2023-08-07 06:11:00
(AOF) – Crédit Agricole shone on the stock market on Friday at the close occupying the head of the CAC 40 (+6.14% to 11.86 euros) following publishing robust results for the second quarter. The group reported net income group share up 2.1% year on year, to 2.48 billion euros. In the first half of 2023, it posted a net profit of nearly 4.2 billion euros, up 9.8%. Net banking income increased by 7.9% over this quarter, standing at 9.54 billion euros. Over the half-year, it amounted to 18.4 billion euros, up 4.2% year-on-year.
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Key points
– Listed vehicle of the mutualist group of the same name, 1st French bank and 8th worldwide;
– Net banking income of €22.7 billion, generated by retail banking at 65%, by specialized financial services at 12%, by wholesale banking at 14% and by savings management and insurance ;
– Business model in 3 points – relational excellence by becoming the preferred bank for individuals, entrepreneurs and institutions, local responsibility to support digitalization and societal commitment by amplifying mutualist commitment;
– Capital held at 55.3% by the regional mutuals, hence the strong presence of their representatives on the Board of Directors (10 out of 21 members) chaired by Dominique Lefebvre, Philippe Brassac being Chief Executive Officer;
– Solid financial position: CET 1 ratio of 11.2%, leverage ratio of 3.6% and cash reserves of €467bn.
Challenges
– New “Ambitions 2025” plan:
– net income above €6 billion and return on tangible equity above 12%,
– acceleration of technological and digital transformation with a €20 billion budget for IT and digital, including €1 billion for technological transformation,
– distribution in cash of 50% of the result;
– Innovation strategy, one of the 3 levers of the business model:
– internally: 90% of Group entities having a “data-centric” architecture in 2022, and €300 million in IT efficiency gains, 100% of IT employees trained in new technologies in the University of the ‘Information and 100% of emerging technologies tested on new business services,
– towards customers: expansion of the range of leading applications (Ma banque Pro, Pro&Entreprises LCL, etc.), offer of digital and mobile checkout solutions for small/medium-sized merchants, European electronic banking offer for large brands and complete range -trade ;
– Environmental strategy aiming for carbon neutrality in 2050 for own footprint and investment and financing portfolios.
Challenges
– Integration of Italian CreVal and Lyxor;
– High impact of provisions and the rise in the cost of risk in the Ukraine and Russia zone, resulting in a 16.1% decline in net profit in the 1st half;
– Difficult market outlook for the 2nd half, excluding the United States: sharp fall in growth and rise in inflation in Europe, stagflation in emerging countries and rise in key rates.
– Share buyback programs.
Learn more regarding the Finance / Banking sector
Despite turbulence, fintechs stay the course
According to the BCG, in mid-2021, all fintech listed in the world were valued on average twenty times their income, i.e. a valuation of around 1,300 billion dollars. This figure had more than quadrupled in three years. At the end of 2022, this multiple was divided by five, with average valuations limited to four times earnings. Nevertheless, the BCG considers that the sector should register a jump in its growth by 2030, with a sixfold increase in revenues for fintech. After payments, development should mainly come from fintech banking, with the boom in turnkey services for businesses and professionals (“banking-as-a-service”).
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