Bank of the Year CRÉDIT MUTUEL GROUP ANNUAL REPORT

Transcription

1 Bank of the Year In france 2013 CRÉDIT MUTUEL GROUP ANNUAL REPORT

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3 CONTENTS Chairman s message 04 Board of Directors of CNCM 06 PROFILE CRÉDIT MUTUEL GROUP 08 Business profile 10 Key figures, A year inside Crédit Mutuel group RESULTS 16 BANKINSURANCE 24 Retail banking, the group s main business 28 The preferred bank of private individuals 30 Number one bank for non-profit associations 38 Number two bank for the farming sector 40 Number three bank for SMEs 42 Technology: Innovation at work 44 Subsidiaries operating as retail banks 48 Insurance, the group s second-largest business 50 Other businesses 54 Corporate and investment banking 56 Asset management and wealth management CORPORATE SOCIAL RESPONSIBILITY 64 The Crédit Mutuel network: The heart of the cooperative model 66 A decentralised structure 68 Participation and consultation 70 Crédit Mutuel group: Solidarity and responsibility CSR indicators 82 FINANCIAL REPORT 94 CNCM Board of Directors management report 98 Financial statements 120 Notes to the financial statements 126 Independent Auditor s report 184

4 Net profit, group share: 2,651 million Above and beyond the numbers, I am very proud of you, We are successfully dealing with an economic situation that is challenging for our country and for Europe. 4 Crédit Mutuel group

5 Chairman s MESSAGE The Crédit Mutuel group played an active role in financing the economy in 2013, both at the national and regional levels. Its goals were aligned as closely as possible with the projects of its clients: members and customers, self-employed professionals, companies and associations. Thanks to its dynamic networks, the group delivered a 23.3% rise in net profit, group share, to 2,651 million. This solid performance provided further proof that the group s model works and allowed it to further consolidate its financial situation. This is a source of security for members and customers and a guarantee of future growth. Shareholders equity topped the 40 billion mark, and Core Tier 1 solvency was the highest in France and among the best in Europe. With a focus on quality of service, the key to its trust-based relationships, the group is expanding all of its banking, insurance and service businesses by constantly making its offering more comprehensive, better adapted and more competitive. Backed by the skills of 24,200 directors and 78,500 employees helping to serve more than 30 million customers, the group recorded solid gains in all business areas: loans and deposits, insurance, its second-largest business, as well as in remote banking, remote surveillance and telephony. It also expanded its international operations, which now contribute almost 20% of net banking income. These performances have earned the group recognition: World Finance magazine named Crédit Mutuel Bank of the Year in France, and Boston Consulting Group chose it as the most highly recommended network bank in France. All of these strengths will help Crédit Mutuel rise to the economic, social, technological, competitive and regulatory challenges that lie ahead. The group is moving forward with confidence, purpose and enthusiasm. Continue to grow, adapt by expanding the range in all markets and to offer the best services to members and customers: these are the group s priorities and it insists on meeting them. Michel Lucas Chairman, Confédération Nationale du Crédit Mutuel 5 Annual report 2013

6 Board of Directors of Confédération Nationale du Crédit Mutuel at 30 june 2014 Chairman 01 Michel Lucas, Chairman of Crédit Mutuel Centre Est Europe Vice-Chairmen 02 Gérard Cormorèche, Chairman of Crédit Mutuel Sud-Est 03 François Duret, Chairman of Crédit Mutuel Centre 04 Philippe Vasseur, Chairman of Crédit Mutuel Nord Europe Chief Financial Officer 05 Alain Têtedoie, Chairman of Crédit Mutuel Loire-Atlantique et Centre-Ouest Group Secretary 06 Daniel Leroyer, Chairman of Crédit Mutuel Maine-Anjou, Basse-Normandie Other board members 07 Jean-Louis Boisson, Vice-Chairman of Crédit Mutuel Centre Est Europe 08 Gérard Bontoux, Chairman of Crédit Mutuel Midi-Atlantique 09 Alain Delserieys, Chief Executive Officer of Crédit Mutuel Antilles-Guyane and Deputy Chief Executive Officer of Crédit Mutuel Centre Est Europe 10 Lucien Miara, Chairman of Crédit Mutuel Méditerranéen 6 Crédit Mutuel group

7 Administrateurs 11 Guy Allain, Director of Crédit Mutuel Bretagne 12 Jean-Louis Bazille, Director of Crédit Mutuel Agricole et Rural 13 Hervé Brochard, Chairman of Crédit Mutuel Normandie 14 Eric Charpentier, Chief Executive Officer of Crédit Mutuel Nord Europe 15 Jacques Chombart, Vice-Chairman of Crédit Mutuel Agricole et Rural 16 Roger Danguel, Director of Crédit Mutuel Centre Est Europe 17 Pascal Durand, Chief Executive Officer of Crédit Mutuel Maine-Anjou, Basse-Normandie 18 Jean-Louis Dussouchaud, Vice-Chairman of Crédit Mutuel Sud-Ouest 19 Jacques Enjalbert, Director of Crédit Mutuel Bretagne 20 Bernard Flouriot, Chairman of Crédit Mutuel Anjou 21 Jean-Louis Girodot, Chairman of Crédit Mutuel Ile-de-France 22 André Halipré, Vice-Chairman of Crédit Mutuel Nord Europe 23 Pierre Julius, Chairman of Crédit Mutuel Antilles-Guyane 24 Guénhaël Le Huec, Director of Crédit Mutuel Bretagne 25 Jean-Luc Le Pache, Director of Crédit Mutuel Bretagne 26 Maurice Loizeau, Vice-Chairman of Crédit Mutuel Loire-Atlantique et Centre-Ouest 27 Jean-Luc Menet, Chief Executive Officer of Crédit Mutuel Océan 28 Claude Osier, Vice-Chairman of Crédit Mutuel Massif Central 29 Albert Peccoux, Chairman of Crédit Mutuel Savoie-Mont Blanc 30 Denis Schitz, Vice-Chairman of Crédit Mutuel Centre Est Europe 31 Nicolas Théry, Deputy Chief Executive Officer of Crédit Mutuel Centre Est Europe 32 Michel Vieux, Chairman of Crédit Mutuel Dauphiné-Vivarais 33 Joseph Vrignon, Chairman of Crédit Mutuel Océan 34 Christine Zanetti, Chief Executive Officer of Crédit Mutuel Loire-Atlantique et Centre-Ouest The following people also sit on the Board: 35 étienne Pflimlin, Honorary Chairman 36 Alain Fradin, Chief Executive Officer 37 Daniel Baal, Deputy Chief Executive Officer 38 Gilles Le Noc, Corporate Secretary 7 Annual report 2013

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9 CRÉDIT MUTUEL GROUP PROFILE BE THE PREFERRED PARTNER OF THOSE WHO DRIVE THE ECONOMY: THIS IS OUR GOAL.

10 PROFILE 2013 BUSINESS PROFILE CONTROLLED GROWTH WE ATTRIBUTE OUR STRONG RESULTS TO OUR ORGANISATION, OUR ELECTED DIRECTORS AND OUR EMPLOYEES, WHO ARE NOT SPECTATORS BUT ACTIVELY WORK TO SUPPORT OUR MEMBERS AND CUSTOMERS. Michel Lucas One of France s leading bankinsurers, the Crédit Mutuel Group comprises the Crédit Mutuel branch network and all of the bank s subsidiaries. Backed by a staff of more than 100,000-78,500 employees and 24,200 directors -, the group offers a comprehensive range of financial expertise to upwards of 30 million customers, more than 28 million of them retail customers. Its overriding priority, and the key to its development, is the quality of its customer and member relationships and the services it provides. Its strategy is one of controlled growth, based on local retail banking, bankinsurance and technological innovation. Combined with Targobank and Cofidis, Crédit Mutuel and CIC the group s two leading brands have a network of almost 6,000 points of sale. Crédit Mutuel is composed of local mutual banks organised into 18 regional federations, which in turn form the Confédération Nationale du Crédit Mutuel, the central body that heads the network. CIC operates a branch network in the Paris region and is the holding company for a group of five regional divisions, along with subsidiaries specialised in all areas of finance and insurance. 10 Crédit Mutuel group

11 A retail bank with a local focus Crédit Mutuel offers a comprehensive range of financial services to a customer base comprising private individuals, locally-based professionals and companies of all sizes. It has a 14.9% share of the French deposit market and 17.3% of the bank-distributed loan market. A leading bankinsurer, its insurance subsidiaries manage 34.4 million savings, auto, home, health, personal protection and retirement policies on behalf of almost 13 million policyholders. The group is a major player in the home loans market and among the European leaders for consumer credit. It is the country s biggest bank for non-profit associations, the second-largest for farmers and banker to one out of every three self-employed professionals. GROUP confidence and solidarity CRÉDIT MUTUEL GROUP 2013 KEY FIGURES Net banking income: 15,276 million Net profit: 2,717 million Net profit, group share: 2,651 million Shareholders equity, group share: 40,281 million Core Tier 1 ratio: 14.5% 5,920 points of sale* 78,482 employees 30.4 million customers 669 billion in savings deposits billion in outstanding loans A leading retail bankinsurance player in France Among the European leaders in consumer credit 17.2% market share in bank loans 14.9% market share in deposits Insurance, the group s second-largest business 14.4 billion in income No. 1 banque des associations et des comités d entreprise No. 2 pour la monétique No. 2 banque de l agriculture No. 3 prêteur à l habitat No. 3 banque des PME 34.4 million policies 12.9 million policyholders Standard & Poor s with a stable outlook for Crédit Mutuel group at the end of 2013 Fitch A A+ with a stable Aa3 outlook** Moody s with a negative outlook** * of which 5,313 in France ** Rating for BFCM 11 Annual report 2013

12 Slovakia France nited Kingdom Switz. Hungary CRÉDIT MUTUEL GROUP IN 2013 INTERNATIONAL SITES AND PARTNERSHIPS Italy Germany Belgium OBK BANK Rép. Tchèque Lux. Slovakia N BANQUE DE TUNISIE France Switz. Hungary Tunisia erica Am th or Canada * United Kingdom Germany Belgium Italy OBK BANK New York Rép. Tchèque Lux. Slovakia Switz. BANQUE DE TUNISIE Hungary Asia Italy N France ain erica Am th r o Canada Tunisia Singapore Portugal * Spain BANQUE DE TUNISIE Morocco -Guyana tilles An Tunisia N Asia Fort-deFrance Singapore Leading the way in banking technology Customers of the branch network benefit from all the advantages of remote banking and a full range of services based on cutting-edge technology. In 2013, the remote banking service clocked up more than a billion contacts, nearly half of them online. The use of applications for smartphones and tablets surged once again during the year. Crédit Mutuel conducts its mobile telephony activity, its third-largest business, through the NRJ Mobile, Crédit Mutuel Mobile and CIC Mobile brands. One highlight of the year in this area was the development of 4G. Crédit Mutuel has been building its mobile telephony activity up for almost ten years, making it a new channel for bankinsurance and services. This new approach to payment instruments is supporting the gradual development of contactless payments. It has attracted 1.3 million customers. Crédit Mutuel is the French leader in residential remote surveillance with a 35% share of that market. It is one of the group s three emerging activities, along with telephony and new property sales. The bank maintained its number two position in France in electronic payments, with a 20% share of the overall market, and its number one position for transactions in France with affiliated retailers, with a market share of 25.7%. 12 Crédit Mutuel group Crédit Mutuel s complementary and competitive offer ensures it has coverage of all market segments, from the integrated distribution majors and franchise networks to independent retailers. A solid and highly-rated bank Crédit Mutuel continued to boost its financial solidity in 2013, with Core Tier 1 Equity of 40.3 billion. Core Tier 1 solvency ended the year at 14.5% (CRD3/Basel 2.5 standards), making the group the leading French bank in this area and among the best in Europe. All of this allows Crédit Mutuel to await future European regulations serenely, without envisaging any business disposals. In a context of all-round ratings downgrades for banks in Europe, those of Crédit Mutuel were among the best in France with an A rating and stable outlook from Standard & Poor s, an A+ rating and stable outlook (for CM11-CIC) from Fitch and an Aa3 rating, outlook negative, from Moody s (CM11-CIC). The one-notch downgrade by Standard & Poor s reflected the economic climate and the downgrade to France s credit rating.

13 A RETAIL BANK SERVING ALL CUSTOMER CATEGORIES AND CATCHMENTS REGIONAL FEDERATIONS NATIONAL BODIES THE DRIVING FORCE behind the group s commitment and responsiveness THE ORGANISATIONAL FRAMEWORK of the business REPRESENTATION of members and customers interests LOCAL MUTUAL BANKS, of which there are 2,129. At Crédit Mutuel, decisions are taken as close as possible to ground level. 18 REGIONAL FEDERATIONS, which coordinate business within their respective jurisdictions. Banking and finance subsidiaries A GROUP WITH A DIFFERENCE serving all its customers and supporting businesses and jobs. Insurance subsidiaries Technology subsidiaries 5,920 points of sale 78,500 employees 30.4 millions customers INTERNATIO NA L THE HEART OF THE SYSTEM THE MUTUAL BANK LOCAL MUTUAL BANKS THE FINAL LINK IN THE CHAIN, two national bodies that represent and defend the group s interests. Real estate subsidiaries BEST FRENCH BANK for the second year World Finance NO. 1 IN EVALBANK SURVEY for Bank-SME relations MOST RECOMMENDED NETWORK BANK IN FRANCE Boston Consulting Group (BCG) REGIONAL FEDERATIONS NATIONAL BODIES THE DRIVING FORCE behind the group s commitment and responsiveness THE ORGANISATIONAL FRAMEWORK of the business REPRESENTATION of members and customers interests LOCAL MUTUAL BANKS, of which there are 2,129. At Crédit Mutuel, decisions are taken as close as possible to ground level. 18 REGIONAL FEDERATIONS, which coordinate business within their respective jurisdictions. Banking and finance subsidiaries Insurance subsidiaries Michel Lucas, Chairman of Crédit Mutuel, with Monique Leroux, Chairwoman of Desjardins Continued expansion The group consolidated its operations abroad in 2013 and made further inroads, notably in insurance and electronic payments with the acquisition of Canada s Desjardins. This was the first full year of consolidation for Beobank/ OBK in Belgium and Spanish subsidiary Agrupacio in insurance. With enhanced solidity and controlled growth, the group is actively serving the real economy and its more than 30 million customers. It is continuing to diversify in France and abroad, consolidating its role as an international retail bank. INTERNATIO NA GLOBAL LEADERSHIP IN ELECTRONIC PAYMENTS THE FINAL LINK IN THE CHAIN, two national bodies that represent and defend the group s interests. Crédit Mutuel and Desjardins, the largest cooperative financial group in Canada, Technology Real estate created Société Monetico subsidiaries subsidiaries International (SMI) in Based in Montreal, SMI offers innovative payment solutions to customers of the two financial institutions. Backed by the strengths of both groups, SMI counts among the ten leading acquirers (providers of payment solutions for merchants) worldwide. Serving 400,000 merchants processing 3.3 billion transactions a year, Monetico is leading the way in electronic payments thanks to a network unified across two continents, its information technology capabilities, L THE HEART OF THE SYSTEM THE MUTUAL BANK LOCAL MUTUAL BANKS its technological expertise and its market share. Monetico offers its customers, whether large retail chains or independent merchants, a comprehensive range of innovative payment solutions that meet international technological and regulatory standards and are adapted to all types of needs: its payment solutions for point of sale and internet and mobile sales are reliable and upgradable, and its systems allow users to simplify payment processing and optimise financial flows. 13 Annual report 2013

14 PROFILE A YEAR INSIDE CRÉDIT MUTUEL GROUP January 2013.CMNE launches its corporate Foundation. Purpose: Give structure to and solidify the Group s commitments. The Foundation houses undertakings already under way and aims to step up efforts in three areas: Personal fulfilment through culture and the development of knowledge; social and environmental initiatives; and entrepreneurial spirit..coop Fr launches défi 2020 : (2020 challenge: from international year to cooperative decade), an opportunity for the body that represents the French cooperative movement to unveil its proposals in light of the upcoming act on the social and solidarity economy. The French cooperative movement has been a highly influential player in the bill, which is set to pass into law in May February.Laval becomes part of CCS. Crédit Mutuel Maine-Anjou, Basse Normandie voted to become part of CCS, which now serves 12 Crédit Mutuel federations and the CIC regional banks. Designed to deliver greater efficiency and profitability by pooling resources, CCS, which is fully integrated into the group s organisational structure and handles its back office and logistics, is now firmly established within the group s networks and subsidiaries (Targobank Spain, Cofidis, Créatis, Monabanq, etc.). March.2012 earnings: Continued development and enhanced solidity. Net profit, group share rose to 2,150 million and total net profit was unchanged from 2011 at 2,217 million. April.Electronic payments: Crédit Mutuel group among the top ten worldwide. Crédit Mutuel group and Desjardins, the largest cooperative financial group in Canada, announced the creation of Société Monetico International (SMI). Based in Montreal, SMI will offer innovative payment solutions for merchants that are customers of the financial institutions. By pooling the strengths of the two groups, SMI will count among the world s ten leading acquiring service specialists..sme financing: No. 3 position confirmed. A partner to all those supporting the regional economy, the group confirmed its position as the number three bank for SMEs. It remains a major financer of independent professionals artisans, small retailers and microbusinesses in the services and light manufacturing sectors with nearly 650,000 customers and a 23% penetration rate..savings: Crédit Mutuel earns top score from Challenges. The group ranked No. 1 ahead of LCL for overall performance..crédit Mutuel Arkéa sells BPE to La Banque Postale..New chairman appointed at Crédit Mutuel Normandie. The departure of Eckart Thomä, who had served as chairman of the federation since 2004, was announced at the 2013 general meeting of Crédit Mutuel Normandie. Hervé Brochard, former International Director of Descours et Cabeau, was appointed chairman of Crédit Mutuel Normandie and the regional bank, and Philippe Gallienne vice-chairman. Eckart Thomä is now honorary chairman. May.Competitiveness and Employment Tax Credit: The group responds with CRED IMPO. Crédit Mutuel and CIC created CRED IMPO to keep up with SME financing needs. By simplifying procedures, this solution enables the immediate financing of receivables resulting from the Competitiveness and Employment Tax Credit (Crédit d Impôt Compétitivité Emploi CICE)..Citibank Belgium rebrands to Beobank. A generalist retail bank where customer needs come first, the name Beobank is associated with Belgium and easily recognisable in the two main languages spoken in the country. June.Consumer credit: Positions strengthened. New agreements were signed with Cofidis, and the group expanded its operations in Spain through a new partnership with Banco Popular Espanõl SA..Standard & Poor s adjusts Crédit Mutuel s long-term ratingl. On 20 June, the agency changed its long-term rating on Crédit Mutuel from A+, negative outlook to A, stable outlook. The short-term rating was left at A-1. The change was exclusively attributable to the downgrade, within S&P s rating system, of the score assigned to banking industry risk, following the downgrade to the economic outlook for and climate in France. 14 Crédit Mutuel group

15 The change had nothing to do with Crédit Mutuel s fundamentals. Its ratings from the different agencies are still among the highest of any banks and are higher overall than those of its main rivals. July/August.Crédit Mutuel No. 35 bank worldwide. In the 2013 ranking of the world s top 1,000 banks established by The Banker magazine (July 2013), based on Tier 1 capital, Crédit Mutuel came in 35th, one notch higher than in It also counted among the 25 best banks in Western Europe since the crisis, tying for tenth place with Caixabank and BNPP. September.Partnership between EI Telecom and Auchan Telecom. This partnership resulted in EI telecom taking over Auchan Telecom s customers and operating its brand. EI Telecom is thus strengthening its positions in the telecoms market and is now more than ever a multi-brand provider with the NRJ Mobile, Crédit Mutuel Mobile, CIC Mobile, Cofidis Mobile, Blancheporte Mobile and now Auchan Mobile brands..crédit Mutuel group named Bank of the year for France. British financial magazine World Finance (World News Media group) named Crédit Mutuel Bank of the Year for France a second time. The magazine cited its ability to continue to grow and remain financially solid in a challenging environment. It also noted the bank s support for the real economy, the values it represents, and its international dimension. October.BVA satisfaction survey among professionals: Crédit Mutuel No. 1 overall. Crédit Mutuel earned the highest scores from its customers for nearly all criteria. These good results reflect the strong relationships built with primary account representatives and an efficient organisational structure that allows it to optimise the use of different channels. November.Evalbank awards: Crédit Mutuel wins across the board. Crédit Mutuel obtained the highest score in the Evalbank survey of bank-sme relations. It earned the best overall score (12.7/20) of the banks rated, and the highest marks in four areas: quality of relations, access to credit, pricing and advice.. Together, Let s Rebuild Haiti : Second phase of construction kicks off. The first phase of the plan to build a new city was completed and 38 families were already settled there when nine months of structural work began for the second phase. In October 2014, 48 other families will take advantage of this home ownership programme. The project involves building a total of 150 homes along with a school, play areas and small retail shops..telephony: 4G available in CM11 mutual banks. The CM11 mutual banks began offering 4G mobile telephony in November. EI Telecom thus became the fourth operator to introduce 4G services in France, after the incumbents (Orange, SFR and Bouygues Télécom), and the first MVNO to do so. December.Targobank the third leading credit card issuer in Germany. The group s German subsidiary announced the acquisition of the credit card distribution business of Valvovis Bank. The takeover will make Targobank the third leading credit card issuer in Germany..Purchasing decisions: Crédit Mutuel among the most recommended brands in France According to a Boston Consulting Group report, word-of-mouth is by far the main criterion consumers take into account when making purchases. This survey of 32,000 people, not all of whom use the services and products included (300 brands in 12 industrial segments), was conducted in five countries: Germany, Spain, the United States, France and the United Kingdom. 15 Annual report 2013

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17 2013 RESULTS Ahead of the field GROUPE Confidence and solidarity

18 2013 RESULTS GOOD PERFORMANCE AND A STRONGER BALANCE SHEET Crédit Mutuel group actively contributed to financing the economy in Thanks to very strong business momentum at the networks, notably the retail banks, it consolidated its fundamentals and delivered a combination of growth and efficiency. Focusing steadily on service quality, the Group was able to develop all of its businesses banking, insurance and services with offers that are more adapted and diversified than ever. The group expanded its international footprint in electronic payments and insurance. With net profit, group share of 2,651 million and total net profit of 2,717 million (+22.6%), Crédit Mutuel further enhanced its financial solidity to guarantee its long-term growth. These performances were widely recognised, earning the group the bank of the year for France award from World Finance magazine (in August 2013). Boston Consulting Group also named Crédit Mutuel group the most recommended network bank in France (December 2013). Financial structure (In millions) 14.5% 13.7% (2) +0.8 pt (1) Accounting basis (2) Comparable basis +7.3% +7.8% Shareholders equity (1) Of which, group share (1) Core Tier 1 ratio Continued expansion The key figures for 2013 are a tribute to the soundness of Crédit Mutuel s business model and the active involvement of its 24,200 elected directors and 78,500 employees. A locally-focused bank, the group has complete geographic coverage (5,920 points of sales of which 5,313 in France). The regional groups are increasingly sharing tools to complement this dense network. Further efforts were made during the year to build CCS operationally to provide logistics and production services. This will allow the group to leverage the diversity of its businesses, become more competitive, and monitor product quality to offer ever more tailored services to members and customers. Crédit Mutuel also entered into new agreements internationally. It strengthened its partnership with Canadian cooperative Desjardins through a new insurance agreement and the creation of an electronic payments company that ranks among the world s top ten firms specialising in acquisition (acceptance of electronic payments by merchants) was the first full year of consolidation for Belgium s Beobank/OBK and, in insurance, Spanish subsidiary Agrupacio. Acquired by Assurances du Crédit Mutuel, the latter creates new expansion opportunities in Spain and will give Targobank Spain and RACC Seguros a full range of insurance products. 18 Crédit Mutuel group

19 2013 RECOGNITION FOR THE GROUP MOST APPRECIATED BANK FOR PRODUCT PERFORMANCE Banks ranked by the quality of their creditworthiness and products. Challenges, Dossier Épargne, April 2013 NO. 35 WORLDWIDE AND AMONG THE BEST BANKS IN WESTERN EUROPE The Banker magazine identified the top 1,000 banks worldwide in 2013 based on Tier 1 capital and ranked Crédit Mutuel No. 35, one slot up from the 2012 edition. Crédit Mutuel ranked 10th, tying with Caixabank and BNPP in the Top 25 best banks in Western Europe since the crisis. The Banker magazine, July 2013 BANK OF THE YEAR FOR FRANCE World Finance ranked Crédit Mutuel best banking group in France for the second year. August, 2013 NO. 1 FOR BANK-SME RELATIONS Crédit Mutuel was given the best overall score (12.7/20) of the banks rated and the highest notes on four criteria: quality of relations, access to credit, pricing and advice. November 2013 CRÉDIT MUTUEL AMONG THE MOST HIGHLY RECOMMENDED BRANDS IN FRANCE According to a Boston Consulting Group (BCG) survey, word-of-mouth is the main criterion consumers take into account when making purchases. The BCG survey of 32,000 individuals, not all of which use the services and products selected (300 brands in 12 industrial segments), was conducted in five countries: Germany, Spain, the United States, France and the United Kingdom. December million customers 12.9 million policyholders 34.4 with million policies OUR PERFORMANCES REFLECT THE TRUST OUR MEMBERS AND CUSTOMERS PLACE IN US. BVA SATISFACTION SURVEY IN PROFESSIONALS MARKET: CRÉDIT MUTUEL NO. 1 FOR OVERALL SATISFACTION Crédit Mutuel received the best scores from its customers. These good results reflect the strength of relations with primary account managers as well as an efficient organisational structure that allows it to optimise the use of different channels. October Annual report 2013

20 2013 RESULTS RETAIL BANKING AND INSURANCE NET BANKING INCOME In millions Retail Banking Insurance INSURANCE, CRÉDIT MUTUEL S SECOND-BIGGEST BUSINESS In billions Non-life premium income Life insurance premium income Total premium income ,201 11, % 1,873 1, % +21.2% +2.2% +8% COST OF RISK In millions COST OF RISK INCURRED RISKS -1,205-1,311 GENERAL PROVISIONS Total -1,254-1, OPERATING EXPENSES In millions MARKET SHARE IN FRANCE 17% 17% 17.1% 17.1% 17.2% 5, % 5,758 3, % -2.5% 3, Personnel expenses Other operating expenses Depreciation and amortisation 13.5% 14.2% 14.8% 15% 14.9% Loans Deposits CORE T1* SOLVENCY, BASEL 2.5 SOLVENCY RATIO, BASEL 3* (without transitional measures) 13.2% 13.7% 14.5% 16.6% 14.2% 11.0% 11.5% 11.2% *T1 ratio from : with additional requirements on 80% Basel 1 floor to ISO method 2012/ % 1 January 2014 Overall ratio CET1 ratio Leverage ratio *As adopted in Regulation CRR/CRD4: with risk weighting of the equity value of insurance companies. 20 Crédit Mutuel group

21 More financially sound than before Owned exclusively by its members, Crédit Mutuel allocates all of its profits to development, the consolidation of its shareholders funds and paying interest on shares. The group became even more financially sound in 2013: Core Tier 1 equity rose 6.6% to 30.5 billion, and Core Tier 1 solvency (Basel 2.5 standards) increased by 80 basis points to 14.5%, making the group the leading French bank in this area and among the best in Europe. TREND IN CUSTOMER DEPOSITS In billions % Crédit Mutuel is thus serenely preparing for the new European regulation adapting the Basel 3 rules in the European Union. Applicable from 1 January 2014, the Common Equity Tier One (CET1) solvency ratio stands at 14.2%. This includes all rules, with no transitional measures or grandfather clauses. The Tier One leverage ratio stands at 5.6%, applying the same standards. This financial solidity led Moody s and Fitch to reaffirm BFCM s long-term credit rating. The decision by Standard & Poor s to lower its rating by one notch in June 2013 and raise the outlook to stable reflected the outlook for and economic climate in France. It had nothing to do with the solidity of the group s fundamentals, and its ratings remain among the best of French banks: it has an A rating with stable outlook from Standard & Poor s, and Aa3 rating, negative outlook from Moody s and an A+ rating, stable outlook, from Fitch. Strong business momentum and support for the economy With its deep local roots, Crédit Mutuel is reaffirming the strength of its development model. It continues to differentiate itself with its members and customers, notably SMEs and microbusinesses, for which it is the No. 3 source of financing. Business levels were satisfactory across all group businesses in 2013, both at the networks Crédit Mutuel, CIC, Targobank Germany and Spain and Cofidis and the diversified activities. Savings deposits up Crédit Mutuel s total savings deposits rose by 5.9% to billion. Customer deposits ( billion excluding SFEF) increased by 6.5% as the strong momentum of recent years carried over. This growth was driven by regulated savings accounts, despite the decline in interest rates on these accounts, mainly Livret bleu and Livret A passbook savings ( 37.7 billion, +8.2%), home savings plans ( 31.7 billion, +3.9%) and current accounts with credit balances (+14.7% to 88.3 billion). STRUCTURE OF DEPOSITS Term accounts 22% Other 4% Current accounts 30% Total deposits excluding SFEF Livret bleu/ Livret 13% Other savings accounts, home purchase savings 31% Off-balance sheet financial savings were up 5.4% to billion. Total insurance-linked savings rose 5.4% to 107 billion, buoyed by a favourable environment for life insurance. Securities-linked accounts were up 5.4% to billion. They benefited from buoyant financial markets, though there was a degree of disaffection with mutual funds, which were hurt by the sharp fall in short-term interest rates. The network banks in France had an almost 15% share of the deposit market. Lending focused on business and retail customers Total lending rose 2.3% to billion, reflecting the group s active efforts to support the economy. Growth in new loans, which had marked a lull in 2012, was boosted by the housing market and increased 15.9% to 73.4 billion. Housing loan outstandings increased by 3.5% to billion. Historically low interest rates underpinned the business, with new loans up 41.3%, well above than the level seen in the market (+23.3%). Consumer credit outstandings rose 0.8% to 36.3 billion, thanks in part to solid showings by certain subsidiaries, notably Targobank Germany which is now the third-largest issuer of credit cards in that country. 21 Annual report 2013

22 2013 RESULTS TREND IN NET CUSTOMER LOANS OUTSTANDING In billions % Significant increases were seen in outstanding equipment loans ( 64.7 billion) and leases ( 11.6 billion), up 3.1% and 6.4%, respectively, despite an economic environment in which companies tended to postpone their projects. Demand for short-term business credits softened (-8% to 23 billion). The group ended the year with a 17.2% share of the bankdistributed loans market in France The loan-to-deposit ratio continued to improve (120.2%, down from 152.0% five years earlier), thus reducing the group s dependence on markets for refinancing , STRUCTURE OF NET LENDING Other 6% Operating 9% Consumer and revolving 10% TREND IN LOAN-TO-DEPOSIT RATIO In billions 147.1% 141.4% 134.7% 125.1% 120.2% Equipment loans and leases 22% Housing loans 53% Insurance, the second-largest business The group s insurance subsidiaries recorded strong growth. Groupe des Assurances du Crédit Mutuel (GACM), Suravenir and Suravenir Assurances and Assurances du Crédit Mutuel Nord (ACMN) manage a total of 34.4 million contracts (+11.2%), of which 29.6 million in risk insurance and 4.8 million in life insurance, on behalf of 12.9 million policyholders. Total income generated by the insurance business reached 14.4 billion, up 21.2% in one year, driven by life insurance. The life insurance business benefited from continued favourable tax conditions and the lower interest rate paid on Livret A passbook savings accounts, increasing by 28.5% to 9.8 billion L-to-D ratio in % Net customer loans Customer deposits Risk insurance also continued to record significant growth with an 8% increase in income. The auto segment was up 4.9% and the IRD (fire, civil liability, casualty excluding auto) segment (mainly multi-risk home insurance) was up 10.2%. Personal insurance saw growth of 8.6% to 2.8 billion, notably a reflection of the networks efforts to win complementary group health insurance contracts. Results in the insurance segment once again illustrated the strength of the traditional bankinsurance model created by Crédit Mutuel more than 40 years ago. This business accounts for more than 30% of total net profit. CONSTANTLY INNOVATING TO BE A LOCAL BANK EVERYWHERE THAT IS WHAT QUALITY SERVICE IS ABOUT. Solid performance in 2013 In 2013, net banking income rose 4.8% to 15.3 billion, reflecting the significant improvement in the interest margin and net commission income, as well as strong showings by the insurance companies. Bankinsurance accounted for more than 86% of NBI (74.5% for retail banking and 12% for insurance). After the sharp rise in expenses in 2012, most of which subsist, overhead ( 9.7 billion) remained stable. All components are well reined in, allowing the cost-to-income ratio to improve by 3 percentage points (63.3% compared to 66.3% a year earlier). 22 Crédit Mutuel group

23 The cost of risk came to 1,384 million, for a 10.4% increase. Restating for the impact of Greek securities in 2012, it would have risen by 164 million, both for incurred risks (+ 140 million) and unidentified risks (+ 24 million). The increase in the cost of incurred risks reflects the impact of the crisis on corporate and professional customers. The proportion of doubtful/non-performing loans in gross credits was stable compared to 2012 (4.4%). At the end of 2013, the coverage ratio on an individual basis stood at 61.1% and the global coverage ratio at 66.1%. Net profit attributable to the group reached 2,651 million (total net profit: 2,717 million), with bankinsurance accounting for most of this amount. It will be reinvested in the group to benefit members and customers. Technology: Innovation at work Using digital technologies to better serve members and customers As a pioneer in remote banking, the Crédit Mutuel group has developed even greater proximity with members and customers thanks to digital technology websites, mobile banking on smartphones and tablets, social networks, etc. This online presence strengthens customer relations by complementing traditional face-to-face meetings. Starting in the spring of 2014, the group will be upgrading its websites ( and and their extensions for other digital channels. Mobile telephony: Making the difference As part of its diversification strategy, Crédit Mutuel has made mobile telephony its third core business. Handled by Euro-Information Telecom (EI Telecom), this business has expanded steadily and now has an active customer base of 1.3 million users (contract and prepaid). The Group launched 4G services in its networks in 2013 and completed the rollout of full MVNO offers on the two networks EI Telecom uses (Orange and SFR). This new technical model will make its marketing and services completely independent of host operators going forward and enhance its ability to optimise purchases of voice minutes. The mobile telephony business is a new application for bankinsurance and services as well as a new approach to payment methods, buttressing the group s position in electronic payment solutions. In this latter area, the group is always on the lookout for tools that make life easier for its members and customers. It is on the cutting edge of contactless payments using cards and mobile phones. Electronic payments: 20% of the market The Group consolidated its No. 2 ranking in electronic payments in France with a 20% share of the total market. It was once again No. 1 for payments in France through affiliated retailers, with 2.2 billion payments processed for a total value of 99.5 billion, representing 25.7% of the market. Crédit Mutuel s complementary and competitive offer ensures it has coverage of all market segments, from the integrated distribution majors and franchise networks to independent retailers. The group is No. 2 in bank cards with 9.4 million active cards and market leader for public sector purchasing cards. Remote surveillance: No. 1 in France Crédit Mutuel subsidiary EPS confirmed its leadership in remote surveillance in France, ending the year with a 35% market share and 328,000 subscribers (+16%). Its expanded and innovated offering is tailored to the needs of residential and business customers. In an environment that remains uncertain, Crédit Mutuel is staying the course. It strives to serve its memberscustomers and the economy, focusing on a relationship of trust built on a dedication to providing quality offers and services. The group continues to diversify in France and abroad, consolidating its position as an international retail bank. Thanks to the day-to-day commitment of its directors and employees, the trust shown by its customers and solid financial fundamentals, the group can focus on growing, adapting and affirming its difference, constantly aiming to better help and serve its members and customers. With these assets, it can confidently meet the economic, technological, competitive and regulatory challenges of today s world. REMOTE SURVEILLANCE EPS NO. 1 IN FRANCE Crédit Mutuel s home and business remote surveillance solutions are a prime example of its commitment to providing top-level service and innovative products that are tailored to customers needs. With a 35% market share and 328,000 subscribers (+16%) in 2013, group subsidiary EPS bolstered its leading position in this market in France. The offer was expanded to include new services like smoke detection and remote gas and electric meter reading. These are included in the new housing offers of the group s real estate subsidiaries. In 2014, the offer will be extended beyond remote surveillance and assistance with carbon monoxide detection, video surveillance, energy management (consumption monitoring and control), water management including leak detection and remote shutoff and lighting management (occupancy simulation and light lines). 23 Annual report 2013

24 Crédit Mutuel group

25 BANKINSURANCE SERVICES AND SOLUTIONS A responsible bank that sets goals offers its customers the best services. That makes all the difference.

26 LA BANCASSURANCE BANKINSURANCE SERVICES AND SOLUTIONS Bankinsurance, the group s core business, comprises its retail banking and life and non-life insurance activities. The retail banking activity is carried out through the group s networks in France and Europe: Crédit Mutuel, CIC, Banque Européenne du Crédit Mutuel, CIC Iberbanco, Targobank Germany and Spain, and Cofidis and Banque Casino for consumer credit. It also includes the specialised companies whose products and services are marketed through the networks. Insurance is the group s second-largest business. The group assists its customers in all of their projects, providing solutions in the areas of investment and borrowing, payments and technology, insurance and savings, real estate, personal services and wealth management. With 30.4 million customers in France and Europe, Crédit Mutuel group is a leading retail bank with 28.8 million retail customers of which 12.9 million subscribe to its life and non-life-insurance products. A local bank with nearly 6,000 branches and over 9,000 ATMs, the group has increased its geographic coverage with a good balance between branch networks and remote banking technology. Remote banking services alone have clocked up more than a billion contacts. The segment has been boosted by the momentum of mobile banking on smartphones and tablets, which is creating a new kind of relationship between people and their banks. Solidly anchored in new forms of expression, Crédit Mutuel has also enhanced its Internet presence. Always in tune with its customers, the group is rolling out social after-sales services on Facebook and Twitter to answer all bank-related queries. In sum, Crédit Mutuel is creating even more proximity to its customers through all channels physical ones, with points of sale, and remote ones like the Internet, mobile banking and social networks. This system of staying constantly in touch with customers through different means and all channels is giving the group more ways to build quality relationships with customers and better hear their needs and advise them. By offering genuinely local services backed by state-of-the-art multi-channel distribution technologies, Crédit Mutuel group is putting digital technologies to work in its customer relations. It is consolidating its positions in the mobile telephony market, a strategic priority for it as Europe moves toward contactless payments. It also remains No. 1 in remote home surveillance with 35% of that market. Good customer relationships are the key to successful development, and Crédit Mutuel once again received numerous awards in this area in KEY FIGURES FOR BANKINSURANCE 28.2 million retail customers out of a total of 30.4 million 12.9 million policyholders and 34.4 million contracts 5,920 points of sale Over 1 billion remote banking contacts 1.3 million mobile telephony subscribers 35% share of remote home surveillance market 26 Crédit Mutuel group

27 A HUMAN RESOURCES POLICY GEARED TOWARDS TRAINING Crédit Mutuel group training centres: 1. Targobank (Germany). 2. Les Gatines (Verrières le Buisson). 3. CM Centre (Angers). 4. Le Bischenberg (Strasbourg). Crédit Mutuel ended 2013 with 79,482 employees, down slightly from This decline reflected changes at the retail bank network, in private asset management (disposal of Banque Privée Européenne) and the media activities. On the other hand, employee numbers rose in the insurance and technology sectors as well as at financial services subsidiaries Groupe La Française, Fortuneo and CM-CIC Services. Foreign entities had 12,355 employees at the end of the year, or 16% of the total. Staff signed up for almost 1,000 professional training initiatives (vocational contracts and programmes) in Experienced employees took advantage to adapt their skills to business changes. Staff members have access to training opportunities throughout their careers: in 2013, Crédit Mutuel s training budget represented 5% of the payroll. The role played by the bank in social dialogue was confirmed by the signature in September 2013, with all representative trade union organisations that represent its employees, of a new version of the collective agreement on the right to organise and social dialogue that was adapted to reflect the ministerial order on trade union representation of 24 June 2013 (published in the Official Journal on 9 July 2013). At Crédit Mutuel, social dialogue encompasses all of the periodic negotiations the law requires for specific sectors. On 18 June 2013, a wage agreement was reached for Crédit Mutuel within the framework of annual pay negotiations, resulting in a readjustment of the minimum wage guaranteed for the ten jobs that serve as a benchmark for the classification scale applicable to Crédit Mutuel. Trade unions can also request negotiations on specific topics, provided that these fall within the remit of the Crédit Mutuel regional federations regarding negotiations. On 16 January 2013, the framework agreement on voluntary interfederal mobility was partially updated and signed by all representative trade unions representing Crédit Mutuel employees. Above and beyond new agreements, the Commission Paritaire Confédérale (CPC) oversees the implementation of existing agreements and prepares annual reviews on subjects that affect all parts of Crédit Mutuel (overview of professional training efforts, handling of disrespect, psychosocial risks, gender equality, employment of the disabled, progress report on the generation contract, etc.). Meanwhile, France s joint national commissions for monitoring and overseeing training and jobs in the sector (Commission paritaire nationale de l emploi CNPE and Observatoire des Métiers) also contribute to analyses of changes affecting the business. In 2013, the Observatoire des Métiers for Crédit Mutuel s sector initiated an internal analysis of changes in banking relations as they relate to the expectations of customers and to new technologies, and how these changes are affecting the organisation and evolution of the businesses. Observatoire des Métiers also looked in 2013 at how the integration of new employees is organised at Crédit Mutuel. TRAINING OUR EMPLOYEES MEANS MAKING MORE ADVICE AND SKILLS AVAILABLE TO ALL OUR MEMBERS AND CUSTOMERS 27 Annual report 2013

28 KEY FIGURES FOR RETAIL BANKING In millions Net banking income: 11,980 Gross operating profit: 4,166 Net profit, group share: 1, million retail customers

29 RETAIL BANKING, THE GROUP S MAIN BUSINESS Retail banking, the group s main business, encompasses the offers of Crédit Mutuel s 18 regional federations and CIC s six regional divisions. It also covers the specialised products and services marketed through the network, notably leasing, factoring, fund management and real estate. Retail banking generated net banking income of 11,890 million in 2013 (74.5% of the group total) and 1,892 million of net profit, group share (almost 72% of the group total). As the day-to-day banking partner of 28.2 million retail customers, Crédit Mutuel has a 14.9% share of the market for deposits and a 17.2% share of the bank loans market. The global economy expanded in 2013, both in emerging countries and the United States. The Euro area alone lagged, with GDP contracting by 0.4%. The situation in France remained problematic, with no bona fide structural reforms initiated and growth that ended the year not far above zero (+0.2%). The factors behind this imbalance are still in play, particularly public deficits and the situation in the job market. These persistent difficulties, combined with greater tax burdens, led many households to tap into their savings and limit their borrowing. In this environment of economic constraint, the group continued to provide support to all of its customers, relying on an ever more diversified portfolio of products and services. The group supported economic actors across the spectrum, posting a further increase in outstanding loans, and was particularly active in lending to businesses notably via medium-term equipment loans designed to support their growth. Innovation, was on the menu again, with the group notably expanding its mobile telephony services to pave the way for contactless payments and offering new ways to use mobile banking on mobile phones and digital tablets. These efforts were enhanced in 2013 by the provisions of the French law on the separation and regulation of banking activities, which caps certain overdraft-related banking fees for all customers and imposes a lower ceiling for very low-income customers. It also creates new obligations (15 days advance notice to customers before potentially debiting banking fees, introduction of measures to prevent over-indebtedness). At Crédit Mutuel, these provisions come on top of specific measures already introduced at the initiative of the regional federations for assisting members with financial difficulties. In a frozen housing market in which transaction numbers bottomed out in 2013, Crédit Mutuel focused on funding customers primary residences, particularly for the less well-off. The group is more concerned about consolidating its customer base than winning new customers through home loans. Today, new services and other growth drivers are fuelling its development. CUSTOMERS AND THE NETWORK CUSTOMERS POINTS OF SALE EMPLOYEES (average headcount) Crédit Mutuel continued to diversify its offer to meet all the needs from the simplest to the most sophisticated of its retail customers and, more generally, of its various customer segments. The group is making specialised online banking tools available to customers with Monabanq and Fortuneo ,961 5,920 79,060 78,482 For the more financially marginalised members of its customer base, Crédit Mutuel has for many years offered a full range of services for withdrawing cash and making payments in all circumstances. Since mid-2010, in line with industry commitments, these have included payment incident fee ceilings and real-time account balance alerts Customers (millions) of which retail Annual report 2013