calculation of
these parameters has a significant influence on the value thereof.
Exposure at Default (EAD) is the amount of exposure to a counterparty
at the time of said counterparty’s default. For balance sheet items, EAD
corresponds to exposure net of provisions for hedged items using the
standardised approach to credit risk, and to gross amounts for hedged items
using internal ratings. In the case of limits and financing commitments not
used by the counterparty, a portion of the total commitment is taken into
account by applying a credit conversion factor (CCF). The CCF is estimated
using an internal method validated by the supervisory authority for Retail
customers portfolios. The Internal CCF is estimated on the basis of the CCF
observed in cases of default by class of exposure. For other portfolios, a
standard CCF of 20%, 50% or 100% is applied, depending on the nature
of the commitment and its term.
For Large Customers, default is defined on a customer-by customer basis. As
a result, it factors in the principle of contagion: an exposure to a defaulting
customer causes the classification under default of all of the said customer’s
loans within the entity responsible for the uniformity of the rating and all
of its loans within Crédit Agricole S.A.
For Retail customers, following the change in the internal definition of
default pursuant to the new EBA guidelines, the definition of default now
also applies solely at the debtor level. Contagion rules are defined and
precisely documented by the entity (joint account, outstandings of individuals
or professionals, notion of risk group, etc.).
The pertinence and reliability of the rating data used are guaranteed by a
process consisting in the initial validation and subsequent maintenance
of internal models based on a structured and documented organisation
implemented throughout the Group and involving entities, the Risk
Management department and the Audit Group function.
The use of internal models for calculating solvency ratios has strengthened
Crédit Agricole S.A.’s risk management. In particular, the development
of “internal rating” approaches has led to the systematic collection of
reliable data in respect of historical default and loss for the majority of
Group entities. The collection of historical data of this nature now makes it
possible to quantify credit risk by giving each rating an average Probability
of Default (PD) and, for “advanced internal rating” approaches, a Loss
Given Default (LGD).
In addition, the parameters of the “internal rating” models are used in
the definition, implementation and monitoring of the entities’ risk and
credit policies. For Large Customers, the Group’s unique rating system
(identical tools and methods, shared data), in place for many years, has
contributed to strengthening and standardising the use of ratings and the
associated risk parameters within the entities. The uniqueness of ratings for
the Large customer class thereby provides a shared framework on which
to base standards and procedures, management tools, provisioning and
risk-hedging policies, as well as alerts and close monitoring procedures.
Due to their role in the monitoring and managing of risk within the various
entities, ratings are subject to quality controls and regular monitoring at
all stages of the rating process.
Internal models for measuring risks accordingly promote the development
of sound risk-management practices among Group entities and improve the
efficiency of the process of capital allocation by allowing a more accurate
measurement of its consumption by business line and by entity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
369
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
The set of internal models used by the Crédit Agricole group was presented
for approval to the Standards and Methodology Committee before auditing
by the Group Control and Audit department. This internal validation process
pre-dates the application for formal approval to the ECB. The process of
constructing and validating an internal rating model requires work over
a period generally spanning three to five years, involving several on-site
pre-validation and validation assignments.
After validation, systems governing internal ratings and the calculation
of risk parameters are subject to permanent and periodic control within
each Group entity.
Modelled Parameter
Portfolio/Entity
Number of models
PD
Sovereigns
5
Local authorities
8
Financial institutions (banks, insurance, funds, etc.)
8
Specialised financing
9
Corporates
5
Retail banking – LCL
2
Retail banking – Crédit Agricole Consumer Finance
16
Retail banking – Crédit Agricole CIB
1
Retail banking – CA Italia
3
LGD
Sovereigns
1
Financial institutions (banks, insurance, funds, etc.)
4
Specialised financing
8
Corporates
1
Retail banking – LCL
8
Retail banking – Crédit Agricole Consumer Finance
16
Retail banking – Crédit Agricole CIB
1
Retail banking – CA Italia
2
CCF
Retail banking – LCL
2
Retail banking – Crédit Agricole Consumer Finance
4
3.4.2.2.3 Quality of exposures under the internal ratings-based approach
Presentation of the internal ratings system and procedure
The internal ratings systems and procedures are described in the section entitled “Risk management – Credit risk – Risk measurement methods and
systems”.
The Retail customers credit risk exposure classes are presented separately as the internal ratings used for them are not the same as those for the other
classes.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
370
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Credit risk exposures by portfolio and probability of default (PD) range
Foundation internal ratings-based approach at 31 December 2020 (CR6)
Exposure classes
(in millions of euros)
PD Scale
On-
balance
sheet
exposures
Off-
balance-
sheet
exposures
pre-CCF
Exposure
weighted
average
CCF
Exposure
post CCF
and post
CRM
Exposure
weighted
average
PD
(%)
Exposure
weighted
average
LGD
(%)
Exposure
weighted
average
maturity
(years)
Risk
weighted
exposure
amount
after
supporting
factors
Density
of risk
weighted
exposure
amount
Expec-
ted loss
amount
Value
adjust-
ments
and
provi-
sions
Central
governments and
Central Banks
0.00 to <0.15
167,384
100
70.36%
171,388
-
45.00%
545
0.32%
-
-
0.15 to <0.25
161
-
-
161
0.16%
45.00%
66
41.13%
-
-
0.25 to <0.50
1
-
-
1
0.30%
45.00%
-
59.42%
-
-
0.50 to <0.75
-
-
-
-
0.63%
44.98%
-
79.97%
-
-
0.75 to <2.50
18
-
-
18
0.80%
45.00%
17
97.10%
-
-
2.50 to <10.00
-
-
-
-
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
-
-
-
-
-
-
100.00 (Default)
-
-
-
-
-
-
-
-
-
-
Sub-total
167,563
100
70.36%
171,568
0.00%
45.00%
629
0.37%
1
18
Institutions
0.00 to <0.15
381,515
1,774
62.24%
382,711
0.03%
1.45%
2,527
0.66%
2
-
0.15 to <0.25
567
16
73.18%
578
0.16%
29.44%
203
35.02%
-
-
0.25 to <0.50
7
2
26.26%
8
0.30%
45.00%
5
66.36%
-
-
0.50 to <0.75
44
19
61.61%
56
0.60%
45.00%
57
102.18%
-
-
0.75 to <2.50
85
25
33.09%
93
0.87%
45.00%
106
114.05%
-
-
2.50 to <10.00
5
2
41.36%
6
5.00%
45.00%
10
186.80%
-
-
10.00 to <100.00
1
1
28.89%
1
15.56%
45.00%
3
257.91%
-
-
100.00 (Default)
-
-
-
-
100.00%
44.68%
-
-
-
-
Sub-total
382,223
1,839
61.84%
383,453
0.03%
1.51%
2,912
0.76%
3
-
Corporates – Other
0.00 to <0.15
9,485
5,661
78.82%
13,745
0.04%
44.75%
2,728
19.85%
3
-
0.15 to <0.25
2,960
2,291
78.90%
4,458
0.16%
44.69%
1,872
41.98%
3
-
0.25 to <0.50
3,234
3,167
69.98%
5,137
0.30%
44.53%
3,015
58.70%
7
-
0.50 to <0.75
2,954
2,039
77.29%
3,982
0.60%
44.66%
3,240
81.38%
11
-
0.75 to <2.50
6,108
3,627
79.52%
7,761
1.19%
44.58%
8,006
103.15%
41
-
2.50 to <10.00
595
272
83.50%
551
5.00%
44.71%
893
161.96%
12
-
10.00 to <100.00
524
170
67.82%
495
15.98%
44.89%
1,194
241.11%
36
-
100.00 (Default)
571
192
39.57%
569
100.00%
44.91%
-
-
256
-
Sub-total
26,431
17,420
76.71%
36,699
2.24%
44.67%
20,949
57.08%
368
586
Corporates – SME
0.00 to <0.15
71
105
88.51%
163
0.04%
44.53%
19
11.92%
-
-
0.15 to <0.25
114
53
84.03%
151
0.16%
44.84%
50
32.93%
-
-
0.25 to <0.50
321
202
76.32%
363
0.30%
44.73%
162
44.54%
-
-
0.50 to <0.75
526
113
81.19%
526
0.60%
43.52%
304
57.67%
1
-
0.75 to <2.50
2,686
493
69.40%
2,452
1.34%
43.82%
1,819
74.16%
14
-
2.50 to <10.00
312
71
77.26%
285
5.00%
43.73%
326
114.30%
6
-
10.00 to <100.00
204
24
62.16%
156
15.98%
44.27%
254
162.28%
11
-
100.00 (Default)
181
20
54.58%
181
100.00%
44.81%
-
-
81
-
Sub-total
4,416
1,081
74.51%
4,278
6.01%
43.98%
2,933
68.56%
114
178
Corporates –
Specialised Lending
0.00 to <0.15
-
-
-
-
-
-
-
-
-
-
0.15 to <0.25
5
-
-
5
0.16%
45.00%
2
41.13%
-
-
0.25 to <0.50
5
2
75.00%
6
0.30%
45.00%
4
57.64%
-
-
0.50 to <0.75
1
4
75.00%
4
0.60%
45.00%
3
79.98%
-
-
0.75 to <2.50
6
10
75.00%
13
1.25%
45.00%
14
105.65%
-
-
2.50 to <10.00
-
-
-
-
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
-
-
-
-
-
-
100.00 (Default)
-
-
-
-
-
-
-
-
-
-
Sub-total
17
15
75.00%
28
0.76%
45.00%
23
80.34%
-
-
TOTAL
(ALL EXPOSURES CLASSES)
580,651
20,455
75.17%
596,027
0.20%
16.99%
27,445
4.61%
486
782
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
371
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Credit risk exposures by portfolio and probability of default (PD) range
Foundation internal ratings-based approach at 31 December 2019 (CR6)
Exposure classes
(in millions of euros)
PD Scale
On-
balance
sheet
exposures
Off-
balance-
sheet
exposures
pre-CCF
Exposure
weighted
average
CCF
Exposure
post CCF
and post
CRM
Exposure
weighted
average
PD
(%)
Exposure
weighted
average
LGD
(%)
Exposure
weighted
average
maturity
(years)
Risk
weighted
exposure
amount
after
supporting
factors
Density
of risk
weighted
exposure
amount
Expected
loss
amount
Value
adjust-
ments
and
provi-
sions
Central
governments and
Central Banks
0.00 to <0.15
98,742
50
61.60%
98,827
0.00%
45.00%
-
461
0.47%
-
-
0.15 to <0.25
113
-
-
113
0.16%
45.00%
-
46
41.15%
-
-
0.25 to <0.50
-
-
-
-
-
-
-
-
-
-
-
0.50 to <0.75
-
-
-
-
0.65%
45.00%
-
-
80.00%
-
-
0.75 to <2.50
1
-
-
1
1.39%
45.00%
-
1
112.06%
-
-
2.50 to <10.00
-
-
-
-
-
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
20.00%
45.00%
-
-
260.30%
-
-
100.00 (Default)
-
-
-
-
-
-
-
-
-
-
-
Sub-total
98,855
50
61.60%
98,941
0.00%
45.00%
-
508
0.51%
-
19
Institutions
0.00 to <0.15
345,671
1,936
57.93%
346,845
0.03%
1.14%
-
1,792
0.52%
1
-
0.15 to <0.25
234
16
70.58%
246
0.16%
22.97%
-
63
25.55%
-
-
0.25 to <0.50
13
2
20.00%
13
0.30%
45.00%
-
10
71.19%
-
-
0.50 to <0.75
89
13
50.28%
95
0.60%
45.00%
-
98
103.10%
-
-
0.75 to <2.50
84
23
34.50%
92
0.88%
41.24%
-
95
103.10%
-
-
2.50 to <10.00
-
3
39.69%
2
5.00%
45.00%
-
3
175.07%
-
-
10.00 to <100.00
127
1
33.25%
127
19.99%
11.48%
-
82
64.53%
3
-
100.00 (Default)
-
-
-
-
100.00%
45.06%
-
-
-
-
-
Sub-total
346,218
1,994
57.62%
347,420
0.04%
1.19%
-
2,142
0.62%
5
1
Corporates – Other
0.00 to <0.15
8,870
5,886
79.31%
13,587
0.04%
44.83%
-
2,726
20.06%
3
-
0.15 to <0.25
2,731
2,252
79.28%
4,523
0.16%
44.66%
-
1,902
42.06%
3
-
0.25 to <0.50
3,221
3,405
73.10%
5,690
0.30%
44.66%
-
3,344
58.78%
8
-
0.50 to <0.75
2,990
2,012
73.24%
4,455
0.60%
44.59%
-
3,633
81.55%
12
-
0.75 to <2.50
3,778
2,643
75.48%
5,697
1.20%
44.64%
-
5,908
103.71%
30
-
2.50 to <10.00
164
139
88.98%
288
5.00%
44.63%
-
462
160.79%
6
-
10.00 to <100.00
219
149
54.85%
297
16.83%
44.67%
-
722
243.17%
22
-
100.00 (Default)
562
237
48.30%
674
100.00%
44.97%
-
-
-
303
-
Sub-total
22,535
16,722
76.15%
35,211
2.45%
44.72%
-
18,698
53.10%
388
491
Corporates – SME
0.00 to <0.15
58
36
96.18%
93
0.05%
45.00%
-
16
17.19%
-
-
0.15 to <0.25
181
96
91.55%
271
0.16%
44.29%
-
98
36.26%
-
-
0.25 to <0.50
328
131
84.31%
437
0.30%
44.76%
-
231
52.76%
1
-
0.50 to <0.75
435
143
83.67%
554
0.60%
44.54%
-
385
69.42%
1
-
0.75 to <2.50
2,236
465
71.75%
2,530
1.32%
44.03%
-
2,241
88.57%
15
-
2.50 to <10.00
148
27
64.44%
159
5.00%
44.00%
-
202
127.60%
3
-
10.00 to <100.00
119
31
71.22%
135
15.32%
43.68%
-
247
183.50%
9
-
100.00 (Default)
202
14
43.71%
205
100.00%
44.83%
-
-
-
92
-
Sub-total
3,707
944
77.68%
4,385
6.21%
44.23%
-
3,421
78.01%
121
172
Corporates –
Specialised
Lending
0.00 to <0.15
-
-
-
-
-
-
-
-
-
-
0.15 to <0.25
5
-
-
5
0.16%
45.00%
-
2
41.13%
-
-
0.25 to <0.50
5
-
-
5
0.30%
45.00%
-
3
57.64%
-
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
6
10
75.00%
13
1.25%
45.00%
-
14
105.65%
-
-
2.50 to <10.00
-
-
-
-
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
-
-
-
-
-
-
100.00 (Default)
-
-
-
-
-
-
-
-
-
-
Sub-total
15
10
75.00%
23
0.82%
45.00%
-
19
81.86%
-
-
TOTAL
(ALL PORTFOLIOS)
471,330
19,720
74.28%
485,979
0.26%
13.65%
-
24,787
5.10%
514
682
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
372
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Credit risk exposures by portfolio and probability of default (PD) range
Advanced internal ratings-based approach at 31 December 2020 (CR6)
Exposure
classes
(in millions
of euros)
PD Scale
On-
balance
sheet
exposures
Off-
balance-
sheet
exposures
pre-CCF
Exposure
weighted
average CCF
Exposure
post CCF
and post
CRM
Exposure
weighted
average
PD
(%)
Exposure
weighted
average
LGD
(%)
Exposure
weighted
average
maturity
(years)
Risk
weighted
exposure
amount
after
supporting
factors
Density
of risk
weighted
exposure
amount
Expec-
ted loss
amount
Value
adjust-
ments and
provisions
Central
governments
and Central
Banks
0.00 to <0.15
80,838
2,831
65.04%
94,308
0.00%
5.46%
1.63
370
0.39%
-
-
0.15 to <0.25
1,184
10
53.12%
1,800
0.16%
9.98%
2.05
144
8.00%
8
-
0.25 to <0.50
202
-
-
202
0.30%
10.00%
2.54
27
13.26%
-
-
0.50 to <0.75
733
232
75.00%
459
0.60%
10.00%
1.77
70
15.27%
-
-
0.75 to <2.50
575
541
74.18%
143
1.33%
45.00%
1.86
137
95.33%
1
-
2.50 to <10.00
759
272
75.00%
52
5.00%
58.78%
3.55
120
228.47%
2
-
10.00 to <100.00
199
203
75.42%
28
15.09%
79.88%
3.32
120
425.44%
3
-
100.00 (Default)
51
-
-
23
100.00%
45.00%
3.82
-
-
14
-
Sub-total
84,540
4,089
64.80%
97,015
0.04%
5.69%
1.64
988
1.02%
28
28
Institutions
0.00 to <0.15
23,709
2,755
95.47%
32,606
0.03%
10.36%
1.81
1,086
3.33%
1
-
0.15 to <0.25
862
852
54.31%
821
0.16%
34.04%
2.12
255
31.10%
1
-
0.25 to <0.50
772
920
25.65%
964
0.30%
41.94%
1.20
465
48.25%
1
-
0.50 to <0.75
71
666
32.26%
268
0.60%
47.37%
1.43
164
61.33%
1
-
0.75 to <2.50
288
767
41.56%
458
1.31%
32.85%
1.97
389
84.92%
2
-
2.50 to <10.00
-
83
24.03%
20
5.00%
83.92%
0.76
59
300.45%
1
-
10.00 to <100.00
-
18
33.40%
4
12.79%
76.51%
1.12
18
421.79%
-
-
100.00 (Default)
200
168
99.29%
367
100.00%
45.01%
4.35
-
-
356
-
Sub-total
25,902
6,229
79.45%
35,507
1.10%
12.74%
1.82
2,437
6.86%
363
360
Corporates –
Other
0.00 to <0.15
25,683
55,300
58.47%
56,315
0.05%
34.13%
1.87
7,522
13.36%
8
-
0.15 to <0.25
10,535
18,865
45.37%
17,333
0.16%
45.43%
2.17
5,696
32.87%
11
-
0.25 to <0.50
8,761
17,077
46.75%
14,196
0.30%
45.13%
2.02
6,440
45.37%
16
-
0.50 to <0.75
8,949
10,355
56.22%
10,445
0.60%
43.51%
1.93
6,212
59.47%
21
-
0.75 to <2.50
12,357
11,725
57.57%
12,140
1.13%
49.08%
2.50
10,906
89.84%
53
-
2.50 to <10.00
1,757
938
68.29%
1,144
5.00%
32.72%
2.17
1,186
103.66%
17
-
10.00 to <100.00
1,709
1,610
36.64%
1,341
14.13%
43.04%
2.24
2,099
156.59%
54
-
100.00 (Default)
2,115
750
39.29%
2,291
100.00%
45.36%
2.44
156
6.82%
1,679
-
Sub-total
71,867
116,620
54.20%
115,204
2.46%
39.92%
2.02
40,218
34.91%
1,859
2,344
Corporates –
SME
0.00 to <0.15
38
55
20.08%
41
0.05%
47.30%
3.06
9
21.23%
-
-
0.15 to <0.25
6
2
75.00%
7
0.18%
31.50%
2.02
1
17.27%
-
-
0.25 to <0.50
23
6
49.03%
17
0.30%
43.75%
1.20
4
25.09%
-
-
0.50 to <0.75
19
4
45.64%
9
0.60%
42.95%
2.78
4
44.72%
-
-
0.75 to <2.50
126
407
30.40%
195
1.48%
36.70%
2.24
111
56.92%
1
-
2.50 to <10.00
9
8
45.41%
4
5.00%
41.58%
3.92
3
82.93%
-
-
10.00 to <100.00
19
10
39.08%
18
16.31%
23.06%
1.96
14
78.23%
1
-
100.00 (Default)
38
28
74.88%
59
100.00%
45.00%
2.25
33
55.50%
16
-
Sub-total
279
519
33.98%
350
18.70%
39.08%
2.30
179
51.21%
18
19
Corporates –
Specialised
Lending
0.00 to <0.15
1,928
991
55.50%
8,930
0.03%
7.99%
3.81
393
4.40%
-
-
0.15 to <0.25
5,579
2,127
52.68%
8,741
0.16%
12.80%
3.72
1,008
11.53%
2
-
0.25 to <0.50
8,573
2,524
51.15%
9,093
0.30%
12.79%
3.66
1,718
18.89%
3
-
0.50 to <0.75
9,483
2,102
42.25%
9,170
0.60%
13.15%
3.07
2,055
22.41%
7
-
0.75 to <2.50
14,384
4,784
50.06%
11,563
1.11%
15.42%
3.44
4,107
35.52%
19
-
2.50 to <10.00
1,157
114
73.93%
1,038
5.00%
13.36%
3.57
549
52.88%
7
-
10.00 to <100.00
1,624
326
73.20%
1,258
13.80%
14.68%
3.11
923
73.40%
25
-
100.00 (Default)
1,788
79
96.73%
1,427
100.00%
31.94%
2.69
130
9.14%
306
-
Sub-total
44,516
13,046
51.38%
51,220
3.67%
13.21%
3.50
10,883
21.25%
370
632
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
373
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Exposure
classes
(in millions
of euros)
PD Scale
On-
balance
sheet
exposures
Off-
balance-
sheet
exposures
pre-CCF
Exposure
weighted
average CCF
Exposure
post CCF
and post
CRM
Exposure
weighted
average
PD
(%)
Exposure
weighted
average
LGD
(%)
Exposure
weighted
average
maturity
(years)
Risk
weighted
exposure
amount
after
supporting
factors
Density
of risk
weighted
exposure
amount
Expec-
ted loss
amount
Value
adjust-
ments and
provisions
Retail –
Secured
by immovable
property
non SME
0.00 to <0.15
63,421
2,392
100.00%
65,814
0.10%
8.98%
1,552
2.36%
6
-
0.15 to <0.25
5,371
63
100.00%
5,434
0.22%
16.98%
400
7.37%
2
-
0.25 to <0.50
14,972
643
100.00%
15,615
0.43%
11.13%
1,410
9.03%
8
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
7,953
401
100.00%
8,354
1.16%
13.32%
1,822
21.81%
14
-
2.50 to <10.00
4,158
241
100.00%
4,400
7.63%
16.42%
3,317
75.40%
55
-
10.00 to <100.00
460
11
100.00%
471
27.05%
-
530
112.51%
23
-
100.00 (Default)
750
2
99.77%
752
100.00%
48.06%
353
46.99%
361
-
Sub-total
97,086
3,754
100.00%
100,840
1.17%
10.44%
9,385
9.31%
469
375
Retail –
Other SME
0.00 to <0.15
101
2,608
121.01%
3,303
0.08%
56.42%
105
3.18%
1
-
0.15 to <0.25
9
73
179.62%
140
0.28%
55.62%
13
9.19%
-
-
0.25 to <0.50
231
2,802
61.00%
1,953
0.45%
61.23%
282
14.43%
6
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
1,059
2,093
62.61%
2,389
1.58%
57.73%
846
35.42%
22
-
2.50 to <10.00
1,468
955
75.15%
2,213
5.06%
60.75%
1,760
79.53%
67
-
10.00 to <100.00
137
27
95.14%
167
30.98%
60.16%
286
171.35%
31
-
100.00 (Default)
331
5
29.27%
333
100.00%
84.71%
79
23.74%
282
-
Sub-total
3,336
8,563
82.35%
10,497
4.98%
59.74%
3,371
32.12%
409
315
Retail –
Qualifying
revolving
0.00 to <0.15
14,056
964
100.20%
15,022
0.09%
12.62%
482
3.21%
2
-
0.15 to <0.25
3,393
141
94.48%
3,526
0.21%
23.51%
368
10.45%
2
-
0.25 to <0.50
5,713
321
103.40%
6,045
0.42%
36.25%
1,584
26.20%
9
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
13,978
537
109.12%
14,565
1.44%
43.99%
8,113
55.70%
92
-
2.50 to <10.00
8,431
208
104.34%
8,650
4.93%
49.79%
6,970
80.58%
197
-
10.00 to <100.00
878
9
99.40%
887
12.71%
21.02%
907
102.17%
159
-
100.00 (Default)
2,117
4
75.31%
2,159
100.00%
74.26%
615
28.51%
1,618
-
Sub-total
48,566
2,183
102.84%
50,853
5.67%
33.79%
19,039
37.44%
2,079
1,775
Retail –
Secured by
immovable
property SME
0.00 to <0.15
222
-
100.00%
222
0.11%
17.08%
8
3.43%
-
-
0.15 to <0.25
230
-
100.00%
231
0.22%
16.91%
13
5.60%
-
-
0.25 to <0.50
847
3
100.00%
849
0.51%
16.61%
86
10.15%
1
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
3,858
54
100.45%
3,912
1.14%
13.26%
628
16.05%
6
-
2.50 to <10.00
783
31
100.00%
814
7.97%
20.83%
600
73.73%
14
-
10.00 to <100.00
122
3
100.00%
124
8.55%
9.62%
130
104.86%
7
-
100.00 (Default)
231
-
100.00%
231
100.00%
53.71%
78
33.87%
124
-
Sub-total
6,292
90
100.26%
6,383
5.21%
15.70%
1,543
24.18%
152
116
Retail – Other
non-SME
0.00 to <0.15
163
2
89.36%
165
0.10%
17.82%
6
3.72%
-
-
0.15 to <0.25
6,403
115
83.08%
6,499
0.19%
30.04%
1,169
17.99%
4
-
0.25 to <0.50
7,296
405
76.55%
7,606
0.44%
32.67%
1,943
25.55%
11
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
7,136
334
82.52%
7,413
1.29%
35.67%
2,946
39.75%
35
-
2.50 to <10.00
3,800
318
82.43%
4,065
6.90%
38.69%
2,629
64.69%
102
-
10.00 to <100.00
455
24
90.17%
477
11.08%
-
452
94.71%
51
-
100.00 (Default)
1,157
26
74.56%
1,182
100.00%
79.02%
338
28.62%
932
-
Sub-total
26,410
1,224
80.56%
27,406
5.79%
35.21%
9,485
34.61%
1,134
968
TOTAL
(ALL EXPOSURES CLASSES)
408,795
156,317
59.94%
495,276
2.33%
21.62%
97,528
19.69%
6,881
6,932
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
374
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Credit risk exposures by portfolio and probability of default (PD) range
Advanced internal ratings-based approach at 31 December 2019 (CR6)
Exposure
classes
(in millions
of euros)
PD Scale
On-
balance
sheet
exposures
Off-
balance-
sheet
exposures
pre-CCF
Exposure
weighted
average CCF
Exposure
post CCF
and post
CRM
Exposure
weighted
average
PD
(%)
Exposure
weighted
average
LGD
(%)
Exposure
weighted
average
maturity
(years)
Risk
weighted
exposure
amount
after
supporting
factors
Density
of risk
weighted
exposure
amount
Expec-
ted loss
amount
Value
adjust-
ments and
provisions
Central
governments
and Central
Banks
0.00 to <0.15
85,427
2,155
63.25%
97,936
0.00%
1.56%
1.59
289
0.30%
-
-
0.15 to <0.25
1,110
10
64.96%
1,789
0.16%
9.91%
2.27
155
8.64%
-
-
0.25 to <0.50
17
-
-
17
0.30%
10.00%
1.78
3
14.94%
-
-
0.50 to <0.75
678
213
75.00%
425
0.60%
10.00%
1.65
64
15.14%
-
-
0.75 to <2.50
609
595
75.02%
86
0.95%
45.71%
2.08
84
97.64%
-
-
2.50 to <10.00
726
99
71.63%
52
5.00%
59.60%
3.55
118
228.29%
2
-
10.00 to <100.00
122
214
75.63%
28
16.13%
78.70%
3.56
131
458.57%
4
-
100.00 (Default)
100
17
75.00%
27
100.00%
45.00%
4.06
3
10.46%
15
-
Sub-total
88,789
3,304
63.64%
100,361
0.05%
1.85%
1.61
846
0.84%
22
29
Institutions
0.00 to <0.15
24,115
2,653
90.32%
31,674
0.03%
10.06%
1.86
956
3.02%
1
-
0.15 to <0.25
2,008
466
52.83%
714
0.16%
36.14%
2.11
260
36.37%
-
-
0.25 to <0.50
598
963
38.76%
924
0.30%
38.28%
1.51
346
37.46%
1
-
0.50 to <0.75
228
1,048
26.31%
493
0.60%
47.10%
1.38
310
62.92%
1
-
0.75 to <2.50
285
680
45.53%
408
1.05%
31.07%
2.25
311
76.17%
2
-
2.50 to <10.00
-
123
22.20%
27
5.00%
82.81%
0.81
82
303.12%
1
-
10.00 to <100.00
-
23
31.28%
6
12.41%
70.17%
1.28
26
410.73%
1
-
100.00 (Default)
401
20
20.20%
405
100.00%
45.01%
1.63
12
3.02%
386
-
Sub-total
27,635
5,975
76.39%
34,652
1.24%
12.60%
1.85
2,304
6.65%
393
396
Corporates –
Other
0.00 to <0.15
24,474
53,923
53.61%
52,898
0.04%
34.90%
2.08
7,286
13.78%
8
-
0.15 to <0.25
11,849
19,075
46.27%
17,767
0.16%
43.10%
2.25
5,946
33.47%
11
-
0.25 to <0.50
10,192
17,401
48.81%
14,471
0.30%
45.94%
2.39
7,068
48.84%
16
-
0.50 to <0.75
7,643
9,302
57.58%
9,165
0.60%
46.30%
2.25
6,451
70.39%
20
-
0.75 to <2.50
9,717
11,350
55.74%
10,093
1.11%
47.62%
2.54
8,479
84.01%
40
-
2.50 to <10.00
605
440
46.06%
250
5.00%
52.83%
2.95
416
166.14%
5
-
10.00 to <100.00
1,055
1,604
33.32%
841
15.48%
35.91%
1.80
1,360
161.65%
39
-
100.00 (Default)
1,882
898
31.27%
1,986
100.00%
45.39%
2.46
292
14.68%
1,507
-
Sub-total
67,417
113,993
51.79%
107,472
2.23%
40.15%
2.21
37,297
34.71%
1,646
1,950
Corporates –
SME
0.00 to <0.15
44
1
72.93%
45
0.06%
45.81%
2.84
11
25.57%
-
-
0.15 to <0.25
29
-
-
32
0.16%
49.98%
3.67
19
59.98%
-
-
0.25 to <0.50
7
3
46.94%
9
0.30%
49.86%
1.70
4
47.45%
-
-
0.50 to <0.75
6
345
20.38%
44
0.60%
51.08%
1.18
32
71.14%
-
-
0.75 to <2.50
126
94
52.90%
151
1.53%
32.86%
2.48
96
63.87%
1
-
2.50 to <10.00
16
3
59.65%
10
5.00%
44.42%
1.90
13
131.32%
-
-
10.00 to <100.00
21
2
83.76%
22
17.76%
36.98%
1.60
37
168.16%
1
-
100.00 (Default)
2
-
36.28%
2
100.00%
45.00%
1.19
-
-
4
-
Sub-total
252
448
30.63%
315
2.93%
40.20%
2.36
213
67.62%
7
6
Corporates –
Specialised
Lending
0.00 to <0.15
2,092
1,511
55.65%
10,419
0.03%
7.32%
3.64
409
3.93%
-
-
0.15 to <0.25
8,127
2,003
63.82%
10,619
0.16%
10.23%
3.59
1,192
11.23%
2
-
0.25 to <0.50
10,783
4,208
59.55%
11,405
0.30%
11.11%
3.47
1,866
16.36%
4
-
0.50 to <0.75
10,011
2,757
51.42%
9,486
0.60%
12.01%
3.21
2,132
22.47%
7
-
0.75 to <2.50
11,548
4,905
49.81%
10,201
1.10%
13.45%
3.40
3,328
32.63%
15
-
2.50 to <10.00
1,030
67
48.95%
865
5.00%
14.22%
3.40
444
51.34%
6
-
10.00 to <100.00
1,569
40
73.00%
907
13.94%
13.16%
2.90
608
67.04%
18
-
100.00 (Default)
1,170
26
79.17%
1,142
100.00%
40.58%
2.93
23
2.00%
395
-
Sub-total
46,330
15,517
56.16%
55,044
2.79%
11.51%
3.45
10,002
18.17%
447
571
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
375
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Exposure
classes
(in millions
of euros)
PD Scale
On-
balance
sheet
exposures
Off-
balance-
sheet
exposures
pre-CCF
Exposure
weighted
average CCF
Exposure
post CCF
and post
CRM
Exposure
weighted
average
PD
(%)
Exposure
weighted
average
LGD
(%)
Exposure
weighted
average
maturity
(years)
Risk
weighted
exposure
amount
after
supporting
factors
Density
of risk
weighted
exposure
amount
Expec-
ted loss
amount
Value
adjust-
ments and
provisions
Retail –
Secured
by immovable
property
non SME
0.00 to <0.15
39,206
1,717
100.00%
40,924
0.09%
11.54%
-
1,139
2.78%
4
-
0.15 to <0.25
4,944
13
100.00%
4,957
0.22%
17.12%
-
389
7.86%
2
-
0.25 to <0.50
21,773
1,010
100.00%
22,783
0.42%
11.24%
-
1,867
8.20%
11
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
18,954
1,644
100.00%
20,597
1.49%
11.28%
-
3,906
18.96%
34
-
2.50 to <10.00
6,512
486
100.00%
6,998
5.65%
11.75%
-
3,018
43.12%
47
-
10.00 to <100.00
437
10
100.00%
447
27.50%
-
-
350
78.27%
16
-
100.00 (Default)
829
7
99.50%
836
100.00%
36.39%
-
453
54.18%
304
-
Sub-total
92,655
4,887
100.00%
97,543
1.70%
11.85%
-
11,122
11.40%
418
358
Retail –
Other SME
0.00 to <0.15
110
2,363
56.63%
1,448
0.09%
64.70%
-
56
3.84%
1
-
0.15 to <0.25
11
347
27.08%
105
0.25%
54.83%
-
8
7.55%
-
-
0.25 to <0.50
218
2,225
61.43%
1,585
0.48%
65.53%
-
240
15.13%
5
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
1,004
1,995
56.65%
2,134
1.67%
61.05%
-
777
36.39%
22
-
2.50 to <10.00
1,676
1,203
70.57%
2,524
5.03%
62.12%
-
1,938
76.78%
78
-
10.00 to <100.00
170
32
73.76%
194
34.40%
61.64%
-
331
170.88%
40
-
100.00 (Default)
300
2
70.23%
303
100.00%
85.62%
-
100
33.13%
260
-
Sub-total
3,489
8,166
58.81%
8,293
6.32%
64.15%
-
3,449
41.59%
405
354
Retail –
Qualifying
revolving
0.00 to <0.15
14,242
453
95.96%
14,677
0.09%
12.54%
-
446
3.04%
2
-
0.15 to <0.25
3,074
56
84.47%
3,124
0.21%
25.05%
-
344
11.02%
2
-
0.25 to <0.50
4,882
258
98.16%
5,135
0.45%
37.40%
-
1,354
26.37%
9
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
13,153
567
104.02%
13,744
1.44%
45.70%
-
7,577
55.13%
91
-
2.50 to <10.00
9,423
155
100.57%
9,582
4.58%
49.52%
-
7,251
75.68%
204
-
10.00 to <100.00
1,181
5
93.65%
1,189
11.53%
18.39%
-
1,212
101.99%
225
-
100.00 (Default)
1,841
4
75.24%
1,857
100.00%
71.65%
-
614
33.09%
1,367
-
Sub-total
47,795
1,499
99.38%
49,308
5.29%
34.29%
-
18,799
38.13%
1,899
1,832
Retail –
Secured by
immovable
property SME
0.00 to <0.15
211
-
-
211
0.11%
17.16%
-
8
3.68%
-
-
0.15 to <0.25
641
4
100.00%
644
0.21%
14.74%
-
33
5.07%
-
-
0.25 to <0.50
1,644
11
100.00%
1,655
0.53%
14.82%
-
161
9.71%
1
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
1,612
24
100.00%
1,636
1.25%
14.24%
-
271
16.57%
3
-
2.50 to <10.00
1,317
60
100.00%
1,377
5.22%
13.81%
-
502
36.43%
10
-
10.00 to <100.00
176
12
100.00%
188
12.50%
9.51%
-
127
67.57%
7
-
100.00 (Default)
236
-
100.00%
237
100.00%
45.76%
-
93
39.50%
108
-
Sub-total
5,837
110
100.00%
5,948
5.91%
15.69%
-
1,195
20.08%
130
108
Retail – Other
non-SME
0.00 to <0.15
158
6
94.41%
163
0.11%
18.74%
-
8
5.08%
-
-
0.15 to <0.25
3,816
168
83.14%
3,956
0.21%
34.04%
-
925
23.39%
3
-
0.25 to <0.50
5,292
330
73.24%
5,534
0.53%
34.90%
-
1,795
32.43%
10
-
0.50 to <0.75
-
-
-
-
-
-
-
-
-
-
-
0.75 to <2.50
5,194
271
78.80%
5,407
1.28%
37.45%
-
2,415
44.66%
26
-
2.50 to <10.00
4,634
360
81.28%
4,926
5.01%
37.84%
-
3,103
62.99%
92
-
10.00 to <100.00
713
47
91.93%
757
14.71%
-
-
741
97.90%
68
-
100.00 (Default)
1,259
32
75.73%
1,285
100.00%
78.73%
-
454
35.29%
1,002
-
Sub-total
21,066
1,214
79.13%
22,029
7.96%
37.30%
-
9,441
42.86%
1,202
967
TOTAL
(ALL PORTFOLIOS)
401,266
155,113
57.34%
480,964
2.31%
20.39%
-
94,668
19.68%
6,569
6,572
The disparities between customer classes seen in prior years in the retail
banking portfolio were again apparent in 2020. The PD levels observed in
loans secured by real estate assets are significantly lower than for other
classes. For instance, 86% of gross exposures to the “Loans to individuals
secured by real estate assets” portfolio have a PD of under 0.5%, while
this figure is 52% for “Other loans to small and medium businesses” in
the IRB portfolio – the Group’s Retail banking arm.
The differences in respect of PD levels are even more pronounced if we
observe the contributions of expected losses attributable to significant
differences in LGD levels from one portfolio to another: Exposure to “Loans
to individuals secured by real estate assets” accounted for 51.5% of total
Retail customer EAD but only 11.1% of expected losses.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
376
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
PD and average LGD by non-defaulted exposure class under the A-IRB approach by geographic area
The LGDs in this table are regulatory and may be subject to floors on certain portfolios.
Type of exposure
31/12/2020
31/12/2019
Geographical area
A-IRB approach
A-IRB approach
PD
LGD
PD
LGD
LOANS TO SME
o/w other loans
All geographical areas
2.12%
33.78%
2.55%
36.07%
France (including overseas departments and territories)
2.14%
31.22%
2.53%
32.80%
Western Europe excluding Italy
1.69%
25.39%
1.87%
27.18%
Italy
2.06%
45.37%
2.66%
48.66%
o/w secured by real estate assets
All geographical areas
2.40%
15.17%
2.63%
14.49%
France (including overseas departments and territories)
2.56%
14.44%
2.65%
13.31%
Italy
2.06%
16.74%
2.59%
16.80%
LOANS TO INDIVIDUAL CUSTOMERS
o/w secured by real estate assets
All geographical areas
0.70%
10.48%
1.00%
11.72%
France (including overseas departments and territories)
0.68%
9.12%
1.03%
10.66%
Italy
0.79%
17.20%
0.86%
17.17%
o/w revolving
All geographical areas
2.10%
58.64%
2.98%
62.87%
France (including overseas departments and territories)
1.76%
54.75%
2.67%
59.11%
Italy
3.04%
69.47%
3.51%
69.34%
o/w others
All geographical areas
1.98%
32.84%
2.30%
33.84%
France (including overseas departments and territories)
2.46%
32.65%
3.08%
34.35%
Western Europe excluding Italy
1.14%
18.23%
1.07%
17.44%
Italy
2.43%
62.55%
2.83%
63.18%
CENTRAL GOVERNMENTS AND CENTRAL BANKS
All geographical areas
0.02%
5.74%
0.02%
1.87%
France (including overseas departments and territories)
0.03%
5.97%
0.04%
2.38%
North America
0.00%
4.99%
0.00%
1.00%
Western Europe excluding Italy
0.01%
5.83%
0.01%
2.29%
Italy
0.07%
8.48%
0.03%
5.81%
Japan
0.00%
5.00%
0.00%
1.00%
Asia-Pacific excluding Japan
0.05%
5.74%
0.05%
1.96%
Africa and Middle East
0.12%
10.92%
0.08%
8.21%
Eastern Europe
0.16%
10.00%
0.16%
10.00%
CORPORATES
All geographical areas
0.58%
31.98%
0.57%
30.91%
France (including overseas departments and territories)
0.58%
29.06%
0.65%
28.11%
North America
0.87%
29.88%
0.68%
29.41%
Western Europe excluding Italy
0.46%
38.84%
0.41%
38.20%
Italy
0.40%
40.58%
0.61%
40.49%
Japan
1.00%
21.27%
0.60%
18.73%
Asia-Pacific excluding Japan
0.30%
33.31%
0.34%
32.43%
Africa and Middle East
0.22%
53.06%
0.67%
51.99%
Eastern Europe
0.44%
41.30%
0.39%
41.06%
INSTITUTIONS
All geographical areas
0.09%
15.71%
0.09%
15.08%
France (including overseas departments and territories)
0.09%
13.89%
0.08%
14.03%
North America
0.07%
12.46%
0.09%
10.44%
Western Europe excluding Italy
0.09%
17.10%
0.09%
14.70%
Italy
0.04%
2.46%
0.05%
6.01%
Japan
0.12%
17.06%
0.14%
22.59%
Asia-Pacific excluding Japan
0.19%
34.14%
0.15%
29.61%
Africa and Middle East
0.18%
30.10%
0.10%
22.97%
Eastern Europe
0.55%
53.34%
0.56%
57.04%
Only the following entities located in France (Crédit Agricole S.A. social entity and LCL) use the F-IRB approach for their RWA calculations on the Central
governments and Central Banks, Institutions and Corporates exposure classes.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
377
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.2.4 Use of credit derivatives for hedging purposes
Effect of credit derivatives used for credit risk mitigation (CRM) on risk-weighted assets (RWA) under the internal ratings-based approach at 31 December 2020.
Effect of credit derivatives on risk-weighted assets (CR7)
31/12/2020
(in millions of euros)
Pre-credit derivatives RWAs
Actual RWAs
1
Exposures under FIRB
-
-
2
Central governments and Central Banks
-
-
3
Institutions
-
-
4
Corporates – SMEs
-
-
5
Corporates – Specialised lending
-
-
6
Corporates – Other
-
-
7
Exposures under AIRB
-
-
8
Central governments and Central Banks
-
-
9
Institutions
-
-
10
Corporates – SMEs
4,837
2,453
11
Corporates – Specialised lending
-
-
12
Corporates – Other
-
-
13
Retail – Secured by real estate SMEs
-
-
14
Retail – Secured by real estate non-SMEs
-
-
15
Retail – Qualifying revolving
-
-
16
Retail – Other SMEs
-
-
17
Retail – Other non-SMEs
-
-
18
Equity IRB
-
-
19
Other non credit obligation assets
-
-
20
TOTAL
4,837
2,453
3.4.2.2.5
Change in RWA between 31 December 2019 and 31 December 2020
Risk-weighted asset (RWA) flow statements of credit risk exposures under the internal ratings-based approach (CR8)
31/12/2020
(in millions of euros)
RWA amounts
Capital requirements
1
RWAs as at the end of the previous reporting period (31/12/2019)
119,455
9,556
2
Asset size
4,904
392
3
Asset quality
1,218
97
4
Model updates
2,315
185
5
Methodology and policy
(1,802)
(144)
6
Acquisitions and disposals
(134)
(11)
7
Foreign exchange movements
(2,912)
(233)
8
Other
1,929
154
9
RWAs as at the end of the reporting period (31/12/2020)
124,973
9,998
The scope of the analysis explaining variations in the credit RWAs is now excluding the equity exposures treated under the IRB Simple risk weight approach and the investments accounted by the equity method.
3.4.2.2.6 Backtesting results
In the following paragraphs, backtesting covers all the methods and
procedures used to verify the performance and stability of the internal
risk models (PD, LGD, CCF), specifically by comparing forecasts with actual
results.
With regard to permanent control, a backtesting Committee has been
established within each entity. The Committee (which may, for some entities,
be a specific agenda item for the Risk Committee) is chaired by the Risk
Management department of the relevant entity and includes a representative
from the Group Risk Management department. It meets at least twice a
year and is the subject of reports to the Chief Executive Officer and the
Head of the entity’s Permanent Control department, as well as the Group
Risk Management department.
Periodic control is conducted annually by the Internal Audit function or any
third party specifically authorised by it. The audit plan covers:
systems for calculating ratings and estimating risk parameters, as well
as compliance with minimum requirements;
systems functioning (correct implementation).
The corresponding reports are sent to the person responsible for monitoring
the relevant entity within the Group Risk Management department.
The entity performs internal controls (permanent and periodic) on:
the quality of input and output data within the system;
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
378
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
the conceptual and technical quality of systems for calculating ratings
and estimating risk parameters;
the completeness of data used for the calculation of risk-weighted assets.
Backtesting is critical in maintaining the pertinence and performance of
rating models. A first phase of analysis is based chiefly on the quantitative
analysis of the predictive model as a whole and its main explanatory
variables.
This exercise can also detect significant changes in the structure and
behaviour of portfolios and customers. Backtesting then results in decisions
to adjust or recast models in order to factor in the new structural elements.
This allows changes in non-cyclical behaviour or change in the franchise
to be identified, revealing the impact of commercial or risk strategies
implemented by the Bank.
Across the Group as a whole, each rating method is back-tested at least
once a year by the unit responsible for the method (Group Risk Management
department or its delegate). This provides the Group annually, through
the Standards and Models Committee, with the result of backtesting
after consulting an
ad hoc
Committee to confirm the proper application
of selected statistical methods and the validity of results, and proposes,
where appropriate, suitable corrective measures (revision of the method,
recalibration, training, recommendations for control, etc.).
These
ex-post
controls are performed – through the cycle – on historical
data covering as long a period as possible. The following tables show the
backtesting results for 2020 in respect of the Probability of Default (PD)
and Loss Given Default (LGD) models.
Backtesting of probability of default (PD) per portfolio (CR9) – Retail customers at 31 December 2020
Exposure class
PD range
Weighted
average PD
Arithmetic average
PD by obligors
(1)
Number of obligors
Defaulted
obligors in
the year
Average historical
annual default rate
End of
previous year
End of
the year
Individuals
0 to <0.15
0.1%
0.1%
4,107,018
4,142,093
2,780
0.1%
0.15 to <0.25
0.2%
0.2%
114,085
174,489
189
0.1%
0.25 to <0.50
0.4%
0.4%
1,518,944
1,520,003
4,147
0.3%
0.50 to <0.75
0.6%
0.6%
958,999
1,110,297
2,868
0.5%
0.75 to <2.50
1.4%
1.4%
2,975,845
2,870,350
29,939
1.3%
2.50 to <10.00
5.1%
4.9%
1,960,550
1,957,002
71,880
4.7%
10.00 to <100
19.0%
22.6%
459,112
391,724
82,514
18.9%
TOTAL
1.3%
1.4%
12,094,553
12,165,958
194,317
1.3%
Professionals
0 to <0.15
0.15 to <0.25
0.2%
0.2%
118,271
123,530
224
0.2%
0.25 to <0.50
0.3%
0.3%
25,231
35,409
40
0.2%
0.50 to <0.75
0.6%
0.6%
65,320
70,570
269
0.5%
0.75 to <2.50
1.3%
1.7%
149,181
160,975
2,185
1.1%
2.50 to <10.00
7.0%
6.0%
66,357
57,785
2,815
5.0%
10.00 to <100
21.3%
21.9%
33,186
25,936
6,129
19.9%
TOTAL
2.1%
2.7%
457,546
474,205
11,662
2.3%
(1)
The performance of the rating methodologies is measured by way
of
regular backtestings, in accordance with
regulations.
Backtestings compare the estimated probability of default (arithmetic
average PD weighted by debtors) with the observed results (historical annual default rate).
Loss Given Default (LGD) retail customers at 31 December 2020
Exposure class
Estimated LGD
(%)
LGD before Prudential margin
(%)
Individual customers
22%
18%
Business customers
30%
27%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
379
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Backtesting of probability of default (PD) per portfolio (CR9) – excluding retail customers at 31 December 2020
Exposure class
PD range
Weighted
average PD
Arithmetic average
PD by obligors
(1)
Number of obligors
Defaulted
obligors in
the year
Average historical
annual default rate
End of
previous year
End of
the year
Sovereigns
0 to <0.15
0.0%
0.0%
100
131
-
0.0%
0.15 to <0.25
0.2%
0.2%
30
35
-
0.0%
0.25 to <0.50
0.3%
0.3%
3
5
-
0.0%
0.50 to <0.75
0.6%
0.6%
9
6
-
0.0%
0.75 to <2.50
1.8%
1.4%
18
20
-
0.0%
2.50 to <10.00
5.0%
5.0%
13
13
-
2.0%
10.00 to <100
15.3%
15.7%
12
15
-
5.7%
TOTAL
0.1%
1.5%
185
225
-
0.6%
Local authorities
(2)
0 to <0.15
0.0%
0.0%
7,494
7,849
8
0.0%
0.15 to <0.25
0.2%
0.2%
115
119
1
0.2%
0.25 to <0.50
0.3%
0.3%
77
69
-
0.3%
0.50 to <0.75
0.6%
0.6%
60
55
-
0.0%
0.75 to <2.50
1.4%
1.2%
20
17
1
1.0%
2.50 to <10.00
0.0%
0.0%
2
-
-
0.0%
10.00 to <100
20.0%
20.0%
3
1
-
4.0%
TOTAL
0.0%
0.0%
7,771
8,110
10
0.1%
Financial
Institutions
0 to <0.15
0.0%
0.0%
2,656
2,755
-
0.0%
0.15 to <0.25
0.2%
0.2%
905
793
-
0.0%
0.25 to <0.50
0.3%
0.3%
668
696
-
0.0%
0.50 to <0.75
0.6%
0.6%
479
507
-
0.0%
0.75 to <2.50
1.0%
1.0%
277
287
-
0.1%
2.50 to <10.00
5.0%
5.0%
71
71
-
0.0%
10.00 to <100
12.9%
14.4%
54
53
-
0.0%
TOTAL
0.1%
0.4%
5,110
5,162
-
0.0%
Corporates
(2)
0 to <0.15
0.0%
0.0%
1,845
1,849
1
0.0%
0.15 to <0.25
0.2%
0.2%
1,708
1,657
1
0.1%
0.25 to <0.50
0.3%
0.3%
3,163
3,221
10
0.2%
0.50 to <0.75
0.6%
0.6%
4,418
4,211
15
0.3%
0.75 to <2.50
1.2%
1.4%
18,340
18,688
173
0.9%
2.50 to <10.00
5.0%
5.0%
2,867
2,952
81
3.4%
10.00 to <100
14.1%
15.3%
2,068
2,148
219
9.5%
TOTAL
0.8%
2.2%
34,409
34,726
500
1.4%
Specialised
financing
0 to <0.15
0.1%
0.1%
52
42
1
0.4%
0.15 to <0.25
0.2%
0.2%
256
172
-
0.0%
0.25 to <0.50
0.3%
0.3%
483
368
4
0.3%
0.50 to <0.75
0.6%
0.6%
312
337
-
0.1%
0.75 to <2.50
1.1%
1.1%
439
527
2
0.9%
2.50 to <10.00
5.0%
5.0%
32
53
2
5.5%
10.00 to <100
14.4%
15.2%
57
70
24
15.5%
TOTAL
1.2%
1.4%
1,631
1,569
33
1.1%
(1)
The performance of the rating methodologies is measured by way of regular backtestings, in accordance with regulation. Backtestings compare the estimated probability of default (arithmetic
average PD weighted by debtors) with the observed results (historical annual default rate).
(2)
PD internal models in the process of recalibration.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
380
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Loss Given Default (LGD) excluding retail customers at 31 December 2020
Exposure class
Estimated LGD
(%)
LGD before Prudential margin
(%)
Sovereigns
55%
12%
Local authorities
F-IRB approach
F-IRB approach
Financial Institutions
(1)
54%
59%
Corporates
45%
39%
Specialised
financing
27%
24%
(1)
LDG internal models in the process of recalibration.
3.4.2.2.7 Comparison between estimated and actual losses
The Expected Losses (EL)/Exposure at Default (EAD) ratio was 1.26% at
31 December 2020 (1.26% at 31 December 2019). This ratio is calculated
for the Central governments and Central Banks, Institutions, Corporates,
Retail customers and Equity portfolios under the A-IRB approach.
At the same time, the provisions to gross exposures ratio was 1.08% at
31 December 2020, compared with 1.05% at end-2019.
3.4.2.3
Counterparty risk
Crédit Agricole S.A. and its subsidiaries calculate counterparty risk for all
their exposures, whether in the banking portfolio or the trading book. For
items in the trading book, counterparty risk is calculated in accordance
with the provisions relating to the regulatory supervision of market risk.
The regulatory treatment of counterparty risk on transactions on forward
financial instruments in the banking portfolio is defined on a regulatory
basis in Regulation (EU) 575/2013 of 26 June 2013. Crédit Agricole S.A.
uses the market price method to measure its exposure to counterparty risk
on transactions on forward financial instruments in the banking portfolio
(Article 274) or the internal model method (Article 283) within the scope
of Crédit Agricole CIB.
3.4.2.3.1 Analysis of exposure to counterparty risk
Exposure to counterparty risk by approach at 31 December 2020
31/12/2020
Standard
IRB
TOTAL
(in billions of euros)
Gross
exposure
EAD
RWA
Gross
exposure
EAD
RWA
Gross
exposure
EAD
RWA
Capital
requirement
Central governments
and Central Banks
5.6
5.6
0.0
8.8
8.8
0.2
14.4
14.4
0.2
0.0
Institutions
10.6
8.5
1.1
25.2
25.7
4.5
35.8
34.2
5.6
0.5
Corporates
3.8
2.9
2.7
30.5
30.0
8.8
34.2
32.9
11.6
0.9
Retail customers
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
Securitisations
-
-
-
-
-
-
-
-
-
-
Other non credit-obligation
assets
-
-
-
-
-
-
-
-
-
-
TOTAL
20.0
17.0
3.8
64.5
64.5
13.6
84.4
81.5
17.4
1.4
Exposure to counterparty risk by approach at 31 December 2019
31/12/2019
Standard
IRB
TOTAL
(in billions of euros)
Gross
exposure
EAD
RWA
Gross
exposure
EAD
RWA
Gross
exposure
EAD
RWA
Capital
requirement
Central governments
and Central Banks
2.5
2.5
0.0
5.5
5.5
0.1
8.0
8.0
0.1
0.0
Institutions
17.2
14.7
1.0
22.6
23.2
4.1
39.8
37.9
5.1
0.4
Corporates
4.2
3.0
2.8
25.0
24.5
8.4
29.2
27.5
11.2
0.9
Retail customers
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
Securitisations
-
-
-
-
-
-
-
-
-
-
Other non credit-obligation
assets
-
-
-
-
-
-
-
-
-
-
TOTAL
23.8
20.2
3.9
53.1
53.1
12.6
76.9
73.4
16.5
1.3
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
381
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
The total gross exposure to counterparty risk was €84.4 billion at 31 December 2020 (in the form of derivatives: €52.4 billion and in the form of securities
financing transactions: €32.0 billion.
3.4.2.3.2 Exposure to counterparty risk by approach
Analysis of exposure to counterparty risk by approach (CCR1)
31/12/2020
(in millions of euros)
Notional
Replacement
cost/current
market value
Potential
future
credit
exposure
EEPE
Multiplier
EAD post
CRM
RWAs
1
Mark to market
-
2,984
3,230
-
-
7,850
3,496
2
Original exposure
-
-
-
-
-
3
Standardised approach
-
-
-
-
-
4
IMM (for derivatives and SFTs)
-
-
-
23,425
1.65
38,652
10,313
5
Of which securities financing
transactions
-
-
-
-
-
6
Of which derivatives and
settlement transactions
-
-
-
23,425
1.65
38,652
10,313
7
Of which from contractual
cross- product netting
-
-
-
-
-
8
Financial collateral simple method
(for SFTs)
-
-
-
-
-
9
Financial collateral comprehensive
method (for SFTs)
-
-
-
-
-
27,888
2,660
10
VaR for SFTs
-
-
-
-
-
11
TOTAL 31/12/2020
-
-
-
-
-
16,469
TOTAL 31/12/2019
14,873
3.4.2.3.3 Exposure to counterparty risk under the standardised approach
Exposure to counterparty risk under the standardised approach by regulatory portfolio and by risk weighting
at 31 December 2020 (CCR3)
31/12/2020
Exposure classes
(in millions of euros)
Risk weight
0%
2%
4%
10%
20%
35%
50%
70%
75%
100%
150%
Other
Total
Exposure to
credit risk
o/w
unrated
Central governments
or Central Banks
5,560
-
-
-
-
-
3
-
-
-
-
-
5,564
5,564
Regional governments
or local authorities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Public sector entities
13
-
-
-
9
-
-
-
-
-
-
-
22
17
Multilateral developments banks
-
-
-
-
-
-
-
-
-
-
-
-
-
-
International organisations
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Banks (Institutions)
15
5,634
-
-
1,641
-
1,174
-
-
44
4
-
8,513
6,497
Corporates
-
-
-
-
16
-
390
-
-
2,470
40
-
2,915
1,974
Retail
-
-
-
-
-
-
-
-
4
-
-
-
4
4
Default
-
-
-
-
-
-
-
-
-
-
3
-
3
-
Institutions and corporates with
a short-term credit assessment
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other items
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TOTAL EXPOSURE VALUE
5,589
5,634
-
-
1,666
-
1,567
-
4
2,515
47
-
17,022
14,056
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
382
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Exposure to counterparty risk under the standardised approach by regulatory portfolio
and by risk weighting at 31 December 2019 (CCR3)
31/12/2019
Exposure classes
(in millions of euros)
Risk weight
0%
2%
4%
10%
20%
35%
50%
70%
75%
100%
150%
Other
Total
Exposure to
credit risk
o/w
unrated
Central governments
or Central Banks
2,450
-
-
-
-
-
4
-
-
3
-
-
2,457
2,457
Regional governments
or local authorities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Public sector entities
10
-
-
-
6
-
3
-
-
-
-
-
19
10
Multilateral developments banks
-
-
-
-
-
-
-
-
-
-
-
-
-
-
International organisations
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Banks (Institutions)
-
12,279
-
-
1,488
-
951
-
-
18
3
-
14,739
12,938
Corporate
-
-
-
-
10
-
374
-
-
2,615
19
-
3,018
2,301
Retail
-
-
-
-
-
-
-
-
15
-
-
-
15
15
Default
-
-
-
-
-
-
-
-
-
-
3
-
3
-
Institutions and corporates with
a short-term credit assessment
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other items
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TOTAL EXPOSURE VALUE
2,459
12,279
-
-
1,504
-
1,332
-
15
2,636
26
-
20,251
17,721
3.4.2.3.4 Exposure to counterparty risk under the advanced approach
Counterparty risk exposures by portfolio and probability of default (PD) range, supervisory portfolios
for foundation internal ratings-based approach at 31 December 2020 (CCR4)
31/12/2020
Exposure classes
(in millions of euros)
PD scale
Exposure
value
Exposure
weighted average
PD
(%)
Exposure
weighted average
LGD
(%)
Exposure weighted
average maturity
(years)
RWA
Density of
risk weighted
exposure
amounts
Institutions
0.00 to <0.15
523
0.03%
1.33%
-
-
-
0.15 to <0.25
-
-
-
-
-
-
0.25 to <0.50
-
0.30%
45.00%
-
-
57.64%
0.50 to <0.75
-
-
-
-
-
-
0.75 to <2.50
-
-
-
-
-
-
2.50 to <10.00
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
-
-
100.00 (Default)
-
-
-
-
-
-
Sub-total
524
0.03%
1.37%
-
-
0.05%
Corporates – Other
0.00 to <0.15
644
0.03%
44.74%
-
46
7.11%
0.15 to <0.25
-
-
-
-
-
-
0.25 to <0.50
-
-
-
-
-
-
0.50 to <0.75
-
-
-
-
-
-
0.75 to <2.50
-
-
-
-
-
-
2.50 to <10.00
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
-
-
100.00 (Default)
-
-
-
-
-
-
Sub-total
644
0.03%
44.74%
-
46
7.11%
TOTAL
1,168
0.03%
25.28%
-
46
3.95%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
383
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Counterparty risk exposures by portfolio and probability of default (PD) range, supervisory portfolios
for foundation internal ratings-based approach at 31 December 2019 (CCR4)
31/12/2019
Exposure classes
(in millions of euros)
PD scale
Exposure
value
Exposure
weighted average
PD
(%)
Exposure
weighted average
LGD
(%)
Exposure weighted
average maturity
(years)
RWA
Density of
risk weighted
exposure
amounts
Institutions
0.00 to <0.15
255
0.03%
1.05%
-
-
-
0.15 to <0.25
-
-
-
-
-
-
0.25 to <0.50
1
0.30%
45.00%
-
-
57.64%
0.50 to <0.75
-
-
-
-
-
-
0.75 to <2.50
-
-
-
-
-
-
2.50 to <10.00
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
-
-
100.00 (Default)
-
-
-
-
-
-
Sub-total
256
0.03%
1.17%
-
-
0.16%
Corporates – Other
0.00 to <0.15
6
0.03%
44.96%
-
-
5.61%
0.15 to <0.25
-
-
-
-
-
-
0.25 to <0.50
-
-
-
-
-
-
0.50 to <0.75
-
-
-
-
-
-
0.75 to <2.50
-
-
-
-
-
-
2.50 to <10.00
-
-
-
-
-
-
10.00 to <100.00
-
-
-
-
-
-
100.00 (Default)
-
-
-
-
-
-
Sub-total
6
0.03%
44.96%
-
-
5.61%
TOTAL
262
0.03%
2.14%
-
1
0.28%
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
384
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Counterparty risk exposures by portfolio and probability of default (PD) range, supervisory portfolios
for advanced internal ratings-based approach at 31 December 2020 (CCR4)
31/12/2020
Exposure classes
(in millions of euros)
PD scale
Exposure value
Exposure
weighted average
PD
(%)
Exposure
weighted average
LGD
(%)
Exposure
weighted average
maturity
(years)
RWA
Density of
risk weighted
exposure
amounts
Central
governments
and Central Banks
0.00 to <0.15
8,257
0.01%
5.67%
2.85
89
1.08%
0.15 to <0.25
385
0.16%
9.98%
2.05
29
7.53%
0.25 to <0.50
21
0.30%
10.00%
2.54
2
9.45%
0.50 to <0.75
24
0.60%
10.00%
1.77
6
24.31%
0.75 to <2.50
101
0.80%
45.00%
1.09
72
71.45%
2.50 to <10.00
8
5.00%
58.78%
3.55
15
197.58%
10.00 to <100.00
-
20.00%
77.17%
3.68
-
249.17%
100.00 (Default)
-
-
-
-
-
-
Sub-total
8,796
0.03%
6.38%
2.80
214
2.44%
Institutions
0.00 to <0.15
18,906
0.04%
14.78%
1.76
1,514
8.01%
0.15 to <0.25
2,510
0.16%
34.04%
2.12
944
37.59%
0.25 to <0.50
2,073
0.30%
41.94%
1.20
953
45.96%
0.50 to <0.75
738
0.60%
47.37%
1.43
635
86.04%
0.75 to <2.50
980
0.82%
25.69%
2.85
443
45.17%
2.50 to <10.00
19
5.00%
83.92%
0.76
48
252.29%
10.00 to <100.00
4
19.81%
39.70%
3.13
9
206.80%
100.00 (Default)
5
100.00%
45.01%
4.35
2
54.17%
Sub-total
25,236
0.14%
20.33%
1.78
4,548
18.02%
Corporates – Other
0.00 to <0.15
14,961
0.04%
33.21%
1.73
1,597
10.67%
0.15 to <0.25
2,498
0.16%
45.43%
2.17
1,096
43.86%
0.25 to <0.50
2,478
0.30%
45.13%
2.02
1,105
44.59%
0.50 to <0.75
2,782
0.60%
43.51%
1.93
1,650
59.30%
0.75 to <2.50
2,059
1.19%
48.87%
2.51
1,827
88.76%
2.50 to <10.00
129
5.00%
32.72%
2.17
180
139.51%
10.00 to <100.00
110
14.40%
43.09%
2.23
237
214.53%
100.00 (Default)
57
100.00%
45.36%
2.44
6
10.11%
Sub-total
25,074
0.55%
38.10%
1.90
7,697
30.70%
Corporates – SME
0.00 to <0.15
54
0.03%
47.31%
2.56
8
14.55%
0.15 to <0.25
4
0.18%
31.50%
2.02
1
33.65%
0.25 to <0.50
14
0.30%
43.75%
1.20
6
44.81%
0.50 to <0.75
6
0.60%
42.95%
2.78
5
89.25%
0.75 to <2.50
27
1.67%
33.29%
2.50
28
102.79%
2.50 to <10.00
5
5.00%
41.58%
3.92
6
127.39%
10.00 to <100.00
1
16.39%
23.16%
1.96
2
176.38%
100.00 (Default)
-
-
-
-
-
-
Sub-total
111
0.87%
42.14%
2.42
57
51.04%
Corporates –
Specialised lending
0.00 to <0.15
690
0.06%
12.04%
3.81
44
6.31%
0.15 to <0.25
1,172
0.16%
12.80%
3.72
236
20.15%
0.25 to <0.50
698
0.30%
12.79%
3.66
119
17.06%
0.50 to <0.75
680
0.60%
13.15%
3.07
187
27.46%
0.75 to <2.50
804
1.03%
15.75%
3.48
325
40.36%
2.50 to <10.00
59
5.00%
13.36%
3.57
34
57.21%
10.00 to <100.00
78
15.85%
16.19%
3.07
103
132.80%
100.00 (Default)
31
100.00%
31.94%
2.69
-
0.99%
Sub-total
4,212
1.50%
13.51%
3.55
1,047
24.87%
Retail – Other SME
0.00 to <0.15
-
0.11%
22.36%
1.00
-
12.48%
0.15 to <0.25
1
0.19%
30.04%
1.75
-
28.81%
0.25 to <0.50
2
0.44%
32.67%
1.52
1
44.88%
0.50 to <0.75
-
-
-
-
-
-
0.75 to <2.50
2
1.28%
36.27%
1.25
1
72.60%
2.50 to <10.00
-
5.33%
44.18%
1.25
-
107.46%
10.00 to <100.00
-
44.52%
39.38%
1.12
-
584.60%
100.00 (Default)
-
100.00%
79.02%
1.09
-
73.76%
Sub-total
5
4.29%
35.49%
1.43
3
62.73%
TOTAL
63,435
0.38%
25.01%
-
13,567
21.39%
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
385
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Counterparty risk exposures by portfolio and probability of default (PD) range, supervisory portfolios
for advanced internal ratings-based approach at 31 December 2019 (CCR4)
31/12/2019
Exposure classes
(in millions of euros)
PD scale
Exposure
value
Exposure
weighted average
PD
(%)
Exposure
weighted average
LGD
(%)
Exposure weighted
average maturity
(years)
RWA
Density of
risk weighted
exposure
amounts
Central
governments
and Central Banks
0.00 to <0.15
5,053
0.01%
1.33%
3.07
14
0.28%
0.15 to <0.25
255
0.16%
9.91%
2.27
20
7.95%
0.25 to <0.50
46
0.30%
10.00%
1.78
4
9.62%
0.50 to <0.75
80
0.60%
10.00%
1.65
14
17.36%
0.75 to <2.50
49
1.34%
46.91%
2.75
57
117.28%
2.50 to <10.00
-
-
-
-
-
-
10.00 to <100.00
6
20.00%
67.81%
4.23
16
255.15%
100.00 (Default)
-
-
-
-
-
-
Sub-total
5,489
0.06%
2.40%
3.00
126
2.29%
Institutions
0.00 to <0.15
17,852
0.04%
14.49%
1.83
1,493
8.36%
0.15 to <0.25
2,142
0.16%
36.14%
2.11
823
38.44%
0.25 to <0.50
1,530
0.30%
38.28%
1.51
778
50.87%
0.50 to <0.75
626
0.60%
47.10%
1.38
587
93.77%
0.75 to <2.50
780
0.84%
23.93%
2.68
306
39.28%
2.50 to <10.00
38
5.00%
82.81%
0.81
95
252.36%
10.00 to <100.00
6
17.65%
50.14%
1.47
13
207.60%
100.00 (Default)
-
-
-
-
-
-
Sub-total
22,973
0.12%
19.35%
1.84
4,096
17.83%
Corporates – Other
0.00 to <0.15
10,694
0.04%
34.21%
2.03
1,333
12.46%
0.15 to <0.25
2,256
0.16%
43.10%
2.25
1,016
45.02%
0.25 to <0.50
2,674
0.30%
45.94%
2.39
1,101
41.19%
0.50 to <0.75
2,501
0.60%
46.30%
2.25
1,443
57.68%
0.75 to <2.50
2,143
0.99%
45.88%
2.41
1,694
79.03%
2.50 to <10.00
63
5.00%
52.83%
2.95
87
137.95%
10.00 to <100.00
865
19.71%
29.79%
1.03
964
111.46%
100.00 (Default)
69
100.00%
45.39%
2.46
26
37.63%
Sub-total
21,265
1.39%
39.11%
2.13
7,663
36.04%
Corporates – SME
0.00 to <0.15
55
0.03%
47.46%
1.26
11
19.60%
0.15 to <0.25
3
0.16%
49.98%
3.67
1
41.66%
0.25 to <0.50
-
0.30%
49.86%
1.70
-
54.48%
0.50 to <0.75
3
0.60%
51.08%
1.18
2
76.00%
0.75 to <2.50
28
1.62%
31.80%
2.47
35
124.67%
2.50 to <10.00
3
5.00%
44.42%
1.90
5
167.58%
10.00 to <100.00
3
13.78%
25.35%
1.40
7
248.32%
100.00 (Default)
-
-
-
-
-
-
Sub-total
95
1.09%
42.33%
1.72
61
64.33%
Corporates –
Specialised lending
0.00 to <0.15
665
0.06%
11.80%
3.36
42
6.27%
0.15 to <0.25
933
0.16%
10.23%
3.59
150
16.06%
0.25 to <0.50
620
0.30%
11.11%
3.47
98
15.84%
0.50 to <0.75
481
0.60%
12.01%
3.21
95
19.76%
0.75 to <2.50
427
0.95%
12.59%
3.39
147
34.45%
2.50 to <10.00
16
5.00%
14.22%
3.40
5
28.67%
10.00 to <100.00
98
14.73%
14.39%
2.86
86
87.30%
100.00 (Default)
22
100.00%
40.58%
2.93
11
47.78%
Sub-total
3,263
1.50%
11.64%
3.41
633
19.40%
Retail – Other SME
0.00 to <0.15
0
0.12%
19.85%
1.07
-
14.46%
0.15 to <0.25
0
0.21%
34.04%
1.76
0
28.56%
0.25 to <0.50
2
0.53%
34.90%
1.51
1
47.03%
0.50 to <0.75
-
-
-
-
-
-
0.75 to <2.50
2
1.19%
38.46%
1.24
1
71.92%
2.50 to <10.00
1
5.50%
37.68%
1.40
1
115.69%
10.00 to <100.00
0
39.61%
40.05%
1.18
0
390.39%
100.00 (Default)
0
100.00%
78.73%
1.08
-
149.19%
Sub-total
5
4.97%
37.34%
1.40
3
70.66%
TOTAL
53,090
0.71%
25.06%
-
12,582
23.70%
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
386
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.3.5 Collateral
Impact of netting and collateral on exposure values (CCR5-A)
31/12/2020
(in millions of euros)
Gross positive fair value
or net carrying amount
Netting benefits
Netted current
credit exposure
Collateral held
Net credit exposure
1
Derivatives
263,665
222,856
40,738
4,273
36,465
2
SFTs
40,022
32,967
7,054
737
6,317
3
Cross-product netting
-
4
TOTAL
303,687
255,824
47,792
5,010
42,782
31/12/2019
(in millions of euros)
Gross positive fair value
or net carrying amount
Netting benefits
Netted current
credit exposure
Collateral held
Net credit exposure
1
Derivatives
203,855
173,299
30,547
4,851
25,696
2
SFTs
26,953
22,820
4,132
1,776
2,356
3
Cross-product netting
-
4
TOTAL
230,808
196,120
34,679
6,628
28,051
Composition of collateral for exposures to counterparty risk (CCR5-B)
31/12/2020
(in millions of euros)
Collateral used in derivative transactions
Collateral used in SFTs
Fair value of collateral received
Fair value of posted collateral
Fair value of
collateral received
Fair value of
posted collateral
Segregated
Unsegregated
Segregated
Unsegregated
1
Cash
-
24,614
258
21,068
668
131
2
Corporate bonds, Sovereign debt,
Government agency debt
-
7,080
393
2,585
274
-
3
Equity securities
-
137
-
-
-
-
4
Other collateral
-
74
17
-
-
-
TOTAL
-
31,905
668
23,653
942
131
31/12/2019
(in millions of euros)
Collateral used in derivative transactions
Collateral used in SFTs
Fair value of collateral received
Fair value of posted collateral
Fair value of
collateral received
Fair value of
posted collateral
Segregated
Unsegregated
Segregated
Unsegregated
1
Cash
-
19,083
366
17,163
711
217
2
Corporate bonds, Sovereign debt,
Government agency debt
-
2,917
-
2,405
5,811
-
3
Equity securities
-
160
-
-
-
-
4
Other collateral
-
240
7
120
-
-
TOTAL
-
22,400
373
19,689
6,521
217
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
387
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.3.6
Change in RWA under the internal model method (IMM) between 31 December 2019 and 31 December 2020
Risk-weighted assets (RWA) flow statement of counterparty risk exposures under the internal model method (IMM) (CCR7)
31/12/2020
(in millions of euros)
RWA amounts
Capital requirements
1
RWAs as at the end of the previous reporting period (31/12/2019)
8,937
715
2
Asset size
(1,204)
(96)
3
Credit quality of counterparties
(96)
(8)
4
Model updates (IMM only)
900
72
5
Methodology and policy (IMM only)
-
-
6
Acquisitions and disposals
-
-
7
Foreign exchange movements
2,076
166
8
Other
(300)
(24)
9
RWAs as at the end of the reporting period (31/12/2020)
10,313
825
4.2.3.7
Central Counterparty (CCP) Exposures
Central Counterparty (CCP) Exposures (CCR8)
(in millions of euros)
31/12/2020
31/12/2019
EAD post CRM
RWAs
EAD post CRM
RWAs
1
Exposures to QCCPs (total)
472
652
2
Exposures for trades at QCCPs (excluding initial margin
and default fund contributions); of which
5,636
114
12,281
246
3
(i)
OTC derivatives
1,503
31
9,004
181
4
(ii) Exchange-traded derivatives
121
2
147
3
5
(iii) SFTs
4,012
80
3,129
63
6
(iv)
Netting sets where cross-product netting has been approved
7
Segregated initial margin
3,785
3,166
8
Non-segregated initial margin
523
10
151
3
9
Prefunded default fund contributions
691
348
744
403
10
Alternative calculation of own funds requirements for exposures
11
Exposures to non-QCCPs (total)
12
Exposures for trades at non-QCCPs (excluding initial margin
and default fund contributions); of which
13
(i)
OTC derivatives
14
(ii) Exchange-traded derivatives
15
(iii) SFTs
16
(iv)
Netting sets where cross-product netting has been approved
17
Segregated initial margin
18
Non-segregated initial margin
19
Prefunded default fund contributions
20
Unfunded default fund contributions
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
388
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.3.8 CVA
The CRD 4 prudential framework introduced a new capital charge to cover
volatility in the CVA (Credit Valuation Adjustment) or valuation adjustment
for assets grouped together under the term “CVA Risk”, which is intended
to include in the valuation of OTC derivatives credit events affecting our
counterparties. The CVA is thus defined as the difference between the
valuation excluding risk of default and the valuation including the probability
of default of our counterparties.
Under the prudential framework, institutions use a regulatory formula
(“standardised approach”) or are authorised to calculate their capital
requirements using their internal models for both counterparty risk and
specific rate risk using the advanced approach (“CVA VaR”).
The CVA requirement under the advanced approach is calculated on the
basis of expected positive exposure on OTC derivative transactions involving
“Financial institution” counterparties excluding intragroup transactions.
Within this scope, the tools used to estimate capital requirements are the
same as for market VaR in respect of specific interest rate risk.
Credit valuation adjustment (CVA) capital requirement (CCR2)
(in millions of euros)
31/12/2020
31/12/2019
Exposure value
RWA
Exposure value
RWA
1
Total transactions subject to the Advanced method
14,796
2,637
16,495
2,682
2
(i)
VaR component (including the 3× multiplier)
-
546
-
250
3
(ii)
stressed VaR component (including the 3× multiplier)
-
2,091
-
2,438
4
Transactions subject to the Standardised Method
22,742
1,691
16,029
1,057
EU4
Transactions subject to the Alternative approach
(based on the Original Exposure Method)
-
-
-
-
5
Total transactions subject to own funds requirements for CVA risk
37,537
4,328
32,524
3,739
3.4.2.4
Credit and counterparty risk mitigation techniques
Exposures under the advanced approach (RC3)
31/12/2020
(in millions of euros)
Exposures
unsecured –
Carrying amount
Exposures to
be secured
Exposures
secured by
collateral
Exposures secured
by financial
guarantees
Exposures
secured by credit
derivatives
1
Total loans
824,014
257,460
130,156
109,513
17,791
2
Total debt securities
120,301
-
-
-
-
3
Total exposures
944,316
257,460
130,156
109,513
17,791
4
Of which non-performing exposures
10,749
3,747
2,100
1,391
256
31/12/2019
(in millions of euros)
Exposures
unsecured –
Carrying amount
Exposures to
be secured
Exposures
secured by
collateral
Exposures secured
by financial
guarantees
Exposures
secured by credit
derivatives
1
Total loans
712,353
232,806
119,490
96,984
16,332
2
Total debt securities
104,549
-
-
-
-
3
Total exposures
816,903
232,806
119,490
96,984
16,332
4.2.4.1
Credit risk mitigation techniques
Collateral management system for collateral received
The main categories of collateral taken into account by the bank are
described in the section entitled “Risk management – Credit risk – Collateral
and guarantees received”.
When a credit is granted, collateral is analysed to assess the value of
the asset, its liquidity, volatility and the correlation between the value of
the collateral and the quality of the counterparty financed. Regardless of
collateral quality, the first criterion in the lending decision is always the
borrower’s ability to repay sums due from cash flow generated by its
operating activities, except for specific trade finance transactions.
For financial guarantees, a minimum exposure coverage ratio is usually
included in loan contracts, with readjustment clauses. Financial guarantees
are revalued according to the frequency of margin calls and the variability
of the underlying value of financial assets transferred as guarantee or
quarterly, as a minimum.
The minimum coverage ratio (or the haircut applied to the value of the
guarantee under Basel 3 treatment) is determined by measuring the
pseudo- maximum deviation of the value of the securities at the revaluation
date. This measurement is calculated with a 99% confidence interval over
a time horizon covering the period between each revaluation, the period
between the default date and the date on which asset disposal starts, and
the duration of the liquidation period. This haircut also applies for currency
mismatch risk when the securities and the collateralised exposure are
denominated in different currencies. Additional haircuts are applied when
the size of the stocks position implies a block sale or when the borrower
and the issuer of the collateral securities belong to the same risk group.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
389
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
For retail banking (LCL, CA Italia), revaluation is automatic based on changes
in the property market indexes. In contrast, for project-type property
financing, assets are mainly revalued on the basis of an expert appraisal
combining various approaches (asset value, rental value, etc.) and include
external benchmarks.
Other types of assets may also be pledged as collateral. This is notably
the case for certain activities such as aircraft, shipping, real estate or
commodities financing. These businesses are conducted by middle offices,
which have specific expertise in valuing the assets financed.
Protection providers
Two major types of guarantee are mainly used (other than intragroup
guarantees): export credit insurance taken out by the Bank and unconditional
payment guarantees.
The main guarantee providers (excluding credit derivatives – see section
below) are export credit agencies, which enjoy a good quality sovereign
rating. The main guarantee providers (excluding credit derivatives) are
export credit agencies, most of which enjoy a sovereign rating and are
rated “Investment grade”. The largest agencies are BPI (France), Sace SPA
(Italy), Euler Hermès (Germany) and Korea Export Insur (Korea).
The use of risk mitigation techniques by Crédit Agricole,
to cover some of its commitments to third parties
Crédit Agricole may also use risk mitigation techniques to cover some of its
transactions vis-à-vis third parties, in particular refinancing transactions.
The latter may contain an additional collateralisation clause in the event of
a downgrading of the credit quality of Crédit Agricole S.A. corporate entity.
By way of example, at end-2020, in the event of a one-notch credit quality
downgrade, the Group would have had to provide the counterparties of the
refinancing transactions with additional collateral totalling €4.8 million.
External ratings given to the export credit agencies
31/12/2020
(in millions of euros)
Moody’s
Standard & Poor’s
Fitch Ratings
Long term rating
(outlook)
Long term rating
(outlook)
Long term rating
(outlook)
Bpifrance Financement (EPIC Bpifrance)
Aa2 [stable]
Unrated
AA [negative]
Euler Hermès S.A.
Aa3 [stable]
AA [stable]
Unrated
Sace S.p.A.
Unrated
Unrated
BBB- [stable]
Moreover, the guarantees received from mutual guarantee companies
cover a substantial portion of the loans in the Group’s “residential real
estate” portfolio in France (see table below). These loans are backed by
guarantees granted by Crédit Logement (rated Aa3 [stable] by Moody’s)
or by the Group’s subsidiary insurance company, CAMCA Assurance S.A.
(rated A+ [negative] by Fitch). The guarantors are subject to prudential
regulation applying to either financing companies for Crédit Logement, or
insurance companies (Solvency 2) for CAMCA Assurance.
Mortgage loan amounts guaranteed by CAMCA and Crédit Logement
(in millions of euros)
Outstandings 31/12/2020
Outstandings 31/12/2019
Amount of
guaranteed
outstandings
% of guaranteed loans
in the “residential
mortgage loans”
portfolio in France
Amount of
guaranteed
outstandings
% of guaranteed loans
in the “residential
mortgage loans”
portfolio in France
Coverage by surety agencies (Crédit Logement, CAMCA)
71,884
82.90%
69,499
82.50%
When a guarantee is issued, the guarantor applies an independent selection
policy in addition to that already implemented by the bank. Where Crédit
Logement is concerned, the guarantee issued covers, with no deductible,
the payment of all amounts legally due by defaulting borrowers in principal,
interest, insurance premiums and costs. In respect of CAMCA Assurance,
the guarantee mechanism is broadly similar to that of Crédit Logement,
with the difference that the payments made by CAMCA Assurance with
respect to the guarantee arise once the bank’s means of recourse against
the borrower have been exhausted. Ultimately, these guarantee provisions
significantly enhance the quality of the mortgage loans guaranteed and
constitute a full transfer of risk in respect of the loans.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
390
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.2.4.2 Risk mitigation techniques applied to counterparty risk
Credit derivatives for hedging purposes
These techniques are presented in the “Risk management” chapter, part 2.4.II.4 “Credit risk – Credit risk mitigation mechanisms – Use of credit derivatives”
of the 2020 Universal Registration Document of Crédit Agricole S.A.
Credit derivatives exposures (CCR6)
31/12/2020
(in millions of euros)
Protection bought
Protection sold
Notionals
1
Single-name credit default swaps
6,819
-
2
Index credit default swaps
-
-
3
Total return swaps
-
-
4
Credit options
-
-
5
Other credit derivatives
-
-
6
TOTAL NOTIONALS
6,819
-
Fair values
7
Positive fair value (asset)
9
-
8
Negative fair value (liability)
(504)
-
3.4.2.5
Equity exposures in the banking portfolio
Crédit Agricole S.A.’s equity exposures, excluding the trading book, consist
of securities “that convey residual, subordinated claims on the assets or
revenues of the issuer or have a similar economic substance”. These
mainly include:
listed and unlisted equities and shares in investment funds;
options implicit in convertible, redeemable or exchangeable bonds;
stock options;
super-subordinated securities.
The accounting policies and valuation methods used are described in
Note 1.2 to the financial statements “Accounting policies and principles”.
Equities under the simple risk-weight approach at 31 December 2020 (CR10.5)
31/12/2020
Categories
(in millions of euros)
On-balance
sheet amount
Off-balance
sheet amount
Risk weight
Exposure
amount
RWAs
Expected loss
amount
Private equity exposures
1,087
29
190%
1,115
2,119
9
Exchange-traded equity exposures
76
-
290%
76
220
1
Other equity exposures
15,424
-
370%
9,467
35,026
227
TOTAL
16,586
29
10,658
37,365
237
Equities under the simple risk-weight approach at 31 December 2019 (CR10.5)
31/12/2019
Categories
(in millions of euros)
On-balance
sheet amount
Off-balance
sheet amount
Risk weight
Exposure
amount
RWAs
Expected loss
amount
Private equity exposures
1,068
77
190%
1,145
2,175
9
Exchange-traded equity exposures
515
-
290%
515
1,493
4
Other equity exposures
15,610
-
370%
6,267
23,189
150
TOTAL
17,193
77
7,927
26,858
164
Equity exposures under the internal ratings based approach mainly consist
of the portfolios of Crédit Agricole S.A., Crédit Agricole CIB and Crédit
Agricole Investissement et Finance.
Equity exposures (on and off-balance sheet) under the internal ratings-based
approach amounted to €16.6 billion at 31 December 2020 (compared with
€17.3 billion at 31 December 2019).
Furthermore, equity exposures using the standardised approach amounted
to €0.9 billion at 31 December 2020 for an RWA amount of €1.14 billion.
The amounts of gains and losses on equity instruments realised during the
period under review are presented in Note 4 to the financial statements
“Notes to the income statement and other comprehensive income”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
391
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.3
Securitisation
3.4.3.1
Definitions of securitisation transactions
The Crédit Agricole CIB Group acts as originator, sponsor and investor in
securitisation transactions within the meaning of the Basel 3 framework.
Securitisation transactions, listed below, consist of transactions defined
in directive 2013/36/EU (“CRD 4”) and EU Regulation 575/2013 of
26 June 2013 (“CRR”) in force since 1 January 2014. The directive
and regulations incorporate into European law the Basel 3 international
reform (issued in December 2010) introducing, among other things, new
requirements for bank solvency and oversight of liquidity risk. These texts
are supplemented by Regulations (EU) 2017/2401 and 2017/2402 of the
European Parliament and the Council of 12 December 2017. Regulation
2017/2402 revises the general framework of securitisation and creates a
specific framework for simple, transparent, and standardised securitisations,
and Regulation 2017/2401 amends the calculation formulas applicable
for securitisations with regard to the solvency ratio.
This applies to transactions under which the credit risk associated with
an exposure or set of exposures is sub-divided into tranches, which have
the following two characteristics:
payments made in such transaction or scheme depend on the
performance of the underlying exposure or basket of exposures;
the subordination of tranches determines how losses are distributed
during the lifetime of the transaction or scheme.
Securitisation transactions include:
traditional securitisations: a securitisation involving the transfer of the
economic interest in the securitised exposures by transferring ownership
of those exposures from the originator to a securitisation entity or by a
sub-participation of a securitisation entity, in which the securities issued
do not represent payment obligations for the originator;
synthetic securitisations: a securitisation whereby the transfer of risks
takes place through the use of credit derivatives or guarantees and in
which the securitised exposures remain exposures for the originator.
The securitisation exposures of Crédit Agricole CIB detailed below cover all
securitisation exposures (recorded on or off-balance sheet) that generate
risk-weighted assets (RWA) and capital requirements with respect to its
regulatory portfolio, according to the following typologies:
the securitisation exposures for which the Group is deemed an originator;
exposures in which the Group is an investor;
exposures in which the Group is a sponsor;
securitisation swap exposures (currency or interest rate hedges) allocated
to securitisation vehicles.
Note that most securitisation transactions on behalf of European customers
involve Ester Finance Technologies, a wholly owned credit institution
subsidiary of Crédit Agricole CIB, which finances the purchase of receivables
and therefore makes Crédit Agricole CIB both sponsor and, via Ester Finance
Technologies, originator of these securitisation transactions.
The proprietary securitisation transactions carried out as part of non-
derecognised collateralised financing transactions, are not described
below. Their impact on the consolidated financial statements is detailed
in Note 6.6 to the financial statements “Transferred assets not derecognised
or derecognised with on-going involvement”.
3.4.3.2
Purpose and strategy
3.4.3.2.1 Proprietary securitisation transactions
The Crédit Agricole S.A.’s proprietary securitisation transactions are the
following:
Collateralised financing transactions
These transactions are designed for the issue of securities and, where
appropriate, can be wholly or partially placed with investors, sold under
repurchase agreements or kept on the issuer’s balance sheet as liquid
securities reserves that can be used to manage refinancing. This activity
relates to several Group entities, mainly CA Consumer Finance and its
subsidiaries as well as EFL (Europejski Fundusz Leasingowy) in Poland.
Crédit Agricole CIB’s transfer of risks by means of proprietary securitisation
transactions are the following:
Active management of the financing portfolio
In addition to using credit derivatives (see the “Risks and Pillar 3 – Use
of credit derivatives” chapter), this activity consists of using synthetic
securitisation to manage the credit risk of the bank, optimise capital
allocation, reduce the concentration of outstanding loans to corporates,
release resources to contribute to the renewal of the banking portfolio
(as part of the Distribute to Originate model) and maximise the return on
capital. This activity is managed by the Private Debt Solutions team, which
reports both to the Execution Management department within the Finance
Department and to the Debt Optimisation and Distribution department at
Crédit Agricole CIB. The approach used to calculate the risk-weighted
amounts on proprietary securitisation exposures is the regulatory formula
approach. In this such transactions, the Bank does not systematically
purchase protection on all tranches, as the management goal is to cover
some of the more risky financing portfolio tranches whilst keeping part
of the overall risk.
New securitisations carried out by Crédit Agricole CIB
in 2020
As part of the management of the financing portfolio, the Private Debt
Solutions teams set up a new synthetic securitisation transaction with private
investors. This five-year transaction involving a US$1.15 billion corporate
loan portfolio of Crédit Agricole CIB is the first synthetic securitisation to be
simultaneously placed with several investors and unlocks new opportunities
for the distribution of these loans. This transaction is secured by a cash
collateral equal to the amount of risk guaranteed.
Transactions carried out by the Crédit Agricole
Consumer Finance Group in 2020
The Crédit Agricole Consumer Finance Group did not carry out any issues
placed in the market in 2020.
The Crédit Agricole Consumer Finance Group carried out several self-
subscribed issues to build reserves of liquid securities eligible for collateral
in the Eurosystem.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
392
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.3.2.2 Securitisation transactions carried out on behalf
of customers as arranger, sponsor, intermediary
or originator
Only Crédit Agricole CIB, within the Crédit Agricole S.A., carries out
securitisation transactions on behalf of its customers.
Securitisation transactions on behalf of customers within Global Markets
activities allow Crédit Agricole CIB to raise funds or manage a risk exposure
on behalf of its customers. When carrying out these activities, Crédit Agricole
CIB can act as an originator, sponsor, arranger or investor:
as a sponsor and arranger, Crédit Agricole CIB structures and manages
securitisation programmes that refinance assets of the bank’s customers,
mainly via ABCP (Asset Backed Commercial Paper) programmes, namely
LMA in Europe, Atlantic and La Fayette in the United States and ITU in
Brazil. These specific entities are protected from Crédit Agricole CIB
bankruptcy risk but are consolidated for accounting purposes at Group
level since the entry into force on 1 January 2014 of the IFRS 10 rules.
The liquidity facilities protect investors from credit risk and guarantee
the liquidity of the programmes;
as an investor, the Group invests directly in certain securitisation
exposures and is a liquidity provider or counterparty of derivative
exposures (exchange or interest rate swaps for instance);
as an arranger, sponsor or originator, Crédit Agricole CIB carries out
securitisation transactions on behalf of its customers. At 31 December 2020,
there were four active consolidated multi-seller vehicles (LMA, Atlantic,
La Fayette and ITU), structured by the Group on behalf of third parties.
LMA, Atlantic, La Fayette and ITU are fully ABCP supported programmes.
This ABCP programme activity finances the working capital requirements
of some of the Group’s customers by backing short-term financing with
traditional assets, such as trade receivables or financial loans. The amount
of the assets held by these vehicles and financed through the issuance
of marketable securities amounted to €24 billion at 31 December 2020
(€27 billion at 31 December 2019).
The default risk on the assets held by these vehicles is borne by the sellers
of the underlying receivables through credit enhancement or by insurers
for certain types of risk upstream of the ABCP transactions. Crédit Agricole
CIB bears the risk through liquidity facilities.
Activities carried out as sponsor
The programme activity was sustained throughout 2020, and the newly
securitised outstandings mainly relate to trade receivables and financial
loans.
For part of this programme activity, Crédit Agricole CIB acts as the originator
insofar as the structures involve the entity Ester Finance Technologies,
which is a consolidated Group entity.
The amount committed to liquidity facilities granted to LMA, Atlantic,
La Fayette and ITU as sponsors was €35 billion at 31 December 2020
(€37 billion at 31 December 2019).
Activities carried out as investor
As part of its sponsor activities, the Group can grant guarantees and liquidity
facilities to securitisation vehicles or act as a counterparty for derivatives
in
ad hoc
securitisation transactions. These are mainly exchange rate
swaps provided to the ABCP programmes and interest rate swaps for
some ABS issues. These activities are recorded in the banking portfolio
as investor activities.
Moreover, Crédit Agricole CIB may be called upon to directly finance on its
balance sheet some securitisation transactions on behalf of its customers
(mainly aircraft transactions and vehicle fleet financing) or provide support
through a liquidity facility to an issue by special purpose vehicles external
to the bank (SPV or ABCP programme not sponsored by the bank). In this
case, Crédit Agricole CIB is deemed to be an investor. Overall, this activity
represented commitments of €2 billion at 31 December 2020 (€2 billion
at 31 December 2019).
Intermediation transactions
Crédit Agricole CIB participates in the structuring and in the placement of
securities, backed by client asset pools and to be placed with investors.
In this activity, the Crédit Agricole CIB retains a relatively low risk via the
possible contribution of back-up lines to securitisation vehicles or via a
share of the securities issued.
3.4.3.2.3 Risk monitoring and recognition
Risk monitoring
The management of risks related to securitisation transactions follows
the rules established by the Group, according to which these assets are
recorded in the banking portfolio (credit and counterparty risk) or in the
trading book (market and counterparty risk).
The development, sizing and targeting of securitisation transactions are
periodically reviewed by Portfolio Strategy Committees specific to those
activities and the countries to which they relate, as well as in the course
of Group Risk Management Committee meetings.
Risks on securitisation transactions are measured against the capacity of
the assets transferred over to financing structures to generate sufficient
flows to cover the costs, mainly financial, of these structures.
Crédit Agricole CIB’s securitisation exposures are treated in accordance with
the IRB securitisation framework approach. The new weighting approaches,
fully in force since 1 January 2020, are the following:
“SEC IRBA” regulatory formula approach: This approach is primarily
based on the prudential weighting of the underlying debt portfolio and
the attachment point of the tranche in question;
Standardised “SEC-SA” Approach: similar to the SEC-IRBA approach,
this approach is based on the weighting of the underlying debt portfolio
(but under the standardised approach) and mainly takes into account
the attachment point and historical performance;
“SEC IRBA” external ratings-based approach: this approach is based
on ratings provided by public external rating agencies approved by the
Committee of European Supervisors. The external agencies used are
Standard & Poor’s, Moody’s, Fitch Ratings and Dominion Bond Rating
Services (DBRS);
Internal Assessment Approach (IAA): internal rating methodology approved
by Crédit Agricole S.A.’s Standards and Methodology Committee for the
main asset classes (particularly trade receivables and car financing).
In line with regulations, the internal assessment approaches used by Crédit
Agricole CIB replicate the public methodologies of external rating agencies.
The latter have two components:
a quantitative component that in particular evaluates the enhancement
of transactions having regard to historical performances as well as the
possible risk of commingling generated by the transaction;
a qualitative component that supplements the quantitative approach
and that makes it possible, among other things, to evaluate the quality
of structures as well as reporting.
The internal rating methodologies apply to the securitisation of trade
receivables, car loans and dealer financing.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
393
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Stress test parameters are dependent on the rating of securitisations and
of the securitised underlyings. For example, for a rating equivalent to AA
(on the S&P scale), the stress test parameter for default risk is around 2.25
for trade receivables transactions, usually 3 for car loan securitisation,
and for the securitisation of dealer financing, the credit stress scenario
is comprised of a number of items including in particular a three notch
downgrade in the car manufacturer’s rating.
Note that aside from regulatory calculation purposes, internal ratings are
used in the course of the origination process to evaluate the profitability
of transactions.
As regards the management of internal models, an independent unit within
Crédit Agricole group is responsible for validating internal methodologies.
Moreover, regular audits are conducted by the Control and Audit department
to ensure the internal methodologies are relevant. Backtesting and stress
testing are also done regularly by the modelling teams.
These ratings cover all types of risks generated by such securitisation
transactions: intrinsic risks on receivables (debtor insolvency, payment
delays, dilution, offsetting of receivables) or risks on the structuring of
transactions (legal risks, risks relating to the receivables collection circuit,
risks relating to the quality of information supplied periodically by managers
of receivables sold, other risks related to the seller, etc.).
These critically examined ratings are only a tool for making decisions
pertaining to the transactions; such decisions are taken by Credit
Committees at various levels.
Credit decisions relate to transactions that are reviewed at least once a
year by the same Committees. Committee decisions incorporate varying
limits according to the evolution of the acquired portfolio (arrears rate, loss
rate, rate of sector-based or geographical concentration, rate of dilution of
receivables or periodic valuation of assets by independent experts, etc.).
Non-compliance with these limits may cause the structure to become
stricter or place the transaction in early amortisation.
These credit decisions also include, in liaison with the Bank’s other credit
Committees, an assessment focusing on the risk generated by the sellers
of the receivables and the possibility of substituting the manager by a
new one in the event of a failure in the management of those receivables.
Like all credit decisions, these decisions include aspects of compliance
and “country risk”.
At 31 December 2020, Ester Finance Titrisation recognised impaired loans
(Bucket 3) for €230.7 million and an impairment (Bucket 3) of €6.7 million.
Net of impairment, this entity had €14.7 billion in securitised assets.
The liquidity risk associated with securitisation activities is monitored by
the business lines in charge, but also centrally by the Market Risk and
Steering departments of Crédit Agricole CIB. The impact of these activities
is incorporated into the Internal Liquidity Model indicators, mainly stress
scenarios, liquidity ratios and liquidity gaps. The management of liquidity
risk at Crédit Agricole CIB is described in more detail in the “Liquidity and
financing risk” paragraph of the “Risk factors” and “Risk management”
sections in this chapter.
The management of foreign exchange risk with respect to securitisation
transactions does not differ from that of the Group’s other assets. As regards
interest rate risk management, securitised assets are refinanced through
special purpose vehicles according to interest rate matching rules similar
to those applying to other assets.
For assets managed in run-off mode, each disposal of position is first
approved by the Market Risk Department of Crédit Agricole CIB.
Accounting policies
Investments made in securitisation instruments (cash or synthetic) are
recognised according to their classification and the associated valuation
method (see Note 1.3 to the consolidated financial statements on accounting
policies and principles for financial asset classification and valuation
methods).
The securitisation exposures can be classified in the following accounting
categories:
“Financial assets at amortised cost”: these securitisation exposures are
measured following initial recognition at amortised cost based on the
effective interest rate and may, if necessary, be impaired;
“Financial assets at fair value recyclable through equity”: these
securitisation exposures are remeasured at fair value at the end of the
reporting period and any changes in fair value are recognised in other
comprehensive income;
“Financial assets at fair value through profit or loss”: these securitisation
exposures are remeasured at fair value at the end of the reporting period
and any changes in fair value are recognised through profit or loss
under “Net gains (losses) on financial instruments at fair value through
profit or loss”.
Gains (losses) on the disposal of these securitisation exposures are
recognised in accordance with the rules of the original category of the
exposures sold.
As part of securitisation transactions, a derecognition test is carried out
pursuant to IFRS 9 (the criteria can be found in Note 1.3 to the consolidated
financial statements on accounting policies and principles).
In the case of synthetic securitisations, the assets are not derecognised
in that they remain under the control of the institution. The assets are still
recognised according to their classification and original valuation method
(see Note 1.3 to the consolidated financial statements on accounting policies
and principles for financial asset classification and valuation methods).
3.4.3.3
Summary of activities in 2020
Crédit Agricole CIB’s Securitisation activity in 2020 was characterised by:
support of the development of the public ABS market in the United States
and in Europe. Crédit Agricole CIB structured and organised the placement
(arranger and bookrunner) of a significant number of primary ABS issues
on behalf of its major “Financial institution” customers, in particular in
the automotive industry and in consumer finance;
on the ABCP programme market, Crédit Agricole CIB maintained its
ranking as one of the leaders in this segment, both in Europe and on the
US market. This was achieved via the renewal and implementation of
new securitisation transactions for trade receivables or financial loans on
behalf of its mainly Corporate customers, while ensuring that the profile
of risks borne by the Bank remained good. The strategy of Crédit Agricole
CIB, focused on the financing of its customers, is well perceived by
investors and resulted in financing conditions that are always competitive.
At 31 December 2020, Crédit Agricole CIB had no early-redemption
securitisation transactions. Moreover, Crédit Agricole CIB did not provide
any implicit support to securitisation transactions in 2020.
Other than Crédit Agricole CIB, in 2020 the Crédit Agricole Consumer Finance
Group carried out several self-subscribed securitisation transactions to
build reserves of liquid securities eligible for collateral in the Eurosystem.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
394
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.3.4
Exposures
3.4.3.4.1
Exposure at default to securitisation transaction risks in the banking portfolio that generate risk-weighted assets
Securitisation exposures in the banking portfolio IRB and STD (SEC1)
31/12/2020
(in millions of euros)
Institution acts as originator
Institution acts as sponsor
Institution acts as investor
Traditional
Synthetic
Traditional
Synthetic
Sub-
total
Traditional
Synthetic
Sub-
total
STS
Non-STS
of which
SRT
Sub-
total
STS
Non-STS
STS
Non-
STS
of
which
SRT
of
which
SRT
1
Total exposures
14,699
43
2,791
11
7,232
7,223
24,722
3,210
14,331
- 17,541
358
2,332
-
2,690
2
Retail (total)
43
43
607
11
-
-
650
1,975
7,143
-
9,118
357
1,048
-
1,405
3
residential mortgage
-
-
-
-
-
-
-
-
-
-
-
357
43
-
400
4
credit card
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
other retail exposures
43
43
607
11
-
-
650
1,975
7,143
-
9,118
-
980
-
980
6
re-securitisation
-
-
-
-
-
-
-
-
-
-
-
-
24
-
24
7
Wholesale (total)
14,657
-
2,184
-
7,232
7,223
24,072
1,235
7,188
-
8,423
1
1,284
-
1,285
8
loans to corporates
-
-
-
-
6,703
6,694
6,703
-
1,141
-
1,141
-
-
-
-
9
commercial mortgage
-
-
-
-
-
-
-
-
-
-
-
-
16
-
16
10
lease and receivables
14,657
-
2,184
-
-
-
16,840
1,235
4,456
-
5,691
1
525
-
527
11
other wholesale
-
-
-
-
529
529
529
-
1,591
-
1,591
-
743
-
743
12
re-securitisation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Exposure at default of securitisation transactions broken down by on- and off-balance sheet accounting classification
Underlying Asset
(in millions of euros)
Exposure values on 31/12/2020
TOTAL
On
BalanceSheet
Off
BalanceSheet
1
Total exposures
1,839
43,114
44,953
2
Retail (total)
859
10,313
11,172
3
residential mortgage
350
50
400
4
credit card
-
-
-
5
other retail exposures
485
10,263
10,748
6
re-securitisation
24
-
24
7
Wholesale (total)
979
32,802
33,781
8
loans to corporates
9
7,835
7,844
9
commercial mortgage
-
16
16
10
lease and receivables
374
22,684
23,058
11
other wholesale
596
2,267
2,863
12
re-securitisation
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
395
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Securitisation exposures in the banking portfolio and related regulatory capital requirements –
Bank acting as issuer or agent IRB and STD (SEC3)
31/12/2020
Exposure values
(by RW bands/deductions)
Exposure values
(by regulatory approach)
RWEA
(by regulatory approach)
Capital charge after cap
(in millions of euros)
≤20%
RW
>20%
to 50%
RW
>50%
to 100%
RW
>100% to
<1250%
RW
1250%
RW/
deductions
SEC-
IRBA
SEC-
ERBA
(including
IAA)
SEC-
SA
1250%/
deductions
SEC-
IRBA
SEC-ERBA
(including
IAA)
SEC-
SA
1250%/
deductions
SEC-
IRBA
SEC-ERBA
(including
IAA)
SEC-
SA
1250%/
deductions
1
Total
exposures
32,987
9,083
23
17
5 7,947
30,783
3,380
- 2,100
5,125
585
-
168
410
47
-
2
Traditional
transactions
30,227
4,620
23
13
-
724
30,783
3,376
-
140
5,125
528
-
11
410
42
-
3
Securitisation
30,227
4,620
23
13
-
724
30,783
3,376
-
140
5,125
528
-
11
410
42
-
4
Retail
underlying
9,582
60
23
13
-
-
7,617
2,060
-
-
1,176
332
-
-
94
27
-
5
Of
which
STS
1,945
60
-
13
-
-
1,988
-
-
-
235
-
-
-
19
-
-
6
Wholesale
20,645
4,560
-
-
-
724
23,166
1,316
-
140
3,949
196
-
11
316
16
-
7
Of
which
STS
14,066
1,826
-
-
-
-
15,620
19
-
-
2,423
1
-
-
194
-
-
8
Re-
securitisation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
Synthetic
transactions
2,760
4,463
-
5
5 7,223
-
5
- 1,959
-
57
-
157
-
5
-
10
Securitisation
2,760
4,463
-
5
5 7,223
-
5
- 1,959
-
57
-
157
-
5
-
11
Retail
underlying
-
-
-
5
5
-
-
5
-
-
-
57
-
-
-
5
-
12
Wholesale
2,760
4,463
-
-
- 7,223
-
-
- 1,959
-
-
-
157
-
-
-
13
Re-
securitisation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Securitisation exposures in the banking portfolio and related regulatory capital requirements –
Bank acting as investor IRB and STD (SEC4)
31/12/2020
Exposure values
(by RW bands/deductions)
Exposure values
(by regulatory approach)
RWEA
(by regulatory approach)
Capital charge after cap
(in millions of euros)
≤20%
RW
>20%
to 50%
RW
>50%
to
100%
RW
>100%
to
<1250%
RW
1250%
RW/
deduc-
tions
SEC-
IRBA
SEC-ERBA
(including
IAA)
SEC-
SA
1250%/
deduc-
tions
SEC-
IRBA
SEC-ERBA
(including
IAA)
SEC-
SA
1250%/
deductions
SEC-
IRBA
SEC-ERBA
(including
IAA)
SEC-
SA
1250%/
deduc-
tions
1
Total exposures
2,188
566
38
46
- 1,013
854
977
-
270
89
586
1
22
7
47
-
2
Traditional securitisation
2,188
566
38
46
- 1,013
854
977
-
270
89
585
1
22
7
47
-
3
Securitisation
2,188
566
38
23
- 1,013
854
953
-
270
89
274
1
22
7
22
-
4
Retail underlying
928
566
1
-
-
501
425
569
-
172
72
75
1
14
6
6
-
5
Of which STS
357
-
-
-
-
-
-
357
-
-
-
36
-
-
-
3
-
6
Wholesale
1,260
-
37
23
-
512
428
384
-
98
17
199
-
8
1
16
-
7
Of which STS
1
-
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
8
Re-securitisation
-
-
-
24
-
-
-
24
-
-
-
311
-
-
-
25
-
9
Synthetic securitisation
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
10
Securitisation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Retail underlying
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12
Wholesale
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Re-securitisation
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
396
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.3.5
Exposure at default of securitisation transaction risks in the trading book that generate risk-weighted assets
Exposure at default of securitisation transactions by role
Securitisation exposures in the trading book (SEC2)
31/12/2020
(in millions of euros)
Institution acts as originator
Institution acts as sponsor
Institution acts as investor
Traditional
Synthetic
Sub-total
Traditional
Synthetic
Sub-total
Traditional
Synthetic
Sub-total
STS
Non-STS
STS
Non-STS
STS
Non-STS
1
Total exposures
168
-
168
2
Retail (total)
-
-
-
3
residential mortgage
-
-
-
4
credit card
-
-
-
5
other retail exposures
-
-
-
6
re-securitisation
-
-
-
7
Wholesale (total)
168
-
168
8
loans to corporates
-
-
-
9
commercial mortgage
-
-
-
10
lease and receivables
-
-
-
11
other wholesale
152
-
152
12
re-securitisation
16
-
16
Exposure at default only concerns traditional securitisations.
Exposure at default of securitisation transactions by approach and by weighting
Risk weighting tranche
(in millions of euros)
31/12/2020
31/12/2019
Long
positions
Short
positions
Capital
requirement
Long
positions
Short
positions
Capital
requirement
EAD subject to weighting
-
-
-
-
-
-
7-10% weightings
-
-
-
-
-
-
12-18% weightings
36
-
1
138
-
1
20-35% weightings
3
-
-
34
-
-
40-75% weightings
111
-
1
5
-
-
100% weightings
1
-
-
1
-
-
150% weightings
-
-
-
-
-
-
200% weightings
-
-
-
-
-
-
225% weightings
-
-
-
-
-
-
250% weightings
-
-
-
-
-
-
300% weightings
-
-
-
-
-
-
350% weightings
-
-
-
-
-
-
425% weightings
-
-
-
-
-
-
500% weightings
-
-
-
-
-
-
650% weightings
-
-
-
-
-
-
750% weightings
-
-
-
-
-
-
850% weightings
-
-
-
-
-
-
1250 weightings
16
-
3
19
-
3
Internal valuation approach
168
-
5
197
-
5
Supervisory Formula Approach
-
-
-
-
-
-
Transparency Approach
-
-
-
-
-
-
NET TOTAL OF DEDUCTIONS OF EQUITY
-
-
-
-
-
-
1250%/Positions deducted from capital
-
-
-
-
-
-
TOTAL PORTEFEUILLE DE NÉGOCIATION
168
-
5
197
-
5
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
397
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Capital requirements relating to securitisations held or acquired
(in millions of euros)
31/12/2020
31/12/2019
Long
positions
Short
positions
Total
weighted
positions
Capital
requirement
Long
positions
Short
positions
Total
weighted
positions
Capital
requirement
Weighted EAD
168
-
5
5
197
-
21
5
Securitisation
152
-
2
2
178
-
2
1
Resecuritisation
16
-
3
3
19
-
19
3
Deductions
-
-
-
-
-
-
-
-
Securitisation exposures – defaulted exposures and adjustment of specific credit risk (SEC5)
31/12/2020
(in millions of euros)
Exposures securitised by the institution –
Institution acts as originator or as sponsor
Total outstanding nominal amount
Total amount of specific credit risk
adjustments made during the period
Of which
exposures
in default
1
Total exposures
42,263
692
2
Retail (total)
9,768
29
3
residential mortgage
-
-
4
credit card
-
-
5
other retail exposures
9,768
29
6
re-securitisation
-
-
7
Wholesale (total)
32,495
663
8
loans to corporates
7,844
23
9
commercial mortgage
-
-
10
lease and receivables
22,531
639
11
other wholesale
2,120
1
12
re-securitisation
-
-
3.4.4
Market risk
3.4.4.1
Internal model market risk measurement
and management methodology
Market risk measurement and management by internal methods are
described in the “Risk factors – Market risk – Market risk measurement
and management methodology” section.
3.4.4.2
Rules and procedures for valuing
the trading book
The rules for valuing the various items in the trading book are described in
Note 1.2 to the financial statements, “Accounting policies and principles”.
Measurement models are reviewed periodically as described in the “Risk
factors – Market risk – Market risk measurement and management
methodology” section.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
398
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.4.4.3
Exposure to market risk of the trading book
3.4.4.3.1 Risk-weighted exposure using the standardised approach
Risk-weighted exposure using the standardised approach (MR1)
(in millions of euros)
31/12/2020
31/12/2019
RWA
Capital
requirement
RWA
Capital
requirement
Futures and forwards
1
Interest rate risk (general and specific)
470
38
831
66
2
Risk on shares (general and specific)
-
-
-
-
3
Currency risk
3,883
311
3,819
306
4
Commodities risk
-
-
15
1
Options
5
Simplificated approach
-
-
-
-
6
Delta-plus method
1
0
-
-
7
Scenarios based approach
-
-
-
-
8
Securitisation
-
-
-
-
9
TOTAL
4,420
354
4,665
373
3.4.4.3.2 Exposures using the internal models approach
Risk-weighted assets and capital requirements
Market risk under the internal models approach (MR2)
(in millions of euros)
31/12/2020
31/12/2019
RWA
Capital
requirement
RWA
Capital
requirement
1
VaR (higher of values a and b)
1,694
136
1,743
139
(a)
Previous day’s VaR (VaRt-1)
29
-
30
(b)
Multiplication factor (mc) x average
of previous 60 working days (VaRavg)
136
-
139
2
SVaR (higher of values a and b)
2,188
175
3,337
267
(a)
Latest available SVaR (SVaRt-1))
37
-
50
(b)
Multiplication factor (ms) x average
of previous 60 working days (sVaRavg)
175
-
267
3
IRC (higher of values a and b)
1,451
116
1,849
148
(a)
Most recent IRC measure
69
-
65
(b)
12 weeks average IRC measure
116
-
148
4
Comprehensive risk measure (higher of values a, b and c)
-
-
-
-
(a)
Most recent risk measure of comprehensive risk measure
-
-
-
-
(b)
12 weeks average of comprehensive risk measure
-
-
-
-
(c)
Comprehensive risk measure Floor
-
-
-
-
5
Other
-
-
-
-
6
TOTAL
5,333
427
6,930
554
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
399
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Values resulting from use of internal models
Value of the trading book using the internal models approach (IMA) (MR3)
(in millions of euros)
31/12/2020
31/12/2019
1
VaR (10 days, 99%)
2
Maximum value
47
39
3
Mean value
34
31
4
Minimum value
26
21
5
End of period value
29
30
6
VaR in stressed period (10 days, 99%)
7
Maximum value
68
75
8
Mean value
44
59
9
Minimum value
35
48
10
End of period value
37
50
11
Capital requirement in line with IRC (99.9%)
12
Maximum value
198
300
13
Mean value
89
114
14
Minimum value
53
47
15
End of period value
53
50
16
Capital requirement in line with CRM (99.9%)
17
Maximum value
-
-
18
Mean value
-
-
19
Minimum value
-
-
20
End of period value
-
-
21
Floor (standard measure method)
-
-
3.4.4.4
Backtesting of the VAR model (MR4)
The backtesting process of the VaR (Value at Risk) model to check the
relevance of the model, as well as the results of this backtesting, are
presented in part 5 “Risk management” of the Universal Registration
Document of Crédit Agricole S.A.
3.4.5
Global interest rate risk
The nature of interest rate risk, the main underlying assumptions retained
and the frequency of interest rate risk measurements are described in the
“Risk factors – Asset/Liability management – Global interest rate risk”
section.
3.4.6
Operational risk
3.4.6.1
Advanced measurement approach
The French Regulatory and Resolution Supervisory Authority, the ACPR,
has, since 1 January 2008, authorised the main Crédit Agricole S.A. Group
entities to use the Advanced Measurement Approach (AMA) to calculate
their regulatory capital requirements for operational risk. The other Group
entities use the standardised approach, in accordance with regulations.
The scope of application of the advanced measurement and standardised
approaches and a description of the advanced measurement approach
methodology are provided in the “Risk factors – Operational risk –
Methodology” section.
3.4.6.2
Insurance techniques for reducing
operational risk
The insurance techniques used to reduce operational risk are described
in the “Risk management – Operational risk – Insurance and coverage of
operational risks” section.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
400
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.5
ASSET ENCUMBRANCE
Medians of the four quarterly end-of-period values over the previous 12 months.
Template A – Encumbered and unencumbered assets
(in millions of euros)
Carrying amount of
encumbered assets
Fair value of
encumbered assets
Carrying amount of
unencumbered assets
Fair value of
unencumbered assets
of which
notionally
eligible EHQLA
and HQLA
(1)
of which
notionally
eligible EHQLA
and HQLA
(1)
of which
EHQLA and
HQLA
(1)
of which
EHQLA and
HQLA
(1)
010
030
040
050
060
080
090
100
010
Assets of the reporting institution
127,156
22,136
1,445,033
83,282
030
Equity instruments
1,284
1,056
10,114
1,088
040
Debt securities
23,928
21,219
22,888
20,577
125,828
81,447
126,636
84,830
050
of which: covered bonds
19
8
19
9
2,076
1,867
2,108
1,897
060
of which: asset-backed securities
93
-
93
-
142
10
121
10
070
of which: issued by general
governments
18,065
16,576
17,041
16,213
59,650
53,815
66,933
56,889
080
of which: issued by financial
corporations
4,767
3,632
4,583
3,646
51,550
22,492
49,419
22,916
090
of which: issued by non-financial
corporations
574
467
574
467
10,828
4,362
6,093
4,373
120
Other assets
100,879
-
1,137,592
188,554
121
of which: Loans and advances
other than loans on demand
70,409
-
928,630
-
(1)
EHQLA: Assets of extremely high liquidity and credit qualitys.
HQLA: Assets of high liquidity and credit quality.
Template B – Collateral received
(in millions of euros)
Fair value of encumbered collateral
received or own debt securities issued
Unencumbered
Fair value of collateral received
or own debt securities issued
available for encumbrance
of which notionally
eligible EHQLA and
HQLA
(1)
of which notionally
eligible EHQLA and
HQLA
(1)
010
030
040
060
130
Collateral received by the reporting institution
356,563
155,713
125,137
42,829
140
Loans on demand
-
-
-
-
150
Equity instruments
4,294
423
9,377
333
160
Debt securities
166,199
155,342
47,787
42,511
170
of which: covered bonds
1,083
999
206
202
180
of which: asset-backed securities
-
-
-
-
190
of which: issued by general governments
143,780
143,190
30,971
30,419
200
of which: issued by financial corporations
16,057
9,638
13,422
10,387
210
of which: issued by non-financial corporations
3,953
2,083
3,165
1,835
220
Loans and advances other than loans on demand
175,382
-
66,565
-
230
Other collateral received
-
-
-
-
240
Own debt securities issued other than own covered
bonds or asset-backed securities
10,008
1,017
241
Own covered bonds and asset-backed securities
issued and not yet pledged
250
TOTAL ASSETS, COLLATERAL RECEIVED
AND OWN DEBT SECURITIES ISSUED
481,715
253,617
(1)
EHQLA: Assets of extremely high liquidity and credit qualitys.
HQLA: Assets of high liquidity and credit quality.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
401
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Template C – Sources of encumbrance
(in millions of euros)
Matching liabilities,
contingent liabilities
or securities lent
Assets, collateral received and own debt
securities issued other than covered
bonds and ABSs encumbered
010
030
010
Carrying amount of selected financial liabilities
504,497
467,039
011
of which: Derivatives
101,059
23,518
012
of which: Deposits
343,590
372,602
013
of which: Debt securities issued
60,597
70,950
Template D – Additional descriptive
information
Crédit Agricole S.A. monitors and manages the encumbrance level of assets
pledged in the Crédit Agricole group.
The asset encumbrance ratio for the Crédit Agricole S.A. represented
23.7% at 31 December 2020.
The encumbrance for assets and collateral received for the Crédit
Agricole S.A. mainly covers loans and receivables (other than loans on
demand). The pledge of receivables due from private customers aims to
obtain refinancing under advantageous conditions or to constitute reserves
that can easily be made liquid if needed. The policy of Crédit Agricole S.A.
aims to both diversify the instruments used to improve resistance to liquidity
stress, which could affect individual markets differently, and to limit the share
of assets pledged in order to retain good quality assets that can be easily
liquidated in the market through existing mechanisms in case of stress.
The rise in Crédit Agricole S.A.’s asset encumbrance ratio over 2020 is in line
with the average rise observed in France and Europe. This is attributable to
the strong increase in drawings on the ECB’s TLTROs in the context of the
measures taken to contend with the COVID-19, even though the reduction
in the haircuts as part of the easing measures relating to Eurosystem
collateral rules announced by the ECB on 7 April 2020 enabled to limit
the impact of this rise.
The sources of asset encumbrance mainly related to loans and receivables
(other than loans on demand) are as follows:
covered bonds referred to in Article 52-(4), first sub-paragraph of Directive
2009/65/EC, issued under the following three programmes:
-
Crédit Agricole Home Loan SFH, pledging the receivables of the
Regional Banks and LCL,
-
Crédit Agricole Public Sector SCF, pledging the receivables of Crédit
Agricole CIB,
-
Crédit Agricole Italia OBG SRL, pledging the receivables of the Crédit
Agricole Italia Group.
At 31 December 2020, the placed covered bonds amounted to €45.5 billion
for a total of €51.2 billion in encumbered underlying assets (and collateral
received) thus complying with the contractual and regulatory requirements
in terms of over-collateralisation.
At 31 December 2020, the retained secured bonds not yet pledged
as collateral amounted to €0.16 billion for a total of €0.14 billion in
unencumbered underlying assets;
asset-backed securities (ABS) issued during securitisation transactions –
as defined in Article 4-(1), item 61, of Regulation (EU) No. 575/2013 –
mainly carried out by the CA Consumer Finance Group and its subsidiaries,
as well as by LCL (through FCT CA Habitat 2019).
At 31 December 2020, placed asset-backed securities amounted to
€5.2 billion for a total of €5.4 billion in encumbered underlying assets.
At 31 December 2020, asset-backed securities retained and not yet
pledged as collateral amounted to €11.8 billion for a total of €12.9 billion
of unencumbered underlying assets;
guaranteed deposits (other than repurchase agreements) mainly
associated with financing activities: from the ECB under TLTROs, via
Crédit Agricole CIB’s ESTER securitisation conduit, as well as French or
supranational institutional organisations (such as the CDC and the EIB).
At 31 December 2020, guaranteed deposits (other than repurchase
agreements) amounted to €161.2 billion for a total of €203.5 billion in
encumbered assets and collateral received;
debt securities (other than covered bonds or ABSs) issued to the
Caisse
de Refinancement de l’Habitat
(CRH) in the form of promissory notes,
pledging the collateral received from the Regional Banks and the
receivables of LCL.
At 31 December 2020, these securities amounted to €9.0 billion for
a total of €13.0 billion in encumbered assets and collateral received.
As Crédit Agricole S.A. is the central actor in most of these secured financing
mechanisms, these levels of encumbrance are broken down at an intragroup
level between Crédit Agricole S.A., its subsidiaries and the Crédit Agricole
Regional Banks.
The other main sources of asset encumbrance in the Crédit Agricole group
are:
repurchase agreements, mainly associated with the activity of Crédit
Agricole CIB and mainly encumbering the collateral received comprising
debt securities and, on an ancillary basis, equity instruments. In particular,
this source concentrates the majority of encumbrance held in the
second material currency (USD), within the meaning of Annex XVII of
the Implementing Regulation (EU) No. 680/2014, other than the reporting
currency (EUR).
At 31 December 2020, repurchase agreements amounted to €199.4 billion
for a total of €184.0 billion in encumbered assets and collateral received;
derivatives associated mainly with the OTC derivative activity of Crédit
Agricole CIB and encumbering mainly cash as part of margin calls.
At 31 December 2020, margin calls amounted to €22.2 billion.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
402
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Repurchase agreements
(€184.0 billion)
Guaranteed deposits
and CB funding
(1)
(€203.5 billion)
Derivatives
(€22.2 billion)
Other
(3)
(€14.0 billion)
Autres
(3)
(7,1 Mds d’€)
Covered bonds
(€51.2 billion)
Debt securities
(2)
(€13.0 billion)
Total FINREP
balence sheet
(€1,573 billion)
Collateral received
(4)
(€505 billion)
Securitisations
(€5.4 billion)
Total encumbered assets
and collateral received = €493 billion
€
2,078
billion
Asset encumbrance level
at 31/12/2020
23.7%
(1) Central banks.
(2) Other than covered bonds or ABSs.
(3) Mainly securities lending and borrowing.
(4) Excluding collateral received that could not be encumbered.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
403
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.6
LIQUIDITY COVERAGE RATIO (LCR)
Quantitative information
Scope of consolidation (solo/consolidated)
(in millions of euros)
Total unweighted value
(average)
Total weighted value
(average)
QUARTER ENDING ON
31/03/2020 30/06/2020 30/09/2020 31/12/2020 31/03/2020 30/06/2020 30/09/2020 31/12/2020
Number of data points used in
the calculation of averages
12
12
12
12
12
12
12
12
HIGH-QUALITY LIQUID ASSETS
1
Total high-quality liquid assets (HQLA)
199,924
224,373
254,214
283,133
CASH-OUTFLOWS
2
Retail deposits and deposits from
small business customers, of which:
387,273
381,537
375,891
370,593
24,224
23,997
23,775
23,590
3
Stable deposits
310,195
299,796
289,534
279,342
15,510
14,990
14,477
13,967
4
Less stable deposits
77,078
81,741
86,357
91,251
8,714
9,007
9,298
9,623
5
Unsecured wholesale funding
258,914
283,664
309,000
328,550
127,723
141,524
155,644
166,102
6
Operational deposits (all counterparties)
and deposits in networks of cooperative banks
110,398
126,164
142,574
155,798
36,337
42,826
50,225
56,325
7
Non-operational deposits (all counterparties)
134,139
142,267
150,623
156,956
77,009
83,465
89,617
93,982
8
Unsecured debt
14,376
15,233
15,803
15,795
14,376
15,233
15,803
15,795
9
Secured wholesale funding
21,260
21,920
22,492
22,277
10
Additional requirements
156,355
160,133
162,116
164,339
40,627
42,644
43,697
44,762
11
Outflows related to derivative exposures
and other collateral requirements
14,572
17,427
18,860
20,355
11,200
13,273
14,735
16,127
12
Outflows related to loss of funding
on debt products
-
-
-
-
-
-
-
-
13
Credit and liquidity facilities
141,783
142,706
143,256
143,984
29,427
29,371
28,962
28,635
14
Other contractual funding obligations
57,841
52,448
45,489
34,432
1,965
2,659
2,619
3,001
15
Other contingent funding obligations
50,383
50306
49661
49506
1895
2456
2931
2,984
16
TOTAL CASH OUTFLOWS
217694
235200
251158
262,716
CASH-INFLOWS
17
Secured lending (eg reverse repos)
160,843
159,343
161,654
161,345
17,879
18,600
20,894
21,349
18
Inflows from fully performing exposures
112,673
99,582
85,623
72,497
45,175
44,902
44,163
43,603
19
Other cash inflows
4,149
4,787
5,528
6,732
4,149
4,787
5,528
6,732
EU-
19a
(Difference between total weighted inflows
and total weighted outflows arising
from transactions in third countries where
there are transfer restrictions or which are
denominated in non-convertible currencies)
EU-
19b
(Excess inflows from a related specialised
credit institution)
20
TOTAL CASH INFLOWS
277,665
263,712
252,804
240,574
67,203
68,289
70,585
71,684
EU-
20a
Fully exempt inflows
-
-
-
-
-
-
-
-
EU-
20b
Inflows Subject to 90% Cap
-
-
-
-
-
-
-
-
EU-
20c
Inflows Subject to 75% Cap
246,292
230,184
216,885
204,656
67,203
68,289
70,585
71,684
21
FULLY EXEMPT INFLOWS
199,924
224,373
254,214
283,133
22
INFLOWS SUBJECT TO 90% CAP
150,491
166,911
180,573
191,032
23
INFLOWS SUBJECT TO 75% CAP
132.8%
134.4%
140.8%
148.2%
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
404
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
Qualitative information
Concentration of funding and liquidity sources
The Crédit Agricole S.A. follows a prudent refinancing policy, with very diversified access to the
markets, in terms of investor base and products.
Derivative exposures and potential collateral calls
The cash outflows relating to this item materialize the contingent risk of an increase in margin
calls on derivative transactions in an unfavorable market scenario and an increase in collateral
requirements following a downgrade of the Group's external rating.
Currency mismatch in the LCR
As of 31 December 2020, the Crédit Agricole S.A. covers its net cash outflows with liquid assets
denominated in the same currency in the main significant currencies (EUR, CHF, GBP, JPY, USD).
The level of the residual asymmetries observed in certain currencies is covered by surplus of
premium liquid assets available in other significant currencies and which could be easily converted
to cover these needs, including in crisis situations.
A description of the degree of centralisation of liquidity
management and interaction between the Group’s units
Crédit Agricole S.A. oversees the management of the liquidity risk.
Crédit Agricole S.A.'s treasury is responsible for refinancing the main short-term needs
(≤1 year) of the Regional Banks and subsidiaries. It also coordinates the treasuries of
the subsidiaries for their additional issuances. Crédit Agricole CIB is self-sufficient in the
management of its short-term refinancing, in close coordination with the Treasury of
Crédit Agricole S.A.
For long-term refinancing (>1 year), Crédit Agricole S.A. identifies long-term resource
needs, plans refinancing programs according to these ones and reallocates the resources
raised to the Group entities. The Group's main issuers are: Crédit Agricole S.A., Crédit
Agricole CIB, Crédit Agricole Consumer Finance and CA Italia.
Other items in the LCR calculation that are not captured
in the LCR disclosure template but that the institution
considers relevant for its liquidity profile
3.7
COMPENSATION POLICY
The information on the compensation policy required pursuant to EU Regulation 575-2013 (CRR) can be found in Chapter 3 of this Universal Registration
Document.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
405
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
3.8
CROSS-REFERENCE TABLES
Cross-reference table for Pillar 3 (CRR and CRD 4)
CRR article
Topic
Reference
2020 Universal Registration Document
2020
Universal Registration Document
90 (CRD 4)
Return on assets
Management report
p. 248
435 (CRR)
1.
Risk management policy and objectives
Presentation of committees – Corporate governance
Main group level Committees dealing with risk –
Risk factors
p. 133 to 138
436 (a)(b)
2.
Scope of consolidation
Pillar 3
Financial statements Note 12.2
p. 336 to 337
p. 339 to 341 and p. 566 to 579
436 (c)(d)(e)
(CRR)
2.
Scope of consolidation
Unpublished information
437 (CRR)
3.
Equity
Reconciliation of accounting and regulatory capital
Details of subordinated debt
p. 322
p. 325
438 (CRR)
4.
Capital requirements
Risk-weighted assets by business line and trends
p. 341 to 343
439 (CRR)
5.
Exposure to counterparty credit risk
General presentation of counterparty credit risk –
exposures by type of risk
Credit risk (all)
Counterparty risk (all)
p. 341 to 391
440 (CRR)
6.
Capital buffer
Minimum requirements and exposures by geographic area
p. 327 to 329
p. 347 to 349
441 (CRR)
7.
Indicators of global systemic importance
Communication on the indicators required for globally
systemically important banks (G-SIBs) + website
p. 327 to 329
Amendment A01
and press release
442 (CRR)
8.
Adjustments for credit risk
Default exposures and value adjustments
p. 355 to 364
443 (CRR)
9.
Asset encumbrance
Asset encumbrance
p. 400 to 402
444 (CRR)
10. Use of ECAIs
Protection providers
p. 388 to 390
445 (CRR)
11.
Exposure to market risk
Exposure to market risk of the trading book
p. 397 to 398
446 (CRR)
12. Operational risk
Operational risk
p. 309 to 311 and p. 399
447 (CRR)
13. Equity exposures excluding
the trading book
Equity exposures in the banking portfolio
p. 343 and p. 388 to 389
448 (CRR)
14. Exposure to interest rate risk on positions
not included in the trading book
Global interest rate risk – Risk factors
p. 294 to 296 and p. 399
449 (CRR)
15. Exposures to securitisation positions
Securitisation – Pillar 3
p. 391 to 397
450 (CRR)
16. Compensation policy
Compensation policy – Corporate governance
p. 177 to 217
451 (CRR)
17. Leverage
Leverage ratio
p. 331 to 333
452 (CRR)
18.
Use of the IRB approach to credit risk
Credit risk – internal ratings-based approach
p. 366 to 379
453 (CRR)
19.
Use of credit risk mitigation techniques
Credit risk mitigation mechanism
p. 283 and p. 388 to 389
454 (CRR)
20. Use of the advanced measurement
approaches to operational risk
Operational risk
p. 310 to 311 and p. 399
455 (CRR)
21.
Use of internal market risk models
Internal models approach to market risk capital
requirements – Pillar 3
p. 397 to 398
Additional elements are presented on the consolidated report on risks available on our website: www.credit-agricole.com/en/finance/finance/
financial-publications.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
406
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
3. Pillar 3 Disclosures
EDTF cross-reference table
Recommendation
Management
report and other
Risk factors
Pillar 3
Consolidated
financial
statements
Introduction
1
Cross-reference table
p. 406
2
Terminology and risk
measurements, key parameters
used
p. 256 to 317
p. 343 and
p. 365 to 376
p. 425 to 445 and
p. 451 to 487
3
Presentation of main risks
and/or emerging risks
p. 256 to 317
p. 451 to 487
4
New regulatory framework for
solvency and Group objectives
p. 249 to 250
p. 296 to 301
p. 318
to 321
p. 487
Governance and risk
management strategy
5
Organisation of control
and risk management
p. 130 to 131 and
p. 140 to 141
p. 269 to 272
and p. 272
to 279
6
Risk management strategy
and implementation
p. 130 to 131 and
p. 140 to 141
p. 256 to 317
and p. 272
to 279
p. 318
to 329
7
Risk mapping by business line
p. 342
8
Governance and management
of internal credit and market
stress tests
p. 269 to 272
and p. 283
Capital requirements
and risk-weighted assets
9
Minimum capital requirements
p. 327
to 329
10a
Breakdown of composition
of capital
p. 322
to 324
(1)
10b
Reconciliation of the balance
sheet and prudential balance
sheet and accounting equity
and regulatory capital
p. 322
to 323 and
p. 336
to 337
11
Change in regulatory capital
p. 325
to 326
12
Capital trajectory and
target CRD 4 ratios
p. 249 to 250
p. 321
to 335
13
Risk-weighted assets by business
line and risk type
p. 341
to 364
14
Risk-weighted assets and capital
requirements by method and
category of exposure
p. 281
p. 341
to 364
15
Exposure to credit risk by category
of exposure and internal rating
p. 279 to 288
p. 344
to 391
16
Changes in risk-weighted
assets by risk type
p. 341
17
Description of back-testing
models and efforts to improve
their reliability
p. 289 to 290
and p. 310
to 311
p. 377
to 378
Liquidity
18
Management of liquidity
and cash balance sheet
p. 294 to 302
p. 403
to 404
19
Asset encumbrance
p. 400
to 402
20
Breakdown of financial assets
and financial liabilities by
contractual maturity
p. 354
p. 478 to 479
and p. 541
21
Liquidity and financing risk
management
p. 296 to 301
p. 403
Market risk
22 to 24
Market risk measurement
p. 288 to 294
p. 398
to 399
p. 425 to 445,
p. 474 to 478 and
p. 550 to 564
25
Market risk management
techniques
p. 288 to 294
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
407
Refer to the glossary on page 681 for the definition of technical terms.
RISKS AND PILLAR 3
5
Disclosure of exposures subject to measures applied in response to the COVID-19 crisis
Recommendation
Management
report and other
Risk factors
Pillar 3
Consolidated
financial
statements
Credit risk
26
Maximum exposure, breakdown
and diversification of credit risks
p. 279 to 288
p. 343
to 391
p. 451 to 473
27 and
28
Provisioning policy and risk hedging
p. 286 to 287
p. 425 to 442 and
p. 473 to 492
29
Derivative instruments: notional,
counterparty risk, offsetting
p. 279 to 288,
p. 288 to 290,
p. 291 to 302
and p. 306
to 307
p. 380
to 391
p. 436, p. 474
to 478, p. 518
and p. 533 to 554
30
Credit risk mitigation mechanism
p. 283
p. 546 to 547
Other risks
31
Other risks: insurance sector risks,
operational risks and legal risks,
information systems security
and business continuity plans
p. 256 to 272
and p. 302
to 309
p. 130 to 132
p. 487, p. 500
to 502 and
p. 530 to 535
32
Declared risks and ongoing actions
regarding operational and legal risks
p. 310 to 311
p. 530 to 535
(1)
Details of debt issues available on the website: www.credit-agricole.com/en/finance/finance/financial-publications.
DISCLOSURE OF EXPOSURES SUBJECT TO MEASURES APPLIED
IN RESPONSE TO THE COVID-19 CRISIS
The Information on loans and advances subject to legislative and non-legislative moratoria, the breakdown of loans and advances subject to legislative and
non-legislative moratoria by residual maturity of moratoria and the information on newly originated loans and advances provided under newly applicable
public guarantee schemes introduced in response to COVID-19 crisis are available in amendment A01 of the 2020 Universal Registration Document, as
this requirement is applicable to the highest level of consolidation,
i.e.
the Crédit Agricole Group.
General framework
410
Legal presentation of the entity
410
Crédit Agricole internal relations
410
Information pertaining to the related parties
413
Consolidated financial statements
416
Income statement
416
Net income and other comprehensive income
417
Balance sheet – assets
418
Balance sheet – liabilities
419
Statement of changes in equity
420
Cash flow statement
422
Notes to the consolidated
financial statements
424
Statutory Auditors’ report on the
consolidated financial statements
585
CONSOLIDATED
FINANCIAL STATEMENTS
6
Approved by the Board of Directors of Credit Agricole S.A. on 10 February 2021
and submitted for the approval of the Ordinary General Meeting of 12 May 2021
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
408
Refer to the glossary on page 681 for the definition of technical terms.
€2,692M
Revenues
€20,500M
€1,961,062M
Total customer loans
€405,937M
Total customer deposits
€719,388M
Total equity
€73,495M
NET INCOME
GROUP SHARE
TOTAL
BALANCE SHEET
Crédit Agricole S.A.
Key figures
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
409
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
GENERAL FRAMEWORK
LEGAL PRESENTATION OF THE ENTITY
Since the Extraordinary General Meeting of 29 November 2001, the
Company’s name has been:
Crédit Agricole S.A.
Since 1 July 2012, the address of the Company’s registered office has
been: 12, place des États-Unis, 92127 Montrouge Cedex, France.
Registration number: 784 608 416 Nanterre Trade and Companies Register.
NAF code: 6419Z.
Crédit Agricole S.A. is a French public limited company
(“Société
anonyme”)
with a Board of Directors governed by ordinary company law
and more specifically by Book II of the French Commercial Code
(“Code
de commerce”)
.
Crédit Agricole S.A. is also subject to the provisions of the French Monetary
and Financial Code and more specifically Articles L.512-47
et seq.
thereof.
Crédit Agricole S.A. was licensed as an authorised lending institution in the
mutual and cooperative banks category on 17 November 1984. As such,
it is subject to oversight by the banking supervisory authorities, and more
particularly by the French Regulatory and Resolution Supervisory Authority
(ACPR) and the European Central Bank.
Crédit Agricole S.A. shares are admitted for trading on Euronext Paris.
Crédit Agricole S.A. is subject to the prevailing stock market regulations
particularly with respect to public disclosure obligations.
A bank with mutual roots
SAS Rue La Boétie, which is wholly owned by the Regional Banks, holds the
majority of Crédit Agricole S.A.’s share capital. Shares in SAS Rue La Boétie
may not be transferred outside the Regional Banks’ network. Furthermore,
any trading in these shares between Regional Banks is governed by a
liquidity agreement that in particular sets out the procedures for determining
the transaction price. This encompasses both disposals of shares between
the Regional Banks and capital increases at SAS Rue La Boétie.
Fédération Nationale du Crédit Agricole
(FNCA) acts as a consultative and
representative body, and as a communication forum for the Regional Banks.
In accordance with the provisions of the French Monetary and Financial
Code (Articles L.511-31 and L.511-32), as the corporate centre of the
Crédit Agricole network, Crédit Agricole S.A. is responsible for exercising
administrative, technical and financial control over the institutions affiliated
to it in order to maintain a cohesive network (as defined in Article R.512-18
of the French Monetary and Financial Code) and to ensure their proper
functioning and compliance with all regulations and legislation governing
them. In that regard, Credit Agricole S.A. may take all necessary measures
notably to ensure the liquidity and solvency of the network as a whole and
of each of its affiliated institutions.
CRÉDIT AGRICOLE INTERNAL RELATIONS
Internal financing mechanisms
Crédit Agricole has instituted a number of internal financing mechanisms
specific to the Group.
Regional Banks’ current accounts
Each Regional Bank holds a current account with Crédit Agricole S.A.,
which records the financial movements resulting from internal financial
transactions within the Group. This account, which may be in credit or
debit, is presented in the balance sheet under “Crédit Agricole internal
transactions – Current Accounts” and integrated on a specific line item,
either “Loans and receivables due from credit institutions” or “Due to
credit institutions”.
Special savings accounts
Funds held in special savings accounts (popular savings passbook accounts
(Livret d’épargne populaire),
sustainable development passbook accounts
(Livret de développement durable),
home purchase savings schemes and
accounts, popular savings schemes, youth passbook accounts
(Livret Jeune)
and passbook savings accounts
(Livret A)
are collected by the Regional
Banks on behalf of Crédit Agricole S.A. and be transferred to the latter. Crédit
Agricole S.A. recognises them on its balance sheet as “Due to customers”.
Term deposits and advances
The Regional Banks also collect savings funds (passbook accounts, bonds,
warrants, certain term accounts and similar accounts, etc.) on behalf of
Crédit Agricole S.A. These funds are transferred to Crédit Agricole S.A.,
and are recognised as such on its balance sheet.
Special savings accounts and time deposits and advances are used by
Crédit Agricole S.A. to make “advances” (loans) to the Regional Banks,
with a view to funding their medium and long term loans.
A series of four internal financial reforms has been implemented. These
reforms have permitted the transfer back to the Regional Banks, in the
form of so-called “mirror advances” (with maturities and interest rates
precisely matching those of the savings funds received) of first 15%, 25%,
then 33% and, since 31 December 2001, 50% of the savings resources,
which they are free to use at their discretion.
Since 1 January 2004, the financial margins generated by the centralised
management of funds collected (and not transferred back via mirror
advances) are shared by the Regional Banks and Crédit Agricole S.A. and
are determined by using replacement models and applying market rates.
Furthermore, the Regional Banks may be refinanced in the form of advances
negotiated at market rates with Crédit Agricole S.A.
Transfer of Regional Banks’ liquidity surpluses
The Regional Banks may use their “monetary” deposits (demand deposits,
non-centralised time deposits and negotiable certificates of deposit) to
finance lending to their customers. Surpluses must be transferred to Crédit
Agricole S.A. where they are booked as current or time accounts, under
“Crédit Agricole internal transactions”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
410
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
General framework
6
Foreign currency transactions
Crédit Agricole S.A. represents the Regional Banks with respect to the
Banque de France and centralises their foreign exchange transactions.
Medium and long-term notes issued
by Crédit Agricole S.A.
These are placed mainly on the market or by the Regional Banks with their
customers. They are booked on the balance sheet by Crédit Agricole S.A.
under liabilities either as “Debt securities” or as “Subordinated debt”,
depending on the type of security issued.
TLTRO III mechanism
The ECB set out a third series of longer-term refinancing operations in
March 2019, the terms and conditions of which were reviewed in September
2019 and again in March and April 2020, in connection with the COVID-19
situation.
The TLTRO III mechanism aims to provide longterm refinancing, with a
subsidy in the event of reaching a lending performance target based on
growth of lending to firms and households, which is applied over the
three-year maturity of the TLTRO operation, with an additional subsidy,
awarding a further and temporary incentive, which is applied over the
one-year period between June 2020 and June 2021.
Provided that the level of outstanding amounts giving entitlement to these
subsidies allow to consider the subsidies as already granted by the ECB
in relation to the support to the economy both in the first year and in
subsequent years, the interest accrued with a negative interest rate takes
this subsidy into account.
All subsidies are spread over the expected refinancing period from the
TLTRO III drawing date. Outstanding amounts that give entitlement to the
subsidy already exceed the level required to be able to benefit from the
planned levels of subsidies. The additional subsidy for the first year is
linearly accrued over one year, starting from June 2020.
For the new subsidy announced by the ECB following its meeting of
10 December 2020, covering the period from June 2021 to June 2022,
these principles will continue to apply as long as there is a reasonable
assurance that the level of eligible amounts outstanding will render it
possible to meet the conditions necessary to acquire these subsidies when
they become due and payable by the ECB.
As at 31 December 2020, the Group has drawn 133 billion euros in TLTRO
III at the ECB.
Hedging of liquidity and solvency risks
and banking resolution
Under the legal internal financial solidarity mechanism enshrined in
Article L.511-31 of the French Monetary and Financial Code (CMF),
Crédit Agricole S.A., as the central body of the Crédit Agricole network, must
take all necessary measures to ensure the liquidity and solvency of each
affiliated credit institution, as well as the network as a whole. As a result,
each member of the network benefits from this internal financial solidarity.
The general provisions of the CMF (
Code monétaire et financier
— French
Monetary and Financial Code) are reflected in the internal provisions setting
out the operational measures required for this legal solidarity mechanism.
In the initial public offering of Crédit Agricole S.A., CNCA (now Crédit
Agricole S.A.) signed an agreement with the Regional Banks in 2001 aimed
at governing internal relations within the Crédit Agricole network. The
agreement notably provides for the creation of a Fund for Bank Liquidity and
Solvency Risks (FRBLS) designed to enable Crédit Agricole S.A. to fulfil its
role as central body by providing assistance to any affiliated members that
may experience difficulties. The main provisions of this agreement are set
out in Chapter III of the Registration Document filed by Crédit Agricole S.A.
with France’s
Commission des Opérations de Bourse
on 22 October 2001
under number R.01-453.
The European banking crisis management framework was adopted in 2014
by EU Directive 2014/59 (known as the “Bank Recovery and Resolution
Directive — BRRD”), incorporated into French law by Order 2015-1024
of 20 August 2015, which also adapted French law to the provisions of
European Regulation 806/2014 of 15 July 2014 establishing uniform rules
and a uniform procedure for the resolution of credit institutions and certain
investment firms in the framework of a Single Resolution Mechanism and
a Single Resolution Fund. Directive (EU) 201/879 of 20 May 2019, known
as “BRRD2”, amended the BRRD and was incorporated into French law
by Order 2020-1636 of 21 December 2020.
This framework, which includes measures to prevent and to resolve banking
crises, is intended to preserve financial stability, to ensure the continuity
of activities, services and operations of institutions whose failure could
significantly impact the economy, to protect depositors, and to avoid or
limit the use of public financial support as much as possible. In this context,
the European Resolution Authorities, including the Single Resolution Board,
have been granted extensive powers to take all necessary measures in
connection with the resolution of all or part of a credit institution or the
group to which it belongs.
For cooperative banking groups, the “extended single point of entry”
(“extended SPE”) resolution strategy is favoured by the resolution authorities,
whereby resolution tools would be applied simultaneously at the level of
Crédit Agricole S.A. and the affiliated entities. In this respect, and in the
event of a resolution of the Crédit Agricole Group, the scope comprising
Crédit Agricole S.A. (in its capacity as the corporate centre) and its affiliated
entities would be considered as a whole as the expanded single entry point.
Given the foregoing and the solidarity mechanisms that exist within the
network, a member of the Crédit Agricole network cannot be put individually
in resolution.
The resolution authorities may initiate resolution proceedings against a
credit institution where it considers that: the institution has failed or is
likely to fail, there is no reasonable prospect that another private measure
will prevent the failure within a reasonable time, a resolution measure is
necessary, and a liquidation procedure would be inadequate to achieve
the resolution objectives mentioned above.
The resolution authorities may use one or more resolution tools, as described
below, with the objective of recapitalising or restoring the viability of the
institution. The resolution tools should be implemented in such a way that
equity holders (shares, mutual shares, CCIs, CCAs) bear losses first, with
creditors following up immediately, provided that they are not excluded from
bail-in legally speaking or by a decision of the resolution authorities. French
law also provides for a protective measure when certain resolution tools or
decisions are implemented, such as the principle that equity holders and
creditors of an institution in resolution may not incur greater losses than
those they would have incurred if the institution had been liquidated in the
context of a judicial liquidation procedure under the French Commercial
Code (NCWOL principle referred to in Article L.613-57.I of the CMF). Thus,
investors are entitled to claim compensation if the treatment they receive in
a resolution is less favourable than the treatment they would have received
if the institution had been subject to normal insolvency proceedings.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
411
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
General framework
In the event that the resolution authorities decide to put the Crédit Agricole
Group in resolution, they will first write down the CET1 instruments
(shares, mutual shares, CCI and CCA), additional Tier 1 instruments, and
Tier 2 instruments, in order to absorb losses, and then possibly convert
the additional Tier 1 instruments and Tier 2
(1)
instruments into equity
securities. Then, if the resolution authorities decide to use the bail-in tool,
the latter would be applied to debt instruments
(2)
, resulting in the partial
or total write-down of these instruments or their conversion into equity in
order to absorb losses.
With respect to the corporate centre and all affiliated entities, the resolution
authorities may decide to implement, in a coordinated manner, impairment
or conversion measures and, where applicable, internal bailouts. In such
an event, the impairment or conversion measures and, where applicable,
internal bailout measures would apply to all entities within the Crédit
Agricole network, regardless of the entity in question and regardless of
the origin of the losses.
The creditor hierarchy in resolution is defined by the provisions of Article
L.613-55-5 of the CMF, effective as at the date of implementation of the
resolution.
Equity holders and creditors of the same rank or with identical rights in
liquidation will then be treated equally, regardless of the group entity of
which they are creditors.
The scope of this bail-in, which also aims to recapitalise the Crédit Agricole
Group, is based on capital requirements at the consolidated level.
Investors must then be aware that there is therefore a significant risk
that holders of shares, mutual shares, CCIs and CCAs and holders of
debt instruments of a member of the network will lose all or part of their
investment if a resolution procedure is implemented on the Group, regardless
of the entity of which they are a creditor.
The other resolution tools available to the resolution authorities are
essentially the total or partial transfer of the activities of the institution
to a third party or to a bridge institution and the separation of the assets
of the institution.
This resolution framework does not affect the legal internal financial
solidarity mechanism enshrined in Article L.511-31 of the French Monetary
and Financial Code, which applies to the Crédit Agricole network, as defined
in Article R.512-18 of the same Code. Crédit Agricole S.A. considers that,
in practice, this mechanism should be implemented prior to any resolution
procedure.
The implementation of a resolution procedure to the Crédit Agricole Group
would thus mean that the legal internal solidarity mechanism had failed
to remedy the failure of one or more network entities, and hence of the
network as a whole. It would also limit the likelihood that the conditions
for triggering the guarantee covering the liabilities of Crédit Agricole S.A.
(granted in 1988 to its third party creditors by the Regional Banks on a joint
and several basis, and up to the aggregate amount of their own funds) are
met. It should be recalled that this guarantee may be triggered in the event
of an asset shortfall following Crédit Agricole S.A.‘s bankruptcy or dissolution.
(1) Articles L. 613-48 and L. 613-48-3 of the CMF.
(2) Articles L. 613-55 and L. 613-55-1 of the CMF.
Specific guarantees provided by the Regional
Banks to Crédit Agricole S.A. (Switch)
The Switch guarantee mechanism, established on 23 December 2011 and
supplemented by an initial addendum signed on 19 December 2013 and
twice amended in 2016 on 17 February (Amendment No. 2) and 21 July
(Amendment No. 3), respectively, forms part of the financial relationship
between Crédit Agricole S.A., as corporate centre, and the mutual network
of Crédit Agricole Regional Banks. The most recent amendments to these
guarantees took effect retroactively on 1 July 2016, replacing the previous
guarantees, and expire on 1 March 2027, subject to total or partial early
termination or extension in accordance with the terms of the contract. A
first partial termination corresponding to 35% of the Switch guarantees
took place on 2 March 2020.
With this mechanism, and subject to the upper limit specified in the
agreement, the Regional Banks assume, on behalf of Crédit Agricole S.A.,
regulatory prudential requirements relating to the equity method of
accounting for certain equity investments held by Crédit Agricole S.A. They
also assume the associated economic risks in the form of compensation,
where applicable.
The guarantees allow the transfer of regulatory prudential requirements
that apply to Crédit Agricole S.A.’s equity investments in Crédit Agricole
Assurances (CAA), the latter being equity-accounted for regulatory reasons:
we are talking about the Insurance Switch guarantees. They are subject
to fixed compensation covering the present value of the risk and the cost
of capital for the Regional Banks.
The effectiveness of the mechanism is secured by cash deposits paid by the
Regional Banks to Crédit Agricole S.A. These security deposits are calibrated
to reflect the capital savings for Credit Agricole S.A., and are compensated
at a fixed rate based on conditions prevailing for long-term liquidity.
The Insurance Switch guarantees protect Crédit Agricole S.A. from a decline
in the equity-accounted value of these equity investments, subject to
payment by the Regional Banks of compensation from the cash deposit.
Likewise, if the equity-accounted value later recovers, Crédit Agricole S.A.
could return previously paid compensation in accordance with a clawback
provision.
In regulatory terms:
Crédit Agricole S.A. reduces its capital requirements in proportion to the
amount of the guarantee provided by the Regional Banks;
the Regional Banks symmetrically record capital requirements matching
those offloaded by Crédit Agricole S.A.
This mechanism, which is neutral at the Crédit Agricole Group level, enables
the rebalancing of capital allocation between Crédit Agricole S.A. and the
Regional Banks.
In accounting terms:
The guarantees are essentially insurance contracts, due to the existence
of an insurance risk as defined by IFRS 4. For the insured, they are treated
as a first demand guarantee, and their compensation is recognised in
stages as a deduction from the interest margin under Revenues. In the
event of a call on guarantees, or following an improvement in fortunes,
where applicable, the compensation payment or redemption proceeds
would be recognized under cost of risk.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
412
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
General framework
It should be noted that the Insurance Switch guarantees are triggered
on a half-yearly basis and are assessed on the basis of half-yearly
changes in the equity-accounted value of the Crédit Agricole Assurances
equity investments. At each quarterly period-end, the Regional Banks are
required to estimate if there is a risk that compensation will be payable
and to fund provisions accordingly. On the other hand, Crédit Agricole S.A.
cannot recognise equivalent income because it is not certain. At each half-
yearly period-end, and if the conditions have been met, Crédit Agricole S.A.
and the Regional Banks recognise on a symmetrical basis the effects of
triggering the guarantees (calling or claw-back).
Capital ties between Crédit Agricole S.A.
and the Regional Banks
The capital ties between Crédit Agricole S.A. and the Regional Banks are governed
by an agreement entered into by the parties prior to Crédit Agricole S.A.’s
initial public offering.
(1) With the exception of
Caisse régionale de la Corse,
which is fully consolidated.
Under the terms of this agreement, the Regional Banks exercise their control
over Crédit Agricole S.A. through SAS Rue La Boétie, a holding company
wholly owned by the Regional Banks. The purpose of SAS Rue La Boétie
is to hold enough shares to ensure that it always owns at least 50% of
the share capital and voting rights of Crédit Agricole S.A.
In addition, under the agreement, Crédit Agricole S.A. directly owned
approximately 25% of the share capital of each Regional Bank (except
for
Caisse régionale de la Corse
which is 99.9%-owned). Following the
transaction to simplify the Group’s capital structure on 3 August 2016, the
bulk of the cooperative investment certificates (
“certificats coopératifs
d’investissement”
or CCIs) and the cooperative associate certificates
(
“certificats coopératifs d’associés”
or CCAs) held by Crédit Agricole S.A.
were transferred to a holding company (“Sacam Mutualisation”) jointly
owned by the Regional Banks.
INFORMATION PERTAINING TO THE RELATED PARTIES
The related parties of Crédit Agricole S.A. are the consolidated companies,
including equity-accounted entities, the Group’s Senior Executives and
the Regional Banks, given the Group’s legal structure and due to the fact
that Crédit Agricole S.A. is the central body of the Crédit Agricole network.
In accordance with the internal financial mechanisms at Crédit Agricole,
transactions between Crédit Agricole S.A. and the Regional Banks
(1)
are
presented on the balance sheet and income statement as Crédit Agricole
internal transactions (Note 4.1 “Interest income and expenses”, Note 4.2
“Net fees and commissions”, Note 6.5 “Financial assets at amortised cost”
and Note 6.8 “Financial liabilities at amortised cost”).
Other shareholders’ agreements
Shareholder agreements signed during the financial year are detailed in
Note 2 “Major structural transactions and material events during the period”.
Relationships between controlled companies
affecting the consolidated balance sheet
A list of Crédit Agricole S.A. companies can be found in Note 13 “Scope
of consolidation at 31 December 2020”. Since the transactions and
outstandings at year-end between the Group’s fully consolidated companies
are eliminated on consolidation, only transactions with companies
consolidated by the equity method affect the Group’s consolidated financial
statements.
The main corresponding outstandings and commitments in the consolidated
balance sheet at 31 December 2020 relate to transactions with the equity-
accounted entities for the following amounts:
loans and receivables due from credit institutions: €3,032 million;
loans and receivables due from customers: €2,934 million;
debt due to credit institutions: €3,584 million;
debt due to customers: €425 million;
commitments given on financial instruments: €7,359 million;
commitments received on financial instruments: €4,051 million.
The transactions entered into with these entities did not have a material
effect on the income statement for the period.
Management of retirement, early retirement
and end-of-career allowances: internal
hedging contracts within the Group
As presented in Note 1.2 “Accounting policies and principles”, employees
are provided with various types of post-employment benefits. These
concerns:
end-of-career allowances;
retirement plans, which may be either “defined-contribution” or “defined-
benefit” plans.
The liability in this respect is partially funded by collective insurance
contracts taken out with Predica, the Crédit Agricole Group’s life insurance
company.
These contracts govern:
the setting up by the insurance company of mutual funds for investing
contributions made by the employer to build up sufficient funds to cover
end-of-career allowances or the various pension schemes;
the management of the funds by the insurance company;
the payment to the beneficiaries of the allowances and of the benefits
due under the various plans.
Information on post-employment benefits is provided in Note 7 “Employee
benefits and other compensation” in paragraphs 7.3 and 7.4.
Relations with senior management
Detailed information on senior executives’ compensation is provided in
paragraph 7.7 of Note 7 “Employee benefits and other compensation”,
as well as in the “Compensation policy” section, Chapter 3 “Corporate
governance” of the Universal Registration Document.
There exist no material transactions between Crédit Agricole S.A. and its
senior management, their families or the companies they control and which
are not included in the Group’s scope of consolidation.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
413
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
General framework
CRÉDIT AGRICOLE S.A.
% OF INTEREST
(1)
(1) Direct percentage of interest held by CASA and its subsidiaries, excluding treasury shares.
ASSET GATHERING
CRÉDIT AGRICOLE S.A.
FRENCH RETAIL
BANKING
INTERNATIONAL
RETAIL BANKING
CRÉDIT
AGRICOLE
ASSURANCES
Holding
S.A.
AMUNDI
S.A.
CA Indosuez
Wealth (Group)
S.A.
LCL
S.A.
CRÉDIT AGRICOLE
SRBIJA
S.A.
Serbia
AMUNDI ASSET
MANAGEMENT
S.A.
CA Indosuez
Wealth (Europe)
S.A.
Luxembourg
CRÉDIT AGRICOLE
FRIULADRIA
S.p.A.
Italy
KBI
Global Investors
Ltd
Irland
CA Indosuez
(Switzerland) SA
S.A.
Switzerland
CPR AM
SA
CFM Indosuez
Wealth
S.A.
Monaco
CALIT
S.R.L.
Italy
SOCIÉTÉ
GÉNÉRALE
DE GESTION
SA
CA Indosuez
Wealth (France)
S.A.
ÉTOILE GESTION
S.A.
CA INDOSUEZ
WEALTH (Italy)
S.A.
Italy
BFT INVESTMENT
MANAGERS
S.A.
PREDICA
S.A.
PACIFICA
S.A.
CRÉDIT
AGRICOLE
CREDITOR
INSURANCE
S.A.
CRÉDIT
AGRICOLE
VITA
S.p.A.
Italy
CRÉDIT
AGRICOLE LIFE
INSURANCE
EUROPE
S.A.
Luxembourg
100%
100%
100%
100%
CRÉDIT
DU MAROC
S.A.
Morocco
78.7%
100%
CRÉDIT AGRICOLE
BANK
PJSC
Ukraine
100%
82.4%
85%
69%
CRÉDIT AGRICOLE
POLSKA SA
S.A.
Poland
100%
100%
CRÉDIT AGRICOLE
EGYPT
S.A.E.
Egypt
47.4%
100%
100%
86.4%
100%
100%
13.6%
100%
100%
100%
100%
100%
5.9%
15%
94.1%
68.1%
1.6%
100%
13.1%
95.6%
75.6%
13.5%
9.3%
4.4%
FOUNDATIONS
SACAM
INTERNATIONAL
SACAM
DÉVELOPPEMENT
Crédit Agricole
CIB
Crédit Agricole CIB
OTHER
GROUP
ENTITY
CA LEASING &
FACTORING
OTHER
GROUP
ENTITIES
INSURANCE
ASSET MANAGEMENT
WEALTH MANAGEMENT
CRÉDIT AGRICOLE
ITALIA
S.p.A
Italy
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
414
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
General framework
CRÉDIT
AGRICOLE-GROUP
INFRASTRUCTURE
PLATFORM
S.A.S.
AS AT 31 DECEMBER 2020
CRÉDIT AGRICOLE S.A.
SPECIALISED
FINANCIAL
SERVICES
LARGE CUSTOMERS
CORPORATE CENTRE
CRÉDIT AGRICOLE
CONSUMER
FINANCE
S.A.
CRÉDIT AGRICOLE
LEASING &
FACTORING
S.A.
EFL
S.A.
Poland
CRÉDIT
AGRICOLE CIB
S.A.
CACIF
S.A.
FONCARIS
S.A.
CRÉDIT AGRICOLE
PAYMENT
SERVICES
S.A.S.
REGIONAL
BANK OF
CORSICA
S.C.C.V.
CRÉDIT AGRICOLE
IMMOBILIER
S.A.
UNI-MÉDIAS
S.A.S.
100%
100%
50%
50%
19.4%
CACEIS Fund
Administration
S.A.
100%
100%
100%
FIRECA
PORTAGE &
PARTICIPATIONS
SAS
51%
100%
99.9%
(4)
CACEIS
Corporate Trust
S.A.
CACEIS
(Switzerland)
S.A.
Switzerland
S3 LATAM
HOLDING 1
SL
Spain
CACEIS Bank
(Spain)
(2)
SAU
100%
100%
100%
50%
100%
100%
97.8%
49%
2.2%
SACAM
DEVELOPPEMENT
80.6%
OTHER
GROUP
COMPANIES
50%
SACAM
IMMOBILIER
50%
REGIONAL
BANKS
REGIONAL
BANKS
ASSET SERVICING
69.5%
CACEIS
S.A.
CACEIS Bank
France
S.A.
(2) % of control.
Financial transactions between Crédit Agricole S.A. and its subsidiaries are subject to regulated agreements, as the case may be, mentioned in the statutory auditor’s special report.
Internal mechanisms of Crédit Agricole Group (in particular between Crédit Agricole S.A. and the Regional Banks) are detailed in the paragraph “internal financing mechanisms”,
in introduction of the consolidated financial statements.
AGOS
FCA Bank
61%
50%
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
415
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
General framework
CONSOLIDATED FINANCIAL STATEMENTS
INCOME STATEMENT
(in millions of euros)
Notes
31/12/2020
31/12/2019
Interest and similar income
4.1
Interest and similar expenses
4.1
(11,716 )
(13,663 )
Fee and commission income
4.2
Fee and commission expenses
4.2
(6,458 )
(6,500 )
Net gains (losses) on financial instruments at fair value through profit or loss
4.3
Net gains (losses) on held for trading assets/liabilities
Net gains (losses) on other financial assets/liabilities at fair value through profit or loss
(210 )
Net gains (losses) on financial instruments at fair value through other comprehensive income
4.4
Net gains (losses) on debt instruments at fair value through other comprehensive
income that may be reclassified subsequently to profit or loss
Remuneration of equity instruments measured at fair value through other comprehensive
income that will not be reclassified subsequently to profit or loss (dividends)
Net gains (losses) arising from the derecognition of financial assets at amortised cost
4.5
(9 )
Net gains (losses) arising from the reclassification of financial assets at amortised cost
to financial assets at fair value through profit or loss
Net gains (losses) arising from the reclassification of financial assets at fair value through
other comprehensive income to financial assets at fair value through profit or loss
Income on other activities
4.6
Expenses on other activities
4.6
(34,935 )
(53,180 )
Reclassification of net gains (losses) of designated financial assets applying the overlay approach
5.3
(445 )
Revenues
Operating expenses
4.7
(11,748 )
(11,713 )
Depreciation, amortisation and impairment of property, plant and equipment and intangible assets
4.8
(1,143 )
(1,048 )
Gross operating income
Cost of risk
4.9
(2,606 )
(1,256 )
Operating income
Share of net income of equity-accounted entities
Net gains (losses) on other assets
4.10
Change in value of goodwill
6.16
(903 )
(589 )
Pre-tax income
Income tax
4.11
(1,129 )
(456 )
Net income from discontinued operations
6.12
(221 )
(38 )
Net income
Non-controlling interests
6.21
NET INCOME GROUP SHARE
Earnings per share
(in euros)
(1)
6.20
Diluted earnings per share
(in euros)
(1)
6.20
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
416
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
NET INCOME AND OTHER COMPREHENSIVE INCOME
(in millions of euros)
Notes
31/12/2020
31/12/2019
Net income
Actuarial gains and losses on post-employment benefits
4.12
(93 )
(162 )
Other comprehensive income on financial liabilities attributable to changes in own credit risk
(1)
4.12
(149 )
(74 )
Other comprehensive income on equity instruments that will not be reclassified to profit or loss
(1)
4.12
(81 )
Pre-tax other comprehensive income on items that will not be reclassified to profit or loss
excluding equity-accounted entities
4.12
(323 )
(183 )
Pre-tax other comprehensive income on items that will not be reclassified to profit or loss
on equity-accounted entities
4.12
(30 )
Income tax related to items that will not be reclassified to profit or loss
excluding equity-accounted entities
4.12
Income tax related to items that will not be reclassified to profit or loss
on equity-accounted entities
4.12
(2 )
Other comprehensive income on items that will not be reclassified to profit or loss
from discontinued operations
4.12
Other comprehensive income on items that will not be reclassified subsequently
to profit or loss net of income tax
4.12
(228 )
(131 )
Gains and losses on translation adjustments
4.12
(805 )
Gains and losses on debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
4.12
Gains and losses on hedging derivative instruments
4.12
Reclassification of net gains (losses) of designated financial assets applying the overlay approach
4.12-5.3
(198 )
Pre-tax other comprehensive income on items that may be reclassified to profit or loss
excluding equity-accounted entities
4.12
(130 )
Pre-tax other comprehensive income on items that may be reclassified to profit or loss
on equity-accounted entities, Group share
4.12
(136 )
Income tax related to items that may be reclassified to profit or loss
excluding equity-accounted entities
4.12
(277 )
(481 )
Income tax related to items that may be reclassified to profit or loss
on equity-accounted entities
4.12
Other comprehensive income on items that may be reclassified to profit or loss
from discontinued operations
4.12
(11 )
(12 )
Other comprehensive income on items that may be reclassified subsequently
to profit or loss net of income tax
4.12
(553 )
OTHER COMPREHENSIVE INCOME NET OF INCOME TAX
4.12
(781 )
NET INCOME AND OTHER COMPREHENSIVE INCOME
Of which Group share
Of which non-controlling interests
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
417
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
BALANCE SHEET – ASSETS
(in millions of euros)
Notes
31/12/2020
31/12/2019
Cash, central banks
6.1
Financial assets at fair value through profit or loss
3.1-6.2-6.6-6.7
Held for trading financial assets
Other financial assets at fair value through profit or loss
Hedging derivative Instruments
3.2-3.4
Financial assets at fair value through other comprehensive income
3.1-6.4-6.6-6.7
Debt instruments at fair value through other comprehensive
income that may be reclassified to profit or loss
Equity instruments at fair value through other comprehensive
income that will not be reclassified to profit or loss
Financial assets at amortised cost
3.1-3.3-6.5-6.6-6.7
Loans and receivables due from credit institutions
Loans and receivables due from customers
Debt securities
Revaluation adjustment on interest rate hedged portfolios
Current and deferred tax assets
6.10
Accruals, prepayments and sundry assets
6.11
Non-current assets held for sale and discontinued operations
6.12
Deferred participation
6.17
Investments in equity-accounted entities
6.13
Investment property
6.14
Property, plant and equipment
6.15
Intangible assets
6.15
Goodwill
6.16
TOTAL ASSETS
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
418
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
BALANCE SHEET – LIABILITIES
(in millions of euros)
Notes
31/12/2020
31/12/2019
Central banks
6.1
Financial liabilities at fair value through profit or loss
6.2
Held for trading financial liabilities
Financial liabilities designated at fair value through profit or loss
Hedging derivative Instruments
3.2-3.4
Financial liabilities at amortised cost
Due to credit institutions
3.3-6.8
Due to customers
3.1-3.3-6.8
Debt securities
3.3-6.8
Revaluation adjustment on interest rate hedged portfolios
Current and deferred tax liabilities
6.10
Accruals, deferred income and sundry liabilities
6.11
Liabilities associated with non-current assets held for sale and discontinued operations
6.12
Insurance company technical reserves
6.17
Provisions
6.18
Subordinated debt
3.3-6.19
Total Liabilities
Equity
Equity – Group share
Share capital and reserves
Consolidated reserves
Other comprehensive income
Other comprehensive income on discontinued operations
(10 )
Net income (loss) for the year
Non-controlling interests
TOTAL LIABILITIES AND EQUITY
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
419
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
STATEMENT OF CHANGES IN EQUITY
(in millions of euros)
Group share
Share and capital reserves
Other comprehensive income
Net income
Total equity
Share
capital
Share
premium
and conso-
lidated
reserves
(1)
Elimina-
tion of
treasury
shares
Other
equity
instru-
ments
Total
capital
and
conso-
lidated
reserves
Other
comprehen-
sive income
on items
that may be
reclassified
to profit
and loss
Other
comprehen-
sive income
on items that
will not be
reclassified
to profit
and loss
Total other
comprehen-
sive income
Equity at 1 January 2019 published
(151 )
(1,105 )
Impacts of new accounting standards
Equity at 1 January 2019
(151 )
(1,105 )
Capital increase
Changes in treasury shares held
Issuance/redemption of equity instruments
(116 )
Remuneration of undated deeply subordinated notes
(471 )
(471 )
(471 )
Dividends paid in 2019
(1,976 )
(1,976 )
(1,976 )
Impact of acquisitions/disposals on non-controlling
interests
Changes due to share-based payments
Changes due to transactions with shareholders
(2,441 )
(2,220 )
(2,220 )
Changes in other comprehensive income
(30 )
(30 )
(94 )
Of which other comprehensive income on equity
instruments that will not be reclassified to profit
or loss reclassified to consolidated reserves
(22 )
(22 )
Of which other comprehensive income attributable
to changes in own credit risk reclassified
to consolidated reserves
(8 )
(8 )
Share of changes in equity-accounted entities
(21 )
(12 )
(7 )
Net income for 2019
Other changes
(110 )
(110 )
(110 )
Equity at 31 December 2019
(108 )
(1,220 )
Appropriation of 2019 net income
(4,844 )
Equity at 1 January 2020
(108 )
(1,220 )
Impacts of new accounting standards
Equity at 1 January 2020 restated
(108 )
(1,220 )
Capital increase
Changes in treasury shares held
(5 )
(5 )
(5 )
Issuance/redemption of equity instruments
(5 )
Remuneration of undated deeply subordinated notes
(368 )
(368 )
(368 )
Dividends paid in 2020
Impact of acquisitions/disposals on non-controlling
interests
Changes due to share-based payments
Changes due to transactions with shareholders
(281 )
(5 )
Changes in other comprehensive income
(43 )
(43 )
(383 )
(196 )
(579 )
(622 )
Of which other comprehensive income on equity
instruments that will not be reclassified to profit
or loss reclassified to consolidated reserves
(38 )
(38 )
Of which other comprehensive income attributable
to changes in own credit risk reclassified
to consolidated reserves
(5 )
(5 )
Share of changes in equity-accounted entities
(72 )
(72 )
(100 )
(99 )
(171 )
Net income for 2020
Other changes
(2)
(166 )
(166 )
(166 )
EQUITY AT 31 DECEMBER 2020
(113 )
(1,415 )
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
420
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
(in millions of euros)
Non-controlling interests
Total
consolidated
equity
Capital,
associated
reserves and
income
Other comprehensive income
Total
equity
Other
comprehensive
income on items
that may be
reclassified to
profit and loss
Other
comprehensive
income on items
that will not be
reclassified to
profit and loss
Total other
comprehensive
income
Equity at 1 January 2019 published
(114 )
(7 )
(121 )
Impacts of new accounting standards
Equity at 1 January 2019
(114 )
(7 )
(121 )
Capital increase
Changes in treasury shares held
Issuance/redemption of equity instruments
Remuneration of undated deeply subordinated notes
(27 )
(27 )
(498 )
Dividends paid in 2019
(376 )
(376 )
(2,352 )
Impact of acquisitions/disposals on non-controlling interests
Changes due to share-based payments
Changes due to transactions with shareholders
(391 )
(391 )
(2,611 )
Changes in other comprehensive income
(16 )
Of which other comprehensive income on equity
instruments that will not be reclassified to profit
or loss reclassified to consolidated reserves
(1 )
(1 )
Of which other comprehensive income attributable
to changes in own credit risk reclassified
to consolidated reserves
Share of changes in equity-accounted entities
(1 )
(1 )
(8 )
Net income for 2019
Other changes
Equity at 31 December 2019
(47 )
(23 )
(70 )
Appropriation of 2019 net income
Equity at 1 January 2020
(47 )
(23 )
(70 )
Impacts of new accounting standards
Equity at 1 January 2020 restated
(47 )
(23 )
(70 )
Capital increase
Changes in treasury shares held
(5 )
Issuance/redemption of equity instruments
Remuneration of undated deeply subordinated notes
(106 )
(106 )
(474 )
Dividends paid in 2020
(109 )
(109 )
(109 )
Impact of acquisitions/disposals on non-controlling interests
Changes due to share-based payments
Changes due to transactions with shareholders
(205 )
(205 )
Changes in other comprehensive income
(2 )
(35 )
(33 )
(68 )
(70 )
(692 )
Of which other comprehensive income on equity
instruments that will not be reclassified to profit
or loss reclassified to consolidated reserves
(2 )
Of which other comprehensive income attributable
to changes in own credit risk reclassified
to consolidated reserves
Share of changes in equity-accounted entities
(35 )
(35 )
(35 )
(206 )
Net income for 2020
Other changes
(1)
(47 )
EQUITY AT 31 DECEMBER 2020
(117 )
(56 )
(173 )
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
421
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
CASH FLOW STATEMENT
The cash flow statement is presented using the indirect method.
Operating activities
are representative of income-generating activities
of Crédit Agricole S.A.
Tax inflows and outflows are included in full within operating activities.
Investment activities
show the impact of cash inflows and outflows
associated with purchases and sales of investments in consolidated and
non-consolidated companies, property, plant and equipment and intangible
assets. This section includes strategic equity investments classified as at
“Fair value through profit or loss” or “Fair value through other comprehensive
income on items that cannot be reclassified”.
Financing activities
show the impact of cash inflows and outflows
associated with operations of financial structure concerning equity and
long-term borrowing.
The
net cash flows
attributable to the operating, investment and financing
activities
of discontinued operations
are presented on separate lines in
the cash flow statement.
Net cash and cash equivalents
include cash, debit and credit balances with
central banks and debit and credit demand balances with credit institutions.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
422
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
(in millions of euros)
Notes
31/12/2020
31/12/2019
Pre-tax income
Net depreciation and impairment of property, plant and equipment and intangible assets
Impairment of goodwill and other fixed assets
6.16
Net addition to provisions
Share of net income (loss) of equity-accounted entities
(502 )
(608 )
Net income (loss) from investment activities
(74 )
(54 )
Net income (loss) from financing activities
Other movements
Total Non-cash and other adjustment items included in pre-tax income
Change in interbank items
(24,679 )
Change in customer items
Change in financial assets and liabilities
(73,179 )
(21,872 )
Change in non-financial assets and liabilities
Dividends received from equity-accounted entities
(1)
Taxes paid
(1,853 )
(1,063 )
Net change in assets and liabilities used in operating activities
(30,706 )
Cash provided (used) by discontinued operations
Total Net cash flows from (used by) operating activities (A)
Change in equity investments
(2)
(2,478 )
Change in property, plant and equipment and intangible assets
(748 )
(947 )
Cash provided (used) by discontinued operations
(2 )
Total Net cash flows from (used by) investing activities (B)
(3,228 )
Cash received from (paid to) shareholders
(3)
(2,666 )
Net cash flows from (used in) financing activities
(4)
Cash provided (used) by discontinued operations
(125 )
(9 )
Total Net cash flows from (used by) financing activities (C)
Impact of exchange rate changes on cash and cash equivalent (D)
(1,308 )
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENT (A + B + C + D)
Cash and cash equivalents at beginning of period
Net cash accounts and accounts with central banks*
Net demand loans and deposits with credit institutions**
(460 )
Cash and cash equivalents at end of period
Net cash accounts and accounts with central banks*
Net demand loans and deposits with credit institutions**
(42,242 )
(460 )
NET CHANGE IN CASH AND CASH EQUIVALENTS
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
423
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1
Group accounting policies and principles,
assessments and estimates applied
425
1.1
Applicable standards and comparability
425
1.2
Accounting policies and principles
427
1.3
Consolidation principles and methods (IFRS 10, IFRS 11 and IAS 28)
443
Note 2
Major structural transactions and material
events during the period
446
2.1
COVID-19 health crisis
446
2.2
Main changes in the scope of consolidation
448
2.3
Benchmark bond issue on the Panda market
449
2.4
Social bond issuance
450
2.5
New definition of default
450
2.6
“Switch” guarantee mechanism
450
2.7
Depreciation of goodwill on CA Italia
450
2.8
Capital increase reserved for employees
451
2.9
Voluntary public cash tender offer by Crédit Agricole Italia
for all shares of Credito Valtellinese
451
2.10 Cheque Image Exchange dispute
451
Note 3
Financial management, risk exposure and hedging policy
451
3.1 Credit risk
451
3.2 Market risk
474
3.3
Liquidity and financing risk
478
3.4 Hedge accounting
480
3.5 Operational risks
487
3.6
Capital management and regulatory ratios
487
Note 4
Notes on net income and other comprehensive income
488
4.1
Interest income and expenses
488
4.2
Fees and commissions income and expense
488
4.3
Net gains (losses) on financial instruments at fair value
through profit or loss
489
4.4
Net gains (losses) on financial instruments at fair value
through other comprehensive income
490
4.5
Net gains (losses) arising from the derecognition of financial
assets at amortised cost
490
4.6
Net income (expenses) on other activities
490
4.7 Operating expenses
490
4.8
Amortisation of intangible assets and depreciation of property,
plant and equipment
491
4.9
Cost of risk
492
4.10 Net gains (losses) on other assets
492
4.11 Income tax charge
493
4.12 Changes in other comprehensive income
494
Note 5
Segment reporting
497
5.1
Operating segment information
498
5.2
Segment information: geographical analysis
499
5.3 Insurance specificities
500
Note 6
Notes to the balance sheet
503
6.1
Cash, central banks
503
6.2
Financial assets and liabilities at fair value through profit or loss
503
6.3 Hedging derivatives
506
6.4
Financial assets at fair value through other comprehensive income
506
6.5
Financial assets at amortised cost
508
6.6
Transferred assets not derecognised or derecognised
with on-going involvement
510
6.7
Exposure to sovereign risk
514
6.8
Financial liabilities at amortised cost
516
6.9
Information on the offsetting of financial assets and financial liabilities
518
6.10 Current and deferred tax assets and liabilities
520
6.11 Accrued income and expenses and other assets and liabilities
521
6.12 Non-current assets held for sale and discontinued operations
522
6.13 Joint ventures and associates
523
6.14 Investment property
525
6.15 Property, plant & equipment and intangible assets (excluding goodwill)
526
6.16 Goodwill
527
6.17 Insurance company technical reserves
529
6.18 Provisions
530
6.19 Subordinated debt
535
6.20 Capital
537
6.21 Non-controlling interests
540
6.22 Breakdown of financial assets and financial
liabilities by contractual maturity
541
Note 7
Employee benefits and other compensation
542
7.1
Analysis of employee expenses
542
7.2 Average headcount
542
7.3
Post-employment benefits, defined-contribution plans
542
7.4
Post-employment benefits, defined-benefit plans
543
7.5
Other employee benefits
545
7.6 Share-based payments
545
7.7 Executive compensation
545
Note 8
Lease contracts
546
8.1
Leases for which the Group is the lessee
546
8.2
Leases for which the Group is the lessor
547
Note 9
Commitments given and received and other guarantees
548
Commitments given and received
548
Financial instruments given and received as collateral
549
Receivables pledged as collateral
549
Guarantees held
549
Note 10
Reclassification of financial instruments
550
Principles applied by the Crédit Agricole S.A. group
550
Reclassification performed by the Crédit Agricole S.A. group
550
Note 11
Fair value of financial instruments
550
11.1 Fair value of financial assets and liabilities recognised
at amortised cost
551
11.2 Information about financial instruments measured at fair value
553
11.3 Estimated impact of inclusion of the margin at inception
564
Note 12
Scope of consolidation at 31 December 2020
565
12.1 Information on subsidiaries
565
12.2 Composition of the scope
566
Note 13
Investments in non-consolidated companies and
structured entities
580
13.1 Information on subsidiaries
580
13.2 Non-consolidated structured entities
580
Note 14
Events subsequent to 31 December 2020
584
14.1 Unwinding of 15% of the switch guarantee mechanism
584
14.2 Redemption by Crédit Agricole Consumer Finance of 49%
of the capital of the joint venture Crédit Agricole Consumer
Finance Bankia S.A.
584
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
424
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
6
NOTE 1
Group accounting policies and principles, assessments and estimates applied
1.1
APPLICABLE STANDARDS AND COMPARABILITY
Pursuant to EC Regulation no. 1606/2002, the consolidated financial
statements have been prepared in accordance with IAS/IFRS standards
and IFRIC interpretations applicable at 31 December 2020 and as adopted
by the European Union (carve-out version), thus using certain exceptions
in the application of IAS 39 on macro-hedge accounting.
These standards and interpretations are available on the European
Commission website at: https://ec.europa.eu/info/business-economy-euro/
company-reporting-and-auditing/company-reporting/financial-reporting_en
The standards and interpretations are the same as those applied and
described in the Group’s financial statements for the financial year ended
31 December 2019.
They have been supplemented by the IFRS standards as adopted by the
European Union at 31 December 2020 and that must be applied for the
first time in 2020.
These cover the following:
Standards, amendments or interpretations
Applicable
in the Group
Date of first-time
application: financial
years from
Amendment to references to the conceptual framework in the IFRS standards
Yes
1
st
January 2020
IAS1/IAS8 Presentation of Financial statements
Definition of material
Yes
1
st
January 2020
Amendment to IFRS9, IAS 39 and IFRS 7 Financial instruments
Interest rate benchmark reform – Phase 1
Yes
1
st
January 2020
(1)
Amendment to IFRS3 Business combinations
Definition of a business
Yes
1
st
January 2020
Amendment to IFRS16 Leases
(2)
Rent concessions related to COVID-19
Yes
1
st
June 2020
(1)
The Group decided to early apply the amendment to IFRS 9, IAS 39 and IFRS 7 Financial instruments on the Interest rate benchmark reform from 1 January 2019. Non-significant impact
at 31 December 2020 of the application of the interest rate banchmark reform - Phase 1.
(2)
Non-significant impact at 31 December 2020 of the application of the amendment to IFRS 16 in 2020.
Moreover, as long as the early application of standards and interpretations adopted by the European Union is optional for a period, this option is not
selected by the Group, unless otherwise stated.
This is the case in particular for:
Standards, amendments or interpretations
Applicable in the
Group
Date of first-time
application: financial
years from
Amendment to IFRS9, IAS39, IFRS7, IFRS4 and IFRS16
Interest rate benchmark reform – Phase 2
(2)
Yes
1
st
January 2021
(1)
Amendment to IFRS4
Optional deferral of the application of IFRS 9 for entities engaged primarily in insurance activities, including
entities in the insurance industry owned by a financial conglomerate as at 1
st
January 2023
No
1
st
January 2021
(1)
The Group decided to early apply the amendment to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 on the Interest rate benchmark reform – Phase 2 from 1 January 2020.
(2)
Non-significant impact at 31 December 2020 of the application of the Interest rate benchmark reform – Phase 2.
Benchmark indices reforms
Reforms of benchmark indices, often referred to as “IBOR reforms”, have
entered a new phase with the very gradual development of the use of
risk-free rate indices (RFR: Risk Free Rates) in new contracts. The situation
remains heterogeneous across currencies and asset classes. At this stage,
a more significant increase in transaction volumes has been observed in
the derivatives markets, particularly with the use of SONIA. Conversely,
liquidity on the €STR markets is less developed.
For a majority of existing contracts that benchmark the interest rate indices
that must be replaced, it is now considered that the replacement rates will
be a combination of forward rates (pre-determined or post-determined)
calculated from RFR and an adjustment spread, with the latter aimed at
ensuring economic equivalence with the replaced index. Despite this strong
orientation, at this stage the adoption of RFR and the limited number of
contracts renegotiated to update fallback clauses or to proactively replace
the benchmark, reflect heterogeneous levels of maturity in the detailed
definition of the transition mechanisms – including agreements – according
to currencies and asset classes. Developments of information systems,
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
425
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
which are contingent on precise definitions of target replacement rates in
order to be finalised, are still in progress.
The private sector remains at the forefront of these transitions. However,
recent announcements suggest a possible intervention by the authorities to
support transitions for contract scopes that could not timely be renegotiated,
be it to replace the benchmark rate in anticipation of the disappearance
of indexes, or to insert robust fallback clauses that allow for a transition to
the disappearance of indexes. Nevertheless, in the absence of an ex-ante
definition of the scope of contracts that could benefit from such support,
the preparation of transition plans continues. In addition, proactive early
transitions are still strongly encouraged by some authorities, such as the
British authority (FCA: Financial Conduct Authority).
Specifically for the scope of derivative contracts, and by extension to
Repo contracts and securities lending/borrowing contracts, the ISDA has
finalised the implementation of a protocol that will enable the new fallback
clauses to be automatically incorporated into the contract. This protocol is
likely to simplify the transition of derivative contracts between the parties
that have agreed to it. Crédit Agricole CIB and the entities that are most
active in derivatives have joined. For other non-derivative instruments,
such mechanism does not exist and numerous bilateral renegotiations
will be necessary.
Crédit Agricole continues to steer benchmark index transitions through the
“Benchmarks” project, by incorporating the recommendations of national
working groups and the milestones set by the authorities, primarily the FCA.
Thus, the project aims to follow the standards defined by the market. The
timetable for the transition project revolves around the phases of adoption
and alternative rate offers and the dates on which the use of indices
whose discontinuation is announced. The transition plans finalised for each
Crédit Agricole Group entity, incorporating the most recent conclusions
of the working groups and market associations and, where applicable,
details of possible government intervention, will be in operation in 2021.
With regard to the transition from EONIA to €STR (transition no later than
3 January 2022), work has been initiated. The clearing houses have switched
the compensation of EONIA collateral to the €STR. The flows that benchmark
the €STR are increasing only very gradually. Moreover, EURIBOR – like any
benchmark – is likely to see its methodology changed or replaced in the
long term. Nonetheless, the short-term replacement scenario of EURIBOR,
following a timetable that would be similar to that of LIBOR transitions, is
not anticipated at this stage.
As things stand, the list of the main benchmark indices at the Crédit Agricole
Group level, and/or defined as critical by ESMA, that are affected by a
certain or potential transition remains unchanged:
EONIA, which will disappear on 3 January 2022;
LIBOR (USD, GBP, CHF, JPY and EUR), which could cease to exist at the
end of 2021 but has not yet been officially announced;
EURIBOR, WIBOR, STIBOR, which may disappear, but not as anticipated
in the short term.
EURIBOR, LIBOR (notably USD) and EONIA represent – in descending
order – the Group’s largest exposure to the benchmark indices.
In addition to preparing for the anticipated transitions and, at the very
least, compliance with BMR, the project’s work also aims at identifying and
managing the risks inherent in the transitions to the benchmark indices,
particularly on the financial, operational and customer protection aspects.
In order to ensure that the accounting hedging relationships affected by
this benchmark interest rate reform can continue despite the uncertainties
over the timetable and terms of transition between the current indices and
the new indices, the IASB published amendments to IAS 39, IFRS 9 and
IFRS 7 in September 2019, which were adopted by the European Union
on 15 January 2020. The Group will apply these amendments as long as
uncertainties about the benchmarks will concern the timings and amounts
of interest rate benchmark-based cash flows and considers, in this respect,
that all its hedging contracts, mainly those relating to EONIA, EURIBOR
and LIBOR rates (USD, GBP, CHF, JPY), are eligible for hedge accounting
at 31 December 2020.
As at 31 December 2020, the inventory of hedging derivatives impacted
by the reform and on which uncertainties remain shows a nominal amount
of €587 billion.
Other amendments, published by the IASB in August 2020, supplement
those published in 2019 and focus on the accounting consequences of
replacing the former reference interest rates with other reference rates
following the reforms.
These amendments, known as “Phase 2”, mainly are changes in contractual
cash flows. They allow entities not to de-recognise or adjust the carrying
amount of financial instruments to reflect the changes required by the
reform, but rather to update the effective interest rate to reflect the change
in the alternative reference rate.
With regard to hedge accounting, entities will not have to de-designate their
hedging relationships when making the changes required by the reform.
The Group decided to early apply these amendments, as of 1
st
January 2020.
At 31 December 2020, the breakdown by significant benchmark index of instruments, based on the old benchmark rates and which must move to the
new rates before maturity, is as follows:
In millions of euros
EONIA
EURIBOR
LIBOR USD
LIBOR GBP
LIBOR JPY
LIBOR CHF
LIBOR EUR
WIBOR
STIBOR
Total non-derivative
financial assets
1,542
266,410
71,401
6,461
13,956
5,727
2
2,734
156
Total non-derivative
financial liabilities
6,136
69,754
37,762
2,404
1,348
123
5
1,537
68
Total notional amount
of derivatives
484,902
3,771,688
2,856,710
363,111
956,350
98,152
-
9,313
29,402
With regard to EONIA index exposures, the outstandings carried forward
are those with a maturity date after 3 January 2022, the transition date.
For non-derivative financial instruments, the exposures correspond to the
nominal value of the securities and the outstanding capital of depreciable
instruments.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
426
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Duration of leases IFRS16 – IFRS IC Decision
of 26 November 2019
During the first half of 2019, IFRS IC received a request about the
determination of the enforceable term for the recognition of lease
agreements under IFRS 16, in particular for two types of lease agreements:
leases without a contractual term, cancellable by either party subject
to notice to terminate;
leases that are renewable automatically (unless terminated by one of
the parties), with no contractual penalty due in the event of termination.
At its meeting on 26 November 2019, IFRS IC recalled that, in application
of IFRS 16 and in general, a lease is no longer enforceable when the lessee
and lessor each have the right to terminate the lease without permission
from the other party with no more than an insignificant penalty, and clarified
that in determining the enforceable term of a lease, the broader economics
of the contract must be taken into account, and that the notion of penalty
is understood to go beyond contractual termination payments and includes
any economic incentive not to terminate the contract.
This decision constitutes a change in the Group’s approach to determining
lease terms, and goes beyond the specific cases for which IFRS IC has
received requests, as recalled by the AMF in its recommendations at
31 December 2019. In fact, the determination of the lease term to be
used for the valuation of the right of use and the lease liability is made in
accordance with IFRS 16 within this enforceable period.
As soon as this final decision of IFRS IC was published, the Crédit Agricole
Group set up a project involving the accounting, finance, risk and
IT departments in order to bring the matter into compliance for the
31 December 2020 year end.
The Group has chosen a term corresponding to the first exit option after five
years as the reasonably certain term of a lease. This term, at the inception
of French commercial leases, will be applied in the majority of cases. The
main exception will be the case of a lease in which the Group has waived
its three-year interim exit options (
e.g.
in return for a reduction in rental
income); in this case, the term of the lease will remain nine years. Crédit
Agricole S.A. did not identify any significant impact at 31 December 2020
of the IFRS IC November 26, 2019 decision’s application.
Standards and interpretations not yet
adopted by the European Union as at
31 December 2020
The standards and interpretations published by the IASB at 31 December 2020
but not yet adopted by the European Union are not applied by the Group.
They will become mandatory only as from the date planned by the European
Union and have not been applied by the Group at 31 December 2020.
This concerns IFRS 17 in particular.
IFRS 17 – Insurance Contracts issued in May 2017 will replace IFRS 4.
It will apply to financial years beginning 1 January 2023 subject to adoption
by the European Union.
IFRS 17 sets out the new measurement and recognition principles
for insurance contract liabilities and evaluation of their profitability, in
addition to their presentation. Between 2017 and 2019, a framework on
the implementation project in order to identify the challenges and impacts
of the standard on the Group’s insurance subsidiaries began. Analysis and
preparation work for implementation continued in 2020.
1.2
ACCOUNTING POLICIES AND PRINCIPLES
Use of assessments and estimates to prepare
the financial statements
Estimates made to draw up the financial statements are by nature based
on certain assumptions and involve risks and uncertainties as to whether
they will be achieved in the future.
Future results may be influenced by many factors, including:
activity in domestic and international financial markets;
fluctuations in interest and foreign exchange rates;
the economic and political climate in certain industries or countries;
changes in regulations or legislation.
This list is not exhaustive.
Accounting estimates based on assumptions are principally used in the
following assessments:
financial instruments measured at fair value;
investments in non-consolidated companies;
pension schemes and other post-employment benefits;
stock option plans;
impairment of debt instruments at amortised cost or at fair value through
other comprehensive income that can be reclassified to profit or loss;
provisions;
impairment of goodwill;
deferred tax assets;
valuation of equity-accounted entities;
policyholders’ deferred profit sharing.
The procedures for the use of assessments or estimates are described in
the relevant sections below.
Financial instruments (IFRS 9, IAS 32 and IAS 39)
Definitions
IAS 32 defines a financial instrument as any contract that gives rise to a
financial asset of one entity and a financial liability or equity instrument
of another entity, meaning any contract representing contractual rights or
obligations to receive or pay cash or other financial assets.
Derivative instruments are financial assets or liabilities whose value changes
according to that of an underlying asset, which requires a low or nil initial
investment, and for which settlement occurs at a future date.
Financial assets and liabilities are treated in the financial statements in
accordance with IFRS 9 as adopted by the European Union, including for
financial assets held by the Group’s insurance entities.
IFRS 9 sets the principles governing the classification and measurement
of financial instruments, impairment of credit risk and hedge accounting,
excluding macro-hedging transactions.
It should nevertheless be noted that Crédit Agricole S.A. has opted not
to apply the IFRS 9 general hedging model. All hedging relationships
consequently remain within the scope of IAS 39 pending future provisions
relating to macro-hedging.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
427
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Conventions for valuing financial assets
and liabilities
Initial measurement
During their initial recognition, financial assets and liabilities are measured
at fair value as defined by IFRS 13.
Fair value as defined by IFRS 13 corresponds to the price that would
be received to sell an asset or paid to transfer a liability in an ordinary
transaction between market participants, on the principal or the most
advantageous market, at the valuation date.
Subsequent measurement
After initial recognition, financial assets and liabilities are measured
according to their classification either at amortised cost using the effective
interest rate method (EIR) for debt instruments or at fair value as defined
by IFRS 13. Derivative instruments are always measured at fair value.
Amortised cost corresponds to the amount at which the financial asset or
liability is measured during its initial recognition, including transaction costs
directly attributable to its acquisition or issue, reduced by repayments of
principal, increased or reduced by the cumulative amortisation calculated
by the effective interest rate method (EIR) on any difference (discount
or premium) between the initial amount and the amount at maturity. In
the case of a financial asset at amortised cost or at fair value through
comprehensive income that can be reclassified to profit or loss, the amount
may be adjusted if necessary in order to correct for impairment (see the
section on “Provisions for credit risk”).
The effective interest rate (EIR) is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial
instrument or, when appropriate, a shorter period, to obtain the net carrying
amount of the financial asset or financial liability.
Financial assets
Classification and measurement of financial assets
Non-derivative financial assets (debt or equity instruments) are classified on
the balance sheet in accounting categories that determine their accounting
treatment and their subsequent valuation mode.
The criteria for the classification and valuation of financial assets depends on
the nature of the financial assets, according to whether they are qualified as:
debt instruments (
e.g.
loans and fixed or determinable income securities);
or
equity instruments (
e.g.
shares).
These financial assets are classified in one of the following three categories:
financial assets at fair value through profit or loss;
financial assets at amortised cost (debt instruments only);
financial assets at fair value through equity (for debt instruments, that
can be reclassified to profit or loss; for equity instruments, that cannot
be reclassified to profit or loss).
Debt instruments
The classification and valuation of a debt instrument depend on the
combination of two criteria: the business model defined at portfolio level
and the analysis of the contractual terms determined by debt instrument,
unless the fair value option is used.
The three business models
The business model represents the strategy followed by the management
of Crédit Agricole S.A. for managing its financial assets in order to achieve
its objectives. The business model is specified for a portfolio of assets and
does not constitute a case-by-case intention for an isolated financial asset.
We distinguish three business models:
the hold to collect model where the aim is to collect contractual cash
flows over the lifetime of the assets; this model does not always imply
holding all of the assets until their contractual maturity; however, sales
of assets are strictly governed;
the hold to collect and sell model where the aim is to collect the
contractual cash flows over the lifetime of the assets and to sell the
assets; under this model, both the sale of the financial assets and receipt
of cash flows are essential; and
the other/sell model, where the main aim is to sell the assets.
In particular, it concerns portfolios where the aim is to collect cash flows
via sales, portfolios whose performance is assessed based on fair value
and portfolios of financial assets held for trading.
When the management strategy for managing financial assets does
not correspond to either the collect model or the collect and sell model,
these financial assets are classified in a portfolio whose management
model is other/sell.
The contractual terms (“Solely Payments of Principal & Interest”
or "SPPI" test)
“SPPI” testing combines a set of criteria, examined cumulatively, to establish
whether contractual cash flows meet the characteristics of simple financing
(principal repayments and interest payments on the remaining amount of
principal due).
The test is satisfied when the financing gives entitlement only to the
repayment of the principal and when the payment of interest received
reflects the time value of money, the credit risk associated with the
instrument, the other costs and risks of a conventional loan contract and
a reasonable margin, whether the interest rate is fixed or variable.
In simple financing, interest represents the cost of the passage of time,
the price of credit and liquidity risk over the period, and other components
related to the cost of carrying the asset (
e.g.
administrative costs etc.).
In some cases, when qualitative analysis of this nature does not allow a
conclusion to be made, quantitative analysis (or benchmark testing) is
carried out. This additional analysis consists of comparing the contractual
cash flows of the asset under review with the cash flows of a benchmark
asset.
If the difference between the cash flows of the financial asset and the
benchmark asset is considered immaterial, the asset is deemed to be
simple financing.
Moreover, specific analysis is conducted when the financial asset is issued
by special purpose entities establishing a differentiated order of payment
among the holders of the financial assets by contractually linking multiple
instruments and creating concentrations of credit risk (“tranches”).
Each tranche is assigned a rank of subordination that specifies the order
of distribution of cash flows generated by the structured entity.
In this case, the “SPPI” test requires an analysis of the characteristics
of contractual cash flows of the asset concerned and underlying assets
according to the “look-through” approach and the credit risk borne by the
tranches subscribed compared to the credit risk of the underlying assets.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
428
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
The mode of recognition of debt instruments resulting from qualification of the business model combined with the “SPPI” test may be presented in the
following diagram:
Business models
Collect
Passed
Debt instrument
Amortised cost
Fair value through
profit or loss
Fair value through
profit or loss
Fair value through
profit or loss
(SPPI test N/A)
Fair value through other
comprehensive income
(items that may be reclassified)
SPPI test
Not passed
Collect and sell
Other/Sell
Debt instruments at amortised cost
Debt instruments are measured at amortised cost if they are eligible for
the hold to collect model and if they pass the “SPPI” test.
They are recorded at the settlement date and their initial valuation also
includes accrued interest and transaction costs.
Amortisation of any premiums or discounts and loans and receivables
transaction costs on fixed-income securities is recognised in the income
statement using the effective interest rate method.
This category of financial assets is impaired under the conditions described
in the specific paragraph “Provisioning for credit risks”.
Debt instruments at fair value through other comprehensive income
(items that can be reclassified)
Debt instruments are measured at fair value through other comprehensive
income on items that can be reclassified if they are eligible for the collect
and sell model and if they pass the SPPI test.
They are recorded at the trade date and their initial valuation also includes
accrued interest and transaction costs.
Amortisation of any premiums or discounts and transaction costs on
fixed-income securities is recognised in the income statement using the
effective interest rate method.
These financial assets are subsequently measured at fair value, with
changes in fair value recorded in other comprehensive income on items that
can be reclassified and offset against the outstandings account (excluding
accrued interest recognised in profit or loss according to the effective
interest rate method).
If the securities are sold, these changes are transferred to the income
statement.
This category of financial instruments is impaired under the conditions
described in the specific paragraph “Provisions for credit risks” (without
this affecting the fair value on the balance sheet).
Debt instruments at fair value through profit or loss
Debt instruments are measured at fair value through profit or loss in the
following cases:
The instruments are classified in portfolios composed of financial assets
held for trading or for which the main objective is disposal.
Financial assets held for trading are assets acquired or generated by the
enterprise primarily with the aim of disposal in the short term or which
are included in a portfolio of financial instruments managed as a unit and
with the purpose of making a profit from short term price fluctuations
or an arbitrage margin. Although contractual cash flows are received
during the period that Crédit Agricole S.A. holds the assets, receiving
these contractual cash flows is not essential but ancillary.
Debt instruments that do not fulfil the criteria of the “SPPI” test. This is
notably the case of the UCITs.
Financial instruments classified in portfolios which Crédit Agricole S.A.
designates at fair value in order to reduce an accounting treatment
difference on the income statement. In this case, the instrument is
classified as designated at fair value through profit or loss.
Financial assets measured at fair value through profit or loss are initially
recognised at fair value, excluding transaction costs (directly recorded to
profit or loss) and including accrued interest.
They are subsequently measured at fair value and changes in fair value
are recognised in profit or loss, under “Revenues”, offset against the
outstandings account. Interest on these instruments are recorded under
“Net gains (losses) on financial instruments at fair value through profit
and loss”.
This category of financial assets is not impaired.
Debt instruments measured by definition at fair value through profit or
loss whose business model is “Other/sell” are recorded at the trade date.
Debt instruments designated at fair value through profit or loss are recorded
on the trade date.
Debt instruments measured by definition at fair value through profit or loss,
failing the SPPI test, are recorded at the settlement date.
Equity instruments
Equity instruments are by default recognised at fair value through profit or
loss, except in the case of the irrevocable option for classification at fair value
through other comprehensive income on items that cannot be reclassified,
providing that these instruments are not held for trading purposes.
Equity instruments at fair value through profit or loss
Financial assets measured at fair value through profit or loss are initially
recognised at fair value, excluding transaction costs (directly recorded to
profit or loss). Equity instruments held for trading purposes are recorded at
the trade date. Equity instruments measured at fair value through profit or
loss and not held for trading are recorded at the settlement date.
They are subsequently measured at fair value and changes in fair value are
recognised in profit or loss, under Revenues, offset against the outstandings
account.
This category of financial assets is not impaired.
Equity instruments at fair value through other comprehensive income on
items that cannot be reclassified (irrevocable option)
The irrevocable option to recognise equity instruments at fair value through
other comprehensive income on items that cannot be reclassified is adopted
at the transactional level (line by line) and applies from the date of initial
recognition. These securities are recorded at the trade date.
The initial fair value includes transaction costs.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
429
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
During subsequent valuations, changes in fair value are recognised in other
comprehensive income on items that cannot be reclassified. In case of
disposal, these changes are not reclassified to profit or loss. The gain or
loss on disposal is recognised in other comprehensive income.
Only dividends are recognised in profit or loss, if:
the right of the entity to receive payment is established;
it is probable that the economic benefits associated with the dividends
will flow to the entity;
the amount of dividends can be reliably estimated.
Reclassification of financial assets
In the case of a significant change in the business model used for
managing financial assets (new activity, acquisition of entities, disposal
or discontinuation of a significant activity), a reclassification of these financial
assets is necessary. The reclassification applies to all financial assets in
the portfolio from the date of reclassification.
In other cases, the business model remains unchanged for existing financial
assets. If a new business model is identified, it applies prospectively to new
financial assets grouped in a new management portfolio.
Temporary investments in/disposals of securities
Temporary disposals of securities (loans of securities, securities delivered
under repurchase agreements) do not generally fulfil the conditions for
derecognition.
Securities lent or sold under repurchase agreements remain on the balance
sheet. In the case of securities under repurchase agreements, the amounts
received, representing the liability to the transferee, are recognised on the
liabilities side of the balance sheet by the transferor.
Securities borrowed or received under repurchase agreements are not
recognised on the balance sheet of the transferee.
In the case of securities under repurchase agreements, a debt to the
transferor is recorded on the balance sheet of the transferee and offset
against the amount paid. If the security is subsequently resold, the transferee
records a liability equivalent to the fair value of fulfilling their obligation to
return the security received under the agreement.
Revenue and expenses relating to such transactions are posted to profit
and loss on a prorated basis, except in the case of classification of assets
and liabilities at fair value through profit or loss.
Derecognition of financial assets
A financial asset (or group of financial assets) is fully or partially
derecognised if:
the contractual rights to the cash flows from the financial asset expire;
or are transferred or are deemed to have expired or been transferred
because they belong
de facto
to one or more beneficiaries; and
substantially all the risks and rewards of the financial asset are transferred.
In this case, any rights or obligations created or retained at the time of
transfer are recognised separately as assets and liabilities.
If the contractual rights to the cash flows are transferred but some of the
risks and rewards of ownership as well as control are retained, the financial
assets continue to be recognised to the extent of the Group’s continuing
involvement in the asset.
Financial assets renegotiated for commercial reasons without financial
difficulties of the counterpart with the aim of developing or keeping a
commercial relation are derecognised at the date of the renegotiation.
The new loans granted to customers are recorded at this date at their fair
value on the date of renegotiation. Subsequent recognition depends on
the business model and the SPPI test.
Interests paid by the government (IAS 20)
Under French government measures to support the agricultural and rural
sector and to help home buyers, certain Crédit Agricole Group entities
grant subsidised loans at rates fixed by the government. Consequently,
the government pays these entities the difference between the subsidised
lending rate and a predetermined benchmark rate. Thus, the loans that
benefit from these subsidies are granted at market rates.
The subsidy system is periodically reviewed by the government.
In accordance with IAS 20, subsidies received from the government are
recorded in profit or loss under Interest and similar income and spread
over the life of the corresponding loans.
Overlay approach applicable to insurance activities
Crédit Agricole S.A. uses the overlay approach for financial assets held
for the purposes of an activity related to insurance contracts, which are
designated in accordance with the option offered by the amendments to
IFRS 4 – Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance
Contracts, published by the IASB in September 2016.
This approach aims to remedy the temporary accounting consequences
of the discrepancy between the effective date of IFRS 9 and that of the
new standard on insurance contracts replacing IFRS 4 (IFRS 17). This has
the effect of eliminating from the income statement part of the additional
accounting mismatch and the temporary volatility which could be caused
by application of IFRS 9 before IFRS 17 came into force.
Eligible financial assets are designated instrument by instrument, and
this may be done:
at 1 January 2018, during the initial application of IFRS 9; or
subsequently, but only at the time of the initial recognition of the assets
in question.
In application of the overlay approach, Crédit Agricole S.A. reclassifies,
for designated financial assets only, their impact in the income statement
under other comprehensive income such that the amount presented in the
income statement corresponds to that which would have been presented
in the income statement if IAS 39 had been applied.
Consequently, the amount reclassified is equal to the difference between:
the amount presented in net income under IFRS 9 for designated financial
assets; and
the amount that would have been presented in net income for designated
financial assets if the insurer had applied IAS 39.
In the income statement, the effects of this reclassification are recognised
under “revenues”, before tax effects, on the line “Reclassification of net
gains or losses on financial assets related to the overlay approach”. The
tax effects related to this reclassification are presented on the line “Income
tax charge”.
In the statement of other comprehensive income, the effects of this
reclassification are recognised as net gains and losses recognised directly
in other comprehensive income on items that may be reclassified to profit
or loss on the line “Reclassification of net gains or losses on financial assets
related to the overlay approach”.
The financial assets that may be designated must fulfil the following
characteristics:
they are held by insurers within the Group for purposes of insurance
activities;
they are measured at fair value through profit or loss under IFRS 9 but
would not have been measured in this way under IAS 39; they are financial
assets which, under IAS 39 would have been recognised at amortised
cost (assets held to maturity, loans and receivables) or at fair value
through other comprehensive income (available-for-sale financial assets).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
430
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Evaluation of the impact of the designated financial assets
on the income statement
Pursuant to the overlay approach, Crédit Agricole S.A. continues to apply
the accounting policies and principles that the Group applied under IAS 39
for the recognition of profit or loss from designated financial assets:
Financial assets at amortised cost under IAS 39
Financial assets at amortised cost are initially recognised at their initial fair
value, including directly-attributable transaction costs and accrued interest.
They are subsequently measured at amortised cost with amortisation
of any premium or discount and transaction costs using the corrected
effective interest rate method.
Available-for-sale financial assets under IAS 39
“Available-for-sale financial assets” are initially recognised at initial fair
value, including transaction costs that are directly attributable to the
acquisition, and accrued interest.
“Available-for-sale financial assets” are later measured at fair value and
subsequent changes in fair value are recorded in other comprehensive
income.
If the securities are sold, these changes are transferred to the income
statement.
Amortisation of any premiums or discounts and transaction costs on
fixed-income securities is recognised in the income statement using the
effective interest rate method.
Impairment of designated financial assets under IAS 39
Impairment must be recognised when there is objective evidence of
impairment resulting from one or more events occurring after the initial
recognition of the financial asset.
Objective evidence of loss corresponds to a prolonged or significant decline
in the value of the security for equity securities or the appearance of
significant deterioration in credit risk evidenced by a risk of non-recovery
for debt securities.
For equity securities, Crédit Agricole S.A. uses quantitative criteria as
indicators of potential impairment. These quantitative criteria are mainly
based on a loss of 30% or more of the value of the equity instrument
over a period of six consecutive months. Crédit Agricole S.A. may also
take account of other factors such as financial difficulties of the issuer, or
short term prospects etc.
Notwithstanding the above-mentioned criteria, Crédit Agricole S.A.
recognises an impairment loss when there is a decline in the value of the
equity instrument higher than 50% or prolonged over three years.
Financial liabilities
Classification and measurement of financial liabilities
Financial liabilities are classified on the balance sheet in the following two
accounting categories:
financial liabilities at fair value through profit or loss, either due to their
nature or optionally;
financial liabilities at amortised cost.
Financial liabilities at fair value through profit or loss due to their nature
Financial instruments issued primarily to be bought back in the short term,
instruments forming part of an identified portfolio of financial instruments
which are managed together and which have indications of a recent profile
of short-term profit-taking, and derivatives (with the exception of certain
hedging derivatives) are measured at fair value due to their nature.
Changes in the fair value of this portfolio are recognised through profit
or loss.
Financial liabilities designated at fair value through profit or loss
Financial liabilities fulfilling one of the three conditions defined by the
standard below may be designated for measurement at fair value through
profit or loss: for hybrid issues comprising one or more separable embedded
derivatives, in order to reduce or eliminate the distortion of accounting
treatment or groups of managed financial liabilities for which performance
is measured at fair value.
This option is irrevocable and applies mandatorily from the date of initial
recognition of the instrument.
During subsequent measurement, these financial liabilities are measured
at fair value through profit or loss for changes in fair value not related to
own credit risk and through other comprehensive income on items that
cannot be reclassified for changes in value related to own credit risk, unless
this aggravates an accounting mismatch (in which case any changes in
value related to the Company’s own credit risk are recorded in the income
statement, as required by the standard).
Financial liabilities measured at amortised cost
All other liabilities fulfilling the definition of a financial liability (excluding
derivatives) are measured at amortised cost.
These liabilities are initially measured at fair value (including transaction
income and costs) and subsequently at amortised cost using the effective
interest rate method.
Deposits and savings accounts
Deposits and savings accounts are recorded under the category “Financial
liabilities at amortised cost – Due to customers” in spite of the characteristics
of the collection system within the Crédit Agricole Group, with deposits
originating from the Regional Banks centralised at Crédit Agricole S.A. For
the Group, the ultimate counterparty for these deposits is the end customer.
The deposits and savings are initially measured at fair value and
subsequently at amortised cost.
Regulated savings products are by nature deemed to be at market rates.
Provisions are accounted where necessary against home purchase savings
schemes and accounts as set out in Note 6.18 “Provisions”.
Reclassification of financial liabilities
The initial classification of financial liabilities is irrevocable. No subsequent
reclassification is authorised.
Distinction between debt instruments and equity
Securities are classed as debt instruments or equity instruments based
on the economic substance of the contractual terms.
A financial liability is a debt instrument if it includes a contractual obligation:
to provide another entity with cash, another financial asset or a variable
number of equity instruments; or
to exchange financial assets and liabilities with another entity at potentially
unfavourable conditions.
An equity instrument is a non-redeemable financial instrument which
offers discretionary return representing a residual interest in a company
after deduction of all its financial liabilities (net assets) and which is not
qualified as a debt instrument.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
431
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Treasury share buyback
Treasury shares or equivalent derivative instruments such as options on
treasury shares bought by Crédit Agricole S.A. with a fixed strike ratio,
including shares held to cover stock option plans, do not meet the definition
of a financial asset and are deducted from equity. They do not generate
any impact on the income statement.
Derecognition and modification of financial liabilities
A financial liability is derecognised in full or in part:
when it is extinguished; or
when quantitative or qualitative analyses suggest it has undergone a
substantial change following restructuring.
A substantial modification of an existing financial liability must be recorded
as an extinction of an initial financial liability and the recognition of a new
financial liability (novation). Any differential between the carrying amount
of the extinct liability and the new liability will be recognised immediately
in the income statement.
If the financial liability is not derecognised, the original effective interest
rate is maintained. A discount/premium is recognised immediately in the
income statement at the date of modification and is then spread, using the
original effective interest rate, over the remaining life of the instrument.
Negative interest on financial assets
and financial liabilities
In accordance with the IFRS IC decision of January 2015, negative interest
income (expense) on financial assets that do not meet the definition of
income under IFRS 15 is recognised as interest expense in the income
statement and not as a reduction of interest income. The same applies to
negative interest expense (income) on financial liabilities.
Provisions for credit risks
Scope of application
In accordance with IFRS 9, Crédit Agricole S.A. recognises a correction
for changes in value for expected credit losses (ECL) on the following
outstandings:
financial assets of debt instruments recognised at amortised cost or fair
value through other comprehensive income (items that can be reclassified)
(loans and receivables, debt securities);
financing commitments which are not measured at fair value through
profit or loss;
guarantee commitments coming under IFRS 9 and which are not
measured at fair value through profit or loss;
rental receivables coming under IFRS 16; and
trade receivables generated by transactions under IFRS 15.
Equity instruments (at fair value through profit or loss or through Other
Comprehensive Income on items that cannot be reclassified) are not
concerned by impairment provisions.
Derivative instruments and other instruments at fair value through profit or
loss are subject to the calculation of counterparty risk which is not covered
by the ECL model. This calculation is described in Chapter 5 “Risks and
Pillar 3”.
Credit risk and provisioning stages
Credit risk is defined as risk of loss related to default by a counterparty
leading to its inability to meet its commitments to the Group.
The process of provisioning credit risk has three stages (Buckets):
1
st
stage (Bucket 1):
upon initial recognition of the financial instrument
(credit, debt security, guarantee etc.), the entity recognises the 12-month
expected credit losses;
2
nd
stage (Bucket 2):
if the credit quality deteriorates significantly for a
given transaction or portfolio, the entity recognises the losses expected
to maturity;
3
rd
stage (Bucket 3):
when one or more default events have occurred
on the transaction or on a counterparty with an adverse effect on the
estimated future cash flows, the entity recognises incurred credit losses
to maturity. Subsequently, if the conditions for classifying financial
instruments in Bucket 3 are not met, the financial instruments are
reclassified in Bucket 2, then in Bucket 1 according to the subsequent
improvement in the quality of the credit risk.
Definition of default
The definition of default for the requirements of ECL provisioning is identical
to that used in management and for the calculation of regulatory ratios. A
debtor is, therefore, considered to be in default when at least one of the
following conditions has been met:
a significant arrear in payment, generally more than ninety days past
due, unless specific circumstances point to the fact that the delay is due
to reasons independent of the debtor’s financial situation;
the entity believes that the debtor is unlikely to settle its credit obligations
unless it avails itself of certain measures such as enforcement of collateral
security right.
A loan in default (Bucket 3) is said to be impaired when one or more events
occur which have a negative effect on the estimated future cash flows
from this financial asset. Indications of impairment of a financial asset
cover observable data on the following events:
significant financial difficulties of the issuer or borrower;
a breach of contract, such as default or overdue payment;
the granting, by the lender(s) to the borrower, for economic or contractual
reasons related to financial difficulties of the borrower, of one or more
favours that the lender(s) would not have considered under other
circumstances;
the increasing probability of bankruptcy or financial restructuring of
the borrower;
the disappearance of an active market for the financial asset due to
financial difficulties;
the purchase or creation of a financial asset with a significant discount,
which reflects the credit losses suffered.
It is not necessarily possible to isolate a particular event. The impairment of
the financial asset could result from the combined effect of several events.
The defaulting counterparty returns to a sound situation only after a period
of observation that makes it possible to confirm that the debtor is no longer
in default (assessment by the Risk Management Department).
Definition of expected credit loss (“ECL”)
ECL is defined as the weighted expected probable value of the discounted
credit loss (principal and interest). It represents the present value of the
difference between the contractual cash flows and the expected cash
flows (including principal and interest).
The ECL approach is designed to anticipate as early as possible the
recognition of expected credit losses.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
432
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
ECL governance and measurement
The governance of the system for measuring IFRS 9 parameters is based
on the structure implemented as part of the Basel framework. The Group’s
Risk Management Department is responsible for defining the methodological
framework and supervising the loan loss provisioning system.
The Group primarily relies on the internal rating system and current Basel
processes to generate the IFRS 9 parameters required to calculate ECL. The
assessment of the change in credit risk is based on an expected loss model
and extrapolation based on reasonable scenarios. All information that is
available, relevant, reasonable and justifiable, including of a forward-looking
nature, must be retained.
The formula includes the probability of default, loss given default and
exposure at default parameters.
These calculations are broadly based on the internal models used as
part of the regulatory framework, but with adjustments to determine an
economic ECL. IFRS 9 recommends a Point in Time analysis while having
regard to historical loss data and forward looking macro-economic data,
whereas the prudential regulation analyses the perspectives Through The
Cycle for probability of default and in a Downturn for Loss Given Default.
The accounting approach also requires the recalculation of certain Basel
parameters, in particular to eliminate internal recovery costs or floors that
are imposed by the regulator in the regulatory calculation of Loss Given
Default (“LGD”).
ECLs are calculated according to the type of product concerned: financial
instruments or off-balance sheet instruments.
The expected credit losses for the coming 12 months make up a percentage
of the lifetime expected credit losses, and represent the lifetime cash
flow shortfalls in the event of a default during the 12 months following
the reporting period (or a shorter period if the expected lifetime of the
financial instrument is less than 12 months), weighted by the probability
of default within 12 months.
Expected credit losses are discounted at the effective interest rate used
for the initial recognition of the financial instrument.
The terms of measurement of ECLs include collateral and other credit
enhancements that are part of the contractual terms and which the entity
does not account for separately. The estimate of the expected cash flow
shortfalls from a guaranteed financial instrument reflects the amount and
timing of the recovery of the guarantees. In accordance with IFRS 9, the
inclusion of guarantees and sureties does not affect the assessment of the
significant deterioration in credit risk: this is based on the evolution of the
debtor’s credit risk without taking into account guarantees.
The models and parameters used are backtested at least annually.
Forward-looking macroeconomic data are taken into account in accordance
with a methodological framework applicable at two levels:
at Group level for the determination of a shared framework for the
consideration of forward-looking data in the estimation of PD and LGD
parameters over the transaction amortisation period;
at the level of each entity in respect of its own portfolios.
Significant deterioration of credit risk
All Group entities must assess, for each financial instrument, the
deterioration of credit risk from origination to each reporting date. Based
on this assessment of the change in credit risk, the entities must classify
their exposure into different risk categories (Buckets).
To assess significant deterioration, the Group uses a process based on
two levels of analysis:
the first level is based on absolute and relative Group criteria and rules
that apply to all Group entities;
the second level is linked to the expert assessment, based on local
forward-looking information, of the risk held by each entity in its portfolios
that may lead to an adjustment in the Group Bucket 2 reclassification
criteria (switching a portfolio or sub-portfolio to ECL at maturity).
Each financial instrument is, without exception, assessed for significant
deterioration. Contagion is not required for the downgrading of financial
instruments of the same counterparty from Bucket 1 to Bucket 2. The
significant deterioration assessment must consider the change in credit risk
of the principal debtor without taking account of any guarantee, including
for transactions with a shareholder guarantee.
Possible losses in respect of portfolios of small loans with similar
characteristics may be estimated on a statistical basis rather than
individually assessed.
To measure the significant deterioration of credit risk since initial recognition,
it is necessary to look back at the internal rating and PD (probability of
default) at origination.
Origination means the trading date, on which the entity became bound
by the contractual terms of the financial instrument. For financing and
guarantee commitments, origination means the date on which the
irrevocable commitment was made.
In the absence of an internal rating model, the Crédit Agricole Group uses
the absolute threshold of non-payment for over 30 days as the maximum
threshold for significant deterioration and classification in Bucket 2.
For outstandings (with the exception of securities) for which internal rating
systems are in place (in particular exposures monitored by authorised
methods), the Crédit Agricole Group considers that all of the information
incorporated into the rating systems allows for a more detailed assessment
than the non-payment for over 30 days criterion alone.
If deterioration since origination is no longer observed, impairment may
be reduced to 12-month expected credit losses (Bucket 1).
To make up for the fact that certain significant deterioration factors or
indicators may not be identifiable at instrument level, the standard allows
for the assessment of significant deterioration at financial instrument
portfolio level, or for groups of portfolios or parts of portfolios.
Portfolios can be created for the collective assessment of deterioration for
instruments that share common characteristics, such as:
instrument type;
credit risk rating (including internal Basel II rating for entities with an
internal ratings system);
collateral type;
date of initial recognition;
remaining term until maturity;
business sector;
geographical location of the borrower;
the value of collateral relative to the financial assets, if this has an impact
on the probability of default (for example, non-recourse loans in certain
countries or loan-to-value ratios);
distribution channel, purpose of financing, etc.
Differentiation of significant deterioration by market is therefore possible
(home loans, consumer finance, loans to farmers or small businesses,
corporate finance etc.).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
433
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
The grouping of financial instruments for the purposes of collective credit
risk assessment may change over time, as new information becomes
available.
For securities, Crédit Agricole S.A. uses an approach that consists of applying
an absolute level of credit risk, in accordance with IFRS 9, below which
exposures are classified in Bucket 1 and provisions are made based on
12-month ECL.
As such, the following rules shall apply for monitoring the significant
deterioration of securities:
“Investment Grade” securities, at the reporting date, are classified in
Bucket 1 and provisions are made based on 12-month ECL;
“Non-Investment Grade” securities (NIG), at the reporting date, must
be subject to monitoring for significant deterioration, since origination,
and be classified in Bucket 2 (lifetime ECL) in the event of significant
deterioration in credit risk.
Relative deterioration must be assessed prior to the occurrence of a known
default (Bucket 3).
Restructuring due to financial difficulty
Debt instruments restructured due to financial difficulties are those for
which the entity has amended the original financial terms (interest rate,
term etc.) for economic or legal reasons linked to the financial difficulties
of the borrower, under conditions that would not have been considered
under other circumstances. As such, these can be any debt instruments,
regardless of the risk deterioration category of the debt instrument since
the initial recognition.
In accordance with the EBA (European Banking Authority) definition as stated
in the “Risk Factors” chapter, debt restructuring for financial difficulties
of the debtor refers to any modification to one or more credit agreements
for that same reason, as well as any refinancing granted due to financial
difficulties experienced by the customer.
This definition of restructuring must be applied to each agreement and
not at client level (no contagion).
The definition of loans restructured due to financial difficulty is therefore
comprised of two cumulative criteria:
contract modification or debt refinancing (concessions);
a customer who is in a financial difficulty (a debtor facing, or about to
face, difficulties in honouring financial commitments).
“Contract modification” refers to the following example situations:
there is a difference between the modified contract and the former terms
of the contract, to the benefit of the borrower;
the contract modifications result in more favourable conditions for the
borrower, from which other customers of the bank, with a similar risk
profile and at the same time, do not benefit.
“Refinancing” refers to situations in which a new debt is granted to the
client to enable it to repay in full or in part another debt for which it cannot
meet the contractual terms and conditions due to its financial position.
The restructuring of a loan (whether performing or non-performing) infers
the presumed existence of a proven risk of loss (Bucket 3). The need to
recognise impairment on the restructured exposure must therefore be
analysed accordingly (a restructuring does not automatically result in the
recognition of impairment for proven losses or classification as default).
The “restructured loan” classification is temporary.
Once the restructuring as defined by the EBA has been carried out, the
exposure continues to be classified as “restructured” for at least two years,
if the exposure was performing when restructured, and three years if the
exposure was in default when restructured. These periods are extended
in the event of the occurrence of certain events (
e.g.
further incidents).
In the absence of derecognition for this type of event, the reduction of
future cash flows granted to a counterparty, or the postponing of these
flows as part of a restructuring, shall result in the recognition of a discount
in the cost of risk.
It represents loss of future cash flow discounted at the original effective
rate. It is equal to the difference between:
the carrying amount of the loan;
and the sum of theoretical future cash flows from the “restructured”
loan, discounted at the original effective interest rate (defined at the date
of the financing commitment).
In the event of a waiver of part of the share capital, this amount shall
constitute a loss to be recorded immediately in cost of risk.
The discount recognised when a loan is restructured is accounted for
under cost of risk.
Upon reversal of the discount, the portion associated with the passage of
time is recorded in revenues.
Accounts uncollectible
When a loan is deemed uncollectible,
i.e.
when it cannot be recovered in
full or in part, the amount deemed uncollectible must be derecognised
from the balance sheet and written off.
The decision as to when to write off a loan is taken on the basis of an expert
opinion. This must therefore be established by each entity, with its Risk
Management Department, according to its own business knowledge. Before
any write-offs, a Bucket 3 provision must be made (with the exception of
assets at fair value through profit or loss).
For loans at amortised cost or fair value through other comprehensive
income on items that can be reclassified, the amount written off is recorded
under cost of risk (nominal amount) and “revenues” (interests).
Derivative financial instruments
Classification and measurement
Derivative instruments are financial assets or liabilities classified by default
as derivative instruments held-for-trading unless they can be considered
to be hedging derivatives.
They are recorded on the balance sheet at their initial fair value on the
trading date.
They are subsequently recognised at their fair value.
At the end of each reporting period, the counterparty of the change in fair
value of derivatives on the balance sheet is recorded:
through profit or loss if it concerns derivative instruments held-for-trading
and for fair value hedges;
through other comprehensive income for cash flow hedging derivatives
and net investments in foreign operations for the effective portion of
the hedge.
Hedge accounting
General framework
In accordance with a decision made by the Group, Crédit Agricole S.A.
chooses not to apply the “hedge accounting” component of IFRS 9, as
permitted by the standard. All hedging relationships will continue to be
documented in accordance with the rules of IAS 39 until, at the latest,
the date on which the macro-hedging text is adopted by the European
Union. However, hedge accounting under IAS 39 uses the classification and
measurement principles of IFRS 9 to decide which financial instruments
qualify.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
434
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Under IFRS 9, and taking account of the IAS 39 hedging principles, debt
instruments at amortised cost or fair value through other comprehensive
income (items that may be reclassified) qualify as fair value hedges and
as cash flow hedges.
Documentation
Hedging relationships must comply with the following principles:
fair value hedges are intended to provide protection from exposure to
changes in the fair value of an asset or a liability that has been recognised,
or of a firm commitment that has not been recognised, attributable to the
risk(s) hedged and that may have an impact on net income (for instance,
the hedging of all or some changes in fair value caused by the interest
rate risk of a fixed-rate debt);
cash flow hedges are intended to provide protection from exposure
to changes in the future cash flow of an asset or liability that has
been recognised, or of a transaction considered to be highly probable,
attributable to the risk(s) hedged and that could (in the event of a planned
transaction not carried out) have an impact on net income (for instance,
the hedging of changes in all or some of the future interest payments
on a floating-rate debt);
net investment hedges in foreign operations are intended to provide
protection against the risk of unfavourable changes in fair value associated
with the foreign exchange risk of an investment carried out abroad in a
currency other than the euro, Crédit Agricole S.A.’s presentation currency.
Hedges must also meet the following criteria in order to be eligible for
hedge accounting:
the hedging instrument and the hedged item must be eligible;
there must be formal documentation from inception, primarily including
the individual identification and characteristics of the hedged item, the
hedging instrument, the nature of the hedging relationship and the nature
of the hedged risk;
the effectiveness of the hedge must be demonstrated, at inception and
retrospectively, by testing at each reporting date.
For interest rate hedges for a portfolio of financial assets or financial
liabilities, Crédit Agricole Group documents the hedging relationship for
fair value hedges in accordance with the carve-out version of IAS 39 as
adopted by the European Union. In particular:
the Group documents these hedging relationships based on its gross
position in derivative instruments and hedged items;
the effectiveness of the hedging relationships is measured by maturity
schedules.
Further details on the Group’s risk management strategy and its application
are presented in Chapter 5 “Risks and Pillar 3”.
Measurement
The remeasurement of the derivative at fair value is recorded in the financial
statements as follows:
fair value hedges: the change in value of the derivative is recognised
in the income statement symmetrically with the change in value of the
hedged item in the amount of the hedged risk. Only the net amount of any
ineffective portion of the hedge is recognised in the income statement;
cash flow hedges: the change in value of the derivative is recognised in
the balance sheet through a specific account in other comprehensive
income (items that may be reclassified) for the effective portion and any
eventual ineffective portion of the hedge is recognised in the income
statement. Profits or losses on the derivative accrued through other
comprehensive income are reclassified to profit or loss when the hedged
cash flows occur;
hedges of net investment in a foreign operation: the change in value
of the derivative is recognised in the balance sheet in the translation
adjustment equity account (items that may be reclassified) and any
ineffective portion of the hedge is recognised in the income statement.
Where the conditions for benefiting from hedge accounting are no longer
met, the following accounting treatment must be applied prospectively,
unless the hedged item disappears:
fair value hedges: only the hedging instrument continues to be revalued
through profit or loss. The hedged item is wholly accounted for according
to its classification. For debt instruments at fair value through other
comprehensive income (items that may be reclassified), changes in fair
value subsequent to the ending of the hedging relationship are recorded
in other comprehensive income in their entirety. For hedged items valued
at amortised cost, which were interest rate hedged, the revaluation
adjustment is amortised over the remaining life of those hedged items;
cash flow hedges: the hedging instrument is valued at fair value through
profit or loss. The amounts accumulated in other comprehensive income
under the effective portion of the hedge remain in other comprehensive
income until the hedged item affects profit or loss. For interest rate
hedged instruments, income statement is affected according to the
payment of interest. The revaluation adjustment is therefore amortised
over the remaining life of those hedged items;
hedges of net investment in a foreign operation: The amounts accumulated
in other comprehensive income under the effective portion of the hedge
remain in other comprehensive income as long as the net investment
is held. The income is recorded once the net investment in a foreign
operation exits the scope of consolidation.
Embedded derivatives
An embedded derivative is a component of a hybrid contract that meets
the definition of a derivative product. This definition applies only to financial
liabilities and non-financial contracts. Embedded derivatives must be
accounted for separately from the host contract if the following three
conditions are met:
the hybrid contract is not measured at fair value through profit or loss;
the embedded component taken separately from the host contract has
the characteristics of a derivative;
the characteristics of the derivative are not closely related to those of
the host contract.
Determination of the fair value of financial
instruments
When determining the fair value of financial instruments observable inputs
must be prioritised. It is presented using the hierarchy defined in IFRS 13.
IFRS 13 defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an ordinary transaction between
market participants, on the principal or the most advantageous market,
at the valuation date.
Fair value applies individually to each financial asset or financial liability.
A portfolio exemption may be used where the management and risk
monitoring strategy so allow and are appropriately documented. Thus,
certain fair value parameters are calculated on a net basis when a group
of financial assets and financial liabilities is managed on the basis of its net
exposure to market or credit risks. This is notably the case for the CVA/DVA
calculation described in Chapter 5 “Risks and Pillar 3”.
Crédit Agricole S.A. considers that the best evidence of fair value is reference
to quoted prices published in an active market.
When such quoted prices are not available, fair value is determined using
valuation techniques that maximise the use of relevant observable data
and minimise the use of unobservable data.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
435
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
When a debt is valued at fair value through profit or loss (by nature or
designated), fair value takes account of the own credit risk of the issuer.
Fair value of structured issues
In accordance with IFRS 13, Crédit Agricole S.A. values its structured
issues, recognised at fair value, by taking as a reference the issuer spread
that specialist participants agree to receive to acquire new Group issues.
Counterparty risk on derivative instruments
Crédit Agricole S.A. incorporates into fair value the assessment of
counterparty risk for derivative assets (Credit Valuation Adjustment or
CVA) and, using a symmetrical treatment, the non-performance risk for
derivative liabilities (Debit Valuation Adjustment or DVA or own credit risk).
The CVA makes it possible to determine the expected losses due to the
counterparty from the perspective of the Crédit Agricole Group, and DVA,
the expected losses due to the Crédit Agricole Group from the perspective
of the counterparty.
The CVA/DVA is calculated on the basis of an estimate of expected losses
based on the probability of default and loss given default. The methodology
used maximises the use of observable market inputs. It is primarily based
on market data such as registered and listed CDS (or Single Name CDS) or
index CDS in the absence of registered CDS on the counterparty. In certain
circumstances, historical default data may also be used.
Fair value hierarchy
The standard classifies fair value into three levels based on the observability
of inputs used in valuation techniques:
Level 1: fair value corresponding to quoted prices (unadjusted)
in active markets
Level 1 is composed of financial instruments that are directly quoted in
active markets for identical assets and liabilities that the entity can access
at the valuation date. These are stocks and bonds quoted in active markets
(such as the Paris Stock Exchange, the London Stock Exchange or the New
York Stock Exchange etc.) and also fund securities quoted in an active
market and derivatives traded on an organised market, in particular futures.
A market is regarded as being active if quoted prices are readily and
regularly available from an exchange, broker, dealer, pricing service or
regulatory agency, and those prices represent actual and regularly occurring
market transactions on an arm’s length basis.
For financial assets and liabilities with offsetting market risks, Crédit Agricole S.A.
uses mid-prices as a basis for establishing fair values for the offsetting
risk positions. The Group applies the current asking price to open short
positions and the current bid price to open long positions.
Level 2: fair value measured using directly or indirectly
observable inputs other than those in Level 1
The inputs used are observable either directly (
i.e.
prices) or indirectly
(derived from prices) and generally consist of data from outside the entity,
which are publicly available or accessible and based on a market consensus.
Level 2 consists of:
stocks and bonds quoted in an inactive market or not quoted in an active
market but for which the fair value is established using a valuation
methodology usually used by market participants (such as discounted
cash flow techniques or the Black & Scholes model) and based on
observable market data;
instruments that are traded over the counter, the fair value of which is
measured with models using observable market data,
i.e.
that can be
derived from various independently available external sources which can
be obtained on a regular basis. For example, the fair value of interest
rate swaps is generally derived from the yield curves of market interest
rates as observed at the reporting date.
When the models are consistent notably with standard models based
on observable market data (such as interest rate yield curves or implied
volatility surfaces), the day one gain or loss resulting from the initial fair
value measurement of the related instruments is recognised in profit or
loss at inception.
Level 3: fair value that is measured using significant
unobservable inputs
For some complex instruments that are not traded in an active market, fair
value measurement is based on valuation techniques using assumptions
that cannot be observed on the market for an identical instrument. These
instruments are disclosed within Level 3.
This mainly concerns complex interest rate instruments, equity derivatives,
structured credit instruments for which fair value measurement includes, for
instance, correlation or volatility inputs that are not directly benchmarkable
with market data.
The transaction price is deemed to reflect the fair value at initial recognition,
any recognition of day one gain or loss is deferred.
The margin relating to these structured financial instruments is generally
recognised through profit or loss over the period during which inputs
are deemed unobservable. When market data become “observable”, the
remaining margin to be deferred is immediately recognised in profit or loss.
Valuation methodologies and models used for financial instruments that
are disclosed within Levels 2 and 3 incorporate all factors that market
participants would consider in setting a price. They shall be beforehand
validated by an independent control. Fair value measurement notably
includes both liquidity risk and counterparty risk.
Offsetting of financial assets
and financial liabilities
In accordance with IAS 32, Crédit Agricole S.A. nets a financial asset and
a financial liability and reports the net amount when, and only when, it
has a legally enforceable right to offset the amounts reported and intends
either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
The derivative instruments and the repurchase agreements handled with
clearing houses that meet the two criteria required by IAS 32 have been
offset on the balance sheet.
Net gains (losses) on financial instruments
Net gains (losses) on financial instruments at fair value
through profit or loss
For financial instruments recognised at fair value through profit or loss, this
item notably includes the following income statement elements:
dividends and other revenues from equities and other variable-income
securities which are classified under financial assets at fair value through
profit or loss;
changes in fair value of financial assets or liabilities at fair value through
profit or loss;
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
436
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
gains and losses on disposal of financial assets at fair value through
profit or loss;
changes in fair value and gains and losses on disposal or termination
of derivative instruments not included in a fair value hedge or cash flow
hedge relationship.
This item also includes the ineffective portion of hedges.
Net gains (losses) on financial instruments at fair value
through other comprehensive income
For financial assets recognised at fair value through other comprehensive
income, this item notably includes the following income statements
elements:
dividends from equity instruments classified as financial assets at fair
value through other comprehensive income that cannot be reclassified;
gains (losses) on disposals and income associated with the termination of
hedging relationships on debt instruments classified as financial assets at
fair value through other comprehensive income that can be reclassified;
net income on disposals or associated with the termination of fair value
hedging instruments of financial assets at fair value through other
comprehensive income when the hedged item is sold.
Financing commitments and guarantees given
Financing commitments that are not designated as fair value through profit
or loss or not treated as derivative instruments within the meaning of IFRS 9
are not recognised on the balance sheet. They are, however, covered by
provisions in accordance with the provisions of IFRS 9.
A financial guarantee contract is a contract under which the issuer must
make specific payments to reimburse the holder for a loss incurred due
to a specific debtor’s failure to make a payment when due under the initial
or amended terms of a debt instrument.
Financial guarantee contracts are recognised at fair value initially then
subsequently at the higher of:
the value adjustment amount for losses determined in accordance with
the provisions of the “Impairment” section of IFRS 9; or
the amount originally recognised less, where applicable, the sum of
income recognised in accordance with the principles of IFRS 15 – Revenue
from contracts with customers.
Provisions (IAS 37 and 19)
Crédit Agricole S.A. has identified all obligations (legal or constructive)
resulting from a past event for which it is probable that an outflow of
resources will be required to settle the obligation, and for which the due
date or amount of the settlement is uncertain but can be reliably estimated.
These estimates are discounted where applicable whenever there is a
material impact.
For obligations other than those related to credit risk, Crédit Agricole S.A.
has set aside general provisions to cover:
operational risks;
employee benefits;
commitment execution risks;
claims and liability guarantees;
tax risks (excluding income tax);
risks related to home purchase savings schemes.
The latter provision is designed to cover the Group’s obligations in the
event of unfavourable moves impacting home purchase savings schemes.
These obligations are: i) to pay a fixed interest rate on the savings contract
determined at inception for an undefined period of time; and ii) to grant a
loan to home purchase savings plan and account savers at a rate fixed at
inception of the contract. The provision is calculated for each generation
of a home purchase savings scheme and for all home purchase savings
accounts, with no netting of obligations between generations.
The amount of these obligations is calculated taking account notably of:
subscriber behaviour models, based on assumptions regarding subscriber
behaviour drawn from historical experience, which may not necessarily
reflect actual trends in future behaviour;
an estimate of the amount and term of the loans that will be granted in
the future, based on historical experience over an extended period of time;
the yield curve for market rates and reasonably foreseeable trends.
Certain estimates may be made to determine the amount of the following
provisions:
the provision for operational risks, which although subject to examination
for identified risks, requires Management to make assessments with
regard to incident frequency and the potential financial impact;
the provision for legal risks, which is based on Management’s best
estimate in light of the information in its possession at the end of the
reporting period.
Detailed information is provided in Note 6.18 “Provisions”.
Employee benefits (IAS 19)
In accordance with IAS 19, employee benefits are recorded in four
categories:
short-term employee benefits, including salaries, social security
contributions, annual leave, profit-sharing and incentive plans and
premiums, are defined as those which are expected to be settled within
12 months of the financial year in which the related services have been
rendered;
post-employment benefits falling into two categories: defined-benefit
schemes and defined-contribution schemes;
other long-term benefits (long-service awards, bonuses and compensation
payable 12 months or more after the end of the financial year);
severance payments.
Post-employment benefits
Defined-benefit plans
At each reporting date, Crédit Agricole S.A. sets aside reserves to cover
its liabilities for retirement and similar benefits and all other employee
benefits falling in the category of defined-benefit plans.
In keeping with IAS 19, these commitments are stated based on a set of
actuarial, financial and demographic assumptions, and in accordance with
the Projected Credit Units method. Under this method, for each year of
service, a charge is booked in an amount corresponding to the employee’s
vested benefits for the period. The charge is calculated based on the
discounted future benefit.
Liabilities for retirement and other future employee benefits are based on
assumptions made by Management with respect to the discount rate, staff
turnover rate and probable increases in salary and social security costs.
(See Note 7.4 “Post-employment benefits, defined-benefit schemes”).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
437
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Discount rates are determined based on the average term of the
commitment, that is, the arithmetical average of the terms calculated
between the valuation date and the payment date weighted by employee
turnover assumptions. The underlying used is the discount rate by reference
to the iBoxx AA.
In accordance with IAS 19, Crédit Agricole S.A. revised all actuarial gains
and losses that were recognised in other comprehensive income that
cannot be reclassified. Actuarial gains and losses consist of experience
adjustments (difference between what has been estimated and what has
occurred) and the effect of changes in actuarial assumptions.
The expected return on plan assets is determined using discount rates
applied to measure the defined benefit obligation. The difference between
the expected and actual return on plan assets is recognised in other
comprehensive income that cannot be reclassified.
The amount of the provision is equal to:
the present value of the obligation to provide the defined benefits at the
end of the reporting period, calculated in accordance with the actuarial
method recommended by IAS 19;
if necessary, reduced by the fair value of the assets allocated to covering
these commitments. These may be represented by an eligible insurance
policy. In the event that 100% of the obligation is covered by a policy
that meets exactly the expense amount payable over the period for all
or part of a defined-benefit plan, the fair value of the policy is deemed
to be the value of the corresponding obligation, (
i.e.
the amount of the
corresponding actuarial liability).
For such obligations that are not covered, a provision for retirement benefits
is recognised under Provisions on the liabilities side of the balance sheet.
This provision is equal to Crédit Agricole S.A.’s liabilities towards employees
in service at financial year-end, governed by the Crédit Agricole Group’s
collective agreement that came into effect on 1 January 2005.
A provision to cover the cost of early retirement commitments is also listed
under Provisions. This provision covers the additional discounted cost of the
various early retirement agreements signed by the Crédit Agricole Group
entities under which employees of eligible age may take early retirement.
Lastly, certain Group companies are liable to pay supplementary retirement
benefits. A provision is calculated on the basis of the Company’s actuarial
liability for these benefits. These provisions are also shown on the liabilities
side of the balance sheet under “Provisions”.
Defined contribution plans
“Employers” contribute to a variety of compulsory pension schemes. Plan
assets are managed by independent organisations and the contributing
companies have no legal or implied obligation to pay additional contributions
if the funds do not have sufficient assets to cover all benefits corresponding
to services rendered by employees during the year and during prior years.
Consequently, Crédit Agricole S.A. has no liabilities in this respect other
than its contributions due for the financial year ended.
Other long-term benefits
Other long-term benefits are employee benefits other than post-employment
benefits or termination benefits but not fully due to employees within 12
months after the end of the financial year in which the related services
have been rendered.
These include, in particular, bonuses and other deferred compensation
payable 12 or more months after the end of the financial year in which
they vest, but which are not share-based.
The measurement method is similar to the one used by the Group for
post-employment benefits with defined-benefit schemes.
Share-based payments (IFRS 2)
IFRS 2 – Share-based payments requires valuation of share-based payment
transactions in the enterprise’s income statement and balance sheet. This
standard applies to transactions with employees and more specifically to:
share-based payment transactions settled in equity instruments;
share-based payment transactions settled in cash.
Share-based payment plans initiated by Crédit Agricole Group that are
eligible for IFRS 2 are mainly transactions settled in equity instruments
(stock options, free share allocation plans, variable compensation settled
in indexed cash or in shares etc.).
Options granted are measured at their fair value at the date of grant primarily
using the Black & Scholes model. These options are recognised as a charge
under Employee expenses, with a corresponding adjustment to equity,
spread over the vesting period.
Employee share issues offered to employees as part of the Employee
savings plans are also subject to the IFRS 2 standard. Shares may be
offered to employees with a maximum discount of 30%. These plans have
no vesting period but the shares are subject to a lock-up period of five
years. The benefit granted to employees is measured as the difference
between the fair value per share acquired taking account of the lock-up
period and the purchase price paid by the employee on the subscription
date multiplied by the number of shares subscribed.
A more detailed description of the method, existing plans and valuation
methods is provided in Note 7.6 “Share-based payments”.
The cost of share based payments settled in Crédit Agricole S.A. equity
instruments and the cost of share subscriptions are recognised in the
financial statements of the entities that employ the plan beneficiaries.
The impact is recorded under Employee expenses, with a corresponding
increase in Consolidated reserves-Group share.
Current and deferred taxes (IAS 12)
In accordance with IAS 12, the income tax charge includes all income
taxes, whether current or deferred.
It defines current tax liability as “the amount of income tax payable
(recoverable) in respect of the taxable profit (tax loss) for a financial year”.
Taxable income is the profit (or loss) for a given accounting period measured
in accordance with the rules determined by the tax authorities.
The applicable rates and rules used to measure the current tax liability are
those in effect in each country where the Group’s companies are established.
The current tax liability includes all taxes on income, payable or recoverable,
for which payment is not subordinated to the completion of future
transactions, even if payment is spread over several years.
The current tax liability must be recognised as a liability until it is paid. If the
amount that has already been paid for the current year and previous years
exceeds the amount due for these years, the surplus must be recognised
under assets.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
438
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Moreover, certain transactions carried out by the entity may have tax
consequences that are not taken into account in measuring the current
tax liability. IAS 12 defines a difference between the carrying amount of
an asset or liability and its tax base as a temporary difference.
This standard requires that deferred taxes be recognised in the following
cases:
a deferred tax liability should be recognised for any taxable temporary
differences between the carrying amount of an asset or liability on the
balance sheet and its tax base, unless the deferred tax liability arises from:
-
initial recognition of goodwill,
-
the initial recognition of an asset or a liability in a transaction that
is not a business combination and that does not affect either the
accounting or the taxable profit (taxable loss) at the transaction date;
a deferred tax asset should be recognised for any deductible temporary
differences between the carrying amount of an asset or liability on the
balance sheet and its tax base, insofar as it is deemed probable that
a future taxable profit will be available against which such deductible
temporary differences can be allocated;
a deferred tax asset should also be recognised for carrying forward
unused tax losses and tax credits insofar as it is probable that a future
taxable profit will be available against which the unused tax losses and
tax credits can be allocated.
The tax rates applicable in each country are used as appropriate.
Deferred taxes are not discounted.
Taxable unrealised gains on securities do not generate any taxable
temporary differences between the carrying amount of the asset and the
tax base. As a result, deferred tax is not recognised on these gains. When
the relevant securities are classified financial assets at fair value through
other comprehensive income, unrealised gains and losses are recognised
directly through other comprehensive income. The tax charge or saving
effectively borne by the entity arising from these unrealised gains or losses
is reclassified as a deduction from these gains.
In France long-term capital gains on the sale of equity investments, as
defined by the General Tax Code, are exempt to tax; with the exception of
12% of long-term capital gains that are taxed at the normally applicable rate.
Accordingly, unrealised gains recognised at the end of the year generate a
temporary difference requiring the recognition of deferred tax on this share.
Under IFRS 16 – Leases, a deferred tax liability is recognised on the right
of use and a deferred tax asset on the rental debt for leases for which the
Group is a lessee.
Current and deferred tax is recognised in net income for the financial year,
unless the tax arises from:
either a transaction or event that is recognised directly through other
comprehensive income, during the same year or during another year,
in which case it is directly debited or credited to other comprehensive
income;
or a business combination.
Deferred tax assets and liabilities are offset against each other if, and only if:
the entity has a legally enforceable right to offset current tax assets
against current tax liabilities; and
the deferred tax assets and liabilities apply to income taxes assessed
by the same tax authority:
a)
either for the same taxable entity, or
b)
for different taxable entities that intend either to settle current tax
assets and liabilities on a net basis, or to settle their tax assets
and liabilities at the same time during each future financial year in
which it is expected that substantial deferred tax assets or liabilities
will be paid or recovered.
Tax risks relating to income tax result in the recognition of a current tax
receivable or liability when the probability of receiving the asset or paying
the liability is considered more likely than not. These risks are also taken into
account in the valuation of current and deferred tax assets and liabilities.
IFRIC 23 on measuring uncertain tax positions applies when an entity has
identified one or more uncertainties about the tax positions they have
adopted. It also provides details of how to estimate them:
the analysis must be based on an assessment by the tax authorities;
the tax risk must be recognized as a liability as soon as he is more likely
than unlikely that the tax authorities will question the treatment adopted,
for an amount reflecting Management’s best estimate;
in the event that the probability of a refund by the tax authorities is
greater than 50%, a receivable must be recognised.
When tax credits on income from securities portfolios and amounts
receivable are effectively used to pay income tax due for the year, they
are recognised under the same heading as the income with which they
are associated. The corresponding tax charge continues to be recognised
under the “Income tax” charge heading in the income statement.
Treatment of fixed assets (IAS 16, 36, 38 and 40)
The Crédit Agricole Group applies component accounting for all of its
property, plant and equipment. In accordance with the provisions of IAS 16,
the depreciable amount takes account of the potential residual value of
property, plant and equipment.
Land is measured at cost less any impairment losses.
Property used in operations, investment property and equipment are
measured at their acquisition cost less accumulated depreciation and
impairment losses since the time they were placed in service.
Purchased software is measured at acquisition cost less accumulated
depreciation and impairment losses since acquisition.
Proprietary software is measured at cost less accumulated depreciation
and impairment losses since completion.
Apart from software, intangible assets are mainly assets acquired during
a business combination resulting from contractual rights (
e.g.
distribution
agreement). These were valued on the basis of corresponding future
economic benefits or expected service potential.
Fixed assets are depreciated over their estimated useful lives.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
439
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
The following components and depreciation periods have been adopted
by Crédit Agricole Group following the application of the measures on
component accounting for property, plant and equipment. These depreciation
periods are adjusted according to the type of asset and its location:
Component
Depreciation
period
Land
Not depreciable
Structural works
30 to 80 years
Non-structural works
8 to 40 years
Plant and equipment
5 to 25 years
Fixtures and fittings
5 to 15 years
Computer equipment
4 to 7 years
Special equipment
4 to 5 years
Exceptional depreciation charges corresponding to tax-related depreciation
and not to any real impairment in the value of the asset are eliminated in
the consolidated financial statements.
Foreign currency transactions (IAS 21)
At the reporting date, assets and liabilities denominated in foreign currencies
are translated to euro, the Crédit Agricole Group’s operating currency.
In accordance with IAS 21, a distinction is made between monetary (
e.g.
debt instruments) and non-monetary items (
e.g.
equity instruments).
Foreign-currency denominated monetary assets and liabilities are translated
at the closing rate. The resulting translation adjustments are recorded in
the income statement. There are three exceptions to this rule:
for debt instruments at fair value through other comprehensive income
that can be reclassified, only the translation adjustments calculated on
amortised cost are taken to the income statement; the balance is recorded
in other comprehensive income that can be reclassified;
translation adjustments on elements designated as cash flow hedges
or forming part of a net investment in a foreign entity are recognised in
other comprehensive income that can be reclassified;
for financial liabilities designated at fair value through profit or loss,
translation adjustments related to value changes attributable to own
credit risk accounted in other comprehensive income (items than cannot
be reclassified).
Non-monetary items are treated differently depending on the type of items
before translation:
items at historical cost are measured at the foreign exchange rate on
the transaction date (historical rate);
items at fair value are measured at the foreign exchange rate at the end
of the reporting period.
Translation adjustments on non-monetary items are recognised:
in the income statement if the gain or loss on the non-monetary item is
recorded in the income statement;
in other comprehensive income that cannot be reclassified if the gain
or loss on the non-monetary item is recorded in other comprehensive
income that cannot be reclassified.
Revenues from contracts with customers
(IFRS 15)
Fee and commission income and expenses are recognised in income based
on the nature of services with which they are associated.
Fees and commissions that are an integral part of the effective yield on a
financial instrument are recognised as an adjustment to the yield on the
instrument and included in its effective interest rate.
The recognition of other types of fees and commissions on the income
statement must reflect the rate of transfer to the customer of control of
the goods or services sold:
the net income from a transaction associated with the provision of
services is recognised under “Fee and commissions” at the time of
transfer of control of the service to the customer, if this can be reliably
estimated. This transfer may take place as the service is provided (ongoing
service) or on a specific date (one-off service):
a)
Fee and commission income from ongoing services (fees and
commissions on payment instruments, for example) is recognised in
income according to the degree of progress of the service provided.
b)
Fee and commission income paid or received as compensation
for one-off services is recognised in income, in its entirety, when
the service is provided.
Fee and commission income payable or receivable and contingent upon
the achievement of a performance target is recognised for the amount at
which it is highly probable that the income thus recognised will not later
be subject to a significant downward adjustment upon resolution of the
contingency. These estimates are updated at the end of each reporting
period. In practice, this condition can result in the deferred recognition
of certain items of performance-related fee and commission income
until the expiry of the performance assessment period and until such
income has been definitively acquired.
Insurance (IFRS 4)
Liabilities remain partially valued under French GAAP, as permitted by IAS
and IFRS regulations, pending further amendments to the existing standards.
Financial assets held by the Crédit Agricole Group’s insurance companies
have been reclassified into the financial assets categories set out in IFRS 9.
The technical reserves of non-life insurance contracts include:
reserves for claims, to cover the total cost of claims incurred but not yet
paid should they be already subject of a claim and assessed or not; and
reserves relating to the acquisition of premiums (mainly provisions for
unearned premiums), allowing for the recognition of premiums relating
to risks hedged over the course of a financial year as earnings for said
year, and therefore to carry forward the portion of premiums written
over the course of the year for a risk hedging period subsequent to the
current financial year.
Provision for increasing risks may be required for insurance transactions
against the risk of sickness and disability when the premiums are unbroken.
It is equal to the difference between the current values of the commitments
made by the insurer and by the policyholders. It is calculated based on a
continuous process of updating biometric bases (probability of incidence
of a state of dependency, length of support, etc.). Since 2017, an additional
provision to cover increasing risks has been created for the
Assurance
Dépendance
product. It takes the form of a global provision, separate
from the provision for increasing regulatory risks, allowing it to deal with
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
440
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
a possible shortfall in future financial production today, as this could not be
compensated quickly by price revaluations that are contractually limited to
5% per annum. Additionally, a provision is accounted to cover any potential
technical drift.
The mathematical provisions of life insurance contracts and financial
contracts containing discretionary participation features correspond to
the difference between the current value of insurer commitments and
policyholder commitments. Provisions are calculated using actuarial
methods that include assumptions pertaining to the premiums, the
performance of financial assets, contract redemption rates and changes
in operating expenses.
Contracts containing discretionary participation features are collectively
classified as a liability under insurance company’s technical reserves. They
are recognised in the same manner as insurance contracts. Premiums on
these contracts are recognised as income and the increase in obligations
to policyholders is recognised as an expense.
Life insurance technical reserves are conservatively estimated based on
the technical rates defined in the contracts. Liabilities associated with
contracts with or without discretionary participation features or minimum
guarantee are measured based on the fair value of the underlying assets
or its equivalent at the end of the reporting period and are recorded under
financial liabilities.
The financial margin on these policies is taken to profit or loss, after reversal
of technical items (premiums, benefits, etc.), according to deposit accounting
principles.
Property and casualty insurance policy liabilities are estimated at the end
of the reporting period, without applying any discount. Claims management
costs associated with technical reserves are charged to a provision in the
financial statements at the reporting date.
For non-life insurance contracts, acquisition costs are recognised as and
when the premium is earned. For life insurance contracts, directly identifiable
acquisition costs are deferred over the profit generation period.
Total expenses related to the insurance business are presented in Note 4.6
“Net income (expenses) on other activities”.
Insurance or investment contracts with discretionary participation in profits
are subject to “shadow accounting” in accordance with the option offered
by IFRS 4. This shadow accounting consists of recording the portion of
positive or negative revaluations of the financial assets backing these
contracts in a policyholders’ deferred profit sharing item, and of certain
consolidation adjustments (e. g. elimination of the provision for liquidity
risk) that may potentially accrue to policyholders.
In addition, CRC Regulation 2000-05 provides for the recognition of deferred
profit sharing, which must be recognised in the case of deferred profit
sharing liabilities and for their recoverable amount in the case of deferred
profit sharing assets.
This policyholders’ deferred profit sharing is recognised as a liability
“Insurance contract technical reserves” or as an asset, with a corresponding
entry in income statement or other comprehensive income similar to the
unrealised gains and losses on the assets to which it relates.
With regard to savings contracts, the policyholders’ deferred profit sharing
rate is assessed prospectively on the basis of scenarios studied that are
consistent with the insurance company’s management guidelines. It is
only updated if it varies significantly.
In the event of a net unrealised loss, a deferred profit sharing asset is
only recognised if it is highly probable that it will be allocated, by entity,
to future profit sharings. This is especially the case if this deferred profit
sharing asset can be deducted from future policyholder sharings, either
directly by deducting it from the deferred profit sharing liabilities recorded
for future disposal profits, or indirectly by being recoverable from future
sums paid to policyholders.
The recoverability tests implemented in the event of a deferred profit
sharing asset are in accordance with the CNC recommendation of
19 December 2008. They are based:
firstly, on liquidity analyses of the Company, which show the enterprise’s
capacity to access funding sources to meet its obligations and its ability
to hold assets with unrealised losses even if new production declines.
The tests were performed with and without new production;
secondly, on a comparison between the average value of future services
measured by the internal model replicating the Company’s management
decisions and the value of the assets representing the obligations at
market value. This shows the Company’s ability to meet its obligations.
Lastly, sensitivity tests on the ability to activate policyholders’ deferred profit
sharing are also carried out, based in particular on a uniform increase in
redemptions applied to redemption rates drawn from scenarios similar to
those used by the French Regulatory and Resolution Supervisory Authority,
or on a further decline in the equity and real estate markets.
Furthermore, in accordance with the provisions of IFRS 4, the Group ensures
at each reporting date that the liabilities recognised for insurance policies
and investment contracts containing discretionary participation (net of
deferred acquisition costs and associated intangible assets) are adequate
to meet estimated future cash flows.
The liability adequacy test used to verify this must meet the following
minimum requirements, as defined in the standard:
it must consider all future contractual cash flows, including associated
management costs, fees and commissions as well as options and
guarantees implicit in these contracts;
if the test shows that the liability is inadequate, it is wholly recognised
in profit or loss.
Lease (IFRS 16)
The Group may be the lessor or lessee of a lease.
Leases for which the Group is the lessor
Leases are analysed in accordance with their substance and financial
reality. They are classified as finance leases or operating leases.
In the case of finance leases, they are considered equivalent to a fixed
asset sale to the lessee financed by a credit granted by the lessor. The
analysis of the economic substance of finance leases leads the lessor to:
-
remove the leased asset from the balance sheet;
-
record a financial debt for the customer under “financial assets at
amortised cost” for a value equal to the present value at the contract’s
implicit rate of the rental payments due to the lessor under the lease,
plus any non-guaranteed residual value owed to the lessor;
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
441
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
-
recognise deferred taxes for temporary differences relating to the
financial debt and the net carrying amount of the leased asset;
-
break down rental income corresponding into interest and capital
depreciation.
In the case of operating leases, the lessor recognises the leased assets
under “Property, plant & equipment” on the assets side of its balance sheet
and records the rental income on a straight-line basis under “Income
from other activities” in the income statement.
Leases for which the Group is the lessee
Leases are recognised in the balance sheet on the date on which the leased
asset is made available. The lessee records an asset representing the
right of use of the leased asset under “property, plant & equipment” over
the estimated term of the contract and a liability representing the rental
payment obligation under “miscellaneous liabilities” over the same term.
The lease period of a contract corresponds to the non-cancellable term
of the lease adjusted for the contract extension options that the lessee is
reasonably certain to exercise and the termination options that the lessee
is reasonably certain not to exercise.
In France, the term used for the “3/6/9” commercial leases is generally
nine years with an initial non-cancellable period of three years. The Group
has chosen a term corresponding to the first exit option after five years as
the reasonably certain term of a lease. This term, at the inception of French
commercial leases, is applied in the majority of cases. The main exception
is the case of a lease in which the interim exit options have been waived
(
e.g.
in return for a reduction in rental income); in this case, the term of
the lease remains nine years. This five-year term is also applied to leases
that are automatically extended.
The lease liability is recognised for an amount equal to the present value of
the rental payments over the term of the contract. Rental payments include
fixed rents, variable rents based on a rate or index, and payments that the
lessee expects to pay as residual value guarantees, purchase options or
early termination penalties. Variable rents that are not based on an index
or rate and the non-deductible VAT on rents are excluded when calculating
the debt and are recognised under “operating expenses”.
The discount rate applicable to the calculation of the right-of-use
asset and the lease liability is, by default, the lessee’s marginal rate of
indebtedness over the term of the agreement at the date of signature of
the agreement, when the implicit rate cannot easily be established. The
marginal indebtedness rate takes account of the rent payment structure.
It reflects the terms of the lease (term, guarantee, economic environment
etc.) – here, the Group applies the IFRS IC decision of 17 September 2019
since the implementation of IFRS 16 (no impact of this decision).
The lease expense is broken down into interest and amortisation of capital.
The right of use of the asset is valued at the initial value of the lease
liability plus the initial direct costs, advance payments and restoration
costs, reduced by the lease inducements. It is amortised over the estimated
term of the lease.
The lease liability and the right of use may be adjusted in the event of
amendment to the lease, re-estimation of the lease period or rent review
related to the application of indices or rates.
Deferred taxes are recognised as temporary differences in right-of-use
and rental liabilities by the lessee.
In accordance with the exception set out in the standard, short-term leases
(initial term of less than 12 months) and leases for which the new value
of the leased asset is low are not recognised on the balance sheet; the
corresponding leasing expenses are recorded on a straight-line basis in
the income statement under “operating expenses”.
In accordance with the standard, the Group does not apply IFRS 16 to
leases of intangible assets.
Non-current assets held for sale
and discontinued operations (IFRS 5)
A non-current asset (or a disposal group) is classified as held-for-sale if its
carrying amount will be recovered principally through a sale transaction
rather than through continuing use.
For this to be the case, the asset (or disposal group) must be available for
immediate sale in its present condition and its sale must be highly probable.
The relevant assets and liabilities are shown separately on the balance sheet
under “Non-current assets held for sale and discontinued operations” and
“Liabilities associated with non-current assets held for sale and discontinued
operations”.
A non-current asset (or disposal group) classified as held for sale is
measured at the lower of its carrying amount and fair value less costs of
sale. In case of unrealised losses, impairment is recognised in the income
statement. Non-current assets are no longer amortised when they are
reclassified.
If the fair value of a group of assets held for sale less its selling costs is
less than its carrying amount after impairment of non-current assets, the
difference is allocated to the other assets in the group of assets held for
sale including the financial assets and is recognised under net income
from discontinued operations.
A discontinued operation is a component that the Group has either disposed
of, or that is classified as held for sale, according to the following situations:
it represents a separate major business line or geographical area of
operations;
it is part of a single coordinated plan to dispose of a separate major
business line or geographical area of operations; or
it is a subsidiary acquired exclusively with a view to resale.
The following are disclosed on a separate line of the income statement:
the profit or loss from discontinued operations until the date of disposal,
net of tax;
the gain or loss recognised on the disposal or on measurement to fair
value less costs of sale of the assets and liabilities constituting the
discontinued operations, net of tax.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
442
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
1.3
CONSOLIDATION PRINCIPLES AND METHODS (IFRS 10, IFRS 11 AND IAS 28)
Scope of consolidation
The consolidated financial statements include the financial statements of
Crédit Agricole S.A. and those of all companies over which, in compliance
with IFRS 10, IFRS 11 and IAS 28, Crédit Agricole S.A. exercises control,
joint control or significant influence.
Definitions of control
In compliance with international accounting standards, all entities under
control, under joint control or under significant influence are consolidated,
provided that they are not covered by the exclusions below.
Exclusive control over an entity is deemed to exist if Crédit Agricole S.A. is
exposed to or entitled to receive variable returns as a result of its involvement
with the entity and if the power it holds over this entity allows it to influence
these returns. Power in this context means substantive (voting or contractual)
rights. Rights are considered substantive if the holder of the rights can
in practice exercise them when decisions about the Company’s relevant
activities are made.
Crédit Agricole S.A. is deemed to control a subsidiary through voting
rights when its rights give it the practical ability to direct the subsidiary’s
relevant activities. Crédit Agricole S.A. is generally considered to control
a subsidiary when it holds more than half the existing or potential voting
rights in an entity, whether directly or indirectly through subsidiaries, except
when it can be clearly demonstrated that such ownership does not give it
the power to direct its relevant activities. Control is also deemed to exist
where Crédit Agricole S.A. holds half or less than half of the voting rights,
including potential rights, in an entity but is able in practice to direct its
relevant activities at its sole discretion, notably because of the existence of
contractual arrangements, the size of its stake in the voting rights compared
to those of other investors, or other reasons.
Control of a structured entity is not assessed on the basis of voting rights
as these have no effect on the entity’s returns. The analysis of control takes
into account contractual arrangements, but also Crédit Agricole S.A.’s
involvement and decisions since creating the entity and what decisions
it made at that time, what agreements were made at its inception and
what risks are borne by Crédit Agricole S.A., any rights under agreements
that give the investor the power to direct relevant activities in specific
circumstances only and any other facts or circumstances that indicate
the investor can direct the entity’s relevant activities. Where there is a
management agreement, the extent of decision-making powers granted to
the delegated manager and the remuneration accorded by such contractual
arrangements are examined to establish whether the manager is in practice
acting as an agent (with delegated powers) or as a principal (on their own
account).
Furthermore, when decisions on the entity’s relevant activities are taken, the
indicators used to assess whether an entity is acting as agent or principal
are as follows: the extent of the decision-making powers compared to
the powers over the entity delegated to the manager, the remuneration
provided for under the contractual arrangements, any substantive rights
that may affect the decision-making capacity of other parties involved in the
entity and the exposure to variable returns of other interests in the entity.
Joint control is deemed to exist when there is a contractual division of
control over an economic activity. Decisions affecting the entity’s relevant
activities require unanimous agreement of the joint controllers.
In traditional entities, significant influence is defined as the power to
influence but not control a company’s financial and operational policies.
Crédit Agricole S.A. is presumed to have significant influence if it owns
20% or more of the voting rights in an entity, whether directly or indirectly
through subsidiaries.
Exclusions from the scope of consolidation
In accordance with IAS 28, minority interests held by entities for which
the paragraph 18 option has been applied, are excluded from the scope
of consolidation insofar as they are classified under financial assets at fair
value through profit or loss by nature.
Consolidation methods
The methods of consolidation are respectively defined by IFRS 10 and
IAS 28. They depend on the type of control exercised by Crédit Agricole S.A.
over the entities that can be consolidated, regardless of activity or whether
or not they have legal entity status:
full consolidation, for controlled entities, including entities with different
financial statement structures, even if their business is not an extension
of that of Crédit Agricole S.A.;
the equity method, for the entities over which Crédit Agricole S.A. exercises
significant influence and joint control.
Full consolidation consists in substituting for the value of the shares each
of the assets and liabilities carried by each subsidiary. The equity and
income attributable to non-controlling interests is presented separately
in the consolidated balance sheet and income statement.
Non-controlling interests are as defined by IFRS 10 and incorporate
instruments representing current ownership interests and that give right
to a proportional share of the net assets in the event of liquidation and the
other equity instruments issued by the subsidiary and not held by the Group.
The equity method consists in substituting for the value of shares the Group’s
proportional share of the equity and income of the companies concerned.
The change in the carrying amount of these shares includes changes in
goodwill.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
443
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
In the event of incremental share purchases or partial disposals with
continued joint control or significant influence, Crédit Agricole S.A.
recognises:
in the case of an increase in the percentage of interest, additional goodwill;
in the case of a reduction in the percentage of interest, a gain or loss
on disposal/dilution in profit or loss.
Restatements and eliminations
Where necessary, financial statements are restated to harmonise the
valuation methods applied to consolidated companies.
The impact of Group internal transactions on the consolidated balance
sheet and income statement is eliminated for fully consolidated entities.
Capital gains or losses arising from intra-group asset transfers are
eliminated; any potential impairment measured at the time of disposal in
an internal transaction is recognised.
Translation of the financial statements
of foreign operations (IAS 21)
The financial statements of entities representing a “foreign operation”
(subsidiary, branch, associate or joint venture) are translated to euro in
two steps:
if applicable, the local currency in which the financial statements are
prepared is converted into the functional currency (currency of the main
business environment of the entity). The conversion is made as if the
information had been recognised initially in the functional currency (same
conversion principles as for foreign currency transactions here above);
the functional currency is converted into euros, the currency in which
the Group’s consolidated financial statements are presented. Assets
and liabilities, including goodwill, are converted at the closing exchange
rate. Equity items, such as share capital or reserves, are converted at
their historical foreign exchange rates. Income and expenses included
in the income statement are converted at the average exchange rate
for the period. Foreign exchange impacts resulting from this conversion
are recognised as a separate component of shareholders’ equity. In the
event of exit from the foreign operation (disposal, repayment of capital,
liquidation, discontinuation of activity) or in the event of deconsolidation
due to a loss of control (even without disposal), these translation
adjustments are recognised in the income statement when the result
of exit or loss of control is recognised.
Business Combinations – Goodwill
Business combinations are accounted for using the acquisition method in
accordance with IFRS 3, except for business combinations under common
control, which are excluded from the scope of application of IFRS 3. Pursuant
to IAS 8, these transactions are entered at carrying amount using the
pooling of interests method, with reference to US standard ASU805-50
which seems to comply with the IFRS general principles.
At the date of acquisition, the identifiable assets, liabilities and contingent
liabilities of the acquired entity which satisfy the conditions for recognition
set out in IFRS 3 are recognised at fair value.
Notably, restructuring liabilities are only recognised as a liability of the
acquired entity if, at the date of acquisition, the acquiree is under an
obligation to complete the restructuring.
Price adjustment clauses are recognised at fair value even if their application
is not probable. Subsequent changes in the fair value of clauses if they
are financial liabilities are recognised in the income statement. Only price
adjustment clauses relating to transactions where control was obtained
at the latest by 31 December 2009 may still be recorded against goodwill,
because these transactions were accounted for under IFRS 3 pre revision
(2004).
The non-controlling interests that are shares of current interests giving rights
to a share of the net assets in the event of liquidation may be measured,
at acquirer’s choice, in two ways:
at fair value on the date of acquisition;
at the share of the identifiable assets and liabilities of the acquired
company revalued at fair value.
The option may be exercised at each acquisition.
The balance of non-controlling interests (equity instruments issued by
the subsidiary and not held by the Group) should be recognised for its fair
value on the date of acquisition.
The initial assessment of assets, liabilities and contingent liabilities may be
revised within a maximum period of 12 months after the date of acquisition.
Some transactions relating to the acquired entity are recognised separately
from the business combination. These include:
transactions that end a pre-existing relationship between the acquired
company and the acquiring company;
transactions that compensate employees or the selling shareholders of
the acquired company for future services;
transactions aimed at reimbursing the acquiree or its former shareholders
for acquisition-related costs that they have assumed on behalf of the
acquirer.
These separate transactions are generally recognised in the income
statement at the acquisition date.
The transferred consideration at the time of a business combination (the
acquisition cost) is measured as the total of fair values transferred by the
acquirer, at the date of acquisition in exchange for control of the acquired
entity (for example: cash, equity instruments etc.).
The costs directly attributable to the business combination shall be
recognised as expenses, separately from the business combination. If
the transaction is highly probable, they are recognised under “Net gains
(losses) on other assets”, otherwise they are recognised under “Operating
expenses”.
The difference between the sum of acquisition costs and non-controlling
interests and the net balance at the date of acquisition of acquired
identifiable assets and liabilities assumed, valued at their fair value, is
recognised, when it is positive, in the assets side of the consolidated balance
sheet, under “Goodwill” when the acquired entity is fully consolidated
and under “Investments in equity-accounted entities” when the acquired
company is consolidated using the equity method of accounting. Any
badwill is recognised immediately through profit or loss.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
444
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
Goodwill is carried in the balance sheet at its initial amount in the currency
of the acquired entity and converted at the closing rate at the end of the
reporting period.
When control is taken by stages, the interest held before taking control is
revalued at fair value through profit or loss at the date of acquisition and the
goodwill is calculated once, using the fair value at the date of acquisition
of acquired assets and liabilities taken over.
Goodwill is tested for impairment whenever there is objective evidence of
a loss of value and at least once a year.
The choices and assumptions used in assessing non-controlling interests
at the date of acquisition may influence the amount of initial goodwill and
any impairment resulting from a loss of value.
For the purpose of impairment testing, goodwill is allocated to the Group
Cash Generating Units (CGUs) that are expected to benefit from the business
combination. The CGUs have been defined within the Group’s business
lines as the smallest identifiable group of assets and liabilities functioning
in a single business model. Impairment testing consists of comparing the
carrying amount of each CGU, including any goodwill allocated to it, with
its recoverable amount.
The recoverable amount of the CGU is defined as the higher of fair value less
than of selling costs and value in use. The value in use is the present value
of the future cash flows of the CGU, as set out in medium-term business
plans prepared by the Group for management purposes.
When the recoverable amount is lower than the carrying amount, a
corresponding impairment loss is recognised for the goodwill allocated
to the CGU. This impairment is irreversible.
In the case of an increase in the percentage ownership interest of Crédit
Agricole S.A. in an entity that is already exclusively controlled, the difference
between the acquisition cost and the share of net assets acquired is
recognised under “Consolidated reserves Group share”; in the event that
the Crédit Agricole S.A.’s percentage ownership interest in an entity that
remains under its exclusive control declines, the difference between the
selling price and the carrying amount of the share of net assets sold is also
recognised directly under “Consolidated reserves Group share”. Expenses
arising from these transactions are recognised in equity.
The accounting treatment of sale options granted to minority shareholders
is as follows:
when a sale option is granted to the minority shareholders of a fully
consolidated subsidiary, a liability is recognised in the balance sheet; on
initial recognition, the liability is measured at the estimated present value
of the exercise price of the options granted to the minority shareholders.
Against this liability, the share of net assets belonging to the minority
shareholders concerned is reduced to zero and the remainder is deducted
from equity;
subsequent changes in the estimated value of the exercise price
will affect the amount of the liability, offset by an equity adjustment.
Symmetrically, subsequent changes in the share of net assets due to
minority shareholders are cancelled, offset in equity.
When there is a loss of control, the proceeds from the disposal are calculated
on the entirety of the entity sold and any investment share kept is recognised
in the balance sheet at its fair value on the date control was lost.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
445
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 1
NOTE 2
Major structural transactions and material events during the period
The scope of consolidation and changes to it as at 31 December 2020 are shown in detail at the end of the notes in Note 12 “Scope of consolidation at
31 December 2020”.
2.1
COVID-19 HEALTH CRISIS
Faced with the COVID-19 health crisis and its economic consequences, Crédit Agricole S.A. underwent a massive mobilisation. To support its customers
whose business would be impacted by the coronavirus crisis, the Group actively participated in the economic support measures put in place by the
public and local authorities.
2.1.1
State-guaranteed loans (SGL)
In the context of the health and economic crisis related to COVID-19,
starting 25 March 2020, Crédit Agricole S.A. has granted all of its corporate
customers, whatever their size and status (farmers, professionals, merchants,
artisans, companies, etc.), access to the massive and unprecedented State-
guaranteed loan scheme, in addition to the measures already announced
(extension of due dates, accelerated procedures for examining applications,
etc.). Companies can apply for these loans until 30 June 2021.
This financing takes the form of a 12-month loan, and the borrower has
the option to amortise it over an additional period of one to five years.
Over this additional period, the loan may, during the amortisation phase,
have a further period of one year during which only the interest and the
cost of the State guarantee will be paid.
The total term of the loan may not exceed six years.
The Group’s offer for the first year takes the form of a zero-interest loan;
only the cost of the guarantee is re-invoiced (via a commission paid by
the customer) in accordance with the eligibility conditions defined by the
State to benefit from the guarantee.
The amount of these loans may be as high as three months of revenues,
thus allowing entrepreneurs to have access to the necessary financing to
get through the current period.
These loans belong to a “Collection” business model and meet the test
for contractual terms. They are therefore recognised at amortised cost.
At 31 December 2020, the amount of State-guaranteed loans granted to
customers by Crédit Agricole S.A. in France amounted to €9.5 billion. The
amount of the guarantee received from the French State in connection
with these loans is €8.5 billion.
2.1.2
Due date extension on loans granted
to customers
Starting March 2020, the Group joined the French banking community
initiative coordinated by the
Fédération des Banques Françaises
(FBF)
to offer an extension of the due dates for outstanding loans by up to six
months for Corporate and Professional customers at no additional cost.
The implementation of a postponement of due dates of this nature without
penalties or additional costs and with maintenance of the contractual rate
over a maximum period of six months implies that only interim interest will
be collected after the postponement over the remaining duration of the
loan, excluding any guarantee costs of the French Public Investment Bank.
As proposed by the Group, the postponement of due dates implies:
an extension of the term of the loan if the customer wishes to maintain
its initial loan instalments; or
an increase in its instalments after the suspension if the customer wants
to maintain its initial term.
This postponement results in a postponement of the original due dates.
Outstanding loans to customers in France with non-contractual due date
postponements amounted to €16.6 billion in 2020, including €0.9 billion
still outstanding as at 31 December 2020 at Crédit Agricole S.A. level.
2.1.3
Impact of these measures
on credit risk
In accordance with the IASB communication of 27 March 2020 relating
to the recognition of expected credit losses under IFRS 9 on financial
instruments under the current exceptional circumstances, the importance
of exercising judgement in the application of IFRS 9 credit risk principles
and the resulting classification of financial instruments was restated.
The due date extension on loans granted to customers does not
systematically cast doubts on the customer’s financial position, and there
is no automatic increase in counterparty risk. Amendments to the agreement
cannot generally be considered as developments linked to restructuring
events due to financial difficulties.
As a result, this postponement does not result in an automatic changeover
of outstandings, the impairment of which are based on expected loan
losses over 12 months (Bucket 1) to recognition of impairment of expected
losses at maturity (Bucket 2), nor does it result in the automatic transfer
of outstandings to the doubtful category (Bucket 3).
Similarly, the calculation of the amount of expected losses must take into
account the specific circumstances and the support measures put in place
by the public authorities.
2.1.4
Credit risk rating measurement
In the context of the health and economic crisis related to COVID-19, the
Group has revised its macroeconomic forecasts (forward-looking) for the
determination of the year-end credit risk estimate. As a reminder, an initial
recognition of the effects of the health crisis and its macro-economic effects
has already been included in the Q2 2020 report.
Background of select macroeconomic scenarios
The Group used four scenarios for calculating IFRS 9 provisioning
parameters with projections for 2022.
These four scenarios incorporate differentiated hypotheses as to the impacts
of the COVID-19 crisis on the economy in faster, slower and full return to
normality of mobility, activity and consumption, and largely depend on how
the health situation development, which is still very uncertain today (taking
into account a second lock-down, but also favourable prospects related to
the discovery of vaccines at the end of the year). The strength of customer
type confidence is also decisive which – depending on health, economic and
employment expectations – results in different levels of wait-and-see and
cautious behaviour. This in turn determines the propensity of households to
consume the abundant savings they accumulated during the lockdown and
the capacity of businesses to invest. The scale, effectiveness and timing of
government stimulus support programmes also have a significant impact
on the development of activity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
446
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 2
The rebound in Q3 2020, enabled by ending lockdowns in most European
countries, was stronger than expected. In France, GDP rebounded by 18.2%
in Q3 versus Q2, after a -13.7% decline in Q2 versus Q1. The extent of
the second wave led to significant restrictions in Europe in Q4. In France,
it seemed likely that the second lockdown would be extended beyond
early December, in order to control levels as the virus started to circulate
again (target of maximum 5,000 infections per day). With an assumption
of a lockdown until mid-December, France’s GDP was expected to drop
by about -8% in Q4 vs Q3. The average annual growth in 2020 was not
expected to be affected much (-10.1% vs. -9.1% forecast in September),
but the achieved growth (
i.e.
2021 annual growth if the quarterly GDP
is equal to that of Q4 2020, therefore zero quarterly growth) for 2021 is
negative (-1.6%).
The first scenario describes a gradual yet not synchronised
recovery from the crisis, with the growth profile strongly dependent
on health assumptions, for which uncertainty is high. Moreover,
health developments and measures taken are not identical among
European countries.
Scenario 1 assumes the pandemic will persist in 2021 with a ‘stop
and go’ scenario during Q1 and Q2 (alternating relaxation, restrictions
and short lock-down periods), but less detrimental than in 2020 (better
control of epidemic flows, fewer restrictions on mobility). Even with a
vaccine on the market, we assume that a large roll-out would not take
place until mid-2021.
For 2021, a GDP growth forecast for France of +4.6%, compared to
the +7.3% forecast used for late June, including a fairly clear rebound
for Q1 2021, but more moderate than for Q3 2020, due to a cautious
lifting of the lockdown – with ongoing restrictive curfew-type measures
likely – and in Q2 2021 a third wave (particularly related to climate issues
and insufficient effectiveness of the testing strategy) is assumed to result
in a new, shorter episode of lockdown and a decline in GDP. Lastly, in
H2 2021 a rebound (lifting of the lockdown) and an improvement in
the situation due to vaccination campaigns. But a cautious recovery,
despite support measures: some sectors will remain markedly weakened
(aeronautics, automotive, trade, tourism, hotels, restaurants, culture, etc.);
uncertainty about a resumption of investments despite the stimulus plan;
bankruptcies; continued high precautionary savings by households in
light of rising unemployment, limiting the use of the savings accumulated
during successive lockdowns.
As a result, the ECB would move towards more easing and more
purchases of sovereign debt securities. Indeed, with the outlook for
growth and inflation still bleak, future sovereign debt issuance should
induce the ECB to do more. We do not expect a rate cut in the foreseeable
future. Net asset purchases under the PEPP (€750 billion in March to
€1,350 billion in June) are due to end in June 2021. This scenario
assumes that the ECB will increase its purchasing programmes during
H2 2021 as well as 2022 (via an extension and expansion of the PEPP
or a simple increase in the APP).
Since the peak of risk aversion in March, the yield on the 10-year Bund
did try to recover but has been systematically reduced to -0.50%/-0.60%.
No view on the evolution of the pandemic, on the growth profile of 2021
and, more generally, a very high degree of uncertainty. Also, the Bund
remains at a very low level.
The second scenario involves more negative health developments
and more severe restrictive measures.
The second scenario uses identical forecasts to those of the first scenario
for the year 2020. The profile for 2021 is assumed to be fairly comparable
to Q1 2021 (cautious lifting of lockdown), but in Q2 2021, a stronger and
faster third wave is assumed, resulting in a more serious lockdown of
about two months, versus a month in the central scenario. This Scenario 2
would result in a much sharper decline in GDP in Q2, but also followed
by a stronger rebound in Q3.
In this scenario, for 2021: there would be an average GDP increase
expected at +3% vs. +4.6% in Scenario 1.
The third scenario is slightly more favourable than Scenario 1 and
assumes a significantly stronger recovery in 2021 (GDP growth
in France of +7.1% due to faster control of the health situation).
The fourth scenario, the least likely, is characterised by a slightly
stronger decline in activity in 2021 and an additional shock, in
France, that would involve renewed social tensions, blockades,
and strikes.
In France, in this scenario, domestic demand will fall sharply in H1 2021.
There is a persistent circulation of the virus. State support measures
will not be renewed in 2021 and, lastly, an increase in unemployment
and bankruptcies is observed.
With no visibility and with excess capacity, there is a marked downward
revision of investments.
Households remain very cautious with few major purchases.
There are also renewed social tensions and a freezing of the reform
programme. Lastly, at the national level, there is a downgrade of the
credit rating by a notch.
In this scenario, in France, gradual recovery is postponed in 2021 (average
increase of only +1.9% of GDP), with the activity trend level weighed down
by a higher increase in unemployment (12.5% in 2021 after 10% in 2020).
Furthermore, with regard to:
support measures:
Note that the risk parameter forecast process
has been revised in 2020 to better reflect the impact of government
programmes in IFRS 9 forecasts. The effect of this revision is to mitigate
the sudden intensity of the crisis and the strength of the recovery, and
to spread these over a longer period (three years).
The variables relating to the interest rates level, and more generally
all the variables linked to the capital markets, have not been modified,
because their forecasts already structurally include the effects of the
support policies;
local and subsidiary scenarios:
as noted above, sector complements
established at the local level (“forward looking local”) by some Group
entities can complement the centrally defined macroeconomic scenarios.
At the end of December 2020, including local forward looking scenarios,
the share of Bucket 1/Bucket 2 provisions on the one hand (provisioning for
performing loans) and Bucket 3 provisions on the other hand (provisioning
for proven risks) represented
27% and 73%
respectively as regards
Crédit Agricole S.A.
At the end of December 2020, net additions to provisions for Bucket 1/
Bucket 2
represented 32% of Crédit Agricole S.A.’s annual cost of
risk
compared to
68%
for the Bucket 3 share of proven risks and other
provisions.
Sensitivity analysis of IFRS 9 provisions
(Buckets 1 and 2 ECL amounts)
Scenario 1 was weighted at 55% for the calculation of IFRS ECL
amounts for Q4-2020.
By way of example, the 10-point reduction in the
weighting of Scenario 1 in the calculations at Q4-2020 in favour of the more
unfavourable Scenario 2, lead to a rise in the ECL stock under “forward
looking central” of around
0.8%
for Crédit Agricole S.A. However, such a
change in the weight would not necessarily have a significant impact due
to “forward looking local” adjustments, which could mitigate the effect.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
447
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 2
2.1.5
Decision regarding the 2019 dividend
On 27 March 2020, the European Central Bank issued recommendations
asking that the banks under its supervision not pay dividends as long
as the coronavirus crisis persists, and until “at least the beginning of
October 2020”.
This deadline appeared to be incompatible with the French Commercial
Code, which stipulates that an annual dividend must be paid no later than
30 September.
Under these conditions, the Board of Directors of Crédit Agricole S.A., which
was consulted in writing on 1 April 2020 pursuant to the legal provisions on
the functioning of deliberative bodies during the COVID-19 epidemic, decided
not to propose to the General Meeting of 13 May 2020 the distribution of
a dividend initially set at €0.70 per share for the 2019 financial year, and
to allocate the entire profit for 2019 to a reserve account.
On 28 July 2020, the ECB extended its recommendation not to pay dividends
until January 2021.
On 15 December 2020, the ECB changed its recommendations, asking all
banks to consider not distributing cash dividends and not repurchasing
shares, or to limit such distributions, until 30 September 2021. Accordingly,
in the event of a distribution, dividends and share buybacks must remain
below 15% of the cumulative distributable earnings for financial years
2019 and 2020 and must not exceed 20 basis points of the CET1 ratio,
whichever is lower. In addition, banks planning to make distributions should
contact their joint prudential supervisory team to determine whether the
level of distribution they are contemplating is prudent.
As at 31 December 2020, Crédit Agricole S.A. had not distributed any
dividends for the 2019 financial year.
2.1.6
Insurance support scheme
for professionals
In the context of the health and economic crisis related to COVID-19 and with
the aim of supporting and helping professionals through this crisis, the Crédit
Agricole Group decided on 22 April 2020 to implement an unprecedented
extra-contractual support scheme for all of its policyholders who have
taken out professional multi-risk insurance with business interruption.
This insurance support scheme entails the payment of a sum corresponding
to a flat-rate estimate of the loss of income for the relevant economic
sector during the period.
As at 31 December 2020, under this scheme, a sum of €237.5 million
had been paid to the Group’s professional policyholders impacting net
banking income, of which:
€231.5 million was paid by the Crédit Agricole Group:
-
€96.5 million by Pacifica,
-
€96.5 million by the Regional Banks and LCL,
-
€38.5 million by La Médicale de France;
€6 million outside the Group was paid by the general agents of La
Médicale de France.
2.2
MAIN CHANGES IN THE SCOPE OF CONSOLIDATION
2.2.1
Acquisition of Sabadell Asset
Management by Amundi
On 21 January 2020, Amundi and Banco Sabadell announced the signing
of a 10-year strategic partnership for the distribution of asset management
products in the Banco Sabadell network in Spain.
The combination of the strong regional presence of the Banco Sabadell
network and Amundi’s comprehensive range of savings products and
solutions creates significant potential for growth in Spain between the
two partners.
Within this framework, Amundi acquires the entire share capital of Sabadell
Asset Management, Banco Sabadell’s asset management subsidiary, with
€22 billion in assets under management at 31 December 2019.
On 30 June 2020, all regulatory authorisations required to complete this
transaction had been obtained, and Amundi acquired the entire share capital
of Sabadell Asset Management for a cash purchase price of €430 million.
An earn-out of up to €30 million could be payable by 2024.
This acquisition, financed exclusively by Amundi’s excess share capital,
generated the recognition of €335 million in goodwill.
In accordance with IFRS 3R, the goodwill presented in this note is a
preliminary measurement and may be revalued in the coming year.
2.2.2
Acquisition of additional Menafinance
shares by Crédit Agricole Consumer
Finance
Following the ten-year renewal of its partnership with Fnac Darty Group in
March 2020, Crédit Agricole Consumer Finance took control of Menafinance,
the entity that provides consumer credit to Darty customers. This entity
was previously under the joint control of the two partners and was equity-
accounted by Crédit Agricole S.A.
As a result, on 30 June 2020, Crédit Agricole Consumer Finance acquired
the 50% of Menafinance’s share capital held by Fnac Darty Group,
i.e.
185,358 Menafinance shares for a total amount of €29.3 million.
Since the transaction, Menafinance has been wholly owned by Crédit
Agricole Consumer Finance and is fully consolidated by Crédit Agricole S.A.
At 30 June 2020, in accordance with IFRS 3R, this additional acquisition had
a positive impact of €12.6 million on profit Group share for the revaluation of
shares previously held. In addition, it generated the recognition of goodwill
of €25.2 million.
On 1 October 2020, Menafinance was absorbed by Crédit Agricole Consumer
Finance.
2.2.3
Full disposal of Crédit Agricole CIB’s
remaining stake in the share capital
of BSF
On 28 September 2020, Crédit Agricole Corporate & Investment Bank
(Crédit Agricole CIB) announced the disposal of its remaining 4% stake
in the capital of Banque Saudi Fransi (BSF). The buyers were two Saudi
government-related institutional investors. They acquired the stake held
by Crédit Agricole CIB in BSF at a price of 30.00 Saudi Riyals (SAR) per
share, for a total consideration of SAR 1.45 billion equivalent to around
€332 million.
BSF shares were accounted in Crédit Agricole CIB balance sheet as
Financial assets at fair value through Other Comprehensive Income; thus
the transaction will have no impact on P&L.
At 31 December 2020, following the sale, Crédit Agricole CIB no longer
holds any interest in the share capital of Banque Saudi Fransi (BSF).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
448
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 2
2.2.4
Disposal plans (IFRS 5)
2.2.4.1 Crédit Agricole Bank Romania
Crédit Agricole Bank Romania is a fully-owned subsidiary of Crédit Agricole S.A.
During 2019, Crédit Agricole S.A. initiated a process to put Crédit Agricole
Bank Romania up for sale.
Crédit Agricole Bank Romania’s assets and liabilities have thus been
reclassified under IFRS 5 in the consolidated financial statements at
31 December 2019.
In December 2020, negotiations with the Romanian bank Vista Bank
Romania S.A. led to the signing of an agreement to sell Crédit Agricole Bank
Romania to Vista Bank Romania S.A. on 4 January 2021. The completion of
this transaction, which is subject to the approval of the competent Romanian
regulatory authorities (the National Bank of Romania and the National
Competition Council), is expected to take place in the first half of 2021.
Crédit Agricole Bank Romania is therefore maintained pursuant to
IFRS 5 in the Crédit Agricole S.A. consolidated financial statements at
31 December 2020 for an amount of €521 million in “Non-current assets
held for sale” and for an amount of €501 million in “Liabilities associated
with non-current assets held for sale”.
The net income is classified under “Net income from discontinued operations
or being sold” for an amount of -€7.5 million.
2.2.4.2 Crédit Agricole Consumer Finance
Nederland (CACF NL)
Crédit Agricole Consumer Finance Nederland is a wholly owned subsidiary
of Crédit Agricole S.A.
In October 2019, the Executive Management of Crédit Agricole S.A. and
Crédit Agricole Consumer Finance began the process of putting Crédit
Agricole Consumer Finance NL up for sale.
A programme to actively search for a potential buyer was launched, leading
to the receipt of several offers in the fourth quarter of 2020. The Group
decided to enter into exclusive negotiations with one of them.
Therefore, pursuant to IFRS 5, the assets and liabilities of Crédit Agricole
Consumer Finance Nederland are classified as at 31 December 2020 in
the balance sheet under “Non-current assets held for sale” for the sum of
€1,704 million and under “Liabilities associated with non-current assets
held for sale” for the sum of €477 million. The net income is classified
under “Net income from discontinued operations or being sold” for an
amount of -€189.8 million.
The impact on the income statement includes the impact of the
reclassification as Non-current assets held for sale of the share of goodwill
of the CGU to which Crédit Agricole Consumer Finance NL is attached, as
well as the estimated loss on that transaction.
2.2.4.3 Crédit Agricole CIB (Miami) and CA
Indosuez Wealth (Brazil) S.A. DTVM
Crédit Agricole CIB (Miami) is a branch of Crédit Agricole CIB (CACIB), which
is in turn 97.8% controlled by Crédit Agricole S.A.
CA Indosuez Wealth (Brazil) S.A. DTVM is a subsidiary 97.8% controlled by
Crédit Agricole S.A. The shares of this company are wholly owned by Crédit
Agricole CIB (CACIB), which in turn is 97.8% controlled by Crédit Agricole S.A.
In 2020, the Executive Management of Crédit Agricole S.A. and Crédit
Agricole CIB began the process of putting the entity CA Indosuez Wealth
(Brazil) S.A. DTVM and the goodwill associated with outstanding loans to
customers of the Crédit Agricole CIB (Miami) branch of Crédit Agricole CIB
(CACIB) up for sale.
A programme to actively search for a potential buyer was launched, leading
to the receipt in the fourth quarter of 2020 of several binding offers, leading
to negotiations of contractual documentation.
Therefore, pursuant to IFRS 5, the assets and liabilities of Crédit Agricole
CIB (Miami) and CA Indosuez Wealth (Brazil) are reclassified as at
31 December 2020 in the balance sheet under “Non-current assets held
for sale” for the sum of €503.8 million and under “Liabilities associated
with non-current assets held for sale” for the sum of €450.9 million.
The impact on the income statement, amounting to -€23.5 million, is
classified under “Net income from discontinued operations or being sold”.
2.2.5
Creation of a joint venture between
Amundi and BOC Wealth Management
Following the 20 December 2019 approval of the China Banking
and Insurance Regulatory Commission, Amundi, a subsidiary of
Crédit Agricole S.A., and BOC Wealth Management, a subsidiary of Bank
of China, obtained a licence on 30 September 2020 for their joint venture
in China, Amundi BOC Wealth Management Company Limited.
The new company, registered in the Lingang Free Zone in Shanghai, is
owned 55% by Amundi and 45% by BOC Wealth Management. It is the first
asset management company with an international majority shareholder to
be able to develop and market an offer in China under “asset management”
product rules.
The savings solutions offered by the joint venture will benefit from Amundi’s
expertise in asset allocation and its rigorous risk management processes and
tools and from Bank Of China’s support in brand strategy and distribution
in branches and online.
Amundi BOC Wealth Management Company Limited is under the exclusive
control of Amundi and is therefore fully consolidated (FC) by Crédit Agricole S.A.
2.3
BENCHMARK BOND ISSUE ON THE PANDA MARKET
On 11 September 2020, following its inaugural Panda Bond issuance in
December 2019, Crédit Agricole S.A. has successfully issued its second CNY
1 billion (equivalent to €125 million) senior preferred bond with a maturity
of three years and a 3.5% fixed rate. Crédit Agricole S.A. thus becomes a
repeat issuer in the fast paced developing Panda Bond market, with the
view to fund its activities in China and further diversify its long-term funding.
The proceeds will be used to finance its wholly-owned banking subsidiary
Crédit Agricole CIB (China) Limited in order to support its international client
base through financing and capital market transactions.
This successful benchmark issuance was bought by Chinese and
International institutional investors on the Chinese bond market and the
Hong Kong Bond Connect exchange. The order book was 1.64 times
oversubscribed, illustrating the investors’ continuous confidence in
Crédit Agricole S.A. and recognition to its CNY 5 billion bonds issuance
programme, the foremost one issued by a French bank and a European
G-SIB (global systemically important banks) financial institution.
Crédit Agricole S.A., the issuer, as the Central Body and member of the
Crédit Agricole Network, and its Panda Bonds have obtained a domestic
rating of AAA from China Chengxin International Credit Rating.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
449
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 2
2.4
SOCIAL BOND ISSUANCE
In the context of the current crisis, which is severely affecting the most fragile,
the Crédit Agricole S.A. is resolutely pursuing its mutualist commitment to
promote development for all. On 2 December 2020, Crédit Agricole S.A.
successfully carried out its first social bond issuance for €1 billion.
The framework of these social bonds issuances aims to reduce social
inequalities by revitalising the most vulnerable territories and by promoting
employment, solidarity initiatives and access to essential goods and services.
Key issuer in the green bond market, Crédit Agricole S.A. is today naturally
broadening the field of its sustainable finance initiatives with this inaugural
social bond issue.
This theme-based issuance contributes to the Group’s ambition, included
in its Societal Project, to pursue its mutualist commitment to promote
development for all. This issuance will be focused in particular on financing
professionals and SME customers of the Regional Banks and LCL in
territories where the unemployment rate is higher than the national average.
2.5
NEW DEFINITION OF DEFAULT
At 31 December 2020, Crédit Agricole S.A. had implemented the new rules
relating to the application of the definition of default (EBA Guidelines (EBA/
GL/2016/7) and thresholds defined by the European Union (Article 1 of
Regulation (EU) 2018/1845 ECB of 21 November 2018).
This change in defaults is classified as a change in accounting estimates.
Its impact amounts to -€56 million and is recognised as an expense in the
income statement under “Cost of risk”.
2.6
“SWITCH” GUARANTEE MECHANISM
The “Switch” guarantee mechanism represents a transfer to the
Regional Banks of a share of the regulatory requirements that apply
to Crédit Agricole S.A. for its insurance activities in return for a fixed
remuneration of the Regional Banks.
2.6.1
Unwinding of 35% of the “Switch”
guarantee mechanism
On 2 March 2020, Crédit Agricole S.A. unwound 35% of the “Switch”
guarantee mechanism set up between the Regional Banks and
Crédit Agricole S.A.
The partial unwinding of this intra-group transaction strengthens
Crédit Agricole S.A.’s earning power with an accretive impact of €70 million
in 2020. It is in line with the Medium-Term Plan’s objective of unwinding
50% of the switch by 2022.
For Crédit Agricole S.A., this transaction resulted in a 35% reduction in
commitments given (€3.2 billion) and a 35% reduction in the security
deposit received from the Regional banks (approximately €1 billion).
This transaction has no impact on the results nor on the solvency ratios
of Crédit Agricole Group.
2.6.2
Triggering of the “Switch”
guarantee mechanism
The “Switch” guarantee mechanism hedges the Equity-Accounted Value
of Crédit Agricole Assurances. It is activated in the event of a decrease
in its value.
If the mechanism is activated, the Regional Banks will be required to
pay Crédit Agricole S.A. the proceeds of the half-yearly reduction in the
equity-accounted value adjusted by the coverage ratio, which has stood
at 44.51% since 2 March 2020, the date on which the 35% guarantee
was unwound.
At 30 June 2020, as a result of the tensions in the equity and bond markets
in the first half of 2020, the Crédit Agricole Assurances adjusted estimated
equity-accounted value had fallen by €147 million in the first half of 2020.
It triggered the guarantee mechanism in the amount of €65.4 million. In the
Crédit Agricole S.A. financial statements, this resulted in the recognition
in the income statement of income under Cost of risk of €65.4 million.
At 30 September 2020, the Crédit Agricole Assurances adjusted final
equity-accounted value for the first half of 2020 was determined. As a
result, the indemnity received by Crédit Agricole S.A. from the Regional
Banks’ security deposit, which was immediately reconstituted by a payment
of funds, was adjusted.
At 30 September 2020, €37.6 million was recognised in the
Crédit Agricole S.A. financial statements as income under cost of risk for
the triggering of the Switch guarantee.
2.6.3
“Switch” guarantee mechanism –
Claw-back
At 31 December 2020, the increase in the Equity-Accounted Value adjusted
for Crédit Agricole Assurances’ distributions in the second half of 2020
offset the decline observed in June 2020.
This increase in equity-accounted value resulted in the implementation of a
full claw-back of the guarantee in the fourth quarter of 2020, leading to the
recognition of an accrued expense of €37.6 million in the Crédit Agricole S.A.
financial statements.
As a result, for the whole of 2020, the Switch guarantee was neutral in
the Crédit Agricole S.A. financial statements.
2.7
DEPRECIATION OF GOODWILL ON CA ITALIA
As part of the preparing the publication of its consolidated financial
statements, Crédit Agricole S.A. conducted the annual valuation tests of
the goodwill recorded in its balance sheet during the fourth quarter of 2020.
In accordance with IFRS accounting standards, these tests are based on a
comparison between the value recorded in the assets of the consolidated
balance sheet of Crédit Agricole S.A. and the value in use. The calculation
of the value in use is based on discounting the future cash flows.
Due to an anticipated prolonged period of very low interest rates, which
is weighing on Crédit Agricole Italia’s interest margins and therefore on
its value in use for Crédit Agricole S.A. and Crédit Agricole Group, on
15 December 2020, Crédit Agricole S.A.’s Board of Directors decided to
impair the goodwill carried on Crédit Agricole Italia. This non-deductible
impairment has an impact on net income Group share of €778 million in
the consolidated financial statements for the fourth quarter of 2020 of
Crédit Agricole S.A.
This charge does not affect the solvency of Crédit Agricole S.A., as the
goodwill has already been fully deducted from the prudential capital, nor
its liquidity.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
450
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 2
2.8
CAPITAL INCREASE RESERVED FOR EMPLOYEES
The capital increase of Crédit Agricole S.A. reserved for employees, with
the subscription period running from 12 to 25 November 2020, was
completed definitively on 22 December 2020. 47,113 Crédit Agricole
Group employees, in France and 17 other countries, subscribed for a
total amount of €162.9 million.
The proposed investment scheme was a standard offer with a subscription
price including a 30% rebate on the share price. The issue and delivery of
the new shares to employees took place on 22 December 2020.
This capital increase created 31,999,928 new shares, thereby bringing the
total number of shares comprising the share capital of Crédit Agricole S.A.
to 2,916,688,640.
2.9
VOLUNTARY PUBLIC CASH TENDER OFFER BY CRÉDIT AGRICOLE
ITALIA FOR ALL SHARES OF CREDITO VALTELLINESE
On 23 November 2020, Crédit Agricole Italia S.p.A. (Crédit Agricole Italia),
a 75.6%-owned subsidiary of Crédit Agricole S.A., launched a voluntary
public all-cash tender offer (the “Offer”) for all ordinary shares of Credito
Valtellinese S.p.A. (Credito Valtellinese).
The acquisition of Credito Valtellinese will strengthen Crédit Agricole
competitive positioning in Italy, its second domestic market, thus confirming
our continued and longstanding commitment in supporting our clients and
local communities in Italy.
The Offer price equals to €10.50 for each Credito Valtellinese’s share. This
corresponds to a total investment of €737 million by Crédit Agricole Italia
to acquire 100% of Credito Valtellinese’s shares.
In the context of the Offer, Crédit Agricole Assurances (a subsidiary of
Crédit Agricole S.A.) will sell to Crédit Agricole Italia its stake in Credito
Valtellinese, equal to 9.8% of the share capital. The Offer is conditional upon
Crédit Agricole Italia’s acquisition of at least 66.67% of the share capital with
voting rights of Credito Valtellinese. In addition, Crédit Agricole Italia retains
the discretionary right to waive the above condition if at least 50% of the
share capital with voting rights of Credito Valtellinese +1 share is acquired.
2.10
CHEQUE IMAGE EXCHANGE DISPUTE
In its judgment of 21 December 2017, the Paris Court of Appeal upheld
the decision of the French Competition Authority (ADLC), which in 2010
had fined the major French banks for colluding to fix the price and terms
of clearing cheques.
Just as the other banks party to this procedure, the Crédit Agricole Group
has filed an appeal with France’s Supreme Court
(Cour de cassation).
The Supreme Court ruled in favour of the banks in the Cheque Image
Exchange case on 29 January 2020 and referred the case back to the Paris
Court of Appeal, with a change in the composition of the Court.
This decision returns the case and the parties to their status before the
Court of Appeal’s decision of 21 December 2017. The banks are therefore
once again subject to the French Competition Authority’s unfavourable
decision of 20 September 2010.
In practice, as a result of the French Supreme Court’s decision,
Crédit Agricole S.A. will be required to pay the French State Treasury the
difference between the fine imposed by the French Competition Authority
in September 2010 (€82.9 million) and the reduced fine imposed by the
Paris Court of Appeal in December 2017 (€76.5 million),
i.e.
€6.4 million. On
7 April 2020, the sum of €6.4 million was paid to the French State Treasury.
Based on the same principle as the fine paid in December 2017, this
additional charge is shared equally between Crédit Agricole S.A. and the
Regional Banks and is recognised in the consolidated financial statements.
NOTE 3
Financial management, risk exposure and hedging policy
Crédit Agricole S.A.’s Financial Management department is responsible
for organising financial flows within Crédit Agricole S.A., defining and
implementing refinancing rules, asset and liability management, and
managing regulatory prudential ratios. It sets out the principles and ensures
a cohesive financial management system throughout the Group.
The Group’s management of banking risks is handled by the Group Risk
Management and Permanent Controls department. This department reports
to the Chief Executive Officer of Crédit Agricole S.A. and its task is to control
credit, financial and operational risks.
A description of these processes and commentary now appear in the
chapter on “Risk factors” in the management report, as allowed by IFRS 7.
Nonetheless, the accounting breakdowns are still presented in the financial
statements.
3.1
CREDIT RISK
3.1.1
Change in carrying amounts
and value adjustments for losses
during the period
Value adjustments for losses correspond to the impairment of assets and
to provisions for off-balance sheet commitments recognised in net income
(Cost of risk) relating to credit risk.
The following tables present a reconciliation of the opening and closing
balances of value adjustments for losses recognised under Cost of risk
and associated carrying amounts, by accounting category and type of
instrument.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
451
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets at amortised cost: debt securities
(in millions of euros)
Performing assets
Credit-impaired assets
(Bucket 3)
TOTAL
Assets subject to
12-month ECL (Bucket 1)
Assets subject to
lifetime ECL (Bucket 2)
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount (a)
Loss
allowance (b)
Net carrying
amount
(a) + (b)
Balance at
31 December 2019
72,170
(27)
380
(12)
23
(15)
72,572
(53)
72,519
Transfers between
buckets during
the period
(18)
-
18
-
-
-
-
-
Transfers from Bucket 1
to Bucket 2
(20)
-
20
-
-
-
-
Return from Bucket 2
to Bucket 1
2
-
(2)
-
-
-
-
Transfers to Bucket 3
(1)
-
-
-
-
-
-
-
-
Return from Bucket 3
to Bucket 2/Bucket 1
-
-
-
-
-
-
-
-
Total after transfers
72,152
(27)
398
(12)
23
(15)
72,572
(53)
72,519
Changes in gross
carrying amounts and
loss allowances
11,403
(8)
(36)
8
21
(25)
11,389
(25)
New financial production:
purchase, granting,
origination…
(2)
45,500
(29)
324
(3)
-
45,825
(32)
Derecognition: disposal,
repayment, maturity…
(32,169)
20
(358)
10
-
-
(32,527)
30
Write-offs
-
-
-
Changes of cash flows
resulting in restructuring
due to financial difficulties
-
1
-
-
-
-
-
1
Changes in models' credit
risk parameters during
period
-
1
(26)
-
(25)
Changes in model/
methodology
-
-
-
-
-
Changes in scope
-
-
-
-
-
-
-
-
Other
(4)
(1,928)
1
(2)
-
21
1
(1,909)
2
Total
83,555
(35)
362
(4)
44
(40)
83,961
(78)
83,883
Changes in carrying
amount due to specific
accounting assessment
methods (with no
significant impact
on loss allowance)
(3)
910
-
-
910
BALANCE AT
31 DECEMBER 2020
84,465
(35)
362
(4)
44
(40)
84,871
(78)
84,794
Contractual amount
outstanding of financial
assets written off during
the period, that are still
subject to enforcement
measures
-
-
-
-
(1)
Transfers to Bucket 3 correspond to outstanding amounts initially classified as Bucket 1 which, during the year, were downgraded directly to Bucket 3, or to Bucket 2 and later to Bucket 3.
(2)
Originations in Bucket 2 could include some originated loans in Bucket 1 reclassified in Bucket 2 during the period.
(3)
Includes the impacts of fair value adjustments of micro-hedged instruments, the impacts relating to the use of the EIR method (notably the amortisation of premiums/discounts), the impacts
of the accretion of discounts on restructured loans (recovered as revenue over the remaining term of the asset), the changes in related receivables and in the currency impact.
(4)
The items in the “Others” line are mainly translation adjustments and reclassifications under IFRS 5.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
452
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets at amortised cost: loans and receivables due from credit institutions
(excluding Crédit Agricole internal transactions)
(in millions of euros)
Performing assets
Credit-impaired assets
(Bucket 3)
TOTAL
Assets subject to
12-month ECL (Bucket 1)
Assets subject to
lifetime ECL (Bucket 2)
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
(a)
Loss
allowance (b)
Net
carrying
amount
(a) + (b)
Balance at
31 December 2019
103,931
(27)
26
-
505
(389)
104,464
(416)
104,048
Transfers between
buckets during the period
(61)
-
62
-
-
-
-
-
Transfers from Bucket 1
to Bucket 2
(63)
-
64
-
-
-
Return from Bucket 2
to Bucket 1
2
-
(2)
-
-
-
-
-
Transfers to Bucket 3
(1)
-
-
-
-
-
-
-
-
Return from Bucket 3
to Bucket 2/Bucket 1
-
-
-
-
-
-
-
-
Total after transfers
103,870
(27)
88
-
505
(389)
104,464
(416)
104,048
Changes in gross carrying
amounts and loss
allowances
(12,532)
2
(27)
-
(100)
33
(12,659)
35
New financial production:
purchase, granting,
origination…
(2)
46,595
(21)
9
-
46,604
(21)
Derecognition: disposal,
repayment, maturity…
(58,216)
11
(34)
-
(66)
5
(58,316)
16
Write-offs
(3)
3
(3)
3
Changes of cash flows
resulting in restructuring
due to financial difficulties
-
(4)
-
-
-
-
-
(4)
Changes in models' credit
risk parameters during
the period
10
-
(1)
-
9
Changes in model/
methodology
-
-
-
-
-
Changes in scope
(180)
-
-
-
-
-
(180)
-
Other
(4)
(731)
6
(2)
-
(31)
26
(764)
32
Total
91,338
(25)
61
-
405
(356)
91,805
(381)
91,424
Changes in carrying amount
due to specific accounting
assessment methods
(with no significant impact
on loss allowance)
(3)
1,364
-
2
1,366
BALANCE AT
31 DECEMBER 2020
92,702
(25)
61
-
407
(356)
93,171
(381)
92,790
Contractual amount
outstanding of financial
assets written off during
the period, that are still
subject to enforcement
measures
-
-
-
-
(1)
Transfers to Bucket 3 correspond to outstanding amounts initially classified as Bucket 1 which, during the year, were downgraded directly to Bucket 3, or to Bucket 2 and later to Bucket 3.
(2)
Originations in Bucket 2 could include some originated loans in Bucket 1 reclassified in Bucket 2 during the period.
(3)
Includes the impacts of fair value adjustments of micro-hedged instruments, the impacts relating to the use of the EIR method (notably the amortisation of premiums/discounts), the impacts
of the accretion of discounts on restructured loans (recovered as revenue over the remaining term of the asset), the changes in related receivables and in the currency impact.
(4)
The items in the “Others” line are mainly translation adjustments and reclassifications under IFRS 5.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
453
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets at amortised cost: loans and receivables due from customers
(in millions of euros)
Performing assets
Credit-impaired assets
(Bucket 3)
TOTAL
Assets subject to 12-month
ECL (Bucket 1)
Assets subject to lifetime
ECL (Bucket 2)
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
(a)
Loss
allowance (b)
Net
carrying
amount
(a) + (b)
Balance at 31 December 2019
360,437
(743)
30,825
(1,277)
13,130
(7,192)
404,392
(9,212)
395,180
Transfers between buckets
during the period
(13,335)
(20)
9,828
22
3,506
(1,273)
-
(1,270)
Transfers from Bucket 1
to Bucket 2
(22,199)
59
22,199
(478)
-
(418)
Return from Bucket 2
to Bucket 1
10,346
(91)
(10,346)
287
-
-
-
196
Transfers to Bucket 3
(1)
(1,582)
13
(2,372)
238
3,953
(1,376)
-
(1,125)
Return from Bucket 3
to Bucket 2/Bucket 1
100
(1)
347
(25)
(447)
103
-
77
Total after transfers
347,102
(765)
40,653
(1,252)
16,636
(8,465)
404,392
(10,482)
393,911
Changes in gross carrying
amounts and loss allowances
16,359
(154)
(1,440)
(472)
(4,044)
1,528
10,875
902
New financial production:
purchase, granting,
origination…
(2)(4)
204,892
(657)
11,317
(796)
216,209
(1,453)
Derecognition: disposal,
repayment, maturity…
(181,558)
482
(11,639)
741
(1,716)
431
(194,913)
1,655
Write-offs
(2,012)
1,879
(2,012)
1,879
Changes of cash flows
resulting in restructuring due
to financial difficulties
(1)
-
(10)
3
(16)
4
(27)
6
Changes in models' credit risk
parameters during the period
(6)
(20)
(497)
(1,049)
-
(1,566)
Changes in model/methodology
-
17
-
-
17
Changes in scope
272
(3)
28
(3)
40
(31)
340
(37)
Other
(7)
(7,246)
44
(1,136)
63
(340)
294
(8,722)
401
Total
363,461
(919)
39,213
(1,724)
12,592
(6,937)
415,267
(9,580)
405,686
Changes in carrying amount
due to specific accounting
assessment methods (with no
significant impact on loss
allowance)
(3)
(565)
3
812
250
BALANCE AT
31 DECEMBER 2020
(5)
362,896
(919)
39,216
(1,724)
13,404
(6,937)
415,517
(9,580)
405,937
Contractual amount outstanding
of financial assets written off
during the period, that are still
subject to enforcement
measures
-
-
-
-
(1)
Transfers to Bucket 3 correspond to outstanding amounts initially classified as Bucket 1 which, during the year, were downgraded directly to Bucket 3, or to Bucket 2 and later to Bucket 3.
(2)
Originations in Bucket 2 could include some originated loans in Bucket 1 reclassified in Bucket 2 during the period.
(3)
Includes the impacts of fair value adjustments of micro-hedged instruments, the impacts relating to the use of the EIR method (notably the amortisation of premiums/discounts), the impacts of the
accretion of discounts on restructured loans (recovered as revenue over the remaining term of the asset), the changes in accrued interests.
(4)
At 31 December 2020, the amount of French state-guaranteed loans (SGL) granted to customers of the Group as part of measures to support the economy in the wake of the COVID-19 health crisis
amounted to €9.5 billion.
(5)
Outstanding loans to customers in France with non-contractual due date postponements amounted to €16.6 billion in 2020, including €0.9 billion still outstanding as at 31 December 2020 at
Crédit Agricole S.A. level.
(6)
Concerning Bucket 3 – this line corresponds to the change in the assessment of the credit risk on files already in default.
(7)
The items in the “Others” line are mainly translation adjustments and reclassifications under IFRS 5.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
454
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets at fair value through other comprehensive income: debt securities
(in millions of euros)
Performing assets
Credit-impaired assets
(Bucket 3)
TOTAL
Assets subject to 12-month
ECL (Bucket 1)
Assets subject to lifetime
ECL (Bucket 2)
Carrying
amount
Loss
allowance
Carrying
amount
Loss
allowance
Carrying
amount
Loss
allowance
Carrying
amount
Loss
allowance
Balance at 31 December 2019
256,189
(135)
2,614
(34)
-
(4)
258,803
(173)
Transfers between buckets
during the period
(350)
-
346
(5)
(4)
(4)
Transfers from Bucket 1 to Bucket 2
(357)
-
353
(5)
(4)
(4)
Return from Bucket 2 to Bucket 1
7
-
(7)
-
-
-
-
-
Transfers to Bucket 3
(1)
-
-
-
-
-
-
-
-
Return from Bucket 3
to Bucket 2/Bucket 1
-
-
-
-
-
-
-
-
Total after transfers
255,839
(135)
2,960
(39)
-
(4)
258,799
(177)
Changes in gross carrying amounts
and loss allowances
6,692
43
(598)
-
-
-
6,094
42
Fair value revaluation during the period
3,605
(34)
-
3,572
New financial production: purchase,
granting, origination…
(2)
40,660
(29)
8,353
(9)
49,013
(38)
Derecognition: disposal,
repayment, maturity…
(37,171)
29
(8,869)
8
-
-
(46,040)
36
Write-offs
-
-
-
-
Changes of cash flows resulting
in restructuring due to financial
difficulties
-
-
4
4
-
-
3
3
Changes in models' credit risk
parameters during the period
43
(3)
-
-
39
Changes in model/methodology
-
-
-
-
-
Changes in scope
7
-
-
-
-
-
7
-
Other
(4)
(409)
-
(52)
-
-
-
(461)
2
Total
262,531
(92)
2,362
(39)
-
(4)
264,893
(135)
Changes in carrying amount due
to specific accounting assessment
methods (with no significant impact
on loss allowance)
(3)
(1,021)
(16)
-
(1,037)
BALANCE AT 31 DECEMBER 2020
261,510
(92)
2,346
(39)
-
(4)
263,856
(135)
Contractual amount outstanding of
financial assets written off during
the period, that are still subject
to enforcement measures
-
-
-
-
(1)
Transfers to Bucket 3 correspond to outstanding amounts initially classified as Bucket 1 which, during the year, were downgraded directly to Bucket 3, or to Bucket 2 and later to Bucket 3.
(2)
Originations in Bucket 2 could include some originated loans in Bucket 1 reclassified in Bucket 2 during the period.
(3)
Includes the impacts of the use of the EIR method (notably the amortisation of premiums/discounts).
(4)
The items in the “Others” line are mainly translation adjustments and reclassifications under IFRS 5.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
455
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financing commitments (excluding Crédit Agricole internal operations)
(in millions of euros)
Performing commitments
Provisioned
commitments (Bucket 3)
TOTAL
Commitments subject to
12-month ECL (Bucket 1)
Commitments subject to
lifetime ECL (Bucket 2)
Amount of
commitment
Loss
allowance
Amount of
commitment
Loss
allowance
Amount of
commitment
Loss
allowance
Amount of
commitment
(a)
Loss
allowance
(b)
Net
amount of
commitment
(a) + (b)
Balance at
31 December 2019
148,020
(169)
5,097
(181)
481
(58)
153,598
(409)
153,189
Transfers between
buckets during
the period
(3,764)
7
3,687
(52)
78
(27)
-
(71)
Transfers from Bucket 1
to Bucket 2
(4,745)
19
4,745
(89)
-
(69)
Return from Bucket 2
to Bucket 1
1,020
(12)
(1,020)
32
-
20
Transfers to Bucket 3
(1)
(61)
-
(62)
5
123
(28)
-
(23)
Return from Bucket 3
to Bucket 2/Bucket 1
22
-
24
-
(45)
1
-
1
Total after transfers
144,256
(162)
8,784
(233)
559
(85)
153,598
(480)
153,117
Changes in
commitments and loss
allowances
11,216
(19)
(684)
13
(242)
27
10,291
21
New commitments
given
(2)
105,568
(322)
2,981
(332)
108,549
(655)
End of commitments
(96,887)
294
(3,343)
375
(344)
44
(100,573)
714
Write-offs
(1)
2
(1)
2
Changes of cash flows
resulting in restructuring
due to financial
difficulties
-
-
-
-
-
-
-
-
Changes in models'
credit risk parameters
during the period
9
(42)
(20)
(53)
Changes in model/
methodology
-
-
-
-
Changes in scope
604
-
2
-
-
-
606
-
Other
(3)
1,931
-
(324)
12
103
1
1,710
13
BALANCE AT
31 DECEMBER 2020
155,472
(181)
8,100
(220)
317
(58)
163,889
(459)
163,430
(1)
Transfers to Bucket 3 correspond to outstanding amounts initially classified as Bucket 1 which, during the year, were downgraded directly to Bucket 3, or to Bucket 2 and later to Bucket 3.
(2)
New commitments given in Bucket 2 could include some originations in Bucket 1 reclassified in Bucket 2 during the period.
(3)
The items in the “Others” line are mainly translation adjustments and reclassifications under IFRS 5.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
456
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Guarantee commitments (excluding Crédit Agricole internal operations)
(in millions of euros)
Performing commitments
Provisioned
commitments (Bucket 3)
TOTAL
Commitments subject to
12-month ECL (Bucket 1)
Commitments subject to
lifetime ECL (Bucket 2)
Amount of
commitment
Loss
allowance
Amount of
commitment
Loss
allowance
Amount of
commitment
Loss
allowance
Amount of
commitment
(a)
Loss
allowance
(b)
Net
amount of
commitment
(a) + (b)
Balance at
31 December 2019
80,129
(48)
4,578
(112)
3,094
(339)
87,800
(498)
87,304
Transfers between
buckets during
the period
(771)
(10)
691
9
80
(10)
-
(11)
Transfers from Bucket 1
to Bucket 2
(1,223)
3
1,223
(9)
-
(6)
Return from Bucket 2
to Bucket 1
495
(13)
(495)
17
-
4
Transfers to Bucket 3
(1)
(107)
-
(38)
1
145
(15)
-
(14)
Return from Bucket 3
to Bucket 2/Bucket 1
64
-
1
-
(65)
5
-
5
Total after transfers
79,358
(58)
5,269
(105)
3,174
(349)
87,801
(512)
87,289
Changes in
commitments
and loss allowances
(1,406)
(5)
(584)
(22)
(76)
88
(2,066)
61
New commitments
given
(2)
48,164
(96)
3,298
(97)
51,462
(193)
End of commitments
(44,708)
85
(3,717)
75
(737)
170
(49,162)
330
Write-offs
-
-
-
-
(14)
14
(14)
14
Changes of cash flows
resulting in restructuring
due to financial
difficulties
-
-
-
-
-
-
-
-
Changes in models'
credit risk parameters
during the period
6
(3)
(109)
-
(106)
Changes in model/
methodology
-
-
-
-
-
Changes in scope
-
-
-
-
-
-
-
-
Other
(3)
(4,862)
-
(165)
3
675
13
(4,352)
16
BALANCE AT
31 DECEMBER 2020
77,952
(63)
4,685
(127)
3,098
(261)
85,735
(451)
85,284
(1)
Transfers to Bucket 3 correspond to outstanding amounts initially classified as Bucket 1 which, during the year, were downgraded directly to Bucket 3, or to Bucket 2 and later to Bucket 3.
(2)
New commitments given in Bucket 2 could include some originations in Bucket 1 reclassified in Bucket 2 during the period.
(3)
The items in the “Others” line are mainly translation adjustments and reclassifications under IFRS 5.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
457
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
3.1.2
Maximum exposure to credit risk
An entity’s maximum exposure to credit risk represents the carrying amount,
net of any impairment loss recognised and without taking account of any
collateral held or other credit enhancements (
e.g.
netting agreements that
do not qualify for offset in accordance with IAS 32).
The tables below show the maximum exposures as well as the amount
of collateral held and other credit enhancements allowing this exposure
to be reduced.
Impaired assets at the end of the reporting period constitute the impaired
assets (Bucket 3).
Financial assets not subject to impairment requirements (accounted at fair value through profit or loss)
(in millions of euros)
31/12/2020
Maximum
exposure
to credit risk
Credit risk mitigation
Collateral held as security
Other credit enhancement
Financial
instruments
provided as
collateral
Mortgages
Pledged
securities
Financial
guarantees
Credit
derivatives
Financial assets at fair value through profit
or loss (excluding equity securities and
assets backing unit-linked contracts)
327,258
-
3,864
702
112
-
Held for trading financial assets
255,747
-
-
691
-
-
Debt instruments that do not meet
the conditions of the “SPPI” test
71,510
-
3,864
11
112
-
Financial assets designated at fair value
through profit or loss
1
-
-
-
-
-
Hedging derivative Instruments
21,745
-
-
1,329
-
-
TOTAL
349,003
-
3,864
2,031
112
-
(in millions of euros)
31/12/2019
Maximum
exposure
to credit risk
Credit risk mitigation
Collateral held as security
Other credit enhancement
Financial
instruments
provided as
collateral
Mortgages
Pledged
securities
Financial
guarantees
Credit
derivatives
Financial assets at fair value through profit
or loss (excluding equity securities and
assets backing unit-linked contracts)
296,409
-
3,327
1,798
79
-
Held for trading financial assets
223,820
-
-
1,769
-
-
Debt instruments that do not meet
the conditions of the “SPPI” test
72,588
-
3,327
29
79
-
Financial assets designated at fair value
through profit or loss
1
-
-
-
-
-
Hedging derivative Instruments
19,368
-
-
1,298
-
-
TOTAL
315,777
-
3,327
3,096
79
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
458
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets subject to impairment requirements
(in millions of euros)
31/12/2020
Maximum
exposure to
credit risk
Credit risk mitigation
Collateral held as security
Other credit enhancement
Financial
instruments
provided as
collateral
Mortgages
Pledged
securities
Financial
guarantees
Credit
derivatives
Financial assets at fair value through
other comprehensive income that may
be reclassified to profit or loss
263,856
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Loans and receivables due from credit institutions
-
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Loans and receivables due from customers
-
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Debt securities
263,856
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Financial assets at amortised cost
583,521
12,680
81,488
9,996
132,740
700
of which impaired assets at the reporting date
6,525
76
604
119
1,426
-
Loans and receivables due from credit
institutions (excluding Crédit Agricole
internal transactions)
92,790
4,632
-
921
3,190
700
of which impaired assets at the reporting date
50
-
-
-
28
-
Loans and receivables due from customers
405,937
8,048
81,488
9,075
129,550
-
of which impaired assets at the reporting date
6,470
76
604
119
1,398
-
Debt securities
84,794
-
-
-
-
-
of which impaired assets at the reporting date
5
-
-
-
-
-
TOTAL
847,377
12,680
81,488
9,996
132,740
700
of which impaired assets at the reporting date
6,525
76
604
119
1,426
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
459
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
(in millions of euros)
31/12/2019
Maximum
exposure to
credit risk
Credit risk mitigation
Collateral held as security
Other credit enhancement
Financial
instruments
provided as
collateral
Mortgages
Pledged
securities
Financial
guarantees
Credit
derivatives
Financial assets at fair value through
other comprehensive income that may
be reclassified to profit or loss
258,803
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Loans and receivables due from credit institutions
-
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Loans and receivables due from customers
-
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Debt securities
258,803
-
-
-
-
-
of which impaired assets at the reporting date
-
-
-
-
-
-
Financial assets at amortised cost
571,730
12,087
77,551
7,564
114,228
288
of which impaired assets at the reporting date
6,066
103
703
116
887
-
Loans and receivables due from credit institutions
(excluding Crédit Agricole internal transactions)
104,030
4,030
-
81
5,157
-
of which impaired assets at the reporting date
115
-
-
-
77
-
Loans and receivables due from customers
395,181
8,057
77,551
7,483
109,071
288
of which impaired assets at the reporting date
5,942
103
703
116
810
-
Debt securities
72,519
-
-
-
-
-
of which impaired assets at the reporting date
9
-
-
-
-
-
TOTAL
830,533
12,087
77,551
7,564
114,228
288
of which impaired assets at the reporting date
6,066
103
703
116
887
-
Off-balance sheet commitments subject to provision requirements
(in millions of euros)
31/12/2020
Maximum
exposure to
credit risk
Credit risk mitigation
Collateral held as security
Other credit enhancement
Financial
instruments
provided as
collateral
Mortgages
Pledged
securities
Financial
guarantees
Credit
derivatives
Guarantee commitments (excluding
Crédit Agricole internal transactions)
85,284
-
37
408
4,360
553
of which provisioned commitments at the reporting date
2,837
-
-
93
14
-
Financing commitments (excluding
Crédit Agricole internal transactions)
163,430
-
943
918
17,177
7,827
of which provisioned commitments at the reporting date
259
-
1
5
12
-
TOTAL
248,714
-
980
1,326
21,536
8,380
of which provisioned commitments at the reporting date
3,096
-
1
98
26
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
460
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
(in millions of euros)
31/12/2019
Maximum
exposure to
credit risk
Credit risk mitigation
Collateral held as security
Other credit enhancement
Financial
instruments
provided as
collateral
Mortgages
Pledged
securities
Financial
guarantees
Credit
derivatives
Guarantee commitments (excluding
Crédit Agricole internal transactions)
87,302
-
23
434
5,980
784
of which provisioned commitments at the reporting date
2,755
-
-
64
14
-
Financing commitments (excluding Crédit Agricole
internal transactions)
153,187
2
1,146
1,173
17,315
7,785
of which provisioned commitments at the reporting date
423
-
2
13
61
-
TOTAL
240,490
2
1,169
1,606
23,295
8,569
of which provisioned commitments at the reporting date
3,178
-
2
76
75
-
A description of the assets held as collateral is provided in Note 9 “Commitments given and received and other guarantees”.
3.1.3
Modified financial assets
Modified financial assets are those assets that have been restructured due
to financial difficulties. Loans for which the entity changed the initial financial
terms (interest rate, term) for economic or legal reasons connected with
the borrower’s financial difficulties, in a manner that would not have been
considered under other circumstances. They thus consist of loans classified
as in default and performing loans at the date they are restructured. (A more
detailed definition of restructured loans and their accounting treatment can
be found in Note 1.2 “Accounting policies and principles”, Chapter entitled
“Financial instruments – Credit risk”).
For assets restructured during the period, the carrying amount following restructuring consists of:
(in millions of euros)
Performing assets
Credit-impaired
assets
(Bucket 3)
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject to
lifetime ECL (Bucket 2)
Loans and receivables due from credit institutions
9
-
-
Gross carrying amount before modification
9
-
-
Net gains (losses) resulting from the modification
-
-
-
Loans and receivables due from customers
7
1,189
649
Gross carrying amount before modification
8
1,199
665
Net gains (losses) resulting from the modification
(1)
(10)
(16)
Debt securities
-
4
-
Gross carrying amount before modification
-
-
-
Net gains (losses) resulting from the modification
-
4
-
In accordance with the principles set out in Note 1.2 “Accounting policies and principles”, Chapter entitled “Financial instruments – Credit risk”, restructured
assets at a stage of impairment corresponding to that of Bucket 2 (performing assets) or Bucket 3 (impaired assets) may go back into Bucket 1 (performing
assets). The carrying amount of modified assets affected by this reclassification during the period is:
(in millions of euros)
Gross carrying amount
Assets subject to
12-month ECL
(Bucket 1)
Restructured assets previously classified in
Bucket 2
or Bucket 3 and
reclassified
in Bucket 1 during the period
Loans and receivables due from credit institutions
-
Loans and receivables due from customers
17
Debt securities
-
TOTAL
17
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
461
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
3.1.4
Credit risk concentrations
The carrying amounts and commitments are presented net of impairment
and provisions.
Exposure to credit risk by category of credit risk
The credit risk categories are presented by probability of default intervals.
The correspondence between internal ratings and probability of default
intervals is discussed in the Chapter entitled “Risk Factors and Pillar 3 –
Credit Risk Management”.
Financial assets at amortised cost (excluding Crédit Agricole internal transactions)
(in millions of euros)
Credit risk
rating grades
At 31 December 2020
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
Retail customers
PD ≤ 0,5%
128,413
628
-
129,041
0,5% < PD ≤ 2%
24,965
1,498
-
26,463
2% < PD ≤ 20%
7,599
8,324
-
15,923
20% < PD < 100%
-
970
-
970
PD = 100%
-
-
4,703
4,703
Total Retail customers
160,977
11,420
4,703
177,100
Non-retail customers
PD ≤ 0,6%
326,390
5,243
-
331,633
0,6% < PD < 12%
52,697
17,483
-
70,180
12% ≤ PD < 100%
-
5,494
-
5,494
PD = 100%
-
-
9,156
9,156
Total Non-retail customers
379,087
28,220
9,156
416,463
Impairment
(980)
(1,729)
(7,333)
(10,042)
TOTAL
539,084
37,911
6,526
583,521
(in millions of euros)
Credit risk
rating grades
At 31 December 2019
(1)
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
Retail customers
PD ≤ 0,5%
94,933
339
-
95,272
0,5% < PD ≤ 2%
38,733
844
-
39,577
2% < PD ≤ 20%
20,707
11,430
-
32,137
20% < PD < 100%
-
1,479
-
1,479
PD = 100%
-
-
4,623
4,623
Total Retail customers
154,373
14,092
4,623
173,088
Non-retail customers
PD ≤ 0,6%
334,149
4,712
-
338,861
0,6% < PD < 12%
48,015
7,993
-
56,008
12% ≤ PD < 100%
-
4,434
-
4,434
PD = 100%
-
-
9,038
9,038
Total Non-retail customers
382,164
17,139
9,038
408,341
Impairment
(800)
(1,287)
(7,595)
(9,682)
TOTAL
535,737
29,944
6,066
571,747
(1) The 2019 amounts have been adjusted to take into account the eliminations of Credit Agricole’s internal operations and in line with the breakdown principles used in 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
462
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets at fair value through other comprehensive income that may be reclassified to profit or loss
(in millions of euros)
Credit risk
rating grades
At 31 December 2020
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
Retail customers
PD ≤ 0,5%
-
-
-
-
0,5% < PD ≤ 2%
-
-
-
-
2% < PD ≤ 20%
-
-
-
-
20% < PD < 100%
-
-
-
-
PD = 100%
-
-
-
-
Total Retail customers
-
-
-
-
Non-retail customers
PD ≤ 0,6%
260,838
1,156
-
261,994
0,6% < PD < 12%
672
1,190
-
1,862
12% ≤ PD < 100%
-
-
-
-
PD = 100%
-
-
-
-
Total Non-retail customers
261,510
2,346
-
263,856
TOTAL
261,510
2,346
-
263,856
(in millions of euros)
Credit risk
rating grades
At 31 December 2019
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
Retail customers
PD ≤ 0,5%
49
3
-
52
0,5% < PD ≤ 2%
-
-
-
-
2% < PD ≤ 20%
-
-
-
-
20% < PD < 100%
-
-
-
-
PD = 100%
-
-
-
-
Total Retail customers
49
3
-
52
Non-retail customers
PD ≤ 0,6%
255,790
1,188
-
256,978
0,6% < PD < 12%
349
1,424
-
1,773
12% ≤ PD < 100%
-
-
-
-
PD = 100%
-
-
-
-
Total Non-retail customers
256,139
2,612
-
258,751
TOTAL
256,188
2,615
-
258,803
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
463
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financing commitments (excluding Crédit Agricole internal operations)
(in millions of euros)
Credit risk
rating grades
At 31 December 2020
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
Retail customers
PD ≤ 0,5%
15,686
76
-
15,762
0,5% < PD ≤ 2%
2,553
270
-
2,823
2% < PD ≤ 20%
799
411
-
1,210
20% < PD < 100%
-
34
-
34
PD = 100%
-
-
22
22
Total Retail customers
19,038
791
22
19,851
Non-retail customers
PD ≤ 0,6%
122,971
1,431
-
124,402
0,6% < PD < 12%
13,463
5,032
-
18,495
12% ≤ PD < 100%
-
846
-
846
PD = 100%
-
-
295
295
Total Non-retail customers
136,434
7,309
295
144,038
Provisions
(1)
(181)
(220)
(58)
(459)
TOTAL
155,291
7,880
259
163,430
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
(in millions of euros)
Credit risk
rating grades
At 31 December 2019
(2)
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
Retail customers
PD ≤ 0,5%
10,880
29
-
10,909
0,5% < PD ≤ 2%
4,520
63
-
4,583
2% < PD ≤ 20%
3,139
825
-
3,964
20% < PD < 100%
-
45
-
45
PD = 100%
-
-
36
36
Total Retail customers
18,539
962
36
19,537
Non-retail customers
PD ≤ 0,6%
115,700
1,486
-
117,186
0,6% < PD < 12%
13,780
2,006
-
15,786
12% ≤ PD < 100%
-
643
-
643
PD = 100%
-
-
445
445
Total Non-retail customers
129,480
4,135
445
134,060
Provisions
(1)
(171)
(181)
(58)
(410)
TOTAL
147,848
4,916
423
153,187
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
(2)
The 2019 amounts have been adjusted in line with the breakdown principles used in 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
464
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Guarantee commitments (excluding Crédit Agricole internal operations)
(in millions of euros)
Credit risk
rating grades
At 31 December 2020
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
Retail customers
PD ≤ 0,5%
910
36
-
946
0,5% < PD ≤ 2%
81
1
-
82
2% < PD ≤ 20%
53
24
-
77
20% < PD < 100%
-
1
-
1
PD = 100%
-
-
87
87
Total Retail customers
1,044
62
87
1,193
Non-retail customers
PD ≤ 0,6%
71,160
1,831
-
72,991
0,6% < PD < 12%
5,748
1,229
-
6,977
12% ≤ PD < 100%
-
1,563
-
1,563
PD = 100%
-
-
3,011
3,011
Total Non-retail customers
76,908
4,623
3,011
84,542
Provisions
(1)
(63)
(127)
(261)
(451)
TOTAL
77,889
4,558
2,837
85,284
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
(in millions of euros)
Credit risk
rating grades
At 31 December 2019
(2)
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
Retail customers
PD ≤ 0,5%
881
18
-
899
0,5% < PD ≤ 2%
160
-
-
160
2% < PD ≤ 20%
19
23
-
42
20% < PD < 100%
-
-
-
-
PD = 100%
-
-
83
83
Total Retail customers
1,060
41
83
1,184
Non-retail customers
PD ≤ 0,6%
73,213
2,158
-
75,371
0,6% < PD < 12%
5,855
1,154
-
7,009
12% ≤ PD < 100%
-
1,226
-
1,226
PD = 100%
-
-
3,011
3,011
Total Non-retail customers
79,068
4,538
3,011
86,617
Provisions
(1)
(47)
(113)
(339)
(499)
TOTAL
80,081
4,466
2,755
87,302
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
(2)
The 2019 amounts have been adjusted in line with the breakdown principles used in 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
465
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Credit risk concentrations by customer type
Financial assets designated at fair value through profit or loss by customer type
(in millions of euros)
31/12/2020
31/12/2019
Carrying
amount
Amount of changes in fair
value resulting from changes
in credit risk
Carrying
amount
Amount of changes in fair
value resulting from changes
in credit risk
During
the period
Cumulative
During
the period
Cumulative
General administration
-
-
-
-
-
-
Central banks
-
-
-
-
-
-
Credit institutions
-
-
-
-
-
-
Large corporates
1
-
-
1
-
-
Retail customers
-
-
-
-
-
-
TOTAL FINANCIAL ASSETS DESIGNATED
AT FAIR VALUE THROUGH PROFIT OR LOSS
1
-
-
1
-
-
Financial assets at amortised cost by customer type (excluding Crédit Agricole internal transactions)
At 31 December 2020
Carrying amount
Performing assets
Credit-impaired
assets (Bucket 3)
TOTAL
(in millions of euros)
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
General administration
44,308
739
61
45,108
Central banks
4,924
-
-
4,924
Credit institutions
113,078
61
407
113,546
Large corporates
216,776
27,420
8,688
252,884
Retail customers
160,978
11,420
4,703
177,101
Impairment
(980)
(1,729)
(7,333)
(10,042)
TOTAL
539,084
37,911
6,526
583,521
At 31 December 2019
Carrying amount
Performing assets
Credit-impaired
assets (Bucket 3)
TOTAL
(in millions of euros)
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
General administration
38,062
179
112
38,353
Central banks
26,066
-
-
26,066
Credit institutions
96,525
27
505
97,057
Large corporates
221,511
16,933
8,421
246,865
Retail customers
154,373
14,092
4,623
173,088
Impairment
(800)
(1,287)
(7,595)
(9,682)
TOTAL
535,737
29,944
6,066
571,747
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
466
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets at fair value through other comprehensive income that may be reclassified to profit or loss by customer type
(in millions of euros)
At 31 December 2020
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
General administration
124,162
693
-
124,855
Central banks
372
378
-
750
Credit institutions
65,091
4
-
65,095
Large corporates
71,885
1,271
-
73,156
Retail customers
-
-
-
-
TOTAL
261,510
2,346
-
263,856
At 31 December 2019
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
General administration
116,377
700
-
117,077
Central banks
384
544
-
928
Credit institutions
67,951
4
-
67,955
Large corporates
71,428
1,363
-
72,791
Retail customers
49
3
-
52
TOTAL
256,189
2,614
-
258,803
Due to customers by customer type
(in millions of euros)
31/12/2020
31/12/2019
General administration
10,550
25,015
Large corporates
279,949
219,466
Retail customers
428,889
402,433
TOTAL AMOUNT DUE TO CUSTOMERS
719,388
646,914
Financing commitments by customer type (excluding Crédit Agricole internal transactions)
(in millions of euros)
At 31 December 2020
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
General administration
3,113
748
-
3,861
Central banks
-
-
-
-
Credit institutions
15,009
-
-
15,009
Large corporates
118,311
6,561
295
125,167
Retail customers
19,039
791
22
19,852
Provisions
(1)
(181)
(220)
(58)
(459)
TOTAL
155,291
7,880
259
163,430
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
467
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
(in millions of euros)
At 31 December 2019
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
General administration
2,669
214
31
2,914
Central banks
94
-
-
94
Credit institutions
12,144
-
1
12,145
Large corporates
114,573
3,921
414
118,908
Retail customers
18,540
961
35
19,536
Provisions
(1)
(171)
(181)
(58)
(410)
TOTAL
147,849
4,915
423
153,187
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
Guarantee commitments by customer type (excluding Crédit Agricole internal transactions)
(in millions of euros)
At 31 December 2020
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
General administration
230
-
-
230
Central banks
465
-
-
465
Credit institutions
7,568
32
23
7,623
Large corporates
68,645
4,591
2,987
76,223
Retail customers
1,044
62
88
1,194
Provisions
(1)
(63)
(127)
(261)
(451)
TOTAL
77,889
4,558
2,837
85,284
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
At 31 December 2019
(in millions of euros)
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
General administration
291
6
-
297
Central banks
511
-
-
511
Credit institutions
7,874
28
47
7,949
Large corporates
70,393
4,504
2,964
77,861
Retail customers
1,060
41
83
1,184
Provisions
(1)
(48)
(113)
(339)
(500)
TOTAL
80,081
4,466
2,755
87,302
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
468
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Credit risk concentrations by geographical area
Financial assets at amortised cost by geographical area (excluding Crédit Agricole internal transactions)
(in millions of euros)
At 31 December 2020
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
France (including overseas departments and territories)
286,538
18,914
4,890
310,342
Other European Union countries
146,708
9,078
5,548
161,334
Other European countries
17,698
712
259
18,669
North America
28,732
3,351
295
32,378
Central and South America
6,870
2,075
1,211
10,156
Africa and Middle East
17,025
2,492
1,126
20,643
Asia-Pacific (ex. Japan)
30,388
1,822
299
32,509
Japan
4,328
1,196
231
5,755
Supranational organisations
1,777
-
-
1,777
Impairment
(980)
(1,729)
(7,333)
(10,042)
TOTAL
539,084
37,911
6,526
583,521
(in millions of euros)
At 31 December 2019
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
France (including overseas departments and territories)
273,736
15,968
4,800
294,504
Other European Union countries
142,978
7,899
6,015
156,892
Other European countries
18,480
750
265
19,495
North America
34,898
964
392
36,254
Central and South America
9,465
1,219
692
11,376
Africa and Middle East
17,289
2,228
1,241
20,758
Asia-Pacific (ex. Japan)
31,083
1,717
256
33,056
Japan
5,938
486
-
6,424
Supranational organisations
2,670
-
-
2,670
Impairment
(800)
(1,287)
(7,595)
(9,682)
TOTAL
535,737
29,944
6,066
571,747
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
469
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financial assets at fair value through other comprehensive income that may be reclassified to profit or loss by geographical area
(in millions of euros)
At 31 December 2020
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
France (including overseas departments and territories)
129,904
747
-
130,651
Other European Union countries
97,281
952
-
98,233
Other European countries
3,784
-
-
3,784
North America
20,465
6
-
20,471
Central and South America
371
-
-
371
Africa and Middle East
690
641
-
1,331
Asia-Pacific (ex. Japan)
5,203
-
-
5,203
Japan
1,432
-
-
1,432
Supranational organisations
2,380
-
-
2,380
TOTAL
261,510
2,346
-
263,856
(in millions of euros)
At 31 December 2019
Carrying amount
Performing assets
Credit-impaired
assets
(Bucket 3)
TOTAL
Assets subject
to 12-month ECL
(Bucket 1)
Assets subject
to lifetime ECL
(Bucket 2)
France (including overseas departments and territories)
127,049
893
-
127,942
Other European Union countries
96,721
917
-
97,638
Other European countries
4,055
-
-
4,055
North America
18,695
-
-
18,695
Central and South America
333
-
-
333
Africa and Middle East
546
804
-
1,350
Asia-Pacific (ex. Japan)
5,522
-
-
5,522
Japan
634
-
-
634
Supranational organisations
2,634
-
-
2,634
TOTAL
256,189
2,614
-
258,803
Due to customers by geographical area
(in millions of euros)
31/12/2020
31/12/2019
France (including overseas departments and territories)
498,725
442,439
Other European Union countries
135,624
127,097
Other European countries
16,441
14,387
North America
22,844
14,448
Central and South America
5,464
4,435
Africa and Middle East
13,852
17,939
Asia-Pacific (ex. Japan)
13,813
12,889
Japan
12,620
13,271
Supranational organisations
5
9
TOTAL AMOUNT DUE TO CUSTOMERS
719,388
646,914
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
470
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Financing commitments by geographical area (excluding Crédit Agricole internal transactions)
(in millions of euros)
At 31 December 2020
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
France (including overseas departments and territories)
63,881
2,376
95
66,352
Other European Union countries
48,607
1,381
197
50,185
Other European countries
6,383
178
2
6,563
North America
22,711
2,483
3
25,197
Central and South America
1,941
1,231
1
3,173
Africa and Middle East
4,875
433
-
5,308
Asia-Pacific (ex. Japan)
6,205
18
20
6,243
Japan
869
-
-
869
Supranational organisations
-
-
-
-
Provisions
(1)
(181)
(220)
(59)
(460)
TOTAL
155,291
7,880
259
163,430
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
(in millions of euros)
At 31 December 2019
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
France (including overseas departments and territories)
57,698
1,912
152
59,763
Other European Union countries
41,492
1,493
163
43,148
Other European countries
6,565
172
69
6,806
North America
26,025
1,102
80
27,207
Central and South America
3,391
63
17
3,471
Africa and Middle East
5,323
240
-
5,563
Asia-Pacific (ex. Japan)
6,566
85
-
6,651
Japan
959
29
-
988
Supranational organisations
-
-
-
-
Provisions
(1)
(171)
(181)
(58)
(410)
TOTAL
147,849
4,915
423
153,187
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
471
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Guarantee commitments by geographical area (excluding Crédit Agricole internal transactions)
(in millions of euros)
At 31 December 2020
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
France (including overseas departments and territories)
34,143
1,040
353
35,536
Other European Union countries
16,272
1,698
2,611
20,581
Other European countries
3,254
127
-
3,381
North America
11,447
1,268
52
12,767
Central and South America
1,341
2
18
1,361
Africa and Middle East
2,523
108
46
2,677
Asia-Pacific (ex. Japan)
6,945
334
18
7,297
Japan
2,027
108
-
2,135
Supranational organisations
-
-
-
-
Provisions
(1)
(63)
(127)
(261)
(451)
TOTAL
77,889
4,558
2,837
85,284
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
(in millions of euros)
At 31 December 2019
Amount of commitment
Performing commitments
Provisioned
commitments
(Bucket 3)
TOTAL
Commitments
subject to 12-month
ECL (Bucket 1)
Commitments
subject to lifetime
ECL (Bucket 2)
France (including overseas departments and territories)
35,531
1,133
459
37,123
Other European Union countries
16,054
1,626
2,132
19,814
Other European countries
4,346
697
-
5,044
North America
10,243
635
397
11,275
Central and South America
1,059
1
29
1,089
Africa and Middle East
3,318
66
76
3,461
Asia-Pacific (ex. Japan)
6,732
235
-
6,966
Japan
2,845
185
-
3,031
Supranational organisations
-
-
-
-
Provisions
(1)
(47)
(113)
(339)
(500)
TOTAL
80,082
4,466
2,755
87,302
(1)
Expected or proven losses in respect of off-balance sheet commitments are covered by provisions recognised as liabilities on the balance sheet.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
472
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
3.1.5
Information on watch list or individually impaired financial assets
Analysis of watch list or individually impaired financial assets by customer type
(in millions of euros)
Carrying amount at 31/12/2020
Assets without significant increase
in credit risk since initial recognition
(Bucket 1)
Assets with significant increase in
credit risk since initial recognition but
not impaired (Bucket 2)
Credit-impaired assets
(Bucket 3)
≤ 30 days
> 30 days
up to
≤ 90 days
> 90 days
≤ 30 days
> 30 days
up to
≤ 90 days
> 90 days
≤ 30 days
> 30 days
up to
≤ 90 days
> 90 days
Debt securities
577
-
-
-
313
-
-
-
-
General administration
-
-
-
-
-
-
-
-
-
Central banks
-
-
-
-
-
-
-
-
-
Credit institutions
-
-
-
-
-
-
-
-
-
Large corporates
577
-
-
-
313
-
-
-
-
Retail customers
-
-
-
-
-
-
-
-
-
Loans and receivables
1,988
320
-
3,126
860
13
148
253
3,810
General administration
20
45
-
19
1
-
-
-
32
Central banks
-
-
-
-
-
-
-
-
-
Credit institutions
6
65
-
-
-
-
-
-
41
Large corporates
1,213
147
-
1,253
425
10
31
145
2,501
Retail customers
749
63
-
1,854
434
3
117
108
1,236
TOTAL
2,565
320
-
3,126
1,173
13
148
253
3,810
(in millions of euros)
Carrying amount at 31/12/2019
Assets without significant increase
in credit risk since initial recognition
(Bucket 1)
Assets with significant increase in
credit risk since initial recognition but
not impaired (Bucket 2)
Credit-impaired assets
(Bucket 3)
≤ 30 days
> 30 days
up to
≤ 90 days
> 90 days
≤ 30 days
> 30 days
up to
≤ 90 days
> 90 days
≤ 30 days
> 30 days
up to
≤ 90 days
> 90 days
Debt securities
914
-
-
-
357
-
-
-
-
General administration
-
-
-
-
-
-
-
-
-
Central banks
-
-
-
-
-
-
-
-
-
Credit institutions
-
-
-
-
-
-
-
-
-
Large corporates
914
-
-
-
357
-
-
-
-
Retail customers
-
-
-
-
-
-
-
-
-
Loans and receivables
2,793
1,058
-
1,444
1,073
9
129
139
4,014
General administration
107
69
-
5
3
-
-
-
45
Central banks
-
-
-
-
-
-
-
-
-
Credit institutions
43
100
-
-
-
-
-
-
59
Large corporates
1,667
760
-
426
468
5
39
24
2,453
Retail customers
976
129
-
1,013
602
4
90
115
1,457
TOTAL
3,708
1,058
-
1,444
1,430
9
129
139
4,014
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
473
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
3.2
MARKET RISK
(See chapter on “Risk factors – Market risk”)
Derivative instruments: analysis by residual maturity
The breakdown of market values of derivative instruments is shown by remaining contractual maturity.
Hedging derivative instruments – Fair value of assets
(in millions of euros)
31/12/2020
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
-
-
-
3,956
3,993
13,318
21,267
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
-
-
-
-
Interest rate swaps
-
-
-
3,952
3,987
13,312
21,251
Interest rate options
-
-
-
-
-
-
-
Caps, floors, collars
-
-
-
4
6
6
16
Other options
-
-
-
-
-
-
-
Currency instruments
-
-
-
142
94
14
250
Currency futures
-
-
-
142
94
14
250
Currency options
-
-
-
-
-
-
-
Other instruments
-
-
-
15
-
-
15
Other
-
-
-
15
-
-
15
Subtotal
-
-
-
4,113
4,087
13,332
21,532
Forward currency transactions
-
-
-
213
-
-
213
TOTAL FAIR VALUE OF HEDGING DERIVATIVES – ASSETS
-
-
-
4,326
4,087
13,332
21,745
(in millions of euros)
31/12/2019
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
-
-
-
2,581
4,000
12,033
18,614
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
-
-
-
-
Interest rate swaps
-
-
-
2,553
3,992
12,025
18,570
Interest rate options
-
-
-
-
-
-
-
Caps, floors, collars
-
-
-
28
8
8
44
Other options
-
-
-
-
-
-
-
Currency instruments
-
-
-
150
56
13
219
Currency futures
-
-
-
150
56
13
219
Currency options
-
-
-
-
-
-
-
Other instruments
-
-
-
36
-
-
36
Other
-
-
-
36
-
-
36
Subtotal
-
-
-
2,767
4,056
12,046
18,869
Forward currency transactions
-
-
-
498
1
-
499
TOTAL FAIR VALUE OF HEDGING DERIVATIVES – ASSETS
-
-
-
3,265
4,057
12,046
19,368
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
474
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Hedging derivative instruments – fair value of liabilities
(in millions of euros)
31/12/2020
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
-
-
-
1,932
4,813
7,827
14,572
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
-
-
-
-
Interest rate swaps
-
-
-
1,929
4,806
7,823
14,558
Interest rate options
-
-
-
-
-
-
-
Caps, floors, collars
-
-
-
3
7
4
14
Other options
-
-
-
-
-
-
-
Currency instruments
-
-
-
141
10
24
175
Currency futures
-
-
-
141
10
24
175
Currency options
-
-
-
-
-
-
-
Other instruments
-
-
-
35
-
-
35
Other
-
-
-
35
-
-
35
Subtotal
-
-
-
2,108
4,823
7,851
14,782
Forward currency transactions
-
-
-
436
-
-
436
TOTAL FAIR VALUE OF HEDGING DERIVATIVES – LIABILITIES
-
-
-
2,544
4,823
7,851
15,218
(in millions of euros)
31/12/2019
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
-
-
-
1,664
3,985
7,174
12,823
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
-
-
-
-
Interest rate swaps
-
-
-
1,664
3,977
7,174
12,815
Interest rate options
-
-
-
-
-
-
-
Caps, floors, collars
-
-
-
-
8
-
8
Other options
-
-
-
-
-
-
-
Currency instruments
-
-
-
154
3
16
173
Currency futures
-
-
-
154
3
16
173
Currency options
-
-
-
-
-
-
-
Other instruments
-
-
-
24
-
-
24
Other
-
-
-
24
-
-
24
Subtotal
-
-
-
1,842
3,988
7,190
13,020
Forward currency transactions
-
-
-
273
-
-
273
TOTAL FAIR VALUE OF HEDGING DERIVATIVES – LIABILITIES
-
-
-
2,115
3,988
7,190
13,293
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
475
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Derivative instruments held for trading – fair value of assets
(in millions of euros)
31/12/2020
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
5
-
-
4,957
16,993
53,300
75,255
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
3
-
-
3
Interest rate swaps
-
-
-
4,231
13,651
38,590
56,472
Interest rate options
-
-
-
159
2,233
13,430
15,822
Caps, floors, collars
-
-
-
564
1,109
1,280
2,953
Other options
5
-
-
-
-
-
5
Currency instruments and gold
-
-
-
6,640
3,538
3,904
14,082
Currency futures
-
-
-
4,349
2,885
3,566
10,800
Currency options
-
-
-
2,291
653
338
3,282
Other instruments
724
671
128
1,812
5,444
1,956
10,735
Equity and index derivatives
724
671
128
1,511
5,298
1,066
9,398
Precious metal derivatives
-
-
-
96
2
-
98
Commodities derivatives
-
-
-
-
-
-
-
Credit derivatives
-
-
-
18
80
51
149
Other
-
-
-
187
64
839
1,090
Subtotal
729
671
128
13,409
25,975
59,160
100,072
Forward currency transactions
-
-
-
14,836
1,154
175
16,165
TOTAL FAIR VALUE OF TRANSACTION DERIVATIVES – ASSETS
729
671
128
28,245
27,129
59,335
116,237
(in millions of euros)
31/12/2019
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
9
2
-
2,441
18,234
51,172
71,858
Futures
2
-
-
-
-
-
2
FRAs
-
-
-
3
45
-
48
Interest rate swaps
-
-
-
1,856
14,315
38,027
54,198
Interest rate options
-
-
-
122
2,455
11,868
14,445
Caps, floors, collars
-
-
-
460
1,419
1,277
3,156
Other options
7
2
-
-
-
-
9
Currency instruments and gold
-
-
-
4,217
3,053
2,934
10,204
Currency futures
-
-
-
3,366
2,047
2,384
7,797
Currency options
-
-
-
851
1,006
550
2,407
Other instruments
352
451
71
1,598
4,944
1,483
8,899
Equity and index derivatives
352
451
71
1,324
4,815
1,113
8,126
Precious metal derivatives
-
-
-
43
-
-
43
Commodities derivatives
-
-
-
-
-
-
-
Credit derivatives
-
-
-
35
99
54
188
Other
-
-
-
196
30
316
542
Subtotal
361
453
71
8,256
26,231
55,589
90,961
Forward currency transactions
-
-
-
8,672
1,110
52
9,834
TOTAL FAIR VALUE OF TRANSACTION DERIVATIVES – ASSETS
361
453
71
16,928
27,341
55,641
100,795
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
476
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Derivative instruments held for trading – fair value of liabilities
(in millions of euros)
31/12/2020
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
-
-
-
3,712
16,093
54,021
73,826
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
-
-
-
-
Interest rate swaps
-
-
-
3,211
12,660
36,934
52,805
Interest rate options
-
-
-
180
2,370
15,247
17,797
Caps, floors, collars
-
-
-
319
1,063
1,840
3,222
Other options
-
-
-
2
-
-
2
Currency instruments and gold
1
-
-
4,803
3,310
3,443
11,557
Currency futures
-
-
-
2,860
2,771
3,254
8,885
Currency options
1
-
-
1,943
539
189
2,672
Other instruments
449
750
185
1,431
3,332
1,011
7,158
Equity and index derivatives
449
750
185
896
2,979
778
6,037
Precious metal derivatives
-
-
-
85
2
-
87
Commodities derivatives
-
-
-
-
-
-
-
Credit derivatives
-
-
-
195
318
30
543
Other
-
-
-
255
33
203
491
Subtotal
450
750
185
9,946
22,735
58,475
92,541
Forward currency transactions
-
-
15,604
1,324
(47)
16,881
TOTAL FAIR VALUE OF TRANSACTION DERIVATIVES – LIABILITIES
450
750
185
25,550
24,059
58,428
109,422
(in millions of euros)
31/12/2019
Exchange-traded transactions
Over-the-counter transactions
Total
market
value
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
143
-
-
2,271
17,649
52,459
72,522
Futures
140
-
-
-
-
-
140
FRAs
-
-
-
24
-
-
24
Interest rate swaps
-
-
-
1,904
13,788
37,895
53,587
Interest rate options
-
-
-
231
2,358
12,696
15,285
Caps, floors, collars
-
-
-
112
1,503
1,868
3,483
Other options
3
-
-
-
-
-
3
Currency instruments and gold
-
-
-
4,431
2,668
2,609
9,708
Currency futures
-
-
-
3,500
2,145
2,317
7,962
Currency options
-
-
-
931
523
292
1,746
Other instruments
230
422
102
807
3,233
916
5,710
Equity and index derivatives
230
422
102
355
2,773
802
4,684
Precious metal derivatives
-
-
-
30
1
-
31
Commodities derivatives
-
-
-
1
-
-
1
Credit derivatives
-
-
-
226
406
38
670
Other
-
-
-
195
53
76
324
Subtotal
373
422
102
7,509
23,550
55,984
87,940
Forward currency transactions
-
-
-
8,553
1,704
221
10,478
TOTAL FAIR VALUE OF TRANSACTION DERIVATIVES – LIABILITIES
373
422
102
16,062
25,254
56,205
98,418
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
477
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Derivative instruments: amount of commitment
(in millions of euros)
31/12/2020
31/12/2019
Total notional
amount
outstanding
Total notional
amount
outstanding
Interest rate instruments
11,804,270
11,697,571
Futures
115,284
155,872
FRAs
2,561,506
2,671,646
Interest rate swaps
7,785,348
7,306,091
Interest rate options
723,595
838,944
Caps, floors, collars
518,130
515,490
Other options
100,407
209,528
Currency instruments and gold
469,713
498,095
Currency futures
253,263
285,714
Currency options
216,450
212,381
Other instruments
176,663
159,995
Equity and index derivatives
117,820
104,119
Precious metal derivatives
3,863
3,848
Commodities derivatives
4
21
Credit derivatives
20,620
25,089
Other
34,356
26,918
Subtotal
12,450,646
12,355,661
Forward currency transactions
1,890,121
2,055,565
TOTAL NOTIONAL AMOUNT
14,340,767
14,411,226
FOREIGN EXCHANGE RISK
(See chapter on “Risk management – Foreign exchange risk”)
3.3
LIQUIDITY AND FINANCING RISK
(See chapter on “Risk management – Balance sheet management”)
Loans and receivables due from credit institutions and due from customers by residual maturity
(in millions of euros)
31/12/2020
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
Loans and receivables due from credit institutions (including Crédit
Agricole internal transactions)
82,369
79,813
219,775
81,593
-
463,550
Loans and receivables due from customers (including finance leases)
84,957
54,943
149,623
122,481
3,513
415,517
Total
167,326
134,756
369,398
204,074
3,513
879,067
Impairment
(9,961)
TOTAL LOANS AND RECEIVABLES DUE FROM CREDIT
INSTITUTIONS AND FROM CUSTOMERS
869,106
(in millions of euros)
31/12/2019
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
Loans and receivables due from credit institutions (including Crédit
Agricole internal transactions)
100,183
94,240
160,197
84,376
-
438,996
Loans and receivables due from customers (including finance leases)
95,047
44,711
140,161
119,609
4,865
404,393
Total
195,230
138,951
300,358
203,985
4,865
843,389
Impairment
(9,628)
TOTAL LOANS AND RECEIVABLES DUE FROM CREDIT
INSTITUTIONS AND FROM CUSTOMERS
833,761
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
478
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Due to credit institutions and to customers by residual maturity
(in millions of euros)
31/12/2020
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
Due to credit institutions (including Crédit Agricole internal transactions)
96,706
8,684
148,029
11,500
-
264,919
Due to customers
663,902
35,835
15,905
3,746
-
719,388
TOTAL AMOUNT DUE TO CREDIT INSTITUTIONS
AND TO CUSTOMERS
760,608
44,519
163,934
15,246
-
984,307
(in millions of euros)
31/12/2019
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
Due to credit institutions (including Crédit Agricole internal transactions)
80,562
18,248
30,550
12,681
-
142,041
Due to customers
583,850
40,840
17,212
5,012
-
646,914
TOTAL AMOUNT DUE TO CREDIT INSTITUTIONS
AND TO CUSTOMERS
664,412
59,088
47,762
17,693
-
788,955
Debt securities and subordinated debt
(in millions of euros)
31/12/2020
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
DEBT SECURITIES
Interest bearing notes
-
-
-
-
-
-
Interbank securities
986
300
5,847
1,945
-
9,078
Negotiable debt securities
34,140
13,783
1,275
30
-
49,228
Bonds
4,387
7,789
49,344
39,860
-
101,380
Other debt securities
559
723
1,458
121
-
2,861
TOTAL DEBT SECURITIES
40,072
22,595
57,924
41,956
-
162,547
SUBORDINATED DEBT
Dated subordinated debt
274
1,603
5,942
15,482
-
23,301
Undated subordinated debt
1
-
-
-
510
511
Mutual security deposits
-
-
-
-
180
180
Participating securities and loans
60
-
-
-
-
60
TOTAL SUBORDINATED DEBT
335
1,603
5,942
15,482
690
24,052
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
479
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
(in millions of euros)
31/12/2019
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
DEBT SECURITIES
Interest bearing notes
-
-
-
-
-
-
Interbank securities
706
835
6,195
1,553
-
9,289
Negotiable debt securities
52,497
30,249
3,495
31
-
86,272
Bonds
3,454
4,904
51,156
42,224
-
101,738
Other debt securities
592
794
2,322
-
-
3,708
TOTAL DEBT SECURITIES
57,249
36,782
63,168
43,808
-
201,007
SUBORDINATED DEBT
Dated subordinated debt
229
1,205
1,938
17,450
-
20,822
Undated subordinated debt
12
1
-
-
734
747
Mutual security deposits
-
-
-
-
167
167
Participating securities and loans
60
-
-
1
-
61
TOTAL SUBORDINATED DEBT
301
1,206
1,938
17,451
901
21,797
Financial guarantees at risk given by expected maturity
The amounts presented correspond to the expected amount of the call of financial guarantees at risk,
i.e.
guarantees that have been impaired or are on
a watch-list.
(in millions of euros)
31/12/2020
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
Financial guarantees given
56
2,439
-
-
-
2,495
(in millions of euros)
31/12/2019
≤ 3 months
> 3 months
to ≤ 1 year
> 1 year to
≤ 5 years
> 5 years
Indefinite
TOTAL
Financial guarantees given
110
443
-
-
-
553
Contractual maturities of derivative instruments are given in Note 3.2 “Market risk”.
3.4
HEDGE ACCOUNTING
(See chapter 3.2 “Market risk” and chapter on “Risk management – Balance sheet management”)
Fair value hedges
A fair value hedge modifies the risk caused by changes in the fair value of
a fixed-rate financial instrument as a result of changes in interest rates.
Fair value hedges transform fixed-rate assets or liabilities into floating-rate
assets or liabilities.
Items hedged are principally fixed-rate loans, securities, deposits and
subordinated debt.
Future cash flow hedges
A cash flow hedge modifies the risk related to variability in cash flows
arising from floating-rate financial instruments.
Items hedged are principally floating-rate loans and deposits.
Hedge of net investment in foreign currency
A hedge of a net investment in foreign currency modifies the risk inherent
in exchange rate fluctuations connected with foreign currency investments
in subsidiaries.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
480
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Hedging derivatives
(in millions of euros)
31/12/2020
31/12/2019
Market value
Notional
amount
Market value
Notional
amount
positive
negative
positive
negative
Fair value hedges
19,607
15,002
807,514
17,323
13,030
820,803
Interest rate
19,396
14,567
786,419
16,877
12,797
779,632
Foreign exchange
211
435
21,095
446
233
41,171
Other
-
-
-
-
-
-
Cash flow hedges
2,099
210
59,025
2,035
230
64,832
Interest rate
1,872
6
25,059
1,737
25
27,095
Foreign exchange
212
169
33,838
262
181
37,613
Other
15
35
128
36
24
124
Hedges of net investments in foreign operations
39
6
2,910
11
33
2,879
TOTAL HEDGING DERIVATIVE INSTRUMENTS
21,745
15,218
869,449
19,368
13,293
888,514
Derivative instruments: Analysis by residual maturity (notionals)
The breakdown of notionals values of derivative instruments is shown by remaining contractual maturity.
(in millions of euros)
31/12/2020
Exchange-traded
Over-the-counter
Total notional
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
-
-
-
380,520
235,074
195,884
811,478
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
-
-
-
-
Interest rate swaps
-
-
-
380,100
234,463
192,821
807,384
Interest rate options
-
-
-
-
-
-
-
Caps, floors, collars
-
-
-
420
611
3,063
4,094
Other options
-
-
-
-
-
-
-
Currency instruments
-
-
-
8,218
1,558
9
9,785
Currency futures
-
-
-
8,218
1,558
9
9,785
Currency options
-
-
-
-
-
-
-
Other instruments
-
-
-
128
-
-
128
Other
-
-
-
128
-
-
128
Subtotal
-
-
-
388,866
236,632
195,893
821,391
Forward currency transactions
-
-
-
44,426
1,683
1,949
48,058
TOTAL NOTIONAL OF HEDGING DERIVATIVES
-
-
-
433,292
238,315
197,842
869,449
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
481
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
(in millions of euros)
31/12/2019
Exchange-traded
Over-the-counter
Total notional
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Interest rate instruments
-
-
-
355,048
221,898
229,781
806,727
Futures
-
-
-
-
-
-
-
FRAs
-
-
-
-
-
-
-
Interest rate swaps
-
-
-
354,994
220,867
226,530
802,391
Interest rate options
-
-
-
-
-
-
-
Caps, floors, collars
-
-
-
54
1,031
3,251
4,336
Other options
-
-
-
-
-
-
-
Currency instruments
-
-
-
9,658
1,051
-
10,709
Currency futures
-
-
-
9,658
1,051
-
10,709
Currency options
-
-
-
-
-
-
-
Other instruments
-
-
-
124
-
-
124
Other
-
-
-
124
-
-
124
Subtotal
-
-
-
364,830
222,949
229,781
817,560
Forward currency transactions
-
-
-
68,264
785
1,905
70,954
TOTAL NOTIONAL OF HEDGING DERIVATIVES
-
-
-
433,094
223,734
231,686
888,514
Note 3.2 “Market risk – Derivative instruments: analysis by residual maturity” breaks down the market value of hedging derivative instruments by
remaining contractual maturity.
Fair value hedges
Hedging derivatives
(in millions of euros)
31/12/2020
Carrying amount
Changes in fair value during
the period (including end
of hedges during the period)
Notional
Amount
Assets
Liabilities
Fair value hedges
Exchange-traded
-
-
-
-
Interest rate
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Foreign exchange
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Other
-
-
-
-
Over-the-counter markets
7,132
6,418
379
261,908
Interest rate
6,921
5,983
829
240,813
Futures
6,921
5,983
855
240,813
Options
-
-
(26)
-
Foreign exchange
211
435
(450)
21,095
Futures
211
435
(450)
21,095
Options
-
-
-
-
Other
-
-
-
-
Total Fair value micro-hedging
7,132
6,418
379
261,908
Fair value hedges of the interest rate exposure of a portfolio
of financial instruments
12,475
8,584
558
545,606
TOTAL FAIR VALUE HEDGES
19,607
15,002
937
807,514
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
482
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
(in millions of euros)
31/12/2019
Carrying amount
Changes in fair value during
the period (including end
of hedges during the period)
Notional
Amount
Assets
Liabilities
Fair value hedges
Exchange-traded
-
-
-
-
Interest rate
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Foreign exchange
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Other
-
-
-
-
Over-the-counter markets
6,111
4,781
1,867
279,122
Interest rate
5,665
4,548
1,722
237,951
Futures
5,665
4,548
1,756
237,950
Options
-
-
(34)
1
Foreign exchange
446
233
145
41,171
Futures
446
233
145
41,171
Options
-
-
-
-
Other
-
-
-
-
Total Fair value micro-hedging
6,111
4,781
1,867
279,122
Fair value hedges of the interest rate exposure of a portfolio
of financial instruments
11,212
8,249
1,910
541,681
TOTAL FAIR VALUE HEDGES
17,323
13,030
3,777
820,803
Changes in the fair value of hedging derivatives are recognised under “Net gains (losses) on financial instruments at fair value through profit or loss” in
the income statement.
Hedged items
Micro-hedging
31/12/2020
Present hedges
Ended hedges
Fair value hedge
adjustments during
the period (including
termination of hedges
during the period)
(in millions of euros)
Carrying
amount
of which
accumulated
fair value hedge
adjustments
Accumulated fair value
hedge adjustments
to be adjusted for
hedging remaining
to be amortised
Debt instruments at fair value through other comprehensive
income that may be reclassified to profit or loss
32,615
730
-
147
Interest rate
32,615
730
-
147
Foreign exchange
-
-
-
-
Other
-
-
-
-
Debt instruments at amortised cost
80,931
2,286
83
965
Interest rate
76,019
2,030
83
664
Foreign exchange
4,912
256
-
301
Other
-
-
-
-
Total Fair value hedges on assets items
113,546
3,016
83
1,112
Debt instruments at amortised cost
153,186
5,842
1
1,493
Interest rate
142,106
5,800
1
1,640
Foreign exchange
11,080
42
-
(147)
Other
-
-
-
-
Total Fair value hedges on liabilities items
153,186
5,842
1
1,493
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
483
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Micro-hedging
31/12/2019
Present hedges
Ended hedges
Fair value hedge
adjustments during
the period (including
termination of hedges
during the period)
(in millions of euros)
Carrying
amount
of which
accumulated
fair value hedge
adjustments
Accumulated fair value
hedge adjustments
to be adjusted for
hedging remaining
to be amortised
Debt instruments at fair value through other comprehensive
income that may be reclassified to profit or loss
26,669
66
-
38
Interest rate
26,669
66
-
40
Foreign exchange
-
-
-
(2)
Other
-
-
-
-
Debt instruments at amortised cost
88,997
1,316
-
668
Interest rate
75,570
1,307
-
755
Foreign exchange
13,427
9
-
(87)
Other
-
-
-
-
Total Fair value hedges on assets items
115,666
1,382
-
706
Debt instruments at amortised cost
158,351
4,578
3
2,573
Interest rate
136,324
4,520
3
2,532
Foreign exchange
22,027
58
-
41
Other
-
-
-
-
Total Fair value hedges on liabilities items
158,351
4,578
3
2,573
The fair value of the hedged portions of micro-hedged financial instruments at fair value is recognised in the balance sheet item to which it relates.
Changes in the fair value of the hedged portions of micro-hedged financial instruments at fair value are recognised under “Net gains (losses) on financial
instruments at fair value through profit or loss” in the income statement.
Macro-hedging
31/12/2020
(in millions of euros)
Carrying
amount
Accumulated fair value hedge
adjustments to be adjusted
for hedging remaining to be
adjusted, on ended hedges
Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
5,874
-
Debt instruments at amortised cost
342,226
(3)
Total – Assets
348,100
(3)
Debt instruments at amortised cost
216,910
58
Total – Liabilities
216,910
58
Macro-hedging
31/12/2019
(in millions of euros)
Carrying amount
Accumulated fair value hedge
adjustments to be adjusted
for hedging remaining to be
adjusted, on ended hedges
Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
6,424
-
Debt instruments at amortised cost
292,921
59
Total – Assets
299,345
59
Debt instruments at amortised cost
244,959
24
Total – Liabilities
244,959
24
The fair value of the hedged portions of macro-hedged financial instruments at fair value is recognised under “Revaluation adjustment on interest rate
hedged portfolios” on the balance sheet. Changes in the fair value of the hedged portions of macro-hedged financial instruments at fair value are recognised
under “Net gains (losses) on financial instruments at fair value through profit or loss” in the income statement.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
484
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
Gains (losses) from hedge accounting
(in millions of euros)
31/12/2020
Net Income (total gains (losses) from hedge accounting)
Change in fair value of hedging
derivatives (including
termination of hedges)
Change in fair value of
hedged items (including
termination of hedges)
Hedge
ineffectiveness
portion
Interest rate
1,387
(1,411)
(24)
Foreign exchange
(450)
448
(2)
Other
-
-
-
TOTAL
937
(963)
(26)
(in millions of euros)
31/12/2019
Net Income (total gains (losses) from hedge accounting)
Change in fair value of hedging
derivatives (including
termination of hedges)
Change in fair value of
hedged items (including
termination of hedges)
Hedge
ineffectiveness
portion
Interest rate
3,632
(3,652)
(19)
Foreign exchange
145
(131)
13
Other
-
-
-
TOTAL
3,777
(3,783)
(6)
Cash flow hedges and Hedges of net investments in foreign operation (NIH)
Hedging derivatives
31/12/2020
Carrying amount
Changes in fair value during the
period (including termination
of hedges during the period)
Notional
amount
(in millions of euros)
Assets
Liabilities
Cash flow hedges
Exchange-traded
-
-
-
-
Interest rate
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Foreign exchange
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Other
-
-
-
-
Over-the-counter markets
946
191
(189)
31,626
Interest rate
726
3
(229)
3,562
Futures
726
3
(229)
3,561
Options
-
-
-
1
Foreign exchange
205
153
40
27,936
Futures
205
153
40
27,936
Options
-
-
-
-
Other
15
35
-
128
Total Cash flow micro-hedging
946
191
(189)
31,626
Cash flow hedges of the interest rate exposure of a portfolio of financial
instruments
1,146
3
385
21,497
Cash flow hedges of the foreign exchange exposure of a portfolio of financial
instruments
7
16
(83)
5,902
Total Cash flow macro-hedging
1,153
19
302
27,399
TOTAL CASH FLOW HEDGES
2,099
210
113
59,025
Hedges of net investments in foreign operations
39
6
45
2,910
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
485
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
31/12/2019
Carrying amount
Changes in fair value
during the period
(including termination of
hedges during the period)
Notional amount
(in millions of euros)
Assets
Liabilities
Cash flow hedges
Exchange-traded
-
-
-
-
Interest rate
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Foreign exchange
-
-
-
-
Futures
-
-
-
-
Options
-
-
-
-
Other
-
-
-
-
Over-the-counter markets
1,237
172
79
37,605
Interest rate
952
-
90
7,010
Futures
952
-
90
7,010
Options
-
-
-
-
Foreign exchange
249
148
(11)
30,470
Futures
249
148
(11)
30,470
Options
-
-
-
-
Other
36
24
-
125
Total Cash flow micro-hedging
1,237
172
79
37,605
Cash flow hedges of the interest rate exposure of a portfolio of financial
instruments
785
25
163
20,085
Cash flow hedges of the foreign exchange exposure of a portfolio of financial
instruments
13
33
(2)
7,142
Total Cash flow macro-hedging
798
58
161
27,227
TOTAL CASH FLOW HEDGES
2,035
230
240
64,832
Hedges of net investments in foreign operations
11
33
(13)
2,879
Changes in the fair value of hedging derivatives are recognised under “Other comprehensive income” save for the ineffective portion of the hedging
relationship which is recognised under “Net gains (losses) on financial instruments at fair value through profit or loss” in the income statement.
Gains (losses) from hedge accounting
(in millions of euros)
31/12/2020
Other comprehensive income on items
that may be reclassified to profit and loss
Net income (hedge
accounting income or loss)
Effective portion of
the hedge recognised
during the period
Amount reclassified
from other
comprehensive
income into profit or
loss during the period
Hedge ineffectiveness
portion
Cash flow hedges
-
-
-
Interest rate
157
-
-
Foreign exchange
(44)
-
-
Other
-
-
-
Total Cash flow hedges
113
-
-
Hedges of net investments in foreign operations
45
-
-
Total cash flow hedges and hedges of net investments in foreign operations
158
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
486
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
(in millions of euros)
31/12/2019
Other comprehensive income on items that may
be reclassified to profit and loss
Net income (hedge
accounting income or loss)
Effective portion of
the hedge recognised
during the period
Amount reclassified
from other
comprehensive
income into profit or
loss during the period
Hedge ineffectiveness
portion
Cash flow hedges
-
-
-
Interest rate
258
-
-
Foreign exchange
(6)
-
-
Other
-
-
-
Total Cash flow hedges
252
-
-
Hedges of net investments in foreign operations
(10)
-
-
Total cash flow hedges and hedges of net investments in foreign operations
242
-
-
3.5
OPERATIONAL RISKS
(See chapter on “Risk management – Operational risks”)
3.6
CAPITAL MANAGEMENT AND REGULATORY RATIOS
The Crédit Agricole S.A. Finance department is tasked with ensuring the
adequacy of liquidity and capital between the requirements generated
by the Group’s global operations and its liquidity and capital financial
resources. It is responsible for monitoring the prudential and regulatory
ratios (solvency, liquidity, leverage, resolution) of Crédit Agricole Group and
of Crédit Agricole S.A. To this end, it sets out the principles and ensures a
cohesive financial management system throughout the Group.
Information on capital management and compliance with regulatory
ratios as required by IAS 1 is presented in the Chapter “Risk factors
and Pillar 3”.
The Group’s management of banking risks is handled by the Group Risk
Management and Permanent Controls department. This department reports
to the Chief Executive Officer of Crédit Agricole S.A. and its task is to control
credit, financial and operational risks.
A description of these processes and commentary appear in the chapter
on “Risk management” in the management report, as allowed by IFRS 7.
Nonetheless, the accounting breakdowns are still presented in the financial
statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
487
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Notes to the consolidated financial statements -
Note 3
NOTE 4
Notes on net income and other comprehensive income
4.1
INTEREST INCOME AND EXPENSES
(in millions of euros)
31/12/2020
31/12/2019
On financial assets at amortised cost
16,100
17,407
Interbank transactions
1,856
1,702
Crédit Agricole internal transactions
2,790
2,877
Customer transactions
10,196
11,429
Finance leases
700
610
Debt securities
558
789
On financial assets recognised at fair value through other comprehensive income
4,919
5,312
Interbank transactions
-
-
Customer transactions
-
-
Debt securities
4,919
5,312
Accrued interest receivable on hedging instruments
2,455
2,351
Other interest income
60
37
INTEREST AND SIMILAR INCOME
(1)(2)
23,534
25,107
On financial liabilities at amortised cost
(10,734)
(12,706)
Interbank transactions
(1,103)
(1,376)
Crédit Agricole internal transactions
(1,282)
(1,008)
Customer transactions
(4,665)
(6,016)
Finance leases
(194)
(68)
Debt securities
(2,944)
(3,605)
Subordinated debt
(546)
(633)
Accrued interest receivable on hedging instruments
(908)
(872)
Other interest expenses
(74)
(85)
INTEREST AND SIMILAR EXPENSES
(3)
(11,716)
(13,663)
(1)
Of which €185 million for impaired receivables (Bucket 3) at 31 December 2020 versus €136 million at 31 December 2019.
(2)
Of which €991 million for negative interest on financial liabilities at 31 December 2020 (€288 million at 31 December 2019).
(3)
Of which -€1.08 billion for negative interest on financial assets at 31 December 2020 (-€434 million at 31 December 2019).
4.2
FEES AND COMMISSIONS INCOME AND EXPENSE
31/12/2020
31/12/2019
(in millions of euros)
Income
Expense
Net
Income
Expense
Net
Interbank transactions
239
(52)
187
261
(43)
218
Crédit Agricole internal transactions
973
(403)
570
803
(477)
326
Customer transactions
1,188
(185)
1,003
1,763
(211)
1,552
Securities transactions
54
(149)
(95)
49
(99)
(50)
Foreign exchange transactions
42
(39)
3
41
(44)
(3)
Derivative instruments and other off-balance sheet items
384
(201)
183
342
(249)
93
Payment instruments and other banking and financial services
2,982
(4,013)
(1,031)
2,506
(3,762)
(1,256)
Mutual funds management, fiduciary and similar operations
4,817
(1,416)
3,401
4,792
(1,616)
3,176
TOTAL FEES AND COMMISSIONS INCOME AND EXPENSE
10,679
(6,458)
4,221
10,556
(6,500)
4,057
Asset Gathering is the main contributor of the commission income from customer transactions and transactions involving payment instruments and other banking and financial services.
Commission income from managing UCITS, trusts and similar activities are mainly related to Asset Gathering.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
488
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
4.3
NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE
THROUGH PROFIT OR LOSS
(in millions of euros)
31/12/2020
31/12/2019
Dividends received
937
1,505
Unrealised or realised gains (losses) on held for trading assets/liabilities
2,853
3,878
Unrealised or realised gains (losses) on equity instruments at fair value through profit or loss
(2,770)
3,462
Unrealised or realised gains (losses) on debt instruments that do not meet the conditions of the “SPPI” test
716
2,860
Net gains (losses) on assets backing unit-linked contracts
1,153
6,440
Unrealised or realised gains (losses) on assets/liabilities designated at fair value through profit or loss
(1)
(647)
(1,771)
Net gains (losses) on Foreign exchange transactions and similar financial instruments (excluding gains
or losses on hedges of net investments in foreign operations)
40
713
Gains (losses) from hedge accounting
(26)
(6)
NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
2,256
17,082
(1) Except
spread
of issuer loan for liabilities at fair value through equity non-recyclable.
Analysis of net gains (losses) from hedge accounting:
(in millions of euros)
31/12/2020
Gains
Losses
Net
Fair value hedges
5,208
(5,210)
(2)
Changes in fair value of hedged items attributable to hedged risks
2,069
(2,450)
(381)
Changes in fair value of hedging derivatives (including termination of hedges)
3,139
(2,760)
379
Cash flow hedges
-
-
-
Changes in fair value of hedging derivatives – ineffective portion
-
-
-
Hedges of net investments in foreign operations
-
-
-
Changes in fair value of hedging derivatives – ineffective portion
-
-
-
Fair value hedges of the interest rate exposure of a portfolio of financial instruments
6,600
(6,624)
(24)
Changes in fair value of hedged items
3,122
(3,704)
(582)
Changes in fair value of hedging derivatives
3,478
(2,920)
558
Cash flow hedges of the interest rate exposure of a portfolio of financial instruments
-
-
-
Changes in fair value of hedging instrument – ineffective portion
-
-
-
TOTAL GAINS (LOSSES) FROM HEDGE ACCOUNTING
11,808
(11,834)
(26)
(in millions of euros)
31/12/2019
Gains
Losses
Net
Fair value hedges
6,362
(6,363)
(1)
Changes in fair value of hedged items attributable to hedged risks
2,283
(4,151)
(1,868)
Changes in fair value of hedging derivatives (including termination of hedges)
4,079
(2,212)
1,867
Cash flow hedges
-
-
-
Changes in fair value of hedging derivatives – ineffective portion
-
-
-
Hedges of net investments in foreign operations
-
-
-
Changes in fair value of hedging derivatives – ineffective portion
-
-
-
Fair value hedges of the interest rate exposure of a portfolio of financial instruments
10,837
(10,842)
(5)
Changes in fair value of hedged items
4,401
(6,316)
(1,915)
Changes in fair value of hedging derivatives
6,436
(4,526)
1,910
Cash flow hedges of the interest rate exposure of a portfolio of financial instruments
-
-
-
Changes in fair value of hedging instrument – ineffective portion
-
-
-
TOTAL GAINS (LOSSES) FROM HEDGE ACCOUNTING
17,199
(17,205)
(6)
Details of gains (losses) from hedge accounting by type of relationship (fair value hedges, cash flow hedges, etc.) are presented in Note 3.4 “Hedge
accounting”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
489
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
4.4
NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE
THROUGH OTHER COMPREHENSIVE INCOME
(in millions of euros)
31/12/2020
31/12/2019
Net gains (losses) on debt instruments at fair value through other comprehensive income
that may be reclassified subsequently to profit or loss
(1)
524
47
Remuneration of equity instruments measured at fair value through other comprehensive income
that will not be reclassified subsequently to profit or loss (dividends)
(2)
62
115
NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
586
162
(1)
Excluding realised gains or losses from impaired debt instruments
(
Bucket 3
)
mentioned in Note 4.9 “Cost of risk”.
(2)
Of which €19 million dividends on equity instruments at fair value through non-recyclable equity derecognised during the period.
4.5
NET GAINS (LOSSES) ARISING FROM THE DERECOGNITION
OF FINANCIAL ASSETS AT AMORTISED COST
(in millions of euros)
31/12/2020
31/12/2019
Debt securities
29
8
Loans and receivables due from credit institutions
-
-
Loans and receivables due from customers
-
1
Gains arising from the derecognition of financial assets at amortised cost
29
9
Debt securities
-
(1)
Loans and receivables due from credit institutions
-
-
Loans and receivables due from customers
(4)
(17)
Losses arising from the derecognition of financial assets at amortised cost
(4)
(18)
NET GAINS (LOSSES) ARISING FROM THE DERECOGNITION OF FINANCIAL ASSETS AT AMORTISED COST
(1)
25
(9)
(1)
Excluding realised gains or losses from the derecognition of impaired debt instruments
(
Bucket 3
)
mentioned in Note 4.9 “Cost of risk”.
4.6
NET INCOME (EXPENSES) ON OTHER ACTIVITIES
(in millions of euros)
31/12/2020
31/12/2019
Gains (losses) on fixed assets not used in operations
(18)
(15)
Other net income from insurance activities
(1)
5,674
13,800
Change in insurance technical reserves
(2)
(4,373)
(26,163)
Net income from investment property
165
140
Other net income (expense)
(46)
100
INCOME (EXPENSE) RELATED TO OTHER ACTIVITIES
1,402
(12,139)
(1)
The €8,126 million decrease in other net income from insurance activities was mainly due to a decrease in net inflows in the amount of €8,100 million on the Retirement Savings activity.
(2)
The €21,790 million decrease in insurance company technical reserves is due in the main to the net positive inflows and the adjustments evolution of the value on the unit-linked policies.
4.7
OPERATING EXPENSES
(in millions of euros)
31/12/2020
31/12/2019
Employee expenses
(7,234)
(7,147)
Taxes other than on income or payroll-related and regulatory contributions
(1)
(924)
(816)
External services and other operating expenses
(3,590)
(3,749)
OPERATING EXPENSES
(11,748)
(11,713)
(1)
Of which -€439 million recognised in relation to the Single Resolution Fund at 31 December 2020 (-€338 million at 31 December 2019).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
490
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
Fees paid to Statutory Auditors
The breakdown of fees paid to Statutory Auditors by firm and type of engagement by fully consolidated Crédit Agricole S.A. companies was as follows in 2020:
Board of Auditors of Crédit Agricole S.A.
(in millions of euros excluding taxes)
Ernst & Young
PricewaterhouseCoopers
TOTAL 2020
2020
2019
2020
2019
Statutory audit, certification, review of individual
and consolidated financial statements
15.89
16.45
14.82
14.79
30.71
Issuer
2.17
1.90
2.19
1.92
4.36
Fully consolidated subsidiaries
13.72
14.55
12.63
12.87
26.35
Non audit services
4.45
5.53
7.61
6.04
12.06
Issuer
0.48
0.46
0.94
0.96
1.42
Fully consolidated subsidiaries
3.97
5.07
6.67
5.08
10.64
TOTAL
20.34
21.98
22.43
20.83
42.77
The total sum of fees paid to PricewaterhouseCoopers Audit, Statutory
Auditor of Crédit Agricole S.A., appearing in the consolidated income
statement for the year, amounts to €10.7 million, of which €9 million
relates to the certification of the accounts of Crédit Agricole S.A. and its
subsidiaries, and €1.7 million relates to non-audit services (comfort letters,
agreed-upon procedures, responsibility statements, services relating to
social and environmental information, consultations, etc.).
The total sum of fees paid to Ernst & Young et Autres, Statutory Auditor of
Crédit Agricole S.A., appearing in the consolidated income statement for the
year, amounts to €7.2 million, of which €6.1 million relates to the certification
of the accounts of Crédit Agricole S.A. and its subsidiaries, and €1.1 million
relates to non-audit services (comfort letters, agreed-upon procedures,
responsibility statements, review of tax returns, consultations, etc.).
Other Statutory Auditors engaged in the audit of fully consolidated Crédit Agricole S.A. subsidiaries
(in millions of euros excluding taxes)
Mazars
KPMG
Deloitte
Other
TOTAL 2020
2020
2019
2020
2019
2020
2019
2020
2019
Statutory audit, certification, review of individual
and consolidated financial statements
1.35
1.12
0.21
0.38
0.22
0.18
0.48
0.30
2.26
Non audit services
(1)
0.09
0.06
0.09
0.01
0.01
0.01
0.01
-
0.20
TOTAL
1.44
1.18
0.30
0.39
0.23
0.19
0.49
0.30
2.46
(1)
Non audit services identified in this table correspond to assignments performed by these firms in the companies where they are Statutory Auditors.
4.8
AMORTISATION OF INTANGIBLE ASSETS AND DEPRECIATION
OF PROPERTY, PLANT AND EQUIPMENT
(in millions of euros)
31/12/2020
31/12/2019
Depreciation and amortisation
(1,142)
(1,047)
Property, plant and equipment
(1)
(744)
(678)
Intangible assets
(398)
(369)
Impairment losses (reversals)
(1)
(1)
Property, plant and equipment
1
(1)
Intangible assets
(2)
-
DEPRECIATION, AMORTISATION AND IMPAIRMENT OF PROPERTY,
PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
(1,143)
(1,048)
(1)
Of which -€380 million accounted for under the depreciation of the right-of-use asset at 31 December 2020 and -€307 million at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
491
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
4.9
COST OF RISK
(in millions of euros)
31/12/2020
31/12/2019
Charges net of reversals to impairments on performing assets (Bucket 1 or Bucket 2) (A)
(817)
216
Bucket 1: Loss allowance measured at an amount equal to 12-month expected credit loss
(246)
24
Debt instruments at fair value through other comprehensive income that may be reclassified to profit or loss
(5)
(1)
Debt instruments at amortised cost
(214)
24
Commitments by signature
(27)
1
Bucket 2: Loss allowance measured at an amount equal to lifetime expected credit loss
(571)
192
Debt instruments at fair value through other comprehensive income that may be reclassified to profit or loss
(2)
(1)
Debt instruments at amortised cost
(502)
129
Commitments by signature
(67)
64
Charges net of reversals to impairments on credit-impaired assets (Bucket 3) (B)
(1,733)
(1,326)
Debt instruments at fair value through other comprehensive income that may be reclassified to profit or loss
-
-
Debt instruments at amortised cost
(1,780)
(1,195)
Commitments by signature
47
(131)
Other assets (C)
(11)
(164)
Risks and expenses (D)
(13)
(15)
Charges net of reversals to impairment losses and provisions (E) = (A)+(B)+(C)+(D)
(2,574)
(1,289)
Realised gains (losses) on disposal of impaired debt instruments at fair value through other comprehensive
income that may be reclassified to profit or loss
-
-
Realised gains (losses) on impaired debt instruments at amortised cost
-
-
Losses on non-impaired loans and bad debt
(184)
(223)
Recoveries on loans and receivables written off
186
345
Recognised at amortised cost
186
345
Recognised in other comprehensive income that may be reclassified to profit or loss
-
-
Discounts on restructured loans
(27)
(29)
Losses on commitments by signature
(1)
-
Other losses
(75)
(74)
Other gains
69
14
COST OF RISK
(2,606)
(1,256)
4.10
NET GAINS (LOSSES) ON OTHER ASSETS
(in millions of euros)
31/12/2020
31/12/2019
Property, plant and equipment and intangible assets used in operations
62
51
Gains on disposals
87
59
Losses on disposals
(25)
(8)
Consolidated equity investments
1
22
Gains on disposals
11
25
Losses on disposals
(10)
(3)
Net income (expense) on combinations
12
(19)
NET GAINS (LOSSES) ON OTHER ASSETS
75
54
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
492
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
4.11
INCOME TAX CHARGE
Income tax charge
(in millions of euros)
31/12/2020
31/12/2019
Current tax charge
(1,485)
(464)
Deferred tax charge
254
(43)
Reclassification of current tax charge (income) related to overlay approach
102
51
TOTAL TAX CHARGE
(1,129)
(456)
Reconciliation of theoretical tax rate and effective tax rate
As at 31 December 2020
(in millions of euros)
Base
Tax rate
Tax
Pre-tax income, goodwill impairment, discontinued operations
and share of net income of equity-accounted entities
5,078
32.02%
(1,626)
Impact of permanent differences
(5.30)%
269
Impact of different tax rates on foreign subsidiaries
(2.88)%
146
Impact of losses for the year, utilisation of tax loss carryforwards and temporary differences
(0.18)%
9
Impact of reduced tax rate
(0.66)%
34
Impact of other items
(0.76)%
39
EFFECTIVE TAX RATE AND TAX CHARGE
22.23%
(1,129)
The theoretical tax rate is the standard tax rate (including the additional social contribution) on taxable profits in France at 31 December 2020.
At 31 December 2019
(in millions of euros)
Base
Tax rate
Tax
Pre-tax income, goodwill impairment, discontinued operations
and share of net income of equity-accounted entities
6,190
34.43%
(2,131)
Impact of permanent differences
(21.87)%
1,354
Impact of different tax rates on foreign subsidiaries
(3.28)%
203
Impact of losses for the year, utilisation of tax loss carryforwards and temporary differences
(0.10)%
6
Impact of reduced tax rate
(0.99)%
61
Impact of other items
(0.82)%
51
EFFECTIVE TAX RATE AND TAX CHARGE
(1)
7.37%
(456)
(1)
Excluding Emporiki tax income, the effective tax rate was 24.59% at 31 December 2019.
The theoretical tax rate is the standard tax rate (including the additional social contribution) on taxable profits in France at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
493
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
4.12
CHANGES IN OTHER COMPREHENSIVE INCOME
The breakdown of income and expenses recognised for the period is presented below:
Breakdown of total other comprehensive income
(in millions of euros)
31/12/2020
31/12/2019
OTHER COMPREHENSIVE INCOME ON ITEMS THAT MAY BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT OR LOSS NET OF INCOME TAX
Gains and losses on translation adjustments
(805)
301
Revaluation adjustment of the period
(805)
301
Reclassified to profit or loss
-
-
Other changes
-
-
Gains and losses on debt instruments at fair value through other comprehensive
income that may be reclassified to profit or loss
549
1,189
Revaluation adjustment of the period
712
1,181
Reclassified to profit or loss
(121)
(38)
Other changes
(42)
46
Gains and losses on hedging derivative instruments
323
361
Revaluation adjustment of the period
326
364
Reclassified to profit or loss
-
-
Other changes
(3)
(3)
Reclassification of net gains (losses) of designated financial assets applying the overlay approach
(197)
434
Revaluation adjustment of the period
(197)
445
Reclassified to profit or loss
-
-
Other changes
-
(11)
Pre-tax other comprehensive income on items that may be reclassified to profit or loss on equity-accounted entities
(136)
9
Income tax related to items that may be reclassified to profit or loss excluding equity-accounted entities
(277)
(481)
Income tax related to items that may be reclassified to profit or loss on equity-accounted entities
-
1
Other comprehensive income on items that may be reclassified to profit or loss from discontinued operations
(10)
(12)
Other comprehensive income on items that may be reclassified subsequently to profit or loss net of income tax
(553)
1,802
OTHER COMPREHENSIVE INCOME ON ITEMS THAT WILL NOT BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT OR LOSS NET OF INCOME TAX
Actuarial gains and losses on post-employment benefits
(93)
(162)
Other comprehensive income on financial liabilities attributable to changes in own credit risk
(149)
(74)
Revaluation adjustment of the period
(155)
(86)
Reclassified to reserves
6
12
Other changes
-
-
Other comprehensive income on equity instruments that will not be reclassified to profit or loss
(81)
53
Revaluation adjustment of the period
(118)
77
Reclassified to reserves
45
20
Other changes
(8)
(44)
Pre-tax other comprehensive income on items that will not be reclassified
to profit or loss on equity-accounted entities
3
(30)
Income tax related to items that will not be reclassified to profit or loss excluding equity-accounted entities
94
71
Income tax related to items that will not be reclassified to profit or loss on equity-accounted entities
(2)
8
Other comprehensive income on items that will not be reclassified to profit or loss from discontinued operations
-
3
Other comprehensive income on items that will not be reclassified subsequently to profit or loss net of income tax
(228)
(131)
OTHER COMPREHENSIVE INCOME NET OF INCOME TAX
(781)
1,671
Of which Group share
(678)
1,620
Of which non-controlling interests
(103)
51
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
494
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
Breakdown of tax impacts related to other comprehensive income
31/12/2019
Changes
31/12/2020
(in millions of euros)
Gross
Income
tax
charges
Net of
income
tax
Net of
income
tax of
which
Group
share Gross
Income
tax
charges
Net of
income
tax
Net of
income
tax of
which
Group
share
Gross
Income
tax
charges
Net of
income
tax
Net of
income
tax of
which
Group
share
OTHER COMPREHENSIVE INCOME ON
ITEMS THAT MAY BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT OR LOSS
Gains and losses on translation adjustments
57
(4)
53
117
(805)
(2)
(807)
(762)
(748)
(6)
(754)
(645)
Gains and losses on debt instruments at fair
value through other comprehensive income
that may be reclassified to profit or loss
3,666
(954)
2,712
2,699
549
(134)
415
410
4,215
(1,088)
3,127
3,109
Gains and losses on hedging derivative
instruments
848
(259)
589
582
323
(41)
282
277
1,171
(300)
871
859
Reclassification of net gains (losses)
of designated financial assets applying
the overlay approach
587
87
674
674
(197)
(100)
(297)
(298)
390
(13)
377
376
Other comprehensive income on items
that may be reclassified to profit or loss
excluding equity-accounted entities
5,158
(1,130)
4,028
4,072
(130)
(277)
(408)
(373)
5,028
(1,407)
3,620
3,699
Other comprehensive income on items
that may be reclassified to profit or loss
on equity-accounted entities
(13)
2
(11)
(8)
(136)
-
(135)
(100)
(149)
3
(146)
(108)
Other comprehensive income on items
that may be reclassified to profit or loss
on equity-accounted entities
on discontinued operations
-
(1)
(1)
(1)
(10)
-
(10)
(10)
(10)
(1)
(11)
(11)
Other comprehensive income on items
that may be reclassified subsequently
to profit or loss
5,145
(1,129)
4,016
4,063
(276)
(277)
(553)
(483)
4,869
(1,405)
3,463
3,580
OTHER COMPREHENSIVE INCOME ON
ITEMS THAT WILL NOT BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT OR LOSS
Actuarial gains and losses
on post-employment benefits
(863)
193
(670)
(624)
(93)
19
(74)
(68)
(956)
212
(744)
(691)
Other comprehensive income on financial
liabilities attributable to changes
in own credit risk
(214)
57
(157)
(153)
(149)
40
(109)
(106)
(363)
97
(266)
(260)
Other comprehensive income on equity
instruments that will not be reclassified
to profit or loss
(309)
(45)
(354)
(381)
(81)
35
(46)
(22)
(390)
(10)
(400)
(403)
Other comprehensive income on items
that will not be reclassified to profit or
loss excluding equity-accounted entities
(1,386)
205
(1,181)
(1,158)
(323)
94
(229)
(196)
(1,709)
299
(1,410)
(1,354)
Other comprehensive income on items
that will not be reclassified to profit or loss
on equity-accounted entities
(57)
(7)
(63)
(62)
3
(2)
1
1
(54)
(9)
(62)
(61)
Other comprehensive income on items
that will not be reclassified to profit or loss
from discontinued operations
1
-
1
-
-
-
-
-
1
-
1
-
Other comprehensive income on items
that will not be reclassified subsequently
to profit or loss
(1,442)
198
(1,243)
(1,220)
(320)
92
(228)
(195)
(1,762)
290
(1,471)
(1,415)
OTHER COMPREHENSIVE INCOME
3,703
(931)
2,773
2,843
(596)
(185)
(781)
(678)
3,107
(1,115)
1,992
2,165
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
495
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
(in millions of euros)
31/12/2018
Changes
31/12/2019
Gross
Income
tax
charges
Net of
income
tax
Net of
income
tax of
which
Group
share
Gross
Income
tax
charges
Net of
income
tax
Net of
income
tax of
which
Group
share
Gross
Income
tax
charges
Net of
income
tax
Net of
income
tax of
which
Group
share
OTHER COMPREHENSIVE INCOME ON
ITEMS THAT MAY BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT OR LOSS
Gains and losses on translation adjustments
(244)
(4)
(248)
(158)
301
-
301
275
57
(4)
53
117
Gains and losses on debt instruments at fair
value through other comprehensive income
that may be reclassified to profit or loss
2,477
(653)
1,824
1,848
1,189
(301)
888
851
3,666
(954)
2,712
2,699
Gains and losses on hedging derivative
instruments
487
(143)
344
339
361
(116)
245
243
848
(259)
589
582
Reclassification of net gains (losses)
of designated financial assets applying
the overlay approach
153
151
304
304
434
(64)
370
370
587
87
674
674
Other comprehensive income on items
that may be reclassified to profit or loss
excluding equity-accounted entities
2,873
(649)
2,224
2,333
2,285
(481)
1,804
1,739
5,158
(1,130)
4,028
4,072
Other comprehensive income on items
that may be reclassified to profit or loss
on equity-accounted entities
(22)
1
(21)
(16)
9
1
10
9
(13)
2
(11)
(8)
Other comprehensive income on items
that may be reclassified to profit or loss
on equity-accounted entities on discontinued
operations
12
(1)
11
11
(12)
-
(12)
(12)
-
(1)
(1)
(1)
Other comprehensive income on items
that may be reclassified subsequently
to profit or loss
2,863
(649)
2,214
2,328
2,282
(480)
1,802
1,735
5,145
(1,129)
4,016
4,063
OTHER COMPREHENSIVE INCOME ON
ITEMS THAT WILL NOT BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT OR LOSS
Actuarial gains and losses
on post-employment benefits
(701)
166
(535)
(504)
(162)
27
(135)
(120)
(863)
193
(670)
(624)
Other comprehensive income
on financial liabilities attributable
to changes in own credit risk
(140)
37
(103)
(100)
(74)
20
(54)
(53)
(214)
57
(157)
(153)
Other comprehensive income on equity
instruments that will not be reclassified
to profit or loss
(362)
(69)
(431)
(457)
53
24
77
76
(309)
(45)
(354)
(381)
Other comprehensive income on items
that will not be reclassified to profit or
loss excluding equity-accounted entities
(1,203)
134
(1,069)
(1,061)
(183)
71
(113)
(97)
(1,386)
205
(1,181)
(1,158)
Other comprehensive income on items
that will not be reclassified to profit
or loss on equity-accounted entities
(27)
(15)
(42)
(42)
(30)
8
(21)
(21)
(57)
(7)
(63)
(62)
Other comprehensive income on items
that will not be reclassified to profit
or loss from discontinued operations
(2)
-
(2)
(2)
3
-
3
3
1
-
1
-
Other comprehensive income on items
that will not be reclassified subsequently
to profit or loss
(1,232)
119
(1,112)
(1,105)
(210)
79
(131)
(115)
(1,442)
198
(1,243)
(1,220)
OTHER COMPREHENSIVE INCOME
1,631
(530)
1,102
1,223
2,072
(401)
1,671
1,620
3,703
(931)
2,773
2,843
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
496
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 4
NOTE 5
Segment reporting
Definition of operating segments
According to IFRS 8, information disclosed is based on the internal reporting
that is used by the Executive Committee to manage Crédit Agricole S.A.,
to assess performance, and to make decisions about resources to be
allocated to the identified operating segments.
Operating segments according to the internal reporting consist of the
business lines of the Group.
At 31 December 2020, Crédit Agricole S.A.’s business activities were
organised into six operating segments:
the following five business lines:
-
Asset Gathering,
-
French Retail Banking – LCL,
-
International Retail Banking,
-
Specialised Financial Services,
-
Large Customers;
as well as the “Corporate Centre”.
Presentation of business lines
1. Asset Gathering
This business line brings together:
insurance activities (savings solutions and property and casualty
insurance):
-
life insurance and personal insurance, conducted mainly by Predica
in France and CA Vita in Italy,
-
property & casualty insurance, conducted primarily by Pacifica,
-
creditor insurance, conducted by Crédit Agricole Creditor Insurance
and group insurance conducted mainly by Predica in France;
asset management activities of the Amundi Group, offering savings
solutions for retail clients and investment solutions for institutionals.
Following its acquisition by Amundi, Sabadell Asset Management,
Banco Sabadell’s asset management subsidiary, was integrated into
this division in the third quarter of 2020. In addition, Amundi, and BOC
Wealth Management, the subsidiary of Bank of China, announced on
30 September 2020 that they have obtained their license from the China
Banking and Insurance Regulatory Commission for their joint venture in
China, Amundi BOC Wealth Management Company Limited;
as well as wealth management activities conducted mainly by
Crédit Agricole Indosuez Wealth Management subsidiaries (CA Indosuez
Switzerland S.A., CA Indosuez Wealth Europe, CFM Indosuez Wealth,
CA Indosuez Wealth France).
2.
French Retail Banking – LCL
LCL is a French Retail Banking network with a strong presence in urban
areas. It is organised into four business lines: Retail Banking for individual
customers, Retail Banking for small businesses, private banking and
corporate banking.
LCL offers a full range of banking products and services, together with
asset management, insurance and wealth management products.
3. International Retail Banking
This business line encompasses foreign subsidiaries and investments that
are mainly involved in Retail Banking.
These subsidiaries and equity investments are primarily located in Europe:
with Gruppo Bancario, CA Italia, Crédit Agricole Polska in Poland and others
in Ukraine and Serbia.
Other subsidiaries operate around the Mediterranean,
e.g.
Crédit du Maroc
and Crédit Agricole Egypt.
Finally, this division also includes banks that are not significant in size. For
this reason, Crédit Agricole Bank Romania is in the process of being sold.
On 4 January 2021, Crédit Agricole S.A. announced that it had signed a
sale contract for Crédit Agricole Bank Romania. The completion of this
transaction, which is subject to the approval of the competent Romanian
regulatory authorities and is expected to take place in the first half of 2021.
Foreign consumer credit, leasing and factoring subsidiaries (subsidiaries of
Crédit Agricole Consumer Finance, Crédit Agricole Leasing & Factoring and
EFL in Poland, etc.) are not included in this segment, but in “Specialised
Financial Services”, except Calit in Italy.
4. Specialised Financial Services
Specialised Financial Services comprises the Group subsidiaries that provide
financial products and services to individual customers, small businesses,
corporates and local authorities in France and abroad. These concerns:
consumer finance companies around Crédit Agricole Consumer Finance
in France and through its subsidiaries or partnerships outside France
(Agos, FCA Bank, Creditplus Bank, Ribank, Credibom, Interbank Group and
Crédit Agricole Consumer Finance Bankia S.A.). Following its acquisition
by Crédit Agricole Consumer Finance, Menafinance was integrated into
that division in the second quarter of 2020;
Specialised Financial Services for companies such as factoring and lease
finance (Crédit Agricole Leasing & Factoring Group, EFL).
5. Large Customers
The Large Customers division includes the Corporate and Investment
bank, which itself consists of two main lines of business most of which
are carried out by Crédit Agricole CIB, and Asset servicing for institutions
realised by CACEIS:
financing activities, which include corporate banking in France and
internationally and structured finance. Structured Finance consists of
originating, structuring and real assets and projects, often collateralised
by physical assets (planes, boats, office buildings, commodities, etc.)
and complex and structured credit instruments;
capital markets and investment banking activities bring together capital
market activities (treasury, foreign exchange, interest rate derivatives, debt
markets), and investment banking activities (mergers and acquisitions
consulting and primary equity advisory);
asset servicing: CACEIS Bank for custody and CACEIS Fund Administration
for fund administration. Following its acquisition by CACEIS during the
third quarter of 2019, KAS Bank was integrated into this division in
September 2019. And as part of the merger of the activities of CACEIS
and Santander Securities Services (“S3”) finalized in December 2019,
S3’s activities in Spain and 49.99% of its activities in Latin America were
integrated into this division in December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
497
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 5
6. Corporate Centre
This segment encompasses:
Crédit Agricole S.A.’s central body function, asset and liability
management and management of debt connected with acquisitions of
subsidiaries or equity investments and the net impact of tax consolidation
for Crédit Agricole S.A.;
the results of the private equity business and results of various other
Crédit Agricole S.A. companies (including CA Immobilier, Uni-médias,
Foncaris, etc.);
the results from management companies including computing and
payment companies and real-estate companies.
The division also includes the technical and volatile impacts related to
intragroup transactions.
5.1
OPERATING SEGMENT INFORMATION
Transactions between operating segments are effected at arm’s length.
Segment assets are determined based on balance sheet elements for each operating segment.
(in millions of euros)
31/12/2020
Asset
Gathering
French Retail
Banking
– LCL
International
Retail
Banking
Specialised
Financial
Services
Large
Customers
Corporate
Centre
TOTAL
Revenues
5,735
3,521
2,659
2,526
6,297
(238)
20,500
Operating expenses
(2,870)
(2,319)
(1,753)
(1,288)
(3,783)
(878)
(12,891)
Gross operating income
2,865
1,202
906
1,238
2,514
(1,116)
7,609
Cost of risk
(56)
(390)
(570)
(732)
(829)
(29)
(2,606)
Operating income
2,809
812
336
506
1,685
(1,145)
5,003
Share of net income of equity-accounted
entities
66
-
-
344
7
(4)
413
Net gains (losses) on other assets
3
2
72
(3)
1
-
75
Change in value of goodwill
(1)
-
-
-
-
-
(903)
(903)
Pre-tax income
2,878
814
408
847
1,693
(2,052)
4,588
Income tax
(770)
(252)
(101)
(69)
(278)
341
(1,129)
Net income from discontinued operations
(24)
-
(8)
(134)
-
(55)
(221)
Net income
2,084
562
299
644
1,415
(1,766)
3,238
Non-controlling interests
378
25
92
85
85
(119)
546
NET INCOME GROUP SHARE
1,706
537
207
559
1,330
(1,647)
2,692
(1)
Goodwill Crédit Agricole Italia impairment for -€903 million.
(in millions of euros)
31/12/2020
Asset
Gathering
French Retail
Banking
– LCL
International
Retail
Banking
Specialised
Financial
Services
Large
Customers
Corporate
Centre
TOTAL
SEGMENT ASSETS
Of which investments
in equity-accounted entities
4,422
72
-
2,642
262
252
7,650
Of which goodwill
7,193
4,161
792
1,119
1,394
-
14,659
TOTAL ASSETS
515,737
182,304
90,472
85,375
900,834
186,340
1,961,062
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
498
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 5
(in millions of euros)
31/12/2019
Asset
Gathering
French Retail
Banking
– LCL
International
Retail
Banking
Specialised
Financial
Services
Large
Customers
Corporate
Centre
TOTAL
Revenues
6,077
3,457
2,796
2,716
5,603
(497)
20,152
Operating expenses
(2,905)
(2,371)
(1,753)
(1,362)
(3,498)
(872)
(12,761)
Gross operating income
3,172
1,086
1,043
1,354
2,105
(1,369)
7,391
Cost of risk
(19)
(217)
(335)
(497)
(160)
(28)
(1,256)
Operating income
3,153
869
708
857
1,945
(1,397)
6,135
Share of net income
of equity-accounted entities
46
-
-
295
5
6
352
Net gains (losses) on other assets
32
2
2
-
6
12
54
Change in value of goodwill
(1)
-
-
-
-
22
(611)
(589)
Pre-tax income
3,231
871
710
1,152
1,978
(1,990)
5,952
Income tax
(881)
(274)
(199)
(233)
(407)
1,538
(456)
Net income from discontinued operations
8
-
(46)
-
-
-
(38)
Net income
2,358
597
465
919
1,571
(452)
5,458
Non-controlling interests
325
27
132
104
33
(7)
614
NET INCOME GROUP SHARE
2,033
570
333
815
1,538
(445)
4,844
(1)
Goodwill LCL impairment for -€611 million.
(in millions of euros)
31/12/2019
Asset
Gathering
French Retail
Banking
– LCL
International
Retail
Banking
Specialised
Financial
Services
Large
Customers
Corporate
Centre
TOTAL
Segment assets
Of which investments
in equity-accounted entities
4,277
-
-
2,344
350
261
7,232
Of which goodwill
6,908
4,161
1,698
1,128
1,385
-
15,280
TOTAL ASSETS
501,631
164,417
80,283
77,642
826,550
117,120
1,767,643
5.2
SEGMENT INFORMATION: GEOGRAPHICAL ANALYSIS
The geographical analysis of segment assets and results is based on the place where operations are booked for accounting purposes.
(in millions of euros)
31/12/2020
31/12/2019
Net income
Group share
Of which
Revenues
Segment
assets
Of which
goodwill
Net income
Group share
Of which
Revenues
Segment
assets
Of which
goodwill
France (including overseas
departments and territories)
1,385
10,888
1,589,508
9,530
2,425
10,688
1,409,567
9,470
Italy
(67)
3,102
110,037
1,201
703
3,158
97,737
2,082
Other European Union countries
600
3,244
92,246
2,712
791
3,023
88,412
2,465
Other European countries
81
699
19,751
705
152
725
20,550
704
North America
271
1,110
65,364
430
210
1,146
61,570
472
Central and South America
74
104
1,391
-
15
50
641
-
Africa and Middle East
85
471
10,126
35
158
490
9,348
38
Asia-Pacific (ex. Japan)
215
590
27,838
25
285
561
26,693
27
Japan
48
292
44,801
21
105
311
53,125
22
TOTAL
2,692
20,500
1,961,062
14,659
4,844
20,152
1,767,643
15,280
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
499
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 5
5.3
INSURANCE SPECIFICITIES
(See chapter on “Risk management – Insurance sector risks” on managing this sector risk.)
Gross income from insurance activities
(in millions of euros)
31/12/2020
31/12/2019
Income
statement
prior to
reclassification
of overlay
approach
Reclassifica-
tion related
to overlay
approach
Income
statement post-
reclassification
of overlay
approach
Recognition in
accordance with
IFRS 9 excluding
effect of overlay
approach
Effect of
overlay
approach
Recognition after
effect of overlay
approach
Written premium
29,440
-
29,440
36,967
-
36,967
Change in unearned premiums
(224)
-
(224)
(225)
-
(225)
Earned premiums
29,216
-
29,216
36,742
-
36,742
Other operating income
232
-
232
(124)
-
(124)
Investment income
7,154
(6)
7,148
7,737
(4)
7,733
Investment expenses
(588)
2
(586)
(457)
1
(456)
Gains (losses) on disposals of investments
net of impairment and amortisation reversals
426
484
910
72
103
175
Change in fair value of investments
at fair value through profit or loss
(1,779)
2,422
645
12,405
(4,041)
8,364
Change in impairment on investments
27
(483)
(456)
(39)
(112)
(151)
Investment income net of expenses
5,242
2,419
7,661
19,718
(4,053)
15,666
Claims expenses
(1)
(27,996)
(2,227)
(30,223)
(49,154)
3,608
(45,546)
Revenue from reinsurance operations
666
-
666
693
-
693
Expenses from reinsurance operations
(842)
-
(842)
(736)
-
(736)
Net reinsurance income (expense)
(176)
-
(176)
(43)
-
(43)
Contract acquisition costs
(2,180)
-
(2,180)
(2,021)
-
(2,021)
Amortisation of investment securities
and similar
-
-
-
-
-
-
Administration costs
(2,222)
-
(2,222)
(2,163)
-
(2,163)
Other current operating income (expense)
(491)
-
(491)
(416)
-
(416)
Other operating income (expense)
-
-
-
7
-
7
Operating income
1,625
192
1,817
2,547
(445)
2,102
Financing expenses
(225)
-
(225)
(238)
-
(238)
Share of net income of associates
-
-
-
-
-
-
Income tax charge
(558)
102
(456)
(591)
51
(540)
Net income from discontinued
or held-for-sale operations
-
-
-
8
-
8
Consolidated net income
842
294
1,136
1,726
(394)
1,332
Non-controlling interests
80
-
80
3
-
3
NET INCOME GROUP SHARE
762
294
1,056
1,723
(394)
1,329
(1)
Including -€23 billion of cost of claims at 31 December 2020 (-€23 billion at 31 December 2019), -€1 billion of changes in policyholder profit-sharing at 31 December 2020 (-€1 billion at
31 December 2019) and -€6 billion of changes in technical reserves at 31 December 2020 (-€21 billion at 31 December 2019).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
500
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 5
Breakdown of insurance company investments
(in millions of euros)
31/12/2020
31/12/2019
Financial assets at fair value through profit or loss
175,671
173,352
Held for trading financial assets
936
776
Treasury bills and similar securities
-
-
Bonds and other fixed income securities
-
-
Equities and other variable income securities
-
-
Derivative instruments
936
776
Other financial instruments at fair value through profit or loss
174,735
172,576
Equity instruments
31,166
33,178
Equities and other variable income securities
11,150
9,774
Non-consolidated equity investments
5,556
4,501
Designated financial assets applying the overlay approach
14,460
18,903
Debt instruments that do not meet the conditions of the “SPPI” test
69,140
70,263
Loans and receivables
831
718
Debt securities
68,309
69,545
Treasury bills and similar securities
175
171
Bonds and other fixed income securities
4,987
4,781
Mutual funds
43,448
44,078
Designated financial assets applying the overlay approach
19,699
20,515
Assets backing unit-linked contracts
74,429
69,135
Treasury bills and similar securities
498
457
Bonds and other fixed income securities
14,912
13,819
Equities and other variable income securities
8,377
6,822
Mutual funds
50,642
48,037
Financial assets designated at fair value through profit or loss
-
-
Loans and receivables
-
-
Debt securities
-
-
Treasury bills and similar securities
-
-
Bonds and other fixed income securities
-
-
Hedging derivative Instruments
710
929
Financial assets at fair value through other comprehensive income
229,726
227,570
Debt instruments at fair value through other comprehensive income that may be reclassified to profit or loss
229,508
227,393
Debt securities
229,508
227,393
Treasury bills and similar securities
74,462
68,474
Bonds and other fixed income securities
155,046
158,919
Equity instruments at fair value through other comprehensive income that will not be reclassified to profit or loss
218
177
Equities and other variable income securities
-
-
Non-consolidated equity investments
218
177
Financial assets at amortised cost
5,588
4,772
Loans and receivables
4,287
3,815
Debt securities
1,301
957
Treasury bills and similar securities
117
76
Bonds and other fixed income securities
1,185
881
Impairment
(1)
-
Investment property
6,355
6,410
Investments in associates and joint venture
4,127
4,002
TOTAL INSURANCE COMPANY INVESTMENTS
422,177
417,035
As of 31 December 2020, investments in Insurance entities accounted for by the equity method amount to €4,127 million compared with €4,002 million
at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
501
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 5
(in millions of euros)
31/12/2020
31/12/2019
Carrying
amount
Unrealised
gains
Unrealised
losses
Carrying
amount
Unrealised
gains
Unrealised
losses
Debt instruments at fair value through other comprehensive
income that may be reclassified to profit or loss
229,508
23,448
(24)
227,393
20,456
(128)
Debt securities
229,508
23,448
(24)
227,393
20,456
(128)
Treasury bills and similar securities
74,462
10,169
-
68,474
7,560
(69)
Bonds and other fixed income securities
155,046
13,279
(24)
158,919
12,896
(59)
Equity instruments at fair value through other comprehensive
income that will not be reclassified to profit or loss
218
21
(10)
177
-
(23)
Equities and other variable income securities
-
-
-
-
-
-
Non-consolidated equity investments
218
21
(10)
177
-
(23)
Total of financial assets at fair value through
other comprehensive income
229,726
23,469
(34)
227,570
20,456
(151)
Income tax charge
(6,132)
9
(5,354)
39
OTHER COMPREHENSIVE INCOME ON FINANCIAL ASSETS
AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
(NET OF INCOME TAX)
17,337
(25)
15,102
(112)
Reclassification between net income and other comprehensive income for financial assets
designated under the overlay approach
(in millions of euros)
31/12/2020
31/12/2019
Amount
reported
for the
designated
financial
assets
applying
IFRS 9
Amount that
would have been
reported for
the designated
financial assets
applying IAS 39
Amount
reclassified in other
comprehensive
income applying
the overlay
approach
Amount
reported
for the
designated
financial
assets
applying
IFRS 9
Amount that
would have been
reported for
the designated
financial assets
applying IAS 39
Amount
reclassified in other
comprehensive
income applying
the overlay
approach
Investment income
756
750
(6)
1,029
1,025
(4)
Investment expenses
(10)
(8)
2
(7)
(6)
1
Gains (losses) on disposals
of investments net of impairment
and amortisation reversals
(1)
483
484
71
174
103
Change in fair value of investments
at fair value through profit or loss
(2,422)
-
2,422
4,041
-
(4,041)
Change in impairment on investments
-
(483)
(483)
-
(112)
(112)
Investment income net of expenses
(1,677)
742
2,419
5,134
1,081
(4,053)
Claims expenses
(2,227)
3,608
Operating income
192
(445)
Income tax charge
102
51
NET INCOME GROUP SHARE
294
(394)
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
502
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 5
NOTE 6
Notes to the balance sheet
6.1
CASH, CENTRAL BANKS
(in millions of euros)
31/12/2020
31/12/2019
Assets
Liabilities
Assets
Liabilities
Cash
1,593
1,656
Central banks
192,676
864
91,423
1,896
CARRYING AMOUNT
194,269
864
93,079
1,896
6.2
FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE
THROUGH PROFIT OR LOSS
Financial assets at fair value through profit or loss
(in millions of euros)
31/12/2020
31/12/2019
Held for trading financial assets
261,968
230,721
Other financial instruments at fair value through profit or loss
170,494
168,756
Equity instruments
34,183
36,293
Debt instruments that do not meet the conditions of the “SPPI” test
72,410
72,942
Assets backing unit-linked contracts
63,900
59,520
Financial assets designated at fair value through profit or loss
1
1
CARRYING AMOUNT
432,462
399,477
Of which lent securities
666
615
Held for trading financial assets
(in millions of euros)
31/12/2020
31/12/2019
Equity instruments
6,221
6,901
Equities and other variable income securities
6,221
6,901
Debt securities
18,522
18,380
Treasury bills and similar securities
13,081
13,665
Bonds and other fixed income securities
5,389
4,607
Mutual funds
52
108
Loans and receivables
120,987
104,645
Loans and receivables due from credit institutions
-
61
Loans and receivables due from customers
872
894
Securities bought under repurchase agreements
120,116
103,690
Pledged securities
-
-
Derivative instruments
116,237
100,795
CARRYING AMOUNT
261,968
230,721
Securities acquired under repurchase agreements include those that the entity is authorised to use as collateral.
Equity instruments at fair value through profit or loss
(in millions of euros)
31/12/2020
31/12/2019
Equities and other variable income securities
21,898
24,753
Non-consolidated equity investments
12,285
11,540
TOTAL EQUITY INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
34,183
36,293
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
503
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Debt instruments that do not meet the conditions of the “SPPI” test
(in millions of euros)
31/12/2020
31/12/2019
Debt securities
68,966
68,733
Treasury bills and similar securities
178
252
Bonds and other fixed income securities
13,660
13,152
Mutual funds
55,128
55,329
Loans and receivables
3,444
4,209
Loans and receivables due from credit institutions
-
-
Loans and receivables due from customers
3,444
4,209
Securities bought under repurchase agreements
-
-
Pledged securities
-
-
TOTAL DEBT INSTRUMENTS THAT DO NOT MEET THE CONDITIONS OF THE “SPPI” TEST
72,410
72,942
Financial assets designated at fair value through profit or loss
(in millions of euros)
31/12/2020
31/12/2019
Loans and receivables
-
-
Loans and receivables due from credit institutions
-
-
Loans and receivables due from customers
-
-
Debt securities
1
1
Treasury bills and similar securities
-
-
Bonds and other fixed income securities
1
1
TOTAL FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
1
1
Financial liabilities at fair value through profit or loss
(in millions of euros)
31/12/2020
31/12/2019
Held for trading financial liabilities
229,265
206,708
Financial liabilities designated at fair value through profit or loss
35,908
39,961
CARRYING AMOUNT
265,173
246,669
This table includes liabilities to holders of mutual funds consolidated in Insurance.
Financial liabilities held for trading
(in millions of euros)
31/12/2020
31/12/2019
Securities sold short
37,179
33,472
Securities sold under repurchase agreements
82,662
74,763
Debt securities
2
55
Due to customers
-
-
Due to credit institutions
-
-
Derivative instruments
109,422
98,418
CARRYING AMOUNT
229,265
206,708
Detailed information on derivative transaction instruments is provided in Note 3.2 relating to market risk, in particular on interest rates.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
504
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Financial liabilities designated at fair value through profit or loss
Financial liabilities for which changes in issuer spread are recognised in other comprehensive
income and will not be reclassified
(in millions of euros)
31/12/2020
Carrying
amount
Difference
between
carrying amount
and amount
contractually
required to pay
at maturity
Accumulated
amount of change
in fair value
attributable to
changes in own
credit risk
Amount of change in
fair value during the
period attributable
to changes in own
credit risk
Amount realised at
derecognition
(1)
Deposits and subordinated liabilities
3,629
-
-
-
-
Deposits
3,629
-
-
-
-
Subordinated liabilities
-
-
-
-
-
Debt securities
21,637
823
363
154
(6)
Other financial liabilities
-
-
-
-
-
TOTAL
25,266
823
363
154
(6)
(1)
The amount realised upon derecognition is transferred to consolidated reserves.
(in millions of euros)
31/12/2019
Carrying
amount
Difference
between
carrying amount
and amount
contractually
required to pay
at maturity
Accumulated
amount of change
in fair value
attributable to
changes in own
credit risk
Amount of change in
fair value during the
period attributable
to changes in own
credit risk
Amount realised at
derecognition
(1)
Deposits and subordinated liabilities
3,993
-
-
-
-
Deposits
3,993
-
-
-
-
Subordinated liabilities
-
-
-
-
-
Debt securities
25,942
(110)
214
86
(11)
Other financial liabilities
-
-
-
-
-
TOTAL
29,935
(110)
214
86
(11)
(1)
The amount realised upon derecognition is transferred to consolidated reserves.
Pursuant to IFRS 9, Crédit Agricole S.A. calculates changes in fair value
attributable to changes in own credit risk using a methodology that allows
for them to be separated from changes in value attributable to changes
in market conditions.
Basis for calculating own credit risk
The source taken into account for the calculation of own credit risk may vary
from one issuer to another. Within Crédit Agricole S.A., the source used is
the change in its cost of market refinancing based on the type of issuance.
Calculation of unrealised gains/losses on own credit
adjustment (recognised in other comprehensive income)
Crédit Agricole S.A. preferred approach is based on the liquidity component
of issues. All issues are replicated by a group of vanilla loans/borrowings.
Changes in fair value attributable to changes in own credit risk of all issues
therefore correspond to those of said loans. These are equal to the changes
in fair value of the loan book caused by changes in the cost of refinancing.
Calculation of realised gains/losses on own credit
risk (recognised in consolidated reserves)
Crédit Agricole S.A. has elected to transfer fair value changes attributable
to changes in own credit risk upon unwinding to consolidated reserves.
Accordingly, when there is a total or partial early redemption, a sensitivity-
based calculation is done. This consists of measuring the change in fair
value attributable to the changes in own credit risk of a given issuance as
being the sum of the credit spread sensitivities multiplied by the change
in this spread between the issuance date and the redemption date.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
505
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Financial liabilities for which changes in issuer spread are recognised in net income
(in millions of euros)
31/12/2020
Carrying
amount
Difference
between
carrying amount
and due on
maturity
Accumulated amount
of change in fair value
attributable to changes
in own credit risk
Amount of change
in fair value during
the period attributable
to changes in own
credit risk
Deposits and subordinated liabilities
10,642
-
-
-
Deposits
10,642
-
-
-
Subordinated liabilities
-
-
-
-
Debt securities
-
-
-
-
Other financial liabilities
-
-
-
-
TOTAL
10,642
-
-
-
(in millions of euros)
31/12/2019
Carrying
amount
Difference
between
carrying amount
and due on
maturity
Accumulated amount
of change in fair value
attributable to changes
in own credit risk
Amount of change
in fair value during
the period attributable
to changes in own
credit risk
Deposits and subordinated liabilities
10,026
152
-
-
Deposits
10,026
152
-
-
Subordinated liabilities
-
-
-
-
Debt securities
-
-
-
-
Other financial liabilities
-
-
-
-
TOTAL
10,026
152
-
-
6.3
HEDGING DERIVATIVES
Detailed information is provided in Note 3.4 on “Hedge accounting”.
6.4
FINANCIAL ASSETS AT FAIR VALUE THROUGH
OTHER COMPREHENSIVE INCOME
31/12/2020
(in millions of euros)
Carrying amount
Unrealised gains
Unrealised
losses
Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
263,856
23,689
(379)
Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
2,216
497
(887)
TOTAL
266,072
24,186
(1,266)
31/12/2019
(in millions of euros)
Carrying amount
Unrealised gains
Unrealised
losses
Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
258,803
20,348
(290)
Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
2,518
617
(938)
TOTAL
261,321
20,965
(1,228)
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
506
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
31/12/2020
(in millions of euros)
Carrying amount
Unrealised gains
Unrealised
losses
Treasury bills and similar securities
88,142
10,417
(75)
Bonds and other fixed income securities
175,714
13,272
(303)
Total Debt securities
263,856
23,689
(378)
Loans and receivables due from credit institutions
-
-
-
Loans and receivables due from customers
-
-
-
Total Loans and receivables
-
-
-
Total Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
263,856
23,689
(379)
Income tax charge
(6,163)
63
OTHER COMPREHENSIVE INCOME ON DEBT INSTRUMENTS THAT WILL NOT
BE RECLASSIFIED TO PROFIT OR LOSS (NET OF INCOME TAX)
17,526
(316)
31/12/2019
(in millions of euros)
Carrying amount
Unrealised gains
Unrealised
losses
Treasury bills and similar securities
82,684
7,806
(151)
Bonds and other fixed income securities
176,119
12,542
(140)
Total Debt securities
258,803
20,348
(291)
Loans and receivables due from credit institutions
-
-
-
Loans and receivables due from customers
-
-
-
Total Loans and receivables
-
-
-
Total Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
258,803
20,348
(290)
Income tax charge
(5,341)
81
OTHER COMPREHENSIVE INCOME ON DEBT INSTRUMENTS THAT WILL NOT
BE RECLASSIFIED TO PROFIT OR LOSS (NET OF INCOME TAX)
15,007
(209)
Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
Other comprehensive income on equity instruments that cannot be reclassified
(in millions of euros)
31/12/2020
Carrying amount
Unrealised gains
Unrealised
losses
Equities and other variable income securities
515
8
(88)
Non-consolidated equity investments
1,701
489
(799)
Total Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
2,216
497
(887)
Income tax charge
(29)
17
OTHER COMPREHENSIVE INCOME ON EQUITY INSTRUMENTS THAT WILL NOT
BE RECLASSIFIED TO PROFIT OR LOSS (NET OF INCOME TAX)
468
(870)
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
507
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
(in millions of euros)
31/12/2019
Carrying amount
Unrealised gains
Unrealised
losses
Equities and other variable income securities
802
29
(33)
Non-consolidated equity investments
1,716
588
(905)
Total Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
2,518
617
(938)
Income tax charge
(65)
19
OTHER COMPREHENSIVE INCOME ON EQUITY INSTRUMENTS THAT WILL NOT
BE RECLASSIFIED TO PROFIT OR LOSS (NET OF INCOME TAX)
552
(919)
Equity instruments derecognised during the period
(in millions of euros)
31/12/2020
Fair value at
the date of
derecognition
Cumulative
gains realised
(1)
Cumulative
losses realised
(1)
Equities and other variable income securities
332
-
(10)
Non-consolidated equity investments
7
-
(28)
Total Investments in equity instruments
339
-
(37)
Income tax charge
-
6
OTHER COMPREHENSIVE INCOME ON EQUITY INSTRUMENTS THAT WILL NOT
BE RECLASSIFIED TO PROFIT OR LOSS (NET OF INCOME TAX)
(1)
-
(32)
(1)
Realised gains and losses are transferred to consolidated reserves.
(in thousands of euros)
31/12/2019
Fair value at
the date of
derecognition
Cumulative
gains realised
(1)
Cumulative
losses realised
(1)
Equities and other variable income securities
(1)
-
(4)
Non-consolidated equity investments
1,058
47
(65)
Total Investments in equity instruments
1,057
47
(69)
Income tax charge
-
-
OTHER COMPREHENSIVE INCOME ON EQUITY INSTRUMENTS THAT WILL NOT
BE RECLASSIFIED TO PROFIT OR LOSS (NET OF INCOME TAX)
(1)
47
(69)
(1)
Realised gains and losses are transferred to consolidated reserves.
6.5
FINANCIAL ASSETS AT AMORTISED COST
(in millions of euros)
31/12/2020
31/12/2019
Loans and receivables due from credit institutions
463,169
438,580
Loans and receivables due from customers
(1)
405,937
395,181
Debt securities
84,794
72,519
CARRYING AMOUNT
953,900
906,280
(1)
Outstanding loans to customers in France with non-contractual due date postponements amounted to €16.6 billion in 2020, including €0.9 billion still outstanding as at 31 December 2020
at Crédit Agricole S.A. level.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
508
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Loans and receivables due from credit institutions
(in millions of euros)
31/12/2020
31/12/2019
CREDIT INSTITUTIONS
Loans and receivables
84,991
98,434
Of which non doubtful current accounts in debit
(1)
6,727
7,002
Of which non doubtful overnight accounts and advances
(1)
173
22,484
Pledged securities
1
1
Securities bought under repurchase agreements
7,466
5,358
Subordinated loans
533
538
Other loans and receivables
180
133
Gross amount
93,171
104,464
Impairment
(381)
(416)
Net value of loans and receivables due from credit institutions
92,790
104,048
CRÉDIT AGRICOLE INTERNAL TRANSACTIONS
Current accounts
1,760
1,294
Securities bought under repurchase agreements
5,085
1,343
Term deposits and advances
363,142
331,504
Subordinated loans
392
392
Total Crédit Agricole internal transactions
370,379
334,533
CARRYING AMOUNT
463,169
438,580
(1)
These transactions are partly comprised of the item “Net demand loans and deposits with credit institutions” on the Cash Flow Statement.
Loans and receivables due from customers
(in millions of euros)
31/12/2020
31/12/2019
LOANS AND RECEIVABLES DUE FROM CUSTOMERS
Trade receivables
23,623
27,824
Other customer loans
356,955
340,041
Pledged securities
205
232
Securities bought under repurchase agreements
3,713
4,071
Subordinated loans
45
45
Insurance receivables
328
314
Reinsurance receivables
845
770
Advances in associates' current accounts
147
143
Current accounts in debit
12,636
14,670
Gross amount
398,497
388,110
Impairment
(9,125)
(8,813)
Net value of loans and receivables due from customers
389,372
379,297
FINANCE LEASES
Property leasing
5,474
5,512
Equipment leases, operating leases and similar transactions
11,547
10,772
Gross amount
17,021
16,284
Impairment
(456)
(400)
Net value of lease financing operations
16,565
15,884
CARRYING AMOUNT
405,937
395,181
Debt securities
(in millions of euros)
31/12/2020
31/12/2019
Treasury bills and similar securities
29,906
23,590
Bonds and other fixed income securities
54,967
48,983
TOTAL
84,873
72,573
Impairment
(79)
(53)
CARRYING AMOUNT
84,794
72,519
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
509
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.6
TRANSFERRED ASSETS NOT DERECOGNISED OR DERECOGNISED
WITH ON-GOING INVOLVEMENT
Transferred assets not derecognised in full at 31 December 2020
Transferred assets
(in millions of euros)
Carrying
amount
Of which
securitisation (non-
deconsolidating)
Of which
securities sold/
bought under
repurchase
agreements
Of which
other
(1)
Fair
value
(2)
Held for trading financial assets
14,130
-
14,130
-
14,130
Equity instruments
3,173
-
3,173
-
3,173
Debt securities
10,957
-
10,957
-
10,957
Loans and receivables
-
-
-
-
-
Other financial instruments at fair value
through profit or loss
-
-
-
-
-
Equity instruments
-
-
-
-
-
Debt securities
-
-
-
-
-
Loans and receivables
-
-
-
-
-
Financial assets at fair value through
other comprehensive income
28,826
-
28,673
154
28,766
Equity instruments
-
-
-
-
-
Debt securities
28,826
-
28,673
154
28,766
Loans and receivables
-
-
-
-
-
Financial assets at amortised cost
15,054
11,406
3,642
5
15,054
Debt securities
3,647
-
3,642
5
3,647
Loans and receivables
11,407
11,406
-
-
11,407
Total Financial assets
58,010
11,406
46,445
159
57,950
Finance leases
-
-
-
-
-
TOTAL TRANSFERRED ASSETS
58,010
11,406
46,445
159
57,950
(1)
Including securities lending without cash collateral.
(2)
When the “counterparty (counterparties) to the associated liabilities has (have) recourse only to the transferred assets” (IFRS 7.42D (d)).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
510
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Transferred assets but still fully recognized
Transferred assets recognised to the extent
of on the entity's continuing involvement
Associated liabilities
Assets and
associated liabilities
Initial total
carrying amount
of assets prior
to transfer
Carrying amount
of assets still
recognised
(continuing
involvement)
Carrying
amount of
associated
liabilities
Carrying
amount
Of which
securitisation (non-
deconsolidating)
Of which
securities
sold/bought
under
repurchase
agreements
Of which
other
(1)
Fair
value
(2)
Net fair value
(2)
13,908
-
13,908
-
13,908
222
-
-
-
3,123
-
3,123
-
3,123
50
-
-
-
10,785
-
10,785
-
10,785
172
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,642
-
28,642
-
28,642
124
-
-
-
-
-
-
-
-
-
-
-
-
28,642
-
28,642
-
28,642
124
-
-
-
-
-
-
-
-
-
-
-
-
13,050
9,456
3,594
-
13,050
2,004
-
-
-
3,594
-
3,594
-
3,594
53
-
-
-
9,456
9,456
-
-
9,456
1,951
-
-
-
55,600
9,456
46,144
-
55,600
2,350
-
-
-
-
-
-
-
-
-
-
-
-
55,600
9,456
46,144
-
55,600
2,350
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
511
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Transferred assets not derecognised in full at 31 December 2019
Transferred assets
(in millions of euros)
Carrying
amount
Of which
securitisation
(non-
deconsolidating)
Of which
securities sold/
bought under
repurchase
agreements
Of which other
(1)
Fair value
(2)
Held for trading financial assets
14,139
-
14,139
-
14,139
Equity instruments
3,911
-
3,911
-
3,911
Debt securities
10,228
-
10,228
-
10,228
Loans and receivables
-
-
-
-
-
Other financial instruments at fair value
through profit or loss
-
-
-
-
-
Equity instruments
-
-
-
-
-
Debt securities
-
-
-
-
-
Loans and receivables
-
-
-
-
-
Financial assets at fair value through
other comprehensive income
24,802
-
24,502
300
24,437
Equity instruments
-
-
-
-
-
Debt securities
24,802
-
24,502
300
24,437
Loans and receivables
-
-
-
-
-
Financial assets at amortised cost
14,620
13,261
1,271
88
14,620
Debt securities
1,359
-
1,271
88
1,359
Loans and receivables
13,261
13,261
-
-
13,261
Total Financial assets
53,561
13,261
39,912
388
53,196
Finance leases
-
-
-
-
-
TOTAL TRANSFERRED ASSETS
53,561
13,261
39,912
388
53,196
(1)
Including loans of securities without cash collateral.
(2)
In the event that “the counterparty (counterparties) to the associated liabilities has (have) recourse only to the transferred assets” (IFRS 7.42D (d)).
Securitisations
Consolidated securitisations with external investors are a transfer of assets
within the meaning of the amendment to IFRS 7. The Group effectively
has an indirect contractual obligation to deliver to external investors the
cash flows from assets sold to the securitisation fund (although these
assets are recorded in the Group balance sheet through the consolidation
of the fund). Receivables assigned to the securitisation fund are used as
collateral for investors.
Fully self-subscribed consolidated securitisations do not constitute a transfer
of assets within the meaning of IFRS 7.
Crédit Agricole Consumer Finance Securitisations
At 31 December 2020, Crédit Agricole Consumer Finance managed
14 consolidated vehicles for securitisation of retail consumer loans and
car dealer financing in Europe. Securitisation transactions carried out
within Crédit Agricole Consumer Finance Group are not considered to form
part of a deconsolidation transaction under IFRS and have therefore been
reintegrated into Crédit Agricole S.A. consolidated financial statements.
The carrying amounts of the relevant assets (net of related liabilities)
amounted to €2,831 million at 31 December 2020. They include, in
particular, outstanding customer loans with a net carrying amount of
€4,221 million. The amount of securities mobilised on the market stood
at €4,221 million. The value of securities still available to be mobilised
stood at €5,301 million.
CA Italia Securitisations
At 31 December 2020, Crédit Agricole Italia managed one home loan
securitisation vehicle. This securitisation transaction is not considered to
form part of a deconsolidation transaction under IFRS and has therefore been
reintegrated into the Crédit Agricole S.A. consolidated financial statements.
The carrying amounts of the relevant assets amounted to €10,611 million
at 31 December 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
512
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Transferred assets but still fully recognized
Transferred assets recognised to the extent
of on the entity's continuing involvement
Associated liabilities
Assets and
associated
liabilities
Initial total
carrying amount
of assets prior
to transfer
Carrying amount
of assets still
recognised
(continuing
involvement)
Carrying
amount of
associated
liabilities
Carrying
amount
Of which
securitisation
(non-
deconsolidating)
Of which
securities
sold/bought
under
repurchase
agreements
Of
which
other
(1)
Fair
value
(2)
Net fair value
(2)
13,331
-
13,331
-
13,331
808
-
-
-
3,688
-
3,688
-
3,688
223
-
-
-
9,643
-
9,643
-
9,643
585
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,458
-
24,458
-
24,458
(21)
-
-
-
-
-
-
-
-
-
-
-
-
24,458
-
24,458
-
24,458
(21)
-
-
-
-
-
-
-
-
-
-
-
-
12,547
11,322
1,225
-
12,547
2,073
-
-
-
1,225
-
1,225
-
1,225
134
-
-
-
11,322
11,322
-
-
11,322
1,939
-
-
-
50,336
11,322
39,014
-
50,336
2,860
-
-
-
-
-
-
-
-
-
-
-
-
50,336
11,322
39,014
-
50,336
2,860
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
513
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.7
EXPOSURE TO SOVEREIGN RISK
The scope of sovereign exposures recorded covers exposures to Governments, but does not include local authorities. Tax debt is excluded from these amounts.
Exposure to sovereign debt corresponds to an exposure net of impairment (carrying amount) presented both gross and net of hedging.
The Group’s exposure to sovereign risk is as follows:
Banking activity
31/12/2020
Exposures net of impairment
(in millions of euros)
Other financial instruments at
fair value through profit or loss
Financial assets
at fair value
through other
comprehensive
income that may
be reclassified
to profit or loss
Financial
assets at
amortised cost
Total banking
activity before
hedging
Hedging
Total banking
activity after
hedging
Held-for-trading
financial assets
Other financial
instruments
at fair value
through
profit or loss
Saudi Arabia
-
-
-
890
890
-
890
Argentina
-
-
-
44
44
-
44
Austria
119
-
-
198
317
(2)
315
Belgium
-
14
2,405
1,552
3,971
(209)
3,762
Brazil
8
-
112
158
278
-
278
China
189
-
34
136
359
(2)
357
Egypt
1
7
641
347
996
-
996
Spain
-
-
1,303
2,034
3,337
(119)
3,218
United States
1,721
-
68
819
2,608
(7)
2,601
France
35
285
3,712
12,528
16,560
(706)
15,854
Greece
-
-
-
-
-
-
-
Hong Kong
58
-
-
880
938
(1)
937
Iran
-
-
-
-
-
-
-
Ireland
-
-
-
-
-
-
-
Italy
-
43
3,066
8,075
11,184
(285)
10,899
Japan
-
-
246
1,435
1,681
1
1,682
Lebanon
-
-
-
-
-
-
-
Lithuania
-
-
-
-
-
-
-
Morocco
11
23
244
-
278
-
278
Poland
-
-
950
229
1,179
-
1,179
United Kingdom
-
-
-
-
-
-
-
Russia
-
-
-
-
-
-
-
Syria
-
-
-
-
-
-
-
Turkey
-
-
-
-
-
-
-
Ukraine
-
-
78
208
286
-
286
Venezuela
-
-
-
30
30
-
30
Yemen
-
-
-
-
-
-
-
Other sovereign
countries
1,086
195
808
4,401
6,490
(26)
6,464
TOTAL
3,228
567
13,667
33,964
51,426
(1,356)
50,070
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
514
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
31/12/2019
Exposures Banking activity net of impairment
(in millions of euros)
Other financial instruments at
fair value through profit or loss
Financial assets
at fair value
through other
comprehensive
income that may
be reclassified
to profit or loss
Financial
assets at
amortised cost
Total banking
activity before
hedging
Hedging
Total banking
activity after
hedging
Held-for-trading
financial assets
Other financial
instruments
at fair value
through profit
or loss
Saudi Arabia
-
-
-
899
899
-
899
Argentina
-
-
-
-
-
-
-
Austria
68
4
-
16
88
(1)
87
Belgium
-
-
2,412
671
3,083
(206)
2,877
Brazil
57
-
77
191
325
-
325
China
12
-
36
-
48
-
48
Egypt
2
8
804
-
814
-
814
Spain
-
7
1,290
612
1,909
(2)
1,907
United States
4,083
-
205
2,858
7,146
(21)
7,125
France
41
195
4,724
10,559
15,519
(1,015)
14,504
Greece
-
-
-
-
-
-
-
Hong Kong
46
-
-
890
936
-
936
Iran
-
-
-
-
-
-
-
Ireland
1
6
-
-
7
-
7
Italy
24
96
2,821
4,921
7,862
(452)
7,410
Japan
-
-
-
889
889
8
897
Lebanon
-
-
-
-
-
-
-
Lithuania
-
-
-
-
-
-
-
Morocco
68
7
258
-
333
-
333
Poland
14
-
722
242
978
-
978
United Kingdom
-
-
-
-
-
-
-
Russia
1
-
-
-
1
-
1
Syria
-
-
-
-
-
-
-
Turkey
-
-
-
-
-
-
-
Ukraine
-
-
55
148
203
-
203
Venezuela
-
-
-
42
42
-
42
Yemen
-
-
-
-
-
-
-
Other sovereign
countries
993
31
699
4,783
6,506
(345)
6,161
TOTAL
5,410
354
14,103
27,721
47,588
(2,034)
45,554
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
515
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Insurance activity
For the insurance activity, exposure to sovereign debt is presented as net of impairment, before hedging, and corresponds to an exposure before application
of sharing mechanisms between insurer and policyholder specific to life insurance.
Gross exposures
(in millions of euros)
31/12/2020
31/12/2019
Saudi Arabia
1
6
Argentina
-
1
Austria
2,484
3,036
Belgium
4,152
3,299
Brazil
-
-
China
-
-
Egypt
-
-
Spain
3,777
1,318
United States
50
131
France
54,004
52,216
Greece
-
4
Hong Kong
-
-
Iran
-
-
Ireland
200
725
Italy
9,103
7,602
Japan
132
97
Lebanon
-
-
Lithuania
77
-
Morocco
-
-
Poland
325
363
United Kingdom
6
15
Russia
-
-
Syria
-
-
Turkey
-
2
Ukraine
-
-
Venezuela
1
1
Yemen
-
-
Other sovereign countries
3,020
2,219
TOTAL EXPOSURES
77,332
71,035
6.8
FINANCIAL LIABILITIES AT AMORTISED COST
(in millions of euros)
31/12/2020
31/12/2019
Due to credit institutions
264,919
142,041
Due to customers
719,388
646,914
Debt securities
162,547
201,007
CARRYING AMOUNT
1,146,854
989,962
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
516
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Due to credit institutions
(in millions of euros)
31/12/2020
31/12/2019
CREDIT INSTITUTIONS
Accounts and borrowings
179,458
74,133
Of which current accounts in credit
(1)
9,167
10,137
Of which overnight accounts and deposits
(1)
1,953
2,359
Pledged securities
-
-
Securities sold under repurchase agreements
21,575
27,169
Total
201,033
101,302
CRÉDIT AGRICOLE INTERNAL TRANSACTIONS
Current accounts in credit
(1)
39,899
18,794
Term deposits and advances
18,903
20,876
Securities sold under repurchase agreements
5,084
1,069
Total
63,886
40,739
CARRYING AMOUNT
264,919
142,041
(1)
These transactions are partly comprised of the item “Net demand loans and deposits with credit institutions” on the Cash Flow Statement.
Due to customers
(in millions of euros)
31/12/2020
31/12/2019
Current accounts in credit
291,807
228,339
Special savings accounts
324,407
302,424
Other amounts due to customers
98,927
112,020
Securities sold under repurchase agreements
1,520
1,569
Insurance liabilities
872
940
Reinsurance liabilities
590
467
Cash deposits received from ceding and retroceding companies against technical insurance commitments
1,265
1,155
CARRYING AMOUNT
719,388
646,914
Debt securities issued
(in millions of euros)
31/12/2020
31/12/2019
Interest bearing notes
-
-
Interbank securities
9,078
9,289
Negotiable debt securities
49,228
86,272
Bonds
(1)
101,380
101,738
Other debt securities
2,861
3,708
CARRYING AMOUNT
162,547
201,007
(1)
Includes issues of Covered Bonds and issues of senior non-preferred bonds.
Debt notes issued by Crédit Agricole S.A. and hold by Insurance entities of Crédit Agricole S.A. group are eliminated for euro contracts. They were eliminated
for the portion backing unit-linked contracts with financial risk borne by the policyholder.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
517
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.9
INFORMATION ON THE OFFSETTING OF FINANCIAL ASSETS
AND FINANCIAL LIABILITIES
Offsetting – financial assets
Type of financial instrument
(in millions of euros)
31/12/2020
Offsetting effects on financial assets covered by master netting agreements and similar agreements
Gross amounts
of recognised
financial assets
before offsetting
Gross amounts
of recognised
financial
liabilities set off
in the financial
statements
Net amounts of
financial assets
presented
in the financial
statements
(3)
Other amounts that can be offset
under given conditions
Net amount after
all offsetting
effects
Gross amounts
of financial
liabilities
covered by
master netting
agreements
Amounts of
other financial
instruments
received
as collateral,
including
security
deposits
Derivatives
(1)(2)
138,368
10
138,358
120,742
11,398
6,218
Reverse repurchase agreements
(4)
203,785
67,200
136,585
10,600
125,271
714
Securities lent
12,909
-
12,909
-
-
12,909
Other financial instruments
-
-
-
-
-
-
TOTAL FINANCIAL ASSETS SUBJECT
TO OFFSETTING
355,062
67,210
287,852
131,342
136,669
19,841
(1)
Including margin calls but before any XVA impact.
(2)
96% of derivatives on the asset side at the reporting date were subject to offsetting.
(3)
The net amount of financial assets shown in the summary statements is equal to the amount shown on the balance sheet as assets.
(4)
99% of repurchase agreements on the assets side at the reporting date were subject to offsetting.
At 31 December 2020, derivative instruments were not subject to accounting clearing within the meaning of IAS 32R, but daily settlement (application of
the so-called “settlement to market” mechanism).
Type of financial instrument
(in millions of euros)
31/12/2019
Offsetting effects on financial assets covered by master netting agreements and similar agreements
Gross amounts
of recognised
financial assets
before offsetting
Gross amounts
of recognised
financial
liabilities set off
in the financial
statements
Net amounts of
financial assets
presented
in the financial
statements
(2)
Other amounts that can be offset
under given conditions
Net amount after
all offsetting
effects
Gross amounts
of financial
liabilities
covered by
master netting
agreements
Amounts of
other financial
instruments
received
as collateral,
including
security
deposits
Derivatives
(1)
120,534
21
120,513
104,711
15,533
269
Reverse repurchase agreements
177,596
62,900
114,696
10,756
103,279
661
Securities lent
2,817
-
2,817
-
-
2,817
Other financial instruments
-
-
-
-
-
-
TOTAL FINANCIAL ASSETS SUBJECT
TO OFFSETTING
300,947
62,921
238,026
115,467
118,812
3,747
(1)
Including margin calls but before any XVA impact.
(2)
The net amount of financial assets shown in the summary statements is equal to the amount shown on the balance sheet as assets.
At 31 December 2019, derivative instruments were not subject to accounting clearing within the meaning of IAS 32R, but daily settlement (application of
the so-called “settlement to market” mechanism).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
518
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Offsetting – financial liabilities
Type of financial instrument
(in millions of euros)
31/12/2020
Offsetting effects on financial liabilities covered by master netting agreements and similar agreements
Gross amounts
of recognised
financial
liabilities before
offsetting
Gross amounts
of recognised
financial
assets set off
in the financial
statements
Net amounts
of financial
liabilities
presented in
the financial
statements
(3)
Other amounts that can be offset
under given conditions
Net amount after
all offsetting
effects
Gross amounts
of financial
assets covered
by master
netting
agreements
Amounts of
other financial
instruments
received as
collateral,
including
security
deposits
Derivatives
(1)(2)
124,664
10
124,654
120,742
2,647
1,265
Repurchase agreements
(4)
178,064
67,200
110,864
10,600
99,380
884
Securities borrowed
-
-
-
-
-
-
Other financial instruments
-
-
-
-
-
-
TOTAL FINANCIAL LIABILITIES
SUBJECT TO OFFSETTING
302,728
67,210
235,518
131,342
102,027
2,149
(1)
Including margin calls but before any XVA impact.
(2)
99% of derivatives on the liabilities side at the reporting date were subject to offsetting.
(3)
The net amount of financial liabilities shown in the summary statements is equal to the amount shown on the balance sheet as liabilities.
(4)
99% of repurchase agreements on the liabilities side at the reporting date were subject to offsetting.
At 31 December 2020, derivative instruments were not subject to accounting clearing within the meaning of IAS 32R, but daily settlement (application of
the so-called “settlement to market” mechanism).
Type of financial instrument
(in millions of euros)
31/12/2019
Offsetting effects on financial liabilities covered by master netting agreements and similar agreements
Gross amounts
of recognised
financial
liabilities before
offsetting
Gross amounts
of recognised
financial
assets set off
in the financial
statements
Net amounts
of financial
liabilities
presented in
the financial
statements
(2)
Other amounts that can be offset
under given conditions
Net amount after
all offsetting
effects
Gross amounts
of financial
assets covered
by master
netting
agreements
Amounts of
other financial
instruments
received as
collateral,
including
security
deposits
Derivatives
(1)
111,711
-
111,711
103,048
6,819
1,844
Repurchase agreements
167,552
62,900
104,652
10,756
89,108
4,788
Securities borrowed
6,060
-
6,060
-
-
6,060
Other financial instruments
-
-
-
-
-
-
TOTAL FINANCIAL LIABILITIES
SUBJECT TO OFFSETTING
285,323
62,900
222,423
113,804
95,927
12,692
(1)
Including margin calls mais avant tout impact XVA.
(2)
The net amount of financial liabilities shown in the summary statements is equal to the amount shown on the balance sheet as liabilities.
At 31 December 2019, derivative instruments were not subject to accounting clearing within the meaning of IAS 32R, but daily settlement (application of
the so-called “settlement to market” mechanism).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
519
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.10
CURRENT AND DEFERRED TAX ASSETS AND LIABILITIES
(in millions of euros)
31/12/2020
31/12/2019
Current tax
1,335
1,233
Deferred tax
2,969
3,067
TOTAL CURRENT AND DEFERRED
TAX ASSETS
4,304
4,300
Current tax
1,363
1,626
Deferred tax
1,971
2,140
TOTAL CURRENT AND DEFERRED
TAX LIABILITIES
3,334
3,766
Tax audits
Crédit Agricole S.A. tax audit
After an audit of accounts for the 2014 and 2015 financial years,
Crédit Agricole S.A. was the subject of adjustments as part of a proposed
correction received at the end of December 2018. Crédit Agricole S.A. paid
the sums due in this regard and reversed the related provision.
Crédit Agricole CIB Paris tax audit
After an audit of accounts for the 2013, 2014 and 2015 financial years,
Crédit Agricole CIB was the subject of adjustments as part of a proposed
correction received at the end of December 2018. Crédit Agricole CIB has
challenged the proposed adjustments with stated arguments. A provision
has been recognised to cover the estimated risk.
Crédit Agricole CIB Milan tax audit
regarding transfer pricing
Following audits, Crédit Agricole CIB Milan received adjustment notices
from the Italian tax authorities regarding transfer pricing for the 2005 to
2014 financial years. Crédit Agricole CIB has challenged the proposed
adjustments with stated arguments. At the same time, the case has been
referred to the competent French-Italian authorities for all financial years.
A provision has been recognised to cover the estimated risk.
CLSA liability guarantee
In 2013, Crédit Agricole Group sold the CLSA entities to the Chinese group
CITICS.
Following tax adjustments made on some CLSA entities in India and the
Philippines, CITICS invoked the liability guarantee against Crédit Agricole
Group. The adjustments have been challenged with stated arguments. A
provision has been recognised to cover the estimated risk.
Crédit Agricole Consumer Finance tax audit
Crédit Agricole Consumer Finance was the subject of an audit of accounts
for the 2016 and 2017 financial years. It received an adjustment notice
in late 2019. Crédit Agricole Consumer Finance has recorded a provision
in its accounts for the adjustments that have been in dispute since 2018
and an additional provision in 2019.
Earlier, Crédit Agricole Consumer Finance had been the subject of a different
audit of accounts for the 2014 and 2015 financial years. A proposed
rectification was received at the end of 2017 and a provision was booked for
that amount. In 2020, Crédit Agricole Consumer Finance paid the amounts
due and reversed the related provision.
Predica tax audit
Predica was the subject of an audit of accounts for the 2015 and 2016
financial years. It received an adjustment notice in early 2019. Predica has
recorded a provision in its accounts for the adjustments that are disputed.
Agos Ducato tax audit
Agos Ducato received a rectification proposal for the 2014 financial
year from the Italian tax authorities following a tax audit. Agos Ducato is
challenging the notified adjustments on grounds. A tax audit is also under
way for the 2015 to 2018 financial years. A provision has been recognised
to cover the estimated risk.
Net deferred tax assets and liabilities break down as follows:
(in millions of euros)
31/12/2020
31/12/2019
Temporary timing differences – tax
2,275
2,208
Non-deductible accrued expenses
324
339
Non-deductible provisions for liabilities and charges
2,172
2,163
Other temporary differences
(1)
(221)
(294)
Deferred tax on reserves for unrealised gains or losses
(1,181)
(662)
Financial assets at fair value through other comprehensive income
(1,115)
(551)
Cash flow hedges
(291)
(388)
Gains and losses/Actuarial differences
134
115
Other comprehensive income attributable to changes in own credit risk
91
71
Reclassification of net gains (losses) of designated financial assets applying the overlay approach
-
91
Deferred tax on income and reserves
(96)
(619)
Of which reclassification of net gains (losses) of designated financial assets applying the overlay approach
-
(91)
TOTAL DEFERRED TAX
998
927
(1)
The portion of deferred tax related to tax loss carryforwards was €361 million for 2020 compared to €380 million for 2019.
Deferred tax assets are netted on the balance sheet by taxable entity.
In order to assess the level of deferred tax assets to be recognised, Crédit Agricole S.A. takes into account for each company or tax group concerned the
dedicated tax status and the earnings projections established during the budgetary process.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
520
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.11
ACCRUED INCOME AND EXPENSES AND OTHER ASSETS
AND LIABILITIES
Accruals, prepayments and sundry assets
(in millions of euros)
31/12/2020
31/12/2019
Other assets
33,160
31,789
Inventory accounts and miscellaneous
217
195
Collective management of
Livret de Développement Durable
(LDD) savings account
-
-
Sundry debtors
(1)
29,585
27,608
Settlements accounts
706
1,531
Due from shareholders – unpaid capital
29
29
Other insurance assets
327
329
Reinsurer's share of technical reserves
2,296
2,097
Accruals and deferred income
7,147
6,560
Items in course of transmission
2,702
2,355
Adjustment and suspense accounts
269
230
Accrued income
3,021
2,623
Prepaid expenses
548
525
Other accruals prepayments and sundry assets
607
827
CARRYING AMOUNT
40,307
38,349
(1)
Including €72 million in respect of the contribution to the single resolution Fund in the form of a security deposit at 31 December 2020. The single resolution Fund may use the security deposit to
provide funding unconditionally and at any time.
Accruals, deferred income and sundry liabilities
(in millions of euros)
31/12/2020
31/12/2019
Other liabilities
(1)
41,283
36,426
Settlements accounts
1,769
2,504
Sundry creditors
37,541
32,254
Liabilities related to trading securities
204
230
Lease liabilities
(3)
1,757
1,407
Other insurance liabilities
12
31
Accruals and deferred income
11,658
12,859
Items in course of transmission
(2)
3,250
3,473
Adjustment and suspense accounts
1,120
1,609
Unearned income
1,233
1,317
Accrued expenses
5,266
5,492
Other accrual prepayments and sundry liabilities
789
968
CARRYING AMOUNT
52,941
49,285
(1)
The amounts shown include related debts.
(2)
Net amounts are shown.
(3)
Taking into account the effects of first-time adoption of the IFRS IC decision of 26 November 2019 respecting the duration of IFRS 16 leases, the balance of rental liabilities in the balance sheet
would have been €1,801 million at 31 December 2019 (see Note 1.1 Applicable standards and comparability).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
521
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.12
NON-CURRENT ASSETS HELD FOR SALE
AND DISCONTINUED OPERATIONS
Balance sheet of discontinued or held for sale operations
(in millions of euros)
31/12/2020
31/12/2019
Cash, central banks
50
55
Financial assets at fair value through profit or loss
5
-
Hedging derivative Instruments
-
-
Financial assets at fair value through other comprehensive income
32
40
Financial assets at amortised cost
2,597
370
Revaluation adjustment on interest rate hedged portfolios
-
-
Current and deferred tax assets
26
-
Accruals, prepayments and sundry assets
24
1
Investments in equity-accounted entities
-
-
Investment property
-
-
Property, plant and equipment
13
5
Intangible assets
(13)
4
Goodwill
-
-
Total Assets
2,734
475
Central banks
-
-
Financial liabilities at fair value through profit or loss
-
-
Hedging derivative Instruments
-
-
Financial liabilities at amortised cost
1,254
420
Revaluation adjustment on interest rate hedged portfolios
-
-
Current and deferred tax liabilities
2
-
Accruals, prepayments and sundry liabilities
25
5
Provisions
16
1
Subordinated debt
-
9
Adjustment to fair value of assets held for sale and discontinued operations (excluding taxes)
133
43
Total Liabilities and equity
1,430
478
NET ASSET FROM DISCONTINUED OR HELD-FOR-SALE OPERATIONS
1,304
(3)
Income statement from discontinued operations
(in millions of euros)
31/12/2020
31/12/2019
Revenues
17
12
Operating expenses
(63)
(12)
Depreciation, amortisation and impairment of property, plant and equipment and intangible assets
(32)
(2)
Cost of risk
4
(1)
Pre-tax income
(74)
(3)
Share of net income of equity-accounted entities
-
-
Net gains (losses) on other assets
-
-
Change in value of goodwill
(55)
-
Income tax charge
(4)
-
Net income
(133)
(3)
Income associated with fair value adjustments of discontinued operations
(88)
(43)
Net income from discontinued operations
(221)
(46)
Non-controlling interests
-
-
NET INCOME FROM DISCONTINUED OPERATIONS – GROUP SHARE
(221)
(46)
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
522
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Discontinued operations cash flow statement
(in millions of euros)
31/12/2020
31/12/2019
Net cash flows from (used by) operating activities
97
(23)
Net cash flows from (used by) investment activities
(2)
-
Net cash flows from (used by) financing activities
(125)
7
TOTAL
(30)
(16)
6.13
JOINT VENTURES AND ASSOCIATES
Financial information of joint ventures
and associates
At 31 December 2020:
the equity-accounted value of joint ventures totalled €3,081 million
(€2,845 million at 31 December 2019);
the equity-accounted value of associates totalled €4,569 million
(€4,387 million at 31 December 2019).
FCA Bank is a joint venture created with the Fiat Chrysler Automobiles
Group. In 2019, Crédit Agricole S.A., Crédit Agricole Consumer Finance and
Fiat Chrysler Automobiles (formerly Fiat Group Automobiles) renewed their
agreement to extend their 50/50 joint venture until 31 December 2024. The
company operates in 18 European countries and manages all financing
operations for dealers and customers of 18 brands: Fiat, Fiat Professional,
Lancia, Alfa Roméo, Abarth, Maserati, Chrysler, Jeep, Ferrari, Aston Martin,
Morgan, Dodge, RAM, Harley, MV Agusta and Hymer in Europe, Jaguar and
Land Rover in Continental Europe. As such, it is strategic for the development
of the JV Automobiles business.
Material associates and joint ventures are presented in the table below.
These are the main joint ventures and associates that make up the “Equity-
accounted value on the balance sheet”.
(in millions of euros)
31/12/2020
% of
interest
Equity-
accounted value
Share of
market
value
Dividends paid to
Group’s entities
Share of net
income
(1)
Share of
shareholders’
equity
(2)
Joint ventures
Fca Bank
50.0%
2,117
-
-
307
1,811
S3 Latam Holdco 1
34.8%
262
-
-
7
525
Others
702
-
22
(14)
910
Net carrying amount of investments
in equity-accounted entities (Joint ventures)
3,081
300
3,246
Associates
Icade
19.0%
935
892
56
49
544
Korian
24.3%
768
801
-
18
728
Ramsay Générale de Santé
39.6%
669
785
-
5
401
Altarea
24.7%
583
613
37
5
486
GAC Sofinco Auto Finance Co (ex-GAC
Crédit Agricole Consumer Finance)
50.0%
375
-
26
52
375
SCI Heart of La Défense
33.3%
264
230
10
4
264
Frey
19.4%
146
143
7
6
144
ABC-CA Fund Management Co
22.7%
143
16
143
Wafasalaf
49.0%
127
-
-
(9)
71
SBI Funds Management Private Limited
25.2%
123
-
6
39
99
Others
436
16
251
Net carrying amount of investments
in equity-accounted entities (Associates)
4,569
200
3,506
NET CARRYING AMOUNT OF INVESTMENTS
IN EQUITY-ACCOUNTED ENTITIES
7,650
501
6,752
(1)
The share of income of Asset gathering and Insurance activities and associates as well as the related share of benefits are classified as Net Banking Income in the income statement.
(2)
Shareholders’ equity Group share in the financial statements of the joint venture or associate when the joint venture or associate is a sub-group.
The market value shown in the table above is the quoted price of the shares
on the market at 31 December 2020. This value may not be representative
of the selling value since the value in use of equity-accounted entities may
be different from the equity-accounted value determined pursuant to IAS 28.
Investments in equity-accounted entities were subject to impairment tests,
in case of an indication of impairment, using the same methodology as
for goodwill.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
523
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
(in millions of euros)
31/12/2019
% of
interest
Equity-
accounted value
Share of
market
value
Dividends paid to
Group’s entities
Share of net
income
(1)
Share of
shareholders’
equity
(2)
Joint ventures
Fca Bank
50.0%
1,818
-
90
232
1,572
S3 Latam Holdco 1
34.8%
234
357
Others
792
-
34
62
1,088
Net carrying amount of investments
in equity-accounted entities (Joint ventures)
2,845
294
3,016
Associates
Icade
19.0%
929
1,372
63
32
539
Ramsay Générale de Santé
39.6%
663
735
-
3
395
Korian
24.4%
650
838
11
29
610
Altarea
24.7%
596
835
51
65
497
GAC Sofinco Auto Finance Co (ex-GAC
Crédit Agricole Consumer Finance)
50.0%
358
-
6
51
358
SCI Heart of La Défense
33.3%
269
266
14
11
269
Frey
19.3%
146
156
4
7
113
Wafasalaf
49.0%
139
-
13
15
81
ABC-CA Fund Management Co
22.8%
131
-
-
9
131
SBI Funds Management Private Limited
25.3%
103
-
5
24
76
Others
404
67
184
Net carrying amount of investments
in equity-accounted entities (Associates)
4,387
313
3,253
NET CARRYING AMOUNT OF INVESTMENTS
IN EQUITY-ACCOUNTED ENTITIES
7,232
607
6,269
(1)
The share of income of Asset gathering and Insurance activities and associates as well as the related share of benefits are classified as Net Banking Income in the income statement.
(2)
Shareholders’ equity Group share in the financial statements of the joint venture or associate when the joint venture or associate is a sub-group.
Condensed financial information for the material associates and joint ventures of Crédit Agricole S.A. group is shown below:
(in millions of euros)
31/12/2020
Revenues
Net income
Total assets
Total Equity
Joint ventures
Fca Bank
836
501
25,767
3,622
S3 Latam Holdco 1
77
29
1,182
1,049
Associates
Icade
258
258
12,429
3,715
Korian
74
74
11,884
2,620
Ramsay Générale de Santé
13
13
6,715
1,037
Altarea
19
19
9,114
2,939
GAC Sofinco Auto Finance Co (ex-GAC Crédit Agricole Consumer Finance)
233
104
6,338
789
SCI Heart of La Défense
13
13
1,880
795
Frey
31
31
1,430
743
ABC-CA Fund Management Co
98
48
512
430
Wafasalaf
102
(18)
1,224
145
SBI Funds Management Private Limited
170
104
301
269
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
524
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
(in millions of euros)
31/12/2019
Revenues
Net income
Total assets
Total Equity
Joint ventures
Fca Bank
1,018
467
31,582
3,143
S3 Latam Holdco 1
-
-
715
714
Associates
Icade
175
175
11,828
3,596
Ramsay Générale de Santé
8
8
4,361
1,039
Korian
119
119
10,720
2,478
Altarea
263
263
8,563
3,187
GAC Sofinco Auto Finance Co (ex-GAC Crédit Agricole Consumer Finance)
217
101
5,214
1,471
SCI Heart of La Défense
33
33
1,881
816
Frey
35
35
1,056
583
Wafasalaf
103
30
1,244
332
ABC-CA Fund Management Co
80
28
461
785
SBI Funds Management Private Limited
150
66
254
413
SCI Heart of La Défense entered the scope of consolidation under the equity method in 2018.
Significant restrictions on joint ventures
and associates
Crédit Agricole S.A. has the following restrictions:
Regulatory constraints
The subsidiaries of Crédit Agricole S.A. are subject to prudential regulation
and regulatory capital requirements in their host countries. The minimum
equity capital (solvency ratio), leverage ratio and liquidity ratio requirements
limit the capacity of these entities to pay dividends or to transfer assets to
Crédit Agricole S.A. group.
Legal constraints
The subsidiaries of Crédit Agricole S.A. are subject to legal provisions
concerning the distribution of capital and distributable earnings. These
requirements limit the ability of the subsidiaries to distribute dividends.
In the majority of cases, these are less restrictive than the regulatory
limitations mentioned above.
Restriction on assets backing unit-linked
contracts for the Insurance business
Assets backing unit-linked contracts of Crédit Agricole S.A. are held
for the benefit of policyholders. Assets of the insurance subsidiaries of
Crédit Agricole S.A. are mainly held for satisfying their obligation towards
their policyholders. Assets transfers to other entities are possible following
the legal conditions. However, in case of a transfer, a part of the profit due
to the transfer must be intended for the policyholders.
6.14
INVESTMENT PROPERTY
(in millions of euros)
31/12/2019
Changes
in scope
Increases
(acquisitions)
Decreases
(disposals)
Translation
adjustments
Other
movements
31/12/2020
Gross amount
6,673
-
253
(308)
-
7
6,625
Depreciation and impairment
(97)
-
(5)
4
-
(5)
(103)
CARRYING AMOUNT
(1)
6,576
-
248
(304)
-
2
6,522
(1)
Including investment property let to third parties.
(in millions of euros)
31/12/2018
Changes
in scope
Increases
(acquisitions)
Decreases
(disposals)
Translation
adjustments
Other
movements
31/12/2019
Gross amount
6,492
-
555
(388)
-
14
6,673
Depreciation and impairment
(84)
-
(4)
7
-
(16)
(97)
CARRYING AMOUNT
(1)
6,408
-
551
(381)
-
(2)
6,576
(1)
Including investment property let to third parties.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
525
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Fair value of investment properties
The market value of investment property recorded at cost, as valued by “expert appraisers”, was €9,955 million at 31 December 2020 compared to
€9,784 million at 31 December 2019.
(in millions of euros)
31/12/2020
31/12/2019
Quoted prices in active markets for identical instruments
Level 1
-
-
Valuation based on observable data
Level 2
9,823
9,639
Valuation based on unobservable data
Level 3
132
145
MARKET VALUE OF INVESTMENT PROPERTIES
9,955
9,784
All investment property are recognised at cost in the balance sheet.
6.15
PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS
(EXCLUDING GOODWILL)
Property, plant and equipment used in operations includes the rights of use of assets leased as lessee.
Depreciation and impairment of property, plant and equipment is presented including depreciation on property, plant and equipment leased under
operating leases.
(in millions of euros)
31/12/2019
Changes
in scope
Increases
(acquisitions)
Decreases
(disposals and
redemptions)
Translation
adjustments
Other
movements
(1)
31/12/2020
PROPERTY, PLANT AND EQUIPMENT
USED IN OPERATIONS
Gross amount
10,249
99
831
(517)
(118)
434
10,978
Depreciation and impairment
(4,651)
(30)
(742)
213
60
(49)
(5,199)
CARRYING AMOUNT
5,598
69
89
(304)
(58)
385
5,779
INTANGIBLE ASSETS
Gross amount
7,808
84
601
(236)
(27)
(41)
8,214
Depreciation and impairment
(4,645)
-
(476)
154
15
(41)
(5,018)
CARRYING AMOUNT
3,163
84
125
(82)
(12)
(82)
3,196
(1)
Taking into account the effects of first-time adoption of the IFRS IC decision of 26 November 2019 respecting the duration of IFRS 16 leases, the balance of rights of use in the balance sheet would
have been €1,762 million at 31 December 2019 (versus €1,371 million before application of the IFRS IC decision) (see Note 1.1 “Applicable standards and comparability”).
(in millions of euros)
31/12/2018
01/01/2019
(1)
Changes in
scope
(2)
Increases
(acquisitions)
Decreases
(disposals)
Translation
adjustments
Other
movements
31/12/2019
PROPERTY, PLANT AND EQUIPMENT
USED IN OPERATIONS
Gross amount
8,466
9,968
(190)
769
(575)
56
221
10,249
Depreciation and impairment
(4,397)
(4,451)
129
(707)
461
(25)
(58)
(4,651)
CARRYING AMOUNT
4,069
5,517
(61)
62
(114)
31
163
5,598
INTANGIBLE ASSETS
Gross amount
6,985
6,926
697
586
(411)
11
(1)
7,808
Depreciation and impairment
(4,698)
(4,644)
80
(442)
390
(6)
(23)
(4,645)
CARRYING AMOUNT
2,287
2,282
777
144
(21)
5
(24)
3,163
(1)
Right of use impact recognised in First Time Application of the IFRS 16 standard.
(2)
Essentially related to the entries of Agos S.p.A and Santander Securities Services S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
526
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.16
GOODWILL
(in millions of euros)
31/12/2019
gross
31/12/2019
net
Increases
(acquisitions)
Decreases
(divestments)
Impairment
losses during
the period
Translation
adjustments
Other
movements
31/12/2020
gross
31/12/2020
net
Asset Gathering
6,908
6,908
335
-
-
(50)
-
7,192
7,193
of which insurance
1,214
1,214
-
-
-
-
-
1,213
1,214
of which asset
management
(1)
4,868
4,868
335
-
-
(51)
-
5,152
5,152
of which international
wealth management
826
826
-
-
-
1
-
827
827
French
Retail Banking – LCL
5,263
4,161
-
-
-
-
-
5,263
4,161
International Retail
Banking
3,239
1,698
-
-
(903)
(3)
-
3,208
792
of which Italy
(3)
2,872
1,660
-
-
(903)
-
-
2,871
757
of which Poland
221
-
-
-
-
-
-
207
-
of which Ukraine
39
-
-
-
-
-
-
38
-
of which other countries
97
38
-
-
-
(3)
-
92
35
Specialised Financial
Services
2,819
1,128
47
(55)
-
(1)
-
2,810
1,119
of which Consumer finance
(excl. Agos)
(2)
1,694
956
25
(55)
-
-
-
1,664
926
of which Consumer
finance-Agos
672
103
-
-
-
-
-
672
103
of which Factoring
(4)
453
69
22
-
-
(1)
-
474
90
Large Customers
2,610
1,385
17
-
-
(1)
(7)
2,620
1,394
of which Corporate and
investment banking
1,711
486
-
-
-
(1)
-
1,711
485
of which Asset servicing
899
899
17
-
-
-
(7)
909
909
Corporate Centre
-
-
-
-
-
-
-
-
-
TOTAL
20,839
15,280
400
(55)
(903)
(55)
(7)
21,093
14,659
Group share
18,959
13,570
289
(55)
(778)
(39)
(29)
19,096
12,957
Non-controlling interests
1,880
1,710
111
-
(125)
(16)
22
1,997
1,702
(1)
Goodwill of €335 million at 31 December 2020 following the acquisition of Sabadell Asset Management by the Amundi group.
(2)
Goodwill of €25 million at 31 December 2020 following the additional acquisition of Menafinance shares by Crédit Agricole Consumer Finance Group, resulting in a change in consolidation method
from equity-accounted to full consolidation.
(3)
Following the annual valuation tests of the goodwill recorded in its balance sheet during the fourth quarter of 2020, CA Italia recognised an impairment of €903 million at 31 December 2020.
(4)
Goodwill of €21 million at 31 December 2020 following the acquisition of Hama POLSKA by Crédit Agricole Leasing & Factoring Group.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
527
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Determining the value in use of the CGUs
Goodwill was subject to impairment tests based on the assessment of the
value in use of the Cash Generating Units (CGU) with which it is associated.
Determining the value in use was based on discounting the CGUs’ estimated
future cash flows calculated from activities forecasts over a period over three
years (2021-2023) developed for Group management purposes, extrapolated
over a fourth and fifth year in order to merge towards a standardized final
year integrating the catch-up effects expected after COVID.
Following the evolution of the health situation, the economic scenario
serving as a basis for projected financial trajectories was adjusted. However,
this remains particularly difficult this year because it depends on how the
pandemic evolves, which is still very uncertain.
This scenario is based on an economy heavily impacted by the health crisis
in 2020 which resulted in a significant drop in GDP. Business was strongly
impacted for almost nine months by periods when entire sections of the
economy were brought to a standstill alternating with phases of partial
recovery when health constraints were relaxed. The scenario assumes that
the epidemic will persist in 2021, prolonging this alternation of restrictions
and short periods of confinement and lifting of constraints during the
first half of the year, but exerting a less violent impact and penalizing the
economy less than in 2020 through better control of the epidemic, less
severe restrictions on mobility and production and a generally well preserved
productive system. It assumes a gradual and moderate recovery in 2021: i)
linked to controlling the spread of the virus through vaccination campaigns,
ii) yet limited due to the behaviour of agents who will likely remain more
cautious (precautionary savings, postponement of investments) and due
to the aftermath of the crisis (rise in unemployment, rise in bankruptcies).
Against this backdrop, the growth forecasts are moderately dynamic for
2021 with a very low level of expected inflation.
States will continue to implement policies to support the economy in order
to limit damage to the productive apparatus and the labour market, and
launch recovery plans to stimulate investment and support household
consumption. However, certain sectors will remain weakened and subject
to certain restrictions including automotive, commerce, tourism, hotels,
restaurants, culture, etc.
To stimulate growth and inflation, while preserving financial stability, central
banks will gradually move towards accommodating monetary policies that
maintain interest rates at a low level for an extended period of time, negative
even for short-term Euro rates. In Europe, asset purchase programmes
should help avoid fragmentation (limiting the widening of spreads).Under
these conditions, the prospect of a rise in interest rates appears to be
more distant than previously anticipated, this having a more significant
impact on International CGU Retail Banking – Italy, whose sensitivity to
these changes is more marked.
As of 31 December 2020, perpetual growth rates, discount rates and capital allocated rates as a proportion of risk-weighted assets were distributed by
business lines as shown in the table below:
In 2020 (for Crédit Agricole S.A. fully consolidated entities)
Perpetual growth rates
Discount rates
Capital allocated
French Retail Banking – LCL
2.0%
7.6%
8.8%
International Retail Banking – Italy
2.0%
8.8%
9.0%
International Retail Banking – Others
5.0%
17.0%
9.5%
Specialised Financial Services
(1)
2.0%
7.6% to 9.3%
8.8% to 9.1%
Asset Gathering
2.0%
7.6% to 8.5%
8.9% to 9.1%
80% of the solvency
margin (Insurance)
Large Customers
2.0%
8% to 9.4%
8.9%
(1)
The Consumer Credit CGU (excluding Agos) now excludes Crédit Agricole Consumer Finance NL which was classified under IFRS 5 “assets held for sale” last September, resulting in an impairment of
the
CGU's goodwill in the amount of €55 million.
The increase by the European Central Bank (ECB) of regulatory prudential
requirements under Pillar 1 and Pillar 2 with effect from 2016 led
Crédit Agricole S.A. progressively to raise the level of capital allocated to
CGUs as a percentage of risk-weighted assets for certain entities. Last
year this allowance was between 9.50% and 9.75% of weighted uses
for all CGUs including counter-cyclical buffers, a rate to which the various
applicable contra-cyclical buffers should be added, in particular the one
that the High Council for Financial Stability (HCSF) had set up in France.
Following the health crisis, the High Council for Financial Stability in its
decision of 18 June 2020, announced the elimination of certain counter-
cyclical buffers. The European Central Bank also announced the early
application of article 104a of CRD 5 which authorizes the coverage of
requirements Pillar 2 (P2R) with 56.25% of CET1 capital, thus reducing the
CET1 requirement for Crédit Agricole S.A. by 66 basis points in both P2R and
P2G. Due to a higher P2R requirement in Italy, this gain is 77 basis points
for the International Retail Banking CGT – Italy. Certain counter-cyclical
cushions imposed by foreign supervisors have also been reduced to zero.
Compared to the previous year all of these measures lead to a reduction
in the allocation of CET1 capital of between 77 and 115 bp, depending
on the CGU considered.
Valuation parameters, in particular the discount rates, were updated to
31 December 2020.
Perpetual growth rates as of 31 December 2020 remain unchanged from
those used as of 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
528
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Sensitivity of the valuation of CGUs to the main valuation parameters
The sensitivity of the value in use of the CGUs comprising each of the major business segments to the variation of certain valuation parameters is
presented in the following table:
In 2020
Sensitivity to
capital allocated
Sensitivity to
discount rates
Sensitivity to cost of
risk in the final year
Sensitivity to the
cost/income ratio
in the final year
+100 bp
-50 bp
+50 bp
-10%
+10%
-100 bp
+100 bp
French Retail Banking – LCL
(2.1%)
+8.8%
(7.3%)
+2.7%
(2.7%)
+3.1%
(3.1%)
International Retail Banking – Italy
(5.4%)
+6.4%
(5.5%)
+3.6%
(3.6%)
+2.7%
(2.7%)
International Retail Banking – Others
(2.6%)
+3.9%
(3.6%)
+0.6%
(0.6%)
+1.4%
(1.4%)
Specialised Financial Services
(2.1%)
+9.8%
(8.3%)
+7.7%
(7.7%)
+3.6%
(3.6%)
Asset Gathering
(0.7%)
+8.6%
(7.3%)
NS
NS
+1.4%
(1.4%)
Large Customers
(8.7%)
+7.8%
(6.8%)
+1.1%
(1.1%)
+2.3%
(2.3%)
Sensitivity analysis have been conducted on goodwill – Group share with
variations of the main parameters of valuation applied uniformly for all CGU.
These tests show that only the International Retail Banking – Italy CGU
whose value in use is just equal to the consolidated value after impairment,
is sensitive to degradations in the model parameters.
With regard to financial parameters, the sensitivity scenarios tested
would lead to the identification of an impairment charge only for the
International Retail Banking – Italy CGU. In fact:
-
a change of +50 basis points in the discount rates would result
in an additional impairment charge of around €210 million on the
International Retail Banking CGU – Italy. Regarding the Retail Banking
CGU in France – LCL, the difference would remain positive at around
€370 million.
Note that a +100 basis point change in discount rates would result
in an impairment charge of €340 million for Retail Banking CGU in
France – LCL; For the International Retail Banking – Italy CGU, the
additional requirement would be €400 million;
-
a change of +100 basis points in the level of equity allocated to
banking CGUs would lead to a need for additional depreciation of
around €210 million on the International Retail Banking CGU – Italy
and would result in no need for depreciation for the other CGUs.
With regard to operational parameters:
-
the simulated deterioration assumptions, namely a scenario of a +10%
increase in the cost of risk in the last year of the projection and that of
a +100 basis point change in the cost-to-income ratio for the same
year, would not result in a negative difference between value in use
and the carrying amount for any CGUs other than International Retail
Banking – Italy: the scenario of a +100 basis point change of the
cost-to-income ratio in the final year of projection would result in a
negative difference of about €110 million between value in use and
consolidated value, whereas in the case of a +10% change in the cost
of risk in the final year, this difference would be around €140 million.
6.17
INSURANCE COMPANY TECHNICAL RESERVES
Breakdown of insurance technical reserves
(in millions of euros)
31/12/2020
Life
Non-Life
International
Creditor
TOTAL
Insurance contracts
215,228
6,802
24,857
2,066
248,953
Investment contracts with discretionary profit-sharing
67,321
-
16,155
-
83,476
Investment contracts without discretionary profit-sharing
2,608
-
1,637
-
4,245
Deferred participation benefits (liability)
25,556
-
1,284
-
26,840
Other technical reserves
-
-
-
-
-
Total Technical reserves
310,713
6,802
43,933
2,066
363,514
Deferred participation benefits (asset)
-
-
-
-
-
Reinsurer's share of technical reserves
(1,255)
(617)
(73)
(351)
(2,296)
NET TECHNICAL RESERVES
309,458
6,185
43,860
1,715
361,218
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
529
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
(in millions of euros)
31/12/2019
Life
Non-Life
International
Creditor
TOTAL
Insurance contracts
208,188
6,092
24,167
2,005
240,452
Investment contracts with discretionary profit-sharing
70,161
-
15,284
-
85,445
Investment contracts without discretionary profit-sharing
2,420
-
1,694
-
4,114
Deferred participation benefits (liability)
25,824
-
763
-
26,587
Other technical reserves
-
-
-
-
-
Total Technical reserves
306,593
6,092
41,909
2,005
356,599
Deferred participation benefits (asset)
-
-
-
-
-
Reinsurer's share of technical reserves
(1,151)
(579)
(86)
(280)
(2,096)
NET TECHNICAL RESERVES
305,442
5,513
41,823
1,725
354,503
Reinsurers’ share in technical reserves and other insurance liabilities is recognised under “Accruals, prepayments and sundry liabilities”. The breakdown
of insurance company technical reserves is presented before elimination of issues in euro and in units of account subscribed by insurance companies.
Deferred policyholders’ profit sharing, before tax, at 31 December 2020 and 31 December 2019 breaks down as follows:
Deferred participation benefits before tax
(in millions of euros)
31/12/2020
31/12/2019
Net deferred
participation benefits
Net deferred
participation benefits
Deferred participation on revaluation of financial assets at fair value through other
comprehensive income and hedging derivatives
(22,768)
(22,550)
of which deferred participation on revaluation of financial assets at fair value
through other comprehensive income
(1)
(23,371)
(23,322)
of which deferred participation hedging derivatives
603
772
Deferred participation on financial assets at fair value through profit or loss adjustement
(1,611)
(1,783)
Other deferred participation
(2,461)
(2,254)
TOTAL PRE-TAX OTHER DEFERRED PARTICIPATION BENEFITS
(26,840)
(26,587)
(1)
See Note 6.4 “Assets at fair value through other comprehensive income”.
6.18
PROVISIONS
(in millions of euros)
31/12/2019
Changes
in scope
Additions
Reversals,
amounts
used
Reversals,
amounts
not used
Translation
adjustments
Other
movements
31/12/2020
Home purchase schemes risks
367
-
78
-
-
-
-
445
Execution risks of commitments
by signature
910
2
815
(17)
(769)
(28)
(4)
909
Operational risks
103
-
53
(23)
(15)
(2)
(16)
100
Employee retirement and similar
benefits
(1)
1,667
-
159
(125)
(89)
(5)
89
1,696
Litigation
607
-
66
(55)
(29)
(3)
(3)
583
Equity investments
-
-
-
-
-
-
-
-
Restructuring
33
-
7
(3)
(9)
-
(1)
27
Other risks
677
-
148
(56)
(232)
(3)
(97)
437
TOTAL
4,364
2
1,326
(279)
(1,143)
(41)
(32)
4,197
(1)
Of which €1,350 million for post-employment benefits under defined-benefit schemes, as detailed in Note 7.4, including €149 million for the provision for long-service awards.
At 31 December 2020, employee retirement and similar benefits included €71 million (€103 million at 31 December 2019) of provisions arising from
social costs of the adaptation plans. The provision for restructuring includes the non-social costs of those plans.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
530
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
(in millions of euros)
31/12/2018
01/01/2019
(1)
Changes
in scope
Additions
Reversals,
amounts
used
Reversals,
amounts
unused
Translation
adjustments
Other
movements
31/12/2019
Home purchase schemes risks
245
245
-
122
-
-
-
-
367
Execution risks of commitments
by signature
872
872
-
776
(41)
(710)
8
5
910
Operational risks
68
68
-
35
(11)
(9)
-
20
103
Employee retirement
and similar benefits
1,709
1,709
(5)
151
(226)
(87)
8
117
1,667
Litigation
2,132
521
2
52
(39)
(27)
2
96
607
Equity investments
1
1
-
2
(1)
(2)
-
-
-
Restructuring
24
24
2
12
(2)
(1)
-
(2)
33
Other risks
758
758
3
132
(72)
(120)
-
(24)
677
TOTAL
5,809
4,198
2
1,282
(392)
(956)
18
212
4,364
(1)
Reclassification of provisions for tax risks relating to income tax from “Provisions” to “Current and deferred tax liabilities” at 1 January 2019 for €1,611 million.
Inquiries and requests for regulatory
information
The main files linked to inquiries and requests for regulatory information are:
Strauss/Wolf/Faudem
US citizens and members of their families who were victims of terrorist
attacks attributed to Hamas and committed in Israel between 2001 and
2004 have brought proceedings against Crédit Lyonnais and another bank
before a New York court.
They claim that these banks gave support to terrorists as they each kept
an account opened (in 1990 in the case of Crédit Lyonnais) by a charity
providing aid to Palestinians. The plaintiffs allege that the account was used
to transfer funds to Palestinian entities accused of financing Hamas. The
plaintiffs, who have not put a figure on the damages they have suffered,
are claiming compensation for “injury, anguish and emotional pain”.
As the matter and the proceedings currently stand, the plaintiffs have not
provided proof that the charity was actually linked to terrorists, nor that
Crédit Lyonnais was aware that its client could have been involved (if it were
to be proven) in financing terrorism. The Court nonetheless demanded that
this be demonstrated by the plaintiffs if they are to win their case. Crédit
Lyonnais vigorously denies the plaintiffs’ allegations.
Under a ruling made on 28 February 2013, the judge issued a Summary
Judgement referring Crédit Lyonnais and the plaintiffs to a jury trial on
the merits.
In February 2018, Crédit Lyonnais filed a new motion for a summary
judgement based on a recent case-law so that the plaintiffs’ claims can
be dismissed without such a jury trial.
On January 2019 the plaintiffs tried to modify their briefs in order to add
new plaintiffs before their action be time-barred. The judge refused this
request and two new actions (Fisher and Miller) have been filed before the
same court as the one in charge of the procedures Strauss/Wolf. They are
similar to the pending actions, their legal analysis are identical and their
result will depend on the outcome of the motion for a summary judgement
filed by Crédit Lyonnais in February 2018. From a procedural standpoint
they will remain outstanding until then.
On 31 March 2019 the court upheld in its entirety the “motion for summary
judgement” filed by Crédit Lyonnais in February 2018. It considered that
no reasonable jury could find in favour of the plaintiffs and dismissed all
their claims. The plaintiffs appealed against this decision.
CIE case (Cheque Image Exchange)
In March 2008, LCL and Crédit Agricole S.A. and ten other banks were
served notice of grievances on behalf of the
Conseil de la concurrence
i.e.
the French Competition Council (now the
Autorité de la concurrence
).
They are accused of colluding to implement and apply interchange fees
for cashing cheques, since the passage of the Cheque Image Exchange
system,
i.e.
between 2002 and 2007. In the opinion of the
Autorité de la
concurrence,
these fees constitute anti-competitive price agreements
in the meaning of Articles 81 paragraph 1 of the treaty establishing the
European Community and Article L.420-1 of the French Commercial Code,
and allegedly caused damage to the economy.
In their defence, the banks categorically refuted the anticompetitiveness
of the fees and contested the legality of the proceedings.
In a decision published on 20 September 2010, the
Autorité de la
concurrence
stated that the Cheque Image Exchange fee (CEIC) was
anti-competitive by its very aim and that it artificially increased the costs
borne by remitting banks, which resulted in an unfavourable impact on
the prices of banking services. Concerning one of the fees for related
services, the fee for cancellation of wrongly cleared transactions (AOCT),
the
Autorité de la concurrence
called on the banks to revise their amount
within six months of the notification of the decision.
The accused banks were sanctioned for an overall amount of €384.92 million.
LCL and Crédit Agricole were respectively sentenced to pay €20.7 million
and €82.1 million for the CEIC and €0.2 million and €0.8 million for the AOCT.
All of the banks appealed the decision to the Paris Court of Appeal. By a
decree of 23 February 2012, the Court overruled the decision, stating that
the
Autorité de la concurrence
had not proven the existence of competition
restrictions establishing the agreement as having an anti-competitive
purpose.
The
Autorité de la concurrence
filed an appeal with the Supreme Court
on 23 March 2012.
On 14 April 2015, the French Supreme Court
(Cour de cassation)
overruled
the Paris Court of Appeal’s decision dated 23 February 2012 and remanded
the case to the Paris Court of Appeal with a change in the composition of
the Court on the sole ground that the Paris Court of Appeal declared the
UFC-Que Choisir and ADUMPE’s interventions in the proceedings devoid
of purpose without having considered their arguments.
The Supreme Court did not rule on the merits of the case and Crédit Agricole
has brought the case before the Paris Court of Appeal.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
531
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
The Paris Court of Appeal issued a decree on 21 December 2017. It confirmed
the decision of the
Autorité de la concurrence
dated 20 September 2010
but reduced from €82,940,000 to €76,560,000 the sanction on Crédit
Agricole. LCL’s sanction remains unchanged, at an amount of €20,930,000.
As well as the other banks parties to this procedure, LCL and Crédit Agricole
filed an appeal with the Supreme Court.
On 29 January 2020, the French Supreme Court
(Cour de cassation)
overruled the Paris Court of Appeal’s decision dated 21 December 2017
and referred the case to the same Court with a different composition on the
ground that the Paris Court of Appeal had not characterized the existence
of restrictions of competition by object.
Office of Foreign Assets Control (OFAC)
In October 2015, Crédit Agricole S.A. and its subsidiary Crédit Agricole
Corporate and Investment Bank (Crédit Agricole CIB) reached agreements
with the US and New York authorities that had been conducting investigations
regarding US dollar transactions with countries subject to US economic
sanctions. The events covered by this agreement took place between
2003 and 2008.
Crédit Agricole CIB and Crédit Agricole S.A., which cooperated with the
US and New York authorities in connection with their investigations, have
agreed to pay a total penalty amount of $787.3 million (
i.e.
€692.7 million).
The payment of this penalty has been allocated to the pre-existing reserve
that had already been taken and, therefore, has not affected the accounts
for the second half of 2015.
The agreements with the Board of Governors of the Federal Reserve System
(Fed) and the New York State Department of Financial Services (NYDFS)
are with CASA and Crédit Agricole CIB. The agreement with the Office of
Foreign Assets Control (OFAC) of the US Department of the Treasury is with
Crédit Agricole CIB. Crédit Agricole CIB also entered into separate deferred
prosecution agreements (DPAs) with the United States Attorney’s Office for
the District of Columbia (USAO) and the District Attorney of the County of
New York (DANY), the terms of which are three years. On 19 October 2018
the two deferred prosecution agreements with USAO and DANY ended at
the end of the three year period, Crédit Agricole CIB having complied with
all its obligations under the DPAs.
Crédit Agricole continues to strengthen its internal procedures and its
compliance programs regarding laws on international sanctions and will
continue to cooperate fully with the US and New York authorities with its
home regulators, the European Central Bank and the French Regulatory
and Resolution Supervisory Authority (ACPR), and with the other regulators
across its worldwide network.
Pursuant to the agreements with NYDFS and the US Federal Reserve, Crédit
Agricole’s compliance program is subject to regular reviews to evaluate its
effectiveness, including a review by an independent consultant appointed
by NYDFS for a term of one year and annual reviews by an independent
consultant approved by the Federal Reserve.
Euribor/Libor and other indexes
Crédit Agricole S.A. and its subsidiary Crédit Agricole CIB, in their capacity
as contributors to a number of interbank rates, have received requests for
information from a number of authorities as part of investigations into: (i)
the calculation of the Libor (London Interbank Offered Rates) in a number
of currencies, the Euribor (Euro Interbank Offered Rate) and certain other
market indices; and (ii) transactions connected with these rates and indices.
These demands covered several periods from 2005 to 2012.
As part of its cooperation with the authorities, Crédit Agricole S.A. and
its subsidiaries Crédit Agricole CIB carried out investigations in order
to gather the information requested by the various authorities and in
particular the American authorities – the DOJ (Department of Justice)
and CFTC (Commodity Future Trading Commission) – with which they are
in discussions. It is currently not possible to know the outcome of these
discussions, nor the date when they will be concluded.
Furthermore, Crédit Agricole CIB is currently under investigation opened by
the Attorney General of the State of Florida on both the Libor and the Euribor.
Following its investigation and an unsuccessful settlement procedure, on
21 May 2014, the European Commission sent a statement of objection to
Crédit Agricole S.A. and to Crédit Agricole CIB pertaining to agreements or
concerted practices for the purpose and/or effect of preventing, restricting
or distorting competition in derivatives related to the Euribor.
In a decision dated 7 December 2016, the European Commission jointly fined
Crédit Agricole S.A. and Crédit Agricole CIB €114,654,000 for participating
in a cartel in euro interest rate derivatives. Crédit Agricole S.A. and Crédit
Agricole CIB are challenging this decision and have asked the European
Court of Justice to overturn it.
Additionally, the Swiss competition authority, COMCO, is conducting
an investigation into the market for interest rate derivatives, including
the Euribor, with regard to Crédit Agricole S.A. and several Swiss and
international banks. This investigation was closed following a transaction,
under the terms of which Crédit Agricole S.A. agreed to pay a penalty of
CHF 4,465,701 and procedural costs in the amount of CHF 187,012, without
any acknowledgement of guilt.
Moreover, in June 2016 the South Korean competition authority (KFTC)
decided to close the investigation launched in September 2015 into
Crédit Agricole CIB and the Libor index on various currencies, Euribor and
Tibor indices. The investigation into certain foreign exchange derivatives
(ABS-NDF) has been closed by the KFTC according to a decision notified
to Crédit Agricole CIB on 20 December 2018.
Concerning the two class actions in the United States of America in which
Crédit Agricole S.A. and Crédit Agricole CIB have been named since 2012
and 2013 along with other financial institutions, both as defendants in
one (“Sullivan” for the Euribor) and only Crédit Agricole S.A. as defendant
for the other (“Lieberman” for Libor), the “Lieberman” class action is at
the preliminary stage that consists in the examination of its admissibility;
proceedings are still suspended before the US District Court of New York
State. Concerning the “Sullivan” class action, Crédit Agricole S.A. and
Crédit Agricole CIB introduced a motion to dismiss the applicants’ claim.
The US District Court of New York State upheld the motion to dismiss
regarding Crédit Agricole S.A. and Crédit Agricole CIB in first instance. On
14 June 2019, the plaintiffs appealed this decision.
Since 1 July 2016, Crédit Agricole S.A. and Crédit Agricole CIB, together
with other banks, are also party to a new class action suit in the United
States (“Frontpoint”) relating to the Sibor (Singapore Interbank Offered Rate)
and SOR (Singapore Swap Offer Rate) indices. After having granted a first
motion to dismiss filed by Crédit Agricole S.A. and Crédit Agricole CIB, the
New York Federal District Court, ruling on a new request by the plaintiffs,
excluded Crédit Agricole S.A. from the Frontpoint case on the grounds that it
had not contributed to the relevant indexes. The Court considered, however,
taking into account recent developments in case law, that its jurisdiction
could apply to Crédit Agricole CIB, as well as to all the banks that are
members of the Sibor index panel. The allegations contained in the complaint
regarding the Sibor/USD index and the SOR index were also rejected by
the court, therefore the index Sibor/Singapore dollar alone is still taken
into account. On 26 December 2018, the plaintiffs filed a new complaint
aimed at reintroducing into the scope of the Frontpoint case the alleged
manipulations of the Sibor and SOR indexes that affected the transactions in
US dollars. Crédit Agricole CIB, alongside the other defendants, objected to
this new complaint at the hearing held on 2 May 2019 before the New York
Federal District Court. On July 26, 2019, the Federal Court granted the
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
532
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
defendants’ motion to dismiss. The plaintiffs filed a notice of appeal on
August 26, 2019.
These class actions are civil actions in which the plaintiffs claim that
they are victims of the methods used to set the Euribor, Libor, Sibor and
SOR rates, and seek repayment of the sums they allege were unlawfully
received, as well as damages and reimbursement of costs and fees paid.
Banque Saudi Fransi
Crédit Agricole Corporate Investment Bank (Crédit Agricole CIB) had received
in 2018 a request for arbitration submitted by Banque Saudi Fransi (BSF)
before the International Chamber of Commerce (ICC). The dispute related
to the performance of a technical services agreement between BSF and
Crédit Agricole CIB that is no longer in force. BSF had quantified its claim
at SAR 1,023,523,357, the equivalent of about €242 million. Crédit Agricole
CIB and BSF have entered into an agreement effectively ending the ICC
arbitration proceedings. This agreement has no significant impact on Crédit
Agricole CIB’s Financial Statements.
SSA Bonds
Several regulators made requests of information to Crédit Agricole S.A. and
to Crédit Agricole CIB for investigations relating to activities of different
banks involved in the secondary trading of SSA bonds (Supranational,
Sub-Sovereign and Agencies) denominated in American dollars. Through the
cooperation with these regulators, Crédit Agricole CIB proceeded to internal
inquiries to gather the required information available. On 20 December 2018,
the European Commission issued a Statement of Objections to a number
of banks including Crédit Agricole S.A. and Crédit Agricole CIB within its
inquiry on a possible infringement of rules of European Competition law
in the secondary trading of Bonds SSA denominated in American dollars.
Crédit Agricole S.A. and Crédit Agricole CIB became aware of these
objections and issued a response on 29 March 2019, followed by an oral
hearing on 10-11 July 2019.
Crédit Agricole CIB is included with other banks in a putative consolidated
class action before the United States District Court for the Southern District
of New York. That action was dismissed on 29 August 2018 on the basis
that the plaintiffs failed to allege an injury sufficient to give them standing.
However the plaintiffs have been given an opportunity to attempt to remedy
that defect. The plaintiffs filed an amended complaint on 7 November 2018.
Crédit Agricole CIB as well as the other defendants have filed motions
to dismiss the amended complaint. As regards Crédit Agricole CIB, the
complaint was ruled inadmissible on 30 September 2019 for lack of
jurisdiction of the New York court and, in a subsequent decision, the Court
ruled that the plaintiffs had in any event failed to establish a violation of
US antitrust law. In June 2020 the plaintiffs appealed these two decisions.
On 7 February 2019, another class action was filed against Crédit Agricole CIB
and the other defendants named in the class action already pending before
the United States District Court for the Southern District of New York. In
July 2020 the plaintiffs voluntarily halted the class action but it may be
taken up again.
On 11 July 2018, Crédit Agricole S.A. and Crédit Agricole CIB were notified
with other banks of a class action filed in Canada, before the Ontario
Superior Court of Justice. Another action was filed the same day in Federal
Court. The action in the Ontario Superior Court of Justice was dismissed
on 19 February 2020.
It is not possible at this stage to predict the outcome of these investigations,
proceedings or class actions or the date on which they will end.
O’Sullivan and Tavera
On 9 November 2017, a group of individuals, (or their families or estates),
who claimed to have been injured or killed in attacks in Iraq filed a complaint
(“O’Sullivan I”) against several banks including Crédit Agricole S.A., and
its subsidiary Crédit Agricole Corporate Investment Bank (Crédit Agricole
CIB), in US Federal District Court in New-York.
On 29 December 2018, the same group of individuals, together with
57 new plaintiffs, filed a separate action (“O’Sullivan II”) against the same
defendants.
On 21 December 2018, a different group of individuals filed a complaint
(“Tavera”) against the same defendants.
All three complaints allege that Crédit Agricole S.A., Crédit Agricole CIB,
and other defendants conspired with Iran and its agents to violate US
sanctions and engage in transactions with Iranian entities in violation of
the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism
Act. Specifically, the complaints allege that Crédit Agricole S.A., Crédit
Agricole CIB, and other defendants processed US dollar transactions on
behalf of Iran and Iranian entities in violation of sanctions administered
by the US Treasury Department’s Office of Foreign Assets Control, which
allegedly enabled Iran to fund terrorist organizations that, as is alleged,
attacked plaintiffs. The plaintiffs are seeking an unspecified amount of
compensatory damages.
On 2 March 2018, Crédit Agricole CIB and other defendants filed a motion
to dismiss the O’ Sullivan I Complaint. On 28 March 2019, the Court granted
defendants’ motion to dismiss. On 22 April 2019, the plaintiffs filed a
motion to amend their complaint. Defendants submitted an opposition to
that motion on 20 May 2019 and plaintiffs filed a reply on 10 June 2019.
On 25 February 2020 the plaintiffs’ motion to amend their complaint was
denied and their original complaint dismissed with prejudice.
On 28 May 2020, the plaintiffs filed a new motion for a final decision with
right of appeal. On 11 June 2020, the defendants opposed this motion
and on 18 June 2020 the plaintiffs responded. The Tribunal has yet to
rule on the petition.
Italian Competition Authority
(“Crédit Agricole Consumer Finance”) and its subsidiary FCA Bank
S.p.A. received – together with several other banks and certain car
manufacturers – a statement of objections from the
Autorità garante della
concorrenza e del mercato
(Italian Competition Authority). It was alleged in
this statement of objections that several banks offering financing solutions
for vehicles commercialized by certain car manufacturers have restricted
competition as a result of certain exchanges of information, in particular
within two professional associations.
In a decision notified on 9 January 2019 the
Autorità garante della
concorrenza e del mercato
considered that FCA Bank S.p.A. had participated
in this alleged infringement and this infringement was also attributable to
Crédit Agricole Consumer Finance.
FCA Bank S.p.A. has been fined €178.9 million. FCA Bank S.p.A. and
Crédit Agricole Consumer Finance appealed this decision with the Regional
Administrative Court (TAR) of Lazio. On 4 April 2019, the TAR of Lazio issued
an interim relief order staying the execution of the obligation to pay the fine
imposed on FCA Bank S.p.A. subject to the provision by FCA Bank S.p.A.
of a guarantee covering the amount of the fine.
The Lazio TAR dismissed the decision of the
Autorità garante della
concorrenza e del mercato
in a judgment on 24 November 2020. On
23 December 2020, the
Autorità garante della concorrenza e del mercato
appealed this decision before the Italian Council of State.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
533
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Intercontinental Exchange, Inc. (“ICE”)
On 15 January 2019 a class action (“Putnam Bank”) was filed before a
federal court in New York (US District Court Southern District of New York)
against the Intercontinental Exchange, Inc. (“ICE”) and a number of banks
including Crédit Agricole S.A., Crédit Agricole CIB and Crédit Agricole
Securities-USA. This action has been filed by plaintiffs who allege that
they have invested in financial instruments indexed to the USD ICE Libor.
They accuse the banks of having collusively set the index USD ICE Libor
at artificially low levels since February 2014 and made thus illegal profits.
On 31 January 2019 a similar action (“Livonia”) has been filed before
the US District Court Southern District of New York, against a number
of banks including Crédit Agricole S.A., Crédit Agricole CIB and Crédit
Agricole Securities-USA. On 1 February 2019, these two class actions
were consolidated.
On 4 March 2019, a third class action (“Hawaii Sheet Metal Workers
retirement funds”) was filed against the same banks in the same court
and consolidated with the two previous actions on 26 April 2019. On
1 July 2019, the plaintiffs filed a “Consolidated Class Action Complaint”.
On 30 August 2019, the Defendants filed a motion to dismiss against this
consolidated complaint.
On 26 March 2020, the judge granted the defendants’ motion to dismiss.
On 14 June 2019, the plaintiffs appealed this decision.
On 30 November 2020, the plaintiffs’ lawyers informed the defendants
of the wish of the named plaintiffs to desist during the filing phase of the
briefs and on 1 December 2020 filed a request for a stay of proceedings
which the defendants opposed. On 7 December 2020, the court rejected
this request and the plaintiffs responded on 15 December 2020.
On 28 December 2020, DYJ Holdings Inc made a request to intervene to
replace the named plaintiffs. On 7 January 2021, the defendants objected
and also filed a motion to dismiss the appeal.
Crédit Agricole Consumer Finance Nederland B.V.
The conditions for the review of the interest rates of revolving loans marketed
by Crédit Agricole Consumer Finance Nederland BV, a fully owned subsidiary
of Crédit Agricole Consumer Finance S.A., and its subsidiaries are the
subject of borrowers’ claims relating to the criteria for revising these rates
and possible overpayments of interests.
On 21 January 2019, in two individual cases concerning two subsidiaries
of Crédit Agricole Consumer Finance Nederland BV, the Appeals Committee
of KIFID (the Financial Services Complaints Authority) in the Netherlands
decided that in case the consumers had no or insufficient information on the
specific factors that determine the interest rate, the individual interest rate
needed to follow the movement of market interest rates on consumer loans.
Crédit Agricole Consumer Finance Nederland BV implemented a compensation
plan for the benefit of the borrowers during 2020 which will take into
account the aforementioned decisions of KIFID.
CACEIS Germany
CACEIS Germany has received from the Bavarian tax authorities a request
for the reimbursement of taxes on dividends repaid to some of its customers
in 2010.
The request amounts to €312 million. In addition, CACEIS is requested to
pay €148 million late interest (calculated at a rate of 6% p.a.).
CACEIS Germany vigorously contests this request, which it regards as
completely unfounded. Moreover, CACEIS appealed on the merits and
has requested a suspension of execution of the payment order pending
a ruling in the substantive proceedings. A suspension of execution was
granted for the payment of the €148 million late interest but was dismissed
for the €312 million principal repayment requested. CACEIS has lodged
an appeal against this ruling. As the decision dismissing the appeal was
immediately enforceable, CACEIS made the €312 million payment and
considering the appeal proceedings in progress, recorded a receivable of
an equivalent amount.
Amundi – AMF procedure
Following an investigation conducted from 2017 to 2019, the
Autorité des
marchés financiers
(AMF) notified Amundi of grievances on 12 June 2020.
The grievances concern the management of certain transactions carried
out by two Amundi employees between 2014 and 2015. This file has
been transmitted to a reporting judge who will present his findings to the
Sanctions Commission upon completion of the investigation of the file.
Amundi is cooperating fully under this procedure. To date, no sanction
has been imposed on Amundi.
Home purchase savings plan provision
Deposits collected in home purchase savings accounts and plans during the savings phase
(in millions of euros)
31/12/2020
31/12/2019
HOME PURCHASE SAVINGS PLANS
Under 4 years old
6,398
6,407
Between 4 and 10 years old
52,627
48,251
Over 10 years old
48,490
49,359
Total home purchase savings plans
107,515
104,017
Total home purchase savings accounts
12,637
11,929
TOTAL DEPOSITS COLLECTED UNDER HOME PURCHASE SAVINGS CONTRACTS
120,152
115,946
Customer deposits outstanding, excluding government subsidies, are based on the carrying amount at the end of November 2020 for the financial
statements at 31 December 2020 and at the end of November 2019 for the financial statements at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
534
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Outstanding loans granted to holders of home purchase savings accounts and plans
(in millions of euros)
31/12/2020
31/12/2019
Home purchase savings plans
2
3
Home purchase savings accounts
12
18
TOTAL OUTSTANDING LOANS GRANTED UNDER HOME PURCHASE SAVINGS CONTRACTS
14
21
Provision for home purchase savings accounts and plans
(in millions of euros)
31/12/2020
31/12/2019
HOME PURCHASE SAVINGS PLANS
Under 4 years old
1
-
Between 4 and 10 years old
35
35
Over 10 years old
409
332
Total home purchase savings plans
445
367
Total home purchase savings accounts
-
-
TOTAL PROVISIONS FOR HOME PURCHASE SAVINGS CONTRACTS
445
367
(in millions of euros)
31/12/2019
Additions
Reversals
Other
movements
31/12/2020
Home purchase savings plans
367
78
-
-
445
Home purchase savings accounts
-
-
-
-
-
TOTAL PROVISIONS FOR HOME PURCHASE SAVINGS CONTRACTS
367
78
-
-
445
Age plan is determined based on the date of the midway point in the
generation of plans to which they belong.
All of the home purchase savings plans and accounts collected by the
Regional Banks are recognised at 100% as liabilities in the consolidated
financial statements of Crédit Agricole S.A.
Half of the amount of outstanding loans related to home purchase savings
plans and accounts is recognised by Crédit Agricole S.A. and the other half
by the Regional Banks in the tables above.
The amounts recognised under provisions represent the portion of risk
borne by Crédit Agricole S.A. and LCL.
Consequently, the ratio between the provision booked and the outstanding
amounts shown on Crédit Agricole S.A.’s balance sheet is not representative
of the level of provisioning for home purchase savings risk.
6.19
SUBORDINATED DEBT
(in millions of euros)
31/12/2020
31/12/2019
Dated subordinated debt
(1)
23,301
20,822
Undated subordinated debt
(2)
511
747
Mutual security deposits
179
167
Participating securities and loans
61
61
CARRYING AMOUNT
24,052
21,797
(1)
Includes issues of dated subordinated notes “TSR”.
(2)
Includes issues of deeply subordinated notes “TSR” and undated subordinated notes “TSDI”.
At 31 December 2020, outstanding deeply subordinated notes amounted
to €247 million compared to €472 million at 31 December 2019.
Debt notes issued by Crédit Agricole S.A. and hold by Insurance entities
of Crédit Agricole S.A. are eliminated for euro accounts.
They were eliminated for the portion backing unit-linked contracts with
financial risk borne by the policyholder.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
535
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Subordinated debt
The issue of subordinated debt plays a part in regulatory capital management
while contributing to refinancing all of Crédit Agricole S.A.’s operation.
The Capital Requirements Regulation and Directive CRD/CRR1 (as last
amended by Directive (EU) 2019/878, called CRD 5, and Regulation (EU)
2019/876 of 20 May 2019, called CRR2) define, among other things, the
conditions under which subordinated instruments qualify as regulatory
capital and set out the terms and conditions for the phase-out of old
instruments that do not meet these requirements, between 1 January 2014
(first effective date of the CRD Directive and the CRR Regulation) and
1 January 2022, and, for instruments issued before 27 June 2019 (date of
entry into force of the CRD V Directive and the CRR2 Regulation amending
CRD 4 and CRR), until 28 June 2025 and subject to certain criteria.
All subordinated debt issuance, whether new or old, is likely to be subject
to Bail-in in certain circumstances, particularly in the event of resolution
of the issuing bank, in accordance with applicable French law transposing
Directive 2014/59/EU of the European Parliament and of the Council on the
reorganisation and resolution of credit institutions and investment firms
of 15 May 2014 (as amended, inter alia, by Directive (EU) 2019/879 of
20 May 2019 on the loss-absorption capacity and recapitalisation of credit
institutions and investment firms) (the
“BRRD Directive”
).
The different types of subordinated debt issued by Crédit Agricole S.A. and
still outstanding are detailed below: these are undated deeply subordinated
notes and dated subordinated notes.
Deeply subordinated notes (TSS)
Crédit Agricole has issued several generations of undated deeply
subordinated notes, given the various regulations and legislation applicable
at the time of their issuance.
The common feature of these securities is that they are all issued for an
indefinite period of time. They may be redeemed under the conditions that
are contractually defined, subject to certain specific conditions related in
particular to their original eligibility as Tier 1 equity.
New issuances of TSS are only made on international markets for institutional
investors under English, French or State of New York (United States) law.
TSS differ from other debt securities by virtue of their ranking in liquidation
(principal and interest) contractually defined by their deep subordination
clause, which refers explicitly to applicable French law, depending on the
date on which they were issued.
Dated subordinated notes (TSR)
and contingent capital securities
Dated subordinated notes (TSR) issued by Crédit Agricole S.A. are loans
with a fixed term (maturity). They may be redeemed prior to maturity under
the conditions that are contractually defined, subject to certain conditions
related in particular to their original eligibility as Tier 2 equity.
TSR are issued either on the French market under French law or on the
international markets under French, UK, State of New York (United States)
or Japanese law.
TSR differ from preferred or non-preferred senior bonds by virtue of
ranking in liquidation (principal and interest) contractually defined by
their subordination clause, which refers explicitly to applicable French
law, depending on the date on which they were issued (TSR are junior to
non-preferred and preferred senior bonds).
Early redemption as part of the conditions
for all subordinated note issues (TSR or TSS)
Depending on the conditions determined at the time of their issue, the
aforementioned TSR or TSS may be the subject of:
on-market or off-market buy-back transactions or through public takeover
bids or exchange offers subject to approval by the competent regulator
and/or supervisory authority, and/or at the initiative of Crédit Agricole S.A.,
in accordance with the contractual clauses applicable to each issuance;
the exercise of an early redemption option at the initiative of
Crédit Agricole S.A. (“call option”), under the conditions and subject to
approval by the competent regulator, where appropriate, at the times
defined by the contractual terms of the issue, in the event that the
issuance agreement for the securities contains such a clause.
Senior non-preferred debt issues
With the law on transparency, the fight against corruption and the
modernisation of the economy (also referred to as the “Sapin 2 Law”) of
10 December 2016, France created a new category of senior debt – senior
“non-preferred” debt – meeting the eligibility criteria of the TLAC and MREL
ratios (as they are presently defined) (codified in Articles L.613-30-3-I-4°
and R.613-28 of the French Monetary and Financial Code). This category
of debt is also covered in the BRRD Directive.
Senior non-preferred securities differ from senior preferred securities by
virtue of their ranking in liquidation contractually defined by reference to
Articles L.613-30-3-I-4° and R.613-28 of the French Monetary and Financial
Code referred to above (senior non-preferred securities are junior to senior
preferred securities and senior to subordinated securities [including the
TSS and TSR referred to above]).
The outstanding amount of senior non-preferred securities of
Crédit Agricole S.A. and Crédit Agricole Group thus stood at €24.1 billion
at 31 December 2020, compared to €18.5 billion in euro equivalent at
31 December 2019.
Covered bond-type issues
In order to increase the amount of medium and long-term financing, the
Group issues Covered Bonds through two subsidiaries in France, one
subsidiary in Italy and one subsidiary in Switzerland:
Crédit Agricole Home Loan SFH,
whose initial issue was launched in
January 2009. The total amount outstanding, in euro equivalent, was
€33 billion at 31 December 2020;
Crédit Agricole Public Sector SCF
, whose initial issue was launched in
October 2012. The total amount issued and outstanding was €4 billion
at 31 December 2020;
Crédit Agricole Italia
: the total amount issued and outstanding at
31 December 2020 was €10 billion in OBG (covered bonds), including
€1.750 billion held at 31 December 2020;
Crédit Agricole Nextbank
, the inaugural issuance of which was in
September 2020 for €184 million in euro equivalent.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
536
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.20 CAPITAL
Ownership structure at 31 December 2020
At 31 December 2020, to the knowledge of Crédit Agricole S.A., the distribution of capital and voting rights is as follows:
Shareholders
Number of
shares at
31/12/2020
% of the share
capital
% of voting
rights
SAS Rue La Boétie
1,612,517,290
55.29%
55.30%
Treasury shares
1,090,000
0.04%
-
Employees (ESOP)
169,020,958
5.79%
5.80%
Public
1,134,060,392
38.88%
38.90%
TOTAL
2,916,688,640
100.00%
100.00%
At 31 December 2020, Crédit Agricole S.A.’s share capital stood at
€8,750,065,920 divided into 2,916,688,640 fully paid up ordinary shares
each with a par value of €3.
SAS Rue La Boétie is wholly-owned by the Crédit Agricole Regional Banks.
Concerning Crédit Agricole S.A. stock, a liquidity agreement was signed
on 25 October 2006 with Crédit Agricole Cheuvreux S.A., purchased by
Kepler, and renamed Kepler Cheuvreux in 2013.
This agreement is automatically renewed every year. So that the operator
can conduct the operations stipulated in the agreement with complete
independence, and in accordance with the provisions of Regulations EU
596/2014 and 2016/908 and AMF Decision No. 2018-01, the agreement
has been allocated a maximum amount of €50 million.
To the Company’s knowledge, no other shareholder owns 5% or more of
the share capital or voting rights, either directly or indirectly or with others.
Earning per share
31/12/2020
31/12/2019
Net income Group share during the period
(in millions of euros)
2,692
4,844
Net income attributable to undated deeply subordinated securities
(in millions of euros)
(373)
(587)
Net income attributable to holders of ordinary shares
(in millions of euros)
2,319
4,257
Weighted average number of ordinary shares in circulation during the period
2,885,319,047
2,873,414,500
Adjustment ratio
1.000
1.000
Weighted average number of ordinary shares for calculation of diluted earnings per share
2,885,319,047
2,873,414,500
BASIC EARNINGS PER SHARE
(in euros)
0.804
1.482
Basic earnings per share from ongoing activities
(in euros)
0.880
1.495
Basic earnings per share from discontinued operations
(in euros)
(0.077)
(0.013)
DILUTED EARNINGS PER SHARE
(in euros)
0.804
1.482
Diluted earnings per share from ongoing activities
(in euros)
0.880
1.495
Diluted earnings per share from discontinued operations
(in euros)
(0.077)
(0.013)
Net income attributable to subordinated and deeply subordinated securities
corresponds to the issuance costs and interest accrued on subordinated
and deeply subordinated Additional Tier 1 bond issues. This amounts to
-€373 million at 31 December 2020.
Taking into consideration the change in the average price of the
Crédit Agricole S.A. share, all Crédit Agricole S.A. stock option plans are
non-dilutive.
In the absence of any dilutive issue by Crédit Agricole S.A., basic earnings
per share are identical to diluted earnings per share.
Dividends
For the 2020 financial year, Crédit Agricole S.A.’s Board of Directors’ meeting
of 10 February 2021 decided to recommend to the General Meeting of
Shareholders of 12 May 2021 the payment of a dividend of €0.80 per share.
The proposal is to offer each shareholder a choice of payment method for
the dividend – in cash or in new Crédit Agricole S.A. share(s). This choice
relates to the dividend in its entirety. The price of new shares cannot be
less than 90% of the weighted average of the prices listed in the 20 trading
days prior to the decision of the General Meeting, less the net amount of
the dividend.
Proposal in respect of the year
(in euros)
2020
2019
2018
2017
2016
Ordinary dividend
0,8
-
0.69
0.63
0.60
Loyalty dividend
N/A
N/A
N/A
0.693
0.660
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
537
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
Dividends paid during the reporting period
In accordance with the decision of the Crédit Agricole S.A. General Meeting
of 13 May 2020, all income for the 2019 financial year has been allocated
to reserves. There was no vote on a dividend distribution (see Note 2.1.5
“Decision regarding the 2019 dividend”).
Appropriation of net income
The proposed appropriation of net income is set out in the draft resolutions
to be presented by the Board of Directors at Crédit Agricole S.A.’s Combined
General Meeting on Tuesday 12 May 2021.
Crédit Agricole S.A. parent company posted positive net income of
€245,175,099.26 in the 2020 financial year.
The Board of Directors decided to propose that the combined General
Meeting of Shareholders agree:
to record that the profit for the financial year amounts to €245,175,099.26;
to allocate the amount of €9,599,978.40 to the legal reserve to bring it
up to 10% of the share capital, which amounts to €8,750,065,920.00;
to record that the distributable earnings amounts to €14,832,826,141.94,
taking into account retained earnings of €14,597,251,021.08;
to establish the amount of the regular dividend at €0.80 per share;
(1) This amount will be adjusted where appropriate to reflect the following events: (a) creation of new shares eligible for dividends before the ex-dividend date, (b) change in the
number of treasury shares at ex-dividend date.
to distribute the dividend paid out of distributable earnings in the amount
of €2,332,478,912.00
(1)
;
to allocate the undistributed balance of €12,500,347,229.94
(1)
to retained
earnings.
Undated subordinated and deeply
subordinated debt
At 31 December 2020, Crédit Agricole S.A. reviewed the accounting
treatment of coupons paid to investors relating to RT1 (Restricted Tier 1)
subordinated financial instruments issued by Crédit Agricole Assurances
(CAA) and subscribed by investors outside the Group.
Since the compensation of these instruments is classified as “cumulative”,
it is vested in the holders of those instruments, who are thus allocated a
portion of the income.
This has the following consequences:
coupons are allocated to non-controlling interests in the income statement
by deducting them from the Group share of income;
at the time of their payment, coupons are deducted from equity relating
to non-controlling interests.
The main issues of undated subordinated and deeply subordinated debt classified in shareholders’ equity Group share are:
Issue date
Currency
Amount in
currency at
31/12/2020
At 31/12/2020
Amount in
currency at
31/12/2019
Partial
repurchases
and redemptions
Amount in
euros at
inception rate
Cumulated
interests paid
Group share
Issuance costs
net of taxes
Shareholders’
equity Group
share
(in millions of units)
(in millions of units)
(in millions of units)
(in millions of euros)
(in millions of euros)
(in millions of euros)
(in millions of euros)
23/01/2014
USD
1,750
-
1,750
1,283
(827)
(8)
448
08/04/2014
GBP
500
-
500
607
(300)
(4)
303
08/04/2014
EUR
1,000
-
1,000
1,000
(436)
(6)
558
19/01/2016
USD
1,250
-
1,250
1,150
(440)
(8)
702
26/02/2019
USD
1,250
-
1,250
1,098
(121)
(7)
970
14/10/2020
EUR
-
750
750
(6)
(5)
739
Crédit Agricole S.A.
Issues
5,888
(2,130)
(38)
3,720
Insurance Issues
-
-
-
-
Issues subscribed
in-house:
Group share/Non
controlling interests
effect
-
89
-
89
Issues subscribed
by Crédit Agricole
CIB for currency
regulation
-
-
-
-
TOTAL
5,888
(2,041)
(38)
3,809
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
538
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
The main issues of undated subordinated and deeply subordinated debt classified in shareholder’s equity – Non controlling interests share (insurance) are:
Issue date
Currency
Amount in currency
at 31/12/2019
Partial repurchases
and redemptions
Amount in currency
at 31/12/2020
At 31/12/2020
Amount in euros
at inception rate
Income – Non
controlling interests
(in millions of units)
(in millions of units)
(in millions of units)
(in millions of euros)
(in millions of euros)
14/10/2014
EUR
745
-
745
745
(203)
13/01/2015
EUR
1,000
-
1,000
1,000
(213)
Insurance Issues
1745
(416)
TOTAL
1,745
(416)
Changes relating to undated subordinated and deeply subordinated debt affecting shareholders’ equity Group share are as follows:
(in millions of euros)
31/12/2020
31/12/2019
Undated deeply subordinated notes
Interests paid accounted as reserves
(368)
(395)
Changes in nominal amounts
754
123
Income tax savings related to interest paid to security holders recognised in net income
127
145
Issuance costs (net of tax) accounted as reserves
(5)
(7)
Other
-
(109)
Undated subordinated notes
Interests paid accounted as reserves
(1)
-
(76)
Changes in nominal amounts
-
-
Income tax savings related to interest paid to security holders recognised in net income
24
26
Issuance costs (net of tax) accounted as reserves
-
-
Other
-
-
(1)
Following the change in accounting method for RT1 coupons on 31 December 2020, these are now recognised in Net profit (loss) for the year attributable to minority interests.
As undated subordinated and deeply subordinated financial instruments are considered equity instruments issued, the tax effects on the compensation
paid are recognised as income tax in the income statement.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
539
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
6.21
NON-CONTROLLING INTERESTS
Information on significant non-controlling interests
The table below presents information on the consolidated subsidiaries and structured entities with significant non-controlling interests in relation to
the total equity of the Group or of the sub-group level or where the total balance sheet of the entities held by the non-controlling interests is significant.
(in millions of euros)
31/12/2020
% of voting rights
held by non-
controlling interests
% of ownership
interests held by
non-controlling
interests
Net income
allocated to
non-controlling
interests during the
reporting period
Accumulated
non-controlling
interests at the end
of the reporting
period
Dividends paid to
non-controlling
interests
Amundi Group
32%
32%
288
2,518
-
Crédit Agricole Italia Group
24%
24%
(71)
1,305
-
CACEIS Group
30%
30%
58
1,030
-
AGOS SPA
39%
39%
82
376
64
CA Égypte
40%
40%
26
145
23
Other entities
(1)
163
2,904
22
TOTAL
546
8,278
109
(1)
Of which €1,745 million related to the issuance of Additional
Tier 1 undated
subordinated bonds realised on 14 October 2014 and 13 January 2015 by Crédit Agricole Assurances, accounted
for in equity of non-controlling interests.
(in millions of euros)
31/12/2019
% of voting rights
held by non-
controlling interests
% of ownership
interests held by
non-controlling
interests
Net income
allocated to
non-controlling
interests during the
reporting period
Accumulated
non-controlling
interests at the end
of the reporting
period
Dividends paid to
non-controlling
interests
Amundi Group
31%
32%
294
2,186
180
Crédit Agricole Italia Group
24%
24%
83
1,379
40
CACEIS Group
30%
30%
-
1,010
2
AGOS SPA
39%
39%
104
363
106
CA Égypte
40%
40%
43
155
25
Other entities
(1)
89
2,828
23
TOTAL
612
7,921
376
(1)
Of which €1,745 million related to the issuance of Additional
Tier 1 undated
subordinated bonds realised on 14 October 2014 and 13 January 2015 by Crédit Agricole Assurances, accounted
for in equity of non-controlling interests.
Individual summary financial information on significant non-controlling interests
The table below presents summary information on subsidiaries with significant non-controlling interests for Crédit Agricole S.A. group on the basis of
the IFRS financial statements.
(in millions of euros)
31/12/2020
Total assets
Revenues
Net income
Net income
and other
comprehensive
income
Amundi Group
28,888
2,521
907
757
Crédit Agricole Italia Group
76,328
1,891
217
240
CACEIS Group
120,695
1,129
189
156
AGOS SPA
17,309
809
223
222
CA Égypte
2,704
197
66
65
TOTAL
245,924
6,547
1,602
1,440
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
540
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
(in millions of euros)
31/12/2019
Total assets
Revenues
Net income
Net income
and other
comprehensive
income
Amundi Group
24,261
2,636
959
966
Crédit Agricole Italia Group
64,231
1,950
326
401
CACEIS Group
88,015
939
158
205
AGOS SPA
18,180
868
267
266
CA Égypte
2,850
216
108
122
TOTAL
197,538
6,609
1,818
1,960
6.22
BREAKDOWN OF FINANCIAL ASSETS AND FINANCIAL
LIABILITIES BY CONTRACTUAL MATURITY
The breakdown of balance sheet financial assets and liabilities is made according to contractual maturity date.
The maturities of derivative instruments held for trading and for hedging correspond to their date of contractual maturity.
Equities and other variable-income securities are by nature without maturity; they are classified “Indefinite”.
(in millions of euros)
31/12/2020
≤ 3 months
> 3 months
up to
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Indefinite
TOTAL
Cash, central banks
194,269
-
-
-
-
194,269
Financial assets at fair value through profit or loss
118,218
30,371
41,300
82,034
160,539
432,462
Hedging derivative Instruments
1,526
2,799
4,087
13,333
-
21,745
Financial assets at fair value through other comprehensive income
8,929
14,559
95,767
144,523
2,294
266,072
Financial assets at amortised cost
180,604
147,308
398,885
224,604
2,499
953,900
Revaluation adjustment on interest rate hedged portfolios
7,463
-
-
-
-
7,463
TOTAL FINANCIAL ASSETS BY MATURITY
511,009
195,037
540,039
464,494
165,332
1,875,911
Central banks
864
-
-
-
-
864
Financial liabilities at fair value through profit or loss
108,784
20,661
42,541
93,187
-
265,173
Hedging derivative Instruments
1,946
598
4,824
7,850
-
15,218
Financial liabilities at amortised cost
800,678
67,115
221,858
57,203
-
1,146,854
Subordinated debt
335
1,603
5,942
15,483
689
24,052
Revaluation adjustment on interest rate hedged portfolios
10,380
-
-
-
-
10,380
TOTAL FINANCIAL LIABILITIES BY MATURITY
922,987
89,977
275,165
173,723
689
1,462,541
(in millions of euros)
31/12/2019
≤ 3 months
> 3 months
up to
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Indefinite
TOTAL
Cash, central banks
93,079
93,079
Financial assets at fair value through profit or loss
94,533
25,421
44,405
79,628
155,490
399,477
Hedging derivative Instruments
2,831
434
4,057
12,046
-
19,368
Financial assets at fair value through other comprehensive income
8,573
16,519
94,771
138,824
2,634
261,321
Financial assets at amortised cost
201,912
153,737
326,542
220,653
3,436
906,280
Revaluation adjustment on interest rate hedged portfolios
7,145
-
-
-
-
7,145
TOTAL FINANCIAL ASSETS BY MATURITY
408,074
196,110
469,775
451,151
161,560
1,686,670
Central banks
1,896
-
-
-
-
1,896
Financial liabilities at fair value through profit or loss
100,314
11,579
43,840
90,937
-
246,669
Hedging derivative Instruments
1,542
573
3,988
7,190
-
13,293
Financial liabilities at amortised cost
721,662
95,870
110,929
61,502
-
989,962
Subordinated debt
301
1,206
1,938
17,451
901
21,797
Revaluation adjustment on interest rate hedged portfolios
9,182
-
-
-
-
9,182
TOTAL FINANCIAL LIABILITIES BY MATURITY
834,897
109,228
160,695
177,078
901
1,282,799
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
541
Refer to the glossary on page 681 for the definition of technical terms.
CONSOLIDATED FINANCIAL STATEMENTS
6
Consolidated financial statements -
Note 6
NOTE 7
Employee benefits and other compensation
7.1
ANALYSIS OF EMPLOYEE EXPENSES
(in millions of euros)
31/12/2020
31/12/2019
Salaries
(1)(2)
(4,987)
(4,899)
Contributions to defined-contribution plans
(402)
(394)
Contributions to defined-benefit plans
(69)
(97)
Other social security expenses
(1,195)
(1,165)
Profit-sharing and incentive plans
(237)
(256)
Payroll-related tax
(343)
(336)
TOTAL EMPLOYEE EXPENSES
(7,233)
(7,147)
(1)
Regarding deferred variable compensation paid to market professionals, Crédit Agricole S.A. booked a charge for share-based payments of €70 million at 31 December 2020 compared to
€51 million at 31 December 2019.
(2)
Of which retirement-related indemnities amounted to €165 million at 31 December 2020, compared with €132 million at 31 December 2019.
7.2
AVERAGE HEADCOUNT
Average headcount
31/12/2020
31/12/2019
France
35,201
34,980
International
37,319
37,544
TOTAL
72,520
72,524
7.3
POST-EMPLOYMENT BENEFITS, DEFINED-CONTRIBUTION PLANS
“Employers” contribute to a variety of compulsory pension schemes. Plan
assets are managed by independent organisations and the contributing
companies have no legal or implied obligation to pay additional contributions
if the funds do not have sufficient assets to cover all benefits corresponding
to services rendered by employees during the year and during prior years.
Consequently, Crédit Agricole S.A. companies have no liability in this respect
other than the contributions payable.
Within the Group, there are several compulsory defined-contribution
plans, the main ones being Agirc/Arrco, which are French supplementary
retirement plans, and some supplementary plans in place notably within
UES Crédit Agricole S.A.
Analysis of supplementary pension plans in France
Business Line
Entity
Compulsory supplementary
pension plans
Number
of employees
covered
Estimation at
31/12/2020
Number
of employees
covered
Estimation at
31/12/2019
Central Support functions
UES Crédit Agricole S.A.
Agriculture industry plan 1.24%
1,750
1,745
Central Support functions
UES Crédit Agricole S.A.
“Article 83” Group executive managers plan
219
192
French Retail Banking – LCL
LCL
“Article 83” Group executive managers plan
292
303
Large Customers
Crédit Agricole CIB
“Article 83” type plan
5,032
4,925
Asset Gathering and Insurance
CAAS/Pacifica/SIRCA/LA MDF
Agriculture industry plan 1.24%
4,443
4,189
Asset Gathering and Insurance
CAAS/Pacifica/CACI/LA MDF
“Article 83” Group executive managers plan
79
65
Asset Gathering and Insurance
CACI/CA Indosuez Wealth
(France)/CA Indosuez Wealth
(Group)/Amundi
“Article 83” type plan
3,725
3,456
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
542
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 7
7.4
POST-EMPLOYMENT BENEFITS, DEFINED-BENEFIT PLANS
Change in actuarial liability
(in millions of euros)
31/12/2020
31/12/2019
Eurozone
Outside
Eurozone
All Zones
All Zones
Actuarial liability at 31/12/N-1
1,611
1,725
3,336
3,072
Exchange difference
-
(55)
(55)
66
Cost of service rended during the period
58
37
95
94
Financial cost
14
21
35
49
Employee contributions
1
13
14
16
Benefit plan changes, withdrawals and settlement
(1)
(17)
(18)
(100)
Changes in scope
6
-
6
(1)
Benefits paid (mandatory)
(90)
(75)
(165)
(132)
Tax, administrative costs and bonuses
-
-
-
-
Actuarial gains/(losses) arising from changes in demographic assumptions
(1)
(23)
33
10
(11)
Actuarial gains/(losses) arising from changes in financial assumptions
(1)
100
87
187
283
ACTUARIAL LIABILITY AT 31/12/N
1,676
1,769
3,445
3,336
(1)
Of which actuarial gains/losses related to experience adjustment.
Breakdown of net charge recognised in the income statement
(in millions of euros)
31/12/2020
31/12/2019
Eurozone
Outside
Eurozone
All Zones
All Zones
Service cost
(57)
(21)
(78)
7
Net interest income (expense)
(7)
(3)
(10)
(11)
IMPACT ON PROFIT OR LOSS AT 31/12/N
(64)
(24)
(88)
(4)
Breakdown of income recognised in OCI that will not be reclassified to profit and loss
(in millions of euros)
31/12/2020
31/12/2019
Eurozone
Outside
Eurozone
All Zones
All Zones
Revaluation from net liabilities (from net assets)
Total amount of actuarial gains or losses recognised in other
comprehensive income that will not be reclassified to profit
or loss at 31/12/N-1
512
316
828
674
Exchange difference
-
(4)
(4)
7
Actuarial gains/(losses) on assets
(14)
(83)
(97)
(112)
Actuarial gains/(losses) arising from changes in demographic assumptions
(1)
(23)
32
9
(11)
Actuarial gains/(losses) arising from changes in financial assumptions
(1)
100
87
187
283
Adjustment of assets restriction's
7
1
8
-
Impact in other comprehensive income at 31/12/N
70
33
103
167
(1)
Of which actuarial gains/losses related to experience adjustment.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
543
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 7
Change in fair value of assets
(in millions of euros)
31/12/2020
31/12/2019
Eurozone
Outside
Eurozone
All Zones
All Zones
Fair value of assets at 31/12/N-1
576
1,477
2,053
1,800
Exchange difference
-
(51)
(51)
60
Interests on asset (income)
5
20
25
35
Actuarial gains/(losses)
14
83
97
112
Employer contributions
35
27
62
102
Employee contributions
-
14
14
16
Benefit plan changes, withdrawals and settlement
-
-
-
-
Changes in scope
-
-
-
6
Tax, administrative costs and bonuses
-
(1)
(1)
(1)
Benefits paid out under the benefit plan
(16)
(72)
(88)
(77)
FAIR VALUE OF ASSETS AT 31/12/N
614
1,497
2,111
2,053
Change in fair value of reimbursement rights
(in millions of euros)
31/12/2020
31/12/2019
Eurozone
Outside
Eurozone
All Zones
All Zones
Fair value of reimbursement rights at 31/12/N-1
338
-
338
337
Exchange difference
-
-
-
-
Interests on reimbursement rights (income)
2
-
2
4
Actuarial gains/(losses)
-
-
-
1
Employer contributions
7
-
7
-
Employee contributions
-
-
-
-
Benefit plan changes, withdrawals and settlement
-
-
-
-
Changes in scope
7
-
7
5
Tax, administrative costs and bonuses
-
-
-
-
Benefits paid out under the benefit plan
(37)
-
(37)
(9)
FAIR VALUE OF REIMBURSEMENT RIGHTS AT 31/12/N
317
-
317
338
Net position
(in millions of euros)
31/12/2020
31/12/2019
Eurozone
Outside
Eurozone
All Zones
All Zones
Closing actuarial liability at end of period
(1,676)
(1,769)
(3,445)
(3,336)
Impact of asset restriction
(7)
(9)
(16)
(9)
Fair value of assets at end of period
614
1,497
2,111
2,053
NET POSITION OF ASSETS/(LIABILITIES) AT END OF PERIOD
(1,069)
(281)
(1,350)
(1,292)
Defined-benefit plans: main actuarial assumptions
(in millions of euros)
31/12/2020
31/12/2019
Eurozone
Outside
Eurozone
Eurozone
Outide Eurozone
Discount rate
(1)
0.35%
0.99%
0.84%
1.27%
Actual return on plan assets and on reimbursement rights
2.39%
7.34%
3.83%
8.56%
Expected salary increase rates
(2)
1.40%
1.74%
1.36%
1.80%
Rate of change in medical costs
0.00%
0.00%
0.00%
0.00%
(1)
Discount rates are determined as a function of the average duration of the commitment, that is, the arithmetic mean of durations calculated between the assessment date and the payment date
weighted by assumptions of staff turnover. The underlying used is the discount rate by reference to the iBoxx AA.
(2)
Depending on the employees concerned (managers or non-managers).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
544
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 7
Information of plan assets: allocation of assets
(1)
(in millions of euros)
Eurozone
Outside Eurozone
All Zones
%
Amount
of which
listed
%
Amount
of which
listed
%
Amount
of which
listed
Equities
9.4%
87
86
24.2%
362
362
18.5%
449
448
Bonds
41.1%
382
371
49.9%
746
746
46.5%
1,128
1,117
Property/Real estate
3.2%
30
11.3%
169
8.2%
199
Other assets
46.4%
432
14.7%
220
26.8%
651
(1) Of which fair value of reimbursement rights.
At 31 December 2020, the sensitivity analysis showed that:
a 50 basis point increase in discount rates would reduce the commitment
by -6.68%;
a 50 basis point decrease in discount rates would increase the
commitment by +7.66%.
The benefits expected to be paid in respect of post-employment plans
for 2020 are as follows:
benefits paid by the employer or by reimbursement rights funds:
€77 million (compared to €55 million paid in 2019);
benefits paid by plan assets:
€88 million (compared to €77 million
paid in 2019).
Crédit Agricole S.A.’s policy on covering employee benefit obligations reflects
local rules on funding post-employment benefits in countries with minimum
funding requirements. Overall, commitments arising from the Group’s
post-employment obligations were 70% covered at 31 December 2020
(including reimbursement rights).
7.5
OTHER EMPLOYEE BENEFITS
In France, the Group’s main entities pay long-service awards. The amounts
vary according to practices and collective bargaining agreements in place.
The provisions funded by Crédit Agricole S.A. for these other employee
benefit obligations amounted to €346 million at 31 December 2020.
7.6
SHARE-BASED PAYMENTS
7.6.1
Stock option plan
No new plan was implemented in 2020.
7.6.2
Deferred variable compensation
settled either in shares or in cash
indexed to the share price
The deferred variable compensation plans implemented by the Group
take two forms:
equity-settled plans;
cash-settled plans indexed to the Crédit Agricole S.A. share price.
Since 1 January 2016, all existing and future deferred variable compensation
plans are now cash-settled plans indexed to the Crédit Agricole S.A. share
price. The impact of the revaluation of the commitment on the basis of
the Crédit Agricole S.A. share price, which is not material, was recognised
in equity.
This deferred variable compensation is subject to continued employment
and a performance condition. It is broken down into thirds that are payable
in March 2021, March 2022 and March 2023.
The expense related to these plans is recognised in compensation expenses.
It is spread on a straight-line basis over the vesting period to factor in
continued employment, and a liability is recorded in employee expenses,
the amount of which is subject to periodical revaluation through profit or
loss until the settlement date, depending on the evolution of the share price
of Crédit Agricole S.A. and on vesting conditions (continued employment
and performance).
7.7
EXECUTIVE COMPENSATION
Senior management includes all members of the Executive Committee,
namely the Chief Executive Officer, Deputy Chief Executive Officer, Deputy
Chief Executive Officers for the Group’s different divisions, Chief Executive
Officers of the main subsidiaries and the Heads of the Group’s core business
activities.
Compensation and benefits paid to the members of the Executive Committee
in 2020 were as follows:
short-term benefits:
€25.2 million for fixed and variable compensation
(of which €3.2 million paid in share-indexed instruments), including social
security expenses and benefits in kind;
post-employment benefits:
€3.5 million for end-of-career allowances
and for the supplementary pension plan for Group executive managers;
other long-term employee benefits:
the amount of long-service awards
granted was not material;
employment contract termination indemnities:
not material;
other share-based payment:
not applicable.
Total compensation paid to members of Crédit Agricole S.A.’s Board
of Directors in 2020 in consideration for serving as directors of
Crédit Agricole S.A. amounted to €1,566,200. After tax deductions, the
net amount received was €1,144,990.
These amounts included the compensation and benefits paid to the Chief
Executive Officer and Deputy Chief Executive Officer of Crédit Agricole S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
545
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 7
NOTE 8
Lease contracts
8.1
LEASES FOR WHICH THE GROUP IS THE LESSEE
The item “Property, plant and equipment” in the balance sheet consists of own and leased assets that do not meet the definition of investment properties.
(in millions of euros)
31/12/2020
31/12/2019
Owned property, plant and equipment
4,104
4,226
Right-of-use on lease contracts
1,675
1,371
TOTAL PROPERTY, PLANT AND EQUIPMENT USED IN OPERATIONS
5,779
5,597
Crédit Agricole is also a lessee under lease agreements for IT equipment (photocopiers, computers, etc.) with terms of one to three years. These are
low-value and/or short-term leases. Crédit Agricole S.A. has opted to apply the exemptions provided for in IFRS 16 and not to recognise the right-of-use
asset and the lease liability for these leases in the balance sheet.
Change in right of use assets
Crédit Agricole is the taker of many assets including offices, agencies and computer equipment.
Information relating to the contracts of which Crédit Agricole S.A. is a taker is presented below:
(in millions of euros)
31/12/2019
Changes
in scope
Increases
(acquisitions)
Decreases
(disposals)
Translation
adjustments
Other
movements
(1)
31/12/2020
PROPERTY/REAL ESTATE
Gross amount
1,687
-
463
(294)
(31)
431
2,256
Depreciation and impairment
(344)
-
(332)
69
9
(46)
(644)
Total Property/Real estate
1,343
-
131
(225)
(22)
385
1,612
EQUIPMENT
Gross amount
43
78
10
(24)
(6)
-
101
Depreciation and impairment
(15)
(16)
(14)
4
2
1
(38)
Total Equipment
28
62
(4)
(20)
(4)
1
63
TOTAL RIGHT-OF-USE
1,371
62
127
(245)
(26)
386
1,675
(1)
Taking into account the effects of first-time adoption of the IFRS IC decision of 26 November 2019 respecting the duration of IFRS 16 leases, the balance of rights of use in the balance sheet would
have been €1,762 million at 31 December 2019 (see Note 1.1 Applicable standards and comparability).
(in millions of euros)
31/12/2018
01/01/2019
Changes
in scope
Increases
(acquisitions)
Decreases
(disposals)
Translation
adjustments
Other
movements
31/12/2019
PROPERTY/REAL ESTATE
Gross amount
-
1,476
14
269
(74)
10
(8)
1,687
Depreciation and impairment
-
(54)
(2)
(294)
6
-
-
(344)
Total Property/Real estate
-
1,422
12
(25)
(68)
10
(8)
1,343
EQUIPMENT
Gross amount
4
31
-
16
(4)
-
-
43
Depreciation and impairment
(2)
(2)
-
(14)
1
-
-
(15)
Total Equipment
2
29
-
2
(3)
-
-
28
TOTAL RIGHT-OF-USE
2
1,451
12
(23)
(71)
10
(8)
1,371
Maturity schedule of rental debts
(in millions of euros)
31/12/2020
≤ 1 year
> 1 year up
to ≤ 5 years
> 5 years
Total Lease
liabilities
Lease liabilities
316
884
557
1,757
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
546
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 8
(in millions of euros)
31/12/2019
≤ 1 year
> 1 year up
to ≤ 5 years
> 5 years
Total Lease
liabilities
Lease liabilities
285
732
390
1,407
Details of rental contract income and expenses
(in millions of euros)
31/12/2020
31/12/2019
Interest expense on lease liabilities
(27)
(24)
Total Interest and similar expenses (Revenues)
(27)
(24)
Expense relating to short-term leases
(15)
(81)
Expense relating to leases of low-value assets
(21)
(28)
Expense relating to variable lease payments not included in the measurement of lease liabilities
(15)
(8)
Income from subleasing right-of-use assets
1
1
Gains or losses arising from leaseback transactions
-
-
Gains or losses arising from lease modifications
1
-
Total Operating expenses
(49)
(115)
Depreciation for right-of-use
(380)
(308)
Total Depreciation and amortisation of property, plant and equipment
(380)
(308)
TOTAL EXPENSE AND INCOME ON LEASE CONTRACTS
(456)
(447)
Cash flow amounts for the period
(in millions of euros)
31/12/2020
31/12/2019
Total Cash outflow for leases
(365)
(407)
8.2
LEASES FOR WHICH THE GROUP IS THE LESSOR
Crédit Agricole S.A. offers its customers leasing activities that take the form of leasing agreements, lease financing with purchase options, finance leasing
and long-term leasing arrangements. Lease agreements are classified as finance leases when the terms of the lease transfer substantially all of the risks
and benefits inherent in ownership to the lessee.
Other lease agreements are classified as operating leases.
Income from rental contracts
(in millions of euros)
31/12/2020
31/12/2019
Finance leases
602
604
Selling profit or loss
58
42
Finance income on the net investment in the lease
544
562
Income relating to variable lease payments
-
-
Operating leases
226
251
Lease income
226
251
Schedule of rent payments to be received
(in millions of euros)
31/12/2020
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Total lease
payments
receivable
Unearned
finance income
Discounted
residual value
Financial lease
receivables
Finance leases
4,877
8,217
3,491
16,585
1,455
1,614
16,745
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
547
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 8
(in millions of euros)
31/12/2019
≤ 1 year
> 1 year
up to
≤ 5 years
> 5 years
Total lease
payments
receivable
Unearned
finance income
Discounted
residual value
Financial lease
receivables
Finance leases
5,406
7,597
2,934
15,937
1,595
1,658
16,000
Lease agreements expire on their residual maturity date.
The amount by expiry corresponds to the undiscounted contractual amount.
NOTE 9
Commitments given and received and other guarantees
Financing and guarantee commitments and other guarantees include discontinued operations.
COMMITMENTS GIVEN AND RECEIVED
(in millions of euros)
31/12/2020
31/12/2019
COMMITMENTS GIVEN
Financing commitments
165,035
154,791
Commitments given to credit institutions
16,155
13,433
Commitments given to customers
148,880
141,358
Confirmed credit lines
120,012
112,825
Documentary credits
4,543
4,282
Other confirmed credit lines
115,469
108,543
Other commitments given to customers
28,869
28,533
Guarantee commitments
85,784
87,884
Credit institutions
8,169
8,542
Confirmed documentary credit lines
2,925
3,372
Other guarantees
5,244
5,170
Customers
77,615
79,342
Property guarantees
1,967
2,168
Other customer guarantees
75,648
77,175
Securities commitments
4,487
4,765
Securities to be delivered
4,487
4,765
COMMITMENTS RECEIVED
Financing commitments
138,092
84,102
Commitments received from credit institutions
(1)
133,940
81,155
Commitments received from customers
4,152
2,946
Guarantee commitments
334,668
327,988
Commitments received from credit institutions
94,136
94,670
Commitments received from customers
240,532
233,318
Guarantees received from government bodies or similar institutions
(2)
33,501
25,934
Other guarantees received
207,031
207,385
Securities commitments
4,095
4,556
Securities to be received
4,095
4,556
(1)
At 31 December 2020, following the activation of the Switch Assurance guarantee on 30 June 2020 and the claw-back of 31 December, the guarantee amounts to €5.9 billion. The security deposit
is €2 billion.
(2)
As part of the economic support measures in the wake of the COVID-19 health crisis, Crédit Agricole S.A. granted loans for which it received guarantee commitments from the French State (SGL).
At 31 December 2020, these guarantee commitments received amounted to €8.5 billion.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
548
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 9
FINANCIAL INSTRUMENTS GIVEN AND RECEIVED AS COLLATERAL
(in millions of euros)
31/12/2020
31/12/2019
CARRYING AMOUNT OF FINANCIAL ASSETS PROVIDED AS COLLATERAL (INCLUDING TRANSFERRED ASSETS)
Securities and receivables provided as collateral for the refinancing structures (Banque de France, CRH, etc.)
397,564
189,444
Securities lent
12,904
8,874
Security deposits on market transactions
19,087
18,155
Other security deposits
-
-
Securities sold under repurchase agreements
110,863
104,627
TOTAL CARRYING AMOUNT OF FINANCIAL ASSETS PROVIDED AS COLLATERAL
540,418
321,099
CARRYING AMOUNT OF FINANCIAL ASSETS RECEIVED IN GUARANTEE
Other security deposits
(1)
2,017
3,102
Fair value of instruments received as reusable and reused collateral
Securities borrowed
7
4
Securities bought under repurchase agreements
434,708
275,463
Securities sold short
37,172
33,468
TOTAL FAIR VALUE OF INSTRUMENTS RECEIVED AS REUSABLE AND REUSED COLLATERAL
471,887
308,935
(1)
As part of the Switch Assurance guarantees, following the partial early termination on 2 March 2020, Crédit Agricole S.A. received a deposit of €2 billion.
RECEIVABLES PLEDGED AS COLLATERAL
At 31 December 2020, Crédit Agricole S.A. deposited €274.2 billion of
receivables (mainly on behalf of the Regional Banks and LCL) for refinancing
transactions to the Banque de France, compared to €81.9 billion at
31 December 2019.
At 31 December 2020, Crédit Agricole S.A. deposited €12.1 billion of
receivables for refinancing transactions to the
Caisse de Refinancement
de l’Habitat
on behalf of the Regional Banks, compared to €12.3 billion
at 31 December 2019, and €1.2 billion of receivables were deposited
directly by LCL.
On 31 December 2020, €2.9 billion receivables of the Regional Banks
had been pledged as collateral for the covered bonds issued by European
Secured Notes Issuer (ESNI), a French securitisation company formed by
five banks including Crédit Agricole Group.
At 31 December 2020, €38.3 billion of Regional Bank and €9.3 billion of
LCL receivables had been pledged as collateral for the covered bond issues
of Crédit Agricole Home Loan SFH, a financial company wholly owned by
Crédit Agricole S.A.
As at 31 December 2020, in the context of transactions with EIB/CEB
supranationals, Crédit Agricole S.A. deposited €2.8 billion in receivables
on behalf of the Regional Banks.
As at 31 December 2020, in the context of refinancing transactions with
CDC, Crédit Agricole S.A. deposited €2.6 billion in receivables on behalf
of the Regional Banks.
These processes, for which there is no transfer of contractual cash flows,
do not form part of the asset transfers.
GUARANTEES HELD
Guarantees held and assets received as collateral by Crédit Agricole S.A.
which it is allowed to sell or to use as collateral are mostly held within
Crédit Agricole S.A. for €297,5 billion and within Crédit Agricole CIB for
€178 billion. The majority of these are receivables pledged as collateral by
the Regional Banks to Crédit Agricole S.A., the latter acting as the central
body with regard to the external refinancing organisations, in order to obtain
refinancing. These receivables (property-related, or loans to businesses or
local authorities) are selected and rated for their quality and retained on
the balance sheet of the Regional Banks.
The majority of these guarantees consist of mortgage liens, collateral or
guarantees received, regardless of the quality of the assets guaranteed.
They are mainly related to repurchase agreements and securities pledged
to guarantee brokerage transactions.
Crédit Agricole S.A. policy is to sell seized collateral as soon as possible.
Crédit Agricole CIB and Crédit Agricole S.A. had no such assets at
31 December 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
549
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 9
NOTE 10
Reclassification of financial instruments
PRINCIPLES APPLIED BY THE CRÉDIT AGRICOLE S.A. GROUP
Reclassifications are performed only under exceptional circumstances and following a decision by the Executive Management of the entity as a result of
internal or external changes: significant changes in the entity’s activity.
RECLASSIFICATION PERFORMED BY THE CRÉDIT AGRICOLE S.A. GROUP
In 2020, Crédit Agricole S.A. did not carry out any reclassification pursuant to paragraph 4.4.1 of IFRS 9.
NOTE 11
Fair value of financial instruments
Fair value is the price that would be received at the sale of an asset or paid
to transfer a liability in a standard transaction between market participants
at the measurement date.
Fair value is defined on the basis of the exit price.
The fair values shown below are estimates made on the reporting date
using observable market data wherever possible. These are subject to
change in subsequent periods due to developments in market conditions
or other factors.
The calculations represent best estimates. They are based on a number
of assumptions. It is assumed that market participants act in their best
economic interest.
To the extent that these models contain uncertainties, the fair values shown
may not be achieved upon actual sale or immediate settlement of the
financial instruments concerned.
The fair value hierarchy of financial assets and liabilities is broken down
according to the general observability criteria of the valuation inputs,
pursuant to the principles defined under IFRS 13.
Level 1 of the hierarchy applies to the fair value of financial assets and
liabilities quoted in active markets.
Level 2 of the hierarchy applies to the fair value of financial assets and
liabilities with observable inputs. This agreement includes market data
relating to interest rate risk or credit risk when the latter can be revalued
based on observable Credit Default Swap (CDS) spreads. Securities bought
or sold under repurchase agreements subject of an active market, depending
on the underlying and the maturity of the transaction are also included in
Level 2 of the hierarchy, as are financial assets and liabilities with a demand
component for which fair value is measured at unadjusted amortised cost.
Level 3 of the hierarchy is used for financial instruments at fair value
for which the valuation draws upon, exclusively or for a significant part,
unobservable market parameters.
Parameters for which no market information is available, or for which
the available market information is considered insufficient, are regarded
as unobservable. This qualification may call upon expert opinion. The
information examined may include transactions actually concluded, firm
or indicative quotations and information resulting from market consensus.
In some cases, market values are close to carrying amounts. These include:
assets or liabilities at variable rates for which remuneration is frequently
adjusted to prevailing market rates;
short-term assets or liabilities where the redemption value is considered
to be close to the market value;
instruments executed on a regulated market for which the prices are
set by the public authorities;
demand assets and liabilities.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
550
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 10
11.1
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES RECOGNISED
AT AMORTISED COST
Amounts presented below include accruals and prepayments and are net of impairment.
Financial assets recognised at cost and measured at fair value on the balance sheet
(in millions of euros)
Value at
31/12/2020
Estimated
fair value at
31/12/2020
Quoted prices in
active markets
for identical
instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
FINANCIAL ASSETS NOT MEASURED AT FAIR VALUE
ON BALANCE SHEET
Loans and receivables
869,106
912,066
-
559,762
352,304
Loans and receivables due from credit institutions
463,169
477,113
-
476,319
794
Current accounts and overnight loans
8,660
8,825
-
8,706
119
Accounts and long-term loans
440,878
454,463
-
454,018
445
Pledged securities
-
-
-
-
-
Securities bought under repurchase agreements
12,551
12,608
-
12,608
-
Subordinated loans
925
1,038
-
808
230
Other loans and receivables
155
179
-
179
-
Loans and receivables due from customers
405,937
434,953
-
83,443
351,510
Trade receivables
40,064
40,267
-
21,403
18,864
Other customer loans
349,072
376,748
-
46,807
329,941
Pledged securities
205
205
-
205
-
Securities bought under repurchase agreements
3,713
3,713
-
3,460
253
Subordinated loans
44
45
-
6
39
Insurance receivables
328
328
-
4
324
Reinsurance receivables
845
845
-
5
840
Advances in associates' current accounts
146
148
-
18
130
Current accounts in debit
11,520
12,654
-
11,535
1,119
Debt securities
84,794
86,402
57,496
12,952
15,954
Treasury bills and similar securities
29,887
30,500
25,536
4,735
229
Bonds and other fixed income securities
54,907
55,902
31,960
8,217
15,725
TOTAL FINANCIAL ASSETS OF WHICH FAIR VALUE
IS DISCLOSED
953,900
998,468
57,496
572,714
368,258
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
551
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
(in millions of euros)
Value at
31/12/2019
Estimated
fair value at
31/12/2019
Quoted prices in
active markets
for identical
instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
FINANCIAL ASSETS NOT MEASURED AT FAIR VALUE
ON BALANCE SHEET
Loans and receivables
833,761
858,085
-
529,155
328,930
Loans and receivables due from credit institutions
438,580
448,243
-
447,039
1,204
Current accounts and overnight loans
30,780
30,793
-
30,618
175
Accounts and long-term loans
400,063
409,649
-
408,849
800
Pledged securities
1
1
-
-
1
Securities bought under repurchase agreements
6,701
6,707
-
6,707
-
Subordinated loans
929
966
-
738
228
Other loans and receivables
106
127
-
127
-
Loans and receivables due from customers
395,180
409,842
-
82,116
327,726
Trade receivables
43,563
42,854
-
20,832
22,022
Other customer loans
332,629
346,991
-
44,075
302,916
Pledged securities
232
232
-
232
-
Securities bought under repurchase agreements
4,071
4,073
-
4,073
-
Subordinated loans
44
44
-
4
40
Insurance receivables
314
314
-
9
305
Reinsurance receivables
770
770
-
1
769
Advances in associates' current accounts
142
143
-
10
133
Current accounts in debit
13,415
14,421
-
12,880
1,541
Debt securities
72,519
72,706
48,164
7,138
17,404
Treasury bills and similar securities
23,578
23,672
21,996
1,435
241
Bonds and other fixed income securities
48,942
49,034
26,169
5,703
17,162
TOTAL FINANCIAL ASSETS OF WHICH FAIR VALUE
IS DISCLOSED
906,280
930,791
48,164
536,293
346,334
Financial liabilities recognised at amortised cost and measured at fair value on the balance sheet
(in millions of euros)
Value at
31/12/2020
Estimated
fair value at
31/12/2020
Quoted prices in
active markets
for identical
instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
FINANCIAL LIABILITIES NOT MEASURED AT FAIR VALUE
ON BALANCE SHEET
Due to credit institutions
264,919
277,020
-
275,768
1,252
Current accounts and overnight borrowings
51,019
51,055
-
51,055
-
Accounts and term deposits
187,241
199,274
-
198,136
1,138
Pledged securities
-
-
-
-
-
Securities sold under repurchase agreements
26,659
26,691
-
26,577
114
Due to customers
719,388
719,762
-
392,282
327,480
Current accounts in credit
291,807
291,822
-
291,822
-
Special savings accounts
324,407
324,408
-
-
324,408
Other amounts due to customers
98,927
99,280
-
98,867
413
Securities sold under repurchase agreements
1,520
1,520
-
1,520
-
Insurance liabilities
872
872
-
67
805
Reinsurance liabilities
590
595
-
6
589
Cash deposits received from ceding and retroceding
companies against technical insurance commitments
1,265
1,265
-
-
1,265
Debt securities
162,547
167,751
85,192
81,912
647
Subordinated debt
24,052
24,626
6,650
17,870
106
TOTAL FINANCIAL LIABILITIES OF WHICH FAIR VALUE
IS DISCLOSED
1,170,906
1,189,159
91,842
767,832
329,485
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
552
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
(in millions of euros)
Value at
31/12/2019
Estimated
fair value at
31/12/2019
Quoted prices in
active markets
for identical
instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
FINANCIAL LIABILITIES NOT MEASURED AT FAIR VALUE
ON BALANCE SHEET
Due to credit institutions
142,041
142,755
-
142,723
32
Current accounts and overnight borrowings
31,290
31,287
-
31,287
-
Accounts and term deposits
82,514
83,207
-
83,175
32
Pledged securities
-
-
-
-
-
Securities sold under repurchase agreements
28,237
28,261
-
28,261
-
Due to customers
646,914
647,017
-
341,395
305,622
Current accounts in credit
228,338
228,337
-
228,301
37
Special savings accounts
302,423
302,425
-
281
302,144
Other amounts due to customers
112,020
112,125
-
111,173
952
Securities sold under repurchase agreements
1,569
1,568
-
1,568
-
Insurance liabilities
942
940
-
61
878
Reinsurance liabilities
467
467
-
11
456
Cash deposits received from ceding and retroceding
companies against technical insurance commitments
1,155
1,155
-
-
1,155
Debt securities
201,007
204,181
71,169
132,308
703
Subordinated debt
21,797
22,119
5,754
16,182
183
TOTAL FINANCIAL LIABILITIES OF WHICH FAIR VALUE
IS DISCLOSED
1,011,759
1,016,071
76,922
632,609
306,540
11.2
INFORMATION ABOUT FINANCIAL INSTRUMENTS MEASURED
AT FAIR VALUE
Valuation mechanism
Financial instruments are valued by management information systems
and checked by a team that reports to the Risk Management department
and is independent from the market operators.
Valuations are based on the following:
prices or inputs obtained from independent sources and/or validated by
the Market Risk department using a series of available sources such as
pricing service vendors, market consensus data and brokers;
models approved by the quantitative teams in the Market Risk department.
The valuation produced for each instrument is a mid-market valuation, which
does not take account of the direction of the trade, the bank’s aggregate
exposure, market liquidity or counterparty quality. Adjustments are then
made to the market valuations to incorporate those factors, as well as the
potential uncertainties inherent in the models or inputs used.
The main types of valuation adjustments are the following:
Mark-to-Market adjustments
These adjustments correct any potential variance between the mid-market
valuation of an instrument obtained using internal valuation models and
the associated inputs and the valuation obtained from external sources
or market consensus data. These adjustments can be either positive or
negative.
Bid/ask reserves
These adjustments incorporate the bid/ask spread for a given instrument
in order to reflect the price at which the position could be reversed. These
adjustments are always negative.
Uncertainty reserves
These adjustments constitute a risk premium taken into account by all
market participants. These adjustments are always negative:
input uncertainty reserves seek to incorporate in the valuation of an
instrument any uncertainty that might exist as regards one or more of
the inputs used;
model uncertainty reserves seek to incorporate in the valuation of an
instrument any uncertainty that might exist due to the choice of model
used.
In addition, in accordance with IFRS 13 “Fair value measurement”,
Crédit Agricole S.A. prices in to the fair value calculated for its OTC
derivatives (
i.e.
those traded over the counter) various adjustments linked to:
default risk or credit rating (Credit Valuation Adjustment/Debit Valuation
Adjustment);
future funding costs and benefits (Funding Valuation Adjustment);
liquidity risk associated with collateral (Liquidity Valuation Adjustment).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
553
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
Credit Valuation Adjustment (CVA)
The CVA (Credit Valuation Adjustment) is a mark-to-market adjustment to
incorporate the market value of the default risk (risk of non-payment of
amounts due in the event of default or deterioration in credit quality) in the
value of OTC derivatives of our counterparties. This adjustment is calculated
per counterparty based on the positive future exposure of the trading
portfolio (taking into account any netting or collateral agreements, where
such exist) weighted by the probabilities of default and losses given default.
The methodology used maximises the use of market inputs/prices
(probabilities of default are derived in priority directly from any existing
listed CDS, proxies of listed CDS and other credit instruments where these
are deemed sufficiently liquid). This adjustment is always negative and
reduces the fair value of the OTC derivative assets held in the portfolio.
Debit Valuation Adjustment (DVA)
The Debit Valuation Adjustment (DVA) is a mark-to-market adjustment that
aims to incorporate the market value of the default risk (potential losses
to which Crédit Agricole S.A.may expose its counterparties in the event of
default or a deterioration in its creditworthiness) in the value of perfectly
collateralised OTC derivatives. This adjustment is calculated by collateral
contract type on the basis of negative future exposure profiles of the trading
portfolio weighted by default probabilities (Crédit Agricole S.A.) and losses
incurred in the event of default.
The methodology used maximises the use of market inputs/prices (use of
Crédit Agricole S.A. CDS to determine default probabilities). This adjustment
is always positive and reduces the fair value of the OTC derivative liabilities
held in the portfolio.
Funding Valuation Adjustment (FVA)
The Funding Valuation Adjustment (FVA) is a mark-to-market adjustment that
aims to incorporate the additional future funding costs and benefits based
on ALM (Asset & Liability Management) funding costs in the value of not
collateralised or imperfectly collateralised OTC derivatives. This adjustment
is calculated per counterparty based on the future exposure of the trading
portfolio (taking into account any netting or collateral agreements, where
such exist) weighted by ALM funding spreads.
As regards the scope of “clear” derivatives, an FVA adjustment called IMVA
(Initial Margin Value Adjustment) is calculated to take into account the future
financing costs and gains of the initial margins to be posted with the main
derivatives clearing houses until the portfolio matures.
Liquidity Valuation Adjustment (LVA)
The LVA (Liquidity Valuation Adjustment) is the positive or negative valuation
adjustment intended to reflect both the potential absence of collateral
payments for counterparties with a CSA (Credit Support Annex), as well
as the non-standard remuneration of CSAs.
Therefore, the LVA reflects the profit or loss resulting from additional liquidity
costs. It is calculated on the scope of OTC derivatives with CSAs.
Breakdown of financial instruments
at fair value by valuation model
Amounts presented below include accruals and prepayments and are
net of impairment.
On the asset side, transfers from Level 2 to Level 3 essentially result from
a better identification of the level of fair value of transactions present
at 31 December 2019 (€138 million). Transfers from Level 3 to Level 2
mainly result from positions of repurchase agreements that have become
observable in line with the observability mapping (€1.3 billion).
On the liabilities side, transfers observed from Level 2 to Level 3 mainly result
from a more accurate identification of the fair value levels of transactions as
at 31 December 2019 (€425 million) and from a review of the mapping of
observability (€624 million). Transfers from Level 3 to Level 2 mainly result
from positions that have become observable in line with the observability
mapping (€500 million).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
554
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
Financial assets measured at fair value
(in millions of euros)
31/12/2020
Quoted prices in
active markets for
identical instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
Held for trading financial assets
261,968
22,633
233,963
5,372
Loans and receivables due from credit institutions
-
-
-
-
Loans and receivables due from customers
872
-
141
731
Securities bought under repurchase agreements
120,116
-
118,489
1,627
Pledged securities
-
-
-
-
Held for trading securities
24,743
22,541
1,775
427
Treasury bills and similar securities
13,081
11,774
1,307
-
Bonds and other fixed income securities
5,389
4,767
466
156
UCITS
52
52
-
-
Equities and other variable income securities
6,221
5,948
2
271
Derivative instruments
116,237
92
113,558
2,587
Other financial assets at fair value through profit or loss
170,494
108,855
50,714
10,925
Equity instruments at fair value through profit or loss
34,183
21,410
7,170
5,603
Equities and other variable income securities
21,898
18,823
2,126
949
Non-consolidated equity investments
12,285
2,587
5,044
4,654
Debt instruments that do not meet the conditions of the “SPPI” test
72,410
43,018
24,102
5,290
Loans and receivables due from credit institutions
-
-
-
-
Loans and receivables due from customers
3,444
-
3,443
1
Debt securities
68,966
43,018
20,659
5,289
Treasury bills and similar securities
178
4
174
-
Bonds and other fixed income securities
13,660
2,003
10,951
706
UCITS
55,128
41,011
9,534
4,583
Assets backing unit-linked contracts
63,900
44,426
19,442
32
Treasury bills and similar securities
498
489
9
-
Bonds and other fixed income securities
4,382
1,145
3,237
-
Equities and other variable income securities
8,378
1,543
6,835
-
UCITS
50,642
41,249
9,361
32
Financial assets designated at fair value through profit or loss
1
1
-
-
Loans and receivables due from credit institutions
-
-
-
-
Loans and receivables due from customers
-
-
-
-
Securities designated at fair value through profit or loss
1
1
-
-
Treasury bills and similar securities
-
-
-
-
Bonds and other fixed income securities
1
1
-
-
Financial assets at fair value through other comprehensive income
266,072
246,573
19,264
235
Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
2,216
956
1,025
235
Equities and other variable income securities
515
15
460
40
Non-consolidated equity investments
(1)
1,701
941
565
195
Debt instruments at fair value through other comprehensive income that may
be reclassified to profit or loss
263,856
245,617
18,239
-
Loans and receivables due from credit institutions
-
-
-
-
Loans and receivables due from customers
-
-
-
-
Debt securities
263,856
245,617
18,239
-
Treasury bills and similar securities
88,142
87,838
304
-
Bonds and other fixed income securities
175,714
157,779
17,935
-
Hedging derivative Instruments
21,745
16
21,729
-
TOTAL FINANCIAL ASSETS MEASURED AT FAIR VALUE
720,279
378,077
325,670
16,532
Transfers from Level 1: Quoted prices in active markets for identical instruments
1,532
12
Transfers from Level 2: Valuation based on observable data
154
183
Transfers from Level 3: Valuation based on unobservable data
1
1,319
TOTAL TRANSFERS TO EACH LEVEL
155
2,851
195
(1)
SAS Rue La Boétie shares held by the Caisse régionale de la Corse have been included in Non-consolidated equity investments in Level 2 for €66 million.
Level 1 to Level 2 transfers mainly involve options listed on the underlying equity.
Level 1 to Level 3 transfers involve bonds and other fixed-income securities.
Level 2 to Level 1 transfers mainly involve treasury bills, bonds and other fixed-income securities.
Level 2 to Level 3 transfers mainly involve securities bought/sold under repurchase agreements and trading derivative instruments.
Level 3 to Level 1 transfers involve bonds and other fixed-income securities.
Level 3 to Level 2 transfers mainly involve securities bought/sold under repurchase agreements from credit institutions, from the customers and trading
derivative instruments. Several positions can now be observed.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
555
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
(in millions of euros)
31/12/2019
Quoted prices in
active markets for
identical instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
Held for trading financial assets
230,721
23,646
201,576
5,499
Loans and receivables due from credit institutions
61
-
61
-
Loans and receivables due from customers
894
-
-
894
Securities bought under repurchase agreements
103,690
-
101,771
1,919
Pledged securities
-
-
-
-
Held for trading securities
25,281
22,762
1,740
779
Treasury bills and similar securities
13,665
12,494
1,170
1
Bonds and other fixed income securities
4,607
3,878
568
161
UCITS
108
84
-
24
Equities and other variable income securities
6,901
6,305
2
594
Derivative instruments
100,795
884
98,004
1,907
Other financial assets at fair value through profit or loss
168,756
113,114
46,358
9,284
Equity instruments at fair value through profit or loss
36,293
25,070
6,852
4,371
Equities and other variable income securities
24,754
21,726
2,027
1,001
Non-consolidated equity investments
11,539
3,344
4,825
3,370
Debt instruments that do not meet the conditions of the “SPPI” test
72,942
45,690
22,535
4,717
Loans and receivables due from credit institutions
-
-
-
-
Loans and receivables due from customers
4,209
-
3,847
362
Debt securities
68,733
45,690
18,688
4,355
Treasury bills and similar securities
252
111
139
2
Bonds and other fixed income securities
13,152
1,995
10,578
579
UCITS
55,329
43,584
7,971
3,774
Assets backing unit-linked contracts
59,520
42,352
16,972
196
Treasury bills and similar securities
457
444
13
-
Bonds and other fixed income securities
4,204
1,218
2,986
-
Equities and other variable income securities
6,822
1,287
5,351
184
UCITS
48,037
39,403
8,622
12
Financial assets designated at fair value through profit or loss
1
1
-
-
Loans and receivables due from credit institutions
-
-
-
-
Loans and receivables due from customers
-
-
-
-
Securities designated at fair value through profit or loss
1
1
-
-
Treasury bills and similar securities
-
-
-
-
Bonds and other fixed income securities
1
1
-
-
Financial assets at fair value through other comprehensive income
261,321
243,263
17,772
286
Equity instruments at fair value through other comprehensive income
that will not be reclassified to profit or loss
2,518
1,367
884
267
Equities and other variable income securities
802
457
309
36
Non-consolidated equity investments
(1)
1,716
910
575
231
Debt instruments at fair value through other comprehensive income
that may be reclassified to profit or loss
258,803
241,895
16,888
20
Loans and receivables due from credit institutions
-
-
-
-
Loans and receivables due from customers
-
-
-
-
Debt securities
258,803
241,895
16,888
20
Treasury bills and similar securities
82,684
82,361
323
-
Bonds and other fixed income securities
176,119
159,534
16,565
20
Hedging derivative Instruments
19,368
34
19,334
-
TOTAL FINANCIAL ASSETS MEASURED AT FAIR VALUE
680,166
380,057
285,040
15,069
Transfers from Level 1: Quoted prices in active markets for identical instruments
4,420
106
Transfers from Level 2: Valuation based on observable data
474
2,119
Transfers from Level 3: Valuation based on unobservable data
72
1,820
TOTAL TRANSFERS TO EACH LEVEL
546
6,240
2,225
(1)
SAS Rue La Boétie shares have been included in Non-consolidated equity investments in Level 2 for €70 million.
Level 1 to Level 2 transfers concern the reclassification of derivatives instruments from organised markets to over the counter.
Level 1 to Level 3 transfers involve bonds and other fixed-income securities.
Level 2 to Level 1 transfers mainly involve treasury bills, bonds and other fixed-income securities.
Level 2 to Level 3 transfers mainly involve securities received under repurchase agreements from credit institutions and interest rate swaps.
Level 3 to Level 1 transfers mainly involve treasury bills.
Level 3 to Level 2 transfers mainly involve securities received under repurchase agreements from customers and trading derivatives including -€0,3 billion
related to the review of the derivatives observability analysis.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
556
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
Financial liabilities measured at fair value
(in millions of euros)
31/12/2020
Quoted prices in
active markets for
identical instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
Held for trading financial liabilities
229,265
37,022
190,351
1,892
Securities sold short
37,179
36,931
248
-
Securities sold under repurchase agreements
82,662
-
81,925
737
Debt securities
2
-
2
-
Due to credit institutions
-
-
-
-
Due to customers
-
-
-
-
Derivative instruments
109,422
91
108,176
1,155
Financial liabilities designated at fair value through profit or loss
35,908
9,943
20,255
5,710
Hedging derivative Instruments
15,218
-
14,607
611
TOTAL FINANCIAL LIABILITIES MEASURED AT FAIR VALUE
280,391
46,965
225,213
8,213
Transfers from Level 1: Quoted prices in active markets for identical instruments
1,057
-
Transfers from Level 2: Valuation based on observable data
64
1,136
Transfers from Level 3: Valuation based on unobservable data
-
628
TOTAL TRANSFERS TO EACH LEVEL
64
1,685
1,136
Level 1 to Level 2 transfers mainly involve options listed on the underlying equity.
Level 2 to Level 1 transfers mainly involve negotiable debt securities.
Level 3 to Level 1 transfers had no impact in 2020.
Level 3 to Level 2 transfers mainly involve securities received under repurchase agreements and interest rate swaps. The review of the observability
analysis of the derivatives and the financial liabilities measured at fair value by option amounts to €500 million and are relating to repurchase agreements.
Level 2 to Level 3 transfers mainly result from better identification of fair value levels on transactions already present at 31 December 2019 for €425
million and a review of the observability analysis for €624 million.
(in millions of euros)
31/12/2019
Quoted prices in
active markets for
identical instruments:
Level 1
Valuation based
on observable
data:
Level 2
Valuation based
on unobservable
data:
Level 3
Held for trading financial liabilities
206,708
34,018
171,104
1,586
Securities sold short
33,473
33,259
214
-
Securities sold under repurchase agreements
74,762
-
73,842
920
Debt securities
55
-
55
-
Due to credit institutions
-
-
-
-
Due to customers
-
-
-
-
Derivative instruments
98,418
759
96,993
666
Financial liabilities designated at fair value through profit or loss
39,961
8,763
23,683
7,515
Hedging derivative Instruments
13,293
-
12,981
312
TOTAL FINANCIAL LIABILITIES MEASURED AT FAIR VALUE
259,962
42,781
207,768
9,413
Transfers from Level 1: Quoted prices in active markets for identical instruments
4,023
-
Transfers from Level 2: Valuation based on observable data
35
605
Transfers from Level 3: Valuation based on unobservable data
241
4,676
TOTAL TRANSFERS TO EACH LEVEL
275
8,699
605
Level 1 to Level 2 transfers concern the reclassification of derivatives instruments from organised markets to over the counter.
Level 2 to Level 1 transfers concern short sales.
Level 2 to Level 3 transfers mainly involve securities delivered under repurchase agreements to credit institutions.
Level 3 to Level 1 transfers mainly involve short sales of treasury bills.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
557
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
Level 3 to Level 2 transfers mainly involve securities delivered under
repurchase agreements to clients, negotiable debt securities accounted
at fair value through profit or loss and trading derivatives. The review of
the observability analysis of the derivatives and the financial liabilities
measured at fair value by option amounts to -€2.1 billion.
Financial instruments classified in Level 1
Level 1 comprises all derivatives quoted in an active market (options,
futures, etc.), regardless of their underlying (interest rate, exchange rate,
precious metals, major stock indexes), as well as equities and bonds
quoted in an active market.
A market is considered as being active if quoted prices are readily and
regularly available from exchange, brokers, dealers, pricing services or
regulatory agencies, and those prices represent actual and regularly
occurring market transactions on an arm’s length basis.
Corporate, government and agency bonds that are valued on the basis
of prices obtained from independent sources, deemed to be enforceable
and updated regularly, are classified in Level 1. This covers the bulk of
sovereign and agency bonds and corporate securities held. Issuers whose
bonds are not quoted are classified in Level 3.
Financial instruments classified in Level 2
The main financial instruments classified in Level 2 are:
liabilities designated at fair value;
Liabilities designated at fair value. Financial liabilities designated at fair
value are classified in Level 2 when their embedded derivative is deemed
to be classified in Level 2;
over-the-counter derivatives.
The main OTC derivatives classified in Level 2 are those valued using inputs
considered to be observable and where the valuation technique does not
generate any significant exposure to a model risk.
Level 2 therefore mainly includes:
linear derivative products such as interest rate swaps, currency swaps
and forward FX. They are valued using simple models widely used in
the market, based either on directly observable inputs (foreign exchange
rates, interest rates), or inputs derived from observable market prices
(currency swaps);
non-linear vanilla instruments such as caps, floors, swaptions, currency
options, equity options and credit default swaps, including digital options.
They are valued using simple models widely used in the market, based
either on directly observable inputs (foreign exchange rates, interest
rates, share prices) or inputs that can be derived from observable market
prices (volatilities);
certain structured products on which market quotations exist and on an
ongoing basis and valued in a market consensus model;
securities listed on a market deemed inactive and for which independent
valuation data are available;
futures and options listed on shares with insufficient volumes.
Financial instruments classified in Level 3
Financial instruments classified in Level 3 are those which do not meet
the conditions for classification in Level 1 or 2. They are therefore mainly
financial instruments with a high model risk whose valuation requires
substantial use of unobservable inputs.
All or part of the initial margin on all new transactions classified in Level 3
is reserved at the date of initial recognition. It is written back into the profit
or loss account either spread over the period during which the inputs
are considered to be unobservable or in full on the date when the inputs
become observable, or when the transaction is completed.
Level 3 therefore mainly includes:
Securities
Securities classified in Level 3 mainly include:
unlisted shares or bonds for which no independent valuation is available;
ABSs and CLOs for which there are indicative independent quotes but
which are not necessarily executable;
ABSs, CLOs and super senior and mezzanine CDO tranches where it
cannot be demonstrated that the market is active.
Liabilities designated at fair value
Financial liabilities designated at fair value are classified in Level 3 when
their embedded derivative is deemed to be classified in Level 3.
Over-the-counter derivatives
Unobservable income includes complex financial instruments that are
significantly exposed to model risk or that involve parameters that are
considered unobservable.
The aggregate of these principles is mapped for observability according
to the three levels indicating for each product, currency and maturity the
classification used.
The following are classified mainly in Level 3:
interest rate exposures or very long-dated currency swaps or covering
emerging currencies;
equity exposures, mainly through products traded on overly shallow
option markets or indexed to volatility or equity/equity correlations and
long-dated;
exposures to non-linear long-dated products (interest rate or currency)
on major currencies/indexes;
non-linear exposures to emerging market currencies;
complex derivatives.
The main exposures involved are:
structured interest rates products known as “path dependent”, whose
future cash flows depend on past fixings observed on IR swap rates.
These products valuation resort to complex models;
securitisation swaps generating an exposure to the prepayment rate. The
prepayment rate is determined on the basis of historical data on similar
portfolios. The assumptions and inputs used are checked regularly on
the basis of actual prepayments;
hybrid products: those products flow depend on correlation between two
different types of underlying products, such as interest rates, indexes,
FX rate, credit spread;
CDOs based on corporate credit baskets. These are no longer significant;
certain portfolios of complex equity derivatives;
securities under repurchase agreements, for long maturities or in
emerging currencies, or related to complex underlying securities.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
558
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
Net change in financial instruments measured at fair value according to Level 3
Financial assets measured at fair value according to Level 3
(in millions of euros)
Total
Financial
assets
measured
at fair value
according to
Level 3
Held for trading financial assets
Loans and
receivables
due from credit
institutions
Loans and
receivables
due from
customers
Securities
bought
under
repurchase
agreements
Pledged
securities
Held for trading securities
Derivative
instruments
Treasury
bills and
similar
securities
Bonds and
other fixed
income
securities
Mutual
funds
Equities
and other
variable
income
securities
Held for
trading
securities
Closing balance
(31/12/2019)
15,069
-
892
1,919
-
-
161
23
594
779
1,907
Gains or losses
during
the period
(1)
(691)
-
(46)
84
-
-
(6)
-
(327)
(334)
(7)
Recognised in
profit or loss
(629)
-
(21)
82
-
-
(6)
-
(327)
(334)
(6)
Recognised
in other
comprehensive
income
(62)
-
(25)
2
-
-
-
-
-
-
(1)
Purchases
5,559
-
415
748
-
-
12
-
4
17
911
Sales
(2,159)
-
(779)
(15)
-
-
(8)
(23)
-
(32)
(190)
Issues
4
-
-
-
-
-
-
-
-
-
4
Settlements
(106)
-
(21)
(5)
-
-
(1)
-
-
(2)
(16)
Reclassifications
-
-
275
-
-
-
-
-
-
-
-
Changes
associated with
scope during
the period
(19)
-
-
-
-
-
-
-
-
-
-
Transfers
(1,125)
-
(5)
(1,104)
-
-
(2)
-
-
(2)
(22)
Transfers
to Level 3
195
-
-
80
-
-
6
-
-
6
97
Transfers
from Level 3
(1,320)
-
(5)
(1,184)
-
-
(8)
-
-
(8)
(119)
CLOSING
BALANCE
(31/12/2020)
16,532
-
731
1,627
-
-
156
-
271
427
2,587
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
559
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
(in millions of euros)
Other financial instruments at fair value through profit or loss
Equity instruments
at fair value
through profit or loss
Debt instruments that do not meet the conditions of the “SPPI” test
Equity and
other variable
income
securities
Non-
consolidated
equity
investments
Loans and
receivables
due from
credit
institutions
Loans and
receivables
due from
customers
Securities
bought
under
repurchase
agreements
Pledged
securities
Debt securities
Treasury bills
and similar
securities
Bonds and
other fixed
income
securities
Mutual
funds
Debt
securities
Closing balance
(31/12/2019)
1,000
3,374
-
362
-
-
2
579
3,774
4,354
Gains or losses
during the period
(1)
(69)
(220)
-
(12)
-
-
(1)
6
35
41
Recognised
in profit or loss
(68)
(214)
-
-
-
-
(1)
6
35
41
Recognised in other
comprehensive
income
(1)
(6)
-
(12)
-
-
-
-
-
-
Purchases
102
1,816
-
(5)
-
-
2
138
1,468
1,608
Sales
(84)
(311)
-
(18)
-
-
-
(22)
(694)
(716)
Issues
-
-
-
-
-
-
-
-
-
-
Settlements
-
-
-
(42)
-
-
-
-
-
-
Reclassifications
-
-
-
(275)
-
-
-
-
-
-
Changes associated
with scope during
the period
-
-
-
(10)
-
-
(2)
(7)
-
(9)
Transfers
-
(5)
-
-
-
-
-
12
-
12
Transfers to Level 3
-
-
-
-
-
-
-
12
-
12
Transfers from
Level 3
-
(5)
-
-
-
-
-
-
-
-
CLOSING BALANCE
(31/12/2020)
949
4,654
-
-
-
-
1
706
4,583
5,290
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
560
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
(in millions of euros)
Other financial instruments at fair value through profit or loss
Assets backing unit-linked contracts
Financial assets designated at fair value through profit or loss
Treasury bills
and similar
securities
Bonds and
other fixed
income
securities
Equities
and other
variable
income
securities
Mutual
funds
Loans and
receivables
due from
credit
institutions
Loans and
receivables
due from
customers
Debt securities
Treasury bills
and similar
securities
Bonds and
other fixed
income
securities
Debt
securities
Closing balance
(31/12/2019)
184
-
184
12
-
-
-
-
-
Gains or losses during
the period
(1)
(184)
-
(184)
-
-
-
-
-
-
Recognised in profit
or loss
(184)
-
(184)
-
-
-
-
-
-
Recognised in other
comprehensive
income
-
-
-
-
-
-
-
-
-
Purchases
-
-
-
25
-
-
-
-
-
Sales
-
-
-
(5)
-
-
-
-
-
Issues
-
-
-
-
-
-
-
-
-
Settlements
-
-
-
-
-
-
-
-
-
Reclassifications
-
-
-
-
-
-
-
-
-
Changes associated
with scope during the
period
-
-
-
-
-
-
-
-
-
Transfers
-
-
-
-
-
-
-
-
-
Transfers to Level 3
-
-
-
-
-
-
-
-
-
Transfers from
Level 3
-
-
-
-
-
-
-
-
-
CLOSING BALANCE
(31/12/2020)
-
-
-
32
-
-
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
561
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
(in millions of euros)
Financial assets at fair value through other comprehensive income
Hedging
derivative
instruments
Equity instruments at fair
value through other comprehensive
income that will not be
reclassified to profit or loss
Debt instruments at fair value through other comprehensive
income that may be reclassified to profit or loss
Loans and
receivables
due from
credit
institutions
Loans and
receivables
due from
customers
Debt Securities
Equities and
other variable
income
securities
Non-
consolidated
equity
investments
Treasury bills
and similar
securities
Bonds and
other fixed
income
securities
Debt
securities
Closing balance
(31/12/2019)
35
231
-
-
-
20
20
-
Gains or losses
during the period
(1)
(2)
(17)
-
-
21
54
75
-
Recognised
in profit or loss
-
-
-
-
21
54
75
-
Recognised in other
comprehensive
income
(2)
(17)
-
-
-
-
-
-
Purchases
7
(10)
-
-
(21)
(54)
(75)
-
Sales
-
(9)
-
-
-
-
-
-
Issues
-
-
-
-
-
-
-
-
Settlements
-
-
-
-
-
(20)
(20)
-
Reclassifications
-
-
-
-
-
-
-
-
Changes associated
with scope during
the period
-
-
-
-
-
-
-
-
Transfers
-
-
-
-
-
-
-
-
Transfers to Level 3
-
-
-
-
-
-
-
-
Transfers from
Level 3
-
-
-
-
-
-
-
-
CLOSING BALANCE
(31/12/2020)
40
195
-
-
-
-
-
-
(1)
This balance includes the gains and losses of the period made on assets reported on the balance sheet at the closing date, for the following amounts:
Gains/losses for the period from Level 3 assets held at the end of the period
(779)
Recognised in profit or loss
(762)
Recognised in other comprehensive income
(17)
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
562
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
Financial liabilities measured at fair value according to Level 3
TOTAL
Held for trading financial liabilities
Financial
liabilities
designated
at fair value
through profit
or loss
Hedging
derivative
instruments
(in millions of euros)
Securities
sold short
Securities
sold under
repurchase
agreements
Debt
securities
Due to credit
institutions
Due to
customers
Derivative
Instruments
Closing balance
(31/12/2019)
9,413
-
920
-
-
-
666
7,514
313
Gains or losses
during the period
(1)
(381)
-
(104)
-
-
-
185
(432)
(30)
Recognised
in profit or loss
(378)
-
(104)
-
-
-
188
(432)
(30)
Recognised in other
comprehensive
income
(3)
-
-
-
-
-
(3)
-
-
Purchases
273
-
129
-
-
-
143
1
-
Sales
(191)
-
-
-
-
-
(6)
(185)
-
Issues
1,868
-
-
-
-
-
-
1,509
359
Settlements
(3,277)
-
-
-
-
-
(77)
(3,169)
(31)
Reclassifications
-
-
-
-
-
-
-
-
-
Changes associated
with scope during
the period
-
-
-
-
-
-
-
-
-
Transfers
508
-
(208)
-
-
-
244
472
-
Transfers to Level 3
1,136
-
225
-
-
-
261
650
-
Transfers from
Level 3
(628)
-
(433)
-
-
-
(17)
(178)
-
CLOSING BALANCE
(31/12/2020)
8,213
-
737
-
-
-
1,155
5,710
611
(1)
This balance includes the gains and losses of the period made on liabilities reported on the balance sheet at the closing date, for the following amounts:
Gains/losses for the period from Level 3 assets held at the end of the period
(348)
Recognised in profit or loss
(348)
Recognised in other comprehensive income
-
Gains and losses recognised in profit or loss relating to financial instruments
held for trading and designated at fair value through profit or loss and
derivative instruments are recognised in “Net gains (losses) on financial
instruments at fair value through profit or loss”; gains and losses recognised
in profit or loss relating to financial assets at fair value through equity are
recognised in “Net gains (losses) on financial instruments at fair value
through profit or loss through other comprehensive income”.
Sensitivity analysis for financial instruments
measured using the Level 3 valuation model
The use of unobservable inputs introduces uncertainty, which we have
assessed below using a sensitivity calculation on instruments valued
using these inputs.
Scope of interest rate derivatives
As regards interest rate derivatives, two key inputs are considered to be
unobservable and of such a type that they result in the classification of
the associated products in Level 3: correlation and prepayment rates (
i.e.
early redemption).
Correlation
Many products are sensitive to a correlation parameter. However, this
parameter is not unique and there are many different types of correlation,
including:
forward correlation between two successive indices in the same currency,
e.g.
: 2-year CMS/10-year CMS;
interest rate/interest rate correlation (different indices),
e.g.
Libor 3M
USD/Libor 3M EUR;
interest rate/FX correlation (or Quanto),
e.g.
USD/JPY – USD;
equity/equity correlation;
equity/FX correlation;
equity/interest rate correlation;
FX/FX correlation.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
563
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
Prepayment rate
The prepayment rate is the rate of early repayment on securitisation
portfolios, whether voluntary or involuntary (default). Exposure to this risk
factor may stem from two types of source: direct exposure to these asset
classes, or certain “securitisation” swaps,
i.e.
where the variations in their
nominal amounts are adjusted automatically to the nominal amount of the
underlying portfolio, with no mark-to-market payment. The prepayment
rate plays a significant part in their valuation.
Calculation of impact
With respect to correlation
The results presented below have been obtained by applying the following
distinct risk shocks:
correlations between successive indices in the same currency (
i.e.
CMS
correlations);
cross assets correlations (
e.g.
: Equity/FX or IR/ Equity) and between two
interest-rate curves in different currencies.
The result of the stress test is the sum of the absolute values obtained.
For each type of correlation we considered absolute values by currency,
maturity and portfolio, thus making a conservative assumption. For the
CMS correlations, we considered the various underlyings independently
(
e.g.
1y10y, 2y10y).
As at 31 December 2019, the sensitivity to the parameters used in interest
rate derivative models was therefore +/-€12 million.
The quantity expressed is a sensitivity for a normalised market variation
assumption that is not intended to measure the impact of extreme variations.
With respect to the prepayment rate
Direct exposure to assets comprising a pre-payment risk concerns
securitisations such as RMBS and CLO and mezzanine CDO tranches.
These exposures are marginal. They can be taken into account through
sensitivity to a 1 bp change in credit spreads. This sensitivity being very
low (<€50 thousand/bp), exposure to pre-payment rate is thus considered
to be negligible.
The pre-payment rate is not an observable market parameter and the
valuation model used for the securitisation swaps is particularly conservative.
The valuation used is defined as the lower of the valuation obtained using
a very fast pre-payment rate and using a very slow pre-payment rate. A
“normal” variation in the pre-payment rate will therefore have no material
impact on M-to-M, no Day One thus being used for these products.
11.3
ESTIMATED IMPACT OF INCLUSION OF THE MARGIN AT INCEPTION
(in millions of euros)
31/12/2020
31/12/2019
Deferred margin at 1
st
January
66
61
Margin generated by new transactions during the period
61
36
Recognised in net income during the period
-
-
Amortisation and cancelled/reimbursed/matured transactions
(63)
(24)
Effects of inputs or products reclassified as observable during the period
(6)
(7)
Other movements
(1)
80
DEFERRED MARGIN AT THE END OF THE PERIOD
138
66
(1)
The amount of €80 million recorded in Other movements is linked to the revision of the historical method for calculating Day One on the non-linear scope during fiscal year 2020.
The first day margin on market transactions falling within Level 3 of fair value is reserved for the balance sheet and recognised in profit or loss as time
passes or when unobservable parameters become observable again.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
564
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 11
NOTE 12
Scope of consolidation at 31 December 2020
12.1
INFORMATION ON SUBSIDIARIES
12.1.1 Restrictions on entities
Regulatory, legal or contractual provisions may limit Crédit Agricole S.A.’s
ability to have free access to the assets of its subsidiaries and to settle
the Group’s liabilities.
Crédit Agricole S.A. has the following restrictions:
Regulatory constraints
The subsidiaries of Crédit Agricole S.A. are subject to prudential regulation
and regulatory capital requirements in their host countries. The minimum
equity capital (solvency ratio), leverage ratio and liquidity ratio requirements
limit the capacity of these entities to pay dividends or to transfer assets
to Crédit Agricole S.A.
Legal constraints
The subsidiaries of Crédit Agricole S.A. are subject to legal provisions
concerning the distribution of capital and distributable earnings. These
requirements limit the ability of the subsidiaries to distribute dividends.
In the majority of cases, these are less restrictive than the regulatory
limitations mentioned above.
Contractual constraints
Constraints related to guarantees: Crédit Agricole S.A. encumbers certain
financial assets to raise funds through securitisation or refinancing with
central banks. Once pledged as guarantees, the assets can no longer
be used by Crédit Agricole S.A. This mechanism is described in Note 9
“Commitments given and received and other guarantees”.
Restriction on assets backing unit-linked
contracts for the Insurance business
Assets backing unit-linked contracts of Crédit Agricole S.A. are held
for the benefit of policyholders. Assets of the insurance subsidiaries of
Crédit Agricole S.A. are mainly held for satisfying their obligation towards
their policyholders. Assets transfers to other entities are possible following
the legal conditions. However, in case of a transfer, a part of the profit due
to the transfer must be intended for the policyholders.
Other constraints
Crédit Agricole CIB Algérie must subject its dividend distribution to the prior
approval of its regulatory authority (Bank of Algeria).
The dividend payment of CA Égypte is subject to the prior approval of the
local regulator.
12.1.2 Support for structured entities
under Group control
Crédit Agricole CIB has contractual arrangements with some consolidated
structured entities that equate to commitments to provide financial support.
To meet its funding needs, Crédit Agricole CIB uses structured debt issuance
vehicles to raise cash on financial markets. Securities issued by these
entities are fully underwritten by Crédit Agricole CIB. At 31 December 2020,
the outstanding volume of these issues was €7 billion.
As part of its third-party securitisation business, Crédit Agricole CIB provides
liquidity lines to its ABCP conduits. At 31 December 2020, these liquidity
lines totalled €35 billion.
Crédit Agricole S.A. provided no other financial support for any structured
entities consolidated at 31 December 2020 and 31 December 2019.
12.1.3 Securitisation transactions
and dedicated funds
Various Group entities conduct securitisation operations on their own
account as part of collateralised refinancing transactions. Depending on
the circumstances, these transactions can be wholly or partially placed
with investors, sold under repurchase agreements or kept on the issuer’s
balance sheet as liquid securities reserves that can be used to manage
refinancing.
Following the IFRS 9 decision tree, these transactions are considered to
form part of deconsolidating or non-deconsolidating transactions: for non-
deconsolidating transactions, the assets are retained on the consolidated
balance sheet of Crédit Agricole S.A.
For more details on these securitisation transactions and on the indication
of the carrying amount of the assets concerned and associated liabilities,
see Note 6.6 “Transferred assets not derecognised or derecognised with
on-going involvement”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
565
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
12.2
COMPOSITION OF THE SCOPE
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Savings Management
Banking and financial institutions
ABC-CA Fund
Management CO
China
A
33.3
33.3
22.7
22.8
AMUNDI
France
S
68.3
68.6
68.1
68.4
AMUNDI (UK) Ltd.
United Kingdom
S
100.0
100.0
68.1
68.4
AMUNDI ASSET
MANAGEMENT
France
S
100.0
100.0
68.1
68.4
AMUNDI ASSET
MANAGEMENT
AGENCIA EN CHILE
Chile
B
100.0
100.0
68.4
68.4
AMUNDI ASSET
MANAGEMENT
BELGIUM
Belgium
B
100.0
100.0
68.4
68.4
AMUNDI ASSET
MANAGEMENT DUBAI
(OFF SHORE) BRANCH
United Arab
Emirates
B
100.0
100.0
68.4
68.4
AMUNDI ASSET
MANAGEMENT HONG
KONG BRANCH
Hong Kong
B
100.0
100.0
68.4
68.4
AMUNDI ASSET
MANAGEMENT
LONDON BRANCH
United Kingdom
B
100.0
100.0
68.1
68.4
AMUNDI ASSET
MANAGEMENT MEXICO
BRANCH
Mexico
B
100.0
100.0
68.4
68.4
AMUNDI ASSET
MANAGEMENT
NEDERLAND
Netherlands
B
100.0
100.0
68.4
68.4
Amundi Asset
Management S.A.I S.A.
Romania
S
100.0
100.0
68.1
68.4
Amundi Austria GmbH
Austria
S
100.0
100.0
68.1
68.4
Amundi BOC Wealth
Management Co. Ltd
E2
France
S
55.0
37.5
Amundi Czech Republic
Asset Management
Bratislava Branch
Slovakia
B
100.0
100.0
68.4
68.4
Amundi Czech Republic
Asset Management
Sofia Branch
Bulgaria
B
100.0
100.0
68.4
68.4
Amundi Czech Republic
Asset Management,
A.S.
Czech Republic
S
100.0
100.0
68.1
68.4
Amundi Czech Republic,
Investicni Spolecnost,
A.S.
Czech Republic
S
100.0
100.0
68.1
68.4
Amundi Deutschland
GmbH
Germany
S
100.0
100.0
68.1
68.4
AMUNDI Finance
France
S
100.0
100.0
68.1
68.4
AMUNDI Finance
Emissions
France
S
100.0
100.0
68.1
68.4
AMUNDI GLOBAL
SERVICING
Luxembourg
S
100.0
100.0
68.1
68.4
AMUNDI Hellas MFMC
S.A.
Greece
S
100.0
100.0
68.1
68.4
AMUNDI Hong Kong Ltd.
Hong Kong
S
100.0
100.0
68.1
68.4
AMUNDI Iberia S.G.I.I.C
S.A.
Spain
S
100.0
100.0
68.1
68.4
AMUNDI Immobilier
France
S
100.0
100.0
68.1
68.4
AMUNDI India Holding
France
S
100.0
100.0
68.1
68.4
AMUNDI Intermédiation
France
S
100.0
100.0
68.1
68.4
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Amundi Intermédiation
Asia PTE Ltd
Singapore
S
100.0
100.0
68.1
68.4
Amundi Intermédiation
Dublin Branch
Ireland
B
100.0
100.0
68.1
68.4
Amundi Intermédiation
London Branch
United Kingdom
B
100.0
100.0
68.1
68.4
Amundi Investment
Fund Management
Private Limited
Company
Hungary
S
100.0
100.0
68.1
68.4
Amundi Ireland Ltd
Ireland
S
100.0
100.0
68.1
68.4
AMUNDI Issuance
France
S
100.0
100.0
68.1
68.4
AMUNDI Japan
Japan
S
100.0
100.0
68.1
68.4
AMUNDI Japan Holding
S4
Japan
S
100.0
68.4
Amundi Luxembourg
S.A.
Luxembourg
S
100.0
100.0
68.1
68.4
AMUNDI Malaysia Sdn
Bhd
Malaysia
S
100.0
100.0
68.1
68.4
Amundi Pioneer Asset
Management Inc
United States
S
100.0
100.0
68.1
68.4
Amundi Pioneer Asset
Management USA Inc
United States
S
100.0
100.0
68.1
68.4
Amundi Pioneer
Distributor Inc
United States
S
100.0
100.0
68.1
68.4
Amundi Pioneer
Institutional Asset
Management Inc
United States
S
100.0
100.0
68.1
68.4
AMUNDI Polska
Poland
S
100.0
100.0
68.1
68.4
AMUNDI Private Equity
Funds
France
S
100.0
100.0
68.1
68.4
AMUNDI Real Estate
Italia SGR S.p.A.
Italy
S
100.0
100.0
68.1
68.4
AMUNDI SGR S.p.A.
Italy
S
100.0
100.0
68.1
68.4
AMUNDI Singapore Ltd.
Singapore
S
100.0
100.0
68.1
68.4
AMUNDI Suisse
Switzerland
S
100.0
100.0
68.1
68.4
Amundi Taïwan Limited
Taiwan
S
100.0
100.0
68.1
68.4
AMUNDI Tenue de
Comptes
France
S
100.0
100.0
68.1
68.4
AMUNDI USA Inc
United States
S
100.0
100.0
68.1
68.4
AMUNDI Ventures
France
S
100.0
100.0
68.1
68.4
BFT INVESTMENT
MANAGERS
France
S
100.0
100.0
68.1
68.4
CA Indosuez
(Switzerland) S.A. Hong
Kong Branch
France
Switzerland
B
100.0
100.0
97.8
97.8
CA Indosuez (Suisse)
S.A. Singapore Branch
Singapore
Switzerland
B
100.0
100.0
97.8
97.8
CA Indosuez (Suisse)
S.A. Switzerland Branch
Switzerland
B
100.0
100.0
97.8
97.8
CA Indosuez
(Switzerland) S.A.
Switzerland
S
100.0
100.0
97.8
97.8
CA Indosuez Finanziaria
S.A.
Switzerland
S
100.0
100.0
97.8
97.8
CA Indosuez Gestion
France
S
100.0
100.0
97.8
97.8
CA Indosuez Wealth
(Brazil) S.A. DTVM
D4
Brazil
S
100.0
100.0
97.8
97.8
CA Indosuez Wealth
(Europe)
Luxembourg
S
100.0
100.0
97.8
97.8
CA Indosuez Wealth
(Europe) Belgium
Branch
Belgium
Luxembourg
B
100.0
100.0
97.8
97.8
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
566
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
CA Indosuez Wealth
(Europe) Spain Branch
Spain
Luxembourg
B
100.0
100.0
97.8
97.8
CA Indosuez Wealth
(France)
France
S
100.0
100.0
97.8
97.8
CA Indosuez Wealth
(Group)
France
S
100.0
100.0
97.8
97.8
CA Indosuez Wealth
Italy S.P.A.
Italy
S
100.0
100.0
97.8
97.8
CA Luxembourg
(succursale Italie)
S2
France
Luxembourg
B
100.0
97.8
CFM Indosuez Conseil
en Investissement
France
S
70.2
70.2
67.5
67.5
CFM Indosuez Conseil
en Investissement,
Succursale de Nouméa
France
B
70.2
70.2
67.5
67.5
CFM Indosuez Gestion
Monaco
S
70.2
70.2
66.6
66.1
CFM Indosuez Wealth
Monaco
S
70.2
70.2
67.5
67.5
CPR AM
France
S
100.0
100.0
68.1
68.4
Etoile Gestion
France
S
100.0
100.0
68.1
68.4
Fund Channel
D2
Luxembourg
S
100.0
50.0
68.1
34.3
Fund Channel
Singapore Branch
D2
Singapore
Luxembourg
S
100.0
50.0
68.1
34.2
KBI Fund Managers
Limited
Ireland
S
87.5
87.5
68.1
68.4
KBI Global Investors
(North America) Limited
Ireland
S
87.5
87.5
68.1
68.4
KBI Global Investors
Limited
Ireland
S
87.5
87.5
68.1
68.4
LCL Emissions
France
S
100.0
100.0
68.1
68.4
NH-AMUNDI ASSET
MANAGEMENT
South Korea
A
30.0
30.0
20.4
20.5
Pioneer Global
Investments LTD
Buenos Aires Branch
S1
Argentina
B
100.0
68.4
Pioneer Global
Investments LTD
Mexico city Branch
Mexico
B
100.0
100.0
68.4
68.4
Sabadell Asset
Management, S.A.,
S.G.I.I.C.
E3
France
S
100.0
68.1
Société Générale
Gestion (S2G)
France
S
100.0
100.0
68.1
68.4
SAS DEFENSE CB3
E1
France
JV
25.0
25.0
Investment
companies
State Bank of India
Fund Management
India
A
37.0
37.0
25.2
25.3
Vanderbilt Capital
Advisors LLC
United States
S
100.0
100.0
68.1
68.4
WAFA Gestion
Morocco
A
34.0
34.0
23.2
23.3
Insurance
ASSUR&ME
France
CSE
100.0
100.0
100.0
100.0
CA Assicurazioni
Italy
S
100.0
100.0
100.0
100.0
CACI DANNI
(1)
France
Ireland
B
100.0
100.0
100.0
100.0
CACI LIFE LIMITED
Ireland
S
100.0
100.0
100.0
100.0
CACI NON LIFE LIMITED
Ireland
S
100.0
100.0
100.0
100.0
CACI NON VIE
(1)
France
Ireland
B
100.0
100.0
100.0
100.0
CACI Reinsurance Ltd.
Ireland
S
100.0
100.0
100.0
100.0
CACI VIE
(1)
France
Ireland
B
100.0
100.0
100.0
100.0
CACI VITA
(1)
France
Ireland
B
100.0
100.0
100.0
100.0
CALIE Europe
Succursale France
(1)
France
Luxembourg
B
100.0
100.0
100.0
100.0
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
CALIE Europe
Succursale Pologne
(1)
France
Luxembourg
B
100.0
100.0
100.0
100.0
Crédit Agricole
Assurances (CAA)
France
S
100.0
100.0
100.0
100.0
Crédit Agricole Creditor
Insurance (CACI)
France
S
100.0
100.0
100.0
100.0
Crédit Agricole Life
Greece
S
100.0
100.0
100.0
100.0
Crédit Agricole Life
Insurance Company
Japan Ltd.
Japan
S
100.0
100.0
100.0
100.0
Crédit Agricole Life
Insurance Europe
Luxembourg
S
100.0
100.0
99.9
99.9
Crédit Agricole Vita
S.p.A.
Italy
S
100.0
100.0
100.0
100.0
Finaref Risques Divers
France
S
100.0
100.0
100.0
100.0
Finaref Vie
S5
France
S
100.0
100.0
GNB SEGUROS
Portugal
S
100.0
75.0
100.0
75.0
Médicale de France
France
S
100.0
100.0
100.0
100.0
Pacifica
France
S
100.0
100.0
100.0
100.0
Predica
France
S
100.0
100.0
100.0
100.0
Predica – Prévoyance
Dialogue du Crédit
Agricole
(1)
France
B
100.0
100.0
100.0
100.0
Space Holding (Ireland)
Limited
Ireland
S
100.0
100.0
100.0
100.0
Space Lux
Luxembourg
S
100.0
100.0
100.0
100.0
Spirica
France
S
100.0
100.0
100.0
100.0
UCITS
37785 QXEURC
(1)
E2
France
CSE
100.0
100.0
ACAJOU
France
CSE
100.0
100.0
68.4
68.4
AGRICOLE RIVAGE
DETTE
(1)
France
CSE
100.0
100.0
100.0
100.0
AIJPMGBIGOAHE
E1
Luxembourg
CSE
82.3
82.3
AM DESE FIII DS3IMDI
(1)
France
CSE
100.0
100.0
100.0
100.0
AMUNDI GRD 24 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
AMUNDI PE Solution
Alpha
France
CSE
100.0
100.0
68.4
68.4
APLEGROSENIEUHD
(1)
Luxembourg
CSE
50.9
50.9
50.9
50.9
ARTEMID
(1)
France
CSE
100.0
100.0
100.0
100.0
BFT CREDIT
OPPORTUNITES -I-C
(1)
France
CSE
100.0
100.0
100.0
100.0
BFT opportunité
(1)
France
CSE
100.0
100.0
100.0
100.0
BFT VALUE PREM OP
CD
(1)
France
CSE
100.0
100.0
100.0
100.0
CA VITA
INFRASTRUCTURE
CHOICE FIPS c.I.A.(1)
France
CSE
100.0
100.0
100.0
100.0
CA VITA PRIVATE DEBT
CHOICE FIPS cl.A
(1)
France
CSE
100.0
100.0
100.0
100.0
CA VITA PRIVATE
EQUITY CHOICE
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2013
COMPARTIMENT 5 A5
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2013 FCPR B1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2013 FCPR C1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2013 FCPR D1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2013-2
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2013-3
(1)
France
CSE
100.0
100.0
100.0
100.0
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
567
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
CAA 2014
COMPARTIMENT 1
PART A1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2014
INVESTISSMENT PART
A3
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2015
COMPARTIMENT 1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2015
COMPARTIMENT 2
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA 2016
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA COMMERCES 2
(1)
E2
France
CSE
100.0
100.0
CAA
INFRASTRUCTURE
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA INFRASTRUCTURE
2017
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA INFRASTRUCTURE
2018 –
COMPARTIMENT 1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA INFRASTRUCTURE
2019
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PR FI II C1 A1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIV EQY 19 CF A
(1)
E2
France
CSE
100.0
100.0
CAA PRIV.FINANC.
COMP.1 A1 FIC
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIV.FINANC.
COMP.2 A2 FIC
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2017
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2017 BIS
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2017 FRANCE
INVESTISSEMENT
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2017 MEZZANINE
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2017 TER
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2018 –
COMPARTIMENT 1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2018 –
COMPARTIMENT
FRANCE
INVESTISSEMENT
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2019 COMPARTIMENT
1
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2019 COMPARTIMENT
BIS
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA PRIVATE EQUITY
2019 COMPARTIMENT
TER
(1)
France
CSE
100.0
100.0
100.0
100.0
CAA SECONDAIRE IV
(1)
France
CSE
100.0
100.0
100.0
100.0
CAREPTA R 2016
(1)
France
CSE
100.0
100.0
100.0
100.0
CEDAR
France
CSE
100.0
100.0
68.4
68.4
Chorial Allocation
France
CSE
99.7
99.7
68.2
68.2
CNP ACP 10 FCP
(1)
France
CSE
98.2
100.0
98.2
100.0
COMPARTIMENT DS3
– IMMOBILIER
VAUGIRARD
(1)
France
CSE
100.0
100.0
100.0
100.0
COMPARTIMENT DS3
– VAUGIRARD
(1)
France
CSE
100.0
100.0
100.0
100.0
CORSAIR 1.52%
25/10/38
(1)
Luxembourg
CSE
100.0
100.0
100.0
100.0
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
CORSAIR 1.5255%
25/04/35
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
CORSAIRE FINANCE
IRELAND 0.83%
25-10-38
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
CORSAIRE FINANCE
IRELAND 1.24%
25-10-38
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
CORSAIRE FINANCE
IRELANDE 0.7%
25-10-38
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
EFFITHERMIE FPCI
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR CAA 2013
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR CAA COMP TER
PART A3
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR CAA COMPART
BIS PART A2
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR CAA
COMPARTIMENT 1
PART A1
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR CAA France
croissance 2 A
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA 2007 A
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA 2007
C2
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA 2008
A1
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA 2008
A2
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA 2008
A3
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA
SECONDAIRE I A1
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA
SECONDAIRE I A2
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA
SECONDAIRES II A
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR PREDICA
SECONDAIRES II B
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR UI CAP AGRO
(1)
France
CSE
100.0
100.0
100.0
100.0
FCPR UI CAP SANTE A
(1)
France
CSE
99.8
100.0
99.8
100.0
FCT BRIDGE 2016-1
(1)
France
CSE
100.0
100.0
100.0
100.0
FCT CAA
COMPARTIMENT
CESSION DES
CRÉANCES LCL
E2
France
CSE
100.0
100.0
FCT CAA –
Compartment 2017-1
(1)
France
CSE
100.0
100.0
100.0
100.0
FCT CAREPTA –
COMPARTIMENT
2014-1
(1)
France
CSE
100.0
100.0
100.0
100.0
FCT CAREPTA –
COMPARTIMENT
2014-2
(1)
France
CSE
100.0
100.0
100.0
100.0
FCT CAREPTA –
COMPARTIMENT
RE-2016-1
(1)
France
CSE
97.8
100.0
97.8
100.0
FCT CAREPTA – RE
2015 -1
(1)
France
CSE
100.0
100.0
100.0
100.0
FCT CAREPTA 2-2016
(1)
S1
France
CSE
100.0
100.0
FCT MID CAP 2
05/12/22
(1)
France
CSE
100.0
100.0
100.0
100.0
FDA 18 FCP 2 DEC
(1)
S1
France
CSE
100.0
100.0
FDC A3 P
(1)
France
CSE
100.0
100.0
100.0
100.0
FEDERIS CORE EU CR
19 MM
(1)
France
CSE
43.7
43.7
43.7
43.7
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
568
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Federval
(1)
France
CSE
97.9
97.9
97.9
97.9
FPCI Cogeneration
France I
(1)
France
CSE
100.0
100.0
100.0
100.0
FR0010671958
PREDIQUANT A5
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD 44
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD 44 N3
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD 44 N2
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD 44 N4 PART CD
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD 44 N5
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD 54
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD02
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD03
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD05
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD07
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD08
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD09
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD10
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD11
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD12
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD13
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD14
(1)
France
CSE
97.8
97.8
97.8
97.8
GRD17
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD18
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD19
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD20
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD21
(1)
France
CSE
100.0
100.0
100.0
100.0
IAA CROISSANCE
INTERNATIONALE
(1)
France
CSE
100.0
100.0
100.0
100.0
LF PRE ZCP 12 99 LIB
(1)
France
CSE
72.4
100.0
72.4
100.0
Londres Croissance
C16
France
CSE
100.0
100.0
68.4
68.4
LRP – CPT JANVIER
2013 0.30 13-21
11/01A
(1)
Luxembourg
CSE
84.2
84.2
84.2
84.2
OBJECTIF LONG TERME
FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
OPCI GHD SPPICAV
PROFESSIONNELLE
(1)
France
CSE
90.0
90.0
90.0
90.0
Peg – Portfolio Eonia
Garanti
France
CSE
97.2
97.2
66.5
66.5
Predica 2005 FCPR A
(1)
France
CSE
100.0
100.0
100.0
100.0
Predica 2006 FCPR A
(1)
France
CSE
100.0
100.0
100.0
100.0
Predica 2006-2007
FCPR
(1)
France
CSE
100.0
100.0
100.0
100.0
PREDICA 2010 A1
(1)
France
CSE
100.0
100.0
100.0
100.0
PREDICA 2010 A2
(1)
France
CSE
100.0
100.0
100.0
100.0
PREDICA 2010 A3
(1)
France
CSE
100.0
100.0
100.0
100.0
PREDICA SECONDAIRES
III
(1)
France
CSE
100.0
100.0
100.0
100.0
Predicant A1 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
Predicant A2 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
Predicant A3 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
Prediquant
Eurocroissance A2
(1)
France
CSE
100.0
100.0
100.0
100.0
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Prediquant opportunité
(1)
France
CSE
100.0
100.0
100.0
100.0
PREDIQUANT
PREMIUM
(1)
France
CSE
100.0
100.0
100.0
100.0
PREMIUM GR 0% 28
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
0.508% 25-10-38
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
0.63% 25-10-38
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
1.24% 25/04/35
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
1.531% 25-04-35
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
1.55% 25-07-40
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
4.52%06-21 EMTN
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
4.54%06-13.06.21
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
4.5575%21 EMTN
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
4.56%06-21
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN 4.7%
EMTN 08/08/21
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
4.72%12-250927
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN PLC
1.095% 25-10-38
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN PLC
4.30%2021
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN TV
06/22
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN TV
07/22
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN TV
07-22
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN TV
22
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN TV
26/07/22
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
TV2027
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
TV23/05/2022 EMTN
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PREMIUM GREEN
4.33% 06-29/10/21
(1)
GREEN 4.33%
06-29/10/21
(1)
Ireland
CSE
100.0
100.0
100.0
100.0
PurpleProtAsset 1,36%
25/10/2038
(1)
Luxembourg
CSE
100.0
100.0
100.0
100.0
PurpleProtAsset
1.093% 20/10/2038
(1)
Luxembourg
CSE
100.0
100.0
100.0
100.0
RED CEDAR
France
CSE
100.0
100.0
68.4
68.4
UI CAP SANTE 2
(1)
France
CSE
100.0
100.0
100.0
100.0
Unit-linked funds
(Fonds UC)
58 fonds UC dont le
taux de détention est
supérieur ou égal à
95%
France
CSE
> 95%
> 95%
> 95%
> 95%
0057514 AUC
(1)
Luxembourg
CSE
59.2
58.1
59.2
58.1
1827 A2EURC
(1)
E2
Luxembourg
CSE
61.1
61.1
56055 A5 EUR
(1)
E2
Luxembourg
CSE
99.5
99.5
5880 AEURC
(1)
E2
Luxembourg
CSE
59.2
59.2
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
569
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
5884 AEURC
(1)
E2
Luxembourg
CSE
30.6
30.6
5922 AEURHC
(1)
Luxembourg
CSE
54.0
51.6
54.0
51.6
78752 AEURHC
(1)
Luxembourg
CSE
41.1
40.2
41.1
40.2
A FD EQ E CON AE (C)
(1)
Luxembourg
CSE
61.8
58.3
61.8
58.3
A FD EQ E FOC AE (C)
(1)
Luxembourg
CSE
67.4
76.3
67.4
76.3
ACTICCIA VIE
(1)
France
CSE
99.1
99.1
99.1
99.1
ACTICCIA VIE 3
(1)
France
CSE
99.3
99.4
99.3
99.4
ACTICCIA VIE 90 C
(1)
France
CSE
100.0
100.0
100.0
100.0
ACTICCIA VIE 90 N2
(1)
France
CSE
100.0
100.0
100.0
100.0
ACTICCIA VIE 90 N3 C
(1)
France
CSE
100.0
100.0
100.0
100.0
ACTICCIA VIE 90 N4
(1)
France
CSE
100.0
99.9
100.0
99.9
ACTICCIA VIE 90 N6 C
(1)
France
CSE
100.0
99.9
100.0
99.9
ACTICCIA VIE N2 C
(1)
France
CSE
99.3
99.3
99.3
99.3
ACTICCIA VIE N4
(1)
France
CSE
99.7
99.7
99.7
99.7
ACTIONS 50 3DEC
(1)
France
CSE
100.0
100.0
100.0
100.0
AF INDEX EQ JAPAN AE
CAP
(1)
Luxembourg
CSE
80.1
17.7
80.1
17.7
AF INDEX EQ USA A4E
(1)
Luxembourg
CSE
63.0
70.2
63.0
70.2
AFCPRGLLIFEAEC
(1)
Luxembourg
CSE
42.2
47.3
42.2
47.3
AIMSCIWOAE
(1)
Luxembourg
CSE
4.6
30.9
4.6
30.9
AM AC FR ISR PC 3D
(1)
France
CSE
81.9
58.1
81.9
58.1
AM.AC.EU.ISR-P-3D
(1)
France
CSE
36.0
44.0
36.0
44.0
AM.AC.MINER.-P-3D
(1)
France
CSE
86.3
73.7
86.3
73.7
AM.AC.USA ISR P 3D
(1)
France
CSE
58.9
54.5
58.9
54.5
AM.ACT.EMER.-P-3D
(1)
France
CSE
42.8
43.4
42.8
43.4
AM.RDT PLUS -P-3D
(1)
France
CSE
48.6
41.3
48.6
41.3
AMIRAL GROWTH OPP
A
(1)
E2
France
CSE
51.1
51.1
AMUN TRESO CT PC
3D
(1)
France
CSE
56.2
85.8
56.2
85.8
AMUN.ACT.REST.P-C
(1)
France
CSE
37.9
70.7
37.9
70.7
AMUN.TRES.EONIA ISR
E FCP 3DEC
(1)
France
CSE
61.8
85.2
61.8
85.2
AMUNDI AC.FONC.PC
3D
(1)
France
CSE
59.8
56.3
59.8
56.3
AMUNDI ACTIONS
FRANCE C 3DEC
(1)
France
CSE
54.9
56.6
54.9
56.6
AMUNDI AFD AV
DURABL P1 FCP 3DEC
(1)
France
CSE
78.8
78.4
78.8
78.4
AMUNDI ALLOCATION
C
(1)
France
CSE
99.3
97.7
99.3
97.7
AMUNDI B GL AGG
AEC
(1)
Luxembourg
CSE
9.6
55.3
9.6
55.3
AMUNDI BGEB AEC
(1)
Luxembourg
CSE
49.1
43.7
49.1
43.7
AMUNDI EQ E IN AHEC
(1)
Luxembourg
CSE
41.2
37.4
41.2
37.4
AMUNDI GBL MACRO
MULTI ASSET P
(1)
France
CSE
70.1
69.6
70.1
69.6
AMUNDI GLB
MUL-ASSET-M2EURC
(1)
Luxembourg
CSE
47.5
67.9
47.5
67.9
AMUNDI GLO M/A
CONS-M2 EUR C
(1)
Luxembourg
CSE
76.2
66.0
76.2
66.0
AMUNDI HORIZON 3D
(1)
France
CSE
66.3
66.0
66.3
66.0
AMUNDI KBI ACTION
PC
(1)
France
CSE
87.7
87.4
87.7
87.4
AMUNDI KBI ACTIONS
C
(1)
France
CSE
89.9
25.2
89.9
25.2
AMUNDI KBI AQUA C
(1)
E2
France
CSE
74.3
74.3
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
AMUNDI OBLIG EURO
C
(1)
France
CSE
49.6
48.5
49.6
48.5
AMUNDI PATRIMOINE C
3DEC
(1)
France
CSE
85.7
85.5
85.7
85.5
AMUNDI
PULSACTIONS
(1)
France
CSE
57.5
57.6
57.5
57.6
AMUNDI SONANCE VIE
7 3DEC
(1)
France
CSE
97.4
97.4
97.4
97.4
AMUNDI SONANCE VIE
N8 3DEC
(1)
France
CSE
98.6
98.7
98.6
98.7
AMUNDI TRANSM PAT
C
(1)
France
CSE
98.6
98.1
98.6
98.1
AMUNDI VALEURS
DURAB
(1)
France
CSE
63.3
67.9
63.3
67.9
AMUNDI-CSH IN-PC
(1)
France
CSE
78.4
76.0
78.4
76.0
AMUNDI-EUR EQ
GREEN IM-IEURC
(1)
Luxembourg
CSE
65.5
80.2
65.5
80.2
AMUNDI-GL INFLAT
BD-MEURC
(1)
Luxembourg
CSE
57.5
60.4
57.5
60.4
AMUNDIOBLIG-
MONDEP
(1)
France
CSE
70.8
68.3
70.8
68.3
AMUNDI-VOLATILITY
WRLD-IUSDC
(1)
S1
Luxembourg
CSE
69.7
69.7
AMUNDI-VOLATILITY
WRLD-OUSDC
(1)
S1
Luxembourg
CSE
64.5
64.5
ANTINEA FCP
(1)
France
CSE
37.3
55.2
37.3
55.2
ARC FLEXIBOND-D
(1)
France
CSE
7.1
49.6
7.1
49.6
ATOUT EUROPE C FCP
3DEC
(1)
France
CSE
84.7
82.4
84.7
82.4
ATOUT FRANCE C FCP
3DEC
(1)
France
CSE
41.8
41.9
41.8
41.9
ATOUT PREM S
ACTIONS 3DEC
(1)
France
CSE
99.9
100.0
99.9
100.0
ATOUT VERT HORIZON
FCP 3DEC
(1)
France
CSE
35.2
35.2
35.2
35.2
AXA EUR.SM.CAP E
3D
(1)
France
CSE
93.0
82.4
93.0
82.4
BA-FII EUR EQ
O-GEUR
(1)
Luxembourg
CSE
51.9
50.7
51.9
50.7
BFT FRAN FUT-C
SI.3D
(1)
France
CSE
50.0
49.2
50.0
49.2
BFT SEL RDT 23 PC
(1)
France
CSE
99.6
100.0
99.6
100.0
BFT STATERE P (C)(1)
France
CSE
42.7
43.6
42.7
43.6
BNP PAR.CRED.ERSC
(1)
S2
France
CSE
60.8
60.8
CA MASTER EUROPE
(1)
France
CSE
46.1
46.6
46.1
46.6
CA MASTER
PATRIMOINE FCP
3DEC
(1)
France
CSE
98.6
98.5
98.6
98.5
CADEISDA 2DEC
(1)
France
CSE
40.0
40.0
40.0
40.0
CALIFORNIA 09
(1)
E2
France
CSE
67.3
67.3
CHORELIA N2 PART C
(1)
France
CSE
87.8
87.8
87.8
87.8
CHORELIA N3 PART C
(1)
Luxembourg
CSE
86.3
86.5
86.3
86.5
CHORELIA N4 PART C
(1)
France
CSE
88.5
88.6
88.5
88.6
CHORELIA N5 PART C
(1)
France
CSE
77.7
77.9
77.7
77.9
CHORELIA N6 PART C
(1)
France
CSE
81.8
58.9
81.8
58.9
CHORELIA N7 C
(1)
E2
France
CSE
87.7
87.7
CHORELIA PART C
(1)
France
CSE
85.1
85.2
85.1
85.2
CPR CONSO
ACTIONNAIRE FCP P
(1)
France
CSE
51.8
51.8
51.8
51.8
CPR CROIS.REA.-P
(1)
France
CSE
28.3
39.1
28.3
39.1
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
570
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
CPR EUR.HI.DIV.P 3D
(1)
France
CSE
44.3
43.2
44.3
43.2
CPR EUROLAND ESG
P
(1)
E2
France
CSE
5.4
5.4
CPR FOCUS INF.-P-3D
(1)
France
CSE
39.5
19.6
39.5
19.6
CPR GLO SILVER AGE
P
(1)
France
CSE
95.1
96.9
95.1
96.9
CPR I-SM B C-AEURA
(1)
Luxembourg
CSE
64.0
61.1
64.0
61.1
CPR OBLIG 12 M.P 3D
(1)
France
CSE
90.2
90.5
90.2
90.5
CPR REF.ST.EP.R.0-100
FCP 3DEC
(1)
France
CSE
100.0
100.0
100.0
100.0
CPR REFL RESP 0-100 I
3DEC
(1)
France
CSE
99.3
97.0
99.3
97.0
CPR REFL.RESP.0-100
P FCP 3DEC
(1)
France
CSE
85.4
85.6
85.4
85.6
CPR REFLEX
STRATEDIS 0-100 P
3D
(1)
France
CSE
99.8
99.8
99.8
99.8
CPR RENAI.JAP.-P-3D
(1)
France
CSE
35.0
66.1
35.0
66.1
CPR SILVER AGE P
3DEC
(1)
France
CSE
55.7
52.6
55.7
52.6
CPR-CLIM ACT-AEURA
(1)
Luxembourg
CSE
43.0
53.3
43.0
53.3
CPRGLODISOPARAC
(1)
Luxembourg
CSE
43.6
47.0
43.6
47.0
ECOFI MULTI
OPPORTUN.FCP 3DEC
(1)
S2
France
CSE
83.3
83.3
EPARINTER EURO BD
(1)
France
CSE
54.1
44.7
54.1
44.7
EXAN.PLEI.FD P
(1)
S1
France
CSE
4.2
4.2
EXANE 1 OVERDR CC
(1)
Luxembourg
CSE
72.1
63.8
72.1
63.8
FE AMUNDI INC
BLDR-IHE C
(1)
Luxembourg
CSE
80.2
77.8
80.2
77.8
FONDS AV ECHUS FIA
A
(1)
France
CSE
80.9
0.2
80.9
0.2
FONDS AV ECHUS FIA
B
(1)
S2
France
CSE
100.0
100.0
FRANKLIN DIVER-DYN-I
ACC EU
(1)
Luxembourg
CSE
48.0
50.1
48.0
50.1
FRANKLIN GLB MLT-AS
IN-IAEUR
(1)
Luxembourg
CSE
76.1
75.1
76.1
75.1
GRD CAR 39 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD FCR 99 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
GRD IFC 97 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
HASTINGS PATRIM AC
(1)
France
CSE
42.3
41.0
42.3
41.0
HYMNOS P 3D
(1)
France
CSE
74.0
46.5
74.0
46.5
IGSF-GBL GOLD FD-I
C
(1)
Luxembourg
CSE
25.9
46.3
25.9
46.3
IND.CAP
EMERG.-C-3D
(1)
France
CSE
42.0
80.6
42.0
80.6
INDO ALLOC MANDAT
C
(1)
France
CSE
92.4
2.0
92.4
2.0
INDO-FII EUR CP-IEUR
(1)
S2
Luxembourg
CSE
51.7
51.7
INDOFIIFLEXEG
(1)
E2
Luxembourg
CSE
47.3
47.3
INDO-GBL TR-PE
(1)
Luxembourg
CSE
59.4
41.0
59.4
41.0
INDOS.EURO.PAT.PD
3D
(1)
France
CSE
43.2
43.1
43.2
43.1
INDOSUEZ
ALLOCATION
(1)
France
CSE
99.5
81.6
99.5
81.6
INDOSUEZ EURO DIV
G
(1)
S2
Luxembourg
CSE
75.8
75.8
INDOSUEZ NAVIGATOR
G
(1)
Luxembourg
CSE
42.5
40.9
42.5
40.9
INDOSUEZSWZOPG
(1)
S1
Luxembourg
CSE
50.8
50.8
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
INVEST RESP S3 3D
(1)
France
CSE
74.6
74.1
74.6
74.1
JPM US EQY ALL CAP-C
HDG
(1)
Luxembourg
CSE
88.7
88.9
88.7
88.9
JPM US SEL EQ PLS-CA
EUR HD
(1)
Luxembourg
CSE
66.0
57.0
66.0
57.0
JPMORGAN F-JPM US
VALUE-CEHA
(1)
Luxembourg
CSE
84.5
59.3
84.5
59.3
JPMORGAN F-US
GROWTH-C AHD
(1)
Luxembourg
CSE
31.5
49.4
31.5
49.4
LCF CREDIT ERSC 3D
(1)
S2
France
CSE
54.7
54.7
LCL 3 TEMPO AV
11/16
(1)
France
CSE
100.0
100.0
100.0
100.0
LCL 6 HORIZ. AV 0615
(1)
France
CSE
100.0
100.0
100.0
100.0
LCL AC.DEV.DU.EURO
(1)
France
CSE
87.7
71.3
87.7
71.3
LCL AC.EMERGENTS
3D
(1)
France
CSE
43.2
54.2
43.2
54.2
LCL AC.MDE HS
EU.3D
(1)
France
CSE
38.1
41.2
38.1
41.2
LCL ACT RES
NATUREL
(1)
France
CSE
45.7
45.3
45.7
45.3
LCL ACT.E-U ISR 3D
(1)
France
CSE
26.9
55.5
26.9
55.5
LCL ACT.IMMOBI.3D
(1)
S2
France
CSE
49.3
49.3
LCL ACT.OR MONDE
(1)
France
CSE
49.5
46.8
49.5
46.8
LCL ACT.USA ISR 3D
(1)
France
CSE
87.0
85.6
87.0
85.6
LCL ACTIONS EURO C
(1)
France
CSE
36.7
64.3
36.7
64.3
LCL ACTIONS EURO
FUT
(1)
France
CSE
76.3
73.9
76.3
73.9
LCL ACTIONS MONDE
FCP 3 DEC
(1)
France
CSE
43.3
51.6
43.3
51.6
LCL ALLOCATION
DYNAMIQUE 3D FCP
(1)
France
CSE
95.4
95.4
95.4
95.4
LCL AUTOCALL VIE 17
(1)
S2
France
CSE
96.6
96.6
LCL DEVELOPPEM.PME
C
(1)
France
CSE
67.9
68.5
67.9
68.5
LCL DOUBLE HORIZON
A
(1)
France
CSE
100.0
100.0
100.0
100.0
LCL FLEX 30
(1)
France
CSE
49.4
45.7
49.4
45.7
LCL FO.SE.FR.AV(AV11)
FCP 3DEC
(1)
S1
France
CSE
100.0
100.0
LCL INVEST.EQ C
(1)
France
CSE
93.4
92.9
93.4
92.9
LCL INVEST.PRUD.3D
(1)
France
CSE
92.7
92.1
92.7
92.1
LCL L.GR.B.AV 17 C
(1)
France
CSE
100.0
100.0
100.0
100.0
LCL MGEST 60 3DEC
(1)
France
CSE
88.1
87.9
88.1
87.9
LCL MGEST FL.0-100
(1)
France
CSE
92.5
92.0
92.5
92.0
LCL OBL.CREDIT
EURO
(1)
France
CSE
84.4
81.4
84.4
81.4
LCL OPTIM II VIE 17
(1)
S2
France
CSE
97.4
97.4
LCL PREMIUM VIE
2015
(1)
S1
France
CSE
98.4
98.4
LCL TRI ESC AV 0118
(1)
S2
France
CSE
100.0
100.0
LCL TRIPLE TE AV OC
(1)
S2
France
CSE
100.0
100.0
LCL TRIPLE TEMPO AV
(FEV.2015)(1)
France
CSE
100.0
100.0
100.0
100.0
LCL TRP HOZ AV 0117
(1)
S2
France
CSE
100.0
100.0
LOUVOIS PLACEMENT
(1)
E2
France
CSE
40.1
40.1
M.D.F.89 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
OBJECTIF DYNAMISME
FCP
(1)
France
CSE
98.3
98.5
98.3
98.5
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
571
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
OBJECTIF MEDIAN
FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
OBJECTIF PRUDENCE
FCP
(1)
France
CSE
77.3
80.1
77.3
80.1
OPCIMMO LCL SPPICAV
5DEC
(1)
France
CSE
97.5
97.4
97.5
97.4
OPCIMMO PREM
SPPICAV 5DEC
(1)
France
CSE
95.0
94.7
95.0
94.7
OPTALIME FCP 3DEC
(1)
France
CSE
99.6
99.6
99.6
99.6
PIMCO GLOBAL BND
FD-CURNC EX
(1)
E2
Ireland
CSE
52.9
52.9
PORT EX ABS RET P
(1)
E2
France
CSE
99.6
99.6
PORT.METAUX
PREC.A-C
(1)
France
CSE
97.7
100.0
97.7
100.0
PORTF DET FI EUR AC
(1)
France
CSE
98.9
99.8
98.9
99.8
RAVIE FCP 5DEC
(1)
France
CSE
100.0
100.0
100.0
100.0
RETAH PART C
(1)
France
CSE
100.0
100.0
100.0
100.0
RSD 2006 FCP 3DEC
(1)
France
CSE
100.0
100.0
100.0
100.0
SCI TANGRAM
(1)
E2
France
S
95.7
95.7
SCI VICQ D'AZIR
VELLEFAUX
(1)
France
CSE
100.0
100.0
100.0
100.0
SCPI LFP MULTIMMO
(1)
France
CSE
41.6
100.0
41.6
100.0
SOLIDARITE AMUNDI
P
(1)
France
CSE
79.2
68.6
79.2
68.6
SOLIDARITE INITIATIS
SANTE
(1)
France
CSE
79.6
82.1
79.6
82.1
SONANCE VIE 2 FCP
3DEC
(1)
S1
France
CSE
100.0
100.0
SONANCE VIE 3 3DEC
(1)
S2
France
CSE
100.0
100.0
SONANCE VIE 3DEC
(1)
S1
France
CSE
100.0
100.0
SONANCE VIE 4 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
SONANCE VIE 5 FCP
3DEC
(1)
France
CSE
100.0
100.0
100.0
100.0
SONANCE VIE 6 FCP
(1)
France
CSE
100.0
100.0
100.0
100.0
SONANCE VIE 9
(1)
France
CSE
98.2
98.1
98.2
98.1
TRIAN 6 ANS N10 C
(1)
France
CSE
82.1
63.2
82.1
63.2
TRIANANCE 6 ANS
(1)
France
CSE
61.9
61.8
61.9
61.8
TRIANANCE 6 ANS 5 C
(1)
France
CSE
79.2
79.2
79.2
79.2
TRIANANCE 6 ANS N
11
(1)
E2
France
CSE
83.2
83.2
TRIANANCE 6 ANS N 4
(1)
S1
France
CSE
74.7
74.7
TRIANANCE 6 ANS N 9
(1)
France
CSE
79.7
79.9
79.7
79.9
TRIANANCE 6 ANS N2
C
(1)
France
CSE
74.8
75.0
74.8
75.0
TRIANANCE 6 ANS N3
(1)
France
CSE
70.5
70.7
70.5
70.7
TRIANANCE 6 ANS N6
(1)
France
CSE
84.6
84.5
84.6
84.5
TRIANANCE 6 ANS N7
C
(1)
France
CSE
82.1
82.2
82.1
82.2
TRIANANCE 6 ANS N8
C
(1)
France
CSE
86.6
86.9
86.6
86.9
TRIANANCE 6 AN 12 C
E1
France
CSE
84.4
84.4
UNIPIERRE ASSURANCE
(SCPI)
(1)
France
CSE
100.0
100.0
100.0
100.0
VENDOME INV.FCP
3DEC
(1)
France
CSE
92.0
91.2
92.0
91.2
Real estate collective
investment fund
(OPCI)
Nexus 1
(1)
Italy
CSE
88.8
98.5
88.8
98.5
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
OPCI CAA
CROSSROADS
France
CSE
100.0
100.0
OPCI Camp Invest
(1)
France
CSE
80.1
80.1
80.1
80.1
OPCI ECO CAMPUS
SPPICAV
(1)
France
CSE
100.0
100.0
100.0
100.0
OPCI Immanens
France
CSE
100.0
100.0
68.4
68.4
OPCI Immo Emissions
France
CSE
100.0
100.0
68.4
68.4
OPCI Iris Invest 2010
(1)
France
CSE
80.1
80.1
80.1
80.1
OPCI MASSY
BUREAUX
(1)
France
CSE
100.0
100.0
100.0
100.0
OPCI Messidor
(1)
France
CSE
100.0
100.0
100.0
100.0
Predica OPCI Bureau
(1)
France
CSE
100.0
100.0
100.0
100.0
Predica OPCI
Commerces
(1)
France
CSE
100.0
100.0
100.0
100.0
Predica OPCI
Habitation
(1)
France
CSE
100.0
100.0
100.0
100.0
Non-trading real
estate investment
company (SCI)
B IMMOBILIER
(1)
France
S
100.0
100.0
100.0
100.0
DS Campus
(1)
France
CSE
100.0
100.0
100.0
100.0
FREY RETAIL VILLEBON
France
JV
47.5
47.5
47.5
47.5
HDP BUREAUX
(1)
France
S
95.0
95.0
95.0
95.0
HDP HOTEL
(1)
France
S
95.0
95.0
95.0
95.0
HDP LA HALLE BOCA
(1)
France
S
95.0
95.0
95.0
95.0
IMEFA 177
(1)
France
CSE
100.0
100.0
100.0
100.0
IMEFA 178
(1)
France
CSE
100.0
100.0
100.0
100.0
IMEFA 179
(1)
France
CSE
100.0
100.0
100.0
100.0
Issy Pont
(1)
France
CSE
75.0
75.0
75.0
75.0
RUE DU BAC (SCI)
France
JV
50.0
50.0
50.0
50.0
SCI 1 TERRASSE
BELLINI
France
JV
33.3
33.3
33.3
33.3
SCI BMEDIC
HABITATION
(1)
France
S
100.0
100.0
100.0
100.0
SCI CAMPUS MEDICIS
ST DENIS
(1)
France
S
70.0
70.0
70.0
70.0
SCI CAMPUS RIMBAUD
ST DENIS
(1)
France
S
70.0
70.0
70.0
70.0
SCI CARPE DIEM
France
JV
50.0
50.0
50.0
50.0
SCI EUROMARSEILLE 1
France
JV
50.0
50.0
50.0
50.0
SCI EUROMARSEILLE 2
France
JV
50.0
50.0
50.0
50.0
SCI FÉDÉRALE PÉREIRE
VICTOIRE
(1)
France
S
99.0
99.0
99.0
99.0
SCI FÉDÉRALE
VILLIERS
(1)
France
S
100.0
100.0
100.0
100.0
SCI FEDERLOG
(1)
France
S
99.9
99.9
99.9
99.9
SCI FEDERLONDRES
(1)
France
S
100.0
100.0
100.0
100.0
SCI FEDERPIERRE
(1)
France
S
100.0
100.0
100.0
100.0
SCI FONDIS
France
A
25.0
25.0
25.0
25.0
SCI GRENIER VELLEF
(1)
France
CSE
100.0
100.0
100.0
100.0
SCI HEART OF LA
DÉFENSE
France
A
33.3
33.3
33.3
33.3
SCI Holding Dahlia
(1)
France
CSE
100.0
100.0
100.0
100.0
SCI ILOT 13
France
JV
50.0
50.0
50.0
50.0
SCI IMEFA 001
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 002
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 003
(1)
France
S
100.0
100.0
100.0
100.0
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
572
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
SCI IMEFA 004
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 005
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 006
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 008
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 009
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 010
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 011
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 012
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 013
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 016
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 017
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 018
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 020
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 022
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 025
(1)
France
CSE
100.0
100.0
100.0
100.0
SCI IMEFA 032
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 033
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 034
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 035
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 036
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 037
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 038
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 039
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 042
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 043
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 044
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 047
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 048
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 051
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 052
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 054
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 057
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 058
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 060
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 061
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 062
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 063
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 064
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 067
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 068
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 069
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 072
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 073
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 074
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 076
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 077
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 078
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 079
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 080
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 081
(1)
France
S
100.0
100.0
100.0
100.0
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
SCI IMEFA 082
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 083
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 084
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 085
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 089
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 091
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 092
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 096
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 100
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 101
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 102
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 103
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 104
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 105
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 107
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 108
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 109
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 110
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 112
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 113
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 115
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 116
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 117
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 118
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 120
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 121
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 122
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 123
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 126
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 128
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 129
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 131
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 132
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 140
(1)
France
CSE
100.0
100.0
100.0
100.0
SCI IMEFA 148
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 149
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 150
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 155
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 156
(1)
France
S
90.0
90.0
90.0
90.0
SCI IMEFA 157
(1)
France
S
90.0
90.0
90.0
90.0
SCI IMEFA 158
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 159
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 164
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 169
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 170
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 171
(1)
France
CSE
100.0
100.0
100.0
100.0
SCI IMEFA 172
(1)
France
CSE
100.0
100.0
100.0
100.0
SCI IMEFA 173
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 174
(1)
France
S
100.0
100.0
100.0
100.0
SCI IMEFA 175
(1)
France
S
100.0
100.0
100.0
100.0
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
573
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
SCI IMEFA 176
(1)
France
S
100.0
100.0
100.0
100.0
SCI LE VILLAGE VICTOR
HUGO
(1)
France
S
100.0
100.0
100.0
100.0
SCI MEDI BUREAUX
(1)
France
S
100.0
100.0
100.0
100.0
SCI PACIFICA HUGO
(1)
France
S
100.0
100.0
100.0
100.0
SCI PORTE DES LILAS
– FRÈRES FLAVIEN
(1)
France
S
100.0
100.0
100.0
100.0
SCI VALHUBERT
(1)
France
S
100.0
100.0
100.0
100.0
SCI VAUGIRARD 36-44
(1)
France
S
100.0
100.0
100.0
100.0
SCI WAGRAM 22/30
France
JV
50.0
50.0
50.0
50.0
SCI WASHINGTON
France
A
34.0
34.0
34.0
34.0
SCI ACADÉMIE
MONTROUGE
E2
France
JV
50.0
50.0
TOUR MERLE (SCI)
France
JV
50.0
50.0
50.0
50.0
Other
56055 AEURHC
E1
Luxembourg
CSE
51.6
51.4
ALTA VAI HOLDCO P
France
S
100.0
100.0
100.0
100.0
ALTAREA
France
A
24.7
24.7
24.7
24.7
AMUNDI EMERG MKT
BD-M2EURHC
E1
Luxembourg
CSE
63.2
63.2
AMUNDI IT Services
France
S
99.6
99.6
69.1
69.4
ARCAPARK SAS
France
JV
50.0
50.0
50.0
50.0
Azqore
Switzerland
S
80.0
80.0
78.2
78.2
Azqore S.A. Singapore
Branch
Singapore
Switzerland
B
80.0
80.0
80.0
78.2
CA Indosuez Wealth
(Asset Management)
Luxembourg
S
100.0
100.0
97.8
97.8
Crédit Agricole
Assurances Solutions
France
S
100.0
100.0
100.0
100.0
EUROPEAN CDT SRI PC
E1
France
CSE
44.6
43.8
EUROPEAN MOTORWAY
INVESTMENTS 1
(1)
Luxembourg
S
60.0
60.0
60.0
60.0
FIXED INCOME
DERIVATIVES
– STRUCTURED FUND
PLC
D2
Ireland
CSE
100.0
97.8
FONCIÈRE HYPERSUD
France
JV
51.4
51.4
51.4
51.4
FREY
France
A
19.4
19.3
19.4
19.3
GRD ACT.ZONE EURO
E1
France
CSE
100.0
100.0
HOLDING
EUROMARSEILLE
France
S
100.0
100.0
100.0
100.0
Icade
France
A
19.0
19.0
19.0
19.0
INDOSUEZ CAP
EMERG.M
E1
France
CSE
100.0
100.0
INFRA FOCH TOPCO
France
A
35.7
36.9
35.7
36.9
IRIS HOLDING FRANCE
France
S
80.1
80.1
80.1
80.1
KORIAN
France
A
24.3
24.4
24.3
24.4
PATRIMOINE ET
COMMERCE
France
A
20.8
20.3
20.8
20.3
PED EUROPE
France
S
100.0
100.0
PREDICA ÉNERGIES
DURABLES
(1)
France
S
58.8
99.9
58.8
99.9
PREDICA
INFRASTRUCTURE S.A.
Luxembourg
S
100.0
100.0
100.0
100.0
PREDIPARK
(1)
France
S
100.0
100.0
100.0
100.0
PREDIWATT
(1)
E2
France
CSE
100.0
100.0
RAMSAY – GÉNÉRALE
DE SANTÉ
France
A
39.6
39.6
39.6
39.6
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
S.A. RESICO
(1)
France
S
100.0
100.0
100.0
100.0
SAS CRISTAL
France
A
46.0
46.0
46.0
46.0
SAS PARHOLDING
France
A
50.0
50.0
50.0
50.0
SAS PREDI-RUNGIS
(1)
France
S
100.0
85.0
100.0
85.0
SH PREDICA ÉNERGIES
DURABLES SAS
(1)
France
S
99.9
99.9
99.9
99.9
VAUGIRARD AUTOVIA
SLU
(1)
Spain
S
100.0
100.0
100.0
100.0
Vaugirard Infra S.L.
Spain
S
100.0
100.0
100.0
100.0
VENDOME SEL EURO
PC
E1
France
CSE
43.6
43.6
Via Vita
France
S
100.0
100.0
100.0
100.0
French Retail Banking
Banking and financial
institutions
FIMO Courtage
France
S
100.0
100.0
94.6
94.6
Interfimo
France
S
99.0
99.0
94.6
94.6
LCL
France
S
95.6
95.6
95.6
95.6
LCL succursale de
Monaco
Monaco
France
B
95.6
95.6
95.6
95.6
Bforbank S.A.
E3
France
A
50.0
50.0
Lease financing
companies
Investment
companies
Tourism – property
development
Angle Neuf
France
S
100.0
100.0
95.6
95.6
Other
C.L. Verwaltungs und
Beteiligungsgesellschaft
GmbH
S3
Germany
S
100.0
95.6
Crédit Lyonnais
Développement
Économique (CLDE)
France
S
100.0
100.0
95.6
95.6
FCT True Sale
(Compartiment LCL)
France
CSE
100.0
100.0
95.6
95.6
International Retail
Banking
Banking and financial
institutions
Arc Broker
Poland
S
100.0
100.0
100.0
100.0
CREDIT AGRICOLE
BANK
Ukraine
S
100.0
100.0
100.0
100.0
Crédit Agricole Bank
Polska S.A.
Poland
S
100.0
100.0
100.0
100.0
Crédit Agricole Banka
Srbija a.d. Novi Sad
Serbia
S
100.0
100.0
100.0
100.0
Crédit Agricole Egypt
S.A.E.
Egypt
S
60.5
60.5
60.2
60.2
Crédit Agricole
Friuladria S.p.A.
Italy
S
82.4
81.8
62.3
61.9
Crédit Agricole Group
Solutions
Italy
CSE
100.0
100.0
74.4
74.4
Crédit Agricole Italia
Italy
S
75.6
75.6
75.6
75.6
Crédit Agricole Leasing
Italia
Italy
S
100.0
100.0
79.3
79.3
Crédit Agricole Polska
S.A.
Poland
S
100.0
100.0
100.0
100.0
Crédit Agricole Bank
Romania
D4
Romania
S
100.0
100.0
100.0
100.0
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
574
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Crédit Agricole Service
sp z o.o.
Poland
S
100.0
100.0
100.0
100.0
Crédit du Maroc
Morocco
S
78.7
78.7
78.7
78.7
SIFIM
Morocco
S
100.0
100.0
78.7
78.7
Other
IUB Holding
France
S
100.0
100.0
100.0
100.0
Specialised Financial
Services
Banking and financial
institutions
AD SUCCURSALE
D1
Morocco
B
100.0
100.0
100.0
100.0
Agos
Italy
S
61.0
61.0
61.0
61.0
Alsolia
France
S
100.0
100.0
100.0
100.0
Crédit Agricole
Consumer Finance
BANKIA sa
Spain
JV
51.0
51.0
51.0
51.0
Crealfi
France
S
51.0
51.0
51.0
51.0
Credibom
Portugal
S
100.0
100.0
100.0
100.0
Crediet Maatschappij
“De Ijssel” B.V.
S1
Netherlands
S
100.0
100.0
Crédit Agricole
Consumer Finance
France
S
100.0
100.0
100.0
100.0
Crédit Agricole
Consumer Finance
Nederland
D4
Netherlands
S
100.0
100.0
100.0
100.0
Crédit LIFT
France
S
100.0
100.0
100.0
100.0
Creditplus Bank AG
Germany
S
100.0
100.0
100.0
100.0
De Kredietdesk B.V.
Netherlands
S
100.0
100.0
100.0
100.0
DE NEDERLANDSE
VOORSCHOTBANK BV
S1
Netherlands
S
100.0
100.0
EFL Services
Poland
S
100.0
100.0
100.0
100.0
EUROFACTOR GmbH
Germany
S
100.0
100.0
100.0
100.0
Eurofactor Italia S.p.A.
Italy
S
100.0
100.0
100.0
100.0
EUROFACTOR
NEDERLAND
Netherlands
Germany
B
100.0
100.0
100.0
100.0
EUROFACTOR POLSKA
S.A.
Poland
S
100.0
100.0
100.0
100.0
Eurofactor S.A. – NV
(Benelux)
Belgium
B
100.0
100.0
100.0
100.0
Eurofactor S.A.
(Portugal)
D2
Portugal
B
100.0
100.0
100.0
100.0
HAMA POLSKA
E2
Poland
S
70.0
70.0
Eurofintus
Financieringen B.V.
S1
Netherlands
S
100.0
100.0
FCA Automotive
Services UK Ltd
United Kingdom
JV
50.0
50.0
50.0
50.0
FCA Bank
Italy
JV
50.0
50.0
50.0
50.0
FCA Bank Gmbh,
Hellenic Branch
Greece
JV
50.0
50.0
50.0
50.0
FCA Bank Germany
GmbH
Germany
JV
50.0
50.0
50.0
50.0
FCA Bank GmbH
Austria
JV
50.0
50.0
50.0
50.0
FCA BANK S.P.A,
BELGIAN BRANCH
D1
Belgium
JV
50.0
50.0
50.0
50.0
FCA BANK SPA, IRISH
BRANCH
Ireland
JV
50.0
50.0
50.0
50.0
FCA BANK SPA
ODDZIAL W POLSCE,
Polska Branch
D1
Poland
JV
50.0
50.0
50.0
50.0
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
FCA Capital Danmark
A/S
Denmark
JV
50.0
50.0
50.0
50.0
FCA Capital España EFC
S.A.
Spain
JV
50.0
50.0
50.0
50.0
FCA CAPITAL France
S.A.
D1
France
JV
50.0
50.0
50.0
50.0
FCA Capital Hellas S.A.
Greece
JV
50.0
50.0
50.0
50.0
FCA Capital IFIC
Portugal
JV
50.0
50.0
50.0
50.0
FCA Capital Nederland
B.V.
Netherlands
JV
50.0
50.0
50.0
50.0
FCA Capital Norge AS
Norway
JV
50.0
50.0
50.0
50.0
FCA Capital Re Limited
D2
Ireland
JV
50.0
50.0
50.0
50.0
FCA Capital Suisse S.A.
Switzerland
JV
50.0
50.0
50.0
50.0
FCA Capital Sverige
Sweden
JV
50.0
50.0
50.0
50.0
FCA DEALER SERVICES
ESPANA S.A., Morocco
Branch
Morocco
Spain
JV
50.0
50.0
50.0
50.0
FCA Dealer services
España, S.A.
Spain
JV
50.0
50.0
50.0
50.0
FCA Dealer Services
Portugal S.A.
D2
Portugal
JV
50.0
50.0
50.0
50.0
FCA Dealer Services UK
Ltd
United Kingdom
JV
50.0
50.0
50.0
50.0
FCA Insurance Hellas
S.A.
Greece
JV
50.0
50.0
50.0
50.0
FCA Leasing France
France
JV
50.0
50.0
50.0
50.0
FCA Leasing GmbH
Austria
JV
50.0
50.0
50.0
50.0
LEASYS POLSKA
D1
Poland
JV
50.0
50.0
50.0
50.0
FERRARI FINANCIAL
SERVICES GMBH
Germany
JV
50.0
50.0
25.0
25.0
FERRARI FINANCIAL
SERVICES GMBH, UK
Branch
United Kingdom
JV
50.0
50.0
50.0
50.0
FCA CAPITAL DANMARK
A/S, Finland Branch
D1
Finland
JV
50.0
50.0
50.0
50.0
Financierings Data
Netwerk B.V.
Netherlands
JV
50.0
50.0
50.0
50.0
Finaref Assurances
S.A.S.
France
S
100.0
100.0
100.0
100.0
Finata Zuid-Nederland
B.V.
Netherlands
S
98.1
98.1
98.1
98.1
GAC – Sofinco Auto
Finance Co.
China
A
50.0
50.0
50.0
50.0
GSA Ltd
Mauritius
S
100.0
100.0
100.0
100.0
IDM Finance B.V.
S1
Netherlands
S
100.0
100.0
IDM Financieringen B.V.
S1
Netherlands
S
100.0
100.0
IDM lease maatschappij
B.V.
Netherlands
S
100.0
100.0
100.0
100.0
Iebe Lease B.V.
Netherlands
S
100.0
100.0
100.0
100.0
INTERBANK NV
Netherlands
S
100.0
100.0
100.0
100.0
INTERMEDIAIRE
VOORSCHOTBANK BV
S1
Netherlands
S
100.0
100.0
Krediet '78 B.V.
Netherlands
S
100.0
100.0
100.0
100.0
Leasys
D2
Italy
JV
50.0
50.0
50.0
50.0
LEASYS DANMARK,
FILIAL AF LEASYS SPA
E2
Denmark
JV
50.0
50.0
LEASYS France S.A.S
D2
France
JV
50.0
50.0
50.0
50.0
LEASYS Nederland
D2
Netherlands
JV
50.0
50.0
50.0
50.0
LEASYS SPA Belgian
Branch
D2
Belgium
JV
50.0
50.0
50.0
50.0
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
575
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
LEASYS SPA GERMAN
BRANCH
D2
Germany
JV
50.0
50.0
50.0
50.0
LEASYS SPA, Spanish
Branch
D2
Spain
JV
50.0
50.0
50.0
50.0
Leasys UK Ltd
D2
United Kingdom
JV
50.0
50.0
50.0
50.0
Mahuko Financieringen
B.V.
S1
Netherlands
S
100.0
100.0
Menafinance
S5
France
S
50.0
50.0
NL Findio B.V
Netherlands
S
100.0
100.0
100.0
100.0
RIBANK NV
Netherlands
S
100.0
100.0
100.0
100.0
Sofinco Participations
France
S
100.0
100.0
100.0
100.0
Société Européenne de
Développement
d'Assurances
France
S
100.0
100.0
100.0
100.0
Société Européenne de
Développement du
Financement
France
S
100.0
100.0
100.0
100.0
Themis Courtage
Morocco
A
49.0
49.0
48.9
48.9
Ucafleet
France
A
35.0
35.0
35.0
35.0
VoordeelBank B.V.
S1
Netherlands
S
100.0
100.0
Wafasalaf
Morocco
A
49.0
49.0
49.0
49.0
LEASYS RENT SPA
D2
Italy
JV
50.0
50.0
50.0
50.0
Lease financing
companies
Auxifip
France
S
100.0
100.0
100.0
100.0
Carefleet S.A.
Poland
S
100.0
100.0
100.0
100.0
Crédit Agricole Leasing
& Factoring
France
S
100.0
100.0
100.0
100.0
Crédit Agricole Leasing
& Factoring, Sucursal
en Espana
Spain
France
B
100.0
100.0
100.0
100.0
Crédit du Maroc
Leasing & Factoring
Morocco
S
100.0
100.0
85.8
85.8
Europejski Fundusz
Leasingowy (E.F.L.)
Poland
S
100.0
100.0
100.0
100.0
Finamur
France
S
100.0
100.0
100.0
100.0
Lixxbail
France
S
100.0
100.0
100.0
100.0
Lixxcourtage
France
S
100.0
100.0
100.0
100.0
Lixxcredit
France
S
100.0
100.0
100.0
100.0
Unifergie
France
S
100.0
100.0
100.0
100.0
Investment
companies
Insurance
ARES Reinsurance Ltd.
Ireland
S
100.0
100.0
61.0
61.0
Other
A-BEST EIGHTEEN
E2
Italy
SJV
50.0
50.0
A-BEST ELEVEN UG
Germany
SJV
50.0
50.0
50.0
50.0
A-BEST FIFTEEN
Italy
SJV
50.0
50.0
50.0
50.0
A-BEST FOURTEEN
Italy
SJV
50.0
50.0
50.0
50.0
A-BEST SEVENTEEN
Italy
SJV
50.0
50.0
50.0
50.0
A-BEST SIXTEEN
Germany
SJV
50.0
50.0
50.0
50.0
A-BEST THIRTEEN
Spain
SJV
50.0
50.0
50.0
50.0
A-BEST TWELVE
Italy
SJV
50.0
50.0
50.0
50.0
CLICKAR SRL
D2
Italy
SJV
50.0
50.0
50.0
50.0
EFL Finance S.A.
Poland
S
100.0
100.0
100.0
100.0
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
EFL Lease Abs 2017-1
Designated Activity
Company
Ireland
CSE
100.0
100.0
100.0
100.0
ERASMUS FINANCE
Ireland
SJV
50.0
50.0
50.0
50.0
FAST THREE SRL
Italy
SJV
50.0
50.0
50.0
50.0
FCT GINGKO DEBT
CONSO 2015-1
France
CSE
100.0
100.0
100.0
100.0
FCT GINGKO PERSONAL
LOANS 2016-1
France
CSE
100.0
100.0
100.0
100.0
FCT GINKGO PERSONAL
LOANS 2020-01
E2
France
CSE
100.0
100.0
FCT GINKGO MASTER
REVOLVING LOANS
France
CSE
100.0
100.0
100.0
100.0
FCT GINGKO SALES
FINANCE 2015-1
France
CSE
100.0
100.0
100.0
100.0
FCT GINKGO SALES
FINANCE 2017-1
France
CSE
100.0
100.0
100.0
100.0
GAC – SOFINCO
2014-01
China
S.A.
50.0
50.0
50.0
50.0
HUI JU TONG 2019-1
China
SJV
50.0
50.0
50.0
50.0
HUI TONG 2018-2
E2
China
CSE
50.0
50.0
HUI TONG 2018-3
E2
China
CSE
50.0
50.0
HUI TONG 2019-1
E2
China
CSE
50.0
50.0
HUI JU TONG 2020-2
E2
China
CSE
50.0
50.0
MAGOI BV
Netherlands
CSE
100.0
100.0
100.0
100.0
MATSUBA BV
Netherlands
CSE
100.0
100.0
100.0
100.0
NIXES SEVEN SRL
Netherlands
SJV
50.0
50.0
50.0
50.0
NIXES SIX (LTD)
Italy
SJV
50.0
50.0
50.0
50.0
RETAIL AUTOMOTIVE
CP GERMANY 2016 UG
D1
Germany
CSE
100.0
100.0
100.0
100.0
SUNRISE SPV 20 SRL
Italy
CSE
100.0
100.0
61.0
61.0
SUNRISE SPV 30 SRL
Italy
CSE
100.0
100.0
61.0
61.0
SUNRISE SPV 40 SRL
Italy
CSE
100.0
100.0
61.0
61.0
SUNRISE SPV 50 SRL
Italy
CSE
100.0
100.0
61.0
61.0
SUNRISE SPV Z60 SRL
Italy
CSE
100.0
100.0
61.0
61.0
SUNRISE SPV Z70 SRL
Italy
CSE
100.0
100.0
61.0
61.0
SUNRISE SPV Z80 SRL
Italy
CSE
100.0
100.0
61.0
61.0
SUNRISE SPV Z90 SRL
E2
Italy
CSE
100.0
61.0
SUNRISE SRL
Italy
CSE
100.0
100.0
61.0
61.0
THETIS FINANCE
2015-1
Portugal
CSE
100.0
100.0
100.0
100.0
LEASYS RENT FRANCE
SAS
D2
France
JV
50.0
50.0
CORPORATE AND
INVESTMENT
BANKING
Banking and financial
institutions
Banco Crédit Agricole
Brasil S.A.
Brazil
S
100.0
100.0
97.8
97.8
Banco Santander
CACEIS México, S.A.,
Institución de Banca
Múltiple
D1
Mexico
JV
50.0
50.0
34.7
34.7
BTN Förvaltning AB
S2
Sweden
Netherlands
A
19.5
13.6
CACEIS Bank
France
S
100.0
100.0
69.5
69.5
CACEIS Bank S.A.,
Germany Branch
Germany
B
100.0
100.0
69.5
69.5
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
576
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
CACEIS Bank, Belgium
Branch
Belgium
B
100.0
100.0
69.5
69.5
CACEIS Bank, Ireland
Branch
Ireland
B
100.0
100.0
69.5
69.5
CACEIS Bank, Italy
Branch
Italy
B
100.0
100.0
69.5
69.5
CACEIS Bank,
Luxembourg Branch
Luxembourg
B
100.0
100.0
69.5
69.5
CACEIS Bank,
Netherlands Branch
D2
Netherlands
B
100.0
100.0
69.5
69.5
CACEIS Bank,
Switzerland Branch
Switzerland
B
100.0
100.0
69.5
69.5
CACEIS Bank, UK
Branch
United Kingdom
B
100.0
100.0
69.5
69.5
CACEIS Belgium
Belgium
S
100.0
100.0
69.5
69.5
CACEIS Corporate Trust
France
S
100.0
100.0
69.5
69.5
CACEIS Fund
Administration
France
S
100.0
100.0
69.5
69.5
CACEIS FUND
ADMINISTRATION SPAIN
S.A.U
D1
Spain
S
100.0
100.0
69.5
69.5
CACEIS Ireland Limited
Ireland
S
100.0
100.0
69.5
69.5
CACEIS S.A.
France
S
69.5
69.5
69.5
69.5
CACEIS Switzerland S.A.
Switzerland
S
100.0
100.0
69.5
69.5
Crédit Agriciole CIB
(Belgium)
Belgium
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB (ABU
DHABI)
United Arab
Emirates
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Germany)
Germany
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Canada)
Canada
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Corée du Sud)
South Korea
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Dubai DIFC)
United Arab
Emirates
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Dubai)
United Arab
Emirates
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Spain)
Spain
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(États-Unis)
United States
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Finlande)
Finland
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Hong-Kong)
Hong Kong
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Inde)
India
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Italie)
Italy
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Japon)
Japan
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Miami)
D4
United States
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Royaume-Uni)
United Kingdom
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Singapour)
Singapore
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Suède)
Sweden
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
(Taipei)
Taiwan
France
B
97.8
97.8
97.8
97.8
Crédit Agricole CIB
Algeria Bank Spa
Algeria
S
100.0
100.0
97.8
97.8
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Crédit Agricole CIB AO
Russia
S
100.0
100.0
97.8
97.8
Crédit Agricole CIB
Australia Ltd.
Australia
S
100.0
100.0
97.8
97.8
Crédit Agricole CIB
China Ltd.
China
S
100.0
100.0
97.8
97.8
Crédit Agricole CIB
China Ltd. Chinese
Branch
China
B
100.0
100.0
97.8
97.8
Crédit Agricole CIB S.A.
France
S
97.8
97.8
97.8
97.8
Crédit Agricole CIB
Services Private Ltd.
India
S
100.0
100.0
97.8
97.8
ESTER FINANCE
TECHNOLOGIES
D1
France
S
100.0
100.0
97.8
97.8
KAS Bank N.V.
S4
Netherlands
S
97.4
67.7
KAS Bank N.V. Frankfurt
branch
S4
Germany
Netherlands
B
97.4
67.7
KAS Bank N.V. London
branch
S4
United Kingdom
Netherlands
B
97.4
67.7
KAS Trust & Depositary
Services B.V.
Amsterdam
S4
Netherlands
S
97.4
67.7
S3 Latam Holdco 1
Spain
JV
50.0
50.0
34.7
34.7
S3 Latam Holdco 2
Spain
JV
50.0
50.0
34.7
34.7
SANTANDER CACEIS
BRASIL DTVM S.A.
D1
Brazil
JV
50.0
50.0
34.7
34.7
SANTANDER CACEIS
BRASIL PARTICIPACOES
S.A
D1
Brazil
JV
50.0
50.0
34.7
34.7
SANTANDER CACEIS
COLOMBIA S.A.,
SOCIEDAD FIDUCIARIA
D1
Colombia
JV
50.0
50.0
34.7
34.7
CACEIS BANK SPAIN,
S.A.U.
D1
Spain
S
100.0
100.0
69.5
69.5
UBAF
France
JV
47.0
47.0
46.0
46.0
UBAF (Corée du Sud)
South Korea
France
JV
47.0
47.0
47.0
46.0
UBAF (Japon)
Japan
France
JV
47.0
47.0
47.0
46.0
UBAF (Singapour)
Singapore
France
JV
47.0
47.0
47.0
46.0
Stockbrokers
Crédit Agricole
Securities (Asia) Limited
Hong Kong
Hong Kong
S
100.0
100.0
97.8
97.8
Crédit Agricole
Securities (Asia) Limited
Seoul Branch
South Korea
B
100.0
100.0
97.8
97.8
Crédit Agricole
Securities (USA) Inc
D2
United States
S
100.0
100.0
97.8
97.8
Crédit Agricole
Securities Asia BV
(Tokyo)
Japan
Netherlands
B
100.0
100.0
97.8
97.8
Investment
companies
Compagnie Française
de l’Asie (CFA)
France
S
100.0
100.0
97.8
97.8
Crédit Agricole CIB Air
Finance S.A.
France
S
100.0
100.0
97.8
97.8
Crédit Agricole CIB
Holdings Ltd.
United Kingdom
S
100.0
100.0
97.8
97.8
Crédit Agricole Global
Partners Inc.
United States
S
100.0
100.0
97.8
97.8
Crédit Agricole
Securities Asia BV
Netherlands
S
100.0
100.0
97.8
97.8
Doumer Finance S.A.S.
France
S
100.0
100.0
97.8
97.8
Fininvest
France
S
98.3
98.3
96.2
96.1
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
577
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Fletirec
France
S
100.0
100.0
97.8
97.8
Insurance
CAIRS Assurance S.A.
France
S
100.0
100.0
97.8
97.8
Other
Atlantic Asset
Securitization LLC
United States
CSE
100.0
100.0
-
-
Benelpart
Belgium
S
100.0
100.0
97.4
95.3
Calixis Finance
S4
France
CSE
100.0
97.8
Calliope SRL
S2
Italy
CSE
100.0
97.8
Clifap
France
S
100.0
100.0
97.8
97.8
Crédit Agricole America
Services Inc.
United States
S
100.0
100.0
97.8
97.8
Crédit Agricole Asia
Shipfinance Ltd.
Hong Kong
S
100.0
100.0
97.8
97.8
Crédit Agricole CIB
Finance (Guernsey) Ltd.
Guernsey
CSE
99.9
99.9
97.7
97.7
Crédit Agricole CIB
Finance Luxembourg
S.A.
Luxembourg
CSE
100.0
100.0
97.8
97.8
Crédit Agricole CIB
Financial Solutions
France
CSE
99.9
99.9
97.7
97.7
Crédit Agricole CIB
Global Banking
France
S
100.0
100.0
97.8
97.8
Crédit Agricole CIB
Pension Limited
Partnership
United Kingdom
CSE
100.0
100.0
97.8
97.8
Crédit Agricole CIB
Transactions
France
S
100.0
100.0
97.8
97.8
Crédit Agricole Leasing
(USA) Corp.
United States
S
100.0
100.0
97.8
97.8
DGAD International
SARL
S2
Luxembourg
S
100.0
97.8
Elipso Finance S.r.l
S2
Italy
SJV
50.0
48.9
ESNI (compartiment
Crédit Agricole CIB)
France
CSE
100.0
100.0
97.8
97.8
Eucalyptus FCT
France
CSE
100.0
100.0
-
-
FCT CFN DIH
France
CSE
100.0
100.0
-
-
FIC-FIDC
Brazil
CSE
100.0
100.0
100.0
97.8
Financière des
Scarabées
Belgium
S
100.0
100.0
98.7
96.5
Financière Lumis
France
S
100.0
100.0
97.8
97.8
Fundo A de
Investimento
Multimercado
D2
Brazil
CSE
100.0
100.0
97.8
97.8
Héphaïstos EUR FCC
S1
France
CSE
100.0
-
Héphaïstos GBP FCT
S1
France
CSE
100.0
-
Héphaïstos Multidevises
FCT
France
CSE
100.0
100.0
-
-
Héphaïstos USD FCT
S1
France
CSE
100.0
-
Investor Service House
S.A.
Luxembourg
S
100.0
100.0
69.5
69.5
ItalAsset Finance SRL
Italy
CSE
100.0
100.0
97.8
97.8
La Fayette Asset
Securitization LLC
United States
CSE
100.0
100.0
-
-
La Route Avance
France
CSE
100.0
100.0
-
-
Lafina
Belgium
S
100.0
100.0
97.7
95.6
LMA S.A.
France
CSE
100.0
100.0
-
-
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Merisma
France
CSE
100.0
100.0
97.8
97.8
Molinier Finances
France
S
100.0
100.0
97.1
95.0
Pacific EUR FCC
France
CSE
100.0
100.0
-
-
Pacific IT FCT
France
CSE
100.0
100.0
-
-
Pacific USD FCT
France
CSE
100.0
100.0
-
-
Partinvest S.A.
Luxembourg
S
100.0
100.0
69.5
69.5
Placements et
réalisations
immobilières (SNC)
S5
France
S
100.0
95.3
Sagrantino Italy SRL
S2
Italy
CSE
100.0
97.8
Shark FCC
France
CSE
100.0
100.0
-
-
Sinefinair B.V.
Netherlands
S
100.0
100.0
97.8
97.8
SNGI
France
S
100.0
100.0
97.8
97.8
SNGI Belgium
Belgium
S
100.0
100.0
97.8
97.8
Sococlabecq
S5
Belgium
S
100.0
95.6
Sofipac
Belgium
S
98.6
98.6
96.0
93.9
Sufinair B.V.
Netherlands
S
100.0
100.0
97.8
97.8
TCB
France
S
98.7
98.7
97.4
95.3
Triple P FCC
France
CSE
100.0
100.0
-
-
TSUBAKI OFF (FCT)
France
CSE
100.0
100.0
-
-
TSUBAKI ON (FCT)
France
CSE
100.0
100.0
-
-
Vulcain EUR FCT
S1
France
CSE
100.0
-
Vulcain Multi-Devises
FCT
S1
France
CSE
100.0
-
Vulcain USD FCT
S1
France
CSE
100.0
-
CACIB Qatar Financial
Center Branch
E2
Qatar
B
100.0
97.8
Corporate Centre
Crédit Agricole S.A.
Crédit Agricole S.A.
l
France
Parent
100.0
100.0
100.0
100.0
Succursale
Crédit Agricole S.A.
United Kingdom
France
B
100.0
100.0
100.0
100.0
Banking and financial
institutions
Caisse régionale de
Crédit Agricole mutuel
de la Corse
France
S
99.9
99.9
49.9
49.9
CL Développement de
la Corse
France
S
99.9
99.9
99.9
99.9
Crédit Agricole Home
Loan SFH
France
CSE
100.0
100.0
100.0
100.0
Foncaris
France
S
100.0
100.0
100.0
100.0
Investment
companies
Crédit Agricole Capital
Investissement &
Finance (CACIF)
France
S
100.0
100.0
100.0
100.0
Delfinances
France
CSE
100.0
100.0
100.0
100.0
Sodica
France
S
100.0
100.0
100.0
100.0
Other
CA Grands Crus
France
S
77.9
77.9
77.9
77.9
Cariou Holding
France
S
71.4
50.0
71.4
50.0
Crédit Agricole – Group
Infrastructure Platform
France
JV
57.7
57.7
53.7
53.7
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
578
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
(1) Consolidation Method:
Full
Equity Accounted
l
Parent
Crédit Agricole S.A.
group
Scope of
consolidation
(1)
(a)
Principal place
of business
Country of
incorporation
if different
from the
principal place
of business
(b)
% control
% interest
31/12/
2020
31/12/
2019
31/12/
2020
31/12/
2019
Crédit Agricole
Agriculture
France
S
100.0
100.0
100.0
100.0
Crédit Agricole
Immobilier
France
JV
50.0
50.0
50.0
50.0
Crédit Agricole Payment
Services
France
CSE
51.3
50.2
50.3
50.3
Crédit Agricole Public
Sector SCF
France
CSE
100.0
100.0
100.0
100.0
Crédit Agricole Régions
Développement
France
S
73.6
75.7
73.6
75.7
ESNI (compartiment
Crédit Agricole S.A.)
France
CSE
100.0
100.0
100.0
100.0
FCT Crédit Agricole
Habitat 2015
Compartiment Corse
S1
France
CSE
100.0
49.9
FCT Crédit Agricole
Habitat 2017
Compartiment Corse
France
CSE
100.0
100.0
99.9
99.9
FCT Crédit Agricole
Habitat 2018
Compartiment Corse
France
CSE
100.0
100.0
99.9
99.9
FCT Crédit Agricole
Habitat 2019
Compartiment Corse
France
CSE
100.0
100.0
99.9
99.9
FCT Crédit Agricole
Habitat 2020
Compartiment Corse
E2
France
CSE
100.0
99.9
FIRECA
France
S
51.0
51.0
51.0
51.0
Grands Crus
Investissements (GCI)
France
S
52.1
52.1
52.1
52.1
IDIA
France
S
100.0
100.0
100.0
100.0
IDIA DÉVELOPPEMENT
France
S
100.0
100.0
100.0
100.0
IDIA PARTICIPATIONS
France
S
100.0
100.0
100.0
100.0
S.A.S. Evergreen
Montrouge
France
CSE
100.0
100.0
100.0
100.0
SCI D2 CAM
France
JV
50.0
50.0
50.0
50.0
SCI Quentyvel
France
S
100.0
100.0
100.0
100.0
SNC Kalliste Assur
France
S
100.0
100.0
49.9
49.9
Société d'Epargne
Foncière Agricole (SEFA)
France
S
100.0
100.0
100.0
100.0
Uni-medias
France
S
100.0
100.0
100.0
100.0
Tourism – property
development
Crédit Agricole
Immobilier Promotion
France
JV
50.0
50.0
50.0
50.0
Crédit Agricole
Immobilier Services
France
JV
50.0
50.0
50.0
50.0
SO.GI.CO
France
JV
50.0
50.0
50.0
50.0
(a) Scope changes
Inclusions (E) into the scope of consolidation
E1: Breach of threshold
E2: Creation
E3: Acquisition (including controlling interests)
Exclusions (S) from the scope of consolidation
S1: Discontinuation of business (including dissolution and liquidation)
S2: Sale to non-Group companies or deconsolidation following loss of control
S3: Deconsolidated due to non-materiality
S4: Merger or takeover
S5: Transfer of all assets and liabilities
Other (D)
D1: Change of company name
D2: Change in consolidation method
D3: First time listed in the Note on scope of consolidation
D4: IFRS 5 entities
(b) Nature of control
S: Subsidiary
B: Branch
CSE: Consolidated structured entity
JV: Joint venture
SJV: Structured joint venture
JO: Joint operation
A: Associate
S.A.: Structured associate
(1) UCITS, unit funds and SCIs held by insurance entities.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
579
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 12
NOTE 13
Investments in non-consolidated companies and structured entities
13.1
INFORMATION ON SUBSIDIARIES
These securities, which are recorded at fair value through profit or loss or at
fair value through other comprehensive income that will not be reclassified
to profit or loss, are variable-income securities representing a significant
portion of the share capital of the companies that issued them and are
intended to be held on a long-term basis.
This line item amounted to €13,986 million at 31 December 2020, compared
with €13,256 million at 31 December 2019. At 31 December 2020, the main
investment in non-consolidated companies where percentage of control is
greater than 20% and which have significant value on the balance sheet
is Crédit Logement (shares A and B). The Group’s investment represents
32.50% of Crédit Logement’s capital and amounts to €509 million but
does not confer any significant influence over this entity, which is jointly
held by various French banks and companies.
13.1.1 Non-consolidated controlled entities
Information relating to conventional entities under exclusive control, under
joint control and subject to significant influence, and to controlled structured
entities not included in the scope of consolidation are available on the
Crédit Agricole S.A. website at the time of publication of the Universal
Registration Document.
13.1.2 Material non-consolidated equity
investments
Material equity investments accounting for a fraction of capital greater
than or equal to 10% and not included in the scope of consolidation are
presented in a table available online on the Crédit Agricole website at the
time of publication of the Universal Registration Document.
13.2
NON-CONSOLIDATED STRUCTURED ENTITIES
IFRS 12 defines a structured entity as an entity that has been designed so
that voting or similar rights are not the dominant factor in deciding who
controls the entity, such as when any voting rights relate to the administrative
tasks only and the relevant activities are directed by means of contractual
arrangements.
Information on the nature and extent
of interests held
At 31 December 2020, Crédit Agricole S.A. group entities had interests in
certain non-consolidated structured entities, the main characteristics of
which are presented below on the basis of their type of activity:
Securitisation
Crédit Agricole S.A., mainly through its subsidiaries in the Large Customers
business line, is tasked with structuring securitisation vehicles through
the purchase of trade or financial receivables. The vehicles fund such
purchases by issuing multiple tranches of debt and equity investments,
with repayment being linked to the performance of the assets in such
vehicles. Crédit Agricole S.A. invests in and provides liquidity facilities to
the securitisation vehicles it has sponsored on behalf of customers.
Asset management
Crédit Agricole S.A., through its subsidiaries in the Asset gathering business
line, structures and manages entities on behalf of customers wishing to
invest in specific assets in order to obtain the best possible return having
regard to the chosen level of risk. Crédit Agricole S.A. entities may thus
either be required to hold interests in such entities in order to ensure a
successful launch or to guarantee the performance of such structures.
Investment funds
Entities in the Crédit Agricole S.A. Asset Gathering business line invest in
companies established to meet investor demand in connection with treasury
management and with the investment of insurance premiums received
from insurance company customers, in accordance with the regulatory
provisions in the French Insurance Code. Insurance company investments
cover commitments to policyholders over the life of insurance policies. Their
value and returns are correlated to these commitments.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
580
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 13
Structured finance
Lastly, Crédit Agricole S.A., via its subsidiaries in the Large Customers
business line, is involved in special purpose asset acquisition entities.
These entities may take the form of asset financing companies or lease
financing companies. In structured entities, the financing is secured by
the asset. The Group’s involvement is often limited to the financing or to
financing commitments.
Sponsored entities
Crédit Agricole S.A. sponsors structured entities in the following instances:
Crédit Agricole S.A. is involved in establishing the entity and that
involvement, which is remunerated, is deemed essential for ensuring
the proper completion of transactions;
structuring takes place at the request of Crédit Agricole S.A. and it is
the main user thereof;
Crédit Agricole S.A. transfers its own assets to the structured entity;
Crédit Agricole S.A. is the manager;
the name of a subsidiary or of the parent company of Crédit Agricole S.A.
is linked to the name of the structured entity or of the financial instruments
issued by it.
Crédit Agricole S.A. has sponsored non-consolidated structured entities in
which it does not hold an interest at 31 December 2020.
Gross revenues from sponsored entities mainly comprise interest expense
and income in securitisation and investment funds, in which Crédit Agricole
Assurances and Crédit Agricole CIB do not hold any interests at the reporting
date. For Crédit Agricole Assurances, these amount to €18 million.
Information on the risks related to interests
Financial support for structured entities
In 2020, Crédit Agricole S.A. did not provide financial support to any non-
consolidated structured entities.
At 31 December 2020, Crédit Agricole S.A. did not intend to provide financial
support to any non-consolidated structured entities.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
581
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 13
Interests in non-consolidated structured entities by type of activities
At 31 December 2020 and 31 December 2019, the Group’s involvement in non-consolidated structured entities is disclosed in the following tables, for
each group of sponsored structured entities that are significant to the Group.
(in millions of euros)
31/12/2020
Securitisation
Carrying
amount
Maximum loss
Maximum
exposure to
losses
Guarantees
received and
other credit
enhancements
Net exposure
Financial assets at fair value through profit or loss
6
6
-
6
Financial assets at fair value through other comprehensive income
-
-
-
-
Financial assets at amortised cost
-
-
-
-
Total assets recognised relating to non-consolidated structured entities
6
6
-
6
Equity instruments
-
-
-
-
Financial liabilities at fair value through profit or loss
21
1
-
1
Liabilities
11
-
-
-
Total liabilities recognised relating to non-consolidated structured entities
31
1
-
1
Commitments given
-
75
-
75
Financing commitments
-
18
-
18
Guarantee commitments
-
-
-
-
Other
-
57
-
57
Provisions for execution risks – commitments given
-
-
-
-
Total commitments (net of provision) to non-consolidated structured entities
-
75
-
75
TOTAL BALANCE SHEET RELATING TO NON-CONSOLIDATED STRUCTURED ENTITIES
25
-
-
-
(1)
Non-sponsored structured entities generate no specific risk related to the nature of the entity. Information concerning these exposures is set out in Note 3.1 “Credit risk” and Note 3.2 “Market risk”.
These are investment funds in which the Group is not a manager, and structured financing entities in which the Group has only granted a loan.
(in millions of euros)
31/12/2019
Securitisation
Carrying
amount
Maximum loss
Maximum
exposure to
losses
Guarantees
received and
other credit
enhancements
Net exposure
Financial assets at fair value through profit or loss
8
8
-
8
Financial assets at fair value through other comprehensive income
-
-
-
-
Financial assets at amortised cost
2,351
2,351
-
2,351
Total assets recognised relating to non-consolidated structured entities
2,360
2,360
-
2,360
Equity instruments
-
-
-
-
Financial liabilities at fair value through profit or loss
-
-
-
-
Liabilities
128
-
-
-
Total liabilities recognised relating to non-consolidated structured entities
128
-
-
-
Commitments given
-
1,608
-
1,608
Financing commitments
-
1,551
-
1,551
Guarantee commitments
-
-
-
-
Other
-
57
-
57
Provisions for execution risks – commitments given
-
-
-
-
Total commitments (net of provision) to non-consolidated structured entities
-
1,608
-
1,608
TOTAL BALANCE SHEET RELATING TO NON-CONSOLIDATED STRUCTURED ENTITIES
2,232
-
-
-
(1)
Non-sponsored structured entities generate no specific risk related to the nature of the entity. Information concerning these exposures is set out in Note 3.1 “Credit risk” and Note 3.2 “Market risk”.
These are investment funds in which the Group is not a manager, and structured financing entities in which the Group has only granted a loan.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
582
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 13
31/12/2020
Asset management
Investments funds
(1)
Structured finance
(1)
Carrying
amount
Maximum loss
Carrying
amount
Maximum loss
Carrying
amount
Maximum loss
Maximum
exposure
to losses
Guarantees
received and
other credit
enhancements
Net
exposure
Maximum
exposure
to losses
Guarantees
received and
other credit
enhancements
Net
exposure
Maximum
exposure
to losses
Guarantees
received and
other credit
enhancements
Net
exposure
3,179
3,179
-
3,179
43,077
43,077
-
43,077
17
17
-
17
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
207
207
-
207
2,007
2,007
-
2,007
3,179
3,179
-
3,179
43,284
43,284
-
43,284
2,024
2,024
-
2,024
-
-
-
-
-
-
-
-
-
-
-
-
799
799
-
799
33
2
-
2
-
-
-
-
-
-
-
-
-
-
-
-
416
-
-
-
799
799
-
799
33
2
-
2
416
-
-
-
-
18,210
399
17,811
-
277
-
277
-
1,044
-
1,044
-
-
-
-
-
-
-
-
-
974
-
974
-
18,242
399
17,843
-
-
-
-
-
70
-
70
-
-
-
-
-
277
-
277
-
-
-
-
-
(32)
-
(32)
-
-
-
-
-
-
-
-
-
18,210
399
17,811
-
277
-
277
-
1,044
-
1,044
113,940
-
-
-
362,928
-
-
-
1,461
-
-
-
31/12/2019
Asset management
Investments funds
(1)
Structured finance
(1)
Carrying
amount
Maximum loss
Carrying
amount
Maximum loss
Carrying
amount
Maximum loss
Maximum
exposure
to losses
Guarantees
received and
other credit
enhancements
Net
exposure
Maximum
exposure
to losses
Guarantees
received and
other credit
enhancements
Net
exposure
Maximum
exposure
to losses
Guarantees
received and
other credit
enhancements
Net
exposure
1,898
1,898
-
1,898
45,705
45,705
-
45,583
20
20
-
20
-
-
-
-
1
1
-
1
-
-
-
-
-
-
-
-
-
-
-
-
2,261
2,261
-
2,261
1,898
1,898
-
1,898
45,706
45,706
-
45,584
2,281
2,281
-
2,281
-
-
-
-
-
-
-
-
-
-
-
-
1,010
1,010
-
1,010
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
492
-
-
-
1,010
1,010
-
1,010
-
-
-
-
492
-
-
-
-
20,311
-
20,336
-
-
-
-
-
1,380
-
1,380
-
-
-
-
-
-
-
-
-
1,216
-
1,216
-
20,336
-
20,336
-
-
-
-
-
164
-
164
-
-
-
-
-
-
-
-
-
-
-
-
-
(25)
-
-
-
-
-
-
-
-
-
-
-
20,311
-
20,336
-
-
-
-
-
1,380
-
1,380
76,800
-
-
-
328,635
-
-
-
2,262
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
583
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 13
Maximum exposure to losses
The maximum exposure to loss risk on financial instruments corresponds to
the value recognised on the balance sheet, with the exception of option sale
derivatives and credit default swaps for which the exposure corresponds to
assets for the notional amount and to liabilities for the notional amount less
the mark-to-market. The maximum exposure to loss risk on commitments
given corresponds to the notional amount and the provision for commitments
given in the amount recognised on the balance sheet.
NOTE 14
Events subsequent to 31 December 2020
14.1
UNWINDING OF 15% OF THE SWITCH GUARANTEE MECHANISM
On 1 March 2021, Crédit Agricole S.A. unwound 15% of the switch guarantee
mechanism set up between the Regional Banks and Crédit Agricole S.A.
For Crédit Agricole S.A., this transaction will result in a decrease in
commitments received from the Regional Banks amounting to €1,375 million
and a decrease in the security deposit of €465 million.
14.2
REDEMPTION BY CRÉDIT AGRICOLE CONSUMER FINANCE OF
49% OF THE CAPITAL OF THE JOINT VENTURE CRÉDIT AGRICOLE
CONSUMER FINANCE BANKIA S.A.
On 3 February 2021, Crédit Agricole Consumer Finance (Crédit Agricole
Consumer Finance) entered into a redemption agreement with Bankia for
49% of the capital held by the latter in the joint venture Crédit Agricole
Consumer Finance Bankia S.A.
At the close of the transaction, the entity will be wholly owned by
Crédit Agricole Consumer Finance and will be fully consolidated in the
Crédit Agricole S.A. financial statements.
The transaction is suspended with the agreement of Banco de España
(Bank of Spain).
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
584
Refer to the glossary on page 681 for the definition of technical terms.
6
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements -
Note 14
STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS
This is a translation into English of the statutory auditors’ report on the consolidated financial statements of the Company issued in French and it is
provided solely for the convenience of English speaking users.
This statutory auditors’ report includes information required by European regulation and French law, such as information about the appointment of
the statutory auditors or verification of the information concerning the Group presented in the management report and other documents provided
to shareholders.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
(For the year ended December 31, 2020)
To the Annual General Meeting of Crédit Agricole S.A.,
OPINION
In compliance with the engagement entrusted to us by your Annual General Meeting, we have audited the accompanying consolidated financial statements
of Crédit Agricole S.A. for the year ended December 31
st
, 2020.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Credit Agricole S.A.
Group at December 31
st
, 2020 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union.
The audit opinion expressed above is consistent with our report to the Audit Committee.
BASIS FOR OPINION
Audit framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Our responsibilities under these standards are further described in the Statutory Auditors’ Responsibilities for the audit of the consolidated financial
statements section of our report.
Independence
We conducted our audit engagement in compliance with the independence requirements of the French Commercial Code
(Code de commerce)
and the
French Code of Ethics
(Code de déontologie)
for Statutory Auditors, for the period from January 1
st
, 2020 to the date of our report and specifically we did
not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014.
JUSTIFICATION OF ASSESSMENTS – KEY AUDIT MATTERS
Due to the global crisis related to the COVID-19 pandemic, the financial statements of this period have been prepared and audited under specific
conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary emergency have had numerous consequences
for companies, particularly on their operations and their financing, and have led to greater uncertainties on their future prospects. Those measures, such
as travel restrictions and remote working, have also had an impact on the companies’ internal organization and the performance of the audits.
It is in this complex and evolving context that, in accordance with the requirements of Articles L.823-9 and R.823-7 of the French Commercial Code
(Code de commerce)
relating to the justification of our assessments, we inform you of the key audit matters relating to the risks of material misstatement
that, in our professional judgement, were the most significant in our audit of the consolidated financial statements of the current period, as well as how
we addressed those risks.
These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, and
we do not provide a separate opinion on specific items of the consolidated financial statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
585
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
Credit risk and estimate of expected losses on performing, underperforming
and nonperforming exposures in the context of COVID-19 crisis
Identified risk
Our response
In accordance with IFRS 9, the Crédit Agricole S.A. Group recognises loss
allowances in respect of expected credit losses (ECL) on exposures that
are performing (Bucket 1), underperforming (Bucket 2) or non-performing
(Bucket 3).
Given the significant judgement required in determining such loss
allowances, especially in the context of COVID-19 crisis on the period
and as at December 31
st
, 2020, we deemed their estimate to be a key
audit matter for the following main entities and risk segments:
Crédit Agricole CIB: loss allowances on performing (Bucket 1),
underperforming (Bucket 2) and nonperforming (Bucket 3) exposures,
specifically for financing granted to companies in the transport and
energy sectors, due to an uncertain economic environment post-
COVID-19, the complexity of identifying exposures where there is a
risk of non-recovery and the degree of judgement needed to estimate
recovery flows;
Retail Banking: loss allowances on exposures in Buckets 1 and 2,
particularly for the corporate and professional segments;
Consumer Finance: loss allowances on loans in Bucket 1, 2 and 3 in
France and in Italy.
As at December 31
st
, 2020, the loss allowances for expected losses
related to all eligible exposures (excluding Credit Agricole internal
transactions) amounted to € 11.1 billion, including:
€ 3.4 billion of loss allowances of performing and underperforming
exposures (€ 1.3 billion for B1 and € 2.1 billion for B2);
€ 7.7 billion of loss allowances of nonperforming exposures (B3).
Refer to notes 1.2 and 3.1 to the consolidated financial statements.
We examined the procedures implemented by the Risk Management
department to classify loans (Bucket 1, 2 or 3) and measure the amount
of recorded loss allowances. We examined the methods used to take into
account the effects of the COVID-19 crisis, the macroeconomic forecasts
and the treatment of measures to support the economy used for the
calculation of loss allowances, as well as the related financial information.
We tested the key controls implemented by the main entities for the annual
portfolio reviews, the updating of credit ratings, the identification of sectors
impacted by the COVID-19 crisis, underperforming and non-performing
exposures, and the measurement of loss allowances. We also read the
main findings of the main Crédit Agricole S.A. Group entities’ specialised
committees in charge of monitoring underperforming and non-performing
loans.
Regarding loss allowances on Buckets 1 and 2, we:
asked experts to assess the economic scenarios used, the methods
and measurements for various loss allowances inputs and calculation
models; We especially examined the adaptations made to take into
account the impacts of measures dedicated to support the economy ;
examined the methodology used by the Risk Management to identify
significant increase in credit risk (“SICR”) and accounting treatments
implemented to take into account measures to support the economy ;
tested the controls that we deemed to be of key importance in relation
to the transfer of the data used to calculate loss allowances or the
reconciliations between the bases used for their calculation and the
accounting records;
carried out independent loss allowance calculations based on samples,
compared the calculated amount with the amount booked and examined
the adjustments made by management where applicable;
assessed the analyses carried out by management on Crédit Agricole
CIB’s corporate bank’s exposures with a negative outlook with a focus
on sectors strongly affected by the COVID-19 crisis.
Regarding individually calculated loss allowances in Bucket 3, we:
For Crédit Agricole CIB :
-
examined the estimates used for impaired significant counterparties;
-
examined, based on credit files sample, the factors underlying the
main assumptions used to assess expected cash flows, taking into
account in particular the collateral value.
For Consumer Finance, checked the consistency between data used in
the calculation of loss allowances and data available in the management
IT systems and based on samples, tested the quality of historical data
used in the statistical estimates.
Lastly, we examined the disclosures in relation to credit risk coverage
provided in the notes to the consolidated financial statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
586
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
Valuation of Goodwill
Identified risk
Our response
Goodwill is tested for impairment whenever there are objective indications
of impairment and otherwise at least once a year. These tests are based on
a comparison between the carrying amount of each Cash Generating Unit
(CGU) and its recoverable amount, defined as the higher of fair value less
costs to sell and value in use. Value in use is determined by discounting
the estimated future cash flows of the CGU, as defined in the three-year
financial forecasts determined by each entity’s management for the purpose
of its business monitoring and extended over two years.
The rate of capital allocation is determined by considering any specific
requirements set by the regulator (Pillar 2 in particular), when they exist.
We deemed the measurement of goodwill to be a key audit matter as
impairment tests necessarily require management to make decisions
concerning the key assumptions to use, in particular for determining
economic scenarios in a context of COVID-19 crisis, financial forecasts
and discount rates.
Given the difference between the value in use and the carrying amount, past
performance and their sensitivity to the assumptions used by management,
we paid particular attention to the tests conducted on the French retail
banking – LCL, International retail banking – Italy and International wealth
management CGUs.
Goodwill recorded in the balance sheet amounts as at December 31
st
,
2020 to € 14.7 billion, including € 4.2 billion related to French retail
banking – LCL, € 792 million related to International retail banking
(after an impairment of € 903 million recorded in 2020) and € 827
million to International wealth management.
Refer to notes 1.2 and 6.16 to the consolidated financial statements.
We obtained an understanding of the processes implemented by the Crédit
Agricole S.A. Group to assess the need for impairment of goodwill.
We involved in our audit team valuation experts to assess the assumptions
used to determine the discount rates and the perpetual growth rates used
as well as the models used for calculating discounted cash flows.
We tested the calculations and compared the main assumptions (rate of
capital allocation, discount rate, perpetual growth rate,
etc.
) with external
sources.
We examined the financial forecasts prepared by the management of each
entity concerned and used in the model to:
check their consistency with those that have been presented to the
governance bodies (Board of Directors or Supervisory Bord) of the entities
or subgroups and the justification of potential adjustments made;
assess the main underlying assumptions, including for the extension of
forecasts beyond the three-year period. These assumptions were assessed
in view of the economic environment affected by the COVID-19 crisis, the
former financial forecasts and the actual performance over prior periods;
conduct sensitivity analyses of the value in use to some of the assumptions
(level of capital allocated, discount rate, cost of risk, cost to income ratio).
We also examined the disclosures provided in the notes to the consolidated
financial statements on the results of these impairment tests and the level
of sensitivity to various measurement parameters.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
587
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
Legal, tax and compliance risks
Identified risk
Our response
The Crédit Agricole S.A. Group is subject to judicial proceedings and several
investigations and requests for regulatory information from different
regulators. These are mainly related to the Euribor/Libor and SSA Bonds
matters with authorities from various countries (USA, UK) and the European
Union. They also concern ongoing actions by the Italian competition authority
and the Dutch credit mediator and supervisory body for the consumer
finance business line.
Various tax investigations are also ongoing in France and some of the
countries in which the Group operates (including Germany).
The decision to recognise a provision or a receivable and the amount to be
recorded requires, by its nature, the use of judgement, due to the difficulty in
assessing the outcome of pending litigation or uncertainties regarding certain
tax treatments, particularly in the context of some structural transactions.
Given the importance of judgment, these assessments carry a significant
risk of material misstatement in the consolidated financial statements and
are therefore a key audit matter.
The various ongoing investigations, requests for information and
actions of certain authorities as well as the most important tax
inspections at December 31
st
, 2020 are described in notes 1.2, 2,
6.10 and 6.18 to the consolidated financial statements.
We obtained an understanding of the process implemented by Management
to assess the risks arising from these litigations and tax uncertainties, as
well as the provisions or receivables, where applicable, through quarterly
inquiries with management and more specifically with the Legal, Tax and
Compliance departments of the Group and its main subsidiaries.
Our work involved:
assessing the assumptions made to determine provisions or receivables
based on available information (documentation prepared by the Legal
or Tax department or external counsel of Crédit Agricole S.A. and main
Group entities, correspondence from regulators and minutes of Legal
Risks Committee meetings);
reading the analyses and conclusions of the Group’s legal advisors and
their responses to our requests for confirmation;
regarding more specifically tax risks, examining, with our tax specialists,
the responses provided by the Group to the relevant authorities as well
as the risk assessment made by the Group;
assessing, accordingly, the level of provisions or receivables as at
December 31
st
, 2020.
Lastly, we examined the related disclosures provided in the notes to the
consolidated financial statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
588
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
Measurement of certain Crédit Agricole CIB financial assets and liabilities
and Crédit Agricole Assurances financial assets classified in level 3
Identified risk
Our response
Within the Large Corporate business line of the Crédit Agricole S.A. Group,
Crédit Agricole CIB originates, structures, sells and trades derivative financial
instruments, for corporates, financial institutions and large issuers. Moreover,
the issue of debt instruments, some of which are “hybrid”, to the Group’s
international and domestic customers contributes to the management of
the Crédit Agricole CIB medium- and long-term refinancing :
Derivative financial instruments held for trading are recorded on the
balance sheet at fair value through profit or loss.
“Hybrid” debt issued is recognised in financial liabilities at fair value
through profit or loss by option.
These instruments are classified in level 3 when their valuation requires the
use of significant unobservable market inputs. The classification of such
instruments by level of fair value and their measurement require judgement
from management, in particular regarding:
the definition of the observability cartography of the valuation parameters,
the use of internal and nonstandard valuation models;
the valuation of parameters that are not supported by observable market
data;
the assessment of valuation adjustments designed to take into account
uncertainties in the models, parameters used or counterparty and liquidity
risks;
Moreover, insurance investments of Credit Agricole Assurances that are
classified in level 3 are mostly parts of venture capital funds
(“FCPR”)
and
unlisted equity securities measured through unobservable market inputs. The
valuation process of those instruments, which takes into account liquidity
and counterparty risks when appropriate, has become more complex in
the context of COVID-19 crisis.
Taking into account the uncertain economic environment, we consider that
the valuation of those financial assets and liabilities of Crédit Agricole CIB
and financial assets of Crédit Agricole Assurances which are classified in
level 3, to be a key audit matter, due to expert judgement and variety and
complexity of methods used for the valuation.
Within assets, Crédit Agricole CIB’s derivative financial instruments and
Credit Agricole Assurances’ financial assets are recorded in the balance
sheet of the Crédit Agricole S.A. Group as financial assets at fair value
which, in level 3, represent € 16.5 billion as at December 31
st
, 2020.
Within liabilities, Crédit Agricole CIB’s derivative financial instruments
and structured debt issued are recorded in the balance sheet of the
Crédit Agricole S.A. Group as financial liabilities at fair value which, in
level 3, represent € 8.2 billion as at December 31
st
, 2020.
See notes 1.2, 6.2 and 11.2 to the consolidated financial statements.
We obtained an understanding processes and controls implemented by
Crédit Agricole CIB to identify, measure and recognise derivative financial
instruments and structured debt issued classified in level 3.
We examined those controls that we have deemed of key importance and
that are mainly performed by Risk Management, such as review of the
observability cartography, the independent verification of measurement
parameters and the internal approval of valuation models. We also examined
the processes and controls for recording valuation adjustments and the
accounting classification of financial products.
With the support of our specialists in valuation of financial instruments, we
carried out independent valuations, analysed those performed by Crédit
Agricole CIB as well as the assumptions, inputs, methodologies and models
used at December 31
st
, 2020. More particularly, we have examined the
documentation relating to developments in the observability mapping made
during the period.
We also analysed the main valuation adjustments recorded, and examined
the justification provided by management for the main differences observed
in margin calls and losses and/or gains in the event of disposal of financial
products.
For insurance investments of Credit Agricole Assurances classified in level 3,
we performed the following procedures:
We updated our understanding of the internal control environment and
processes of valuation of these financial assets;
For assets measures through internal valuation models:
-
We examined the adequacy of the underlying assumptions, methods
and parameters used taking into account market practices and the
context of COVID-19 crisis;
-
We analysed the values determined and recorded at December 31
st
, 2020
For assets measured by independent asset managers:
-
We compared the valuation recorded at December 31
st
, 2020 with the
valuation disclosed in asset manager’s reports;
-
For assets directly impacted by the COVID-19 crisis: we examined
independent valuation reports and the correct analysis of underlying
risks;
-
For assets which were valued before the closing date : we examined
the analyses performed by the Group to prevent any material difference
between the recorded values and the values at the closing date;
We also examined the appropriateness of disclosures provided in the
notes to the consolidated financial statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
589
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
Specific technical reserves in relation to insurance policies
Identified risk
Our response
Within the Insurance business line of the Crédit Agricole S.A. Group, insurance
liabilities are recognised as technical reserves in compliance with French
consolidation standards and the applicable regulations, as permitted under
IFRS 4.
These technical reserves include some specific provisions that require
judgment in their determination. These include:
the reserve for increasing risks of dependence, established where the
present value of the insurer’s commitments in terms of health or disability
cover is higher than the projected contributions of policyholders;
reserves for late claims relating to nonlife insurance policies for which
losses have occurred but have not yet been declared or valued.
For Predica’s life insurance technical reserves, the Group conducts an annual
liability adequacy test to ensure that insurance liabilities are adequate to
meet estimated future cash flows after projected management fees.
Considering the sensitivity of the above specific reserves and of the liability
adequacy test to the different underlying assumptions used, especially in the
context of COVID-19 crisis (asset yield forecasts, policyholders’ behaviour,
insurer management’s decisions, period of independent living or probability
of occurrence of a state of dependency, future premiums, statistical models
and expert assessments used for valuing late claims, discount rate, etc.),
we deemed specific technical reserves and liability adequacy tests to be
a key audit matter.
Net insurance technical reserves amount to €361.2 billion as at
December 31
st
, 2020.
See notes 1.2, 4.6, and 6.17 to the consolidated financial statements.
For the main specific reserves mentioned in the column opposite, we
performed the below procedures with the support of our actuaries:
Obtaining an understanding of the compliance of the Group’s methodology
for measuring these reserves;
Obtaining an understanding of the control environment relating to the
management or valuation of losses, the design of forecast models or
stochastic models and the determination of the main assumptions to
the model (asset yield, future premiums, mortality tables, probability
of occurrence of a state of dependency, projected period of dependent
living, discount rate, etc.);
Obtaining an understanding of the results of the controls implemented by
the Group to check the accuracy of management data used to calculate
the reserves;
analysing certain assumptions or data in the light of market practice, the
historical data and the economic context related to the COVID-19 crisis;
examining the controls that we deemed of key importance in relation
to the information systems supporting the processing of technical data
and accounting entries;
recalculating certain reserves.
More specifically for the Predica liability adequacy test, we have examined
the sensitivity of the result to scenarios of changes in the main financial
and portfolio assumptions in order to check that the provisions remain
sufficient in these different scenarios.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
590
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
SPECIFIC VERIFICATIONS
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations of
the Group’s information given in the management report of Board of Directors.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
We attest that the consolidated non-financial statement provided for by Article L. 225-102-1 of the French Commercial Code (Code de commerce) is
included in the Group’s information given in the management report, it being specified that, in accordance with Article L. 823-10 of this Code, we have
verified neither the fair presentation nor the consistency with the consolidated financial statements of the information contained therein.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Format of presentation of the consolidated financial statements intended
to be included in the annual financial report
We have also verified, in accordance with the professional standard applicable in France relating to the procedures performed by the statutory auditors
relating to the annual and consolidated financial statements presented in the European single electronic format, that the presentation of the consolidated
financial statements intended to be included in the annual financial report mentioned in Article L. 451-1-2, I of the French Monetary and Financial Code
(Code monétaire et financier),
prepared under the responsibility of the Chief Executive Officer, complies with the single electronic format defined in the
European Delegated Regulation No 2019/815 of December 17
th
, 2018. As it relates to consolidated financial statements, our work includes verifying that
the tagging of these consolidated financial statements complies with the format defined in the above delegated regulation.
Based on the work we have performed, we conclude that the presentation of the consolidated financial statements intended to be included in the annual
financial report complies, in all material respects, with the European single electronic format.
We have no responsibility to verify that the consolidated financial statements that will ultimately be included by your company in the annual financial
report filed with the AMF are in agreement with those on which we have performed our work.
Appointment of the Statutory Auditors
We were appointed as statutory auditors of Crédit Agricole S.A. by your Annual General Meeting held on May 19
th
, 2004 for PricewaterhouseCoopers
Audit and in 1985 for ERNST & YOUNG et Autres.
As at December 31
st
, 2020, PricewaterhouseCoopers Audit and ERNST & YOUNG et Autres were in the 17
th
and 36
th
of total uninterrupted engagement, respectively.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH
GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free of material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting, unless it expects to liquidate the Company
or to cease operations.
The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risk management systems
and where applicable, its internal audit, regarding the accounting and financial reporting procedures.
The consolidated financial statements were approved by the Board of Directors.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
591
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
STATUTORY AUDITORS’ RESPONSIBILITIES FOR THE AUDIT
OF THE CONSOLIDATED FINANCIAL STATEMENTS
Objectives and audit approach
Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free of material misstatement. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions taken by
users on the basis of these consolidated financial statements.
As specified in article L.823-10-1 of the French Commercial Code (Code de commerce), our statutory audit does not include assurance on the viability
or quality of the Company or the quality of management of the affairs of the Company.
As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional judgement
throughout the audit and furthermore :
Identifies and assesses the risks of material misstatement in the consolidated financial statements, whether due to fraud or error, designs and performs
audit procedures in response to those risks and obtains audit evidence considered to be sufficient and appropriate to provide a basis for their opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the internal control.
Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management
in the consolidated financial statements.
Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. This
assessment is based on the audit evidence obtained up to the date of the audit report. However, future events or conditions may cause the Company
to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty exists, they are required to draw attention in the
audit report to the related disclosures in the consolidated financial statements or, if such disclosures are not provided or are inadequate, to modify the
opinion expressed therein.
Evaluates the overall presentation of the consolidated financial statements and assesses whether these statements represent the underlying transactions
and events in a manner that achieves fair presentation.
Obtains sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an
opinion on the consolidated financial statements. The statutory auditors is responsible for the direction, supervision and performance of the audit of
the consolidated financial statements and for the opinion expressed on these consolidated financial statements.
Report to the Audit Committee
We submit to the Audit Committee a report which includes in particular a description of the scope of the audit and the audit programme implemented,
as well as the results of our audit. We also report, if any, significant deficiencies in internal control regarding the accounting and financial reporting
procedures that we have identified.
Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgement, were the most significant for the audit
of the consolidated financial statements of the current
period and which are therefore the key audit matters that we are required to describe in this report.
We also provide the Audit Committee with the declaration provided for in article 6 of Regulation (EU) No 537/2014, confirming our independence within
the meaning of the rules applicable in France such as they are set in particular by Articles L.822-10 to L.822-14 of the French Commercial Code (code de
commerce) and in the French Code of Ethics (code de déontologie) for statutory auditors. Where appropriate, we discuss the risks that may reasonably
be thought to bear on our independence, and the related safeguards.
Neuilly-sur-Seine and Paris-La Défense, March 23
rd
, 2021
The Statutory Auditors
French original signed by
PricewaterhouseCoopers Audit
ERNST & YOUNG et Autres
Anik Chaumartin
Olivier Durand
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
592
Refer to the glossary on page 681 for the definition of technical terms.
Statutory Auditors’ report on the consolidated financial statements
6
CONSOLIDATED FINANCIAL STATEMENTS
Parent Company Financial statements 596
Balance sheet at 31 December 2020
596
Off-balance sheet at 31 December 2020
597
Income statement at 31 December 2020
598
Notes to the parent company
financial statements
599
Statutory Auditors’ report
on the financial statements
644
7
PARENT COMPANY
FINANCIAL STATEMENTS
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
594
Refer to the glossary on page 681 for the definition of technical terms.
Key figures
€245 m
Revenues
€1,496 m
€716,689 m
Crédit Agricole internal transactions (assets)
€372,327 m
Financial investments
€63,744 m
Equity excluding FGBR
€50,748 m
NET
INCOME
TOTAL ASSETS
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
595
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
PARENT COMPANY FINANCIAL STATEMENTS
Approved by the Board of Directors of Crédit Agricole S.A. on 10 February 2021
and submitted for the approval of the Ordinary General Meeting o 12 May 2021
BALANCE SHEET AT 31 DECEMBER 2020
Assets
(in millions of euros)
Notes
31/12/2020
31/12/2019
Money market and interbank items
211,641
155,186
Cash, Central banks
54,426
8,312
Treasury bills and similar securities
5-28
15,567
14,867
Loans and receivables due from credit institutions
3-28
141,648
132,007
Crédit Agricole internal transactions
3
372,327
336,348
Loans and receivables due from customers
4
4,473
4,439
Securities transactions
46,898
37,734
Bonds and other fixed Income securities
5-28
46,859
37,688
Equities and other variable-income securities
5
39
46
Fixed assets
63,875
64,413
Equity investments and other long-term securities
6-7
1,023
950
Investments in subsidiaries and affiliates
6-7
62,721
63,334
Intangible assets
7
19
17
Property, plant and equipment
7
112
112
Due from shareholders – unpaid capital
-
-
Treasury shares
8
11
6
Accruals, prepayments and sundry assets
17,464
18,109
Other assets
9
5,628
5,581
Accruals and deferred income
9
11,836
12,528
TOTAL ASSETS
716,689
616,235
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
596
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Parent Company Financial statements
7
Liabilities and equity
(in millions of euros)
Notes
31/12/2020
31/12/2019
Money market and interbank items
218,200
92,565
Central banks
24
12
Due to credit institutions
11
218,176
92,553
Crédit Agricole internal transactions
11
64,624
41,253
Due to customers
12-28
225,851
261,032
Debt securities
13
103,865
118,946
Accruals, deferred income and sundry liabilities
25,917
25,791
Other liabilities
14-28
12,758
11,729
Accruals and deferred income
14
13,159
14,062
Provisions and subordinated debt
26,245
25,108
Provisions
15-16-17
1,242
1,386
Subordinated debt
19
25,003
23,722
Fund for General Banking Risk (FGBR)
18
1,239
1,194
Equity excluding FGBR
20
50,748
50,346
Share capital
8,750
8,654
Share premiums
12,536
12,470
Reserves
14,612
12,597
Revaluation adjustments
-
-
Regulated provisions and investment subsidies
8
12
Retained earnings
14,597
14,597
Net income/(loss) for the financial year
245
2,016
TOTAL LIABILITIES AND EQUITY
716,689
616,235
OFF-BALANCE SHEET AT 31 DECEMBER 2020
(in millions of euros)
Notes
31/12/2020
31/12/2019
Commitments given
26,357
21,827
Financing commitments
27
8,267
5,296
Guarantee commitments
27
18,081
16,521
Securities commitments
27
9
10
Commitments received
137,758
77,944
Financing commitments
27
129,170
65,744
Guarantee commitments
27
8,588
12,200
Securities commitments
27
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
597
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Parent Company Financial statements
7
INCOME STATEMENT AT 31 DECEMBER 2020
(in millions of euros)
Notes
31/12/2020
31/12/2019
Interest and similar income
29
9,620
9,698
Interest and similar expenses
29
(10856)
(11261)
Income from variable income securities
30
1,952
2,712
Fee and commission income
31
1,177
972
Fee and commission expenses
31
(563)
(596)
Net gains (losses) on trading book
32
139
(26)
Net gains (losses) on short term investment portfolios and similar
33
61
15
Other banking income
34
27
39
Other banking expenses
34
(61)
(52)
Revenues
1,496
1,501
Operating expenses
35
(770)
(778)
Depreciation, amortisation and impairment of property, plant & equipment and intangible assets
(7)
(7)
Gross Operating Income
719
716
Cost of risk
36
(4)
(13)
Operating income
715
703
Net gains (losses) on fixed assets
37
(715)
(292)
Pre-tax income on ordinary activities
-
411
Net extraordinary items
-
-
Income tax charge
38
286
1,644
Net allocation to FGBR and regulated provisions
(41)
(39)
NET INCOME FOR THE FINANCIAL YEAR
245
2,016
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
598
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Parent Company Financial statements
7
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
Note 1
Legal and financial background and significant events
during the financial year
600
1.1
Legal and financial background
600
1.2
Crédit Agricole internal transactions
600
1.3
Significant events in 2020
602
1.4
Events after financial year 2021
604
Note 2
Accounting policies and principles
604
2.1
Loans and financing commitments
604
2.2 Securities portfolio
607
2.3 Fixed assets
609
2.4
Amounts due to customers and credit institutions
610
2.5 Debt securities
610
2.6 Provisions
610
2.7
Fund for General Banking Risk (FGBR)
611
2.8
Transactions on forward financial instruments and options
611
2.9
Foreign currency transactions
611
2.10 Consolidation of foreign branches
612
2.11 Off-balance sheet commitments
612
2.12
Employee profit-sharing and incentive plans
612
2.13 Post-employment benefits
612
2.14
Stock options and share subscriptions offered to employees
under the Employee Savings Plan
613
2.15 Extraordinary income and expenses
613
2.16
Income tax charge
613
Note 3
Loans and receivables due from credit institutions –
Analysis by residual maturity
613
Note 4
Loans and receivables due from customers
614
4.1
Loans and receivables due from customers –
Analysis by residual maturity
614
4.2
Loans and receivables due from customers –
Analysis by geographic area
614
4.3
Loans and receivables due from customers –
Doubtful loans and impairment losses by geographic area
614
4.4
Loans and receivables due from customers –
Analysis by customer type
615
Note 5
Trading, short-term investment, long-term investment
and medium-term portfolio securities
615
5.1
Trading, short-term investment, long-term investment and
medium-term portfolio securities (excluding treasury bills) –
breakdown by major category of counterparty
616
5.2
Breakdown of listed and unlisted fixed and variable-income securities
616
5.3
Treasury bills, bonds and other fixed-income securities –
analysis by residual maturity
617
5.4
Treasury bills, bonds and other fixed-income securities –
analysis by geographic area
617
Note 6
Equity investments and subsidiary securities
618
6.1
Estimated values of equity investments
622
Note 7
Movements in fixed assets
623
7.1 Financial investments
623
7.2
Property, plant & equipment and intangible assets
623
Note 8
Treasury shares
624
Note 9
Accruals, prepayments and sundry assets
624
Note 10
Impairment losses deducted from assets
624
Note 11
Due to credit institutions – Analysis by residual maturity
625
Note 12
Due to customers
625
12.1 Due to customers – Analysis by residual maturity
625
12.2
Due to customers – Analysis by geographic area
626
12.3
Due to customers – Analysis by customer type
626
Note 13
Debt securities
626
13.1 Debt securities – Analysis by residual maturity
626
13.2 Bonds (by currency of issuance)
627
Note 14
Accruals, deferred income and sundry liabilities
627
Note 15
Provisions
628
Note 16
Home purchase savings
630
Note 17
Employment-related commitments – post-employment
benefits, defined-benefit plans
631
Note 18
Fund for General Banking Risk (FGBR)
632
Note 19
Subordinated debt – Analysis by residual maturity
632
Note 20
Changes in equity (before appropriation)
633
Note 21
Composition of capital
633
Note 22
Transactions with subsidiaries and affiliates
and equity investments
634
Note 23
Foreign currency denominated transactions
634
Note 24
Foreign exchange transactions, foreign currency loans
and borrowing
634
Note 25
Transactions involving forward financial instruments
635
25.1
Transactions on forward financial instruments –
notional outstanding by residual maturity
636
25.2 Forward financial instruments – Fair value
637
Note 26
Information on counterparty risk on derivative products
637
Note 27
Commitments and guarantees given and received
638
Note 28
Clearing of securities borrowings and centralised savings
638
28.1 Securities borrowing
638
28.2 Centralised savings
639
Note 29
Net interest and similar income
639
Note 30
Income from variable-income securities
639
Note 31
Net fee and commission income
640
Note 32
Net gains (losses) on trading books
640
Note 33
Gains (Losses) on short-term investment portfolios and similar
640
Note 34
Other banking income and expenses
641
Note 35
Operating expenses
641
Note 36
Cost of risk
642
Note 37
Net gains (losses) on fixed assets
642
Note 38
Income tax charge
643
Note 39
Presence in non-cooperative States and territories
643
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
599
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Notes to the parent company financial statements
7
NOTE 1
Legal and financial background and significant events during the financial year
1.1
LEGAL AND FINANCIAL BACKGROUND
Crédit Agricole S.A. is a French Public Limited Company (Société Anonyme)
with a share capital of €8,750,066 thousand (
i.e.
2,916,688,640 shares
with a par value of €3 each).
At 31 December 2020, the share capital of Crédit Agricole S.A. broke
down as follows:
55.28% owned by SAS Rue La Boétie;
44.68% free float (including employees).
In addition, Crédit Agricole S.A. had 1,090,000 treasury shares at 31
December 2020,
i.e.
0.04% of its capital, compared with 435,000 treasury
shares at 31 December 2019.
Crédit Agricole S.A. coordinates the activities of the Regional Banks, is
responsible for exercising administrative, technical and financial control
over them and has right of supervision in accordance with the French
Monetary and Financial Code. By virtue of its duties as a corporate centre,
as confirmed by the banking Law, it is responsible for ensuring the
cohesion and proper functioning of the network, as well as each Regional
Bank’s compliance with operating standards. It guarantees their liquidity
and solvency. Moreover, in 1988, the Regional Banks granted a guarantee
to third-party creditors of Crédit Agricole S.A. on a joint and several basis
up to the aggregate amount of their own funds. This guarantee may
be exercised in the event of an asset shortfall at Crédit Agricole S.A.
identified in the course of its bankruptcy or dissolution.
1.2
CRÉDIT AGRICOLE INTERNAL TRANSACTIONS
Internal financing mechanisms
Affiliation with the Crédit Agricole network also means being part of
a system of financial relationships that operates as described below:
Regional Banks’ current accounts
Each Regional Bank holds a current account with Crédit Agricole S.A.,
which records the financial movements resulting from internal financial
transactions within the Group. This account, which may be in credit or
debit, is presented in the balance sheet under “Crédit Agricole internal
transactions – Current Accounts”.
Special savings accounts
Funds held in special savings accounts (popular savings passbook
accounts
(Livret d’épargne populaire)
, sustainable development passbook
accounts
(Livret de développement durable)
, home purchase savings
schemes and accounts, popular savings plans, youth passbook accounts
(Livrets Jeunes)
and passbook savings accounts
(Livret A)
are collected
by the Regional Banks on behalf of Crédit Agricole S.A. These funds are
required to be transferred to the latter. Crédit Agricole S.A. recognises
them on its balance sheet as “Due to customers”.
Time deposits and advances
The Regional Banks also collect savings funds (passbook accounts, bonds,
warrants, certain term accounts and similar accounts etc.) on behalf of
Crédit Agricole S.A. These funds are transferred to Crédit Agricole S.A.,
and are recognised as such on its balance sheet.
Special savings accounts and time deposits and advances are used by
Crédit Agricole S.A. to make “advances” (loans) to the Regional Banks,
with a view to funding their medium and long-term loans.
A series of four internal financial reforms has been implemented. These
reforms have permitted the transfer back to the Regional Banks, in the
form of so-called “mirror advances” (with maturities and interest rates
precisely matching those of the savings funds received) of first 15%,
25%, then 33% and, since 31 December 2001, 50% of the savings
resources, which they are free to use at their discretion.
Since 1 January 2004, the financial margins generated by the centralised
management of funds collected (and not transferred back via mirror
advances) are shared by the Regional Banks and Crédit Agricole S.A. and
are determined by using replacement models and applying market rates.
Furthermore, the Regional Banks may be refinanced in the form of
advances negotiated at market rates with Crédit Agricole S.A.
Transfer of Regional Banks’ liquidity surpluses
The Regional Banks may use their “monetary” deposits (demand
deposits, non-centralised time deposits and negotiable certificates
of deposit) to finance lending to their customers. Surpluses must be
transferred to Crédit Agricole S.A. where they are booked as current or
time accounts, under “Crédit Agricole internal transactions”.
Foreign currency transactions
Crédit Agricole S.A. represents the Regional Banks with respect to the
Banque de France and centralises their foreign exchange transactions.
Medium and long-term notes issued
by Crédit Agricole S.A.
These are placed mainly on the market or by the Regional Banks with
their customers. They are booked by Crédit Agricole S.A. under liabilities
either as “Debt instrument” or as “Provisions and subordinated debt”,
depending on the type of securities issued.
TLTRO III mechanism
The ECB set out a third series of longer-term refinancing operations
in March 2019, the terms and conditions of which were reviewed in
September 2019 and again in March and April 2020, in connection with
the COVID-19 situation.
The TLTRO III mechanism aims to provide longterm refinancing, with a
subsidy in the event of reaching a lending performance target based
on growth of lending to firms and housholds, which is applied over the
three-year maturity of the TLTRO operation, with an additional subsidy,
awarding a further and temporary incentive, which is applied over the
one-year period between June 2020 and June 2021.
Provided that the level of outstanding amounts giving entitlement to
these subsidies allows to consider the subsidies as already granted by
the ECB in relation to the support to the economy both in the first year
and in subsequent years, the interest accrued with a negative interest
rate takes this subsidy into account.
All subsidies are spread over the expected refinancing period from
the TLTRO III drawing date. Outstanding amounts that give entitlement
to the subsidy already exceed the level required to benefit from the
planned levels of subsidies. The additional subsidy for the first year is
spread over one year on straight-line basis, starting from June 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
600
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 1
For the new subsidy announced by the ECB following its meeting of
10 December 2020, covering the period from June 2021 to June 2022,
these principles will continue to apply as long as there is reasonable
assurance that the level of eligible amounts outstanding will render it
possible to meet the conditions necessary to acquire these subsidies
when they become due and payable by the ECB.
As at 31 December 2020, the Group has drawn €133 billion in TLTRO III
at the ECB.
Hedging of liquidity and solvency risks,
and banking resolution
Under the legal internal financial solidarity mechanism enshrined in
Article L. 511-31 of the French Monetary and Financial Code (CMF),
Crédit Agricole S.A., as the central body of the Crédit Agricole network,
must take all necessary measures to ensure the liquidity and solvency
of each affiliated credit institution, as well as the network as a whole.
As a result, each member of the network benefits from this internal
financial solidarity.
The general provisions of the CMF (
Code monétaire et financier
— French
Monetary and Financial Code) are reflected in the internal provisions
setting out the operational measures required for this legal solidarity
mechanism.
In the initial public offering of Crédit Agricole S.A., CNCA (now
Crédit Agricole S.A.) signed an agreement with the Regional Banks in
2001 aimed at governing internal relations within the Crédit Agricole
network. The agreement notably provides for the creation of a Fund
for Bank Liquidity and Solvency Risks (FRBLS) designed to enable
Crédit Agricole S.A. to fulfil its role as central body by providing assistance
to any affiliated members that may experience difficulties. The main
provisions of this agreement are set out in Chapter III of the Registration
Document filed by Crédit Agricole S.A. with France’s
Commission des
Opérations de Bourse
on 22 October 2001 under number R. 01-453.
The European banking crisis management framework was adopted in 2014
by EU Directive 2014/59 (known as the “Bank Recovery and Resolution
Directive — BRRD”), incorporated into French law by Order 2015-1024
of 20 August 2015, which also adapted French law to the provisions of
European Regulation 806/2014 of 15 July 2014 establishing uniform rules
and a uniform procedure for the resolution of credit institutions and certain
investment firms in the framework of a Single Resolution Mechanism and
a Single Resolution Fund. Directive (EU) 201/879 of 20 May 2019, known
as “BRRD2”, amended the BRRD and was incorporated into French law
by Order 2020-1636 of 21 December 2020.
This framework, which includes measures to prevent and to resolve
banking crises, is intended to preserve financial stability, ensure the
continuity of activities, services and operations of institutions whose failure
could significantly impact the economy, protect depositors, and avoid or
limit to the greatest extent possible, the use of public financial support
as much as possible. In this context, the European Resolution Authorities,
including the Single Resolution Board, have been given very broad powers
to take all necessary measures in connection with the resolution of all or
part of a credit institution or the group to which it belongs.
For cooperative banking groups, the “extended single point of entry”
(“extended SPE”) resolution strategy is favoured by the resolution
authorities, whereby resolution tools would be applied simultaneously
at the level of Crédit Agricole S.A. and the affiliated entities. In this
respect, and in the event of a resolution of the Crédit Agricole Group, the
scope comprising Crédit Agricole S.A. (in its capacity as the corporate
centre) and its affiliated entities would be considered as a whole as
the expanded single entry point. Given the foregoing and the solidarity
mechanisms that exist within the network, a member of the Crédit
Agricole network cannot be put individually in resolution.
(1) Articles L. 613-48 and L. 613-48-3 of the CMF.
(2) Articles L. 613-55 and L. 613-55-1 of the CMF.
The Resolution authority may initiate resolution proceedings against
a credit institution where it considers that: the institution has failed
or is likely to fail, there is no reasonable prospect that another private
measure will prevent the failure within a reasonable time, a resolution
measure is necessary, and a liquidation procedure would be inadequate
to achieve the objectives of the resolution mentioned above.
The resolution authorities may use one or more resolution tools, as
described below, with the objective of recapitalising or restoring the
viability of the institution. The resolution tools should be implemented
in such a way that equity holders (shares, mutual shares, CCIs, CCAs)
bear losses first, with creditors following up immediately, provided that
they are not excluded from bail-in legally speaking or by a decision of
the resolution authorities. French law also provides for a protective
measure when certain resolution tools or decisions are implemented,
such as the principle that equity holders and creditors of an institution
in resolution may not incur greater losses than those they would have
incurred if the institution had been liquidated in the context of a judicial
liquidation procedure under the French Commercial Code (NCWOL
principle referred to in Article L. 613-57.I of the CMF). Thus, investors
are entitled to claim compensation if the treatment they receive in a
resolution is less favourable than the treatment they would have received
if the institution had been subject to normal insolvency proceedings.
In the event that the resolution authorities decide to put the Crédit Agricole
Group in resolution, they will first write down the CET1 instruments
(shares, mutual shares, CCI and CCA), additional Tier 1 and Tier 2
instruments, in order to absorb losses, and then possibly convert the
additional Tier 1 and Tier 2 instruments into equity securities
(1)
. Then,
if the resolution authorities decide to use the bail-in tool, the latter
would be applied to debt instruments
(2)
, resulting in the partial or total
write-down of these instruments or their conversion into equity in order
to absorb losses.
With respect to the corporate centre and all affiliated entities, the
resolution authorities may decide to implement, in a coordinated manner,
impairment or conversion measures and, where applicable, internal
bailouts. In such an event, the impairment or conversion measures and,
where applicable, internal bailout measures would apply to all entities
within the Crédit Agricole network, regardless of the entity in question
and regardless of the origin of the losses.
The creditor hierarchy in resolution is defined by the provisions of
Article L. 613-55-5 of the CMF, effective as at the date of implementation
of the resolution.
Equity holders and creditors of the same rank or with identical rights in
liquidation will then be treated equally, regardless of the Group entity
of which they are creditors.
The scope of this bail-in, which also aims to recapitalise the Crédit
Agricole Group, is based on capital requirements at the consolidated level.
Investors must therefore be aware that there is a significant risk that
holders of shares, mutual shares, CCIs and CCAs and holders of debt
instruments of a member of the network will lose all or part of their
investment if a resolution procedure is implemented on the Group,
regardless of the entity of which they are a creditor.
The other resolution tools available to the resolution authorities are
essentially the total or partial transfer of the activities of the institution
to a third party or to a bridge institution and the separation of the assets
of the institution.
This resolution framework does not affect the legal internal financial
solidarity mechanism enshrined in Article L. 511-31 of the French
Monetary and Financial Code, which applies to the Crédit Agricole network,
as defined in Article R. 512-18 of the same Code. Crédit Agricole S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
601
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 1
considers that, in practice, this mechanism should be implemented
prior to any resolution procedure.
The implementation of a resolution procedure to the Crédit Agricole
Group would thus mean that the legal internal solidarity mechanism
had failed to remedy the failure of one or more network entities, and
hence of the network as a whole. It would also limit the likelihood that
the conditions for triggering the guarantee covering the liabilities of
Crédit Agricole S.A. (granted in 1988 to its third-party creditors by the
Regional Banks on a joint and several basis, and up to the aggregate
amount of their own funds) are met. It should be recalled that this
guarantee may be triggered in the event of an asset shortfall following
Crédit Agricole S.A.’s bankruptcy or dissolution.
Specific guarantees provided by the Regional
Banks to Crédit Agricole S.A. (Switch)
The Switch guarantee mechanism, established on 23 December 2011
and supplemented by an initial addendum signed on 19 December 2013
and twice amended in 2016 on 17 February (Amendment no. 2) and
21 July (Amendment no. 3), respectively, forms part of the financial
relationship between Crédit Agricole S.A., as corporate centre, and the
mutual network of Crédit Agricole Regional Banks. The most recent
amendments to these guarantees took effect retroactively on 1 July 2016,
replacing the previous guarantees, and expire on 1 March 2027, subject
to total or partial early termination or extension in accordance with the
terms of the contract. A first partial termination corresponding to 35%
of the Switch guarantees took place on 2 March 2020.
The effectiveness of the mechanism is secured by cash deposits paid
by the Regional Banks to Crédit Agricole S.A. These security deposits
are calibrated to reflect Crédit Agricole S.A.’s capital savings and bear
interest at a fixed rate under long-term liquidity conditions.
Accordingly, the Switch Insurance guarantees protect Crédit Agricole S.A.
from a decline in the overall equity-accounted value of these equity
investments, subject to payment by the Regional Banks of compensation
from the cash deposit. Likewise, if the equity-accounted value later
recovers, Crédit Agricole S.A. could return previously paid compensation
in accordance with a clawback provision.
Guarantees are recognised as off-balance sheet commitments in the
same way as first demand guarantees given. Their compensation is
recognised in stages in the interest margin under Revenues. In the
event of a call of guarantees or following an improvement in fortunes,
where applicable, the compensation payment or redemption proceeds
are recognised under cost of risk.
It is worth noting that the Switch Insurance guarantees are triggered on
a half-yearly basis and are assessed on the basis of half-yearly changes
in the equity-accounted value of the CAA equity investments. At each
quarterly period-end, the Regional Banks are required to estimate if
there is a risk that compensation will be payable and to fund provisions
accordingly: where a return to better fortune may or may not occur, no
income will be recognised due to such uncertainty. At each half-yearly
period-end, and if the conditions have been met, the Regional Banks
recognise the effects of triggering the guarantees (call of guarantee
or clawback).
1.3
SIGNIFICANT EVENTS IN 2020
Decision regarding the 2019 dividend
On 27 March 2020, the European Central Bank issued recommendations
asking that the banks under its supervision not pay dividends as long
as the coronavirus crisis persists, and until “at least the beginning of
October 2020”.
This deadline appeared to be incompatible with the French Commercial
Code (Code de commerce), which stipulates that an annual dividend
must be paid no later than 30 September.
Under these conditions, the Board of Directors of Crédit Agricole S.A.,
which was consulted in writing on 1 April 2020 pursuant to the legal
provisions on the functioning of deliberative bodies during the COVID-19
epidemic, decided not to propose to the General Meeting of 13 May 2020
the distribution of a dividend initially set at €0.70 per share for the 2019
financial year, and to allocate the entire profit for 2019 to a reserve
account.
On 28 July 2020, the ECB extended its recommendation not to pay
dividends until January 2021.
On 15 December 2020, the ECB changed its recommendations, asking all
banks to consider not distributing cash dividends and not repurchasing
shares, or to limit such distributions, until 30 September 2021.
Accordingly, in the event of a distribution, dividends and share buybacks
must remain below 15% of the cumulative distributable earnings for
financial years 2019 and 2020 and must not exceed 20 basis points of
the CET1 ratio, whichever is lower. In addition, banks planning to make
distributions should contact their joint prudential supervisory team to
determine whether the level of distribution they are contemplating is
prudent.
During 2020, Crédit Agricole S.A. had not distributed any dividends in
respect of 2019.
Capital increase reserved for employees
The capital increase of Crédit Agricole S.A. reserved for employees, with
the subscription period running from 12 to 25 November 2020, was
completed definitively on 22 December 2020. 47,113 Crédit Agricole
Group employees, in France and 17 other countries, subscribed for a
total amount of €162.9 million.
The proposed investment scheme was a standard offer with a subscription
price including a 30% rebate on the share price. The issue and delivery
of the new shares to employees took place on 22 December 2020.
This capital increase created 31,999,928 new shares, thereby
bringing the total number of shares comprising the share capital of
Crédit Agricole S.A. to 2,916,688,640.
“Switch” guarantee mechanism
The “Switch” guarantee mechanism represents a transfer to the Regional
Banks of a share of the regulatory requirements that apply to Crédit
Agricole S.A. for its insurance activities in return for a fixed remuneration
of the Regional Banks.
Unwinding of 35% of the “Switch”
guarantee mechanism
On 2 March 2020, Crédit Agricole S.A. unwound 35% of the “Switch”
guarantee mechanism in place between the Regional Banks and
Crédit Agricole S.A.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
602
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 1
The partial unwinding of this intra-group transaction strengthens
Crédit Agricole S.A.’s earning power with an accretive impact of
€70 million in 2020. It is in line with the Medium-Term Plan’s objective
of unwinding 50% of the Switch by 2022.
For Crédit Agricole S.A., this transaction resulted in a 35% reduction in
commitments given (€3.2 billion) and a 35% reduction in the security
deposit received from the Regional banks (approximately €1 billion).
Triggering of the “Switch” guarantee mechanism
The “Switch” guarantee mechanism hedges the Equity-Accounted Value
of Crédit Agricole Assurances. It is activated in the event of a decrease
in its value.
If the mechanism is activated, the Regional Banks will be required
to pay Crédit Agricole S.A. the proceeds of the half-yearly reduction
in the equity-accounted value adjusted by the coverage ratio, which
has stood at 44.51% since 2 March 2020, the date on which the 35%
guarantee was unwound.
At 30 June 2020, as a result of the tensions in the equity and bond
markets in the first half of 2020, the Crédit Agricole Assurances adjusted
estimated equity-accounted value had fallen by €147 million in the
first half of 2020. It triggered the guarantee mechanism in the amount
of €65.4 million. In the Crédit Agricole S.A. financial statements, this
resulted in the recognition in the income statement of income under
Cost of risk of €65.4 million.
At 30 September 2020, the Crédit Agricole Assurances adjusted final
equity-accounted value for the first half of 2020 was determined. As a
result, the indemnity received by Crédit Agricole S.A. from the Regional
Banks’ security deposit, which was immediately reconstituted by a
payment of funds, was adjusted.
At 30 September 2020, €37.6 million was recognised in the
Crédit Agricole S.A. financial statements as income under cost of risk
for the triggering of the Switch guarantee.
“Switch” guarantee mechanism - Claw-back
At 31 December 2020, the increase in the Equity-Accounted Value
adjusted for Crédit Agricole Assurances' distributions in the second half
of 2020 offset the decline observed in June 2020.
This increase in equity-accounted value resulted in the implementation
of a full claw-back of the guarantee in the fourth quarter of 2020, leading
to the recognition of an accrued expense of €37.6 million euros in the
Crédit Agricole S.A. financial statements.
As a result, for the whole of 2020, the Switch guarantee was neutral in
the Crédit Agricole S.A. financial statements.
Debt optimisation operation
for Crédit Agricole S.A.
On 28 May 2020, Crédit Agricole S.A. has launched simultaneous cash
buyback offers for 15 preferred senior bond strains outstanding, in
order to optimise its liability structure and debt management in light
of current and future regulations and to provide liquidity to investors
in the targeted bond strains. The transaction was carried out between
28 May and 5 June 2020, the aggregate nominal repurchased amount
was equivalent to €3.4 billion.
The impact of these redemptions, net of the hedging effect, is a loss
of €41 million before tax in the financial statements for the year ended
31 December 2020.
Benchmark
bond issue on the Panda market
On 11 September 2020, following its initial Panda Bond issue in
December 2019, Crédit Agricole S.A. successfully issued its second
CNY one billion (equivalent to €125 million) senior preferred bond with
a maturity of 3 years and a 3.5% fixed rate. Crédit Agricole S.A. thus
becomes a repeat issuer in the fast paced developing Panda Bond market,
with the view to fund its activities in China and further diversifying its
long-term funding.
The proceeds will be used to finance its wholly-owned banking subsidiary
Crédit Agricole CIB (China) Ltd. in order to support its international client
base through financing and capital market transactions.
This successful issuance was bought by Chinese and International
institutional investors on the Chinese bond market and the Hong Kong
Bond Connect exchange. The order book was 1.64 times oversubscribed,
illustrating the investors’ continuous confidence in Crédit Agricole S.A.
and recognition to its CNY 5 billion bonds issuance programme, the
foremost one issued by a French bank and a European G-SIB (global
systemically important banks) financial institution.
Crédit Agricole S.A., the issuer, as the Central Body and member of the
Crédit Agricole Network, and its Panda Bonds have obtained a domestic
rating of AAA from China Chengxin International Credit Rating.
Social bond issuance
In the context of the current crisis, which is severely affecting the most
fragile, the Crédit Agricole Group is resolutely pursuing its mutualist
commitment to promote development for all. On 2 December 2020,
Crédit Agricole S.A. successfully carried out its first social bond issuance
for €1 billion.
The framework of these social bonds issuances aims to reduce social
inequalities by revitalising the most vulnerable territories and by
promoting employment, solidarity initiatives and access to essential
goods and services.
A key issuer in the green bond market, Crédit Agricole S.A. is today
naturally broadening the field of its sustainable finance initiatives with
this inaugural social bond issue.
This theme-based issuance contributes to the Group’s ambition, included
in its Societal Project, to pursue its mutualist commitment to promote
development for all. This issuance will be focused in particular on
financing professionals and SME customers of the Regional Banks
and LCL in territories where the unemployment rate is higher than the
national average.
Depreciation of equity investment
on Crédit Agricole Italia
As part of the preparing the publication of its financial statements,
Crédit Agricole S.A. conducted the annual valuation tests of the equity
investment recorded in its balance sheet during the fourth quarter of
2020. These tests are based on a comparison between the value recorded
in the assets of the balance sheet of Crédit Agricole S.A. and the value
in use. The calculation of the value in use is based on discounting the
future cash flows.
Due to an anticipated prolonged period of very low interest rates, which
is weighing on Crédit Agricole Italia's interest margins and therefore on
its value in use for Crédit Agricole S.A. and Crédit Agricole Group, on
15 December 2020, Crédit Agricole S.A.'s Board of Directors decided
to impair the equity investment carried on Crédit Agricole Italia. This
non-deductible impairment charge will impact Crédit Agricole S.A.'s
financial statements by €635 million in the fourth quarter of 2020.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
603
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 1
BForBank capital increase
BForBank is the 100% online bank of Crédit Agricole's. This entity was
15%-owned by Crédit Agricole S.A. and 85%-owned by the Regional
Banks (SACAM Avenir).
Against a backdrop of transformation in the banking sector and the
development of digital solutions, Crédit Agricole Group has decided to
initiate a transformation plan that requires significant investment, which
will be financed by capital increases subscribed by current shareholders.
As a result of the significant investments that will be made, a review
of BForBank's shareholder structure has been completed, and
Crédit Agricole S.A. will become a 50% shareholder of BForBank.
Cheque Image Exchange dispute
In its judgment on 21 December 2017, the Paris Court of Appeal
upheld the decision of the French Competition Authority (Autorité de
la concurrence — ADLC), which in 2010 had fined the major French
banks for colluding to fix the prices and terms for clearing cheques.
Just as the other banks party to this procedure, Crédit Agricole S.A.
has filed an appeal with France’s Supreme Court
(Cour de cassation)
.
The Supreme Court ruled in favour of the banks in the Cheque Image
Exchange case on 29 January 2020 and referred the case back to the
Paris Court of Appeal, with a change in the composition of the Court.
This decision returns the case and the parties to their status before the
Court of Appeal’s decision of 21 December 2017. The banks are therefore
once again subject to the French Competition Authority’s unfavourable
decision of 20 September 2010.
In practice, as a result of the French Supreme Court’s decision,
Crédit Agricole S.A. will be required to pay the French State Treasury
the difference between the fine imposed by the French Competition
Authority in September 2010 (€82.9 million) and the reduced fine
imposed by the Paris Court of Appeal in December 2017 (€76.5 million),
i.e.
€6.4 million. On 7 April 2020, the sum of €6.4 million was paid to
the French State Treasury.
Based on the same principle as the fine paid in December 2017, this
additional charge is shared equally between Crédit Agricole S.A. and
the Regional Banks and is recognised in the individual accounts of
Crédit Agricole S.A. for an amount of €3.2 million.
1.4
EVENTS AFTER FINANCIAL YEAR 2021
Unwinding of 15% of the “Switch”
guarantee mechanism
On 1 March 2021, Crédit Agricole S.A. unwound 15% of the “Switch”
guarantee mechanism set up between the Regional Banks and
Crédit Agricole S.A.
For Crédit Agricole S.A., this transaction will result in a decrease in
commitments received from the Regional Banks amounting to €1,375
million and a decrease in the security deposit of €465 million.
NOTE 2
Accounting policies and principles
Crédit Agricole S.A. prepares its financial statements in accordance with
the accounting principles applicable to banks in France.
The presentation of the financial statements of Crédit Agricole S.A.
complies with the provisions of ANC Regulation 2014-07, which, for
financial years beginning on or after 1 January 2015, combines in a
single regulation, on the basis of established law, all accounting standards
applicable to credit institutions.
Changes in accounting policies and the presentation of the financial statements compared with the previous financial year relate to the following:
Regulations
Date of first-time application:
financial years from
Regulation no. 2020-10 amending ANC Regulation no. 2014-07
relating to the clearing of securities borrowing and centralised savings
(1)
1 January 2020
(1)
Regulation no. 2020-10 of 22 December 2020 amends Regulation ANC 2014-07 of 26 November 2014 pertaining to the accounts of undertakings in the banking sector on the presentation:
–
securities borrowings: debts representing the value of borrowed securities are presented net of the value of identical securities classified by the institution as trading securities. These are the
amount of securities borrowed and securities received under a financial collateral agreement with a right of re-use (see Note 28.1 Securities borrowings);
–
centralised savings: special savings accounts under the “Livret A” passbook savings account, the “Livret de développement durable et solidaire” passbook savings account and the “Livret
d'épargne populaire” passbook savings account are presented after deduction of the claim on the savings fund representing the share of the total deposits collected by the institution, centralised
by Caisse des Dépôts et Consignations (see Note 28.2 Centralised savings).
2.1
LOANS AND FINANCING COMMITMENTS
Receivables from credit institutions, Crédit Agricole Group entities and
customers are governed by ANC Regulation 2014-07.
They are presented according to their residual maturity or their nature:
demand and time deposits for credit institutions;
current accounts, term loans and advances for Crédit Agricole internal
transactions;
trade receivables, other facilities and ordinary accounts for customers.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
604
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
In accordance with regulations, the customers category also includes
transactions with financial customers.
Subordinated loans and repurchase agreements (represented by
certificates or securities) are included under the various categories of
loans and receivables according to counterparty type (interbank, Crédit
Agricole, customers).
Loans are recorded on the balance sheet at face value.
Under Article 2131-1 of ANC Regulation 2014-07, the fees and
commissions received, and the marginal transaction costs borne are
deferred over the effective term of the loan and are thus included in
the outstanding amount of the relevant loan.
Accrued interest on loans is recognised on the balance sheet under
accrued interest and taken to profit or loss.
Financing commitments recognised off-balance sheet represent
irrevocable commitments to cash advances and guarantee commitments
that have not resulted in fund movements.
The application of ANC Regulation 2014-07 led Crédit Agricole S.A. to
recognise loans with a credit risk in accordance with the rules set out
in the following paragraphs.
The use of external and/or internal ratings systems helps assess the
level of credit risk.
Loans and financing commitments are divided into performing and
doubtful loans.
Performing loans
So long as loans are not classified as doubtful, they are classified as
either performing or underperforming and remain as initially classified.
Provisions for credit risk on performing
and underperforming loans
For credit exposures, Crédit Agricole S.A. recognises provisions on the
liabilities side of its balance sheet to cover the expected credit risks
over the next 12 months (sound exposures) and/or over the life of the
exposure if the credit quality of the exposure has deteriorated significantly
(exposures classified as impaired).
These provisions are determined as part of a specific monitoring process
and are based on estimates reflecting changes in the level of expected
credit loss.
Definition of expected credit loss (“ECL”)
ECL is defined as the weighted expected probable value of the discounted
credit loss (principal and interest). It represents the present value of the
difference between the contractual cash flows and the expected cash
flows (including principal and interest).
The ECL approach is designed to anticipate as early as possible the
recognition of expected credit losses.
ECL governance and measurement
The governance of the measurement system of provisioning parameters
is based on the structures put in place for the Basel system. The
Group’s Risk Management Department is responsible for defining the
methodological framework and supervising the loan loss provisioning
system.
The Crédit Agricole Group primarily relies on the internal rating system
and current Basel processes to generate the parameters needed to
calculate the ECL. The assessment of changes in credit risk relies on a
model for loss anticipation and extrapolation on the basis of reasonable
scenarios. All available, relevant, reasonable and documentable
information, including forward-looking information, has been used.
The formula includes the probability of default, loss given default and
exposure at default parameters.
These calculations are broadly based on the internal models used as
part of the regulatory framework, but with adjustments to determine
an economic ECL.
The accounting approach also requires the recalculation of certain Basel
parameters, in particular to eliminate internal recovery costs or floors
that are imposed by the regulator in the regulatory calculation of Loss
Given Default (“LGD”).
The manner in which ECL is calculated should be assessed on the basis
of the type of products: loans and receivables due from customers and
financing commitments.
The expected credit losses for the coming 12 months make up a
percentage of the lifetime expected credit losses, and represent the
lifetime cash flow shortfalls in the event of a default during the 12 months
following the reporting period (or a shorter period if the expected lifetime
of the financial instrument is less than 12 months), weighted by the
probability of default within 12 months.
Expected credit losses are discounted at the effective interest rate
determined upon initial recognition of the outstanding amount.
Provisioning parameters are measured and updated using the
methodologies defined by the Crédit Agricole Group and thereby
establishing a first reference level, or shared base, for provisioning.
Backtesting of the models and parameters used is done at least annually.
The forward looking macro-economic data are factored into a
methodological framework that is applicable at two levels:
at the Crédit Agricole Group level, in determining a shared framework
for factoring in forward looking inputs when projecting the PD and
LGD parameters over the repayment horizon of transactions;
at the level of each entity in respect of its own portfolios.
Crédit Agricole S.A. applies additional forward looking parameters
to the performing and underperforming loans and receivables due
from customers and financial commitments portfolios that are exposed
to additional losses not covered in the scenarios defined at the Group
level due to the local economic and/or structural factors.
Significant deterioration in credit risk
Crédit Agricole S.A. assesses, for each loan, the deterioration in credit
risk since origination to each period-end. Based on this assessment
of the change in credit risk, the entities must classify their exposure
into different risk categories (exposures qualified as healthy/exposures
qualified as degraded/doubtful exposures).
To assess significant deterioration, the Crédit Agricole Group employs
a process based on two levels of analysis:
the first level is based on absolute and relative Group criteria and
rules that apply to all Group entities;
the second level is specific to each entity and linked to an expert
assessment, based on additional forward looking parameters exposing
it to additional losses not covered in the scenarios defined at the
Group level through local economic and/or structural factors, of the
risk held by each entity in its portfolios that may lead to an adjustment
in the Group’s performing to underperforming reclassification criteria
(switching a portfolio or sub-portfolio to ECL at maturity).
Each loan is, subject to exceptions, assessed for significant deterioration.
Contagion is not required for the downgrading of same-counterparty
loans from performing to underperforming. The monitoring of significant
deterioration must look at changes in the credit risk of the main debtor
without regard to guarantees, including transactions that are guaranteed
by the shareholder.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
605
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
Possible losses in respect of portfolios of small loans with similar
characteristics may be estimated on a statistical basis rather than
individually assessed.
To measure the significant deterioration of credit risk since initial
recognition, it is necessary to look back at the internal rating and PD
(Probability of Default) at origination.
Origination means the trading date, on which the entity became bound
by the contractual terms of the loan. For financing and guarantee
commitments, origination means the date on which the irrevocable
commitment was made.
In the absence of an internal rating model, the Crédit Agricole Group
uses the absolute threshold of non-payment for over 30 days as the
maximum threshold for significant deterioration and classification as
underperforming loan.
For loans measured based on an internal rating systems (in particular
exposures monitored by an advanced approach), the Crédit Agricole
Group considers that all of the information incorporated into such
rating systems allows for a more relevant assessment than just the
non-payment for over 30 days criterion.
If deterioration since origination is no longer observed, the provision
may be reduced to 12-month expected credit losses (reclassification
to performing loans).
Where certain significant deterioration factors or indicators may not be
identifiable at the level of a loan by itself, the assessment of significant
deterioration is made at the level of portfolios, groups of portfolios or
parts of outstanding portfolios.
Portfolios can be created for the collective assessment of deterioration
for instruments that share common characteristics, such as:
type of loan;
credit risk rating (including internal Basel II rating for entities with an
internal ratings system);
type of collateral;
date of initial recognition;
remaining term until maturity;
business sector;
geographic location of the borrower;
the value of collateral relative to the financial assets, if this has an
impact on the probability of default (for example, non-recourse loans
in certain countries or loan-to-value ratios);
distribution channel, purpose of financing, etc.
Differentiation of significant deterioration by market is therefore possible
(home loans, consumer finance, loans to farmers or small businesses,
corporate finance, etc.).
The grouping of outstandings for the purpose of collective credit risk
assessment may change over time, as new information becomes
available.
Increases and reversals of provisions for credit risk on performing and
underperforming loans are recognised under cost of risk.
Doubtful loans
These are loans of all types, including collateralised, with an identified
credit risk corresponding to one or more of the following situations:
a significant arrear in payment, generally more than 90 days past due,
unless specific circumstances point to the fact that the delay is due
to reasons independent of the debtor’s financial situation;
the entity believes that the debtor is unlikely to settle its credit
obligations unless it avails itself of certain measures such as
enforcement of collateral security right.
A loan in default is said to be doubtful when one or more events occur
which have a negative effect on the estimated future cash flows. The
following events are observable data, indicative of doubtful loans:
significant financial difficulties of the issuer or borrower;
a breach of contract, such as default or overdue payment;
the granting, by the lender(s) to the borrower, for economic or
contractual reasons related to financial difficulties of the borrower,
of one or more favours that the lender(s) would not have considered
under other circumstances;
the growing probability of bankruptcy or financial restructuring of
the borrower;
the disappearance of an active market for the financial asset due to
financial difficulties;
the purchase or creation of a financial asset with a significant discount,
which reflects the credit losses suffered.
It is not necessarily possible to isolate a particular event. The doubtful
nature of an outstanding amount may result from the combined effect
of several events.
A defaulting counterparty returns to a sound situation only after a period
of observation that makes it possible to confirm that the debtor is no
longer doubtful (assessment by the Risk Management Department).
Crédit Agricole S.A. makes a distinction between doubtful loans and
irrecoverable loans:
Doubtful loans
All doubtful loans that do not fall into the irrecoverable loans category
are classified as doubtful loans.
Irrecoverable doubtful loans
Loans for which the prospects of recovery are highly impaired and
that are likely to be written off over time.
Interest continues to accrue on doubtful loans but no longer accrues
once the loan is classified as irrecoverable.
The classification as doubtful loan may be discontinued and the loan
is once again classified as performing loans.
Impairment resulting from credit risk
on doubtful loans
Once a loan is doubtful, the likely loss is recognised by Crédit Agricole S.A.
by means of impairment losses deducted from the asset on the balance
sheet. This impairment represents the difference between the carrying
amount of the loan and the estimated future flows discounted at the
effective interest rate, having regard to the financial position of the
counterparty, its economic outlook as well as any guarantees net of
the cost of realising them.
Probable losses in respect of off-balance sheet commitments are covered
by provisions recognised as liabilities.
Loans and advances provided by Crédit Agricole S.A. to the Regional
Banks do not represent a direct risk for Crédit Agricole S.A. with respect to
the corresponding customer loans made by the Regional Banks. They do,
however, represent a potential indirect risk with respect to the financial
strength of the Regional Banks. Crédit Agricole S.A. has not made any
provisions for such loans and receivables to the Regional Banks.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
606
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
Accounting treatment of impairments
Impairment losses and reversals for non-recovery of doubtful loans are
recognised under cost of risk.
In accordance with Article 2231-3 of ANC Regulation 2014-07, the Group
elected to recognise the increase in the carrying amount resulting from
the reversal of impairment due to the passage of time under cost of risk.
Write-offs
Decisions as to when to apply a write-off are taken on the basis of
expert opinion. Crédit Agricole S.A. makes such determinations in
conjunction with its Risk Management department, according to its
business knowledge.
Loans that become irrecoverable are written off and the corresponding
impairment reversed.
Country risks
Country risks (or risks on international commitments) consist of the total
amount of unimpaired loans, both on and off-balance sheet, carried by
an institution directly or via hive-off vehicles, involving private or public
debtors residing in the countries identified by the French Regulatory
and Resolution Supervisory Authority (Autorité de contrôle prudentiel
et de résolution — ACPR), or where settlement thereof depends on the
position of public or private debtors residing in those countries.
Restructured loans
Loans restructured due to financial difficulties are those for which the
entity has amended the original financial terms (interest rate, term etc.)
for economic or legal reasons linked to the financial difficulties of the
borrower, under conditions that would not have been considered under
other circumstances.
The definition of loans restructured due to financial difficulty is therefore
comprised of two cumulative criteria:
contract modification or debt refinancing (concessions);
a customer who is in a financial difficulty (a debtor facing, or about
to face, difficulties in honouring financial commitments).
This definition of restructuring must be applied to each agreement and
not at client level (no contagion).
They consist of loans classified as doubtful and performing loans at
the time of restructuring.
Restructured loans do not include loans whose characteristics have been
renegotiated on a commercial basis with counterparties not showing
any insolvency problems.
The reduction of future cash flows granted to a counterparty, or the
postponing of these flows as part of a restructuring, shall result in the
recognition of a discount. It represents future loss of cash flow discounted
at the original effective rate.
It is equal to the difference between:
the face value of the loan; and
the sum of theoretical future cash flows from the restructured loan,
discounted at the original effective interest rate (defined at the date
of the financing commitment).
The discount recognised when a loan is restructured is accounted for
under cost of risk.
Loans restructured due to the debtor’s financial position are rated
in accordance with Basel rules and are impaired on the basis of the
estimated credit risk.
Once the restructuring has been carried out, the exposure continues
to be classified as “restructured” for an observation period of at least
two years, if the exposure was performing when restructured, and 3
years if the exposure was in default when restructured. These periods
are extended in the event of the occurrence of certain events (
e.g.
further incidents).
Crédit Agricole S.A. had no restructured loans at 31 December 2020.
2.2
SECURITIES PORTFOLIO
The rules on recognition of securities transactions are defined by Articles
2311-1 to 2391-1 (Part 3 “Recognition of Securities Transactions” of
Book II “Special Transactions”) and Articles 2211-1 to 2251-13 (Part 2
“Accounting Treatment of Credit Risk” of Book II “Special Transactions”)
of ANC Regulation 2014-07 of 26 November 2014 for the determination
of credit risk and the impairment of fixed-income securities.
These securities are presented in the financial statements according to
their asset class: treasury bills (treasury bonds and similar securities),
bonds and other fixed-income securities (negotiable debt securities and
interbank market instruments), equities and other variable income securities.
They are classified in portfolios defined by regulation (trading, long-term
investment, short-term investment, medium term portfolio, fixed assets,
other long-term equity investments, equity investments, investments
in subsidiaries and affiliates), depending on the management objective
of the entity and the characteristics of the instrument at the time the
product is subscribed.
2.2.1 Trading securities
Trading securities are those that are originally:
bought with the intention of selling them in the near future, or sold
with the intention of repurchasing them in the near future; or
held by the institution as a result of its market-making activity. The
classification of these securities as trading securities depends on the
effective turnover of the securities and on a significant trading volume
taking into account market opportunities.
These securities must be tradable on an active market and market prices
thus available must represent real transactions regularly undertaken in
the market on an arm’s length basis.
Trading securities also include:
securities bought or sold as part of specialised management of a
trading portfolio, including forward financial instruments, securities
or other financial instruments that are managed collectively and on
which there is an indication of recent short term profit taking;
securities on which there is a commitment to sell as part of an arbitrage
transaction on an organised exchange for financial instruments or
similar market.
Except as provided in Articles 2381-1 to 2381-5 (Part 3 “Recognition
of Securities Transactions” of Book II “Special Transactions”) of ANC
Regulation 2014-07, trading securities may not be reclassified into
another accounting category. They continue to be presented and
measured as trading securities until they are removed from the balance
sheet after being sold, fully repaid or written off.
Trading securities are recognised on the date they are purchased in
the amount of their purchase price, excluding transaction expenses and
including accrued interest.
Liabilities relating to securities sold short are recognised on the liabilities
side of the institution’s balance sheet for the selling price excluding
transaction expenses.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
607
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
At each reporting date, securities are measured at the most recent
market price. The overall amount of differences resulting from price
changes is recorded in the income statement under “Net gains (losses)
on trading books”.
2.2.2 Short-term investment securities
This category consists of securities that do not fall into any other category.
The securities are recorded at purchase price, including transaction
expenses.
Crédit Agricole S.A.’s portfolio of short-term investment securities
consists mostly of bonds denominated in euros and foreign currencies
and mutual investment funds.
Bonds and other fixed Income securities
These securities are recognised at purchase price including interest then
accrued. The difference between the purchase price and the redemption
value is staggered over the residual maturity of the security on an
actuarial basis.
Income is recorded in the income statement under “Interest and similar
income from bonds and other fixed-income securities.
Equities and other variable-income securities
Equities are recognised in the balance sheet at purchase value including
acquisition costs. The associated dividends are recorded as income
under “Income from variable income securities”.
Income from mutual investment funds is recognised when received
under the same heading.
At each reporting date, short-term investment securities are measured
at the lower of acquisition cost and market value. If the current value
of a holding or of a homogeneous set of securities (calculated from
market prices at the reporting date, for example) is lower than its
carrying amount, an impairment loss is recorded for the unrealised
loss without offset against any gains recognised on other categories of
securities. Gains from hedging within the meaning of Article 2514-1 of
ANC Regulation 2014-07, in the form of purchases or sales of forward
financial instruments, are factored in for the purposes of calculating
impairment losses. Potential gains are not recorded.
Impairment intended to take into account counterparty risk and
recognised under cost of risk is booked on fixed-income securities
as follows:
in the case of listed securities, impairment is based on market value,
which intrinsically reflects credit risk. However, if Crédit Agricole S.A.
has specific information on the issuer’s financial position that is not
reflected in the market value, a specific impairment loss is recorded;
in the case of unlisted securities, impairment is recorded in the
same way as for loans and receivables due from customers based
on identified probable losses (see Note 2.1 “Loans and financing
commitments – Impairment resulting from identified credit risk”).
Sales of securities are deemed to take place on a first-in, first-out basis.
Impairment losses and reversals and disposal gains or losses on short-
term investment securities are recorded under “Net gains (losses) on
short-term investment portfolios and similar” in the income statement.
2.2.3 Long-term investment securities
Long-term investment securities are fixed-income securities with a fixed
maturity date that have been acquired or transferred to this category
with the manifest intention of holding them until maturity.
This category only includes securities for which Crédit Agricole S.A. has
the necessary financial ability to continue holding them until maturity and
that are not subject to any legal or other restriction that could interfere
with its intention to hold them until maturity.
Long-term investment securities are recognised at purchase price,
including acquisition costs and accrued interest.
The difference between the purchase price and the repayment price is
staggered over the residual maturity of the security.
Impairment is not booked for long-term investment securities if their
market value falls below cost. On the other hand, if the impairment
arises from a risk relating specifically to the issuer of the security,
impairment is recorded under “Cost of risk”, in accordance with Part 2
“Accounting Treatment of Credit Risk” of Book II “Special Transactions”
of ANC Regulation 2014-07.
In the case of the sale or reclassification to another category of long-term
investment securities representing a material amount, the institution
is no longer authorised, during the current financial year and the two
subsequent financial years, to classify securities previously bought or
to be bought as long-term investment securities, in accordance with
Article 2341-2 of ANC Regulation 2014-07.
2.2.4 Medium-term portfolio securities
In accordance with Articles 2351-2 to 2352-6 (Part 3 “Recognition
of Securities Transactions” of Book II “Special Transactions”) of ANC
Regulation 2014-07, these securities are “investments made on a normal
basis, with the sole aim of securing a gain in the medium term, with
no intention of investing in the issuer’s business on a long term basis
or taking an active part in its management”.
Securities can only be included in this category if the activity is carried
out to a significant extent and on an ongoing basis within a structured
framework and gives the institution a recurring return mainly in the
form of gains on disposals.
Crédit Agricole S.A. meets these conditions and some of its securities
can be classified in this category.
Medium term portfolio securities are recorded at purchase price,
including transaction expenses.
They are recognised at the end of the reporting period at the lower of
historical cost or value in use, which is determined on the basis of the
issuer’s general outlook and the estimated residual maturity.
For listed companies, value in use is generally the average market price
over a sufficiently long period of time, depending on the estimated time
horizon for holding the securities, to mitigate the impact of substantial
fluctuations in market prices.
Impairment losses are booked for any unrealised losses calculated
for each holding and are not offset against any unrealised gains. They
are recorded under “Net gains (losses) on short-term investment
portfolios and similar” along with impairment losses and reversals on
these securities.
Unrealised gains are not recognised.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
608
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
2.2.5 Investments in subsidiaries
and affiliates, equity investments
and other long-term equity
investments
Investments in subsidiaries and affiliates are investments in companies
that are under exclusive control and that are or are liable to be fully
consolidated into a consolidated unit.
Equity investments are investments (other than investments in
subsidiaries and affiliates), of which the long-term ownership is
judged beneficial to the institution, in particular because it allows it
to exercise influence or control over the issuer.
Other long-term equity investments consist of securities held with
the intention of promoting long-term business relations by creating
a special relationship with the issuer, but with no influence on the
issuer’s management due to the small percentage of voting rights held.
These securities are recognised at purchase price, including transaction
expenses.
At the reporting date, the value of these securities is measured
individually, based on value in use, and they are recorded on the balance
sheet at the lower of historical cost or value in use.
This represents what the institution would be prepared to pay to acquire
them having regard to its reasons for holding them.
The estimation of the value in use may be based on various factors such
as the profitability and profitability prospects of the issuing company, its
shareholders’ equity, economic conditions or the average stock market
price in recent months or the mathematical value of the security.
When value in use of securities is lower than historical cost, impairment
losses are booked for these unrealised losses and are not offset against
any unrealised gains.
Impairment losses and reversals and disposal gains or losses on these
securities are recorded under “Net gains (losses) on fixed assets”.
2.2.6 Market price
The market price at which the various categories of securities are
measured is determined as follows:
securities traded on an active market are measured at the latest price;
if the market on which the security is traded is not or no longer
considered active or if the security is unlisted, Crédit Agricole S.A.
determines the likely value at which the security concerned would
be traded using valuation techniques. Firstly, these techniques take
into account recent transactions carried out in normal competition
conditions. If required, Crédit Agricole S.A. uses valuation techniques
commonly used by market participants to price these securities,
when it has been demonstrated that these techniques provide reliable
estimates of prices obtained in actual market transactions.
2.2.7 Recording dates
Crédit Agricole S.A. records securities classified as long-term investment
securities on the settlement date. Other securities, regardless of type
or classification, are recognised on the trading date.
2.2.8 Securities sold/bought
under repurchase agreements
Securities sold under repurchase agreements are kept on the balance
sheet. The amount received, representing the liability to the buyer, is
recorded as a liability.
Securities bought under repurchase agreements are not recorded on the
balance sheet, but the amount paid, representing the receivable from
the seller, is recorded as an asset on the balance sheet.
Securities sold under repurchase agreements are subject to the
accounting treatment applying to the portfolio from which they originate.
2.2.9 Reclassification of securities
In accordance with Articles 2381-1 to 2381-5 (Part 3 “Recognition
of Securities Transactions” of Book II “Special Transactions”) of ANC
Regulation 2014-07, the following securities reclassifications are allowed:
from “trading portfolio” to “long-term investment portfolio” or “short-
term investment portfolio” in the case of exceptional market conditions
or, for fixed-income securities that are no longer tradable in an active
market and if the entity has the intention and ability to hold the
securities for the foreseeable future or until maturity;
from “short-term investment portfolio” to “long-term investment
portfolio” in the case of exceptional market conditions or for fixed-
income securities that are no longer tradable in an active market.
In 2020, Crédit Agricole S.A. did not carry out any reclassification of
securities under ANC Regulation 2014-07.
2.2.10 Treasury shares buy-back
Treasury shares bought back by Crédit Agricole S.A., including shares
and stock options held to hedge stock option plans, are recognised as
assets under a specific balance sheet heading.
They may, where necessary, be impaired where the current value is below
the purchase price, except for transactions connected with employee
free share allocation plans and stock option and share subscription
plans as per ANC Regulation 2014-03 of 5 June 2014.
2.3
FIXED ASSETS
Crédit Agricole S.A. applies ANC Regulation 2014-03 of 5 June 2014
relating to the depreciation, amortisation and impairment of assets.
Crédit Agricole S.A. applies component accounting for all of its property,
plant and equipment. In accordance with the provisions thereof, the
depreciable amount takes account of the potential residual value of
fixed assets.
ANC Regulation 2015-06 changes the way in which technical merger
losses are recognised on the balance sheet and monitored in the parent
company financial statements. Losses are no longer required to be
comprehensively and systematically recognised under “Goodwill”; they
must be recognised in the balance sheet under the asset headings to
which they are allocated in “Other property, plant & equipment, intangible
assets and financial assets, etc.”. Losses are amortised, impaired and
written off in the same way as the underlying asset.
The acquisition cost of fixed assets includes the purchase price plus
any incidental expenses, namely expenses directly or indirectly incurred
in connection with bringing the asset into service or“into inventory”.
Land is recorded at acquisition cost.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
609
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
Property and equipment are measured at acquisition cost less
accumulated depreciation and impairment losses since the time they
were placed in service.
Purchased software is measured at acquisition cost less accumulated
amortisation and impairment losses since acquisition.
Proprietary software is measured at cost less accumulated amortisation
and impairment losses since completion.
Intangible assets other than software, patents and licences are not
amortised. They may be subject to impairment.
Fixed assets are depreciated over their estimated useful lives.
The following components and depreciation periods have been adopted
by Crédit Agricole S.A. following the application of the measures on
component accounting for fixed assets. These depreciation periods must
be adjusted according to the type of asset and its location:
Component
Depreciation period
Land
Not depreciable
Structural works
30 to 80 years
Non-structural works
8 to 40 years
Plant and equipment
5 to 25 years
Fixtures and fittings
5 to 15 years
Computer equipment
4 to 7 years (declining or straight-line)
Special equipment
4 to 5 years (declining or straight-line)
Based on available information, Crédit Agricole S.A. has concluded
that impairment testing would not lead to any change in the existing
depreciable base.
2.4
AMOUNTS DUE TO CUSTOMERS AND CREDIT INSTITUTIONS
Amounts due to credit institutions, Crédit Agricole entities and customers
are presented in the financial statements according to their residual
maturity or their nature:
demand and time deposits for credit institutions;
current accounts, term loans and advances for Crédit Agricole internal
transactions;
special savings accounts and other amounts due to customers (notably
including financial customers).
Special savings accounts are presented after offsetting the claim on the
savings fund (in respect of regulated savings centralised by the
Caisse
des Dépôts et Consignations
).
Repurchase agreements (represented by certificates or securities) are
included under these various headings, according to counterparty type.
Accrued interest on these deposits is recognised under accrued interest
and taken to profit or loss.
2.5
DEBT SECURITIES
Debt securities are presented according to their form: interest-bearing
notes, interbank market instruments, negotiable debt securities, bonds
and other debt securities, excluding subordinated securities, which are
classified in liabilities under “Subordinated debt”.
Interest accrued but not yet due is recognised under accrued interest
and taken to profit or loss.
Issue or redemption premiums on bonds are amortised over the
maturity period of each bond. The corresponding charge is recorded
under “Interest and similar expenses on bonds and other fixed-income
securities”.
Redemption premiums and debt issue premiums represented by
securities are amortised using the actuarial amortisation method.
Crédit Agricole also amortises borrowing expenses in its parent
company’s financial statements.
Fee and commission expenses on financial services paid to the Regional
Banks are recognised as expenses under “Fee and commission
expenses”.
2.6
PROVISIONS
Crédit Agricole S.A. applies ANC Regulation 2014-03 of 5 June 2014
for the recognition and measurement of provisions.
Provisions include provisions relating to financing commitments,
retirement and early retirement liabilities, litigation and various risks.
The provisions also include country risks. All these risks are reviewed
quarterly.
Provisions are set aside for country risks following an analysis of the
types of transactions, the term of commitments, their form (receivables,
securities, market products) as well as country quality.
Crédit Agricole S.A. partially hedges provisions on these foreign currency-
denominated receivables by buying foreign currency to limit the impact
of changes in foreign exchange rates on provision levels.
The provision for home purchase savings scheme imbalance risk is
designed to cover obligations in the event of unfavourable movements
in home purchase savings schemes. These obligations are: i) to pay a
fixed interest rate on the savings contract determined at inception for an
undefined period of time; and ii) to grant a loan to home purchase savings
plan and account savers at a rate fixed at inception of the contract. The
provision is calculated for each generation of home purchase savings
scheme and for all home purchase savings accounts, with no netting
of obligations between generations.
The amount of these obligations is calculated taking account notably of:
saver behaviour, as well as an estimate of the amount and term of the
loans that will be granted in the future. These estimates are based
on historical observations over a long period;
the yield curve for market rates and reasonably foreseeable trends.
This provision is calculated in accordance with Part 6 “Regulated
Savings” of Book II “Special Transactions” of ANC Regulation 2014-07.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
610
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
2.7
FUND FOR GENERAL BANKING RISK (FGBR)
In accordance with Fourth European Directive and CRBF Regulation
90-02 of 23 February 1990 as amended relating to capital, funds for
general banking risks are constituted by Crédit Agricole S.A., at the
discretion of its management, to meet any charges or risks relating to
banking operations but whose incidence is not certain.
Provisions are released to cover any incidence of these risks during a
given financial year.
2.8
TRANSACTIONS ON FORWARD FINANCIAL INSTRUMENTS
AND OPTIONS
Hedging and market transactions on forward interest rate, foreign
exchange or equity instruments are recorded in accordance with the
provisions of Part 5 “Forward Financial Instruments” of Book II “Special
Transactions” of ANC Regulation 2014-07.
Commitments relating to these transactions are recorded off-balance
sheet at the par value of the contracts: this amount represents the
volume of pending transactions.
Gains or losses relating to these transactions are recorded on the basis
of the type of instrument and the strategy used:
Hedging transactions
Gains or losses realised on hedging transactions (category “b”
Article 2522-1 of ANC Regulation 2014-07) are recorded on the income
statement symmetrically with the recognition of income and expenses
on the hedged item and under the same accounting heading.
Income and expenses relating to forward financial instruments used
to hedge and manage Crédit Agricole S.A.'s overall interest rate risk.
(category “c” Article 2522-1 of Regulation ANC 2014-07) are prorated
under “Interest and similar income (expense) - Net income (expense)
on macro-hedging transactions”. Unrealised gains and losses are not
recorded.
Market transactions
Market transactions include:
isolated open positions (category “a” Article 2522-1 of ANC Regulation
2014-07);
specialised management of a trading portfolio (category “d”
Article 2522 of ANC Regulation 2014-07).
They are measured in reference to their market value on the reporting
date.
If there is an active market, the instrument is stated at the available
market price. In the absence of an active market, fair value is determined
using internal valuation techniques and models.
Instruments
For isolated open positions traded on organised or similar exchanges,
all realised and unrealised gains and losses are recognised.
For isolated open positions traded over the counter, only unrealised
losses are recognised, via a provision. Realised gains and losses are
taken to profit or loss when the transaction is settled.
As part of a trading portfolio, all realised and unrealised gains and
losses are recognised.
Counterparty risk on derivative instruments
In accordance with Article 2525-3 of ANC Regulation 2014-07,
Crédit Agricole S.A. makes a credit valuation adjustment to the market
value of its derivative assets to reflect counterparty risk. For this reason,
Credit Valuation Adjustments (CVAs) are only made to derivatives
recognised as isolated open positions and as part of a trading portfolio
(derivatives classified in categories “a” and “d” Article 2522-1 of the
aforementioned regulation).
The CVA makes it possible to calculate counterparty losses expected
by Crédit Agricole S.A.
The CVA is calculated on the basis of an estimate of expected losses based
on the probability of default and loss given default. The methodology
used maximises the use of observable market inputs.
It is based:
primarily on market parameters such as registered and listed CDS
(or Single Name CDS) or index-based CDS;
in the absence of registered CDS on the counterparty, an approximation
based on a basket of Single Name CDS of counterparties with the same
rating operating in the same sector and located in the same area.
In certain circumstances, historical default data may also be used.
2.9
FOREIGN CURRENCY TRANSACTIONS
At each reporting date, receivables and liabilities as well as foreign
exchange contracts included in off-balance sheet commitments
denominated in foreign currencies are translated using the exchange
rate at the reporting date.
Income received and expenses paid are recorded at the exchange rate
on the transaction date. Accrued income and expenses not yet due are
translated at the closing rate.
Foreign currency assets held on a long-term basis, including allocations
to branches, fixed assets, long-term investment securities, subsidiary
securities and equity investments in foreign currencies financed in
euros remain converted at the exchange rate on the day of acquisition.
A provision may be booked if there is a permanent deterioration in
exchange rates affecting Crédit Agricole S.A.’s foreign equity investments.
At each reporting date, forward foreign exchange transactions are
measured at the relevant forward exchange rate. Recognised gains or
losses are recorded on the income statement under “Net gains (losses)
on trading book – Net gains (losses) on foreign exchange transactions
and similar financial instruments”.
Pursuant to the implementation of Part 7 “Recognition of Foreign Currency
Transactions” of Book II “Special Transactions” of ANC Regulation 2014-07,
Crédit Agricole S.A. has instituted multi-currency accounting to enable
it to monitor its foreign exchange position and to measure its exposure
to this risk.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
611
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
2.10
CONSOLIDATION OF FOREIGN BRANCHES
Branches keep separate accounts that comply with the accounting rules
in force in the countries in which they are based.
At each reporting date, the branches’ balance sheets and income
statements are adjusted according to French accounting rules, translated
into euros and integrated with the accounts of their head office after
the elimination of intra-group transactions.
The rules for translation into euros are as follows:
balance sheet items are translated at the closing rate;
income and expenses paid and received are recorded at the exchange
rate on the transaction date, whereas accrued income and expenses
are translated at the closing rate.
Gains or losses resulting from this translation are recorded on the balance
sheet under “Accruals, prepayments and sundry assets” or “Accruals,
deferred income and sundry liabilities”.
2.11
OFF-BALANCE SHEET COMMITMENTS
Off-balance sheet items mainly reflect the unused portion of financing
commitments and guarantee commitments given and received.
A charge is booked to provisions for commitments given if there is
a probability that calling in the commitment will result in a loss for
Crédit Agricole S.A.
Reported off-balance sheet items do not mention commitments on
forward financial instruments or foreign exchange transactions. Similarly,
they do not include commitments received concerning treasury bonds,
similar securities and other securities pledged as collateral. However,
these items are detailed in Notes 24, 25 and 26 to the financial
statements.
2.12
EMPLOYEE PROFIT-SHARING AND INCENTIVE PLANS
Employee profit-sharing is recognised in the income statement in the financial year in which the employees’ rights are earned.
Incentive plans are covered by the 21 June 2011 agreement.
The cost of employee profit-sharing and incentive plans is included in “Employee expenses”.
2.13
POST-EMPLOYMENT BENEFITS
2.13.1 Retirement, early-retirement and end-
of-career allowance commitments –
defined-benefit schemes
Since 1 January 2013, Crédit Agricole S.A. has applied ANC
recommendation 2013-02 of 7 November 2013 relating to the
measurement and recognition of retirement and similar benefit
obligations, such recommendation having then been repealed and
incorporated in Section 4 of Chapter II of Part III of ANC Regulation
2014-03 of 5 June 2014.
In accordance with this regulation, Crédit Agricole S.A. sets aside
provisions to cover its retirement and similar benefit obligations falling
within the category of defined-benefit schemes.
These commitments are stated based on a set of actuarial, financial and
demographic assumptions, and in accordance with the Projected Unit
Credit method. Under this method, for each year of service, a charge is
booked in an amount corresponding to the employee’s vested benefits
for the period. The charge is calculated based on the discounted future
benefit.
Crédit Agricole S.A. has opted for method 2 which allows in particular for
the recognition of gains or losses arising from changes to defined-benefit
schemes when the curtailment or settlement occurs.
The regulation also allows for the recognition of actuarial gains and
losses using the “corridor method” or any other method that results in
faster recognition in profit or loss.
Crédit Agricole S.A. elected to immediately recognise the actuarial
gains and losses in profit or loss, and accordingly the amount of the
provision is equal to:
the present value of the obligation to provide the defined benefits at
the reporting date, calculated in accordance with the actuarial method
advised by the regulation;
less, where applicable, the fair value of plan assets. These may be
represented by an eligible insurance policy. In the event that the
obligation is fully covered by such a policy, the fair value thereof is
deemed to be the value of the corresponding obligation —
i.e.
the
amount of the corresponding actuarial liability.
2.13.2 Retirement plans – defined-
contribution schemes
Employers contribute to a variety of compulsory pension schemes. Plan
assets are managed by independent organisations and the contributing
companies have no legal or implied obligation to pay additional
contributions if the funds do not have sufficient assets to cover all
benefits corresponding to services rendered by employees during the
year and during prior years.
Consequently, Crédit Agricole S.A. has no liabilities in this respect other
than its on-going contributions.
The amount of contributions under the terms of these pension schemes
is shown under “Employee expenses”.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
612
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 2
2.14
STOCK OPTIONS AND SHARE SUBSCRIPTIONS OFFERED
TO EMPLOYEES UNDER THE EMPLOYEE SAVINGS PLAN
Stock option plans
Stock option plans granted to certain categories of employees are
recorded when exercised. Exercise gives rise to either an issue of shares,
recorded in accordance with requirements relating to capital increases,
or the transfer to employees of treasury shares, previously purchased
by Crédit Agricole S.A. and recognised in accordance with the terms
set out in the “Treasury shares buyback” section.
Share subscriptions under
the Employee Savings Plans
Share subscriptions offered to employees under the Employee Savings
Scheme, with a maximum discount of 30%, do not have a vesting period
but are subject to a five-year lock-up period. These share subscriptions
are recognised in accordance with requirements relating to capital
increases.
2.15
EXTRAORDINARY INCOME AND EXPENSES
These comprise income and expenses that are extraordinary in nature and relate to transactions that do not form part of Crédit Agricole S.A.’s
ordinary activities.
2.16
INCOME TAX CHARGE
In general, only the current tax liability is recognised in the parent
company’s financial statements.
The tax charge appearing in the income statement is the corporate
income tax due in respect of the financial year. It includes the effect of
the 3.3% additional social contribution on profits.
Revenues from loans and securities portfolios are recognised net of
tax credits.
Crédit Agricole S.A. has had a tax consolidation mechanism in place since
1990. At 31 December 2020, 1,231 entities had signed tax consolidation
agreements with Crédit Agricole S.A. Under these agreements, each
company that is part of the tax consolidation mechanism recognises
in its financial statements the tax that it would have had to pay in the
absence of tax consolidation.
Given that the legislative intent when introducing the tax credit for
competitiveness and employment (
(Crédit d’Impôt pour la Compétitivité et
l’Emploi – CICE)
was to reduce employee expenses, Crédit Agricole S.A.
chose to recognise the CICE (Article 244 quater C of the French General
Tax Code) as a reduction in employee expenses and not as a reduction
in tax.
NOTE 3
Loans and receivables due from credit institutions –
Analysis by residual maturity
(in millions of euros)
31/12/2020
31/12/2019
≤3 months
>3 months
≤1 year
>1 year
≤5 years
>5 years
Total
principal
Accrued
interest
TOTAL
TOTAL
CREDIT INSTITUTIONS
Loans and receivables:
demand
2,017
-
-
-
2,017
1
2,018
2,746
time
36,796
11,793
65,570
9,273
123,432
749
124,181
113,771
Pledged securities
-
-
-
-
-
-
-
-
Securities bought under
repurchase agreements
-
-
-
-
-
-
-
-
Subordinated loans
-
5,348
48
10,025
15,421
28
15,449
15,490
Total
38,813
17,141
65,618
19,298
140,870
778
141,648
132,007
Impairment
-
-
Net carrying amount
141,648
132,007
CRÉDIT AGRICOLE INTERNAL
TRANSACTIONS
Current accounts
1,817
-
-
-
1,817
2
1,819
1,333
Time deposits and advances
44,983
75,949
162,937
80,929
364,798
178
364,976
333,255
Securities bought under
repurchase agreements
4,920
193
-
-
5,113
1
5,114
1,342
Subordinated loans
-
-
-
416
416
2
418
418
Total
51,720
76,142
162,937
81,345
372,144
183
372,327
336,348
Impairment
-
-
Net carrying amount
372,327
336,348
TOTAL
513,975
468,355
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
613
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 3
NOTE 4
Loans and receivables due from customers
4.1
LOANS AND RECEIVABLES DUE FROM CUSTOMERS –
ANALYSIS BY RESIDUAL MATURITY
(in millions of euros)
31/12/2020
31/12/2019
≤3 months
>3 months
≤1 year
>1 year
≤5 years
>5 years
Total
principal
Accrued
interest
TOTAL
TOTAL
Trade receivables
-
-
-
-
-
-
-
-
Other customer loans
1,092
943
1,710
539
4,284
3
4,287
4,190
Pledged securities
-
-
-
-
-
-
-
-
Current accounts in debit
186
-
-
-
186
1
187
250
Impairment
(1)
(1)
NET CARRYING AMOUNT
4,473
4,439
4.2
LOANS AND RECEIVABLES DUE FROM CUSTOMERS –
ANALYSIS BY GEOGRAPHIC AREA
(in millions of euros)
31/12/2020
31/12/2019
France (including DOM-TOM)
3,203
2,709
Other EU countries
1,261
1,716
Other European countries
6
9
North America
-
-
Central and South America
-
-
Africa and Middle East
-
-
Asia and Oceania (excl. Japan)
-
-
Japan
-
-
Non-allocated and international organisations
-
-
Total principal
4,470
4,434
Accrued interest
4
6
Impairment
(1)
(1)
NET CARRYING AMOUNT
4,473
4,439
4.3
LOANS AND RECEIVABLES DUE FROM CUSTOMERS –
DOUBTFUL LOANS AND IMPAIRMENT LOSSES BY GEOGRAPHIC AREA
(in millions of euros)
31/12/2020
31/12/2019
Gross
outstanding
O/w
doubtful
loans
O/w
irrecoverable
loans
Impairment
of doubtful
loans
Impairment of
irrecoverable
loans
Gross
outstanding
O/w
doubtful
loans
O/w
irrecoverable
loans
Impairment
of doubtful
loans
Impairment of
irrecoverable
loans
France (including
DOM-TOM)
3,207
1
1
(1)
(1)
2,714
1
1
(1)
(1)
Other EU countries
1,261
-
-
-
-
1,717
-
-
-
-
Other European
countries
6
-
-
-
-
9
-
-
-
-
North America
-
-
-
-
-
-
-
-
-
-
Central and
South America
-
-
-
-
-
-
-
-
-
-
Africa and
Middle East
-
-
-
-
-
-
-
-
-
-
Asia and Oceania
(excl. Japan)
-
-
-
-
-
-
-
-
-
-
Japan
-
-
-
-
-
-
-
-
-
-
Non-allocated
and international
organisations
-
-
-
-
-
-
-
-
-
-
TOTAL
4,474
1
1
(1)
(1)
4,440
1
1
(1)
(1)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
614
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 4
4.4
LOANS AND RECEIVABLES DUE FROM CUSTOMERS –
ANALYSIS BY CUSTOMER TYPE
(in millions of euros)
31/12/2020
31/12/2019
Gross
outstanding
O/w
doubtful
loans
O/w
irrecoverable
loans
Impairment
of doubtful
loans
Impairment of
irrecoverable
loans
Gross
outstanding
O/w
doubtful
loans
O/w
irrecoverable
loans
Impairment
of doubtful
loans
Impairment of
irrecoverable
loans
Individual
customers
-
-
-
-
-
-
-
-
-
-
Farmers
-
-
-
-
-
-
-
-
-
-
Other small
businesses
-
-
-
-
-
-
-
-
-
-
Financial
institutions
2,657
-
-
-
-
3,058
-
-
-
-
Corporates
1,815
1
1
(1)
(1)
1,381
1
1
(1)
(1)
Local authorities
2
-
-
-
-
1
-
-
-
-
Other customers
-
-
-
-
-
-
-
-
-
-
TOTAL
4,474
1
1
(1)
(1)
4,440
1
1
(1)
(1)
NOTE 5
Trading, short-term investment, long-term investment and medium-term
portfolio securities
(in millions of euros)
31/12/2020
31/12/2019
Trading
securities
Investment
securities
Medium-term
portfolio
securities
Long-term
investment
securities
TOTAL
TOTAL
Treasury bills and similar securities
-
5,049
-
10,401
15,450
14,750
o/w residual net premium
-
147
-
1,024
1,171
899
o/w residual net discount
-
(2)
-
(40)
(42)
(44)
Accrued interest
-
37
-
82
119
119
Impairment
-
-
-
(2)
(2)
(2)
Net carrying amount
-
5,086
-
10,481
15,567
14,867
Bonds and other fixed-income securities
(1)
:
-
-
-
-
-
-
Issued by public bodies
-
4,213
-
4,034
8,247
3,822
Other issuers
-
14,550
-
23,937
38,487
33,713
o/w residual net premium
-
204
-
191
395
291
o/w residual net discount
-
(11)
-
(30)
(41)
(46)
Accrued interest
-
66
-
59
125
155
Impairment
-
-
-
-
-
(2)
Net carrying amount
-
18,829
-
28,030
46,859
37,688
Equities and other variable income securities
(including treasury shares)
35
5
-
-
40
46
Accrued interest
-
-
-
-
-
-
Impairment
-
(1)
-
-
(1)
-
Net carrying amount
35
4
-
-
39
46
TOTAL
35
23,919
-
38,511
62,465
52,601
Estimated values
35
24,530
-
38,510
63,075
53,154
(1)
Of which €3,209 million of subordinated debt (excluding accrued interest) at 31 December 2020 and €4,758 million at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
615
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 5
5.1
TRADING, SHORT-TERM INVESTMENT, LONG-TERM INVESTMENT AND
MEDIUM-TERM PORTFOLIO SECURITIES (EXCLUDING TREASURY BILLS) –
BREAKDOWN BY MAJOR CATEGORY OF COUNTERPARTY
(in millions of euros)
31/12/2020
31/12/2019
Government and central banks (including central governments)
4,674
2,311
Credit institutions
26,037
20,964
Financial institutions
4,774
4,439
Local authorities
3,574
1,511
Corporates, insurance companies and other customers
7,715
8,356
Other and non-allocated
-
-
Total principal
46,774
37,581
Accrued interest
125
155
Impairment
(1)
(2)
NET CARRYING AMOUNT
46,898
37,734
5.2
BREAKDOWN OF LISTED AND UNLISTED FIXED AND VARIABLE –
INCOME SECURITIES
(in millions of euros)
31/12/2020
31/12/2019
Bonds and
other fixed
Income
securities
Treasury bills
and similar
securities
Equities
and other
variable-
income
securities
TOTAL
Bonds and
other fixed
Income
securities
Treasury bills
and similar
securities
Equities
and other
variable-
income
securities
TOTAL
Fixed-income and variable
income securities
46,734
15,450
40
62,225
37,535
14,750
46
52,331
o/w listed securities
32,645
15,450
-
48,096
26,396
14,750
-
41,146
o/w unlisted securities
(1)
14,089
-
40
14,129
11,139
-
46
11,185
Accrued interest
125
119
-
244
155
119
-
274
Impairment
-
(2)
(1)
(3)
(2)
(2)
-
(4)
NET CARRYING AMOUNT
46,859
15,567
39
62,466
37,688
14,867
46
52,601
(1)
UCITS break down as follows: no foreign UCITS comprising capitalisation UCITS.
Breakdown of UCITS by type at 31 December 2020
(in millions of euros)
Inventory value
Net asset value
Money market UCITS
35
-
UCITS Bonds
-
-
Equity UCITS
4
4
Other UCITS
-
-
TOTAL
39
4
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
616
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 5
5.3
TREASURY BILLS, BONDS AND OTHER FIXED-INCOME SECURITIES –
ANALYSIS BY RESIDUAL MATURITY
(in millions of euros)
31/12/2020
31/12/2019
≤3 months
>3 months
≤1 year
>1 year
≤5 years
>5 years
Total
principal
Accrued
interest
TOTAL
TOTAL
BONDS AND OTHER FIXED
INCOME SECURITIES
Gross amount
2,348
5,851
19,058
19,478
56,827
125
56,952
37,690
Impairment
-
-
-
-
-
-
-
(2)
NET CARRYING AMOUNT
2,348
5,851
19,058
19,478
56,827
125
56,952
37,688
TREASURY BILLS AND
SIMILAR SECURITIES
Gross amount
2,756
3,075
2,012
7,607
15,754
119
15,873
14,869
Impairment
-
-
-
-
-
-
(2)
(2)
NET CARRYING AMOUNT
2,756
3,075
2,012
7,607
15,754
119
15,871
14,867
5.4
TREASURY BILLS, BONDS AND OTHER FIXED-INCOME SECURITIES –
ANALYSIS BY GEOGRAPHIC AREA
(in millions of euros)
31/12/2020
31/12/2019
Gross
outstanding
O/w doubtful loans
Gross
outstanding
O/w doubtful loans
France (including DOM-TOM)
36,651
-
31,290
-
Other EU countries
20,493
-
16,297
-
Other European countries
1,592
-
1,457
-
North America
2,628
-
2,430
-
Central and South America
-
-
-
-
Africa and Middle East
306
-
293
-
Asia and Oceania (excl. Japan)
150
-
170
-
Japan
364
-
348
-
Total principal
62,184
-
52,285
-
Accrued interest
244
-
274
-
Impairment
(2)
-
(4)
-
NET CARRYING AMOUNT
62,426
-
52,555
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
617
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 5
NOTE 6
Equity investments and subsidiary securities
(in millions of original currency)
(in millions of
euro equivalents)
(in millions of euro equivalents)
Company
Financial information
Carrying
amount of
securities held
Loans and
receiv-
ables
granted
by the
Company
and not
yet paid
back
Amount of
guarantees
and other
commit-
ments
given by the
Company
Revenues
or gross
revenues
(ex VAT) last
financial
year
ended
(2)
Net income
for last
financial
year ended
31/12/2020
Address
Cur-
rency
Share
capital
31/12/2020
Equity other
than share
capital
31/12/2020
Percentage
of share
capital held
(as a %)
31/12/2020
Gross
amount
Net
amount
Dividends
received
by the
Company
during
financial
year
INVESTMENTS WHOSE CARRYING AMOUNT EXCEEDS 1% OF CRÉDIT AGRICOLE S.A.’S SHARE CAPITAL
1) Investments in banking related parties (more than 50% owned)
Banco Bisel
Corrientes 832,
1° Piso Rosario,
Provincia De Santa
Fe, Argentine
ARS
N.A.
N.A.
99
237
-
-
-
N.A.
N.A.
-
BFORBANK
Tour Europlaza, 20
av André Prothin,
92927 Paris
Cedex, France
EUR
217
(49)
(1)
50
145
125
249
-
34
(1)
(29)
(1)
-
Crédit Agricole
Italia
Via Universita
No. 1 43121
Parma, Italy
EUR
979
5,107
(1)
76
5,469
3,884
879
-
1,650
(1)
302
(1)
-
Crédit Agricole
Serbia
Brace Ribnikara
4-6, 21000 Novi
Sad, Republic
of Serbia
RSD
10,661
1,059
(1)
100
268
114
176
206
43
(1)
9
(1)
-
Crédit du Maroc
48-58, boulevard
Mohamed V,
Casablanca,
Morocco
MAD
1,088
3,444
(1)
79
377
337
77
2
205
(1)
37
(1)
12
EFL S.A.
Pl. Orlat
Lwowskich 1, 53
605 Wroclaw,
Poland
PLN
674
190
(1)
100
341
243
1,105
638
135
(1)
22
(1)
-
Crédit Agricole
Ukraine
42/4 Pushkinska
Street, Kiev 01004,
Ukraine
UAH
1,222
2,203
(1)
100
360
170
24
3
103
(1)
49
(1)
-
Crédit Agricole
Polska SA
Pl. Orlat
Lwowskich 1, 53
605 Wroclaw,
Poland
PLN
1
1,345
(1)
100
664
516
84
-
1
(1)
1
(1)
-
Crédit Agricole
Corporate and
Investment
Bank
12, place des
États-Unis, CS
70052, 92547
Montrouge Cedex,
France
EUR
7,852
5,591
(1)
97
19,053
19,053
47,148
25
3,944
(1)
1,329
(1)
498
Amundi
91-93, boulevard
Pasteur, Immeuble
Cotentin, 75015
Paris
EUR
505
3,657
(1)
68
4,231
4,231
3,219
3,639
622
(1)
567
(1)
-
Crédit Agricole
Leasing
& Factoring
12, place des
États-Unis, CS
30002, 92548
Montrouge Cedex,
France
EUR
195
240
(1)
100
839
839
18,543
4,720
247
(1)
109
(1)
135
Crédit Agricole
Consumer
Finance
1, rue Victor Basch
CS 7000191068
Massy Cedex,
France
EUR
554
3,548
(1)
100
7,607
7,607
18,194
8,672
1,077
(1)
376
(1)
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
618
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 6
(in millions of original currency)
(in millions of
euro equivalents)
(in millions of euro equivalents)
Company
Financial information
Carrying
amount of
securities held
Loans and
receiv-
ables
granted
by the
Company
and not
yet paid
back
Amount of
guarantees
and other
commit-
ments
given by the
Company
Revenues
or gross
revenues
(ex VAT) last
financial
year
ended
(2)
Net income
for last
financial
year ended
31/12/2020
Address
Cur-
rency
Share
capital
31/12/2020
Equity other
than share
capital
31/12/2020
Percentage
of share
capital held
(as a %)
31/12/2020
Gross
amount
Net
amount
Dividends
received
by the
Company
during
financial
year
LCL
18, rue de la
République, 69002
Lyon, France
EUR
2,038
3,467
(1)
95
11,847
9,507
34,528
251
3,232
(1)
465
(1)
-
Crédit Agricole
Home Loan SFH
12, place des
États-Unis, 92127
Montrouge Cedex,
France
EUR
550
4
(1)
100
550
550
-
-
4
(1)
-
(1)
-
Foncaris
12, place des
États-Unis, 92127
Montrouge Cedex,
France
EUR
225
107
(1)
100
320
320
-
146
30
(1)
12
(1)
12
Caisse régionale
Corse
1, avenue
Napoleon III,
BP 308, 20193
Ajaccio, France
EUR
99
31
100
99
99
-
4
88
12
-
2) Investments in banking associates
(10% to 50% owned)
Banco Espirito
Santo
Avenida de
Libertade 195,
1250 Lisbonne,
Portugal
EUR
N.A.
N.A.
12
684
-
-
-
N.A.
N.A.
-
Crédit Agricole
Egypt SAE
P/O Box 364,
11835 New Cairo,
Egypt
EGP
1,243
3,605
(1)
47
258
258
25
-
209
(1)
121
(1)
29
Crédit
Logement
50, boulevard
Sébastopol, 75003
Paris, France
EUR
1,260
203
(1)
16
208
208
-
-
211
(1)
103
(1)
-
Caisse de
refinancement
de l’habitat
35, Rue La Boétie,
75008 Paris,
France
EUR
540
23
(1)
29
165
165
-
-
2
(1)
-
-
3) Investments in other subsidiaries
and affiliates (more than 50% owned)
Crédit Agricole
Assurances
50-56, rue de
la Procession,
75015 Paris,
France
EUR
1,490
7,390
(1)
100
10,516
10,516
1,382
-
1
(1)
1,325
(1)
1,185
Crédit Agricole
Capital
Investissement
& Finance
100, boulevard
du Montparnasse,
75014 Paris,
France
EUR
688
402
(1)
100
1,146
1,146
-
-
50
(1)
46
(1)
20
Crédit Agricole
Immobilier
12, place des
États-Unis, 92545
Montrouge Cedex,
France
EUR
125
79
(1)
50
91
91
160
-
38
(1)
7
(1)
5
Delfinances
12, place des
États-Unis, 92127
Montrouge Cedex,
France
EUR
151
67
(1)
100
171
171
-
-
-
(1)
2
(1)
30
Evergreen
Montrouge
12, place des
États-Unis, 92127
Montrouge Cedex,
France
EUR
475
(204)
(1)
100
475
475
6
1
73
(1)
(7)
(1)
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
619
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 6
(in millions of original currency)
(in millions of
euro equivalents)
(in millions of euro equivalents)
Company
Financial information
Carrying
amount of
securities held
Loans and
receiv-
ables
granted
by the
Company
and not
yet paid
back
Amount of
guarantees
and other
commit-
ments
given by the
Company
Revenues
or gross
revenues
(ex VAT) last
financial
year
ended
(2)
Net income
for last
financial
year ended
31/12/2020
Address
Cur-
rency
Share
capital
31/12/2020
Equity other
than share
capital
31/12/2020
Percentage
of share
capital held
(as a %)
31/12/2020
Gross
amount
Net
amount
Dividends
received
by the
Company
during
financial
year
IUB HOLDING
12, place des
États-Unis, 92127
Montrouge Cedex,
France
EUR
37
12
(1)
100
112
2
-
-
-
(1)
(47)
(1)
-
CACEIS
1-3, place
Valhubert,
75013 Paris,
France
EUR
941
1,438
(1)
70
1,771
1,771
9,352
3,652
124
(1)
107
(1)
-
4) Other investments (<50% owned)
Deposit
resolution
guarantee fund
65, rue de la
Victoire,
75009 Paris,
France
EUR
-
2
-
313
313
-
-
-
-
-
INVESTMENTS WHOSE CARRYING
AMOUNT IS UNDER 1% OF
CRÉDIT AGRICOLE S.A.’S
SHARE CAPITAL
EUR
567
509
-
-
-
-
22
TOTAL SUBSIDIARIES
AND ASSOCIATES
68,884
63,220
135,151
21,959
-
-
1,948
Fundable advances
and accrued interest
EUR
524
524
-
-
-
-
-
CARRYING AMOUNT
69,408
63,744
135,151
21,959
-
-
1,948
(1)
Data for financial year 2019.
(2)
Revenues of subsidiaries other than the Regional Banks.
Determining the value in use of subsidiaries
and equity investments
Equity investments were subject to impairment tests based on the
assessment of the value in use. Determining the value in use was based
on discounting the estimated future cash flows from subsidiaries and
equity investments over a period over three years (2021-2023) developed
for Group management purposes, extrapolated over a fourth and fifth
year in order to merge towards a standardised year-end incorporating
the catch-up effects expected after COVID.
The economic scenario on which the projected financial trajectories are
based has been adjusted as a result of changes in the public health
situation. Nevertheless, this financial year remains particularly difficult
due to the dependence of growth on the evolution of the pandemic,
which is still very uncertain.
This scenario is based on an economy that has been severely impacted by
the public health crisis in 2020, which has led to a significant drop in GDP.
For almost nine months, activity was in fact marked by periods in which
entire sections of the economy were shut down, alternating with phases
of partial recovery as constraints were relaxed. The scenario assumes
that the epidemic will persist in 2021, prolonging this succession of
alternating restrictions and short periods of lockdown and removal of
constraints during the first half of the year, but which should be less
drastic and less damaging to the economy than in 2020 (better control
of epidemic flows, less severe restrictions on mobility and production,
production facilities preserved overall). It envisages a gradual and
moderate recovery in 2021: (i) linked to the control of the spread of
the virus thanks to vaccination campaigns, (ii) but limited due to the
behaviour of agents who should remain more cautious (precautionary
savings, postponement of investments) and the after-effects of the
crisis (rise in unemployment, increase in insolvencies). In this context,
growth forecasts are moderately dynamic for 2021 with a very low
level of inflation expected.
States should extend their policies to support the economy in order
to limit damage to the productive apparatus and the labour market,
and put in place stimulus packages to bolster investment and support
household consumption. Certain sectors will however remain fragile
and still marked by certain restrictions (automotive, commerce, tourism,
hotels, restaurants, culture, etc.).
In order to stimulate growth and inflation while preserving financial
stability, central banks will maintain very accommodating monetary
policies that keep interest rates low for a prolonged period, and
even negative for short-term Euro rates. In Europe, asset purchase
programmes should make it possible to avoid fragmentation (limited
widening of spreads). Under these conditions, the prospect of a rise in
interest rates seems more distant than anticipated until now, having a
more significant impact on the value in use of subsidiaries and equity
investments in the International Retail Banking business line in Italy,
whose sensitivity is greater to these developments.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
620
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 6
At 31 December 2020, perpetual growth rates, discount rates and CET1 capital allocation rates as a proportion of risk-weighted assets were
distributed by business lines as shown in the table below:
In 2020
(Crédit Agricole S.A. business lines)
Perpetual growth rates
Discount rate
Capital allocated
Retail banking in France – LCL
2.0%
7.6%
8.85%
International retail banking – Italy
2.0%
8.8%
8.99%
International retail banking – Poland
3.0%
8.9%
9.13%
International retail banking – other
5.0%
17.0%
9.50%
Specialised financial services
2.0%
7.6% to 9.3%
8.84% to 9.13%
Asset gathering
2.0%
7.6% to 8.5%
8.89% to 9.13%
80% of the solvency
margin (Insurance)
Large customers
2.0%
8% to 9.4%
8.88% to 8.93%
The increase by the European Central Bank (ECB) of regulatory prudential
requirements under Pillar 1 and Pillar 2 with effect from 2016 led
Crédit Agricole S.A. to gradually raise the level of CET1 capital allocated
to equity investments and subsidiaries as a percentage of risk-weighted
assets for certain entities. This allocation, including counter-cyclical
buffers, ranged last year between 9.50% and 9.75% of risk-weighted
assets for all subsidiaries and equity investments, a rate to which the
various applicable counter-cyclical buffers should be added, in particular
the one set up in France by the High Commission for Financial Stability
(HCSF).
Following the public health crisis, the High Commission for Financial
Stability, in its decision of 18 June 2020, announced the elimination
of certain counter-cyclical buffers. The European Central Bank also
announced the early application of Article 104a of CRD 5, which
authorises the coverage of Pillar 2 Requirements (P2R) with 56.25%
of CET1 capital, thereby reducing the CET1 requirement by 66 basis
points in both P2R and P2G for Crédit Agricole S.A. Due to a higher P2R
requirement in Italy, this gain is 77 basis points for International Retail
Banking equity investments and subsidiaries in Italy. Some counter-
cyclical buffers imposed by foreign supervisors have also been reduced
to zero.
Compared to the previous year, all of these measures lead to a reduction
in the allocation of CET1 capital of between 77 and 115 points, depending
on the equity investments and subsidiaries considered.
The valuation parameters, in particular the discount rates, were updated
at 31 December 2020.
Perpetual growth rates to infinity at 31 December 2020 remain
unchanged from those used at 31 December 2019.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
621
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 6
6.1
ESTIMATED VALUES OF EQUITY INVESTMENTS
(in millions of euros)
31/12/2020
31/12/2019
Carrying
amount
Estimated value
Carrying
amount
Estimated value
INVESTMENTS IN SUBSIDIARIES AND AFFILIATES
Unlisted securities
62,313
80,957
62,217
79,401
Listed securities
4,867
13,178
4,867
12,188
Advances available for consolidation
515
515
508
508
Accrued interest
-
-
-
-
Impairment
(4,974)
-
(4,258)
-
Net carrying amount
62,721
94,650
63,334
92,097
EQUITY INVESTMENTS AND OTHER LONG-TERM EQUITY INVESTMENTS
Equity investments
Unlisted securities
1,390
1,076
1,426
1,068
Listed securities
-
-
-
-
Advances available for consolidation
9
9
9
9
Accrued interest
-
-
-
-
Impairment
(690)
-
(688)
-
Subtotal equity investments
709
1,085
747
1,077
Other long-term equity investments
Unlisted securities
314
316
203
205
Listed securities
-
-
-
-
Advances available for consolidation
-
-
-
-
Accrued interest
-
-
-
-
Impairment
-
-
-
-
Subtotal other long-term equity investments
314
316
203
205
Net carrying amount
1,023
1,401
950
1,282
TOTAL EQUITY INVESTMENTS
63,744
96,051
64,284
93,379
(in millions of euros)
31/12/2020
31/12/2019
Carrying amount
Estimated value
Carrying amount
Estimated value
TOTAL GROSS AMOUNTS
Unlisted securities
64,017
63,846
Listed securities
4,867
4,867
TOTAL
68,884
68,713
Estimated values are determined on the basis of the value-in-use of securities; this is not necessarily the market value.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
622
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 6
NOTE 7
Movements in fixed assets
7.1
FINANCIAL INVESTMENTS
(in millions of euros)
01/01/2020
Increases
(acquisitions)
Decreases
(disposals
and
redemptions)
Other
movements
(1)
31/12/2020
INVESTMENTS IN SUBSIDIARIES AND AFFILIATES
Gross amount
67,084
111
(53)
38
67,180
Advances available for consolidation
508
19
(12)
-
515
Accrued interest
-
-
-
-
-
Impairment
(4,258)
(773)
57
-
(4,974)
Net carrying amount
63,334
(643)
(8)
38
62,721
EQUITY INVESTMENTS AND OTHER LONG-TERM EQUITY INVESTMENTS
Equity investments
Gross amount
1,426
2
-
(38)
1,390
Advances available for consolidation
9
-
-
-
9
Accrued interest
-
-
-
-
-
Impairment
(688)
(2)
-
-
(690)
Subtotal equity investments
747
-
-
(38)
709
Other long-term equity investments
Gross amount
203
111
-
-
314
Advances available for consolidation
-
-
-
-
-
Accrued interest
-
-
-
-
-
Impairment
-
-
-
-
-
Subtotal other long-term equity investments
203
111
-
-
314
Net carrying amount
950
111
-
(38)
1,023
TOTAL
64,284
(532)
(8)
-
63,744
(1)
“Other movements” namely include the impact of foreign exchange rate fluctuations on the value of fixed assets accounted for in foreign currencies.
7.2
PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS
(in millions of euros)
01/01/2020
Increases
(acquisitions)
Decreases
(disposals and
redemptions)
Other
movements
(1)
31/12/2020
PROPERTY, PLANT AND EQUIPMENT
Gross amount
157
-
(21)
-
136
Depreciation, amortisation and impairment
(45)
-
21
-
(24)
Technical merger losses on property, plant
and equipment
-
-
-
-
-
Gross amount
-
-
-
-
-
Depreciation, amortisation and impairment
-
-
-
-
-
Net carrying amount
112
-
-
-
112
INTANGIBLE ASSETS
Gross amount
105
9
(10)
-
104
Depreciation, amortisation and impairment
(88)
(7)
10
-
(85)
Technical merger losses on intangible losses
-
-
-
-
-
Gross amount
-
-
-
-
-
Depreciation, amortisation and impairment
-
-
-
-
-
Net carrying amount
17
2
-
-
19
TOTAL
129
2
-
-
131
(1)
“Other movements” namely include the impact of foreign exchange rate fluctuations on the value of fixed assets accounted for in foreign currencies.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
623
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 7
NOTE 8
Treasury shares
(in millions of euros)
31/12/2020
31/12/2019
Trading
securities
Investment
securities
Fixed assets
TOTAL
TOTAL
Number
1,090,000
-
-
1,090,000
435,000
Carrying amounts
11
-
-
11
6
Market values
11
-
-
11
6
Par value per share: €3.00.
NOTE 9
Accruals, prepayments and sundry assets
(in millions of euros)
31/12/2020
31/12/2019
OTHER ASSETS
(1)
Financial options bought
12
15
Inventory accounts and miscellaneous
-
-
Miscellaneous debtors
(2)
5,613
5,562
Collective management of
Livret de développement durable
(LDD) savings account securities
-
-
Settlement accounts
3
4
Net carrying amount
5,628
5,581
ACCRUALS AND DEFERRED INCOME
Items in course of transmission
5,296
5,059
Adjustment and suspense accounts
2,204
2,495
Unrealised losses and deferred losses on financial instruments
-
-
Prepaid expenses
1,834
2,193
Accrued income on commitments on forward financial instruments
2,047
2,285
Other accrued income
92
107
Deferred charges
360
389
Other accruals and deferred income
3
-
Net carrying amount
11,836
12,528
TOTAL
17,464
18,109
(1)
Amounts including accrued interest.
(2)
Of which €63.94 million in respect of the contribution to the Single Resolution Fund in the form of a security deposit. The Resolution Fund may use the security deposit to provide funding, at any time
and without condition.
NOTE 10
Impairment losses deducted from assets
(in millions of euros)
Balance at
01/01/2020
Depreciation
Reversals and
utilisations
Accretion
Other
movements
Balance at
31/12/2020
Interbank and similar items
2
1
(1)
-
-
2
Loans and receivables due from customers
1
-
-
-
-
1
Securities transactions
2
70
(71)
-
-
1
Fixed assets
4,947
775
(58)
-
-
5,664
Other assets
168
-
(2)
-
(3)
163
TOTAL
5,120
846
(132)
-
(3)
5,831
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
624
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 8
NOTE 11
Due to credit institutions – Analysis by residual maturity
(in millions of euros)
31/12/2020
31/12/2019
≤3 months
>3 months
≤1 year
>1 year
≤5 years
>5 years
Total
principal
Accrued
interest
TOTAL
TOTAL
CREDIT INSTITUTIONS
Accounts and borrowings:
demand
7,140
-
-
-
7,140
2
7,142
5,972
time
36,673
2,836
142,385
28,596
210,490
524
211,014
85,804
Pledged securities
-
-
-
-
-
-
-
-
Securities sold under repurchase agreements
20
-
-
-
20
-
20
777
Carrying amount
43,833
2,836
142,385
28,596
217,650
526
218,176
92,553
CRÉDIT AGRICOLE INTERNAL
TRANSACTIONS
Current accounts
40,241
-
-
-
40,241
-
40,241
18,972
Time deposits and advances
2,453
2,943
8,533
4,941
18,870
400
19,270
21,213
Securities sold under repurchase agreements
4,920
193
-
-
5,113
-
5,113
1,068
Carrying amount
47,614
3,136
8,533
4,941
64,224
400
64,624
41,253
TOTAL
91,447
5,972
150,918
33,537
281,874
926
282,800
133,806
NOTE 12
Due to customers
12.1
DUE TO CUSTOMERS – ANALYSIS BY RESIDUAL MATURITY
(in millions of euros)
31/12/2020
31/12/2019
≤3 months
>3 months
≤1 year
>1 year
≤5 years
>5 years
Total
principal
Accrued
interest
TOTAL
TOTAL
Current accounts in credit
555
-
-
-
555
-
555
842
Special savings accounts:
188,449
24,440
5,601
1,544
220,034
-
220,034
253,756
demand
114,154
-
-
-
114,154
-
114,154
150,540
time
74,295
24,440
5,601
1,544
105,880
-
105,880
103,216
Other amounts due to customers:
634
2,216
1,825
197
4,872
242
5,114
6,258
demand
291
-
-
-
291
-
291
518
time
343
2,216
1,825
197
4,581
242
4,823
5,740
Pledged securities
148
-
-
-
148
-
148
176
CARRYING AMOUNT
189,786
26,656
7,426
1,741
225,609
242
225,851
261,032
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
625
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 11
12.2
DUE TO CUSTOMERS – ANALYSIS BY GEOGRAPHIC AREA
(in millions of euros)
31/12/2020
31/12/2019
France (including DOM-TOM)
222,846
257,409
Other EU countries
2,763
3,143
Other European countries
-
-
North America
-
-
Central and South America
-
-
Africa and Middle East
-
-
Asia and Oceania (excl. Japan)
-
-
Japan
-
-
Non-allocated and international organisations
-
-
Total principal
225,609
260,552
Accrued interest
242
480
CARRYING AMOUNT
225,851
261,032
12.3
DUE TO CUSTOMERS – ANALYSIS BY CUSTOMER TYPE
(in millions of euros)
31/12/2020
31/12/2019
Individual customers
181,376
216,803
Farmers
15,007
15,352
Other small businesses
16,770
15,337
Financial institutions
3,013
3,567
Corporates
3,076
2,980
Local authorities
801
1,524
Other customers
5,566
4,989
Total principal
225,609
260,552
Accrued interest
242
480
CARRYING AMOUNT
225,851
261,032
NOTE 13
Debt securities
13.1
DEBT SECURITIES – ANALYSIS BY RESIDUAL MATURITY
(in millions of euros)
31/12/2020
31/12/2019
≤3 months
>3 months
≤1 year
>1 year
≤5 years
>5 years
Total
principal
Accrued
interest
TOTAL
TOTAL
Interest bearing notes
-
-
-
-
-
-
-
-
Money-market securities
657
300
5,546
1,458
7,961
159
8,120
8,294
Negotiable debt instruments
(1)
2,174
939
-
30
3,143
1
3,144
23,498
Bonds
715
5,602
39,303
22,149
67,769
629
68,398
68,416
Other debt securities
-
-
11,587
12,491
24,078
125
24,203
18,738
NET CARRYING AMOUNT
3,546
6,841
56,436
36,128
102,951
914
103,865
118,946
(1)
Of which €618 million issued abroad.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
626
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 13
13.2
BONDS (BY CURRENCY OF ISSUANCE)
(in millions of euros)
31/12/2020
31/12/2019
Residual maturity
Outstanding
amount
Outstanding
amount
≤1 year
>1 year
≤5 years
>5 years
Euro
4,944
35,053
21,473
61,470
56,663
Fixed-rate
2,009
32,334
18,526
52,869
47,015
Floating-rate
2,935
2,719
2,947
8,601
9,648
Other European Union currencies
214
215
-
429
657
Fixed-rate
214
215
-
429
645
Floating-rate
-
-
-
-
12
Dollar
511
1,151
81
1,743
4,913
Fixed-rate
359
1,151
81
1,591
4,109
Floating-rate
152
-
-
152
804
Yen
279
1,170
173
1,622
2,766
Fixed-rate
279
1,170
173
1,622
2,766
Floating-rate
-
-
-
-
-
Other currencies
369
1,714
422
2,505
2,610
Fixed-rate
369
1,480
422
2,271
2,376
Floating-rate
-
234
-
234
234
Total principal
6,317
39,303
22,149
67,769
67,609
Fixed-rate
3,230
36,350
19,202
58,782
56,911
Floating-rate
3,087
2,953
2,947
8,987
10,698
Accrued interest
-
-
-
629
807
CARRYING AMOUNT
6,317
39,303
22,149
68,398
68,416
NOTE 14
Accruals, deferred income and sundry liabilities
(in millions of euros)
31/12/2020
31/12/2019
OTHER LIABILITIES
(1)
Counterparty transactions (trading securities)
-
-
Liabilities relating to stock lending transactions
-
-
Financial options sold
-
-
Settlement and negotiation accounts
-
-
Sundry creditors
12,711
11,670
Payments on securities in process
47
59
Carrying amount
12,758
11,729
ACCRUALS AND DEFERRED INCOME
Items in course of transmission
5,975
6,548
Adjustment and suspense accounts
3,001
3,038
Unrealised gains and deferred gains on financial instruments
-
-
Unearned income
2,335
2,159
Accrued expenses on commitments on forward financial instruments
1,318
1,707
Other accrued expenses
514
532
Other accruals and deferred income
16
77
Carrying amount
13,159
14,061
TOTAL
25,917
25,790
(1)
Amounts include accrued interest.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
627
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 14
NOTE 15
Provisions
(in millions of euros)
Balance at
01/01/2020
Depreciation
Reversals,
amounts
used
Reversals,
amounts
unused
Other
movements
Balance at
31/12/2020
Provisions for employee retirement and similar benefits
328
7
-
-
(16)
319
Provisions for other employment-related commitments
6
-
-
(2)
-
4
Provisions for financing commitment execution risks
22
5
-
(5)
-
22
Provisions for tax disputes
(1)
221
13
(190)
-
-
44
Provisions for other litigation
36
-
-
(4)
-
32
Provisions for country risk
-
-
-
-
-
-
Provisions for credit risks
(2)
17
17
-
(16)
-
18
Provisions for restructuring
-
-
-
-
-
-
Provisions for tax
(3)
411
9
-
(12)
-
408
Provisions on equity investments
(4)
-
-
-
-
-
-
Provisions for operational risks
-
4
(4)
-
-
-
Provisions for home purchase savings scheme imbalance risks
266
64
-
-
-
330
Other provisions
(5)
79
83
(8)
(89)
-
65
CARRYING AMOUNT
1,386
202
(202)
(128)
(16)
1,242
(1)
Provisions for already notified tax adjustments.
(2)
These provisions are prepared on a collective basis primarily on the basis of estimates drawn from CRR/CRD4 models.
(3)
Mainly comprises tax liabilities due to subsidiaries under the tax consolidation mechanism.
(4)
Including joint ventures, EIGs, property risks of equity instruments.
(5)
Including provisions for economic interest group investment risks.
Crédit Agricole S.A. tax audit
After an audit of accounts for the 2014 and 2015 financial years,
Crédit Agricole S.A. was the subject of adjustments as part of a proposed
correction received at the end of December 2018. Crédit Agricole S.A.
paid the amounts due in this respect and reversed the related provision.
CIE (Cheque Image Exchange) case
In March 2008, LCL and Crédit Agricole S.A. and 10 other banks were
served notice of grievances on behalf of the Conseil de la Concurrence,
i.e.
the French Competition Council (now the Autorité de la Concurrence).
They are accused of colluding to implement and apply interchange fees
for cashing cheques, since the passage of the Cheque Image Exchange
system,
i.e.
between 2002 and 2007. In the opinion of the Autorité de la
concurrence, these fees constitute anti-competitive price agreements
in the meaning of Articles 81 paragraph 1 of the treaty establishing the
European Community and Article L. 420-1 of the French Commercial
Code, and allegedly caused damage to the economy.
In their defense, the banks categorically refuted the anticompetitiveness
of the fees and contested the legality of the proceedings.
In a decision published on 20 September 2010, the Autorité de la
concurrence stated that the Cheque Image Exchange fee (CEIC) was
anti-competitive by its very aim and that it artificially increased the costs
borne by remitting banks, which resulted in an unfavourable impact on
the prices of banking services. Concerning one of the fees for related
services, the fee for cancellation of wrongly cleared transactions (AOCT),
the
Autorité de la concurrence
called on the banks to revise their amount
within six months of the notification of the decision.
The accused banks were sanctioned for an overall amount of
€384.92 million.
LCL and Crédit Agricole were respectively sentenced to pay €20.7 million
and €82.1 million for the CEIC and €0.2 million and €0.8 million for
the AOCT.
All of the banks appealed the decision to the Paris Court of Appeal.
By a decree of 23 February 2012, the Court overruled the decision,
stating that the Autorité de la concurrence had not proven the existence
of competition restrictions establishing the agreement as having an
anti-competitive purpose.
The Autorité de la concurrence filed an appeal with the Supreme Court
on 23 March 2012.
On 14 April 2015, the French Supreme Court
(Cour de cassation)
overruled
the Paris Court of Appeal’s decision dated 23 February 2012 and remanded
the case to the Paris Court of Appeal with a change in the composition of
the Court on the sole ground that the Paris Court of Appeal declared the
UFC-Que Choisir and ADUMPE’s interventions in the proceedings devoid
of purpose without having considered their arguments.
The Supreme Court did not rule on the merits of the case and Crédit
Agricole has brought the case before the Paris Court of Appeal.
The Paris Court of Appeal issued a decree on 21 December 2017.
It confirmed the decision of the Autorité de la Concurrence dated
20 September 2010 but reduced from €82,940,000 to €76,560,000
the sanction on Crédit Agricole. LCL’s sanction remains unchanged, at
an amount of €20,930,000.
As well as the other banks parties to this procedure, LCL and Crédit
Agricole filed an appeal with the Supreme Court.
On 29 January 2020, the French Supreme Court (Cour de cassation)
overruled the Paris Court of Appeal’s decision dated 21 December 2017
and referred the case to the same Court with a different composition
on the ground that the Paris Court of Appeal had not characterized the
existence of restrictions of competition by object.
Euribor/Libor and other indexes
Crédit Agricole S.A. and its subsidiary Crédit Agricole CIB, in their capacity
as contributors to a number of interbank rates, have received requests
for information from a number of authorities as part of investigations
into: (i) the calculation of the Libor (London Interbank Offered Rates)
in a number of currencies, the Euribor (Euro Interbank Offered Rate)
and certain other market indices; and (ii) transactions connected with
these rates and indices. These demands covered several periods from
2005 to 2012.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
628
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 15
As part of its cooperation with the authorities, Crédit Agricole S.A. and
its subsidiary Crédit Agricole CIB carried out investigations in order
to gather the information requested by the various authorities and in
particular the American authorities – the DOJ (Department of Justice)
and CFTC (Commodity Future Trading Commission) – with which they
are in discussions. It is currently not possible to know the outcome of
these discussions, nor the date on which they will be concluded.
Furthermore, Crédit Agricole CIB is currently under investigation opened
by the Attorney General of the State of Florida on both the Libor and
the Euribor.
Following its investigation and an unsuccessful settlement procedure, on
21 May 2014, the European Commission sent a statement of objection to
Crédit Agricole S.A. and to Crédit Agricole CIB pertaining to agreements
or concerted practices for the purpose and/or effect of preventing,
restricting or distorting competition in derivatives related to the Euribor.
In a decision dated 7 December 2016, the European Commission jointly
fined Crédit Agricole S.A. and Crédit Agricole CIB €114,654,000 for
participating in a cartel in euro interest rate derivatives. Crédit Agricole S.A.
and Crédit Agricole CIB are challenging this decision and have asked
the European Court of Justice to overturn it.
The Swiss competition authority, COMCO, has conducted an investigation
into the market for interest rate derivatives, including the Euribor, with
regard to Crédit Agricole S.A. and several Swiss and international banks.
This investigation was closed following a settlement under which
Crédit Agricole S.A. agreed to pay a penalty of CHF 4,465,701 and costs
of proceedings amounting to CHF 187,012, without any admission of guilt.
Concerning the two class actions in the United States of America in which
Crédit Agricole S.A. and Crédit Agricole CIB have been named since 2012
and 2013 along with other financial institutions, both as defendants in
one (“Sullivan” for the Euribor) and only Crédit Agricole S.A. as defendant
for the other (“Lieberman” for Libor), the “Lieberman” class action is at
the preliminary stage that consists in the examination of its admissibility;
proceedings are still suspended before the US District Court of New York
State. Concerning the “Sullivan” class action, Crédit Agricole S.A. and
Crédit Agricole CIB introduced a motion to dismiss the applicants’ claim.
The US District Court of New York State upheld the motion to dismiss
regarding Crédit Agricole S.A. and Crédit Agricole CIB in first instance.
On 14 June 2019, the plaintiffs appealed this decision.
Since 1 July 2016, Crédit Agricole S.A. and Crédit Agricole CIB, together
with other banks, are also party to a new
class action
suit in the United
States (“Frontpoint”) relating to the SIBOR
(Singapore Interbank Offered
Rate)
and SOR
(Singapore Swap Offer Rate)
indices. After having granted
a first motion to dismiss filed by Crédit Agricole S.A. and Crédit Agricole
CIB, the New York Federal District Court, ruling on a new request by the
plaintiffs, excluded Crédit Agricole S.A. from the Frontpoint case on the
grounds that it had not contributed to the relevant indices.
These class actions are civil actions in which the plaintiffs claim that
they are victims of the methods used to set the Euribor, Libor, Sibor and
SOR rates, and seek repayment of the sums they allege were unlawfully
received, as well as damages and reimbursement of costs and fees paid.
SSA Bonds
Several regulators have requested information from Crédit Agricole S.A.
and Crédit Agricole CIB for investigations relating to the activities
of a number of banks involved in the secondary trading of Bonds
SSA (Supranational, Sub-Sovereign and Agencies) denominated in
American dollars. Through the cooperation with these regulators,
Crédit Agricole CIB proceeded to internal inquiries to gather the
required information available. On 20 December 2018, the European
Commission issued a Statement of Objections to a number of banks
including Crédit Agricole S.A. and Crédit Agricole CIB within its inquiry
on a possible infringement of rules of European Competition law in
the secondary trading of Bonds SSA denominated in American dollars.
Crédit Agricole S.A. and Crédit Agricole CIB became aware of these
objections and issued a response on 29 March 2019, followed by an
oral hearing on 10-11 July 2019.
On 11 July 2018, Crédit Agricole S.A. and Crédit Agricole CIB were notified
with other banks of a class action filed in Canada, before the Ontario
Superior Court of Justice. Another class action has been filed before the
Federal Court of Canada. The action before the Ontario Superior Court
of Justice was dismissed on 19 February 2020.
It is not possible at this stage to predict the outcome of these
investigations, proceedings or class actions or the date on which they
will end.
Intercontinental Exchange, Inc. (“ICE”)
On 15 January 2019 a class action (“Putnam Bank”) was filed before a
federal court in New York (US District Court Southern District of New York)
against Intercontinental Exchange, Inc. (“ICE”) and a number of banks
including Crédit Agricole S.A., Crédit Agricole CIB and Crédit Agricole
Securities-USA. This action was filed by plaintiffs who allege that they
have invested in financial instruments indexed to the USD ICE Libor. They
accuse the banks of having collusively set the index USD ICE Libor at
artificially low levels since February 2014 and made thus illegal profits.
On 31 January 2019 a similar action (“Livonia”) was filed before the
US District Court Southern District of New York, against a number of
banks including Crédit Agricole S.A., Crédit Agricole CIB and Crédit
Agricole Securities-USA. On 1 February 2019, these two class actions
were consolidated for pre-trial purposes.
On 4 March 2019, a third class action (“Hawaii Sheet Metal Workers
retirement funds”) was filed against the same banks in the same court
and consolidated with the two previous actions on 26 April 2019. On
1 July 2019, the plaintiffs filed a consolidated class action complaint.
On 30 August 2019, the defendants filed a motion to dismiss against
this consolidated complaint.
On 26 March 2020, a judgment granted the defendants' motion to
dismiss. On 24 April 2020 the plaintiffs filed a notice of appeal.
On November 30, 2020, during briefing of the appeal, Plaintiffs’ lawyers
informed Defendants that all of the named Plaintiffs wished to withdraw
from the case and, on December 1, 2020, Plaintiffs’ counsel filed the
motion to stay the appeal, which Defendants opposed. The court denied
the motion on December 7, 2020 and Plaintiffs filed their reply brief
on December 15, 2020.
On 28 December 2020, DYJ Holdings Inc. filed a motion for leave to
intervene to replace the currents named plaintiffs. On 7 January 2021,
defendants filed a brief in opposition to DYJ Holdings’ motion and also
filed a motion to dismiss the appeal.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
629
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 15
NOTE 16
Home purchase savings
DEPOSITS COLLECTED IN HOME PURCHASE SAVINGS ACCOUNTS AND PLANS
DURING THE SAVINGS PHASE
(in millions of euros)
31/12/2020
31/12/2019
HOME PURCHASE SAVINGS SCHEMES
Seniority of less than 4 years
5,725
5,728
Seniority of more than 4 and less than 10 years
48,700
44,635
Seniority of more than 10 years
44,322
45,108
Total home purchase savings schemes
98,747
95,471
Total home purchase savings accounts
11,293
10,635
TOTAL CUSTOMER ASSETS UNDER HOME PURCHASE SAVINGS CONTRACTS
110,040
106,106
PROVISION FOR HOME PURCHASE SAVINGS ACCOUNTS AND PLANS
(in millions of euros)
31/12/2020
31/12/2019
HOME PURCHASE SAVINGS SCHEMES
Seniority of less than 4 years
-
-
Seniority of more than 4 and less than 10 years
-
-
Seniority of more than 10 years
331
266
Total home purchase savings schemes
331
266
Total home purchase savings accounts
-
-
TOTAL PROVISIONS FOR HOME PURCHASE SAVINGS CONTRACTS
331
266
(in millions of euros)
01/01/2020
Depreciation
Reversals
31/12/2020
Home purchase savings schemes
266
65
-
331
Home purchase savings accounts
-
-
-
-
TOTAL PROVISIONS FOR HOME PURCHASE SAVINGS CONTRACTS
266
65
-
331
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
630
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 16
NOTE 17
Employment-related commitments – post-employment benefits,
defined-benefit plans
CHANGE IN ACTUARIAL LIABILITY
(in millions of euros)
31/12/2020
31/12/2019
Actuarial liability at 31/12/2019
328
327
Current service cost
11
14
Financial cost
2
4
Employee contributions
-
-
Benefit plan changes, withdrawals and settlement
2
(31)
Changes in scope
6
3
Severance payments
-
-
Benefits paid (mandatory)
(36)
(9)
Actuarial (gains)/losses
5
20
ACTUARIAL LIABILITY AT 31/12/2020
(1)
318
328
(1)
The actuarial liability excludes commitments for long-service awards.
BREAKDOWN OF CHARGE RECOGNISED IN THE INCOME STATEMENT
(in millions of euros)
31/12/2020
31/12/2019
Service cost
11
14
Financial cost
2
3
Expected return on assets
-
-
Past service cost
-
-
Net actuarial (gains)/losses
5
17
(Gains)/losses on plan withdrawals and settlements
-
(31)
(Gains)/losses due to changes in asset restrictions
-
-
NET EXPENSE RECOGNISED IN INCOME STATEMENT
18
3
CHANGES IN FAIR VALUE OF PLAN ASSETS
(in millions of euros)
31/12/2020
31/12/2019
Fair value of assets/reimbursement rights at 31/12/2019
303
305
Expected return on assets
-
-
Actuarial gains/(losses)
(1)
2
3
Employer contributions
7
-
Employee contributions
-
-
Benefit plan changes, withdrawals and settlement
-
-
Changes in scope
6
4
Severance payments
-
-
Benefits paid out under the benefit plan
(36)
(9)
FAIR VALUE OF ASSETS/REIMBURSEMENT RIGHTS AT 31/12/2020
282
303
(1)
Interest on reimbursement rights.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
631
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 17
NET POSITION
(in millions of euros)
31/12/2020
31/12/2019
Actuarial liability at 31/12/2020
(318)
(328)
Impact of asset restriction
-
-
Fair value of assets at end of period
283
303
NET POSITION (LIABILITIES)/ASSETS AT 31/12/2020
(35)
(25)
NOTE 18
Fund for General Banking Risk (FGBR)
(in millions of euros)
31/12/2020
31/12/2019
Fund for general banking risk
1,239
1,194
CARRYING AMOUNT
1,239
1,194
NOTE 19
Subordinated debt – Analysis by residual maturity
(in millions of euros)
31/12/2020
31/12/2019
≤3 months
>3 months
≤1 year
>1 year
≤5 years
>5 years
Total
principal
Accrued
interest
TOTAL
TOTAL
Fixed-term subordinated debt
-
736
5,969
12,070
18,775
193
18,968
17,826
Euro
-
736
4,002
8,285
13,023
123
13,146
12,950
Other European Union currencies
-
-
417
-
417
1
418
443
Swiss Franc
-
-
111
-
111
-
111
111
Dollar
-
-
1,220
2,033
3,253
50
3,303
2,495
Yen
-
-
219
998
1,217
5
1,222
1,226
Other currencies
-
-
-
754
754
14
768
601
Participating securities and loans
-
-
-
-
-
-
-
-
Other subordinated term loans
-
-
-
-
-
-
-
-
Undated subordinated debt
(1)
-
-
-
6,006
6,006
29
6,035
5,896
Euro
-
-
-
1,933
1,933
4
1,937
1,255
Other European Union currencies
-
-
-
553
553
1
554
724
Swiss Franc
-
-
-
-
-
-
-
-
Dollar
-
-
-
3,520
3,520
24
3,544
3,917
Yen
-
-
-
-
-
-
-
-
Other currencies
-
-
-
-
-
-
-
-
Investment of own funds of Local Banks
-
-
-
-
-
-
-
-
Mutual security deposits
-
-
-
-
-
-
-
-
CARRYING AMOUNT
-
736
5,969
18,076
24,781
222
25,003
23,722
(1)
Residual maturity of undated subordinated debt classified by default in >5 years.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
632
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 18
NOTE 20
Changes in equity (before appropriation)
CHANGES IN EQUITY
(in millions of euros)
Total equity
Share
capital
Legal
reserve
Statutory
reserve
Share
premiums,
other
reserves
and retained
earnings
Translation/
revaluation
adjustments
Regulated
provisions and
investment
subsidies
Net
income
TOTAL
EQUITY
Balance at 31/12/2018
8,599
854
341
37,610
15
2,740
50,159
Dividends paid in respect of 2018
-
-
-
(1,976)
-
-
-
(1,976)
Change in share capital
55
-
-
-
-
-
-
55
Change in share premiums and reserves
-
6
-
90
-
-
-
96
Appropriation of 2018 parent company
net income
-
-
-
2,740
-
-
(2,740)
-
Retained earnings
-
-
-
-
-
-
-
-
Net income/(loss) for 2019
-
-
-
-
-
-
2,016
2,016
Other changes
-
-
-
(1)
-
(3)
-
(4)
Balance at 31/12/2019
8,654
860
341
38,463
12
2,016
50,346
Dividends paid in respect of 2019
-
-
-
-
-
-
-
-
Change in share capital
(1)
96
-
-
-
-
-
-
96
Change in share premiums and reserves
-
5
-
60
-
-
-
65
Appropriation of 2019 parent company
net income
-
-
-
2,016
-
-
(2,016)
-
Retained earnings
-
-
-
-
-
-
-
-
Net income/(loss) for 2020
-
-
-
-
-
-
245
245
Other changes
-
-
-
-
-
(4)
-
(4)
BALANCE AT 31/12/2020
8,750
865
341
40,539
-
8
245
50,748
(1)
€96 million capital increase reserved for employees on 22 December 2020.
NOTE 21
Composition of capital
(in millions of euros)
31/12/2020
31/12/2019
Total equity
50,748
50,346
Fund for general banking risk
1,239
1,194
Subordinated debt and participating securities
25,003
23,722
Mutual security deposits
-
-
TOTAL CAPITAL
76,990
75,262
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
633
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 20
NOTE 22
Transactions with subsidiaries and affiliates and equity investments
(in millions of euros)
31/12/2020
31/12/2019
Loans and receivables
532,281
458,909
Credit and other financial institutions
524,691
450,312
Customers
2,229
1,769
Bonds and other fixed Income securities
5,361
6,828
Liabilities
200,170
170,107
Credit institutions and other financial institutions
197,681
167,641
Customers
2,489
2,466
Debt securities and subordinated debt
-
-
Commitments given
15,732
12,909
Financing commitments given to credit institutions
446
402
Financing commitments given to customers
-
-
Guarantees given to credit institutions
8,743
6,184
Guarantees given to customers
6,543
6,323
Securities acquired with repurchase options
-
-
Other commitments given
-
-
NOTE 23
Foreign currency denominated transactions
ANALYSIS OF THE BALANCE SHEET BY CURRENCY
(in millions of euros)
31/12/2020
31/12/2019
Assets
Liabilities
Assets
Liabilities
Euro
686,862
669,054
582,709
559,075
Other European Union currencies
3,248
2,124
3,615
3,764
Swiss Franc
7,813
4,964
7,474
5,207
Dollar
10,234
16,130
12,733
22,509
Yen
164
6,970
353
7,332
Other currencies
1,157
1,889
1,208
1,849
Gross amount
709,478
701,131
608,092
599,736
Receivables, related liabilities and accruals and deferred income
13,043
15,558
13,262
16,499
Impairment
(5,832)
-
(5,119)
-
TOTAL
716,689
716,689
616,235
616,235
NOTE 24
Foreign exchange transactions, foreign currency loans and borrowing
(in millions of euros)
31/12/2020
31/12/2019
To be received
To be delivered
To be received
To be delivered
Spot foreign exchange transactions
155
155
66
66
Foreign currencies
139
151
30
36
Euros
16
4
36
30
Forward currency transactions
17,741
18,024
23,547
23,318
Foreign currencies
15,601
4,022
20,938
3,894
Euros
2,140
14,002
2,609
19,424
Foreign currency denominated loans and borrowings
25
259
19
118
TOTAL
17,921
18,438
23,632
23,502
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
634
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 22
NOTE 25
Transactions involving forward financial instruments
(in millions of euros)
31/12/2020
31/12/2019
Hedging
transactions
Non-hedging
transactions
TOTAL
TOTAL
Futures and forwards
530,437
356,904
887,341
863,833
Exchange-traded
(1)
-
-
-
-
Interest rate futures
-
-
-
-
Currency forwards
-
-
-
-
Equity and stock index forwards
-
-
-
-
Other forwards
-
-
-
-
Over-the-counter
(1)
530,437
356,904
887,341
863,833
Interest rate swaps
526,429
356,800
883,229
859,359
Other interest rate forwards
-
-
-
-
Currency forwards
2,838
104
2,942
3,258
FRAs
-
-
-
-
Equity and stock index forwards
1,170
-
1,170
1,216
Other forwards
-
-
-
-
Options
1,365
-
1,365
1,365
Exchange-traded
-
-
-
-
Interest rate futures
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Equity and stock index futures
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Currency forwards
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Other options
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Over-the-counter
1,365
-
1,365
1,365
Interest rate swap options
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Interest rate forwards
-
-
-
-
-
Bought
1,365
-
1,365
1,365
-
Sold
-
-
-
-
Currency forwards
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Equity and stock index forwards
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Other options
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
Credit derivatives
-
-
-
-
Credit derivative contracts
-
-
-
-
-
Bought
-
-
-
-
-
Sold
-
-
-
-
TOTAL
531,802
356,904
888,706
865,198
(1)
The amounts shown in respect of futures and forwards correspond to aggregate long and short positions (interest rate swaps and interest rate swap options), or to aggregate purchases and sales of
contracts (other contracts).
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
635
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 25
25.1
TRANSACTIONS ON FORWARD FINANCIAL INSTRUMENTS –
NOTIONAL OUTSTANDING BY RESIDUAL MATURITY
(in millions of euros)
Total 31/12/2020
o/w over-the-counter
o/w exchange-traded
and equivalent
≤1 year
>1 year
≤5 years
>5 years
≤1 year
>1 year
≤5 years
>5 years
≤1 year
>1 year
≤5 years
>5 years
Futures
-
-
-
-
-
-
-
-
-
Currency options
-
-
-
-
-
-
-
-
-
Interest rate options
-
-
-
-
-
-
-
-
-
Currency futures
1,783
1,159
-
1,783
1,159
-
-
-
-
FRAs
-
-
-
-
-
-
-
-
-
Interest rate swaps
501,731
208,244
173,254
501,731
208,244
173,254
-
-
-
Caps, floors, collars
420
610
335
420
610
335
-
-
-
Interest rate forwards
-
-
-
-
-
-
-
-
-
Equity and index forwards
241
651
278
241
651
278
-
-
-
Equity and index options
-
-
-
-
-
-
-
-
-
Equity, equity index and precious metal derivatives
-
-
-
-
-
-
-
-
-
Credit derivatives
-
-
-
-
-
-
-
-
-
Subtotal
504,175
210,664
173,867
504,175
210,664
173,867
-
-
-
Currency swaps
2,147
11,438
12,269
2,147
11,438
12,269
-
-
-
Forward currency transactions
9,911
-
-
9,911
-
-
-
-
-
Subtotal
12,058
11,438
12,269
12,058
11,438
12,269
-
-
-
TOTAL
516,233
222,102
186,136
516,233
222,102
186,136
-
-
-
(in millions of euros)
Total 31/12/2019
o/w over-the-counter
o/w exchange-traded
and equivalent
≤1 year
>1 year
≤5 years
>5 years
≤1 year
>1 year
≤5 years
>5 years
≤1 year
>1 year
≤5 years
>5 years
Futures
-
-
-
-
-
-
-
-
-
Currency options
-
-
-
-
-
-
-
-
-
Interest rate options
-
-
-
-
-
-
-
-
-
Currency futures
1,679
1,579
-
1,679
1,579
-
-
-
-
FRAs
-
-
-
-
-
-
-
-
-
Interest rate swaps
484,588
191,089
183,682
484,588
191,089
183,682
-
-
-
Caps, floors, collars
-
1,030
335
-
1,030
335
-
-
-
Interest rate forwards
-
-
-
-
-
-
-
-
-
Equity and index forwards
-
651
565
-
651
565
-
-
-
Equity and index options
-
-
-
-
-
-
-
-
-
Equity, equity index and precious metal derivatives
-
-
-
-
-
-
-
-
-
Credit derivatives
-
-
-
-
-
-
-
-
-
Subtotal
486,267
194,349
184,582
486,267
194,349
184,582
-
-
-
Currency swaps
2,392
11,342
12,607
2,392
11,342
12,607
-
-
-
Forward currency transactions
20,524
-
-
20,524
-
-
-
-
-
Subtotal
22,916
11,342
12,607
22,916
11,342
12,607
-
-
-
TOTAL
509,183
205,691
197,189
509,183
205,691
197,189
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
636
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 25
25.2
FORWARD FINANCIAL INSTRUMENTS – FAIR VALUE
(in millions of euros)
Fair value
positive at
31/12/2020
Fair value
negative at
31/12/2020
Notional
outstanding
at
31/12/2020
Fair value
positive at
31/12/2019
Fair value
negative at
31/12/2019
Notional
outstanding
at
31/12/2019
Futures
-
-
-
-
-
-
Currency options
-
-
-
-
-
-
Interest rate options
-
-
-
-
-
-
Currency futures
-
-
2,942
-
-
3,258
FRAs
-
-
-
-
-
-
Interest rate swaps
18,433
10,308
883,229
16,697
10,589
859,359
Caps, floors, collars
15
14
1,365
16
8
1,365
Interest rate forwards
-
-
-
-
-
-
Equity and index forwards
-
-
1,170
134
-
1,216
Equity and index options
-
-
-
-
-
-
Equity, equity index and precious metal derivatives
142
-
-
-
-
-
Credit derivatives
-
-
-
-
-
-
Subtotal
18,590
10,322
888,706
16,847
10,597
865,198
Currency swaps
150
121
25,854
169
95
26,341
Forward currency transactions
11
21
9,911
5
25
20,524
Subtotal
161
142
35,765
174
120
46,865
TOTAL
18,751
10,464
924,471
17,021
10,717
912,063
NOTE 26
Information on counterparty risk on derivative products
(In thousands of euros)
31/12/2020
31/12/2019
Market value
Potential
credit risk
(1)
Total
counterparty
risk
Market value
Potential
credit risk
Total
counterparty
risk
Risk regarding OECD governments, central Banks
and similar organisations
-
-
-
-
-
-
Risk regarding OECD financial institutions
and similar organisations
18,750
1,921
20,671
17,020
1,805
18,825
Risk on other counterparties
-
-
-
-
-
-
Total before impact of netting contracts
18,750
1,921
20,671
17,020
1,805
18,825
O/w risk on:
interest rate, exchange rate and commodities
contracts
18,608
1,839
20,447
16,886
1,725
18,611
equity and index derivative contracts
142
82
224
134
80
214
Total before impact of netting contracts
18,750
1,921
20,671
17,020
1,805
18,825
Impact of netting and collateralisation contracts
-
-
-
-
-
-
TOTAL AFTER IMPACT OF NETTING AND
COLLATERALISATION CONTRACTS
18,750
1,921
20,672
17,020
1,805
18,825
(1)
Calculated under CRR/CRD4 regulatory standards.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
637
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 26
NOTE 27
Commitments and guarantees given and received
(in millions of euros)
31/12/2020
31/12/2019
COMMITMENTS GIVEN
Financing commitments
8,267
5,296
Commitments given to credit institutions
8,267
5,296
Commitments given to customers
-
-
Confirmed credit lines
-
-
-
Documentary credits
-
-
-
Other confirmed credit lines
-
-
Other commitments given to customers
-
-
Guarantee commitments
18,081
16,521
Credit institutions
8,909
6,357
Confirmed documentary credit lines
-
-
Other
8,909
6,357
Customers
9,172
10,164
Property guarantees
-
-
Other customer guarantees
9,172
10,164
Securities commitments
9
10
Securities acquired with repurchase options
-
-
Other commitments to be given
9
10
COMMITMENTS RECEIVED
Financing commitments
129,170
65,744
Commitments received from credit institutions
129,170
65,744
Commitments received from customers
-
-
Guarantee commitments
8,588
12,200
Commitments received from credit institutions
8,586
12,198
Commitments received from customers
2
2
Guarantees received from government bodies or similar institutions
-
-
Other guarantees received
2
2
Securities commitments
-
-
Securities sold with repurchase options
-
-
Other commitments received
-
-
NOTE 28
Clearing of securities borrowings and centralised savings
28.1
SECURITIES BORROWING
(In thousands of euros)
31/12/2020
31/12/2019
Gross liabilities
relating to
stock lending
transactions
(a)
Borrowed
trading
securities
(b)
Liabilities
relating to
stock lending
transactions
(c) = (a) - (b)
Gross liabilities
relating to
stock lending
transactions
(a)
Borrowed
trading
securities
(b)
Liabilities
relating to
stock lending
transactions
(c) = (a) - (b)
Treasury bills and similar securities
304
304
-
-
-
-
o/w borrowed securities
-
-
-
-
-
-
Bonds and other fixed income securities
10,093
10,093
-
-
-
-
o/w borrowed securities
-
-
-
-
-
-
Equities and other variable-income securities
-
-
-
-
-
-
o/w borrowed securities
-
-
-
-
-
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
638
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 27
28.2 CENTRALISED SAVINGS
(in millions of euros)
31/12/2020
31/12/2019
Loans and receivables from Caisse des Dépôts et Consignations savings funds
53,542
41,878
Deposits collected in respect of special savings accounts
167,696
150,540
AMOUNTS OF DEPOSITS MADE BY CUSTOMERS NET OF LOANS TO SAVINGS FUNDS
114,154
108,662
NOTE 29
Net interest and similar income
(in millions of euros)
31/12/2020
31/12/2019
Interbank transactions
2,481
2,167
Crédit Agricole internal transactions
2,634
2,713
Customer transactions
173
176
Bonds and other fixed-income securities
1,109
1,105
Net gains on macro-hedging transactions
640
769
Debt securities
2,528
2,677
Other interest income
55
91
Interest and similar income
9,620
9,698
Interbank transactions
(1,743)
(1,549)
Crédit Agricole internal transactions
(1,290)
(1,013)
Customer transactions
(3,842)
(4,191)
Net losses on macro-hedging transactions
-
-
Bonds and other fixed-income securities
(908)
(726)
Debt securities
(3,075)
(3,745)
Other interest expense
2
(37)
Interest and similar expenses
(10,856)
(11,261)
TOTAL NET INTEREST AND SIMILAR INCOME
(1,236)
(1,563)
NOTE 30
Income from variable-income securities
(in millions of euros)
31/12/2020
31/12/2019
Investments in subsidiaries and affiliates, equity investments and other long-term equity investments
1,952
2,712
Short-term investment securities and medium-term portfolio securities
-
-
Other securities transactions
-
-
TOTAL INCOME FROM VARIABLE-INCOME SECURITIES
1,952
2,712
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
639
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 29
NOTE 31
Net fee and commission income
(in millions of euros)
31/12/2020
31/12/2019
Income
Expense
Net
Income
Expense
Net
Interbank transactions
168
(50)
118
128
(21)
107
Crédit Agricole internal transactions
976
(404)
572
805
(479)
326
Customer transactions
-
-
-
-
-
-
Securities transactions
-
(3)
(3)
-
(2)
(2)
Foreign exchange transactions
-
-
-
-
-
-
Forward financial instruments and other off-balance sheet
transactions
-
-
-
-
-
-
Financial services
33
(106)
(73)
39
(94)
(55)
Provision for fee and commission risks
-
-
-
-
-
-
TOTAL NET FEE AND COMMISSION INCOME
1,177
(563)
614
972
(596)
376
NOTE 32
Net gains (losses) on trading books
(in millions of euros)
31/12/2020
31/12/2019
Net gains (losses) on trading securities
-
11
Net gains (losses) on foreign exchange transactions and similar financial instruments
128
(46)
Net gains (losses) on other forward financial instruments
11
9
NET GAINS (LOSSES) ON TRADING BOOK
139
(26)
NOTE 33
Gains (Losses) on short-term investment portfolios and similar
(in millions of euros)
31/12/2020
31/12/2019
INVESTMENT SECURITIES
Impairment losses
(72)
(3)
Reversal of impairment losses
72
8
Net impairment losses/reversals
-
5
Gains on disposals
61
10
Losses on disposals
-
-
Net gains (losses) on disposals
61
10
Net gains (losses) on short-term investment securities
61
15
MEDIUM-TERM PORTFOLIO SECURITIES
Impairment losses
-
-
Reversal of impairment losses
-
-
Net impairment losses/reversals
-
-
Gains on disposals
-
-
Losses on disposals
-
-
Net gains (losses) on disposals
-
-
Net gains (losses) on medium term portfolio securities
-
-
GAINS (LOSSES) ON SHORT TERM INVESTMENT PORTFOLIOS AND SIMILAR
61
15
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
640
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 31
NOTE 34
Other banking income and expenses
(in millions of euros)
31/12/2020
31/12/2019
Other income
7
6
Share of joint ventures
-
-
Charge-backs and expense reclassifications
17
28
Reversal of provisions
3
5
Other banking income
27
39
Sundry expenses
(53)
(43)
Share of joint ventures
(8)
(8)
Charge-backs and expense reclassifications
-
(1)
Additions to provisions
-
-
Other banking expenses
(61)
(52)
TOTAL OTHER BANKING INCOME AND EXPENSES
(34)
(13)
NOTE 35
Operating expenses
(in millions of euros)
31/12/2020
31/12/2019
EMPLOYEE EXPENSES
(1)
Wages and salaries
(172)
(177)
Social security costs
(99)
(112)
o/w contributions to defined-contribution post-employment benefit plans
(32)
(32)
Profit-sharing and incentive plans
(14)
(14)
Payroll-related tax
(31)
(28)
Total employee expenses
(316)
(331)
Charge-backs and reclassification of employee expenses
22
29
Net employee expenses
(294)
(302)
ADMINISTRATIVE EXPENSES
(2)
Taxes other than on income or payroll-related
(30)
(29)
External services, other administrative expenses and regulatory contributions
(3)
(511)
(518)
Total administrative costs
(541)
(547)
Charge-backs and reclassification of administrative costs
65
71
Net administrative expenses
(476)
(476)
OPERATING EXPENSES
(770)
(778)
(1)
At 31 December 2020, the compensation of members of the Board of Directors and the Executive Committee paid by Crédit Agricole S.A. amounted to €27.5 million, €3.6 million of which in
post-employment benefits.
(2)
Information on fees paid to Statutory Auditors is indicated in the notes to the consolidated financial statements of Crédit Agricole S.A.
(3)
Of which €85.7 million in respect of the contribution to the Single Resolution Fund.
Headcount by category
(Average number of active employees in proportion to activity)
Employee categories
31/12/2020
31/12/2019
Managers
1,574
1,585
Non managers
144
117
TOTAL AVERAGE HEADCOUNT
1,718
1,702
Of which:
France
1,700
1,685
Abroad
18
17
Of which: detached employees
121
139
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
641
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 34
NOTE 36
Cost of risk
(in millions of euros)
31/12/2020
31/12/2019
Additions to provisions and impairment losses
(31)
(166)
Impairment for doubtful loans
-
-
Other provisions and impairment
(31)
(166)
Reversal of provisions and impairment losses
32
121
Reversal of impairment of doubtful loans
-
-
Other reversals of provisions and impairment losses
32
121
Change in provisions and impairment losses
1
(45)
Losses on non-impaired irrecoverable loans
(38)
(11)
Losses on impaired irrecoverable loans
-
(119)
Discounts on restructured loans
-
-
Recoveries on loans written off
-
162
Other losses
(4)
-
Other gains
37
-
COST OF RISK
(4)
(13)
NOTE 37
Net gains (losses) on fixed assets
(in millions of euros)
31/12/2020
31/12/2019
FINANCIAL INVESTMENTS
Impairment losses
(775)
(550)
Long-term investment securities
-
-
Investments in subsidiaries and affiliates, equity investments and other long-term equity investments
(775)
(550)
Reversal of impairment losses
58
231
Long-term investment securities
-
-
Investments in subsidiaries and affiliates, equity investments and other long-term equity investments
58
231
Net impairment losses/reversals
(717)
(319)
Long-term investment securities
-
-
Investments in subsidiaries and affiliates, equity investments and other long-term equity investments
(717)
(319)
Gains on disposals
10
85
Long-term investment securities
6
3
Investments in subsidiaries and affiliates, equity investments and other long-term equity investments
4
82
Losses on disposals
(8)
(60)
Long-term investment securities
-
-
Investments in subsidiaries and affiliates, equity investments and other long-term equity investments
(8)
(60)
Losses on receivables from equity investments
-
-
Net gains (losses) on disposals
2
25
Long-term investment securities
6
3
Investments in subsidiaries and affiliates, equity investments and other long-term equity investments
(4)
22
Net gains (losses)
(715)
(294)
PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS
Gains on disposals
-
2
Losses on disposals
-
-
Net gains (losses)
-
2
NET GAINS (LOSSES) ON FIXED ASSETS
(715)
(292)
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
642
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 36
NOTE 38
Income tax charge
(in millions of euros)
31/12/2020
31/12/2019
Income tax charge
(1)
106
730
Net reversal of tax provisions under the tax consolidation scheme
180
915
NET BALANCE
286
1,644
(1)
The tax gain mainly consists of the taxes that Crédit Agricole S.A., as head of the tax consolidation group, collected from the subsidiaries included in the tax consolidation scheme.
NOTE 39
Presence in non-cooperative States and territories
At 31 December 2020, Crédit Agricole S.A. had no direct or indirect presence in non-cooperative States or territories within the meaning of
Article 238-0A of the French General Tax Code.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
643
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
7
Notes to the parent company financial statements -
Note 38
STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS
This is a translation into English of the statutory auditors’ report on the financial statements of the Company issued in French and it is provided
solely for the convenience of English speaking users. This statutory auditors’ report includes information required by European regulation and
French law, such as information about the appointment of the statutory auditors or verification of the management report and other documents
provided to the shareholders. This report should be read in conjunction with, and construed in accordance with, French law and professional
auditing standards applicable in France.
(Year ended December 31, 2020)
To the General Meeting of Shareholders of Crédit Agricole S.A.,
Crédit Agricole S.A.
12, place des États-Unis
92127 Montrouge cedex
OPINION
In compliance with the engagement entrusted to us by your General Meeting of Shareholders, we have audited the accompanying financial statements
of Crédit Agricole S.A. for the year ended December 31
st
, 2020.
In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company at December 31
st
, 2020
and of the results of its operations for the year then ended in accordance with French accounting principles.
The audit opinion expressed above is consistent with our report to the Audit Committee.
BASIS FOR OPINION
Audit framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under these standards are further described in the “Statutory Auditor’s Responsibilities for the Audit of the Financial Statements”
section of our report.
Independence
We conducted our audit engagement in compliance with independence requirements of the French Commercial Code (Code de commerce) and the
French Code of Ethics (Code de déontologie) for statutory auditors for the period from 1 January 2020 to the date of our report and specifically we
did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014.
EMPHASIS OF MATTER
We draw attention to the matter described in note 2 “Accounting policies and principles” to the annual financial statements regarding the ANC
Regulation n°2020-10 amending ANC Regulation n°2014-07 relating to the accounts of banking sector companies on the presentation of securities
borrowings and centralised savings.
JUSTIFICATION OF ASSESSMENTS – KEY AUDIT MATTERS
Due to the global crisis related to the COVID-19 pandemic, the financial statements of this period have been prepared and audited under specific
conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary emergency have had numerous consequences
for companies, particularly on their operations and their financing, and have led to greater uncertainties on their future prospects. Those measures,
such as travel restrictions and remote working, have also had an impact on the companies’ internal organization and the performance of the audits.
It is in this complex and evolving context that, in accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial
Code (Code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material
misstatement that, in our professional judgment, were of most significance in our audit of the financial statements of the current period, as well
as how we addressed those risks.
These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not
provide a separate opinion on specific items of the financial statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
644
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Statutory Auditors’ report on the financial statements
7
Risks concerning the measurement of equity investments and subsidiaries
whose valuation requires judgement
Identified risk
Our response
Equity investments and subsidiaries are recognised at cost and impaired
based on their value in use, corresponding to the price that the Company
would be willing to pay to acquire them in line with its ownership
objectives.
Value in use can be determined by different aspects, among which
profitability and the profitability outlook of the company concerned. In
that case, value in use is determined by discounting the estimated future
cash flows generated by the CGU, as defined in the three-year financial
forecasts determined by each entity’s management for the purpose of
its business monitoring and extended over two years.
The percentage of capital allocation is determined by taking into account,
when they exist, specific requirements set by the regulator (in particular
Pillar 2).
We deemed the measurement of equity investments and subsidiaries,
to be a key audit matter. Indeed, determining value in use requires
management to make decisions concerning key assumptions to use in
particular to determine economic scenarios in a context of COVID-19
crisis, financial forecasts and discount rates.
We paid particular attention to the determination of the values in use
of LCL and CA Italia, given their sensitivity to the assumptions used by
management.
Equity investments and subsidiaries recorded in the balance sheet
amounted to a net value of €63,7 billion, including €5,7 billion
in impairment at December 31st, 2020.
The carrying amount of LCL amounted to €9,5 billion and that of
CA Italia €3,9 billion.
See Notes 2.2.5 and 6 to the annual financial statements.
We obtained an understanding of the processes implemented to
determine value in use and related impairments of equity investments
and subsidiaries whose valuation requires judgement.
We involved in our audit valuation experts team to assess the assumptions
used to determine the discount rates and the perpetual growth rates
used as well as the models used for calculating discounted cash flows.
We tested the calculations and compared the main assumptions (rate
of capital allocation, discount rate, perpetual growth rate,
etc.
) with
external sources.
We examined the financial forecasts prepared by the management of
each entity concerned and used in the model to:
check their consistency with those that have been presented to the
governance bodies (Board of Directors or Supervisory Board) of the
entities or sub-groups, and the justification of potential adjustments
made;
assess the main underlying assumptions, including for the extension
of forecasts beyond the three-year period. These assumptions
were assessed in view of the economic environment affected by
the COVID-19 crisis, the former financial forecasts and the actual
performance over prior periods;
conduct sensitivity analyses of the value in use to some of the
assumptions (level of capital allocated, discount rate, cost of risk,
cost to income ratio).
We also examined the disclosures provided in the notes to the annual
financial statements on the value in use of equity investments and
subsidiaries whose valuation requires judgement.
Legal, compliance and tax risks
Identified risk
Our response
Crédit Agricole S.A. is subject to judicial proceedings and several
investigations and requests for regulatory information from different
regulators. These are mainly related to the Euribor/Libor and SSA Bonds
matters with authorities from various countries (USA, UK) and the
European Union.
Various tax investigations are also ongoing.
The decision to recognise a provision or a receivable and the amount
to be recorded requires, by its nature, the use of judgement, due to the
difficulty in assessing the outcome of pending litigation or uncertainties
regarding certain tax treatments, particularly in the context of some
structural transactions.
Given the importance of judgment, these assessments carry a significant
risk of material misstatement in the annual financial statements and are
therefore a key audit matter.
The various ongoing investigations, requests for information and
actions of certain authorities as well as the most important tax
inspections at December 31st, 2020, are described in Notes 1.3
and 15 to the annual financial statements.
We obtained an understanding of the process set up by Management
for collecting and measuring the risks resulting from those disputes,
the tax uncertainties as well as, where applicable, the provisions and
debts associated with these matters, through quarterly exchanges with
management and in particular the Legal, Compliance and Tax departments
of the bank.
Our work involved:
assessing the assumptions made to determine provisions or receivables
based on available information (documentation prepared by the
Legal or Tax department or external counsel of Crédit Agricole S.A.,
correspondence from regulators and minutes of Legal Risks Committee
meetings);
reading the analyses and conclusions of the bank’s legal advisors and
their responses to our requests for confirmation;
regarding more specifically tax risks, examining, with our tax specialists,
the responses provided by the bank to the relevant authorities as well
as the risk assessment madet by the bank;
assessing, accordingly, the level of provisions or receivables as at
December 31
st
, 2020.
Lastly, we examined the related disclosures provided in the notes to the
annual financial statements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
645
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Statutory Auditors’ report on the financial statements
7
SPECIFIC VERIFICATIONS
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations.
Information given in the management report and in the other documents with respect to
the Company’s financial position and the financial statements provided to the shareholders
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management
report of the Board of Directors and in the other documents with respect to the financial position and the financial statements provided to the
Shareholders.
With respect to the fair presentation and the consistency with the financial statements of the information relating to the payment deadlines
mentioned in Article D.441-6 of the French Commercial Code, we draw your attention to the following matter: as indicated in the management
report, this information does not include banking and related transactions as the Company considers that such information is not part of the scope
of information to be provided.
Report on corporate governance
We attest that the Board of Directors’ report on corporate governance sets out the information required by Articles L. 225-37-4 et L. 22-10-10 and
L. 22-10-9 of the French Commercial Code (Code de commerce).
Concerning the information given in accordance with the requirements of Article L. 22-10-9 of the French Commercial Code (Code de commerce)
relating to remunerations and benefits received by, or allocated to the directors and any other commitments made in their favor, we have verified
its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable,
with the information obtained by your Company from companies controlled thereby, included in the consolidation scope. Based on these procedures,
we attest the accuracy and fair presentation of this information.
With respect to the information relating to items that your Company considered likely to have an impact in the event of a takeover bid or exchange
offer, provided pursuant to Article L. 22-10-11 of the French Commercial Code (Code de commerce), we have agreed this information to the source
documents communicated to us. Based on these procedures, we have no observations to make on this information.
Other information
In accordance with French law, we have verified that the required information concerning the purchase of investments and controlling interests and
the identity of the shareholders and holders of the voting rights has been properly disclosed in the management report.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Format of presentation of the financial statements intended to be included
in the annual financial report
We have also verified, in accordance with the professional standard applicable in France relating to the procedures performed by the statutory
auditor relating to the annual and consolidated financial statements presented in the European single electronic format, that the presentation of the
financial statements intended to be included in the annual financial report mentioned in Article L. 451-1-2, I of the French Monetary and Financial
Code (Code monétaire et financier), prepared under the responsibility of the Chief Executive Officer complies with the single electronic format
defined in the European Delegated Regulation No 2019/815 of December 17, 2018.
Based on the work we have performed, we conclude that the presentation of the financial statements intended to be included in the annual financial
report complies, in all material respects, with the European single electronic format.
We have no responsibility to verify that the financial statements that will ultimately be included by your company in the annual financial report filed
with the AMF are in agreement with those on which we have performed our work.
Appointment of the Statutory Auditors
We were appointed as statutory auditors of Crédit Agricole S.A. by your Annual General Meeting held on May 19
th
, 2004 for PricewaterhouseCoopers
Audit and in 1985 for ERNST & YOUNG et Autres.
As at December 31
st
, 2020, PricewaterhouseCoopers Audit and ERNST & YOUNG et Autres were in the 17
th
and the 36
th
of total uninterrupted
engagement, respectively.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED
WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the financial statements in accordance with French accounting principles
and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
646
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Statutory Auditors’ report on the financial statements
7
In preparing the financial statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or
to cease operations.
The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks management
systems and where applicable, its internal audit, regarding the accounting and financial reporting procedures.
The financial statements were approved by the Board of Directors.
STATUTORY AUDITORS’ RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Objectives and audit approach
Our role is to issue a report on the financial statements. Our objective is to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As specified in Article L. 823-10-1 of the French Commercial Code (Code de commerce), our statutory audit does not include assurance on the viability
of the Company or the quality of management of the affairs of the Company.
As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercices professional judgement
throughout the audit and furthermore:
Identifies and assesses the risks of material misstatement of the financial statements, whether due to fraud or error, designs and performs audit
procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for his opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the internal control.
Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
Management in the financial statements.
Assesses the appropriateness of Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.
This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or conditions may cause the
Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty exists, there is a requirement to
draw attention in the audit report to the related disclosures in the financial statements or, if such disclosures are not provided or inadequate, to
modify the opinion expressed therein.
Evaluates the overall presentation of the financial statements and assesses whether these statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Report to the Audit Committee
We submit to the Audit Committee a report which includes in particular a description of the scope of the audit and the audit program implemented,
as well as the results of our audit. We also report, if any, significant deficiencies in internal control regarding the accounting and financial reporting
procedures that we have identified.
Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were of most significance in the
audit of the financial statements of the current period and which are therefore the key audit matters that we are required to describe in this report.
We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No 537/2014, confirming our independence
within the meaning of the rules applicable in France such as they are set in particular by Articles L. 822-10 to L. 822-14 of the French Commercial
Code (Code de commerce) and in the French Code of Ethics (code de déontologie) for statutory auditors. Where appropriate, we discuss with the
Audit Committee the risks that may reasonably be thought to bear on our independence, and the related safeguards.
Neuilly-sur-Seine and Paris-La Défense, March 23
rd
, 2021
The Statutory Auditors
PricewaterhouseCoopers Audit
ERNST & YOUNG et Autres
Anik Chaumartin
Olivier Durand
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
647
Refer to the glossary on page 681 for the definition of technical terms.
PARENT COMPANY FINANCIAL STATEMENTS
Statutory Auditors’ report on the financial statements
7
Articles of Association – updated
version on 22 December 2020
650
Information on the Company
658
Acquisitions made by Crédit Agricole S.A.
over the past three financial years
658
New products and services
658
Material contracts
659
Material changes
659
Publicly available documents
659
General Meeting of Shareholders of 12 May 2021
660
Information on inactive bank accounts
660
Information on accounts payable and receivables
660
Information on the Crédit Agricole S.A. entities
660
Transactions with related parties
670
Statutory auditors’ report
on related party agreements
671
Person responsible for
the Universal registration
document of Crédit Agricole S.A.
680
Statement by the person responsible
680
Statutory auditors
680
Statutory Auditors
680
Deputy Statutory Auditors
680
8
GENERAL
INFORMATION
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
648
Refer to the glossary on page 681 for the definition of technical terms.
General Meeting of Crédit Agricole S.A.
Wednesday May 12
th
2021 at 9:30 a.m.
WARNING
At its meeting of 10 February 2021, the Board of Directors of Crédit Agricole S.A., called the shareholders and
“Crédit
Agricole Classique”
FCPE fund unitholders to an Ordinary and Extraordinary General Meeting to be held on Wednesday
May 12
th
2021 at 9:30 a.m. at the Maison de la Mutualité located at 24, rue Saint-Victor, 75005, Paris, but granted all
powers to the Chairman to decide whether to hold the meeting behind closed doors in light of the health situation and
the associated legislation in force, and to ensure that the information for shareholders included in the notice of meeting
is amended accordingly.
The Chairman, having considered the difficulty of foreseeing the state of the current health crisis in France on May 12
th
2021
and having determined, in any case, the unlikelihood of a return to normalcy by this date, has decided that the Combined
General Meeting of May 12
th
2021 will be held at 9:30 a.m. without the physical presence of its shareholders. All the
factual and legal considerations justifying this decision are described in the press release of 24 March 2021.
This decision is based on the provisions of the Order of 25 March 2020 with regard to the holding of General Meetings,
made by the government in accordance with the rights conferred to it by the State of Emergency Law of 23 March 2020
in order to combat the COVID-19 epidemic, as amended and extended by the Order of 20 December 2020 and Decree
of 9 March 2021.
The notice of the meeting published on 24 March 2021 in the
Bulletin des Annonces Légales Obligatoires
(BALO), includes
the special processes for shareholder participation in the General Meeting of May 12
th
2021.
These processes are subject to regulatory provisions as well as the recommendations of the
Autorité des Marchés
Financiers
in the exceptional context of the fight against the COVID-19 epidemic.
Determined to allow shareholders to exercise their rights under the best possible conditions in the present circumstances,
Crédit Agricole S.A. is making every effort to ensure that these processes are in accordance with best practices,
notably in terms of the use of the Internet to carry out formalities, to express their choices on the resolutions
proposed via remote voting and, finally, to ask questions in written form.
Crédit Agricole S.A. invites its shareholders to regularly consult the page dedicated to the General Meeting on the company
website www.credit-agricole.com, which will be updated to reflect these decisions. It also reminds them that, as every
year and independent of the exceptional measures taken in the context of this health crisis, the General Meeting will
be broadcast on the company website.
WRITTEN QUESTIONS
Shareholders or unitholders of the FCPE fund “Crédit Agricole Classique” wishing to ask any
questions in writing
may, from the date of the Meeting Notice until the end of the second business day preceding the date of the Meeting,
namely
Monday, 10 May 2021
, send them by registered letter with return receipt requested to the Chairman of
the Board of Directors of Crédit Agricole S.A. at the address of its registered office, or by email to: assemblee.
generale@credit-agricole-sa.fr, along with a
certificate of account registration
.
The answers to such written questions will be published directly on the website of Crédit Agricole S.A., at the
following address:
To follow the General Meeting in real time on the Internet,
visit our website at www.credit-agricole.com from 9:30 a.m. (CET)
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
649
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL
INFORMATION
8
ARTICLES OF ASSOCIATION – UPDATED VERSION ON 22 DECEMBER 2020
CRÉDIT AGRICOLE S.A.
Société anonyme au capital de €8,750,065,920
784 608 416 RCS Nanterre
Headquarters:
12, place des États-Unis – 92127 Montrouge Cedex
Article 1 – Form
Crédit Agricole S.A. (the
“Company”
) is a French company
(“société
anonyme”)
with a Board of Directors
(“Conseil d’administration”)
governed
by ordinary corporate law, notably Book II of the French Commercial Code.
Crédit Agricole S.A. is also subject to the provisions of the Monetary and
Finance Code, in particular Articles L.512-47
et seq.,
and those provisions
of former Book V of the Rural Code which have not been repealed.
Prior to the Extraordinary General Meeting of 29 November 2001, the Company
was called “Caisse Nationale de Crédit Agricole”, abbreviated “C.N.C.A.”
The Company was born of the transformation of the Caisse Nationale de
Crédit Agricole, an
“Établissement Public Industriel et Commercial”,
following
the merger of the Mutual Guarantee Fund of the
Caisses régionales de
Crédit Agricole Mutuel
(the Regional Banks); it continues to hold all of the
rights, obligations, guarantees and security interests of those legal entities
prior to their transformation; it exercises all rights relating to mortgages
granted in favour of the State.
Article 2 – Name
The name of the Company is: Crédit Agricole S.A.
In all deeds and documents of the Company that are intended for third parties,
the corporate name shall be immediately preceded or followed by the words
“Société Anonyme”
or the initials “S.A.”,
“régie par le livre deuxième du
Code de commerce et par les dispositions du Code monétaire et financier”
(“governed by Book II of the French Commercial Code and the provisions of
the Monetary and Finance Code”) and by the amount of the share capital.
Article 3 – Object
Crédit Agricole S.A. has for object to facilitate and promote the activities
and development of the
Caisses régionales de Crédit Agricole Mutuel
and
the Crédit Agricole Group. In furtherance of this purpose:
1.
Crédit Agricole S.A. operates as a central financial institution and ensures
that the Group acts as a single financial unit in its dealings with third
parties with the object of optimising the financial management of funds
and, in return, the allocation of the financial resources so collected.
Crédit Agricole S.A. collects and manages the excess deposits and
savings of the Regional Banks, as well as savings collected by such
Banks on its behalf.
Crédit Agricole S.A. grants facilities to the Regional Banks to permit
the funding of their medium and long-term loans. It ensures that the
transformation risks pertaining to the Company, its subsidiaries and
the Regional Banks are assumed. It implements the mechanisms for
guaranteeing transactions by the
Caisses régionales de Crédit Agricole
mutuel.
In its own name and on behalf of the companies in the Crédit
Agricole Group, Crédit Agricole S.A. negotiates and enters into domestic
and international agreements which may affect the credit of the Group.
It executes all nation-wide agreements with the State.
2.
In France and abroad, Crédit Agricole S.A. performs all types of banking,
financial, credit, investment or securities transactions and related
services under the Monetary and Finance Code, guaranty, arbitrage,
brokerage and commission transactions, whether for its own account or
for the account of others, without infringing on the remit of the
Caisses
Régionales de Crédit Agricole Mutuel.
3.
In accordance with the provisions of the Monetary and Finance Code, as
the Central Organ of Crédit Agricole Mutuel, Crédit Agricole S.A. ensures
the cohesion of the Crédit Agricole Mutuel network, the proper operation
of the credit institutions that are a part thereof, and compliance by such
institutions with the applicable laws and regulations by exercising
administrative, technical and financial supervision thereof; it guarantees
the liquidity and solvency of the entire network and all institutions
affiliated therewith.
And, as a general matter, Crédit Agricole S.A. engages in all types of
commercial, financial, personal and real property transactions and provides
all services directly or indirectly related to its purpose, provided that they
are in furtherance thereof.
Article 4 – Registered office
The registered office of the Company is situated at 12, place des États-Unis,
92127 Montrouge Cedex.
Article 5 – Duration
The Company, born out of the transformation described in the last
paragraph of Article 1 of these Articles of Association, shall terminate
on 31 December 2086 unless extended or dissolved in advance by the
Shareholders at an Extraordinary General Meeting.
Article 6 – Share capital
The share capital of the Company is €8,750,065,920 divided into
2,916,688,640 shares with a par value of €3, all of them paid up in full.
For purposes of these Articles of Association:
“General Meeting”
means the General Meeting of Shareholders;
“Extraordinary General Meeting”
means the General Meeting convened
to vote on extraordinary business;
“Ordinary General Meeting”
means the General Meeting convened to
vote on ordinary business.
Article 7 – Changes in the share capital:
capital increases, reductions and redemptions
A.
Capital increases
1.
The share capital may be increased by any method and in any manner
authorised by law.
2.
The Extraordinary General Meeting shall have exclusive authority to
decide whether to increase the share capital or to authorise such a
decision.
3.
Pursuant to the applicable laws and regulations, holders of shares have
a pre-emptive right to subscribe for shares and securities granting
rights to shares in the Company, in proportion to the quantity of shares
that they own.
4.
In-kind contributions must be approved by the Extraordinary General
Meeting, pursuant to the applicable laws and regulations.
B.
Capital reductions
1.
Capital reductions are decided or authorised by the Extraordinary
General Meeting, which may delegate to the Board of Directors all
powers for purposes of carrying out capital reductions.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
650
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
8
Articles of Association – updated version on 22 December 2020
2.
Any capital reduction due to losses is allocated to the share capital
among the different shares in proportion to the percentage of share
capital they represent.
Losses shall first be charged against the following accounts, in the
following order: 1) retained earnings, 2) distributable reserves, 3) other
reserves, 4) statutory reserves, 5) any share premiums, 6) the legal
reserve, and 7) equity.
3.
The Company may carry out capital reductions for reasons other than
losses under the conditions stipulated by laws and regulations.
C.
Redemption of the share capital
The share capital may be redeemed in accordance with Articles L.225-198
et seq.
of the French Commercial Code.
Article 8 – Form of shares
The shares may be in registered or bearer form, at the holders’ election,
subject to applicable statutory and regulatory provisions.
They shall be registered in shareholders’ accounts on the terms and
conditions provided for by law. They may be transferred from account
to account.
Article 9 – Declarations regarding reaching
thresholds and shareholder identification
A.
Declarations regarding reaching thresholds
Without prejudice to the ownership threshold disclosures provided by law,
any person or legal entity, acting solely or with others, who directly or
indirectly comes into possession of a number of shares representing 1%
of the share capital or voting rights must inform the Company, by recorded
delivery with advice of delivery, at its registered office, within five days of
the date on which the shares enabling such person to reach or breach said
threshold were registered, of the total number of shares and the number
of voting rights it owns, as well as the total number of securities which
may grant rights to the Company’s equity in the future, any voting rights
which may be attached thereto.
The said declaration must be renewed as set forth above each time that the
number of shares or voting rights attains a multiple of a 1% threshold (through
either a purchase or sale of shares) of the total shares or voting rights.
If a Shareholder has not issued the required declarations as set forth
above, he shall lose his right to vote on the shares exceeding the level
which should have been reported, as provided for by law, if one or more
holders of shares representing at least 2% of the shares or voting rights
so request during a General Meeting.
B.
Shareholder identification
In accordance with applicable laws and regulations, and in order to identify
the holders of bearer securities, the Company shall have the right to request
at any time, at its expense, that the central custodian of its securities
account provide the name, nationality, year of birth or formation, and the
address of the holders of securities which provide a present or future right
to vote at its General Meetings, as well as the number of securities held
by each and the restrictions, if any, which may apply to the said securities.
Based on the list provided by the central custodian, and subject to the
same terms and conditions, the Company shall have the right to request,
either from said central custodian or directly from the persons on the list
who the Company feels may be acting as intermediaries on behalf of
third party, the information regarding said securities holders set forth in
the preceding paragraph.
If they are intermediaries, said persons must disclose the identity of the
holders of said securities. The information should be provided directly to
the financial intermediary that maintains the account and said entity must
then transmit the information to the Company or to the central custodian.
For registered securities, the Company shall also have the right at any
time to request that the intermediary that has registered on behalf of
third parties disclose the identity of the holders of said securities and the
number of securities held by each of them.
For so long as the Company feels that certain holders of securities (whether
registered or bearer), the identity of which has been provided to it, are
holding said securities on behalf of third parties, it shall have the right to
request said holders to disclose the identity of the owners of the securities
as set forth above and the number of securities held by each of them.
After the information set forth above has been requested, the Company
shall have the right to request any legal entity which holds more than
one-fortieth of the share capital or voting rights of the Company to disclose
to the Company the identity of the persons who directly or indirectly hold
more than one-third of the share capital or voting rights (which are exercised
at the legal entity’s general meetings) of the said legal entity.
If a person who has been the subject of a request in accordance with
the provisions of the present Article 9.B. fails to disclose the requested
information within the legally required period or discloses incomplete or
incorrect information regarding its capacity or the holders of the securities,
or the number of securities held by each of them, the shares or securities
which give rise to present or future rights to the Company’s share capital
which said person has registered, shall immediately lose their voting rights
at any General Meeting until complete information has been provided.
Dividend payments shall also be suspended until that date.
In addition, in the event that the registered person deliberately misconstrues
the above provisions, the court which has territorial jurisdiction over the
Company’s registered office may, at the request of the Company or of
one or more shareholders holding at least 5% of the share capital, revoke
in whole or in part the voting rights regarding which the information was
requested and, possibly, the corresponding dividend payment of the shares,
for a period which may not exceed five years.
Article 10 – Voting rights – Indivisibility
of the shares – Rights and obligations
attached to the shares
A.
Voting rights
The voting rights attached to the Company’s shares are proportional to the
share capital that they represent and each share entitles its holder to one
vote. The Company’s shares (including any that might be freely allocated
as part of a capital increase via a capitalisation of reserves, profits or
issue premiums) do not carry double voting rights in accordance with the
last sub-paragraph of article L.225-123 of the French Commercial Code.
B.
Indivisibility of the shares
The shares are indivisible with regard to the Company.
Voting rights attached to each share are exercised by the beneficial owner
at Ordinary General Meetings and by the legal owner at Extraordinary
General Meetings.
The joint owners of indivisible shares are represented at General Meetings
by one of them or by a single representative. In the event of a dispute, their
representative shall be appointed by the Court at the request of the first
joint owner to refer this matter to the Court.
CRÉDIT AGRICOLE S.A.
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GENERAL INFORMATION
Articles of Association – updated version on 22 December 2020
8
The right to the award of new shares following the capitalisation of reserves,
profits or any share premiums belongs to the legal owner, subject to the
rights of the beneficial owner.
C.
Rights and obligations attached to the shares
1.
Ownership of a share automatically entails compliance with the Articles
of Association and with resolutions duly adopted by General Meetings.
2.
Each share gives the holder the same right of ownership in the
Company’s assets and profits, as defined in Article 31 “Dissolution –
Liquidation” and Article 30 “Determination, allocation and distribution
of profit” herein.
Each share gives the holder the right to attend General Meetings and
to vote therein, under the conditions set forth by law and by the Articles
of Association. Each share shall give the holder the right to cast one
vote at General Meetings.
3.
Whenever it is necessary to hold several shares to exercise a given
right, such as in the case of an exchange, consolidation or allocation
of shares, or as a result of an increase or reduction of the share capital
regardless of whether this is due to accumulated losses, or in the case
of a merger or other corporate transaction, the holders of individual
shares, or those who do not own the required number of shares, may
exercise such rights only if they personally arrange for the consolidation
of the shares and purchase or sell the required number of shares or
fractional shares, where necessary.
Article 11 – Board of Directors
1.
The Company shall be governed by a Board
of directors composed of:
at least 3 and no more than 18
directors shall be elected by the General
Meeting in accordance with the provisions of Article L.225-18 of the
French Commercial Code;
one director representing the professional agricultural organisations,
shall be appointed in accordance with the provisions of Article L.512-49
of the Monetary and Finance Code; and
two directors shall be elected by the staff
in accordance with Articles
L.225-27 to L.225-34 of the French Commercial Code;
one director representing employee shareholders,
in accordance
with Article L.225-23 of the French Commercial Code, elected by the
General Meeting upon the proposal of the shareholders as referred to
in Article L.225-102.
The following individuals may also attend Board Meetings in an advisory
capacity:
non-voting Board Members appointed in accordance with Article 12 of
these Articles of Association; and
one member of the Works Council designated thereby.
In the event that one of the positions held by the directors elected by the staff
or by the director who represents the professional agricultural organisations
becomes vacant, the Board of directors whose Board Members are elected
by the General Meeting may validly deliberate.
The age limit for Directors is 65. When a director reaches the age of 65, he
will be deemed to have resigned at the end of the next Ordinary General
Meeting of Shareholders.
2.
Directors elected by the General Meeting
of Shareholders
Directors elected by the General Meeting of Shareholders shall be natural
persons or legal entities.
The term of office of directors is three years. However, a director appointed
to replace another director whose term of office has not yet expired shall
remain in office only for the balance of his predecessor’s term.
Directors who are natural persons may not be elected to more than four
consecutive terms of office. However, if a director is appointed to replace
an outgoing director whose term of office has not yet expired, the director
appointed for the remainder of the outgoing director’s term may seek a
fifth term, for a period not exceeding four consecutive terms of office. He
will be deemed to have resigned at the end of the next Ordinary General
Meeting following the twelfth anniversary of his first appointment.
A director’s duties shall terminate at the end of the Ordinary General Meeting
called to consider the accounts for the previous financial year that is held
during the year in which such director’s term expires.
With the exception of the directors elected by the staff and the director
who represents the professional agricultural organisations, the renewal
of the directors elected by the General Meeting of Shareholders shall be
carried out in such a way as to ensure, to the extent possible, a gradual
and balanced expiry of terms of office.
3.
Director representing the professional
agricultural organisations
The term of office of the director representing the professional agricultural
organisations is three years. He may be re-appointed or removed at any
time by the authority that appointed him.
4.
Directors elected by the staff
The status and procedures for the election of the directors elected by the
staff are set out in L.225-27
et seq.
of the French Commercial Code in
the following provisions:
The term of office of the two directors elected by the staff is three years.
Their duties terminate on the third anniversary of the date of their election
and the Company shall take all steps necessary to hold a new election within
the three-month period prior to the expiration of the term of said directors.
They may not be elected to more than four consecutive terms.
One of the directors is elected by the managerial staff, whilst the other is
elected by the other employees of the Company.
In the event that the seat of a director elected by the staff falls vacant
as a result of his death, resignation, removal or the termination of his
employment contract, his successor shall take office immediately. If there
is no successor able to carry out the director’s duties, a new election shall
be held within three months.
The first ballot of the election of directors by the staff shall be conducted
in accordance with the following procedures:
The lists of voters, indicating their respective surnames, given names, dates
and places of birth and domiciles, are prepared by the Chief Executive
Officer and posted at least five weeks prior to the election date. One list
of voters is prepared for each of the two groups. Within fifteen days after
the lists are posted, any voter may submit a request to the Chief Executive
Officer either that another voter who was omitted be registered, or that
another voter who was erroneously registered be removed from the list.
Within the same time period, any person whose name was omitted may
also submit a request for registration.
The candidates must belong to the group whose votes they are seeking.
In each group of voters, each announcement of a candidacy must specify
not only the name of the candidate, but also the name of any successor.
The Chief Executive Officer closes and posts the lists of candidates at least
three weeks prior to the election date.
In the absence of a candidate for a given group, the seat of the director
representing such group shall remain vacant for the entire term for which
it would have been filled.
Results are recorded in minutes which shall be posted no later than three
days after voting is closed. The Company shall keep a copy of the minutes
in its records.
CRÉDIT AGRICOLE S.A.
—
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GENERAL INFORMATION
Articles of Association – updated version on 22 December 2020
8
The organisation of elections and their requirements are determined by
the Chief Executive Officer and shall be posted no less than five weeks
prior to the date of the election.
Voting procedures are determined by Articles L.225-28
et seq.
of the French
Commercial Code. Any voter may vote either in person at the locations
provided for that purpose, or by mail.
If no candidate for a given group obtains a majority of the votes cast on the
first ballot, a second ballot shall be held within fifteen days.
5.
Director representing employee shareholders
a.
Procedures for appointing the candidate for the position
of Director representing employee shareholders
Under the conditions defined in Article L.225-102 of the French Commercial
Code, the candidate for appointment as Director representing employee
shareholders is designated:
1.
on the one hand, by all the elected members of the Supervisory Boards
of the said FCPEs for unitholders of company mutual funds (FCPE)
invested mainly in Crédit Agricole S.A. shares; and
2.
on the other hand, by electors elected by all employee shareholders
when they directly exercise the voting rights attached to the shares that
they own directly (it being specified that the employees referred to in
this paragraph 2) and are those referred to in Article L.225-102 of the
French Commercial Code,
i.e.
employee shareholders of the Company
and of entities or groupings related or affiliated to the Company pursuant
to Article L.225-180 of the French Commercial Code).
The members of the Supervisory Boards referred to in paragraph 1)
and the electors referred to in paragraph 2) shall meet within a college
(Collège)
responsible for electing from among themselves the candidate
for the position of Director representing employee shareholders and his
or her substitute with a view to their election by the General Meeting. The
conditions for appointing the electors and the candidate, which are not
specified in these Articles of Association, shall be determined by the Board
of Directors, and shall be implemented by any person and/or management
of Crédit Agricole S.A. to whom it has delegated authority, in agreement
with the Chief Executive Officer.
In any event,
the Board of Directors, when determining the conditions for eligibility to
stand for election as a candidate for the positions of electors, must ensure
that the number of electors will be such that the composition of the College
will be reasonably representative of the respective weighting of shares
whose voting rights are exercised directly by employee shareholders
and shares whose voting rights are exercised by the Supervisory Boards
of the FCPEs;
the candidate and his/her substitute having received the absolute majority
of the votes cast within the College will be proposed to the General
Meeting; if, at the end of the vote, no candidate has obtained an absolute
majority, then the two candidates having obtained the most votes will
have to present themselves for a second round, at the end of which
the one having obtained the absolute majority of the votes cast will be
proposed to the General Meeting. The identity of the candidate and that
of his or her substitute must be included in the Notice to the General
Meeting called to decide on his or her appointment.
b.
Status of the Director representing employee shareholders
The term of office of the Director representing employee shareholders
is identical to that of the Directors elected by the General Meeting in
accordance with Article L.225-18 of the French Commercial Code. However,
such Director’s term of office shall terminate automatically and the Director
representing employee shareholders shall be deemed to have resigned
automatically in the event of loss of capacity as a shareholder (individually
or through an FCPE), or as an employee of the Company or of a company
or economic interest grouping related to the Company within the meaning
of Article L.225-180 of the French Commercial Code.
All candidates must present themselves with a substitute, who is called
upon to replace them in the event of the definitive termination, during their
term of office, of the duties as Director of the holder with whom they have
been appointed. In this case, the substitute is co-opted by the Board of
Directors to serve as Director representing employee shareholders until
the term set. The co-optation of the substitute by the Board of Directors
shall be subject to ratification by the next Ordinary General Meeting. Until
the co-optation of the Substitute Director, the Board of Directors will be
able to meet and deliberate validly.
If the substitute is definitively unable to attend, the replacement of the latter
will be carried out under the conditions provided for in paragraph a. for the
appointment of the candidate, at the latest before the Meeting of the next
Ordinary General Meeting or, if this Meeting is held less than four months
after the definitive impediment of the substitute, before the next Ordinary
General Meeting. Until the co-optation of the alternate Director, the Board
of Directors will be able to meet and deliberate validly.
In the event that, during the term of office, the report presented annually by
the Board of Directors to the General Meeting pursuant to Article L.225-102
of the French Commercial Code establishes that the shares held within
the scope of said article represent a percentage of less than 3% of the
Company’s share capital, the term of office of the member of the Board of
Directors representing employee shareholders shall end at the close of the
General Meeting at which the report of the Board of Directors establishing
this fact is presented.
Article 12 – Non-voting Directors
Upon recommendation from the Chairman, the Board of Directors may
appoint one or more non-voting directors.
Non-voting directors shall be notified of and participate at meetings of the
Board of Directors in an advisory capacity.
They are appointed for a term of three years and may not be reappointed
for more than four terms. They may be dismissed by the Board at any time.
In consideration of services rendered, they may be remunerated as
determined by the Board of Directors.
Article 13 – Directors’ shares
Each Director must own at least one share. If, on the date of his appointment
or during his term of office, a director does not own or no longer owns at
least one share and fails to correct this situation within three months, he
will be deemed to have resigned.
Article 14 – Deliberations of the Board
of Directors
1.
The Board of Directors shall meet as often as the interests of the
Company so require, upon notice by its Chairman, by any person
authorised for that purpose by the Board of Directors, or by at least
one-third of its members to address a specific agenda if the last meeting
was held more than two months previously.
If necessary, the Chief Executive Officer may request the Chairman to
call a meeting of the Board of Directors to address a specific agenda.
Meetings may be held at the registered office or at any other place
specified in the notice of the meeting.
Generally, notice of a meeting shall be given at least three days in
advance by letter or by any other means. However, if all of the directors
so agree, notice may be given orally and need not be in advance.
CRÉDIT AGRICOLE S.A.
—
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653
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GENERAL INFORMATION
Articles of Association – updated version on 22 December 2020
8
Notices of meetings shall set forth the principal items of business on
the agenda.
2.
The physical presence of at least one half of the directors is required
for deliberations to be valid.
At the Chairman’s request, employees in positions of responsibility in
the group may attend Board Meetings.
A majority of the votes of the directors present or represented is required
for a resolution to pass. Each director has one vote and is not authorised
to represent more than one of his fellow directors.
The Chairman shall have the casting vote in the event of a tie.
The directors and any individuals requested to attend the Board of
Directors’ Meetings must exercise discretion with respect to the Board’s
deliberations and any confidential information and documents described
as such by the Chairman of the Board of Directors.
3.
Decisions falling within the Board’s remit relating to the appointment
of Directors on a provisional basis, the compliance of the Articles of
Association with the regulations and legislation, the calling of the
General Meeting and the relocation of the registered office within
the same department may be taken by written consultation with the
Directors.
Article 15 – Powers of the Board of Directors
The Board of Directors determines and ensures compliance with the
business focus of the Company.
Except for the powers expressly reserved to the General Meeting of
Shareholders and within the limits established by the Company’s purpose,
the Board of Directors is responsible for all issues related to the Company’s
operations and business and deliberates on such issues. In its relations
with third parties, the Company may be bound by the acts of the Board
of Directors which fall outside the Company’s object unless the Company
can prove that the said third party knew that the act was
ultra vires
or
that it could not have been unaware, in light of the circumstances, that
the act was
ultra vires.
The publication of the Articles of Association shall
not constitute proof thereof.
The Board of Directors may conduct any inspections or audits that it
deems necessary. Each director shall receive the information necessary
to accomplish the Board’s duties; management shall furnish to any director
those documents that the said director deems necessary or appropriate.
The Board may decide to set up various committees to examine issues
raised by itself or its Chairman and render an opinion.
The Board shall be responsible for determining the composition and powers
of committees which do their work under its authority.
Article 16 – Chairmanship of the Board
of Directors
In accordance with Article L.512-49 of the Monetary and Finance Code, the
Board of Directors shall elect a Chairman from among its members who
are directors of a
Caisse régionale de Crédit Agricole Mutuel
and shall fix
his term of office, which may not exceed his term of office as a director.
The Board of Directors shall elect one or more Vice-Chairmen whose term
shall also be established by the Board, but which may not exceed his (their)
term of office as a director.
The Chairman of the Board of Directors represents the Board of Directors.
He organises and directs the activities thereof and reports to the General
Meeting on its activities.
He is responsible for the proper operation of the Company’s entities, and,
in particular, insures that directors are able to fulfil their duties.
As an exception to the provisions of the last paragraph of Article 11-1, the
age limit for serving as Chairman of the Board of Directors is 67. Subject
to this age limit, and as an exception to the provisions of Article 11-2,
paragraph 3 of the Articles of Association, a serving Chairman may seek
a fifth consecutive term of office.
Article 17 – General Management
A.
Chief Executive Officer
In accordance with Article L.512-49 of the Monetary and Finance Code, the
Board of Directors appoints the Chief Executive Officer of the Company, it
may also terminate his appointment.
The Chief Executive Officer shall enjoy the broadest powers to act in all
cases on behalf of the Company. He may exercise his authority within
the limits of the Company’s object and subject to that authority expressly
reserved to General Meetings and to the Board of Directors.
He represents the Company in its relations with third parties.
The Company shall be bound by those actions of the Chief Executive Officer
which are
ultra vires
unless the Company can prove that the said third party
knew that the act was
ultra vires
or that it could not have been unaware,
in light of the circumstances, that the act was
ultra vires.
Publication of
the Articles of Association shall not constitute proof thereof.
Provisions of the Articles of Association and decisions of the Board of
Directors that limit the Chief Executive Officer’s powers are not binding
on third parties.
He shall attend the meetings of the Board of Directors.
He shall appoint all employees and fix their compensation, in accordance
with the provisions of the Monetary and Finance Code.
He may delegate part of his authority to as many individuals as he deems
advisable.
B.
Deputy Chief Executive Officers
Upon recommendation of the Chief Executive Officer, the Board of Directors
appoints one or more persons responsible for assisting the Chief Executive
Officer who shall have the title “Deputy Chief Executive Officer”
(“Directeur
général délégué”).
With the consent of the Chief Executive Officer, the Board of Directors shall
determine the scope and term of the authority granted to the Deputy Chief
Executive Officers.
Deputy Chief Executive Officers shall have the same authority as the Chief
Executive Officer with respect to third parties.
In the event that the Chief Executive Officer ceases or is unable to perform
his duties, the Deputy Chief Executive Officers shall continue to perform
their duties until the appointment of a new Chief Executive Officer, unless
the Board of Directors decides otherwise.
Article 18 – General provision on age limits
Any officer or director who reaches the age limit set by the Articles of
Association or the law shall be deemed to have resigned at the close of
the Annual Ordinary General Meeting of Shareholders that follows said
anniversary date.
Article 19 – Directors’ compensation
The Ordinary General Meeting determines and approves the directors’
compensation package.
Article 20 – Statutory Auditors
Audits of the accounts shall be exercised in accordance with the law
by two Statutory Auditors appointed by the Ordinary General Meeting of
Shareholders.
The term of office of the Statutory Auditors shall be six financial years.
Statutory Auditors whose term of office expires may be re-appointed in
compliance with the legal and regulatory provisions relating to their terms
of office and turnover rates.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
654
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Articles of Association – updated version on 22 December 2020
8
The Statutory Auditors may act jointly or separately, but must submit a
joint report on the Company’s accounts. They shall report to the Annual
Ordinary General Meeting of Shareholders.
Article 21 – Shareholders’ General Meetings
Collective resolutions shall be adopted at General Meetings which are
either ordinary or extraordinary depending on the decisions they are called
upon to take.
Article 22 – Notice and venue of Shareholders’
General Meetings
General Meetings of Shareholders shall be convened and shall deliberate
in accordance with the applicable laws and regulations.
General Meetings of Shareholders may be held at the registered office or
at any other place specified in the notice of the meeting.
Article 23 – Agenda and minutes of General
Meetings
The person calling the General Meeting shall draft the agenda for the
General Meeting in accordance with the applicable laws and regulations.
Minutes must be drawn up and copies or extracts of the deliberations shall
be issued and certified in accordance with the law.
Article 24 – Access to General Meetings
A.
Proxies
Any Shareholder, regardless of the number of shares he/she owns, has
the right to attend General Meetings, either in person or by proxy, subject
to the conditions laid down by law and in these Articles of Association, by
providing proof of identity and ownership of the shares, provided that the
shares have been registered, either in his/her name or in the name of the
intermediary registered on his/her behalf, by 12 midnight Paris time, on
the second business day before the General Meeting:
holders of registered shares must register their shares in the registered
share accounts kept in the Company’s registers;
holders of bearer shares must deposit their shares in the bearer
share accounts held by the authorised intermediary. This entry or
filing is evidenced by a certificate of share ownership delivered by the
intermediary or electronically, as applicable.
If a Shareholder cannot attend the General Meeting in person or by proxy,
he/she may participate in one of the following two ways:
cast a vote remotely;
or
forward a proxy to the Company without naming a proxy holder,
in accordance with the applicable laws and regulations.
B.
Participation in General Meetings
If the Shareholder has requested an admission card or a certificate of share
ownership, or has cast his/her vote remotely or sent a proxy, he/she may
no longer choose to take part in the General Meeting in another manner.
However, he/she may sell all or part of his/her shares at any time.
If ownership is transferred before 12 midnight CET on the second business
day before the General Meeting, the Company shall invalidate or make the
necessary changes to the remote vote, the proxy, the admission card or the
certificate of share ownership, as appropriate. To that end, the authorised
intermediary, acting as account holder, shall notify the Company or its agent
of such a transfer and forward the necessary information to it.
The authorised intermediary shall not issue a notification of transfer of
ownership taking place after 12 midnight CET on the second business day
before the General Meeting, nor shall the Company take such a transfer
into consideration.
Shareholders in the Company who are not domiciled in France may be
registered in an account and represented at General Meetings by any
intermediary that has been registered on their behalf and given a general
power of attorney to manage the shares. When opening its account,
however, the intermediary must have declared its status, as an intermediary
holding shares on behalf of third parties, to the Company or the financial
intermediary acting as account holder, in accordance with the applicable
and regulatory provisions.
Following a decision by the Board of Directors published in the notice
convening the Meeting, Shareholders may participate in General Meetings
by videoconferencing, or by any other means of telecommunication or
remote transmission, including the internet, in accordance with the legal
and regulatory provisions in force. The Board of Directors shall determine
the terms governing participation and voting, ensuring that the procedures
and technologies used meet the technical criteria required to ensure that
the General Meeting’s deliberations are continuously and simultaneously
relayed and that the votes are accurately recorded.
Provided that they comply with the relevant deadlines, Shareholders who
use the electronic voting form provided on the website set up by the entity
in charge of the General Meeting’s formalities shall be counted as being
present or represented at the General Meeting. The electronic form may
be completed and signed directly online using any procedure, including a
username and password combination that has been approved by the Board
of Directors and complies with the requirements set out in the first sentence
of the second sub-paragraph of Article 1367 of the French Civil Code.
A proxy or vote issued before the General Meeting using such electronic
means and the subsequent acknowledgement of receipt thereof shall
be deemed to be irrevocable and enforceable against all parties, it being
understood that if the ownership of shares is transferred before 12 midnight
CET on the second business day before the General Meeting, the Company
shall invalidate or make the necessary changes to the proxy or vote issued
before that time and date, as appropriate.
Article 25 – Attendance list – Officers
of the General Meeting
1.
An attendance list setting out the information required by law is kept
for each General Meeting of Shareholders.
This list, which must be duly initialled by all shareholders present
or their proxies, and to which are attached all proxy forms given to
each of the proxies and any ballots cast remotely, shall be certified as
accurate by the officers of the General Meeting.
2.
The Chairman of the Board, or in his absence a Vice-Chairman or a
Director expressly authorised for that purpose by the Board of Directors,
shall chair General Meetings of Shareholders.
If a General Meeting of Shareholders is convened at the request of one
or more Statutory Auditors, one of the Statutory Auditors shall chair
the General Meeting.
Whenever the person entitled or designated to chair is absent, the
General Meeting of Shareholders shall elect its Chairman.
The officers of the General Meeting appoint a secretary who needs
not be a Shareholder.
The officers of the General Meeting are in charge of verifying, certifying
and signing the attendance list, ensuring that the debate is conducted
in good order, resolving problems which may arise during the General
Meeting, checking the ballots cast and verifying that they are not void,
and ensuring that minutes of the General Meeting are drawn up.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
655
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Articles of Association – updated version on 22 December 2020
8
Article 26 – Quorum – Voting –
Number of votes at General Meetings
The quorum at General Meetings is calculated on the basis of the total
number of shares, less those shares not entitled to vote in accordance with
the provisions of the law or of the Articles of Association.
In the case of remote voting, only ballots received by the Company prior
to the General Meeting within the time periods and under the conditions
prescribed by the applicable laws and regulations shall be counted.
In the event of a proxy vote without naming a proxy holder, the Chairman
shall add a vote in favour of the resolutions presented or approved by the
Board of Directors and a vote against all other resolutions.
Except in the special cases provided for by law, each Shareholder at a
General Meeting shall have the right to cast as many votes as shares he
holds for which all capital calls have been met.
The Company shall have the right to request from an intermediary registered
on behalf of a Shareholder who is not domiciled in France, but which has
a general power of attorney to manage the securities of that Shareholder,
to provide a list of shareholders which it represents and whose votes will
be exercised at a General Meeting.
The votes or proxies exercised by an intermediary which has not disclosed
that it is acting in that capacity in accordance with applicable laws and
regulations or the Articles of Association, or which has not disclosed the
identity of the securities holders, shall not be counted.
Article 27 – Ordinary General Meetings
1.
All decisions which do not amend the Articles of Association are taken
by the Ordinary General Meeting of Shareholders.
The Ordinary General Meeting must meet at least once a year within
the period prescribed by the applicable laws and regulations to consider
and vote on the accounts for the prior financial year.
Its powers include the following:
-
to approve, modify or reject the accounts submitted to it;
-
to decide on the distribution and allocation of profit in accordance
with the Articles of Association;
-
to discharge or refuse to discharge directors;
-
to appoint and dismiss directors;
-
to approve or reject temporary appointments of directors by the
Board of Directors;
-
to authorise the purchase of shares under share buyback programmes
established under the conditions stipulated by Articles L.225-209
et seq.
of the French Commercial Code (or equivalent regulations
applicable as of the date of the relevant transaction);
-
to appoint the Statutory Auditors;
-
to consider and vote on the special report of the Statutory Auditors
concerning transactions subject to prior authorisation by the Board
of Directors.
2.
The deliberations of the Ordinary General Meeting of Shareholders
convened following the first notice shall be valid only if the Shareholders
present, represented or voting remotely at the General Meeting hold,
in the aggregate, at least one fifth of all voting shares.
There is no quorum requirement for the General Meeting following
the second notice.
In order to pass, resolutions require a majority of the votes of the
shareholders present, represented or voting remotely.
Article 28 – Extraordinary General Meetings
1.
The Extraordinary General Meeting of Shareholders shall have exclusive
authority to amend any of the provisions of the Articles of Association.
However, it shall not increase the obligations of the shareholders other
than through transactions, duly authorised and carried out, which are
the result of an exchange or consolidation of shares.
2.
The deliberations of the Extraordinary General Meeting of Shareholders
convened following the first notice shall be valid only if the holders of
shares present, represented or voting remotely at the General Meeting
hold, in the aggregate, at least one fourth of all voting shares, or one
fifth of all voting shares following the second notice. If this last quorum
is not met, the second Extraordinary General Meeting may be postponed
to a date not later than two months after the date for which it was
scheduled.
In order to pass, resolutions require a two-thirds majority of the votes
of the holders of shares present, represented or voting remotely.
3.
Notwithstanding the foregoing provisions, and as permitted by law,
an Extraordinary General Meeting which approves a capital increase
through the capitalisation of reserves, profits or share premiums shall
be subject to the same quorum and majority voting requirements as
an Ordinary General Meeting.
Article 29 – Financial year
The financial year shall begin on 1 January and end on 31 December of
each year.
Article 30 – Determination, allocation
and distribution of profit
1.
Five per cent of the profit for a financial year less any accumulated
losses shall be posted to the legal reserve until the reserve reaches
one-tenth of the share capital.
2.
The balance, increased by retained earnings, if any, shall constitute the
distributable profit which the Ordinary General Meeting of Shareholders
shall:
-
allocate to one or more ordinary or extraordinary, optional reserve
accounts, with or without a specific purpose;
-
distribute to the shareholders as a dividend.
The Ordinary General Meeting may also decide to distribute amounts
from reserves distributable by the Shareholders.
3.
The Ordinary General Meeting or, in the case of an interim dividend,
the Board of Directors, may, for a given financial period, decide to pay
or not to pay a dividend to the Shareholders, in order to comply with
the Company’s prudential requirements.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
656
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Articles of Association – updated version on 22 December 2020
8
Article 31 – Dissolution – Liquidation
1.
The Company shall be in liquidation as from the time that it is dissolved,
for any reason whatsoever. Its legal personality shall subsist for purposes
of such liquidation and until completion thereof.
The shares may continue to be traded until liquidation has been
completed.
Dissolution of the Company shall be effective as against third parties
only as from the date on which the notice of dissolution is published
in the Paris Trade and Company Registry.
At the end of the life of the Company or if it is dissolved in advance
by an Extraordinary General Meeting of Shareholders, said Meeting
shall fix the rules governing liquidation. Voting in accordance with the
quorum and majority voting requirements applicable to Ordinary General
Meetings, it shall appoint one or more liquidators whose powers it shall
determine, and who shall carry out their responsibilities in accordance
with the law. Upon appointment of the liquidators, the functions of the
Directors, the Chairman, the Chief Executive Officer and the Deputy
Chief Executive Officers shall cease.
Throughout the duration of liquidation, the General Meeting of
Shareholders shall continue to exercise the same powers as it did
during the life of the Company.
2.
The liquidator shall represent the Company. He shall be vested with
the broadest powers to dispose of its assets, even informally. He is
authorised to pay creditors and distribute the remaining balance.
The General Meeting may authorise the liquidator to continue pending
business or to undertake new business for the purpose of the liquidation.
The par value of the shares shall be reimbursed proportional to their
share of the Company’s share capital, and any liquidation dividend
shall be distributed.
Article 32 – Disputes
Courts having jurisdiction under ordinary law shall resolve any dispute
which may arise during the life of the Company or during liquidation
following dissolution, either among the Shareholders, the managing and
governing bodies and the Company, or among the shareholders themselves,
in connection with corporate business or compliance with the provisions
of the Articles of Association.
CRÉDIT AGRICOLE S.A.
—
2020 Universal registration document
657
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Articles of Association – updated version on 22 December 2020
8
INFORMATION ON THE COMPANY
ACQUISITIONS MADE BY CRÉDIT AGRICOLE S.A. OVER THE PAST THREE
FINANCIAL YEARS
Main acquisitions completed
Date
Country
Investments
Financing
03/05/2018
Italy
Indosuez Wealth Management finalised the acquisition of 94.1% of Banca
Leonardo.
The acquisition was financed by core own
funds generated and retained during the year.
27/07/2018
Italy
Crédit Agricole Assurances finalised the acquisition of 5% of the share
capital of Credito Valtellinese S.p.A.
The acquisition was financed by core own
funds generated and retained during the year.
21/12/2018
Portugal
Crédit Agricole Assurances finalised the acquisition of a 25% interest
in GNB Seguros, bringing its total stake to 75%.
The acquisition was financed by core own
funds generated and retained during the year.
28/06/2019
Italy
AGOS finalised the acquisition of 100% of the share capital
of ProFamily S.p.A.
The acquisition was financed by core own
funds generated and retained during the year.
08/07/2019
Spain
ABANCA and Crédit Agricole Assurances announced the signing of
a partnership agreement to form a non-life company for the Spanish
and Portuguese markets. The new joint-venture is held at 50%
by Crédit Agricole Assurances.
The acquisition was financed by core own
funds generated and retained during the year.
07/10/2019
Netherlands
CACEIS finalised the acquisition of 97.4% of the share capital of KAS Bank.
The acquisition was financed by core own
funds generated and retained during the year.
20/12/2019
Spain
Crédit Agricole S.A. and Santander entered a Master Agreement to combine
their institutional custody and asset servicing activities.
The new entity,
which shall keep the name CACEIS, is held by Crédit Agricole S.A.
and by Santander for 69.5% and 30.5%, respectively.
The acquisition was carried out through
a capital increase by CACEIS, underwritten
by Santander through its asset servicing
activities in Spain and Latin America.
21/01/2020
Spain
Acquisition by Amundi AM of 100% of Sabadell Asset Management.
The acquisition was financed by core own
funds generated and retained during the year.
18/06/2020
France
Acquisition by CACF of 50% of Menafinance.
The acquisition was financed by core own
funds generated and retained during the year.
The acquired entity has been absorbed.
17/06/2020
France
CAPS finalised the acquisition of 55.56% of Linxo Group.
The acquisition was financed by core own
funds generated and retained during the year.
30/09/2020
China
Amundi and BOC Wealth Management launched Amundi BOC Wealth
Management Company Limited, held for 55% by Amundi and 45%
by BOC Wealth Management.
The acquisition was financed by core own
funds generated and retained during the year.
05/10/2020
Luxembourg
Amundi, the founding shareholder of Fund Channel, announced the purchase
of 49.96% of the company's share capital, making it the sole shareholder
of 100% of the capital since early 2021.
The acquisition was financed by core own
funds generated and retained during the year.
09/10/2020
Portugal
Crédit Agricole Assurances announced the signing of an agreement
with Novo Banco to acquire 25% of GNB Seguros, increasing
its investment in the company to 100%.
The acquisition was financed by core own
funds generated and retained during the year.
N.B. : we cannot disclose certain information about investment amounts without violating confidentiality agreements or revealing information to our competitors that could be detrimental to the Group.
Acquisitions in progress
On 23 November 2020, Crédit Agricole Italia launched a voluntary public tender offer in cash for all shares of Credito Valtellinese. The launch of this
public tender offer is scheduled for the second quarter of 2021, after the necessary regulatory approvals are obtained.
NEW PRODUCTS AND SERVICES
The Group entities regularly offer new products and services to customers. Information is available on the Group’s websites, including through press
releases that can be accessed via this site: www.credit-agricole.com.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
658
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
MATERIAL CONTRACTS
(1) “Eurêka” operation described on page 528 of the 2016 Registration Document.
In the framework of the initial public offering of Crédit Agricole S.A. in
2001, CNCA (now Crédit Agricole S.A.) signed an agreement with the
Regional Banks aiming to govern internal relations within the Crédit
Agricole Group. The main provisions of the agreement are set out in
Chapter IV of the Registration Document filed by Crédit Agricole S.A.
with the
Commission des opérations de bourse
on 22 October 2001
under number R. 01-453. The agreement notably provided for the
creation of a Fund for Bank Liquidity and Solvency Risks (
Fonds pour
risques bancaires de liquidité et de solvabilité
– “FRBLS”) designed
to enable Crédit Agricole S.A. to fulfil its role as corporate centre by
providing assistance to any affiliated members that may be experiencing
difficulties. To allow for changes in the way the FRBLS works following
Crédit Agricole Corporate and Investment Bank’s affiliation to the Crédit
Agricole network, Crédit Agricole S.A. approved new regulations at its
13 December 2011 Board of Directors Meeting, which set new rules for
the contributions paid by Crédit Agricole S.A. on behalf of its affiliates.
The fund was originally allocated €610 million in assets. At 31 December 2020,
it totalled €1,239 million, having been increased by €45 million in the
course of the year.
Furthermore, since CNCA’s reorganisation as a mutual company in
1988, the Regional Banks have committed to making up any shortfall
suffered by creditors should Crédit Agricole S.A. become insolvent or
experience similar financial difficulties as a result of a court-supervised
liquidation, or once dissolution-related formalities are complete. The
Regional Banks’ potential commitment under this guarantee is equal
to the sum of their share capital and reserves.
Switch guarantee
The Switch mechanism was implemented on 23 December 2011 as part
of the financial relationship framework between Crédit Agricole S.A., as
corporate centre, and the mutualist network of Crédit Agricole Regional
Banks.
It initially enabled the transfer of the regulatory prudential requirements
applying to Crédit Agricole S.A.’s interests in the Regional Banks, which
were accounted for under the equity method in the consolidated financial
statements of Crédit Agricole S.A. before the Eurêka operation
(1)
was
carried out.
By amendment signed on 19 December 2013, Crédit Agricole S.A. and
the Regional Banks decided to extend the guarantee base granted by
the Regional Banks to Crédit Agricole S.A. on 23 December 2011 to
Crédit Agricole S.A.’s equity investment in Crédit Agricole Assurances
(CAA). The new guarantees came into effect on 2 January 2014 and
subsequently allowed the transfer of regulatory prudential requirements
applying to Crédit Agricole S.A.’s interests both in the Regional Banks
(CCI/CCA) and in CAA.
As part of the “Eurêka” Crédit Agricole Group structure simplification
operation, the Switch guarantee mechanism was amended in 2016
by two supplemental agreements, signed respectively on 17 February
(Supplemental agreement No. 2) and 21 July (Amendment No. 3).
With these supplemental agreements, Crédit Agricole S.A. and
the Regional Banks decided: (i) to limit the scope of application of
the guarantees previously granted by the Regional Banks to Crédit
Agricole S.A. exclusively to Crédit Agricole S.A.’s interest in Crédit
Agricole Assurances (CAA), following the transfer of Crédit Agricole S.A.’s
interest in the Regional Banks to Sacam Mutualisation; (ii) to change
the conditions of expiry of the coverage obligation for insurance entities
to enable the beneficiary to gradually reduce the guaranteed amount;
(iii) to replace the quarterly calculation with a half-yearly calculation.
The new scope and guarantee terms came into effect on 1 July 2016.
The effectiveness of the mechanism is guaranteed by a security deposit
paid by the Regional Banks to Crédit Agricole S.A.
The guarantee transfers to the Regional Banks the risk of a fall in the
equity-accounted value of Crédit Agricole S.A.’s interests in CAA.
As soon as a drop in value is observed, the guarantee mechanism is
activated and Crédit Agricole S.A. receives compensation drawn from
the security deposit. If the equity-accounted value later recovers, Crédit
Agricole S.A. can return previously paid compensation in accordance
with a clawback provision.
The guarantee expires on 1 March 2027, when it may be extended
automatically. The guarantee may be terminated early, under certain
circumstances and subject to prior notification of the ACPR.
The security deposit is remunerated at a fixed rate based on conditions
prevailing for long term liquidity. The guarantee attracts a fixed
remuneration covering the present value of the risk and cost of capital
of the Regional Banks.
Under the Ambitions MTP 2022 as adopted by the Board of Directors
on 5 June 2019, the Group has undertaken to unwind at least half of
the Switch guarantee by the end of 2022. In this context, under the
authorisation of the Board of Directors on 17 December 2019, a first
tranche of 35% was unwound in the first quarter of 2020. In addition,
on 8 January 2021, the Board of Directors authorized the unwinding of
a second 15% tranche of the Switch guarantee as of the first quarter
of 2021.
MATERIAL CHANGES
The financial statements for financial year 2020 were approved by the
Board of Directors at its meeting of 10 February 2021. Crédit Agricole CIB
has received information after the financial statements were approved
by its Board of Directors, specifying the tax treatment of transactions
carried out abroad. The estimate of these uncertain tax positions will
be reviewed in the first quarter of 2021. The favourable impact of this
review on Crédit Agricole S.A.'s effective tax rate in 2021 would, on a
2020 basis and all other things being equal, be between 1% and 2%.
PUBLICLY AVAILABLE DOCUMENTS
This document is available on the website at www.credit-agricole.com/
en/finance/finance and on the website of the French Financial Market
Authority (Autorité des marchés financiers – AMF), www.amf-france.org.
All regulated information as defined by the AMF (in Title II of Book II
of the AMF’s General Regulations) is available from the Company’s
website: www.credit-agricole.com/en/finance/finance under “Regulated
information”. Crédit Agricole S.A. Articles of Association are reproduced,
in full, in this document.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
659
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
GENERAL MEETING OF SHAREHOLDERS OF 12 MAY 2021
The agenda and draft resolutions presented to the Ordinary and Extraordinary General Meeting on Wednesday 12 May 2021 are available at
INFORMATION ON INACTIVE BANK ACCOUNTS
Under articles L. 312-19 and L. 312-20 of the French Monetary and
Financial Code, based on Law No. 2014-617 of 13 June 2014 relative
to unclaimed assets on inactive bank accounts, named Law Eckert
which came into force on 1 January 2016, every credit institution is
required to publish annual information on inactive bank accounts. At
end-2020, Crédit Agricole S.A. had two inactive bank accounts for an
estimated total amount of €63,681. No transfer to the
Caisse des Dépôts
et Consignations has
been made.
INFORMATION ON ACCOUNTS PAYABLE AND RECEIVABLES
Under article L. 441-6-1 of the French Commercial Code
(Code de
commerce)
, companies whose annual financial statements are certified
by a Statutory Auditor are required to disclose in their management
report the balance of amounts due to suppliers by payment term, as
set out in article D. 441-4 of Decree No. 2008-1492.
This information does not include any banking operations neither related
transactions.
Accounts payable payment terms
(in millions of euros)
2020
2019
Past due
-
-
Current
-
-
<30 days
-
7
>30 days <45 days
-
-
>45 days
-
-
TOTAL
-
7
Customer payment terms
The number of invoices issued by Crédit Agricole S.A. outside its banking activity and related transactions is considered immaterial.
INFORMATION ON THE CRÉDIT AGRICOLE S.A. ENTITIES
The information about Crédit Agricole S.A. entities required by article 7
of Law No. 2013-672 of 26 July 2013 on the separation and regulation
of banking activities and by Order No. 2014-158 of 20 February 2014
supplemented by Implementing Decree No. 2014-1657 of 29 December 2014
implementing article L. 511-45 of the French Monetary and Financial
Code, are detailed below.
Consolidated entities included in this reporting are the parent
company, the subsidiaries and the branches. Held-for-sale operations
or discontinued operations under IFRS 5, as well as equity-accounted
entities, are excluded.
Revenues from international entities correspond to their territorial
contribution to the consolidated financial statements prior to elimination
of reciprocal intragroup transactions.
Headcount corresponds to the average number of employees of the
reporting period.
Geographic location
Revenues excluding
intragroup
eliminations
Average
headcount
(full time equivalent)
Pre-tax income
Income tax
charge – current
Income tax
charge –
deferred
Public grants
received
FRANCE (INCLUDING DOM-TOM)
France
10,542
35,201
1,957
(782)
304
-
France DOM-TOM
-
-
-
-
-
-
OTHER EU COUNTRIES
Germany
527
1,331
39
(21)
9
-
Austria
48
119
25
(8)
1
-
Belgium
55
116
31
(7)
(1)
-
Bulgaria
-
2
-
-
-
-
Denmark
-
-
-
-
-
-
Spain
264
488
122
(38)
11
-
Finland
10
12
9
(1)
(1)
-
Greece
-
19
(2)
-
-
Hungary
3
19
-
-
-
-
Ireland
155
591
79
(8)
(3)
-
Italy
3,081
12,209
(235)
(154)
(1)
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
660
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Geographic location
Revenues excluding
intragroup
eliminations
Average
headcount
(full time equivalent)
Pre-tax income
Income tax
charge – current
Income tax
charge –
deferred
Public grants
received
Luxembourg
823
1,481
452
(88)
5
-
Netherlands
91
80
(3)
(2)
6
-
Poland
359
5,177
(15)
(7)
2
-
Portugal
144
512
54
(14)
-
-
Czech Republic
23
95
10
(2)
1
-
Romania
1
9
-
-
-
-
United Kingdom
1,044
886
639
(98)
(35)
-
Slovakia
1
4
-
-
-
-
Sweden
28
46
15
(3)
-
-
OTHER EUROPEAN COUNTRIES
Monaco
135
443
34
(6)
-
-
Russia
17
173
2
(1)
-
-
Serbia
47
870
10
(1)
-
-
Switzerland
327
1,150
(25)
3
6
-
Ukraine
110
2,399
70
(7)
1
-
Guernsey
1
-
-
-
-
-
NORTH AMERICA
Canada
11
13
8
(2)
-
-
United States
1,100
1,115
402
(88)
5
-
Mexico
1
5
-
-
-
-
CENTRAL AND SOUTH AMERICA
Argentina
-
-
-
-
-
-
Brazil
104
95
78
-
(6)
-
Chile
4
2
3
(1)
-
-
AFRICA AND MIDDLE EAST
Algeria
4
23
2
-
-
-
Egypt
197
2,488
123
(32)
-
-
United Arab Emirates
58
106
22
-
-
-
Morocco
216
2,557
28
(21)
11
-
Mauritius
-
120
1
-
-
-
Qatar
-
1
-
-
-
-
ASIA AND OCEANIA (EXCL. JAPAN)
Australia
50
32
34
(10)
-
-
China
66
176
23
(11)
4
-
South Korea
60
92
22
(4)
(1)
-
Hong Kong
244
703
53
(11)
1
-
India
39
190
22
(5)
-
-
Malaysia
9
22
6
(1)
-
-
Singapore
156
809
(9)
(3)
3
-
Taiwan
53
114
25
(13)
9
-
Vietnam
JAPAN
Japan
292
429
64
(38)
25
-
TOTAL
20,500
72,520
4,175
(1,485)
356
-
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
661
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
At 31 December 2020, Crédit Agricole S.A. had the following entities:
Scope of consolidation of Crédit Agricole S.A.
Operation Name
Type of
business
Geographic
location
AMUNDI
AG
France
AMUNDI (UK) Ltd.
AG
United Kingdom
AMUNDI ASSET MANAGEMENT
AG
France
AMUNDI ASSET MANAGEMENT AGENCIA
EN CHILE
AG
Chile
AMUNDI ASSET MANAGEMENT BELGIUM
AG
Belgium
AMUNDI ASSET MANAGEMENT DUBAI
(OFF SHORE) BRANCH
AG
United Arab
Emirates
AMUNDI ASSET MANAGEMENT HONG KONG
BRANCH
AG
Hong Kong
AMUNDI ASSET MANAGEMENT LONDON
BRANCH
AG
United Kingdom
AMUNDI ASSET MANAGEMENT MEXICO
BRANCH
AG
Mexico
AMUNDI ASSET MANAGEMENT NEDERLAND
AG
Netherlands
Amundi Asset Management S.A.I. S.A.
AG
Romania
Amundi Austria GmbH
AG
Austria
Amundi BOC Wealth Management Co. Ltd
AG
China
Amundi Czech Republic Asset Management
Bratislava Branch
AG
Slovakia
Amundi Czech Republic Asset
Management Sofia Branch
AG
Bulgaria
Amundi Czech Republic Asset
Management, A.S.
AG
Czech Republic
Amundi Czech Republic, Investicni
Spolecnost, A.S.
AG
Czech Republic
Amundi Deutschland GmbH
AG
Germany
AMUNDI Finance
AG
France
AMUNDI Finance Emissions
AG
France
AMUNDI GLOBAL SERVICING
AG
Luxembourg
AMUNDI Hellas MFMC S.A.
AG
Greece
AMUNDI Hong Kong Ltd.
AG
Hong Kong
AMUNDI Iberia S.G.I.I.C S.A.
AG
Spain
AMUNDI Immobilier
AG
France
AMUNDI India Holding
AG
France
AMUNDI Intermédiation
AG
France
Amundi Intermédiation Asia PTE Ltd
AG
Singapore
Amundi Intermédiation Dublin Branch
AG
Ireland
Amundi Intermédiation London Branch
AG
United Kingdom
Amundi Investment Fund Management
Private Limited Company
AG
Hungary
Amundi Ireland Ltd
AG
Ireland
AMUNDI Issuance
AG
France
AMUNDI Japan
AG
Japan
AMUNDI Japan Holding
AG
Japan
Amundi Luxembourg S.A.
AG
Luxembourg
AMUNDI Malaysia Sdn Bhd
AG
Malaysia
Amundi Pioneer Asset Management Inc
AG
United States
Amundi Pioneer Asset Management USA Inc
AG
United States
Amundi Pioneer Distributor Inc.
AG
United States
Amundi Pioneer Institutional Asset
Management Inc
AG
United States
AMUNDI Polska
AG
Poland
AMUNDI Private Equity Funds
AG
France
Operation Name
Type of
business
Geographic
location
AMUNDI Real Estate Italia SGR S.p.A.
AG
Italy
AMUNDI SGR S.p.A.
AG
Italy
AMUNDI Singapore Ltd.
AG
Singapore
AMUNDI Suisse
AG
Switzerland
Amundi Taïwan Limited
AG
Taiwan
AMUNDI Tenue de Comptes
AG
France
AMUNDI USA Inc.
AG
United States
AMUNDI Ventures
AG
France
BFT INVESTMENT MANAGERS
AG
France
CA Indosuez (Switzerland) S.A.
Hong Kong Branch
AG
Hong Kong
CA Indosuez (Switzerland) S.A.
Singapore Branch
AG
Singapore
CA Indosuez (Switzerland) S.A.
Switzerland Branch
AG
Switzerland
CA Indosuez (Switzerland) S.A.
AG
Switzerland
CA Indosuez Finanziaria S.A.
AG
Switzerland
CA Indosuez Gestion
AG
France
CA Indosuez Wealth (Europe)
AG
Luxembourg
CA Indosuez Wealth (Europe)
Belgium
Branch
AG
Belgium
CA Indosuez Wealth (Europe) Spain Branch
AG
Spain
CA Indosuez Wealth (France)
AG
France
CA Indosuez Wealth (Group)
AG
France
CA Indosuez Wealth Italy S.P.A.
AG
Italy
CA Luxembourg (succursale Italie)
AG
Italy
CFM Indosuez Conseil en Investissement
AG
France
CFM Indosuez Conseil en Investissement,
Succursale de Nouméa
AG
France
CFM Indosuez Gestion
AG
Monaco
CFM Indosuez Wealth
AG
Monaco
CPR AM
AG
France
Etoile Gestion
AG
France
Fund Channel
AG
Luxembourg
Fund Channel Singapore Branch
AG
Singapore
KBI Fund Managers Limited
AG
Ireland
KBI Global Investors (North America) Limited
AG
Ireland
KBI Global Investors Limited
AG
Ireland
LCL Emissions
AG
France
Pioneer Global Investments LTD
Buenos Aires Branch
AG
Argentina
Pioneer Global Investments LTD
Mexico city Branch
AG
Mexico
Sabadell Asset Management, S.A., S.G.I.I.C.
AG
Spain
Société Générale Gestion (S2G)
AG
France
Vanderbilt Capital Advisors LLC
AG
United States
ASSUR&ME
AG
France
CA Assicurazioni
AG
Italy
CACI DANNI
AG
Italy
CACI LIFE LIMITED
AG
Ireland
CACI NON LIFE LIMITED
AG
Ireland
CACI NON VIE
AG
France
CACI Reinsurance Ltd.
AG
Ireland
CACI VIE
AG
France
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
662
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
CACI VITA
AG
Italy
CALIE Europe Succursale France
AG
France
CALIE Europe Succursale Pologne
AG
Poland
Crédit Agricole Assurances (CAA)
AG
France
Crédit Agricole Creditor Insurance (CACI)
AG
France
Crédit Agricole Life
AG
Greece
Crédit Agricole Life Insurance
Company Japan Ltd.
AG
Japan
Crédit Agricole Life Insurance Europe
AG
Luxembourg
Crédit Agricole Vita S.p.A.
AG
Italy
Finaref Risques Divers
AG
France
Finaref Vie
AG
France
GNB SEGUROS
AG
Portugal
Médicale de France
AG
France
Pacifica
AG
France
Predica
AG
France
Predica - Prévoyance Dialogue
du Crédit Agricole
AG
Spain
Space Holding (Ireland) Limited
AG
Ireland
Space Lux
AG
Luxembourg
Spirica
AG
France
37785 QXEURC
AG
Luxembourg
ACAJOU
AG
France
AGRICOLE RIVAGE DETTE
AG
France
AIJPMGBIGOAHE
AG
Luxembourg
AM DESE FIII DS3IMDI
AG
France
AMUNDI GRD 24 FCP
AG
France
AMUNDI PE Solution Alpha
AG
France
APLEGROSENIEUHD
AG
Luxembourg
ARTEMID
AG
France
BFT CREDIT OPPORTUNITES -I-C
AG
France
BFT opportunité
AG
France
BFT VALUE PREM OP CD
AG
France
CA VITA INFRASTRUCTURE CHOICE FIPS
c.I.A.
AG
France
CA VITA PRIVATE DEBT CHOICE FIPS cl.A
AG
France
CA VITA PRIVATE EQUITY CHOICE
AG
France
CAA 2013 COMPARTIMENT 5 A5
AG
France
CAA 2013 FCPR B1
AG
France
CAA 2013 FCPR C1
AG
France
CAA 2013 FCPR D1
AG
France
CAA 2013-2
AG
France
CAA 2013-3
AG
France
CAA 2014 COMPARTIMENT 1 PART A1
AG
France
CAA 2014 INVESTISSMENT PART A3
AG
France
CAA 2015 COMPARTIMENT 1
AG
France
CAA 2015 COMPARTIMENT 2
AG
France
CAA 2016
AG
France
CAA COMMERCES 2
AG
France
CAA INFRASTRUCTURE
AG
France
CAA INFRASTRUCTURE 2017
AG
France
CAA INFRASTRUCTURE 2018 –
COMPARTIMENT 1
AG
France
CAA INFRASTRUCTURE 2019
AG
France
CAA PR FI II C1 A1
AG
France
CAA PRIV EQY 19 CF A
AG
France
Operation Name
Type of
business
Geographic
location
CAA PRIV.FINANC.COMP.1 A1 FIC
AG
France
CAA PRIV.FINANC.COMP.2 A2 FIC
AG
France
CAA PRIVATE EQUITY 2017
AG
France
CAA PRIVATE EQUITY 2017 BIS
AG
France
CAA PRIVATE EQUITY 2017 FRANCE
INVESTISSEMENT
AG
France
CAA PRIVATE EQUITY 2017 MEZZANINE
AG
France
CAA PRIVATE EQUITY 2017 TER
AG
France
CAA PRIVATE EQUITY 2018 –
COMPARTIMENT 1
AG
France
CAA PRIVATE EQUITY 2018 –
COMPARTIMENT FRANCE INVESTISSEMENT
AG
France
CAA PRIVATE EQUITY 2019 COMPARTIMENT 1
AG
France
CAA PRIVATE EQUITY 2019
COMPARTIMENT BIS
AG
France
CAA PRIVATE EQUITY 2019
COMPARTIMENT TER
AG
France
CAA SECONDAIRE IV
AG
France
CAREPTA R 2016
AG
France
CEDAR
AG
France
Chorial Allocation
AG
France
CNP ACP 10 FCP
AG
France
COMPARTIMENT DS3 - IMMOBILIER
VAUGIRARD
AG
France
COMPARTIMENT DS3 - VAUGIRARD
AG
France
CORSAIR 1.52% 25/10/38
AG
Luxembourg
CORSAIR 1.5255% 25/04/35
AG
Ireland
CORSAIRE FINANCE IRELAND
0.83% 25-10-38
AG
Ireland
CORSAIRE FINANCE IRELAND
1.24% 25-10-38
AG
Ireland
CORSAIRE FINANCE IRELANDE
0.7% 25-10-38
AG
Ireland
EFFITHERMIE FPCI
AG
France
FCPR CAA 2013
AG
France
FCPR CAA COMP TER PART A3
AG
France
FCPR CAA COMPART BIS PART A2
AG
France
FCPR CAA COMPARTIMENT 1 PART A1
AG
France
FCPR CAA France croissance 2 A
AG
France
FCPR PREDICA 2007 A
AG
France
FCPR PREDICA 2007 C2
AG
France
FCPR PREDICA 2008 A1
AG
France
FCPR PREDICA 2008 A2
AG
France
FCPR PREDICA 2008 A3
AG
France
FCPR PREDICA SECONDAIRE I A1
AG
France
FCPR PREDICA SECONDAIRE I A2
AG
France
FCPR PREDICA SECONDAIRES II A
AG
France
FCPR PREDICA SECONDAIRES II B
AG
France
FCPR UI CAP AGRO
AG
France
FCPR UI CAP SANTE A
AG
France
FCT BRIDGE 2016-1
AG
France
FCT CAA COMPARTIMENT CESSION
DES CREANCES LCL
AG
France
FCT CAA – Compartment 2017-1
AG
France
FCT CAREPTA – COMPARTIMENT 2014-1
AG
France
FCT CAREPTA – COMPARTIMENT 2014-2
AG
France
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
663
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
FCT CAREPTA – COMPARTIMENT
RE-2016-1
AG
France
FCT CAREPTA – RE 2015 -1
AG
France
FCT CAREPTA 2-2016
AG
France
FCT MID CAP 2 05/12/22
AG
France
FDA 18 FCP 2 DEC
AG
France
FDC A3 P
AG
France
FEDERIS CORE EU CR 19 MM
AG
France
Federval
AG
France
FPCI Cogeneration France I
AG
France
FR0010671958 PREDIQUANT A5
AG
France
GRD 44
AG
France
GRD 44 N°3
AG
France
GRD 44 N2
AG
France
GRD 44 N4 PART CD
AG
France
GRD 44 N5
AG
France
GRD 54
AG
France
GRD02
AG
France
GRD03
AG
France
GRD05
AG
France
GRD07
AG
France
GRD08
AG
France
GRD09
AG
France
GRD10
AG
France
GRD11
AG
France
GRD12
AG
France
GRD13
AG
France
GRD14
AG
France
GRD17
AG
France
GRD18
AG
France
GRD19
AG
France
GRD20
AG
France
GRD21
AG
France
IAA CROISSANCE INTERNATIONALE
AG
France
LF PRE ZCP 12 99 LIB
AG
France
Londres Croissance C16
AG
France
LRP - CPT JANVIER 2013 0.30
13-21 11/01A
AG
Luxembourg
OBJECTIF LONG TERME FCP
AG
France
OPCI GHD SPPICAV PROFESSIONNELLE
AG
France
Peg - Portfolio Eonia Garanti
AG
France
Predica 2005 FCPR A
AG
France
Predica 2006 FCPR A
AG
France
Predica 2006-2007 FCPR
AG
France
PREDICA 2010 A1
AG
France
PREDICA 2010 A2
AG
France
PREDICA 2010 A3
AG
France
PREDICA SECONDAIRES III
AG
France
Predicant A1 FCP
AG
France
Predicant A2 FCP
AG
France
Predicant A3 FCP
AG
France
Prediquant Eurocroissance A2
AG
France
Prediquant opportunité
AG
France
PREDIQUANT PREMIUM
AG
France
PREMIUM GR 0% 28
AG
Ireland
PREMIUM GREEN 0.508% 25-10-38
AG
Ireland
Operation Name
Type of
business
Geographic
location
PREMIUM GREEN 0.63% 25-10-38
AG
Ireland
PREMIUM GREEN 1.24% 25/04/35
AG
Ireland
PREMIUM GREEN 1.531% 25-04-35
AG
Ireland
PREMIUM GREEN 1.55% 25-07-40
AG
Ireland
PREMIUM GREEN 4.52%06-21 EMTN
AG
Ireland
PREMIUM GREEN 4.54%06-13.06.21
AG
Ireland
PREMIUM GREEN 4.5575%21 EMTN
AG
Ireland
PREMIUM GREEN 4.56%06-21
AG
Ireland
PREMIUM GREEN 4.7% EMTN 08/08/21
AG
Ireland
PREMIUM GREEN 4.72%12-250927
AG
Ireland
PREMIUM GREEN PLC 1.095% 25-10-38
AG
Ireland
PREMIUM GREEN PLC 4.30%2021
AG
Ireland
PREMIUM GREEN TV 06/22
AG
Ireland
PREMIUM GREEN TV 07/22
AG
Ireland
PREMIUM GREEN TV 07-22
AG
Ireland
PREMIUM GREEN TV 22
AG
Ireland
PREMIUM GREEN TV 26/07/22
AG
Ireland
PREMIUM GREEN TV2027
AG
Ireland
PREMIUM GREEN TV23/05/2022 EMTN
AG
Ireland
PREMIUM GREEN4.33%06-29/10/21
AG
Ireland
PurpleProtAsset 1.36% 25/10/2038
AG
Luxembourg
PurpleProtAsset 1.093% 20/10/2038
AG
Luxembourg
RED CEDAR
AG
France
UI CAP SANTE 2
AG
France
0057514 AUC
AG
Luxembourg
1827 A2EURC
AG
Luxembourg
56055 A5 EUR
AG
Luxembourg
5880 AEURC
AG
Luxembourg
5884 AEURC
AG
Luxembourg
5922 AEURHC
AG
Luxembourg
78752 AEURHC
AG
Luxembourg
A FD EQ E CON A E (C)
AG
Luxembourg
A FD EQ E FOC AE (C)
AG
Luxembourg
ACTICCIA VIE
AG
France
ACTICCIA VIE 3
AG
France
ACTICCIA VIE 90 C
AG
France
ACTICCIA VIE 90 N2
AG
France
ACTICCIA VIE 90 N3 C
AG
France
ACTICCIA VIE 90 N4
AG
France
ACTICCIA VIE 90 N6 C
AG
France
ACTICCIA VIE N2 C
AG
France
ACTICCIA VIE N4
AG
France
ACTIONS 50 3DEC
AG
France
AF INDEX EQ JAPAN AE CAP
AG
Luxembourg
AF INDEX EQ USA A4E
AG
Luxembourg
AFCPRGLLIFEAEC
AG
Luxembourg
AIMSCIWOAE
AG
Luxembourg
AM AC FR ISR PC 3D
AG
France
AM.AC.EU.ISR-P-3D
AG
France
AM.AC.MINER.-P-3D
AG
France
AM.AC.USA ISR P 3D
AG
France
AM.ACT.EMER.-P-3D
AG
France
AM.RDT PLUS -P-3D
AG
France
AMIRAL GROWTH OPP A
AG
France
AMUN TRESO CT PC 3D
AG
France
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
664
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
AMUN.ACT.REST.P-C
AG
France
AMUN.TRES.EONIA ISR E FCP 3DEC
AG
France
AMUNDI AC.FONC.PC 3D
AG
France
AMUNDI ACTIONS FRANCE C 3DEC
AG
France
AMUNDI AFD AV DURABL P1 FCP 3DEC
AG
France
AMUNDI ALLOCATION C
AG
France
AMUNDI B GL AGG AEC
AG
Luxembourg
AMUNDI BGEB AEC
AG
Luxembourg
AMUNDI EQ E IN AHEC
AG
Luxembourg
AMUNDI GBL MACRO MULTI ASSET P
AG
France
AMUNDI GLB MUL-ASSET-M2EURC
AG
Luxembourg
AMUNDI GLO M/A CONS-M2 EUR C
AG
Luxembourg
AMUNDI HORIZON 3D
AG
France
AMUNDI KBI ACTION PC
AG
France
AMUNDI KBI ACTIONS C
AG
France
AMUNDI KBI AQUA C
AG
France
AMUNDI OBLIG EURO C
AG
France
AMUNDI PATRIMOINE C 3DEC
AG
France
AMUNDI PULSACTIONS
AG
France
AMUNDI SONANCE VIE 7 3DEC
AG
France
AMUNDI SONANCE VIE N8 3DEC
AG
France
AMUNDI TRANSM PAT C
AG
France
AMUNDI VALEURS DURAB
AG
France
AMUNDI-CSH IN-PC
AG
France
AMUNDI-EUR EQ GREEN IM-IEURC
AG
Luxembourg
AMUNDI-GL INFLAT BD-MEURC
AG
Luxembourg
AMUNDIOBLIGMONDEP
AG
France
AMUNDI-VOLATILITY WRLD-IUSDC
AG
Luxembourg
AMUNDI-VOLATILITY WRLD-OUSDC
AG
Luxembourg
ANTINEA FCP
AG
France
ARC FLEXIBOND-D
AG
France
ATOUT EUROPE C FCP 3DEC
AG
France
ATOUT FRANCE C FCP 3DEC
AG
France
ATOUT PREM S ACTIONS 3DEC
AG
France
ATOUT VERT HORIZON FCP 3 DEC
AG
France
AXA EUR.SM.CAP E 3D
AG
France
BA-FII EUR EQ O-GEUR
AG
Luxembourg
BFT FRAN FUT-C SI.3D
AG
France
BFT SEL RDT 23 PC
AG
France
BFT STATERE P (C)
AG
France
BNP PAR.CRED.ERSC
AG
France
CA MASTER EUROPE
AG
France
CA MASTER PATRIMOINE FCP 3DEC
AG
France
CADEISDA 2DEC
AG
France
CALIFORNIA 09
AG
France
CHORELIA N2 PART C
AG
France
CHORELIA N3 PART C
AG
Luxembourg
CHORELIA N4 PART C
AG
France
CHORELIA N5 PART C
AG
France
CHORELIA N6 PART C
AG
France
CHORELIA N7 C
AG
France
CHORELIA PART C
AG
France
CPR CONSO ACTIONNAIRE FCP P
AG
France
CPR CROIS.REA.-P
AG
France
CPR EUR.HI.DIV.P 3D
AG
France
Operation Name
Type of
business
Geographic
location
CPR EUROLAND ESG P
AG
France
CPR FOCUS INF.-P-3D
AG
France
CPR GLO SILVER AGE P
AG
France
CPR I-SM B C-AEURA
AG
Luxembourg
CPR OBLIG 12 M.P 3D
AG
France
CPR REF.ST.EP.R.0-100 FCP 3DEC
AG
France
CPR REFL RESP 0-100 I 3DEC
AG
France
CPR REFL.RESP.0-100 P FCP 3DEC
AG
France
CPR REFLEX STRATEDIS 0-100 P 3D
AG
France
CPR RENAI.JAP.-P-3D
AG
France
CPR SILVER AGE P 3DEC
AG
France
CPR-CLIM ACT-AEURA
AG
Luxembourg
CPRGLODISOPARAC
AG
Luxembourg
ECOFI MULTI OPPORTUN.FCP 3DEC
AG
France
EPARINTER EURO BD
AG
France
EXAN.PLEI.FD P
AG
France
EXANE 1 OVERDR CC
AG
Luxembourg
FE AMUNDI INC BLDR-IHE C
AG
Luxembourg
FONDS AV ECHUS FIA A
AG
France
FONDS AV ECHUS FIA B
AG
France
FRANKLIN DIVER-DYN-I ACC EU
AG
Luxembourg
FRANKLIN GLB MLT-AS IN-IAEUR
AG
Luxembourg
GRD CAR 39 FCP
AG
France
GRD FCR 99 FCP
AG
France
GRD IFC 97 FCP
AG
France
HASTINGS PATRIM AC
AG
France
HYMNOS P 3D
AG
France
IGSF-GBL GOLD FD-I C
AG
Luxembourg
IND.CAP EMERG.-C-3D
AG
France
INDO ALLOC MANDAT C
AG
France
INDO-FII EUR CP-IEUR
AG
Luxembourg
INDOFIIFLEXEG
AG
Luxembourg
INDO-GBL TR-PE
AG
Luxembourg
INDOS.EURO.PAT.PD 3D
AG
France
INDOSUEZ ALLOCATION
AG
France
INDOSUEZ EURO DIV G
AG
Luxembourg
INDOSUEZ NAVIGATOR G
AG
Luxembourg
INDOSUEZSWZOPG
AG
Luxembourg
INVEST RESP S3 3D
AG
France
JPM US EQY ALL CAP-C HDG
AG
Luxembourg
JPM US SEL EQ PLS-CA EUR HD
AG
Luxembourg
JPMORGAN F-JPM US VALUE-CEHA
AG
Luxembourg
JPMORGAN F-US GROWTH-C AHD
AG
Luxembourg
LCF CREDIT ERSC 3D
AG
France
LCL 3 TEMPO AV 11/16
AG
France
LCL 6 HORIZ. AV 0615
AG
France
LCL AC.DEV.DU.EURO
AG
France
LCL AC.EMERGENTS 3D
AG
France
LCL AC.MDE HS EU.3D
AG
France
LCL ACT RES NATUREL
AG
France
LCL ACT.E-U ISR 3D
AG
France
LCL ACT.IMMOBI.3D
AG
France
LCL ACT.OR MONDE
AG
France
LCL ACT.USA ISR 3D
AG
France
LCL ACTIONS EURO C
AG
France
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
665
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
LCL ACTIONS EURO FUT
AG
France
LCL ACTIONS MONDE FCP 3 DEC
AG
France
LCL ALLOCATION DYNAMIQUE 3D FCP
AG
France
LCL AUTOCALL VIE 17
AG
France
LCL DEVELOPPEM.PME C
AG
France
LCL DOUBLE HORIZON A
AG
France
LCL FLEX 30
AG
France
LCL FO.SE.FR.AV (AV11) FCP 3DEC
AG
France
LCL INVEST.EQ C
AG
France
LCL INVEST.PRUD.3D
AG
France
LCL L.GR.B.AV 17 C
AG
France
LCL MGEST 60 3DEC
AG
France
LCL MGEST FL.0-100
AG
France
LCL OBL.CREDIT EURO
AG
France
LCL OPTIM II VIE 17
AG
France
LCL PREMIUM VIE 2015
AG
France
LCL TRI ESC AV 0118
AG
France
LCL TRIPLE TE AV OC
AG
France
LCL TRIPLE TEMPO AV (FEV.2015)
AG
France
LCL TRP HOZ AV 0117
AG
France
LOUVOIS PLACEMENT
AG
France
M.D.F.89 FCP
AG
France
OBJECTIF DYNAMISME FCP
AG
France
OBJECTIF MEDIAN FCP
AG
France
OBJECTIF PRUDENCE FCP
AG
France
OPCIMMO LCL SPPICAV 5DEC
AG
France
OPCIMMO PREM SPPICAV 5DEC
AG
France
OPTALIME FCP 3DEC
AG
France
PIMCO GLOBAL BND FD-CURNC EX
AG
Ireland
PORT EX ABS RET P
AG
France
PORT.METAUX PREC.A-C
AG
France
PORTF DET FI EUR AC
AG
France
RAVIE FCP 5DEC
AG
France
RETAH PART C
AG
France
RSD 2006 FCP 3DEC
AG
France
SCI TANGRAM
AG
France
SCI VICQ D'AZIR VELLEFAUX
AG
France
SCPI LFP MULTIMMO
AG
France
SOLIDARITE AMUNDI P
AG
France
SOLIDARITE INITIATIS SANTE
AG
France
SONANCE VIE 2 FCP 3DEC
AG
France
SONANCE VIE 3 3DEC
AG
France
SONANCE VIE 3DEC
AG
France
SONANCE VIE 4 FCP
AG
France
SONANCE VIE 5 FCP 3DEC
AG
France
SONANCE VIE 6 FCP
AG
France
SONANCE VIE 9
AG
France
TRIAN 6 ANS N10 C
AG
France
TRIANANCE 6 ANS
AG
France
TRIANANCE 6 ANS 5 C
AG
France
TRIANANCE 6 ANS N 11
AG
France
TRIANANCE 6 ANS N 4
AG
France
TRIANANCE 6 ANS N 9
AG
France
TRIANANCE 6 ANS N2 C
AG
France
TRIANANCE 6 ANS N3
AG
France
Operation Name
Type of
business
Geographic
location
TRIANANCE 6 ANS N6
AG
France
TRIANANCE 6 ANS N7 C
AG
France
TRIANANCE 6 ANS N8 C
AG
France
TRIANANCE 6 AN 12 C
AG
France
UNIPIERRE ASSURANCE (SCPI)
AG
France
VENDOME INV.FCP 3DEC
AG
France
Nexus 1
AG
Italy
OPCI CAA CROSSROADS
AG
France
OPCI Camp Invest
AG
France
OPCI ECO CAMPUS SPPICAV
AG
France
OPCI Immanens
AG
France
OPCI Immo Emissions
AG
France
OPCI Iris Invest 2010
AG
France
OPCI MASSY BUREAUX
AG
France
OPCI Messidor
AG
France
Predica OPCI Bureau
AG
France
Predica OPCI Commerces
AG
France
Predica OPCI Habitation
AG
France
B IMMOBILIER
AG
France
DS Campus
AG
France
HDP BUREAUX
AG
France
HDP HOTEL
AG
France
HDP LA HALLE BOCA
AG
France
IMEFA 177
AG
France
IMEFA 178
AG
France
IMEFA 179
AG
France
Issy Pont
AG
France
SCI BMEDIC HABITATION
AG
France
SCI CAMPUS MEDICIS ST DENIS
AG
France
SCI CAMPUS RIMBAUD ST DENIS
AG
France
SCI FEDERALE PEREIRE VICTOIRE
AG
France
SCI FEDERALE VILLIERS
AG
France
SCI FEDERLOG
AG
France
SCI FEDERLONDRES
AG
France
SCI FEDERPIERRE
AG
France
SCI GRENIER VELLEF
AG
France
SCI Holding Dahlia
AG
France
SCI IMEFA 001
AG
France
SCI IMEFA 002
AG
France
SCI IMEFA 003
AG
France
SCI IMEFA 004
AG
France
SCI IMEFA 005
AG
France
SCI IMEFA 006
AG
France
SCI IMEFA 008
AG
France
SCI IMEFA 009
AG
France
SCI IMEFA 010
AG
France
SCI IMEFA 011
AG
France
SCI IMEFA 012
AG
France
SCI IMEFA 013
AG
France
SCI IMEFA 016
AG
France
SCI IMEFA 017
AG
France
SCI IMEFA 018
AG
France
SCI IMEFA 020
AG
France
SCI IMEFA 022
AG
France
SCI IMEFA 025
AG
France
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
666
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
SCI IMEFA 032
AG
France
SCI IMEFA 033
AG
France
SCI IMEFA 034
AG
France
SCI IMEFA 035
AG
France
SCI IMEFA 036
AG
France
SCI IMEFA 037
AG
France
SCI IMEFA 038
AG
France
SCI IMEFA 039
AG
France
SCI IMEFA 042
AG
France
SCI IMEFA 043
AG
France
SCI IMEFA 044
AG
France
SCI IMEFA 047
AG
France
SCI IMEFA 048
AG
France
SCI IMEFA 051
AG
France
SCI IMEFA 052
AG
France
SCI IMEFA 054
AG
France
SCI IMEFA 057
AG
France
SCI IMEFA 058
AG
France
SCI IMEFA 060
AG
France
SCI IMEFA 061
AG
France
SCI IMEFA 062
AG
France
SCI IMEFA 063
AG
France
SCI IMEFA 064
AG
France
SCI IMEFA 067
AG
France
SCI IMEFA 068
AG
France
SCI IMEFA 069
AG
France
SCI IMEFA 072
AG
France
SCI IMEFA 073
AG
France
SCI IMEFA 074
AG
France
SCI IMEFA 076
AG
France
SCI IMEFA 077
AG
France
SCI IMEFA 078
AG
France
SCI IMEFA 079
AG
France
SCI IMEFA 080
AG
France
SCI IMEFA 081
AG
France
SCI IMEFA 082
AG
France
SCI IMEFA 083
AG
France
SCI IMEFA 084
AG
France
SCI IMEFA 085
AG
France
SCI IMEFA 089
AG
France
SCI IMEFA 091
AG
France
SCI IMEFA 092
AG
France
SCI IMEFA 096
AG
France
SCI IMEFA 100
AG
France
SCI IMEFA 101
AG
France
SCI IMEFA 102
AG
France
SCI IMEFA 103
AG
France
SCI IMEFA 104
AG
France
SCI IMEFA 105
AG
France
SCI IMEFA 107
AG
France
SCI IMEFA 108
AG
France
SCI IMEFA 109
AG
France
SCI IMEFA 110
AG
France
SCI IMEFA 112
AG
France
SCI IMEFA 113
AG
France
Operation Name
Type of
business
Geographic
location
SCI IMEFA 115
AG
France
SCI IMEFA 116
AG
France
SCI IMEFA 117
AG
France
SCI IMEFA 118
AG
France
SCI IMEFA 120
AG
France
SCI IMEFA 121
AG
France
SCI IMEFA 122
AG
France
SCI IMEFA 123
AG
France
SCI IMEFA 126
AG
France
SCI IMEFA 128
AG
France
SCI IMEFA 129
AG
France
SCI IMEFA 131
AG
France
SCI IMEFA 132
AG
France
SCI IMEFA 140
AG
France
SCI IMEFA 148
AG
France
SCI IMEFA 149
AG
France
SCI IMEFA 150
AG
France
SCI IMEFA 155
AG
France
SCI IMEFA 156
AG
France
SCI IMEFA 157
AG
France
SCI IMEFA 158
AG
France
SCI IMEFA 159
AG
France
SCI IMEFA 164
AG
France
SCI IMEFA 169
AG
France
SCI IMEFA 170
AG
France
SCI IMEFA 171
AG
France
SCI IMEFA 172
AG
France
SCI IMEFA 173
AG
France
SCI IMEFA 174
AG
France
SCI IMEFA 175
AG
France
SCI IMEFA 176
AG
France
SCI LE VILLAGE VICTOR HUGO
AG
France
SCI MEDI BUREAUX
AG
France
SCI PACIFICA HUGO
AG
France
SCI PORTE DES LILAS – FRERES FLAVIEN
AG
France
SCI VALHUBERT
AG
France
SCI VAUGIRARD 36-44
AG
France
56055 AEURHC
AG
Luxembourg
ALTA VAI HOLDCO P
AG
France
AMUNDI EMERG MKT BD-M2EURHC
AG
Luxembourg
AMUNDI IT Services
AG
France
Azqore
AG
Switzerland
Azqore S.A. Singapore Branch
AG
Singapore
CA Indosuez Wealth (Asset Management)
AG
Luxembourg
Crédit Agricole Assurances Solutions
AG
France
EUROPEAN CDT SRI PC
AG
France
EUROPEAN MOTORWAY INVESTMENTS 1
AG
Luxembourg
FIXED INCOME DERIVATIVES – STRUCTURED
FUND PLC
AG
Ireland
GRD ACT.ZONE EURO
AG
France
HOLDING EUROMARSEILLE
AG
France
INDOSUEZ CAP EMERG.M
AG
France
IRIS HOLDING FRANCE
AG
France
PED EUROPE
AG
France
PREDICA ENERGIES DURABLES
AG
France
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
667
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
PREDICA INFRASTRUCTURE S.A.
AG
Luxembourg
PREDIPARK
AG
France
PREDIWATT
AG
France
S.A. RESICO
AG
France
SAS PREDI-RUNGIS
AG
France
SH PREDICA ENERGIES DURABLES SAS
AG
France
VAUGIRARD AUTOVIA SLU
AG
Spain
Vaugirard Infra S.L.
AG
Spain
VENDOME SEL EURO PC
AG
France
Via Vita
AG
France
FIMO Courtage
FRB
France
Interfimo
FRB
France
LCL
FRB
France
LCL succursale de Monaco
FRB
Monaco
Angle Neuf
FRB
France
C.L. Verwaltungs und
Beteiligungsgesellschaft GmbH
FRB
Germany
Crédit Lyonnais Développement
Économique (CLDE)
FRB
France
FCT True Sale (Compartiment LCL)
FRB
France
Arc Broker
IRB
Poland
CREDIT AGRICOLE BANK
IRB
Ukraine
Crédit Agricole Bank Polska S.A.
IRB
Poland
Crédit Agricole Banka Srbija a.d. Novi Sad
IRB
Serbia
Crédit Agricole Egypt S.A.E.
IRB
Egypt
Crédit Agricole Friuladria S.p.A.
IRB
Italy
Crédit Agricole Group Solutions
IRB
Italy
Crédit Agricole Italia
IRB
Italy
Crédit Agricole Leasing Italia
IRB
Italy
Crédit Agricole Polska S.A.
IRB
Poland
Credit Agricole Service sp z o.o.
IRB
Poland
Crédit du Maroc
IRB
Morocco
SIFIM
IRB
Morocco
IUB Holding
IRB
France
AD SUCCURSALE
SFS
Morocco
Agos
SFS
Italy
Alsolia
SFS
France
Crealfi
SFS
France
Credibom
SFS
Portugal
Crediet Maatschappij “De Ijssel” B.V.
SFS
Netherlands
Crédit Agricole Consumer Finance
SFS
France
Crédit LIFT
SFS
France
Creditplus Bank AG
SFS
Germany
De Kredietdesk B.V.
SFS
Netherlands
DE NEDERLANDSE VOORSCHOTBANK BV
SFS
Netherlands
EFL Services
SFS
Poland
EUROFACTOR GmbH
SFS
Germany
Eurofactor Italia S.p.A.
SFS
Italy
EUROFACTOR NEDERLAND
SFS
Netherlands
EUROFACTOR POLSKA S.A.
SFS
Poland
Eurofactor S.A. – NV (Benelux)
SFS
Belgium
Eurofactor S.A. (Portugal)
SFS
Portugal
HAMA POLSKA
SFS
Poland
Eurofintus Financieringen B.V.
SFS
Netherlands
Finaref Assurances S.A.S.
SFS
France
Finata Zuid-Nederland B.V.
SFS
Netherlands
Operation Name
Type of
business
Geographic
location
GSA Ltd
SFS
Mauritius
IDM Finance B.V.
SFS
Netherlands
IDM Financieringen B.V.
SFS
Netherlands
IDM lease maatschappij B.V.
SFS
Netherlands
Lebe Lease B.V.
SFS
Netherlands
INTERBANK NV
SFS
Netherlands
INTERMEDIAIRE VOORSCHOTBANK BV
SFS
Netherlands
Krediet ‘78 B.V.
SFS
Netherlands
Mahuko Financieringen B.V.
SFS
Netherlands
Menafinance
SFS
France
NL Findio B.V
SFS
Netherlands
RIBANK NV
SFS
Netherlands
Sofinco Participations
SFS
France
Société Européenne
de Développement d’Assurances
SFS
France
Société Européenne
de Développement du Financement
SFS
France
VoordeelBank B.V.
SFS
Netherlands
Auxifip
SFS
France
Carefleet S.A.
SFS
Poland
Crédit Agricole Leasing & Factoring
SFS
France
Crédit Agricole Leasing & Factoring,
Sucursal en Espana
SFS
Spain
Crédit du Maroc Leasing et Factoring
SFS
Morocco
Europejski Fundusz Leasingowy (E.F.L.)
SFS
Poland
Finamur
SFS
France
Lixxbail
SFS
France
Lixxcourtage
SFS
France
Lixxcredit
SFS
France
Unifergie
SFS
France
ARES Reinsurance Ltd.
SFS
Ireland
EFL Finance S.A.
SFS
Poland
EFL Lease Abs 2017-1 Designated Activity
Company
SFS
Ireland
FCT GINKGO DEBT CONSO 2015-1
SFS
France
FCT GINKGO PERSONAL LOANS 2016-1
SFS
France
FCT GINKGO PERSONAL LOANS 2020-01
SFS
France
FCT GINKGO MASTER REVOLVING LOANS
SFS
France
FCT GINKGO SALES FINANCE 2015-1
SFS
France
FCT GINKGO SALES FINANCE 2017-1
SFS
France
MAGOI BV
SFS
Netherlands
MATSUBA BV
SFS
Netherlands
RETAIL AUTOMOTIVE CP GERMANY 2016 UG
SFS
Germany
SUNRISE SPV 20 SRL
SFS
Italy
SUNRISE SPV 30 SRL
SFS
Italy
SUNRISE SPV 40 SRL
SFS
Italy
SUNRISE SPV 50 SRL
SFS
Italy
SUNRISE SPV Z60 Srl
SFS
Italy
SUNRISE SPV Z70 Srl
SFS
Italy
SUNRISE SPV Z80 Srl
SFS
Italy
SUNRISE SPV Z90 Srl
SFS
Italy
SUNRISE SRL
SFS
Italy
THETIS FINANCE 2015-1
SFS
Portugal
Banco Crédit Agricole Brasil S.A.
LC
Brazil
CACEIS Bank
LC
France
CACEIS Bank S.A., Germany Branch
LC
Germany
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
668
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
CACEIS Bank, Belgium Branch
LC
Belgium
CACEIS Bank, Ireland Branch
LC
Ireland
CACEIS Bank, Italy Branch
LC
Italy
CACEIS Bank, Luxembourg Branch
LC
Luxembourg
CACEIS Bank, Netherlands Branch
LC
Netherlands
CACEIS Bank, Switzerland Branch
LC
Switzerland
CACEIS Bank, UK Branch
LC
United Kingdom
CACEIS Belgium
LC
Belgium
CACEIS Corporate Trust
LC
France
CACEIS Fund Administration
LC
France
CACEIS FUND ADMINISTRATION SPAIN S.A.U
LC
Spain
CACEIS Ireland Limited
LC
Ireland
CACEIS S.A.
LC
France
CACEIS Switzerland S.A.
LC
Switzerland
Crédit Agriciole CIB (Belgique)
LC
Belgium
Crédit Agricole CIB (ABU DHABI)
LC
United Arab
Emirates
Crédit Agricole CIB (Allemagne)
LC
Germany
Crédit Agricole CIB (Canada)
LC
Canada
Crédit Agricole CIB (Corée du Sud)
LC
South Korea
Crédit Agricole CIB (Dubai DIFC)
LC
United Arab
Emirates
Crédit Agricole CIB (Dubai)
LC
United Arab
Emirates
Crédit Agricole CIB (Espagne)
LC
Spain
Crédit Agricole CIB (United States)
LC
United States
Crédit Agricole CIB (Finlande)
LC
Finland
Crédit Agricole CIB (Hong-Kong)
LC
Hong Kong
Crédit Agricole CIB (Inde)
LC
India
Crédit Agricole CIB (Italie)
LC
Italy
Crédit Agricole CIB (Japon)
LC
Japan
Crédit Agricole CIB (Royaume-Uni)
LC
United Kingdom
Crédit Agricole CIB (Singapour)
LC
Singapore
Crédit Agricole CIB (Suède)
LC
Sweden
Crédit Agricole CIB (Taipei)
LC
Taiwan
Crédit Agricole CIB Algérie Bank Spa
LC
Algeria
Crédit Agricole CIB AO
LC
Russia
Crédit Agricole CIB Australia Ltd.
LC
Australia
Crédit Agricole CIB China Ltd.
LC
China
Crédit Agricole CIB China Ltd.
Chinese Branch
LC
China
Crédit Agricole CIB S.A.
LC
France
Crédit Agricole CIB Services Private Ltd.
LC
India
ESTER FINANCE TECHNOLOGIES
LC
France
KAS Bank N.V.
LC
Netherlands
KAS Bank N.V. Frankfurt branch
LC
Germany
KAS Bank N.V. London branch
LC
United Kingdom
KAS Trust & Depositary Services B.V.
Amsterdam
LC
Netherlands
CACEIS BANK SPAIN, S.A.U.
LC
Spain
Credit Agricole Securities (Asia) Limited
Hong Kong
LC
Hong Kong
Credit Agricole Securities (Asia) Limited
Seoul Branch
LC
South Korea
Crédit Agricole Securities (USA) Inc
LC
United States
Crédit Agricole Securities Asia BV (Tokyo)
LC
Japan
Operation Name
Type of
business
Geographic
location
Compagnie Française de l’Asie (CFA)
LC
France
Crédit Agricole CIB Air Finance S.A.
LC
France
Crédit Agricole CIB Holdings Ltd.
LC
United Kingdom
Crédit Agricole Global Partners Inc.
LC
United States
Crédit Agricole Securities Asia BV
LC
Netherlands
Doumer Finance S.A.S.
LC
France
Fininvest
LC
France
Fletirec
LC
France
CAIRS Assurance S.A.
LC
France
Atlantic Asset Securitization LLC
LC
United States
Benelpart
LC
Belgium
Calixis Finance
LC
France
Calliope SRL
LC
Italy
Clifap
LC
France
Crédit Agricole America Services Inc.
LC
United States
Crédit Agricole Asia Shipfinance Ltd.
LC
Hong Kong
Crédit Agricole CIB Finance (Guernsey) Ltd.
LC
Guernsey
Crédit Agricole CIB Finance
Luxembourg S.A.
LC
Luxembourg
Crédit Agricole CIB Financial Solutions
LC
France
Crédit Agricole CIB Global Banking
LC
France
Crédit Agricole CIB Pension Limited
Partnership
LC
United Kingdom
Crédit Agricole CIB Transactions
LC
France
Crédit Agricole Leasing (USA) Corp.
LC
United States
DGAD International SARL
LC
Luxembourg
ESNI (compartiment Crédit Agricole CIB)
LC
France
Eucalyptus FCT
LC
France
FCT CFN DIH
LC
France
FIC-FIDC
LC
Brazil
Financière des Scarabées
LC
Belgium
Financière Lumis
LC
France
Fundo A De Investimento Multimercado
LC
Brazil
Héphaïstos EUR FCC
LC
France
Héphaïstos GBP FCT
LC
France
Héphaïstos Multidevises FCT
LC
France
Héphaïstos USD FCT
LC
France
Investor Service House S.A.
LC
Luxembourg
ItalAsset Finance SRL
LC
Italy
La Fayette Asset Securitization LLC
LC
United States
La Route Avance
LC
France
Lafina
LC
Belgium
LMA S.A.
LC
France
Merisma
LC
France
Molinier Finances
LC
France
Pacific EUR FCC
LC
France
Pacific IT FCT
LC
France
Pacific USD FCT
LC
France
Partinvest S.A.
LC
Luxembourg
Placements et réalisations immobilières (SNC)
LC
France
Sagrantino Italy SRL
LC
Italy
Shark FCC
LC
France
Sinefinair B.V.
LC
Netherlands
SNGI
LC
France
SNGI Belgium
LC
Belgium
Sococlabecq
LC
Belgium
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
669
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
Operation Name
Type of
business
Geographic
location
Sofipac
LC
Belgium
Sufinair B.V.
LC
Netherlands
TCB
LC
France
Triple P FCC
LC
France
TSUBAKI OFF (FCT)
LC
France
TSUBAKI ON (FCT)
LC
France
Vulcain EUR FCT
LC
France
Vulcain Multi-Devises FCT
LC
France
Vulcain USD FCT
LC
France
CACIB Qatar Financial Center Branch
LC
Qatar
Crédit Agricole S.A.
CC
France
Succursale Credit Agricole S.A.
CC
United Kingdom
Caisse régionale de Crédit Agricole mutuel
de la Corse
CC
France
CL Développement de la Corse
CC
France
Crédit Agricole Home Loan SFH
CC
France
Foncaris
CC
France
Crédit Agricole Capital Investissement
et Finance (CACIF)
CC
France
Delfinances
CC
France
Sodica
CC
France
CA Grands Crus
CC
France
Cariou Holding
CC
France
Crédit Agricole Agriculture
CC
France
Crédit Agricole Payment Services
CC
France
Crédit Agricole Public Sector SCF
CC
France
Crédit Agricole Régions Développement
CC
France
ESNI (compartiment Crédit Agricole S.A.)
CC
France
FCT Crédit Agricole Habitat 2015
Compartiment Corse
CC
France
Operation Name
Type of
business
Geographic
location
FCT Crédit Agricole Habitat 2017
Compartiment Corse
CC
France
FCT Crédit Agricole Habitat 2018
Compartiment Corse
CC
France
FCT Crédit Agricole Habitat 2019
Compartiment Corse
CC
France
FCT Crédit Agricole Habitat 2020
Compartiment Corse
CC
France
FIRECA
CC
France
Grands Crus Investissements (GCI)
CC
France
IDIA
CC
France
IDIA DEVELOPPEMENT
CC
France
IDIA PARTICIPATIONS
CC
France
S.A.S. Evergreen Montrouge
CC
France
SCI Quentyvel
CC
France
SNC Kalliste Assur
CC
France
Société d’Epargne Foncière Agricole (SEFA)
CC
France
Uni-medias
CC
France
FRB: French Retail Banking.
AG: Asset Gathering.
IRB: International Retail Banking.
SFS: Specialised Financial Services.
LC: Large customers.
CC: Corporate Centre.
Excluded are:
entities consolidated using the equity method, except for equity
accounted Insurance entities, which contribute to revenues
(financial investments);
IFRS 5.
TRANSACTIONS WITH RELATED PARTIES
The main transactions entered into with related parties are disclosed
in the consolidated financial statements as at 31 December 2020 in
the “General framework – Related parties” section.
In addition, in accordance with paragraph 13 of article L. 225-102-1
of the French Commercial Code
(Code de commerce)
, please note that
no agreements were entered into, directly or through intermediaries,
between, (i) on the one hand, the Chief Executive Officer, any one of the
Deputy Chief Executive Officers or Directors or shareholders of Crédit
Agricole S.A. with more than 10% of the voting rights, and (ii) on the other,
another company in which Crédit Agricole S.A. has, directly or indirectly,
more than a 50% share capital interest unless, where appropriate, these
agreements relate to ordinary arm’s length transactions.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
670
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Information on the Company
8
STATUTORY AUDITORS’ REPORT ON RELATED PARTY AGREEMENTS
This is a translation into English of a report issued in French and it is provided solely for the convenience of English-speaking users.
This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
Annual General Meeting held to approve the financial statements for the year ended 31 December 2020
To the General Meeting of Shareholders of Crédit Agricole S.A.,
In our capacity as statutory auditors of your Company, we hereby present to you our report on related party agreements.
We are required to inform you, on the basis of the information provided to us, of the terms and conditions of those agreements indicated to us, or that
we may have identified in the performance of our engagement, as well as the reasons justifying why they benefit the Company. We are not required to
give our opinion as to whether they are beneficial or appropriate or to ascertain the existence of other agreements. It is your responsibility, in accordance
with Article R. 225-31 of the French Commercial Code
(Code de commerce)
, to assess the relevance of these agreements prior to their approval.
We are also required, where applicable, to inform you in accordance with Article R. 225-31 of the French Commercial Code
(Code de commerce)
of the
continuation of the implementation, during the year ended 31 December 2020, of the agreements previously approved by the Annual General Meeting.
We performed those procedures which we deemed necessary in compliance with professional guidance issued by the French Institute of Statutory
Auditors
(Compagnie nationale des commissaires aux comptes)
relating to this type of engagement. These procedures consisted in verifying the
consistency of the information provided to us with the relevant source documents.
AGREEMENTS SUBMITTED FOR APPROVAL TO THE ANNUAL GENERAL MEETING
Agreements authorized during the year ended 31 December 2020
In accordance with Article L. 225-40 of the French Commercial Code
(Code de commerce)
, we have been notified of the following related party
agreements which received prior authorization from your Board of Directors.
Loan agreement with Crédit du Maroc
Person concerned
Mr. Gérard OUVRIER-BUFFET, director or member of the Supervisory Board of the entities concerned and / or indirectly interested in the Loan
Agreement through his functions within the Crédit Agricole Group.
Nature and purpose
The purpose of the Loan Agreement is to:
meet the expectations expressed by Bank Al-Maghrib to strengthen the regulatory capital and solvency ratios of Crédit du Maroc;
define the specific terms by which Crédit Agricole SA grants to Crédit du Maroc, as indefinite debt, a loan the amount of which corresponds to the
amount of dividends, i.e. one hundred and thirty-six million one hundred and sixteen thousand two hundred and sixty Dirhams and twenty-eight
cents (136,116,260.28 MAD) (the “Principal Amount of the Loan”) and repayable at the sole initiative of Crédit du Maroc, under the conditions
provided below.
Crédit Agricole S.A. has made the Principal Amount of the Loan available to Crédit du Maroc in one go, by transfer of the Principal Amount of the
Loan on December 14, 2020.
Conditions
The applicable annual interest rate would be revised in an annual basis and calculated by retaining (i) the interpolated rate determined from the
reference rate curve of the secondary market of Moroccan Treasury Bills as published by Bank Al-Maghrib five (5) Business Days before each interest
payment date (with the exception of the interpolated rate for the first year calculated on October 21, 2020), between the Treasury Bill maturity date
immediately preceding the corresponding interest payment date and the date maturity of the Treasury Bill immediately following the same date of
interest payment (this linear interpolation being carried out after conversion of the rates on an actuarial basis into equivalent money market rates)
(ii) increased by a margin of 235 basis points.
For the first year, this interpolated rate is 1.625% plus the margin of 235 bp.
The loan is granted for an indefinite period.
The interest payment date is set for November 15th of each year.
Crédit Agricole S.A. has no right to request reimbursement of the Principal Amount of the Loan.
The loan will only be repayable in the event of the liquidation of Crédit du Maroc, or at the option of Crédit du Maroc, subject to obtaining prior
authorization from Bank Al-Maghrib
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
The Loan Agreement allows to meet the expectations of the maroccan Central Bank, Bank Al-Maghrib, to strengthen the equity of Crédit du Maroc
in the context of the health crisis.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
671
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
Amendment to the Shareholder’s agreement with Crédit Agricole Technologies and Services (CATS), Crédit Agricole
Assurances Solutions (CAAS), CA Consumer Finance (CACF), Crédit Agricole Corporate and Investmank Bank
(CACIB), Crédit Agricole Group Solutions (CAGS), Crédit Agricole Payment Services (CAPS), Crédit Lyonnais (LCL)
and the National Federation of Credit Agricole (FNCA)
Persons concerned
MM. Philippe BRASSAC and Xavier MUSCA, Chief Executive Officer and Deputy Chief Executive Officer of Crédit Agricole S.A., Ms Françoise GRI,
Catherine POURRE, and MM. Dominique LEFEBVRE, Raphaël APPERT, Pierre CAMBEFORT, Daniel EPRON, Jean-Pierre GAILLARD, and Gérard
OUVRIER-BUFFET, directors of Crédit Agricole SA, joint directors with entities concerned and / or indirectly interested in the Loan Agreement through
his functions at within the Crédit Agricole Group.
Nature and Purpose
Approved by the Board of Directors on May 14, 2018, the plan to create CAGIP was accompanied by two related party agreements authorized by
the Board of Crédit Agricole SA at the same meeting, one relating to the Memorandum of Understanding, the other on the Shareholder’s Agreement.
Crédit Agricole S.A., CAAS, CACF, CACIB, CAGS, CAPS, CATS, LCL and FNCA signed the Shareholder’s Agreement on June 8, 2018, which notably
concerned CAGIP’s governance rules.
The signatory partners and CAGIP have agreed to conclude a draft amendment to the Shareholder’s Agreement in order to make changes to the
rules of governance.
Conditions
The amendment increases the number of CAGIP directors from 10 to 12 while respecting the Crédit Agricole SA / Regional Banks parity rules,
with corresponding modification of the quorum, or even introduces flexibility in the appointment of the Chairmen of the specialized committees, in
particular of the Audit and Finance Committee, by decorrelating them from the exercise of an ès-quality function. The changes also aim to reflect
the establishment of Technical Committees for the Board of Directors (the steering committee, for example, had never been set up) and to increase
the number of members of the Risk and Safety Committee from 4 to 6 and the Audit and Finance Committee.
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
The proposed changes facilitate the functioning of the Board of Directors of CAGIP and provide flexibility in the appointment of Chairs of specialized
committees.
Amendment to the business transfer agreement made on January 1, 2018 with CA-CIB
Persons concerned
Ms Françoise GRI and Ms Catherine POURRE, joint directors of Crédit Agricole S.A. and CA-CIB.
Nature and purpose
CA-CIB and Crédit Agricole S.A. have come together to negotiate an addendum which modifies the terms and conditions of the amendment to the
business transfer agreement made on January 1, 2018.
Conditions
The business transfer agreement would be partially canceled, with retroactive effect from January 1, 2018, in order to expressly exclude the continued
activities, as defined in the agreement, from the scope of the sale, as well as all the rights and obligations attached thereto as they existed at the
time of sale on the transfer date, and to include them in the excluded activities with retroactive effect to the transfer date.
The partial cancellation of the business transfer agreement would not give rise to the retrocession by Crédit Agricole SA to CA-CIB of a share of the
sale price relating to the continuing activities, the latter having been valued at zero in the context of determining the sale price.
The deadline for the transitional period would be extended until a date on which Crédit Agricole SA and CA-CIB would mutually agree when the IT
migration was effective and the other operational constraints had been lifted, and no later than December 31, 2022. Crédit Agricole SA and CA-CIB
could also agree by mutual agreement to modify the cut-off date at any time during the transitional period.
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
The purpose of modifying the scope of the initial sale contract is to ensure better consistency in the Group’s liquidity management and monitoring
processes concerning:
the minimum reserve accounts of the Regional Banks and Amundi. In fact, maintaining these accounts at Crédit Agricole SA makes it possible in
particular to ensure consistency with the treatment adopted for LCR cash accounts (which are excluded from the initial contract and therefore
maintained at Crédit Agricole S.A). Minimum reserve accounts are similar in nature to LCR cash accounts in that their management is part of
Crédit Agricole SA’s mandate as a central body and they also provide liquidity to the ECB;
Bforbank’s refinancing and investment accounts for which, maintaining at Crédit Agricole SA ensures consistency between the remuneration /
invoicing by Crédit Agricole S.A and the long-term liquidity qualification of this resource for Crédit Agricole SA.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
672
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
The agreement allows Crédit Agricole SA to maintain non-transferable accounts from a technical point of view. These are two accounts of Syrian
banks which are subject to restrictive measures; an account of a deceased natural person whose inheritance is still in progress; two technical
accounts allowing Crédit Agricole SA to record its security deposits with the ABE and STET payment systems, which by design cannot be integrated
into a business.
Agreements with no prior authorization
In accordance with Article L. 225-42 et L. 823-12 of the French Commercial Code
(Code de commerce)
, we inform you that these agreements did
not receive prior authorization from your Board of Directors.
Our role is to inform you of the reasons why the authorization procedure was not followed.
Tax consolidation agreement with the Regional Banks of Crédit Agricole
Persons concerned
MM. Dominique LEFEBVRE, Raphaël APPERT, Pierre CAMBEFORT, Daniel EPRON, Jean-Pierre GAILLARD, Ms. Nicole GOURMELON, MM. Jean-Paul
KERRIEN, Pascal LHEUREUX, Gérard OUVRIER-BUFFET, Louis TERCINIER and Philippe de WAAL, Chairman or directors of Crédit Agricole S.A. and
chairmen, general managers of the aforementioned entities.
Nature and purpose
The Board of Directors meeting on February 10, 2021 authorized the renewal of the group tax regime agreement under the same terms and principles
as those concluded in 2016, for a period of five years from January 1, 2020.
In its meeting of January 21, 2010, the Board authorized the expansion of the Crédit Agricole S.A. tax group, on the basis of paragraph 5 of article
223 A of the General Tax Code, this expansion necessarily applying to the all of the Regional Banks and Local Banks subject to corporation tax at
the common law rate as well as, optionally, to their subsidiaries.
The system was framed by an agreement binding the central body and each of the entities entering the group due to its enlargement, as of January
1, 2010. The agreements are renewable by joint and express agreement of all the entities concerned for successive five-year periods.
Conditions
The overall amount of the 2020 tax savings due to intra-group dividends, which are subject to payment under the agreements between Crédit
Agricole S.A. and the companies referred to above, amounts to 27.1 million euros.
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
The extension of the scope of the Crédit Agricole tax group is based on a principle of sharing between Crédit Agricole SA and these entities, dictated
by a common social, economic and financial interest specific to each of the member entities of the Crédit Agricole Fiscal Group, and in particular
by the reallocation of certain tax savings made by the Crédit Agricole tax group.
Tax consolidation agreement with SACAM Mutualisation
Persons concerned
MM. Dominique LEFEBVRE and Raphaël APPERT, Chairman or director of Crédit Agricole S.A. and managers of Sacam Mutualisation.
Nature and Purpose
The Board of Directors meeting on February 10, 2021 authorized the renewal of the group tax regime agreement under the same terms as the
agreement signed in 2016, for a period of five years from January 1, 2020, between Crédit Agricole SA and the Sacam Mutualisation company
which provides that the tax savings made by the group as a result of the intra-group dividends received by this entity were fully reallocated to it.
Conditions
The amount of the 2020 tax savings paid under the agreement between Crédit Agricole S.A. and the company SACAM Mutualisation amounts to
3.1 million euros.
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
Following the sale by Crédit Agricole SA of CCI / CCA to Sacam Mutualisation on August 1, 2016, Crédit Agricole SA and Sacam Mutualisation agreed
to the terms of a tax consolidation agreement renewed in November 2020 governing the relations between these companies and specifying in
particular the sharing rules via the reallocation of certain tax savings generated by the tax group.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
673
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
Tax consolidation agreement with the companies SAS Rue La Boëtie, SAS Ségur, SAS Miromesnil, SACAM Avenir,
SACAM Développement, SACAM International, SACAM Participations, SACAM FIA-NET Europe, SACAM Fireca,
SACAM Immobilier, SACAM Machinisme, SACAM Assurance Caution, SARL Adicam and SAS Crédit Agricole
Logement et Territoires
Persons concerned
MM. Dominique LEFEBVRE, Raphaël APPERT, Daniel EPRON, MM. Jean-Pierre GAILLARD, Pascal LHEUREUX, Gérard OUVRIER-BUFFET and Philippe
de WAAL, Chairman or directors of Crédit Agricole S.A. and Chairmen, general managers or directors of the aforementioned entities.
Nature and Purpose
The Board of Directors authorized at its meeting of January 21, 2010, and renewed at its meeting of December 15, 2015, the tax consolidation
agreements between Crédit Agricole SA and the companies SAS Rue La Boétie, SAS Ségur, SAS Miromesnil and the federal holding companies
(Sacam Avenir, Sacam Développement, Sacam International, Sacam Participations, Sacam Fia-net Europe, Sacam Fireca, Sacam Immobilier, Sacam
Machinisme, and Sacam Assurance Caution).
These agreements, concluded for a period of five years, provided for half of the tax savings made on dividends received by these entities to be
reallocated to them.
The Board of Directors, in its meeting of December 13, 2016, authorized the signing of the addendum to the tax consolidation agreements concluded
with the aforementioned entities, henceforth providing for the full reallocation of tax savings.
The Board of Directors meeting on February 10, 2021 authorizes the renewal of the tax consolidation agreements under the same terms as those
signed in 2016 for a period of five years from January 1, 2020 with the aforementioned entities and by adding the new companies to them. integrated
into the tax group in 2020, SARL Adicam and SAS Crédit Agricole Logement et Territoires.
Conditions
The overall amount of 2020 tax savings due to intragroup dividends paid under agreements between Crédit Agricole S.A. and the companies
concerned, amounts to 3.3 million euros.
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
Following the sale by Crédit Agricole SA of the CCI / CCA to Sacam Mutualisation on August 1, 2016, Crédit Agricole SA and the Sacams agreed
to the terms of a tax consolidation agreement renewed in November 2020 governing the relations between these companies and specifying in
particular the sharing rules via the reallocation of certain tax savings generated by the tax group.
Tax consolidation agreement with CA-CIB
Persons concerned
Ms Françoise GRI and Catherine POURRE, Mr Philippe BRASSAC, chief executive officer or directors of Crédit Agricole S.A. and Chairman or directors
of CA-CIB.
Nature and Purpose
The Board of Directors at its meeting of February 10, 2021, renewed the tax consolidation agreement concluded in 1996 Crédit Agricole SA and
CA-CIB, the purpose of which is to determine the relations between Crédit Agricole SA, on the one hand , and CA-CIB and its integrated subsidiaries,
on the other hand, and in particular the distribution of the corporate tax charge. This tax consolidation agreement is renewed for the period from
2020 to 2024 and renews the relationship between Crédit Agricole SA and CA-CIB and its consolidated subsidiaries from January 1, 2020.
The tax consolidation agreement allowed CA-CIB to collect the tax savings made by the Crédit Agricole Group up to its individual tax loss result
actually charged by the Group. The Board of Directors, in its meeting of November 15, 2016, authorized the signing of the amendment to the tax
consolidation agreement between Crédit Agricole SA and CA-CIB in order to provide for the extension of monetization for the benefit of CA -CIB, of
the entire deficit of the sub-group charged by Crédit Agricole SA as the head of the group.
Conditions
The provisional amount of tax savings for the year 2020 due to the agreement amounts to 40.7 million euros. The amount of final compensation
for the previous year is 13.1 million euros.
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
The essential motivation of this tax consolidation agreement is to determine the distribution of the corporate tax charge between Crédit Agricole
SA and CA-CIB, in particular through the reallocation of the tax savings relating to the generated deficit. by the CA-CIB subgroup and transmitted
and used by the tax group.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
674
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
Amendment to the modifying loan agreement of October 10, 2017 with the Caisse Régionale Normandie
Person concerned
Mr. Daniel EPRON, Chairman of Caisse Régionale Normandie and director of Crédit Agricole S.A.
Nature and Purpose
The Board of Directors, in its meeting of May 19, 2016, authorized the signing of the loan contracts granted as part of the “Eureka” transaction
between Crédit Agricole S.A. and the Regional Banks. At its meeting of August 2, 2017, the Board of Directors authorized the signing of amendments
to these loan agreements. The amendments to the senior loan contracts have changed the structure of the financing granted by Crédit Agricole S.A.
which has offered the Regional Banks to buy back the early repayment option. On December 18, 2020, Crédit Agricole S.A. and Caisse Régionale
Normandie decided on the partial early repayment of 16% of the principal remaining due.
Conditions
Crédit Agricole S.A. and Caisse Régionale Normandie have agreed to repay the sum of € 49,660,339.95 (forty-nine million six hundred and sixty
thousand three hundred and thirty nine euros and ninety-five cents) corresponding, from the partial early repayment date, to the principal amount
remaining due under the loan of € 47,904,320 (forty-seven million nine hundred four thousand three hundred and twenty euros), increased by
the amount of accrued and unmatured interest calculated on the amount repaid up to the early repayment date partial (included) and an early
repayment indemnity in accordance with the provisions below. At the same time, Crédit Agricole S.A. and Caisse Régionale Normandie agreed to
modify the provisions relating to the calculation and payment of late payment interest in order to replace the EONIA index with the € STR index.
Reasons justifying why the Company benefits from this agreement
Your board justified this agreement as follows:
The nature of the early repayment option appears in the senior loan contracts signed in 2016. The amendment to the EUREKA loan contract formalizes the
already existing legal possibility of repaying the loan by mutual agreement between Crédit Agricole S.A. and Caisse Régionale Normandie, at a price of market.
Due to an omission by your board of directors, the above agreements have not been subject to the prior authorization provided for in Article L. 225-38
of the French Commercial Code.
We hereby specify that your Board of Directors, at its meeting held on February 10, 2021 decided to subsequently authorize this agreement.
Agreements previously approved by the Annual General Meeting
In accordance with Article R. 225-30 of the French Commercial Code
(Code de commerce)
, we have been notified that the implementation of the
following agreements, which were approved by the Annual General Meeting in prior years, continued during the year ended 31 December 2020.
Shareholder’s agreement with Shareholder’s agreement with CAAS, CACF, CACIB, CAGS, CAPS, CATS, LCL and FNCA
Persons concerned
MM. Philippe BRASSAC and Xavier MUSCA, Chief Executive Officer and Deputy Chief Executive Officer of Crédit Agricole S.A., Ms Véronique FLACHAIRE
(until the 2020 AGM), Françoise GRI, Catherine POURRE, and MM. Dominique LEFEBVRE, Raphael APPERT, Daniel EPRON, Jean-Pierre GAILLARD, Gérard
OUVRIER-BUFFET, François THIBAULT (until the 2020 AGM) directors of Crédit Agricole S.A., directors or joint managers in common with the entities concerned.
Nature and purpose
Under the terms of the memorandum of understanding cited above, some of the parties have agreed to set up a new company, Crédit Agricole
Group Infrastructure Platform, which carries the project relating to the merger of certain infrastructure and IT production activities of the Group.
Agricultural credit.
The company was formed to acquire on January 1, 2019, SILCA and the IT production activities of CATS, CACIB in France and CAAS. It is intended
to accommodate the IT production activities of other Crédit Agricole Group entities. The associated parties together hold 100% of the Company’s
share capital and voting rights.
In this context, the parties wished, through this shareholders’ agreement:
complete the rules of governance of the company provided for in the articles of association;
organize their relationships as Partners;
determine the conditions they intend to comply with in the event of a Transfer of all or part of their stake in the Company’s capital.
The shareholders’ agreement relating to Crédit Agricole Group Infrastructure Platform sets out, in particular, the following specific governance rules
for Crédit Agricole Group Infrastructure Platform: a Board of Directors made up 50/50 between the Regional Banks and their subsidiaries or production
entities IT and the Crédit Agricole SA Group with a Chairman of the SAS, also Chairman of the Board of Directors appointed on the proposal of the
Regional Banks and a Chief Executive Officer appointed on the proposal of the Crédit Agricole SA Group.
Noting, in addition to the presence of common Managers and Directors, that the governance rules described above do not reflect the planned capital
distribution between the Regional Banks and their subsidiaries (36%) and the Crédit Agricole SA group (64%), this Agreement was considered to
constitute a regulated agreement within the meaning of the provisions of the French Commercial Code. It was authorized by the Board of Directors
at its meeting on May 14, 2018.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
675
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
Conditions
The shareholders’ agreement specifies the governance rules of Crédit Agricole Group Infrastructure Platform, both as regards the management
body in its executive functions and in its supervisory functions, as well as of the subsidiary to be set up provided for in the memorandum of
understanding. agreement. It organizes, in particular, the rules relating to the financing of the company and the transfer of securities, as well as the
possible conditions of exit of a partner and the conditions under which the services of the company will be provided.
The Shareholder’s Agreement was signed on June 8, 2018.
Guarantee agreement with SILCA
Persons concerned
Ms Véronique FLACHAIRE (until the 2020 AGM) Françoise GRI and Catherine POURRE, and MM. Philippe BRASSAC, Xavier MUSCA and Jean-Pierre
GAILLARD, François THIBAULT (until the 2020 AGM) Joint chairmen and directors with the entities concerned.
Nature and purpose
At its meeting of May 14, 2018 during which it authorized the signing of the Protocol, the Board of Directors was informed that the signatory parties
would agree that the contracts for the contribution or sale of activities will include guarantee clauses. assets and liabilities relating to management
prior to the completion date and that, regarding SILCA, a particular mechanism must be studied insofar as this entity will be the subject of a
merger-absorption before the expiry of the guarantees of liabilities.
The terms of this guarantee were presented to the Board of Directors, which authorized the signing of the related agreement at its meeting on
November 6, 2018.
Its purpose is to specify the declarations and guarantees granted by the Guarantors for the benefit of CAGIP under the merger-absorption operation of
SILCA by CAGIP, as well as the respective rights and obligations of the parties in the event of violation or inaccuracy of one or more of these statements.
Conditions
For a period of 36 months from January 1, 2019, the Guarantors undertake, each up to their share in the capital of SILCA on the date of completion
of the merger-absorption, to indemnify CAGIP:
any increase in liabilities or any decrease in assets resulting from or originated in a fact or event prior to January 1, 2019;
any damage suffered by CAGIP as a result of the inaccuracy or insincerity of a declaration relating to the assets transferred as part of the
merger-absorption;
any damage suffered by CAGIP following a third-party claim for acts attributable to SILCA and prior to January 1, 2019.
The 36-month period is replaced by the duration of the legal prescription with regard to any damage suffered by CAGIP as a result of the inaccuracy
or insincerity of a declaration relating to SILCA. The indemnification commitment for damage suffered by CAGIP in tax matters will end after a period
of 10 working days from the expiration of the statutory limitation period.
A unit threshold of 10,000 (ten thousand) euros is set for the consideration of a complaint. No overall ceiling has been set by the parties.
The guarantee agreement was signed on November 21, 2018. For the year 2019, no guarantee was activated.
Loan agreement with the Regional Banks of Crédit Agricole of Languedoc, Lorraine, Val de France, Centre-Est,
Sud Rhône Alpes, Finistère, Loire Haute-Loire, Charente-Maritime Deux Sèvres and Centre Loire
Persons concerned
Ms Véronique FLACHAIRE (until the AGM 2020) Renée TALAMONA (August 2020), MM. Dominique LEFEBVRE, Raphaël APPERT, Jean-Pierre GAILLARD,
Jean-Paul KERRIEN, Gérard OUVRIER-BUFFET, Louis TERCINIER, François THIBAULT (until the 2020 AGM) Chairman or directors of Crédit Agricole
SA and Chairmen, general managers of the above-mentioned entities.
Nature and purpose
The Board of Directors, at its meeting of May 19, 2016, authorized the signing of the loan contracts granted as part of the “Eureka” transaction between
Crédit Agricole SA and the Regional Banks, with the choice for them between different options
,
reimbursement, clarification being made regardless
of the option chosen by a Regional Bank, the average cost of its financing remained equal to 2.15% per annum under the following conditions.
The Regional Banks thus benefited from financing under the following conditions:
total loan of 11 billion euros at a fixed rate of 2.15% over 10 years;
semi-annual early repayment option from the 4th year, with 12 months notice.
At its meeting of August 2, 2017, the Board of Directors authorized the signing of amendments to these loan agreements. The amendments to
the senior loan contracts modified the structure of the financing granted by Crédit Agricole SA, which offered the Regional Banks to buy back the
early repayment option, this buyback taking the form of a rate reduction in return. the setting by each Regional Bank of a firm repayment schedule.
Conditions
The refinancing schedule offered to the Regional Banks has been the subject of a fairness certificate from an external firm.
CRÉDIT AGRICOLE S.A.
—
2020 Universal Registration Document
676
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
The Regional Banks had the option of keeping the initial financing structure or replacing it with one or more financing on the maturities of their
choice from the table below (depending on the market conditions in force on July 4, 2017). The proposed yield drop was between 35bp and 56bp,
corresponding to the estimated management cost of 50bp for Crédit Agricole S.A. from the outset.
Loan maturity
Bullet fixed rate
03/08/2020
1.8
03/08/2021
1.64
03/08/2022
1.59
03/08/2023
1.60
03/08/2024
1.67
03/08/2025
1.75
03/08/2026
1.84
The amendments were signed on October 10, 2017. The total amount of financing offered to the regional banks concerned by the regulated nature
of these agreements is € 3.391 billion.
Guarantee agreement with the Regional Banks of Crédit Agricole of Languedoc, Lorraine, Val de France, Normandie,
Sud Rhône-Alpes, Finistère, Loire Haute-Loire and Centre-Loire
Persons concerned
Ms Véronique FLACHAIRE (until the AGM 2020) Renée TALAMONA (August 2020) and MM. Dominique LEFEBVRE, Daniel EPRON, MM. Jean-Pierre
GAILLARD, Jean-Paul KERRIEN and Gérard OUVRIER-BUFFET, François THIBAULT (until the 2020 AGM) Chairman or directors of Crédit Agricole S.A.
and Chairmen, General Managers of the above-mentioned entities.
Nature and purpose
The Board of Directors, in its meeting of May 19, 2016, authorized the signing of addendum no.3 to the Switch guarantee agreement between
Crédit Agricole S.A. and the Regional Banks.
As part of the “Eureka” transaction, the parties decided to modify certain terms of the Switch agreement for the Insurance part, under which the
Regional Banks guarantee Crédit Agricole SA against a drop in the equity-accounted value of stakes that it holds in the capital of Crédit Agricole
Assurances, and to adjust the conditions for the return of the amount of cash collateral relating to the Guarantee applicable to CCI / CCA.
This rider makes the following changes to the Switch guarantee relating to Crédit Agricole S.A.’s participation in Crédit Agricole Assurances:
introduction of a mechanism for partial termination of the Switch Assurances which would be implemented by decision of Crédit Agricole S.A.
by gradually reducing the guaranteed amount;
replacement of the quarterly calculation periodicity by a half-yearly periodicity.
Conditions
The signing of addendum n° 3 to the Switch guarantee agreement took place on July 21, 2016, with effect from July 1, 2016. The amount of
guarantees provided by the Regional Mutuals under the Insurance part amounts to MEUR. 1,274.51 and their guarantee deposits of MEUR 431.42
as of December 31, 2020. The remuneration paid or to be paid by your company to the regional guarantee funds mentioned above, for the 2020
financial year amounts to MEUR 44, 42.
MSI Activity transfer agreement with CA-CIB
Persons concerned
Ms Françoise GRI and Catherine POURRE and MM. Philippe BRASSAC and François THIBAULT (until the 2020 AGM), Chief Executive Officer or
directors of Crédit Agricole S.A. and Chairman or directors of CA-CIB.
Nature and purpose
CA-CIB and Crédit Agricole SA have come together in order to negotiate and decide on the terms and conditions of the sale of the business transferred
under the terms of an agreement (hereinafter referred to as the “Sale of Business Agreement”).
Conditions
The transfer of ownership of the business transferred as well as the rights, risks and enjoyment resulting therefrom would be effective on January
1, 2018 (hereinafter referred to as the “Transfer Date”). However, for operational reasons, and in particular for IT migration, CA-CIB would not be
able, on the transfer date, to open accounts for DSB customers. Consequently, the accounts opened by customers would be maintained at Crédit
Agricole SA during a transitional period and opened at CA-CIB, during and at the end of this transitional period, according to a schedule which would
depend on the progress of the work. to be carried out at CA-CIB and which should end no later than December 31, 2020. During this transitional
period, Crédit Agricole SA would retrocede to CA-CIB the income from the activities of the business transferred that Crédit Agricole SA would
CRÉDIT AGRICOLE S.A.
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GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
have received from DSB customers. At the same time, all charges, costs and liabilities incurred by Crédit Agricole S.A. in respect of the business
transferred would be borne by CA-CIB.
As of the transfer date, CA-CIB would operate the business transferred with the human and material resources that would have been transferred to it.
Agreement relating to the strengthening of equity capital with the company CA-CIB
Persons concerned
Ms Françoise GRI and Ms Catherine POURRE, MM. Philippe BRASSAC and François THIBAULT (until the 2020 AGM) Chief Executive Officer of Crédit
Agricole, directors of Crédit Agricole S.A. and Chairmen or directors of the aforementioned entities.
Nature and purpose
Following the merger of the corporate and investment banking activities of the Crédit Agricole SA and Crédit Lyonnais groups, a partial transfer of
assets from Crédit Lyonnais to Crédit Agricole Indosuez (now Calyon then CA-CIB) was realized.
Conditions
Within the framework of this authorization, Crédit Agricole S.A. notably subscribed in 2004 to an issue of super-subordinated securities, for an
amount of US $ 1,730 million. During fiscal year 2014, one of the issues amounting to US $ 1,260 million was prepaid on February 28, 2014.
The second issue for an amount of $ 470 million was partially reimbursed in early 2019 (up to $ 270 million) and the notional outstanding for fiscal
2020 is $ 200 million. The total coupon amount due for 2020 is $ 7,280,267 excluding late interest.
Temporary shared fine agreement with Crédit Agricole CIB
Persons concerned
Ms Françoise GRI and Ms Catherine POURRE, MM. Philippe BRASSAC and François THIBAULT (until the 2020 AGM), Chief Executive Officer of Crédit
Agricole S.A. and Chairman of CA-CIB, joint directors of Crédit Agricole S.A. and CA-CIB.
Nature and purpose
On December 7, 2016, the European Commission condemned Crédit Agricole SA and CA-CIB jointly and severally to a fine of 114,654 million euros
following a Commission investigation concluding that there was an agreement between seven institutions. banking on interest rate derivatives in
euros by agreeing on the determination of the reference interest rate that is EURIBOR.
The charges allegedly took place between September 2005 and May 2008.
As soon as the Commission’s decision was delivered, Crédit Agricole announced that it would appeal to the General Court of the European Union.
The motion to quash was filed on February 17, 2017.
As the appeal was not suspensive, Crédit Agricole had to pay the full amount of the fine before March 5, 2017.
Under the terms of an agreement concluded with CA-CIB, Crédit Agricole SA has agreed to pay the entire penalty on behalf of the two jointly condemned
institutions and deferring the distribution between them of the payment of the fine to the decision of the judicial authorities of the European Union.
Conditions
At its meeting of January 20, 2017, the Board of Directors authorized the draft agreement between Crédit Agricole S.A. and CA-CIB under the terms
of which:
pending the intervention of a decision having the authority of res judicata in the last instance, Crédit Agricole S.A. assumed and paid the sum of
114,654,000 euros for the penalty;
the final terms of distribution of the final amount of the possible penalty to be agreed at a later date by mutual agreement between Crédit Agricole
SA and CA-CIB, once a decision having the force of res judicata in the last instance has been adopted.
The agreement was authorized in identical terms by the Board of CA-CIB on February 10, 2017. It constitutes a formal measure to organize the
distribution of the joint and several sentences, without prejudging the results of the appeals initiated.
In accordance with the delegation granted by their respective boards, it was signed on February 27, 2017 by the Chief Executive Officer of Crédit
Agricole S.A. and the Chief Executive Officer of CA-CIB. The penalty was settled within the legal deadlines, ie before March 5, 2017. No decision
having been taken on the appeal initiated by Crédit Agricole, the situation between Crédit Agricole SA and CA-CIB is identical to that observed at
the end of 2017.
CRÉDIT AGRICOLE S.A.
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GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
Billing and collecting agreement with Crédit Agricole CIB
Persons concerned
Mmes Françoise GRI And Catherine POURRE, MM. Philippe BRASSAC and François THIBAULT (until the 2020 AGM) Chief Executive Officer of Crédit
Agricole S.A. and Chairman of CA-CIB, joint directors of Crédit Agricole S.A. and CA-CIB.
Nature and purpose
The Board of Directors, in its meeting of December 19, 2017, authorized the transfer of the IT activities of Crédit Agricole S.A. (MSI), to Global IT
(GIT), which performs the same missions within the scope of CA-CIB.
The transfer of activity in itself does not constitute a regulated agreement but, within the framework of this operation, Crédit Agricole SA and CA-CIB
have set up an invoicing and collection mandate which falls within the scope of this transaction. the provisions of paragraph 2 of article L. 225-38
of the French Commercial Code relating to regulated agreements. As such, this mandate was authorized by the Board of Directors at a meeting of
December 19, 2017, separately from the overall authorization for the transfer of activity.
Conditions
Some Crédit Agricole Group entities benefit from MSI’s services, through signed quotes. Invoicing and recovery of services are carried out by Crédit
Agricole SA within the framework of the invoicing and recovery mandate which includes, in particular, the guarantee from Crédit Agricole SA to
CA-CIB relating to recovery, from the entities benefiting from these services, sums invoiced by Crédit Agricole SA in the name and on behalf of CA-CIB.
Neuilly-sur-Seine and Paris-La Défense, 23 March 2021
The Statutory Auditors
French original signed by:
PricewaterhouseCoopers Audit
ERNST & YOUNG et Autres
Anik Chaumartin
Olivier Durand
CRÉDIT AGRICOLE S.A.
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GENERAL INFORMATION
Statutory auditors’ report on related party agreements
8
PERSON RESPONSIBLE FOR THE UNIVERSAL REGISTRATION
DOCUMENT OF CRÉDIT AGRICOLE S.A.
Mr Philippe Brassac,
Chief Executive Officer of Crédit Agricole S.A.
STATEMENT BY THE PERSON RESPONSIBLE
I hereby certify that, to my knowledge and after all due diligence, the information contained in the present Universal registration document is true
and accurate and contains no omission likely to affect the import thereof.
I hereby certify that, to my knowledge, the consolidated financial statements have been prepared in accordance with applicable accounting standards
and give a true and fair view of the assets liabilities, financial position and results of the Company and all entities included in the consolidated Group,
and the management report, made up of the sections indicated in the cross-reference table at the end of this document, provides a true and fair
view of the development and performance of the business, profit or loss and financial position of the Company and all the entities included in the
consolidated Group, and that it describes the principal risks and uncertainties that they face.
Montrouge, 24 March 2021
Chief Executive Officer of Crédit Agricole S.A.
Philippe Brassac
STATUTORY AUDITORS
STATUTORY AUDITORS
Ernst & Young et Autres
PricewaterhouseCoopers Audit
Company represented by Olivier Durand
Company represented by Anik Chaumartin
1-2, place des Saisons
92400 Courbevoie, Paris – La Défense 1
63, rue de Villiers
92208 Neuilly-sur-Seine
Statutory Auditors, Member,
Compagnie régionale des Commissaires
aux comptes de Versailles
Statutory Auditors, Member,
Compagnie régionale des Commissaires
aux comptes de Versailles
Ernst & Young et Autres
was appointed Statutory Auditor under the name Barbier Frinault et Autres by the Ordinary General Meeting of 31 May 1994.
This term of office was renewed for a further six years at the Combined General Meeting of 16 May 2018.
Ernst & Young et Autres is represented by Olivier Durand.
PricewaterhouseCoopers Audit
was appointed Statutory Auditor by the Ordinary General Meeting of 19 May 2004. This term of office was renewed
for a further six years at the Combined General Meeting of 16 May 2018.
PricewaterhouseCoopers Audit is represented by Anik Chaumartin.
The Crédit Agricole S.A. Board of Statutory Auditors remained unchanged in 2011/2012/2013/2014/2015/2016/2017/2018 and 2019. The signatories
remained unchanged in 2011/2012/2013 and 2014, namely Valérie Meeus for Ernst & Young et Autres and Catherine Pariset for PricewaterhouseCoopers
Audit. Since 2015, the signatory for PricewaterhouseCoopers Audit has been Anik Chaumartin, replacing Catherine Pariset. Since 2017, the signatory
for Ernst & Young et Autres has been Olivier Durand, replacing Valérie Meeus.
DEPUTY STATUTORY AUDITORS
Picarle et Associés
Jean-Baptiste Deschryver
Company represented by Marc Charles
1-2, place des Saisons
92400 Courbevoie, Paris – La Défense 1
63, rue de Villiers
92208 Neuilly-sur-Seine
Statutory Auditors, Member,
Compagnie régionale des Commissaires
aux comptes de Versailles
Statutory Auditors, Member,
Compagnie régionale des Commissaires
aux comptes de Versailles
Picarle et Associés
was appointed Alternate Statutory Auditor for Ernst & Young et Autres by the Combined General Meeting of 17 May 2006.
This term of office was renewed for a further six years at the Combined General Meeting of 16 May 2018.
Jean-Baptiste Deschryver
was appointed Alternate Statutory Auditor for PricewaterhouseCoopers Audit by the Combined General Meeting of
16 May 2018.
Crédit Agricole S.A.
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Universal registration document 2020
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GENERAL INFORMATION
Person responsible for the Universal registration document of Crédit Agricole S.A.
8
GLOSSARY
ACRONYMS
ACPR
French Regulatory and Resolution Supervisory Authority.
AFEP/MEDEF
French Business and Employers’ Associations.
AMF
French financial markets authority.
CSR
Corporate and Social Responsibility.
EBA
European Banking Authority.
ECB
European Central Bank.
ESG
Environment, Social, Governance.
GOI
Gross Operating Income.
IFRS
International Financial Reporting Standards.
MSE
Medium-sized Enterprise.
MTP
Medium-Term Plan.
SME
Small and Medium-sized Enterprise.
SREP
Supervisory Review and Evaluation Process.
VSB
Very Small Business.
DEFINITIONS
Accretion
A transaction is described as “accretive” when it increases the portion of
net asset value (e.g. net book value per share) or earnings (e.g. earnings
per share) attributable to each share in the company.
ALM
Asset and Liability Management
Management of the financial risks borne by an institution’s balance sheet
(interest rate, currency, liquidity) and its refinancing policy in order to
protect the bank’s asset value and/or its future profitability.
Asset encumbrance
Asset encumbrance corresponds to assets used to secure, collateralise
or back up a credit facility for any type of transaction.
Asset management
Management of negotiable or other assets, for the manager’s own
account or for third-party (institutional or retail) investors. In third-party
asset management, assets are adapted via funds or in the framework
of management mandates. Specialised products are offered to meet
the range of customer expectations in terms of geographical and sector
diversification, short-term or long-term investing and the desired level
of risk.
Assets under management
Operating activity indicator not reflected in the Group’s consolidated
financial statements, reflecting the assets marketed by the Group,
whether they are managed, advised or delegated to an external fund
manager. Assets under management are measured for each fund by
multiplying net asset value per unit (as calculated by an external appraiser
in line with the regulations in force) by the number of units/shares
outstanding. Amundi fully consolidates all the assets under management
by its joint ventures.
AT1
Additional Tier 1 capital
Additional Tier 1 capital eligible under Basel 3 made up of perpetual
debt instruments without any redemption incentive or obligation. It is
subject to a loss absorption mechanism where the CET1 ratio falls below
a given threshold, fixed in their prospectus.
Basel 3
Regulatory standards for banks, which replace the previous Basel 2
agreements by increasing the quality and quantity of the minimum capital
that banks are required to hold against the risk they take. It also introduces
minimum standards for liquidity risk management (quantitative ratios),
defines measures attempting to curb the financial system’s pro-cyclicality
(capital buffers varying according to the economic cycle) and tightens
the requirements on institutions considered as systemically important. In
the European Union, these regulatory standards were introduced under
directive 2013/36/EU (CRD 4 –
Capital Requirements Directive) and
regulation (EU) No. 575/2013 (CRR –
Capital Requirements Regulation).
Basis point (bp)
A basis point is equal to 0.01% or 1/10,000.
Benchmark rate
Interest rate set by a country’s or currency zone’s central bank to regulate
economic activity. Principal tool in a central bank’s arsenal for fulfilling
its role of regulating economic activity: inflation, stimulation of growth.
CCA
Cooperative Associate Certificate – Certificat coopératif d’associés
Unlisted securities, which may be traded over the counter and may
be issued only by cooperative companies. They may be subscribed by
members of the issuing Regional Banks and affiliated Local Banks. A
CCA does not carry voting rights but gives its holders rights to a share
of the net assets and to receive dividends.
CCI
Cooperative Investment Certificate – Certificat coopératif d’investissement
Securities quoted on the stock exchange that do not carry voting rights
and may be issued only by cooperative companies. A CCI gives its holders
rights to a share of the net assets and to receive a dividend payment.
Collateral
A transferable asset or a guarantee that provides security for the
repayment of a loan, should the recipient of the loan fail to meet their
repayment obligations.
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GENERAL INFORMATION
Glossary
8
Corporate governance
Any mechanism that can be implemented to achieve transparency,
equality between shareholders and a balance of powers between
management and shareholders. These mechanisms encompass the
methods used to formulate and implement strategy, the operation of
the Board of Directors, the organisation framework between different
governing bodies and the compensation policy for directors and executive
managers.
Cost/income ratio
The cost/income ratio is calculated by dividing operating expenses
by revenues, indicating the proportion of revenues needed to cover
operating expenses.
Cost of risk
The cost of risk reflects allocations to and reversals from provisions for
credit and counterparty risk (loans, securities, and off-balance sheet
commitments).
Cost of risk/outstandings
(1)
Calculated by dividing the cost of credit risk (over four quarters on a
rolling basis) by outstandings (over an average of the past four quarters,
beginning of the period). Can also be calculated by dividing the annualised
cost of credit risk for the quarter by outstandings at the beginning of
the quarter. Similarly, the cost of risk for the period can be annualised
and divided by the average outstandings at the beginning of the period.
Since the first quarter of 2019, the outstandings taken into account are
the customer outstandings, before allocations to provisions.
The calculation method for the indicator is specified each time the
indicator is used.
Crédit Agricole Group
This include Crédit Agricole S.A., Regional Banks and Local Banks.
Crédit Agricole S.A.
Listed company of the Credit Agricole Group. Its parent company is
“Crédit Agricole S.A. Parent Company”. Its consolidation perimeter
includes subsidiaries, joint ventures and associated companies that it
holds directly or indirectly.
Crédit Agricole S.A. Parent Company
Legal entity that acts as central body and head of Crédit Agricole network
and that guarantees the financial unity of the Group.
Credit rating
Measurement of credit quality in the form of an opinion issued by a rating
agency (Standard & Poor’s, Moody’s, Fitch Ratings, etc.). The rating may
apply to a specific issuer (business, government, public-sector authority)
and/or specific issues (bonds, securitised notes, secured bonds, etc.). The
credit rating may influence an issuer’s borrowing terms (interest rate it
pays, its access to funding) and its market image (see Rating agency).
Credit spread
Actuarial margin (difference between a bond’s yield to maturity and that
on a risk-free borrowing with an identical maturity).
CVA
Credit Valuation Adjustment
Expected loss arising from the risk of a counterparty default which
aims at building in the possibility that the full positive market value of
instruments may not be recovered. The methodology used to determine
the CVA is based largely on the same type of market parameters that
market participants use.
(1) APM indicator.
Dilution
A transaction is described as “dilutive” when it reduces the portion of
net asset value (e.g. net book value per share) or earnings (e.g. earnings
per share) attributable to each share in the company.
Dividend
Portion of net income or reserves paid out to shareholders. The Board
of Directors proposes the dividend to be voted on by shareholders at
the Annual General Meeting, after the financial statements for the year
ended have been approved.
Doubtful loan
Defaulting loan. The debtor is
considered to be in default when at least
one of the following conditions has been met:
a payment generally more than ninety days past due, unless specific
circumstances point to the fact that the delay is due to reasons
independant of the debtor’s financial situation;
the entity believes that the debtor is unlikely to settle its credit
obligations unless it avails itself of certain measures
such as
enforcement of collateral secutirty right.
DVA
Debit Valuation Adjustment
Symmetrical to the CVA and represents the expected loss from the
counterparty’s perspective on passive valuations of financial instruments.
It reflects the impact of the entity’s own credit risk on the valuation of
these instruments.
EAD
Exposure At Default
Exposure at default: this is the Group’s exposure should the counterparty
default. The EAD includes on- and off-balance sheet exposures. Off-
balance sheet exposures are converted into balance sheet equivalents
using internal or regulatory conversion factors (draw-down scenarios).
EL
Expected Loss
Loss likely to be incurred depending on the quality of the counterparty in
view of the structure of the transaction and any risk mitigation measures,
such as collateral. It is computed by multiplying the exposure at default
(EAD) by the probability of default (PD) and by the loss given default (LGD).
EPS
Earnings Per Share
(1)
This is the net income Group share, from which the AT1 coupon has been
deducted, divided by the average number of shares in issue excluding
treasury shares. It indicates the portion of profit attributable to each
share (not the portion of earnings paid out to each shareholder, which
is the dividend). It may decrease, assuming the net income Group share
remains unchanged, if the number of shares increases (see Dilution).
FCP
Fonds commun de placement – mutual fund
Type of UCITS that issues units and does not have legal personality. By
acquiring units, investors gain co-ownership of the securities, but do
not have any voting rights. They are not shareholders. An FCP mutual
fund is represented and managed from an administrative, financial and
accounting perspective by a single management company, which may
delegate these tasks.
FCPE
Fonds commun de placement d’entreprise – corporate mutual fund
Employee savings vehicle used by companies offering this type of
arrangement to their employees. Savers hold units in FCP mutual funds
that are allotted in return for their payments and any top-up payments
made by their employer (employer contribution).
FinTech
Finance, Technology
A FinTech is a non-banking company that uses information and
communication technologies to deliver financial services.
Crédit Agricole S.A.
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GENERAL INFORMATION
Glossary
8
FReD
Fides, Respect, Demeter
Initiative to implement, manage and measure the progress made by the
Corporate Social Responsibility (CSR) programme. FReD has three pillars
with 19 commitments that aim to bolster trust
(Fides)
, grow individuals
and the corporate ecosystem
(Respect)
and protect the environment
(Demeter)
. Every year since 2011, the FReD index has provided a measure
of the progress made by the CSR programme being pursued by Crédit
Agricole S.A. and its subsidiaries. PricewaterhouseCoopers conducts
an annual audit of this index.
Free float
Percentage of a listed company’s share capital held by non-core
shareholders. Non-core shareholders means any shareholders likely
to buy or sell the shares at any time without having to worry about the
effects of their decision on the control of the business and not bound by
a contract limiting their right of disposal (e.g. shareholders’ agreement).
Shares held by retail investors (including employees) and by institutional
investors (SICAV and FCP mutual funds, pension funds, and insurance
companies) are included in the free float. In contrast, the investment
held by a majority shareholder is not included in the free float.
FSB
Financial Stability Board
The Financial Stability Board’s remit is to identify vulnerabilities in the
global financial system and establish principles serving as a basis
for the regulation and oversight of financial stability. It is made up of
the governors, finance ministers and supervisors of G20 countries. Its
primary objective is to coordinate at international level the work of the
national financial authorities and of the international standard-setters
in the regulation and supervision of financial institutions. Founded at
the G20 meeting in London in April 2009, the FSB is the successor to
the Financial Stability Forum set up by the G7 in 1999.
GOI
Gross Operating Income
Calculated as revenues less operating expenses (general operating
expenses, such as employee expenses and other administrative
expenses, depreciation and amortisation).
Goodwill
Amount by which the acquisition cost of a business exceeds the value of
the net assets revalued at the time of acquisition. Every year, goodwill has
to be tested for impairment, and any reduction in its value is recognised
in the income statement.
Green bonds
Bonds
issued by an approved entity (business, local authority
or international organisation) to finance an eco-friendly and/or
sustainability-driven project or activity. These instruments are often
used in connection with the financing of sustainable agriculture, the
protection of ecosystems, renewable energy and organic farming.
HPSP
Home Purchase Saving Plans
The Home Purchase Saving Plan provision represents the provision set
up for payment into housing savings plans that benefit from an attractive
interest rate and may be closed in the short term by their holders.
HQLA
High-Quality Liquid Assets
Assets are categorised as High-Quality Liquid Assets (HQLA), as defined
by Capital Requirements Directive IV, if they can be converted into cash
quickly and easily without – or with minimum – loss of value, and, in
general, if they can be mobilised in the central bank to obtain financing.
The main characteristics of High-Quality Liquid Assets are: 1) low risk
and volatility, 2) ability to be valued with ease and certainty, 3) low
correlation with higher-risk assets, and 4) listed on a recognised and
sizeable developed market. The High-Quality Liquid Assets that are not
already being used as collateral form the numerator of the one-month
Liquidity Coverage Ratio (LCR)
for stress scenarios, according to the
same regulation.
Impaired loan
Loan which has been provisioned due to a risk of non-repayment.
Impaired (or non-performing) loan coverage ratio
This ratio divides the outstanding provisions by the impaired gross
customer outstandings.
Impaired (or non-performing) loan ratio
This ratio divides the gross customer outstandings depreciated on
an individual basis, before provisions, by the total gross customer
outstandings.
Institutional investors
Businesses, public-sector bodies and insurance companies involved
in securities investment, for example, investing in the shares of listed
companies. Pension funds and asset management and insurance
companies come under this heading.
Issuer spread
Actuarial margin representing the difference between the actuarial rate
of return at which the Group can borrow and that of a risk-free loan
of identical duration.
LCR
Liquidity Coverage Ratio – 1 month Liquidity Ratio
This one-month ratio aims to enhance the short-term resilience of a
bank’s liquidity risk profile. The LCR obliges banks to hold sufficient
risk-free, highly liquid assets (see HQLA) to cover outflows, net of inflows,
assessed under stressed assumptions, to see it through a crisis period
of 30 days without relying on any support from Central banks.
Leverage ratio
A voluntarily simple ratio that is intended to control the size of banks’ total
assets. The leverage ratio establishes a link between Tier 1 regulatory
capital and on-/off-balance sheet assets, after restatement of given items.
LGD
Loss Given Default
Ratio between the loss experienced on an exposure on a counterparty
at default and the size of the exposure at default.
Loan Portfolio Hedges (Credit Portfolio Management - CPM)
The impact of loan portfolio hedges of the Large Customer DIvision is
based on market movements in credit risk hedging and the level of
reserves linked to the market movements.
Crédit Agricole S.A.
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Universal registration document 2020
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Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Glossary
8
Mutual shareholders
Holders of mutual shares, which make up the capital of the Local Banks.
The Local Banks own the share capital of the Regional Bank with which
they are affiliated. They receive returns in respect of their mutual shares,
the interest rate of which is capped by law. The members come together
once a year at the Annual General Meeting at which they approve the
financial statements of the Local Banks and elect its directors. Each
individual member has one vote at these General Meetings, irrespective
of the number of mutual shares that she/he owns.
Mutual shares
Portion of the capital of a Local Bank or Regional Bank. Mutual shares
receive an annual interest payment. Ownership units are reimbursed
at their nominal value and give no right to reserves or to liquidation
proceeds.
MREL
Minimum Requirement for own funds and Eligible Liabilities
Ratio defined in the European Bank Recovery and Resolution Directive
indicating the minimum requirement for own funds and eligible liabilities
that have to be available to absorb losses in the event of resolution
(see chapter 5 on Risks and Pillar 3/Regulatory indicators and ratios).
NBV
Net Book Value not revaluated
(1)
The Net Book Value not revaluated corresponds to the shareholders’
equity Group share from which the amount of the AT1 issues, the
unrealised gains and/or losses on OCI Group share and the pay out
assumption on annual results have been deducted.
NBV per share
Net Book Value per share
/
NTBV per share
Net Tangible Book Value per share
(1)
One of the methods for calculating the value of a share. This represents
the Net Book Value (see below) divided by the number of shares in issue
at end of period, excluding treasury shares.
Net Tangible Book Value per share represents the Net Book Value after
deduction of intangible assets and goodwill, divided by the number of
shares in issue at end of period, excluding treasury shares.
Net income Group share
NIGS
Net income/(loss) for the financial year (after corporate income tax). Equal
to net income less the share attributable to non-controlling interests in
fully consolidated subsidiaries.
NIGS attributable to ordinary shares
(1)
The net income Group share attributable to ordinary shares represents
the net income Group share from which the AT1 coupon has been
deducted, including issuing costs before tax.
Non-financial rating agency
Organisation specialised in qualitatively and quantitatively assessing
corporates according to social and environmental criteria, following
specifications related to sustainable development and using a specific
form of rating.
NPS
Net Promoter Score
Index measuring how likely customers are to recommend their bank
to their family and friends. Based on polling conducted every quarter,
this index reflects the number of customers who are critical of, neutral
on or willing to promote the bank.
(1) APM indicator.
NSFR
Net Stable Funding Ratio – 1 year Liquidity Ratio
Ratio intended to promote longer-term resilience through the introduction
of additional incentives for banks to fund their activities using more stable
resources of finance (namely with longer maturities). This structural
liquidity ratio covering a one-year period has been designed to limit
the funding of long term assets by short term resources.
Operating income
Calculated as gross operating income less the cost of risk.
P/E ratio
Price/Earnings ratio
Ratio of the share price to earnings per share. For shareholders, it
represents the number of years’ earnings needed to recoup their initial
investment. It is an indicator used to compare the value of different
stocks, for example, within the same sector of activity. A high P/E rating
reflects expectations of strong earnings growth or a situation where a
company’s value is not fully reflected in its earnings (e.g. it may have
substantial cash holdings). If a company has a P/E of 15x, it is said to
capitalise its earnings 15 times.
Raison d’Être
The
Raison d’Être
of Crédit Agricole Group was formulated in the Group
project and MTP 2022. It engages and irrigates all the Group’s activities
and businesses. It does not fall within the scope of article 1835 of the
Civil Code according to which “the articles of association may specify
a
Raison d’Être,
consisting of the principles which the company adopts
and for the respect of which it intends to allocate resources in carrying
out its activity”.
Rating agency
Organisation specialised in assessing the solvency of issuers of debt
securities,
i.e.
their ability to honour their repayment obligations (principal
repayments and interest payments over the contractual period).
Resolution
Shortened form of “resolution of crises and bank failures”. In practice,
two types of plan need to be drawn up for every European bank: 1) a
preventative recovery plan prepared by the bank’s senior managers,
and 2) a preventative resolution plan put in place by the competent
supervisory authority. Resolution occurs before bankruptcy of the bank,
to plan its ordered dismantling and avoid systemic risk.
Risk appetite
Level of risk that the Group is willing to assume in pursuit of its strategic
objectives. It is determined by type of risk and by business line. It may
be stated using either quantitative or qualitative criteria. Establishing
the risk appetite is one of the strategic management tools available to
the Group’s governing bodies.
Revenues
Difference between banking income (interest income, fee income, capital
gains from market activities and other income from banking operations)
and banking expenses (interest paid by the bank on its funding sources,
fee expenses, capital losses arising on market activities and other
expenses incurred by banking operations).
Crédit Agricole S.A.
–
Universal registration document 2020
684
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Glossary
8
RoTE
Return on Tangible Equity
(1)
The RoTE
(Return on Tangible Equity)
measures the return on tangible
capital by dividing the NIGS by the group’s NBV (see above) net of
intangibles and goodwill.
RWA
Risk-Weighted Assets
Assets and risk commitments (loans, etc.) held by a bank weighted by
a prudential factor and based on the risk of loss and used, when added
together, as the denominator for major solvency ratios.
SDG
Sustainable Development Goals
The UN Sustainable Development Goals are a list of 17 targets for 2030.
SICAV
(Société d’investissement à capital variable) – open-ended investment company
A type of UCITS which enables investors to invest in a portfolio of financial
assets without holding them directly and to diversify their investments.
It manages a portfolio of stocks or other assets and may specialise in
a specific market, an asset class, an investment profile, or a specific
sector. From a tax perspective, a SICAV unit is like a share.
Social Bonds
Bonds issued by an approved entity (business, local authority or
international organisation) to finance a social or society-driven project
or activity. These instruments are often used in connection with the
financing of projects relating to regional economic development, social
inclusion and autonomy, and access to healthcare services.
Solvency
Measures the ability of a business or an individual to repay its debt over
the medium to long term. For a bank, solvency reflects its ability to cope
with the losses that its risk profile is likely to trigger. Solvency analysis
is not the same as liquidity analysis. The liquidity of a business is its
ability to honour its payments in the normal course of its business, to
find new funding sources and to achieve a balance at all times between
its incomings and outgoings. For banks, solvency is governed by the
CRD 4 directive and CRR regulation. For an insurance company, solvency
is covered by the Solvency 2 directive (see Solvency 2).
Solvency 2
European directive on insurance and reinsurance undertakings intended
to ensure that they comply at all times with their commitments towards
policyholders in view of the specific risks incurred by such businesses.
It aims to achieve an economic and prospective assessment of solvency
based on three pillars – quantitative requirements (Pillar 1), qualitative
requirements (Pillar 2) and information for the public and the supervisor
(Pillar 3). Adopted in 2014, it was transposed into national law in 2015
and came into force on 1 January 2016.
SRI
Socially Responsible Investing
Systematic and clearly documented incorporation of environmental,
social and governance criteria in investment decisions.
Stress tests
Exercise to study the ramifications on banks’ balance sheets, profit and
loss and solvency in order to measure their ability to withstand these
kinds of situations.
(1) APM indicator.
Subordinated notes
Issues made by a company, the returns on and/or redemption of which
are contingent upon an event (conditional upon payment of a dividend
or achievement of an outcome).
Systemically important bank
Crédit Agricole Group, but not Crédit Agricole S.A., appears on the list
of the 30 global systemically important banks (G-SIBs) published by
the Financial Stability Board (FSB) in November 2012 and updated in
November 2016. A systemically important bank has to put in place a
basic capital buffer of between 1% and 3.5% in relation to Basel 3
requirements.
TCFD
Task Force on Climate-related Financial Disclosures
The TCFD was created by the G20 at COP21 and defines 11 recommendations
concerning the financial transparency of companies in terms of managing
climate risk.
TLAC
Total Loss Absorbing Capacity
Designed at the G20’s request by the Financial Stability Board. It aims
to provide an indication of the loss-absorbing capacity and of the ability
to raise additional capital of the systemically important banks (G-SIBs)
(see chapter 5 on Risks and Pillar 3/ Regulatory indicators and ratios).
Treasury shares
Shares held by a company in its own capital. Shares held in treasury
do not carry a voting right and are not used in EPS or NBV per share
calculations as they receive no dividend and have no right to reserves.
TSDI
Undated subordinated notes
Undated subordinated notes have no specified maturity date, with
redemption being at the behest of the issuer beyond a certain date.
TSS
Deeply subordinated notes
Undated subordinated issue giving rise to perpetual returns. Their
perpetual maturity arises from the fact that they do not have a contractual
redemption date, with redemption taking place at the option of the issuer.
Should the issuer be liquidated, these notes are redeemed after all the
other creditors have been repaid.
UCITS
Undertakings for Collective Investment in Transferable Securities
An UCITS is a portfolio of negotiable securities (equities, bonds, etc.)
managed by professionals (management companies) and held collectively
by retail or institutional investors. There are two types of UCITS – SICAVs
(open-ended investment companies) and FCPs (mutual investment funds).
Underlying NIGS (Net Income Group Share)
(1)
The underlying net income Group share represents the stated net
income Group share from which specific items have been deducted
(
i.e.
non-recurring or exceptional items).
VaR
Value-at-Risk
Synthetic indicator used to track on a day-to-day basis the market
risks taken by the Group, particularly in its trading activities (VaR is
calculated using a 99% on 10 days-confidence interval, over one day,
in line with the regulatory internal model). Reflects the largest exposure
obtained after eliminating 1% of the most unfavourable occurrences
over a one-year history.
Crédit Agricole S.A.
–
Universal registration document 2020
685
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Glossary
8
CROSS-REFERENCE TABLES
CROSS REFERENCE TABLE OF THE UNIVERSAL REGISTRATION DOCUMENT
This cross-reference table contains the headings provided for in Annex 1 (as referred to in Annex 2) of the Commission Delegated Regulation (EU)
2019/980 of the Commission as of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council and
repealing Commission Regulation (EC) No 809/2004 (Annex I), in application of the Directive, said “Prospectus”. It refers to the pages of this Universal
registration document where the information relating to each of these headings is mentioned.
Page number of
this Universal
registration
document
Section 1
Persons responsible, third party information, experts’ reports and competent authority approval
680
1.1
Identify all persons responsible for the information or any parts of it, given in the Registration document with, in the latter
case, an indication of such parts. In the case of natural persons, including members of the issuer’s administrative,
management or supervisory bodies, indicate the name and function of the person; in the case of legal persons indicate the
name and registered office.
680
1.2
A declaration by those responsible for the Registration document that to the best of their knowledge, the information
contained in the Registration document is in accordance with the facts and that the Registration document makes no
omission likely to affect its import. Where applicable, a declaration by those responsible for certain parts of the Registration
document that, to the best of their knowledge, the information contained in those parts of the Registration document for
which they are responsible is in accordance with the facts and that those parts of the Registration document make no
omission likely to affect their import.
680
1.3
Where a statement or report attributed to a person as an expert, is included in the Registration document, provide the
following details for that person: (a) name; (b) business address; (c) qualifications; (d) material interest if any in the issuer.
If the statement or report has been produced at the issuer’s request, state that such statement or report has been included
in the Registration document with the consent of the person who has authorised the contents of that part of the Registration
document for the purpose of the prospectus.
N/A
1.4
Where information has been sourced from a third party, provide a confirmation that this information has been accurately
reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no
facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, identify the
source(s) of the information.
N/A
1.5
A statement that: (a) the [Registration document/prospectus] has been approved by the [name of the competent authority],
as competent authority under Regulation (EU) 2017/1129; (b) the [name of competent authority] only approves this
[registration document/prospectus] as meeting the standards of completeness, comprehensibility and consistency imposed
by Regulation (EU) 2017/1129; (c) such approval should not be considered as an endorsement of the issuer that is the
subject of this [registration document/prospectus].
N/A
Section 2
Statutory auditors
680
2.1
Names and addresses of the issuer’s auditors for the period covered by the historical financial information (together with
their membership in a professional body).
680
2.2
If auditors have resigned, been removed or have not been re-appointed during the period covered by the historical financial
information, indicate details if material.
N/A
Section 3
Risk factors
256 to 268
3.1
A description of the material risks that are specific to the issuer, in a limited number of categories, in a section headed “Risk
Factors”. In each category, the most material risks, in the assessment undertaken by the issuer, offeror or person asking
for admission to trading on a regulated market, taking into account the negative impact on the issuer and the probability
of their occurrence shall be set out first. The risks shall be corroborated by the content of the Registration document.
256 to 268
Section 4
Information about the issuer
410, 650 to 657
4.1
The legal and commercial name of the issuer.
410, 650
4.2
The place of registration of the issuer, its registration number and legal entity identifier (“LEI”).
410, 650
4.3
The date of incorporation and the length of life of the issuer, except where the period is indefinite.
410, 650
4.4
The domicile and legal form of the issuer, the legislation under which the issuer operates, its country of incorporation, the
address, telephone number of its registered office (or principal place of business if different from its registered office) and
website of the issuer, if any, with a disclaimer that the information on the website does not form part of the prospectus
unless that information is incorporated by reference into the prospectus.
41, 650 to 657,
692
Crédit Agricole S.A.
–
Universal registration document 2020
686
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Cross-reference tables
8
Page number of
this Universal
registration
document
Section 5
Business overview
5.1
Principal activities.
14 to 28,
497 to 498
5.1.1
A description of, and key factors relating to, the nature of the issuer’s operations and its principal activities, stating the main
categories of products sold and/or services performed for each financial year for the period covered by the historical financial
information.
14 to 28, 497
to 498, 230-231,
234 to 244
5.1.2
An indication of any significant new products and/or services that have been introduced and, to the extent the development
of new products or services has been publicly disclosed, give the status of their development.
446 and 658
5.2
Principal markets
A description of the principal markets in which the issuer competes, including a breakdown of total revenues by operating
segment and geographic market for each financial year for the period covered by the historical financial information.
11, 16 to 28,
497-498,
614 to 615
5.3
The important events in the development of the issuer’s business.
29 to 32,
446 to 451
5.4
Strategy and objectives
A description of the issuer’s business strategy and objectives, both financial and non-financial (if any). This description shall
take into account the issuer’s future challenges and prospects.
249 to 252
5.5
If material to the issuer’s business or profitability, summary information regarding the extent to which the issuer is dependent,
on patents or licences, industrial, commercial or financial contracts or new manufacturing processes.
315
5.6
The basis for any statements made by the issuer regarding its competitive position.
10
5.7
Investments.
29 to 31,
422 to 423,
448 and 449,
565 to 579, 658
5.7.1
A description, (including the amount) of the issuer’s material investments for each financial year for the period covered by
the historical financial information up to the date of the Registration document.
29 to 31, 448
and 449, 658
5.7.2
A description of any material investments of the issuer that are in progress or for which firm commitments have already
been made, including the geographic distribution of these investments (home and abroad) and the method of financing
(internal or external).
658
5.7.3
Information relating to the joint ventures and undertakings in which the issuer holds a proportion of the capital likely to have
a significant effect on the assessment of its own assets and liabilities, financial position or profits and losses.
523 to 525
5.7.4
A description of any environmental issues that may affect the issuer’s utilisation of the tangible fixed assets.
45 to 50
Section 6
Organisational structure
6.1
If the issuer is part of a group, a brief description of the group and the issuer’s position within the group. This may be in the
form of, or accompanied by, a diagram of the organisational structure if this helps to clarify the structure.
5
6.2
A list of the issuer’s significant subsidiaries, including name, country of incorporation or residence, the proportion of
ownership interest held and, if different, the proportion of voting power held.
414-415, 566
to 579,
618 to 621
Section 7
Operating and financial review
7.1
Financial condition.
416 to 423,
596 to 598
7.1.1
To the extent not covered elsewhere in the Registration document and to the extent necessary for an understanding of the
issuer’s business as a whole, a fair review of the development and performance of the issuer’s business and of its position
for each year and interim period for which historical financial information is required, including the causes of material
changes. The review shall be a balanced and comprehensive analysis of the development and performance of the issuer’s
business and of its position, consistent with the size and complexity of the business. To the extent necessary for an
understanding of the issuer’s development, performance or position, the analysis shall include both financial and, where
appropriate, non-financial Key Performance Indicators relevant to the particular business. The analysis shall, where
appropriate, include references to, and additional explanations of, amounts reported in the annual financial statements.
230 to 248
7.1.2
To the extent not covered elsewhere in the Registration document and to the extent necessary for an understanding of the
issuer’s business as a whole, the review shall also give an indication of: (a) the issuer’s likely future development; (b) activities
in the field of research and development. The requirements set out in item 7.1 may be satisfied by the inclusion of the
management report referred to in Articles 19 and 29 of Directive 2013/34/EU of the European Parliament and of the Council
(1)
.
248 to 252
7.2
Operating results.
416, 598
7.2.1
Information regarding significant factors, including unusual or infrequent events or new developments, materially affecting
the issuer’s income from operations and indicate the extent to which income was so affected.
230 to 234
7.2.2
Where the historical financial information discloses material changes in net sales or revenues, provide a narrative discussion
of the reasons for such changes.
N/A
Crédit Agricole S.A.
–
Universal registration document 2020
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Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Cross-reference tables
8
Page number of
this Universal
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document
Section 8
Capital resources
8.1
Information concerning the issuer’s capital resources (both short term and long term).
9, 33 to 40, 233,
250, 318 to 335,
419 to 421,
537 to 539,
597 and 633
8.2
An explanation of the sources and amounts of and a narrative description of the issuer’s cash flows.
422-423
8.3
Information on the borrowing requirements and funding structure of the issuer.
233-234, 297
to 302,
478 to 480
8.4
Information regarding any restrictions on the use of capital resources that have materially affected, or could materially
affect, directly or indirectly, the issuer’s operations.
318 to 324,
448, 565
8.5
Information regarding the anticipated sources of funds needed to fulfil commitments referred to in item 5.7.2.
658 to 660
Section 9
Regulatory environment
9.1
A description of the regulatory environment that the issuer operates in and that may materially affect its business, together
with information regarding any governmental, economic, fiscal, monetary or political policies or factors that have materially
affected, or could materially affect, directly or indirectly, the issuer’s operations.
425 to 442,
446 to 448
Section 10
Trend information
10.1
A description of: (a) the most significant recent trends in production, sales and inventory, and costs and selling prices since
the end of the last financial year to the date of the Registration document; (b) any significant change in the financial
performance of the group since the end of the last financial period for which financial information has been published to
the date of the Registration document, or provide an appropriate negative statement.
248-252, 659
10.2
Information on any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a
material effect on the issuer’s prospects for at least the current financial year.
248-252, 659
Section 11
11.1
Where an issuer has published a profit forecast or a profit estimate (which is still outstanding and valid) that forecast or
estimate shall be included in the Registration document. If a profit forecast or profit estimate has been published and is still
outstanding, but no longer valid, then provide a statement to that effect and an explanation of why such forecast or estimate
is no longer valid. Such an invalid forecast or estimate is not subject to the requirements in items 11.2 and 11.3.
N/A
11.2
Where an issuer chooses to include a new profit forecast or a new profit estimate, or a previously published profit forecast
or a previously published profit estimate pursuant to item 11.1, the profit forecast or estimate shall be clear and unambiguous
and contain a statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
The forecast or estimate shall comply with the following principles: (a) there must be a clear distinction between assumptions
about factors which the members of the administrative, management or supervisory bodies can influence and assumptions
about factors which are exclusively outside the influence of the members of the administrative, management or supervisory
bodies; (b) the assumptions must be reasonable, readily understandable by investors, specific and precise and not relate
to the general accuracy of the estimates underlying the forecast; (c) in the case of a forecast, the assumptions shall draw
the investor’s attention to those uncertain factors which could materially change the outcome of the forecast.
N/A
11.3
The prospectus shall include a statement that the profit forecast or estimate has been compiled and prepared on a basis
which is both: (a) comparable with the historical financial information; (b) consistent with the issuer’s accounting policies.
N/A
Section 12
Administrative, management and supervisory bodies and senior management
12.1
Names, business addresses and functions within the issuer of the following persons and an indication of the principal
activities performed by them outside of that issuer where these are significant with respect to that issuer: (a) members of
the administrative, management or supervisory bodies; (b) partners with unlimited liability, in the case of a limited partnership
with a share capital; (c) founders, if the issuer has been established for fewer than five years; (d) any senior manager who
is relevant to establishing that the issuer has the appropriate expertise and experience for the management of the issuer’s
business. Details of the nature of any family relationship between any of the persons referred to in points (a) to (d). In the
case of each member of the administrative, management or supervisory bodies of the issuer and of each person referred
to in points (b) and (d) of the first subparagraph, details of that person’s relevant management expertise and experience
and the following information: (a) the names of all companies and partnerships where those persons have been a member
of the administrative, management or supervisory bodies or partner at any time in the previous five years, indicating whether
or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary
to list all the subsidiaries of an issuer of which the person is also a member of the administrative, management or supervisory
bodies; (b) details of any convictions in relation to fraudulent offences for at least the previous five years; (c) details of any
bankruptcies, receiverships, liquidations or companies put into administration in respect of those persons described in
points (a) and (d) of the first subparagraph who acted in one or more of those capacities for at least the previous five years;
(d) details of any official public incrimination and/or sanctions involving such persons by statutory or regulatory authorities
(including designated professional bodies) and whether they have ever been disqualified by a court from acting as a member
of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the
affairs of any issuer for at least the previous five years. If there is no such information required to be disclosed, a statement
to that effect is to be made.
115 to 129,
148 to 176
Crédit Agricole S.A.
–
Universal registration document 2020
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Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Cross-reference tables
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Page number of
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document
12.2
Administrative, management and supervisory bodies and senior management conflicts of interests.
Potential conflicts of interests between any duties to the issuer, of the persons referred to in item 12.1, and their private
interests and or other duties must be clearly stated. In the event that there are no such conflicts, a statement to that effect
must be made. Any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to
which any person referred to in item 12.1 was selected as a member of the administrative, management or supervisory
bodies or member of senior management. Details of any restrictions agreed by the persons referred to in item 12.1 on the
disposal within a certain period of time of their holdings in the issuer’s securities.
125 to 127, 177
Section 13
Remuneration and benefits
In relation to the last full financial year for those persons referred to in points (a) and (d) of the first subparagraph of item 12.1:
13.1
The amount of remuneration paid (including any contingent or deferred compensation), and benefits in kind granted to such
persons by the issuer and its subsidiaries for services in all capacities to the issuer and its subsidiaries by any person. That
information must be provided on an individual basis unless individual disclosure is not required in the issuer’s home country
and is not otherwise publicly disclosed by the issuer.
119 to 121,
136 to 137,
178 to 218,
542 to 545, 641
13.2
The total amounts set aside or accrued by the issuer or its subsidiaries to provide for pension, retirement or similar benefits.
136-137,
191-193, 203,
207-216,
542 to 545, 612
Section 14
Board practices
In relation to the issuer’s last completed financial year, and unless otherwise specified, with respect to those persons referred to in
point (a) of the first subparagraph of item 12.1:
14.1
Date of expiration of the current term of office, if applicable, and the period during which the person has served in that
office.
148-176
14.2
Information about members of the administrative, management or supervisory bodies’ service contracts with the issuer or
any of its subsidiaries providing for benefits upon termination of employment, or an appropriate statement to the effect that
no such benefits exist.
177
14.3
Information about the issuer’s audit committee and remuneration committee, including the names of committee members
and a summary of the terms of reference under which the committee operates.
134 to 137
14.4
A statement as to whether or not the issuer complies with the corporate governance regime(s) applicable to the issuer. In
the event that the issuer does not comply with such a regime, a statement to that effect must be included together with an
explanation regarding why the issuer does not comply with such regime.
116 to 147,
219 to 225
14.5
Potential material impacts on the corporate governance, including future changes in the board and committees composition
(in so far as this has been already decided by the board and/or shareholders meeting).
N/A
Section 15
Employees
15.1
Either the number of employees at the end of the period or the average for each financial year for the period covered by
the historical financial information up to the date of the Registration document (and changes in such numbers, if material)
and, if possible and material, a breakdown of persons employed by main category of activity and geographic location. If
the issuer employs a significant number of temporary employees, include disclosure of the number of temporary employees
on average during the most recent financial year.
2, 14, 98, 99,
100, 101, 102,
542, 641
15.2
Shareholdings and stock options With respect to each person referred to in points (a) and (d) of the first subparagraph of
item 12.1 provide information as to their share ownership and any options over such shares in the issuer as of the most
recent practicable date.
151-174,
203 to 216,
545, 631
15.3
Description of any arrangements for involving the employees in the capital of the issuer.
37-38, 612-613
Section 16
Major shareholders
16.1
In so far as is known to the issuer, the name of any person other than a member of the administrative, management or
supervisory bodies who, directly or indirectly, has an interest in the issuer’s capital or voting rights which is notifiable under
the issuer’s national law, together with the amount of each such person’s interest, as at the date of the Registration document
or, if there are no such persons, an appropriate statement to that that effect that no such person exists.
33-34, 151-174
16.2
Whether the issuer’s major shareholders have different voting rights, or an appropriate statement to the effect that no such
voting rights exist.
33, 34
16.3
To the extent known to the issuer, state whether the issuer is directly or indirectly owned or controlled and by whom and
describe the nature of such control and describe the measures in place to ensure that such control is not abused.
7, 33, 34
16.4
A description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change
in control of the issuer.
N/A
Crédit Agricole S.A.
–
Universal registration document 2020
689
Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
Cross-reference tables
8
Page number of
this Universal
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document
Section 17
Related party transactions
17.1
Details of related party transactions that the issuer has entered into during the period covered by the historical financial
information and up to the date of the Registration document, must be disclosed in accordance with the respective standard
adopted under Regulation (EC) No 1606/2002 if applicable. If such standards do not apply to the issuer the following
information must be disclosed: (a) the nature and extent of any transactions which are, as a single transaction or in their
entirety, material to the issuer. Where such related party transactions are not concluded at arm’s length provide an explanation
of why these transactions were not concluded at arm’s length. In the case of outstanding loans including guarantees of any
kind indicate the amount outstanding; (b) the amount or the percentage to which related party transactions form part of
the turnover of the issuer.
410-413,
523-525,
600-602, 634
Section 18
Financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
18.1
Historical financial information.
18.1.1
Audited historical financial information covering the latest three financial years (or such shorter period as the issuer has
been in operation) and the audit report in respect of each year.
253, 408-592,
596-647
18.1.2
Change of accounting reference date If the issuer has changed its accounting reference date during the period for which
historical financial information is required, the audited historical information shall cover at least 36 months, or the entire
period for which the issuer has been in operation, whichever is shorter.
N/A
18.1.3
Accounting standards the financial information must be prepared according to International Financial Reporting Standards
as endorsed in the Union based on Regulation (EC) No 1606/2002. If Regulation (EC) No 1606/2002 is not applicable, the
financial information must be prepared in accordance with: (a) a Member State’s national accounting standards for issuers
from the EEA, as required by Directive 2013/34/EU; (b) a third country’s national accounting standards equivalent to
Regulation (EC) No 1606/2002 for third country issuers. If such third country’s national accounting standards are not
equivalent to Regulation (EC) No 1606/2002 the financial statements shall be restated in compliance with that Regulation.
425-445,
604-613
18.1.4
Change of accounting framework The last audited historical financial information, containing comparative information for
the previous year, must be presented and prepared in a form consistent with the accounting standards framework that will
be adopted in the issuer’s next published annual financial statements having regard to accounting standards and policies
and legislation applicable to such annual financial statements. Changes within the accounting framework applicable to an
issuer do not require the audited financial statements to be restated solely for the purposes of the prospectus. However, if
the issuer intends to adopt a new accounting standards framework in its next published financial statements, at least one
complete set of financial statements (as defined by IAS 1 Presentation of Financial Statements as set out in Regulation (EC)
No 1606/2002), including comparatives, must be presented in a form consistent with that which will be adopted in the
issuer’s next published annual financial statements, having regard to accounting standards and policies and legislation
applicable to such annual financial statements.
N/A
18.1.5
Where the audited financial information is prepared according to national accounting standards, it must include at least the
following: (a) the balance sheet; (b) the income statement; (c) a statement showing either all changes in equity or changes
in equity other than those arising from capital transactions with owners and distributions to owners; (d) the cash flow
statement; (e) the accounting policies and explanatory notes.
596-643
18.1.6
Consolidated financial statements If the issuer prepares both stand-alone and consolidated financial statements, include
at least the consolidated financial statements in the Registration document.
408-584
18.1.7
Age of financial information The balance sheet date of the last year of audited financial information may not be older than
one of the following: (a) 18 months from the date of the Registration document if the issuer includes audited interim financial
statements in the Registration document; (b) 16 months from the date of the Registration document if the issuer includes
unaudited interim financial statements in the Registration document.
11, 416-423,
596-598
18.2
Interim and other financial information.
18.2.1
If the issuer has published quarterly or half-yearly financial information since the date of its last audited financial statements,
these must be included in the Registration document. If the quarterly or half-yearly financial information has been audited
or reviewed, the audit or review report must also be included. If the quarterly or half-yearly financial information is not
audited or has not been reviewed, state that fact. If the Registration document is dated more than nine months after the
date of the last audited financial statements, it must contain interim financial information, which may be unaudited (in which
case that fact must be stated) covering at least the first six months of the financial year. Interim financial information
prepared in accordance with the requirements of Regulation (EC) No 1606/2002. For issuers not subject to Regulation (EC)
No 1606/2002, the interim financial information must include comparative statements for the same period in the prior
financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the
year’s end balance sheet in accordance with the applicable financial reporting framework.
N/A
Crédit Agricole S.A.
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document
18.3
Auditing of historical annual financial information.
18.3.1
The historical annual financial information must be independently audited. The audit report shall be prepared in accordance
with the Directive 2014/56/EU of the European Parliament and Council and Regulation (EU) No 537/2014 of the European
Parliament and of the Council. Where Directive 2014/56/EU and Regulation (EU) No 537/2014 do not apply: (a) the historical
annual financial information must be audited or reported on as to whether or not, for the purposes of the Registration
document, it gives a true and fair view in accordance with auditing standards applicable in a Member State or an equivalent
standard; (b) If audit reports on the historical financial information have been refused by the statutory auditors or if they
contain qualifications, modifications of opinion, disclaimers or an emphasis of matter, such qualifications, modifications,
disclaimers or emphasis of matter must be reproduced in full and the reasons given.
587-592,
644-647
18.3.2
Indication of other information in the Registration document that has been audited by the auditors.
N/A
18.3.3
Where financial information in the Registration document is not extracted from the issuer’s audited financial statements
state the source of the information and state that the information is not audited.
N/A
18.4
Pro forma financial information.
18.4.1
In the case of a significant gross change, a description of how the transaction might have affected the assets, liabilities and
earnings of the issuer, had the transaction been undertaken at the commencement of the period being reported on or at
the date reported. This requirement will normally be satisfied by the inclusion of pro forma financial information. This pro
forma financial information is to be presented as set out in Annex 20 and must include the information indicated therein.
Pro forma financial information must be accompanied by a report prepared by independent accountants or auditors.
N/A
18.5
Dividend policy.
9, 35-36
18.5.1
A description of the issuer’s policy on dividend distributions and any restrictions thereon. If the issuer has no such policy,
include an appropriate negative statement.
35, 537-538
18.5.2
The amount of the dividend per share for each financial year for the period covered by the historical financial information
adjusted, where the number of shares in the issuer has changed, to make it comparable.
35, 253, 537-538
18.6
Legal and arbitration proceedings.
18.6.1
Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or
threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have
had in the recent past significant effects on the issuer and/or group’s financial position or profitability, or provide an
appropriate negative statement.
312-315,
530-534,
628-629
18.7
Significant change in the issuer’s financial position.
18.7.1
A description of any significant change in the financial position of the group which has occurred since the end of the last
financial period for which either audited financial statements or interim financial information have been published, or provide
an appropriate negative statement.
228 to 252,
659
Section 19
Additional information
19.1
Share capital the information in items 19.1.1 to 19.1.7 in the historical financial information as of the date of the most
recent balance sheet.
19.1.1
The amount of issued capital, and for each class of share capital: (a) the total of the issuer’s authorised share capital; (b)
the number of shares issued and fully paid and issued but not fully paid; (c) the par value per share, or that the shares have
no par value; and (d) a reconciliation of the number of shares outstanding at the beginning and end of the year. If more than
10 % of capital has been paid for with assets other than cash within the period covered by the historical financial information,
state that fact.
33-34, 36, 537,
633, 650-652
19.1.2
If there are shares not representing capital, state the number and main characteristics of such shares.
N/A
19.1.3
The number, book value and face value of shares in the issuer held by or on behalf of the issuer itself or by subsidiaries of
the issuer.
33-34, 37,
38 and 39
19.1.4
The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the
conditions governing and the procedures for conversion, exchange or subscription.
N/A
19.1.5
Information about and terms of any acquisition rights and or obligations over authorised but unissued capital or an
undertaking to increase the capital.
N/A
19.1.6
Information about any capital of any member of the group which is under option or agreed conditionally or unconditionally
to be put under option and details of such options including those persons to whom such options relate.
N/A
19.1.7
A history of share capital, highlighting information about any changes, for the period covered by the historical financial
information.
33-34, 537, 633
19.2
Memorandum and Articles of Association.
19.2.1
The register and the entry number therein, if applicable, and a brief description of the issuer’s objects and purposes and
where they can be found in the up to date memorandum and articles of association.
650-657
19.2.2
Where there is more than one class of existing shares, a description of the rights, preferences and restrictions attaching to
each class.
N/A
19.2.3
A brief description of any provision of the issuer’s articles of association, statutes, charter or bylaws that would have an
effect of delaying, deferring or preventing a change in control of the issuer.
34, 650-657
Crédit Agricole S.A.
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GENERAL INFORMATION
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document
Section 20
Material contracts
20.1
A summary of each material contract, other than contracts entered into in the ordinary course of business, to which the
issuer or any member of the group is a party, for the two years immediately preceding publication of the Registration
document. A summary of any other contract (not being a contract entered into in the ordinary course of business) entered
into by any member of the group which contains any provision under which any member of the group has any obligation
or entitlement which is material to the group as at the date of the Registration document.
410-413,
600-602, 659,
671-679
Section 21
Documents available
21.1
A statement that for the term of the Registration document the following documents, where applicable, can be inspected:
(a) the up to date memorandum and articles of association of the issuer; (b) all reports, letters, and other documents,
valuations and statements prepared by any expert at the issuer’s request any part of which is included or referred to in the
Registration document. An indication of the website on which the documents may be inspected.
659
N.A.: not applicable.
(1)
In accordance with Annex I of European Regulation 2017/1129 the following are incorporated by reference:
-
the annual and consolidated financial statements for the year ended 31 December 2018 and the corresponding Statutory Auditors’ Reports, as well as the Group’s management report, appearing
respectively on 518 to 559 and 346 to 510, on pages 560 to 563 and 511 to 517 and on pages 178 to 203 of the Crédit Agricole S.A. Registration document 2018 registered by the AMF
on 26 March 2019 under number D.19-0198. The information is available via the following link: https://www.credit-agricole.com/en/pdfPreview/173593;
-
the annual and consolidated financial statements for the year ended 31 December 2019 and the corresponding Statutory Auditors’ Reports, as well as the Group’s management report, appearing
respectively on pages 566 to 614 and 388 to 556, on pages 612 to 615 and 557 to 564 and on pages 216 to 239 of the Crédit Agricole S.A. Registration document 2019 registered by the AMF
on 25 March 2020 under number D.20-0168. The information is available via the following link: https://www.credit-agricole.com/en/pdfPreview/180684.
The sections of the Registration documents number D.19-0198 and number D.20-0168 not referred to above are either not applicable to investors
or are covered in another part of this Universal registration document.
All these documents incorporated by reference in this Universal registration document have been filed with the French Financial Markets Authority
(Autorité des marchés financiers) and can be obtained on request free of charge during the usual office opening hours at the headquarters of the
issuer as indicated at the end of this Universal registration document. These documents are available on the website of the issuer (https://www.
credit-agricole.com/en/finance/finance/financial-publications) and on the website of the AMF (www.amf-france.org).
The information incorporated by reference has to be read according to the above cross-reference table. Any information not indicated in the
cross-reference table but included in the documents incorporated by reference is only given for information.
Crédit Agricole S.A.
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Universal registration document 2020
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Refer to the glossary on page 681 for the definition of technical terms.
GENERAL INFORMATION
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REGULATED INFORMATION WITHIN THE MEANING OF THE AMF’S GENERAL
REGULATIONS CONTAINED IN THIS UNIVERSAL REGISTRATION DOCUMENT CAN
BE FOUND ON THE PAGES SHOWN IN THE CORRESPONDENCE TABLE BELOW
This Universal registration document, which is published in the form of an annual report, includes all components of the 2020 Annual Financial Report
referred to in Article L. 451-1-2 of the French Monetary and Financial Code as well as in Article 222-3 of the AMF’s General Regulations and
Order No. 2017-1162 of 12/07/2017 (Sapin 2 law):
Annual Financial Report
Page number of the Universal registration document
1. Management report
Analysis of the financial position and earnings
226-253
Risk analysis
256-317
Share buybacks
37-38
Information on accounts payable and receivables
660
2. Statement of Non-Financial Performance and Vigilance duty
Statement of Non Financial Performance
4-7; 14-15; 16-29; 44-106; 265-266
Vigilance duty
139-147
Independant third party report
108-113
3. Corporate governance report
Board’s report on corporate governance
116
Positions and functions held by Corporate Officers
151-174
Agreements between a Senior Executive or a major shareholder and a subsidiary
410-413; 600-602; 671-679
Authorizations in force concerning capital increases
35-36
Methods for exercising General Management
116-147; 175-176; 219-223
Compensation policy
120-121; 136-137; 178-218; 542-545; 641
Information on the organisation of Committees, Board and Executive management
51-54; 115-139; 148-151;
175-176; 218-225
Capital structure and articles of association
5; 33-34; 219-222; 650-657
4. Financial statements
Parent Company financial statements
596-643
Statutory Auditors’ Report on the parent company annual financial statements
644-647
Consolidated financial statements
408-584
Statutory Auditors’ Report on the consolidated financial statements
585-592
5. Responsibility statement for the document
680
Crédit Agricole S.A.
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Design and production:
Tel.: +33 (0)1 55 32 29 74
Photos credits: Getty images
Interview pictures: Seignette Lafontan
Cover and chapter openings conception: Lonsdale
A French limited company with share capital of 8,750,065,920
Nanterre Trade and Company Registry No. 784 608 416 RCS
12 place des États-Unis
92127 Montrouge Cedex
France
Individual sharholders relations (France only): 0 800 000 777
Institutional sharholders relations: + 33 (0) 1 43 23 04 31
Tel. + 33 (0) 1 43 23 52 02