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February 26, 2020updated 25 Mar 2020 7:19pm

Credit Agricole posts solid profits in 2019 with a strong showing for leasing division

By Alejandro Gonzalez

Credit Agricole, France’s second-largest bank and a European leasing provider, witnessed a surge in profits in the last quarter of 2019 to end the year strongly, while its Credit Agricole Leasing & Factoring division posted a net profit increase for the year of 2.5%, the bank reported.

  • Underlying net income: +4% to €4.58bn in FY 2019 (+23.5% to €1.31bn in Q4)
  • Underlying revenue: +3.3% to €20.3bn in FY 2019 (+7.7% to €5.18bn in Q4)

The strong net income and revenue recorded by Credit Agricole – a universal bank that runs an investment banking, asset finance and insurance business alongside a network of retail banks across France – which were stronger than expected were “driven by the corporate and investment banking division and insurance,” according to a Barclays analyst reported in the Financial Times.

Credit Agricole also has two “specialised financial services” units – Credit Agricole Consumer Finance and Credit Agricole Leasing & Factoring – which together posted new business growth of 3.3% to €11.5bn in Q4.

Credit Agricole Leasing & Factoring

The bank’s financial report described Credit Agricole Leasing & Factoring activity as “buoyant” with commercial factoring production up 119% to €4.9bn (on Q4, 2018) both in France (+144% to €3bn) and abroad (+87% to €1.8b). Commercial leasing reached its highest level since 2014 (€1.8bn, representing a 9.3% increase from Q4 2018).

In explaining the bank’s +3.3% underlying revenue figures, the bank said its leasing and factoring division “posted higher revenues, supported by very buoyant business,” attributing this to “revenues from the large customers business lines” which increased by 6.5%, “due to the sales momentum in all business activities, in market conditions that have become more favourable in 2019.”

During an earnings call last week, Jérôme Grivet, Crédit Agricole, deputy general manager, chief financial officer and head of the group finance division, said: “When it comes to leasing and factoring, it’s been a very good year with a level of activity that started to increase significantly at the beginning of the year and the second half of the year clearly benefited from the good business that was onboarded in the first half.

“So all in all, the net profit of Credit Agricole Leasing & Factoring on a full-year basis increased by 2.5%.”

Credit Agricole Leasing & Factoring operates across nine countries: France, Morocco, Portugal, Spain, Italy, Belgium, The Netherlands, Germany and Poland.

Climate change and sustainability

In terms of changes in governance, that will affect the Group’s entire operations, Credit Agricole said it was in the final stages of setting up a scientific committee which will bring together “climate experts and scientists from outside Crédit Agricole Group” which will help “guide and implement the Group’s climate strategy.”

The Group also announced plans, as part of its carbon transition, to “request its large corporate customers to provide a detailed plan, by 2021, for the withdrawal of their industrial mining and thermal coal production assets within the 2030/2040 timeframe.”

No similar plan, requesting corporate customers withdraw from oil and gas production, was mentioned.

Unifergie

The bank said that Unifergie – a subsidiary of Crédit Agricole Leasing & Factoring – along with other financiers joined in the refinancing of the French asset portfolio of Boralex, a Canadian company that develops, builds and operates renewable power generation facilities in North America and Europe.

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