CREDIT AGRICOLE SA: Fourth quarter and full-year 2023 - VERY GOOD RESULTS IN 2023
*VERY GOOD RESULTS IN** 2023*
*2023* *CRÉDIT AGRICOLE S.A.* *CRÉDIT AGRICOLE GROUP * *Stated* *Underlying* *Stated* *Underlying*
Revenues *€25,180m*
+12.0% 12M/12M *€24,563m*
+9.5% 12M/12M *€36,492m*
+4.8% 12M/12M *€35,641m*
+3.8% 12M/12M
Costs excl. SRF *-€13,632m *
+8.1% 12M/12M *-€13,618m*
+8.9% 12M/12M *-€21,464m*
+5.7% 12M/12M - €*21,450*m
+6.6% 12M/12M
Gross Operating Income *€11,039m*
+19.6% 12M/12M *€10,436m*
+12.5% 12M/12M *€14,408m*
+5.2% 12M/12M *€13,572m*
+1.3% 12M/12M
Cost of risk * -€1,777m*
+1.8% 12M/12M *-€1,693m*
+9.2% 12M/12M *-€2,941m*
+1.7% 12M/12M * -€2,856m*
+5.9% 12M/12M
Net income group share *€6,348m*
+19.6% 12M/12M *€5,923m*
+11.0% 12M/12M *€8,258m*
+3.3% 12M/12M *€7,647m*
-1.5% 12M/12M
C/I ratio (excl. SRF) *54.1%*
-1.9 pp 12M/12M *55.4%*
-0.3 pp 12M/12M *58.8%*
+0.5 pp 12M/12M *60.2%*
+1.5 pp 12M/12M
2023/2022 changes are pro-forma IFRS 17
*NET INCOME AT RECORD LEVEL WITH STRONG GROWTH*
· Performance driven by strong revenue growth across all business lines, supported by development projects.
· All financial indicators in line with, or ahead of, MTP Ambitions 2025 trajectory
· *Cost/income ratio of 55.4% *(underlying excluding SRF), below the MTP ceiling of 58%
· *RoTE of 12.6%* (underlying), above the MTP target of 12%
· *CASA phased-in CET1 ratio 11.8%*, above the MTP target of 11%
· *GCA phased-in CET1 17.5%* (820 bps>SREP)
*2023 DIVIDEND REFLECTING THIS VERY GOOD PERFORMANCE*
· *Increased to €1.05/share* (+24% vs. 2022 dividend excluding 2019 catch-up)
· *Tripled in 9 years*
*Q4-23 MARKED BY WEATHER-RELATED CLAIMS AFTER AN ESPECIALLY HIGH Q4-22 *
· *Stable revenues in Q4/Q4*, up +9.1% excluding Insurance, impacted this quarter by very high weather-related claims and an IFRS 17 base effect
· *Controlled increase in recurring costs* of +3.7% Q4/Q4
· *Cost of risk in line with previous quarters*
*STRENGTHENED AND STEPPED-UP CLIMATE STRATEGY, PRESENTED AT THE CLIMATE WORKSHOP*
· Increased commitment to the transition to low-carbon energy sources
· Expanded ambitions to decarbonise our portfolios (Net Zero)
· Improvement of CASA’s CDP rating from B to A-, translating our progress regarding Climate strategy
*Dominique Lefebvre, *
Chairman of SAS Rue La Boétie and Chairman of the Crédit Agricole S.A. Board of Directors
“Crédit Agricole Group posted very strong earnings in 2023, three quarters of which will be retained and reinvested into the economy to support the major social transitions".
*Philippe Brassac,*
Chief Executive Officer of Crédit Agricole S.A.
“Our strong earnings for 2023 (€8.3 billion) and the fourth quarter (€1.7 billion), while obviously impacted by a large number of weather-related claims, demonstrated once again that our business model is sound and useful."
This press release comments on the results of Crédit Agricole S.A. and those of Crédit Agricole Group, which comprises the Crédit Agricole S.A. entities and the Crédit Agricole Regional Banks, which own 59.7% of Crédit Agricole S.A. Please see the appendices to this press release for details of specific items, which are restated in the various indicators to calculate underlying income. All 2022 figures are presented on a pro forma basis under IFRS 17.
*Crédit Agricole Group*
*Roll-out of the strategic plan*
*The universal banking model ensures steady, high growth in revenues*
Crédit Agricole S.A.’s model offers constantly renewed potential for organic growth. This model is based on three pillars: customer acquisition, customer equipment and the development of new offers. Gross customer capture amounted to 1.9 million new customers in 2023, growing the customer base by 191,000 customers over the year. Customer equipment is growing steadily across our various offers. For instance, our market share in household loans stood structurally at 30%^1 and this is helping to drive market share in our other offerings. These currently stand at 30% in asset management^2, 28% in payment services^3, 22% in individual death and disability insurance^4, 19% in creditor insurance^4, 15% in life insurance^4, 7% in property and casualty insurance^4, and 4% in property services. Lastly, in line with our universal banking model, we are steadily expanding our customer offers: CA Transitions et Energies (CATE) and CA Santé et Territoires (CAST) business lines have recently been rolled out to industrialise the financing of renewable energy projects as well as the production and supply of electricity, and to offer solutions to improve access to healthcare and support for the elderly.
This model is complemented by a steady stream of acquisitions and partnerships, through the consolidation of Crédit Agricole S.A.’s business lines in their markets to build the universal bank. In 2023, Crédit Agricole S.A.’s external growth focused on six main areas of development. First, private banking and asset servicing increased in scale thanks to the current transaction with Degroof Petercam^5 and the acquisition in August 2023 of the European operations of RBC Investor Services. In addition, the Specialised Financial Services division developed a comprehensive mobility offering: the joint venture Leasys, created with Stellantis to become the European leader in long-term car rental; 100% of CA Auto Bank was acquired, in order to develop partnerships with smaller manufacturers and with independent distributors; six European subsidiaries of ALD and LeasePlan were acquired; and lastly, CA Mobility Services was formed, to create 20 service offers by 2026, mainly through the acquisition of a minority stake in WATEA^6, the creation of a joint venture with Opteven^7 and the acquisition of a stake in HiFlow. Moreover, CACF reached a milestone in 2023, with one million vehicles financed in Europe. This figure confirms CACF’s momentum in the mobility market. At the same time, the insurance business line extended its distribution network through new commercial partnerships: a non-life and credit insurance distribution agreement in Italy between Crédit Agricole Assurances and Banco BPM^8 and a partnership between Pacifica and Renault (Mobilize Financial Services) in car insurance. Furthermore, Crédit Agricole S.A. is structuring its property services operations via the acquisition of Casino’s property management activities, and is stepping up its digitalisation and innovation thanks to its acquisition of a stake in Worklife^9 and, in payment services, its partnership with Wordline^10. On 22 January 2024, Crédit Agricole S.A. announced its acquisition of a 7% minority stake in Worldline. Lastly, to support the transitions in the new CATE and CAST business lines, Crédit Agricole S.A. acquired minority stakes of 40% in R3 (energy transition consultancy) and 43% in Selfee (energy production and supply). In addition, Crédit Agricole Assurances acquired majority stakes of 93% in Omedys and 86% in Medicalib (see further below).
These two pillars of Crédit Agricole S.A.’s universal banking model ensure steady, high growth in revenues. From 2017 to 2023, revenues grew every year, in every environment.
*Progress of the Customer Project*
To roll out the Customer Project road maps were drawn up for the two new business lines, CA Transitions & Energies and CA Santé et Territoires.
First, CA Transitions & Energies is structured around two activities: on the one hand, transition advisory services for private individuals (via J'écorénove mon logement), corporates and public authorities (via R3), and on the other hand, the production and short circuit supply of renewable electricity, in cooperation with local players, supported by an investment offer and a financing offer. In this regard, the following targets were set: the structuring and distribution of nearly €19 billion in financing for renewable energy projects by 2030, the production of 2 GW of installed capacity by 2028 from assets held by Crédit Agricole, and the supply of 500 GWh by 2026, equivalent to the annual consumption of 196,000 inhabitants^11. Second, CA Santé et Territoires is organised into two industrial platforms serving the Group: access to healthcare, and “ageing well”. With respect to access to healthcare, Crédit Agricole S.A. aims to meet primary healthcare needs throughout France at all times. Targeted acquisitions (Omedis, a solution for assisted remote consultations, and Medicalib, a solution for connecting patients and paramedics for home care services) were carried out to structure the customer offer. As for “ageing well”, Crédit Agricole S.A. aims to anticipate and support society's adaptation to ageing through accommodation services and other solutions.
In addition, progress on the customer project was reflected in increased customer satisfaction and greater digitalisation. The Net Promoter Score of the Regional banks was up among professionals, corporates and high net worth customers. Crédit Agricole has become the preferred bank of French entrepreneurs^12, LCL was recognised for its Customer Service^13 and CA Italia topped the Net Promoter Score ranking^14. At the same time, the proportion of digital customers at regional banks is high (76.9%)^15) and growing (+8.7 percentage points over the last three years). LCL has deployed a digital journey for insurance subscriptions and 12% of its sales are made in “selfcare”. Lastly, BforBank's new commercial launch took place in September 2023. The increase in customer satisfaction and digitalisation was reflected in the customer acquisition figures. Since the launch of the Medium-Term Plan, net customer capture stood at 573,000, against a target of one million new customers for the entire duration of the Plan.
*Climate strategy*
New strong commitments in line with existing commitments were announced at the climate workshop held on 14 December 2023.
Crédit Agricole Group announced that it would focus and strengthen its support for renewable and low-carbon energies, in particular reflected by two targets: multiplying by 3 the annual structuring by CATE of renewable energy financing in France between 2020 and 2030, thus bringing cumulative financing to €19 billion by 2030; and a 80% increase in Crédit Agricole CIB’s exposure to low-carbon energies between 2020 and 2025, i.e. €13.3 billion in 2025 (vs. a target of +60% announced at the end of 2022). The Crédit Agricole Group is also stepping up its fossil fuel divestment, in particular with the announcement that it will halt all new fossil fuel development projects and implement a selective approach to supporting energy providers. The Group will also accelerate the reduction of financed emissions in the oil and gas sector by -75% from 2020 levels by 2030 (compared with the -30% reduction initially announced for 2022).
Crédit Agricole has also made commitments in 10 sectors that account for 60% of the Group's outstandings and 75% of global emissions, with the publication of Net Zero trajectories in eight sectors: oil and gas, automotive, electricity, commercial real estate, aviation, shipping, steel and cement; and measures to support trajectories in residential real estate and agriculture.
Achieving these targets is supported by collective action to incorporate these commitments into the Group's activities: in its offers, by driving the expansion of the Group’s range of services and expertise; in its processes, by managing carbon as a scarce resource, accounted for in budgeting processes, risk policies and lending decisions; and in its reporting, by the transparent and annual disclosure of the progress on its decarbonisation trajectories.
*Group activity*
*Commercial activity *saw a decline in lending in France, offset by the excellent performances of the other business lines.
In 2023, *gross customer capture* stood at 1.9 million retail banking customers, while *the customer base* grew by +191,000 customers. The slowdown in retail banking activity in France translated into a lacklustre loan production in *retail banking in France. *Between the third quarter and fourth quarters of 2023, production was stable at regional banks (-1.4%) and down at LCL (-6.6%). In *consumer finance*, production was stable compared with the fourth quarter of 2022, as the increased selectivity in the loan application process was maintained.
At the same time, corporate and investment banking, asset management, insurance and international retail banking activities once again enjoyed very good momentum this quarter. *Corporate and Investment Banking *posted a record performance for the quarter and for 2023. It continued to hold leading positions, ranking 2^nd in green, social and sustainable bond issuance^16 in euros, and 2^nd in issuances of all euro bonds worldwide^17. *Asset management* was driven by strong inflows (€26 billion in 2023, of which €19 billion in the fourth quarter of 2023), taking assets under management beyond the €2,000 billion mark. *Insurance* was also boosted by a record unit-linked rate of 50.2% of gross inflows in this quarter; the property and casualty insurance equipment rate increased to 43.1% for the Regional Banks (+0.5 percentage point compared to the fourth quarter of 2022), 27.5% for LCL (+0.4 percentage point) and 18.8% for CA Italy (+2.0 percentage points); property and casualty insurance premium income increased by +7.6% compared to the fourth quarter of 2022; and death and disability insurance activity was strong (premium income rose by +10.6% compared to the fourth quarter of 2022). Lastly, for CA Italy, loan production continued to recover strongly, increasing by +32.3% in Italy compared with the third quarter of 2023.
Lastly, loans outstanding in retail banking, at €876 billion^18, grew further by 2.5% compared with the fourth quarter of 2022. Customer savings in the retail banking balance sheet, amounting to €823 billion^19, increased again in this quarter by +2.0% compared to September 2023, of which +1.5% for the Regional Banks, +3.9% for LCL and 1.8% for CA Italy.
*Group results*
*In the fourth quarter of 2023*, Crédit Agricole Group’s *stated net income Group share* came to *€1,724 million*, down -23.2% compared to the fourth quarter of 2022.
The *specific items* for the quarter had a combined impact of *+€86 million on net income Group share* and included +€69 million in recurring accounting items and +€17 million in non-recurring items. The recurring items mainly correspond to the reversal of the Home Purchase Saving Plans provision of +€63 million (+€5 million for LCL, +€4 million for the Corporate Centre and +€55 million for the Regional Banks); the other recurring items (+€6 million) are split between the issuer spread portion of the FVA^20 and secured lending (+€4 million) and loan book hedging (+€1 million). The non-recurring items relate to the ongoing reorganisation of the Mobility activities^21 in the SFS division (+€17 million).
Restated from these specific items, *Crédit Agricole Group’s underlying net income Group share*^22 amounted to €*1,638 million, *down -27.5% compared with the fourth quarter of 2022.
Crédit Agricole Group – Stated and Underlying results Q4-2023 and Q4-2022
€m Q4-23
stated Specific items Q4-23
underlying Q4-22
stated Specific items Q4-22
underlying ∆ Q4/Q4
stated ∆ Q4/Q4
underlying
*Revenues* *8,769* *93* *8,677* *8,852* *(63)* *8,914* (0.9%) (2.7%)
Operating expenses excl.SRF (5,682) 4 (5,686) (5,283) (84) (5,199) +7.5% +9.4%
SRF - - - - - - n.m. n.m.
*Gross operating income* *3,088* *97* *2,991* *3,568* *(147)* *3,715* *(13.5%)* *(19.5%)*
Cost of risk (762) - (762) (753) - (753) +1.1% +1.1%
Equity-accounted entities 73 - 73 97 (8) 105 (24.7%) (30.5%)
Net income on other assets (19) - (19) (13) - (13) +45.4% +45.4%
Change in value of goodwill 2 12 (9) - - - n.m. n.m.
*Income before tax* *2,382* *109* *2,274* *2,899* *(155)* *3,054* *(17.8%)* *(25.5%)*
Tax (455) (23) (432) (436) 176 (612) +4.3% (29.4%)
Net income from disconted or held-for-sale ope. (10) - (10) (27) (14) (13) (63.2%) (24.3%)
*Net income* *1,918* *86* *1,832* *2,435* *7* *2,428* *(21.3%)* *(24.6%)*
Non controlling interests (194) - (194) (190) (20) (170) +2.1% +13.9%
*Net income Group Share* *1,724* *86* *1,638* *2,246* *(13)* *2,258* *(23.2%)* *(27.5%)*
*Cost/Income ratio excl.SRF (%)* *64.8%* * * *65.5%* *59.7%* * * *58.3%* *+5.1 pp* *+7.2 pp*
In the fourth quarter of 2023, total *underlying revenues* amounted to €8,677 million, down -2.7% compared to the fourth quarter of 2022, due to the Asset Gathering business line (-23.3%), in which the Insurance business line was impacted by the very high weather-related claims compared with a positive Q4-22, as well as by an IFRS 17^23 base effect, and the French Retail Banking business line (-4.7%) due to the increase in refinancing costs and customer resources. This was partly offset by the steady increase in the loan production rate and by gains from macro-hedging. Revenues from the other business lines rose: Specialised Financial Services (+23.9%), boosted by the line-by-line integration of CA Auto Bank^24 since the second quarter of 2023 and the takeover of ALD and Leaseplan activities in six European countries^25 since the third quarter of 2023; International Retail Banking was up 9.2%, with a higher net interest margin over the period as a result of the rise in interest rates; the Large Customers division posted revenues up +8.6%, driven by a high level of revenues in CIB and the integration of ISB^26 in Asset Servicing.
*Underlying operating expenses excluding the SRF (Single Resolution Fund)* were -€5,686 million, up +9.4% compared to the fourth quarter of 2022. This increase is primarily due to the higher recurring costs of the business lines (staff costs and variable compensation, mainly in Retail Banking, International Retail Banking and LCL). It also reflects a scope effect of +€192 million linked to the consolidation of CA Auto Bank within the Specialised Financial Services division (+€83 million), ISB activities within the Asset Servicing division (+€100 million) and the first integration of CATE (+€9 million) into the Corporate Centre division. Lastly, it also reflects non-recurring items, i.e. a 2022 base effect and other exceptional items. Overall, the Group posted an *underlying cost/income ratio excluding SRF* of 65.5%, up +7.2 percentage points versus the fourth quarter of 2022, and an *underlying gross operating income* of €2,991 million, down -19.5% over the same period.
The *underlying cost of credit risk *increased moderately, to -€762 million, an increase of +1.1% compared to the fourth quarter of 2022, when it stood at -€753 million. The expense of -€762 million in the fourth quarter of 2023 breaks down into a -€27 million provision for performing loans (levels 1 and 2) compared with a -€50 million provision in the fourth quarter of 2022, a -€669 million provision for proven risk (level 3), compared with -€741 million in the fourth quarter of 2022 (which included provisions for a specific loan), and finally a -€66 million provision for other risks corresponding mainly to legal provisions. The provisioning levels were determined by taking into account several weighted economic scenarios, as in previous quarters, and by applying adjustments on sensitive portfolios. The weighted economic scenarios for the fourth quarter were updated, with a favourable scenario (French GDP at +1.2% in 2024, +1.6% in 2025) and an unfavourable scenario (French GDP at +0.1% in 2024 and +0.7% in 2025). The* cost of credit risk on outstandings*^*27** over a rolling four-quarter period stood at 25 basis points, which is in line with the 25 basis point assumption of the Medium-Term Plan. *It stands at 26 basis points on a quarterly annualised basis^28.
*Underlying pre-tax income stood at €2,274 million*, a year-on-year decrease of -25.5% from fourth quarter 2022. The underlying pre-tax income included the contribution from *equity-accounted entities* for €73 million (down -30.5%, mainly due to the line-by-line consolidation of CA Auto Bank, formerly FCA Bank) and net income on other assets, which came to €-19 million this quarter. The underlying *tax charge* *fell -29.4%* over the period. *Underlying net income* before non-controlling interests was down -24.6% to €1,832 million. Non-controlling interests rose +13.9%. Lastly, *underlying net income Group share came to €1,638 million, down -27.5% *compared with the fourth quarter of 2022.
Crédit Agricole Group – Stated and underlying results, 2023 and 2022
€m 2023
stated Specific items 2023
underlying 2022
stated Specific items 2022
underlying ∆ 2023/2022
stated ∆ 2023/2022
underlying
*Revenues* *36,492* *851* *35,641* *34,804* *480* *34,324* +4.8% +3.8%
Operating expenses excl.SRF (21,464) (14) (21,450) (20,304) (174) (20,130) +5.7% +6.6%
SRF (620) - (620) (803) - (803) (22.8%) (22.8%)
*Gross operating income* *14,408* *837* *13,572* *13,698* *306* *13,392* *+5.2%* *+1.3%*
Cost of risk (2,941) (84) (2,856) (2,892) (195) (2,697) +1.7% +5.9%
Equity-accounted entities 263 (39) 302 419 (8) 427 (37.2%) (29.4%)
Net income on other assets 88 89 (1) 28 - 28 x 3.1 n.m.
Change in value of goodwill 2 12 (9) - - - n.m. n.m.
*Income before tax* *11,821* *814* *11,007* *11,253* *103* *11,150* *+5.0%* *(1.3%)*
Tax (2,748) (203) (2,545) (2,647) 59 (2,706) +3.8% (5.9%)
Net income from discounted or held-for-sale ope. (3) - (3) 121 80 40 n.m. n.m.
*Net income* *9,071* *611* *8,459* *8,727* *242* *8,484* *+3.9%* *(0.3%)*
Non-controlling interests (813) (0) (813) (729) (7) (722) +11.4% +12.5%
*Net income Group Share* *8,258* *611* *7,647* *7,997* *236* *7,762* *+3.3%* *(1.5%)*
*Cost/Income ratio excl.SRF (%)* *58.8%* * * *60.2%* *58.3%* * * *58.6%* *+0.5 pp* *+1.5 pp*
*Over the full year 2023,* stated net income Group share amounted to €8,258 million, versus €7,997 million for full year 2022, an increase of +3.3%.
*Specific items for 2023* had a positive impact of *+€611 million* on stated net income Group share and were composed of +€331 million in recurring accounting items and +€280 million in non-recurring items. The recurring items mainly correspond to the reversal of the Home Purchase Saving Plans provision for +€360 million, as well as the accounting volatility items of the Large Customers division (the DVA for -€11 million and loan book hedging for -€18 million). The non-recurring items are related to the reorganisation of the Mobility activities^29 of the Specialised Financial Services division (+€176 million) and the reversal of provision for the Cheque Image Exchange fine (+€104 million).
Excluding specific items, *underlying net income Group share amounted to* *€7,647 million, *down -1.5% compared with full year 2022.
*Underlying revenues totalled €35,641 million*, up *+3.8%* compared with 2022. This increase was due to very high revenues across all the business lines in the *Asset Gathering* division, the line-by-line integration of CA Auto Bank in the *Specialised Financial Services* division, a very high level of revenues in the *Large Customers *division and the higher net interest margin in the *International Retail Banking *division; by contrast, revenues in the *French Retail Banking *division were affected by the lower interest margin.
Underlying *operating expenses* excluding SRF amounted to -€21,450 million, up +6.6% compared with 2022, mainly including the scope effect relating to the line-by-line consolidation of CA Auto Bank within the Specialised Financial Services division since the second quarter of 2023, the consolidation of the operations of ISB within the Asset Servicing division since the third quarter of 2023, and the first consolidation of CATE into the Corporate Centre division in the fourth quarter of 2023. The remainder of the increase was due to higher staff costs in an inflationary environment, variable compensation linked to business performance, and higher IT expenses. *The underlying cost/income ratio excluding SRF *was 60.2%, up +1.5 percentage points compared with that of 2022. The SRF totalled -€620 million in 2023, down -22.8% compared to 2022.
Underlying *gross operating income* totalled €13,572 million, up +1.3% compared with 2022.
*The underlying cost of risk* was -€2,856 million (including -€220 million in cost of risk on performing loans (Stages 1 and 2), -€2,554 million in cost of proven risk (stage 3) and -€82 million in other risks, i.e. an increase of +5.9% compared with 2022.
In 2023, risk indicators confirmed *the high quality of Crédit Agricole Group’s assets and risk coverage level*. The diversified loan book is mainly geared towards home loans (46% of gross outstandings) and corporates (32% of gross outstandings). Loan loss reserves amounted to €20.7 billion (€11.1 billion for Regional Banks), 42% of which represented provisioning of performing loans (48% for Regional Banks). The loan loss reserves for performing loans have increased at Group level by +€3.3 billion since the fourth quarter of 2019. The prudent management of these loan loss reserves has enabled the Crédit Agricole Group to have one of the best^30 overall coverage ratios for doubtful loans (82.6% at the end of December 2023) among the largest European banks.
*Underlying income before tax,* discontinued operations and non-controlling interests came to €11,007 million, down slightly by -1.3% compared with 2022. The tax charge was €2,545 million, down by -5.9%, with an underlying effective tax rate of 23.8%.
*Underlying net income Group share* thus came to €7,647 million, down by -1.5% compared with *2022*.
NB: Unless mentioned otherwise, the results by business will be commented on the basis of the stated results.
*Regional banks*
In 2023,* gross customer capture was positive *with +1.1 million new customers^31. The customer base of the Regional Banks was marked by the high percentage of customers using their current accounts as their main account, at 76.1%^32 (up 2 percentage points over the last three years), and by the high proportion of digital customers, at 76.9%^33. The payment card stock was up by +1.7% year-on-year, 14.8% of which was made up of premium cards. Lastly, the equipment rate for *property and casualty insurance *was 43.1% at end-December 2023, up +0.5 percentage point compared with September 2022.
*Loan production was down* -28.6% compared to the fourth quarter 2022, and -1.4% compared to the third quarter 2023. The drop was sharp for home loans (-40.8% compared to the fourth quarter 2022, and -15.9% compared to the third quarter 2023). Conversely, the home loan production rate increased by 42 basis points compared with the third quarter of 2023. The average rate for 20-25 year lending was 4.32% in the first week of January 2024. *Loan outstandings* stood at €646.2 billion at end-December 2023 (+2.4% compared with end-December 2022 and +0.2% compared with end-September 2023), driven by the corporate market (+2.6% compared with the fourth quarter of 2022).
*Total customer assets* rose by +3.9% year on year to €888.0 billion at end-December 2023. This growth was mainly driven by on-balance sheet deposits, which reached €595.8 billion at end-December 2023, up +3.3% compared with end-December 2022. Compared with end-September 2023, on-balance sheet deposits rose by +1.5%, driven by an +18.3% increase in term deposits and, to a lesser extent, passbook accounts (+2.2%). Outflows from demand deposits stabilised (-3.4%) compared with end-September 2023. Off-balance sheet customer assets totalled €292.2 billion at end-December 2023, up +5.0% year-on-year, driven by net inflows, particularly on unit-linked bonds, and positive market effects.
*In the fourth quarter of 2023, the stated revenues of the Regional Banks including SAS Rue La Boetie’s dividend* amounted to €3,223 million, down -4.0% from fourth quarter 2022. Net interest margin was down -31.8%^34 compared with the fourth quarter of 2022, and -10.6% compared with the third quarter of 2023^35, penalised by higher refinancing costs, partially offset by increased loan yields and macro-hedging gains. Portfolio revenues increased in the fourth quarter of 2023, reflecting positive market effects. Fee and commission income remained on a positive trend, at +6.5%, thanks to strong momentum in payment and insurance. *Operating expenses* were down by -2.0% compared with the fourth quarter of 2022, due to a base effect in the fourth quarter of 2022 that notably included a donation to combat illiteracy for €35 million and the costs of transforming CAGIP for €30 million; growth in recurring expenses was therefore only -0,0%^36. As a result, *gross operating income* was down -9.8% compared with the fourth quarter of 2022. *The cost of risk* was up +3.9% compared with the fourth quarter of 2022 to -€322 million. Risk indicators remained stable, with a cost of risk/outstandings of 18 basis points, a non-performing loans ratio of 1.8% (or +0.1 percentage points compared with the third quarter of 2023) and a high coverage ratio of 96.5% (-1.1 percentage points compared with the third quarter of 2023). *The net income Group share* of the Regional Banks was €349 million in the fourth quarter of 2023, down -16.9% compared to the fourth quarter of 2022.
*The Regional banks’ contribution to the results of Crédit Agricole Group amounted to €336 million*^*37* (-23.5% compared with the fourth quarter of 2022) in stated net income Group share in the fourth quarter of 2023, with revenues of €3,227 million (-5.0%) and a cost of risk of -€321 million (+4.6%).
*In 2023, revenues including the SAS Rue La Boétie dividend* amounted to €14,792 million, down -4.7% compared with 2022. Net interest margin, excluding the reversal of Home Purchase Savings Plans provisions, was down -27.6% over the full year to €4,482 million at the end of 2023. It was adversely affected by higher refinancing costs, which rose faster than the gradual repricing of new loan production. Portfolio revenues were up due to the positive market effect, and fee and commission income came to €7,277 million, up +3.7% in 2023. Operating expenses posted a controlled increase of +2.1% in 2023. *Gross operating income* was down as a result by-15.4% over 2023 to €5,061 million. The *cost of risk* remained stable over the full year, rising by +1.3% to €1,155 million. *The Regional Banks’ net income Group share*, including SAS Rue La Boétie’s dividend, amounted to €3,386 million, down -15.9% over the full year 2023.
*The Regional banks’ contribution to the results of Crédit Agricole Group in 2023 *amounted to €1,756 million (-32.6%) in stated net income Group share, with revenues of €13,259 million (-6.3%) and a cost of risk of -€1,152 million (+1.4%).
*Crédit Agricole S.A.*
*Results*
Crédit Agricole S.A.’s Board of Directors, chaired by Dominique Lefebvre, met on 7 February 2024 to examine the financial statements for the fourth quarter of 2023.
Crédit Agricole S.A. – Stated and underlying results, Q4-2023 and Q4-2022
*€m* *Q4-23*
*stated* *Specific items* *Q4-23*
*underlying* *Q4-22*
*stated* *Specific items* *Q4-22*
*underlying* *∆ Q4/Q4*
*stated* *∆ Q4/Q4*
*underlying*
*Revenues* *6,040* *19* *6,021* *5,967* *(63)* *6,029* *+1.2%* *(0.1%)*
Operating expenses excl.SRF (3,710) 4 (3,714) (3,231) (20) (3,211) +14.8% +15.7%
SRF - - - - - - n.m. n.m.
*Gross operating income* *2,330* *24* *2,307* *2,735* *(83)* *2,818* *(14.8%)* *(18.1%)*
Cost of risk (440) - (440) (443) - (443) (0.7%) (0.7%)
Equity-accounted entities 61 - 61 80 (8) 88 (24.3%) (31.3%)
Net income on other assets (17) - (17) (10) - (10) +61.3% +61.3%
Change in value of goodwill 2 12 (9) - - - n.m. n.m.
*Income before tax* *1,937* *35* *1,902* *2,362* *(91)* *2,453* *(18.0%)* *(22.5%)*
Tax (369) (4) (365) (323) 160 (483) +14.1% (24.5%)
Net income from discounted or held-for-sale ope. (10) - (10) (27) (14) (13) n.m. n.m.
*Net income* *1,558* *32* *1,527* *2,012* *55* *1,957* *(22.6%)* *(22.0%)*
Non-controlling interests (224) (0) (224) (228) (30) (199) (2.1%) +12.4%
*Net income Group Share* *1,334* *31* *1,303* *1,784* *25* *1,758* *(25.2%)* *(25.9%)*
*Earnings per share (€)* *0.36* *0.01* *0.35* *0.49* *0.01* *0.48* *(25.2%)* *(26.1%)*
*Cost/Income ratio excl. SRF (%)* *61.4%* * * *61.7%* *54.2%* * * *53.3%* *+7.3 pp* *+8.4 pp*
*In the fourth quarter of 2023*, Crédit Agricole S.A.’s *stated net income Group share* amounted to €*1,334** **million*, a decline of -25.2% compared to the fourth quarter of 2022.
*Specific items* for the quarter had a cumulative impact of +€31 million on net income Group share, and included recurring accounting items for +€14 million and non-recurring items for +€17 million. The recurring items mainly correspond to the reversal of the Home Purchase Savings Plans provision of +€8 million (+€4 million for LCL and +€4 million for the Corporate Centre); the other recurring items – the issuer spread portion of the FVA^38 and secured lending (+€4 million) and loan book hedging (+€1 million) – offset each other. The non-recurring items relate to the ongoing reorganisation of the Mobility activities^39 in the SFS division (+€17 million).
Excluding specific items, *underlying net income Group share*^40 stood at *€1,303 million*, down -25.9% compared with the fourth quarter of 2022.
*Underlying revenues* totalled €6,021 million, stable at -0.1% compared with the fourth quarter of 2022, but up +9.1% excluding the Insurance business line. Excluding Insurance, revenue growth was driven by all business lines: *Asset Management* was up +2.1%, driven by financial income and stable management fees; revenues from the *Large Customers division* were up +8.5%, thanks to a good level of CIB revenues (+1.1%) compared with an already-high fourth quarter 2022, and revenues from Asset Servicing (+39.9%), driven by the integration of RBC IS Europe’s European activities^41; revenues from the *Specialised Financial Services* division were up +23.9%, boosted by the integration of CA Auto Bank^42 and the takeover of the activities of ALD and LeasePlan in six European countries^43 since the third quarter of 2023; CACF’s margin rate was up between the fourth and third quarters of 2023; revenues from the *French Retail banking* division rose by +4.2%^44 driven by a +3.5% increase in the net interest margin and a +4.9% increase in fee and commission income; revenues from the *International Retail banking* division were up +8.7%, with a +4.4% increase for CA Italy, driven by growth in NIM, and a +22.5%^45 increase for Poland, Egypt and Ukraine. Revenues from the *Insurance* business line were down -47.3% compared with the fourth quarter of 2022 pro forma IFRS 17 data, accounted for by a -€262 million decline due to the high level of weather-related claims during the quarter compared with a more positive fourth quarter 2022, and a -€205 million decline due to the base effect of IFRS 17^46 and other factors.
*Underlying operating expenses *stood at -€3,714 million, an increase of +15.7%, or an increase of -€503 million compared with the fourth quarter of 2022, of which +3.7% was for recurring business line expenses (i.e. an increase of -€141 million, of which around -€103 million for staff costs and variable compensation, mainly in the Large Customers, International Retail Banking and LCL divisions). This change includes a scope effect of -€192 million, linked to the consolidation of CA Auto Bank within the Specialised Financial Services division (-€83 million), the consolidation of RBC IS Europe activities within the Asset Servicing division (-€100 million) and the first integration of Crédit Agricole Transitions & Énergies within the Corporate Centre division (-€9 million). In addition, there were non-recurring effects of approximately -€187 million, including around -€97 million for 2022 base effect^47, around -€89 million for other non-recurring items^48 and a foreign exchange impact of +€18 million.
The *underlying cost/income ratio excluding SRF* in the fourth quarter of 2023 thus stood at 61.7%, an improvement of +8.4 percentage points compared with the fourth quarter of 2022.
Underlying *gross operating income* stood at €2,307 million, or -18.1%.
As at 31 December 2023, risk indicators confirm *the high quality of Crédit Agricole S.A.’s assets and risk coverage level*. The diversified loan book is mainly geared towards home loans (27% of gross outstandings) and corporates (43% of Crédit Agricole S.A. gross outstandings). The Non-Performing Loans ratio was down slightly compared with the previous quarter and remained low at 2.6% (-0.1 percentage point). The coverage ratio^49 was high at 70.8%, up +0.1 percentage points over the quarter. *Loan loss reserves*^*50* amounted to €9.6 billion for Crédit Agricole S.A., down -2.7% compared with end-September 2023. Of those loan loss reserves, 35% were for performing loan provisioning compared with 22% at end-2019. Loan loss reserves for performing loans were up by €1.4 billion compared with end-2019.
The underlying *cost of credit risk* was stable at -€440 million (i.e. -0.7% compared with the fourth quarter of 2022, when it stood at -€443 million). The -€440 million expense in the fourth quarter of 2023 consists of a small provision on performing loans (Stages 1 and 2) for -€0.8 million (compared with a reversal of +€53 million in the fourth quarter of 2022), a provision of -€373 million for proven risk (Stage 3 – compared with -€521 million in the fourth quarter of 2022), and lastly, a provision of -€66 million for other risks, corresponding mainly to legal provisions. The provisioning levels were determined by taking into account several weighted economic scenarios, as in previous quarters, and by applying adjustments on sensitive portfolios. The weighted economic scenarios for the fourth quarter were updated, with a favourable scenario (French GDP at +1.2% in 2024, +1.6% in 2025) and an unfavourable scenario (French GDP at +0.1% in 2024 and +0.7% in 2025). The cost of risk relative to outstandings on a four quarter rolling basis^51 stood at 33 basis points, *i.e. in line with the assumption of the Medium-Term Plan of 40 basis points* and 34 basis points on an annualised quarterly basis^52.
The underlying contribution of *equity-accounted entities *came to €61 million (-31.3% compared with the fourth quarter of 2022) and *net income on other assets* was -€17 million (-€7 million compared with the fourth quarter of 2022); the changes in these two income statement categories were impacted by a scope effect with the line-by-line consolidation of CA Auto Bank within the Specialised Financial Services division.
*Underlying pre-tax income* stood at €1,902 million, down -22.5% compared with the fourth quarter of 2022.
The *underlying effective tax rate* was 19.7% and the underlying tax charge was -€365 million, down -24.5% compared with the fourth quarter of 2022. *Net income from discontinued or held-for-sale operations* was -€10 million, compared with -€13 million in the fourth quarter of 2022.
*Underlying net income before non-controlling interests* was accordingly down -22.0% to €1,527 million. *Non-controlling interests *amounted to -€224 million, up +12.4% year on year.
*Underlying net income Group share* was down -25.9% compared with the fourth quarter of 2022 at €1,303 million.
*Underlying earnings per share (pro-forma IFRS 17) *in the fourth quarter of 2023 came to €0,35, or -26.1%, compared to the fourth quarter of 2022.
Crédit Agricole S.A. – Stated and underlying results, 2023 and 2022
*€m* *2023*
*stated* *Specific items* *2023*
*underlying* *2022*
*stated* *Specific items* *2022*
*underlying* *∆ 2023/2022*
*stated* *∆ 2023/2022*
*underlying*
*Revenues* *25,180* *617* *24,563* *22,491* *68* *22,423* *+12.0%* *+9.5%*
Operating expenses excl.SRF (13,632) (14) (13,618) (12,614) (110) (12,504) +8.1% +8.9%
SRF (509) - (509) (647) - (647) (21.3%) (21.3%)
*Gross operating income* *11,039* *603* *10,436* *9,231* *(42)* *9,273* *+19.6%* *+12.5%*
Cost of risk (1,777) (84) (1,693) (1,746) (195) (1,551) +1.8% +9.2%
Equity-accounted entities 197 (39) 235 371 (8) 379 (46.9%) (37.9%)
Net income on other assets 85 89 (4) 15 - 15 x 5.5 n.m.
Change in value of goodwill 2 12 (9) - - - n.m. n.m.
*Income before tax* *9,546* *580* *8,966* *7,871* *(245)* *8,116* *+21.3%* *+10.5%*
Tax (2,201) (153) (2,047) (1,806) 150 (1,956) +21.8% +4.7%
Net income from discounted or held-for-sale ope. (3) - (3) 121 80 40 n.m. n.m.
*Net income* *7,343* *427* *6,916* *6,186* *(15)* *6,201* *+18.7%* *+11.5%*
Non-controlling interests (995) (2) (992) (879) (17) (863) +13.1% +15.1%
*Net income Group Share* *6,348* *425* *5,923* *5,306* *(32)* *5,338* *+19.6%* *+11.0%*
*Earnings per share (€)* *1.94* *0.14* *1.80* *1.68* *(0.01)* *1.69* *+15.6%* *+6.5%*
*Cost/Income ratio excl.SRF (%)* *54.1%* * * *55.4%* *56.1%* * * *55.8%* *-1.9 pp* *-0.3 pp*
*In 2023*, the stated net income Group share was €6,348 million, an all-time high and up sharply by +19.6% compared with 2022, boosted by all development projects.
*Specific items for 2023* had a positive impact of *+€425 million* on stated net income Group share and comprise +€188 million in recurring accounting items and +€237 million in non-recurring items. The recurring items mainly correspond to the reversal of the Home Purchase Savings Plans provision for +€216 million, as well as the accounting volatility items of the Large Customers division (the DVA for -€11 million and loan book hedging for -€18 million). The non-recurring items are related to the reorganisation of the Mobility activities^53 of the Specialised Financial Services division (+€176 million) and the reversal of the provision for the Cheque Image Exchange fine (+€62 million).
Excluding specific items, *underlying net income Group share reached €5,923 million*, up* +11.0%* compared with 2022^54.
*Underlying earnings per share stood at €1.80 per share* for the full year 2023, up +6.5% compared with 2022.
*Underlying*^55* RoTE, *which is calculated on the basis of an annualised underlying net income Group share^56 and IFRIC charges linearised over the year, net of annualised Additional Tier 1 coupons (return on equity Group share excluding intangibles) and restated for certain volatile items recognised in equity (including unrealised gains and/or losses), came to *12.6% for 2023*, stable from the full year 2022 (12.6%).
*Underlying revenues* were up *+9.5%* compared with the full year 2022, driven by all business lines. Underlying *operating expenses* excluding SRF were up +8.9%. The cost/income ratio excluding SRF was 55.4%, an improvement of 0.3 percentage point compared with that of 2022 and below the Medium-Long Term Plan target. The SRF for the period came to -€509 million, or -21.3% compared with the full year 2022. Underlying *gross operating income* totalled €10,436 million, up +12.5% compared with the full year 2022. The *cost of risk* increased by +9.2% over the period, to -€1,693 million, versus -€1,551 million for the full year 2022. Lastly, *the results of the equity-accounted entities *decreased by -37.9%, due to the line-by-line consolidation of CA Auto Bank since the second quarter of 2023.
*Analysis of the activity and the results of Crédit Agricole S.A.’s divisions and business lines*
*Activity of the Asset Gathering division*
In the fourth quarter of 2023, assets under management in the Asset Gathering (AG) division stood at €2,564 billion, up +2.9% compared to end-September 2023, thanks to net inflows and positive market effects this quarter (+€72.9 billion). Net inflows for the quarter amounted to +€19.4 billion for the division, mainly due to +€19.5 billion in net inflows for Amundi and +€0.5 billion in net inflows for Savings/Retirement, while Wealth Management recorded a slight outflow (-€0.6 billion). In addition, the deconsolidation of Lyxor Inc. created a scope effect in the amount of -€20.0 billion this quarter. Over the year, assets under management also rose by +6.2% due to a positive market effect (+€144.9 billion), with positive year-on-year net inflows (+€23.9 billion) and strong inflows into unit-linked bond products. Excluding double counting, assets under management stood at €2,285 billion at 31 December 2023, up +6.8% compared to 31 December 2022.
*The Insurance activity (Crédit Agricole Assurances)* generated fourth-quarter total premium income of €9.5 billion, up +12.4% compared with the fourth quarter of 2022, driven by higher premium income in Savings/Retirement, and in Death and Disability, Creditor and Group insurance. Premium income for the whole of 2023 reached a record €37.2 billion, up 4.5% from 2022.
In *Savings/Retirement*, premium income for the fourth quarter of 2023 amounted to €7.1 billion (up +13.6% from the fourth quarter of 2022), driven in particular by the acquisition of a large group retirement contract. The unit-linked rate rose by 5.9 percentage points compared with the fourth quarter of 2022, to 50.2%. Excluding the group retirement contract mentioned previously, the unit-linked rate in gross inflows would be 45.5%. Net inflows amounted to €0.5 billion this quarter; the positive net inflows from unit-linked contracts (+€1.8 billion) were unable to offset the net outflows of the euro funds (-€1.3 billion). For the full year 2023, premium income amounted to €26.4 billion, up +4.4% from the full year 2022, driven by the unit-linked bond products and group retirement insurance.
*Assets* (savings, retirement and death and disability) stood at the record level of €330.3 billion, up year-on-year by +€8,9 billion, i.e. +2.8%. Unit-linked contracts stood at a record 28.9% of assets, up +3.3 percentage points year-on-year, buoyed by the successful marketing of unit-linked bond products and favourable financial markets.
*The average policyholders’ deferred profit-sharing* rate on Predica’s euro-denominated policies stood at 2.80%^57 at the end of 2023, up +50 cents year-on-year (after a +106 cent increase in 2022). Lastly, the Policy Participation Reserve (PPE^58) amounted to €9.8 billion at 31 December 2023, representing 4.5% of total euro outstandings.
*Property and casualty insurance* activity was dynamic, with premium income of €1.1 billion in the fourth quarter of 2023, up +7.6% compared to fourth quarter 2022. In 2023, total premium income was €5.7 billion, up +9.1% compared with the full year 2022. At the end of December 2023, the portfolio of property and casualty policies totalled nearly 15.8 million^59, a +3.5% increase over one year. The equipment of individual customers in the banking networks of Crédit Agricole Group increased compared with end-December 2022 for all networks: 43.1%, or +0.5 percentage point for Regional Banks, 27.5%, or +0.4 percentage point for LCL, and 18.8% for CA Italy including Creval’s customer base, or +2.0 percentage points. The combined ratio stood at 97.1%^60, up 1.8 percentage points year-on-year, with the fourth quarter of 2023 having been heavily impacted by weather-related claims, while the discount rate remained stable.
In *Death & Disability/Creditor/Group insurance*, premium income for the fourth quarter of 2023 stood at €1.3 billion, up +10.6% from the fourth quarter of 2022, thanks to the growth of premium income in death & disability (up +4.0%) and group insurance (+34.7%). Premium income from creditor insurance was up 10.1%, driven by the increase in Regional Banks and LCL backing rates, and single premiums in international markets. For the full year 2023, total premium income was €5.1 billion, up +8.3% compared with the full year 2022.
The fourth quarter for the asset management market in Europe was characterized by high risk aversion, resulting in modest inflows, mainly in treasury products, and strong outflows in active management, which passive management was unable to offset.
Against this backdrop, *Asset Management (Amundi)* posted strong net inflows, in particular for treasury and bond products, passive management and Asia, in both the Retail and Institutional segments.
*Assets under management* reached €2,037 billion at 31 December 2023, up +3.2% compared with 30 September 2023 and +7.0% compared with 31 December 2022.
*By customer segment*, *Retail* recorded positive inflows of +€1.1 billion*,* marked as in the previous quarters by high risk aversion, but posting a good level of activity in partner networks in France and internationally (+€1.1 billion), and +€0.5 billion in the third-party distributor segment. In China, Amundi BOC recorded net outflows -€0.4 billion. Over the year, inflows were driven by the French networks and third-party distributors, while the international networks, excluding Amundi BOC, posted balanced inflows amid competition from BTP Valore in Italy, despite the success of bond funds at maturity.
The *Institutional segment* recorded *strong inflows*, at +€12.0 billion, driven by Treasury (+€7.0 billion), in particular for Corporates. MLT inflows were positive thanks to a new mandate awarded to CA&SG insurers (+€4 billion), despite the continued withdrawals from euro-denominated policies. Over the year, activity was characterized by the rebound in inflows for treasury products, while inflows for MLT assets were positive thanks to bonds and liabilities, despite continued outflows from euro-denominated policies.
Lastly, *JVs*^61 recorded positive inflows across all countries, at +€6.3 billion, thanks to the continued growth of the Indian JV, SBI MF and inflows from Amundi NH (South Korea); the stabilisation of the Chinese JV ABC-CA (China, +€0.9 billion excluding Channel Business activity), thanks to positive inflows from mutual funds. As with the quarter, the full year in this segment was characterized by continued inflows for SBI MF (India) in active management, a good level of activity in active management and treasury products for Amundi NH in South Korea, and outflows from low-margin institutional mandates in China.
*In Wealth Management*^*62**,* assets under management (CA Indosuez Wealth Management and LCL Private Banking) were stable at €197.5 billion at the end of December 2023 (including €135.1 billion for Indosuez Wealth Management), and were up +1.6% compared with the end of September 2023, as positive market impacts offset outflows at LCL.
*Results of the Asset Gathering division*
The 2023 data for the Insurance business line, and therefore the data for the Asset management and Savings business line, are compared with 2022 pro forma IFRS 17 data.
*In the fourth quarter of 2023,* the Asset Gathering division generated *revenues* amounting to €1,555 million, down -22.9% compared with the fourth quarter of 2022 due to weather events in the fourth quarter that impacted Insurance activity, while revenues from Asset Management were resilient due to management fee and commission income as well as financial income; revenues from Wealth Management are falling slightly.
Costs excluding SRF were up +11.2% due mainly to an increase in the cost of insurance (2022 base effect and an increase in IT costs). Thus, the cost/income ratio excluding SRF stood at 46.7%, up +14.3 percentage points compared to the fourth quarter of 2022. Gross operating income stood at €828 million, down -39.2% compared with the fourth quarter of 2022. Taxes totalled -€173 million, a decrease of -57.2%. The *net income Group share* of Asset Gathering stood at €546 million, down -36.2% compared with the fourth quarter of 2022. Between the fourth quarter of 2023 and the fourth quarter of 2022, *net income Group share* was up in Asset Management (+4.1%) and down in the Insurance (-47.0%) and Wealth Management (-55.9%) business lines, due to initial costs related to the Degroof Petercam transaction and various non-recurring items.
*In 2023*, the Asset Gathering division generated *revenues* of €6,688 million, up +6.8% compared with 2022, boosted by positive contributions from all business lines. Costs excluding SRF were up +3.0%. As a result, the cost/income ratio excluding SRF stood at 43.0%, down -1.6 percentage points compared with the full year 2022. Gross operating income came to €3,808 million, up +10.0% compared with the full year 2022. Taxes totalled
-€872 million, down -7.3%. The *net income Group share* of the Asset Gathering division stood at €2,541 million, up by +11.4% compared with the full year 2022, for all the division’s business lines: asset management (+8.6%), insurance (+12.6%) and wealth management (+12.5%).
For the full year 2023, the Asset Gathering division contributed 38% of the underlying net income Group share of Crédit Agricole S.A.’s core businesses (excluding Corporate Centre division) and 26% of the underlying revenues excluding the Corporate Centre division.
As at 31 December 2023, equity allocated to the division amounted to €12.4 billion, including €10.6 billion for Insurance, €1.3 billion for Asset Management, and €0.6 billion for Wealth Management. The division’s risk weighted assets amounted to €52.9 billion, including €33.6 billion for Insurance, €13.4 billion for Asset Management and €5.9 billion for Wealth Management.
The *underlying* *RoNE* (return on normalised equity) stood at 23.6% at 31 December 2023.
*Insurance results *
In the fourth quarter of 2023, *revenues* from insurance activities amounted to €521 million, down -47.3% compared with the fourth quarter of 2022 pro forma IFRS 17, impacted by a high level of weather-related claims during the quarter compared with a favourable fourth quarter of 2022 (- €262 million) and an IFRS 17^63 / other base effect (~ - €205 million).
This quarter’s revenues were generated mainly from Savings/Retirement at €588 million^64, personal protection at €188 million^65 and property and casualty insurance at -€30 million^66.
*Gross operating income* came to €447 million, and tax was -€79 million. The *net income Group share* was €335 million, down -47.0% compared with the fourth quarter of 2022 pro forma IFRS 17.
The contractual service margin, or CSM, amounted to €23.8 billion at 31 December 2023, up 9.5% compared with 31 December 2022. This reflected a CSM on new business higher than the CSM allocation in net income, in a positive market environment for Savings/Retirement. The CSM allocation factor^67 on stock was 8.5% for the full year 2023.
For the full year *2023*, revenues from insurance reached €2,543 million, up by +11.7% compared with the full year 2022, and down slightly by -2.3% excluding the IFRS 17 base effect^68, which notably reflected high claims (storms and floods) at the end of 2023. Gross operating income was up +10.4% compared to the full year 2022. Meanwhile, the tax charge for 2023 was down -18.1%, mainly due to a base effect in 2022. As a result, net income Group share came to €1,653 million, up +12.6% compared with the full year 2022.
Insurance contributed 25% of the underlying net income Group share of Crédit Agricole S.A.’s core businesses (excluding the Corporate Centre division) at end-December 2023 and 10% of their underlying revenues.
Crédit Agricole Assurances also demonstrated its strength and resilience, with a high Solvency 2 prudential ratio of 214% at 31 December 2023, up 10 percentage points compared with end-2022 and down 8 percentage points compared with 30 June 2023.
*Asset management results*
*In the fourth quarter of 2023*, *revenues* totalled €786 million, up 2.1% compared with the fourth quarter of 2022, due to the resilience of management fee and commission income, higher financial income boosted by rising short-term interest rates, and a good level of performance fees despite the ESMA regulatory impact. Operating *expenses* excluding SRF amounted to -€435 million, up +2.7% compared with the fourth quarter of 2022, and were kept under control despite the inflationary environment through ongoing productivity efforts and the full achievement of Lyxor synergies. As a result, the *cost/income ratio excluding SRF* was 55.3%. *Gross operating income* was up +1.4% compared with the fourth quarter of 2022. The contribution from equity-accounted entities, comprising the contribution from the Amundi joint ventures in Asia, stood at €29 million, up +20.5% from the fourth quarter of 2022, while the tax charge amounted to -€89 million, an increase of +2.0%. Lastly, *net income Group share* increased by +4.1% to €195 million.
For the full year 2023, revenues were high (€3,122 million,) and growing (+2.2%), driven as in the fourth quarter by financial income (€80 million vs. -€48 million for the full year 2022) and Amundi Technology revenues (+23.6% to €60 million); net management fee and commission income was down slightly in an environment characterized by risk aversion; performance fees were down even more sharply, by -28.0% (€123 million vs. €171 million).
*Operating expenses excluding SRF* were under control, down -1.5% (+1.9% excluding Lyxor integration costs in 2022) and benefited from further productivity efforts and Lyxor synergies. *The cost/income ratio excluding SRF* stood at 55.7%, an improvement of 2.1 percentage points compared with the full year 2022. As a result, gross operating income was up +7.4% compared with the full year 2022. The net income of equity-accounted entities increased by +15.7%. In total, net income Group share for the full year stood at €760 million, up +8.6%.
Asset management contributed 11% to the underlying net income Group share of Crédit Agricole S.A.’s core businesses (excluding the Corporate Centre division) at end-December 2023 and 12% of their underlying revenues.
*Wealth management results*^*69*
*Revenues* from wealth management in the fourth quarter of 2023, although down -4.1% compared with the fourth quarter of 2022, remained high, at €247 million, due mainly to strong fee and commission income (+9% compared with the fourth quarter of 2022). *Costs excluding SFR* amounted to €217 million, an increase of +6.5%, mainly impacted by transaction costs on the Degroof-Petercam project and non-recurring items. The *cost/income ratio* rose by +8.7 percentage points over three months to 87.6%. Gross operating income dropped -43.8% to €31 million. Excluding costs related to the Degroof-Petercam transaction and non-recurring items, gross operating income amounted to +€46.9 million, down -5.0% compared with the third quarter of 2023 and -13.9% compared with the fourth quarter of 2022.
The *net income Group share* stood at €15 million, down -55.9% compared with the fourth quarter of 2022.
For the full year 2023, revenues from wealth management exceeded one billion euros to reach €1,023 million, up +10.1% compared with the full year 2022. Expenses excluding SRF were up +6.9%. Gross operating income thus rose by +25.7% to €195 million. As a result, net income Group share in 2023 climbed +12.5% to €127 million. For the full year 2023, the cost/income ratio excluding SRF was 80.6%, an improvement of -2.3 percentage points compared with the full year 2022.
Wealth management contributed 2% of Crédit Agricole S.A.’s business lines underlying net income Group share. (Excluding the Corporate Centre division) at end-December 2023 and 4% of their underlying revenues.
*Activity of the Large Customers division*
*Corporate and Investment Banking* *(CIB)* and *Asset Servicing* confirmed their strong momentum this quarter.
*In the fourth quarter*, *underlying revenues*^*70* from *Corporate and Investment banking (CIB) *came to €1,452 million, up slightly by +1.1% compared with the fourth quarter of 2022. The increase was driven by *Financing* activities, with underlying revenues of €860 million, up +4.4% compared with the fourth quarter of 2022, thanks to high commercial banking revenues (+6.8% compared with the fourth quarter of 2022), driven by Cash management and Telecoms activities. Structured finance revenues were up +0.7% on the fourth quarter of 2022, confirming the strong business momentum, particularly in Shipping and Power. Underlying revenues from *Capital Markets and Investment Banking* were down -3.2% compared with the fourth quarter of 2022, to €592 million. Revenues from FICC were down -3.1% compared with the fourth quarter of 2022, due to an adverse base effect, but this quarter’s revenues remained high, driven by structured interest rate products and securitisation. In the investment banking segment, the fourth quarter was characterized by a good performance of structured equities.
For the full year 2023, *underlying revenues*^*71* from *Corporate and Investment banking (CIB) *were up +7.1% compared with 2022, to €6,140 million. The increase was driven by *Capital Markets and Investment Banking*, whose underlying revenues came to €2,968 million, up sharply by +12.7% compared with 2022, mainly attributable to FICC revenues, which were buoyed by structured interest rate products, primary credit and securitisation. Investment banking revenues were up over the year, reflecting the good performance of structured equities. *Financing activities* posted underlying revenues of €3,173 million, up +2.3% on 2022, attributable to strong growth of +7.1% in revenues from structured finance, with increasing revenues across all product lines. Commercial banking revenues were stable compared with 2022, and benefited from a good performance on Cash management and Telecoms.
Corporate and Investment Banking posted *leading positions* in syndicated loans (#2 in France^72 and #3 in EMEA^73) and for bond issues (#2 All bonds in EUR Worldwide^74 and #2 Green, Social & Sustainable bonds in EUR^75). Corporate and Investment Banking gained positions in euro-denominated bond issues, moving up from 5^th place in 2021 to 3^rd place in 2022, and to 2^nd place in 2023. Average regulatory *VaR *stood at €13.2 million in the fourth quarter of 2023, down from the €15.6 million recorded in the third quarter of 2023, reflecting changes in positions and the financial markets. It remained at a level that reflected *prudent risk management*.
In the