Release Details

2023 RESULTS¹

Crédit Mutuel Alliance Fédérale turned in record results in 2023, confirming the relevance of its strategic choices.

Crédit Mutuel Alliance Fédérale completed its ensemble#nouveaumonde (together#today’s world) strategic plan in 2023 with historic results. For the first time ever, its net income reached €4.1 billion (+18.1%). Its net revenue surpassed the €16 billion (+2.8%). These results reflect winning strategic choices in relation to diversification, innovation and commitment to environmental transformation and solidarity.

Crédit Mutuel Alliance Fédérale generated record results that confirm the relevance of its long-standing focus on a universal banking and insurance model. 2023 also marked the completion of the ensemble#nouveaumonde (together#today’s world) strategic plan it launched in 2019, the revised financial targets of which were reached if not surpassed. These results serve as further motivation as the group implements its new 2024-2027 strategic plan, Togetherness, Performance, Solidarity.

The net revenue generated by the mutualist group illustrates good resilience in the retail banking activity, which made €12 billion (+1.7 %, +€200m), and excellent performances by the specialized business lines (+15.3 %, +€362m), in particular private banking, corporate and investment banking and TARGOBNAK Germany (+11.7 %). The insurance activities stabilized at a very high level (€1.2 billion, -1.5 %) and remain the group's main diversification business.

In addition to being the first year of implementation of the societal dividend and with €439 million raised under the Environmental and Solidarity Revolution Fund, 2023's exceptional results will enable the mutualist group to speed up its commitments in 2024 with a societal dividend of €617 million earmarked to finance new entrepreneurial projects that help to combat global warming and to stem the rise in social inequality. In the space of two years, more than €1 billion has been mobilized through the societal dividend.

Crédit Mutuel Alliance Fédérale turned in record results in 2023, surpassing the targets of its 2019-2023 strategic plan.

“Crédit Mutuel Alliance Fédérale is fully embodying the mutualist approach. It serves its customers, members and prospective customers with the sole aim of meeting their needs and providing protection in all areas of banking, insurance and non-material services. It seeks to contribute to the community by remaining fully mobilized to implement solidarity measures and finance environmental transformation, particularly through the societal dividend which will provide more than €1 billion in two years. Crédit Mutuel Alliance Fédérale demonstrates that it is possible to combine exceptional operating performance (in eight years, revenue has grown by a quarter and earnings have grown by two thirds) with a tangible contribution to the improvement of society.” Nicolas Théry, Chairman

“Crédit Mutuel Alliance Fédérale, the biggest French banking group, with regional headquarters, once again turned in a first-rate financial performance, confirming the relevance of its mutualist banking and insurance business model and its strategic choices in relation to innovation, transformation and the diversification of activities and revenue sources. In a world facing multiple revolutions, it is speeding up its societal and environmental commitments, reflecting its aim to fully play its role as a benefit corporation.“ Daniel Baal, Chief Executive Officer

I.      2023 results: proof of the relevance of the diversified universal banking and insurance model


In a climate characterized by a sudden rise in interest rates, economic slowdown and an escalation of international conflict, Crédit Mutuel Alliance Fédérale confirmed the relevance of its diversified universal banking and insurance model. Drawing on its unique approach and mutualist values, the group supports all its customers and members, retail and corporate, on a daily basis through its 25,000 dedicated advisors, its subsidiaries in Germany, Belgium Luxembourg and Switzerland and its specialized business lines.

Its local and relationship-focused model founded on responsibility and a personalized relationship between the advisor and their customer has enabled the mutualist group to register historic results. Net revenue of €16.1 billion (+2.8 %) and net income of €4.1 billion (+18.1%) are record levels, higher than the financial targets in the revised 2019-2023 strategic plan, together#today’s world, (net revenue €14.6 billion and net income €3billion), which was completed at the end of December 2023.

All of the networks and specialized business lines continued to support customer projects throughout the year, including those of retail customers, farmers, professionals and corporates. Despite a slowdown in demand, outstandings in home loans (+4.1%), consumer loans (+6.9%) and equipment loans (+4.9%) all increased. Total outstanding loans came to €522.0 billion (+4.0%) while deposits came to €481.1 billion (+5.3%). Crédit Mutuel Alliance Fédérale therefore fully played its role in financing the economy, including the real estate market.

Good resilience in retail banking
Revenue from retail banking remained stable at €8.4 billion (-0.4 %). Net income came to €1.8 billion (-18.9 %) amid a slowdown in new home loans, more limited debt capacity among households, a narrowing of interest margins (on the portfolio of existing loans) and an increase in the cost of risk.

The business subsidiaries serving the networks recorded net revenue of €703 million (+9.9 %), driven in particular by the factoring activities (€436 million, +24.1%), the revenue of which came to €153 million (+56% year-on-year), illustrating the quality of the solutions offered by the group to help companies achieve a stable cash position.

The mutualist group confirmed the relevance of its diversification strategy, with a steady increase in motor, property, provident and health insurance policies and an increase in telephone contract subscriptions (in particular wifi boxes, which form part of the “housing” strategy) and remote surveillance contracts.

The consumer credit activity showed continued growth in France and Europe with outstandings reaching €54.6 billion (+6.9 %), driven in particular by Cofidis Group and TARGOBANK Germany (which turned in very good results and confirmed Germany's place as the group’s second-largest domestic market), with revenue from the consumer credit activity surpassing €3.1 billion (+5.7%) for the first time while net income reached €481 million (+12.6 %).

Stronger customer protection thanks to the insurance pooling strategy
Amid an acceleration of claims related to climate change, an increase in vehicle repair costs and home reconstruction costs, the results of Groupe des Assurances du Crédit Mutuel (GACM) remained solid. Its net revenue reached a high of €1.2 billion (-1.5%) and its net income remained stable at €822 million (+0.9%).

The life insurance activity continued to stand out. In France, gross inflows came to €7.4 billion (+6.2%) with a high level of investment in unit-linked contracts (29%). Total net inflows were positive (€1.6 billion) in both euro-denominated funds and unit-linked contracts . The average return on life insurance, endowment and pension euro-denominated funds was 2.8 % (+0.5 pp). Income from P&C and protection insurance in France also increased, reaching €6.2 billion (+7.1 % at constant scope). This strength stems from the conviction that as many interests as possible need to be pooled in order to best serve the interests of all insureds. In this regard, Groupe des Assurances du Crédit Mutuel confirmed its excellence.

In creditor insurance, to ensure that people with health problems do not suffer increased discrimination when seeking borrower insurance and therefore when purchasing property, the group removed all medical questionnaire requirements for almost all loyal customers when purchasing their main residence. A move that goes far beyond Its legal requirements. In health insurance, the Avance Santé card offers a comprehensive third-party payer solution enabling policyholders to avoid paying healthcare costs upfront. In property insurance, the group made special allowances in solidarity with those who suffered damage from the street violence that occurred in summer 2023, whether they were private individuals, traders or professionals.

A very good performance by the specialized businesses
Crédit Mutuel Alliance Fédérale’s specialized business lines (corporate banking, capital markets, private equity, asset management and private banking activities) demonstrated agility in supplying tailored services and supporting the projects of its corporate, business and professional customers that create value and jobs. In 2023, net revenue surpassed €2.77 billion while net income reached €860 million (21% of group net income).

Among these activities, asset management and private banking generated net income of €262 million (+8.8%). Private equity, the second largest contributor among the specialized business lines, also confirmed strong momentum (net income of €256 million) in serving regional economic development (€3.8 billion in assets under management via 333 regional companies).

II.      An industrial and relationship-focused bank with remarkable operational efficiency


Crédit Mutuel Alliance Fédérale's 2023 results demonstrate the strength of its mutualist model.
These results stem from a decentralized organization and technological investment that give it complete autonomy and remarkable solidity.

Freedom, technology, responsibility and solidarity: the keys to operational efficiency
In an inflationary environment, operating expenses reached €9.2 billion (+6.5%), in line with the development targets set by the group. This level results from the efficiency of its decentralized business model, that upholds the fundamental mutualist principles of freedom, responsibility and solidarity.

Caisse Fédérale de Crédit Mutuel, the head company of the group, initially built to strengthen the resources of the 14 federations, helps to maximize the efficiency of the entire group and to control costs, as reflected by the cost/income ratio of Crédit Mutuel Alliance Fédérale. At 57.1%, this ratio means the group is one of the most profitable banks, and largely surpasses the target in the strategic plan that has just been completed.

Being in a position to make decisions locally means the group can act rapidly for its customers. 93%1 of loan decisions are taken by the Crédit Mutuel local banks or CIC branches.

The group's 2023 results hinge on a strong social contract, guaranteeing individual and collective efficiency.

Technological investments that support development
In order to speed up its development, Crédit Mutuel Alliance Fédérale, as an industrial bank, invests massively via its technology subsidiary Euro-Information, combining the best in technology with the best in human resources.

In 2023, nearly one third of sales opportunities gave rise to a sale using the artificial intelligence tool. A technology that improves employee efficiency by automating repetitive tasks (input, searches, etc.) and making it easier to identify the needs of customers and members.

To meet customer needs in terms of autonomy, 95.5%⁶ of current processing can be carried out remotely. No less than 22 million documents were signed electronically in 2023 (x4 since 2018). A technological leap that helps to reduce costs and optimize processes while improving the customer experience.

All of the technological advances made have helped save significant administrative time. In 2023, more than 2.57 million hours were freed up in the Crédit Mutuel and CIC networks thanks to technology, of which 35% involving artificial intelligence. An undeniable advantage in helping to strengthen the quality of the relationship between the customer and their dedicated advisor. Even more time will be saved in the future with developments in quantum computing, through the quantum factory launched in 2023.

A stronger financial position
The cost of risk was €1.3 billion (+68.7%). It reflects in particular the number of bankruptcies in 2023, close to the pre-health-crisis level (+9% versus 2019 according to the INSEE). This increase in the cost of risk is largely the result of the end of the massive aid measures deployed during the health crisis. The overall cost of customer risk related to the outstanding loans was only 0.24% (0.28% in 2019).

Crédit Mutuel Alliance Fédérale's financial solidity remains well above the prudential capital requirement and confirms the group's position as one of the most solid banks in Europe. In fact, its shareholders’ equity totaled €62.4 billion at the end of 2023 (+€4.0 billion) and its CET1 ratio, estimated at 18.5 % at December 31, 2023, is one of the highest in the sector.

III.      2023 saw an acceleration of environmental and community commitments supported by the societal dividend


In 2023, Crédit Mutuel Alliance Fédérale – the first bank to take the step of becoming a benefit corporation – accelerated measures to support the environmental and solidarity transformation by creating the societal dividend. In 2023, €439 million was allocated to projects with a strong social and environmental purpose, i.e. 12.5% of the group’s 2022 net income. In 2024, more than €600 million will be allocated to such projects. This unprecedented measure should lead to nearly €3 billion being generated over the horizon of the 2024-2027 strategic plan, Togetherness, Performance, Solidarity.

The Environmental and Solidarity Revolution Fund creating ecological and social added value
In 2023, the Environmental and Solidarity Revolution Fund allocated €363 million to entrepreneurial projects with a high environmental and societal impact without any goal of financial return.

The resources deployed supported projects that aim to preserve ecosystems and biodiversity (acquisition of the Dambach forest), produce in a more sustainable manner using renewable energies (osmotic power with Sweetch Energy, fossilization of waste with Néolithe, liquefaction of biogas with Sublime Énergie, plasma catalysis to convert gas into green molecules with Energo, production of industrial refrigeration without the use of fluorinated gas with Alpinox X), improve food quality by focusing on health or organic foods (Agrilife Studio) and improve access to quality accommodation through shared housing (co-living with Colonies).

The fund's investment policy is to prioritize the environmental value added of industrial players by giving them the time they need to develop and establish a solid financial position. It makes indirect investments via partner funds, as part of which only performance fees based on the achievement of non-financial performance are recognized.

In 2023, Crédit Mutuel Alliance Fédérale joined Act4nature international and in particular made a commitment to measure the biodiversity footprint of its financing and investments.

Such initiatives make Crédit Mutuel Alliance Fédérale one of the most committed banks to environmental protection. It will strengthen its commitments during the first half of 2024 with the creation of the Institut Mutualiste pour l’Environnement et la Solidarité.

Sponsorship, a priority in order to increase solidarity in all regions
In terms of sponsorship, 2023 saw a change of scale with the volume of sponsorship increasing five-fold. In order to meet its solidarity commitments, several projects were financed in 2023 totaling €68 million (from local projects supported by Caisse de Crédit Mutuel to transformative action supported by the Crédit Mutuel Alliance Fédérale Foundation). €17.5 million was mobilized to support associations that offer food aid which were heavily impacted by inflation. Additionally, a call for “Biodiversity” projects led to €2.5 million being earmarked for associations working to preserve ecosystems in France.

Accelerating the transformation of banking and insurance practices
Crédit Mutuel Alliance Fédérale has been a pioneer on the creditor insurance market by going over and above its legal requirements in the terms it offers patients and former patients when purchasing a main residence.

In 2023, more than €6 million was allocated to encourage customers to switch to green forms of mobility; more than 25,000 people now benefit from the zero per-cent bike loan. Local sports and cultural associations obtained nearly €2 million via the complete reimbursement of their banking costs (account, check book, card, remote banking and dedicated advisor). Based on the 2023 results, €617 million will be allocated to the societal dividend.

1 The annual audit of the financial statements for the year ended 12/31/2023 is under way
2 Estimé au 31/12/2023.
3 Montant de l'intéressement, de la participation, de l'abondement et de la prime de partage de la valeur attribué aux salariés du socle social commun en France par rapport au résultat net 2022.
4 Part du résultat net consolidé 2022 consacré au dividende sociétal en 2023
5 Augmentations collectives depuis le 01/01/2022 sur le périmètre socle social France hors augmentations individuelles et hors prime de partage de la valeur
6 More than 95% for retail customers

Attachment

• Crédit Mutuel Alliance Fédérale - Results for the year ended December 31 2023