CREDIT AGRICOLE S.A. Georges Pauget Chief Executive Officer

Transcription

1 CREDIT AGRICOLE S.A. Georges Pauget Chief Executive Officer Morgan Stanley : European Banks & Financials Conference April

2 2 Disclaimer This presentation may include prospective information on the Group, supplied as information on trends. This data does not represent forecasts under the meaning of European Regulation n 809/2004 from 29 April 2004 (chapter 1, article 2, 10). This information was developed from scenarios based on a number of economic assumptions for a given competitive and regulatory environment. Therefore, they are by nature subject to random factors that could cause actual results to differ from projections. Likewise, the financial statements are based on estimates, particularly in calculating market value and asset depreciation. The readers must take all these risk factors and uncertainties into consideration before making their own judgement.

3 3 Contents Solid results despite the market crisis Our producer/distributor business model Validity and resilience of our business model confirmed

4 4 Crédit Agricole S.A. consolidated results 2007 Solid results despite the market crisis Net income (Group share): 4,044m (-16.8%) ROE: 12.2% Net dividend per share: 2.51 Dividend per share: 1.20 (+4.3%) Pay-out ratio: 48% Optional payment of dividends in shares: 80%

5 5 Solid 2007 results despite the market crisis Net banking income: 16.8bn, up 3.6% versus 2006; 19.9bn, up 26% excluding the impact of the financial market crisis Robust organic growth Contribution from growth drivers, particularly outside France (Cariparma-FriulAdria, Emporiki, FGAFS) Gross operating income: 4.1bn; 7.1bn, up 31% excluding the impact of the financial market crisis Expenses up 23%, more than half of which relates to acquisitions and the remainder to LCL's competitiveness plan and organic growth Net income (Group share): 4bn, down just 16.8% Results confirm the validity of the Group's business model

6 Impacts of the crisis... on the 2007 financial statements, fully borne by CIB (in billions) Gross value* Net value* Discount rate* Impairment Allowances ABS portfolio % -0.4 CDOs: Mezzanine % -0.5 Impact on NBI Super senior % -1.3 = -3.2 Mark-to-market adjustment +0.2 Monoline exposure % -1.2 O/w ACA % -0.8 Impact on risk related costs * As at 31/12/2007 6

7 7 Contents Solid results despite the market crisis Our producer/distributor business model Validity and resilience of our business model confirmed

8 8 Outlook for the producer/distributor business model (1/2) Production Looking for economies of scale... Standardisation of basic banking products (payment methods, consumer loans etc.) Creation of production tools on a pan-european scale... due to pressure on margins EU regulations Consumer pressure Convergence in margins due to the gradual standardisation of the European market Establishment of the multi-channel distribution model Growing number of online banking customers Easier to compare services, quality, innovation, prices etc. Generalised development of mobile phones, becoming a universal banking tool Can be used anywhere in the world as a means of developing different types of customer Easy to use in the most sophisticated banks Main resource for a low-cost bank

9 9 Outlook for the producer/distributor business model (2/2) Production-distribution Dynamic management allows for: Acceleration in economies of scale and important cost savings Development of the industrial approach Discussions about customer perception and sales techniques resulting in: Innovation in services (new products) Innovation in distribution (new customer segments) Synergies are therefore a source of value creation We need to factor demographic changes and consumer behaviour into our innovative solutions

10 10 A proven business model Strong resilience to extremely unfavourable economic conditions Resilience of retail banking Thanks to the customer base (44 million retail banking customers, including consumer finance customers) Advantage of the origination-distribution model Sound understanding of customer needs, which are taken into account in creating products Simpler products that are easy to understand for both customers and vendors Structured products provide a better response to customers' increasingly demanding needs (development, clarity and standardisation) Innovation serves as a growth driver in our business model: examples Development of online banking, multi-channel offerings: (25% increase in the number of online banking customers in 2007) Creation of an original model for integration of the real estate business

11 11 Our producer/distributor business model Retail banking supported by structured business lines developing direct business activities International operations: in 19 countries Specialised financial services Insurance Asset management and private banking Corporate and investment banking Development of specific areas of expertise Access to distribution networks Balance between production and distribution Industrialisation of products

12 12 Key characteristics of our retail banking model Adapting our marketing offerings and distributing them via our networks Retail banking: Gold card, savings solutions, debit-credit card Life insurance: CAP Découverte for young workers, prudential life insurance, funeral cover Asset management: GEMS (Global Equity Multi-Strategies) : global equities range on international markets Financial services: remote payments via mobile phone, electronic signature Targeting new types of customer Consumer finance: Near prime offering Créditlift: focusing on sensitive customers in France and Italy Retail banking: L Autre Carte (500,000 cards in its second year)

13 13 Our network acquisition strategy: presence in the culturally homogenous region of Southern Europe Success and speed of integration of retail banks acquired Projected profitability of our Italian network is ahead of initial estimates Greater productivity of banks in Italy (cost/income ratio : 53%, NBI/employee : 220,000 ) 2010 target revised upwards: pre-tax profit of 1bn All business lines are tied to various distribution networks Thanks to the various Italian subsidiaries and business lines (insurance, consumer finance, CIB, asset management) the initial target of synergies of 155m by 2010 has been increased to 253m Thanks to Emporiki, strong outlook for expansion in the Balkans (insurance, consumer finance) Expansion of BES in Portugal (insurance, consumer finance) Bankinter A very high quality asset, with limited exposure to the risks of property development A remarkable management team, able to combine innovation and profitable growth One of the most advanced banks in Europe in e-banking

14 14 Contents Solid results despite the market crisis Our producer/distributor business model Validity and resilience of our business model confirmed

15 15 Solidity and validity of the business model: diversification and balance Diversified business lines ensure strong resilience Revenues balanced between business lines Corporate and investment banking Net banking income 17.0% 38.5% Retail banking Corporate and investment banking Net banking income 32.2% Retail banking 30.6% 44.5% 37.2% Specialised business lines Excluding impacts of market crisis Specialised business lines Balance between revenues in France and from international activities Net banking income Net banking income International France International France 44% 56% 49% 51% Excluding impacts of market crisis

16 16 Solidity and validity of the business model: balance between three main business lines Balanced contribution from three main business lines CAGR +20.4% 2,895 2,727 3,227 * 2,886 * Contribution to net income - Group share CIB 2,284 2,403 Specialised business lines Retail banking 1,763 1,742 S1-04 S2-04 S1-05 S2-05 S1-06 S2-06 S1-07 S2-07 * Excluding impacts of market crisis

17 17 A balanced model based on a solid network Solid customer base of 44 million customers (excluding double counting), including an additional 4 million since million retail banking customers in France 5 million retail banking customers abroad 20 million consumer finance customers (including customers of bank networks) 11,000 branches worldwide, including an additional 2,000 since ,100 branches in France 1,900 branches abroad

18 18 Model based on the strong momentum of our three main business lines Our retail banks in France and abroad Continuing strategy of entering new markets Roll-out of all of the Group's businesses locally Specialised business lines (SFS, asset management private banking, insurance) Remarkable and recurring performances Significant and targeted international expansion Corporate and investment banking Strong growth in structured finance, brokerage, fixed income derivatives Policy of strict risk management Reinforcement of all controls Apart from capital market activities, all of the Group's business lines have seen improvement in earnings

19 19 French retail banking: The leader with 28% market share Solid expansion in business assets Brisk rate of branch openings in RB: Customer loans ( bn) % +10.7% for the Regional Banks +26 for LCL Optimisation of general operating expenses In % for the Regional Banks in 2007 despite an increase of investments in the network (+4.8%) +0.9% for LCL in 2007 thanks to considerable efforts to improve productivity Dec 05 Dec 06 Dec 07 LCL: Customer loans ( bn) +10.4% % Acceleration in the development of online banking for the Regional Banks Implementation of the LCL competitiveness plan Dec 05 Dec 06 Dec 07

20 20 International retail banking Eastern Europe 254 branches, Poland, Ukraine, Serbia Italy 725 sales outlets, 1.4 million customers Greece 450 branches (including 70 in the Balkans) 1.5 million customers Portugal Stake in BES (23.8%) Morocco 200 branches 631,000 customers Egypt 51 branches, 132,000 private banking customers West Africa 41 branches, Senegal, Ivory Coast, Cameroon, Gabon, Congo Uruguay 35 branches, 139,000 customers International retail banking Asset management & insurance Specialised financial services

21 21 Cariparma FriulAdria: Integration is completed, focus on growth Acquisition and integration process completed in eight months IT migration of Intesa branches in record time Highly competitive new entity Cost-income ratio of 53.1%, 12 percentage points better than comparable networks Support of all of the Group's business lines FGAFS, CAAM Sgr, BFI, life insurance (Po Vita), Agos Promising results for the future Full-year contribution to CASA's results of over 250m in 2007

22 22 Emporiki: return to profitability Extensive transformation complete On an operational, organisational and commercial basis Establishing its presence in new markets 75 new branches created in 2007, including 65 in the strong growth region of the Balkans Creation of 12 business centres dedicated to SME clients Successful advertising campaigns: home loans, consumer loans, bancassurance offering enhanced with the launch of Emporiki Assurances Gains in market share in deposits, decline in loans due to a much more rigorous risk management policy Return to profitability in 2007 Net income (Group share): 45m

23 23 Specialised financial services: a European leader A solid business line in France and abroad Sofinco outperforms its competitors Commercial efficiency of Sofinco and Finaref Renowned scoring, recovery and risk assessment techniques New synergies from the development of a shared platform for handling collections Innovative services for electronic signature and payment by mobile phone International expansion in 2007 buoyed by: Acquisition of 100% of Interbank N.V. and DMC Groep in the Netherlands Creation of new subsidiary Sofinco Saudi Fransi in Saudi Arabia Launch of Créditlift in Italy, focusing on near-prime customers More than half of assets under management are now outside France The division's net banking income rose by 13% in 2007 and net income (Group share) by 28%

24 24 AM, insurance, private banking: a leader which expands internationally No. 1 in asset management in France, No. 2 insurer in France, market leader in the top end of the market in France Acceleration in international expansion Reconfiguration in Italy with the new Crédit Agricole Asset Management SGR entity Coverage of new countries: Saudi Arabia, Australia, Brunei, China, Canada In private banking, acquisition of 100% of the Bahamas subsidiary of National Bank of Canada and Banque Sarrazin in Luxembourg In life insurance, launch of a company in Japan; the Group is continuing with its expansion in Italy, Greece and Portugal Net banking income up 11.2% and net income (Group share) up 23% in 2007

25 25 Corporate and investment banking: a diversified business model Strong momentum in the main business lines Steady growth in average quarterly revenues from structured finance activities Strong growth in commercial banking revenues in France and abroad Leading position in international rankings Strong momentum of structured finance activities Global performance of capital market activities (fixed income derivatives, equity derivatives, cash management, forex) Very active brokerage business (CLSA, CA Cheuvreux, Calyon Financial) Solidity and diversification of our business model 85% of direct revenues originate from customers Significant geographical diversification Brisk growth of the corporate and institutional client base Policy of gradual and regular investment (equity derivatives, commodities)

26 26 Conclusion Crédit Agricole's business model has held up well against the current market crisis Integration being achieved, we are focusing on commercial development We are not initiating any more significant acquisitions in the current market crisis An exceptional investment programme for 2008 and 2009 has been launched focusing on risks and control systems We have given the market a strong sign of confidence by increasing our dividend

27 Dividend policy in keeping with our strategy of durable growth CAGR +14% ** CAGR +25% ,407 1,890 2,000** 2001* 2002* 2003* 2004* 2005* 2006 Net dividend per share (in ) Amount paid in dividends (in millions) *Adjusted for the January 2007 capital increase **Subject to approval from the general shareholders' meeting of 21/05/2008