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

21 FOCUS Listening to small business owners Small business owners are a cornerstone of the economy. As entrepreneurs, employers, and business leaders, they often struggle with financing issues and/or buyouts. Moreover, since a large portion of their wealth is invested in their businesses, they need reliable capital protection and wealth management services. Small business owners are a strategic customer segment for Crédit Agricole; many of its Regional Banks target their needs and offer investment banking services across France. Their goal is to assist small business owners with more than just their day-to-day banking requirements. Four Regional Banks* in central France have joined forces to create Carcie, a special unit designed to help companies expand and carry out Mergers and Acquisitions (M&A) transactions. Two out of every three companies will change hands over the next five years, notes Sylvie Rodier, who manages this task force. Therefore Carcie s market offers considerable potential, since it comprises 2,300 companies of over 3 million of revenue each (for a total of 23 billion!) and a total of 126,000 employees. Executives are often isolated and need someone to talk to, adds Sylvie Rodier. The recent crisis has simply exacerbated the situation. By supporting them, locating investment funds in their companies, and enabling them to realise their gains, we can provide them with a sense of relief and sometimes loosen their approach to risk. Carcie also assists small business owners looking to acquire other companies. For example, in 2007 Régis Chevrinais, a former senior manager at a US corporation and now the head of Quadrilaser (a French image processing company), decided he wanted to buy an SME in the graphics industry. I soon realised that very few investment banks deal with SME acquisitions, he recalls. Not surprising considering that in a traditional investment bank s business model revenue comes from commission fees, which creates an incentive to focus Régis Chevrinais Head of Quadrilaser Having a specific M&A department and divisions that exchange information is crucial. on large transactions. However, Crédit Agricole s Regional Banks aim to build long-term relationships with SMEs, so that they will then turn to Crédit Agricole for loans, investments, operating transactions, etc. Around 70% of the inflows of French private banking comes from company sales. Such opportunities can feed all of Crédit Agricole s businesses through synergies, and can improve their services. Having a specific M&A department and divisions that exchange information is crucial, remarks Régis Chevrinais. At Crédit Agricole, the different business units work together. I was also impressed by the way Crédit Agricole s employees listened to me, gave me advice, and considered my particular acquisition goals, instead of setting their solution; that makes the difference. Carcie found the hidden gem that Régis Chevrinais was looking for, and he closed the deal six months later. * The Regional Banks of Val de France, Touraine Poitou, Centre Ouest, and Centre Loire employees assigned exclusively to SMEs (52,000 customers) Executives are often isolated and need someone to talk to. Sylvie Rodier Head of Carcie 18 MAIN STORIES

22 Sodica: a network for M&A deals Idia, a beefy fund for the agricultural sector The agricultural sector is one of the biggest export sectors in France. And it innovates continuously with a long-term vision, notes Jean-Jacques Ricoleau, Chairman of the private equity fund Idia. Idia is the largest private equity fund in France that invests in agricultural companies, and has 1.1 billion of assets under management. A sizable resource for this largely family-owned, capitalistic sector where companies now need to shore-up their capital (like companies everywhere during the current financial crisis). Idia s strengths lie in its specialised knowledge, which stems from Crédit Agricole s farming industry roots, and its long-term culture. Its average investment horizon is around seven years, which is longer than that of conventional funds. We pick companies based on their plans for the future, before looking at the effects of financial leverage, explains Jean-Jacques Ricoleau. Since we are a consulting firm, we tend to hold up well during market crises, remarks Jean-Jacques Ricoleau when asked about Sodica, a Crédit Agricole subsidiary that advises midcaps on M&A transactions. This consulting business creates substantial revenue synergies across Crédit Agricole. For instance, in 2008 when Sodica arranged an LBO for Sogal, France s leading supplier of custom-made sliding doors, the firm brought in LCL and Crédit Agricole Regional Banks for the senior debt, and Crédit Agricole Luxembourg for the liabilities guarantee. Sodica works with LCL and the Regional Banks regularly to arrange project financing and find counterparties. Indeed, their unparalleled coverage across France is a valuable asset in of itself! Sodica also manages a database of very small businesses (called e-ris) for the Regional Banks a bit like an online dating website that matches entrepreneurs with potential buyers. Crédit Agricole Immobilier: The Hauts de Bastide apartment building in Bordeaux, Qualitel certified and awarded by Bleu Ciel EDF in the renewable energy category Crédit Agricole Immobilier, Crédit Agricole s property development subsidiary, serves as the project owner or promoter for construction projects across France to meet the specific needs of individuals, investors, and institutional investors. In 2008, Crédit Agricole Immobilier delivered 2,400 new residences and 137,000 m² of commercial property and warehouse space. The subsidiary also builds schools, sports stadiums, concert halls, and healthcare establishments all of which are designed to meet strict environmental criteria. MAIN STORIES 19

23 We are the largest foreign banking group in Italy, and we intend to become a major player in the Italian banking market. We will keep a federal arrangement so that each division can remain independent but still rely on centralised services. This model has proven ideal for allowing us to be near our customers, meet their needs effectively, and anchor ourselves in the region. Looking ahead, other small or medium sized banks might be interested in the possibility of being able to keep their positions in their local markets while receiving the backing of a worlwide banking group. Ariberto Fassati Head of Crédit Agricole S.A. Group in Italy and Chairman of Cariparma International retail banking A business model that CAn be exported effectively Crédit Agricole set up its full range of businesses in Italy in record time, through its Cariparma FriulAdria Italian banking network. The secret to this rapid deployment is Crédit Agricole s business model, which is based on building strong local ties and facilitating cooperation among its multiple businesses. Two years. That s how long it took for Crédit Agricole to set up its businesses in Italy and make the country its second-largest domestic market. A huge task in terms of organisation (see inset), and one that illustrates how well the Green Bank s business model is both portable and exportable. The expansion effort began in late 2006, even though Crédit Agricole had been present in Italy since 1991 through its stake in Banca Intesa. When Banca Intesa announced its merger with Sanpaolo IMI in October 2006, Crédit Agricole S.A. decided to end the Banca Intesa partnership and establish its own operations in the country. The Group built a banking network from 209 Banca Intesa branches and two Italian Regional Banks, Cariparma employees work for the Group in Italy, which represent 20% of the staff abroad and FriulAdria. Both Cariparma and FriulAdria use a business model similar to that of Crédit Agricole s French Regional Banks, with entrepreneurs and local decision-makers heavily involved in the banks governance. Moreover, Cariparma is consistently ranked as one of the top Italian banks in terms of profitability. These two Italian Regional Banks had a lot to gain from joining Crédit Agricole: they could draw from all of the Green Bank s 20 MAIN STORIES

24 services yet would still be able to function independently. These benefits were well-understood by all parties Cariparma, FriulAdria, and Crédit Agricole s senior management. The political will to move forward was strong at all levels, recalls Ariberto Fassati, Head of Crédit Agricole S.A. Group in Italy and Chairman of Cariparma. The two years from early 2007 to late 2008 were extremely hectic, with the start-up and ramp-up of Italian divisions for all of Crédit Agricole s businesses. A property and casualty (P&C) bancassurance division along the lines of Pacifica was created in 18 months, the first of its kind in Italy (see the interview with Marina Mantelli). Eurofactor, Crédit Agricole s factoring subsidiary, began offering factoring services through the Cariparma FriulAdria distribution network; Italy is the second-largest factoring market worldwide with 123 billion of receivables bought in In consumer finance, Crédit Agricole jumped to the top of the Italian market following the merger between Agos, a Sofinco subsidiary with a long history in Italy, and Ducato, a Banco Popolare subsidiary, announced on 30 April After adding in the Italian operations of Calyon, Crédit Agricole Asset Management, Crédit Agricole Vita, Crédit Agricole Creditor Insurance, Crédit Agricole Leasing, and FGA (a joint venture between Fiat and Crédit Agricole Private Equity), Crédit Agricole has a total of 12 Italian divisions spanning its entire range of businesses. These divisions work hand-in-hand with the Italian banking network, as is done in France. This means that Crédit Agricole customers (individuals and corporations) can use the same services in both countries. Furthermore, thanks to a customer support department in Milan, they can receive comprehensive, seamless assistance on both sides of the Alps. Crédit Agricole is now Italy s ninth-biggest bank but the Group doesn t plan to stop there. We are the largest foreign banking group in Italy, and we intend to become a major player in the Italian banking market, remarks Ariberto Fassati. We will keep a federal arrangement so that each division can remain independent but still rely on centralised services. This model has proven ideal for allowing us to be near our customers, meet their needs effectively, and anchor ourselves in the region. Looking ahead, other small or medium sized banks might be interested in the possibility of being able to keep their positions in their local markets while receiving the backing of a worlwide banking group. Cariparma and FriulAdria branches Building a national organisation This Italian deployment necessitated substantial changes to the two banks business processes and IT systems. Procedures, risk management, reporting, HR the ramifications were huge, explains Francis Canterini, Deputy CEO of Cariparma (until February 2009) and the man behind the project from the very first discussions with Banca Intesa. After Crédit Agricole officially acquired Cariparma, FriulAdria, and 209 Banca Intesa branches in late 2006, some of the first challenges were to migrate these disparate entities onto a single IT system and to allow Crédit Agricole to break from Banca Intesa and function independently. These new entities were linked to the Crédit Agricole Group through centralised functions, such as a centralised risk management department modelled after the one in France, which separates compliance, auditing, risk assessment, and internal controls. Another key challenge was to find the most efficient way to tie the two Italian banking chains to Crédit Agricole s specialised businesses, in order to create the optimal conditions for cooperation. And to do all this while ensuring that Cariparma and FriulAdria remain the best players in the Italian banking landscape, recalls Francis Canterini. A goal reached just 18 months later. Cariparma FriulAdria received a 5-star rating from the Italian weekly newspaper Il Mondo, putting it in the upper echelon of Italian banks. This is the newspaper s highest rating and is based on three criteria: financial stability, risk management, and profitability. Cariparma FriulAdria was ranked No. 1 in Italy for profitability. MAIN STORIES 21

25 Employees from the French insurance division spent a lot of time teaching the entire process. Questions to... Marina Mantelli Associate Director of Crédit Agricole Assicurazioni As a pioneer in Italian bancassurance, Crédit Agricole Assicurazioni launched a new car insurance policy in only nine months by drawing from the know-how of Pacifica. What growth opportunities are there for Crédit Agricole in the Italian Property and Casualty (P&C) bancassurance market? The Italian P&C insurance market is worth around 40 billion, but most insurance policies are sold through traditional distribution channels. Bancassurance makes up only 1.8% of this market, versus 10% in France. Until now Italian banks have been hesitant to offer P&C insurance due to the large amount of investment needed and cultural shift that bancassurance would require relative to traditional claims management processes. Customer satisfaction takes on a whole other dimension when you are both the customer s insurer and its bank! But we have a major advantage: the established know-how of Pacifica and the backing of the entire Crédit Agricole Group. Why did you start with car insurance? We wanted to start with a product that was fairly complicated and relevant to a large percentage of Cariparma FriulAdria s customers. We also wanted to break from the existing banking culture by building new customer relationships that go beyond the scope of strictly finance. What were the key success factors of this strategy? We had a very skilful sales and marketing network in Cariparma FriulAdria, and we were eager to make the most of this competitive advantage. All levels of management were actively involved, which was crucial, as was our methodology. Employees from the French insurance division spent a lot of time teaching the entire process, explaining how a claims management department works, etc. We needed to understand all of that fully before we could tailor it to suit Italian regulations. How are the results so far? Extremely encouraging. We carried out 3-month pilot tests at 14 branches to test the procedures and marketing materials, then started offering car insurance policies at all branches at the end of We now plan to expand our product line and further develop the skills of our distribution network. The Agos-Ducato merger In April 2008, Crédit Agricole and Banco Popolare officialised the merger of their two consumer finance subsidiaries, Agos and Ducato. The merged entity will be 61% owned by Sofinco and 39% owned by Banco Popolare. Agos is a Sofinco subsidiary with a long history in Italy, and one of the leading providers of revolving credit cards and special-purpose loans. Ducato is a major player in personal loans. This merger will propel Crédit Agricole to the top of the Italian market. Leading consumer loan provider in Italy with a 14% market share, following the merger between Agos and Ducato 22 MAIN STORIES

26 The «Laboratory» with the technological innovations of the Crédit Agricole Innovation GroWth through better Customer service Electronic signatures, Double Action card, contactless payment, simplified account management Crédit Agricole is often a pioneer in new services and sets itself apart through innovation. The bank listens to its customers, who want increasingly simpler transactions and greater freedom of choice. Payment methods: standing out by staying in the background Today consumers can make purchases from just about anywhere and at just about any time. Payment services should work the same way. They should be easy-to-use and invisible, remarks Narinda Viguier, Head of Interbank Systems and Strategy at Crédit Agricole. Consumers want more transparency, better performance, and greater mobility and this trend has been accentuated by the recent European Payment Services Directive. In terms of commercial trade, globalisation and the Single Euro Payments Area (SEPA) have spread the use of electronic transactions. Payment systems should evolve to match today s global, mobile lifestyles, yet at a reasonable cost and with maximum security. Moreover, they should remain hidden to users, but still be differentiated enough to succeed in a highly competitive market. A difficult circle to square! But it s only by reconciling these seemingly opposing requirements that payment systems will be able to advance with the times. Below are a few innovations that work in the background so as to stand out even more. Consumers want more transparency, better performance, and greater mobility. Narinda Viguier Head of Interbank Systems and Strategy Billion dealings ordered by Crédit Agricole in the French Interbank System MAIN STORIES 23

27 Contactless payment is just around the corner The Double Action card: double services, double protection, and double innovation Starting in 2008, customers will be able to decide, at the moment of purchase, whether to pay by an immediate debit or by tapping into a credit facility thanks to Crédit Agricole s Double Action card. This innovation stems from the EMV chip, a technological breakthrough and new industry standard that allows cards to be used in more sophisticated applications. This enables Crédit Agricole to offer new services, since we have our own card personalisation department that can develop these ideas further unlike most of our competitors, notes Julie Maghsoudnia, Head of Crédit Agricole s Card Issuance Division. But that s not all; the Double Action card also provides two types of insurance (Sécurishopping and Sécuripanne) for purchases made with the card. This enhanced-services card won the 2008 French Innovation Oscard services category, and was awarded for its design. The clear strip running across the card embodies its multi-function, multi-usage purpose and the associated desire for transparency. The card is made from a unique translucent plastic whose properties have been successfully proven another sign of Crédit Agricole s technical prowess! Before long consumers will be paying for their groceries with their mobile phones, thanks to a new embedded bank card. In 2007, a group of mobile phone operators and banks, including Crédit Agricole, began testing this new concept (called Payez Mobile) in two French cities, Caen and Strasbourg. Payez Mobile represents a major innovation that promises numerous benefits, such as less time spent at cash registers and a reduced use of bills and coins. During these tests, 1,000 customers were given contactless payment mobile phones and 400 vendors were given contactless readers linked to their existing payment terminals. Customers could use the mobile phones to pay for purchases of any amount, and could choose whether to require a PIN code for purchases under 20. In terms of the back-office, a new player joined the mobile phone operator in the payment services value chain: a platform to manage the embedded bank card. The test proved immensely successful, as 91% of the customers and 82% of the vendors reported satisfaction with the new system. Before long, mobile phones will be used for a wide range of contactless services such as public transport tickets (e-ticketing), store vouchers (e-couponing), etc. Payment systems will naturally be an integral part of this technology, and we are already thinking about what other services we can offer customers, comments Daniel Savoyen, Head of Innovation and Technological Monitoring at Crédit Agricole s Payment Systems Division. A pilot test is scheduled for By 2012, one-third of the mobile phones in France should be equipped with contactless payment systems. Electronic payments make life easier for small businesses Small business owners often have to spend time on administrative tasks like managing payroll and settling supplier invoices, which cuts into the time that they could be spending with customers. Therefore Crédit Agricole has developed an online service called Web EDI that entrepreneurs can access directly from their offices, freeing them for more strategic matters. For private practices, such as doctors offices and law firms, the daily data transfer across phone lines required by conventional credit and debit card payment systems results in prohibitively high phone bills. To solve this problem, Crédit Agricole has developed light terminals that work over the internet thereby reducing the phone charges. 24 MAIN STORIES

28 A table that facilitates banker-customer dialogue It looks like something out of a spaceship in a sci-fi movie but it is in fact much easier to use. It s a prototype of Crédit Agricole s new Table Surface, a table being developed to give customers an intuitive vision of how to optimise their various accounts. Bankers and their customers can use this high-tech piece of furniture together to generate graphic metaphors, and to model different account allocation scenarios (current accounts, various types of savings accounts, employee savings plans, consumer loans, etc.). The table gives customers simulations of how their accounts would evolve over the long-term, so that they can make the decisions best-suited to their needs. In addition, the table is ergonomic and similar to new-generation mobile phones in that cameras under a glass panel film the table s surface and users hand movements. I thought of this application as soon as I heard about the table, recalls Jean-Philippe Blanchard, Head of Innovation and Industrial Performance at Crédit Agricole. While the checking and savings accounts available to customers are relatively straightforward, it s difficult to figure out the optimal way to use them and therefore sell them. Crédit Agricole developed this table in association with Intuilab, a start-up based in Toulouse and specialised in man-machine interfaces, and Microsoft, which designed the software for the table s surface Microsoft s first concrete global banking application. Only a small number of these tables currently exist and they are still expensive ( 15,000), since large-scale manufacturing of the tables has not yet begun. This year the table will be taken on a road show to numerous Crédit Agricole sites to show employees its commercial and informative potential. Digital signatures for online transactions As another sign of Crédit Agricole s drive for innovation, in 2005, it became one of the first banks in France to certify digital signatures. Digital signatures were initially used by French companies to submit VAT statements electronically, but have since become more widespread; today Crédit Agricole s online banking customers can use them to carry out sensitive transactions. Digital signatures can also be used to sign contracts, since they carry the same legal value as handwritten signatures. A boon for consumers who demand flexible banking services and the ability to carry out transactions whenever they want, from wherever they are. MAIN STORIES 25

29 Strategy STRENGTHS FOR PULLING OUT OF THE CRISIS AHEAD Crédit Agricole is already looking ahead to after the crisis, and has updated its strategy to suit the radically new banking landscape that will be marked by heightened risk aversion, weakened sectors, and a need to exploit synergies and achieve critical mass in order to face the headwinds of globalisation. The new focus for Calyon, the joint-venture with Société Générale in asset management illustrate how Crédit Agricole can leverage its business model and competitive advantages while ensuring their long-term potential. A new focus for Calyon In September 2008, Crédit Agricole s management unveiled a 2-year plan for Calyon to survive the crisis by focusing on its core skills: structured finance, fixed income markets, and brokerage services. Calyon will also take advantage of its global footprint, with operations in 57 countries (some dating back to the 19th century) and its solid customer base. The goal is for Calyon to become a corporate and investment bank CAAM-SGAM, an enhanced business model for asset management In January 2009, Crédit Agricole S.A. and Société Générale signed a preliminary agreement to merge their asset management operations into a new entity that will be 70% owned by Crédit Agricole S.A. and 30% owned by Société Générale. This new entity will sell savings account products through both Groups banking networks, and will benefit from the complementary regional coverage, customer base, and products and services of Crédit Agricole Asset Management (CAAM) and Société Générale Asset Management (SGAM). Moreover, the ensuing economies of scale will result in lower operating costs. This agreement underscores the advantages of Crédit Agricole s production/distribution business model in a sector suffering from greater risk aversion on the part of investors. Many financial institutions have decided to refocus on their core banking network and outsource their asset management operations, which presents a huge growth opportunity for CAAM-SGAM. 26 MAIN STORIES

30 that can effectively meet Crédit Agricole s needs. The 2-year plan also addresses the limits of its diversification and critical size in some areas. It sets a target of recurring net income of 1 billion by 2010, which will be achieved through enhanced risk management ( 200 million of investments over two years) and 300 million of cost reductions forecast by end-2009 and already achieved end This major restructuring will be implemented through measures taken by Calyon s individual businesses to improve their risk management, profitability, and comprehensive consulting services (see the interview with Jean-François Marchal, Head of Structured Finance). Y Y IN BRIEF Public-private partnerships The city of Le Mans, France, has selected Vinci to build its new stadium. Calyon is leader for this 100 million financing, which involves two Crédit Agricole Regional Banks (Anjou-Maine and Normandie Seine). Project financing In 2008 the Chinese company Huaneng Power International acquired Tuas Power, one of Singapore s largest electricity producers, for SGD* 4.2 billion. Calyon participated in the deal as the mandated lead arranger for an interim financing package of SGD 2.25 billion. * Singapore dollars Our diversified portfolio makes us well-positioned to weather the crisis. Questions to... Jean-François Marchal Head of Structured Finance It s no coincidence that structured finance is one of the main pillars of Calyon s new strategy. Crédit Agricole s corporate and investment bank has an enviable competitive position, as it is one of the five leading players in each of its businesses globally. What is involved in the restructuring that you started a few months ago? We grouped our businesses by sector rather than region in order to tear down the walls between them and make better use of our skills. We grouped our export and trade finance operations together for the same reasons. We merged our consulting business into our natural resources department so that we can help customers plan and prepare for their large projects. Finally, we moved our M&A financing operations to structured finance. What are Calyon s strengths in structured finance? We have been in this market for a long time, through Crédit Agricole Indosuez as well as Crédit Lyonnais. Their merger underscored the importance of this business and gave it a global scope. In addition, we have established a risk management approach over the years that we strictly adhere to under all circumstances. We have been through crises in the past, which taught us the value of being thorough in our stress test assumptions when testing the robustness of our financial models. We also prefer to use short-term financing so that we can rearrange our maturity schedules if some sectors are facing difficulties. How has the crisis affected your business, and what have you done in response? The crisis has weeded out many of our competitors, but we have been able to keep working since we are lucky enough to be part of a large group. The hardest-hit sectors, like property and maritime shipping, make up only a small percentage of our volumes. Fortunately, business has remained buoyant in export finance and infrastructure projects thanks to support from government stimulus plans. The entire economy can t grind to a halt at once that s why we aim to have a diversified portfolio. MAIN STORIES 27

31 Steve Howard Chief Executive Officer of The Climate Group Sustainable development moving towards A low-carbon economy The Climate Principles reflect a commitment made by financial institutions and none more than Crédit Agricole to tackling climate change, an issue that has major ramifications for not just the environment but also the entire economy. The working group continues to move forward despite the dramatic downturn in the global economy, notes Steve Howard, CEO of The Climate Group, a not-for-profit organisation that helps governments and businesses in all sectors contribute to the fight against climate change. In 2006, The Climate Group began working with leading financial institutions, including Crédit Agricole, to develop The Climate Principles, a code of best practices for dealing with the economic aspects of climate change. Crédit Agricole, two other banks (HSBC and Standard Chartered), and two reinsurers (Munich Re and Swiss Re) signed The Climate Principles in December While the financial crisis could have delayed the adoption process at some companies, at Crédit Agricole, the fight against climate change is a top priority in our corporate social responsibility policy, notes Bernard Michel, Executive Committee Member and coordinator of The Climate Principles in the Group. Regardless of the crisis, when it came time to sign, we adopted the Principles without hesitation. Along with the Principles other early adopters, Crédit Agricole will continue efforts to reduce its environmental impact. This entails not only curbing the direct effects of its operations, but also taking advantage of its considerable sphere of influence. Bernard Michel points out that financial institutions, which serve as advisers, lenders, investors, and insurers, can make a major contribution by helping customers understand and manage the risks and opportunities presented by climate change. Several Crédit Agricole businesses already consider environmental factors. For example, Crédit Agricole Private Equity has created the CapÉnergie fund to invest in projects designed to improve energy efficiency. And Unifergie, a Crédit Agricole leasing subsidiary, specialises in green financing. 28 MAIN STORIES

32 In 2007, the European Investment Bank (EIB) selected Unifergie as its exclusive partner in France for renewable energy projects. The EIB has already given Unifergie a 100 million package, and plans to give two more packages in 2008 and 2009 for a total of 550 million. This is the first partnership of its kind in France. Other Crédit Agricole subsidiaries have introduced even more far-reaching initiatives; for instance, Calyon is a founding signatory of the Equator Principles. Crédit Agricole retail banks encourage customers to adopt environmentally-responsible practices through targeted positioning and special products such as home improvement loans for energy-efficiency improvements and proportionally lower car insurance premiums for green vehicles. Banks that have signed The Climate Principles will soon meet in two working groups to refine a set of indicators. One group will address project finance and the other will address insurance two sides of the same climate change story. For instance, the threats facing Holland s dykes serve as a stark reminder that all forms of global warming bring serious threats as well as promising investment opportunities. Our role is to help customers cope with these new risks, exploit the wealth potential of low-carbon activities, and position themselves to innovate, explains Brigitte Drège, Senior Officer Sustainable Development at Crédit Agricole. With a key focus on the danger that, for example, a car manufacturer could pose to its banker if it forgets to review its R&D strategy. We will have to cut our greenhouse gas emissions by twothirds in the coming decades, even though the economy will continue to expand even double or triple, explains Steve Howard. All types of growth will soon need to be low-carbon. The transition could seem modest on the surface; we will still drive cars, although they will probably be electric, and we will still light our cities. But this revolution will be just as radical as that caused by new technology in terms of its impact on society. Banks, which are at the heart of the economy, will have to meet these challenges if they are to remain leaders. And that s exactly what the first signatories of The Climate Principles realise. CapÉnergie, a fund focused more on industry than finance The CapÉnergie fund was created by Crédit Agricole Private Equity in 2006 to invest in renewable energy, energy efficiency, and energy infrastructure companies in France and throughout Europe. The fund, which currently has 109 million of assets under management, uses a targeted approach that differs from those used by traditional private equity funds. We are shareholders in these companies and speak with their management teams daily, in order to help their businesses grow effectively. We aim to support their expansion by opening the door to all the services provided by Crédit Agricole, explains Sylvia Raussin, Investment Manager at Crédit Agricole Private Equity. The fund s investment criteria include financial aspects as well as the quality of the people and assets. These companies plan to generate energy over the next few decades, so it s essential that we assess the quality of their assets before we invest. France and its European peers have set an ambitious target, called 3x20 : cut greenhouse gas emissions by 20%; cut energy use by 20%; and generate 20% of their energy from renewable sources. All three are considerable growth drivers for a market that adds value and creates local jobs. We are shareholders in these companies and speak with their management teams daily, in order to help their businesses grow effectively. Sylvia Raussin Investment Manager at Crédit Agricole Private Equity MAIN STORIES 29

33 At Normandie Seine Regional Bank, sustainable development is banking-compatible [...] a bank lends out money that doesn t technically belong to it. Sustainable development follows a similar concept. Guillaume Lefebvre Deputy Chief Executive Officer of Normandie Seine Regional Bank Companies and local governments in Normandy wishing to bring their operations into compliance with France s High Environmental Quality (HQE) standard, and looking for a successful role model to follow, turn to the Normandie Seine Regional Bank administrative building. Normandie Seine Regional Bank measured its carbon footprint, then decided to cut its emissions by 20% and turn its headquarters into a model of energy efficiency. It also introduced numerous sustainable development products in 2008, such as lowinterest-rate loans for energy-efficiency projects, sustainable development savings accounts, and socially responsible investment funds. The banking business involves maintaining a balance between the trust that you inspire among depositors and the trust that you place in borrowers. In other words, a bank lends out money that doesn t technically belong to it. Sustainable development follows a similar concept. We are living on the Earth for now, but it doesn t really belong to us, notes Guillaume Lefebvre, Deputy Chief Executive Officer of Normandie Seine Regional Bank and Head of Projects. Only by basing our business on sustainable values that can we create value sustainably. Carbon footprint, a genuine measure When a bank talks about its carbon footprint, is it simply using a marketing gimmick? Not really. In 2006 Crédit Agricole measured the carbon footprint of its French operations, and found that its 45 buildings (with a total of 17,400 employees) generate as much pollution as the 100 th largest production site in the country. So the Group s decision to launch an offensive against its environmental impact was not just a ploy. Its first target was the 16,500 tonnes of CO 2 emissions in 2007 resulting from the buildings energy use. Crédit Agricole plans to cut this figure by 15% in three years. To offset the balance in 2008, the Group bought certified emission reduction (CER) credits (under the Kyoto Protocol) related to a biomass power plant in Brazil that uses wood scraps. It then cancelled the credits directly to prevent them from being resold. These credits offset 15,000 of CO 2 emissions. We wanted to find an agriculturally-related CER project in a country committed to sustainable development. Some of the money will be given to Unicef Brazil to help build schools in the Amazon, in accordance with Brazilian law, explains Michel Auzet, Head of Environmental Affairs at Crédit Agricole S.A. of the power generation projects financed by Calyon use renewable energy customers had signed up for Crédit Agricole s environment-related loan by the end of 2008, for a total of 300 million (vs. 6,300 customers at end-2007) 30 MAIN STORIES

34 KEY FACTS AND FIGURES MILESTONES is Crédit Agricole's Tier 1 Ratio (at 01/01/2009) which reflects the real financial resources of a powerful Group. This level of capital proves that Crédit Agricole S.A. is solid. In 2008, the Bank demonstrated its flexibility and ability to weather a storm. Below are some insights into a bank that combines sound resources with top-notch skills.

35 LOCAL PRESENCE AND EXPERTISE Abusiness model combining the strength of networks with a firm foothold in their region and the efficiency of production-oriented business lines. french retail BAnKInG k 76,000 employees 39 Crédit Agricole Regional Banks Nearly 7,100 branches million customers million customers k 22,000 employees More than 2,050 LCL branches, mainly located in urban area InTernATIOnAL retail BAnKInG k 30,500 employees Present in more than 20 countries mainly in Southern and Eastern Europe and around the Mediterranean basin Nearly 2,400 branches million customers 32 MILESTONES

36 SPecIALISeD financial SerVIceS k 11,350 employees The European leader in consumer finance, present in more than 20 countries French leader in lease finance and factoring million customers ASSeT MAnAGeMenT, InSUrAnce AnD PrIVATe BAnKInG billion assets under management k 8,650 employees Market-leading positions in France and Europe in: Asset management and securities Insurance Private banking corporate AnD InVeSTMenT BAnKInG k 12,300 employees Four business lines: Coverage and Investment Banking Equity Brokerage and Derivatives Fixed Income Markets Structured Finance countries SPecIALISeD SUBSIDIArIeS Crédit Agricole Immobilier, Crédit Agricole Private Equity, Idia, Sodica, Uni-Editions MILESTONES 33

37 STRONG POSITIONS IN OVER 70 COUNTRIES EUROPE More than 150,000 employees in 29 countries Retail banking: 31 million customers and 11,500 branches; 3 domestic markets (France, Italy, Greece) Consumer finance, factoring and lease finance in more than 20 countries Asset management, insurance and private banking Corporate and investment banking in 23 countries NORTH AMERICA 1,800 employees in the United States and Canada Asset management Private banking Corporate and investment banking ASIA/PACIFIC 3,400 employees in 16 countries Asset management Life insurance Private banking Corporate and investment banking SOUTH AMERICA More than 600 employees in 6 countries Retail banking in Uruguay with Crédit Uruguay Banco (166,000 customers) Private banking Corporate and investment banking AFRICA/MIDDLE EAST Mor than 6,500 employees in 20 countries Retail banking, mainly with Crédit du Maroc (668,000 customers) and Crédit Agricole Egypt (158,000 customers) Consumer finance Asset management Private banking Corporate and investment banking The map of our locations around the world and their details on: in France with 28% of the household market in Europe in terms of retail banking revenues million customers Data as of 31/12/ Sources: Banque de France, Company MILESTONES MILESTONES

38 2008 RESULTS AND STOCK MARKET DATA A SOLID GROUP crédit Agricole S.A.'s results proved to be resilient in the face of a major financial crisis that spread abruptly and profoundly through the global economy in the second half of the year. In billion Net banking income Net income - group share Capital o.w. Shareholders' equity group share Tier 1 ratio (01/01/2009) CRÉDIT AGRICOLE GROUP % CRÉDIT AGRICOLE S.A % Crédit Agricole Group comprises Crédit Agricole S.A. and all Crédit Agricole Regional Banks CRÉDIT AGRICOLE GROUP Net income - group share billion During the unprecedented financial crisis that shook the markets in 2008, Crédit Agricole, the leading financial partner to the French economy, continued to support all its customers individuals, professionals, and businesses alike. Outstanding loans in France (i.e., at LCL and the Regional Banks) grew by 7% to 424 billion. Crédit Agricole secured its position as a top-tier European bank, with net income - group share of 2.5 billion, a Tier 1 ratio of 9.4%, and more than 160,000 employees serving 58 million customers worldwide. Net income - group share billion In 2008, crédit Agricole S.A. demonstrated its responsiveness and ability to withstand challenging environments. This was particularly evident in the share issue carried out in the first half of the year, in Calyon's new, refocused strategy, in cost-cutting measures that lowered expenses by 0.7%, and in the adjustments to the Group's business model that will enhance the specialised businesses serving the distribution network. Crédit Agricole S.A.'s net income - group share totalled 1 billion in 2008, despite a 67% increase in risk-related costs, positioning the Group well to play a key role in a difficult environment and to pull out of the crisis ahead. RESULTS crédit Agricole S.A.'s net banking income held up well in 2008 despite the crisis, down by only 4.8% to close to 16 billion. The retail banking business remained buoyant; LCL reported 2.9% growth, and specialised financial services had a solid year. However, net banking income was pressured by weakness in asset management, which contracted 7.2%, and in corporate and investment banking, which shrank 31.9% (or 3.4% for the core businesses only). Operating expenses fell 0.7% in 2008 to 12.6 billion. Expenses were contained in all businesses and reflect cuts in variable compensation. Costs at corporate and investment banking decreased by 193 million thanks to the refocusing plan announced in September. Gross operating income fell 18% to 3.3 billion. risk-related costs totalled 3.2 billion (up 66.8% from 2007), or 0.85 % of average risk-weighted assets (Basle I). This sharp rise off of a relatively low level reflects the deteriorating global economy. The largest increases in risk-related costs were in international retail banking (especially Emporiki Bank), consumer finance, and corporate and investment banking. 36 MILESTONES

39 Equity affiliates contributed 868 million in 2008, down from 1,269 million in 2007 due to the incorporation of Bankinter (22% owned by Crédit Agricole) and lower income from Banco Espirito Santo (BES) and the Regional Banks. The net gain on other asset disposals amounted to 428 million, and consists mainly of a 435 million gain from the creation of Newedge that was recognised under Proprietary asset management and other activities. In e million Change 2008/2007 Net banking income Operating expenses Gross operating income Risk-related costs Operating income Equity affiliates Net income on other assets Pre-tax income Tax After-tax income from discontinued activities 16,768 (12,718) 4,050 (1,897) 2,153 1,269 1,395 4,817 (257) (4) 15,956 (12,635) 3,321 (3,165) , (4.8%) (0.7%) (18.0%) 66.8% (92.8%) (31.6%) n.s. (75.7%) n.s. n.s. Net income 4,556 1,266 (72.2%) Net income - group share 4,044 1,024 (74.7%) Contribution to Net income - Group share by business In e million Regional Banks LCL International retail banking 460 (420) Specialised financial services Asset management, insurance, and private banking 1,899 1,392 Corporate and investment banking (904) (1,924) Proprietary asset management and other activities Net income group share 4,044 1,024 * Excluding the impact of discontinuing activities 36% Corporate and investment banking* 20% Retail banking 44% Specialised businesses Breakdown of the headcount by business lines in 2008* 10% Asset management, insurance, and private banking 14% Corporate and investment banking 4% Proprietary asset management 25% French retail banking More than half of the headcount abroad* 13% Specialised financial services 34% International retail banking * Crédit Agricole S.A. (without the Regional Banks) MILESTONES 37

40 An InCREASE In OUTSTAnDInG LOAnS ThAT REFLECTS ThE BAnK'S COMMITMEnT TO SUPPORTInG ThE ECOnOMy billion billion Outstanding loans at Regional Banks (up 6.7%) Outstanding loans at LCL (up 8.8%) ShAREhOLDERS' EQUITy In e billion The rise in shareholders' equity in 2008 is due primarily to a successful share issue in early July, partially offset by lower unrealised gains on the available-for-sale securities portfolio. OnE OF ThE MOST SOLID GLOBAL BAnKS crédit Agricole S.A. has received high ratings from rating agencies, reflecting its robust financial health and affiliation with the Crédit Agricole Group. Its solid balance sheet includes 41.7 billion of shareholders' equity, backed by the financial resources of the Crédit Agricole Group as a whole ( 63.7 billion of shareholders' equity and 101 billion of capital). At 1 January 2009, Crédit Agricole S.A.'s Tier 1 ratio was 9.1% and its Core Tier 1 ratio was 8.0%. These levels are appropriate for its risk profile and the new market standards. The Tier 1 ratio for the Crédit Agricole Group as whole was 9.4% at 1 January Crédit Agricole Group's Tier 1 ratio at 1 January 2009 RATInG AGEnCIES ShORT-TERM LOnG-TERM OUTLOOK FitchRatings Moody s F1+ P1 AA- Aa1 Stable Negative Financial reporting section Standard and Poor s A1+ AA- Stable 38 MILESTONES

41 SHARE PRICE Between the date of the company s flotation and 31 December 2006, Crédit Agricole S.A. outperformed the CAC 40 and the financial sector indexes. However, the subprime crisis erupted in 2007 and in 2008 this crisis spread throughout the global economy. During this period financial institutions were either bailed out or had to file for bankruptcy, governments announced massive intervention plans, and investors were easily swayed by market rumours. The Lehman Brothers bankruptcy on 15 September 2008 triggered steep stock market declines, particularly among banking stocks. Investors became suspicious of the entire sector, and volatility within the sector exploded as share prices often fluctuated by more than 10% during a single trading session. Crédit Agricole S.A.'s share price ended 2008 down 65% at 8, compared with a 64% fall in the European banking index and a 43% drop in the CAC 40. Dividend of 0.45* per share Crédit Agricole S.A. shareholders can choose to receive their 2008 dividends either: fully in cash; or fully in shares. The ex-dividend date is 27 May The dividend will be paid on 23 June 2009 (for both cash and share payments). * To be proposed at the Annual General Meeting on 19 May 2009 SHARE PRICE Adjusted for the share issue with pre-emptive rights in July Crédit Agricole S.A. share data Ownership structure at 31/12/2008 ISIN code: FR Mnemonic code: ACA 2008 high and low: 21.05; last: 8.00 Market capitalisation: 17.8 bn Exchange: Euronext Paris Included in the indices: CAC 40; DJ Euro Stoxx 50; and FTSEuronext 80 Included in three main sustainability indices: ASPI Eurozone; FTSE4Good; and Dow Jones Sustainability Index (Europe) 4.4% Employees (via employee mutual fund) 8.6% Individual shareholders 31.6% Institutional investors 0.6% Treasury shares 54.8% SAS Rue La Boétie (includes the Regional Banks) MILESTONES 39

42 SUSTAINABLE DEVELOPMENT, A PROACTIVE ORGANISATION In 2008 Crédit Agricole bolstered the human and financial resources devoted to the Group's corporate social responsibility (CSR) policy, in line with the Group's commitments and key priorities. This reinforced policy was particularly relevant during the financial crisis that hit the global economy during the year. The Group's CSR efforts were recognised yet again in 2008 when Crédit Agricole S.A. was added to the Dow Jones Sustainability Index Europe. As a result of organisational changes that took place during the year, the Group's CSR policy will now be managed by a Deputy CEO rather than a member of the Executive Committee (the Company Secretary). developpement-durable 40 MILESTONES

43 2008 FIELD OF ACTION CSR policy management Policy monitoring Include CSR* issues in business annual strategy reviews Employee awareness Train employees at Calyon, purchasing, and the Crédit Agricole Training Institute on sustainable development STATUS AT YEAR- END-2008 Done Done OUTLOOK FOR 2009 Continue to offer training programmes Train employees at Calyon and the Industry and Sector Research Unit on The Climate Principles Stakeholder relationships Have BMJ Ratings assess the Group's CSR policy Done CSR data confirmation Continue to confirm data so as to provide a moderate level of assurance Done Continue the certification process International retail banking Build a network of sustainable development contacts at foreign subsidiaries Done Economic responsibility Social and environmental risks and opportunities Crédit Agricole Group - Sign up to The Climate Principles Calyon - Develop a CSR policy for the energy sector - Update the policy for the defence sector - Develop a CSR risk identification and decision-making procedure for the Group s financing activities Crédit Agricole Asset Management Group - Add environmental and social governance ratings to fund managers' investment tools Crédit Agricole Assurances - Create a new Sustainable Development Manager position Products and services - Energy-efficiency loans Continue offering these loans at Regional Banks Introduce these loans at LCL and Cariparma Compliance Enhance local risk management and prevention systems to ensure compliance, especially at newly-acquired foreign operations Customer relationship management (CRM) Continue rolling-out the new CRM initiative at Regional Banks Support struggling agricultural sectors Perform a customer satisfaction survey Done Postponed Done In progress Done Done Done Done Done In progress To be continued Done Introduce an energy policy in line with The Climate Principles Develop new environmentally-focused products for farmers Begin offering an environmentally-focused zero-interest rate loan (Eco PTZ) Step-up the fight against fraud in the Group through a new, cross-functional unit Implement the EU's Third Money Laundering Directive Consolidate claims at Regional Banks on a national level Suppliers Establish a list of socially- and environmentally-responsible suppliers Buy "green" office supplies Include the following in the Group's bid specifications: - CSR criteria (including International Labour Organisation rules) - Environmentally-friendly designs Social responsibility Crédit Agricole Group human resources Create a Pan-European HR Committee Continue implementing the agreement on jobs and skills planning Sign the Diversity Charter and create a working group comprised of Crédit Agricole entities Continue the employee satisfaction surveys at certain subsidiaries Assistance for low-income people in France and abroad Create the Grameen Crédit Agricole Microfinance Foundation Continue rolling-out support centres (Points Passerelles) at Regional Banks Environmental responsibility Mitigate the Group's direct environmental impacts Perform a second measurement of the Group's carbon footprint in the Paris region Measure the carbon footprint of 13 Regional Banks Cut energy consumption 15% in three years (from 2008 to 2010) Offset 15,000 tonnes of the CO 2 emissions related to the Group's energy consumption by purchasing carbon credits Expand the Group's environmental scope of consolidation * CSR: Corporate Social Responsibility In progress Done Done In progress Done In progress Done Done Done In progress Done In progress In progress Done In progress Recognise socially- and environmentallyresponsible suppliers through the Horizon Award Build alliances with suitable companies Train Committee members on CSR Continue implementing diversity improvement initiatives Introduce a Business Travel Programme at Crédit Agricole S.A. and Calyon Continue offsetting carbon emissions at constant scope MILESTONES 41

44 FRENCH RETAIL BANKING CRÉDIT AGRICOLE REGIONAL BANKS With 20 million customers and a 24% share of the French household market, Crédit Agricole's Regional Banks are at the forefront of almost all of France's retail banking markets. In 2008 they continued to be a major source of financing for the local economy and advanced their sales and marketing efforts. million retail customers Crédit Agricole's 39 Regional Banks operate around 7,100 branches across France as both cooperatives and full-service banks. They are market leaders in almost all customer segments: individuals, farmers, professionals, businesses, and associations. Moreover, they provided financial support to the local economy throughout 2008 in spite of the crisis, and continued to win new customers. Livret A regulated savings accounts New French legislation passed in 2008 has allowed all retail banks in the country to begin offering Livret A regulated savings accounts as of 1 January To prepare for this change, in late summer 2008 Crédit Agricole started offering special savings accounts that would be transitioned to Livret A accounts as soon as the new legislation went into effect. In the seven months ending 31 March 2009, 3 million customers signed up for a total savings of 10 billion. Crédit Agricole also introduced two new life insurance policies in 2008: Cap Découverte at the start of the year for people taking out their first policy; and Vers l Avenir in November for minors. Bank card innovation Crédit Agricole introduced numerous bank card innovations in The first of these was the Double Action card, which constitutes a major breakthrough in payment systems. It's the first universal payment card that lets customers choose, at the time of payment (and at any merchant or kiosk), whether to pay by direct debit or by credit. Morevover, in 2008, Crédit Agricole grew its share of the premium card market, with a 15% rise in the number of these cards issued. The Group also began offering the first official bank card of the France Football Team. Multichannel retail banking Crédit Agricole's online banking operations continued to expand in The Regional Banks' websites were updated and now offer more than 200 product sheets. These websites include new options for obtaining property and casualty (P&C) insurance quotes, applying for consumer and home loans, and opening savings accounts online. A new online stock trading service called Invest Store was introduced in the second half of the year, and comes in two versions to suit different customer needs. 39 Regional Banks Crédit Agricole's 39 Regional Banks have multiple branches across France, enabling them to build strong footholds in their local communities and close customer relationships MILESTONES

45 Agriculture's leading bancassurer With a 92% market penetration rate (according to a 2007 Ipsos study), Crédit Agricole is the leading banker for the French agriculture sector and actively targets young farmers. Crédit Agricole is also the sector's leading bancassurer. It continuously develops new products designed for farmers' needs, such as loans with flexible repayment terms and once-yearly payment suspensions, and a special savings account for farmers. Indeed, the total amount invested in these savings accounts have more than doubled over the past year. Crédit Agricole strives to help farmers manage their risks and has enlarged the range and distribution of its insurance policies. The Group sold 100,000 policies in 2008 and now has an over 17% market share. Support for professionals Crédit Agricole is the leading bank serving professionals in France, with more than 750,000 professional customers and a 30% market penetration rate. The Group's primary goal is customer satisfaction; in 2008 the Regional Banks embarked on a strategy to both acquire new professional customers and better meet their needs. For example, since transaction processing is a main concern for this segment, Crédit Agricole constantly implements the latest technology to ensure optimal security, improved payment methods, and more guarantees. In order to help professionals navigate through today's tough economic climate, Crédit Agricole has developed solutions for short-term and medium-term financing as well as services to help entrepreneurs and facilitate buyouts. Examples include Eurofactor's Créances Services option and loans with flexible repayment terms. enhanced business services In 2008, Crédit Agricole improved the range of services it offers business customers (a segment where Crédit Agricole is a pioneer), especially in terms of support for international expansion. The Regional Banks now provide investment banking services in addition to commercial banking. Through these new services, the banks aim to build closer relationships with executives so as to help them expand their operations and/or manage their own private wealth portfolios. Stronger ties to the public sector and social economy Crédit Agricole took further steps to strengthen its relationships with local governments in The Group introduced new products and services designed to supplement traditional budget financing options, most notably in three areas: insurance, public-private partnerships, and e-administration. Thanks to a 881 million special-purpose grant that Crédit Agricole received for 2008, the Group became the biggest provider of loans for social and intermediate housing in France. Crédit Agricole is already the leading financial partner for French associations with a 29% share of the commercial market, and has implemented measures developed specifically for large organisations in this segment. HIGHLIGHTS Y Crédit Agricole introduced the Double Action card in 2008, the first universal payment card that lets customers choose, at the moment of purchase, whether to pay by direct debit or by credit. Y Promotion for Crédit Agricole death and disability insurance, positioning it as a family insurer offering a full range of policies to cover all of life's unforeseen events. Y In December, Crédit Agricole and the European Investment Bank signed two credit lines for a total of 300 million. This money will be used to help local governments make environmental investments and to help SMEs expand their operations. CUSTOMERS LOAnS AnD ASSETS million bank cards In brief A boom in energy-efficiency loans 30,000 Crédit Agricole customers had taken out energy-efficiency loans at end-2008, up sharply from 6,300 at end These customers not only reduced their energy bills, but also contributed to the fight against climate change. Focus on 2 insurance policies Crédit Agricole's Regional Banks had sold over 300,000 Cap Découverte life insurance policies by the end of November The number of funeral cover policies sold rose from 77,000 in 2007 to 95,000 in In 2008, Crédit Agricole provided one out every two euros used to finance French micro-enterprises (source: Banque de France) Crédit Agricole doubled the number of loans issued to start new businesses in four years (source: Oséo) MILESTONES 43

46 FRENCH RETAIL BANKING LCL I n 2008, LCL reaped the rewards of its effective repositioning strategy and reported some of its best sales and financial results. LCL operates under its own brand (introduced in August 2005), and is the only national banking chain in France to focus exclusively on retail banking for individuals, professionals, and corporate customers. net new demand accounts were opened for individuals in 2008 Customer acquisition and loyalty LCL is a national retail bank with a large presence in urban areas. In 2007, it was structured into four businesses: retail banking for individuals; private banking; and corporate banking. This structure is consistent with LCL's strategic goals which prioritise business development. In 2008, LCL implemented a new customer acquisition strategy targeted primarily towards young people, and carried out customer loyalty initiatives for its entire customer base. Customer Appreciation Agreement Customer satisfaction is the spearhead of LCL's new strategy. For the past three years, the bank has differentiated itself through innovative products and services, and in November 2008 introduced a fresh concept: the Customer Appreciation Agreement. In this Agreement LCL makes clear commitments, and the Agreement is enriched over time. In January 2009, LCL introduced the LCL à la Carte programme, another breakthrough whereby new customers can select only the products and services meeting their specific needs and pay only the corresponding fees. LCL Private Banking LCL Private Banking is the second-largest private bank in its market, meeting the needs of 100,000 customers. The sales and marketing strategy that it implemented in 2007 was finished in 2008 according to plan. In 2009 the private bank plans to roll-out a new architectural design at its 54 sites and divisions. LCL Private Banking currently manages 30 billion of assets, and has received positive feedback from its customers, most notably for its investment advisory services. Risk management In 2008, LCL introduced Crescendo 2, a multi-year business development plan with measures to boost the bank's competitiveness. LCL also strengthened its risk management system in order to mitigate the effects of the deteriorating economic climate. It extended the steps taken in prior years to track individual risk, but with greater vigilance. LCL's risk management system operates at all levels and involves all players, allowing the bank to limit its risks throughout the year while continuing to meet customer needs. net BAnKInG InCOME UP 2.9% 2008/2007 HIGHLIGHTS Y December 2008: The first wave of employees moves into LCL's new operating headquarters at Villejuif, where the offices were specially designed to respect the environment. Y January 2009: LCL introduces the LCL à la Carte programme allowing individuals to select the only products and services best suited to their needs, and consequently pay lower banking fees. In May 2008, LCL put on line a new version of its corporate website with new features and ergonomy, and rethought contents. 44 MILESTONES

47 INTERNATIONAL RETAIL BANKING Crédit Agricole's international retail banking business has 2,400 branches operating in around 20 countries and serving 5 million customers. The Group is particularly active in Europe and the Mediterranean Basin. In egypt, Crédit Agricole Egypt made further progress on its branch renovation programme to roll-out the Group's new concept for its international branches. This new concept, also being introduced in Serbia and Morocco, includes a layout that can be customised to suit almost any environment, and will entail a reorganisation of the branches' human resources. It should enable the international banks to achieve better sales performance while maintaining high customer satisfaction. HIGHLIGHTS Y 12 December 2008: Lukas Bank introduces a new card, Furora, tied to a new customer loyalty programme. Newsweek magazine named Lukas Bank the Friendliest Bank for the second year in a row, and for the fourth time overall. million customers 2008 review Crédit Agricole's international retail banking strategy focuses on Europe and the Mediterranean Basin, and saw a sharp increase in business in In Italy, Cariparma FriulAdria once again grew revenue and profits faster than the market. It expanded organically, opening 49 branches and winning 48,000 new customers, while gaining market share in new provinces such as Imperia and Caserte. In Greece, Emporiki Bank continued to acquire new customers, especially in the business segment. It is Greece's fifth-largest bank and consequently felt the effects of the country's struggling economy. In Morocco, Crédit du Maroc stepped up the expansion of its retail banking chain with the opening of 50 new branches in This move expands the bank's national coverage, enlarges its customer base, and opens up new cross-selling opportunities. In Poland, Lukas Bank was achieved controlled growth despite intense competition. Growth opportunities Italy Italy became Crédit Agricole's second-biggest domestic market in less than two years following the acquisitions of Cariparma and FriulAdria. All of the Group's businesses now operate in Italy: corporate and investment banking, asset management, consumer finance, factoring, life insurance, and P&C insurance. Synergies among these businesses will broaden the range of products and services that Crédit Agricole can provide. The Group s entry into Italy demonstrates its ability to build a network of Regional Banks that combine strong local ties with close customer relationships. Greece A new management team was appointed in Greece in order to thoroughly transform Emporiki Bank and return it to the level of its main competitors. Poland Lukas Bank will continue to expand its range of businesses, starting with consumer finance, with the goal of developing a onestop shop for banking services for individuals and SMEs. egypt and Morocco Crédit Agricole Egypt and Crédit du Maroc plan to further diversify their services targeted to individual customers. These banks should continue to grow, especially following by Crédit Agricole S.A. s purchase of a bigger stake in Crédit du Maroc. Y 25 november 2008: Crédit Agricole S.A. and Attijariwafa Bank enter into an agreement concerning changes to their investments in Morocco and Africa. Y Cariparma FriulAdria was awarded five stars by the Italian financial magazines Il Mondo and Lombard. It was also named the best Italian banking group (in the large group category) by BancaFinanza magazine. Y Crédit Uruguay Banco won the Golden Superbrands Award. For more information about the Group's subsidiaries and links to their websites, please visit MILESTONES 45

48 SPECIALISED FINANCIAL SERVICES The Group s specialised financial services held up well in Crédit Agricole is one of the leading European players with operations in 21 countries, thanks to stronger relationships with existing customers and continued expansion efforts. million customers Three businesses lines consumer finance: Sofinco offers consumer financing options at the point-of-sale through a network of branches and partnerships. Finaref specialises in remote financial services and is France's leading provider of private cards. Lease finance: Crédit Agricole Leasing provides financing solutions for businesses, professionals, and farmers in France and abroad. factoring: Eurofactor is the largest integrated factoring network in Europe and serves companies in all sectors. It works with managers to develop solutions for their accounts receivables that are tailored to their particular strategy, industry, size, and customer profile. Consumer finance in 2008 The European consumer finance market was pressured by three factors in 2008: higher refinancing costs, increased risks, and lower household consumption. Against this backdrop, Crédit Agricole S.A. reinforced the synergies that were created between its two consumer finance subsidiaries in The completed merger within the debt collection department and the ongoing IT system consolidation should bolster the business. expansion at Sofinco Sofinco reported another year of expansion in 2008, in both its domestic and international markets. In France, Sofinco anchored its position in various markets, most notably at the point of sale. It also formed partnerships for gift cards and co-branded bank cards. Outside of France, Sofinco persevered its growth with a primary focus on Italy, where in early 2008 it bought the 49% of Agos that it did not already own from Intesa San Paolo. It also entered into an agreement with Banco Popolare to merge Ducato, a Banco Popolare subsidiary, with Agos. The merged entity is majority-owned by Sofinco and is Italy's leading consumer finance provider. A commitment from finaref In 2008, Finaref grew its credit business through three drivers: support for its partners; increased loan refinancing operations; and innovative new customer services. Finaref carried out several promotional campaigns during the year to support its private card partners marked some important partnership anniversaries, such as the 40-year anniversary of the Kangourou card. Finaref also introduced a breakthrough system for obtaining private cards online, called Cliquez-achetez.fr, which should increase its market share of online credit. This novel sales process allows Finaref's partners to position their private cards as the preferred payment method starting from a customer s first purchase on their website. A pan-european player The Crédit Agricole Group operates in 21 countries and is one of Europe's leading providers of specialised financial services. In 2008, Sofinco, Crédit Agricole Leasing, and Eurofactor furthered their international expansion, primarily in Italy. Responsible financing for the economy Factoring and lease finance are two particularly effective financing solutions during economic downturns. factoring gains ground Factoring arrangements allow companies to obtain cash immediately based on their Website for each brand MILESTONES

49 operations, and can be used by all types of businesses. Eurofactor is France's leading factoring services provider, and continued to grow in 2008 by offering customers close relationships with experts who understand the economic, cultural, and legal specifics of different countries. In April 2008, Eurofactor opened a division in Italy, the second-largest factoring market worldwide. Eurofactor Italia provides Cariparma and FriulAdria customers with a wide range of factoring solutions. Eurofactor also enlarged its European network with new regional operations in Germany, Spain, and the UK. It plans to open a site in the Antilles in 2009 in order to serve customers in Martinique and Guadeloupe. A boom in lease finance With a 23% surge in outstandings to 16 billion, Crédit Agricole Leasing confirmed its status as France's leading provider of property leases and second-biggest provider of equipment leases. Crédit Agricole Leasing actively supports responsible investing through its heavy involvement in sustainable development and public sector financing. Unifergie, a Crédit Agricole Leasing subsidiary, obtained a 250 million package from the European Investment Bank to fund sustainable development projects in Europe. Crédit Agricole Leasing's outstandings outside France rose 16% to almost 1 billion. Growth in factored receivables Rise of the production in lease finance HIGHLIGHTS Y April 2008: Eurofactor opens a division in Italy, the second-largest factoring market worldwide. Y november 2008: Finaref introduces its new Visa Tactik card with multiple payment options and specific purchasing guarantees. Y Sofinco completed the Agos-Ducato merger in Italy. The merged entity is Italy's leading provider of consumer finance. COnSUMER FInAnCE: RAPID InTERnATIOnAL ExPAnSIOn Y 16 January 2009: Crédit Agricole Leasing and the Poitou-Charentes Regional Bank won a bid to provide 400 million of financing to build solar energy power plants. In brief Crédit Agricole Leasing expands its footprint In 2008, Crédit Agricole Leasing (which already operated in Poland, Armenia, Spain, and Morocco) expanded first into Greece, by purchasing a stake in Emporiki Leasing in October, then into Italy, by taking over an Intesa Sanpaolo subsidiary in December. The Kangourou card gets a makeover In 2008, Finaref introduced a new Kangourou card as part of a drive to update its services. The new card has a fresh look and new features targeted towards online customers (purchasing power guarantees, electronic safe boxes, etc.). MILESTONES 47

50 ASSET MANAGEMENT, INSURANCE, AND PRIVATE BANKING This division has established marketleading positions in France and its expansion aims are based on already solid international growth drivers. It encompasses asset management activities in the wider sense. billion of assets under management Leading mutual fund manager in France and the rest of Europe France's second-largest insurer INTERNATIONAL EXPANSION Three businesses lines Securities and asset management: Crédit Agricole Asset Management is the leading mutual fund manager in France and in Europe. CACEIS (a 50%-owned subsidiary at 31/12/2008) specialises in asset servicing for institutions and large businesses. Insurance: Crédit Agricole Assurances is France's second-largest insurer and offers life insurance (through Predica), Property and Casualty (P&C) insurance (through Pacifica), and creditor insurance (through CACI). It is rolling out its business model based on integrated distribution through banks in other countries. Private banking: In addition to the Regional Banks, the Group s operations in France include BGPI and LCL Banque Privée. It also has specialised subsidiaries outside France under the Crédit Agricole Private Bank brand. Strong resilience The securities and asset management business held up well in the challenging economic climate and delivered satisfying sales performance. Its assets under management totalled billion at end A decline in absolute return, alternative investment, and equity products was partially offset by robust inflows in money-market products, capital-protected products, and employee savings plans. Crédit Agricole confirmed its leadership positions in the French and Crédit Agricole Asset Management: CAAM has nine investment centres outside France and sales offices in over 20 countries. In 2008 it continued its expansion into Australia and Malaysia, while business at its Chinese operations ramped-up considerably. Crédit Agricole Assurances: 20% of Crédit Agricole Assurance's revenue was generated outside France in 2008, thanks to a sharp 16% international growth rate. Crédit Agricole Creditor Insurance (CACI) operates from Dublin with 25 partners in 15 European countries. Private banking: The private banking business operates in 21 countries with offices in the world's main private banking markets. European mutual fund markets with market shares of 19.3% and 4.4%, respectively through its prudent management strategy adapted to the market environment. The Group rounded-out its range of products and services for specific customer segments with a new line of exchangetraded funds (ETFs). It also extended its global reach with new sales offices in Saudi Arabia, China, and Malaysia. The insurance business was able to withstand the stock market turbulence thanks to its diversified operations, traditionally diligent approach to financial management, and growing percentage of international sales. The business' assets under management rose 3.3% in 2008 to 192 billion, while that of bancassurers slipped 1%. Its share of the French life insurance market grew 0.2 percentage points to 15.5%, and that of the French P&C insurance market climbed 1 percentage point to 4%. Predica anchored its leadership position in the death, dependency, and funeral cover market with a 13% climb in contributions. At the Regional Banks, 2008 saw the introduction of two new life insurance policies: Vers l Avenir (for minors) and Cap Découverte. Over 300,000 Cap Découverte policies had been sold by the end of the year. The P&C insurance policy portfolio grew 8% in 2008 to a total of 7.1 million policies. Most notably, LCL began offering P&C insurance during the year, and exceeded its target by selling 210,000 new policies. In private banking, the Group's business model proved resilient during the financial crisis and extreme market turmoil. The business continued to win new customers and gathered over 2.6 billion of net inflows. It also reinforced its sales and marketing efforts in high-growth areas like Asia and the Middle East. Website for each brand MILESTONES

51 Outlook At caam, on 26 January 2009 Crédit Agricole S.A. and Société Générale entered into a preliminary agreement* to merge their asset management operations. The merged entity is 70% owned by Crédit Agricole S.A. and had 638 billion of assets under management (pro forma) at 30 September 2008 and will be the fourth largest asset manager in Europe and ninth-largest in the world. This new entity aims to become: - the main supplier of savings account products to Crédit Agricole and Société Générale retail banks. It currently has 50 million individual customers worldwide and is the undisputed leader in Europe in this field, and may form arrangements with other partners in the future; - a high-performing asset management firm with multiple skills and a vast international network, offering products tailored to the needs of institutional investors. The new entity's size advantage means that its operations will be particularly competitive in terms of costs and service quality which will benefit individual and institutional customers alike. It will target a cost/income ratio of less than 50%. ASSETS UnDER MAnAGEMEnT crédit Agricole Assurances will continue to manage its financial and technical risks carefully while taking further steps in its growth and innovation strategy. The goal is to boost the sale of long-term products so as to keep Crédit Agricole Assurances leadership positions in life insurance and disability insurance. In P&C insurance, Pacifica will provide additional customer support materials to retail banks and will update its medical and personal accident insurance policies. Following the successful completion of a 2-year pilot phase, LCL and the Regional Banks will roll-out their coordinated personal services offer. Crédit Agricole Creditor Insurance (CACI) will sell its products and services at LCL branches, and will continue to expand its business with partners both inside and outside the Group, in France and abroad. In terms of international operations, the Group will deploy its bancassurance business model in more countries and leverage its know-how in association with other partners. The private banking business will respond to the current market climate by offering simplified products and more flexible arrangements. This strategy will enable it to seize market opportunities while ensuring careful risk management for its customers. HIGHLIGHTS Y April 2008: Official inauguration of the jointventure ABC - CA Fund Management - held in 33.33% by Crédit Agricole Asset Management - brought to manage and to market investment funds in China. Y September 2008: The first mandatory investment fund for a life insurance policy is introduced, designed to help secure customers' investments. Y 26 January 2009: Winter storm Klaus hits France, and Crédit Agricole responds by extending its no-deductible policy to storm victims. 9,100 claims for damages were filed by phone on 26 January Y February 2009: Crédit Agricole is named "Best Private Banking Services Overall" in Monaco and "Second-Best Private Banking Services Overall" in France In brief Crédit Agricole Assurances is born saw the birth of Crédit Agricole Assurances, a new legal entity that brings together all of Crédit Agricole S.A.'s French and international insurance businesses: Predica; Pacifica; Crédit Agricole Creditor Insurance (CACI); and subsidiaries in over 15 countries. Caceis. In February, 2009, Crédit Agricole S.A. announced that it is entering exclusive talks with Natixis, with a view to acquiring 35% of the share capital of Caceis to take its holding to 85%. Caceis is one of the world leaders of asset servicing. *The preliminary agreement is subject to approval by the two Groups' employee committees, all governing regulatory bodies, and the partners of various joint ventures. The transaction should be finalised in the second half of MILESTONES 49

52 CORPORATE AND INVESTMENT BANKING In September 2008, Calyon presented its business development and refocusing plan, in response to the financial market turmoil. This plan outlines a new strategy for Crédit Agricole's corporate and investment banking business so as to better serve the Group and its customers. countries tions, then used the results to develop the refocusing plan presented in September This plan aims to focus Calyon on its core strengths; many of the first steps have already been taken. Calyon's net incomegroup share for the fourth quarter was close to breakeven and it achieved its cost-cutting targets. Calyon's businesses lines Calyon's refocusing plan groups its operations into the following four businesses. Corporate and investment banking, which serves companies and financial institutions both in France and abroad. This business includes structuring and execution staff from Crédit Agricole's Mergers & Acquisitions, Equity Capital Markets, Corporate Equity Derivatives, and Loan Syndication divisions. It also has an Islamic Finance department dedicated to meeting these special needs. Equity Brokerage, which is comprised of two Crédit Agricole subsidiaries market leaders Crédit Agricole Cheuvreux in Europe and CLSA in Asia along with Calyon Securities Inc. in the US and Newedge. Newedge is jointly-owned with Société Générale and is worldwide leader in execution and clearing houses for listed Calyon in 2008 Crédit Agricole's corporate and investment banking business suffered in 2008 from the deterioration in the global economy that was due primarily to crises in the subprime market and among monoline insurers. The Group assessed the effects of the first 12 months of the crisis (starting in summer 2007) on Calyon's recurring operaderivatives. This business will also offer trading services for equities, equity derivatives, index derivatives, structured products (simple and complex), warrants, certificates, and products indexed to investment funds. CASAM, a 50/50 joint venture with Crédit Agricole Asset Management (CAAM), is also grouped into this business as the Group's specialist in exchange-traded funds (ETFs). Fixed income, which covers all of Crédit Agricole's trading and market products operations carried out at 31 exchanges, including six liquidity centres in London, Paris, New York, Tokyo, Bahrain, and Hong Kong. Its sales staff draw from five specialty areas: cash, foreign exchange, commodities, interest rate derivatives, debt, and credit markets. Structured finance, which provides advisory and credit services and has over 800 employees working in nine fields: aircraft and rail financing; shipping financing; natural resources, infrastructure, and electricity; property and hotels; export and trade financing; acquisition financing; commodity transaction financing; tax-optimised leases; and consulting in structured finance. Calyon is one of the leading companies worldwide in each of these fields. GEOGRAPhICAL DISTRIBUTIOn OF REvEnUES FROM CLIEnTS On 18 November 2008, Calyon unveiled a new corporate website to match its refocused strategy. The new, more modern website is designed to enhance the bank's image and provide key information MILESTONES

53 Refocusing plan The refocusing plan presented in September 2008 builds from Calyon's historical strengths: a global reach; a solid customer base; and widely-recognised skills. Historical strengths Calyon operates in 57 countries and therefore meets the needs of Crédit Agricole's customers in France and around the world. Its multiple offices serve as a base for other Group businesses to expand internationally. Crédit Agricole's corporate and investment banking business has 3,800 corporate and institutional customers who are at the heart of its new strategy. The business strives to provide seamless global customer support. Rather than selling pre-packaged products, its staff develop personalised solutions tailored to the needs of specific customers. These solutions draw from the three areas in which Calyon has renowned expertise: structured finance; brokerage; and capital markets. Calyon's staff use its undisputed critical size as a base to leverage the potential for cross-selling within and among the businesses. Other growth drivers include Calyon's streamlined processes that can support a sharp increase in volumes, and high value-added consulting services. Reduced risk profile Calyon's risk profile was reduced as part of its refocusing plan. The company shut down operations incompatible with the target risk profile, such as structured credit and some exotic products. Calyon also took proactive measures to cut costs in areas like variable compensation, headcount, and operating expenses. The planned cost reductions were even achieved ahead of schedule; while 200 million and 100 million of cost savings were planned for 2008 and 2009, respectively, the entire 300 million reduction was realised in Now more than ever, Calyon intends to make optimal use of its equity. It will remain selective in origination transactions, increase the level of syndications, and continue to manage its balance sheet effectively. It will also enhance its risk management efforts through a 200 million, two-year investment programme, a review of the company's risk limits, and a closer tracking of market positions. In brief 2008 Awards and rankings Y Calyon was ranked second in M&A transactions by Thomson Reuters (up from eighth in 2007), after advising on five of the year's ten largest transactions this year (and eight of the year's 20 largest transactions as identified by Thomson Reuters in 2007). Y Newedge was ranked second out of the 50 main brokers operating in the US by Futures Magazine. Y Calyon Aircraft Finance of the Year by Jane's Transport Finance magazine for the fourth year in a row. Y Asiamoney's annual ranking placed CLSA as the top broker in Asia for research and sales services by global fund managers. Continued cost-cutting Y Calyon was named Investment Bank of the Year for the Middle East and Africa by Thomson Reuters and Acquisitions Monthly. *Pro forma Newedge calculated on 2007 figures In e million Y Calyon was the mandated lead arranger and bookrunner for a syndicated loan for First Gas Power in the Philippines (in November 2008), which was awarded Asia Pacific Refinancing Deal of the Year in the 2008 PFI Awards. Highlights April: Calyon is appointed joint bookrunner for a 2.5 billion bond issue by EON, to be carried out in two tranches. This is biggest corporate bond issue in Europe so far in September: CA Cheuvreux becomes the first broker to sign the United Nations Principles for Responsible Investment, a major step in the company's commitment to putting social, environmental, and corporate governance issues at the centre of its business development. November: Calyon is a Joint Lead Manager for two bond issues by SFEF, the French government's investment agency. December: Calyon is the Joint Lead Manager for a share issue by Banco Santander. This is the largest all-cash share issue ever carried out by a Spanish company; Calyon's role in the transaction demonstrates its recognised skills and close ties with Banco Santander. MILESTONES 51

54 Contacts Head of investor relations: Denis Kleiber Shareholder relations Toll-free number from France only Analyst and institutional investor relations + 33 (0) / [email protected] Sustainable development mission Brigitte Drège: + 33 (0) / [email protected] Julie Bureth: +33 (0) / [email protected] Press relations Stéphane Petibon: +33 (0) / [email protected] Anne-Sophie Gentil: +33 (0) / [email protected] Internet This document is printed on Satimat Green paper made of 60% post-consumer recovered fibre (PCRF) and 40% raw fibre from forests certified to the FSC (Forestry Stewardship Council) standard marking socially, ecologically and economically responsible management. The paper is made at plants working to the strictest environmental management and sustainable development standards (ISO 14001, ISO 9001 AFAQ). Vegetable-based inks were used in the four-colour printing processes. Photos: Alain Goulard, Hamid Azmoun, Christophe Audebert, Hervé Thouroude, Didier Cocatrix, Jean-Louis Blouin, Karl Attard, Quadrilaser, Marc Antoine Edeline, Hugues Legrix de la Salle, Fotolia, Cedicam, groupe SOGAL, Foto Studio Internazionale di Negri Stefano, Foto Carra, X. Illustrations: Antoine Chassin - Cover: Aubertstorch - Design:

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