CRÉDIT AGRICOLE GROUP, A LEADER IN EUROPE

Transcription

1 Business Review 2008

2 CRÉDIT AGRICOLE GROUP, A LEADER IN EUROPE As the No. 1 retail bank in France, Crédit Agricole is the leading financial partner to the French economy and the largest retail bank in Europe*. 6.2 million cooperative shareholders elect the Local Banks directors 2,549 Local Banks Its ambition: to create a world-class European leader in banking and insurance, in accordance with the principles of the United Nations Global Compact. hold the bulk of the Regional Banks share capital With more than 160,000 employees in 74 countries, Crédit Agricole is present across the entire spectrum of finance activities. Via its network of 11,850 branches with a firm foothold in their local region, as well as the expertise of its specialised subsidiaries, it combines efficient production and powerful distribution, serving 58 million customers in the world. Listed since December 2001, Crédit Agricole S.A. ensures the cohesion of the strategic development and the Group s financial unity. Crédit Agricole S.A. manages and consolidates its subsidiaries organised into 3 business lines. 39 Crédit Agricole Regional Banks Crédit Agricole S.A. hold a majority stake in Crédit Agricole S.A. (54.8%) via SAS Rue La Boétie The Fédération Nationale du Crédit Agricole (FNCA) acts as a consultative and representative body and a forum for the Regional Banks *in terms of retail banking revenues Sources: Banque de France, Company 3 business lines: in the world million customers billion net income - group share countries billion shareholders equity group share of the household market in France* Tier 1 Ratio (01/01/2009) FRENCh ANd INTERNATIoNAl RETAIl banking 25% of the Regional Banks (excl. the Regional Bank of Corsica) LCL International retail banking : Cariparma FriulAdria Emporiki Crédit du Maroc Crédit Agricole Egypt Lukas Bank SpECIAlISEd business lines Asset management Insurance Private banking Consumer finance Lease finance Factoring CoRpoRATE ANd INVESTmENT banking Calyon Coverage and Investment Banking Equity Brokerage and Derivatives Fixed Income Markets Structured Finance SpECIAlISEd SUbSIdIARIES: Crédit Agricole Immobilier, Crédit Agricole Private Equity, Idia, Sodica, Uni-Editions. * Source : Banque de France

3 01 OVERVIEW 1 st financial partner to the French economy 02 INTERVIEW WITH THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER 06 BOARD OF DIRECTORS 07 THE EXECUTIVE COMMITTEE OUR COMMITMENTS: 08 CORPORATE GOVERNANCE 10 CORPORATE SOCIAL RESPONSIBILITY 13 SHAREHOLDERS INFORMATION 15 MAIN STORIES 58 million customers worldwide 16 CRÉDIT AGRICOLE, LEADING FINANCIAL PARTNER to the french economy 20 A BUSINESS MODEL THAT CAN BE EXPORTED EFFECTIVELY 23 GROWTH THROUGH BETTER CUSTOMER SERVICE 26 STRENGTHS FOR PULLING OUT OF THE CRISIS AHEAD 28 MOVING TOWARDS A LOW-CARBON ECONOMY 31 MILESTONES 9.4% is Crédit Agricole s Tier 1 Ratio 32 LOCAL PRESENCE AND EXPERTISE 34 STRONG POSITIONS IN OVER 70 COUNTRIES RESULTS AND STOCK MARKET DATA 40 SUSTAINABLE DEVELOPMENT, A PROACTIVE ORGANISATION 42 CRÉDIT AGRICOLE REGIONAL BANKS 44 LCL 45 INTERNATIONAL RETAIL BANKING 46 SPECIALISED FINANCIAL SERVICES 48 ASSET MANAGEMENT, INSURANCE, AND PRIVATE BANKING 50 CORPORATE AND INVESTMENT BANKING For more information: website: Registration Document/Annual Report 2008: Sustainable development website:

4 INTERVIEW OVERVIEW Crédit Agricole is the leading financial partner to the French economy and a top-tier European bank. This status is a testimony to the Group s sound business model, which is based on close ties and coordinated expansion efforts with Regional Banks. But even more importantly in the current economic climate, it reflects Crédit Agricole s fundamental responsibility as a banker a responsibility that the Group is acutely aware of and intends to fulfil by keeping its customer service commitments and playing a key role in financing the economy.

5 Interview with the Chairman and the Chief Executive Officer In the very early stages of the crisis, we chose to be transparent In 2008, the financial crisis spread like wildfire throughout the world economy, leaving deep scars in its wake. In this turbulent climate, Crédit Agricole S.A. was quick to size up the crisis and to take steps to minimise its impact, while systematically reshaping its model to further solidify its base so as to weather the crisis and to emerge from it as one of strongest operators in its industry. What is your analysis of the current situation? Where does Crédit Agricole stand in a banking landscape that is shifting as a result of the crisis? The financial crisis, which began in 2007 in the US, spread swiftly and turned into a full-blown global economic crisis in The difficulties encountered by certain banking and financial institutions revealed the true nature of the crisis that is sweeping the industry, as well as its depth and breadth. All of our business lines are now operating in a harsher climate, with growth grinding to a near halt, the impact of the new capital requirements and the emergence of new risk areas and extremely volatile financial markets that uncertainty has driven to overestimate the risk of default by economic and financial operators. Crédit Agricole s culture, which is rooted in its strong local presence and interaction among its core businesses, is not being called into question far from it. With the Regional Banks and LCL in France, Cariparma FriulAdria in Italy and Emporiki in Greece, our Group is underpinned by branch franchises that are solidly anchored in their regions. Our model aims to combine the strength of these franchises with the efficiency of our production-oriented business lines. Furthermore, our experience in operating multiple franchises means that we can open up certain businesses to other distributors. This model makes us one of the leading banks in Europe, and it is solid. Of course, the banking landscape is undergoing a dramatic shift. The role of governments and the extent of their involvement in regulating and supporting the banking industry have been completely redefined. The French banks are among the most resilient; they are meeting their commitments and fulfilling their mission, which is to provide financing to the economy. The French government s plan was more of a way to help the banks to support lending than a bailout. Naturally, Crédit Agricole backed this plan, in keeping with its position as the leading financial partner to the French economy. With its extremely solid financial position, our Group has the wherewithal to fulfil its role during the difficult times we face while actively preparing for the postcrisis period. Crédit Agricole s culture, which is rooted in its strong local presence and interaction among its core businesses, is not being called into question far from it. With the Regional Banks and LCL in France, Cariparma FriulAdria in Italy and Emporiki in Greece, our Group is underpinned by branch franchises that are solidly anchored in their regions. 2 OVERVIEW

6 René Carron - Chairman Georges Pauget - Chief Executive Officer With its extremely solid financial position, our Group has the wherewithal to fulfil its role during the difficult times we face while actively preparing for the post-crisis period. What is your strategy for preparing for the postcrisis period? In the very early stages of the crisis, we chose to be transparent. At the end of 2007, we were the first in France to release figures on asset impairment due to the subprime crisis and our exposure to monolines. We were highly responsive. We showed that we were able to size up the crisis and began to reshape our business model very early on. At the beginning of 2008, when market conditions were still relatively favourable, we launched a rights issue of unprecedented size ( 5.9 billion). We were convinced that the sustainability of the banking system would be contingent on solidity, solvency and access to liquidity. With the support of the Regional Banks, our rights issue met with success it was 130% over-subscribed and enabled us to strengthen our ratios. At the same time, we actively decided to reduce Calyon s risk profile. To achieve this, we carried out a systematic review of the portfolio and decided to focus only those businesses in which Calyon has recognised expertise and undeniable critical mass: structured finance, fixed-income and brokerage. Calyon was refocused very rapidly, thereby reducing exposure to capital market activities. Our rapid response in implementing the changes is evidenced by the fact that net income from Corporate and investment banking was near break-even in the fourth quarter, despite market dislocation at the end of the year. Lastly, to enhance our operational efficiency, we initiated a costreduction process, primarily through stringent controls over fixed costs and cutting variable compensation. Our decisions have already started to pay off, with observable results at the end of the year for the Group as a whole: operating expenses declined by 0.7% on FY 2007, and by 5.7% in the fourth quarter. OVERVIEW 3

7 C rédit Agricole S.A. reported net income - group share of 1 billion, compared with 4 billion in What is your assessment of this result? Our bottom line was in the black in 2008, which makes us one of the strongest performers among the major banks in the world and demonstrates our Group s resilience. Net banking income moved down only 4.8 % over the full year. Our resilience was also reflected in its cost/income ratios, which are lower than those of other French banks for most of our specialised business lines consumer finance, asset management, insurance, financing activities. This operational efficiency enabled us to offset part of the inevitable crisis-related increase in risk-related costs, which advanced by 67% in 2008 on a relatively low basis of comparison. Most of the increase is attributable to our subsidiary Emporiki in Greece, to consumer finance and to a few property and finance sector exposures in Corporate and investment banking. At the same time, throughout 2008 and at the beginning of 2009, Crédit Agricole S.A. took steps to reinforce its specialised financial services business line to channel ever more competitive products to its distribution networks. It created Newedge, which is now the world leader in brokerage and listed derivatives. It reorganised the insurance business line to create the No. 1 French bancassurance company and the eleventh largest insurance group in Europe. It completed the merger between Agos and Ducato, thereby forming the leading consumer finance company in Italy. At the beginning of 2009, we created a European market leader in Asset management with the merger of CAAM and SGAM. We are consolidating all of the Our bottom line was in the black in 2008, which makes us one of the strongest performers among the major banks in the world and demonstrates our Group s resilience. businesses that weathered the crisis well. In areas where we expect to see concentration, we are taking initiatives to reorganise our operations. Our reconfigured business model blends resilience with a dynamic approach to prepare us for the post-crisis period. Are international markets still strategic? Europe is our new domestic market. Payment instruments are becoming pan-european, as will soon be the case for consumer credit, mortgage loans and asset management. In specialised financial services, Crédit Agricole is among the top few in Europe with operations in 21 countries and a base of 27 million customers. In just two years, we have made Italy our second largest domestic market. We now have bases for all of our business lines in that country. Greece has been our third largest domestic market since we acquired control of Emporiki Bank in the summer of Emporiki No. 5 in Greece has been hurt by the economic downturn, labour-related difficulties and the negative impact of local tax reforms. We are reshaping the bank s business and marketing model. The new management has already initiated the process. We also have a strong presence in the Middle East and in Asia, in Corporate and investment banking, Asset management, Life insurance and Consumer finance. We have forged many partnerships in these sectors and they will serve as solid springboards for growth when the time comes. 4 OVERVIEW

8 In these tough economic times, we ensure that those who are most exposed and weakest can count on products and services tailored to their needs. We also help to develop lasting solutions to environmental problems that affect the future and the very existence of our human communities. We are taking actions in sustainable development, renewable energy (with the signature of The Climate Principles in 2008) and in microcredit, with the creation of a microfinance foundation funded with 50 million and dedicated to fighting the war on poverty in developing countries. We showed that we were able to size up the crisis and began to reshape our business model very early on. As bankers, what lessons have you learned from this crisis? The crisis revealed the dangers of highly fragmented regulations and limitless securitisation. It brought home the consequences of virtually ignoring the notion of risk. For us, the main conclusion is that we need a new international framework for banking and finance. We have the resources to do this, with 101 billion in capital for the Crédit Agricole Group as a whole. Crédit Agricole S.A. has capital of 83 billion, including 41.7 billion in shareholders equity - group share, and a Tier 1 ratio of 9.1% at 1 January The Board of Directors has decided to propose a dividend of 0.45 euro per share, or nearly 100% of Crédit Agricole S.A. s earnings, to be approved by the Annual General Meeting of 19 May. As we see it, this reflects our confidence in the future, underpinned by the loyalty of our 58 million customers, the dedication of the Crédit Agricole Group s 164,000 employees and the trust of our 1.3 million shareholders. 424 billion In aggregate loans outstanding Regional Banks and LCL The Crédit Agricole is the French leading financial partner In addition, the crisis has given us a stronger sense of our responsibility as a bank, of our obligation to look at the long-term consequences of our business and financial decisions. Crédit Agricole, which was conceived at the grass-roots level, could not do otherwise. Its natural avocation is to support all local economic agents by helping to meet their needs and bring their projects to fruition over the long term. The crisis revealed the dangers of highly fragmented regulations and limitless securitisation. It brought home the consequences of virtually ignoring the notion of risk. For us, the main conclusion is that we need a new international framework for banking and finance. OVERVIEW 5

9 BOard Of directors At 4 March directors elected by the agm 1- René Carron, Chairman first appointed: 20/05/1999 term of office ends: 2011 chairman of the regional bank des savoie Deputy chairman, fnca 2- Jean-Marie Sander, Deputy Chairman (1) first appointed : 20/05/1999 term of office ends: 2009 representing sas rue la boétie chairman of the regional bank alsace-vosges chairman, fnca and sas rue la boétie 3- Jean-Paul Chifflet, Deputy Chairman first appointed: 31/01/2007 term of office ends: 2010 chief executive officer of the regional bank centre-est general secretary, fnca Deputy chairman, sas rue la boétie 4- Noël Dupuy, Deputy Chairman (1) first appointed: 21/05/2003 term of office ends: 2009 chairman of the regional bank touraine-poitou Deputy chairman, fnca Pierre Bru first appointed: 25/05/2000 term of office ends: 2010 chairman of the regional bank nord Midi-pyrénées 6- Philippe Camus (2) first appointed: 18/05/2005 term of office ends: 2011 co-manager, lagardère 7- Gérard Cazals (1) first appointed: 21/05/2008 term of office ends: 2009 chairman of the regional bank toulouse-midi toulousain 8- Patrick Clavelou (1)(3) first appointed: 20/01/2009 term of office ends: 2009 chief executive officer of the regional bank brie picardie 9- Alain David first appointed: 18/05/2005 term of office ends: 2010 chairman of the regional bank Ille-et-vilaine 10- Alain Diéval first appointed: 19/05/2004 term of office ends: 2011 chief executive officer of the regional bank nord de france 11- Xavier Fontanet first appointed: 29/11/2001 term of office ends: 2011 chairman and ceo, essilor International 12- Carole Giraud (1) first appointed: 29/11/2001 term of office ends: 2009 regional bank employee 13- Lord Michael Jay first appointed : 23/05/2007 term of office ends: 2011 president, house of lords appointments commission Director of companies 14- Bruno de Laage first appointed : 17/05/2006 term of office ends: 2010 chief executive officer of the regional bank anjou-maine 15- Dominique Lefebvre (1) first appointed : 23/05/2007 term of office ends: 2009 chairman of the regional bank val de france 16- Michel Mathieu first appointed: 21/05/2008 term of office ends: 2011 chief executive officer of the regional bank languedoc 17- Michel Michaut first appointed : 19/05/2004 term of office ends: 2011 chairman of the regional bank champagne-bourgogne 18- François Veverka first appointed: 21/05/2008 term of office ends: 2011 consultant financial services and banking (banquefinance associés) director representing professional farming organisations 19- Jean-Michel Lemétayer first appointed: november 2001 term of office ends: august 2011 chairman, fnsea (french national farmers union) directors elected by the employees 20- Daniel Coussens first appointed: June 2006 term of office ends: June Guy Savarin first appointed: June 2006 term of office ends: June 2009 non-voting director 22- Henri Moulard first appointed: May 2003 term of office ends: 2009 chairman, truffle capital representative of the work council 23- Catherine Abalain-Angeli appointed in June 2006 statutory auditors Barbier Frinault et Autres, Ernst & Young Pricewaterhouse Coopers Audit (1) Standing for re-election at the Annual General Meeting of 19 May 2009 (2) Until the Annual General Meeting of 19 May 2009 (3) Mr Clavelou s cooptation by the Board of Directors of 20 January 2009 will be subjected to the ratification of the General shareholders meeting of 19 May OVERVIEW

10 the executive COmmIttee At 4 March Georges Pauget chief executive officer 2. Jean-Yves Hocher Deputy chief executive officer in charge of regional banks development, payment instruments and Insurance area 3. Jacques Lenormand Deputy chief executive officer in charge of crédit agricole s.a. group functions area Jean-Frédéric de Leusse Deputy chief executive officer in charge of the group specialised business lines area 5. Bernard Mary Deputy chief executive officer in charge of retail (lcl and International retail banking) Mohammed Agoumi Deputy head of International Development 17. Jérôme Grivet Deputy chief executive officer of calyon Bertrand Badré group chief financial officer 8. Jean-Paul Betbèze chief economist 9. Jérôme Brunel head of specialised financial services 10. Francis Canterini head of group risk Management and permanent controls 11. Marc Carlos head of payment systems and services 12. Pierre Deheunynck head of group human resources 13. Alain Deschênes head of group It and process Development (as from 1 st april 2009) 14. Philippe Dumont group chief Internal auditor 15. Christian Duvillet chief executive officer of lcl 16. Ariberto Fassati head of crédit agricole s.a. group in Italy 18. Paul de Leusse head of group strategy (as from 1 st april 2009) 19. Gilles de Margerie head of private banking, private equity and real estate 20. Alain Massiera Deputy chief executive officer of calyon 21. Bernard Michel head of crédit agricole assurances 22. Yves Perrier head of asset Management, securities and Investor services 23. Alexandra Rocca head of communications crédit agricole s.a. group 24. Alain Strub chief executive officer of emporiki bank 25. Patrick Valroff chief executive officer of calyon 26. Jean-Pierre Vauzanges head of regional banks Development OVERVIEW 7

11 OUR COMMITMENTS CORPORATE GOVERNANCE Crédit Agricole S.A., majority-owned by Crédit Agricole Regional Banks, has established its own corporate governance policy based on the enduring mutualistic values of Crédit Agricole s subsidiaries and the rules used by listed European companies. This policy is founded on Crédit Agricole s long-standing values of transparency, responsibility, and efficiency. These values are reflected in the Board of Director s structure and modus operandi through: Board Members active involvement in overseeing the Company s management and strategy, as well as in the life of the Company; A desire for an open, balanced composition and sharing of power within each of the Company s executive bodies; Continuous efforts to ensure that Board Members can perform their duties objectively, effectively, and with the necessary independence, by engaging in meaningful dialogue and relying on transparent information. Board Members The Board of Directors has had 21 Members and one Non-voting Member since Crédit Agricole S.A. became a listed company. The following 18 Board Members are appointed by an Annual General Meeting: Twelve are the Chairman or Chief Executive of a Crédit Agricole Regional Bank; One is a legal entity, SAS Rue La Boétie, represented by the Chairman of a Crédit Agricole Regional Bank, who is also the Chairman of SAS Rue La Boétie; Four come from outside the Crédit Agricole Group; One is an employee of a Crédit Agricole Regional Bank. The Board of Directors also has one Member appointed jointly by the French Ministries of Finance and Agriculture (in accordance with a French law dated 18 January 1988 on the mutualisation of Caisse Nationale de Crédit Agricole, which became Crédit Agricole S.A. on 29 November 2001), two Members elected by Crédit Agricole Group employees, and one Non-voting member appointed by the Board of Directors Achievements Most of the Board s work in 2008 involved assessing the consequences of the financial crisis for Crédit Agricole S.A. and its main subsidiaries. The Board outlined measures to cope with the crisis, drawn largely from the efforts of the Audit and Risk Committee. The Board s activities The Board of Directors and its committees met 32 times in Board of Director meetings 8 Audit and Risks Committee meetings 5 Strategic Committee meetings 5 Compensation Committee meetings 3 Appointments and Governance Committee meetings The Board was particularly active in It and its committees met 32 times; over a third of these meetings were not regularly-scheduled meetings. The attendance rate was over 90%, testifying to the Members active involvement. The Appointments and Governance Committee reviewed the Board s operations with the help of an outside consultant, and the results of this review were presented to the Board in mid The main recommendations were to: strengthen the Strategic Committee s role, especially in terms of ensuring that all Crédit Agricole businesses and subsidiaries follow the strategic guidelines set forth by management; and to more closely track and analyse all types of risks incurred by Crédit Agricole s various activities. In October 2008 the Board approved a restructuring of Crédit Agricole S.A., upon the recommendation of the Appointments and Governance Committee, that reflects the key goals outlined in the Company s strategic plan; i.e., expand the banking and insurance businesses; strengthen the specialised businesses; and improve the Company s financial and strategic oversight functions. Steps were made towards the latter goal in 2008 through the appointment of two new Deputy Chief Executive 8 OVERVIEW

12 After Lyon in 2005, the 2008 Annual General Meeting took place in Nantes. Officers and the creation of a strategy and finance oversight department. This new organisational structure is more straightforward and better able to guide the Company through a crisis. Moreover, it reflects Crédit Agricole s desire to have its operations managed on a level as close as possible to its businesses. On 13 November 2008, the Board of Directors adopted the recommendations issued jointly by AFEP (the French Association of Private Companies) and MEDEF (the French Business Confederation) on 6 October 2008 concerning the compensation paid to corporate officers of listed companies. The Board agreed that these recommendations are consistent with Crédit Agricole s corporate governance policy. Therefore Crédit Agricole S.A. will use the AFEP-MEDEF code of corporate governance as amended by these recommendations to write the report required by Article L of the French Commercial Code, in accordance with the French law dated 3 July 2008 transposing European Commission Directive 2006/46/EC of 14 June Board Committees (at 31 December 2008) The Audit and Risks Committee, with seven members Henri Moulard (Committee Chairman), independent Non-voting Board Member Philippe Camus, independent Board Member Alain Diéval, Chief Executive of a Crédit Agricole Regional Bank Noël Dupuy, Deputy Chairman of the Board and Chairman of a Regional Bank Michel Mathieu, Chief Executive of a Regional Bank Michael Jay, independent Board Member François Veverka, independent Board Member The Compensation Committee, with four members Philippe Camus (Committee Chairman), independent Board Member Jean-Marie Sander, Deputy Chairman of the Board and Chairman of a Regional Bank Pierre Bru, Chairman of a Regional Bank Alain David, Chairman of a Regional Bank The Appointments and Governance Committee, with five members Michael Jay (Committee Chairman), independent Board Member René Carron, Chairman of the Board Jean-Marie Sander, Deputy Chairman of the Board and Chairman of a Regional Bank Jean-Paul Chifflet, Deputy Chairman of the Board and Chief Executive of a Regional Bank Michel Michaut, Chairman of a Regional Bank The Strategic Committee, with six members René Carron (Committee Chairman), Chairman of the Board Jean-Marie Sander, Deputy Chairman of the Board and Chairman of a Regional Bank Jean-Paul Chifflet, Deputy Chairman of the Board and Chief Executive of a Regional Bank Noël Dupuy, Deputy Chairman of the Board and Chairman of a Regional Bank Bruno de Laage, Chief Executive of a Regional Bank Xavier Fontanet, independent Board Member More detailed information about Crédit Agricole s corporate governance is provided in the Company s Registration Document, in the chapter entitled Corporate governance and internal control. OVERVIEW 9

13 Our COmmItments corporate social responsibility Crédit Agricole s corporate social responsibility (CSR) policy is consistent with the principles set forth in the United Nations Global Compact, which the Group signed in Crédit Agricole has expanded its social and environmental initiatives despite the current economic slowdown, as a result of the Group s long-term vision. Several major initiatives were introduced in 2008 such as the Grameen Crédit Agricole Microfinance foundation, the signing of the Diversity Charter, and the signing of The Climate Principles which Crédit Agricole actively promotes. The Group s initiatives in 2008 reflect the main priorities of its CSR policy; namely: the fight against climate change (see the article on p. 28); respect for human rights; advancement of the agricultural industry; and the development of products and services that support all of the above. Moreover, a concern for social welfare is written into Crédit Agricole s mutualistic genes and is a natural driver of the Group s socially responsible approach. For example, in 2008 the Group created the Grameen Crédit Agricole Microfinance Foundation to help reduce poverty around the world, and all its Regional Banks offer support centres (Points Passerelles) to help customers get back on their feet after an adverse life event. Diversity and non-discrimination. With 90,000 employees worldwide (over half were outside France in 2008), Crédit Agricole demonstrates its commitment to the Universal Declaration of Human Rights and the International Labour Organisation Conventions. Diversity is a key element in Crédit Agricole s HR policy, particularly in terms of hiring disabled people, AN AWARD-WINNING APPROACH Ratings given by ratings agency SAM since 2006 (out of 100) Total Economic Social Environmental 29 After being awarded by The Banker magazine in 2007 for its CSR policy, in 2008 Crédit Agricole S.A. was added to the Dow Jones Sustainability Index based on sustainability ratings given by ratings agency SAM. Crédit Agricole S.A. is now included in three major non-financial indices: ASPI Eurozone (2004), FTSE4Good (2005), and DJSI Europe + 3,1% + 3,1% + 3,3% (2008). and was reinforced in early 2008 when Crédit Agricole S.A. and eight of its subsidiaries signed the Diversity Charter. This Charter entails numerous commitments such as teaching employees about the benefits of diversity and eliminating discrimination at the time of hiring M 898 M M 934 M M 886 M 946 M T1 T2 T3 T4 In 2008, Année Crédit 2007 : 3 Agricole 664 M S.A. formed a partnership with a French community organisation (Nos Quartiers Ont des Talents) that puts college graduates from poor neighbourhoods in touch with companies looking to hire young employees. Crédit Agricole employees volunteer their time to teach 10 OVERVIEW

14 René Carron, Georges Pauget, and Professor Muhammad Yunus, winner of the 2006 Nobel Peace Prize, sign an agreement to create the Grameen Crédit Agricole Microfinance Foundation. graduates the basics of how to succeed in the workplace, and give advice on CVs and cover letters, hold practise interviews, help graduates define their career goals, etc. The Grameen Crédit Agricole Microfinance Foundation. In February 2008, René Carron, Georges Pauget, and Professor DIVERSITY EFFORTS AT CRÉDIT AGRICOLE SUBSIDIARIES Muhammad Yunus, founder of Grameen Bank and winner of the 2006 Nobel Peace Prize, announced a new foundation designed to reduce poverty in developing countries through the use of microfinance and social business. This joint initiative was born from the values and convictions shared by Grameen and Crédit Agricole, including active Sofinco and Finaref have implemented measures to inform and train managers on diversity, and in 2009 Eurofactor will introduce an e-learning module (developed by Halde) on promoting diversity within a company. Other Crédit Agricole subsidiaries work closely with organisations dedicated to promoting fair treatment during hiring; for instance, LCL and Finaref have both signed an agreement with the French employment agency (ANPE) on this issue. LCL will also participate in a plan to revitalise French suburbs (Plan Banlieue), and Sofinco has formed a partnership with the IMS-Entreprendre Pour la Cité network for socially responsible initiatives. All of these engagements testify to a desire to reinforce social links, whether by hiring people from poor neighbours under three-year contracts, or by helping new graduates find jobs. solidarity, dignity for all people regardless of income and social class, the opportunity for every individual to take control of his or her own life, and the capacity for microfinance to help poor people, especially women, live a better life. Crédit Agricole gave the Foundation an irrevocable 50 million grant which will be used to issue loans and guarantees, and if needed to make equity investments in microfinance institutions. The Foundation will focus on developing countries in Africa and Southeast Asia. Most of the aid will go to local institutions that have trouble accessing domestic or international sources of funding, and that aim to promote the social and economic welfare of poor people. Special consideration will be given to rural agricultural producers. The Foundation s next goal will be to set up a system for providing technical assistance to microfinance institutions. OVERVIEW 11

15 France s proactive financial partner As a universal, mutualistic bank, Crédit Agricole aims to provide valuable services to all its customers including those that have recently gone through an adverse life event. Therefore 20 of its Regional Banks have set up 33 support centres (Points Passerelles), starting with the Nord-Est Regional Bank in At these centres, customers can talk to Crédit Agricole employees or local councillors and receive financial information and advice; the centres are designed to be a reassuring resource to ease the burden during troubled times. Crédit Agricole is the leading financial partner to the French economy, and one of its top priorities is to give individuals and companies access to credit. The Group has been particularly active in the current financial crisis through measures targeted to small businesses. In October 2008, the French government introduced a stimulus plan for SMEs and appointed a credit mediator to review the financing problems faced by businesses, professionals, and farmers, and their relationships with banks. Crédit Agricole received 843 queries from the mediator in just over two months, compared with around a million loan customers. These figures prove that Crédit Agricole has a professional, responsible loan policy; less than one borrower out of 1,000 requested mediation services, and in 50% of the cases the mediator confirmed Crédit Agricole s initial decision (vs. an average of 37%). The agricultural sector was hit particularly hard by the financial crisis in 2008, especially by the soaring commodities prices. In response, Crédit Agricole the sector s leading financer stepped-up its efforts to back this historical customer base. The Group helped implement the agricultural support plan announced by the French Minister of Agriculture, Michel Barnier, and will provide substantial amounts of funding to reflect the Group s market share. Crédit Agricole is also offering farmers and agricultural cooperatives a type of option that guarantees a market price and allows them to cover any potential losses. Furthermore, the Company served on the agriculture working group of the Grenelle de l Environnement conference among the leaders of French governments, businesses, and organisations. Finally, Crédit Agricole plans to support (as soon as it is officially adopted) France s High Environmental Value (Haute Valeur Environnementale) initiative to help agricultural producers adopt best environmental practices. FAIR TRADE With 11 tonnes of fair trade coffee and 15 tonnes of fair trade beverages consumed by Crédit Agricole employees in 2008, the Group is one of the top in France in terms of the consumption of fair trade food products. Crédit Agricole works closely with Max Havelaar to teach employees and the broader agricultural community about fair trade. For example, during a two-week fair trade convention held in France in 2008 (Quinzaine du Commerce Équitable 2008), Crédit Agricole arranged a meeting between chambers of agriculture and six producers from Mali, India, Peru, and France; the Group plans to support the convention again in HIGHLIGHTS Y Signing the Diversity Charter Crédit Agricole S.A. and eight of its subsidiaries signed the Diversity Charter, thereby committing to fight all forms of discrimination and to ensure that their staff reflects the diversity of the French people. Y The new Grameen Crédit Agricole Microfinance Foundation Crédit Agricole S.A. created the Grameen Crédit Agricole Microfinance Foundation in association with Professor Muhammad Yunus, founder of Grameen Bank and winner of the 2006 Nobel Peace Prize for his efforts to reduce poverty through microfinance. Y Signing up to The Climate Principles Crédit Agricole signed up to The Climate Principles, reinforcing its commitment to fighting climate change and cutting greenhouse gas emissions. Crédit Agricole S.A. plans to reduce its energy use in the Paris region by 15% between 2008 and Y An alliance among Crédit Agricole Assurances, University of Paris- Dauphine, and the Europlace Institute of Finance These three organisations entered into a two-year alliance to perform scientific research on insurance policies for farmers, and to eventually develop products better suited to their needs. 12 OVERVIEW

16 OUR COMMITMENTS SHAREHOLDERS INFORMATION Crédit Agricole s shareholder communications policy, put in place when the company went public, is founded on the principles of close relationships and open dialogue and is particularly relevant during the current financial crisis. Extensive information for individual shareholders Crédit Agricole S.A. has been providing individual shareholders with a full range of information since its IPO in December 2001, and following its acquisition of Crédit Lyonnais in The company s shareholder communications policy has always been focused on building close relationships and facilitating direct contact. This policy has proven its merits in the current financial crisis, as shareholders need clear, specific answers to their questions about the complicated mechanisms behind the turmoil. information 24 hours a day. In 2008 this service won the Fils d Or award from Synerfil and La Vie Financière for its reliability and availability. In addition, Finance & Shareholders website has a shareholder section with a specific address for shareholder queries. In 2003 Crédit Agricole S.A. formed a Shareholder Liaison Committee, which now has 12 members representing the company s individual shareholders. The Committee is responsible for gathering feedback on the company s shareholder communications and improving the shareholder newsletters and reports. The Committee meets at least three times a year; the meeting minutes are posted on the Shareholder Liaison Committee section of Finance & Shareholders website Crédit Agricole S.A. also has a Shareholders Club for shareholders owning at least 50 bearer shares or one registered share. This Club, now 120,000-members strong, aims to inform and educate mainly through a quarterly Shareholders Club Newsletter sent to all members. Crédit Agricole S.A. organises around 20 shareholder meetings every year across Metropolitan France that are attended by as many as 1,200 people. 22 meetings were held in 2008, along with an Annual General Meeting in Nantes and a presentation at Actionaria, a French shareholder s convention. During four of these meetings shareholders were able to speak directly with Crédit Agricole S.A. management; during the other meetings, a company expert discussed a particular topic such as investment strategy, the transfer of private wealth, and the global economic and financial climate. A toll-free number from France is available ( ) where shareholders can contact Crédit Agricole S.A. s investor relations department directly and hear a recording of certain The Shareholder Liaison Committee with the company s individual shareholders OVERVIEW 13

17 Strong ties with institutional investors The Group s communications for institutional investors were in high demand in 2008, due to the many significant major market events during the year and the decisive transactions carried out by Crédit Agricole S.A. The Group intensified its contacts with financial analysts in order to answer their questions (which came in more frequently than usual) about the status of its various businesses. The institutional investor relations team held meetings in Paris for fund managers wishing to meet Crédit Agricole s senior managers, and the Group s Chief Executive Officer and Chief Financial Officer gave presentations at major international banking conferences. In conjunction with Crédit Agricole S.A. s share issue in June 2008, the bank s management team went on an extensive road show covering the traditional European financial centres as well as the entire North American region, the Middle East, and the main Asian market hubs. During this road show the management team met hundreds of fund managers in just a couple of weeks; some fund managers updated their existing information about Crédit Agricole S.A., while others expressed an interest in the Group for the first time. In September 2008, the investor relations team organised an Investor Day, another highlight of the financial calendar. This day was focused on the Group s corporate and investment banking business. Around a hundred analysts and fund managers went away with a better understanding of the strategy set forth by Calyon s new management team a strategy that aims to reinforce Calyon s historical strengths and reduce its overall risk profile Financial calendar 4 March: 2008 results presentation 14 May: publication of 2009 first quarter results 19 May: Annual General Meeting in Paris 27 May: Ex-dividend date 23 June: Dividend payout of 0.45 per share* 27 August: publication of 2009 first half results 10 November: publication of 2009 nine-month results * Subject to approval by the Annual General Meeting Georges Pauget and more than 800 shareholders discussing the recession at a meeting in Dijon. 14 OVERVIEW

18 Five viewpoints MAIN STORIES Crédit Agricole s 58 million customers worldwide reflect the Group s many businesses, faces, and diverse markets. This number more than any other embodies the balance and resilience of a business model based on local networks. Crédit Agricole knows which steps are needed to pull out of the crisis ahead, and constantly reflects on the competitive advantages of tomorrow s banks. Below are a few stories about a Group that knows how to leverage its strengths.

19 Whether the economy is in a boom or in a bust, Crédit Agricole is there to support the entire value chain and give each player the specific services it needs. Crédit Agricole s Regional Banks, due to their long history and strong local ties, have developed an in-depth understanding of their local economies. This knowledge is what makes their business model effective, since the Regional Banks secure the link between production and distribution. In addition, Crédit Agricole s specialised businesses draw from the Regional Banks expertise to develop innovative products and services. The Regional Banks business model has also proven to be flexible and exportable; Crédit Agricole s expansion into Italy (described on the following pages) illustrates how the banks synergies can be used to build a local network quickly and effectively. French retail banking Crédit Agricole, leading financial partner to the french economy Crédit Agricole works with all participants in the local economy, as its Regional Banks by nature share their history and their prospects for the future a particularly effective strategy during challenging times. Throughout the current financial crisis, Crédit Agricole has continuously sought new growth opportunities for itself and its customers. For instance, the wave of business transfers that looks set to happen over the medium-term provides an opportunity for Crédit Agricole to support a new generation of entrepreneurs and lay the foundations for tomorrow s economy. France s leading provider of loans to new businesses*. Also France s leading mortgage provider, granting 270,000 mortgages in % of which were to first-time buyers**. Crédit Agricole Asset Management is France s leading asset manager and the second-largest manager of employee savings plans. The Group is present across the entire economic chain and serves all types of customers, regardless of size even in the middle of a financial crisis. Crédit Agricole had 424 billion of outstanding loans at 31 December 2008, up 6.7% from end During stormy weather, the Group s solid financial structure allows it to serve nascent businesses, primarily through its private equity funds. Crédit Agricole offers all its business customers (professionals, corporations, and agricultural producers) solutions enabling them to continue operating and investing for the future. The Group has expanded its reach by introducing products and services better tailored to the needs of small businesses, such as leasing solutions for entrepreneurs, loans with flexible repayment terms, and factoring arrangements (see inset). These constitute growth opportunities for Crédit Agricole as well as helpful leg-ups for entrepreneurs struggling with cash flow problems. But Crédit Agricole does not limit itself to entrepreneurs and corporations. It also supports social welfare organisations like associations and foundations that provide a growing source of richness to the community. Over 20% of the associations in France rely on Crédit Agricole for their banking needs. Crédit Agricole is also France s leading bank for public-private partnerships, and is the * LCL and Crédit Agricole Regional Banks ** Crédit Agricole Regional Banks 16 MAIN STORIES

20 first in line to support local government projects (for retirement homes, hospitals, etc.). It also advises local governments on their booming financing needs, a natural consequence of the Group s decentralised structure. Investing in each region The keys to Crédit Agricole s success and the reasons behind its commitment can be found in its business model. Bruno Carles, Head of Business, Local Government, and Professional customers at Crédit Agricole S.A., explains, All 39 of Crédit Agricole s Regional Banks are full-service banks with strong ties to the local area. They are required to have sites throughout the region, which ensures that they are near their customers, readily available, and responsive to customers needs. This also frames their growth strategy, as the Regional Banks must innovate and invest in their local markets markets where they themselves are key businesses. Therefore the Regional Banks have no choice but to become heavily involved in the local economy. Moreover, one-fourth of the Regional Banks Board Members are local elected officials. Having regional decision-making bodies that can issue loans and implement initiatives out in the field is especially pertinent during a crisis. Crédit Agricole is a long-standing leader in the agriculture sector, and over the past 20 years has developed an approach focused on meeting companies needs. The bank supports its customers through a web of experts and, as the cornerstone of this approach, 155 business centres. Furthermore, Crédit Agricole s specialised businesses asset management, lease finance, factoring, private equity, and Crédit Agricole S.A. supplement the Regional Banks skills by working hand-in-hand with employees and customers whenever needed (see insets for examples). Factoring services offer financing of all sizes The French factoring market surged 14.4% in 2008 despite a sharp decline in volumes sold in the fourth quarter. This doubledigit growth, and that of the ten prior years, reflects buoyant demand for these services. Leasing also grew substantially in 2008 with an 18% jump in production. Companies facing cash problems clearly find these financing sources to be of great benefit. Factoring is a perfect solution during a crisis, because it involves only a company s high-quality receivables and debtors. It can be used by SMEs that are struggling in the current economic climate but that work with buyers from high-quality firms, explains Bernard Muselet, Deputy CEO of Eurofactor, a Crédit Agricole subsidiary and France s leading factoring services provider. Until recently, very small businesses were deterred from using factoring because they would have had to assign all of their accounts receivables (and pay the ensuing fees) for what were often only short-term cash needs. But 18 months ago Crédit Agricole introduced a unique, novel service called Créances Services that lets managers select which receivables to assign based on their financing needs, for up to 150,000. Many customers signed up for this service in 2008, attracted by its simplicity, freedom of choice, and customisation potential. Leading bank serving SMEs (over 1.5 million of revenue or over ten employees), with a 35% share of the commercial market Having regional decision-making bodies that can issue loans and implement initiatives out in the field is especially pertinent during a crisis. Bruno Carles Head of Business, Local Government, Professional customers and farmers - Crédit Agricole S.A. MAIN STORIES 17