Full-year results (PDF - 696.00 kB)

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Groupe Banque Populaire
Press conference
February 26, 2009
Full-year results 2008
Disclaimer
This presentation may include forward-looking statements based on current beliefs and expectations about future events.
Forward-looking statements are not guarantees of future performance and are subject to inherent risks, uncertainties and
assumptions about Groupe Banque Populaire, banking industry trends, changes in economic conditions, the competitive
market and regulatory factors. Occurrence of such events is not certain, and outcomes may prove different from current
expectations, significantly affecting expected results. Groupe Banque Populaire shall in no event have any obligation to
publish modifications or updates of such projections.
The financial information presented in respect of 2008 and the comparative information
were prepared in accordance with IFRS adopted in the European Union and applied at these dates.
for
2007
The 2008 consolidated results and the 2007 results have been subject to an audit by the Statutory Auditors.
The retail bank financial statements are prepared from the consolidation, under IFRS, of the Banque Populaire banks’
financial statements, those of Société Marseillaise de Crédit including transactions with Banque Fédérale des Banques
Populaires, the central body of Groupe Banque Populaire.
The scope of consolidation of the retail bank comprises 20 Banque Populaire banks and their subsidiaries, Société
Marseillaise de Crédit, Crédit Maritime Mutuel and the mutual guarantee companies (Socama, Socami).
For 2008, the regional banks contribution to the retail banking business relates to the second-half of 2008. Their
outstanding loans and sources of funds are taken into account at December 31, 2008.
The financial statements were approved by the Board of Directors of the Banque Fédérale des Banques Populaires
on February 25, 2009.
2
2008 highlights

An unprecedented banking and financial crisis

Increased Group scope thanks to strengthening of regional footprint with
acquisition of seven regional banks from HSBC France

Good resilience of retail banking in a challenging environment
` Continued sales and marketing drive with:
– Increase in number of customers
– Rise in savings and lending
– Growth in cross-selling

3
Start of merger process to establish second largest French banking group
Summary
4
1
Retail banking
2
3
Appendices
Summary
5
1
Retail banking
2
3
Appendices
1
Income statement: key figures
2008
2007
U
in Group
structure
5,928
5,776
+3%
-
(87)
63
5,841
5,839
-
-5%
(3,870)
(3,658)
+6%
+2%
€ mn
`
Recurring revenues
IFRS volatility*
U
`
Total revenues
•
Operating expenses
`
Gross operating income
1,970
2,181
-10%
-16%
•
Cost of risk
(527)
(388)
+36%
+33%
`
Net income
1,101
1,340
-18%
-25%
`
Net income without IFRS volatility
1,158
1,298
-11%
-11%
* IFRS volatility: changes in fair value + home savings
6
Retail banking Groupe Banque Populaire Appendices
1
Revenue breakdown
Revenues

Solid sales and marketing drive
with enhanced product take up rate
and contribution from the regional banks
€mn
2,089
` 8% increase in fee and commission income
` Progression in relative weighting of revenues
by 3 points to 39%

3,040
Net interest income down 2.6%
due to sharp rise in rates combined
with intense competitive pressure
Fee and
commission income
2,265
Net interest margin
2,961
Other
2007
2008
Fee and commission income
€mn

Fee and commission income:
` Payment services: +10% with continuous move
upscale of payment cards
(high end cards: +12%)
` Loans: +4% including borrower insurance up 9%
` Financial fees: -9% due to very unfavorable
environment for customer savings
2,265
2,089
Payment
services
340
Loans
262
Financial fees
Accounts,
Services,
other
Relative
16%
weighting
16%
12%
614
29%
799
38%
373
12%
274
25%
560
38%
869
Other
7
2007
2008
1
Cost of risk
Cost of risk
38 bps
Non-recurring items related to the financial
crisis led to more pronounced
evolution in cost of risk of 7 basis points
Amount
34 bps
31bps
bps
Banque Populaire banks
€453 mn
34
Regional Banks
€12 mn
nm
Retail banking
€465 mn
34
Financial crisis
€61 mn
4
Total cost of risk
€527 mn
38
527
2006
383
2007
384
2006
2007
465
2008
2008
Financial crisis
Customer breakdown

Large corporates
Low risk profile thanks to strong weighting of fixedrate home loans in addition to French households
debt-to-income levels among the lowest
28%
Personal
Close relationship with small businesses &customers
corporates, the historic base for Banque Populaire
banks, enabling trends to be followed in an optimal
manner
41%
22%
Small businesses
5% 3% 1%
Sovereign
8
Cost of risk/
weighted credit risk

35 bps
Retail banking business cost of risk
contained to 3 basis points increase
Cost of risk (€ mn)

various
financial institutions
1

Personal customers (1/2)
Continued customer acquisition
` High level of new customer wins
´ with young customers strongly represented (44%) and civil servants(16%)
` 511,000 additional customers (2/3 related to integration of Regional Banks & 1/3 account for new customers)
– 7,400,000 customers

Growth in customer deposits
` Outstandings of €64.4 bn (+11%) from strong performance of inflow of funds, in particular:
Su. Dev. Ac
+14%
Term accounts
+38%
Savings account
Demand deposits
+8%
+12%*

Livret A savings accounts: 593,000 accounts opened since start of 2009 with deposit inflows of
€1.9 bn

Sustained increase in lending: +12% to €74.4 bn
` Home loans up:
– Outstandings: +13% to €66.6 bn
Home and consumer loans
€bn
2002//2008:+114%
74.4
TCAM:+13%
` Firm progression in consumer lending
– Outstandings: €7.1 bn
` Roll out of Créodis permanent credit facility
34.8
– 86,000 new contracts
€125 mn loans written
9
* Regional banks included
2002
6 yrs
2008
1

Customer savings

Life insurance
` Solid commercial performance of private banking products
– Gross money inflows: €1,169 million (-2% versus market:-10.6%) Î Outstandings: €5.3 bn (+19% versus
market: 0.3%)
` Continuous development on all market segments
– Gross money inflows: €3,431 mn Î Assets under management: €32.3 bn (€37.2 bn with Regional banks)

Successful distribution of the new range of “Izeis” capital guaranteed products

Property and casualty insurance
– Increase in revenues: +6% to €163 mn
– Growth in contracts
-

143,000 new contracts Î 626,000 contrats IARD (+4%)
Personal risk insurance
– Rise in contracts of 10% to 5.4 millions
-
Revenues: €149 mn (+2%)
– Distribution of borrower insurance in network on track
-

Revenues: €94 mn (+45%)
Rapid expansion of internet payment service
-
e-bank card: +37% holders, +48% transactions

Strengthened position in customer take-up rate: 10 contracts per customer v. 9 in
2007

Customer relations recognised with « 2009 customer service » award
10
1

Small business and corporate customers
Solid positions with further integration in the economic fabric
`
`
`
`

Leading bank for franchise funding (CSA 2008)
1st main bank for SMEs (TNS Sofres)
1st bank for craftsmen (pépites csa 2008)
2nd bank for small businesses (pépites csa 2008)
A full suite of products to assist and speed up growth of companies:
` Business start-ups: leading provider of business start-up loans (source: Oséo)
` Funding and receivables management:
– Funding:+11% in new contracts
– Management: 28% in insurance / +10% in company information
` Investment, with notably:
– 30 Socama serving entrepreneurial investments
– Renewal in October of agreement with European Investment Fund (EIF):
–
- Express Socama investment loans counter guaranteed by EIF
- Socama transmission loan with limited personal guarantee
Lending levels: 9,200 loans representing €272 million
Equipment leasing: +12% and property leasing: +35% (new contracts)

Outstanding loans:
€64.7 bn (+15%) with a high level of new lending in investment loans (+17%)

Electronic banking:
` Small business market
` Card transactions:+11%
Retailer contracts
185,000 contracts / 322 million transactions
11
1

Loans and assets managed
Strong commitment for funding the economy without
restrictive changes to our credit policy

Growth in customer deposits
at same pace as progression in lending
` Increase in outstanding loans:+13% versus 2007
Assets managed
€bn
182.4
€bn
Outstandings (ex. repos)
167.9
139.2
156.7
7.1
Time
deposits
122.7
7.1
7.0
66.6
58.9
Home
loans
50.8
Customer deposits
Consumer
lending
108.7
11.9
Equipment
finance
10.9
36.8
41.6
48.5
Other
31/12/2006.
12
Personal customers
24.3
16.7
42.8
Regulated
savings
39.4
39.9
Demand
deposits
35.8
36.2
Life insurance
29.9
32.4
Mutual
funds
31.4
31.1
29.5
31/12/2006.
31/12/2007
31/12/2008
11.2
31/12/2007
31/12/2008
Small business & coporate customers
Customer savings
Short-term
loans
30.0
40.7
35.8
Other
1
Liquidity

81% of customer deposits cover Banque Populaire banks loan book
(loan to deposit ratio:123%)

Diversified source of funding, tailored to expansion strategy with creation of
Banque Fédérale des Banques Populaires treasury department
Programs
Customer
deposits
19%
13
` CD program
: €20 bn
` Covered bonds
: €25 bn
` BMTN
: €3 bn
` EMTN
: €30 bn
1

Strategic plan « Ambitions 2012 »
A strategic plan with three fundamental principles:
` Affirm Banque Populaire’s identity within the new entity
– Be the leading bank acting as advisor of target clientele
– Confirm regional footprint and proximity as base for long-term relations
– Speed up tripartite dimension “Bank, Insurance, Real estate”
` Build collectively to maintain a high-level of performance
– Cooperation between Banque Populaire banks to focus on best practices
– Human resources policy in line with position as bank acting as advisor
` Invest in new growth areas
– Accelerate development of retail banking business
– Establish real estate department around Foncia

Ambitions measured by three indicators:
` Improve cost/income ratio: -1 point
` Overheads+cost of risk/Client revenue
` Progression in assets under administration: +31%
` Growth in revenue per employee (in FTE): +14%
14
Summary
15
1
Retail banking
2
3
Appendices
2
Capital structure

Effect of Natixis’ contribution on Tier one ratio: -150 bps

Groupe Banque Populaire Tier one ratio of 8.6% with core tier one ratio of 7.2%
(80% floor)
` Without floor, Tier one ratio of 9.3% o/w 7.8% core tier 1
` With participation in 2nd part of plan to support funding of French economy (€950 million)
– Increase in Tier one ratio by 60 bp to 9.9%

Core Tier one capital represents 80% of total capital

One of the highest Tier one ratios in the French banking sector
Tier 1 ratio
T1
9.4%
Capital
9.9%
9.3%
7.8%
Core T1
Hybrid T1
8.9%
0.5%
31/12/2007
16
7.8%
2.1%
1.5%
01/01/2009
Pf: without floor
01/01/2009
Pf : without floor
2nd part of French plan
€bn
T2
Hybrid T1
Core T1
Total
31/12/2008
3.3
2.3
12.1
17.7
31/12/2007
4.3
0.7
15.2
20.2
2
Income statement
2008
2007
7,296
7,445
(6,328)
(5,908)
968
1,537
(1,204)
(485)
(236)
1,052
Share of income of associates
128
154
Net gains on disposals of other assets
143
250
Change in value of goodwill
(324)
-
Income taxes
(139)
(337)
Net income before minority interests
(429)
1,119
Minority interests
(40)
(64)
Net income
(468)
1,055
€mn
Variation in revenues
Retail banking
Revenues
-
Natixis
Operating expenses
-51%
Cost of risk
Variation in cost of risk
Retail banking
Operating income
+ 36%
Natixis
X7
Breakdown of net income (contribution – ex. dividends)
M€
795 *
112
Natixis
Retail
banking
GBP
Goodwill
impairment
GBP after
impairment
-144
Federal
activities
-324
-468
GBP: Groupe Banque Populaire
Federal activities: BFBP activities and its property companies, other Group &
BFBP subsidiaries not contributing to Natixis’ results
-1 051
17 * 1,101 with dividends
Goodwill impairment: impairment of goodwill arising from Natixis’ CIB
2

Conclusion and outlook
Groupe Banque Populaire’s results marked by Natixis:
` Natixis
: €(2,799) million
` Retail banking
: €1,101 million
` Central body
: €299 million (1)

Financial strength confirmed with Tier 1 ratio rising to 9.9% with participation
in second part of plan to support funding for French economy

Financial robustness strengthens Groupe Banque Populaire’s competitive
advantages, creating France’s second largest banking group with Groupe
Caisse d’Epargne:
` Over 110,000 employees
` 33.8 million customers, including 7 million member-stakeholders
` 7,700 branches
18
` Savings
: €502 billion(2)
` Loans
: €351 billion(2)
` Capital
: €40 billion (2)
(1) Stand-alone
income / (2) 2007 figures
Retail banking Groupe Banque Populaire Annexes
Summary
19
1
Retail banking
2
3
Appendices
`
Regional banks
P 21-22
`
Distribution platform
P 23
`
Foncia
P 24
`
Number of employees
P 25
`Banque
Populaire banks
P 26
`
Retail banking
P 27
`
Aggregate Banque Populaire banks
P 28
`
Personal customers
P 29 to 31
`
Small business and corporate clients
P 32 to 33
`
Remote banking
P 34
`
Risk-weighted assets
P 35
`
Interest-rate trends
P 36
20
3
Regional Banks
Contribution in €mn

Successful arrival in record timeframe:
` 1st IT migration from 2009
` Transfer of custodial services and payment media to
specialised Group subsidiaries
` Entire personal customers and virtually all
small business and corporate clients rated by BFBP

Included in Group’s commercial action plan

Rapid availability of Group products including:
2H08
Revenues
295
•Operating
expenses
(151)
144
•Cost
of risk
12
Operating income
131
Net income
95
At 31/12/2008
` Wealth management and electronic banking to increase
relations with personal customer segment
Branches
394
Personal customers
367,000
` Wide range of tailored products for
small businesses & corporate clients to strengthen
their development
Small businesses
and corporate clients
88,000
Managed assets
€10,050 mn
Loans
€5,640 mn
21
3
Regional Banks
59
53
12
11
56
57
68
13
68
474
22
68
145
3

Distribution platform based on closeness
Stimulating local and regional life
` 4th largest French banking network: 3,391 branches
` 20,000 account managers in total, representing advisors
for market segments as follows:
116
Account managers
114
112
110
108
– Personal customers: 12,900
– Private banking:
600
– Small businesses:
2,400
– Corporate clients:
740
` 160 business centres for companies

Strong regional roots with…
` 18 Banque Populaire regional banks
` 7 Regional banks

... dedicated expertise
` Casden Banque Populaire
` For employees of French eduction,
research and culture systems
` Crédit Coopératif
key player in the social and solidarity based economy
` Crédit Maritime Mutuel
marine industries
23
106
104
102
100
98
96
2003-2008
3
Foncia
Contribution in €mn
2008
Revenues

Revenues: +8%

Recurring revenues account for 84%
of total revenues

Growth fuelled by:
expenses
(486)
40
•Cost
of risk
-
Operating income
40
` Lease management
of income of associates
•Net gains or losses on disposals of other assets
•Change in the value of goodwill
•Income taxes
(0,1)
15
` Joint property management
25
` Rental income
and continued external growth strategy

•Operating
526
Reduced weighting of transactions in total revenue
•Share
•Minority
interests
(0,7)
Net income
24
` Limited effect of drop in real estate transactions

Synergies leveraged
` « Pass location » offered by MA Banque to fund initial rent,
deposit and fees
– 6,000 new applications approved
Revenues by activity
Joint property management
Rental income
38%
13%
` Multirisk home insurance policy with Natixis Assurances
– 30,000 contracts written
16%
` Intranet set up to facilitate cross selling synergies
` Project launched to create Foncia stands in Banque Populaire
bank branches
3%
30%
Lease management
24
Other
Sales comm.
3
Number of employees
Retail banking
` Employee stabilisation
18 Banque Populaire regional banks
CASDEN Banque Populaire
Crédit Coopératif
29,158
461
1,552
Regional Banks
2,990
Crédit Maritime
764
Other
460
Total at 31/12/2008
25
31,171
Open and fixed term contracts – full time equivalents (FTE)
35,385
3
20 Banques Populaires
18 Banque Populaire regional banks
CASDEN Banque Populaire
Crédit Coopératif
B.P.
du Nord
Bred B.P.
B.P.
Rives
de
Bred B.P.
B.P.
Atlantique
B.P.
Lorraine Champagne
Paris
B.P.
de l’Ouest
B.P.
Val de France
B.P.
Centre Atlantique
B.P.
d’Alsace
B.P.
Bourgogne Franche -Comt é
B.P.
Massif Central
B.P.
Loire et Lyonnais
B.P.
des Alpes
B.P.
Sud-Ouest
Martinique, Guadeloupe, Réunion
(Bred B.P.)
B.P.B.P
Occitane
B.P.
du Sud
B.P.
Proven çale
et Corse
B.P.
Côte -d'Azur
(Proven çale et Corse)
26
3
Income statement: retail banking business
U
2008
2007
U
5,928
5,776
+3%
-
IFRS * volatility
(87)
63
Total revenue
5,841
5,839
-
-5%
+6%
+2%
-10%
-16%
-19%
-27%
-18%
-25%
€mn
Recurring revenues
•Operating
expenses
(3,870) (3,658)
Constant
structure
1,970
2,181
•Cost
(527)
(388)
1,443
1,793
10
8
1
63
1
-
(349)
(515)
1,107
1,349
(6)
(9)
Net income
1,101
1,340
-18%
-25%
Net income without IFRS volatility
1,158
1,298
-11%
-11%
of risk
Operating income
•Net
gains on disposals of other assets
•Change
•Income
in value of goodwill
taxes
•Minority
interests
* IFRS volatility: changes in fair value+home savings
27
3
Aggregated income statement Banque
Populaire banks
€mn
Total revenues
U
2008
2007
U
5,698
5,839
-2%
-5%
-13%
-16%
-24%
-27%
-22%
-25%
-23%
-25%
Constant
structure
(3,802) (3,658)
Operating expenses
1,895
2,181
Cost of risk
(529)
(388)
Operating income
1,366
1,793
10
8
Gains on disposals of other assets
2
63
Change in value of goodwill
1
-
Income taxes
(329)
(515)
1,050
1,349
(25)
(9)
1,026
1,340
Minority interests
Net income
CCI contribution to Natixis
Equity method accounting (20%)
Accretion profit
Other
Accounting contribution
Taxes on CCI dividends
Economic contribution
28
205
25
(27)
203
(21)
182
268
38
(19)
288
(27)
260
3

Insurance
Life insurance (assets managed)
35.7
€bn
2002//2008:+82%
Gross inflows life insurance
€mn
2002//2008:+50%
CAGR:+10%
3,431
CAGR:+7%
2,288
19.6
31/12/2002.
31/12/2008
2002
Number of non-life insurance contracts
2008
Number of P&C contracts
millions
2003/2008: 46% - CAGR: 8%
2003/2008:+86%
621,783
566,335
5.4
CAGR:+13%
601,435
4.9
502,477
4.4
456,656
3.9
426,085
3.5
2.9
31/12/2003.
31/12/2004
31/12/2005
31/12/2006
31/12/2007
29
31/12/2008
31/12/2003.
31/12/2004
31/12/2005
31/12/2006
31/12/2007
31/12/2008
3

New loans
Consumer and home loans
€bn
20.4
19.1
Consumer
Home
3.5
3.6
16.3
17.3
3.1
3.4
16.9
15.5
12.9
Loans 2005-2008
Compound annual growth rate
Total
+2%
Home
+3%
14.2
Regional banks not included
2005

2006
2007
2008
Source of funds
Outstandings
€bn
2005/2008: 23% - CAGR: 7%
52.5
30
54.8
12.4
58.0
64.4
14.8
13.2
Demand
deposits
11.7
Savings
40.8
42.4
45.0
49.6
31/12/2005.
31/12/2006
31/12/2007
31/12/2008
Source of funds 2005-2008
Compound annual growth rate
Total
+7%
Demand
deposits
+8%
Savings
+7%
3
High-end cardholders
Card holders
Number of cards
Number of cards (Base 100 31/12/2004)
Thousands
2004//2008: +10%
3,567
CAGR: +2%
180
2004//2008: +74%
CAGR: +12%
3,483
160
3,393
140
3,298
120
3,240
100
80
31/12/2004.
31/12/2005
31/12/2006
31/12/2007
31
31/12/2008
60
31/12/2004.
31/12/2005
31/12/2006
31/12/2007
31/12/2008
3
Small businesses and corporate clients (1/2)
National market share
Banques
Populaires

24%
New company loans Î
divers 2%
18%
CIC
13%
3%
Crédit
Agricole
Crédit du Nord
6%
Caisses d’Epargne
9%
9%
LCL
6%
10%
BNPParibas
Crédit Mutuel
Société Générale

Small business card market
Small business cards
thousands
2003/2008: 97% - CAGR: 14%
321.5
342.4
Number of transactions
290.6
257.1
215.6
174.1
32
31/12/2003. 31/12/2004
31/12/2005 31/12/2006
31/12/2007 31/12/2008
2005
21.0 million
2006
23.8 million
2007
26.8 million
2008
29.2 million
3
Small business and corporate clients (2/2)
! Small
retailer contracts"
Number of small retailer contracts
Transactions
millions
thousands
183.1
181.1
178.8
187.6
183.2
184.9
543
2003/2008: 28% - CAGR: 6%
618
584
563
633
486
31/12/03.
31/12/04
31/12/05
31/12/06
31/12/07
31/12/08
! Corporate
Penetration rate (TNS Sofres 2007)
35%
2003
2004
2005
2007
clients "
Employee savings (number of companies)
35%
2006//2008:+24%
CAGR:+11%
27%
25,635
22%
14%
13%
13%
11%
Groupe CIC
31,825
28,292
23%
Crédit Agricole
Ï
Banques
33
Populaires
2006
Société
BNP Paribas Crédit Mutuel
Générale
HSBC
Groupe Crédit
du Nord
La Banque
Postale
11%
LCL
10%
Caisse d’Epargne
2006
2007
2008
2008
3
Remote banking
On-line brokerage
Internet-based bank customer relationships
21.4
Transactions in millions
Transactions in thousands
21.1
66.9
57.3
19.0
18.7
19.5
18.9
35.1
17.9
18.3
Mar
April
30.6
27.8
Jun
July
16.0
Aug. Sep
Oct
Nov
Jan
Dec
Feb
2008
Mar
April
May
Jun
3,369
Number of contracts
5,052
Transactions
(thousands)
4,500
3500
6,000
3000
5,000
2500
4,000
2000
3,000
1500
3,939
2,108
1,820
Number of -ATM
3,373
July
Aug.
Sep
Oct
Accounts
32.3 million
2008
390,000
77
5,278
3,821
4,095
4,432
4,481
0
34
2H07
1H08
2H08
70
50
40
30
20
1,000
500
1H07
80
60
2,000
1000
1,047
2H06
Nov
Cash dispenser-ATM
Cyberplus payment (on-line payment system)
3,243
31.7
21.6
Pages viewed
2,666
30.0
18.2
May
41.1
38.7
28.1 29.4
10
0
0
2004
2005
2006
2007
2008
Dec
3
Risk-weighted assets
€bn
209,5
178.4
161.2
Banque Populaire
banks & other Î
Credit
142.2
126.2
112.8
Natixis
Credit
51.5
Market
36.8
43.1
5.4
5.5
31/12/2006.
31/12/2008
Other
35
11.8
31/12/2008
3
Interest rate trends
7
%
6
6 month Euribor Æ
Ï
5
10 year CMS
4
3
2
January 1, 2008 to December 31, 2008
36
Website: www.ir.banquepopulaire.fr
Contacts: Annie de Paillette, Pierre Jouffrey, Terence de Cruz
Tel: +33 (0) 1 40 39 66 97
E-mail: [email protected]