The third quarter of this year was characterized by extraordinary turmoil that led the governments of most industrialised countries to take far-reaching measures to restore confidence and to implement plans to provide financing to the economy, as was the case in France. On 13 November 2008 Crdit Agricole S.A.’s board of directors, chaired by Ren Carron reviewed the accounts for the nine months to 30 September 2008. The financial results for this period turned to be rather positive.
Over the first nine months, net income, Group share, was EUR 1,333 million, including EUR 365 million in the third quarter. With EUR 420 billion in total loans held by the Regional Banks and LCL, lending by the Crdit Agricole Group increased significantly, with a 19.2% jump in loans to SMEs and a solid 8.5% rise advance in residential mortgages over the 12 months from September 2007 to September 2008.
Despite tougher economic conditions, net banking income edged down only 1.9% year-on-year in the third quarter of 2008; taking into account the scope of consolidation excluding Calyon’s discontinuing operations, revenues were down by 1.3% over the quarter and up by 0.3% over the first nine months. Net income, Group share, declined by 35.0% over the quarter and by 30.8% over the first nine months.
Among well resulted initiatives of this time are the introduction of a new Group organisation by strengthening the executive management team so as to focus operational oversight; capital increase, which was launched at the right time and successfully completed, ensuring as of June a Tier 1 ratio of at least 8.5%; refocusing the corporate and investment banking on its strengths (structured finance and commercial banking, brokerage, fixed income) while reducing the model’s volatility and cutting costs; active balance sheet management by initiating a EUR 5 billion asset disposal programme.
The Regional Banks, which form the Group’s base, have committed to back Crdit Agricole S.A. up to 100% of their capital funds and reserves, which amounted to EUR 41 billion at end-September 2008.
Shareholders equity (Group share) and capital ratios were among the highest in Europe (Tier 1: 8.5%).
These results are the fruit of the Group’s collective efforts and the dedication of our staff, says Ren Carron, chairman, Board of Directors, Crdit Agricole S.A. They substantiate the relevance of our business model, which is based on achieving a combination of resilience and responsiveness in all of our business lines. Moreover, with a Tier 1 ratio of 8.5% at 30 September, Crdit Agricole S.A. confirmed its position as one of Europe’s soundest financial institutions.
In the prevailing climate, the growth achieved in French and international retail banking and the resilience demonstrated by the consumer finance and asset management businesses are quite noteworthy, says Georges Pauget, chief executive officer, Crdit Agricole S.A. In France, Crdit Agricole consolidated its position as the leading partner to the domestic economy. At 30 September 2008, loans to small and midsize businesses were up 19.2%, lifting our total loans outstanding to EUR 73.4 billion. We will continue to fulfil our mission to serve all segments of our customer base -individuals, companies and local authorities.
L.D.