Credit Agricole Sa · EURONEXT:ACA
Credit Agricole Sa — FY2002 Earnings Presentation
71 slides from Credit Agricole Sa's earnings presentation, March 2003
Slide 1: 2002 Annual Results Presentation
2002 Annual Results Presentation March 2003
Slide 2: Crédit Agricole S.A. 2002 Consolidated Results
2 Crédit Agricole S.A. 2002 Consolidated Results Results of the Business Activities French Retail Banking Asset Management, Insurance and Private Banking Corporate and Investment Banking International Retail Banking Proprietary Asset Management and Other Activities 4Q-02 Consolidated Results Capital
Slide 3: Consolidated Results at 31 December 2002
3 Crédit Agricole S.A. Consolidated Results at 31 December 2002 Net income Group share: € 1 064 m: (27.5%) Net income Group share before goodwill: € 1 350 m: (23.5%) ROE 2002: 9.3%
Slide 4: Crédit Agricole S.A. Consolidated 2002 Results
4 Crédit Agricole S.A. Consolidated 2002 Results 2002 Highlights Dynamic growth of retail banking activities and strengthening of businesses with recurring profitability Positive impact of control of risk-related costs Agreement with PPR for the acquisition of Finaref Announcement on 16th December o
Slide 5: 2002 Consolidated income statement
5 Crédit Agricole S.A. Consolidated 2002 Results 2002 Consolidated income statement €m 2001 2002 Variation Net Banking Income 6 314 5 329 (15.6%) Operating costs (4 351) (3 929) (9.7%) Gross Operating Income 1 963 1 400 (28.7%) Risk-related costs (371) (207) (44.2%) Income from equity affiliates 704
Slide 6: French Retail Banking
6 French Retail Banking Continued strong growth of activities and results of French Retail Banking 2002 Pre-tax income: € 686 m (+2.5%) Caisses Régionales Strong growth in activity and NBI 43% Costs controlled and further reduction of cost/income ratio Risk-related cost lower over the year Strong pr
Slide 7: Sustained growth of funds collected
7 French Retail Banking Sustained growth of funds collected € 9.9 bn increase in funds collected despite negative market impact on mutual fund outstandings Sustained high levels of current accounts in 2002 (+8.5% annual average) Notable growth in precautionary savings schemes (passbook accounts, hom
Slide 8: Continued growth of loan outstandings
8 French Retail Banking Continued growth of loan outstandings Maintained high level of new MLT loans : + € 35.9 bn (+13.7%) Increase in outstandings in all types of financing Household demand for loans sustained overall, mainly for Home-Finance (43% of outstandings) Variation € bn 2002/2001 Total +6
Slide 9: Increase in services and equipment to clients
9 French Retail Banking – Caisses Régionales Increase in services and equipment to clients Strong increase in commission to € 3.4 bn (+7.3%) despite decline in securities activity Fee income products represent 35.1% of client NBI in 2002 (+0.2 points) Increase in number of products Increase in clien
Slide 10: Constant improvement of the Caisses Régionales' financial performance
10 French Retail Banking – Caisses Régionales Constant improvement of the Caisses Régionales’ financial performance Cost/income ratio significantly improved to 62.7% in 2002 (vs 65.7% in 2001) Risk-related costs decreased (-5 bp/2002) and new increase in coverage of doubtful loans by reserves ratio
Slide 11: Caisses Régionales continued dynamic growth
11 French Retail Banking – Caisses Régionales Caisses Régionales continued dynamic growth and strong contribution to results Net Banking Income increased notably due to strong performance and increase of shareholders’ equity Limited increase in costs (+1.8% to € 6.2 bn) and decrease of cost/income r
Slide 12: Sofinco: strong growth in consumer credit in France
12 French Retail Banking – Subsidiaries Sofinco: strong growth in consumer credit in France Strong increase in loan outstandings, driven notably by the partnership with Crédit Lyonnais NBI increased by 8.1% over 2002 New improvement of the cost/income ratio to 61.0% (vs 62.0% in 2001) Stable risk-re
Slide 13: Good resistance of other specialised financing activities
13 French Retail Banking – Subsidiaries Good resistance of other specialised financing activities Limited impact of low level of corporate investment and of surge in company bankruptcies Stability of NBI of factoring (Transfact) and lower NBI of lease-finance (Ucabail) Increased selectivity in lendi
Slide 14: 2002 results of the French Retail Banking division
14 French Retail Banking 2002 results of the French Retail Banking division 2001 2002 Variation €m pro-forma Net Banking Income 760 791 +4.1% Operating costs (448) (466) +4.0% Gross Operating Income 312 325 +4.2% Risk-related costs (100) (103) +3.0% Income from equity affiliates 348 464 +33.3% Pre-t
Slide 15: Asset Management, Insurance and Private Banking
15 Asset Management, Insurance and Private Banking Sustained growth of the division’s activity and results in an enduring and severe market crisis Pre-tax income 2002: € 673 m (-6.3%) Sustained performance in fund collection and small progression in assets managed despite very unfavourable market co
Slide 16: Resilience of assets under management
16 Asset Management, Insurance and Private Banking Resilience of assets under management despite difficult market conditions Despite very unfavourable market conditions, assets managed increased by 0.1% in 2002 Continued progression towards interest rate vehicles away from equity ones € bn 305.9 310
Slide 17: Asset management: growth of assets managed
17 Asset Management, Insurance and Private Banking Asset management: growth of assets managed and international diversification Dynamic growth of inflow (+ € 12.5 bn) stemming mostly from fixed income products Growth of outstandings (+1.5%) despite very negative impact of market trends Continued int
Slide 18: Private banking: slowdown in activity
18 Asset Management, Insurance and Private Banking Private banking: slowdown in the activity due to impact of the equity markets NBI decreased (-14.1% vs 2001) under the combined effects of the stock market crisis and a lower US dollar Clear results coming from the effects of cost reduction programm
Slide 19: Life insurance: steady growth of the activity
19 Asset Management, Insurance and Private Banking Life insurance: steady growth of the activity 8.2% growth of assets under management (income increased by +2.9% to € 9.7 bn) Mix of products weighted towards euro-denominated products (+8%) vs unit-linked (-21%) Financial reserves increasing to € 3.
Slide 20: Property and casualty insurance
20 Asset Management, Insurance and Private Banking Property and casualty insurance: Commercial growth and lower claims Remarkable growth of activity and increased turnover for all products (+14.1%) Client portfolio near 3.2 millions contrats, increasing by 13.7% Net decrease of claim/policy ratio an
Slide 21: 2002 results for the Asset Management, Insurance and Private Banking division
21 Asset Management, Insurance and Private Banking 2002 results for the Asset Management, Insurance and Private Banking division 2001 2002 Variation €m pro-forma Net Banking Income 1 520 1 520 = Operating expenses (804) (839) +4.4% Gross Operating Income 716 681 (4.9%) Risk-related costs (1) (11) n.
Slide 22: Corporate and Investment Banking
22 Corporate and Investment Banking Good defensive performance of Corporate and investment banking activity, meeting objectives for cost reduction and risk control Pre-tax income 2002: € 477 m (-19.8%) Lasting financial crisis bearing on the level of business of Corporate and Investment 30% Banking
Slide 23: Good defensive performance in the Financing activity
23 Corporate and Investment Banking Good defensive performance thanks to contained risk-related costs in the Financing activity Rapid re-balancing of the activity : strong growth in asset financing (GOI : +25%) and reduction of commercial banking (GOI: -20%) Positive impact of NBI and risk-related c
Slide 24: Rapid adaptation of Banking and Capital Markets
24 Corporate and Investment Banking Rapid adaptation of Banking and Capital Markets to deteriorating market conditions Good resistance of Fixed Income Financial Services activities over the whole year Lower level of business (notably in Q3-02) for equity activities, primary, brokerage and convertibl
Slide 25: 2002 Results by Activity
25 Corporate and Investment Banking 2002 Results by Activity Investment Banking and Capital Markets Financing activity 2001 2002 Variation 2001 2002 Variation €m NBI 1 817 1 564 (13.9%) 895 858 (4.1%) Costs (1 387) (1 263) (8.9%) (625) (595) (4.8%) GOI 430 301 (30.0%) 270 263 (2.6%) Risk-related cos
Slide 26: 2002 Results for the Corporate and Investment Banking division
26 Corporate and Investment Banking 2002 Results for the Corporate and Investment Banking division 2001 2002 Variation €m pro-forma Net Banking Income 2 712 2 422 (10.7%) Operating expenses (2 012) (1 858) (7.7%) Gross Operating Income 700 564 (19.4%) Risk-related costs (161) (171) +6.2% Income from
Slide 27: International Retail Banking
27 International Retail Banking Results of International Retail Banking affected by non-recurring items in first half-year 2002 Pre-tax income 2002: (€ 33 m) Impact of Latin America (2%) Impact of Intesa’s strategic restructuring plan Allocated capital: € 2 874 m Sustained growth in activities and c
Slide 28: Impact of international development strategy
28 International Retail Banking Impact of international development strategy Contribution of Bisel Proactive handling of Latin American crisis to Net income bef. goodwill amort. - Organised withdrawal from Argentina (Bisel) 2001 2002 - Re-sizing of operations in Uruguay (Acac) (106) - Sale of non-st
Slide 29: 2002 results for the International Retail Banking division
29 International Retail Banking 2002 results for the International Retail Banking division 2001 2002 Variation €m pro-forma Net Banking Income 866 503 (41.9%) Operating expenses (632) (353) (44.1%) Gross Operating Income 234 150 (35.9%) Risk-related costs (272) (133) (51.1%) Income from equity affil
Slide 30: Proprietary Asset Management and Other Activities
30 Proprietary Asset Management and Other Activities Positive contribution from the Proprietary Asset Management and Other Activities division, despite very deteriorated markets Pre-tax income 2002: (€ 208 m) Impact of stock market crisis in on the equity portfolios (13%) Lesser contribution of fixe
Slide 31: Impact of markets on equity portfolios
31 Proprietary Asset Management and Other Activities Impact of markets on equity portfolios of Proprietary asset management and other activities Reminder of valuation principles: - Equity portfolio activity: equity portfolio valuation is based on a multi-criteria approach (average share price over t
Slide 32: 2002 results for the Proprietary Asset Management division
32 Proprietary Asset Management and Other Activities 2002 results for the Proprietary Asset Management and Other Activities division 2001 2002 Variation €m pro-forma Net Banking Income 456 93 (79.6%) Operating expenses (455) (413) (9.2%) Gross Operating Income 1 (320) n.m. Risk-related costs 163 211
Slide 33: Q4-02 Consolidated Results
33 Crédit Agricole S.A. Consolidated 2002 Results Q4-02: fourth quarter 2002 Consolidated Results Net result Group share : € 343 m: +42.7% vs average 9M-02 Net result Group share before goodwill amortisation: € 404 m: +28.1% vs average 9M-02 Good level of activity for all divisions Controlled impact
Slide 34: Q4-02 Highlights for business activities
34 Crédit Agricole S.A. Consolidated 2002 Results Q4-02 Highlights for business activities 2002 Net quaterly results Sustained and strong activity of French Group share before goodwill retail banking division and notable €m progression of contribution from Caisses Régionales Stable contribution from
Slide 35: Detailed quarterly consolidated results
35 Crédit Agricole S.A. Consolidated 2002 Results Detailed quarterly consolidated results €m Q1-02* Q2-02* Q3-02 Q4-02 2002 Net Banking Income 1 395 1 486 1 146 1 302 5 329 Operating expenses (990) (989) (937) (1 013) (3 929) Gross Operating Income 405 497 209 289 1 400 Risk-related costs (122) 7 (4
Slide 36: Return on capital allocated by business activity
36 Crédit Agricole S.A. Consolidated 2002 Results Return on capital allocated by business activity Net result per business activity Capital allotted to business activity (before goodwill amortisation) €m ROE 13 947 1 490 13 564 1 402 80 1 309 2001 2002 12 616 22 2 874 2 753 International retail bank
Slide 37: Strong capital base
37 Crédit Agricole S.A. Consolidated 2002 Results Strong capital base Shareholders’ equity Group share increases by 2.9% (excl. Foreign Exchange : +4.0%) High level of provisions and FGBR (€ 2.4 bn) 7.3% decrease in risk-weighted assets (-€ 7.9 bn) Solvency ratio 9%, following impact of –1.4 points
Slide 38: EPS and dividend
38 Crédit Agricole S.A. Consolidated 2002 Results EPS and dividend Earnings per share: € 1.10 Proposal to maintain net dividend: € 0.55
Slide 39: Consolidated Results at 31 December 2002 of Crédit Agricole Group
39 Financial Information for the Crédit Agricole Group Consolidated Results at 31 December 2002 of Crédit Agricole Group Net income Group share : € 2 297 m : +98.4% Net income Group share before goodwill amortisation: € 2 596 m : +77.8% Return to normal levels after impact of IPO in 2001 Excluding B
Slide 40: Crédit Agricole Group consolidated P&L
40 Financial Information for the Crédit Agricole Group Crédit Agricole Group consolidated P&L €m 2001 2002 Variation Net Banking Income 16 259 15 727 (3.3%) Operating expenses (10 701) (10 505) (1.8%) Gross Operating Income 5 558 5 222 (6.0%) Risk-related costs (1 353) (796) (41.2%) Income from equi
Slide 41: Crédit Agricole Group has strengthened its financial position
41 Financial Information for the Crédit Agricole Group Crédit Agricole Group has strengthened its financial position Financial position is strengthened and shareholders’ equity increased by 8.3% Solvency ratio 11.7% of which Tier 1 ratio: 10.8% Capital Risk-weighted assets (€ bn) (Equity, FGBR and s
Slide 42: Appendices
42 Appendices
Slide 43: 2002: detailed consolidated income statement
43 Crédit Agricole S.A. Consolidated 2002 Results 2002 : detailed consolidated income statement French Asset Mgmt, Corporate & International Proprietary Retail Insurance and Investment Retail Asset Mgmt 2002 €m Banking Private Banking Banking Banking & Other Activities Net Banking Income 791 +4.1% 1
Slide 44: Q4-02: detailed consolidated income statement
44 Crédit Agricole S.A. Consolidated 2002 Results Q4-02 : detailed consolidated income statement French Asset Mgmt, Corporate & International Proprietary Retail Insurance and Investment Retail Asset Mgmt €m Banking Private Banking Banking Banking & Other Activities T4-02 Net Banking Income 202 (3.3%
Slide 45: Consolidated income statement excluding Bisel
45 Crédit Agricole S.A. Consolidated 2002 Results Consolidated income statement excluding Bisel In 2001 : - 100% consolidation of the Bisel group (Bisel, Bersa, Suquia) - at Q4, Argentinine crisis triggered provisioning of the total exposure (loans outstanding to Bisel: € 110 m; residual goodwill: €
Slide 46: Exposure to market risks
46 Variation of Risk Exposure to market risks Overall VAR (99% - intraday) to 31st December 2002: € 26.0 m Overall VAR (99% - 10 days) to 31st December 2002: € 82.1 m Evolution during 2002 of Crédit Agricole S.A.’s exposure to market risks VAR (99% - 10 days) 1st January – 31 December 2002 31 Decemb
Slide 47: Variation of risk-related costs
47 Variation of Risk Variation of risk-related costs Crédit Agricole S.A. June 01 Dec 01 June 02 Dec 02 pro-forma €m Gross customer outstandings 76 760 79 299 74 361 71 812 Doubtful loans 4 872 4 650 4 316 3 970 Reserves 3 328 3 049 2 698 2 608 Ratio of doubtful loans to gross outstandings 6.3% 5.9%
Slide 48: Geographical spread of assets
48 Variation of Risk Geographical spread of assets Gross customer credits and lease - finance outstanding Crédit Agricole S.A. June 01* Dec 01 June 02 Dec 02 Variation € bn pro-forma 2002/2001 France 29.0 29.4 33.1 30.8 +4.8% Other countries of the European Economic Community 12.5 12.8 12.3 13.3 +4.
Slide 49: General Provisions and FGBR
49 General Provisions and FGBR Variation per type and impact on consolidated net income Crédit Agricole S.A. June 01 Dec 01 June 02 Dec 02 €m pro-forma Liability provisions for sector risks and other provisions covering credit risks (excl. doubtful) 593 553 439 446 Country risk provisions 581 599 41
Slide 50: Equity, FGBR and subordinated debt
50 Change in Consolidated Capital Equity, FGBR and subordinated debt Crédit Agricole S.A. €m Group Minority Total FGBR Subordinated share share debt 31 December 2001 14 994 690 15 684 1 716 9 574 Dividend paid in 2002 (535) (35) (570) 2002 results 1 064 (3) 1 061 Change in the share of the Caisses 8
Slide 51: Breakdown of capital and earnings per share calculation
51 Change in Consolidated Capital Breakdown of capital and earnings per share calculation Crédit Agricole S.A. Breakdown of share capital: Dec 2001 Dec 2002 SAS Rue la Boétie 682 717 240 682 717 240 SNC Crédit Agricole transactions* - 26 903 605 Treasury shares - 745 968 Shares held by Group compani
Slide 52: Simplified consolidated balance sheets 2001 and 2002
52 Consolidated Balance Sheet Simplified consolidated balance sheets 2001 and 2002 € bn Dec 2002 Dec 2001 ASSETS Cash, money market and interbank items 107.8 92.9 Crédit Agricole internal transactions 149.9 141.6 Customer-related items 62.5 69.8 Lease financing 6.7 6.5 Securities 48.0 58.6 Insurance
Slide 53: Capital allocation methodology
53 Capital Allocation Capital allocation methodology Summary methodology by business activity French Retail 5% of weighted risk (incl. 25% of the Caisses Régionales’ Banking risk-weighted assets) + goodwill Asset Management The highest of 6% risk-weighted assets or 3 months Insurance and of operatin
Slide 54: International solvency ratios
54 Capital Allocation International solvency ratios € bn June 01 Dec 01 June 02 Dec 02 Credit risks 98.0 94.0 86.6 86.8 Market risks 14.7 15.1 15.4 14.4 Total of weighted risks 112.7 109.1 102.0 101.2 Tier 1 14.0 14.8 15.1 15.1 Tier 2 5.8 9.4 8.9* 8.7 Tier 3 0.8 0.6 0.7 0.2 Deductions 9.2 14.9 15.0
Slide 55: Weighted risks retained by division
55 Capital Allocation Weighted risks retained to determine the capital allocated by division € bn June 01 Dec 01 June 02 Dec 02 French Retail Banking 58.6 59.2 62.0 63,2 of which Caisses Régionales 42.6 42.6 44.9 46,7 of which subsidiaries 16.0 16.6 17.1 16,5 Asset Mgmt, Insurance and Private Bankin
Slide 56: Capital allocated to business divisions
56 Capital Allocation Capital allocated to business divisions € bn June 01 (%) Dec 01(%) June 02 (%) Dec 02 (%) French Retail Banking 3.5 22.0% 3.2 21.9% 3.5 22.5% 3.2 20.4% Asset Management, Insurance and Private Banking 3.1 19.7% 3.0 20.6% 3.6 23.2% 3.5 21.9% Corporate & Investment Banking 5.1 32.
Slide 57: Contribution of the Caisses Régionales
57 French Retail Banking – Caisses Régionales Contribution of the Caisses Régionales €m Aggregated results 2001 2002 Variation T4-02 Variation of the 44 Caisses Régionales pro-forma 2002/2001 T4-02/T4-01 consolidated by the equity method Net Banking Income 9 842 10 318 +4.8% 2 784 +7.9% Operating co
Slide 58: Increase in the number of products per client
58 French Retail Banking Increase in the number of products per client: 7.40 at 31 December 2002 Number of products Variation millions 2002/2001 13.0 13.1 Current accounts (0.6%) 12.1 11.1 Cards +3.4% 8.4 8.9 Life insurance +3.5% 7.3 Services accounts +6.1% 6.1 Property & Casualty +13.7% 3.2 insuran
Slide 59: Key figures of SOFINCO
59 French Retail Banking Key figures of SOFINCO €m 2001 2002 Variation 2002/2001 Net Banking Income 662 737 +11.4% Administration costs (404) (443) +9.6% Depreciation (19) (20) +5.9% Gross Operating Income 239 275 +14.8% Risk-related costs (79) (96) +21.6% Net operating income 160 178 +11.4% Income
Slide 60: Increase in the range of products and services offered
60 Asset Management, Insurance and Private Banking Increase in the range of products and services offered by the division Rationalisation of structures and increase in strong value-added products - alternative management : CAAIPG* - quantitative management: CPR AM* - services to issuers : CAIS Bank*
Slide 61: Key figures of CAAM
61 Asset Management, Insurance and Private Banking Key figures of CAAM €m 2001 2002 Variation 2002/2001 Net Banking Income 330 370 +12.0% Of which commissions 317 342 +7.9% Operating costs (200) (233) +16.7% Financial revenues 22 4 (80.0%) Pre-tax income 152 141 (7.2%) Extraordinary items - 34* n.m.
Slide 62: Key figures of Private Banking
62 Asset Management, Insurance and Private Banking Key figures of Private Banking €m 2001 2002 Variation 2002/2001 Net Banking Income 434 373 (14.1%) Operating costs (351) (337) (4.0%) Gross Operating Income 83 36 (56.6%) Risk-related costs - (15) n.m. Operating income 83 21 (74.6%) Income from equi
Slide 63: Key figures of Predica
63 Asset Management, Insurance and Private Banking Key figures of Predica Progression of financial reserves to € 3.2 bn (i.e. 3.9% of technical provision) Provision for profit sharing made: + € 27 m (+2.3%) Increase in capital (+12.8%) mirroring growth of outstandings Unrealised capital gains on inv
Slide 64: Key figures of Predica
64 Asset Management, Insurance and Private Banking Key figures of Predica €m 2001 2002 Variation 2002/2001 Net premia 9 452 9 725 +2.9% Management fees 827 918 +11.0% Net financial income 3 856 3 880 +0.6% Operating expenses (51) (55) +7.8% Distribution commissions (628) (719) +14.5% Technical resul
Slide 65: Key figures of Pacifica
65 Asset Management, Insurance and Private Banking Key figures of Pacifica €m 2001 2002 Variation 2002/2001 Number of policies 2 806 551 3 191 360 +13.7% Number of claims 306 043 318 555 +4.1% Gross premium income 515.3 588.1 +14.1% C / P ratio 73.8% 70.4% Combined ratio * 98.1% 97.6% Sales commissi
Slide 66: Breakdown of industry risks
66 Corporate and Investment Banking Breakdown of industry risks Breakdown of net outstandings of the Financing activity Sector in % Sector in % Transport 19.9% Agri food 2.2% Shipping 13.5% Building and construction 2.0% Aviation 3.1% Banks and financial institutions 2.0% Other 3.3% Public services
Slide 67: Key figures of CAI
67 Corporate and Investment Banking Key figures of CAI €m 2001 2002 Variation 2002/2001 Net Banking Income 3 193 2 644 (17.2%) Operating costs (2 424) (2 187) (9.8%) Gross Operating Income 769 457 (40.6%) Risk-related costs (266) (168) (36.8%) Income from equity affiliates 84 92 +9.5% Net income on
Slide 68: Major holdings in private equity
68 Corporate and Investment Banking Major holdings in private equity Holdings Participations Sector Secteur Stake % Acquisition Investment ValeurMarket Date Investissement boursière Cap détenu d’acquisition date (€ (m) € m) (€(€m) m) Marionnaud Parfumerie Distribution Sale of perfumes de parfums 9.7
Slide 69: Presence in European consumer credit
69 International Retail Banking Presence in European consumer cedit At 31 December, assets managed internationally: € 5.1 bn Finaref : control gained in 2003 Sofinco Credit-Plus Lukas (H2-2001) 1998: 100% Finaref (2003) Lukas: acquired 100% in 2003 Ribank 1990: 100% Credigen 1999: 100% Credibom 1995
Slide 70: Effects of non-recurring items on division
70 Proprietary Asset Management and Other Activities Effects of non-recurring items on division 2001 of which 2001 2001 2002 of which 2002 €m pro-forma impact of pro-forma published market impact Proprietary Asset Management actual preparation of excl. listing on share portfolios and Other Activitie
Slide 71: Crédit Agricole S.A.
KX CREDIT AGRICOLE S.A.