CORR: The value of the day in Paris – Crédit Agricole: ECB fines of 4.8 million euros confirmed

CORR: The value of the day in Paris - Crédit Agricole: ECB fines of 4.8 million euros confirmed

(AOF) – With a drop of 1.1% to 9.25 euros, Crédit Agricole shows the biggest drop in the CAC 40. The green bank is penalized by the bad news. The ECB has confirmed fines totaling €4.76 million against him and two of his subsidiaries. The central bank accuses them of having classified CET1 capital stocks without prior authorization. These fines, imposed in 2018, were annulled by the Court of the European Union two years later, as the ECB had not duly justified its decision.

In 2021, the central bank then published a guide on the method to determine the sanctions in case of regulatory non-compliance. A guide that allows you to confirm the sanctions.

Crédit Agricole may appeal to the Court of Justice of the European Union. A spokesman for the group, quoted by the

it’s echoes

, remember that “the sanction is based on a text that has not been in force since 2019”. The sanction is due to a “lack of communication in time” of the accounting decisions made during the capital increases carried out between 2015 and 2016, indicated the group, which has already provisioned the amount in its accounts.

AOF – MORE INFORMATION

Key points

– Listed vehicle of the mutual group of the same name, 1st French bank and 8th worldwide;

– Net banking income of 22,700 million euros, generated by retail banking by 65%, by specialized financial services by 12%, by wholesale banking by 14% and by savings and insurance management;

– 3-point business model – relational excellence by becoming the preferred bank for individuals, entrepreneurs and institutions, local responsibility to support digitization and social commitment, amplifying the mutual commitment;

– 55.3% of capital held by regional mutuals, hence the strong presence of their representatives on the Board of Directors (10 of 21 members) chaired by Dominique Lefebvre, with Philippe Brassac as CEO;

– Solid financial position – CET 1 ratio of 17%, return on equity of 11.6% and liquidity reserves of 472,000 million euros.

bets

– Investors’ response to the new 2025 plan, having achieved the objectives of the 2019-2022 plan one year ahead of schedule;

– Innovation strategy, one of the 3 levers of the business model: internally: 90% of the Group’s entities with a “data-centric” architecture in 2022, and 300 million euros in IT efficiency gains, 100% of IT employees trained in new technologies at the University of Information Systems and 100% of emerging technologies tested in new business services / towards customers: expansion of the range of leading applications (Ma banque Pro, Pro&Entreprises LCL, etc.) , digital and mobile checkout solutions offering for small/medium merchants, European e-banking offering for major retailers and full range of e-commerce;

– Reinforced environmental strategy: carbon neutrality by 2050 for own footprint and in investment and financing portfolios / in 2022: total cessation of financing of unconventional hydrocarbon extraction projects, no financing of extraction or gas in the Arctic region / in 2025: reduction to 20% in oil extraction, for all open funds under active management of Amundi, an energy rating higher than that of the competition and 20,000 million euros committed in impact funds, renewable energies: doubling of the capacity of production of renewable energy facilities financed by Crédit Agricole Assurances up to 10.5 GW

– 60% growth in investment banking exposure to non-coal energies and development of the platform dedicated to hydrogen projects / 50% increase in renewable energy financing in France by Unifergie;

– Benefits of penetrating the Chinese (first foreign asset management company) and Indian (cash management offer) markets;

– Reinforcement in the financing of mobility through the alliance with Stellantis, operational in 2023, and the start-up of an internal entity specialized in vehicle financing, rental and mobility.

challenges

– Net assets of €13.2 per share, compared to the stock market price;

– Russia-Ukraine War: strong impact on results in the 1st quarter due to provisions made on the risks of the 2 countries and stoppage of financing to Russian companies;

– Integration of the Italian companies CreVal and Lyxor;

– 2021 dividend of €1.05 (including €0.2 for the 2019 update).

The Negative Effects of Rising Interest Rates

The rise in interest rates usually causes an increase in bank income through loans granted. In Europe, according to a survey carried out by S&P among 85 banking establishments, the sector expects an average increase of 18% in its interest margin. However, this new inflationary context also has undesirable effects, in particular an increase in refinancing costs. It is also accompanied by fears of a new recession, which would then affect all of the bank’s businesses, from lending to asset management, whose revenues are correlated to market valuations. Reassuring element: Eurozone banks are strong enough to weather a deteriorating environment.

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