Credit Agricole Sa · EURONEXT:ACA
Credit Agricole Sa — Q2 2020 Earnings Presentation
62 slides from Credit Agricole Sa's earnings presentation, Aug 6, 2020
Slide 1: Results of the second quarter and first half 2020
WORKING EVERY DAY IN THE INTEREST OF OUR CUSTOMERS AND SOCIETY RESULTS of the second quarter and first half 2020
Slide 2: Disclaimer
NOTE Disclaimer The Crédit Agricole Group The financial information on Crédit Agricole S.A. and Crédit Agricole Group for second quarter and first half 2020 comprises this scope presentation and the attached appendices and press release which are available on the website: https://www.credit- of cons
Slide 3: Contents
01 General summary 05 02 06 Contents 03 07 04 3 SECOND QUARTER AND FIRST HALF 2020 RESULTS
Slide 4: Summary: Key figures
CRÉDIT AGRICOLE S.A. CRÉDIT AGRICOLE GROUP SUMMARY Key figures Crédit Agricole Group Crédit Agricole S.A. 2.4% 16.1% NPL ratio 3.2% 12.0% NPL ratio +0.1 pp vs. 31/03 stable vs. 31/03 Solvency Solvency Coverage (phased-in CET1) +7.2pp Coverage 73.4% (phased-in CET1) +4.1pp 84.5% ratio +0.2 pp vs. 31/
Slide 5: A V-shaped recovery for Crédit Agricole Group
CRÉDIT AGRICOLE S.A. CREDIT AGRICOLE GROUP SUMMARY A “V” shaped recovery for Crédit Agricole Group Massive mobilisation of the 1st bank in France to support its customers Crédit Agricole S.A. Crédit Agricole S.A. €28.7bn in State guaranteed loans, €4.2bn in extended maturities, €239m in support for
Slide 6: Largest bank in France, massively committed to support the economy
GROUPE CREDIT AGRICOLE CRÉDIT AGRICOLE GROUP SUMMARY Largest bank in France, massively committed to support the economy Mobilised in Massive mobilisation of all of the employees at the service of the customers 90% of branches reachable, either in person or remotely the front lines State-guaranteed l
Slide 7: A crisis that reveals the full relevance of our Group Project
GROUPE CRÉDIT AGRICOLE CRÉDIT AGRICOLE GROUP SUMMARY A crisis that reveals the full relevance of our Group Project Customer Project Human-centric Project Digital and Human Empowered teams for customers Societal Project → Increase in customer satisfaction(1) → Instant adaptation of the organisation t
Slide 8: Faster and stronger than expected rebound in France
CRÉDIT AGRICOLE S.A. CRÉDIT AGRICOLE GROUP SUMMARY Faster and stronger than expected rebound in France Rebound in household confidence and in business climate in 60 Monthly manufacturing PMI France in June and July 55 Consumer confidence(1): near pre-crisis level (97 vs. 104 June/February) 50 Apple
Slide 9: A V-shaped recovery of the Group's activity thanks to the Universal Banking Model
CRÉDIT AGRICOLE S.A. CREDIT AGRICOLE GROUP SUMMARY A “V” shaped recovery of the Group’s activity thanks to the Universal Banking Model Retail gross customer acquisition — Crédit Agricole Group +2.4% vs. June 2019 170,000 155,000 150,000 92,000 74,000 46,000 Jan. 20 Feb. 20 Mar. 20 Apr. 20 May 20 Jun
Slide 10: Contents: Crédit Agricole S.A. – Summary
01 05 Crédit Agricole S.A. – 02 Summary 06 Contents 03 07 04 10 SECOND QUARTER AND FIRST HALF 2020 RESULTS
Slide 11: Increasing revenues Q2/Q2 and H1/H1
CRÉDIT AGRICOLE S.A. REVENUES Increasing revenues Q2/Q2 and H1/H1 Q2/Q2 and H1/H1 change in underlying revenues(1), by business line Exceptional half-year in LC, penalised by an unfavourable market effect in AG +0.1% €6m 5,179 +22 5,185 Retail activities (RB and SFS) heavily penalised by the two mon
Slide 12: Expenses down Q2/Q2
CRÉDIT AGRICOLE S.A. EXPENSES Expenses down Q2/Q2 Q2/Q2 and H1/H1 change in underlying costs excluding SRF (1), by business line Decrease in cost-income ratio Q2/Q2 LC: increase due to a base effect in CIB (reversal of reserves for employee expenses in Q2-19) and a scope effect for AS -1.9% €-57m As
Slide 13: One of the lowest NPL ratios and highest coverage ratios in Europe
CRÉDIT AGRICOLE S.A. CRÉDIT AGRICOLE GROUP RISKS One of the lowest NPL ratios and highest coverage ratios in Europe Crédit Agricole S.A. Regional Banks Crédit Agricole S.A.(1) Regional Banks(1) NPL ratio: 3.2% 1.8% NPL coverage ratio(1): 73.4% 99.7% +0.1 pp / March 20 +0.9 pp / March 20 -0.3 pp / Ma
Slide 14: Controlled Q2/Q2 increase in provisioning
CRÉDIT AGRICOLE S.A. CRÉDIT AGRICOLE GROUP RISKS Controlled Q2/Q2 increase in provisioning, half of which related to performing loans provisioning Breakdown of cost of risk per Stage (in €m): S1&S2: provisioning of performing loans; S3: provisioning for proven risks Crédit Agricole S.A. Group Crédit
Slide 15: High NPL coverage ratios in all of the Group's business lines
CRÉDIT AGRICOLE S.A. CRÉDIT AGRICOLE GROUP RISKS High NPL coverage ratios in all of the Group’s business lines Cost of credit risk by stage and by business line (in €m) – Cost of credit risk/outstandings (in bp, annualised on the basis of H1-20) 307 299 Regional Banks CA-Italia 238 LCL 117 146 26 10
Slide 16: Solid results thanks to growth in GOI over the first half year
CRÉDIT AGRICOLE S.A. NET INCOME Solid results thanks to growth in GOI over the first half year Q2/Q2 and H1/H1 change in underlying net income(1), by business line Q2/Q2: Resilient GOI (-0.5%) despite the lockdown AG: positive market effect, partially offsetting the negative effect in -10.9% €-136m
Slide 17: Contents: Crédit Agricole S.A. – Business lines
01 05 02 06 Contents Crédit Agricole S.A. – 03 Business lines 07 04 17 SECOND QUARTER AND FIRST HALF 2020 RESULTS
Slide 18: Asset gathering and insurance: Net income Group share up
CRÉDIT AGRICOLE S.A. ASSET GATHERING AND INSURANCE Net Income Group Share up over the quarter Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Contribution to earnings Activity indicators (Outstandings under management €bn) (in €m) underlyin underlyin underlyin underlyin g g g g +5.4% Insurance 386 +20.6% 590 (2.5%) +5.
Slide 19: Insurance: Business recovery in June, results up Q2/Q2
CRÉDIT AGRICOLE S.A. INSURANCE Business recovery in June, results up Q2/Q2 Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (€bn) (in €m) underlying underlying underlying underlying Savings/Retirement Protection of assets and individuals Revenues 701 +13.5% 1,212 (2.7%) Net i
Slide 20: Asset management: Resilient activity and results at a high level
CRÉDIT AGRICOLE S.A. ASSET MANAGEMENT Resilient activity and results maintained at a high level Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (Assets under management €bn) (in €m) underlying underlying underlying underlying Revenues 607 (7.5%) 1,201 (7.2%) +7.1% +7.1% Oper
Slide 21: French retail banking – LCL
CRÉDIT AGRICOLE S.A. FRENCH RETAIL BANKING – LCL Resilient activity and controlled costs Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (€bn) (in €m) underlying underlying underlying underlying Loans outstanding Customer savings Revenues 857 (3.6%) 1,746 (0.7%) Operating ex
Slide 22: International retail banking – Italy
CRÉDIT AGRICOLE S.A. INTERNATIONAL RETAIL BANKING – ITALY Resumption of activity after the lockdown Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (€bn) (in €m) underlying underlying underlying underlying Loans outstanding Customer savings Revenues 431 (10.8%) 875 (6.4%) +5
Slide 23: International retail banking – excl. Italy
CRÉDIT AGRICOLE S.A. INTERNATIONAL RETAIL BANKING – EXCL. ITALY Prudent management of liquidity and risk coverage Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (€bn) (in €m) underlying underlying underlying underlying Loans outstanding Customer savings Revenues 209 (9.8%)
Slide 24: Specialised financial services
CRÉDIT AGRICOLE S.A. SPECIALISED FINANCIAL SERVICES Decrease in production and control of expenses Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (€bn) (in €m) underlying underlying underlying underlying CA Consumer Finance – Gross managed loans CAL&F – Gross consolidated l
Slide 25: Large customers: GOI sharply up
CRÉDIT AGRICOLE S.A. LARGE CUSTOMERS GOI sharply up thanks to sustained activity Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (Underlying revenues of Large Customers (€m)) (in €m) underlying underlying underlying underlying +20.9% Revenues 1,788 +20.9% 3,271 +15.0% 1,788
Slide 26: Corporate and investment banking
CRÉDIT AGRICOLE S.A. CORPORATE AND INVESTMENT BANKING Very strong activity and top-ranking positions, RWA under control Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (Bond origination – Activity volume in €bn) (in €m) underlying underlying underlying underlying Revenues 1,
Slide 27: Corporate centre
CRÉDIT AGRICOLE S.A. CORPORATE CENTRE Decrease in financing costs, but unfavorable market effect €m Q2-20 Q2-19 ∆ Q2/Q2 H1-20 H1-19 ∆ H1/H1 Activity indicators (€bn) Revenues (266) (85) (181) (167) (256) +90 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Operating expenses excl. (187) (207) +
Slide 28: Contents: Crédit Agricole Group
01 05 02 06 Contents 03 07 04 Crédit Agricole Group 28 SECOND QUARTER AND FIRST HALF 2020 RESULTS
Slide 29: Regional Banks: Dynamic activity, sharp increase in GOI
GROUPE CRÉDIT AGRICOLE CRÉDIT AGRICOLE GROUP REGIONAL BANKS Dynamic activity, sharp increase in GOI and Net income Group Share Contribution to earnings Q2-20 ∆ Q2/Q2 H1-20 ∆ H1/H1 Activity indicators (€bn) (in €m) underlying underlying underlying underlying Customer savings Loans outstanding Revenue
Slide 30: Contents: Financial strength
01 05 Financial strength 02 06 Contents 03 07 04 30 SECOND QUARTER AND FIRST HALF 2020 RESULTS
Slide 31: Phased-in CET1 ratio: 12.0%, +4.1 pp above SREP requirement
CREDIT AGRICOLE S.A. FINANCIAL STRENGTH Phased-in CET1 ratio: 12.0%, +4.1 pp above SREP requirement Change in Crédit Agricole S.A. risk weighted assets (€bn) Change in CET1 ratio (bp) Risk weighted assets stable over the quarter CET1 ratio: 12.0%, fully-loaded 11.7% Growth in business lines: neutral
Slide 32: Phased-in CET1 ratio 16.1% achieving 2022 Group Project objective
CREDIT AGRICOLE GROUP FINANCIAL STRENGTH Phased-in CET1 ratio 16.1% achieving today the objective of the 2022 Group Project Change in Crédit Agricole Group risk-weighted assets (€bn) Change in CET1 ratio (bp) Slight increase in risk-weighted assets Distance to SREP: +7.2pp (+0.6pp vs Q1 2020) Increa
Slide 33: Dynamic management of reserves
CRÉDIT AGRICOLE GROUP FINANCIAL STRENGTH Dynamic management of reserves in order to serve client and benefit from competitive funding rate Liquidity reserves (€bn) Very strong ability to mobilize collateral to create 405 additional reserves 64 Eligible claims to Central Banks after haircut (immediat
Slide 34: 96% of MLT market programme completed at end-July 2020
CRÉDIT AGRICOLE GROUP FINANCIAL STRENGTH 96% of MLT market programme completed by Crédit Agricole S.A. at end-July 2020 Crédit Agricole Group - MLT market issues Crédit Agricole S.A. - MLT market issues Breakdown by Breakdown by issuer : €21.8bn* at 30/06/20 segment : €11.5bn* at 31/07/20 EFL 1% CAL
Slide 35: Contents: Conclusion
01 05 02 06 Conclusion Contents 03 07 04 35 SECOND QUARTER AND FIRST HALF 2020 RESULTS
Slide 36: A V-shaped recovery for Crédit Agricole Group
CRÉDIT AGRICOLE S.A. CREDIT AGRICOLE GROUP CONCLUSION A “V” shaped recovery for Crédit Agricole Group Very solid results, thanks to the Group’s universal banking model Crédit Agricole Group Crédit Agricole Group €28.7bn 552,000 Crédit Agricole Group in State repayment Massive commitment of the 1st B
Slide 37: Contents: Appendices
01 05 02 06 Contents 03 07 Appendices 04 37 SECOND QUARTER AND FIRST HALF 2020 RESULTS
Slide 38: Market recovery, without a return to the pre-crisis level
CRÉDIT AGRICOLE S.A. CRÉDIT AGRICOLE GROUP APPENDICES Market recovery, without a return to the pre-crisis level Interest rates, in euros (%) Credit spreads (1-year iTraxx Main CDS index) 1.9 Avg. French 10y bond yield Q2-20: -0,007% (+7bp Q2/Q1) 140 (% ) Average spread Q2-20: 1.6 130 1.4 France: 44b
Slide 39: A more prudent central economic scenario
CRÉDIT AGRICOLE S.A. CRÉDIT AGRICOLE GROUP APPENDICES A more prudent central economic scenario than what business data indicates France, Italy, Eurozone – Real GDP growth % 7.5 5.5 For provisioning of performing loans, use of several 4.9 1.8 1.9 1.5 1.2 weighted economic scenarios of which: 0.7 0.3
Slide 40: A diversified loan book, oriented towards large corporates and home loans
CRÉDIT AGRICOLE S.A. APPENDICES A diversified loan book, oriented more towards large corporates and home loans Gross customer loans outstanding(1) at Crédit Agricole S.A. (30/06/20) Corporate loans • O/w €141bn CACIB, €29bn LCL, €19bn IRB Private €195bn Banking Other Leasing 4% 1% 5% Home loans • O/
Slide 41: Limited share of EAD exposed to Covid-19 sensitive sectors
CRÉDIT AGRICOLE S.A. APPENDICES A limited share of EAD exposed to sectors sensitive to the economic effects of Covid-19 June-20 EAD % Investment % default EAD €Bn Grade EAD excluding financial institutions(1) as of June 2020 Aeronautics 17.2 57.5% 2.4% Tourism / Hotel / Restaurants 7.9 50.9% 2.6% Sh
Slide 42: Crédit Agricole CIB: Oil & Gas
CRÉDIT AGRICOLE S.A. ANNEXES Oil & Gas EAD excl. Commodity Traders: 25.2 Bn€ Crédit Agricole CIB: Midstream Upstream (pipelines, 12% LNG, O&G Oil & Gas storage) Services 21% 5% Integrated Oil & Gas companies 25.2 bn€ EAD(1) on Oil & Gas excluding commodity traders as of May 2020 20% State EAD is gro
Slide 43: Crédit Agricole CIB: Aeronautics and Shipping
CRÉDIT AGRICOLE S.A. ANNEXES Crédit Agricole CIB: Aeronautics exposure by geography Aeronautics and Shipping Other Europe 3% Japan Latin America 2% 3% Middle East & 16.8 bn€ EAD(1) on aeronautics as of May 2020 Africa 10% EAD is gross of Export Credit Agency and Credit Risk Insurance covers : as of
Slide 44: A well-balanced corporate portfolio
CRÉDIT AGRICOLE S.A. ANNEXES A well-balanced corporate portfolio Credit Agricole S.A. : €326bn corporate EAD at 30/06/2020 NON BANKING FINANCIAL ACTIVITIES (32 Bn) 9.8% ENERGY (EXCL. OIL & GAS) (25 Bn) 7.6% % of Corporate EAD OIL & GAS (24 Bn) 7.4% AUTOMOTIVE (23 Bn) 7.1% REAL ESTATE (22 Bn) Africa
Slide 45: Financial impact of the activation of the Switch guarantee mechanism
CRÉDIT AGRICOLE S.A. CREDIT AGRICOLE GROUP APPENDICES Financial impact of the activation of the Switch guarantee mechanism Activation in Q2-2020 related to the drop in the equity- Income statement accounted value of insurance (-€147m) against a backdrop of adverse changes in market parameters: • Dec
Slide 46: Reminder of how the Switch guarantee mechanism works
CRÉDIT AGRICOLE S.A. CREDIT AGRICOLE GROUP APPENDICES Reminder of how the Switch guarantee mechanism works The Switch guarantee transfers to the Regional Banks the regulatory prudential requirements related to Crédit Agricole S.A.’s equity interest in Crédit Agricole Assurances (CAA), thus attesting
Slide 47: Crédit Agricole in Italy – a set of resilient businesses
CRÉDIT AGRICOLE S.A. APPENDICES Crédit Agricole in Italy – a set of resilient businesses Crédit Agricole Group in Italy Results of Crédit Agricole Group in Italy Loans: dynamic commercial production, growth in total All Group business lines present outstanding loans of +2.3% H1/H1 Complete and
Slide 48: Specific items: -€153m in net income in Q2-20
CRÉDIT AGRICOLE S.A. APPENDICES Specific items: -€153m in net income in Q2-20 (vs. -€30m in Q2-19) and -€167m in H1-20 (vs. -€53m in H1-19) Mutualist support for customers insured against business interruption in connection with the Covid-19 crises: -€145m in revenues, -€98m in net income LCL: -€2m
Slide 49: Alternative performance measures – specific items Q2-20 and H1-20
CREDIT AGRICOLE S.A. APPENDICES Alternative performance measures – specific items Q2-20 and H1-20 Q2- 20 Q2- 19 H1- 20 H1- 19 €m Impact on Impact on Impact on Impact on Gross Gross Gross Gross Net Net Net Net impact* impact* impact* impact* income income income income DVA (LC) Loan portfolio hedges
Slide 50: Reconciliation between stated and underlying income – Q2-20
CREDIT AGRICOLE S.A. APPENDICES Reconciliation between stated and underlying income – Q2-20 Q2-20 Specific Q2-20 Q2-19 Specific Q2-19 ∆ Q2/Q2 ∆ Q2/Q2 €m stated items underlying stated items underlying stated underlying Revenues 4,897 (288) 5,185 5,149 (30) 5,179 (4.9%) +0.1% Operating expenses excl.
Slide 51: Reconciliation between stated and underlying income – H1-20
CREDIT AGRICOLE S.A. APPENDICES Reconciliation between stated and underlying income – H1-20 H1-20 Specific H1-20 H1-19 Specific H1-19 ∆ H1/H1 ∆ H1/H1 €m stated items underlying stated items underlying stated underlying Revenues 10,097 (225) 10,322 10,004 (78) 10,081 +0.9% +2.4% Operating expenses ex
Slide 52: Changes in underlying net income Group share, by business lines
CRÉDIT AGRICOLE S.A. APPENDICES Changes in underlying net income Group share, by business lines – Q2/Q2 and H1/H1 Q2- 20 Q2- 19 ∆ Q2/Q2 ∆ Q2/Q2 H1- 20 H1- 19 ∆ H1/H1 ∆ H1/H1 €m €m underlying underlying underlying underlying underlying underlying underlying underlying Net income Group Share 1,107 1,2
Slide 53: Alternative performance measures – specific items Q2-20 and H1-20
CRÉDIT AGRICOLE GROUP APPENDICES Alternative performance measures – specific items Q2-20 and H1-20 Q2- 20 Q2- 19 H1- 20 H1- 19 Gross Impact on Gross Impact on Gross Impact on Gross Impact on €m impact* Net impact* Net impact* Net impact* Net DVA (LC) (7) (5) (5) (3) (26) (19) (12) (9) Loan portfolio
Slide 54: Reconciliation between stated and underlying income – Q2-20
CRÉDIT AGRICOLE GROUP APPENDICES Reconciliation between stated and underlying income – Q2-20 Q2-20 Specific Q2-20 Q2-19 Specific Q2-19 ∆ Q2/Q2 ∆ Q2/Q2 €m stated items underlying stated items underlying stated underlying Revenues 8,096 (441) 8,536 8,485 (49) 8,534 (4.6%) +0.0% Operating expenses excl
Slide 55: Reconciliation between stated and underlying income – H1-20
CRÉDIT AGRICOLE GROUP APPENDICES Reconciliation between stated and underlying income – H1-20 H1-20 Specific H1-20 H1-19 Specific H1-19 ∆ H1/H1 ∆ H1/H1 €m stated items underlying stated items underlying stated underlying Revenues 16,462 (452) 16,914 16,682 (175) 16,857 (1.3%) +0.3% Operating expenses
Slide 56: Profitability in business lines
CRÉDIT AGRICOLE S.A. APPENDICES Profitability in business lines H1-20 annualised underlying RoNE (1,2) by business line and 2022 targets(%) Underlying 2019 Underlying H1- 2022 MTP target >30% >18% 27,5% >14% >12,5% >13% 21,4% 11% 19,3% >10% 16,0% 12,1% 12,7% 11,9% 10,8% 10,1% 10,0% 7,8% 9,3% 8,5% 4,
Slide 57: A stable, diversified and profitable business model
CREDIT AGRICOLE S.A. APPENDICES A stable, diversified and profitable business model Underlying revenues(1) H1-20 by business line Underlying net income (1) H1-20 by business line (excluding Corporate Centre) (%) (excluding Corporate Centre) (%) Large Asset customers Asset Large servicingInsurance ga
Slide 58: Risk-weighted assets and allocated capital by business line
CREDIT AGRICOLE S.A. APPENDICES Risk-weighted assets and allocated capital by business line Risk-weighted assets by business line at 30/06/2020 (€bn and %) Allocated capital by business line at 30/06/2020 (in €bn and %) Asset gathering Corporate Insurance Large €40.9bn Asset centre 7% customers Corp
Slide 59: RWA and allocated capital by business line
CREDIT AGRICOLE S.A. APPENDICES RWA and allocated capital by business line Risk-weighted assets Capital June March June June March June €bn 2020 2020 2019 2020 2020 2019 Asset gathering 40.9 39.2 30.8 10.0 9.2 9.0 - Insurance* ** 24.8 22.7 15.3 8.5 7.7 7.5 - Asset management 11.1 11.3 10.5 1.1 1.1 1
Slide 60: Distribution of share capital and number of shares
CREDIT AGRICOLE S.A. APPENDICES Distribution of share capital and number of shares 30/06/2020 31/12/2019 30/06/2019 Num ber of Num ber of Num ber of Breakdow n of share capital % % % shares shares shares SAS Rue La Boétie 1,612,517,290 55.9% 1,612,517,290 55.9% 1,612,517,290 56.3% Treasury shares 1,
Slide 61: Data per share
CREDIT AGRICOLE S.A. APPENDICES Data per share (€m) Q2-20 Q2-19 H1-20 H1-19 ∆ Q2/Q2 ∆ H1/H1 Net income Group share - stated 954 1,222 1,592 1,985 (21.9%) (19.8%) - Interests on AT1, including issuance costs, before tax (72) (99) (229) (240) (27.2%) (4.5%) NIGS attributable to ordinary shares - state
Slide 62: List of contacts
List of contacts: CRÉDIT AGRICOLE S.A. INVESTOR RELATIONS CONTACTS : CREDIT AGRICOLE PRESS CONTACTS: Institutional shareholders + 33 1 43 23 04 31 investor.relations@credit-agricole-sa.fr Charlotte de Chavagnac + 33 1 57 72 11 17 charlotte.dechavagnac@credit-agricole-sa.fr Individual shareholders +