Credit Agricole SA · EURONEXT:ACA
Credit Agricole SA — Investor Presentation (April 2005)
55 slides from Credit Agricole SA's investor presentation, Apr 22, 2005
Slide 1: Conversion to IAS/IFRS standards
Conversion to IAS/IFRS standards 22 April 2005
Slide 2: Warning
WARNING This presentation does not include figures for listed companies in which the Group has a minority stake and which have not publicly reported the impact of converting their financial statements to IAS/IFRS standards. Their inclusion might lead to later changes in the disclosed information. To
Slide 3: Contents
CONTENTS Foreword 2005 timetable for financial communication Preparation of figures Figures relating to conversion to IAS/IFRS standards Key figures Impact on shareholders' equity Impact on 2004 income statement Impact already anticipated in financial statements under French standards Explanation of
Slide 4: 2005 timetable for financial communication
2005 timetable for financial communication 2004 2005 Period for First IAS/IFRS financial statements comparison APRIL MAY JUNE JANUARY FEBRUARY MARCH 9 March: 2004 annual results (French standards) 22 APRIL: Impact of conversion to IAS/IFRS standards on 2004 2 June: 2005 first quarter results (IAS/IF
Slide 5: Preparation of figures
PREPARATION OF FIGURES ü The figures presented have been prepared using the IFRS standards adopted by the European Union at 31 December 2004 (including IFRS 2). ü Under these regulations, all standards except IAS 32 and 39, and IFRS 4 apply from 1 January 2004. Crédit Agricole S.A. applies IAS 32 an
Slide 6: Preparation of figures
PREPARATION OF FIGURES ü The Audit Committee has reviewed all of the financial information presented in this document. ü The figures relating to the impact of IFRS standards applicable from 1 January 2004 (excluding IAS 32 and 39, and IFRS 4) on shareholders’ equity at 1 January 2004 and on income i
Slide 7: Preparation of figures: impact on shareholders' equity
PREPARATION OF FIGURES üImpact on shareholders' equity The impact of adjustments on shareholders' equity may be final or temporary: § Any adjustment which might have had an impact on the profit and loss account if IAS/IFRS standards had always been applied is recorded in non-reversible shareholders'
Slide 8: Preparation of figures: impact on income statement
PREPARATION OF FIGURES üImpact on income statement Variances in the income statement between French and IAS/IFRS standards may be final or temporary : § Variances are final when the new standards either prohibit one kind of accounting treatment or make it compulsory. Example: Termination of amortisa
Slide 9: Contents
CONTENTS Foreword 2005 timetable for financial communication Preparation of figures Figures relating to conversion to IAS/IFRS standards Key figures Impact on shareholders' equity Impact on 2004 income statement Impact already anticipated in financial statements under French standards Explanation of
Slide 10: Crédit Agricole S.A.: Key Figures (excl. IAS 32 and 39)
CREDIT AGRICOLE S.A.: Key Figures (excl. IAS 32 and 39) ü2004 net income - Group share § After goodwill and integration-related costs: €2,787m (+€584m) § Before goodwill and integration-related costs: €3,191m (+€34m) üShareholders' equity – Group share at 31 December 2004: €26,240m (+€1,300m) üROE:
Slide 11: Crédit Agricole S.A.: Key Figures (incl. IAS 32 and 39)
CREDIT AGRICOLE S.A.: Key Figures (incl. IAS 32 and 39) ü2004 net income - Group share § After goodwill and integration-related costs: €2,507m (+€304m) § Before goodwill and integration-related costs: €2,911m (- €246m) üShareholders' equity – Group share at 1 January 2005 § Including unrealised capi
Slide 12: Impact on shareholders' equity and 2004 result excluding IAS 32 and 39
Impact on shareholders’ equity – Group share and 2004 result excluding IAS 32 and 39 €m Net of tax Shareholders’ Changes in Shareholders’ Net income – equity – Group 2004 equity – Group Group share share at 2004 shareholders’ share at 01/01/2004 equity 31/12/2004 French standards 23,571 2,203 (834)
Slide 13: Impact on shareholders' equity at 1 January 2005
Impact on Crédit Agricole S.A. shareholders' equity – Group share at 1 January 2005 Shareholders' Estimation of equity – Group net income - (€ m, net of tax) share at Group share* Including IAS 32 and 39 1 January 2005 French standards 2,203 24,940 Impact on non-reversible shareholders' equity 266 1
Slide 14: Estimated impact on consolidated results
Estimated impact on Crédit Agricole S.A. consolidated results €m IAS/IFRS Including IAS 32 and 39 French standards IAS/IFRS standards 2004 impact* 2004* Net banking income 12,513 (404) 12,109 Operating expenses (8,752) 154 (8,598) Gross operating income 3,761 (250) 3,511 Risk-related costs (576) 4 (
Slide 15: Impact already anticipated under French standards
Impact already anticipated in financial statements under French standards üFixed assets (IAS 16, 36, 38, 40) Crédit Agricole S.A. has applied in anticipation starting 1 January 2004 the entirety of regulation CRC 2002-10, relating to amortisation and depreciation of assets. This regulation implement
Slide 16: Explanation of main variances
Explanation of main variances ü FGBR and provisions for liabilities (IAS 30, 37 and 39) ü Scope and consolidation methods(IAS 27, 28 and 31) ü Business combinations and goodwill (IAS 36, IAS 38 and IFRS 3) ü Securities portfolios (IAS 39) ü Derivatives (IAS 39) ü Derivatives and micro hedging of fai
Slide 17: FGBR and provisions for liabilities
FGBR and Provisions for liabilities (IAS 30, 37 and 39) French standards IAS/IFRS treatment • Under French standards, FGBR are created in • Risks covered by FGBR according to IAS have been addition to liabilities reserves. reversed as a contra-asset (global reserves according • FGBR cover the follow
Slide 18: Scope and methods of consolidation
Scope and methods of consolidation (IAS 27, 28 and 31) French standards IAS/IFRS treatment • The Crédit Agricole S.A. group only consolidates • Whether an entity can be consolidated or not is companies over which it has control (using full determined using criteria similar to those used consolidatio
Slide 19: Business combinations and goodwill
Business combinations and goodwill (IAS 36, IAS 38 and IFRS 3) French standards IAS/IFRS treatment • Business combinations are accounted for using the • No change in treatment of acquisitions prior to 1 acquisition cost method. January 2004. • Positive and negative goodwill arising from an • Goodwil
Slide 20: Investment portfolios (IAS 39) – 1/2
Investment portfolios (IAS 39) – 1/2 French standards IAS/IFRS treatment • Securities recognised as assets are recorded in portfolios as • Securities are classified in four categories laid down by IAS laid down by regulations (trading, available for sale, held to 39: maturity, portfolio, other long-
Slide 21: Investment portfolios (IAS 39) – 2/2
Investment portfolios (IAS 39) – 2/2 French standards IAS/IFRS treatment • Securities recognised as assets are classified in • Securities are allocated to in four categories laid portfolios as laid down by regulations (trading, down by IAS 39: available for sale, held to maturity, portfolio, other •
Slide 22: Derivatives (IAS 39)
Derivatives (IAS 39) French standards IAS/IFRS treatment • Derivatives are recorded in four categories (trading, • All derivatives are recognised on the balance sheet single open position, micro hedging, macro hedging) at fair value, whether they are held for trading according to management intentio
Slide 23: Derivatives and micro hedging of fair value
Derivatives and micro hedging of fair value (IAS 39 ) French standards IAS/IFRS treatment • The purpose of the hedging contract is to reduce the • Fair value hedging aims to hedge changes in the risk of a change in price or interest rate on an asset or price of a financial asset, liability, or a fir
Slide 24: Derivatives and micro hedging of cash flow
Derivatives and micro hedging of cash flow (IAS 39) French standards IAS/IFRS treatment • The purpose of the hedging contract is to reduce the • Micro hedging of cash flows aims to cover the risk risk of a change in price or interest rate on a future of variability of future cash flow (variable rate
Slide 25: Derivatives and macro hedging (carve-out)
Derivatives and macro hedging (IAS 39 – carve-out) French standards IAS/IFRS treatment • Macro hedging consists of reducing general interest rate • The Group favours the implementation of fair value risk on the bank’s balance sheet, using derivative macro hedges as allowed under IAS 39 ‘carve-out’,
Slide 26: Day one profit (IAS 39)
Day one profit (IAS 39) French standards IAS/IFRS treatment • Structured finance deals and complex financial • Where there are no prices in an active market, the fair instruments in capital markets are valued using value of a financial instrument is calculated using internal valuation models. either
Slide 27: Net commission and fees income and effective interest rate
Net commission and fees income and effective interest rate (IAS 18 – IAS 39) French standards IAS/IFRS treatment • Commissions are treated according to the nature of • Initial valuation of loans at fair value, with ultimate the service. recognition at amortised cost using the effective • Interest is
Slide 28: Provisions for credit risk (IAS 39)
Provisions for credit risk (IAS 39) French standards IAS/IFRS treatment • Risks on doubtful outstandings are individually • Individual provisions are accounted for when there provisioned. is material evidence of impairment. They are • Collective provisions are charged for non-doubtful estimated base
Slide 29: Deferred tax (IAS 12)
Deferred tax (IAS 12) French standards IAS/IFRS treatment • Life assurance companies’ capitalisation reserve is • A deferred tax liability is recognised on the whole not subject to deferred tax liabilities. life assurance companies’ reserve for depreciation • In spite of being non-deductible, FGBR a
Slide 30: Treasury shares and share-based payments
Treasury shares and shares-based payments (IFRS 2 and IAS 32) French standards IAS/IFRS treatment • The Group’s stock option plans are hedged by the • IFRS 2 applies to plans awarded after 7 purchase of shares. November 2002. This applies to three Crédit • Provisions are charged to personnel costs a
Slide 31: Grants (IAS 20)
Grants (IAS 20) French standards IAS/IFRS treatment • Grants are included under a specific heading within • Grants are included in the balance sheet as a consolidated shareholders’ equity. deduction from asset accounts. IAS/IFRS impact Estimated impact on 2004 net income – Group Impact on shareholde
Slide 32: Contents
CONTENTS Foreword 2005 timetable for financial communication Preparation of figures Figures relating to conversion to IAS/IFRS standards Key figures Impact on shareholders' equity Impact on 2004 income statement Impact already anticipated in financial statements under French standards Explanation of
Slide 33: Summary of impacts on financial statements and prudential ratios
Summary of impacts on financial statements and prudential ratios, including IAS 32 and 39 Limited impact on income statement apart from end of amortisation of goodwill and one-off items in 2004 €m Net income - group Net of tax share before Net income - goodwill and ROE Group share integration-relate
Slide 34: Summary of impacts on financial statements and prudential ratios
Summary of impacts on financial statements and prudential ratios, including IAS 32 and 39 Significant increase in shareholders' equity – Tier One capital impacted by reclassification of FGBR € bn Shareholders' Net tier one Net of tax equity – Group Tier one capital at share at ratio 01/01/2005 01/01
Slide 35: Contents
CONTENTS Foreword 2005 timetable for financial communication Preparation of figures Figures relating to conversion to IAS/IFRS standards Key figures Impact on shareholders' equity Impact on 2004 income statement Impact already anticipated in financial statements under French standards Explanation of
Slide 36: Impact on 2004 income statement: French retail banking
Impact on 2004 income statement by business line Results of French retail banking Main sources of variance between French and IAS/IFRS standards: üSpreading of commissions (bank cards, …) üImpact on provisions for doubtful loans and impairment on restructured loans of discounting expected future cas
Slide 37: French retail banking - Regional Banks
Impact on 2004 income statement by business line Results of French retail banking - Regional Banks €m 2004 2004 Impact IFRS standards Reported Net banking income Operating expenses Gross operating income Risk-related costs Equity affiliates 718 10 728 Pre-tax income on ordinary activities 718 10 728
Slide 38: French retail banking - Crédit Lyonnais
Impact on 2004 income statement by business line Results of French retail banking - Crédit Lyonnais €m 2004 2004 Impact IFRS standards Reported Net banking income 3,393 6 3,399 Operating expenses (2,479) 1 (2,478) Gross operating income 914 7 921 Risk-related costs (158) (11) (169) Pre-tax income on
Slide 39: Impact on 2004 income statement: Specialised financial services
Impact on 2004 income statement by business line Results of Specialised financial services Main sources of variance between French and IAS/IFRS standards: üCommissions to specifiers presented as reduction of net banking income, and spread over time üImpact on provisions for doubtful loans and impair
Slide 40: Specialised financial services
Impact on 2004 income statement by business line Results of Specialised financial services €m 2004 2004 Impact IFRS standards Reported Net banking income 2,387 (108) 2,279 Operating expenses (1,398) 170 (1,228) Gross operating income 989 62 1,051 Risk-related costs (342) (27) (369) Equity affiliates
Slide 41: Asset management, insurance and private banking
Impact on 2004 income statement by business line Results of Asset management, insurance and private banking Main sources of variance between French and IAS/IFRS standards: üNo reversal of impairment on securities available for sale üPosting to assets at fair value by income of securities valued unde
Slide 42: Summary of impact on insurance businesses
Summary of impact on insurance businesses (IAS 27, IFRS 4, IAS 39) French standards IAS/IFRS treatment • The accounting principles and valuation regulations for • The financial assets of group insurance companies have insurance businesses have been used in Crédit Agricole S.A.’s been reclassified in
Slide 43: Asset management, insurance and private banking
Impact on 2004 income statement by business line Results of Asset management, insurance and private banking €m 2004 2004 Impact IFRS standards Reported Net banking income 2,782 (37) 2,745 Operating expenses (1,385) - (1,385) Gross operating income 1,397 (37) 1,360 Risk-related costs (11) 2 (9) Equit
Slide 44: Corporate and investment banking (excluding Private Equity)
Impact on 2004 income statement by business line Results of Corporate and investment banking (excluding Private Equity) Main sources of variance between French and IAS/IFRS standards: üDay one profits deferred üParticipation fees spread üNo reversal of impairment on securities available for sale 44
Slide 45: Corporate and investment banking (excluding Private Equity)
Impact on 2004 income statement by business line Results of Corporate and investment banking (excluding Private Equity) €m 2004 2004 Impact IFRS standards Reported Net banking income 3,710 (8) 3,702 Operating expenses (2,620) (2) (2,622) Gross operating income 1,090 (10) 1,080 Risk-related costs 50
Slide 46: Impact on 2004 income statement: Private Equity
Impact on 2004 income statement by business line Results of Private Equity Main sources of variance between French and IAS/IFRS standards: üPosting to assets at fair value through profit and loss of whole portfolio: § Gains on disposals on 2004 assumed realised as at 1 January 2004 § Reduction in va
Slide 47: Results of Private Equity
Impact on 2004 income statement by business line Results of Private Equity €m 2004 2004 Impact IFRS standards Reported Net banking income 206 (273) (67) Operating expenses (36) - (36) Gross operating income 170 (273) (103) Risk-related costs (87) 84 (3) Equity affiliates - - - Gain/(loss) on disposa
Slide 48: Impact on 2004 income statement: International retail banking
Impact on 2004 income statement by business line Results of International retail banking Main sources of variance between French and IAS/IFRS standards: üExcluding direct impact of Intesa which have not been disclosed yet, the main one being the ending of amortisation of goodwill on the equity inter
Slide 49: Results of International retail banking
Impact on 2004 income statement by business line Results of International retail banking €m 2004 2004 Impact IFRS standards Reported Net banking income 352 (8) 344 Operating expenses (278) (4) (282) Gross operating income 74 (12) 62 Risk-related costs (32) 2 (30) Equity affiliates 305 63 368 Pre-tax
Slide 50: Proprietary asset management and other activities
Impact on 2004 income statement by business line Results of Proprietary asset management and other activities Main sources of variance between French and IAS/IFRS standards: üTransfer of reserves into shareholders’ equity 50 Conversion to IAS/IFRS standards - 22 April 2005
Slide 51: Results of Proprietary asset management and other activities
Impact on 2004 income statement by business line Results of Proprietary asset management and other activities €m 2004 2004 Impact IFRS standards Reported Net banking income (317) 25 (292) Operating expenses (556) (12) (568) Gross operating income (873) 13 (860) Risk-related costs 4 (33) (29) Equity
Slide 52: Changes to the consolidated balance sheet
Changes to the consolidated balance sheet The main changes to the consolidated balance sheet relate to: üReclassifications § With no impact on total assets, in particular: New classification of securities portfolios, reclassification of intangibles into goodwill on Crédit Lyonnais business franchise
Slide 53: Consolidated balance sheet at 1 January 2005 - Assets
Crédit Agricole S.A. consolidated balance sheet at 1 January 2005 Assets (€ m) IFRS* IFRS* IFRS French standards reclassifications impact standards* Cash, central banks 23,585 23,585 Financial assets at fair value 288,715 1,889 290,604 Derivatives instruments for hedging 215 283 498 Financial assets
Slide 54: Consolidated balance sheet at 1 January 2005 - Liabilities
Crédit Agricole S.A. consolidated balance sheet at 1 January 2005 Liabilities (€ m) French IFRS* IFRS* IFRS standards reclassifications impact standards * Central banks 504 504 Liabilities at fair value 203,595 2,860 206,455 Derivative instruments 268 845 1,113 Due to banks 142,469 (53,154) 122 89,4
Slide 55: Details of IAS/IFRS impact on equity affiliates
Details of IAS/IFRS impact on equity affiliates (€m, net of tax) Including IAS 32 and 39 Shareholders’ equity – Group share Impact on non-reversible shareholders' equity FGBR and uneligible reserves (IAS 37) 324 Badwill and goodwill (IFRS 3) 203 Revaluation of securities: trading, impairment (IAS 39