Credit Agricole SA · EURONEXT:ACA
Credit Agricole SA — Q1 2005 Earnings Presentation
70 slides from Credit Agricole SA's earnings presentation, June 2005
Slide 1: 2005 first quarter results
2005 first quarter results June 2005 1 First quarter results 2005 - June 2005
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements or projections on the business activities or financial position of Crédit Agricole S.A. This information was developed from scenarios based on a number of economic assumptions for a given competitive and regulatory environment.
Slide 3: Contents
Contents Crédit Agricole S.A. consolidated results Presentation of results by business line French retail banking – Regional Banks French retail banking – Crédit Lyonnais Specialised financial services Asset management, insurance and private banking Corporate and investment banking International ret
Slide 4: Basis of figures
Crédit Agricole S.A. consolidated results Basis of figures ü The figures presented have been prepared in accordance with the international financial reporting standards (IFRS) endorsed by the European Union on 31 December 2004 (including IFRS 2). ü Within this framework IAS 32 and 39 and IFRS 4 must
Slide 5: Crédit Agricole S.A. consolidated results
Crédit Agricole S.A. consolidated results üGross operating income: €1,024m (+26.0%) üNet income – Group share: €905m (+41.6%) üCost/income ratio: 68.3% (- 4.1 pts) 5 First quarter results 2005 - June 2005
Slide 6: Earnings up sharply
Crédit Agricole S.A. consolidated results Earnings up sharply €m % change* Q1-04* Q1-05 Q1-04/Q1-05 ü Gross operating income up 26% Net banking income 2,946 3,233 +9.7% driven by strong momentum in net Operating expenses (2,133) (2,209) +3.6% banking income (+9.7%) and control over costs (+3.6%) Gro
Slide 7: Robust earnings growth in all business lines
Crédit Agricole S.A. consolidated results Robust earnings growth in all business lines Contribution of business lines to net income before integration-related costs ü Strong commercial momentum at both €m Regional Banks and Crédit Lyonnais, 1,004 coupled with excellent control over +35.1% costs; 180
Slide 8: Improved profitability of business activity
Crédit Agricole S.A. consolidated results Improved profitability of business activity Q1-05 allocated % % ROE €bn capital Q1-05 Q1-04* Q1-05 French retail banking – Regional Banks 3.3 14.4 13.2 20.4 % French retail banking – Crédit Lyonnais 2.3 10.0 9.6 20.6 % Specialised financial services 2.0 8.9
Slide 9: Contents
Contents Crédit Agricole S.A. consolidated results Presentation of results by business line French retail banking – Regional Banks French retail banking – Crédit Lyonnais Specialised financial services Asset management, insurance and private banking Corporate and investment banking International ret
Slide 10: Regional Banks: Growth across all business activities
French retail banking – Regional Banks Growth across all business activities Q1-05 pre-tax income: €236m* 18.5% ü Buoyant business volumes in all markets (personal customers, farming, small businesses, corporates, local authorities); ü Continued success of pension savings products; Allocated capital
Slide 11: Sustained growth in customer assets
French retail banking – Regional Banks Sustained growth in customer assets ü Sustained buoyant growth in new inflows: €3.4bn in Q1-05 § Launch of two new mutual funds, Protein’ and Protein’ Vie (€750m) § Placement of two bond issues bringing in over €570m and success of Sanef offering with over €380
Slide 12: Strong growth in new lending and loan book
French retail banking – Regional Banks Strong growth in new lending and loan book ü New medium and long-term lending up 12.1% vs Q1-04 to over €12bn, driven by strong growth in corporate lending (+22.8%), local authorities (+18.9%) and small businesses and farming (+14.6%) . ü Growth in loan book co
Slide 13: Strong commercial momentum in net banking income
French retail banking – Regional Banks Strong commercial momentum, with 3.4%* growth in net banking income ü Growth in business with farming, small business and corporate sectors (crop insurance, CA certificate, franchise partnerships, etc.); ü Growth in fee income driven by insurance (in particular
Slide 14: Healthy operating metrics
French retail banking – Regional Banks Healthy operating metrics ü 0.7 percentage point improvement in cost/income ratio over one year, with controlled increase of operating expenses (+2.2%); ü Strengthened provision cover against bad and doubtful debts; ü 3 bp decrease in cost of risk. Continuous i
Slide 15: Robust growth in contribution from Regional Banks
French retail banking – Regional Banks Robust growth in contribution from Regional Banks ü An aggregate net income, in the individual accounts, sharply up, due to the GOI increase (+5.3%) and the drop in risk-related costs (-18.5%); ü A 7.9% growth in the contribution of the Regional Bank’s contribu
Slide 16: Regional Banks income statement
French retail banking – Regional Banks Income statement €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income Operating expenses Gross operating income Risk-related costs Equity affiliates 219 236 +7.9% Pre-tax income on ordinary activities 219 236 +7.9% Tax* (49) (56) +14.3% Net income 170 180 +6.
Slide 17: Crédit Lyonnais: Gross operating income up 6.6%
French retail banking – Crédit Lyonnais Gross operating income* up 6.6% Q1-05 pre-tax income: €169m 13.2% ü Strong commercial dynamics, reflected in market share gains in deposits ü Excellent control over costs against a backdrop of moderate growth in net banking income: cost/income ratio down 1.3 p
Slide 18: Sustained growth in customer assets
French retail banking – Crédit Lyonnais Sustained growth in customer assets ü Acceleration in growth in passbook accounts, leading to market share gains in deposits; ü Sharp growth in securities outstanding following the success of the Sanef placement (Crédit Lyonnais market share 20%); ü Good perfo
Slide 19: Further growth in loans outstanding
French retail banking – Crédit Lyonnais Further growth in loans outstanding ü Continued strong growth in mortgage lending; ü Significant recovery in medium and long-term lending to SMEs (new lending up 50% and loan book up 8.1%). €bn % change Q1-05/Q1-04* 49.4 46.5 Total +6.2% 9.0 8.7 7.8 7.6 SME lo
Slide 20: 1.1% growth in net banking income
French retail banking – Crédit Lyonnais 1.1%* growth in net banking income ü Net interest income was impacted by historically low interest rates and continued fierce competition, which largely offset the impact of volume growth in deposits and lending; ü Strong growth in fees on sales of insurance (
Slide 21: Trends in operating costs and risk-related costs
French retail banking – Crédit Lyonnais Trends in operating costs and risk-related costs ü Tight control over costs (down 0.6%) enabling continuation of programme to optimise the branch network (12 new branches and 28 refurbishing in Q1) and increasing use of call centres; ü Progress in the business
Slide 22: Crédit Lyonnais income statement
French retail banking – Crédit Lyonnais Income statement €m % change Q1-04* Q1-05 Q1-05/Q1-04* Net banking income 827 837 +1.1% Operating expenses (630) (627) (0.6%) Gross operating income 197 210 +6.6% Risk-related costs (43) (41) (4.8%) Pre-tax income on ordinary activities 154 169 +9.8% Tax (47)
Slide 23: Specialised financial services: net income up nearly 50%
Specialised financial services Very strong growth in net income: up by nearly 50% Q1-05 pre-tax income: €183m 14.3% ü A steady growth phase: § Acquisitions (Dan’Aktiv, household equipment consumer credit of BCP, 50% of Eurofactor); § Organic growth in international Allocated capital: €2.0bn markets,
Slide 24: Consumer credit in France and abroad
Specialised financial services Consumer credit in France and abroad ü Strong growth in new lending: up €5.2bn or 17% vs Q1-04 driven by international business (+45%); ü Growth in loan book: up 14% vs Q1-04, driven by strong international growth and co-operation with the Regional Banks and Crédit Lyo
Slide 25: Lease finance and factoring
Specialised financial services Lease finance and factoring ü Lease finance: § New lending up 3.8% to €939m vs Q1-04, including 20% for EFL in Poland; § Lease book stable at €12.6bn; § Gross operating income up 15% vs Q1-04. ü Factoring: revenues up 16.5% vs Q1-04. One third of business now generated
Slide 26: Specialised financial services income statement
Specialised financial services Income statement €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 540 603 +11.6% Operating expenses (289) (324) +12.0% Gross operating income 251 279 +11.1% Risk-related costs (102) (97) (4.9%) Equity affiliates - 1 X3.8 Net income on other assets (6) - (100%) Pr
Slide 27: Asset management, insurance and private banking: contribution up nearly 19%
Asset management, insurance and private banking Contribution up by nearly 19% Q1-05 pre-tax income: €449m ü Assets under management top €430bn (up 8.5% year-on-year); 35.1% ü Excellent commercial performance in asset management: new inflows of €9bn in the quarter, representing annualised growth of 1
Slide 28: Assets under management of €430bn
Asset management, insurance and private banking Assets under management of €430bn ü Asset under management up €24bn in the quarter; ü Continued shift in investment categories, notably towards life insurance; ü Further mergers between dedicated subsidiaries of the Crédit Agricole Group and Crédit Lyo
Slide 29: Asset management
Asset management, insurance and private banking Asset management ü Assets under management up €14.5bn in Q1-05 (on a like-for-like basis and unchanged valuation methods), driven by new inflows (€9.0bn) and a positive market effect; ü Continued good commercial momentum in international subsidiaries;
Slide 30: Private banking
Asset management, insurance and private banking Private banking First quarter highlights: ü Legal, organisational and systems merger of CAI Suisse and CL Suisse to create Crédit Agricole Suisse S.A., the number two foreign bank in the Swiss private banking market; ü Excellent performance from BGPI w
Slide 31: Life insurance
Asset management, insurance and private banking Life insurance ü Sustained business activity: § Premium income in excess of €5bn with 300,000 new policies; § In-force business up 9.7% year-on-year to €133bn, consolidating on the Group’s number two position in the French life insurance market.. Asset
Slide 32: Non-life insurance
Asset management, insurance and private banking Non-life insurance ü Continued strong commercial momentum with a 12.4% increase in new policies, compared to Q1-04, bringing the total to over 4.2 million* policies; ü Launch and initial sales of new products for farmers and small businesses (notably c
Slide 33: Asset management, insurance and private banking income statement
Asset management, insurance and private banking Income statement €m % change Q1-04* Q1-05 Q1-05/Q1-04* Net banking income 682 777 +13.9 % Operating expenses (321) (338) +5.2% Gross operating income 361 439 +21.6% Risk-related costs (1) - n.m. Equity affiliates 2 10 X4.6 Net income on other assets -
Slide 34: Corporate and investment banking: net income up 48%
Corporate and investment banking Net income* up 48% Q1-05 pre-tax income: €395m 30.9% ü Gross operating income up 25%, driven by revenue growth and cost synergies; ü Strong growth in contribution from key business lines, financing, capital markets and investment banking; Allocated capital: €7.2bn ü
Slide 35: Decrease in staff numbers of 22% since January 2003
Corporate and investment banking A decrease in staff numbers of 22% since 1st January 2003 that continued in Q1-05 13,907 13,314 12,925 12,377 11,062 10,828 5,636 5,496 5,298 5,199 France: 18.4% decrease in 15 months 4,717 4,486 8,271 7,818 7,627 7,178 6,345 6,342 International: 18.9% decrease in 15
Slide 36: Sharp improvement in operating results
Corporate and investment banking Sharp improvement in operating results Trends in revenues* m€ 985 1,033 954 958 ü Continued recovery in revenues since Q4-04 824 (up 7.3% on a like-for-like basis and at 423 420 454 395 constant exchange rates vs Q1-04); Calyon 396 created on 565 01.05.04 563 610 ü C
Slide 37: Financing activities: gross operating income up 29%
Corporate and investment banking Financing activities: gross operating income up 29% ü Net banking income increase in a climate of margin erosion; ü Stronger weighting to higher value-added products: from 53% to 61% between Q1-04 and Q1-05; ü Risk climate still favourable; ü Sharp fall in cost/ inco
Slide 38: Income statement of financing activities
Corporate and investment banking Income statement of financing activities €m % change Q1-04* Q1-05 Q1-05/Q1-04* Net banking income 420 423 +0.7% Operating expenses (249) (202) (19.0%) Gross operating income 171 221 +29.4% Risk-related costs (37) 13 n.m. Equity affiliates 17 22 +30.0% Net income on o
Slide 39: Capital markets and investment banking: strong revenue growth
Corporate and investment banking Capital markets and investment banking: strong growth in revenues, continuing the trend of Q4-04 ü High level of market activities NBI, with growth of customer-based revenues (which represent over 80% of total) and a controlled risk profile (VaR at 31 March 2005: €17
Slide 40: Income statement of investment banking and capital markets
Corporate and investment banking Income statement of investment banking and capital markets % change €m Q1-04* Q1-05 Q1-05/Q1-04* Net banking income 565 610 +7.9% Operating expenses (451) (476) +5.6% Gross operating income 114 134 +17.2% Risk-related costs (2) 1 n.m. Net income on other assets 0 4 n
Slide 41: Income statement of financing, investment banking and capital markets
Corporate and investment banking Income statement of financing activities, investment banking and capital markets €m % change Q1-04* Q1-05 Q1-05/Q1-04* Net banking income 985 1,033 +4.9% Operating expenses (700) (678) (3.1%) Gross operating income 285 355 +24.5% Risk-related costs (39) 14 n.m. Equit
Slide 42: Front-ranking positions
Corporate and investment banking Front-ranking positions ü No. 1 arranger of securitisations in Europe ü No. 1 mandated arranger of project finance in Europe ü No. 1 equity broker in Asia ü No. 2 in Western European country research in equity brokerage ü No. 2 non-US futures broker in the USA ü No.
Slide 43: Substantial rise in contribution from international retail banking
International retail banking Substantial rise in contribution from international retail banking Q1-05 pre-tax income: €128m ü Excellent contribution of Banca Intesa to 10.0% income from equity affiliates which amounts to: €123m in Q1-05, up 44.4% vs Q1-04; ü Change in scope: exit of BLF, BFC AG tran
Slide 44: International retail banking income statement
International retail banking Income statement €m % change Q1-04* Q1-05 Q1-05/Q1-04* Net banking income 69 63 (9.1%) Operating expenses (55) (53) (4.7%) Gross operating income 14 10 (25.9%) Risk-related costs (7) (2) (70.0%) Equity affiliates 85 123 +44.4% Net income on other assets - (3) n.m. Pre-ta
Slide 45: Proprietary asset management and other activities
Proprietary asset management and other activities Proprietary asset management and other activities Q1-05 pre-tax income: €(281)m ü Volatility in net banking income caused by the reclassification of some financial instruments held for macro-hedging purposes to trading 21.9% negative securities under
Slide 46: Proprietary asset management income statement
Proprietary asset management and other activities Income statement €m % change Q1-04* Q1-05 Q1-05/Q1-04* Net banking income (158) (80) (49.6%) Operating expenses (138) (190) +38. 4% Gross operating income (296) (270) (8.7%) Risk-related costs (14) (11) (20.9%) Equity affiliates 6 (4) n.m. Net income
Slide 47: Contents
Contents Crédit Agricole S.A. consolidated results Presentation of results by business line French retail banking – Regional Banks French retail banking – Crédit Lyonnais Specialised financial services Asset management, insurance and private banking Corporate and investment banking International ret
Slide 48: Implemented synergies in line with 2005 targets
Progress report on synergies Implemented synergies in line with 2005 targets 760 €m 620 602 325 275 40 2003 2004 target 2004 actual 2005 target Synergies 2006 target secured at 31/03/2005 48 First quarter results 2005 - June 2005
Slide 49: Contents
Contents Crédit Agricole S.A. consolidated results Presentation of results by business line French retail banking – Regional Banks French retail banking – Crédit Lyonnais Specialised financial services Asset management, insurance and private banking Corporate and investment banking International ret
Slide 50: International solvency ratio
Crédit Agricole S.A. and Crédit Agricole Group financial data International solvency ratio Mar 05 Dec 04* Mar 05 € bn Crédit Agricole Crédit Agricole S.A. Crédit Agricole S.A. Group Total risk-weighted assets 215.6 225.5 439,8 Tier 1 solvency ratio 7.4% 7.6% 7.5% Total solvency ratio 8.1% 8.1% 9.8%
Slide 51: Crédit Agricole Group consolidated income statement
Crédit Agricole S.A. and Crédit Agricole Group financial data Crédit Agricole Group consolidated income statement % change €m Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 5,875 6,146 +4.6% Operating expenses (3,848) (3,971) +3.2% Gross operating income 2,027 2,175 +7.3% Risk-related costs (391) (288)
Slide 52: First quarter results 2005 - June 2005
52 First quarter results 2005 - June 2005
Slide 53: Appendices
2005 first quarter results Appendices 53 First quarter results 2005 - June 2005
Slide 54: Appendices contents
Crédit Agricole S.A. consolidated results Consolidated results by business line Business transfers restated pro forma on 2004 disclosed data Q1-04 – like-for-like basis and comparable methods to Q1-05 Trends in risk Movements in consolidated capital Capital allocation Additional information on busin
Slide 55: Consolidated results by business line
Crédit Agricole S.A. consolidated results Consolidated results by business line Asset Proprietary asset French retail French retail Specialised Corporate and management, International management banking – banking – financial investment In €m insurance and retail banking and other Regional Banks Créd
Slide 56: Business transfers restated pro forma on Q1-04 data
Crédit Agricole S.A. consolidated results Business transfers restated pro forma on Q1-04 disclosed data üYemen, Egypt IRB CIB üUBAF IRB CIB üBSF from Q1-04 IRB CIB (reminder) üCPR Online AM CIB üBFC AG IRB Prop. asset mgt. üPrivate Equity CIB Prop. asset mgt. 56 First quarter results 2005 - June 200
Slide 57: Q1-04 like-for-like basis and comparable methods
Crédit Agricole S.A. consolidated results Q1-04 – like-for-like basis and comparable methods to Q1-05* (excluding impact of transfer of entities) Operating expenses: Corporate and investment Operating expenses: €3m banking €4m GOI Q1-04: (€11m) NBI: €10m NBI: €8m NBI: €6m Proprietary asset managemen
Slide 58: Market risk
Trends in risk Market risk Overall VaR (99% - 1 day) at 31 March 2005: €20m for Crédit Agricole S.A. Group, including €17m for activities included in Calyon scope of consolidation Trends in VaR for Crédit Agricole S.A. capital markets business VaR (99% - 1 day) 1st January to 31 March 2005 31 Decemb
Slide 59: Breakdown of share capital and earnings per share calculation
Change in consolidated capital Breakdown of share capital and earnings per share calculation Breakdown of share Dec 2003 June 04 Dec 2004 Mar 05 % capital: SAS Rue la Boétie 771,841,801 783,146,587 794,929,524 812,394,524 55.13 % SNC Crédit Agricole 14,771,187 6,102,837 - - - Transactions* Treasury
Slide 60: Risk-weighted assets for capital allocation per business line
Capital allocation Risk-weighted assets for capital allocation per business line € bn Dec 04 Mar 05 French retail banking 89.7 90.4 - Regional Banks 52.1 52.2 - Crédit Lyonnais 37.6 38.2 Specialised financial services 35.0 34.5 Asset management, insurance and private banking 11.4 11.5 Corporate and
Slide 61: Regional Banks' contribution
French retail banking – Regional Banks Regional Banks’ contribution € m – Aggregated unconsolidated results of the 42 Regional % change Q1-04 Q1-05 Banks accounted for at equity Q1-05/Q1-04 Net banking income 2,758 3,093* +12.1% Operating expenses (1,623) (1,658) +2.2% Gross operating income 1,135 1
Slide 62: Consumer credit highlights
Specialised financial services Consumer credit highlights €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 451 489 +8.6% Operating expenses (228) (246) +7.9% Gross operating income 223 243 +9.2% Risk-related costs (86) (89) +3.6% Equity affiliates - 2 X3.8 Integration-related costs (1) - n.m.
Slide 63: Lease finance highlights
Specialised financial services Lease finance highlights €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 65 67 +4.0% Operating expenses (43) (42) (1.6%) Gross operating income 22 25 +15.1% Risk-related costs (15) (9) (40.5%) Net income on other assets (6) - (100%) Integration-related costs (1)
Slide 64: Factoring highlights
Specialised financial services Factoring highlights €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 25 46 +85.2% Operating expenses (17) (31) +85.0% Gross operating income 8 15 +85.5% Risk-related costs (1) 1 n.m. Integration-related costs - (1) n.m. Pre-tax income 7 15 X2.3 Tax (2) (6) X3.8
Slide 65: Asset management highlights
Asset management, insurance and private banking Asset management highlights €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 270 320 +18.5% Operating expenses (163) (175) +7.5% Gross operating income 107 145 +35.3% Risk-related costs 1 - n.m. Equity affiliates - 1 n.m. Integration-related cost
Slide 66: Insurance highlights
Asset management, insurance and private banking Insurance highlights €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 284 332 +16.7% Operating expenses (58) (66) +13.3% Gross operating income 226 266 +17.6% Risk-related costs (1) (1) (33.3%) Equity affiliates 2 7 x3.6 Integration-related costs
Slide 67: Private banking highlights
Asset management, insurance and private banking Private banking highlights €m % change Q1-04 Q1-05 Q1-05/Q1-04 Net banking income 128 125 (2.2%) Operating expenses (100) (96) (3.4%) Gross operating income 28 29 +2.1% Risk-related costs (1) 1 n.m. Equity affiliates - 1 n.m. Integration-related costs
Slide 68: Trends in main NBI aggregates
Proprietary asset management and other activities Trends in main NBI aggregates €m Q1-04 Q1-05 Cost of financing (264) (298) Financial management (39) 113 O/w trading (according to IFRS) (115) 63 Other business 37 41 Work-out activities 108 64 Net banking income (158) (80) 68 First quarter results 2
Slide 69: Changes in operating expenses Q1-04/Q1-05
Changes in operating expenses Q1-04/Q1-05 €m Q4-04 operating expenses (IFRS) 2,258 New synergies in Q1-05 (compared to Q4-04) (17) Change in scope of consolidation (Eurofactor) 11 Non recurring Q4-04 operating expenses ≈ (80) Performance-linked remuneration and organic growth ≈ 37 Q1-05 operating ex
Slide 70: First quarter results 2005 - June 2005
70 First quarter results 2005 - June 2005