Credit Agricole Group, a parent to a French bank and provider of leasing and factoring, recorded a net profit of €4.69bn in 2020, down 34.9% against 2019, but these figures hid a strong performance by its leasing and factoring unit during a difficult 2020.
Credit Agricole Group reported a year-on-year improvement in revenue of 0.9% in 2020 to €33.6bn.
The parent’s banking segment, Credit Agricole SA, recorded a net profit of €2.69bn in 2020, down 44.4% against 2019. It reported a YoY improvement in revenue of 1.7% in 2020 to €20.5bn.
Crédit Agricole Group posted a CET1 ratio of 17.2% (8.3 percentage points above the SREP requirement) and Crédit Agricole SA posted CET1 of 13.1% (5.2 percentage points above SREP). Supervisory Review and Evaluation Process is a measure of the bank’s risk measured by the European Central Bank.
Credit Agricole Group is a universal bank that runs an investment banking, asset finance and insurance business alongside a network of retail banks across France.
It also operates two specialised financial services – Credit Agricole Consumer Finance and Credit Agricole Leasing & Factoring, “which have proven resilient, the decrease in revenues remains limited -1.1% despite a strong sensitivity of this activity to the economic environment,” the company said.
Specialised financial services activity “rebounded in December after a limited second lockdown impact … The reason for this was the strong performance of the automobile joint ventures (+11% in Q4 2020 compared to Q4 2019),” the Group said in a statement.
Credit Agricole Leasing & Factoring
The company reported:
At Credit Agricole Leasing & Factoring, leasing production was €1.8bn in Q4 2020, higher than Q4 2019 (+0.8%). This upturn, compared to Q3 2020 (+28.7%), was driven by performances in France and Poland.
Gross consolidated loans were up YoY (+3.2% in December 2020 compared to 2019), driven by its performance in France.
Factoring activity was up in Q4 2020 with factored revenues up by +4.4% from Q4 2019.
“This level of activity was not directly reflected in the change in overall revenues because there was a decline in the share of turnover subject to factoring, in the context of lower liquidity requirements for corporates considering exceptional governmental liquidity support measures such as state-guaranteed loans,” the Group said.
In Q4 2020, the underlying revenues of CAL&F totalled €152m, slightly up by 1.5% compared to Q4 2020, thanks to the robust recovery of the activity that began in June 2020 but again curbed by a factoring business, which was penalised by a decrease in the share of factored turnover resulting from the impact of state-guaranteed loans for corporates.
The cost/income ratio returned to a normal level at 51.1% in Q4, an improvement compared to Q3 2020, but slightly down compared to Q4 2019 (-4.3 percentage points).
Cost of risk increased sharply (x2.1 compared to Q4 2019, reaching €25m) notably related to performing loans provisioning, which accounts for 80% of total outstandings.
Nevertheless, CAL&F’s underlying net income Group share was €37m in Q4 2020, down -32% compared to Q4 2019, but up 8.9% compared to Q3 2020.
CAL&F recorded a stable leasing production during Q4 2020, reaching 101% of the production of Q4 2019.
For full-year 2020, CAL&F revenues decreased by -6.7% compared to 2019 impacted by a lower factoring performance, strongly linked to the crisis and clients lower liquidity requirements. This lead to an increase in cost/income ratio excluding SRF, which rose by 4.6 percentage points to 54.6%.
As the cost of risk doubled compared to 2019, CAL&F’s net income Group share stood at €101m, down -40.8% compared to 2019.
In 2020, CAL&F’s leasing was 98% of its 2019 level.