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Annual report 2009
Annual report
2009
Contents
Chairman's Message
Development, solidity and identity
2009
Chairman's message
3
GROUP PROFILE
4
Business profile, 2009
Board of Directors of Confédération nationale du Crédit Mutuel
CRÉDIT MUTUEL, THE MUTUAL BANK
10
A decentralised structure
Governance and membership
A pro-active human resources policy
La Fondation du Crédit Mutuel
Banking for all members of society
14
16
18
20
24
RESULTS AND KEY FIGURES
26
BANKINSURANCE
34
One of France's leading retail banks
The preferred bank of private individuals
A key player in housing finance
A dedicated offer for young people
The leading bank for non-profit associations
Number three for SMEs
At the cutting edge of technology
The challenger in the farming sector
Retail banking subsidiaries
38
40
42
44
46
48
50
51
52
Insurance
56
OTHER ACTIVITIES
Corporate and investment banking
Asset management and private banking
Technological services
FINANCIAL REPORT
2
Crédit Mutuel
7
8
60
62
65
68
72
Board of Directors' management report
Financial statements
Notes to the financial statements
76
101
108
Independent Auditor’s report
164
Crédit Mutuel withstood the crisis intact. While subject to a certain, controlled impact,
above all it showed determination by affirming its ability to grow and taking the necessary
strategic decisions.
It contributed to the financing of the economy, notably by supporting households,
self-employed professionals and SMEs by offering a range of increasingly competitive
bankinsurance products to its members and customers.
It developed its new technologies, mobile telephony and electronic money and payments
activities, and tested numerous new remote payment solutions to facilitate banking
for its customers, all the time remaining true to its commitment to local banking.
It expanded its local mutual bank and branch network, saw new interfederal partnerships
emerge and promoted internal sharing of applications to help cut costs.
Lastly, it acquired Targobank (formerly Citibank Deutschland) and Cofidis, and grew
its international insurance business, thus increasing the proportion of business done
outside France from 5% to 17%, while developing its consumer credit activities.
This commitment to growth relies on the group’s increased solidity: it now has
€29.6 billion of capital and an 11.8% Tier 1 ratio. This financial profile makes it
the only French bank with unchanged credit ratings and one of the eurozone’s
most highly rated institutions.
At the same time, the Crédit Mutuel group has once again shown the strength of
its cooperative business model. Thanks to its democratic governance structure,
its regional organisation based on a network of 2,045 local mutual banks run by
24,000 unpaid elected directors, and its staff’s responsiveness and ability to provide
solutions, it was able to fulfil its role of economic support by, as always, helping its
23 million members and customers to realise projects and overcome difficulties.
At a deeper level, the long-lasting relationship of trust and closeness it has built
with these customers was once again recognised with the year’s top award for customer
relations from BearingPoint-TNS Sofres.
The end of 2009 sees the group’s choices vindicated: the strategic choice to extend
its scope for growth, and the choice to be a mutual bank upholding the values
of responsibility and solidarity. Every day, its directors and employees make
Crédit Mutuel what it is as they work to serve its members and customers and help
them build their future.
Etienne PFLIMLIN
Annual report 2009
3
Group profile
Financial structure
IFRS (in € billions)
11.8%
9.6%
The Crédit Mutuel group, which is one of France's leading bankinsurers,
comprises the Crédit Mutuel branch network and all the bank’s subsidiaries.
The group offers a comprehensive range of financial expertise to
its 23.3 million customers, which include 21.4 million retail customers.
2009
Its overriding priority, and the key to its development, is the quality of
its customer relationships and services.
Its strategy is one of controlled growth centred on local retail banking,
bankinsurance and technological excellence.
The group focuses on closeness to the customer, combining the strengths
of Crédit Mutuel – a cooperative, mutual bank with extensive regional
and local ties - with those of CIC, a commercial bank.
Crédit Mutuel and CIC – the group’s two leading brands – combined with
the 2008 acquisitions of Targobank (formerly Citibank Deutschland)
and CIC Iberbanco and the 2009 acquisition of Cofidis have a network
of almost 6,000 points of sale.
Leading the way
in banking technology
The branch network is supported by a comprehensive multi-channel banking offer based
on cutting edge technology. In 2009, remote
banking clocked up over a billion contacts, more
than half of them via the Internet.
The group is gaining prominence in upcoming
fields such as mobile telephony, which provides
another channel for bankinsurance, banking
services and electronic payments, which are key
European markets.
This new strategic direction broadens the
group’s know-how and expertise, adding highly
innovative services that bolster its leadership
position.
A solid, highly rated bank
The crisis has not dented the group’s financial
strength, and its 11.8% Tier 1 ratio is one of the
best among French banks.
26.9
9.8%
30.6 +22%
25
26.4
24.7
29.6
2007
2008
2009
+20%
Despite an economy marked by falling demand
and increased risk, Crédit Mutuel is the only French
bank to have had all its ratings maintained.
It was the first bank to repay state aid in September
2009 and remains one of the eurozone’s most
highly rated issuers, with an A+/A-1 rating and
stable outlook from Standard & Poor’s. Banque
Fédérative du Crédit Mutuel, the holding company
for the Centre Est Europe group and a direct
shareholder of CIC, is rated Aa3/P1 by Moody’s
and AA-/F1+ by Fitch.
Tier 1 ratio
Shareholders’ equity
(of which, group share)
It ranks number two in France in electronic
payments, with a 20.1% share of the overall
market and a 26% share among retailers.
Crédit Mutuel is composed of local mutual banks organised into 18 regional
federations, which in turn form the Conféderation Nationale du Crédit Mutuel,
the central body that heads the network.
CIC operates a branch network in the Paris region and is the holding company
for a group of five regional divisions, along with subsidiaries specialised
in all areas of finance and insurance.
The group now carries out nearly a fifth of all its business abroad.
“The Crédit Mutuel Group comprises
the Crédit Mutuel branch network
and all the bank’s subsidiaries”
4
Crédit Mutuel
Annual report 2009
5
Business profile,
A bank with stronger
international presence
Whether in financing, insurance or electronic
payments and wherever in the world they
are based, Crédit Mutuel is always there for its
customers.
Adding to existing operations in Europe, North
Africa, the United States and Asia and CIC’s 40
or so foreign branches, over recent months the
group has realised a number of major strategic
goals abroad.
By acquiring Citibank Deutschland, renamed
Targobank, at the end of 2008, Crédit Mutuel
affirmed its European development strategy in
various retail banking fields – consumer credit in
particular – and in insurance and international
financial services. The acquisition also opens up
a second domestic market in Germany.
The group’s acquisition of a controlling interest
in Cofidis in 2009 gives it a firm foothold in the
European consumer credit market, where it now
ranks fourth.
The creation of RACC Seguros, a joint holding
of Assurances du Crédit Mutuel (ACM) and Royal
Automobile Club de Catalogne, has strengthened
the group’s Spanish insurance division.
Crédit Mutuel also acquired Banco Popular
Español’s French subsidiary, renamed CIC
Iberbanco, and is negotiating commercial
cooperation agreements with this group.
This controlled development opens up a much
broader avenue of growth for the group and
confirms its position as a major bank both in
France and elsewhere in Europe.
www.creditmutuel.com
www.cic.fr
2009
Net banking income: €13.6 billion
Net profit, group share: €1,831 million
Shareholders’ equity: €29.6 billion
Tier 1 ratio: 11.8%
5,831 points of sale*
72,465 employees
23.3 million customers
Customer deposits amounting to €543.8 billion
Loans amounting to €304.2 billion
A leading retail bankinsurance player in France
17.5% market share in loans
11.9% market share in deposits
N° 1 bankinsurer in non-life insurance
N°1 bank for non-profit associations and works councils
N° 2 bank in electronic banking
N° 2 bank for the farming sector
N° 3 bank in housing loans
N° 3 bank for the SME sector
N° 3 banking network for consumer credits
N° 4 bankinsurer for life insurance
Un émetteur de qualité
Standard & Poor’s : A+/A-1
with a stable outlook for Crédit Mutuel
Fitch : AA-/F1+
with a stable outlook for BFCM and CIC
Moody’s : Aa3/P1
with a stable outlook for BFCM and CIC
* of which 5,441 in France
6
Crédit Mutuel
Annual report 2009
7
Bureau:
Philippe Vasseur (1), Alain Têtedoie (2), Daniel Leroyer (3),
François Duret (4), Pierre Filliger (5), Christian Péron (6),
Alain Delserieys (7), Michel Bokarius (8),
Gérard Bontoux (9), Etienne Pflimlin (10),
Georges Coudray (11) and Jean-Pierre Denis (12).
Board of Directors
of Confédération nationale
du Crédit Mutuel
as at 30 May 2010
Bureau
Chairman
Etienne Pflimlin,
Chairman of Crédit Mutuel Centre Est Europe
Deputy Chairman
Director of Crédit Mutuel Centre Est Europe
Gérard Bontoux,
Chairman of Crédit Mutuel Midi-Atlantique
Honorary chairman of Crédit Mutuel Bretagne
Alain Delserieys,
Vice-Chairman
Deputy Chief Executive Officer
of Crédit Mutuel Centre Est Europe
Jean-Pierre Denis
Michel Lucas,
Chief Executive Officer
Eric Charpentier,
Ronan Le Moal
Chief Executive Officer of Crédit Mutuel Nord
Europe
Chief Executive Officer of Crédit Mutuel Arkéa
Jacques Chombart,
Chief Executive Officer of Crédit Mutuel Océan
Jean-Luc Menet
Vice-Chairman of Crédit Mutuel Agricole et Rural
Albert Peccoux,
Gérard Cormorèche,
Chairman of Crédit Mutuel Savoie-Mont Blanc
Chairman of Crédit Mutuel Sud-Est
Jean-Noël Roul,
Louis Crusol,
Vice-Chairman of Crédit Mutuel
Loire-Atlantique et Centre-Ouest
Chairman of Crédit Mutuel Antilles-Guyane
Roger Danguel,
Denis Schitz
Director of Crédit Mutuel Centre Est Europe
Vice-Chairman of Crédit Mutuel Centre Est Europe
Jean-François Devaux,
Eckart Thomä,
Chairman of Crédit Mutuel Massif Central
Chairman of Crédit Mutuel Normandie
Christian Touzalin,
François Duret,
Chairman of Crédit Mutuel Centre
Bernard Flouriot,
Chairman of Crédit Mutuel Dauphiné-Vivarais
Daniel Leroyer,
Chairman of Crédit Mutuel Anjou
Joseph Vrignon,
Chairman of Crédit Mutuel Maine-Anjou,
Basse-Normandie
Jean-Louis Girodot,
Chairman of Crédit Mutuel Océan
Chairman of Crédit Mutuel Ile-de-France
Christine Zanetti,
Alain Têtedoie,
André Halipré,
Chairman of Crédit Mutuel Loire-Atlantique
et Centre-Ouest
Vice-Chairman of Crédit Mutuel Nord Europe
Chief Executive Officer of Crédit Mutuel
Loire-Atlantique et Centre-Ouest
Philippe Vasseur,
Pierre Filliger,
Auguste Jacq,
Vice-Chairman of Crédit Mutuel Bretagne
Chairman of Crédit Mutuel Sud-Ouest
Chief Financial Officer
Chairman of Crédit Mutuel Méditerranéen
Jean-Louis Boisson,
Vice-Chairman of Crédit Mutuel Centre Est Europe
Pascal Durand,
Chairman of Crédit Mutuel Bretagne
Group Secretary
The following also sit on the Board:
Chief Executive Officer of Crédit Mutuel
Maine-Anjou, Basse-Normandie
Chairman of Crédit Mutuel Agricole et Rural
Chairman of Crédit Mutuel Nord Europe
Crédit Mutuel
Michel Bokarius,
Georges Coudray,
Christian Péron,
8
Other members
of the Bureau
Other directors
Daniel Baal,
Alain Fradin,
Gilles Le Noc,
Corporate Secretary
Michel Vieux,
Annual report 2009
9
THE mutual bank
The Group's main entity, Crédit Mutuel,
is a cooperative bank under the 10 September 1947
Act governing French cooperatives. It belongs
exclusively to its members, who own its capital
and determine its strategy within a framework
of democratic governance.
A cooperative bank belongs exclusively to its members
10
Crédit Mutuel
Annual report 2009
11
Crédit Mutuel - THE mutual bank
As a mutual bank, Crédit Mutuel places its members, who are both co-owners
and customers, at the heart of all its decisions. Its growth is exclusively based
on its founding values of solidarity, responsibility, equality, closeness and
transparency.
These values have the same strategic importance for the bank as service
quality. They are the Crédit Mutuel hallmarks, and they testify to the relevance
of its business model in modern France.
Every year, 20,000 board and supervisory board meetings and 2,000
general meetings take place in the 2,045 local mutual banks, of which more
than a third are located in rural areas. These meetings aim to assemble 10%
of members; they provide a basis for truly democratic corporate
governance. The local mutual banks are organised into 18 regional
Federations, which in turn are part of the national Confederation.
At end-2009, Crédit Mutuel had 7.4 million members and 12.1 million customers
in more than 2,000 local mutual banks run by 24,000 member-elected
representatives.
Crédit Mutuel’s three levels operate according to the principle of
subsidiarity, the local mutual banks – which are closest to members
and customers – carrying out all the key functions of bank branch offices,
and the other two levels exercising only those functions for which the local
entities are not equipped.
To serve its customers and society, Crédit Mutuel's strategy combines
sustainable development and solidarity1. Historically, the bank has played
a key social role, notably through its action in support of society’s most
vulnerable members.
The governing bodies are made up of representatives of the bank's
members, from the level of local general meetings – where they elected
on a “one person one vote” basis – right up to the Board of Directors
at national level.
Crédit Mutuel is a company based on people rather than capital. It is not listed
on the stock exchange. Because it plays an important role in the social
economy, its sustainable development strategy is not bound by an all-out
quest for short-term profitability. Sound management, crucial to the
company’s durability, is not geared towards the enrichment of a group of
shareholders: rather it serves to ensure growth and first-rate service quality
in the most cost effective way.
The shares held by members constitute the capital classed as Tier 1
regulatory capital. They can be redeemed only at their face value.
As a financial cooperative, Crédit Mutuel is inalienable, meaning it can
neither be sold nor taken over; it can be wound up only on the decision
of its members.
Its decentralised organisation encourages staff to become more involved
at every level, be it local, regional or national, thus enhancing the group’s
responsiveness and service quality. It makes possible short decision-making
circuits, better risk diversification and a highly effective control system.
With its solid local base, Crédit Mutuel cannot be moved offshore
and stands as an independent entity that contributes to job creation
and economic vitality in all the areas in which it operates.
THE CRÉDIT MUTUEL
NETWORK
2,045 local mutual banks
3,329 branches
12.1 million customers,
including 11 million private
individuals
7.4 million members
24,000 directors
41,000 employees*
*in Federations and subsidiaries
(not including CIC, Targobank
and Cofidis)
“Crédit Mutuel is a company based
on people rather than capital.
It is not listed on the stock exchange.”
(1) Crédit Mutuel's Corporate Social Responsibility (CSR) report is available on www.creditmutuel.com.
12
Crédit Mutuel
Annual report 2009
13
A decentralised structure
18 regional groups
The first level of organisation is made up of
local mutual banks, or caisses locales, which
have the legal status of cooperative companies
with variable capital (sociétés coopératives
à capital variable). These are credit institutions
governed by French banking law, with the
capital owned by their members, who are
both shareholders and customers. Financially
independent, the local mutual banks take
deposits, distribute loans and provide a full
range of banking services. Most decisions
concerning customers are taken at this level.
Each local mutual bank is governed by a board
of directors and/or a supervisory board, made
up of unpaid members elected at general
meetings on a “one person, one vote” basis.
In all, there are more than 2,000 local mutual
banks, whose 24,000 directors represent
7.4 million members.
At the next level up, there are 18 regional groups,
each of which comprises a regional federation
and a federal bank or caisse fédérale (or an
interfederal bank or caisse interfédérale, as is the
case for the Centre-Est-Europe, Ile-de-France,
Sud-Est, Savoie-Mont Blanc and Midi-Atlantique
federations; the Bretagne, Massif Central
and Sud-Ouest federations; and the Crédit
Mutuel Méditerranéen and Dauphiné-Vivarais
federations).
The local mutual banks and the federal bank,
of which they are shareholders, are members
of a regional federation.
The regional federation is responsible for strategy
and supervision, and represents Crédit Mutuel in
its region.
The federal bank is responsible for functions such
as cash management and providing technical
and IT services.
The federation and the federal bank are governed
by boards elected by the local mutual banks.
In addition to the 18 regional federations, there
is a federation with nationwide scope specifically
for the farming sector – Crédit Mutuel Agricole
et Rural (CMAR).
14
Crédit Mutuel
The national confederation and
the central financing bank
7.4 million members
12.1 million customers
These bodies make up the third and top level
of organisation.
3,329 branches including
The Conféderation Nationale or national
confederation, which has the legal status of
a non-profit organisation, is the central body
governing the network under the Banking Act
of 1984.
The 19 Fédérations and the Caisse Centrale du
Crédit Mutuel are affiliates of the Conféderation
Nationale, which represents Crédit Mutuel
vis-à-vis the authorities and is responsible for
defending and promoting its interests.
The Conféderation Nationale also oversees the
proper operation of its member establishments,
supervises the regional groups and ensures
the overall cohesion of the network, as well
as co-ordinating business development and
providing shared services.
The Caisse Centrale, or central financing bank,
manages treasury for the regional groups
and organises the pooling of Crédit Mutuel's
financial resources. Its capital is jointly owned
by the Caisses Fédérales.
18 regional groups
(Fédérations and Caisses Fédérales)
1 farming federation (CMAR)
Confédération
nationale
Caisse
centrale
Crédit Mutuel’s customers
Crédit Mutuel’s network
(millions)
12.0
12.1
+1.3%
7.1
7.2
7.4
+1.6%
2007
2008
2009
11.0
3,151
3,285
3,329 +1.3%
1,988
2,017
2,045
2007
2008
2009
Customers
Branches
Members
Local mutual banks
+1.4%
Annual report 2009
15
Governance
and membership
As a mutual bank, Crédit Mutuel receives capital contributions through
subscriptions to member shares (1) that earn interest at a fixed rate set
by the general meeting of member shareholders, who are associates
and co-owners of the local mutual bank.
Reserves serve to back the shared obligations of members and as security
for deposits. They are also used to finance long-term development.
At the end of 2009, Crédit Mutuel member shares represented a total
of €8.4 billion, up 29.6% compared with the previous year, while dividends
paid to members had risen by 30% to €294 million, representing nearly
35% of the net earnings of the core cooperative business carried out by
the local mutual banks and Caisses Fédérales.
“Decisional power at Crédit Mutuel
is determined not by the number of shares
owned but by membership, on a
“one person, one vote” basis”
Participation and democracy
Business operation
Participation and democracy are the cornerstone
of Crédit Mutuel’s operation as a cooperative.
The 7.4 million Crédit Mutuel members supervise
the management of the local mutual banks
and elect the directors at general meetings,
ensuring genuinely democratic governance.
The decentralised structure with decisionmaking processes at regional and local level
favours entrepreneurship, a sense of personal
responsibility and team spirit.
The ties between the local mutual banks and
the regional federations and banks ensure the
cohesion of the various entities as regional
groups that operate as fully-fledged credit
institutions within the framework of French
banking regulations.
The 24,000 elected voluntary directors present
at all three levels of the organisation - local,
regional and national - are responsible for
the group’s management and supervision.
Attentive to the needs and aspirations of the
members they represent, these directors are
themselves committed, active members and
participate in the administration of the local
mutual banks alongside the employees. As
members of the local communities, they also
exemplify the values that Crédit Mutuel stands
for, and help to ensure their implementation.
The 41,000 Crédit Mutuel staff members
are responsible for implementing company
strategy and operating the business under the
supervision of the elected directors.
The regional groups cooperate freely to rationalise resources and costs through technical
partnerships, notably in areas such as information
technology and financing. Other avenues for
cooperation are provided by the Caisses Interfédérales serving more than one regional bank
and by joint subsidiaries in insurance, leasing,
factoring, corporate banking, investment banking,
asset management and private banking.
Regional groups’ membership of the Confédération Nationale and the Caisse Centrale
ensures cohesion and shared responsibility at
national level.
As the central body for the whole Crédit Mutuel
group, the Confédération Nationale approves
appointments to management positions and
regional audit teams in the regional federations,
and takes all necessary steps to ensure the
group’s proper operation, with responsibility for
overall control and the coherence of business
development.
(1) 'A' shares are those shares initially subscribed to by persons wishing to become members of a local mutual bank and to
acquire the right to vote at general meetings on a “one person, one vote” basis.
'B' shares represent additional amounts paid in by members. They earn dividends but carry no voting rights.
16
Crédit Mutuel
“One person,
one vote”
The Annual General Meetings
that members and customers
of the local mutual banks are
invited to attend each year
are the basis of Crédit Mutuel's
democratic structure. General
meetings provide members with
a special opportunity to meet the
bank’s directors and employees
and learn more about the
business and express their own
views. They also offer a forum
for suggestions and discussion
of ways to enhance services,
reflecting the values that distinguish Crédit Mutuel from other
banks.
Required items on the agenda
include a report on the management and activities of the
mutual and on its specific action
as a cooperative bank, leading
up to approval of the financial
statements and the election of
directors on the basis of one
person, one vote. A second part
of the meeting is devoted to the
presentation and discussion of
current themes and events.
Some 500,000 members attend
the regional and local annual
meetings held between February
and May.
Jointly with Internal Control committees at regional
federation level, the Confédération Nationale
reviews audit reports and reports its findings to
the boards concerned.
The Confédération Nationale's Board of Directors
comprises representatives of all the regional
federations, elected by the general meeting of
Confédération Nationale shareholders.
The general meeting also elects the Chairman
and Deputy Chairman for five years.
Mutual members are thus represented at all three
levels of the organisation through the directors
they elect.
Annual report 2009
17
A pro-active human
resources policy
The marked rise in the number of Crédit Mutuel group employees
(up by 6,857, or 10.5%, to 72,465) mainly reflects recent acquisitions.
At constant scope the headcount rose by 0.4%.
The marked rise in the number of Crédit Mutuel
group employees (up by 6,857, or 10.5%,
to 72,465) mainly reflects recent acquisitions.
At constant scope the headcount rose by 0.4%.
Crédit Mutuel provides staff members with
training opportunities throughout their careers,
reflected by a training budget equivalent in
2009 to almost 5% of the payroll.
To keep pace with its robust growth and anticipate future needs, Crédit Mutuel recruited
1,574 people in 2009 (excluding CIC).
The vast majority of these new hires were newly
qualified students in branch based sales posts.
The average headcount in 2009 was 41,000*.
The group has set up an internal labour statistics
database. This will notably contain group-wide
job stratification data and comparative data
relating to the number of men and women
employed, in application of the gender equality
agreement signed by the Crédit Mutuel division
in March 2007.
Nearly 1,000 vocational training contracts
were signed, enabling over 350 young people
at Bac to Bac +2 level to move rapidly to
account manager posts for retail or professional
customers, while just over 600 ongoing training
programmes helped experienced staff train
in new disciplines.
Following the signing in 2008 of a framework
agreement for the employment of people with
disabilities, at the end of 2009 the group signed
an equivalent agreement for seniors.
Agreement for the employment of seniors
The negotiations on employment of seniors started at the beginning of 2009 and concluded
in December with an agreement signed by half of Crédit Mutuel’s employee representative bodies.
“Nearly 1,000 vocational training
contracts were signed in 2009”
This agreement reflects the government’s efforts to encourage the employment of seniors in
France and is part of a three-yearly negotiation obligation covering forward jobs and skills
management for employees in the latter stage of their career.
It also provided a wealth of additional data for Crédit Mutuel’s employment database, in the form of
indicators for age groups up to 60 years and above covering workforce structure, recruitments and
departures, pay, promotion, professional training, etc.
This framework agreement is separate from the obligation created by the 2009 Social Security
Funding Act (LFSS), which, from 1 January 2010, requires all regional groups to have in place an
agreement or action plan for seniors, complete with figures and targets, failing which they are liable
for a penalty equivalent to 1% of the total payroll.
* Federations and subsidiaries but excluding CIC, Targobank and Cofidis
18
Crédit Mutuel
Annual report 2009
19
Fondation du Crédit Mutuel,
a new framework for broader
corporate sponsorship
http://fondation.creditmutuel.com
Crédit Mutuel runs an innovative corporate
sponsorship programme through its regional
and national foundations under the aegis of
the new Fondation du Crédit Mutuel, which was
created in early 2009 and oversees the various
strands of the group’s patronage initiatives at
national level:
- promoting the reading and use of French in all
its forms through the Fondation du Crédit
Mutuel pour la Lecture,
- combating financial and social exclusion,
- implementing independent, sustainable banking
networks in developing countries through
funding of the Centre International du Crédit
Mutuel (CICM).
These initiatives demonstrate the group’s ongoing
commitment to ground-level social solidarity.
A unique corporate
patronage initiative
in France: la Fondation du
Crédit Mutuel pour la Lecture
Awareness raising, help with reading and writing,
innovative learning methods, a non-profit network
to prevent illiteracy, social insertion programmes
and fostering openness to literary culture are
all initiatives that the Crédit Mutuel Reading
Foundation has been pursuing for nearly 20
years. The Foundation seeks to give children
and marginalised population groups or people
in difficulty access to knowledge and to help all
people of all ages feel supported, encouraged
and understood and so become confident,
knowledge-hungry and responsible citizens.
In 2009, the Foundation sponsored almost
90 initiatives. Its budget is supplemented by
contributions from Crédit Mutuel Enseignant
and any of the 18 Crédit Mutuel federations or
local mutual banks that choose to support local
voluntary projects.
Priority is given to long-term initiatives on the
ground drawing active support from people in
every part of Crédit Mutuel.
The year 2009 was marked by the launch of
the Foundation’s first international project,
in association with the Trait d’Union association
in Madagascar. This association has sent brand
new French language books to the country and
successfully set up 21 village libraries. These
facilities cater for nearly 250,000 Malagasy
children, adolescents and young adults every year.
The Foundation helps to train the librarians and
support staff.
Combating illiteracy
Making people understand the importance
of reading first involves getting them to want
to read, which means offering children and
their families access to the knowledge that will
stimulate their curiosity and help them develop
intellectually. Such is the challenge faced by
associations working to combat illiteracy. They
focus on providing people with quality books and
literature, targeting childcare establishments,
hospitals, street corners, prison workshops and
rural areas, which they visit in mobile libraries.
The Foundation has long been involved in
harnessing this ground-level energy and pooling
and promoting local efforts. It has actively
supported – at the launch and on an ongoing
basis – the “Quand les livres relient” (“the binding
power of books”) network, which has become a
national benchmark thanks to its work on youth
literature. In parallel the Foundation remains
attentive to the needs of people experiencing
language learning difficulties and supports
French language-based training programmes
designed to help people back into work.
Indeed, with 38 initiatives sponsored in 2009,
this is the Foundation’s most active area of
engagement.
‘Lire la Ville’
A town's architecture and spatial structure and
features can, like any landscape, be read just
like a book – provided you know the relevant
codes.
This was the principle – along with the host of
players that such an idea makes it possible
to bring together, such as students, teachers,
writers, historians, architects and those with
an interest in a town’s cultural life – that led
the Foundation to design and put in place the
Lire la Ville programme in 1993.
More than 5,000 school children now
take part in the scheme, at the end of
the school year presenting the work
they have done in the form of plays,
3D exhibitions, alphabet charts and
photo stories.
A ten-year-old offshoot of Lire la Ville
is Lire le Théâtre (“read the theatre”),
which involves regular sessions with
producers, playwrights and actors
providing older school children with an approach
to the theatre based on curiosity, freedom of
expression and sharing.
Reading workshops linked to teaching programmes enable pupils to discover classical and
contemporary theatre in a way that connects
with their everyday lives.
In 2009, the Foundation supported a national
initiative undertaken by the Ecrivains associés
de théâtre (“writer friends of the theatre”)
group, which is helping train pupils from Paris,
Créteil, Bordeaux and French Guyana in
theatre arts.
The power of literature
The Foundation’s participation in national and
regional festivals gives people everywhere
– children in particular – the chance to become
involved in France’s literary life.
Reflecting its keenness to make reading an
instinctive activity, it supports groups that carry
out year-round projects related to literary
festivals, such as writing competitions, reading
aloud workshops and meetings with writers.
One such initiative is the flagship Incorruptibles
awards, in which 160,000 pupils from nearly
3,000 schools across France read books
selected according to their respective levels
before voting for their favourite.
“Books tell
a different story
for every reader”
Alberto Manguel
The Foundation has well established partnerships
with the regional educational authorities of
Strasbourg, Rouen, Clermont-Ferrand and
Limoges, and in 2009 extended this model, in
collaboration with the Crédit Mutuel regional
federations, to the Lille, Bordeaux, Nice and
Marseille areas.
20
Crédit Mutuel
Annual report 2009
21
Research, social assistance
initiatives and promotion
of cooperatives
Part of Fondation du Crédit Mutuel’s remit is to
forge partnerships with research organisations,
or think tanks, and to invest in research into
economics and finance. In this role it works
alongside such entities as Institut français des
relations internationales (IFRI), Confrontations
Europe, Fondation Robert Schuman, the French
European Movement, Semaines sociales de
France, the European League for Economic
Cooperation, Centre interprofessionnel de
recherche en droit bancaire de l’université
de Lyon 3 (Lyon University interprofessional
banking law research centre), Centre des professions financières and Institut de l’Entreprise.
The foundation is dedicated to supporting work
in the social economy and cooperative fields,
such as that of Réseau national des Juniors
Associations, France générosité and Semaine
de la coopération. Likewise, it provides funding
for initiatives in connection with its partnerships
with Adie, for publications such as Revue des
études coopératives, mutualistes et associatives (Recma) and for Fonda projects and
initiatives linked to specific organisations such
as Groupement national de la coopération
(Gnc) and Finansol.
By supporting these research groups through
contributing to the financing of specialised
studies, Crédit Mutuel helps raise awareness
concerning banking, cooperative ventures and
social aid.
In response to the massive destruction caused by the earthquake of
12 January 2010, Crédit Mutuel
harnessed its resources in a show of
solidarity for the Haitian people.
Development aid through
Centre International
du Crédit Mutuel (CICM)
Active for some 30 years in building mutual
banking networks in developing countries, Centre
International du Crédit Mutuel (CICM) continues
to work to promote access to banking services
for all.
It works in several areas: extending banking
services to communities as a means of improving
their welfare, helping to develop the local socioeconomic fabric, disseminating the cooperative
model and its democratic values, and promulgating professional savings and credit
management.
CICM's approach is based on Crédit Mutuel's
guiding principles: the responsibility of its members,
the use of voluntary directors and a community
approach that gives priority to local banking
services.
In often unstable political and economic
environments, the CICM networks enable local
people to protect their assets, build up personal
savings and fund work projects.
Through the provision of tailored banking
services, these cooperative networks make a
major contribution to the development of local
economies by fostering social cohesion and the
settlement of nomads. CICM's operations are
financed by the federations with contributions
from external sponsors.
This non-profit association, to which the 18 Crédit
Mutuel regional federations contribute, works to
set up independent, sustainable cooperative
networks in countries where individuals cannot
always access existing banking services.
Its aim is to help local populations to take charge
of their own development by enabling them
to create their own cooperative networks for
savings and credit.
New shared tools
to assist the networks
2009 saw the launch of the CICM
network’s new information system
enabling centralised transaction
management. This paves the way
for implementation of a real-time
management control application.
Project Afric@rte was also launched
in the MUCODEC banks last year.
Initially, the card will replace the
account book and serve as a means
of identifying members who visit the
bank. It will then be incorporated
into the group’s long-term project to
improve access to banking services
via the installation of ATMs in CICM
branches.
ATMs will be installed in the MUCODEC
banks in 2010 as part of a global
plan covering all CICM networks.
It focused on practical measures,
providing immediate relief for urgent
needs as well as helping with more
long-term rebuilding projects.
It worked toward two major objectives:
carrying out short-term repair work
and providing logistical assistance
at the French hospital in Port-auPrince, and helping with longer-term
planning work and the construction
of 154 housing units in Titanyn.
Working under the aegis of Fondation
de France, Fondation du Crédit Mutuel
centralises donations from group
entities and members via its website,
which also enables it to keep continuous track of the use of collected
funds.
The CICM is active in seven african and asian countries
- Central African Republic through Crédit Mutuel
de Centrafrique,
- Cameroon through Mutuelle de développement
et d’investissement du Cameroun (MdiC),
- Republic of the Congo through Mutuelles
congolaises d’épargne et de crédit (MUCODEC),
- Niger through Crédit Mutuel du Niger (CMN),
- Burkina Faso through Crédit Mutuel du Burkina
Faso (CMBF), a new project which aims to recruit
7,500 members over the next five years,
- The Philippines through the Mutual Saving and
Credit Cooperative of Philippines (MSCCP), and
- Cambodia through the Crédit Mutuel Savings
and Credit network (CMSC).
http://fondation.creditmutuel.com
22
Crédit Mutuel
Annual report 2009
23
Banking for all members
of society
More than a year after an unprecedented economic and financial crisis
that caused turmoil on a global scale, the group’s choices - its commitment
to strategic development and its decision to operate as a cooperative,
mutual bank - have been vindicated.
It leads the way in promoting social cohesion, as can be seen in its responsible
initiatives and solidarity-driven goals, implemented directly on the ground.
Its initiatives cater for the needs of the most vulnerable members of society:
it operates a low-income and business microcredit activity, for example,
both directly and in close cooperation with integration assistance and
social aid networks. Crédit Mutuel underwrites 50% of the risk associated
with loans granted under such schemes.
It also offers a special assistance programme for members facing financial
difficulties.
Crédit Mutuel also works alongside the France
Active network, which offers grants and loans
to initiatives aimed to promote economically
driven social integration. It sits on half of the
organisation’s financing committees, and in
2009 backed 16% of the guarantees extended,
representing a commitment of almost €9 million.
Members in financial difficulty:
specific assistance programmes
Social micro-credit
Crédit Mutuel’s social assistance converts words
into action. Through its regional federations,
the group runs a number of initiatives, of which
several are described below. They offer a daily
reminder of the group’s commitment to its
most vulnerable members.
The goal is to develop a joint approach to helping
people in difficulty implementing a project that will
enable them to find a job. By opening accounts
for them and extending loans that are partly
guaranteed by the Fonds de Cohésion Sociale
(French social aid fund), Crédit Mutuel enables
them to regain access to the banking system
and to become regular bank customers once
again.
Crédit Mutuel assumes 50% of the risk on these
loans.
Crédit Mutuel
For over 20 years, the group has been working
with France Initiative, the leading network of
associations set up to promote local economic
development that handles 17% of bank-financed
business start-ups in France. The group is actively
involved with over 60% of its local initiative
platforms and a member of its "Entreprises"
collegial body of partner companies. In 2009,
it lent nearly €139 million via the network, representing over 18% of its overall financing volume.
Spanning past and present and embodying commitment for the future,
the ethic of social responsibility is the cornerstone of the group’s actions,
the driving force behind a socially supportive, responsible bank.
Crédit Mutuel assists the most vulnerable sections
of the population by extending micro-credit
within the framework of partnerships.
More than 100 experimental projects are under
way throughout France through regional or
local partnerships with social and insertion
assistance organisations such as Secours
Catholique, COORACE, UDAF and a number of
other family-oriented social aid networks such as
ADMR, Familles Rurales, Emmaüs and Restos du
Cœur, together with neighbourhood agencies,
local employment agencies, community social
aid centres (CCAS) and local social integration
organisations.
24
it was set up and in 20091 it financed 9% of all
lending by this organisation, which granted
1,300 loans averaging €2,318, representing a
total of €3 million.
The Fonds de Cohésion Sociale (and Secours
Catholique for its own network) covers the
remaining risk under an agreement signed
in January 2006 with Caisse des Dépôts et
Consignations.
These loans, for amounts ranging between
€500 and €3,000, are granted to people
who do not have a chequebook, have little or no
access to credit, have no stable employment
or are living on social welfare but are actively
looking for work.
Since its launch in 2006, Crédit Mutuel has
been responsible for granting over 16% of all
microcredits distributed via this system, while in
2009 it funded 13% of the total.
Professional micro-credit
In 2009, the group financed €151 million in loans
through three networks: Association pour le
Droit à l’Initiative Economique (ADIE), France
Active and France Initiative.
Crédit Mutuel has been a partner of Adie, the
pioneer of micro-lending in France, ever since
Since 1986, the Association de gestion du fond
d’entraide du Crédit Mutuel de Bretagne
(CMB) has been providing aid to members
faced with loan repayment difficulties resulting
from unforeseen circumstances. The association
covers up to 75% of instalments for a period of up
to 12 consecutive months, with a maximum of
€16,000 available per borrower or household.
Operational since 2006 in Lille, Caisse Solidaire
du Crédit Mutuel Nord Europe was created to
enable people to re-enter the banking system
after being excluded from it, and to provide
basic financial services to people with little money
or who are encountering temporary difficulties
due to their professional situation or to health
or other problems.
This entity works in partnership with a number
of aid organisations, some of which have a seat
on its Board of Directors.
At the end of 2007, Crédit Mutuel Maine-Anjou
Basse-Normandie set up Crédit Mutuel Solidaire
(CMS), which acts both as a social aid fund and
a micro-credit organisation. Its primary aim
is to support members in difficulty who have
personal recovery projects by helping them to
obtain aid from the specialised associations
and bodies with which CMS has partnership
agreements.
CMS works closely with the local mutual banks,
which are responsible for identifying the potential
partner associations and handling relations with
these partners with help from CMS. Repayments
on loans granted, which amount to between
€500 and €4,000 over six to 48 months, cannot
exceed €100 per month.
In early 2008, the Nantes federation set up
Créavenir Budget, a special initiative to help
customers with payment difficulties. Aimed at
local members only, this association is a vehicle
for the group’s “individual solidarity micro-credit”
programme, and aims to support those in financial
difficulty by providing budget management
advice and help with certain administrative
procedures. In doing this, the group – while not
seeking to act as a substitute social security
system – shows its commitment to seeking
solutions that require input from its directors
and employees. Créavenir Budget relies on two
voluntary directors for each area, with one
employee per area acting in a consulting role.
The Economic and Social Action task force
(AES) is responsible for coordinating the scheme.
Since the second half of 2009, the Ark'ensol
association has housed Crédit Mutuel Arkéa’s
solidarity-oriented initiatives, and it is now the
one-stop entity for all the group’s social undertakings.
There are two specialised sub-associations
working under the Ark'ensol banner: Ark’ensol
Créavenir and Ark’ensol Entraide. The first, which
is continuing in another form the work done
by Créavenir, provides business start-up assistance, while the second - a continuation of
the social aid fund – helps families in difficulty.
A socially
supportive bank
Crédit Mutuel helps develop
socially beneficial savings
schemes through two Finansol*accredited products: Livret
d’épargne pour les autres
(LEA) and Crédit Mutuel France
Emploi.
Launched in 2006 and gradually
rolled out by all Crédit Mutuel
regional federations, the LEA
operates like a traditional savings
account but with an interestsharing component.
Crédit Mutuel France Emploi is
a mutual fund (FCP) allowing
holders to donate half of the
interest income they earn to
the France Active association.
The association uses these funds
to grant loans to business startups by unemployed people or to
inject core funding into social
enterprises, such as integration
initiatives and intermediation and
residential services companies.
* This professional association, of which
Crédit Mutuel is a founder member,
is a federation of organisations that
provide finance for social aid initiatives.
Its aims are to support and promote
the principle of socially beneficial saving
and financing, to coordinate the collection
and investment of related funds and
to guarantee the social usefulness
and transparency of accredited financial
investments.
It grants micro-loans of €500 to €2,000,
repayable over six to 24 months and at market
rates, and can in some cases finance the purchase of subsidised housing.
Annual report 2009
25
2009 results
Despite a downbeat and still very competitive environment
in the retail banking market, Crédit Mutuel’s net profit, group share
came in at €1,831 million, the third highest among French banks.
This takes into account the Cofidis and Monabanq takeovers
and 11/12ths of that of Targobank, and is 4.2 x higher than in 2008
(4.4 x excluding acquisitions).
26
Crédit Mutuel
Annual report 2009
27
2009 Results
In an environment marked by a fall-off in financing applications,
a normalisation of financial markets and increasing credit risk, the group
turned in a resilient, efficient performance on behalf of all its customers.
Its dynamism enabled it to embark on a period of European growth in banking
and insurance, a new strategic direction which gives it a broader
development sphere.
The network’s vitality and the quality and depth of the group’s banking
and insurance offer enabled it to win new customers and increase market share,
once again demonstrating the strength of its bankinsurance model.
International growth:
a key year
The proportion of international
business grew from 5% to 17%
under the combined effect of
two acquisitions:
- Citibank Deutschland at the end
of 2008, renamed Targobank
in February 2010; and
- Cofidis, in March 2009.
These two acquisitions make
Crédit Mutuel the fourth largest
player in European consumer
credit and strengthen its position
in this market.
The group pursued its growth
strategy in the insurance field with
the creation in Spain of insurance
company RAC Seguros, the fruit of
an alliance with Royal Automobile
Club de Catalogne.
The group also launched fresh IT
projects in Spain, Morocco and
Tunisia.
With almost €30 billion of shareholders’ equity, group share, the bank
has increased its financial solidity, with an 11.8% Tier 1 capital ratio that places
it in the upper echelons of French banks.
The combination of strong revenues and efficiently controlled overheads
resulted, despite a rise in the cost of risk, in a marked improvement in
the cost-to-income ratio: at 61.6% it is back at the 2007 level, reflecting
well controlled growth.
With solid revenues, a high savings rate and providing constant support
to all economic players, Crédit Mutuel stands as a major banking player
on the French and European stage, providing its services to over 23 million
customers.
2009 Key figures
at 31 December
€ millions
2008
IFRS
2009
IFRS
581,709
579,038
25,036
24,676
30,619
29,616
9.8%
11.8%
Customer deposits
o/w
- Deposits
- Debt securities issued
- Insurance-linked savings
478,194
543,766
197,219
199,712
81,264
219,279
235,130
89,357
Outstanding loans
295,497
304,153
8,424
13,573
(6,677)
(8,368)
1,747
5,205
(1,405)
(2,370)
Operating profit
342
2,835
Pre-tax profit
409
2,742
33
-860
Net profit
442
1,882
Net profit, group share
440
1,831
5,746
5,831
19.5
23.3
65,608
72,465
Total assets
Shareholders’ equity
- of which attributable to group
Tier 1 solvency ratio
Net banking income
A good year for results
Despite the particular economic and financial
context, marked not only by a confidence crisis
but also by a contraction of investment expenditure and loan requests, most of the group’s
divisions recorded stronger performances and
helped make 2009 a good year in terms of
both growth and earnings.
The defining features of the year were sustained
growth and new acquisitions, with a significant
expansion of the group’s European banking and
insurance activities.
The year should be assessed in light of the major
changes in consolidation scope brought about
by the acquisitions of Cofidis, Monabanq and La
Française des Placements, together with the
first-time consolidation of Banca popolare di
Milano and the full-year impact of the integration
of Citibank Deutschland, or, as has it has been
known since February 2010, Targobank.
Net banking income rose by 61.1%, or 37.5%
excluding acquisitions*, to €13,573 million. This
was due to the combined effect of the interbank
market’s normalisation, increased fee income
and new acquisitions.
The 14.6% increase in net income from nonbanking activities, of which net income from
insurance accounts for 89%, underscores once
again the strength of the bankinsurance model.
Net income from securities and derivatives
transactions (€586 million) clearly reflects
the normalisation of market conditions, which
benefited players industry wide.
Retail bankinsurance, the group’s core business
line, accounted for 82% of overall net banking
income. It totalled €11,822 million, comprising
€10,500 million in retail banking and €1,322
million in insurance. The contribution by corporate
and investment banking activities represented
12.7% (€1,832 million), while the asset management and private banking arm accounted
for 3.5% (€512 million) and other activities
1.8% (€258 million).
The increase in operating expenses to
€8,368 million (+25.3%, +8.2% excluding
acquisitions*) stems largely from the widening
of the group’s consolidation scope through
acquisitions and the creation of new local mutual
banks and branches. They increased at a slower
rate than net banking income, a testament to
efficient management and sustainable growth.
Pay-related expenses rose by 3.4% at constant
scope. Employee incentive payments and profit
sharing also increased sharply, reflecting the
group's higher earnings.
Operating expenses
Gross operating profit
Cost of risk
Income tax
Points of sale
Customers (millions)
Workforce
(1)
figures excluding acquisitions, at constant scope, i.e. based on the group’s balance sheet not taking into account
Cofidis, Monabanq and 11/12ths of Targobank’s contribution, and thus reflecting the situation as in 2008.
28
Crédit Mutuel
Annual report 2009
29
2009 Results
The respective changes in net banking income
and operating expenses led to a sharp improvement in the cost-to-income ratio,
to 61.6%. It has returned to the 2007 level,
reflecting the group’s well controlled growth.
The group tripled its gross operating profit to
€5,205 million (x 2.5 excluding acquisitions)
thanks to the strong rise in net banking income,
which exceeded that of operating expenses.
Net profit, group share came to €1,831 million,
despite the increase in the cost of risk. This grew
by 68.7%, a significant rise - albeit starting from
a very low level prior to 2008 - that is directly
related to the economic climate, as the economic
crisis stepped in where the 2008 financial crisis
left off to weigh heavily on the year’s results.
Bankinsurance accounted for 89% of net profit
for a total of €1,629 million, of which €1,042
million came from retail banking and €587 million from insurance.
Corporate and investment banking contributed
€733 million (40% of the total), while income
from asset management and private banking
totalled €95 million (5.2%).
Shareholders’ equity, group share stood at
€29.6 billion at 31 December 2009, up 20%.
A good year for growth
The difficult economic conditions stimulated
activity in the branch network, which showed
even greater responsiveness at local, regional
and national level.
In an intensely competitive climate, at constant
scope Crédit Mutuel won 265,000 new customers,
of which 160,000 private individuals. It now has
almost 16.5 million customers, or 23.3 million
taking into account those added by Targobank
and Cofidis. 85 new local mutual banks and
branches were opened in order to increase the
bank’s local reach, bringing the total number of
outlets to 5,831, of which 5,441 in France.
Alongside the network’s development there
was increased sharing of applications between
the regional groups. Further interfederal
partnerships developed around the Caisses
Interfédérales, subsidiaries and work platforms.
On 1 January 2009, Crédit Mutuel MidiAtlantique joined the Caisse Interfédérale
comprising the Centre Est Europe, Ile-deFrance, Sud-Est and Savoie-Mont Blanc
federations, following a partnership agreement
signed the previous year between these five
federations and the Marseille and Valence
groups, and other similar projects are being
considered. Operational development work to
increase CM-CIC Services’ (CCS) production
and logistics capacity also gathered pace.
Net banking income
IFRS (in € millions)
13,573
IFRS
79.2%
1
11,822 +39.4%
11,579
HA*
10,568
Cost-to-income ratio
Retail banking and
insurance net banking income
IFRS (in € millions)
1
61.6%
61.6%
8,480
8,424
10,500
+40.3%
HA* +8.6%
7,485
1,322
995
2007
2008
2009
2008
+32.9.%
2007
2009
2008
2009
Total retail bankinsurance(1)
Retail banking
Insurance
(1) before elimination of inter-sector transactions
These developments allowed the group to
become more competitive, enhance product and
service quality, control its costs and profitability
and strengthen and optimise its equity capital.
Total customer deposits increased by 13.7%
in 2009, to €543.8 billion.
Activity remained upbeat, carried by new
deposits (up 11.2% to €219.3 billion, or 6.2%
excluding SFEF and acquisitions) and the
securities segment (up 17.7% to €235.1 billion).
This trend applied for all savings accounts
(+2.8%) except for the LDD and the LEP, which
lost some of their attraction on account of
lower interest rates and consequently saw a
slight contraction. Term deposits continued to
increase (up 16.5% for regulated deposits and
18.3% for non-regulated deposits).
Life insurance deposits posted a 10% increase
to €89.4 billion, in line with the market.
(in € millions)
Regulatory capital,
of which Tier 1
Cost of risk
as a %
12.3
2,730
0.61% (HA* 0.33%)
0.19%
11.3
2,370
11.8
2,072
9.5
1,831
1,405
9.6
9.8
12.7
10.9
609
440
2007
2008
186 219
2009
2007
2008
2008
(with floor)
(without floor)
2009
2007
2008
2009
Cost of risk(1)
Regulatory capital
The securities segment also saw significant
inflows for money market funds and benefited
from the BFCM and Crédit Mutuel Arkéa bond
issues, the growth of employee savings (up 25%)
and a positive performance from the CIC securities
custody activity (up 8%).
Tier 1 capital
As from 2007 figures have been calculated using the
methods laid down in the decree of 20 February 2007
(Basel II).
Overall cost of risk
Cost of customer risk
(1) Cost of customer risk excluding collective
provisions / average credit outstandings (%)
*Excluding acquisitions
30
Crédit Mutuel
Annual report 2009
31
2009 Results
Customers
(millions)
The group boosted
its position in new
technologies in 2009
These performances boosted fee income, which
was up 27.8%, or 4.9% excluding acquisitions,
to €3,342 million.
The group’s share of the French deposits market
remained relatively stable at 11.9%.
Lending remained upbeat despite the depressed
economy and the slowdown in demand, leading
to an €8.6 billion, or 2.9% increase in loan
outstandings to €304.2 billion, for all financial
intermediaries and loan types combined.
Insurance came out firmly as the group’s
second largest business line, occupying the lead
position in the French bankinsurance market
with a 4% increase in non-life premium income
to €2.3 billion and the fourth position in life
insurance with premium income of €10.1 billion
(up 26.4%).
The insurance subsidiaries generated total
premium income of €12.4 billion (up 21.5%)
on 28 million contracts under management
(of which 23.8 million in non-life) for more than
11 million policyholders (+2.2%).
While overall outstandings remained stable,
corporate lending told a contrasting tale.
Microbusinesses and SMEs saw their loan
outstandings grow, which was not the most
predictable outcome given the year’s economic
climate. The same cannot be said of large caps,
however, which resorted more to the bond
markets for financing.
Equipment lending increased for companies
across the board as from October 2009,
whereas there was less demand for operating
loans linked in particular to the downturn.
Unused authorised credit lines (mainly treasury
facilities) increased by €2.4 billion, or 12% over
the year, while amounts drawn down fell by
€1.5 billion (1.5%), reflecting mainly a 15.6%
decrease in cash facilities.
The group solidly defended its position as
France’s second biggest provider of electronic
payment systems, where it has a 20.1% overall
market share and 26% of the retail market.
In the area of acquiring, which involves acting
as reconciling agent for a service’s payer and
supplier banks, revenues were up by 40%. The
group is France's leading and Europe's second
largest acquirer.
The group increased its market share of bankdistributed loans by 0.6 points to 17.5%.
5,746
5,831 +1.5%
Average number
of employees
59,455
65,608
72,465 +10.5 %
(+0.4% excluding
acquisitions)
+20.6%
21.4
17.8
13.3
2007
2008
2009
2007
2008
2007
2009
2008
2009
o/w retail
customers
The group asserted its position in new technologies in 2009.
Having been the first bank to offer trade
customers secure online payments, the first
French bank to trial remote payment by mobile
phone as well as the first to develop remote
card payment solutions, Crédit Mutuel now offers,
under the NRJ Mobile, Crédit Mutuel Mobile
and CIC Mobile brands, a new approach to
payment means and services within the framework
of Europe’s emerging pay-by-mobile market.
It released a number of major new products and
services in 2009 giving each customer access
to solutions tailored to his or her needs.
This personalised service is also a feature of its
range of residential and commercial remote
surveillance solutions. With a 30% market share
and 180,000 subscribers the group is number
one in this market.
Housing loans (up 2.7%) and consumer loans
(up 23.5%) performed well thanks to a prudent
credit policy.
The outlook for mortgage lending, which was
adversely affected by the weak economic and
financial environment in the first half, brightened
in the final quarter of 2009 as production rose,
while the consumer credit business was helped
by the group’s new acquisitions and contributed
to improving its positioning in this field.
(points of sale)
5,206
19.5
15.0
Headcount
Network
23.3 +19.3%
Market share(1) (France)
Market share(1) (France)
Deposits
Loans
11.5%
12.0%
11.9%
16.6%
16.9%
Credit risk
3.6%
17.5%
2.4%
3.0%
62.4%
62.0%
58.6%
2007
2008
2007
2009
2008
2007
2009
2008
2009*
Impaired loans
(1) excluding repurchase transactions
(1) excluding repurchase
transactions and SFEF
Coverage rate (1)
2008 and 2009 figures reflect
the consolidation of Targobank
(1) Excluding collective provisions
Breakdown of
new loans (2009)
8%
Breakdown of customer deposits
(2009)
16.4%
Deposits
(€ billions)
543.8 +13.7%
482.3
28%
40.3%
11%
53 %
43.3%
171.6
478.2
219.3
+11.2%
89.4
+10.0%
235.1
+17.7%
197.2
80.2
81.3
Home loans
Consumer credit
Equipment loans, leases and operating loans
Other
Deposits
Securities segment
Insurance-linked savings
230.5
199.7
2007
2008
2009
Total deposits
Customer deposits(1)
Insurance-linked savings
Securities segment
(1) including short-term notes
32
Crédit Mutuel
Annual report 2009
33
Bankinsurance
Bankinsurance, the group's core business, covers retail
banking and life and non-life insurance activities.
In a depressed economic environment, in 2009
it generated net banking income of €11.8 billion
and net profit, group share of €1.6 billion,
respectively 82% and 89% of overall net banking
income and net profit, group share.
34
Crédit Mutuel
Annual report 2009
35
Bankinsurance
The group assists its customers in all their projects, providing
solutions in the areas of investment and borrowing, electronic
payments and technology, life and non-life insurance, real estate,
personal services and wealth management.
Crédit Mutuel, number 1 bank
for customer relationships in 2009
Good customer relations are crucial for successful development,
and Crédit Mutuel was once again recognised for its customer
service quality and efficiency in 2009.
One of France’s biggest retail banks and its leading non-life
bankinsurer, the Crédit Mutuel group has over 21 million retail
customers, including 11.2 million in its life and non-life insurance
divisions. It was to better address these customers’ needs that
in the 1970s Crédit Mutuel developed bankinsurance activities,
i.e. the sale of insurance products through its bank branches,
and it was this same responsiveness that led it to become the
leader in remote home surveillance, with a 30% market share.
As a local bank with more than 5,800 branches and almost
7,500 ATMs, the group has increased its geographic coverage
with an appropriate balance between physical networks and
remote banking technology. It thus offers a truly local banking
service backed up by state-of-the-art, multi-channel technology:
remote banking services alone have now recorded over
a billion contacts, more than 50% of them via Internet,
an ever expanding channel.
The group is a leader in breakthrough areas such as mobile
telephony, which is a major strategic development priority within
the context of Europe’s emerging pay-by-mobile market.
The customer relationship is the key to successful development,
and in 2009 Crédit Mutuel was once again recognised for its quality
and efficiency in this area.
For the second consecutive year, Crédit Mutuel came first in
the BearingPoint – TNS Sofres customer relationship survey (1).
These awards differ from others in that businesses are judged
not by panels of experts and professionals but by consumers
themselves.
KEY FIGURES FOR
BANKINSURANCE
23.3 million customers of
which 21.4 million retail
customers
11,2 million policyholders
and 28 million insurance
contracts
5,831 outlets
7,421 ATMs
(1)
Survey carried out in France in April 2009 on a sample of 4,000 customers and users of more
than 100 businesses and organisations in 11 sectors: insurance, automobile, banking, specialised retail,
services companies, mass retail, public services, fixed telephony/Internet access providers, mobile
telephony, tourism and transport.
1 billion remote banking
contacts
Le Revenu’s Super Trophée 2009:
Crédit Mutuel voted top 1
On 1 September 2009, Crédit Mutuel topped the
rankings in the general category of Le Revenu’s Super
Trophée 2009 awards for the best bank.
In the individual categories, which cover lowest prices,
best customer service, innovation, property loans,
life insurance and fund management, Crédit Mutuel
picked up triple honours:
• first place for innovation,
• second for property loans,
• and third equal with CIC for fund management.
“A major retail bank, the group assists
its customers in all their projects”
36
Crédit Mutuel
Annual report 2009
37
Bankinsurance
KEY FIGURES FOR
RETAIL BANKING
(in € millions)
Net banking income: 10,500
The group continued to develop new products
and services, such as in mobile telephony,
where it pressed ahead with the roll-out of its
offer within the context of Europe’s emerging
pay-by-mobile market.
Gross operating profit: 3,515
Net profit, group share: 1,042
It has continued to diversify its offer so as to
meet all the needs – from the simplest to the
most sophisticated – of its retail customers
and, more generally, of its various customer
segments, i.e. young people, who constitute
one of its priority areas of development,
but also associations, farmers, self-employed
professionals and microbusinesses and SMEs.
Crédit Mutuel Enseignant:
a special relationship
Union nationale du Crédit Mutuel
Enseignant (UNCME) now has
more than 40 mutuals throughout
France*.
They offer a service combining
clear terms and conditions, high
quality products and mutualist
values to civil servants employed
by the departments of education,
research, youth and sports and
culture.
Since 2008, the CME mutuals have
been able to extend membership
to teachers and non-teaching staff
in the private education sector within
the framework of a partnership with
the State.
*www.creditmutuel.com
One of France's
leading retail banks
Retail banking, the group's main business, encompasses the offers
of Crédit Mutuel’s 18 regional federations and CIC's five regional divisions.
It also covers the specialised products and services marketed through
the network, notably leasing, factoring, fund management and real estate.
Retail banking generated net banking income
of €10,500 million in 2009 (77.2% of the group
total) and €1,042 million of net profit, group
share (56.6% of the group total).
As the day-to-day banking partner of 21.4 million
retail customers, Crédit Mutuel has an 11.9%
share of the market for deposits and a 17.5%
share of the bank loans market.
After the enormous upheaval caused by the
financial crisis of 2008, 2009 was marked by a
fall-off in investment and financing applications,
the return to normal of financial markets and an
increase in credit risk.
Against this sombre economic backdrop, the
group continued to provide solid support to all
of its customers.
The retail banking business sustained its momentum to emerge from the crisis unscathed.
38
Crédit Mutuel
Faced with extremely high short-term refinancing
rates in the first half of 2009, the group stood
firm thanks to the healthy level of deposits
on its books (PEL home savings plans, term
deposits, regulated savings accounts, etc.). This
enabled it to continue lending at acceptable
rates to households and businesses alike while
managing potential risks more tightly.
In the second half of the year the refinancing
difficulties subsided and the bank was able to
lower its lending rates.
In these conditions, the group maintained its
market share and business by relying on its
core products and services: portfolio activities,
regulated savings accounts, home savings
schemes and term deposits; housing loans,
where it prioritised first-time buyers and
continued to serve low-income customers;
and insurance and provident solutions, where
it continued to win new business.
For the more financially marginalised members
of its customer base, the Crédit Mutuel group
offers a full range of services for withdrawing
cash and making payments in all circumstances:
Facil’accès at Crédit Mutuel and Service Accueil
at CIC.
As a major housing loans player with an 18%
share of new loans granted, the group is a
key player in the financing of programmes
to facilitate home ownership among the less
well-off sections of society, particularly through
the distribution of interest-free home loans
under recently introduced legislation.
Crédit Mutuel members have access to a range
of green financing solutions for home purchases
and improvements, such as the zero-rate eco
loan and Crédinergie. Also available is the ACM
“Pack Ecologique”, a new home insurance package
covering environment friendly installations.
Following the acquisition of Germany's leading
consumer credit provider, Targobank (formerly
Citibank Deutschland), and Cofidis, which
has operations in around ten countries across
Europe, the group is now France’s third and
Europe’s fourth largest player in this sector.
The group has made specialised online banking
tools available to its customers, such as
Monabanq and Fortuneo.
Livret A/bleu:
the group strengthens its position as a leading distributor
Distribution of regulated savings accounts (Livret A/Livret Bleu) was opened up to all banks
on 1 January 2009.
Mediation:
more than
2,000 opinions
issued in 2009
Created by the Murcef Act, bank
mediation has become an integral
part of the customer relationship.
Initially linked to retail deposit
accounts, the scope was extended
in January 2008 to cover disputes
linked to financial instruments,
savings products, loans and
investment services, insofar as
these concern a contract’s
execution rather than its negotiation.
Crédit Mutuel's ombudsman
received 3,520 claims in 2009,
a rise of 25.3% from 2008. More
than half of these fell within
its ambit, and 81% received a
response within a month.
The ombudsman issued 2,090
opinions in 2009, 54.5% of which
were partly or totally in the
customer’s favour.
Although the ombudsman's
opinion is not binding for the
network, it has been followed
in all cases by Crédit Mutuel’s
regional federations and CIC's
regional banks.
This reform, which was implemented at the request of the European Commission, in no way
changes the group’s philosophy. As a traditional distributor of Livret A/Bleu savings books,
Crédit Mutuel will continue to distribute this popular savings product, frequently the first rung
on the savings ladder for retail customers.
Generalised distribution has not affected the group’s market share in these products, with
the number of active savers rising to 6.5 million for total deposits of €26 billion, a 2.3%
increase, despite the decrease in the account’s interest rate between August 2008 and
August 2009, from 4% to 1.25%.
The Livret A/Bleu continues to be what it has always been: a popular basic savings product
offering availability and reliability, and Crédit Mutuel will continue to distribute this product,
sharing costs between large and small savings accounts in another example of its commitment
to solidarity.
Annual report 2009
39
Bankinsurance
The preferred bank
of private individuals
Annual bank charges
statement:
clearer than ever
In accordance with current regulations applicable to all banks,
as of January 2009 customers
now receive a yearly statement
summarising the charges they
have incurred in connection with
their current accounts.
This statement provides an
overview of the charges levied
over the past year, reflects Crédit
Mutuel’s ongoing commitment to
transparency and clarity, made
some years ago, and results in the
provision of straightforward, useful
advice and enhanced access to
information.
Crédit Mutuel endeavours to anticipate and respond to customers’
needs with an appropriate and particularly innovative offer of bankinsurance
products and services.
A full range of remote banking services
The group aims to be within easy reach of its customers wherever they are, providing them
with a full range of remote banking services in addition to its branch network. Internet banking
continues to grow, thus confirming customers’ interest in managing their accounts and
seeking information online. The group’s large number of ATMs plays an important part in
developing its remote services.
In millions of connections
2009
2009/2008
Internet
569.6
+24%
Mobile Internet
8.4
+11%
Customer relations centres
33
+6%
ATMs
383.5
+7%
Minitel-Audiotel
8.9
-20%
Total remote connections
1,003.5
+16%
Sustainable development lies at the heart of
Crédit Mutuel’s activity; accordingly, it offers
its retail customers a range of competitive
solutions for environmentally oriented home
purchases, refurbishment work and insurance.
Similarly, Crédit Mutuel has gained a genuine
lead concerning the quality and performance
of new technological services provided to
customers in the areas of remote banking,
remote home surveillance, electronic payments
and mobile telephony.
The group has produced a new energy saving
guide for retail customers covering financing
solutions, administrative procedures, tax breaks
and other information on its attractive finance
packages for energy saving projects. It is available
at www.creditmutuel.com.
Remote surveillance:
number 1 in France
Crédit Mutuel’s residential and professional
remote surveillance solutions are a prime
example of its commitment to offering
innovative products and services that are
tailored to customers’ needs.
Crédit Mutuel’s tailored financing solutions for
its customers’ projects include:
The zero-rate eco-loan
for home improvements:
this interest-free loan is arranged free of
charge and is designed to cover energy saving
work up to €30,000 on a property classed as a
main residence, whether owned or rented. It is
available for owners or lessees of buildings
completed before 1 January 1990, irrespective
of their income. In 2009, Crédit Mutuel financed
24% of all eco-loans granted by banking
institutions.
Crédinergie home improvement loan:
this loan offers preferential financing terms
for certain types of energy saving work.
The work must be eligible for the “sustainable
development” tax credit and carried out in a
house built more than two years ago.
The Pack Ecologique (‘eco-pack’)
equipment insurance offer:
energy saving projects require significant
investment, which is why Assurances du Crédit
Mutuel (ACM) has designed the Pack Ecologique home insurance solution for environment
friendly equipment.
NRJ Mobile – the best
mobile telephony
services
Crédit Mutuel’s mobile telephony
activity, marketed under the "NRJ
Mobile", "Crédit Mutuel Mobile"
and "CIC Mobile" brands, provides
a new channel for bankinsurance
and services and constitutes a
new approach to payments.
In 2009, the bank introduced new
deals incorporating unlimited
text messaging and Internet
connections.
There are offers to meet the
requirements of all membercustomers, with free add-on
services such as phone insurance,
emergency assistance and links
from the mobile to the CyberMUT/Filbanque online banking
facilities for access to new value
added services.
With a 30% market share and 180,000
subscribers the group is number one in this
market in France.
Linked to the EPS surveillance centre by
traditional phone line, ADSL or GSM/GPRS,
the group’s alarm system manages multiple
functions and communicates in real time
with the customer’s mobile phone.
A number of new services were added to
the remote surveillance range in 2009:
• Detection IMAGE system, which takes
photos of any intruders detected and
sends them via email or directly to the
customer’s mobile phone;
• Signo, a free SMS/email alert service
providing subscribers with information on
people entering or leaving their property;
• Top Alarme, another free service enabling
customers to check remotely whether
their alarm system is working and activate
it online or via mobile phone.
40
Crédit Mutuel
Annual report 2009
41
Bankinsurance
A key player in
housing finance
The fragile economic and financial environment weighed on new home loan
issuance in the first half of the year, with high refinancing costs and cautious
buyers making for a slow market.
The market recovered starting in the third quarter, leading to a rise
in the production of new home loans by the networks in the second half
of the year.
Crédit Mutuel’s 18% market share makes it France’s third biggest issuer of
home loans1, with outstandings of almost €160 billion, up 2.7% from 2008.
An active partner in subsidised
housing
The group is one of the biggest banking partners
for first-time buyers, with extensive experience
in providing government subsidised loans via the
new interest-free loan (Nptz) scheme, for which
it is one of the leading distributors with a 16%
market share, the PAS subsidised acquisition
loan, the Pass Foncier deferred land purchase
loan and the PSLA subsidised rental-acquisition
loan. It also plays an increasing role in financing
low cost rented accommodation by distributing
PLS loans.
The bank seeks to broaden loan coverage
at a national level and was one of the first
organisations to offer higher limit zero-rate
expertise in France’s most marginalised areas.
Crédit Mutuel has a longstanding relationship
with operators of the “1% logement” subsidised
housing scheme, which have traditionally been
active in the rental sector for low-income
households and are now involved in subsidised
acquisition schemes.
The group has begun to set up schemes for
separating the purchase of land from that of
the homes built on it. It is committed to working
alongside the main bodies involved in collecting
the “1% logement” contribution, by providing
financing in conjunction with the local authorities’
contributions (aid in addition to higher limit
Since 2009, this activity has benefited from
measures to stimulate new-builds, such as the
raising of the interest-free loan ceiling to twice
its former level and the gradual roll-out of legal
and tax arrangements for using the Pass
Foncier for multi-occupancy housing.
• it is a close partner of social housing cooperatives
for construction programmes under subsidised
homebuyer schemes, which it finances through
interest-free loans or tenant home purchase
schemes;
• it has extended its direct presence through
partnership agreements with the OPH social
housing bodies, which manage half of France’s
existing subsidised housing and have projects
for the priority zones designated in the
government's urban development policy.
The group is an active player in several regions,
with a range of activities:
• it has capital stakes in around 40 subsidised
housing bodies (Entreprises sociales de l’habitat
- ESH) to which it offers intermediate rental
loans (PLS and PSLA). It also contributes its
know-how in the sale of social housing (HLM)
through subsidised homebuyer loans;
As a traditional partner of the French agency for
housing improvement (Agence nationale pour
l’Amélioration de l’Habitat - ANAH), the group
aims to work more closely with social housing
bodies in sensitive urban areas covered by
French urban renovation agency (Agence
Nationale pour la Rénovation Urbaine - ANRU)
programmes.
interest-free loans, reduced VAT rate of 5.5%
and carrying of the cost of land by the CIL
cross-sector housing committees thanks to the
Pass Foncier scheme).
Crédit Mutuel signs the 100,000th interest-free eco-loan
As the provider of over a quarter of all interest-free
eco-loans issued in 2009, Crédit Mutuel was invited by
Jean-Louis Borloo, Secretary of State for the Environment,
Energy, Sustainable Development and Maritime Affairs,
to sign the 100,000th loan of this type on 1 April 2010.
This symbolic number underscores the commitment and
dynamism of the Crédit Mutuel network, which in 2009
alone studied applications for, prepared and issued
21,000 zero-rate eco-loans.
Having been actively involved from the launch of this
major commitment made at the Grenelle environment summit, the group began operational
roll-out of the eco-loan starting in April 2009. This achievement bears testament to
the group’s values of closeness to and high quality relations with its member-customers,
particularly as regards those on modest incomes with strong ties to their area of origin.
The interest-free eco-loan is a new addition to the range of products and services dedicated to
energy saving and renewable energies, in particular the Crédinergie loan and, since April 2009,
the Pack Ecologique, a new home insurance solution offering special terms for environment
friendly equipment cover.
All the Crédit Mutuel financing solutions are presented in the “Energy saving and sustainable
development” guide on www.creditmutuel.com.
(1)
Ranking after the 2009 BPCE merger, which created a new group comprising the Caisses d’Epargne, Banques Populaires
and Crédit Foncier.
42
Crédit Mutuel
Annual report 2009
43
Bankinsurance
A dedicated offer
for young people
In 2009, the Crédit Mutuel group invested further in developing its offer for
people under the age of 26, who represent nearly a quarter of its customer base.
Teaching young people how to use basic banking services, encouraging
savings from an early age and assisting young people along the road to
independence are the main facets of the bank’s offer for a customer segment
that is central to its development strategy.
Crédit Mutuel,
official banking partner
to Disneyland Paris
This partnership governs the
use of the promotional rights to
the Disney and Disneyland Paris
brands and establishes Crédit
Mutuel as the official banking
partner to Disneyland Paris.
It makes Crédit Mutuel the only
bank to be able to offer its
younger customers special deals
for Disneyland Paris, including for
family visits with accommodation.
The agreement will ultimately
enable the bank to offer a broad
range of financial services to
Disneyland Paris employees and
to roll out cutting edge payment
management projects.
44
Crédit Mutuel
■ Pop Corn covers the period from birth to
11 years and features the livret bleu savings
book account, a key product for the children's
segment given the opening up of the savings
book market and the demand for insurance and
savings products and assistance with starting
and continuing to save;
■ VIP caters for customers aged between
11 and 25, whatever stage of their schooling
or career they are at (secondary school pupil,
apprentice, student or graduate employee),
in three major areas:
- day-to-day banking needs, notably through
Eurocompte VIP, a service package enabling
customers to manage their budgets;
- accommodation, with Clic-Clac, a package
comprising a loan to finance a guarantee
deposit, a bank guarantee for the landlord
and a home insurance policy. These products
can be subscribed to separately if required;
- projects: computer loans, the €1 per day
driving licence scheme, and flexible student
loans, including, since the end of 2008, the
Oséo government backed student loan, which
enables the student to borrow up to €15,000
over a two- to ten-year period and comes
with a government guarantee of 70% for
the unpaid portion of capital. This loan is
specifically tailored for young people without
a parental guarantee.
New products for young people include a prepaid
bank card which enables 12 to 17 year olds
to manage their pocket money securely and
independently. It can be used for purchases in
France or abroad, including online.
The VIP offer is mainly marketed through Crédit
Mutuel’s advertising on educational materials
handed out to students throughout their school
years, including at key moments in terms of
academic and career decisions.
CIC offers both Parcours J and the Starts
Jeunes Actifs package for under 28s.
As well as these specific products, the group
distributes intergenerational savings products
which can be subscribed by parents or grandparents to set aside money for their offspring’s
future.
The group is particularly closely involved with
young people who undertake ‘responsible
citizenship’ projects, through partnerships with
non-profit associations such as Trophées J.Pass
and Junior Associations and initiatives launched
directly by the Crédit Mutuel federations (Crédit
Mutuel Centre Est’s Les Jeunes qui osent
competition and Les jeunes qui s’engagent
programme, Crédit Mutuel Maine-Anjou and
Basse-Normandie’s Challenge Jeunes Créavenir
contest, Crédit Mutuel du Sud-Ouest’s Coup de
Pouce programme, etc.).
The bank for every kind of music
Allowing our customers to express themselves is the cornerstone of our relationship with them,
and sponsoring their music is one way of thanking them for the trust they place in us.
Crédit Mutuel therefore gives its support to some of the leading music events and programmes
on television and radio, such as the Victoires de la Musique on France 2 and France Inter,
Taratata, N'oubliez pas les paroles and Fête de la Musique.
It partners music programmes and discussions on France Inter, France Info and Le Mouv’,
as well as the France Bleu talent showcase night.
Crédit Mutuel is also involved in major music events such as the Printemps de Bourges festival,
Francofolies de la Rochelle, the Arras Main Square Festival, Musilac in Annecy, Marseille’s
Fiesta des Suds and last but by no means least the Fête de la Musique, of which it is the official
sponsor. In addition, it promotes numerous regional events.
With a view to bringing live music to as many people as possible, Crédit Mutuel is associated
with Jeunesses Musicales de France and with the 2,000 concerts they give each year in primary
and secondary schools, as well as with Confédération Musicale de France which groups some
700,000 musicians in 6,000 music academies, orchestras and choirs.
Since 2008, Crédit Mutuel has been making its voice heard over the Internet, notably with
Goomradio, through which it broadcasts two exclusively digital radio programmes targeting
young people: Pop Corn radio for 8-to-12 year olds and VIP radio for 12-to-18 year olds.
Again through music, Crédit Mutuel works to help sick children by supporting the “Tout le
monde chante” cancer prevention and support endeavour.
In 2009, Crédit Mutuel launched a major competition giving all performers in the Fête de la
Musique the chance to earn the title of one of the new acts of the year (les RévéLAtions).
It involved five different musical categories, with vouchers for musical equipment and a
recording studio session to be won.
CIC also supports young performers, through its patronage, since 2003, of the Victoires de
la Musique Classique classical music awards. This event, which enables young musicians to
build a reputation, helps to promote classical music to an increasingly wide audience in Paris
and throughout France.
Channelling energies, being attentive and developing individual talents and goals are just
some of the values to be found in music and which justify the group's commitment to this
form of expression.
Helping young talent
emerge with Cercle
Passeport Télécoms
The Cercle Passeport Télécoms
initiative enables young people
from disadvantaged backgrounds
in marginal urban areas to attend
engineering or business schools
(including at the preparatory
year stage) by eliminating all
financial discrimination.
This association’s work is
supported by nine corporate
partners*, including Crédit
Mutuel, which has been involved
in the project since 2007
through the provision of student
loans requiring no parental
guarantee and the joint running
of educational workshops in the
partner schools.
The Ministry for Higher Education
and Research, the Secretary of
State for Urban Areas and
ACSè, the national agency for
social cohesion and equal
opportunities, are also partners.
This public-private partnership
has grown substantially: Cercle
student numbers have risen
from 125 in 2005 to more than
542 in 2009 and tutor numbers
from 100 to more than 485, while
students have enjoyed a 90%
success rate in entrance exams
for the leading educational
institutions.
This initiative serves Crédit Mutuel’s
goal of becoming the bank behind
young talent.
* SFR, Orange, Nokia Siemens
Networks, Alcatel-Lucent,
Devoteam Group, Ericsson,
Gemalto and Hôtel F1.
Annual report 2009
45
Bankinsurance
The leading bank
for non-profit associations
With a customer base comprising nearly 400,000 associations,
Crédit Mutuel is the active partner of more than one out of every
three associations and one of every two works councils.
It responds to the needs of this sector, which plays a key role in reinforcing
social cohesion and creating new community ties.
At end-2009, the group was managing
€12.8 billion in non-profit association deposits,
representing an 8.6% increase year-on-year,
and had over €2 billion in loan outstandings
(up 10.2%).
A specifically targeted banking offering, assistance
facilities for voluntary workers and close
relationships with associations and their
federations at national and regional level have
helped to make Crédit Mutuel their natural
partner.
In September 2009, Crédit Mutuel launched Associ@thèque, a public information
and services website designed to consolidate the group’s position in the non-profit
associations market.
Designed for everyday use by voluntary workers and current and future association
directors, Associ@thèque provides a wealth of information (legal, tax, accounting,
community and events news, along with useful guides, downloadable information
sheets and templates, Partenaire Associations and other newsletters, etc.). It also
offers numerous online services to help manage and promote an association, such
as a directory, small ads, legal and tax advice from a partner law firm and data upload
to the local CM-CIC branch.
Associ@thèque is regularly updated and enhanced by our specialist partner companies*.
It is a free service with a subscriber area reserved for customer associations with
a remote banking contract or a Eurocompte account (subject to region-specific terms
and conditions). The public part of the site offers various useful features, such as
guides on setting up and managing associations.
As well as providing assistance to associations, Associ@thèque is a means for Crédit
Mutuel to win new customers, secure the loyalty of existing ones, and burnish its image.
www.associatheque.fr
* Editions Juris associations (an Editions Dalloz company), In Extenso, an accounting firm belonging to the
Deloitte group, and Service 1901, a consultancy specialised in the associations sector
46
Crédit Mutuel
These close relationships, built as much on the
group's values as on its professional efficiency,
have created a climate of trust: CNRSMatisse’s survey, which was launched in 2005
and introduces new evaluation criteria every
year, ranks Crédit Mutuel as the leading bank
for medium-sized and large associations, with
a 33% market share.
Crédit Mutuel manages 22% of the funds of all
the associations in France: it is their leading
banking partner in the areas of healthcare,
social work, education, training, social integration
and humanitarian aid, and the second largest
bank in the areas of sport, culture, human rights,
charities, local economic and development
initiatives, and campaign groups.
Renewed partnerships
In 2009, Crédit Mutuel renewed its partnership with
the Familles Rurales (rural families) association,
the Réseau National des Juniors Associations
(RNJA) network and COORACE.
As one of RNJA’s leading banking partners,
Crédit Mutuel also contributes to the financing
of the guides it publishes. In 2009, it helped
fund a study of the impact of involvement in
voluntary work on the career paths of young
people.
Crédit Mutuel has been a partner to COORACE
for more than ten years, and in 2009 renewed
its ties with this national federation for socially
cohesive economic development.
COORACE’s purpose is to assist people who are
temporarily out of work and contribute to developing employment at national level. It notably
helps its 500 members to implement quality
certification procedures (Cedre and Afnor
Services) to heighten their professionalism and
ability to create jobs and produce high quality
goods and services.
Crédit Mutuel financed the 2009 First Prize for
Innovation designed to stimulate and reward
ingenuity and entrepreneurship in COORACE’s
members.
The committed bank
Children, young people, the elderly, social aid, and social, cultural and sporting
activities: Crédit Mutuel supports numerous networks under long-term agreements,
including:
• Union nationale interfédérale des oeuvres et organismes privés sanitaires et sociaux
(UNIOPSS), a national federation of private healthcare and social work organisations.
As a member of its Club des partenaires (partners’ club), Crédit Mutuel provides
financial support for a number of projects and is well represented at the federation’s
conventions and annual meetings;
• Union Nationale pour l’Habitat des Jeunes (UNHAJ), a housing scheme formerly
known as Foyers de jeunes travailleurs. The bank provides financial support and
communication tools to ensure more publicity for the scheme’s action and notably
for its development programme aimed at building 10,500 new housing units and
renovating 3,500;
• Association des Directeurs au Service des Personnes Agées (AD-PA - care for the elderly).
Crédit Mutuel is providing financial support over three years for communication,
the organisation of events and the development of networks linking retirement homes,
home care services and families;
• Fédération sportive et culturelle de France (FSCF). This sporting and cultural
association is present in 74 departments throughout France and comprises more
than 3,700 associations and sub-associations with 500,000 members, of which half
are under 17, and 40,000 voluntary supervisors;
• Fédération nationale des jardins familiaux et collectifs (FNJFC), which focuses
on nature conservation and the environment, sustainable development and
enhancement of the living environment. Crédit Mutuel contributes to the development
of this national association, which is becoming increasingly involved in developing
public policies on land planning and health (dietary, physical and mental);
For the fifth year in a row, through the Trophées
J.Pass competition in partnership with Familles
Rurales it has provided financial support for
humanitarian, ecological, cultural and social
projects handled by young people aged 12-25.
• Fédération française des Bde (FfBde), a student union federation with a membership
of over 2 million students and 150,000 voluntary workers;
The Group has partnered RNJA since its creation
in 1998. This association enables young people
under eighteen to organise initiatives and carry
out projects within an association framework.
During the 2008/2009 school year there were
more than 1,000 active Junior Associations.
The group helps to promote voluntary work, a considerable force for good in
France. On behalf of France Bénévolat, it is funding a comprehensive study of the
quantitative development of France’s voluntary sector as well as a qualitative study
by socio-economic research body Cerlis (Centre de recherches sur les liens sociaux)
on the impact, input and difficulties associated with carrying out regular voluntary work
for non-profit associations.
• Fédération des carnavals et festivités (Fcf), a central body for events committees
and popular culture organisations.
Annual report 2009
47
Bankinsurance
Number 3 for SMEs
Crédit Mutuel plays an active role alongside all those involved in the regional
economy, whether independent professionals, microbusinesses or small
and medium-sized enterprises.
It ranked as the number three bank for the sector in 2009 with nearly €70 billion
in outstanding loans to SMEs.
Business financing activities are carried out
by the network and specialised subsidiaries:
Banque de l’Economie du Commerce et de la
Monétique (BECM), a subsidiary of Crédit Mutuel
Centre Est Europe; Banque Commerciale pour
le Marché de l’Entreprise (BCME), a subsidiary
of Crédit Mutuel Arkéa and Crédit Mutuel de
Loire-Atlantique et du Centre-Ouest; Banque
Commerciale du Marché Nord Europe (BCMNE),
holding company for the business banking
division of Crédit Mutuel Nord Europe – the
majority shareholder in SA Crédit Professionnel,
the central body for Crédit Professionnel Belge,
and CAMEFI Banque, a jointly-owned subsidiary
of Crédit Mutuel Arkéa and Crédit Mutuel
Méditerranéen.
CIC has put in place a system ensuring the local
presence of account managers and rapid response
times thanks to a short decision-making circuit.
The group is a major financer of independent
professionals, tradesmen and microbusinesses
in the services and light manufacturing sectors,
with more than 700,000 customers and a 23.8%
penetration rate.
It is also strongly positioned among business
start-ups, notably through the assistance provided
to entrepreneurs and the distribution of business
start-up loans (Prêts à la Création d’Entreprise
– PCE), in which it holds third place with a market
share of 19.7% for start-up financing.
The group’s insurance activity, comprising Oseo,
Siagi and France Active Garantie, continues to
grow.
The group is also a long-standing partner of the
France Initiative, France Active, Boutiques de
Gestion and ADIE business development networks.
It has worked for more than 20 years to help
develop local economies with France Initiative,
the largest business creation aid network in
France.
The group is a member of the France Initiative
"Entreprises" collegial body. It is actively involved
with more than 60% of this network’s local
initiative platforms, with Crédit Mutuel covering
152 and CIC 122. In 2009, it distributed 2,403
loans totalling nearly €139 million and accounting
for more than 18% of total bank financing.
The group supports France Active, a network
that aids and finances social inclusion through
economic initiatives. As founder of six of the
38 local funds, Crédit Mutuel is present on
half of the loan acceptance committees and
accounted for 21% of the guarantees given in
2009.
Since January 2009, Crédit Mutuel has been a
partner of Réseau des Boutiques de Gestion,
a non-profit association and the leading
independent network for business start-up aid,
with 430 branches nationwide. Through this
partnership it helps businesses from the ideas
stage through to their third anniversary. The
boutiques de gestion initiate and manage a
variety of schemes (experimental business
incubators, financial engineering for projects,
enterprise zones and entrepreneur networks)
to encourage job creation, initiative-taking,
wealth creation and social cohesion.
In 2009, initiatives were taken at regional level
in Pays de la Loire, PACA (Provence-Alps-Cote
d’Azur) and Burgundy to strengthen cooperation
between the Crédit Mutuel federations and the
boutiques de gestion.
Working alongside SMEs and
microbusinesses
Despite the decline in demand for loans, funds
lent by Crédit Mutuel to microbusinesses and
independent SMEs rose by 1.56% in 2009, while
available credit lines – i.e. those confirmed but
unused – increased by 1.47%.
Investment loans increased by 4.36% for
businesses as a whole (i.e. including affiliated
SMEs and large companies), while treasury
loans contracted by 15.65%, reflecting both
the strong dip in requirements resulting from
sluggish economic conditions and government
measures (tax and social security payment
deferrals).
In parallel with the roll-out of products designed
to rebuild or consolidate cash flow, complete with
Oseo insurance cover, Crédit Mutuel continued to
review files submitted by the credit ombudsman.
The group had a successful mediation rate of
40%, compared with a national average of 65%.
This rate highlights the network’s more in-depth
approach to referrals and its excellent level of local
knowledge: for a great number of companies,
notably very small businesses, the mediator
approved the Crédit Mutuel and CIC’s decisions.
Specialised mutuals for the healthcare sector
CMPS, which was created more than 30 years ago, is a network of branches dedicated exclusively
to professionals working in the healthcare sector*.
Representatives from all segments of the medical and paramedical sectors sit on the boards and
supervisory bodies of these mutuals.
The banks assist practitioners with their strategic and financial decisions, whether professional or
private. In each case they offer personalised solutions, from bankinsurance, electronic payments
and financing packages for individual projects to wealth management from a savings strategy
perspective, retirement planning and tax planning.
In addition to banking expertise, the CMPS have developed active partnerships with professional
associations, unions, specialised management associations, professional guilds and regional and
national institutional bodies.
*www.cmutuel.com
48
Crédit Mutuel
Annual report 2009
49
Bankinsurance
At the cutting
edge of technology
Using its technological skills to serve its customers is a central element
of the group's development strategy. Each year it adds new,
innovative services to its range.
Close to customers at all times, the group provides
a wide range of remote banking channels,
which, with over a billion uses in 2009, account
for more than 90% of customer contacts.
Online banking continued to grow, with nearly
600 million connections, a 24% increase.
Whether for motor or home insurance quotes,
consumer loan simulations or basic information
requests, customers are showing an increasing
appetite for online services.
A few highlights:
• Our mobile Internet service is becoming
an increasingly prominent alternative to fixed
Internet, with 8.4 million connections in 2009.
In July we introduced a new platform equipped
to handle all current mobile phones, from the
traditional WAP devices to the more sophisticated Apple iPhone and Google Android, as
well as a special site for mini PCs. In addition
to the http://m.cmut.fr and http://m.cic.fr
portals, which are the entry point for our mobile
Internet services, we now offer dedicated
smartphone sites for Windows, Blackberry,
Nokia phones etc.
• the www.cmcicpaiement.fr website, the entry
point for the new remote payment service
launched in early 2009, has processed
aggregate payments of more than €2 billion,
a 10% increase;
• there were new developments in the area of
e-commerce transaction security. CM CIC has
further strengthened the identification process
associated with its bar code, thanks to the
recent introduction of 3D Secure, the Visa and
MasterCard authentication technology used
to offer added security for web purchases;
• the bank’s provision of ten-years’ free storage
of statements in electronic rather than paper
form - as PDF files consultable online - already
covers more than 9 million documents. This 40%
growth for the year is testament to the strong
interest of member-customers in a service
provided as part of the bank’s sustainable
development approach.
Leading the way in electronic payments
The group’s capabilities in electronic payments make it France's second largest player, with a 20.1%
overall market share and a 26% share with retailers. With 8.7 million cards in issue it ranks second
in the bank cards market, and the market leader for public sector purchasing cards.
The group’s large number of ATMs (nearly 7,500) plays a large part in developing its remote services.
This network ensures customer access to a comprehensive range of domestic banking transactions,
such as withdrawals, account viewing, making transfers and deposits and ordering cheque books.
The group’s ATMs can also be used to top up an increasing number of facilities such as mobile phone
accounts, Monéo cash payment cards and travel passes (Navigo, Badgéo, etc.).
The bank has incorporated new, cutting edge services in its card based solutions:
• for younger customers, prepaid ‘pocket money’ cards that can be topped up as needed;
• an enhanced deferred payment solution for certain card ranges, which allows the customer to
designate transactions for immediate or deferred debit directly from CyberMUT; plus the launch
of jointly branded cards;
• development of Flotte - Districash cards:
• launch of a foreign currency card specially designed to meet the needs of ‘cross-border’ customers.
In the area of acquiring, which involves acting as reconciling agent for a service’s payer and supplier
banks, transaction volume was up by 40% in 2009. The group is France's leading and Europe's second
largest acquirer.
To meet its quality requirements, the group uses monitoring tools that provide quasi-real time qualitative
and quantitative data analysis for processed transactions.
The way corporate customers and banks interact is currently being transformed, with the Electronic
Banking Internet Communication Standard (EBICS) and SWIFTNet protocols due to replace X25
by 2011.
In response to this change, the group has introduced a range of targeted solutions perfectly tailored
to the various needs of small, medium and large businesses.
• the Web CM-CIC service, designed specifically for small companies, has been complemented by
the HUB-Transfert product, which, in conjunction with EBICS or SWIFTNet for external multi-bank
transactions, enables the company to manage all transactions using a single system. Based on
cutting edge technology, it is extremely user friendly and includes an electronic signature function;
• CM-CIC’s SWIFTNet Plug & Play for medium-sized and large businesses;
• Service Bureau SWIFTNet for major companies.
+ 5.6%
Electronic payments
1,707
+ 3.5%
1,617
7,421
7,170
+ 3.1%
We now show the relationship manager’s name
on all account documentation, particularly on
CyberMUT. This illustrates the bank’s commitment
to making its remote services complementary
to the face-to-face services provided by the
network.
8.4
8.7
2008 2009
2008 2009
2008 2009
ATMs
Affiliated retailer
payments
Interbank cards
(in millions)
20.0%
2008
20.1%
2009
Electronic payments
market share
26% 26%
2008
2009
Retailers
market share
(in millions)
50
Crédit Mutuel
Annual report 2009
51
Bankinsurance
The challenger
in the farming sector
Retail banking
subsidiaries
Crédit Mutuel is the number two bank for the farming sector with 14.1%
of subsidised loans to young farmers and 11.9% of the medium- and long-term
loan market.
Factoring
Real Estate
FactoCIC, the group's factoring subsidiary,
is the fifth largest bank factor in France. It has
a market share of 7.95% in terms of volume of
receivables purchases, 3,011 active contracts,
turnover of more than €10 billion and total
managed outstandings of €1.8 billion.
It posted new production records in 2009 both
in terms of new contracts (1,000) and potential
turnover (€4.1 billion). Net profit came to €13.2
million.
The Crédit Mutuel group is active in all areas of the
property market from sales and development
through to land development and real estate
management.
Consumer credit
Against the backdrop of an international crisis,
having started to seize up at the end of 2008
the property market went through a particularly
tough time in 2009, a year characterised by a
contraction in sales and housing starts in the
new-build segment as well as a decline in prices,
particularly for old properties.
Taken all together, in 2009 the subsidiaries
made almost 3,200 property sales (down 8.2%),
mainly in new property, for a total amount of
€558 million, corresponding to a 7.2% decrease.
The group has been a close partner of the
farming community for 20 years.
With more than one-third of its local mutual
banks located in rural areas, along with Fédération
du Crédit Mutuel Agricole et Rural (CMAR),
a dedicated nationwide entity run by elected
farmers, Crédit Mutuel is particularly attentive
to changes in the agricultural sector, in touch
with all types of farming and responsive to their
various requirements.
During a year marked by a sharp contraction in
farmers’ income, all network branches offered
the loans provided for under the exceptional
farming support programme implemented by
the government at the end of the year.
Crédit Mutuel’s loans, savings products and
insurance offer are all suited to the specific needs
and constraints of agricultural production.
52
Crédit Mutuel
Its financing solutions cover the entire range of
farming projects.
The Modul’agri professional loan with adjustable
maturities enables borrowers to tailor repayments
to their cash flow.
Actimat is a farm machinery financing offer
distributed directly through farm machinery
dealers on special, fast track terms, with no
set-up fee.
Agridispo provides farmers with a range of shortterm cash facilities to enable them to respond
rapidly to sudden financing needs.
New medium- and long-term loans granted
in 2009 totalled €1.2 billion, and the overall
farming loan book came to €4.8 billion.
In terms of investment and cash management
products, Crédit Mutuel’s range enables
customers to balance their requirements for
asset availability, profitability and security.
Assur Horizons Agri, which enables holders to
enjoy a regular additional income on reaching
retirement age, is available for farmers and their
spouses as well as paid helpers.
Tonic Agri provides a way of building up a rainy
day fund and offers both capital appreciation
and the tax benefits implemented under the
‘Dotation pour Aléas’ freak events provision
fund legislation.
Préviris provides online access to grain futures
markets, with an internal control system that
ensures orders are secure.
The consumer credit offering marketed through
the network is rounded out by those of specialised subsidiaries Financo (Crédit Mutuel
Arkéa) and Sofemo, which is jointly owned by
Crédit Mutuel Centre Est Europe and CIC.
The acquisition at the end of 2008 of Citibank
Deutschland (renamed Targobank), Germany's
leading consumer credit provider, and in the
first quarter of 2009 of a controlling stake in
Cofidis, the 3 Suisses International consumer
credit subsidiary with operations in around ten
European countries, has enabled the group
to enter a new phase of strategic development:
it is now Europe’s fourth largest consumer credit
provider, with outstandings of €33.4 billion
(up 23.5%).
The main subsidiaries are Ataraxia (Crédit
Mutuel de Loire-Atlantique et du Centre-Ouest
and Crédit Mutuel de Bretagne), which is active
in all segments, UFG-LFP (Crédit Mutuel Nord
Europe), CM-CIC Agence Immobilière (Crédit
Mutuel Centre Est Europe) and Soderec.
Ataraxia, the only subsidiary to operate in
property management, manages almost 6,000
individually owned and 19,420 collectively
owned properties. The market downturn led
to a far-reaching reorganisation of activities
at the end of 2008 to focus on project mode
operation with an emphasis on synergy between
the production and sales businesses.
Business volumes were contrasting, with a record
number of reservations of new housing units,
helped by the Scellier scheme tax benefits, but
a decrease in building plot sales.
CM-CIC Participations Immobilières, CM-CIC
Aménagement Foncier, CM-CIC Agence Immobilière and CM-CIC Réalisations Immobilières
make up the CMCEE-CIC group’s property division.
Annual report 2009
53
Bankinsurance
It markets properties to three broad customer
categories: retail (through the sales network
developed by UFG Partenaires, which became
UFG-LFP France on 1 January 2010), institutional
(through a dedicated institutional sales team)
and customers introduced through the Crédit
Mutuel Nord Europe networks.
CM-CIC Participations Immobilières SAsupports
property developers by helping finance nontrading real estate companies (Société Civile
Immobilier – SCI) used for residential property
development programmes throughout France.
CM-CIC Aménagement Foncier SA: CM-CIC
Sarest, a land and property developer with
operations in the east of France, pressed ahead
with the projects set up through the newly
opened branches in Lyon, Lille and Paris.
CM-CIC Agence Immobilière SAS: CM-CIC
Afedim is a broker marketing new property
developments within the framework of the Hoquet
Act and on behalf of the Crédit Mutuel and CIC
networks – including CIC private banking –
to investors and homebuyers.
CM-CIC Réalisations Immobilières SAS: this
company, which trades under the name CM-CIC
Sofedim, undertakes a range of services for the
CM-CIC group such as sales, renovation project
ownership and various assistance assignments.
54
Crédit Mutuel
UFG Real Estate Managers (UFG REM) is
the property management subsidiary of the
UFG-LFP group (Crédit Mutuel Nord Europe).
Soderec, a nationwide Crédit Mutuel subsidiary,
operates in the field of public works projects,
where it acts as an agent or site manager on
behalf of the State, local authorities or affiliated
bodies. It also undertakes private contracting
work for these clients.
Revenues rose 4.41% in 2009 to €6 million.
Soderec won several tenders for new projects
such as residential homes for dependent seniors,
the multi-modal interchange at Chambéry
railway station, the Rueil-Malmaison hospital,
the new branch of the overseas departments’
issuing house in French Guyana, the Chalonsur-Saône multimedia library and research labs
at the Franche-Comté university.
It also completed a number of major contracts
in 2009, including secondary schools in
Burnhaupt-le-Haut and l’Isle-sur-le-Doubs,
Villeurbanne’s central catering unit, two police
stations in Doubs, and the “Le Lawn” commercial
building in Strasbourg for CIC Est.
Equipment leasing
CM-CIC Bail, (Crédit Mutuel Centre Est Europe),
Bail Actéa (Crédit Mutuel Nord Europe) and
Sodelem (a subsidiary owned jointly by several
Crédit Mutuel groups in the west of France) together manage 215,000 contracts representing
a total of €6.3 billion of assets, corresponding
to an increase of 1.7% in 2009.
Aggregate production on 88,000 contracts
came to more than €3 billion, giving the group
a 13.9% share of the overall market (up 1.8 points).
Property leasing
As well as medium- and long-term loan financing,
business customers are offered specialised
property leasing products through CM-CIC
Lease (jointly owned subsidiary of Crédit Mutuel
Centre Est Europe and CIC), Bail Entreprises
(Crédit Mutuel Arkéa), Bail Immo Nord and
Batiroc Normandie (Crédit Mutuel Nord Europe).
Production grew by 6.6% to €664 million, i.e.
12.7% of the market (0.7 points up from 2008),
while managed outstandings increased 16.1% to
over €3 billion.
The French leader in property investment funds
with a 24% market share in France (managed
funds of €5.5 billion, 2.3 million square metres
of property assets and 1,400 properties managed
on behalf of 80,000 shareholders), UFG REM
manages a wide range of property investment
funds: SCPI, SCI and OPCI.
In early 2009 it launched the first OPCI dedicated
to socially responsible investment, a product of
UFG’s partnership, via UFG REM, with Banque
Sarasin.
UFG REM offers expertise in all areas of property
management, from product innovation, asset
management, investment and sales to transaction
processing, marketing, and the maintenance
and development of portfolio properties.
Annual report 2009
55
Bankinsurance
Insurance
KEY FIGURES
No. 1 in non-life insurance
No. 4 in life insurance
Insurance is the group's second-largest business. In 2009, it generated net
banking income of €1.3 billion, i.e. 9.2% of the total, and net profit, group
share of €587 million (32% of the total).
11.2 million policyholders
28 million contracts
(in € millions)
The group retained its position as the leading
non-life bankinsurer with a 4% increase in
premiums to €2.3 billion. It is France’s fourth
largest bank for life insurance, netting €10.1 billion
in premium income in 2009, a 26.4% increase
from 2008.
Net profit, group share: 587
In 2009, the group's insurance subsidiaries
collected aggregate premiums of €12.4 billion,
up by 21.5%. The number of contracts managed
increased by 4.4% to 28 million, of which 23.8
million were non-life contracts, while policyholders
numbered more than 11 million, a 2.2% increase.
The insurance activity is carried out through
Groupe des Assurances du Crédit Mutuel
(GACM), Suravenir (life), Suravenir Assurances
(non-life) and Assurances du Crédit Mutuel
Nord (ACMN) (life and non-life).
Groupe des Assurances du Crédit Mutuel,
the flagship of the bankinsurance concept
invented by Crédit Mutuel in 1970, is nearly 53%
owned by Banque Fédérative du Crédit Mutuel,
20.5% by CIC and 26.7% by the Crédit Mutuel
federations.
GACM’s range of insurance products is marketed
by the 15 Crédit Mutuel federations and all of
the CIC regional banks, which represent more
than 5,000 sales outlets in total.
GACM’s net premium income exceeded €8 billion
in 2009, representing an increase of over 20%,
more than twice the corresponding growth in
the French insurance market as a whole (9%).
The increase was particularly marked in life
insurance.
Life insurance company premiums totalled more
than €6 billion, up by 27%, while premiums
for non-life subsidiaries came in at nearly
€2 billion (up 3.1%).
With nearly 1.3 million new contracts subscribed
in 2009, by year-end the insurance division
was managing almost 21.5 million contracts
for more than seven million policyholders.
The company’s entire product range was
upgraded with improved cover offers and services.
The life insurance range was extended with
several high profile new products to coincide
with the reduction in the cash savings rates:
• the Livret Assurance savings account was
launched to provide customers of the Crédit
Mutuel and CIC networks with a simple, accessible
and reliable savings solution,
• the Banque Fédérative du Crédit Mutuel
(BFCM) bond was launched as a complement to
unit-linked contracts, which sharply increased
fund inflows,
• the Plan Assurance Vie multisupport policy,
launched at the end of 2009, attracted nearly
85,000 subscriptions in just a few weeks.
Assurance Accidents de la Vie, a policy insuring
against everyday accidents, was added to the
personal insurance range, while the Sécuritys
funeral insurance solution was enhanced with
new service packages.
The Pack Entreprises product was rolled out as
a comprehensive social security solution for
SMEs and counterpart to the Pack Protection
Sociale, designed to cater for the health insurance,
personal protection and retirement needs of the
group’s independent professional customers.
The Pack écologique, an optional add-on to
standard home insurance policies, gives ACM a
foothold in the market in renewable energy
equipment cover. A new range of services was also
rolled out for motor insurance policyholders.
Abroad, RACC Seguros, the company created
as a result of the partnership agreement between
ACM and Royal Automobile Club de Catalogne,
rolled out its motor insurance contract. Despite
a tough economic environment in Spain, the
first year of business in this country yielded a
portfolio of 103,800 contracts.
The Belgian non-life insurance company, Partners,
migrated to the ACM IT platform, thereby
acquiring tools that are better suited to its
development.
The ICM Life activity was revived through a new
offering devised within the framework of the
recent agreements with Banque de Luxembourg.
56
Crédit Mutuel
Life insurance
Plan Assurance Vie, a multi support life insurance contract
released at the end of 2009,
received a “Label d'Excellence”
from Dossiers de l’Epargne in its
2010 life insurance guide. It was
also shortlisted for Le Revenu’s
special prize for innovation.
The group’s other life insurance
contracts also proved their competitiveness, with Plan Patrimonio
receiving a “Label d'Excellence
2010” from Dossiers de l’Epargne
and a “Trophée d’or” from Le
Revenu for aggressive multisupport contracts.
Plan Assur Horizons and Livret
Avenir received Le Revenu’s
“Trophée de bronze” in the diversified multisupport and euro
contract categories.
Property insurance
The Dossiers de l’Epargne panel
awarded the Assurance Habitation contract a “Label d'Excellence 2010”.
Consolidated net profit (per IFRS) grew by 15.4%
to €457 million.
Provisions for asset impairment ceased to weigh
on results in the 2009 financial year, and
writebacks of provisions for liquidity risk enabled
the group to rebuild reserves for policyholders’
profit share. Shareholders’ equity was consolidated, bringing it to €5.8 billion.
Underwriting results remained good overall,
boosted by personal insurance revenues. However,
in line with the market, property insurance
was hit by a strong increase in claims due to a
significant natural disaster rate and a worsening
of the claims rate in motor insurance.
ACM in
the financial
press
Insurance, the group’s second biggest business
+21.5%
+5.4%
12,429
28.0
26.6
+5.5%
+26.4%
10,080
10,232
22.5
23.8
7,974
Personal insurance
The Plans Prévoyance, XL Prévoyance, Sécuritys and Assurance
Santé contracts all received a
“Label d'Excellence 2010” from
Dossiers de l’Epargne.
+4.9%
4.1
+4.0%
4.2
2,258 2,349
2008 2009
2008 2009
2008 2009
2008 2009
2008 2009
2008 2009
Non-life premium
income
Life insurance premium
income
Total premium
income
Non-life contracts
Life contracts
Total contracts
(millions)
(millions)
(millions)
(in € millions)
(in € millions)
(in € millions)
Annual report 2009
57
Bankinsurance
Crédit Mutuel Arkéa: main awards in 2009
Life insurance
Fortuneo Banque’s Symphonis-Vie won the top prize in the online multisupport contracts
category (Journal des Finances), top prize for ‘attractive contracts’ from Le Revenu, second prize
in the ‘multisupport contracts for experienced investors’ category (Investir Magazine) and a “label
d’excellence” from Dossiers de l’Epargne. Prévi-Options, a Suravenir contract distributed by a
large number of Group networks, also received a Dossiers de l’Epargne “label d'excellence”.
Non-life insurance
“Labels d’Excellence” for Suravenir Assurances’ home cover, personal accident and automobile
contracts, as well as for Novélia’s e.Nov health contract (Les Dossiers de l’Epargne)
Suravenir, a Crédit Mutuel Arkéa / Crédit
Mutuel de Loire-Atlantique et du Centre-Ouest
subsidiary, manages 3.2 million life and personal
insurance contracts on behalf of 2.2 million
customers. Sales were up 23% to €2.4 billion,
yielding net profit of €90.4 million (up 4.2%).
The group’s multi-distribution strategy was
stepped up. It is based around four distribution
channels: a banking network channel made up
of the Crédit Mutuel shareholder federations –
Bretagne,
Sud-Ouest, Massif Central and Loire-Atlantique
et Centre-Ouest, together with Banque Privée
Européenne; a “white label” channel for distribution
under other brand names (Fortuneo, Banque
Accord, Meilleurtaux.com, Fidelity, Linxea and
Financo); a channel dedicated to independent
financial advisers; and a company retirement
savings channel.
The new partnerships developed with brokers,
CGPI, the online bank and mass retailers are
resulting in a corresponding amount of new
business, thereby reducing costs for Crédit Mutuel
members. The Crédit Mutuel federations and
other partner networks together constitute a
distribution network with a sales force of 10,000
customer advisers.
This high quality service, which focuses on
innovation and customer satisfaction, regularly
attracts praise from specialised publications.
Suravenir Assurances, a wholly owned subsidiary
of Crédit Mutuel Arkéa, manages 1.5 million
contracts covering a comprehensive range of
non-life insurance products on behalf of
390,000 customers.
This company supports environmentally responsible consumption, notably through its limited
distance packages for motor insurance and, in its
home insurance contracts, cover of renewable
energy equipment and stipulating the replacement
of electrical goods by ‘A’ category equivalents.
Its products are marketed by Crédit Mutuel Arkéa’s
340 branches, its Banque Privée Européenne
(BPE) subsidiary and, for 10% of production, by
Novélia, Arkéa’s broker network.
2009 premium income exceeded €200 million
(up 15.5%) for net profit of €16 million.
Crédit Mutuel Nord Europe manages nearly
2 million life and non-life contracts through
two subsidiaries: ACMN Vie and ACMN Iard.
In 2009, in an economic and financial environment that was particularly favourable for life
insurance, ACMN Vie recorded a marked 29.2%
increase in premium income to €1.6 billion.
While this growth can be attributed partly to its
merger with La Pérennité, most of it came from
an overall 29% increase in insurance business,
outstripping both management targets and
the life insurance market average of 12%.
Accordingly, contract sales by the BKCP network
in Belgium increased significantly, while online
sales now account for 11% of new business,
compared with 6% a year earlier.
The company upgraded a number of its products
over the course of the year.
The ACMN Horizon Patrimoine range was
entrusted to La Française des Placements
(UFG-LFP) under an enhanced management
agreement. A number of new partnerships were
set up and new contracts were introduced
online, earning widespread recognition from
the financial press for both innovation and
performance.
A new euro fund marketed exclusively online
was also started.
Managed funds amounted to €8.34 billion,
spread over nearly 332,000 life insurance
contracts.
AMCN Vie posted net profit of €29.2 million in
2009, compared with €14 million in 2008, while
ACMN Iard’s premium income continued
to rise, gaining 1.5% to €112 million.
In a highly competitive environment, new signings
increased and existing contracts attracted
additional deposits, while the adoption rate
rose. Net profit decreased 43% to €2.8 million
owing to an increase in claims.
ACMN Iard continued to adapt its offer to its
policyholders’ requirements and develop its
portfolio while working hard to secure loyalty
among existing customers.
With this in mind, it focused on its strongest
products, enhanced its day-to-day management
and prioritised asset protection initiatives.
2009 Le Revenu awards:
Crédit Mutuel’s subsidiaries well placed
The group received numerous awards at the 32nd edition of Le Revenu* magazine’s
Trophées life insurance awards.
Euro-denominated contracts:
Trophée d’Argent (silver) for ACMN Horizon Patrimoine (ACMN Vie),
Trophée de Bronze (bronze) for Livret Avenir (ACM Vie).
Active multisupport category, “high-potential contracts”:
ACMN Avenir (ACMN Vie)
Diversified multisupport category, “attractive contracts”:
Accord Avenir (Suravenir)
Diversified multisupport category, “promising contracts”:
Prévi-Options (Suravenir)
Diversified multisupport category, “high-potential contracts”:
Plan Assur Horizons (ACM Vie)
Aggressive multisupport category, “attractive contracts”:
ACMN Horizon Patrimoine (ACMN Vie), Hedios Vie (ACMN Vie), MeilleurTaux Vie
(Suravenir) and Symphonis-Vie (Fortuneo).
Aggressive multisupport category, “promising contracts”:
Plan Patrimonio (ACM Vie)
* April 2009
58
Crédit Mutuel
Annual report 2009
59
Other activities
The Crédit Mutuel networks draw on the expertise
of specialised subsidiaries for the benefit
of all its customers.
Some activities of group-wide strategic importance,
such as corporate and investment banking, asset
management and private banking and technological
services, are largely carried out through shared entities
such as CM-CIC Asset Management, CM-CIC Epargne
Salariale, CM-CIC Securities and CM-CIC Marchés.
60
Crédit Mutuel
Annual report 2009
61
Other activities
Corporate and
investment banking
The turnaround was the most spectacular in this business line.
Capital markets activities benefited from the return to normal
of financial markets while financing activities suffered from the harsh
business environment, leading to a considerable decline in investment
by major accounts.
Following an unusual year in 2008, which was
marked by losses (net banking loss of €64 million
and net loss of €736 million), business recovered
in 2009.
Net banking income for the business line came
to €1,832 million and net profit, group share
totalled €733 million, representing 12.7% of the
group’s consolidated net banking income and
40% of its overall net profit, group share.
Corporate banking
Corporate banking covers all the banking and
related services provided to companies with
annual revenues of more than €50 million.
Investment banking covers capital markets,
merchant banking, venture capital, development
capital, broking and trading.
Corporate banking, capital markets activities
and investment banking are carried out by
Banque Fédérative du Crédit Mutuel (BFCM),
Crédit Mutuel Centre Est Europe’s holding
company, and by Crédit Mutuel Arkéa.
62
Crédit Mutuel
Tight access to credit in the first half of 2009
led companies to turn in priority to the bond
market, and, to a lesser extent, to club deal
transactions or bilateral lending agreements.
The group nevertheless was able to play its
part in extending or renewing loans to large
companies.
The syndicated loan market remained virtually
closed, with new deals very thin on the ground.
Also of note was a slackening in the use of
existing credit lines, with 25% less drawn down
year-on-year - a sign of large businesses’
determination to maintain or even reduce their
gearing.
By contrast, asset backed lending was up
substantially, both for operating and property
leases, testament to the group’s ongoing
support of its customers.
In addition to credit-related activities, our major
accounts continued to work actively with their
own customers, enabling the group to claim
the position of one of the undisputed leaders
of the French cash management market.
The implementation of the single European
payments area (SEPA) and the gradual
replacement of Etebac 5 represent vectors
for further developing our relationships with
European customers.
KEY FIGURES
(in € millions)
The group’s position in this market meant that
it was frequently selected in cash management
tender operations by its customers in 2009.
Another defining feature of the year was the
marked increase in financial investment by
our customers, via euro and foreign currency
deposits as well as domestic certificates of
deposit and mutual funds. Also of note in 2009
was a rising contribution by major accounts to
the development of our specialised business lines.
Capital markets
Third party and own account capital markets
activities are carried out by CM-CIC Marchés,
which has run a shared trading room with BFCM
and CIC since 2005 and is the group’s main
operator in this field, and by Crédit Mutuel Arkéa.
To facilitate access to the financial markets,
BFCM created the CM-CIC Covered Bonds
subsidiary in 2007, thereby providing the
additional refinancing capacity that is essential
to the network’s commercial development.
The debt market gradually reopened in 2009,
which allowed first-rate banking institutions
to resume issuing under their own name.
Nevertheless, in order to sustain this recovery
the ECB and the SFEF continued to provide
refinancing support to banks for the majority
of the year.
In September 2009, the Crédit Mutuel group
was the first bank in France to repay the state
aid it had received in the form of a capital
injection.
- increasing its holdings of transferable,
ECB-eligible cash assets in order to ensure
the group's access to short-term refinancing
in the event of a liquidity crisis;
- extending the average maturity of deposits
received, mainly through the SFEF, with respect
to which BFCM acts as centralising agent for
the whole CM-CIC group, as well as through:
- two public bond issues, in the form of BFCM
EMTN with 18-month and two-year maturities
for a total of €2.75 billion, which it placed
with around 100 mainly foreign (i.e. 66%)
investors, thereby confirming the level of
confidence the market has in the group;
- two four-year and eight-year bond issues,
placed with the group’s network customers for
a total of €1.4 billion.
Gross operating profit: 1,444
Moreover, the ceiling of the CM-CIC Covered
Bonds programme was raised to €30 billion
in order for it to be able to carry out issues
in 2010 and to promptly take advantage of the
new legislation on housing financing companies
(Sociétés de Financement de l’Habitat - SFH)
soon to be implemented in France.
CM5-CIC’s cooperation with the EIB continued
in 2009, notably with the drawing
down of an initial amount in connection with a new SME loan fund.
The CM5-CIC group seized this opportunity
to further enhance and secure its strategy for
accessing funding, by:
- focusing on the international placement of
short-term paper (sterling CDs and euro
commercial paper), thereby helping to diversify
its sources of funding and reducing the
proportion of domestic certificates of deposit
in its money market portfolio. Accordingly,
the share of domestic certificates of deposit fell
from 48% at end-2008 to 33% at end-2009;
Annual report 2009
63
Other activities
Development capital
With an investment portfolio of more than
€2 billion at the end of 2009, the CM5-CIC group
has holdings in nearly 500 French companies.
Its investments are made to support the
economy rather than for speculative purposes,
with 50% of its lines held for more than five
years and 20% for more than ten years.
Services for investors
and listed companies
Investment company CM-CIC Securities covers
all the needs of institutional investors, private
asset management companies and securities
issuers. A global broker, it is a member of ESN
LPP, a multilocal network composed of ten
brokers operating in 14 countries in Europe,
and accordingly can trade in all European and
American equity markets.
In its capacity as a clearer and custodian, at
end-2009 CM-CIC Securities provided services
to 102 asset management companies and
managed 38,000 individual customer accounts
and 226 mutual funds, representing almost
€15.6 billion in assets.
Its issuing department serves 150 different
companies, providing a comprehensive range
of services including financial transaction
engineering, financial communication, investor
relations, financial registrar services and a
dedicated trading room.
Crédit Mutuel Centre Est Europe is one of France’s
leading regional investment players, through
three CIC entities that operate individually and
jointly to cover the whole of France:
- CIC-Finance, which operates in private equity
and M&A advisory services, covering north-east
France;
- IPO, covering the west of France for the past
30 years and the south-west region since 2006.
The main event of 20081 was its merger by
absorption of the Ar Men financial company
and its takeover of Financière Voltaire, both
subsidiaries of CIC Banque CIO-BRO, managed by IPO since 2006 under an extinction
management mandate;
- Banque de Vizille, which offers a comprehensive range of investment banking services,
covering the south of France.
Crédit Mutuel has several dedicated structures:
Sobrepar, Synergie Finance, Océan Participations, CM-CIC Participations Immobilières,
FCPR CM Arkéa and UFG Private Equity.
Their combined net investments amounted
to €222 million at the end of 2009.
Asset management
and private banking
In 2009, with net banking income of €512 million and net profit, group share
of €95 million (up 28.4%) asset management and private banking
contributed in relatively similar proportions to group net banking income
and net profit, group share (3.5% and 5.2% respectively).
KEY FIGURES
(in € millions)
Net banking income: 512
Gross operating profit: 133
Asset management covers fund management,
employee savings plans, and securities and
custodian services.
This activity is carried out through CM-CIC
Asset Management, the fund management
specialist that provides the Crédit Mutuel and
CIC banking networks with a broad, innovative
range of financial products, CM-CIC Gestion for
discretionary and advisory management, and
specialised subsidiaries Federal Finance, a Crédit
Mutuel Arkéa subsidiary, and Crédit Mutuel
Nord Europe subsidiary UFG-LFP, a multispecialist asset manager serving institutional
customers, intermediaries and private individuals.
CM-CIC Epargne Salariale and Federal
Finance Banque, subsidiaries specialised in
employee savings schemes, offer a variety of
products catering for corporate customers of
all sizes, notably very small companies (i.e. with
fewer than ten employees).
At end-2009, assets under management(1)
came to €115 billion (up 33.3 %), of which
€74.7 billion in mutual funds through the Crédit
Mutuel and CIC networks, €35.3 billion under
discretionary and advisory management for
private customers (€6 billion) and institutional
customers (€29.3 billion) and €5 billion in
employee savings.
Combined with the SCPI property investment
business (€5.5 billion overall for the group,
with the majority through UFG REM), assets
under management came to €120.5 billion,
representing a 31.6% increase from 2008.
The asset management subsidiaries earn
regular recognition for their consistent
performances and first class contracts.
€32 billion in assets under
management with UFG-LF
UFG-LFP is an asset management group created in the summer of 2009
through the merger of UFG, a multi-specialist asset manager, and
independent asset management company La Française de Placements.
UFG-LFP had €32 billion in assets under management at end-2009.
Driven by common values and goals, this new group combines expertise
in both securities and real estate. Its majority shareholder is Crédit Mutuel
Nord Europe, alongside private shareholders from the group’s management
and staff, and institutional investors MACSF and Groupe Monceau.
UFG-LFP is a market leader in themed management, socially responsible
investment and alternative multimanagement.
A real estate major with both asset management and service provision
activities, the group is also active in private equity.
It has a broad customer base, ranging from institutions to banking
networks, investment platforms and intermediaries, and plans to extend
its offer to cover private and international customers.
UFG-LFP seeks to re-inject meaning into finance, by committing to
in-depth research into major trends and their impact on the economy
and the financial markets, devising solutions adapted to its customers’
long-term constraints and needs, and prioritising socially responsible
management in all asset classes in order to serve its customers’ interest.
(1)
Includes mutual fund management (including master funds), discretionary and advisory management and management of FCPE employee savings vehicles
64
Crédit Mutuel
Annual report 2009
65
Other activities
Trophies and performance awards for CM-CIC AM
in 2009: a testament to rigorous management
Through its network and through specialised
subsidiaries in France, Luxembourg and Switzerland,
the Crédit Mutuel group offers a comprehensive
range of private banking wealth management
and advisory services for customers with financial
assets in excess of €1 million.
Nearly €300 billion in securities under custody
In 2009, CM-CIC AM received numerous awards for all of its threeand five-year investment products, which offer bond, equity and diversified
management. This illustrates the high quality of the service provided
to the group's networks by its equity and fixed-income managers.
The main awards for performances to 31 December 2009 were:
CIC Banque Private Banking is the umbrella
organisation for Crédit Mutuel-CIC’s global private
banking activities, which are conducted mainly
in Europe (Luxembourg, Switzerland and Belgium)
and Asia (Singapore and Hong Kong).
CM-CIC Titres is CM-CIC’s centre of expertise for account keeping and custody, fund
centralisation and financial services for issuers. It provides these services to all Crédit
Mutuel federal banks, CIC banks and group subsidiaries – including CM-CIC AM, CM-CIC
Gestion, CM-CIC Securities and the private banking arm - as well as the bank’s major
corporate and institutional customers and its ACM insurance division.
Lipper Fund Awards: the Lipper-Reuters awards go to the best funds
marketed in France with three-, five- and ten-year investment horizons
(35 categories).
The group’s French business is handled by the
CIC Banque Privée business line, which provides
high-end services to company directors, CIC
Banque Transatlantique, which offers a range
of customised solutions, including in private
banking, principally to French citizens residing
abroad, Dubly-Douilhet SA, Banque Privée
Européenne (BPE), a Crédit Mutuel Arkéa
subsidiary, and Nord Europe Private Bank SA,
a Crédit Mutuel Nord Europe subsidiary.
CM-CIC Titres provides the same range of services to financial institutions, investment
companies and third-party management companies through the Crédit Mutuel Centre
Est Europe subsidiary, Boreal. Backed by the latest technology and relevant expertise
in the group’s teams, these products and services have a strong customer focus and
can be adjusted and tailored to suit individual needs.
Union Obli Long Terme received two prizes, as the best euro-denominated
long-term fund (Obligations Euro Long Terme), in the five and ten-year
categories;
Mieux Vivre Votre Argent “labels”: these recognise mutual funds
experiencing positive growth and ranked among the first decile in
their category over five years. Union Obli Court Terme and CM-CIC
Dynamique International won Regular Performance awards;
Victoire La Tribune: CM-CIC AM received the Victoire du meilleur Groupe
(best group) prize in the “Obligations Gamme Large” (diversified bonds)
category.
Novethic SRI 2009 award for the CM-CIC Valeurs Ethiques fund.
Having suffered from the effects of the financial downturn of 2008, this division has
now begun to thrive again.
At end-2009, CM-CIC Titres was managing almost €300 billion of assets, or 25% of all
retail business in France, 2.5 million active accounts, making it the fourth biggest player
in the French market, and nearly 1,000 mutual funds. It processed 13.5 million
transactions in 2009, representing a slight 3% decline from 2008. These included 2.3
million stock market orders (up by 7.2%) and 4.4 million fund transactions (down 12%).
The company continued to upgrade the tools it provides to the networks and end
customers, as well as its specialised back office systems. CM-CIC Titres acquired and
implemented new services and continued to adapt its systems in line with changes in
the market.
ProCapital Securities Services, a subsidiary of Crédit Mutuel Arkéa with operations in
France and Belgium, is a provider of securities services to financial institutions - fund
management companies, private banks, retail banks, insurance companies and online
brokers and banks – that require flexible solutions ranging from account-keeping and
transaction execution services on behalf of customers to the development of
transactional websites.
Crédit Mutuel Arkéa: main 2009 fund awards
Federal Finance was ranked second in Mieux Vivre Votre Argent’s corbeille d’or and third
in the long-term category. These awards are for the best SICAV and FCP mutual funds
available via banking networks with more than 100 branches.
Since its creation in 2000, ProCapital has been providing its institutional customers
with quality assured service thanks to its integrated platform based on cutting edge
technology.
It boosted its offering in 2009 with the creation of ProCapital Banking Services,
a banking services subsidiary dedicated to customers in the asset management,
insurance and payment services sectors. ProCapital Securities Services had €19 billion
in assets under custody and 380,000 active accounts as at 31 December 2009.
The Federal Trimestriel fund won a prize for excellence in the euro-denominated
medium-term bond category and the Federal Indiciel Apal fund won a performance award
in the Asia ex. Japan equity category (Mieux Vivre Votre Argent).
Federal Finance won a bronze award from Le Revenu for its funds’ performances over
three years.
Novethic awarded the SRI 2009 label to the Federal Europe ISR and Federal Actions
Ethiques funds for their rigorous and transparent management approach.
66
Crédit Mutuel
Annual report 2009
67
Other activities
Technological services
A comprehensive range of technological services – IT, payment-related,
telephony, remote surveillance and electronic document management –
are available to the Crédit Mutuel group and its customers.
Information technology
This activity, focused on ongoing optimisation,
is organised around two information system
platforms provided by Euro-Information and
Crédit Mutuel Arkéa.
Euro-Information, the holding company for
Crédit Mutuel Centre Est Europe-CIC's technology
subsidiaries, provides financial and technical
services that meet the IT needs of the group’s
various entities: Crédit Mutuel federations, CIC
banks, insurance subsidiaries, business line
centres and other subsidiaries. In this context,
Euro-Information acts as a centralised procurement and financing platform and also
manages relations with suppliers, the logistics
of leasing and selling equipment and software,
payment authorisations and remote deposits
and banking channels. Euro-Information is
supported by dedicated technical structures
in charge of operating, developing and maintaining the group's IT resources and developing
telephony-related activities, document dematerialisation and card and cheque processing
and personalisation.
The system is connected to stock market
networks, electronic payment systems, and
the Target2 settlement system, as well as data
exchange systems such as STET (Système
technique des échanges et des traitements) for
SEPA and European Bank Area (EBA) transactions,
and, of course, international systems. It is
supported by five high-security, highly productive
interconnected IT centres (Lille, Lyon, Nantes, Paris
and Strasbourg), a help centre, a broadband
network and Euro-Information Développements,
a company dedicated to the development and
maintenance of the applications used by Crédit
Mutuel Centre Est Europe-CIC and its partner
federations and subsidiaries. Euro-Information
Services and Sicorfé Maintenance install and
maintain the equipment and workstations,
the networks, the EFTPOS terminals, ATMs and
telephony and video surveillance equipment.
The Arkéa platform is shared by the three
Crédit Mutuel Arkéa federations (Crédit Mutuel
de Bretagne, Crédit Mutuel du Sud-Ouest and
Crédit Mutuel du Massif Central).
Telephony
NRJ Mobile is 90% owned by Euro-Information
and 10 % by NRJ Group. It uses the services
of two network operators, Orange and SFR,
although all new lines are now opened on the
Orange network and benefit from new rate
agreements that allow the company to offer
even more attractive packages.
NRJ Mobile markets its products in the Crédit
Mutuel and CIC networks under the Crédit Mutuel
Mobile, CIC Mobile and NRJ Mobile brands.
The latter brand targets younger customers via
large retailers such as Carrefour and specialised
networks such as FNAC and Internity as well
as local outlets such as tobacconists, through
direct online sales on nrjmobile.fr and via the
company’s 1080 telesales platform.
NRJ Mobile grew exponentially in 2009, acquiring
300,000 new customers on post-paid contracts
(subscription or one-off, renewable limited call
time deals).
It marketed a number of high profile products
during the year: its first limited call time deals with
unlimited text messaging and two free concert
tickets, a special seniors contract including
tailored assistance, and, in preparation for
the marketing of smartphones, unlimited text
messaging, Internet access and emails.
A player at the cutting edge of technology, NRJ
Mobile was the only operator in 2009 to roll out
new contact-free payment pilots, in partnership
with Casino (in Marseille) and Eurodisney.
It has strong ambitions for 2010 too, as can be
seen from the release at the beginning of the
year of new deals offering generous talk time
(three unlimited numbers) and 'everything
unlimited' (text messaging, Internet access and
emails) at the most competitive rates on the
market.
In mid-2010, NRJ Mobile, Crédit Mutuel and CIC
took part in the Near Field Communication event
in Nice, in which the mobile phone featured as an
all-embracing, contact-free facility for payments,
transport, ticket reservations, cultural and tourist
information, etc.
Euro-Information Production serves as an
information system platform for the Crédit Mutuel
federations – of which there are now 15 since
the integration in May 2009 of the Crédit Mutuel
Anjou and Crédit Mutuel Océan federations –
and for all of the CIC banks.
68
Crédit Mutuel
Annual report 2009
69
Other activities
Payment services
Payment-related services are managed through
Euro P3C, a subsidiary specialised in the
personalisation of cheques, cards and other
electronic components and which works for
all Crédit Mutuel and CIC entities as well as for
outside customers and partners. Two production
sites enable it to offer permanent back-up.
Euro TVS (Traitement des Valeurs et Services) is
number two in France in batch cheque processing.
It provides processing services to Crédit Mutuel
Centre Est Europe-CIC and partner federations,
large retail groups, institutional customers and,
more generally, any large document issuer wishing
to dematerialise documentary and financial
exchanges. Euro TVS also forms part of the
project to offer invoice management services
to customers.
Residential remote surveillance
and document management
Crédit Mutuel is the French leader in residential
remote surveillance through Euro-Protection
Surveillance (EPS), which provided services to
180,800 subscribers and had a 30% share of
the market at end-2009. Its customer base,
which grew by more than 14% in 2009, has doubled
over the past four years.
Euro Télé Services (ETS) is a 24/7 incoming
call centre, providing top-quality service to
Centre Est Europe-CIC, partner federations
and their respective customers (cardholders,
merchants and NRJ mobile users).
Other services
Communication and media
Crédit Mutuel Centre Est Europe owns 98.8%
of the capital of printing company SFEJIC,
the holding company for the L’Alsace group.
Banque Fédérative du Crédit Mutuel (BFCM) holds
100% of the capital of Républicain Lorrain,
which it bought in 2007, as well as 80% of
France East SAS, which in turn owns 18% of Est
Republicain.
It also owns Ebra, which has controlling stakes
in Le Bien Public, Le Journal de Saône-et-Loire,
Le Progrès and Le Dauphine Libéré.
Euro Information Direct Services (EIDS) plans
and executes telemarketing campaigns for Crédit
Mutuel Centre Est Europe-CIC and partner
federations. These campaigns use outgoing call
centres with the aim of winning new customers
and boosting the loyalty of existing ones.
In 2009, Euro GDS (Gestion de Documents et
Services) dematerialised 13.4 million documents
at its Lyon and Laval sites, up from 6.9 million
the previous year, representing 43.8 million
pages in 2009 compared with 17.3 million in
2008.
Travel
ACTA Voyages, the leading travel agency
network in western France, is jointly owned by
Crédit Mutuel Arkéa and Carlson Wagonlit
Travel. It specialises in three areas – tourism,
business travel and business conventions.
Keynectis has 95% of the electronic certification
market and is the only French player with two
providers of digital certification services (PSCE),
a benchmark sign of professionalism and quality.
70
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Annual report 2009
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Financial Report
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Crédit Mutuel
Annual report 2009
73
Financial Report
Contents
MANAGEMENT REPORT OF THE BOARD OF DIRECTORS
OF CONFEDERATION NATIONALE DU CREDIT MUTUEL
Economic and financial background
Activity and results
Analysis by sector of activity
Results by activity
Shareholders' equity and risk exposure
Recent trends and outlook
FINANCIAL STATEMENTS
Statement of financial position
Income statement
Statement of changes in shareholders' equity
Statement of cash flows
INDEPENDENT AUDITORS' REPORT
ON THE CONSOLIDATED FINANCIAL STATEMENTS
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Crédit Mutuel
76
76
79
81
82
84
100
101
101
102
104
106
108
164
Annual report 2009
75
Management report
Management report of the board
of directors of confederation
nationale du credit mutuel on
the 2009 consolidated financial
statements
Economic and
financial background
A crisis on a scale not seen for half a
century
In the economic annals, 2009 will go down as an
exceptional year as it marked the first global recession
since 1945. The first signs of the global economy returning
to growth did not appear before the spring. By the summer,
large tracts of the world economy had staged a rebound,
following the United States and the euro zone out of
recession. However, annual indicators for 2009 bear the
imprint of the exceptionally strong economic contraction
that got under way mid-2007 and gathered momentum in
the last months of 2008 and into the first months of 2009,
brought about by a virtual paralysis of the financial system
triggered by the collapse of Lehman Brothers. The
suddenness of this contraction was due to the amplifier
effect of globalisation through international trade and to
the fact that the crisis was caused to a large extent by the
dysfunction of the global financial system. World trade
shrank by 13.5%, a downturn on a scale not seen since the
Great Depression. As a result, global GDP declined by 1% in
2009. Even so, the recession experienced by the Unites
States and the euro zone contrasts with the strong growth
recorded by China, which was one of the first countries to
show signs of recovering thanks to the effects of huge
economic stimulus plans. Chinese GDP grew by 8.7% in
2009 compared with 9% in 2008. Other emerging
countries, notably Brazil, were also quick to emerge from
the crisis. Apart from Mexico, which fared even more poorly,
Japan experienced the worst recession of all G20 countries,
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Crédit Mutuel
its economy contracting by 5.3% in 2009. On average, GDP
declined by 2.4% in the United States and by nearly 4% in
the euro zone. If the global economy did not slip into a
depression this was due as much to the Chinese economic
stimulus plan or to India’s growth as to the measures taken
in developed countries to help their economies. As a result,
a new global economic order emerged at last October’s
Pittsburgh Summit, with emerging countries given greater
representation in a drive to achieve a more balanced
development at world level.
Europe reacted but not in real unison
As the economic crisis deepened, European countries took
measures to support their economies that were tailored to
their economic profile. The euro zone moved back onto the
growth track in the third quarter of 2009. As yet, this growth
remains moderate at just 1.6% on annualised basis and it
does seem more in the nature of a technical rebound than
a solid recovery. Household consumption has been penalised
by the labour market’s deterioration, notwithstanding
measures taken by the authorities to bolster the
automobile market, and low production capacity utilisation
rates caused investment to plummet. Not all economies
were affected in the same way by the crisis. Germany, which
was hit full force by the collapse in world trade, is probably
the European country that experienced the deepest
recession, with a 5% decline in GDP in 2009. Italy’s
industrial sector staged a recovery in the third quarter, but
it is estimated that GDP declined by 4.8% over the year as
a whole. The United Kingdom, whose economy is intimately
tied to the financial sector, was one of the last developed
countries to emerge from the recession. Spain and Ireland
remain in the throes of recession, with both economies
affected by property bubbles. Eastern European countries,
which were already affected by external imbalances, were
hit particularly hard by the financial and banking crisis, with
GDP in these countries falling by more than 8%.
Recession in France was not as severe as
in other European countries
The 2.2% decline in GDP recorded by France in 2009 was
one of the slightest recorded by a European economy. This
particularity is explained by the fact that exports did not fall
as much as in other euro zone economies that are more
dependent on world trade. In addition, France experienced
a more moderate decline in investment expenditure, while
household consumption expenditure proved more resilient.
Resistant as the French economy was, this should not be
allowed to mask the extent of the downturn, which was the
sharpest in seventy years. Thanks to support from certain
specific programmes contained in the economic stimulus
package adopted end-2008 (notably the scrapping
incentive), industrial activity did pick up from the spring
onwards, but this was without effect on employment. On the
downside, the reduction in capital expenditure and the
significant destocking weighed on economic activity
throughout the year. However, these two factors did reduce
considerably the external financing requirements of
companies. Inflation was weak at 0.9% year on year and 0.1%
on average, which contributed to boosting purchasing power
by around 2% and, given their wait-and-see attitude, this
enabled households to increase their savings rate to 16.5%
of disposable income despite a temporary, unparalleled
decline in payrolls in the market sector in the first half.
Households and non-financial companies also started to
deleverage. To stem the crisis, France, like other G20
countries, opted to increase the public deficit, in France’s
case to around 8.2% of GDP. This course of action meant
that the public debt ballooned to more than 77% of GDP.
Proactive economic policies, resulting in
excess liquidity and a deepening of public
deficits, staved off a great depression
Close international cooperation between economic policy
deciders could not prevent a serious recession but it did
stave off a great depression. To stimulate economic
activity, central banks slashed key policy rates to a whisker
above zero. In the United State, the federal funds rate
objective was kept at between 0% and 0.25% throughout
2009. In the United Kingdom, the Bank of England cut its
bank rate to 1.5% on 9 January 2009, its lowest level since
the institution’s creation three centuries ago. It went on to
cut the bank rate to 0.5% on 5 March. In the euro zone, the
European Central Bank has kept its repo rate at 1% since
13 May 2009, apparently reluctant to pursue a zero interest
rate policy, although it has allowed the Eonia rate to hold
below the repo rate, at 0.35%, since July. Central banks also
implemented exceptional measures to support the financial
system, inundating it with liquidity. Given the cost of the
various stimulus plans and of the bank support programmes,
the erstwhile discipline, which had been about maintaining
balanced budgets, took a back seat. Between 2007 and
2009 public deficits widened by nearly 7 points of GDP to
10% in the United States and by 6 points to more than 6%
in the euro zone. At the same time, there was a ballooning
of public debt. In the case of the euro zone, it is expected
to increase at least until the end of 2011 when it is expected
to represent 86.5% of GDP on average, and far more in
certain Member States.
Signs of a recovery visible in the financial and
commodity markets at the start of 2009
The commodity markets started to rebound at the end of
2008. The price of Brent crude doubled in six months to
just under $80 per barrel in early December. Prices for
industrial commodities tracked pretty much the same
course, displaying firmness throughout the year. Bucking
this trend, foodstuff commodities were more hesitant. The
general upturn in commodity prices was due to the
restoration of investor confidence in a context of abundant
liquidity. As for the stock markets, they resumed their rise in
2009. Generally speaking, however, the profile charted by
stock markets showed that after picking up there followed a
gradual tapering off. Stock market rallies were far more
pronounced in emerging countries, which posted gains of
78.6% on average, than in developed countries, which
posted gains of 28.7% on average. Over one year, New York
closed 19% higher, Tokyo 16%, London 35%, Frankfurt 28%
and Paris 27%. With investors moving back in, market
volatility declined.
Page 78
Normalisation of 3-month interest rates
and of bond yields at relatively low levels
2009 will go down as the year of normalisation at the short
end of the yield curve. After peaking around 5% at the start
of October 2008, 3-month rates converged gradually
toward key policy rates, which central banks kept at
historically low levels throughout the year. Long rates,
Annual report 2009
77
Management report
which had declined to abnormally low levels at the end of
2008, picked from the start of 2009 as visibility over the
economic outlook improved. In the second half of the year,
however, yields did tend to ease. Bond markets were not
destabilised by the widening public deficits. The US 10-year
rate finished the year at 3.8%, near its June high, while the
euro zone 10-year rate reached 3.5% at the year end, down
from 4% in the spring. The risk premium between private
sector and public sector issuers narrowed gradually, but
remained above levels seen pre-crisis.
Currency markets were paradoxical on
occasions
At the height of the crisis, the dollar played its role as a safe
haven. The euro declined to 1.25 against the US dollar at
the start of 2009, down from a high of almost 1.60 during
the summer of 2008. Thereafter, however, the US dollar
weakened as signs multiplied that the US economy was
emerging from recession, causing a series of currencies to
appreciate but thereby penalising economies trying to haul
themselves out of the crisis. Towards the end of 2009, the
US currency elicited renewed interest from investors on
expectations that the Federal Reserve would move more
quickly than expected to tighten monetary policy. The
Japanese yen tended to appreciate against the greenback,
with the US currency falling back to 93 yen. Finally, after
falling sharply in 2008, sterling tended to trade sideways
against the euro in 2009. Yet, in contrast to the euro zone,
the British economy did not emerge from recession until
the fourth quarter of 2009. As regards emerging
currencies, the South Korean won had a particularly jagged
profile. However, what attracted most attention in Asia was
the Chinese yuan’s renewed stability against the US dollar.
The Chinese authorities had permitted a gradual
appreciation of the country’s currency, but they stepped in
to check this uptrend, thus accentuating foreign exchange
distortions against other currencies, notably the euro.
Signs of reduced strain in the banking
system confirmed in 2009
The banking system, which seized up at the end of 2008,
gradually started to function normally in 2009. Banks in the
euro zone, the United States and the United Kingdom
succeeded in repairing their balance sheets. The easing of
monetary policies and the bank support plans put in place
by governments, together with the improvement in the
economic environment and the turnaround of the financial
markets contributed largely to restoring the profitability of
the banks, which also made efforts to rein in their costs.
Attractive lending rates failed to bolster demand from the
private sector, which increased by only 1.8% in 2009, but
the upturn in lending to households was confirmed in
December.
Treaty of Lisbon
The Lisbon Treaty came into force on 1 December 2009,
ushering in a new era for the European Union by providing
modern institutions and working methods to address its
enlargement. The issue of unemployment will be the first
challenge faced by the European Union and its new system
of governance. The euro zone, which celebrated its tenth
anniversary in 2009, will need to restore budgetary
credibility in at least half of the 16 euro zone countries.
Will 2010 mark a return to economic
growth?
The global economy can be expected to return to growth of
almost 4%, but the recovery will be fragile and largely
dependent on just when emergency measures are withdrawn
and lending resumes. Uncertainties about what lies ahead
have caused markets to turn more hesitant since September
2009, but this is likely to be just a pause before a
resumption of their uptrend. In France, growth should be
buoyed by the launch of the national loan to finance
innovative investments.
Activity and results
The Crédit Mutuel group is not listed and is consequently under no obligation to present financial statements in
accordance with International Financial Reporting Standards (IFRS). However, for the sake of greater transparency and to
promote comparability with other leading financial institutions, the Board of Directors of Confédération Nationale du
Crédit Mutuel, which is the group's central governing body within the meaning of Article L.511-31 of the French Monetary
and Financial Code, has opted to prepare consolidated financial statements in accordance with International Financial
Reporting Standards as approved by the European Union.
The Board of Directors approved the consolidated financial statements for the year ended 31 December 2009 when it met
on 17 March 2010 and is presenting them, together with this report, to the General Meeting for its approval.
While the group pressed ahead
with its development…
2009 was marked by significant changes in the consolidation
scope, with notably the acquisition of Cofidis, of Monabanq
and of the La Française des Placements group. Note too,
that Banco Popolare di Milano (BPM) and Ebra group were
consolidated for the first time.
… business was subdued, with a strong
increase in deposits but a limited rise in
loans and advances
There was another increase in customer deposits, up
11.2% to €219.3 billion. Excluding SFEF and the Cofidis
group, deposits increased by 6.2% to €207.5 billion.
On this basis, the group’s market share of deposit taking in
France reached 11.9% at the end of 2009.
Demand deposits rose to €134,671 million, with increases:
- in non-regulated demand deposits of 13.1% to €65,301
million, reflecting 10.8% growth in customer credit
balances as well as higher overnight deposits by financial
customers; and
- in regulated demand deposits of 2.8% to €69,461 million,
as more savings were channelled into the various types of
saving book deposits.
There was another increase in regulated term deposits, up
16.5% to €34,985 million. Non-regulated deposits
increased by 18.3% to €48,685 million. They include loans
contracted with Société de Financement de l’Economie
Française (SFEF).
There was another increase in loans and advances to
customers1, up 2.9% to €304.2 billion with the acquisition
of Cofidis. In France, Crédit Mutuel’s share of bank lending
reached 17.5% at the end of 2009, up 0.2 percentage point
at constant consolidation scope (excluding Cofidis).
Home loans reached €159.8 billion at the year end, up 2.7%
on the preceding year. The distribution of home loans
was penalised by the fragile economic and financial
environment, notably the higher refinancing costs in the
first half (driving up rates charged to customers), the
caution shown by home buyers, and the slowdown of the
property market. However, prospects brightened in the last
quarter of 2009, with network loan production picking up
once again.
Consumer credits reached €33.4 billion, with €6.7 billion
contributed by Cofidis and €10.2 billion contributed by
Targobank. These two acquisitions have increased and
strengthened the group’s presence in this business line.
Since 2007, the consumer credit loan book has doubled in
size, from €15.4 billion in 2007 to €33.4 billion in 2009.
Equipment loans to businesses and professionals to help
develop their activity and improve their performances
increased by 3.6% to €48.3 billion. Leasing financing also
increased, up 5.8% to €9.5 billion. However, because the
economic slowdown reduced working capital requirements
for these customers and certain of them experienced a
deterioration in their financial positions, due notably to a
sharp increase in doubtful debts, operating loans did not
increase and totalled €27.7 billion at the end of 2009.
The increase in deposits and the lesser demand for loans
and advances reduced the group’s refinancing requirements.
As a result:
- amounts due to credit institutions declined to
€38,800 million because of the trend in long-term loans.
- debts represented by securities declined by 12.5%,
notably negotiable debt instruments; and
- subordinated debts declined by 13.8%, mainly because
of the repayment at the end of September of the super
subordinated securities subscribed to by Société de Prise
de Participation de l’Etat (SPPE) in connection with
France’s economic stimulus plan.
(1) Analysis of activity with customers includes management accounting data
78
Crédit Mutuel
Annual report 2009
79
Management report
In terms of the income statement, these balance sheet
changes and the favourable interest rate environment
helped the interest margin increase by €3,422 million
(€2,044 million excluding acquisitions) to €7,392 million
(€6,014 million excluding acquisitions).
Net income from other activities increased to €2,253 million,
up by 14.6% (mainly insurance).
The rebound on financial markets was
favourable for the securities portfolio…
Net gains on securities at fair value through profit or loss
increased by €587 million to €599 million, thanks mainly
to securities trading, which made a positive contribution of
€1,984 million in 2009.
… paving the way for a substantial increase
in net banking income to €13,573 million,
up 61.1% (37.5% excluding acquisitions)…
… despite an increase in general operating
expenses...
General operating expenses increased by 25.3% (8.2%
excluding acquisitions), mainly because staff costs reached
€4,777 million (of which €495 million resulting from
acquisitions). Because of the improvement in the results,
amounts due under mandatory and discretionary
employee profit sharing plans increased sharply.
A high level of services is provided to the bank’s customermembers at the network’s 5,831 branches, of which 5,441 are
in France. On average, the Crédit Mutuel group employed
72,465 people in 2009 (of which 62,852 in France),
equivalent to an increase contained to 0.4% at constant
consolidation scope.
… and a substantial increase in cost of risk…
Analysis by sector of activity
The financial crisis, by bringing to its knees a number of banks,
pushed up the cost of risk in 2008. The economic crisis
dominated in 2009, which weighed on the group’s
performances. Adjusted for the impact of Lehman Brothers
and Iceland’s banks, which cost €720 million in 2008, cost
of risk doubled to €1,429 million in 2009 (excluding
acquisitions). Impaired loans increased sharply between 2008
and 2009, from 3% of total loans to 4.2%. Acquisitions
account for around half this increase, due to the policy of
reclassifying loans as doubtful on a timelier basis.
The Crédit Mutuel group is organised into five operating segments.
Before taking into account general provisions, the coverage
rate for these loans reached 58.2% (58.6% excluding
acquisitions) at 31 December 2009 compared with 62% at
31 December 2008.
Group’s share of net profit more than quadrupled to
€1,831 million, up 4.2 times (up 4.4 times excluding
acquisitions)
Shareholders’ equity benefited from
this performance, increasing by 20%
to €29,616 million
Retail Banking comprises the networks of Crédit Mutuel's
regional federations and those of CIC's regional banks. This
segment also includes some of the specialised activities
whose products and services are marketed by the network
such as finance leasing, factoring, real estate businesses
(investment, facilities management, distribution and
property development) and collective management of
products distributed by the network.
Insurance is considered as a separate segment given its
importance in the group's activities. The group has
historically been the leading bank in this activity, having
started its bankinsurance activity in 1970. The activity
covers both life and non-life insurance.
Corporate and Investment Banking covers financing for
large corporates and institutional customers, added-value
financing activities, private equity, international activities
and market activities, whether on its own behalf or on
behalf of customers, including stock market intermediation.
Asset management and private banking comprises the
subsidiaries that are mainly engaged in private banking,
both in France and abroad, together with the asset
management and employee savings activities.
Other activities cover all the activities that cannot be
attributed to any of the above segments, together with
subsidiaries involved purely in logistical support, whose
expenses are generally re-billed to the other entities. They
include intermediate holding companies, companies
owning the property used in the group’s operations and IT
subsidiaries.
Shareholders’ equity (excluding minority interests) increased
by €5 billion to €29,616 million. There were three reasons
for this increase:
- capital contributions by members;
- the growth in earnings; and
- an increase in unrealised gains on the portfolio of
securities available for sale stemming from the improved
conditions in the financial markets.
Minority interests increased significantly, up €643 million
to €1 billion, following the acquisition of the Cofidis group.
Crédit Mutuel group confirmed it was one the most highly
rated banks in the euro zone. Standard & Poor’s affirmed
the A+/A-1 ratings assigned to all group entities with a
Stable outlook. Banque Fédérative du Crédit Mutuel (the
holding company for the Crédit Mutuel Centre Est Europe
group, and a direct shareholder in CIC) is rated Aa3 by
Moody’s and AA- by Fitch.
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Crédit Mutuel
Annual report 2009
81
Management report
Results by activity
Note that the weight of the data by sector of activity is calculated before elimination of intra-group transactions.
Corporate and Investment Banking
Retail Banking
(in €m)
Net banking income
Profit before tax
Retail Banking recorded a 40.3% increase in net banking
income. This increase includes net banking income
contributed by acquisitions. Excluding these acquisitions,
net banking income increased by €643 million, up 8.6%,
reflecting:
- the effect on the intermediation margin of the significant
decline in the cost of deposits, due notably to successive
cuts in the rate offered on regulated savings products,
while the rates charged on loans and advances also
declined, as they did at all other banking institutions;
- the slightly lower refinancing allocated to customer
lending given the weaker growth in customer loans and
advances and the further increase in customer deposits;
at the same time, refinancing costs were more moderate
than in the liquidity crisis of 2008.
Commission income from customers continued to grow,
generated mainly by account management and services,
credit cards and payment instruments.
With the integration of Targobank, Cofidis group and CIC
Iberbanco, the group now has 23.3 million customers in
total, including 21.4 million retail customers. In 2009,
it attracted 265 thousand new customers, not taking
2009
2008
10,500
3,515
1,605
1,042
7,485
2,081
1,565
1,017
Variation
2009/2008
40.3%
68.9%
2.6%
2.5%
into account the contribution by Cofidis of 3.5 million
customers.
Gross operating profit was affected by a rise in general
operating expenses as the group continued to develop
its activities and to invest in extending its network.
In 2009, the number of branches increased by 85 to 5,831
at the end of the year.
At constant consolidation scope, general operating expenses
increased mainly because of the higher amounts due under
mandatory and discretionary employee profit-sharing
plans.
The increase in cost of risk held back earnings growth.
This increase was due both to specific and general provisions.
Acquisitions accounted for half this increase, due to the
policy of reclassifying loans as doubtful on a timelier basis.
Against the backdrop of an economic crisis, Retail Banking
posted a net attributable profit of €1,042 million. It contributed
almost 73% of the group’s net banking income and 57%
of its net profit.
Insurance
(in €m)
2009
2008
Variation
2009/2008
Net banking income
Profit before tax
1,322
809
829
587
995
535
543
420
32.9%
51.2%
52.7%
39.8%
In Insurance, the group’s subsidiaries manage 28 million
insurance contracts (of which 23.8 million non-life contracts),
up 5.4% in 2009, for 11.2 million policyholders, up 2.2%.
Whereas business was slack in 2008, life insurance
benefited from favourable conditions in 2009, notably
because of the significant yield differential compared with
liquid savings products and also because life insurance
presents only a slight risk exposure. Life insurance
subsidiaries generated €10.1 billion of premium income in
2009, up 29% on the preceding year, while assets under
management increased by 10% to €89.4 billion.
82
Crédit Mutuel
The group pressed on with its development in the highly
competitive non-life insurance market. The almost 24 million
contracts in portfolio generated €2.3 billion of premium
income, up 4%.
Non-life insurance had to contend with a quite high claims
experience. General operating expenses increased sharply
because of the significant rise in taxes. As cost of risk
was negligible, the group’s share of net profit increased by
€167 million to €587 million, up 39.8%.
Insurance contributed more than 9% of the group’s net
banking income and nearly 32% of its net profit.
(in €m)
2009
2008
Net banking income
Profit before tax
1,832
1,444
1,066
733
(64)
(440)
(1,163)
(736)
Corporate and Investment Banking naturally benefited
from the recovery of the financial markets (derivatives and
securities portfolios).
Overall, net banking income increased by €1,896 million,
while the business moved back into the black with a gross
operating profit as well as a net profit, though the latter was
Variation
2009/2008
n.m.
n.m.
n.m.
n.m.
dented by cost of risk. From €725 million in 2008, due
mainly to the collapse of Lehman Brothers and Iceland’s
banks, cost of risk declined to €378 million. This activity
accounted for 16% of cost of risk at group level compared
with 51.6% in 2008. Nonetheless, this sector of activity
contributed significant earnings in 2009.
Asset Management and Private Banking
(in €m)
Net banking income
Profit before tax
Asset Management and Private Banking recorded a slight,
€37 million decline in net banking income. The increase in
earnings was due to the non-recurrence of the costs
incurred in 2008 in connection with the collapse of Lehman
Brothers.
Not taking into account life insurance, off balance sheet
savings increased to €235.1 billion. While there was a
favourable valuation effect compared with 2008, the 17.7%
2009
2008
Variation
2009/2008
512
133
135
95
549
211
103
74
-6.7%
-37.0%
31.1%
28.4%
increase in managed assets reflected especially:
- an excellent level of collection for money market UCITS as
well as the first-time consolidation of La Française des
Placements;
- the issue of bonds by BFCM and Crédit Mutuel Arkéa
subscribed to by network customers;
- growth of almost 25% in employee savings plans; and
- the satisfactory 8% increase in securities custody to
€139 billion recorded by CIC.
Other Activities
(in €m)
2009
2008
Variation
2009/2008
Net banking income
Profit before tax
258
(696)
(893)
(626)
6
(640)
(639)
(335)
n.m.
8.8%
39.7%
86.9%
The significant increase in net banking income contributed
by Other activities is explained by a favourable base
effect as 2008 performances were affected by losses on
disposals and impairment losses on listed investments.
General operating expenses increased mainly because of
acquisitions.
Annual report 2009
83
Management report
Shareholders' equity
and risk exposure
Les données présentées dans les tableaux des pages suivantes sont exprimées en millions d’euros. Les chiffres qui figurent
dans ce chapitre sont audités sauf ceux expressément indiqués par un astérisque.
shareholders’ equity
Under CRBF Regulation 2000-03, the networks of banking
institutions with a central body must comply with management
ratios both on an individual basis (for each of the groups making
up Crédit Mutuel) and on a consolidated basis at national level
(market risk and credit risk, large risks, and equity holdings).
The consolidating entity and the scope of prudential supervision
of the Crédit Mutuel group are identical to those used for
the group's consolidated financial statements. Only the
consolidation method changes, notably as regards the
insurance companies, which are consolidated for accounting
purposes using the full consolidation method and
consolidated using the equity method for prudential purposes.
The overall capital adequacy ratio defines the capital
requirement needed to cover credit and market risks.
Total shareholders' equity corresponds to the sum of core
shareholders' equity (Tier 1 including undated supersubordinated securities), additional shareholders' equity
(including redeemable subordinated securities and undated
Capital adequacy*
Tier 1 capital
Total prudential shareholders' equity
Weighted risk
Overall capital adequacy ratio
Tier 1 ratio
subordinated securities) and regulatory deductions (some
investments in non-consolidated or equity-accounted
financial institutions and investments in insurance companies).
Accounting shareholders' equity is restated to take into
account the effect of prudential filters, whose purpose is to
reduce the volatility of shareholders' equity induced by the
international standards, notably by the introduction of fair
value.
The group also complies with the reporting requirements
arising from the EU Directive applicable to financial
conglomerates. This requires, among other things, additional
monitoring of the coverage by consolidated shareholders'
equity of the cumulative capital adequacy requirements of
banking activities and those of the insurance companies.
The Crédit Mutuel group complies with all the applicable
regulatory ratios.
31.12.2009 (IFRS)
31.12.2008 (IFRS)
27,479
25,469
212,101
10.9%
11.8%
25,599
24,761
201,966
9.5%
9.8%
As part of the overall group risk policy adopted by the
Confédération's Board of Directors, each regional group is
responsible for defining a general policy for managing risks
at its level. This policy is then applied by each regional
group through rules for approving loans and advances,
in the main orientations defined for its lending activity
(notably in terms of customer segmentation), and
by setting and monitoring limits. Financing limits are set
so that they are adapted to the level of the entity
concerned and are consistent with the system in place at
national level.
(from A+ to E+) and three for impaired loans (E-/E for
non-performing and F for default).
National and regional procedures are based on an internal
rating system, put in place to comply with Basel II
requirements. This internal rating system is used by all
group entities. It allows for the rating of all counterparts
eligible for internal ratings-based approaches. The system
is based on different statistical models for customer
segments for retail exposures and on manual rating grids
developed by experts for bank exposures, large corporate
exposures and specialised market activities. All counterparts
eligible for internal ratings-based approaches are positioned
on a single rating scale reflecting the progressive nature
of the risk: there are nine levels for unimpaired loans
At national level, data retrieval and steering applications have
been enhanced. These applications generate management
reports of credit risks that analyse exposures by the main
categories defined in the internal rating system. These reports,
which are produced at national level and then analysed
by regional entity, provide information on the quality of the
group’s commitments and compliance with national limits
placed on credit risks. They are sent to the senior management
of the regional groups (Chief Executive Officers, Risk
Management Directors, Commitments Directors) and to the
executive and deliberative bodies of Confédération
Nationale du Crédit Mutuel.
The systems for reclassifying and provisioning loans are
integrated into the information systems and operate on a
monthly basis, reclassifying performing loans as doubtful
loans where applicable. The software also integrates the
notion of contagion to a third party. Provisions are
calculated according to the outstanding amount and the
guarantees received, and adjusted by the risk managers
depending on the estimated expected loss.
Credit risk exposure on loans and receivables
Loans and receivables
Credit institutions
Customers
Gross exposure
Provisions for impairment
Credit institutions
Customers
Net exposure
31.12.2009
31.12.2008
44,042
312,834
356,876
(8,796)
(548)
(8,248)
48,374
302,150
350,524
(6,549)
(344)
(6,205)
348,080
343,975
There was a 1.2% increase in the net exposure to credit risk. This reflects a 2.9% increase in exposure to customers, partly
offset by a 9.4% decrease in net exposure to credit institutions.
Risk management policy
Credit risk
As the group's central governing body, risk measurement
and monitoring form part of Confédération Nationale du
Crédit Mutuel's supervisory duties. At regional level, each
Crédit Mutuel group is responsible for managing its own risk
exposures.
Crédit Mutuel’s credit risk management policy seeks to
achieve several objectives, which are to:
Credit risk exposure on commitments given
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Crédit Mutuel
- measure capital requirements;
- help steer the group by managing commitments (in
compliance with limits in terms of unit amount, and sector
and geographic exposures and risks;
- reduce cost of risk over time; and
- respond efficiently to Basel II and internal control regulations
and ensure that regulatory compliance investments
generate a return.
Financing commitments given
Credit institutions
Customers
Guarantee commitments given
Credit institutions
Customers
Provisions for risk on commitments given
31.12.2009
31.12.2008
1,860
54,444
1,758
47,236
4,776
15,742
178
3,282
16,090
151
Credit risk exposure arising from commitments increased by 12.4%, reflecting increases in risk exposure on financing
commitments of 14.9% and on guarantee commitments of 5.9%.
Annual report 2009
85
Management report
Customer credit risk
Exposure to credit risk on debt securities
31.12.2009
31.12.2008
Debt securities (*)
Government securities
Bonds
Derivatives
Repurchase agreements and securities lending
Gross exposure
21,240
108,860
5,498
16,671
152,269
(141)
20,569
111,936
13,109
12,767
158,381
(383)
Net exposure
152,128
157,998
Breakdown of loans and advances
by customer segment
A - Central governments and banks
B – Credit institutions
C- Corporates
D - Retail
31.12.2009
as a %
31.12.2008
as a %
13.9%
10.6%
19.4%
56.1%
15.5%
11.8%
20.6%
52.1%
31.12.2009
as a %
31.12.2008
as a %
91.8%
4.0%
3.3%
0.9%
92.1%
4.3%
2.5%
1.1%
Retail customers account for over 50% of the group’s exposure.
(*) Excluding securities classified under loans and receivables
Credit exposure on debt securities decreased by 3.7%.
Geographic breakdown of customer risk
Rating structure of interbank outstandings and geographic breakdown of interbank loans
France
Germany
Rest of Europe
Rest of world
The two tables below concern the group's retail banking and insurance activities.
The bulk of customer risk is concentrated in France (including French overseas departments).
Rating structure of interbank outstandings
31.12.2009
as a %
31.12.2008
as a %
4.7%
6.8%
48.8%
26.4%
13.3%
5.4%
20.6%
50.5%
11.2%
12.3%
Concentration of customer risk
AAA and AA+
AA and AAA+ and A
ABBB+ and below
The significant reduction in the proportion of interbank outstandings rated AA and AA- reflects the deterioration in the
ratings of several large banks due to the difficult operating conditions prevailing in 2009, notably in lending. Nevertheless,
nearly 87% of the group’s exposure to banks is concentrated on counterparts rated above A- in 2009, compared with 88%
the preceding year.
Commitments exceeding €300 million
Number
Loans (€m)
Off balance sheet commitments (€m)
Securities (€m)
Commitments of between €200 million and €300 million
Number
Loans (€m)
Off balance sheet commitments (€m)
Securities (€m)
31.12.2009
31.12.2008
76
14,370
16,435
15,490
74
16,634
13,949
15,024
31
2,325
3,008
1,065
34
2,765
2,037
2,581
Taking all commitments into account (loans, off balance sheet and securities), the average unit amount of the 76 risks
exceeding €300 million was €609 million (2008: €616 million) while the average unit amount of the 31 risks between
€200 million and €300 million was €206 million (2008: €217 million).
Geographic breakdown of interbank loans
France
Rest of Europe
Rest of world
31.12.2009
as a %
31.12.2008
as a %
31.6%
49.2%
19.2%
100.0%
33.7%
50.6%
15.7%
100.0%
The geographic breakdown of interbank loans changed little from one year to the next. Some 81% of these loans were to
French and European banks. There was a rebalancing in favour of countries outside Europe, which increased in relative
terms from 15.7% to 19.2%.
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Crédit Mutuel
Quality of risk
31.12.2009
31.12.2008
Loans and advances written down individually
Individual provisions
General provisions
Overall coverage ratio
13,257
(7,713)
(535)
62.2%
8,975
(5,562)
(643)
69.1%
Coverage ratio (individual provisions only)
58.2%
62.0%
Impaired loans increased sharply to 4.2% of total loans in 2009, up from 3% in 2008. Acquisitions accounted for half this
increase, due to the policy of reclassifying loans as doubtful on a timelier basis.
Annual report 2009
87
Management report
Past dues
31.12.2009 (€m)
< 3 months > 3 months > 6 months
< 6 months
< 1 year
> 1 year
Total
Breakdown of risk by economic sector
Debt instruments
Central governments
Credit institutions
Financial institutions other than credit institutions
Large corporates
Retail customers
Loans and advances
Central governments
Credit institutions
Large corporates
Retail customers
Other financial assets
6,176
5
19
47
648
5,457
-
103
2
101
-
16
16
-
14
14
-
6,309
5
19
47
650
5,588
-
Total
6,176
103
16
14
6,309
< 3 months > 3 months > 6 months
< 6 months
< 1 year
> 1 year
Total
31.12.2008
Debt instruments
Central governments
Credit institutions
Large corporates
Retail customers
Loans and advances
Central governments
Credit institutions
Large corporates
Retail customers
3,000
12
14
22
442
2,510
-
75
14
61
-
22
10
12
-
15
6
9
-
3,112
12
14
22
472
2,592
-
Total
3,000
75
22
15
3,112
Private individuals
Public administrations
Banks and financial institutions
Business services
Sole traders
Retail trade
Food processing and agriculture
Real estate
Construction & building materials
Other financial activities
Specialised financing
Industrial transport
Travel & leisure
Automobile
Household products
High technology
Media
Utilities
Healthcare
Telecommunications
Raw materials
Sundry
31.12.2009
en %
31.12.2008
en %
45.8%
13.7%
9.4%
4.6%
3.9%
3.3%
3.2%
2.6%
2.3%
2.2%
1.4%
1.0%
1.0%
0.7%
0.7%
0.6%
0.6%
0.6%
0.5%
0.5%
0.4%
1.1%
42.4%
15.4%
10.5%
3.5%
3.9%
3.8%
3.2%
2.7%
2.8%
2.3%
1.4%
1.1%
1.0%
0.7%
0.7%
0.7%
0.7%
0.6%
0.6%
0.3%
0.6%
1.2%
Source: CM-CIC group – Basel 2 calculator
Past dues concern mainly retail customers (89%) and large corporates (10%).
88
Crédit Mutuel
Annual report 2009
89
Management report
Exposures linked to the financial crisis
In response to the financial crisis, the Financial Stability Board
(FSB) issued recommendations relating to transparency,
aimed at improving financial information in respect of certain
risk exposures.
Guarantees received from monoliner insurance companies
The Crédit Mutuel group elected to apply these recommendations with a view to improving its financial communication.
The information below is expressed in millions of euro
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
RMBS issued in the United States
Non covered bonds
61
4
73
4
64
4
Total
65
77
68
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
FSA
MBIA
Ambac
FGIC
4
4
22
35
4
5
22
46
4
7
34
23
Total
65
77
68
Carrying value
31.12.2009
Carrying value
31.12.2008
Trading
Available-for-sale (AFS)
Loans (held-to-maturity/loans and receivables)
23
285
118
67
405
143
Total
426
615
Carrying value
31.12.2009
Carrying value
31.12.2008
France
Rest of Europe
United States
Other
49
259
118
69
345
201
Total
426
615
Commitments by type of obligation
Exposure to residential mortgage backed securities (RMBS)
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
Trading
1,067
2,124
2,487
1,080
2,193
3,058
1,169
3,020
3,306
Total
5,678
6,331
7,495
Commitments on monoliner insurers
In their very great majority, residential mortgage backed securities are valued based on analyses of information provided
by external sources (counterparts, brokers, etc.).
Exposure to commercial mortgage backed securities (CMBS)
Exposure to RMBS issued in the United States
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
529
716
722
115
633
990
886
121
710
1,244
1,115
53
2,082
2,630
3,122
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
Agencies
AAA
AA
A
BBB
BB
B or less
697
93
41
7
18
31
1,195
687
101
55
10
28
34
1,715
1 227
472
49
69
422
101
782
Not rated
0
0
0
2,082
2,630
3,122
Analysis by year of origination
2005 and earlier
2006
2007
Since 2008
Total
Analysis by rating
Total
Breakdown by geographic area
These exposures have arisen in connection with market activities carried out for own account.
These exposures consist mainly of collateralized mortgage obligations (CMO).
90
Crédit Mutuel
Annual report 2009
91
Management report
Exposure to collateralized debt obligations (CDO)
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
577
991
70
588
1,012
71
581
1,715
113
1,638
1,671
2,409
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
AAA
AA
A
Other
1,276
150
13
199
1,301
161
13
196
1,978
180
87
164
Total
1,638
1,671
2,409
Exposure to CDO not hedged by credit default swaps
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
4
104
1,858
1,966
5
110
1,864
1,979
4
331
1,786
2,121
France
Rest of Europe
United States
Other
Total
Trading
Total
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
30
920
72
944
30
924
74
951
76
620
513
912
1,966
1,979
2,121
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
AAA
AA
Other
1,521
343
102
1,533
348
98
1,794
115
212
Total
1,966
1,979
2,121
France
Rest of Europe
United States
Other
Total
Breakdown by rating
Breakdown by rating
Asset-backed securities hedged by credit default swaps amounted to €995 million at 31 December 2009.
Exposure to leveraged buy-out (LBO) financing
Breakdown by geographical area of LBO financing
via special purpose financing vehicles
Carrying value
31.12.2009
Carrying value
31.12.2008
1,501
494
140
50
1,692
572
228
46
2,185
2,538
France
Rest of Europe
United States
Other
Total
Détail par secteurs des structures de financements dédiées au 31.12.2009
10%
Exposure to other asset-backed securities not hedged
16%
6%
Carrying value
31.12.2009
Acquisition cost
31.12.2009
Carrying value
31.12.2008
6%
12%
Trading
Total
715
534
389
1,638
733
539
399
1,671
1,061
780
568
2,409
Travel & leisure
Retail trade
Telecommunications
Services
Media
Industrial transport
24%
11%
Construction
Healthcare
Other
9%
6%
Transactions with special purpose vehicles
At 31 December 2009, liquidity lines totalling €298 million had been granted to three mutual loan funds.
92
Crédit Mutuel
Annual report 2009
93
Management report
BASEL II SYSTEM – CREDIT RISK
Standardised approach
To better take into account the quality of the borrower, a
Framework for the Convergence of Capital Measurements
and Capital Standards (Basel II), including notably the
implementation of an internal system of ratings specific to
each institution, has been instituted by the Basel
Committee on Banking Supervision and by the European
Commission. In France, these new prudential requirements
were published on 20 February 2007 in the form of a
decree issued pursuant to the recommendations of the
Advisory Committee on Financial Legislation and
Regulation (Comité Consultatif de la Législation et de la
Réglementation Financières - CCLRF) dealing with capital
requirements for credit institutions and investment
companies.
The so-called standardised approach is similar to the Basel
I Framework in so far as it is based on the application of fixed
risk weightings to the different categories of exposures as
defined by the regulations. The main modifications result
from the possibility to differentiate applicable risk
weightings on the basis of credit assessments provided by
reputed external institutions and from the broader range of
sureties, guarantees and credit derivatives that may be
taken into account by banks.
With the agreement of the French Banking Commission
(Commission Bancaire), claims on sovereigns and on
regional governments and local authorities will be
measured using the standardized method over the
foreseeable future.
That decree describes the three pillars:
- the First Pillar introduces new minimum capital
requirements, with the calculation of a capital ratio for
credit, market and operational risks;
- the Second Pillar requires banks to perform their own
assessment to determine they have adequate capital to
support all the risks in their business and to perform stress
tests to assess their capital requirements in the event of
a deterioration in the economic environment.
- the Third Pillar tightens up market discipline by requiring
more extensive disclosure and transparency regarding
the risk profile of banks governed by the new Framework.
To this end, the Crédit Mutuel group will release a specific
report in the first half of 2010 that will be available on its
institutional website.
Regarding the minimal capital requirements of Pillar I, the
major changes compared with the Cooke ratio concern the
treatment of credit risk, with a modification of the
calculation of weighted risks related to unexpected losses
(UL) included in the ratio’s denominator and possible
correction of the capital on the basis of the differential
between expected losses (EL) and provisions included in
the ratio’s numerator.
Banks must choose between three approaches of rising risk
sensitivity subject to the authorisation and under the
control of their national supervisory bodies: standardised
approach, foundation internal ratings-based approach,
and advanced internal ratings-based approach. Each
banking institution is required to adopt the approach best
suited to the stage of development of its activities and to
its organisation.
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Crédit Mutuel
Internal ratings-based approaches
These approaches are more sophisticated. Credit risk is a
function of the characteristics of each exposure (or pool of
exposures) based on the four following parameters:
probability of default (PD) by the debtor over a 1-year
horizon, loss given default (LGD), credit conversion factors
(CCF) for off balance sheet exposures, and the effective
maturity (M). The use of internal ratings-based approaches
is conditional upon complying with a series of quantitative
and qualitative requirements aimed at guaranteeing the
integrity and credibility of the processes as well as the
estimation of parameters used for calculating the
regulatory capital.
There are two main approaches:
- Foundation internal ratings-based approach (F-IRB),
under which banks provide their own empirical model to
estimate the probability of default. Other risk components
(LGD, CCF and M) are defined in the regulations.
Confédération Nationale du Crédit Mutuel has been
authorised by the French Banking Commission to use its
internal ratings models on exposures to credit institutions
at 31 December 2008.
- Advanced internal ratings-based approach (A-IRB),
under which banks provide their own internal estimates for
the PD, CCF, LGD and M risk components. This approach
requires historical records stretching back over a long
enough period of time for statistical purposes. Confédération
Nationale du Crédit Mutuel has been authorised by the
Banking Commission to use its internal ratings models on
exposures to retail customers since 30 June 2008.
As a cooperative bank owned by its members, Crédit Mutuel
group’s purpose is not to redistribute any capital gain to its
shareholders. By opting for an internal ratings-based
approach for most of its exposures, the group has:
- complied with requirements laid down in the regulations
and by the French Banking Commission;
- adopted a national framework that has helped standardise
practices;
- improved its customer risk segmentation, helping fine-tune
its management and steering; and
- brought up to standard its information systems and work
methods at all levels of its organisation given the
obligation to use ratings in its management.
All in all, Crédit Mutuel has structured it management and
credit risk management system by capitalising on the Basel
II Framework, based upon:
- a single counterparty rating system that is based very
largely on statistical algorithms;
- a harmonised definition of default that is consistent with
the approach for accounting purposes;
- the use of national parameters incorporating a margin of
prudence; and
- significant investments in its information systems.
Interest rate risk
Interest rate risk arises from the bank’s commercial
activities. It results from differences in interest rates and
benchmark indices for customer loans and advances on
the one hand and customer deposits on the other hand,
based on a prospective analysis of expected changes in
these components, taking into account embedded options
(early repayments, extensions, drawdowns against
confirmed credit lines, etc.).
The regional groups are responsible for defining their interest
rate risk management and hedging strategies. As required
by the regulations (CRBF Regulation 97-02 as amended
and extended to central bodies), CNCM’s Risk Management
department is responsible for the consolidated and
homogeneous measurement of this risk by co-ordinating
methodologies and by regular measurement of overall risk
at group level.
The Crédit Mutuel group has established harmonised
risk agreements and risk limits, which are set out in the
"Group asset and liability management guidelines".
Measurement and supervision of interest rate risk is carried
out at regional level by the Crédit Mutuel regional groups
and at national level by CNCM.
At regional level
Each of the Crédit Mutuel regional groups has an asset/liability
management (ALM) unit dedicated to monitoring overall
interest rate exposure.
The Crédit Mutuel group entities all use a common base for
measuring overall interest rate risk (application of common
methodology for scheduling, scenarios and early repayment),
which is measured excluding the trading book. The trading
book is monitored at the level of the dealing room.
Group entities have introduced systems of limits that are
consistent with the national system. Management and
hedging decisions are taken by the regional committees.
Interest rate risk is analysed and the residual balance sheet
position is hedged, if appropriate, by entering into so-called
macro hedging transactions. These transactions are
accounted for in accordance with IAS 39 as adopted by the
European Union, i.e. in accordance with the carved out
version. High-value or special-purpose vehicle customer
transactions may be hedged specifically.
At national level
Interest rate risk is measured by two indicators:
- risk relating to future income, analysed in terms of the
sensitivity of the margin over the short-to medium-term
(1 to 5 years);
- risk relating to the instant value of the entity, measured as the
sensitivity of net present value over a long-term horizon.
At national level, the sensitivity limit for net banking income
over one or two years includes new loan production based
on a scenario of moderate changes in interest rates (+/- 1%
for variable rates and +/- 0.5% for regulated interest rates).
Sensitivity of net banking income to a differentiated
rise in interest rates
Dynamic approach
2008
2009
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
0.80%
0.18%
Year 1
1.07%
0.44%
Year 2
The Crédit Mutuel group’s sensitivity to a rise in interest
rates is moderate.
Other scenarios (including stress scenarios) are calculated
at the level of CNCM.
Annual report 2009
95
Management report
Liquidity risk
Liquidity risk is monitored by the regional groups using
notably the following indicators:
- the liquidity ratio as defined by regulations, which
compares resources maturing in less than one year with
applications maturing in less than one year. Some of the
regional federations and Caisses Fédérales apply limits
that are stricter than those required by the regulations;
- a medium- to long-term liquidity ratio defined at national
level, the general principle being to match all assets and all
liabilities and to measure the coverage ratio of applications
by resources of equivalent duration at different maturities.
A system of limits has been put into place.
- projected refinancing requirements over 5 years.
Like all credit institutions, the Crédit Mutuel group is
exposed to the risk of insufficient liquidity to meet its
commitments at a given moment.
The regional federations each have an ALM unit or
committee tasked notably with ensuring there is sufficient
liquidity to meet their commitments. They have concluded
agreements with CCCM, BFCM or Compagnie Financière to
cover their refinancing needs.
Breakdown of financial assets and financial liabilities
Breakdown of maturities for liquidity risk at 31 December 2008
Residual contractual
maturities (€m)
< 1 month
> 1 months > 3 months
< 3 months
< 1 year
> 1 year
< 2 years
> 2 years
< 5 years
> 5 years
No set
maturity
Total
Assets
Financial assets held for trading
Financial assets at fair value
through profit and loss
1,071
1,046
7,312
4,659
5,938
7,333
767
28,126
4,328
7,579
1,512
456
1,336
504
729
16,444
Financial assets available for sale
2,035
1,655
3,192
4,805
8,934
15,756
5,250
41,627
Loans and advances (including leasing)
41,413
14,970
26,596
30,827
71,907
148,560
9,982
344,255
804
1,081
824
1,221
1,168
1,500
10
6,608
1,963
306
50
-
-
-
-
2,319
896
632
5,770
943
2,803
3,353
502
14,899
10,912
14,982
5,204
124
11
4
-
31,237
193,901
67,176
38,656
16,699
36,031
29,862
Financial assets held to maturity
Liabilities
Central bank deposits
Breakdown of financial assets and financial liabilities
Financial liabilities held for trading
Breakdown of maturities for liquidity risk at 31 December 2009
Residual contractual
maturities (€m)
< 1 month
> 1 months > 3 months
< 3 months
< 1 year
Financial liabilities at fair value
> 1 year
< 2 years
> 2 years
< 5 years
> 5 years
No set
maturity
Total
Financial liabilities valued
at amortised cost
14,270
396,595
Assets
Financial assets held for trading
3,256
1,052
3,657
3,383
5,509
5,989
330
23,176
Financial assets at fair value
7,914
5,194
2,390
145
1,634
169
997
18,443
Derivatives used for hedging
25
4
514
96
209
144
1,010
2,002
1,202
781
3,996
3,594
13,507
10,922
4,668
38,760
Loans and advances (including leasing)
41,791
13,521
27,393
31,636
73,451
152,189
8,860
348,841
30
68
1,086
581
1,827
1,275
-
4,867
Central bank deposits
260
-
1,005
-
-
-
-
1,265
Financial liabilities held for trading
870
216
1,331
965
2,770
3,920
11
10,083
15,907
14,312
7,907
65
65
2
-
38,258
58
45
1,666
144
2,085
410
1,005
5,413
178,891
46,463
50,484
24,293
44,556
29,478
9,849
384,014
Liabilities
Financial liabilities at fair value
Derivatives used for hedging
Financial liabilities valued
at amortised cost
96
Crédit Mutuel
Comments:
This table was established using the FIN50 grid in application of CB instruction 2006-04. The entities included are those
included within the prudential scope.
The scheduling rules are as follows:
- Outstandings as reported in the balance sheet drawn up in accordance with IFRS.
- Maturities are the contractual maturities for repayment of the principal.
- Shares are recorded under “No set maturity”, as are undated loans and securities
- Debts and related liabilities are broken down according to their actual maturity and, failing that, under “less than 1 month”.
- Provisions are analysed in the same way as the assets concerned.
- Non-performing loans are analysed according to their contractual date, if not yet past, and, failing that, under “No set
maturity”. Receivables in litigation are recorded under “No set maturity”.
- The market value of derivatives is recorded in the flow corresponding to the end date of the contract.
- When it is not possible to establish a reliable repayment schedule, the carrying amount is recorded under “No set maturity”.
Annual report 2009
97
Management report
Foreign exchange risk
Each bank hedges the currency risk on customer
transactions. This risk is not material at the Crédit Mutuel
group level.
Market risk
The main group entities engaged in market activities are
Crédit Mutuel Centre Est Europe-CIC and Crédit Mutuel
Arkéa. They trade on their own account and on behalf of
the other federations. Their activities include refinancing
the local mutual banks' activities, securities management
and commercial activities for corporate customers (foreign
exchange transactions, interest-rate risk and foreign
exchange hedging).
The dealing room activities are the subject of regular
reports covering risks as well as economic and accounting
performances.
The permitted activities and terms and conditions of capital
markets activities are included in each regional group's
internal regulations. At operational level, these are
analysed by the various Committees involved and reported
upon regularly to the Boards of Directors concerned.
Internal controls for these activities are performed at the
level of the regional groups concerned. The organisation of
the internal control system and the conditions under which
controls are performed are described in the annual reports
of those entities.
At national level, reports produced in respect of market
activities are used to monitor the main risk indicators.
Market risk is not material at the group level.
The system for measuring and controlling operational risk
rests on foundations common to the entire Crédit Mutuel
group and is based on approaches first to identify and then
model risks leading to the calculation of final capital
requirements for operational risk.
The group has put into place an operational risk
management system that is structured and coherent,
enabling risk mappings to be performed for each generic
potential risk, featuring summaries according to the eight
business lines and the seven loss event types (actual losses
and potential risks) defined in the Basel II Framework.
The group is in the process of homologating the advanced
measurement approach (AMA) for operational risk. The banking
subsidiaries located abroad (Belgium, Luxembourg,
Switzerland, etc.) and the subsidiaries involved in factoring
are the only group entities that continue to apply the
standardised approach for the time being.
Main objectives
The operational risk management policy is designed to
achieve the following:
- improve group management by controlling risks and
related costs;
- at human level, protect people, foster individual
responsibility, autonomy and controls, and capitalise on
the skills within the group;
- at economic level: preserve margins by managing risks
close to the ground in all activities, ensure a return on
investment from regulatory compliance, optimise capital
allocated to the cost of risk, and adapt insurance
programmes to the risks identified;
- at regulatory level: meet effectively the requirements of
Basel II and of supervisory authorities, draw on the
internal control system (CRBF Regulation 97.02),
optimise business continuity plans for key activities, and
ensure appropriate financial communication (Basel II,
Pillar 3).
Operational risk
In response to Basel II requirements, the Crédit Mutuel
group has since 2002 progressively implemented a
comprehensive operational risk management system
under the responsibility of the executive bodies concerned,
with group risk management guidelines and common
quantitative measurement methods. At the group level,
a global function with responsibility for operational
risk management has been clearly identified. In practice,
this function is carried on at national level as well as at
regional levels. This global function oversees operational
risks, business continuity plans and insurance cover for
these risks.
98
Crédit Mutuel
Role and positioning of the operational risk
management function
The national operational risk management function
coordinates and consolidates the entire system. It has its
own staff in the service of the group’s interests and works
in liaison with operational risk managers in the regional
groups.
The operational risk management function at regional level
implements the system and measures its effectiveness,
ensuring that it is consistent with the system in place at
national level. The regional function is coordinated by
regional operational risk managers.
Measurement and control of operational risk
Homogenous risk mapping by business lines and by type of
risk is performed for all activities based on experts’
assessments and then using probabilistic models. These
models are validated by the operational risk technical
committee. Allocated capital is calculated at national level
and then allocated at regional level.
The general guidelines for reducing operational risk include:
- efficient preventive actions (identified during the risk
mapping) that are implemented directly by operational
staff or through permanent controls; and
- protective measures that focus primarily on generalising
business continuity plans in all key areas (business
activities, logistics and information systems) to limit the
severity of any catastrophic event.
A coherent crisis management plan – dovetailed into the
general crisis management plan for the interbank sector
has been implemented throughout the group. This plan
covers crisis communication and the efficient organisation
of the three phases of the business continuity plan: rescue
plan, continuity plan and resumption plan.
Operational risk financing programmes are reviewed as and
when risk assessments are performed, taking into account
remedial action to mitigate these risks. They are based on
the following principles:
- insure risks when justified by their size and severity to the
extent they are insurable and develop self-insurance
within the group for amounts before insurers’ deductibles
and for intra-group risks;
- insure risks when justified by their frequency or finance
them through self-retentions at P&L level;
- risks that are uninsurable due to their severity and
residual uninsured risks are the object of reserves against
prudential capital;
- major risks for the interbank payment and exchange
systems are the object of liquidity reserves, which are set
aside and allocated by the system concerned.
Reporting and general supervision
The application of the operational risk management policy
and risk profile are monitored using key indicators,
thresholds and warning systems for the measurement of
potential risk, loss events, effectiveness of risk reduction
measures and allocated financing. Reports are submitted
to the group’s management and supervisory bodies at
regular intervals and comply with the requirements of CRBF
Regulation 97-02.
Documentation and procedures
The group has implemented permanent procedures that
have been approved by its executive bodies, which cover:
- governance: general governance defining the role and
composition of the decision-making bodies, the contents
of reports, their periodicity and the recipients, the scope
for identifying losses and intervals at which updated;
- loss event collection: general procedure for collecting
and processing risk frontiers, and quality assurance
review of the loss event database;
- measurement system: general procedure for the
application of the advanced measurement method,
methodology for mapping and for probabilistic models,
the process for retrieving risk indicators from the
information systems, calculation of net banking
income by business line, capital allocation keys, and
COREP filings.
Business continuity plans (BCPs)
Business continuity plans (BCPs) are amongst the
measures implemented by the group to safeguard its
assets by limiting the severity of occurrences threatening
the continuation of its activities. They form part of the
programme for management of operational risks.
A methodology for drawing up business continuity plans
has been developed that constitutes the reference
document within the Crédit Mutuel-CIC group. It is available
to all staff members concerned by these plans and is
applied at the level of the regional groups.
There are two types of business continuity plans:
- business-specific BCPs that concern a precisely defined
banking activity (per the mapping of business lines for
Basel II purposes);
- cross-functional BCPs that concern activities which
support the other activities; there are three plans
covering respectively logistics, human resources and
information systems.
These plans are organised into three phases:
- rescue plan, applied immediately and consisting of
measures to address emergencies and to implement
solutions that will enable operations to continue
temporarily in degraded mode;
- continuity plan, consisting of measures to resume activity
in a degraded mode in the condition defined pre-crisis;
- resumption plan, consisting of measures implemented
immediately after the start-up of the continuity plan, the
time taken to initiate this phase being dependent on the
extent of the damage.
Annual report 2009
99
Management report
Crisis management and organisation
The crisis management system implemented at the group
and regional levels seeks to attain the highest level of
efficiency in all aspects of communication and organisation
during all three phases of the business continuity plan:
rescue plan, continuity plan and resumption plan.
This system is organised around the following units:
- a crisis committee, tasked with taking key decisions,
defining priority actions and overseeing internal and
external communication; the regional committee is
chaired by the region’s chief executive officer, the
national committee by the group’s chief executive officer;
- a crisis cell, tasked with centralising information,
implementing decisions taken, and monitoring their
application;
- a crisis platform at each activity, tasked with coordinating
crisis management plans on the ground in liaison with the
crisis cell, in particularly activity business continuity plans,
until operations have resumed normally.
Other risks
• Legal risk
Legal risk forms part of operational risk and includes, but is
not limited to, exposure to fines, penalties, or punitive
damages as a result of fault committed by the group in the
conduct of its operations.
• Industrial and environmental risks
Industrial and environmental risks form part of operational
risk and are analysed in terms of the disruption of systems
and the occurrence of natural disasters (100-year floods,
deluges, earthquakes, pollution, etc.), their impact on the
group and the measures that could be taken to prevent or
mitigate the risks, notably in terms of crisis management
and business continuity plans.
Insurance used to reduce capital requirements
The group has arranged a comprehensive insurance
programme covering property damage, professional
liability and management liability, and also featuring banker
and fraud blanket coverage.
This programme helps reduce capital requirements in respect
of operational risk.
The opening months of 2010 have been characterised by
the continuing development of the group’s commercial
activities, with confirmation of renewed growth in loan
production and further increases in deposit taking across
all product lines.
Training
Each year, the group arranges training courses on operational
risks for branch directors, internal controllers and operations
staff responsible for risk monitoring.
2009 inventory of loss events in the group
Loss events in the group amounted to €92.5 million,
including incurred losses of €58.2 million and provisions
totalling €38.4 million.
They break down as follows:
- fraud: €33.9 million;
- employment practices: €22.2 million;
- human error or failed processing: €18.6 million;
- legal: €14.4 million;
- natural disasters and disruption of systems: €3.4 million
Fraud, employment practices – individual disputes with
current or past employees, resulting in workout agreements
or legal proceedings – and involuntary errors remain the
main source of loss events.
Recent trends and outlook
In 2010, in what will be an uncertain economic environment, the
group will press ahead with its development, participating
in the financing of the local, regional and national economy.
It will draw on the expansion of its network of local mutual banks
and neighbourhood branches, as well as the broadening of
its activities thanks to the recent acquisitions in France and
neighbouring countries.
for the year ended 31 December 2009
Statement of financial position Assets
€m
Cash in hand and balances with central banks
Financial assets at fair value through profit or loss
Derivative hedging instruments
Available for sale financial assets
Loans and advances to credit institutions
Loans and advances to customers
Re-measurement adjustment on portfolios hedged for interest rate risk
Current tax assets
Deferred tax assets
Prepayments, accrued income and other assets
Non-current assets classified as held for sale
Deferred profit-sharing
Investments in companies accounted for using the equity method
Investment property
Plant, property and equipment
Intangible assets
Goodwill
Total assets
Crédit Mutuel
31.12.2008
Notes
10,674
67,994
2,053
102,435
44,324
304,511
882
12,500
1,740
1,570
18,912
6
41
516
1,624
3,566
1,244
4,446
18,090
69,257
4,984
96,135
48,734
295,837
729
13,710
1,785
2,176
18,638
3
2035
257
1,328
3,358
801
3,852
1a
2a, 2c, 4, 9
3a, 4
5a, 5b, 9
1a, 9
6a, 9
3b
7, 9
10a
10b
11a
579,038
581,709
31.12.2009
31.12.2008
Notes
1,265
48,350
5,413
38,800
218,431
117,580
(1,811)
658
934
15,146
2,319
48,334
8,617
54,030
196,507
134,373
(1,414)
504
958
17,275
1b
2b, 2c, 4
3a, 4
1b
6b
16
3b
10a
10b
11b
94,670
1,612
7,371
30,619
29,616
8,735
19,047
3
1,831
1,003
85,274
1,345
8,551
25,036
24,676
6,826
18,920
(1,510)
440
360
17
18
19
579,038
581,709
12
13
14a
14b
15
Liabilities and shareholders’ equity
€m
Central banks
Financial liabilities at fair value through profit or loss
Amounts due to credit institutions
Amounts due to customers
Debt securities
Re-measurement adjustment on portfolios hedged for interest rate risk
Current tax liabilities
Deferred tax liabilities
Accrued charges, deferred income and other liabilities
Liabilities directly associated with non-current
assets classified as held for sale
Technical provisions for insurance contracts
Provisions for risks and charges
Subordinated debt
Shareholders' equity
Shareholders' equity – group share
Share capital and related reserves
Consolidated reserves
Unrealised or deferred gains or losses
Profit for the year
Minority interests
TOTAL liabilities and shareholders’ equity
100
31.12.2009
20a
20a
20b
Annual report 2009
101
Income statements – IFRS
Statement of comprehensive income
€m
31.12.2009
31.12.2008
Notes IFRS
22,265
(14,873)
4,411
(1,069)
25,538
(21,568)
3,734
(1,119)
22
22
23
23
599
(13)
19,005
(16,752)
12
(139)
11,582
(9,616)
24
25
26
26
Net banking income – IFRS
16,573
8,424
General operating expenses
Provisions, amortisation and depreciation for non-current assets
(7,795)
(573)
(6,210)
(467)
27a, 27b
27c
Gross operating profit – IFRS
Cost of risk
5,205
(2,370)
1,747
(1,405)
28
2,835
342
22
9
(124)
24
20
23
Profit on ordinary activities before tax – IFRS
2,742
409
Corporation tax
(860)
33
Total consolidated profit
1,882
442
51
2
1,831
440
Interest and similar income
Interest and similar expense
Fees and commissions (income)
Fees and commissions (charges)
Net gains (losses) on financial instruments
at fair value through profit or loss
Net gains (losses) on available for sale financial assets
Income from other activities
Expenses on other activities
Operating profit – IFRS
Share in net profit or loss of companies
accounted for using the equity method
Net gains (losses) on other assets
Changes in goodwill
Minority interests
Profit, group share
102
Crédit Mutuel
€m
31.12.2009
31.12.2008
Total consolidated profit
1,882
442
Translation differences
Re-measurement of available for sale financial assets
Re-measurement of derivative hedging instruments
Re-measurement of non-current assets
Share of unrealised or deferred gains and losses
on companies accounted for using the equity method
Total gains and losses recognised directly in equity
1,542
(22)
-
33
(2,118)
(69)
-
(2)
1,518
(2,154)
3,400
(1,712)
3,344
56
(1,667)
(45)
Profit and gains and losses recognised directly in equity
Of which
Group share
Minority interests
Notes IFRS
32, 33
12
29
30
31
Annual report 2009
103
Statement of changes in shareholders' equity
Share capital and reserves
€m
Balance at 1 January 2008
Elimination
of treasury share
Consolidated
reserves
Translation
differences
Revaluation
differences
(excluding
financial
instruments)
Changes in the value of
financial instruments
Changes in
the fair value
of AFS
securities
Profit,
group
share
Group
share of
shareholders'
equity
Minority
interests
Total
consolidated
shareholders'
equity
Changes in
the fair value
of derivative
hedging
instruments
37
-
16,449
- 33
2
632
(4)
2,730
26,442
422
26 864
159
1
-
-
-
-
-
-
-
160
-
160
Appropriation of profit for 2007
-
-
-
2,730
-
-
-
-
(2,730)
-
-
-
Dividends paid in 2008 in respect of 2007
-
-
-
(196)
-
-
-
-
-
(196)
(11)
(207)
159
1
-
2,534
-
-
-
-
(2,730)
(36)
(11)
(47)
Gains and losses recognised directly to equity
-
-
-
-
33
-
(2,071)
(69)
-
(2,107)
(47)
(2,154)
Profit for the year 2008
-
-
-
-
-
-
-
-
440
440
2
442
Sub-total
-
-
-
-
33
-
(2,071)
(69)
440
(1,667)
(45)
(1,712)
Impact of acquisitions and disposals on minority interests
-
-
-
(67)
-
-
-
-
-
(67)
5
(62)
Changes in accounting methods
-
-
-
(3)
-
-
-
-
-
(3)
-
(3)
Share of changes in the capital of companies
-
-
-
(1)
-
-
-
-
-
(1)
(1)
(2)
Changes in foreign exchange rates
-
-
-
18
-
-
-
-
-
18
4
22
Other changes
-
-
-
(9)
-
-
-
-
-
(9)
(14)
(23)
Sub-total of changes in capital linked
to relations with shareholders
Shareholders' equity at 31 December 2008
6,788
38
-
18,920
-
2
(1,439)
(73)
440
24,676
360
25,036
Shareholders' equity at 1 January 2009
6,788
38
-
18,920
-
2
(1,439)
(73)
440
24,676
360
25,036
Capital increase
1,908
1
-
-
-
-
-
-
-
1,909
-
1,909
Appropriation of profit for 2008
-
-
-
440
-
-
-
-
(440)
-
-
-
Dividends paid in 2009 in respect of 2008
-
-
-
(229)
-
-
-
-
-
(229)
(21)
(250)
1,908
1
-
211
-
-
-
-
(440)
1,680
(21)
1,659
Gains and losses recognised directly to equity
-
-
-
-
-
-
1,516
(3)
-
1,513
5
1,518
Profit for the year 2009
-
-
-
-
-
-
-
-
1,831
1,831
51
1,882
Sub-total
-
-
-
-
-
-
1,516
(3)
1,831
3,344
56
3,400
Impact of acquisitions and disposals on minority interests
-
-
-
(122)
-
-
-
-
-
(122)
585
462
Changes in accounting methods
-
-
-
6
-
-
-
-
-
6
0
6
Share of changes in the capital of companies
-
-
-
31
-
-
-
-
-
31
3
34
Changes in foreign exchange rates
-
-
-
12
-
-
-
-
-
12
0
13
Other changes
-
-
-
(12)
-
-
-
-
-
(12)
21
9
8,696
39
-
19,047
-
2
77
- 76
1,831
29, 616
1,003
30,619
Sub-total of changes in capital linked
to relations with shareholders
Shareholders' equity at 31 December 2009
Crédit Mutuel
Other paid
in capital
Unrealised or deferred gains/losses (after tax)
6,629
Capital increase
104
Share capital
Consolidated
reserves
Annual report 2009
105
Statement of cash flows
€m
Profit for the year
Corporation tax
Profit before tax
=+/- Net provision for depreciation of tangible and intangible non-current assets
- Impairment of goodwill and other non-current assets
+/- Net charges to provisions
+/- Share of results of companies accounted for using the equity method
+/- Net loss/income from investment activities
+/- (Income)/charges on financing activities
+/- Other movements
= Total of non-monetary items included in profit before tax
and other adjustments
+/- Flows relating to transactions with credit institutions (a)
+/- Flows relating to transactions with customers (b)
+/- Flows relating to other transactions affecting financial assets or liabilities (c)
+/- Flows relating to other transactions affecting non-financial assets or liabilities
- Taxes paid
= Net reduction/(increase) in assets and liabilities from operating activities
TOTAL NET CASH FLOW GENERATED BY OPERATING ACTIVITIES (A)
€m
31.12.2009
31.12.2008
1,882
860
2,742
588
1
5,052
(22)
(12)
443
(33)
410
466
1
1,323
(24)
(56)
2,825
(2,271)
8,432
(17,917)
19,433
(18,809)
(1,952)
(864)
(20,109)
(8,935)
(561)
4,666
(11,722)
11,162
(3,924)
(1,051)
(869)
(1,020)
1,812
(280)
(736)
796
(2,057)
12
(674)
(2,719)
+/- Cash flows from or to shareholders (g)
+/- Other cash flows from financing activities (h)
TOTAL NET CASH FLOW RELATING TO FINANCING ACTIVITIES (C)
1,658
(2,701)
(1,043)
(48)
3,211
3,163
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (D)
Net increase/(reduction) in cash and cash equivalents (A + B+ C + D)
Net cash flow from operating activities (A)
Net cash flow relating to investment activities (B)
Net cash flow relating to financing activities (C)
Effect of exchange rate changes on cash and cash equivalents (D)
19
(9,163)
(8,935)
796
(1,043)
19
8
(568)
(1,020)
(2,719)
3,163
8
Cash and cash equivalents on opening
Cash and central banks (assets and liabilities)
Accounts (assets and liabilities) and lending/borrowing with credit institutions
16,316
15,774
542
16,884
8,239
8,645
Cash and cash equivalents on closing
Cash and central banks (assets and liabilities)
Accounts (assets and liabilities) and lending/borrowing with credit institutions
7,153
9,409
(2,256)
16,316
15,774
542
CHANGE IN NET CASH
(9,163)
(568)
+/- Flows relating to financial assets and holdings (d)
+/- Flows relating to investment property (e)
+/- Flows relating to tangible and intangible non-current assets (f)
TOTAL NET CASH FLOW RELATING TO INVESTMENT ACTIVITIES (B)
31.12.2009
(a) Flows relating to transactions with credit institutions break down as follows:
+/- Inflows and outflows linked to loans and advances to credit institutions
(other than items included in cash and cash equivalents), excluding related receivables8,701
+/- Inflows and outflows linked to amounts due to credit institutions, excluding related liabilities
(b) Flows relating to transactions with customers break down as follows:
+/- Inflows and outflows linked to loans and advances to customers, excluding related receivables
+/- Inflows and outflows linked to amounts due to customers, excluding related liabilities21,800
(c) Flows relating to other transactions affecting financial assets or liabilities break down as follows:
+/- Inflows and outflows linked to financial assets at fair value through profit and loss(3,758)
+/- Inflows and outflows linked to financial liabilities at fair value through profit and loss 1,508
- Outflows on acquisitions of fixed income available for sale securities (*)
2,288
+ Inflows on disposals of fixed income available for sale securities (*)
+/- Inflows and outflows on derivative hedging instruments
+/- Inflows and outflows on debt securities
(18,847)
(d) Flows relating to financial assets and holdings break down as follows:
- Outflows on acquisitions of subsidiaries, net of acquired cash
+ Inflows on disposals of subsidiaries, net of cash ceded
- Outflows linked to purchase of securities of companies accounted for using the equity method
+ Inflows linked to sales of securities of companies accounted for using the equity method
+ Inflows from dividends received
- Outflows linked to purchases of held-to-maturity financial assets
(1,779)
+ Inflows linked to sales of held-to-maturity financial assets
3,754
- Outflows on acquisitions of variable income available for sale securities
(275)
+ Inflows on disposals of variable income available for sale securities
104
+/- Other flows linked to investment transactions
+ Inflows from interest received, excluding accrued interest not yet due
(830)
(26,619)
(2,367)
14,259
(25,981)
3,352
8
(3,304)
1,550
(1,196)
893
(350)
70
(273)
285
(f) Flows relating to non-current assets break down as follows:
- Outflows linked to acquisition of non-current assets
+ Inflows linked to sales of non-current assets
(953)
217
(827)
153
1,908
159
(250)
(207)
3,704
(4,955)
27
(1,477)
13,821
(12,411)
1,984
(183)
(h) Other net cash flows from financing activities break down as follows:
+ Inflows linked to issuance of bonds and debt securities
- Outflows linked to repayment of bonds and debt securities
+ Inflows linked to issuance of subordinated debt
- Outflows linked to repayment of subordinated debt
- Outflows linked to interest paid, excluding accrued interest not yet due
5,496
29,061
(19,262)
(1,989)
(e) Flows relating to investment property break down as follows:
- Outflows linked to acquisitions of investment property
+ Inflows linked to sales of investment property
(g) Flows from or to shareholders break down as follows:
+ Inflows from issuance of shares and similar securities
+ Inflows from sales of shares and similar securities
- Outflows linked to dividends paid
- Outflows linked to other remuneration paid
31.12.2008
* Including re-measurements linked to the purchase or sale of variable income financial assets available for sale
106
Crédit Mutuel
Annual report 2009
107
Part I - Accounting policies
The Crédit Mutuel group is not listed and is consequently under no obligation to present financial statements in
accordance with IFRS. However, for the sake of greater transparency and comparability with other leading financial
institutions, the Board of Directors of Confédération Nationale du Crédit Mutuel, which is the group's central governing
body within the meaning of Article L511-31 of the French Monetary and Financial Code, has decided to present
consolidated financial statements according to IFRS. These financial statements are presented in accordance with CNC
Recommendation 2009-R04 relating to summary financial statements. They comply with International Financial
Reporting Standards as adopted by the European Union and, in particular, with the standards that are effective for annual
periods beginning on or after 1 January 2009 (notably IAS 1 revised, IFRS 7 and IFRS 8). Information regarding risk
management is presented in the group’s management report.
Table of contents
Part i – Rccounting policies
Note 1: Consolidation scope
p. 109
1.1 Determination of the consolidation scope
1.2 Composition of the consolidation scope
p. 109
p. 110
Note 2: Consolidation methods and policies
p. 118
2.1 Consolidation methods
2.2. Closing date
2.3. Elimination of intra-group transactions
p. 118
p. 118
p. 118
3.14. Non-current assets
p. 128
3.15. Fees and commissions
p. 129
3.16. Corporation tax
3.17. Interest payable by the State on certain loans
p. 129
p. 129
3.18. Financial guarantees and financing commitments p. 130
3.19. Transactions denominated in foreign currencies
3.20. Non-current assets classified as held for sale
and discontinued operations
p. 130
p. 130
3.21. Judgements and estimates used in preparation
of the financial statements
p. 130
p. 118
2.5. Goodwill
p. 118
Note 4: Segment reporting (IFRS 8)
p. 131
Note 3: Accounting policies and methods
p. 119
Note 5: Related parties
p. 131
3.1. Loans and receivables
p. 119
Note 6: Standards and interpretations adopted
by the european union not yet applied due
to their application date
p. 132
3.7. Subordinated debt
Crédit Mutuel
p. 126
p. 127
2.4. Translation of accounts denominated
in a foreign currency
3.2. Provisions for impairment of loans and receivables,
loan commitments and guarantees
p. 119
3.3. Leases
p. 120
3.4. Securities
p. 120
3.5. Derivatives and hedge accounting
p. 123
3.6. Debt securities
p. 125
108
3.12. Employee benefits
3.13. Insurance activities
p. 125
3.8. Distinction between liabilities
and shareholders’ equity
p. 125
3.9. Provisions
p. 125
3.10. Amounts due to customers and credit institutions
3.11. Cash and cash equivalents
p. 126
p. 126
Part II – Rables
p. 133
Note 1: Consolidation scope
1.1 Determination of the consolidation scope
The group's main entity, Crédit Mutuel, is a co-operative
bank under the 10 September 1947 Act governing French
co-operatives. It is owned solely by its members, who hold
member shares ('A' shares). Members are each entitled to
one vote at general meetings, where their powers include
the election of directors.
The three levels of organisation—local, regional and
national—operate on a decentralised basis in accordance
with the principle of subsidiarity, which means that decisions
are taken as close to the ground as possible. The local
mutual banks, which are in closest contact with members
and customers, carry out all the principal functions of bank
branch offices, with the other two levels exercising only those
functions the local entities are not equipped to carry out.
Under Article L511-30 of the French monetary and financial
code, Confédération Nationale is the central body for the
group. As such it is responsible for:
- ensuring the liquidity and solvency of the Crédit Mutuel
network,
- representing Crédit Mutuel vis-à-vis the public authorities
and defending and promoting its interests,
- and, more generally, ensuring the overall cohesion of the
network and overseeing its business development while
at the same time exercising an administrative, technical
and financial control over the regional groups and their
subsidiaries.
The method for consolidating a group with such a distinctive capital ownership structure is based on determining a
consolidating entity that reflects the community of members linked by shared financial solidarity and governance.
The analysis of the control exercised by the consolidating
entity complies with IAS 27, thus enabling the group to present
consolidated financial statements according to IFRS.
1. Notes to the statement of financial position
p. 133
2. Notes to the income statement
p. 152
• Consolidating entity
3. Notes to the statement
of comprehensive income
p. 158
4. Segment reporting
p. 159
5. Other information
p. 162
The consolidating entity for the Crédit Mutuel group is
composed of all the local mutual banks, the Caisses
Fédérales (general purpose or farming and rural), the
Regional Federations, Caisse Centrale du Crédit Mutuel,
Confédération Nationale du Crédit Mutuel, and Fédération
du Crédit Mutuel Agricole et Rural.
The capital of the consolidating entity is owned exclusively
by all the members of the local mutual banks.
• Basis of consolidation
The general principles for the inclusion of an entity within
the consolidation scope are as defined in IAS 27, IAS 28
and IAS 31.
All the entities included in the consolidation scopes of the
regional groups are included in the national consolidation
scope. Joint companies, not consolidated at regional level,
are excluded from the national consolidation scope if their
total balance sheet or earnings have an impact of less
than 1% on the consolidated equivalent. However, an entity
that does not reach this threshold may be consolidated
if its activity or development is considered a strategic
investment.
The consolidation scope comprises:
- Entities controlled exclusively: exclusive control is presumed
to exist when the group controls directly or indirectly
a majority of the voting rights, or has the power to appoint
the majority of the members of the administrative, management and supervisory bodies, or has the power to
govern the financial and operating policies of an entity
by virtue of regulations or a contract. The accounts of
entities controlled exclusively are fully consolidated.
- Entities controlled jointly: joint control arises when, in
accordance with the terms of a contractual agreement,
control of an economic activity is shared with one or
more third parties regardless of the structure or form in
which the activities are undertaken. Entities controlled
jointly are consolidated using the proportional method.
- Entities over which significant influence is exercised: these
are entities over whose financial and operational policies
the group exerts significant influence but does not have
control. Entities over which significant influence is exercised
are consolidated using the equity method.
Special-purpose entities are consolidated when the conditions
defined in SIC 12 are met, namely that the entity’s activities
are carried out exclusively on the group’s behalf, the group
has decision-making or management power to obtain the
majority of the benefits deriving from the entity’s ordinary
activities and the capacity to profit from the entity’s benefits,
and retains the majority of the risks.
Holdings belonging to private equity companies and over
which joint control or significant influence is exercised are
excluded from the consolidation scope and are recognised
at fair value by option
Annual report 2009
109
1.2 Composition of the consolidation scope
The following entities were included in the Crédit Mutuel group's consolidation scope at 31 December 2009:
Consolidated entities are presented according to the sectors
used for preparing segment information under IFRS 8.
Accordingly, for example, entities included under Retail
Banking do not necessarily have the legal status
of credit institutions
31.12.2009
%
31.12.2008
Method
%
Comments
Method
Control
Interest
+
Control
Interest
+
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
4.99
20.00
20.98
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
95.41
100.00
100.00
92.44
100.00
100.00
100.00
100.00
100.00
99.98
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
4.88
20.00
20.98
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
95.41
97.52
34.17
92.44
100.00
97.52
100.00
97.52
100.00
99.39
97.53
100.00
97.52
97.52
98.66
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
EM
EM
EM
FC
FC
FC
FC
FC
FC
FC
FC
FC
NC
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
20.00
20.98
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
91.14
93.80
98.36
100.00
92.48
100.00
100.00
100.00
100.02
100.00
100.00
99.98
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
20.00
20.98
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
91.14
93.80
98.36
97.33
92.48
100.00
100.00
97.33
100.00
97.33
100.00
99.35
97.35
100.00
97.33
97.33
98.56
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
NC
EM
EM
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
A. Retail Banking
Acman
Actéa Environnement
Actimo
Agence de l'Hotel de Ville
Agerim
Amofi (formerly ERIF)
Amofi B
Ataraxia Distribution
Ataraxia Finance
Ataraxia Gestion
Ataraxia Production
Ataraxia Sud Aménagement
Bail Actea
Bail Entreprises
Bail Immo Nord
Banca Popular di Milano
Banque de Tunisie
Banque Delubac
Banque Privée Europeenne
Bâtiroc
BCME
BCMI
BCMNE
BECM
BECM Francfort
BECM Saint Martin
BEDE
BKCP Noord
BKCP SCRL
BKCP Wallonie
BSD
C2C
Caisse de Bretagne de CMA
Camefi Banque
Centrale des Marchés de l'Immobilier
CIC Est
CIC Iberbanco
CIO
CM Arkea Covered Bonds
CMCIC AM
CMCIC Bail
CMCIC Covered Bonds
CMCIC Epargne Salariale
CMCIC Gestion
CMCIC Lease
Method: FC = Full Consolidation, PM = Proportional Method, EM = Equity Method, NC = Not Consolidated
110
Crédit Mutuel
Consolidated for first time
Absorbed by BKPC SCRL
Acquired
Wound-up
31.12.2009
%
31.12.2008
Method
%
Comments
Method
Control
Interest
+
Control
Interest
+
100.00
100.00
100.00
100.00
50.00
100.00
50.00
66.00
100.00
99.66
97.35
100.00
100.00
100.00
50.00
85.00
50.00
64.64
100.00
99.38
FC
FC
FC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
FC
NC
FC
PM
FC
NC
FC
FC
100.00
100.00
97.86
96.66
100.00
85.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
25.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
-
100.00
100.00
97.80
96.66
100.00
85.00
100.00
100.00
100.00
97.33
98.17
100.00
100.00
25.00
100.00
100.00
100.00
90.00
100.00
100.00
97.32
97.33
100.00
100.00
91.10
-
FC
NC
FC
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
EM
FC
FC
FC
FC
FC
NC
FC
FC
NC
FC
FC
NC
NC
FC
FC
-
CMCIC Lease Belgium (formerly CMCIC Bail Belgium)
CMCIC Lease GmbH
CMN Environnement SNC
CMO Immobilier
Cofidis Argentine
Cofidis Belgique
Cofidis Espagne
Cofidis France
Cofidis Hongrie
Cofidis Italie
Cofidis Portugal
Cofidis République Tchèque
Cofidis Roumanie
Cofidis Slovaquie
CPSA
Creatis
Créfidis
Eole
Ermaxia
Factocic
FCC Libravou
FCP Nord Europe Gestion
FCP Richebe Gestion
100.00
100.00
100.00
97.53
97.53
100.00
66.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
50.00
66.00
100.00
100.00
-
22.55
34.17
34.17
34.17
34.17
34.17
34.17
34.17
34.17
34.17
100.00
34.17
34.17
50.00
64.73
34.17
100.00
-
FC
FC
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
NC
PM
FC
FC
FC
NC
FCP Richebé Gestion
FCT Cofitirisation
Fédéral Equipements
Fédéral Service
Federale Kaas voor het BeroepsKrediet (FKBK)
Filaction
Financo
Fininmad SA
Foncière d’Investissement
France Luxembourg Invest Holding
Gesteurop
GICM
GIE CMA
GIE MAT
Golfimmo
Habitat Gestion
Immobilière des Marsauderies
Immobilière du CMN
Immoprix Gestion
Investlaco
La Française des Placements Gestion Privée
Lacocim
Laviolette Financement
LFP-Sarasin AM
Lyonnaise de Banque
Mobilease
Monabanq
Monabanq Belgique
Nord Europe Private Bank
Oostvlaamse Invest Company
Pythagore Investissement BP
99.73
100.00
100.00
96.80
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
25.00
100.00
100.00
100.00
90.00
100.00
99.98
100.00
100.00
100.00
100.00
100.00
66.00
100.00
100.00
99.96
43.04
99.53
34.17
100.00
96.77
100.00
100.00
100.00
100.00
100.00
97.52
96.87
100.00
100.00
25.00
100.00
100.00
100.00
90.00
100.00
99.98
100.00
97.51
100.00
97.52
100.00
22.55
22.55
100.00
95.37
43.04
FC
FC
FC
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
EM
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
EM
Created
Wound-up
Acquired
Acquired
Acquired
Acquired
Acquired
Acquired
Acquired
Acquired
Acquired
Acquired
Acquired
Absorbed by Financo
Acquired
Absorbed by FCP Haussmann
Gestion
Formerly FCP Haussmann
Acquired
Absorbed by BKCP SCRL
Acquired
Acquired
Acquired
Acquired
Acquired
Annual report 2009
111
SA Ataraxia
SA Sofimpar
Saint Pierre SNC
SBCIC
SCI Astrée
SCI Cafimmo Gap
SCI Cafimmo Marseille
SCI Centre Gare
SCI CMDV
SCI CMN
SCI CMN 1
SCI CMN 2
SCI CMN 3
SCI CMN Location
SCI CMN Location 2
SCI CMN Richebé Inkerman
SCI des Antons
SCI DVPT CMM
SCI Familia
SCI Fontainebleau
SCI Gambetta Immob
SCI Gueydan
SCI Jeanne d'Arc
SCI Les Trois Rues
SCI Maurice Faure
SCI Mende
SCI Merlet Immobilier
SCI Nice Avenue
SCI Nice Joffre
SCI Nice République
SCI Palais de la Mer
SCI Plantagenets
SCI Provence Languedoc
SCI Puget
SCI SCMDV
SCI Sud-Est Gestion Immobilière
SCI Vercoulor
Selaco
SI du Vivier
SNC Crédit Mutuel Anjou Immobilier
Sodelem
Sofemo
Sofim
Sofimmo3
Sud-Est Transactions Immobilières
Targo Bank AG & Co, KGaA
(formerly Citibank Privatkunden AG & Co. KGaA)
Targo Finanzberatung GmbH (formerly Citi Finanzberatung GmbH)
Transactimmo
Trefliere SCI
UFG Property Management
UFG Transaction
UFG LFP France
Union Immobilière Océan SCI
West-Vlaamse Bank SCRL
31.12.2009
%
31.12.2008
Method
%
Control
Interest
+
Control
Interest
+
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
97.52
97.52
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
100.00
100.00
100.00
99.17
97.52
100.00
99.96
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.33
97.33
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.11
97.33
100.00
100.00
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
FC
FC
FC
FC
FC
FC
FC
FC
NC
100.00
100.00
100.00
100.00
78.79
100.00
100.00
100.00
95.52
100.00
100.00
100.00
100.00
78.79
100.00
100.00
100.00
95.52
FC
FC
FC
FC
FC
FC
FC
FC
FC
112
Crédit Mutuel
Comments
Method
31.12.2009
%
31.12.2008
Method
%
Comments
Method
Control
Interest
+
Control
Interest
+
Actimut
Banque de Vizille
BFCM Francfort
BKCP Securities
CEOI
CIC Finance
CIC Investissement
CIC Investissement Alsace
CIC Investissement Est
CIC Investissement Nord
CIC Vizille Participation
Cigogne Management
Cloe
CM-CIC Securities
Compagnie Financière du Crédit Mutuel
100.00
97.69
100.00
100.00
100.00
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
95.35
100.00
100.00
100.00
97.50
97.50
97.50
97.50
97.50
96.41
98.65
97.52
-
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
NC
FC
NC
100.00
97.69
100.00
100.00
100.00
99.94
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.18
100,00
100.00
100.00
97.27
97.27
97.27
97.27
97.27
96.23
98.54
100.00
97.33
100.00
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FCP Richebé 2011
FCP Richebé Recovery
FCT Home Loans
Financière Voltaire
Fortunéo (formerly Symphonis)
groupe Victor Hugo
IPO
IPO Ingenierie
Normandie Partenariat
Océan Participations
Procapital
SDR de Normandie
Sobrepar
Sudinnova
Synergie Finance
UFG Private Equity (formerly NEPE)
Vizille Capital Finance
Vizille Capital Innovation
Volney Développement
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
99.65
100.00
99.98
99.79
100.00
57.21
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.52
99.98
99.96
97.52
97.52
99.63
100.00
99.98
99.79
100.00
54.55
100.00
100.00
95.35
95.35
100.00
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
90.63
100.00
100.00
90.63
90.63
99.65
100.00
99.98
99.79
100.00
50.32
100.00
100.00
100.00
100.00
100.00
88.63
99.98
100.00
88.63
88.63
99.63
100.00
99.98
99.79
100.00
47.89
100.00
100.00
95.17
95.18
100.00
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
70.00
45.00
52.50
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
70.00
100.00
99.98
68.26
60.46
51.20
97.51
98.20
97.51
97.52
95.69
97.52
98.51
97.52
68.26
97.52
99.98
FC
EM
FC
FC
FC
FC
FC
FC
NC
FC
FC
FC
FC
FC
FC
70.00
45.00
52.50
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
70.00
100.00
99.98
68.13
60.34
51.10
97.33
98.07
97.33
97.33
95.49
97.33
97.33
98.40
97.32
68.13
97.33
99.98
FC
EM
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
B. Corporate and Investment Banking
Absorbed by CMMABN
Absorbed by
Crédit Mutuel Arkéa
Created
Created
Created
C. Asset Management and Private Banking
Agefor SA Genève
Alternative Gestion SA Genève
Banque Pasche (Liechtenstein) AG
Banque Pasche Monaco SAM
Banque de Luxembourg
Banque Pasche
Banque Transatlantique
Banque Transatlantique Belgique
Banque Transatlantique Jersey
Banque Transatlantique Londres
Banque Transatlantique Luxembourg
BLC Gestion
Calypso Management Company
CIC Suisse
CM Habitat Gestion
Activity discontinued
Annual report 2009
113
31.12.2009
31.12.2008
Comments
Control
Interest
+
Control
Interest
+
Dubly-Douilhet
Elite Opportunities (Liechtenstein) AG
Fédéral Finance Banque
Fédéral Finance Gestion
Financière Nord Europe
Franklin Gérance
GPK Finance SA
La Francaise des Placements (LFP)
LRM Advisory SA
Multi Financière de l'Anjou SA
Nord Europe Gestion SA (NEGE)
Pasche Bank & Trust Ltd Nassau
Pasche Finance SA Fribourg
Pasche Fund Management Ltd
Pasche International Holding Ltd
Pasche SA Montevideo
Serficom Family Office Inc
Serficom Family Office Ltda Rio
Serficom Family Office SA
Serficom Investment Consulting (Shangaï) Ltd
Serficom Maroc Sarl
Synergie Finance Gestion
Transatlantique Finance
UFG Alteram
UFG Courtage
UFG REM (formerly UFG Immobilier)
Valeroso Management Ltd
62.61
100.00
100.00
100.00
100.00
88.58
100.00
70.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.98
100.00
100.00
100.00
100.00
100.00
100.00
100.00
45.00
61.05
100.00
100.00
100.00
100.00
86.38
100.00
68.26
100.00
100.00
97.51
97.51
97.51
97.51
97.51
97.51
50.69
97.51
97.51
97.51
100.00
97.52
100.00
100.00
60.46
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
NC
FC
FC
EM
62.19
100.00
100.00
100.00
100.00
100.00
87.83
99.99
70.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
45.00
60.53
97.33
100.00
100.00
100.00
100.00
85.48
99.99
68.13
100.00
100.00
97.33
97.33
97.33
97.33
97.33
97.33
49.64
97.33
97.33
97.33
100.00
97.32
100.00
100.00
100.00
60.34
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
EM
%
Method
%
Method
Deconsolidated
Absorbed by LFP
D. Multisector
BFCM
CIC IDF
CIC London
CIC New York
CIC Singapore
100.00
97.52
100.00
100.00
100.00
100.00
97.52
97.52
97.52
97.52
FC
FC
FC
FC
FC
100.00
97.33
100.00
100.00
100.00
100.00
97.33
97.33
97.33
97.33
FC
FC
FC
FC
FC
ACM Iard AIR
ACM Services
ACM Vie SAM
ACM Vie
ACMN Iard
ACMN Vie
Adepi
Alverzele
Astrée
Atlancourtage Anjou
Atlancourtage Entreprise
Atlancourtage Ouest Atlantique
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
30.00
100.00
100.00
-
99.51
99.49
100.00
99.49
99.75
100.00
97.52
100.00
29.86
100.00
100.00
-
FC
FC
FC
FC
FC
FC
FC
FC
EM
FC
FC
CI
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
30.00
100.00
100.00
100.00
99.47
99.45
100.00
99.45
99.73
100.00
97.33
100.00
29.84
100.00
100.00
100.00
FC
FC
FC
FC
FC
FC
FC
FC
EM
FC
FC
FC
Courtage CMN
Courtage Océan
CP-BK Reinsurance (Lux)
Euro Protection Services (EPS)
GIE ACM
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.49
99.49
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.46
99.46
FC
FC
FC
FC
FC
Crédit Mutuel
Control
Interest
+
Control
Interest
+
ICM Life
ICM Reinsurance
Immobilière ACM
Infolis
La Pérennité
La Pérennité Entreprises
Massena
Massena Property
Massimob
MTRL
Nord Europe Assurances
Nord Europe Life Luxembourg
Nord Europe Retraite
Novelia
Partners
Procourtage
RMA Watanya
Royal Automobile Club de Catalogne
SCI ADS
Serenis Ass
Serenis Vie (formerly Televie)
Société de Réassurance Lavalloise
Suravenir
Suravenir Assurances
Suravenir Assurances Holding
100.00
100.00
100.00
100.00
90.00
99.88
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
20.00
49.00
100.00
99.59
100.00
99.99
100.00
100.00
-
99.49
99.49
99.49
100.00
90.00
98.49
99.49
99.51
100.00
100.00
100.00
100.00
99.99
99.45
99.49
20.00
48.76
99.08
99.08
99.49
99.99
100.00
100.00
-
FC
FC
FC
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
EM
EM
FC
FC
FC
FC
FC
FC
NC
100.00
100.00
100.00
100.00
100.00
90.00
99.88
100.00
100.00
100.00
100.00
100.00
100.00
99.99
100.00
100.00
20.00
100.00
99.59
100.00
99.99
100.00
100.00
100.00
99.46
99.47
99.46
100.00
100.00
90.00
98.42
99.46
99.47
100.00
100.00
100.00
100.00
99.99
99.46
99.46
20.00
99.04
99.04
99.45
99.99
100.00
100.00
100.00
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
EM
NC
FC
FC
FC
FC
FC
FC
FC
Vie Services
77.60
77.60
FC
77.60
77.60
FC
Acta Voyages
Agence Générale d’Informations Régionales
40.00
99.80
40.00
99.80
EM
FC
40.00
-
40.00
-
EM
NC
BKCP IT
Carmen Holding Investissement
CIC Migrations
CIC Participations
Cicor
Cicoval
CM Akquisition
CMCIC Services
CMCP
CMN Tel
CMNE Belgium
CNCP - NKBK Pool SA
Cofidis Participations
Cofisin
Darcy Presse
100.00
67.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
99.80
100.00
67.00
97.52
97.52
97.52
97.52
100.00
100.00
99.98
100.00
100.00
100.00
34.17
34.17
99.73
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
97.33
97.33
97.33
97.33
100.00
100.00
99.98
100.00
100.00
100.00
-
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
NC
NC
NC
Documents AP
100.00
100.00
FC
-
-
NC
EFSA
EI Développements
EIP (formerly GTOCM)
Euro Information
Gestunion 2
100.00
100.00
100.00
100.00
100.00
97.52
99.69
100.00
99.69
97.52
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
97.33
99.65
100.00
99.65
97.33
FC
FC
FC
FC
FC
Method
%
Method
%
Absorbed by ACMN Vie
Acquired
Absorbed by
F. Other
E. Insurance
114
Comments
31.12.2008
31.12.2009
Asset-liability transfer
to CMLACO
(EBRA group)
Acquired
Acquired
Acquired
(EBRA group)
(EBRA group)
Annual report 2009
115
31.12.2009
31.12.2008
Comments
Control
Interest
+
Control
Interest
+
Gestunion 3
Gestunion 4
GIE BCMNE Gestion
GIE CMN Gestion
GIE CMN Prestations
GIE UFG Trésorerie
Groupe EBRA
Groupe Progrès
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.52
97.52
100.00
100.00
100.00
100.00
100.00
100.00
FC
FC
FC
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
-
97.33
97.33
100.00
100.00
100.00
100.00
-
FC
FC
FC
FC
FC
FC
NC
NC
Immo W16
Immocity
100.00
100.00
100.00
99.93
FC
FC
100.00
-
100.00
-
FC
NC
Impex Finance
Information pour la Communication
100.00
50.00
97.52
49.98
FC
FC
100.00
-
97.33
-
FC
NC
Jean Bozi Communication
100.00
100.00
FC
-
-
NC
La Gazette Indépendante de Saône et Loire
100.00
100.00
FC
-
-
NC
La Tribune
100,00
99.97
FC
-
-
NC
Le Bien Public
99.93
99.93
FC
-
-
NC
Le Dauphiné Libéré
99.97
99.97
FC
-
-
NC
Les Journaux de Saône et Loire
100.00
100.00
FC
-
-
NC
Lyon Plus
100.00
100.00
FC
-
-
NC
Lyonnaise de Télévision
60.00
60.00
FC
-
-
NC
Marsovalor
Nord Europe Participations et Investissements (NEPI)
NRJ Mobile
Pargestion 2
Pargestion 3
Pargestion 4
Pargestion 5
Placinvest
Poujoulat Belgique
Presse Diffusion
100.00
100.00
90.00
100.00
100.00
99.96
34.53
100.00
97.62
100.00
89.72
97.52
97.52
97.46
34.53
100.00
FC
FC
FC
FC
NC
FC
NC
FC
EM
FC
100.00
100.00
90.00
100.00
100.00
100.00
100.00
99.96
34.53
-
97.33
100.00
89.69
97.33
97.33
97.33
97.33
97.26
34.53
-
FC
FC
FC
FC
FC
FC
FC
FC
EM
NC
Promopresse
100.00
99.97
FC
-
-
NC
Publiprint Dauphiné
100.00
99.97
FC
-
-
NC
Publiprint Province no 1
99.96
99.96
FC
-
-
NC
Rhône Offset Presse
100.00
100.00
FC
-
-
NC
SCI de Palais
100.00
100.00
FC
-
-
NC
SCI Hotel de Ville
100.00
100.00
FC
-
-
NC
30.17
30.17
EM
-
-
NC
SCI Le Progrès Confluence
%
Method
%
Method
consolidated for first time
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
31.12.2009
31.12.2008
Comments
Control
Interest
+
Control
Interest
+
SCI 6 Place Joubert
100.00
100.00
FC
-
-
NC
Services et Crédits aux Professions Indépendantes et PME
Sicorfé Maintenance
SNP Sicorfé
Société d’Edition des Hebdomadaires et Périodiques Locaux
56.22
90.00
92.29
99.67
53.64
87.20
92.29
99.67
FC
FC
FC
FC
56.22
90.00
92.29
-
55.30
87.19
92.29
-
FC
FC
FC
NC
Sodelem Services
Sofiholding 2
Sofiholding 3
Sofiholding 4
Sofinaction
Sopreg SA
Targo Akademie GmbH (formerly Citicorp Akademie GmbH)
Targo Deutschand GmbH (formerly Citicorp Deutschand GmbH)
Targo Dienstleistung GmbH (formerly Citicorp Dienstleistung GmbH)
Targo IT Consulting GmbH (formerly Citicorp Consulting GmbH)
Targo IT Consulting Singapore (formerly Citicorp Consulting Singapore)
Targo Management AG (formerly Citicorp Management AG)
Targo Realty Services GmbH (formerly Citicorp Realty Services GmbH)
UFG ICC
UFG-LFP
Ufigestion 2
Ufigestion 3
Ugépar Service
Valimar 2
Valimar 4
Ventadour Investissement
VTP1
VTP5
100.00
100.00
100.00
100.00
100.00
49.66
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.98
100.00
100.00
97.62
97.62
97.62
97.62
49.66
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.62
97.62
97.62
97.62
100.00
97.60
97.62
FC
FC
FC
FC
FC
EM
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
NC
FC
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.97
100.00
100.00
97.33
97.33
97.33
97.33
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.33
97.33
97.33
97.33
97.33
100.00
97.29
97.33
FC
FC
FC
FC
FC
NC
FC
FC
FC
FC
NC
FC
FC
NC
FC
FC
FC
FC
FC
FC
FC
FC
FC
%
Method
%
Method
(EBRA group)
(EBRA group)
Acquired
Created
Deconsolidated
Deconsolidated
Deconsolidated
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
(EBRA group)
116
Crédit Mutuel
Annual report 2009
117
Note 2: Consolidation methods and policies
2.1 Consolidation methods
The following consolidation methods have been used:
• Full consolidation
This method consists of substituting the various assets and
liabilities of the subsidiary concerned for the value of the
securities held and of recognising the share of minority interests
in shareholders’ equity and net profit. It is applied to all
exclusively-controlled entities, including those with a different
accounts structure, regardless of whether or not the activity
concerned forms part of the consolidating entity’s activities.
• Proportional consolidation
This method consists of including in the accounts of the
consolidating entity the proportion of the subsidiary’s
assets and liabilities represented by the interest held in the
consolidated entity, as restated where required; minority
interests are therefore not recognised. It is applied to
all jointly-controlled entities, including those with a
different accounts structure, regardless of whether or not
the activity concerned forms part of the consolidating
entity’s activities.
• Equity method of consolidation
The equity method of consolidation consists of substituting
the group’s share of the shareholders’ equity and net profit
of the equity affiliate for the value of the securities held. It
is applied to all entities over which significant influence is
exercised.
is translated using the official exchange rate on the closing
date. The translation difference arising on the capital, reserves
and retained earnings is recognised in shareholders’ equity,
under “Translation reserves”. The profit and loss account is
translated using the average exchange rate for the year.
The resulting translation differences are recognised directly
in the translation reserve. Such differences are transferred
to the profit and loss account in the event of the disposal
or liquidation of all or part of the holding in the foreign
entity.
2.5 Goodwill
• Valuation differences
On the date that control of a new entity is acquired,
the assets, liabilities and contingent operating liabilities
are measured at their fair value. Differences between
the carrying amount and the fair value are recognised
under 'valuation differences'.
• Goodwill on acquisition
In compliance with IFRS 3, on the date that control of a new
entity is acquired, those identifiable assets, liabilities and
contingent liabilities of the acquiree meeting criteria for
recognitions under IFRS 3 are measured at fair value on the
date of acquisition, except for non-current asset classified
as assets held for sale, which are recognised at fair value
less costs to sell. The difference between the price paid for
the securities and the total valuation of the assets,
liabilities and contingent liabilities constitutes the goodwill.
If goodwill is positive, it is recorded as an asset, and if it is
negative, it is recognised immediately in profit or loss,
under “Changes in goodwill”.
2.2 Closing date
All the companies included in the group consolidation
scope close their accounts on 31 December of each year.
2.3 Elimination of intra-group transactions
Intra-group accounts and any effects resulting from intragroup transfers that would have a material impact in terms
of the consolidated financial statements are eliminated.
Intra-group receivables, liabilities, reciprocal commitments,
charges and income are eliminated for entities consolidated
using the full or proportional methods.
2.4 Translation of accounts denominated in a foreign
currency
Concerning foreign entities whose accounts are
denominated in a foreign currency, the balance sheet
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If the group’s percentage holding in a controlled entity is
increased, the difference between the acquisition cost of
the securities and the incremental share of consolidated
shareholders’ equity represented by such securities on the
acquisition date is recognised in shareholders’ equity.
The group regularly (at least once each year) tests goodwill
for impairment. These tests are intended to ensure that
such goodwill has not experienced any permanent
impairment. If the recoverable value of the cashgenerating unit (CGU) to which the goodwill is allocated is
less than its carrying amount, the difference is recognised
as an impairment. This impairment, recognised in profit and
loss, is irreversible. In practice, the group’s CGUs are its
various business lines.
Note 3: Accounting policies and methods
International Financial Reporting Standards (IFRS) offer a
choice of accounting methods in certain areas. The main
options adopted by the group concern:
All commissions received or paid relating directly to
setting in place of the loan and resembling interest
spread over the life of the loan in accordance with
effective interest rate method and are recorded in
profit and loss account as an interest item.
the
are
the
the
• Opening balance sheet:
- use of fair value or re-measurement as the presumed
cost of non-current assets at the time of transition:
this option may be applied to any tangible or intangible
non-current asset that satisfies the re-measurement
criteria, or to any investment property stated on a cost
basis. The group chose not to adopt this option;
- immediate recognition in shareholders’ equity of
actuarial differences linked to employee benefits;
this has not been applied by the group;
- the group has opted to zero out translation reserves.
The fair value of loans and advances is disclosed in the
notes to the financial statements on each closing date: it
comprises the present value of projected future cash flows
discounted using a zero-coupon interest rate curve, which
includes the signature cost inherent to the debtor.
• The mark to market valuation of certain liabilities issued
by the enterprise that are not included in a trading
portfolio.
Impairment is recognised once there is objective evidence
of the existence of an event or events occurring
subsequent to the granting of the loan – or group of loans
– likely to generate a loss. An analysis is performed on a
contract-by-contract basis at each period end. The
amount of impairment is equal to the difference between
the carrying amount and the present value of the projected
future cash flows discounted at the original effective
interest rate on the loan, taking into account any
guarantees. For variable rate loans, the last known
contractual rate is used.
The existence of unpaid past due amounts for more than 3
months (or 6 months for mortgages and local
governments, or for current accounts that have been
irregular for more than 3 months) represents objective
evidence of a loss event. Similarly, an objective indication
of loss is identified when it is probable that the debtor will
not be able to repay all the amounts due or when a default
event has taken place or in the event of a court-ordered
liquidation.
• The eligibility for fair-value hedging relationships of
macro-hedging transactions entered into in the context
of the asset-liability management of fixed-rate positions
(notably including customer demand deposits)
authorised by EU Regulation 2086/2004 has been
applied by the group.
• The group availed itself of the amendments to IAS 39
issued in October 2008 permitting the reclassification of
some financial instruments from the fair-value-throughprofit-or-loss category to loans and receivables or
assets held to maturity. Note that reclassifications to
available-for-sale assets are permitted (see Note 3.4).
3.1 Loans and receivables
Loans and receivables are fixed or determinable-income
financial assets not listed on an active market, which are
not intended for sale when acquired or granted. They
include loans granted directly or the bank’s share of
syndicated loans, loans acquired and unlisted debt
securities. When first recorded on the balance sheet, they
are recognised at their fair value, which is generally the net
amount disbursed. The rates applied are presumed to be
market rates in that the rate scales are constantly adjusted
as a function, in particular, of the rates applied by the large
majority of competitor institutions. At subsequent period
ends, they are measured at their amortised cost using the
effective interest rate method (other than those
recognised using the fair value by option method).
3.2 Provisions for impairment of loans and
receivables, loan commitments and guarantees
• Individual provisions for impairment of loans and
receivables
Impairment losses and provisions are recognised as a
component of cost of risk. When reversed, impairment
losses and provisions are treated as a reduction in cost of
risk with the exception of the portion relating to the impact
of the passage of time associated with the discounting
mechanism. The provision is deducted from loans and
receivables when it related to impaired assets and is
recognised as a liability under provisions for risks when it
relates to loan commitments and guarantee obligations
(see Note 3.9)
Irrecoverable receivables are written off and the
corresponding provisions are written back.
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119
• General provisions for impairment of loans and
receivables
All loans to customers not written down for impairment on
an individual basis are grouped together into homogenous
pools of exposures. Exposures at risk are subject to an
impairment provision based on the actual loss rate and the
probability of default to maturity observed internally and
externally applied to the loan outstandings. This provision is
recognised as a deduction from the corresponding assets
in the balance sheet and changes during the period are
recognised in cost of risk in profit and loss.
3.3 Leases
A lease is an agreement under which the lessor grants to
the lessee, for a predetermined period, the right to use an
asset in exchange for a payment or series of payments.
A finance lease is a lease under which virtually all of the risks
and benefits inherent in ownership of an asset are
transferred to the lessee. Ownership of the asset may or
may not eventually be transferred.
An operating lease is any lease that is not a finance lease.
• Finance leases – lessor
In accordance with IAS 17, finance lease transactions with
non-group companies are reported on the consolidated
balance sheet at their financial accounting amount.
Analysis of the economic substance of transactions results,
in the accounts of the lessor, in:
• Finance leases – lessee
In accordance with IAS 17, the non-current assets
concerned are recorded on the balance sheet as assets
and the borrowing from credit institutions is recorded as a
liability. Lease payments are broken down between interest
expense and repayment of principal.
3.4 Securities
• Determination of fair value
Fair value is the amount for which an asset could be
exchanged, or a liability settled, between knowledgeable,
willing parties in an arm's length transaction.
On initial recognition of a financial instrument, fair value is
generally the transaction price.
When measured subsequently, fair value must be
determined. The measurement method applied varies
depending on whether the financial instrument is traded in
a market considered as active or not.
Financial instruments traded in an active market
When financial instruments are traded in an active market,
fair value is determined by reference to their quoted
price as this is considered to represent the best estimate
of fair value. A financial instrument is regarded as quoted
in an active market if quoted prices are readily and
regularly available from an exchange, dealer, broker or
pricing service, and those prices represent actual
and regularly occurring market transactions on an arm’s
length basis.
In all instances, the adjustments made by the group are
reasonable and appropriate, with reliance placed on
judgement.
• Fair value hierarchy
The amendment to IFRS 7 published in March 2009 defined
a three-level hierarchy for fair value measurement:
- Level 1: quoted prices in active markets for identical
assets or liabilities;
- Level 2: inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices); and
- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
• Classification of securities
Securities may be classified in one of the following
categories:
- financial assets at fair value through profit or loss;
- available-for-sale financial assets;
- held-to-maturity financial assets; or
- loans and receivables.
Classification in one or other of these categories reflects
the group’s management intention and determines how a
particular financial asset is recognised and measured in the
financial statements.
Financial assets and financial liabilities at fair value
through profit or loss
near term, these securities may be reclassified in
accordance with the provisions of the amendments to IAS
39 issued in October 2008. Transfers to financial assets
held for trading or to financial assets held to maturity are
permitted in limited circumstances. Transfers to loans and
receivables are permitted when the group has the positive
intention and ability to hold these securities over the
foreseeable future or until their maturity, and when assets
transferred meet criteria for recognition as loans and
receivable, in particular the requirement that they not be
quoted in an active market. These portfolio transfers are
intended to better reflect the current management
intention for these instruments and to reflect more fairly
their impact on the group’s results.
b) Instruments designated at fair value through profit on loss
Financial instruments may be designated as at fair value
through profit or loss upon initial recognition. Once
designated as such, financial instruments cannot be
reclassified. This classification is permitted in the following
circumstances:
- financial instruments containing one or several separable
embedded derivatives;
- instruments for which the accounting treatment would be
inconsistent with that applied to another related
instrument, were the fair value option not applied; and
- instruments belonging to a pool of financial assets
measured and accounted for at fair value.
The group has used this option in particular for unit-linked
insurance policies, for consistency with the treatment
applied to liabilities, and for private equity securities and
certain liabilities issued that contain embedded derivatives.
Financial instruments not traded in an active market
- recognition of a financial receivable due from the
customer, amortised by the lease payments received;
- breakdown of the lease payments between interest and
the amortisation of the principal, known as financial
amortisation;
- recognition of a net unrealised reserve, equal to the
difference between:
- the net financial outstanding: the amount due by
the lessee, comprising the remaining capital due
and accrued interest at the closing date;
- the net carrying amount of the leased non-current
assets;
- the deferred tax provision.
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Crédit Mutuel
• Classification criteria and transfer rules
When the market is illiquid, market prices may be used as an
element in determining fair value, but cannot be the
overriding element.
When there is no observable data or when adjustments
to market prices require reliance to be placed on nonobservable data, the entity may use internal assumptions
regarding future cash flows and discount rates, integrating
adjustments for market risks in the same way as the market
would (i.e. credit risk and liquidity risk). Observable market
data is used when this data reflects the reality of a
transaction in an arm’s length exchange motivated by
normal business considerations and do not require material
adjustments to the valuation obtained in this way.
Otherwise, the group uses non-observable data, applying a
mark-to-model approach.
Securities are classified in this category when acquired for
the purpose of selling them in the near term or because,
upon initial recognition, they were designated as at fair
value through profit or loss.
a) Instruments held for trading
Securities are classified as held for trading if they were
acquired principally for the purpose of selling them in the
near term or if they are part of a portfolio for which there
is evidence of a recent actual pattern of short-term
profit-taking.
Market conditions may prompt the group to review the
investment strategy and management intention for these
securities. When it would be untimely to sell securities
purchased initially for the purpose of selling them in the
• Basis for the measurement and recognition of income
and charges
Securities classified as assets and liabilities at fair value
through profit or loss are recognised on the balance sheet
at fair value when they are first recorded and at all
subsequent balance sheet dates until such time as they are
disposed of.
Changes in fair value and revenues received or accrued on
fixed-income securities classified in this category are
recorded in the profit and loss account under “Net gains
(losses) on financial instruments at fair value through profit
or loss”.
Purchases and sales of securities measured at fair value
through profit or loss are recognised on the settlement
date. Changes in fair value between the transaction and
settlement dates are recognised in profit or loss.
Annual report 2009
121
If there is a transfer to one of the three other categories,
the asset’s fair value on the transfer date is treated
subsequently as representing cost or amortised cost. No
gain or loss recognised prior to transfer may be reversed.
Financial assets and financial liabilities available
for sale
Income accrued or received on fixed-income securities
is recognised in profit or loss using the effective interest
method under “Interest and similar income”. Dividends
received on variable-yield securities are recorded in profit
or loss under “Net gains (losses) on available-for-sale
financial assets”.
since the recognition of the impairment is also recognised
to profit or loss under “Cost of risk” when there has been an
improvement in the borrower’s credit situation.
Loans and receivables
Held-to-maturity financial assets
IAS 39 authorises certain securities to be classified as loans
and receivables when they have fixed or determinable
payments and they are not quoted in an active market.
Classification as loans and receivables may take place
upon initial recognition of the securities or upon their
transfer from financial assets at fair value through profit or
loss or from available-for-sale securities pursuant to the
amendments to IAS 39.
• Impairment and credit risk
Available-for-sale financial assets comprise financial
assets not classified as loans and receivables, as held-tomaturity financial assets, nor as at fair value through profit
or loss.
Fixed income securities may be reclassified as:
- held-to-maturity financial assets if there is a change in
management intention, providing these assets meet the
classification criteria for this category;
- loans and receivables if there is a change in management
intention and a positive intention and ability to hold these
securities over the foreseeable future or until their
maturity, providing these assets meet the classification
criteria for this category.
• Basis for measurement and recognition of income and
charges These assets are recognised on the balance sheet at
fair market value when they are acquired and at
subsequent balance sheet dates until such time as they
are disposed of. Changes in fair value are recorded in
shareholders’ equity under a specific heading entitled
“Unrealised or deferred gains or losses”, excluding accrued
income. Unrealised gains or losses recognised in
shareholders’ equity are recognised in the profit and
loss account only when the assets are disposed of or
when evidence of permanent impairment is observed.
On disposal, the unrealised gains or losses previously
recognised in shareholders’ equity are transferred to the
profit and loss account under “Net gains (losses) on
available-for-sale financial assets”, together with the gain
or loss on disposal. Purchases and sales of securities are
recognised on the settlement date.
If securities with a fixed maturity are transferred out to
held-to-maturity financial assets or to loans and
receivables, and in the absence of impairment losses,
unrealised gains or losses previously recognised directly to
equity are reversed over the residual life of the asset. If
securities with no fixed maturity are transferred out to loans
and receivables, unrealised gains or losses previously
recognised directly to equity are maintained in equity until
the sale of the securities.
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a) Lasting diminution in the value of shares and other
equity instruments
Impairment losses are recognised in respect of variable
income financial assets classified as available for sale in the
event of a prolonged and material decline in fair value
relative to cost.
In the case of variable income securities, Crédit Mutuel
considers that a loss in the value of an instrument relative
to its acquisition cost of 50% or a loss in value over a period
of 24 consecutive months triggers the recognition of an
impairment loss, except in those instances where it is
considered that the fair value determined by the group
does not reflect a probable loss of all or part of the amount
invested. Impairment testing is carried out on a line by line
basis. Judgement is also exercised for securities not
meeting the aforementioned criteria when management
estimates that the recovery of the amount invested cannot
be expected reasonably in the near future. The probable
loss is recognised in profit and loss under "Net gains
(losses) on available-for-sale financial assets".
Any subsequent impairment is also recognised in profit
and loss.
Losses for permanent impairment of equities and other
equity instruments recorded in profit and loss may not
be reversed as long as the instrument is carried on
the balance sheet. Any subsequent appreciation is
recognised to equity under “Unrealised or deferred gains
and losses”.
b) Impairment losses in respect of credit risk
Impairment losses relating to fixed-income securities
available for sale (mainly bonds) are recognised under
“Cost of risk”. The existence of a credit risk alone may
justify recognising impairment losses against fixed
income securities, whereas a decline in value due simply
to an increase in interest rates does not. In the event
an impairment loss is recognised, all accumulated
unrealised losses taken to equity must be reversed to
profit or loss. Impairment losses may be reversed. Any
subsequent appreciation resulting from an event occurring
Held-to-maturity financial assets are securities with fixed
or determinable payments and a fixed maturity, and which
the group has the positive intention and ability to hold to
maturity.
Transactions to hedge the interest rate risk in respect of
this category of securities are not eligible for hedge
accounting under IAS 39.
Possibilities for selling or transferring held-to-maturity
securities are extremely restricted under IAS 39 which,
depending on the circumstance, may require the entire
portfolio to be reclassified at the level of the group and to
prohibit the use of this category for two years.
charges
Loans and receivables are recognised initially at fair value.
Subsequently they are accounted for and measured in
accordance with the rules applied to loans and receivables
described in Note 3.1 dealing with loans and receivables.
• Credit risk
charges Held-to-maturity securities are recognised at fair value
when acquired. Subsequently they are measured at
amortised cost using the effective interest rate method,
which factors in the amortisation of any premium, discount
and acquisition costs if material.
Purchases and sales of securities are recognised on the
date of settlement.
Income received from these securities is recorded under
“Interest and similar income” in the profit and loss account.
• Credit risk
An impairment loss is recognised when there is objective
evidence that the asset is impaired as a result of one
or more events having occurred after initial recognition
of the asset and when this could generate a loss (proven
credit risk). Impairment testing is carried out at each
balance sheet date for each security in turn. The amount
of the loss is measured as the difference between
the asset's carrying amount and the present value of
estimated cash flows discounted at the asset's original
effective interest rate, taking into account any guarantees.
The impairment loss is recognised to profit or loss under
“Cost of risk”. Any subsequent appreciation resulting
from an event having occurred since the recognition
of the impairment loss is also recognised to profit or loss
under “Cost of risk”.
An impairment loss is recognised when there is objective
evidence that the asset is impaired as a result of one or
more events having occurred after initial recognition of the
asset and when this could generate a loss (proven credit
risk). The amount of the loss is measured as the difference
between the asset's carrying amount and the present value
of estimated cash flows discounted at the asset's effective
interest rate, taking into account any guarantees. The
impairment loss is recognised to profit or loss under “Cost
of risk”. Any subsequent appreciation resulting from an
event having occurred since the recognition of the
impairment loss is also recognised to profit or loss under
“Cost of risk”.
3.5 Derivatives and hedge accounting
Determination of fair value of derivatives
The majority of over-the-counter derivatives, swaps, future
rate agreements, caps, floors and simple options are
valued using standard, generally accepted models (present
value of future cash flows, Black and Scholes model,
interpolation techniques), based on observable market
data such as yield curves. The valuations given by these
models are adjusted to take into account the liquidity risk
and the credit risk.
Derivatives are recognised as financial assets when their
market value is positive and as financial liabilities when their
market value is negative.
Annual report 2009
123
Classification of derivatives and hedge accounting
• Derivatives classified as financial assets or financial
liabilities at fair value through profit or loss
As a rule, all derivatives not designated as hedging
instruments under International Financial Reporting
Standards are classified as financial assets or financial
liabilities at fair value through profit or loss, even when for
financial purposes they were entered into to hedge one or
more risks.
Embedded derivatives
An embedded derivative is a component of a hybrid
instrument that, when separated from its host contract,
meets the definition criteria for a derivative. It has the
effect, notably, of changing certain cash flows in a manner
analogous to a separate derivative.
The derivative is detached from the host contract and
recognised separately as a derivative instrument at fair
value through profit or loss only if all of the following three
conditions are satisfied:
- the hybrid instrument hosting the embedded derivative is
not measured at fair value through profit or loss;
- the economic characteristics of the derivative and the
associated risks are not considered as being closely
related to those of the host contract; and
- separate measurement of the embedded derivative is
sufficiently reliable to provide relevant information.
Accounting
Realised and unrealised gains and losses are recognised to
profit or loss under “Gains and losses on financial
instruments at fair value through profit or loss”.
• Hedge accounting
IAS 39 provides for three types of hedging relationship. The
choice of the hedging relationship is made according to the
nature of the risk being hedged.
A fair value hedge is a hedge of the exposure to changes in
the fair value of financial assets or financial liabilities.
A cash flow hedge is a hedge of the exposure to the
variability in cash flows of financial assets or financial
liabilities, firm commitments and forward transactions.
Hedges of net investments in foreign operations, which are
accounted for in the same way as cash flow hedges, are not
used by the group.
Hedging derivatives must meet the criteria required by IAS
39 to be designated as hedging instruments for accounting
purposes. The hedging instrument and the hedged item
must both qualify for hedge accounting.
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Crédit Mutuel
The relationship between the instrument covered and the
hedging instrument is documented formally immediately
upon inception of the hedging relationship. This
documentation includes the management objectives of the
hedging relationship, the nature of the risk hedged, the
underlying strategy, the identification of the hedging
instrument and of the item hedged, and the methods used
to measure the effectiveness of the hedge.
Hedge effectiveness is assessed immediately upon
inception of the hedging relationship and subsequently
throughout its life, at the very least at each balance sheet
date. Changes in the fair value or cash flows of the hedging
instrument must approximately offset changes in the fair
value or cash flows of the hedged item. Actual results must
be within a range of 80% to 125%. If this is not the case,
hedge accounting is discontinued prospectively.
Fair value hedge of identified assets and liabilities
In the case of a fair value hedge, derivatives are measured
at their fair value as an offset to the profit and loss account
in “Net gains (losses) on financial instruments at fair value
through profit or loss” symmetrically to the revaluation of
the hedged items. This rule is also applied if the hedged
item is recognised at its amortised cost or in the case of a
financial asset classified as available for sale. Changes
in the fair value of the hedging instrument and hedged
risk component will offset partially or totally; only
the ineffective portion of the hedge is recognised in profit
or loss.
The portion corresponding to the rediscounting of the
derivative financial instrument is recognised in the profit
and loss account in “Interest income and charges”
symmetrically to the interest income or charges for the
hedged item.
If the hedging relationship is interrupted or the effectiveness
criteria are not met, hedge accounting is discontinued on a
prospective basis. Hedging derivatives are transferred to
financial assets or financial liabilities at fair value through
profit or loss and are accounted for in accordance with the
principles applicable to this category. The carrying amount
of the hedged item is subsequently no longer adjusted to
reflect changes in fair value. In the case of identified
interest rate instruments, valuation adjustments are
amortised over their remaining life. If the hedged item has
been derecognised, due notably to early repayments, the
cumulative adjustments are recognised immediately in the
profit and loss account.
The group has availed itself of the possibilities offered
by the European Commission as regards accounting
for macro-hedging transactions. The European Union's
so-called carve out amendment to IAS 39 enables
customer demand deposits to be included in hedged fixed-rate
liability portfolios with no effectiveness measurement
if under hedged. The maturities of the deposits are
established as a function of the run-off rules defined for
asset-liability management purposes.
For each portfolio of fixed rate assets or liabilities, the
maturity schedule of the hedging derivatives is reconciled
with that of the hedged items to ensure that there is no
over-hedging.
The accounting method for fair value macro-hedging
derivatives is the same as for fair value hedges.
Changes in the fair value of the hedged portfolios are
recorded in a specific line of the balance sheet,
“Revaluation difference on portfolios hedged for interest
rate risk”, the other side of the entry being to the profit and
loss account.
Cash flow hedges
In the case of cash flow hedging relationships, the
derivatives are recognised in shareholders’ equity on the
balance sheet at their fair value for the portion considered
effective while the portion considered as ineffective is
recorded in the profit and loss account in “Net gains
(losses) on financial instruments at fair value through profit
or loss”.
Amounts recorded in shareholders’ equity are reversed
through profit or loss under “Interest income and charges”
symmetrically to the flows of the hedged item affecting the
The hedged items continue to be recognised in accordance
with the rules specific to their accounting category. If the
hedging relationship is interrupted or the effectiveness
criteria are not met, hedge accounting ceases to be
applied. The cumulative amounts recorded in shareholders’
equity for the re-measurement of the hedging derivative
are maintained in shareholders’ equity until such time as
the hedged transaction itself affects the profit and loss
account or when it is determined that the transaction will
not take place. These amounts are then transferred to
profit or loss.
If the hedged item has been derecognised, the cumulative
amounts recorded in shareholders' equity are immediately
transferred to profit or loss.
3.6 Debt securities
Debt securities (interest-bearing notes, interbank market
securities, bond loans etc.) that are not classified at fair
value through profit or loss by option are recognised
initially at their issue amount, when applicable net of
transaction costs.
These securities are subsequently measured at amortised
cost using the effective interest rate method.
3.7 Subordinated debt
Both dated and undated subordinated debt is separated
from other debt securities as, in the event of the issuer’s
liquidation, it is repaid only after claims by other creditors
have been extinguished. Subordinated debt is measured at
amortised cost.
3.8 Distinction between liabilities and shareholders’
equity
In accordance with IFRIC 2, the interests of members are
classified as shareholders’ equity if the entity has the
unconditional right to refuse to redeem such interests, or if
there are legal or statutory provisions that prohibit or
strictly limit such redemption. Under existing statutory and
legal provisions, shares issued by the structures comprising
the consolidating entity of the Crédit Mutuel group are
recognised under shareholders’ equity.
The other financial instruments issued by the group qualify
for accounting purposes as debt instruments if the group
has a contractual obligation to deliver cash to the holders
of such instruments. This is the case, in particular, for all the
subordinated securities issued by the group.
3.9 Provisions
Provisions and reversals of provisions for risks are classified
by type under the corresponding item of income or
expenditure.
A provision is set aside whenever it is probable that an
outflow of resources representing economic benefits will be
necessary to extinguish an obligation arising from a past
event and when the amount of the obligation can be
estimated accurately. Where applicable, the net present
value of this obligation is calculated to determine the
amount of the provision to be set aside.
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The provisions constituted by the group cover, in particular:
- operating risks;
- employee commitments (see Note 3.12);
- execution risks on signature commitments;
- legal disputes and liability guarantees;
- tax risks; and
- risks related to home savings (see Note 3.10).
3.12 Employee benefits
These are fixed- or determinable-rate financial liabilities.
They are initially recognised at fair value and measured at
subsequent balance sheet dates at amortised cost using
the effective interest rate method, except in the case of
those recognised at fair value by option.
Employee benefits are recognised in accordance with IAS
19. Where applicable, employee obligations are recognised
under “Provisions for risks and charges”. Changes in such
provisions are recognised in the profit and loss account
under “Staff costs”.
Regulated savings contracts
• Post-employment defined benefit plans
Home savings accounts (comptes épargne logement CEL) and home savings schemes (plans épargne logement
- PEL) are French regulated products available to individual
customers. These products provide retail investors with
interest-bearing savings vehicles during a first phase, and
grant them access to a mortgage during a second phase.
These comprise retirement, early retirement and supplementary
retirement plans under which the group has a formal or
implicit obligation to provide employees with pre-defined
benefits.
These commitments are estimated on the basis of
customer behavioural statistics and market data. A
provision is set aside on the liability side of the balance
sheet to cover future charges related to the potentially
disadvantageous conditions of these products in
comparison with the interest rates offered to individual
customers for products that are similar but whose
remuneration is not regulated. This approach is carried out
by homogeneous generation in terms of the regulated
conditions for both products. The impact on the profit and
loss account is recorded as interest paid to customers.
Crédit Mutuel
Cash and cash equivalents comprise cash in hand, deposits
and demand loans and borrowings with central banks and
credit institutions.
For cash flow statement purposes, UCITS are classified
as an “operating” activity and are not therefore reclassified
as cash.
3.10 Amounts due to customers
and credit institutions
They generate two kinds of commitments for the
establishments that distribute them:
- a commitment to pay a fixed rate of interest in the future
on the savings (solely for home savings schemes, as the
interest rate on home savings accounts is comparable to
a variable rate and is periodically revised in accordance
with an indexation formula);
- a commitment to extend a loan based on predetermined
conditions to customers who request one (both
products).
126
3.11 Cash and cash equivalents
These obligations are calculated using the projected unit
credit method, which involves allocating entitlement to
benefits to periods of service by applying the contractual
formula for calculating plan benefits. Such entitlements are
then discounted using demographic and financial
assumptions such as:
- a discount rate, determined by reference to the rate on
long-term private-sector bonds as a function of the term
of the commitments;
- the rate of salary increases, assessed as a function of age
brackets, manager/non-manager classification and
regional characteristics;
- inflation rates, estimated by comparing treasury bond
rates and inflation-linked treasury bond rates at different
maturities;
- staff turnover rates, determined by age bracket, using the
three-year average for the ratio of resignations and
dismissals relative to the year-end number of employees
with permanent contracts;
- retirement ages: estimated on a case-by-case basis
using the actual or estimated date of commencement
of full-time employment and the assumptions set out in
the so-called Fillon law, with a ceiling set at 65 years of
age; and
- life expectancy rates set out in INSEE table TH/TF 00-02.
Differences arising from changes in these assumptions and
from differences between previous assumptions and actual
experience constitute actuarial differences. When the plan
is funded by assets, these are measured at fair value and
recognised in the profit and loss account for their expected
yield. Differences between actual and expected yields also
constitute actuarial differences.
The group has opted to set aside provisions so as to
recognise immediately to profit or loss any actuarial
differences, rather than to spread it over the residual active
life of employees. Any plan curtailments or terminations
generate a change in the obligation, which is recognised
immediately to the profit and loss account.
Post-employment defined contribution plans
Group entities contribute to various retirement plans
managed by independent organisations, to which they
have no formal or implicit obligation to make
supplementary payments in the event, notably, that the
fund’s assets are insufficient to meet its commitments.
As such plans do not represent a commitment for the
group, they are not subject to a provision. The charges are
recognised in the period in which the contribution is due.
Other long-term benefits
These represent benefits other than post-employment
benefits and end-of-service indemnities payable more
than 12 months after the end of the financial year in which
staff rendered the corresponding service. They include, for
example, long-service awards and time savings accounts.
The group’s commitment in respect of other long-term
benefits is measured using the projected unit credit
method. Actuarial differences are recognised immediately
through profit or loss as the corridor method cannot be
used.
Certain commitments in respect of long-service awards are
covered by insurance policies. Only the portion not covered
is provisioned.
• End-of-contract indemnities
These indemnities consist of benefits granted by the group
when an employment contract is terminated before the
usual retirement age or following the employee’s decision
to leave the group voluntarily in exchange for an indemnity.
End-of-contract indemnity provisions are discounted if
payment is expected to be made more than 12 months
after the balance sheet date.
• Short-term benefits
These are benefits, other than end-of-contract indemnities,
payable within the 12 months following the closing date and
include salaries, social security contributions and certain
bonuses.
A charge is recognised in respect of short-term benefits in
the period in which the services giving rise to the
entitlement to the benefit are provided to the entity.
3.13 Insurance activities
The accounting principles and measurement rules relating
to assets and liabilities arising from the writing of insurance
policies, including inwards and outwards reinsurance,
and financial contracts that include a discretionary profitsharing clause (which entitles subscribers to receive a share
of the entity’s financial results in addition to any
guaranteed remuneration) are in accordance with IFRS 4.
Other assets held and liabilities issued by fullyconsolidated insurance companies are recognised in
accordance with the rules common to all assets and
liabilities of the group. Financial assets representing
technical provisions relating to contracts denominated in
units of account are therefore presented under “Financial
assets at fair value through profit or loss” and the asset and
corresponding liability are measured on the closing date at
the realisable value of the investment instruments
concerned.
Moreover, contracts governed by IFRS 4 continue to be
recognised and consolidated in accordance with French
accounting standards and are measured and recognised in
accordance with the same rules, other than for certain
limited restatements. These are, notably, restatements
linked to the elimination of regulatory equalisation reserves
and the recognition of deferred interests in accordance
with the French regulations applied to valuation differences.
They relate mainly to provisions for the deferred sharing of
income relating to unrealised gains and losses recognised
on assets in accordance with IAS 39 (which, according
to IFRS 4, corresponds to the application of mirror
accounting: to reflect the share of such unrealised gains
and losses, the “discretionary income sharing component”
being recognised entirely in provisions and not in
shareholders’ equity). These provisions for the deferred
sharing of income are shown under assets or liabilities by
each legal entity and are not netted off between entities in
the consolidation scope. When on the asset side, they are
reported under a separate heading.
Annual report 2009
127
Apart from the various provisions recognised and reversed
on the liability side of the balance sheet, the other
transactions generated by these contracts are measured
and recognised in accordance with the same rules. These
relate notably to contract acquisition costs, receivables
and liabilities arising on contracts, advances on policies
and recourse and subrogation features resulting from
insurance and reinsurance contracts.
At the balance sheet date, a test is performed to determine
if the liabilities recognised in connection with the contracts
(net of other related assets and liabilities such as deferred
acquisition costs and portfolio securities acquired) are
adequate to cover estimated future cash flows at that date.
Any shortfall in technical provisions is recognised in the
profit and loss account for the period, and may
subsequently be reversed if appropriate.
The capitalisation reserve constituted free of tax in the
accounts of French companies as a result of the sale of
redeemable transferable securities, for the purpose of
deferring a part of the net gains realised in order to
maintain the actuarial return on the portfolio in line with the
contractual commitments, is cancelled on consolidation.
Movements in the reserve during the period are recognised
in the profit and loss account of the companies concerned
but are reversed in the consolidated profit and loss
account. As required by IAS 12, a deferred tax liability has
been recognised in relation to the effective reclassification
in shareholders’ equity of the capitalisation reserve. In
contrast, if there is a strong probability that profits will be
shared with policyholders, notably to reflect their
entitlements in respect of certain insurance portfolios of
group entities, a deferred profit share is recognised
following restatement of the capitalisation reserve.
Non-current assets are subsequently measured at amortised
historical cost, i.e. their cost less accumulated depreciation
and amortisation and any impairment.
When a non-current asset comprises several components
likely to be replaced at regular intervals, with different
uses or providing economic benefits over differing lengths
of time, each component is recognised separately from
the outset and is depreciated or amortised in accordance
with its own depreciation schedule. The component
approach is applied to both operating and investment
properties.
The depreciable or amortisable value of a non-current
asset is determined after deducting its residual value net of
disposal costs. As the useful life of non-current assets is
generally equal to their expected economic life, residual
values are not recognised.
Non-current assets are depreciated or amortised over
their estimated useful lives at rates reflecting the holding
entity’s estimated consumption of the assets’ economic
benefits. Intangible assets with an indefinite useful life are
not amortised.
Depreciation and amortisation charges on operating
non-current assets are recognised under “Provisions,
amortisation and depreciation for operating non-current
assets” in the profit and loss account.
Depreciation charges on investment properties are
recognised under “Expenses on other activities” in the
The following depreciation and amortisation periods
are used:
3.14 Non-current assets
Non-current assets reported on the balance sheet include
tangible and intangible assets used in operations as well as
investment properties. Operating non-current assets are
used for the production of services or for administrative
purposes. Investment properties are property assets held
to generate rental income and/or gains on the invested
capital. The historical cost method is used to recognise
both operating and investment properties.
Non-current assets are initially recognised at acquisition
cost plus any directly attributable costs required to bring
them into working order with a view to their use. Finance
charges incurred during the construction or transformation
of property assets are not capitalised.
128
Crédit Mutuel
Property, plant and equipment:
- Land improvements:
- Buildings – shell:
(depending on the type of building)
- Buildings – equipment:
- Fixtures and fittings:
- Office furniture and equipment:
- Safety equipment:
- Vehicles and moveable equipment:
- IT hardware:
15-30 years
20-80 years
10-40 years
5-15 years
5-10 years
3-10 years
3-5 years
3-5 years
Intangible assets:
- Software purchased or developed internally: 1-10 years
- Business goodwill acquired
9-10 years
(if customer contract portfolios acquired)
Depreciable non-current assets are tested for impairment
at each period end whenever there is evidence of loss of
value. Non-depreciable non-current assets such as lease
rights are tested for impairment once a year.
If evidence of impairment is found, the asset’s recoverable
amount is compared with its net carrying amount. In the
event of a loss of value, impairment is recognised in the
profit and loss account, thus modifying the basis for future
depreciation. Impairment losses are reversed if there is an
improvement in the estimated recoverable value or there is
no longer any evidence of impairment. The net carrying
amount following the reversal of an impairment provision
cannot exceed the net carrying amount that would have
been calculated if the impairment had not been
recognised.
Impairment charges on operating non-current assets are
recognised under “Provisions, amortisation and
depreciation for operating non-current assets” in the profit
and loss account.
Impairment charges and reversals on investment
properties are recognised in the profit and loss account
under “Charges on other activities” and “Income from other
activities”, respectively.
Gains or losses on disposals of operating non-current
assets are recorded in the profit and loss account on the
line “Net gains (losses) on other assets”.
Gains or losses on disposals of investment properties are
recorded in the profit and loss account on the lines
“Income from other activities” and “Charges on other
activities” respectively.
The fair value of investment property is disclosed in the
notes to the financial statements at the end of each
financial year end based on an appraisal carried out by
independent valuers.
3.16 Corporation tax
The tax charge includes all tax, both current and deferred,
chargeable in respect of the income for the period under
review.
Current taxes are determined in accordance with applicable
tax regulations.
The 2010 Finance Act repealed the local business tax (Taxe
Professionnelle) and replaced it by the Territorial Economic
Contribution (Contribution Economique Territoriale – CET),
which is composed of two different taxes: Real Property
Contribution (Cotisation Foncière des Entreprises - CFE)
and Contribution on the Added Value (Cotisation sur la
Valeur Ajoutée des Entreprises - CVAE). Based on the
recommendation issued by the French National
Accounting Board (Conseil National de la Comptabilité –
CNC) on 14 January 2010, the group elected to treat this
contribution as an operating charge and, accordingly, did
nor recognise any deferred taxes in the consolidated
financial statements.
Deferred tax
As required by IAS 12, deferred taxes are calculated in
respect of temporary differences between the value on the
consolidated balance sheet of an asset or liability and its
tax value, with the exception of goodwill.
Deferred taxes are calculated using the liability method,
applying the corporation tax rate known at the end of the
period and applicable to subsequent years.
Deferred tax assets net of deferred tax liabilities are
recorded only when there is a high probability that they will
be utilised. Current or deferred tax is recognised as income
or a charge, except for that relating to unrealised or
deferred gains or losses recognised in shareholders’ equity,
for which the deferred tax is allocated directly to
shareholders’ equity.
3.15 Fees and commissions
Fees and commissions in respect of services are recorded
as income and charges according to the nature of the
services involved.
Fees and commissions linked directly to the grant of a loan
are amortised (see Note 3.1).
Fees and commissions remunerating a service provided on
a continuous basis are recognised to profit or loss over the
period during which the service was provided.
Fees and commissions remunerating a significant service
are recognised to profit or loss in full upon execution of the
service.
Deferred tax assets and liabilities are netted if they arise in
the same entity or in the same tax group subject to the
same tax authority and if there is a legal right of set off.
Deferred tax is not discounted.
3.17 Interest payable by the State on certain loans
In the context of government measures to assist the
agricultural sector and the rural economy, and to assist with
home purchases, certain group entities grant loans at
reduced rates that are set by the State. Such entities
therefore receive State subsidies equivalent to the
Annual report 2009
129
differential between the interest rate granted to the
customer and a pre-determined benchmark rate.
Accordingly, these subsidised loans are not discounted.
The terms and conditions of the compensation mechanism
are periodically re-examined by the State.
The State subsidies received are recognised under “Interest
and similar income” and are spread over the term of the
relevant loans, in accordance with IAS 20.
3.18 Financial guarantees and financing
commitments
A financial guarantee is similar to an insurance policy if it
provides for a specific payment to be made to reimburse
the holder of the guarantee for a loss incurred as the result
of the failure of a specific debtor to make a payment on
maturity of a debt instrument.
In accordance with IFRS 4, such financial guarantees
continue to be measured using French accounting
standards, i.e. they are treated as off-balance sheet items
until such time as the current standards are revised.
Accordingly, they are subject to a provision for liabilities if
an outflow of resources is probable.
By contrast, financial guarantees requiring a payment
to be made in the event of a change in a financial
variable (price, rating, credit index, etc.) or a non-financial
variable, provided that in such a case the variable is not
specific to one of the parties to the contract, are covered
by IAS 39 and are therefore treated as derivative
instruments.
Financing commitments that are not considered as
derivatives within the meaning of IAS 39 are not shown on
the balance sheet. However, they give rise to provisions in
accordance with the provisions of IAS 37.
3.19 Transactions denominated in foreign
currencies
Financial assets and financial liabilities denominated in a
currency other than the local currency are translated at the
exchange rate ruling at the balance sheet date.
Monetary financial assets and liabilities
Foreign exchange gains and losses arising on the
translation of such items are recognised to profit or loss
account under “Net gains (losses) on portfolios at fair value
through profit or loss”.
130
Crédit Mutuel
Non-monetary financial assets and liabilities
Foreign exchange gains and losses arising on the
translation of non-monetary assets and liabilities are
recognised to profit or loss under “Net gains (losses) on
portfolios at fair value through profit or loss” if the item is
classified at fair value through profit or loss, or under
“Unrealised or deferred gains or losses” if the item is
classified under available-for-sale financial assets.
When consolidated securities denominated in a foreign
currency are funded by a borrowing in the same foreign
currency, the future cash flows relating to the borrowing are
hedged.
Accounting estimates requiring the formulation of
assumptions are used mainly for measurement of the
following items:
- fair value of financial instruments not quoted on an active
market. The distinction between an active and not active
market, the definition of a forced transaction, and the
definition of an observable parameter all require the
exercise of judgement (see Note 3.4 Securities);
- retirement plans and other future employee benefits;
- permanent impairment losses;
- impairment of receivables;
- provisions;
- impairment of intangible assets and goodwill; and
- deferred tax assets.
Asset Management and Private Banking comprises two
activities:
- asset management: fund management (UCITS, real
estate funds), employees savings schemes, custody and
depositary services for its own customer base, as
opposed to that of the network; and
- private banking: wealth management and estate
planning.
Note 4: Segment reporting (IFRS 8)
• Segment reporting by geographic zone (secondary level)
In terms of segment reporting, the group has two levels of
disclosure that are based on the group’s own internal
reporting system. Data by sector of activity is the primary
level and data by geographic sector is the secondary level.
Three geographic zones have been defined for this
secondary level of reporting:
- France;
- rest of Europe; and
- rest of world.
3.20 Non-current assets classified as held for sale
and discontinued operations
Non-current assets and or groups of assets are classified
as held for sale if their carrying amount will be recovered
through a sale and provided a sale is highly probable and
likely to be completed within the next 12 months.
The related assets and liabilities are presented on two distinct
balance sheet lines under, respectively, “Non-current
assets classified as held for sale” and “Liabilities directly
associated with assets classified as held for sale”. They are
recognised at the lower of their carrying amount and their
fair value less the costs to sell, and are no longer
depreciated or amortised.
Any recognised impairment loss on such assets and
liabilities is recognised to profit and loss.
Discontinued operations are a component of an entity that
either has been disposed of or is classified as held for sale,
or they correspond to a subsidiary acquired exclusively with
a view to resale. They are shown on a separate line of the
profit and loss account under “Gains and losses on
discontinued operations, net of tax”.
3.21 Judgements and estimates used in
preparation of the financial statements
The preparation of the group’s financial statements
necessitates the formulation of assumptions in order to
effect the required measurements, which carry risks and
uncertainties concerning their future outcome.
The future outcome of such assumptions may be
influenced by several factors, in particular:
- the activities of national and international markets;
- changes in interest rates and foreign exchange rates;
- economic and political conditions in certain business
sectors or countries; and
- regulatory and legislative changes.
Other Activities comprise technical support subsidiaries
that cannot be included in the retail banking segment
(technology, electronic payments, media, travel).
Transactions between the different operating segments are
carried out at market conditions.
• Segment reporting by activity (primary level)
Sector data for the Crédit Mutuel group is organised into
five operating segments:
- Retail Banking;
- Corporate and Investment Banking;
- Insurance;
- Asset Management and Private Banking; and
- Other Activities.
Retail Banking covers the network of Crédit Mutuel’s local
mutual banks, CIC's regional banks as well as all the
specialised activities marketed through the network: all
business banking (other than for large corporates), finance
and property leasing, factoring, real estate, etc.
Corporate and Investment Banking comprises the following
activities:
- corporate banking, which covers banking and related
services provided to large companies through a specific
department or subsidiary; and
- investment banking, which covers market activities,
merchant banking, venture capital, private equity,
financial intermediation, mergers and acquisitions, etc.
Insurance comprises the life and non-life insurance
activities (life insurance, property and casualty insurance
and insurance brokerage).
The geographic analysis of assets and earnings is based on
the country in which the activities are recorded for
accounting purposes.
Note 5: Related parties
Parties related to the Crédit Mutuel group are the
consolidated companies, including companies accounted
for using the equity method, and the third-level
administrative entities (Caisse Centrale du Crédit Mutuel
and Confédération Nationale du Crédit Mutuel).
Transactions between the Crédit Mutuel group and related
parties are carried out at the normal market conditions
prevailing at the time of the transaction.
The list of consolidated companies is provided in note 1.2.
As transactions carried out and any outstandings at the
end of the period between group companies consolidated
using the full method are eliminated on consolidation, only
transactions between companies over which the group
exercises joint control (consolidated using the proportional
method) are included in the tables in the notes for the
portion not eliminated on consolidation, and transactions
between companies over which the group exercises
considerable influence, consolidated using the equity
method, are included in the tables in the notes.
Annual report 2009
131
Note 6: Standards and interpretations adopted by the european union not yet applied due
to their application date
IAS / IFRS
Title
Application date
2 - Financial data
The notes to the financial statements are expressed in millions of euro
unless indicated otherwise.
Impact of application
1. Notes to the statement of financial position
IFRS
IAS 27
Note 1: Cash in hand, balances with central banks and post office accounts
Consolidated and Separate Financial Statements
Effective for annual periods beginning
on or after 1 January 2010
Impact already anticipated
in the case of a partial
disposal of an investment
in a subsidiary while control
is retained
IFRS 3 revised
Business Combinations
No impact on opening
balance sheet
IAS 32
Financial Instruments: Presentation – Disclosure
Amendment concerns
the classification of rights
issues
IAS 39
Financial Instruments: Recognition
and Measurement (amendment relating
to elements eligible for hedging)
Not material
IFRIC 12
Service Concession Arrangements
Not concerned
IFRIC 15
Agreements for the Construction of Real Estate
Not concerned
1a - Loans and advances to credit institutions
31.12.2009
31.12.2008
9,412
1,810
1,262
16,939
1,869
1,151
Total
10,674
18,090
Crédit Mutuel network accounts (1)
Other ordinary accounts
Loans
Other receivables
Securities not listed on an active market
Repurchase agreements
Loans having given rise to specific provisions
Accrued interest
Provisions
27,809
3,103
3,569
1,074
6,107
855
1,706
649
(548)
28,865
2,575
5,877
1,223
9,024
739
376
399
(344)
Total
44,324
48,734
31.12.2009
31.12.2008
1,265
1,265
2,319
2,319
1,637
31,289
893
4,842
139
1,688
49,190
711
2,182
259
38,800
54,030
Cash in hand, balances with central banks and post office accounts
Central banks
of which mandatory reserves
Cash in hand, post office accounts
(1) Relates mainly to outstandings with CDC (LEP, Codevi, Livret Bleu)
IFRIC 16
Hedges of a Net Investment in a Foreign Operation
Not material
IFRIC 17
Distributions of Non-cash Assets to Owners
Not concerned
IFRIC 18
Transfers of Assets from Customers
Not concerned
1b - Amounts due to credit institutions
Central banks
Total
Crédit Mutuel network accounts
Other ordinary accounts
Loans
Others liabilities
Repurchase agreements
Accrued interest
Total
132
Crédit Mutuel
Annual report 2009
133
• Financial liabilities at fair value by option through profit or loss
Note 2: Financial assets and liabilities at fair value through profit or loss
2a - Financial assets at fair value through profit or loss
31.12.2009
31.12.2009
Trading
Securities(1)
- Government securities
- Bonds and other fixed-income securities
. Listed
. Not listed
- Shares and other variable-yield securities
. Listed
. Not listed
Trading derivatives
of which repurchase agreements
Total
19,744
4,768
12,474
12,474
2,502
2,502
8,445
28,189
Fair value
by option
29,733
160
8,233
7,991
242
21,340
19,333
2,007
15,072
14,974
44,805
Carrying
amount
31.12.2008
Total
49,477
4,928
20,707
20,465
242
23,842
21,835
2,007
8,445
15,072
14,974
67,994
Trading
20,013
4,273
15,200
15,194
6
540
540
8,124
28,137
Fair value
by option
28,951
167
11,985
11,051
934
16,799
15,060
1,739
12,169
12,028
41,120
Total
48,964
4,440
27,185
26,245
940
17,339
15,600
1,739
8,124
12,169
12,028
69,257
The maximum exposure to credit risk on loans and receivables classified at fair value by option through profit and loss
amounted to €43,510 million in 2009.
2b - Financial liabilities at fair value through profit or loss
Financial liabilities held for trading purposes
Financial liabilities at fair value by option through profit or loss
Total
31.12.2009
31.12.2008
10,083
38,267
14,907
33,427
48,350
48,334
Debt securities
Due to credit institutions
Due to customers
Total
Short sales of securities
- Shares and other variable-yield securities
Debt securities under repurchase agreements
Trading derivatives
Other financial liabilities held for trading purposes
Total
134
Crédit Mutuel
31.12.2009
31.12.2008
4,169
3,496
673
5,572
342
3,568
3,316
252
8,150
3,189
10,083
14,907
31.12.2008
Total
Carrying
amount
Amount due
at maturity
Total
3,819
27,197
7,251
3,811
27,178
7,250
8
19
1
3,777
28,576
1,074
3,763
28,499
1,073
14
77
1
38,267
38,239
28
33,427
33,335
92
2c - Fair value hierarchy
Financial assets
• Available for sale
- Government securities – Available for sale
- Bonds and other fixed-income securities - Available for sale
- Shares and other variable-yield securities - Available for sale
- Participating interests and other long-term investments – Available for sale
- Investments in related companies
• Trading and fair value option
- Government securities - Trading
- Government securities - Fair value option
- Bonds and other fixed-income securities - Trading
- Bonds and other fixed-income securities - Fair value option
- Shares and other variable-yield securities - Trading
- Shares and other variable-yield securities - Fair value option
- Loans and receivables from credit institutions - Fair value option
- Loans and receivables from customers - Fair value option
- Derivatives and other financial assets - Trading
• Derivative instruments entered into for hedging purposes
Total
• Financial liabilities held for trading purposes
Amount due
at maturity
Financial liabilities
• Trading and fair value option
- Due to credit institutions - Fair value option
- Due to customers - Fair value option
- Debt securities - Fair value option
- Subordinated debt - Fair value option
- Derivatives and other financial liabilities - Trading
• Derivative instruments entered into for hedging purposes
Total
Level 1
Level 2
Level 3
Total
94,615
15,501
69,931
7,898
1,284
1
39,790
4,671
160
8,472
3,970
2,486
19,750
281
2
5,329
4,966
308
55
25,919
97
3,562
4,192
7,385
7,687
2,996
2,050
2,491
1,427
52
568
444
2,285
440
71
16
1,590
168
1
102,435
15,501
76,324
7,950
2,160
500
67,994
4,768
160
12,474
8,233
2,502
21,340
7,385
7,687
3,445
2,053
134,407
33,298
4,777
172,482
4,617
4,617
52
43,708
27,197
7,251
3,819
5,441
5,333
25
25
28
48,350
27,197
7,251
3,819
10,083
5,413
4,669
49,041
53
53,763
- Level 1: values based on quoted prices on an active market
- Level 2: values based on quoted prices on an active market or on valuation models for which key model inputs derive from observable market data
- Level 3: values based on internal models for which some key model inputs are unobservable data.
In 2009, there was no material transfer (i.e. exceeding 10% total assets or total liabilities) from level 1 to level 2 or from level 2 to level 1.
As required by IFRS 7, financial assets available for sale are analysed in the above table for the first time in 2009.
Annual report 2009
135
Note 4: Breakdown of derivatives
Fair value hierarchy - Details of level 33
Opening
balance
Purchases
Issue
Sales
Closing
balance
Transfers
Gains and
losses to P&L
Gains and
losses to
equity
Other
Closing
balance
1,573
102
-
(87)
-
(1)
23
-
(20)
1,590
31.12.2009
Shares and other
variable -yield securities Fair value option
In 2009, there was no material transfer (i.e. exceeding 10% total for the asset category) from level 1 or level 2 to level 3 or
from level 3 to level 1 or level 2.
Note 3a: Hedging
3a -Instruments dérivés de couverture
31.12.2009
Assets
Liabilities
Cash flow hedges
Fair value hedges (change through profit or loss)
Total
31.12.2008
Assets
Liabilities
9
2,044
140
5,273
3
4,981
134
8,483
2,053
5,413
4,984
8,617
The ineffective portion recognised in profit or loss is not material.
No amounts relating to changes in cash flow were recognised in profit or loss.
3b - Revaluation difference on portfolios hedged against interest rate riskx
Fair value
31.12.2009
31.12.2008
Fair value of interest rate risk by portfolio
- Financial assets
- Financial liabilities
136
Crédit Mutuel
882
(1,811)
729
(1,414)
Change in fair value
Notional
Trading derivatives
Interest rate instruments
Swaps
Other firm contracts
Options and conditional instruments
Foreign exchange instruments
Swaps
Other instruments
Swaps
Sub-total
Hedging derivatives
Fair Value Hedges
Swaps
Cash Flow Hedges
Swaps
Sub-total
Total
Assets
31.12.2008
Liabilities
Notional
Assets
Liabilities
372,094
15,736
64,267
2,031
24
475
4,375
1
477
433,746
27,502
55,085
6,447
120
735
6,892
19
343
231
14,799
21
147
158
43
123
158
205
11,603
76
365
182
100
334
180
24,090
6,078
14,394
511,689
289
300
3,445
230
3
162
5,572
29,744
4,506
4,569
566,960
27
172
8,124
24
11
247
8,150
82,048
14
1,991
53
5,273
-
63,369
90
4,920
61
8,483
-
710
82,772
8
1
2,053
140
5,413
86
63,545
3
4,984
134
8,617
594,461
5,498
10,985
630,505
13,108
16,767
153
(397)
Annual report 2009
137
Note 5: Financial assets available for sale
Note 6: Customers
5a - Financial assets available for sale
6a - Customer loans and receivables
31.12.2009
31.12.2008
15,323
75,726
74,166
1,560
7,985
7,279
706
2,616
1,494
663
459
785
14,600
71,692
68,697
2,995
6,616
6,075
541
2,483
1,366
658
459
744
102,435
96,135
78
67
(1,895)
1,023
(1,439)
259
(990)
888
Government securities
Bonds and other fixed-income securities
- Listed
- Not listed
Shares and other variable-yield securities
- Listed
- Not listed
Long-term investments
- Investments in associates
- Other long-term investments
- Investments in related undertakings
- Securities lent
- Non-performing current account advances
Accrued interest
Total
o/w unrealised gains or losses recognised in shareholders' equity
o/w impaired bonds
o/w provisions for impairment
o/w listed investments
31.12.2009
31.12.2008
Performing receivables
• Receivable-related claims
• Other customer loans and advances
- Home loans
- Other loans and receivables including repurchase agreements
• Accrued interest
• Securities not quoted on an active market
Insurance and reinsurance receivables
Loans having given rise to specific provisions
Gross loans and advances
Specific provisions
General provisions
289,772
4,177
284,422
159,402
125,020
815
358
237
13,056
303,065
(7,571)
(535)
283,824
5,313
277,283
155,205
122,078
888
340
270
8,810
292,904
(5,449)
(643)
SUB-TOTAL I
294,959
286,812
9,694
6,391
3,102
201
(142)
9,552
9,138
6,293
2,680
165
(113)
9,025
304,511
295,837
27
173
21
155
Finance leases (net investment)
• Equipment
• Property
• Receivables having given rise to specific provisions
SUB-TOTAL II
TOTAL
Of which participating loans
Of which subordinated loans
(1) In 2009, customer loans and advances contributed by acquisitions amount to €7.8 billion.
5b – List of main unconsolidated investments
Républicain Lorrain
Caisse de Refinancement de l'Habitat (CRH)
Banca di Legnano
Crédit Logement
Veolia
Foncière des Régions
BMCE Bank
Not listed
Not listed
Not listed
Not listed
Listed
Listed
Listed
% held
Shareholders'
equity*
Total
Assets*
Net banking
income
or revenue*
Net profit
or loss*
100%
< 34%
< 10%
< 10%
< 5%
< 5%
< 5%
65
182
1,217
1,430
9,532
5,797
733
89
38,525
4,616
11,671
49,126
17,447
13,341
82
8
n/a
169
36,206
1,094
534
(2)
4
67
85
709
(832)
127
Finance leases with customers
Gross carrying amount
Impairment of uncollectable lease payments
Net carrying amount
31.12.2008
Increase
Decrease
Other
31.12.2009
9,138
(113)
9,025
1,596
(55)
1,541
(1,051)
26
(1,025)
11
11
9,694
(142)
9,552
The above information, except for percentages held, relates to 2008.
138
Crédit Mutuel
Annual report 2009
139
Note 8: Change in impairment provisions
6b – Amounts due to customers
31.12.2009
31.12.2008
• Regulated savings deposits
- On demand
- Term (1)
• Liabilities associated with savings deposits
Sub-total
• Demand accounts
• Term accounts and borrowings
• Repurchase agreements
• Related liabilities
• Insurance and reinsurance liabilities
Sub-total
104,340
69,450
34,890
106
104,446
64,809
46,263
1,876
948
89
113,985
97,529
67,586
29,943
96
97,625
57,200
40,382
326
860
114
98,882
Total
218,431
196,507
31.12.2008
Loans and receivables due from credit institutions
Customer loans and receivables
Securities available for sale
Securities held to maturity
Total
Charges Write-backs
Other
31.12.2009
(344)
(6,205)
(990)
(151)
(221)
(2,556)
(92)
(11)
9
1,351
224
146
8
(838)
(1,037)
(2)
(548)
(8,248)
(1,895)
(18)
(7,690)
(2,880)
1,730
(1,869)
(10,709)
(1) The increase was due mainly to a €3.7 billion transfer in Germany from non-regulated term deposits having matured to regulated term deposits offering attractive terms.
Note 9: Reclassifications of financial instruments
Note 7: Financial assets held to maturity
There was no reclassification in 2009. The information below concerns reclassifications made in 2008.
Assets reclassified
31.12.2009
31.12.2008
31.12.2009
Carrying value
• Securities
- Government securities
. Listed
. Not listed
. Conversion
• Accrued interest
Total – gross
Of which written down for impairment
Total – net
140
Crédit Mutuel
12,439
791
11,648
11,089
559
79
12,518
13,706
1,332
12,374
10,341
2,033
155
13,861
26
(18)
158
(151)
12,500
13,710
Fair value
31.12.2008
Carrying value
Fair value
Portfolio of loans and receivables
Portfolio of financial assets available for sale
7,121
13,590
6,763
13,590
8,730
15,436
7,986
15,436
Total
20,711
20,353
24,166
23,422
31.12.2009
31.12.2008
Gains (losses) that would have been recognised
to profit or loss in application of fair value rule had
the assets not been reclassified
1,468
(973)
Gains (losses) that would have been recognised
to equity had the assets not been reclassified
(849)
(256)
Gains (losses) recognised to profit or loss
in respect of reclassified assets
(410)
(35)
Annual report 2009
141
Note 10: Taxes
Note 11: Accrual accounts and other assets and liabilities
10a - Current taxes
11a - Prepayments, accrued income and other assets
31.12.2009
31.12.2008
1,740
658
1,785
504
Current tax assets (to profit or loss)
Current tax liabilities (to profit or loss)
Prepayments and accrued income
Securities collection accounts
Currency adjustment accounts
Accrued income
Sundry accruals
Sub-total
Other assets
Settlement accounts on securities transactions
Other debtors (1)
Inventories and similar
Sundry
Sub-total
Other assets of insurance companies
Other
Sub-total
10b - Deferred taxes
31.12.2009
31.12.2008
1,284
286
769
165
1,402
774
937
21
Deferred tax assets (to profit or loss)
Deferred tax assets (to equity)
Deferred tax liabilities (to profit or loss)
Deferred tax liabilities (to equity)
Total
31.12.2009
31.12.2008
1,048
419
511
2,858
1,036
96
620
3,646
4,836
5,398
232
13,382
66
(9)
13,671
296
10,453
28
2
10,779
405
405
2,461
2,461
18,912
18,638
(1) 2008 has been restated for the "deferred profit-share", which is now shown as an asset on the balance sheet (summary statement).
11b - Accrued charges, deferred income and other liabilities
Breakdown of deferred tax by main category
31.12.2009
Assets Liabilities
• Tax losses carried forward
• Temporary differences
- Deferred gains or losses on available-for-sale securities
- Other unrealised or deferred gains or losses
- Provisions
- Unrealised finance leasing reserve
- Results of transparent companies
- Other temporary differences
• Offsetting
Total deferred tax assets and liabilities
31.12.2008
Assets Liabilities
522
2,076
376
28
508
1
1,163
(1,028)
1,962
227
10
79
3
1,643
(1,028)
658
1,830
780
347
6
697
(313)
1,272
21
210
34
12
995
(313)
1,570
934
2,175
959
Deferred tax is calculated using the liability method. For French companies, the deferred tax rate is 34.43%
Accrued charges and deferred income
Blocked accounts on collection transactions
Currency adjustment accounts
Accrued charges
Sundry accruals
Sub-total
Other liabilities
Settlement accounts on securities transactions
Payments to be made on securities
Other creditors
Sub-total
Other liabilities of insurance companies
Security deposits and guarantees received
Other
Sub-total
Total
142
Crédit Mutuel
31.12.2009
31.12.2008
1,022
641
1,031
8,034
10,778
606
1,698
959
9,542
12,805
368
252
3,603
4,223
428
134
3,772
4,334
145
145
136
136
15,146
17,275
Annual report 2009
143
Note 12: Investments in companies accounted for using the equity method
Note 14: Non-current assets
Share in net profit or loss of companies accounted for using the equity method
14a - Property, plant and equipment
31.12.2009
31.12.2008
Increase
Decrease
Other
changes
31.12.2009
462
4,310
2,350
7,122
38
346
335
719
(102)
(246)
(348)
4
142
59
205
504
4,696
2,498
7,698
(1)
(2,117)
(1,646)
(3,764)
(224)
(239)
(463)
58
126
184
(82)
(7)
(89)
(1)
(2,365)
(1,766)
(4,132)
3,358
256
(164)
116
3,566
31.12.2008
Investment
Share of net
profit or loss
Investment
Share of net
profit or loss
RMA Watanya
BPM
RACC
Banque de Tunisie
Other
198
172
85
46
15
19
9
1
8
(15)
194
14
42
21
7
3
Total
516
22
257
24
Cost
Land used in operations
Buildings used in operations
Other property, plant and equipment
Total
Depreciation and impairment
Land used in operations
Buildings used in operations
Other property, plant and equipment
Total
Net carrying amount
Other changes relate mainly to acquisitions made in 2009, notably EBRA group.
Note 13: Investment property
Of which buildings rented under finance leases
31.12.2008
Increase
Decrease
Other
31.12.2009
Historical cost
1,542
(214)
350
(32)
(70)
3
54
(9)
1,876
(252)
Gross carrying amount
Net carrying amount
1,328
318
(67)
45
1,624
Total
31.12.2008
Increase
Decrease
changes
31.12.20099
177
(56)
(2)
-
29
(3)
206
(61)
121
(2)
-
26
145
31.12.2008
Increase
Decrease
Other
changes
31.12.2009
27
1,367
372
995
1,394
30
204
53
151
234
(1)
(69)
(8)
(61)
(70)
2
401
285
116
403
58
1,903
702
1,202
1,961
(593)
(320)
(273)
(593)
(127)
(74)
(53)
(127)
25
7
18
25
(22)
(23)
1
(22)
(717)
(410)
(307)
(717)
801
107
(45)
381
1,244
The fair value of property recognised at cost came to €2,046 MILLION AT 31 December 2009 (€1,750m at 31 December 2008).
14b - Intangible assets
Historical cost
. Non-current assets produced internally
. Non-current assets acquired
- Software
- Other
Total
Amortisation and impairment
Non-current assets produced internally
. Non-current assets acquired
- Software
- Other
Total
Net carrying amount
Other changes relate mainly to acquisitions made in 2009, notably Cofidis, Monabanq and EBRA group.
144
Crédit Mutuel
Annual report 2009
145
Note 17: Insurance technical reserves
Note 15: Goodwill
Subsidiaries
Carrying amount
of goodwill
at 31.12.2008
Increase
Decrease
Impairment
Carrying amount
of goodwill
at 31.12.2009
Cofidis/Monabanq
UFG/La Française des Placements
Citibank
Groupe CIC
Procapital
Fortunéo
NRJ Mobile
Other
2
2,800
515
122
107
78
228
406
159
193
(40)
-
(124)
406
161
2,760
515
122
107
78
297
Total
3,852
758
(40)
(124)
4,446
31.12.2009
31.12.2008
Life
Non-life
Unit-linked
Other
80,285
2,376
11,720
289
73,258
2,389
9,347
280
Total
94,670
85,274
Note 18: Provisions
• Acquisition of Cofidis Participations group
The group took control of Cofidis Participations group in
March 2009. This was accomplished by acquiring 51% of
the capital of Cofidis Participations through Carmen
Holding Investissement, a holding company controlled by
BFCM (67% of the capital) and 3 Suisses Internationale
(3SI) (33% of the capital). Under existing agreements,
BFCM has the possibility to increase its interest in Cofidis
Provisions
Participations to 67% of the capital and voting rights by
2016 at the initiative of one or other of the parties.
2009
Price including acquisition costs
Fair value of assets acquired
and liabilities assumed
Goodwill on acquisition
31.12.2008
Increases
663
274
389
Provisions for retirement commitments
Provisions for risks
Other
Total
Reversals
for the
period
(used)
Reversals
for the
period
(not used)
Other
changes
31.12.2009
249
455
641
94
199
242
(11)
(50)
(41)
(59)
(70)
(71)
29
(6)
11
302
528
782
1,345
535
(102)
(200)
34
1,612
Reversals
for the
period
(used)
Reversals
for the
period
(not used)
Other
changes
31.12.2008
Note 16: Debt securities
2008
146
Crédit Mutuel
31.12.2009
31.12.2008
Certificates of deposit
Interbank certificates and negotiable debt securities
Bonds
Accrued interest
831
77,820
37,995
934
696
93,540
38,817
1,320
Provisions for retirement commitments
Provisions for risks
Other
Total
117,580
134,373
Total
31.12.2007
Increases
249
346
545
12
182
221
(12)
(20)
(25)
(9)
(68)
(109)
9
15
9
249
455
641
1,140
415
(57)
(186)
33
1,345
Annual report 2009
147
Note 19: Subordinated debt
• Provisions for home savings accounts and schemes
0-4 years 4-10 years +10 years
Deposits in respect of home savings schemes during the savings phase
Provisions in respect of home savings schemes
Deposits taken on home savings accounts during the savings phase
Provisions in respect of home savings accounts
Provisions set aside in respect of home-savings products
Reversal of provisions set aside in respect of home-savings products
3,104
61
7,801
-
Total
6,699
40
17,604
101
4,438
89
(9)
34
Outstanding loans granted in respect of home-savings products
Provisions in respect of these loans
1,818
55
Subordinated debt
Participating loans
Perpetual subordinated debt
Other debt*
Accrued interest
Total
31.12.2009
31.12.2008
4,901
162
2,072
127
109
4,972
161
3,294
124
7,371
8,551
* Other debt relates to EBRA group
Home saving scheme deposits excluding the Capital range of products.
• Principal subordinated debt issues (in € thousands)
• Commitments for retirement and similar benefits
31.12.2008
Increases
Reversals
Other
changes
Obligations relating to defined benefit retirement plans
and similar, excluding pension funds
Retirement indemnities
87
Top-up retirement benefits
98
Premiums linked to long-service awards
(other long-term benefits)
56
Total recognised
241
Top-up defined benefit plans covered
by the group's retirement funds
Commitments to employees and retired employees
8
Fair value of assets
Total recognised
8
76
5
(8)
(1)
(41)
8
114
110
9
90
(1)
(10)
4
(29)
68
292
3
3
-
(1)
(1)
10
10
Total
93
(10)
(30)
302
249
31.12.2009
Issuer
Banque Fédérative du Crédit Mutuel
Type
Date
of issue
Amount
issued
Amount
outstanding
at year-end
Maturity
date
Redeemable
Redeemable
Redeemable
Redeemable
Redeemable
Redeemable
Redeemable
Redeemable
Redeemable
Redeemable
Redeemable
Perpetual
December 2006
December 2008
September 2003
July 2001
December 2002
February 2004
June 2008
December 2007
May 2007
May 2006
September 2008
July 2004
624,314
500,000
500,000
400,000
300,000
300,000
300,000
300,000
300,000
300,000
267,309
250,000
624,314
500,000
500,000
400,000
300,000
300,000
300,000
300,000
300,000
300,000
267,309
250,000
December 2016
December 2016
September 2015
July 2013
July 2013
September 2015
June 2016
December 2015
May 2017
February 2016
September 2018
Undated
Other changes relate mainly to Targo Bank.
Discount rates
Discount rates based on maturity of commitments
at level of regional groups
148
Crédit Mutuel
31.12.2009
31.12.2008
3.6% to 5.0%
3.9% to 5.6%
Annual report 2009
149
Note 20: Shareholders' equity and reserves
Note 21: Commitments given and received
Shareholders' equity - group share (excluding unrealised gains or losses)
31.12.2009
31.12.2008
Financing commitments
Commitments given to credit institutions
Commitments given to customers
1,860
54,444
1,758
47,236
Guarantee commitments
Commitments given to credit institutions
Commitments given to customers
4,776
15,742
3,282
16,090
2,019
2,321
31.12.2009
31.12.2008
Financing commitments
Commitments received from credit institutions
Commitments received from customers
18,006
-
8,146
14
Guarantee commitments
Commitments received from credit institutions
Commitments received from customers
25,976
14,292
25,594
11,077
1,565
2,273
Commitments given
31.12.2009
31.12.2008
• Capital and capital reserves
- Share capital
- Share premium
• Consolidated reserves
- Legal reserve
- Contractual and statutory reserves
- Regulated reserves
- Translation reserves
- Other reserves (including impact of first-time adoption)
- Retained earnings
8,735
8,696
39
19,047
12
(25)
19,037
23
6,826
6,787
39
18,920
12
(47)
18,882
73
Total
27,782
25,746
Commitments on securities
Securities acquired under resale agreements
Other commitments given
Commitments received
Unrealised or deferred gains and losses
Unrealised or deferred gains or losses(*) on:
- Available-for-sale assets
- Cash flow hedges
- Other
Total
* Net of tax and after adjustment for mirror accounting
150
Crédit Mutuel
31.12.2009
31.12.2008
78
(76)
1
(1,439)
(73)
2
3
(1,510)
Commitments on securities
Securities sold under repurchase agreements
Other commitments received
Cofidis contributed €5,096 million towards the increase in financing commitments given to customers
Annual report 2009
151
2. Notes to the income statement
Note 24: Net gains (losses) on financial instruments at fair value through profit or loss
Note 22: Interest and similar income and charges
31.12.2009
31.12.2008
Income
Charges
Income
Charges
Credit institutions and central banks
Customers
- Of which finance leases
Hedging derivative instruments
Debt securities
Subordinated debt
2,041
16,738
3,062
2,236
881
369
-
(1,918)
(6,705)
(2,630)
(2,984)
(3,029)
(237)
4,534
15,978
3,028
3,272
1,503
251
-
(4,826)
(7,648)
(2,560)
(2,748)
(6,191)
(155)
Total
22,265
(14,873)
25,538
(21,568)
Of which interest income and charges calculated
at the effective interest rate
Of which interest on liabilities at amortised cost
20,029
(11,889)
(11,889)
22,266
-
(18,820)
(18,820)
Trading instruments
Instruments at fair value by option
Ineffective portion of hedges
- On cash flow hedges
- On fair value hedges
. Change in fair value of hedged items
. Change in fair value of hedging items
Foreign exchange gain (loss)
Total changes in fair value
Of which trading derivatives
Including €42 million estimated based on a valuation
model comprising non-observable market data
31.12.2009
31.12.2008
569
(6)
(35)
2
(37)
586
(623)
71
503
(626)
78
78
854
(776)
57
599
12
(1,415)
(150)
L'impact des acquisitions sur les produits d'intérêts nets est de 1,4 Mds €.
Note 23: Fees and commissions
Note 25: Net gains (losses) on financial assets available for sale
31.12.2009
31.12.2008
Income
Charges
Income
Charges
Credit institutions
Customers
Securities
Of which activities managed on behalf of third parties
Derivative instruments
Foreign exchange
Loan commitments and guarantee obligations
Services rendered
26
1,229
909
577
11
21
45
2,170
(8)
(20)
(75)
(11)
(4)
(10)
(941)
30
1,087
860
575
14
30
19
1,694
(6)
(28)
(62)
(23)
(17)
(5)
(978)
Total
4,411
(1,069)
3,734
(1,119)
Dividends
31.12.2009
Gains/losses
Impairment
realised
Total
Government securities, bonds
and other fixed-income securities
Other
20
83`
-
(78)
6
1
(1)
(5)
(39)
-
(78)
21
45
(1)
Total
103
(72)
(44)
(13)
31.12.2008
Gains/losses
Impairment
realised
Total
Acquisitions had an impact of €0.6 billion on net fees and commissions.
Dividends
152
Crédit Mutuel
Government securities, bonds
and other fixed-income securities
Other
52
236
-
(46)
105
32
(3)
(1)
(171)
(343)
-
(47)
(14)
(75)
(3)
Total
288
88
(515)
(139)
Annual report 2009
153
Note 26: Income and charges from other activities
Income from other activities
. Insurance policies
- Premiums earned
- Net investment income
- Technical and non-technical income
. Investment property:
- Reversal of provisions/depreciation
- Gains on disposal
. Charges rebilled
. Other income
Sub-total
Charges on other activities
. Insurance policies:
- Cost of benefits
- Changes in provisions
- Technical and non-technical charges
. Investment property:
- Changes in provisions/depreciation (depending on method used)
- Losses on disposals
. Other charges
Sub-total
Total other net income (charges)
Note 27: General operating expenses
31.12.2009
31.12.2008
18,153
12,258
4,810
1,085
4
4
13
835
19,005
10,833
10,090
103
640
7
2
5
4
738
11,582
(16,312)
(5,921)
(5,559)
(4,832)
(36)
(36)
(404)
(16,752)
(9,249)
(5,200)
(968)
(3,081)
(30)
(30)
(337)
(9,616)
2,253
1,966
31.12.2009
31.12.2008
Staff costs
Other charges
(4,777)
(3,591)
(3,871)
(2,806)
Total
(8,368)
(6,677)
31.12.2009
31.12.2008
Wages and salaries
Social security costs
Short-term benefits
Employee profit-sharing and incentives
Payroll and other similar taxes
Other
(2,962)
(1,173)
(10)
(329)
(300)
(3)
(2,431)
(1,011)
(9)
(124)
(303)
7
Total
(4,777)
(3,871)
27a: Staff costs
Acquisitions (Targo Bank, Cofidis) accounted for €0.5m of the increase in staff costs
Average staff numbers
31.12.2009
31.12.2008
Operational staff
Executives
45,857
26,608
41,861
23,684
Total
72,465
65,545
31.12.2009
31.12.2008
Taxes other than corporation tax
External services
Sundry expenses (transport, travel, etc.)
(369)
(2,519)
(130)
(322)
(1,921)
(96)
Total
(3,018)
(2,339)
27b: Other operating charges
Acquisitions (Targo Bank, Cofidis) contributed €0.6 billion to the increase in other operating charges.
27c: Depreciation, amortisation and impairment of property, plant and equipment and intangible assets
recognised and reversed
154
Crédit Mutuel
31.12.2009
31.12.2008
Depreciation and amortisation:
- Property, plant and equipment
- Intangible assets
Impairment:
- Property, plant and equipment
- Intangible assets
(572)
(449)
(123)
(1)
(1)
(467)
(407)
(60)
-
Total
(573)
(467)
Annual report 2009
155
Note 28: Cost of risk
31.12.2009
Note 30: Changes in goodwill
Increases
Recoveries
Uncollectable
receivables
covered
Uncollectable
receivables
not covere
Collections of
receivables
previously
written off
TOTAL
Credit institutions
Customers
. Finance leases
. Other
Sub-total
Held-to-maturity assets
Available-for-sale assets
Other
(220)
(2,439)
(13)
(2,426)
(2,659)
(9)
(6)
(150)
8
1,272
10
1,262
1,280
141
179
80
(525)
(5)
(520)
(525)
(138)
(160)
-
(2)
(497)
(4)
(493)
(499)
(14)
(12)
117
117
117
2
3
(214)
(2,072
(12)
(2,060)
(2,286)
(6)
1
(79)
Total
(2,824)
1,680
(823)
(525)
122
(2,370)
Acquisitions contributed €0.9 billion towards cost of risk in 2009.
Targo Bank sets aside provisions in respect of doubtful loans on a statistical basis. As a result, when loans are written off, this is recognised under uncollectable
receivables not covered. In 2009, the amounts concerned came to €418 million out of a total of €497 million recognised in respect of customers.
31.12.2008
Increases
Recoveries
Uncollectable
receivables
covered
Uncollectable
receivables
not covere
Collections of
receivables
previously
written off
TOTAL
Credit institutions
Customers
. Finance leases
. Other
Sub-total
Held-to-maturity assets
Available-for-sale assets
Other
(323)
(1,295)
(9)
(1,286)
(1,618)
(154)
(215)
(170)
2
1,036
9
1,027
(1,038)
8
7
64
(2)
(317)
(5)
(312)
(319)
(8)
-
(2)
(58)
(3)
(55)
(60)
(4)
(1)
25
25
25
2
(325)
(609)
(8)
(601)
(934)
(146)
(220)
(105)
Total
(2,157)
1,117
(327)
(65)
27
(1,405)
Note 29: Gains or losses on other assets
31.12.2009
31.12.2008
Impairment
Negative goodwill charged to profit and loss
(124)
-
(2)
25
Total
(124)
23
31.12.2009
31.12.2008
Current taxes
Deferred taxes
Adjustments for prior years
(996)
126
10
(534)
565
2
Total
(860)
33
31.12.2009
31.12.2008
34.43%
34.43%
0.33%
-0.50%
0.50%
2.76%
3.99%
33.53%
2,757
-5.36%
-34.82%
-5.85%
23.24%
-19.69%
-8.05%
410
(860)
33
Note 31: Tax charge for the period
• Breakdown of tax charge for the period
• Reconciliation of actual tax charge and theoretical tax charge
Theoretical tax rate
Impact of special tax regime for venture capital companies
and real property leasing companies
Impact of reduced tax rate on long-term capital gains
Impact of specific tax rates at foreign entities
Permanent timing differences
Other
Effective tax rate
Taxable income
Tax charge
Property, plant and equipment and intangible assets
. Losses on disposals
. Gains on disposals
Gains (losses) on disposals of consolidated securities
Total
156
Crédit Mutuel
31.12.2009
31.12.2008
9
(37)
46
-
20
(22)
42
-
9
20
Annual report 2009
157
3. Notes to the statement of comprehensive income
4. Segment reporting
Note 32: Reclassification of gains and losses recognised directly to equity
Breakdown of results by activity
31.12.2009
31.12.2008
Mouvements
Mouvements
31.12.2009
Retail
banking
Insurance
Corporate and
investment
banking
Asset
management
and private
banking
Other
Total
Elimination
of intra-group
transactions
Consolidated
total
Net banking income
10,500
General expenses
(6,985)
3,515
Cost of risk
(1,925)
Income (loss) on non-current
assets and share in net profit or loss
of companies accounted for using
the equity method
15
Profit before tax
1,605
Corporation tax
(517)
Consolidated net profit
1,088
Minority interests
46
1,042
1,322
(513)
809
2
1,832
(388)
1,444
(378)
512
(379)
133
2
258
(954)
(696)
(71)
14,424
(9,219)
5,205
(2,370)
(851)
851
-
13,573
(8,368)
5,205
(2,370)
18
829
(240)
589
2
587
1,066
(329)
737
4
733
135
(38)
97
2
95
(126)
(893)
264
(629)
(3)
(626)
(93)
2,742
(860)
1,882
51
1,831
-
(93)
2,742
(860)
1882
51
1,831
Retail
banking
Insurance
Corporate and
investment
banking
Asset
management
and private
banking
Other
Total
Elimination
of intra-group
transactions
Consolidated
total
Net banking income
7,485
General expenses
(5,404)
2,081
Cost of risk
(558)
Income (loss) on non-current
assets and share in net profit or loss
of companies accounted for using
the equity method
42
Profit before tax
1,565
Corporation tax
(530)
1,035
Minority interests
18
1,017
995
(460)
535
(9)
(64)
(376)
(440)
(725)
549
(338)
211
(108)
6
(646)
(640)
(5)
8,971
(7,224)
1,747
(1,405)
(547)
547
-
8,424
(6,677)
1,747
(1,405)
17
543
(121)
422
2
420
2
(1,163)
418
(745)
(9)
(736)
103
(24)
79
5
74
6
(639)
290
(349)
(14)
(335)
67
409
33
442
2
440
-
67
409
33
442
2
440
in €m
Reclassified to profit and loss
Other
Sub-total
Re-measurement of available for sale financial assets
Other
Sub-total
Re-measurement of derivative hedging instruments
Other
Sub-total
Actuarial differences on defined benefit plans
Share of unrealised or deferred gains and losses
on companies accounted for using the equity method
Sub-total
-
33
33
221
1,321
1,542
(640)
(1,478)
(2,118)
(22)
(22)
(69)
(69)
n/a
n/a
(2)
-
1,518
(2,154)
31.12.2008
Note 33: Tax in respect of each category of gains
and losses recognised directly to equity
in €m
31.12.2009
Re-measurement of available
for sale financial assets
Re-measurement of derivative
hedging instruments
Crédit Mutuel
Gross amount
Tax
Net amount
Gross amount
Tax
Net amount
-
-
-
33
-
33
2,188
(646)
1,542
(2,837)
719
(2,118)
(34)
12
(22)
(106)
37
(69)
(2)
2
-
-
-
-
Actuarial differences on defined benefit plans
n/a
n/a
n/a
n/a
n/a
n/a
Share of unrealised or deferred gains
and losses on companies accounted
for using the equity method
(2)
-
(2)
-
-
-
2,150
(632)
1,518
(2,910)
756
(2,154)
Total
158
31.12.2008
Annual report 2009
159
Breakdown of total assets by business line
Retail
banking
Insurance
• Passif
Corporate and
investment
banking
in €m
2009
Total assets
2008
Total assets
Asset
management
and private
banking
Other
Total
Elimination
of intra-group
transactions
Total
France
750,302
71.1%
105,273
10.0%
153,083
14.5%
28,961
2.7%
17,957
1.7%
1,055,576
100.0%
(476,536)
579,040
737,630
68.0%
95,118
8.8%
187,803
17.3%
28,213
2.6%
35,432
3.3%
1,084,196
100.0%
(502,487)
581,709
Central banks
Financial liabilities at fair value through profit or loss
Amounts due to customers
Debt securities
43,947
4,945
42,679
191,692
100,957
31.12.2009
Rest of Rest of
Europe world (*)
Total
France
196
4
2,080
862
5,051
1,265
48,350
5,413
38,800
218,431
117,580
43,581
8,218
53,459
170,935
122,692
31.12.2009
Rest of Rest of
Europe world (*)
Total
France
13,573
(8,368)
5,205
(2,370)
31
(124)
2,742
1,882
1,831
8,006
(6,196)
1,810
(1,138)
18
690
605
599
1,265
4,207
464
(5,959)
25,877
11,572
31.12.2008
Rest of
Rest of
Europe world (*)
2,319
4,394
389
(3,735)
25,018
9,006
Total
359
10
4,306
554
2,675
2,319
48,334
8,617
54,030
196,507
134,373
31.12.2008
Rest of
Rest of
Europe world (*)
Total
* United States, Singapore and Tunisia
Analysis of balance sheet by geographic zone
Analysis of profit and loss by geographic zone
• Assets
France
Cash in hand and balances with central banks
Financial assets at fair value through profit or loss
Available for sale financial assets
Investments in companies accounted
for using the equity method
160
Crédit Mutuel
31.12.2009
Rest of Rest of
Europe world (*)
Total
France
31.12.2008
Rest of
Rest of
Europe world (*)
Total
7,282
67,082
2,018
95,363
35,687
279,548
12,390
2,337
535
32
6,185
5,679
22,086
109
1,055
377
3
887
2,958
2,877
1
10,674
67,994
2,053
102,435
44,324
304,511
12,500
16,362
68,107
4,903
87,349
39,860
272,589
13,358
1,660
593
81
7,231
6,632
20,151
352
68
557
1,555
2,242
3,097
-
18,090
69,257
4,984
96,135
48,734
295,837
13,710
123
133
260
516
20
2
235
257
France
Net banking income
General expenses
Cost of risk
Gains on other assets (**)
Change in goodwill
Profit before tax
Profit attributable to equity holders
11,277
(6,987)
4,290
(1,326)
(7)
(124)
2,833
1,960
1,810
1,982
(1,312)
670
(769)
8
(91)
(49)
(48)
314
(69)
245
(275)
30
(29)
69
595
(432)
163
(216)
6
23
(24)
(17)
(19)
(177)
(49)
(226)
(51)
20
(257)
(146)
(140)
8,424
(6,677)
1,747
(1,405)
44
23
409
442
440
** including net profit or loss of companies accounted for using the equity method and goodwill impairment
Annual report 2009
161
Note I2
5. Other information
Dividends
Note I1
The consolidating entity intends to pay €305 million in dividends outside the Crédit Mutuel group.
Fair value
Note I3
Fair value of financial instruments recognised
at amortised cost
The fair values given here are estimates based on observable
parameters as at 31 December 2009. They are based on
discounted future cash flows estimated based on a yield curve
that takes into account the debtor's inherent signature risk.
The financial instruments referred to in this note are loans
and borrowings. They do not include non-monetary
instruments (equities), trade payables, other assets, other
liabilities or accrual accounts. Non-financial instruments
are not covered by this note.
The fair value of on-demand financial instruments and
customers' regulated savings contracts is the amount that can
be demanded by the customer, i.e. the carrying amount.
Related parties
Some group entities also apply the following assumption,
which is that the market value is the carrying amount for
contracts based on variable rates and for contracts with a
residual maturity of one year or less.
Note that, excepting financial assets held to maturity,
financial instruments recorded at amortised cost cannot be
sold or, in practice, disposed of before maturity.
Accordingly, capital gains or losses are not recognised.
However, if a financial instrument recognised at amortised
cost were to be sold, the disposal proceeds could be
significantly different to the fair value calculated as at 31
December.
31.12.2009
Assets
Loans and receivables due from credit institutions
Loans and receivables due from customers (*)
Held-to-maturity financial assets
Liabilities
Due to customers
Debt securities
Subordinated debt
Market
value
Carrying
amount
44,064
302,750
12,290
44,324
304,511
12,500
38,460
208,951
117,022
7,473
38,800
218,431
117,580
7,371
31.12.2008
Unrealised
gain or loss
(4,260)
(1,761)
(210)
340
9,480
558
(102)
Market
value
Carrying
amount
46,746
292,226
13,722
48,734
295,837
13,710
53,773
190,599
133,149
8,572
54,030
196,507
134,373
8,551
Unrealised
gain or loss
(1,988)
(3,611)
12
257
5,908
1,224
(21)
31.12.2009
31.12.2008
Companies
consolidated using
the proportional
method
Companies
accounted for
using the
equity method
Companies
consolidated using
the proportional
method
Companies
accounted for
using the
equity method
Assets
Of which ordinary accounts
Assets at fair value trough profit and loss
Assets available for sale
Assets held to maturity
Other assets
-
-
16
-
-
Liabilities
Of which ordinary accounts
Liabilities at fair value through profit and loss
Due to customers
Debt securities
Subordinated debt
-
-
5
5
-
-
The small amounts above reflect the extremely small number of companies consolidated using the proportional method or accounted for by the equity method at
national level. Amounts relating to companies consolidated under the full consolidation method are wholly eliminated on consolidation and are therefore not
included in the above table.
Remuneration of corporate officers
(in €000)
Main corporate officers
Salaryfixed portion
Salaryvariable portion
Benefitsin-kind
Social security
adjustment
Total
1,844
-
9.7
17.7
1,871.4
These amounts relate to overall remuneration paid to the main corporate officers of CNCM in respect of their functions in the various group entities.
In addition, most members of senior management benefit from group retirement and supplementary pension schemes. However, those who are remunerated
for their corporate function but who, due to their status, cannot benefit from the usual entitlement in respect of incentive schemes, profit sharing and retirement
indemnities will receive a compensating indemnity when they leave office. At 31 December 2009, the provision recognised amounted to €2.53 million.
The group’s senior management receive no other specific benefits. They have not been granted any equity instrument or other instrument giving access to the capital
of CIC. No stock options have been issued because of the mutual bank status. Note that senior management does not receive board attendance fees in respect of
their functions at group companies or at other companies, only in respect of their functions in the group.
Senior management may hold assets in the group or receive loans from the group on the same conditions as applicable to all the staff.
162
Crédit Mutuel
Annual report 2009
163
Independent Auditors' Report
Independent Auditors' Report
on the consolidated financial statements
• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods and in Note
5, impairment losses in respect of available-for-sale assets are recognised when there is objective evidence of a prolonged or
significant diminution in an asset’s value. We examined the system of controls used to identify evidence of impairment and to
value the most material holdings and the estimates relied upon to recognise provisions in respect of these impairment losses.
Year ended 31 December 2009
• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods and in Notes
6, 8, 18 and 28, impairment losses and provisions are recognised to cover credit risks inherent to the group’s activities. We
examined the system of controls used to monitor credit risks, to assess the risks of non recovery, and to cover these risks by
recognising specific or general provisions.
MAZARS
ERNST & YOUNG ET AUTRES
To the Shareholders,
In fulfilment of the assignment entrusted to us by your General Meeting of Shareholders, we present to you our report for
the year ended 31 December 2009 on:
- the audit of the consolidated financial statements of Crédit Mutuel, as attached to this report;
- the basis of our opinion; and
- the specific verifications required by law.
The consolidated financial statements have been prepared under the responsibility of the Board of Directors. It is our
responsibility, based on our audit, to express an opinion on these financial statements.
I - Opinion on the consolidated financial statements
We conducted our audit in accordance with auditing standards applied in France. Those standards require that we plan and
perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement.
An audit includes examining, on a sample basis or via other means of selection, the evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and
the significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the information we have obtained provides an adequate and reasonable basis for our opinion.
In our opinion, having regard to International Financial Reporting Standards (IFRS) as adopted by the European Union, the
consolidated financial statements give a true and fair view of the Group’s financial position and its assets and liabilities at
31 December 2009, and of the results of operations of the companies and entities included in the consolidation scope for
the year then ended.
10b, deferred tax assets have been recognised in respect of tax losses carried forward. We examined the key estimates and
assumptions used to recognise these deferred tax assets.
18, provisions are recognised in respect of employee benefits. We examined the assumptions and calculation methods used
to determine these obligations.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore
contributed to determining the unqualified opinion expressed in the first part of this report.
III – Specific verifications
We have also verified the information on the Group contained in the Management Report. This work was performed in
accordance with French auditing standards.
We have no comment to make as to its fair presentation and its consistency with the consolidated financial statements.
Courbevoie and Neuilly-sur-Seine, 4 May 2010
The Independent Auditors
MAZARS
ERNST & YOUNG ET AUTRES
Pierre Masieri
Olivier Durand
II – Basis of our opinion
Accounting estimates that were relied upon for the preparation of the financial statements for the year ended 31 December
2009 were drawn up when the economic environment and conditions in the financial markets remained depressed. It is against
this backdrop that, pursuant to the provisions of article L823.9 of the French Commercial Code requiring that we indicate the
basis for our opinion, we draw your attention to the following elements:
• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods that have
been applied, the group uses internal models and methods for valuing financial instruments that are not quoted on an active
market and for determining certain provisions. We examined the system of controls used to determine that a market is not
active, to check the models used, and to determine the parameters used.
164
Crédit Mutuel
Annual report 2009
165
Confédération nationale du Crédit Mutuel
88-90, rue Cardinet - 75847 Paris Cedex 17
Tel.: +33 (0)1 44 01 10 10 - Fax: +33 (0)1 44 01 12 30
www.creditmutuel.com
Institutional communication
Design / Production: BDC / Bela Vista
Photos: Caroline Doutre – Crédit Mutuel – Thinkstock

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press release - Banque Fédérative du Crédit Mutuel

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Banque Fédérative du Crédit Mutuel Investor Presentation

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74 KOGuillaume Lefebvre is appointed Head of French Regions

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