Crédit Mutuel Alliance Fédérale - 2023 half-year results

H1 2023 RESULTS1


Crédit Mutuel Alliance Fédérale turned in solid first-half results, with net revenue approaching €8 billion (+4%). These results reflect the resilience of the retail banking activities, for which net revenue grew by 1.9% to more than €6 billion, and strong sales momentum in insurance (+13%) and the specialized businesses (+18.4%).

In a period of inflation, economic slowdown and monetary policy upheaval, the group’s financial results confirm the relevance and solidity of its diversified mutualist model. Net income for the first half of the year remained high at nearly €2 billion (down 7.3%).

After three years of post-Covid stimulus, the cost of risk was up 44.4%, having returned to a normative level (€679 million, i.e. 24 basis points of total loans versus 27 basis points in 2019), while expenses increased by 6.7%, mainly due to strong wage measures and significant technological investments for the transformation of our business lines.

These first six months reflect the capability of the locally-focused relationship-based model serving individual, business and corporate customers and the collective mobilization of our 77,500 employees and 15,500 mutualist elected directors.

Results for the period ended June 30, 2023

 1st semester 2023Evolution proforma
S1 2023 / S1 2022
of which retail banking€6,062bn+1.9%
of which insurance€641m+13.0%
of which specialized business lines€1,455bn+18.4%
Home loans
Equipment loans and leasing
Consumer loans

Ratio CET12
Capitaux propres
60,4 Md

Crédit Mutuel Alliance Fédérale generated solid H1 results

Crédit Mutuel Alliance Fédérale demonstrated the excellent resilience of its model by reporting solid first-half results despite changing monetary policy and the economic slowdown, which weighed especially on retail banking in France. The results once again confirm the relevance of universal bankinsurance in serving the common interest. Nicolas Théry, Chairman

Crédit Mutuel Alliance Fédérale closed the first six months of the year on very strong sales momentum and with solid results, proof of the group’s operational efficiency. Our 77,500 employees and 15,500 mutualist elected directors worked tirelessly to support individual, business and corporate customers amid strong inflation and rising interest rates. Daniel Baal, Chief Executive Officer

I.     Working tirelessly over the period for our members and customers

The war in Ukraine and the inherent geopolitical tensions continued to disrupt the economic outlook, for individuals, businesses and corporates alike. As a mutual bankinsurance provider and the first bank to adopt the status of a benefit corporation (“entreprise à mission”), Crédit Mutuel Alliance Fédérale continued to work hard over the period to support its customers, in particular those most affected by the successive crises. A relevant relationship-focused model for which we were awarded the 2023 Podium de la Relation Client3.

A bank that is useful for its customers and members

The mutual banking group continued to work alongside its retail, business and corporate customers providing financing for their projects. Loan outstandings reached €510 billion (+5.0%) despite a significant decrease in home loan releases over the first half (-29.4%), returning to a level close to that of 2019. Consumer credit remained strong, with outstandings rising by 9.6% to €53.5 billion. The group also continued to support businesses and corporates, with equipment loan and finance lease outstandings totaling €138 billion (+8.3%).

The protection and growth of customer savings is a key pillar of the group's activity. Deposits stood at €461 billion at June 30, 2023, up 2.2%.

A bank that meets a growing need for solidarity measures

With annual inflation running at 4.5% in France4, of which +13.7% on food prices, the inflationary cycle sparked after Russia’s invasion of Ukraine continued to weigh on customers’ purchasing power, in particular that of the most vulnerable customers.

True to its mutualist values, Crédit Mutuel Alliance Fédérale spearheaded solidarity and locally-focused measures.

Its 30,000 advisors galvanized into action to support households, in particular through regulated savings. Inflows into Livret A savings accounts, revalued at 3% in February 2023 and secured at this high level until the end of 2024, thus reached €6.5 billion, with outstandings totaling €51.4 billion (+14.4%).

The €1 net per month solidarity account remained in place, allowing people in a fragile financial situation to benefit from all the advantages of a universal local bank and a dedicated advisor without having to pay late-payment fees. Launched in August 2022, this solidarity offer has been taken up by more than 55,000 customers. Intended for those most affected by the current economic situation, this offer was awarded the 2023 “Good Economie Prix d’Or”5.

The street riots that erupted towards the end of the period also affected individuals and businesses. Exceptional measures are required for exceptional circumstances. With this in mind, Les Assurances du Crédit Mutuel and CIC Assurances eliminated the deductible payable by individuals on claims for damage to their car or home.

The social tension also impacted many retailers. Crédit Mutuel Alliance Fédérale decided to take strong measures to support companies and small retailers that suffered damages as a result of the unrest.

Solidarity with Restos du Cœur : €5 million to cope with the rise in food insecurity

Inflation has led to an increase in the number of people seeking support from the Restaurants du Cœur centers. To address this issue, the NGO launched an appeal to businesses. Crédit Mutuel Alliance Fédérale for its part galvanized into action without waiting for the social dividend to come into play and provided a one-off donation of €5 million via its Foundation, €2 million of which for priority assistance for infants.

As an insurer it released without delay the first cash advances for craftspeople, merchants and professionals. A “claims expense” estimated at €10 million. As a banker, the Crédit Mutuel and CIC networks offered solutions tailored on a case-by-case basis, including the suspension of credit maturity schedules.

A mutual bank shoulder to shoulder with its employees

Underpinned by a strong social contract, the group once again demonstrated its commitment to its employees. In January 2023, a general wage increase of 3% was granted to group employees in addition to profit-sharing and incentive schemes. The sustainable mobility package increased from €400 to €700 while coverage of the transport subscription increased from 50% to 75%. This solid social policy for the benefit of its employees is also an investment in the development of the group and its subsidiaries. It helps to increase our appeal so that we can attract more new talent.

II.     Strong sales growth driven by the strength of our diversified model

Despite an unstable economic environment and regulatory pressure serving to counter the benefits of universal banking, thanks to the collective mobilization and efficiency of the universal local bankinsurance model, we generated growth in net revenue of 4%. As at June 30, 2023, net revenue reached a record level of nearly €8 billion.

Performance of the retail banking and insurance activities

Net revenue from retail banking rose by 1.9% to €6 billion. Net revenue from the branch networks remained stable at +0.7% while consumer credit rose by +5.5%.

The consumer credit business (€1.5 billion) was driven mainly by the performance of Targobank in Germany. Cofidis Group saw its activity remain stable in the first half and continued to expand in Europe.

A major insurance player in France with 37.2 million policies (+1.6%), Groupe des Assurances du Crédit Mutuel (GACM) posted a strong performance in the first half of 2023, with record revenue of €7.5  billion (+13.6%). Note that GACM España was sold to AXA Seguros Generales on July 12, 2023.

Revenue growth over the period was driven in particular by life insurance, for which the turnover reached €4.2 billion (+16.7%). The life insurance activity benefited from positive net inflows in euros (+€181 million), underpinned by the announcement early in the year of a 1-point increase in the rates paid for 2022 on euro-denominated funds (i.e. an average return of 2.30%).

As at end-June 2023, the number of customers of the Crédit Mutuel bankinsurance branch network rose by 1.0% to more than 8.7 million, while the five CIC regional banks and the CIC network in the Greater Paris region had 5.6 million customers (+1.1%).

Sustained momentum in corporate banking and the specialized businesses

The performance of the specialized businesses accounted for nearly three-quarters of the increase in the group's net revenue. There was a strong rebound in revenue from private banking (+41.2%), corporate banking (+38.1%) and capital markets (+63.3%).

Net revenue from corporate banking rose thanks to the increase in net interest margin on deposits and strong loan production for corporate customers. The group’s support for entrepreneurial activity is also reflected in the investment activities carried out by Crédit Mutuel Equity in all regions.

Nearly €140 million was invested in more than 31 companies in the first half of the year.

Private banking benefited from both a market effect and positive inflows. It performed well in all countries, i.e. France, Belgium and Switzerland and in Luxembourg via Banque Transatlantique, Banque de Luxembourg and Banque CIC Suisse. The asset management division had a good first half, with revenue remaining stable at €267 million.

The capital markets business performed very well in the first half of the year, driven by strong sales momentum.

III.     Solid results at a time of monetary pressure and economic slowdown

At a time of changing monetary policy, the resilience of the universal bankinsurance model was once again made plain. The group is on track to meet the financial targets of its 2019-2023 strategic plan, ensemble#nouveaumonde plus vite, plus loin (together#today’s world, faster, further!), which runs until the end of the year.

First-half net income driven by the insurance activities and specialized businesses

Crédit Mutuel Alliance Fédérale made H1 net income of nearly €2 billion, a year-on-year decrease of 7.3%. It was impacted in particular by the decrease in net interest margin in retail banking in France -3.7%) in a specific context in France for fixed-rate home loans, regulated savings that protect household purchasing power, and commitments from the profession to limit the increase in retail rates to below 2% in 2023.

The group's comprehensive income benefited from strong results in insurance (€443 million, up 9.0%) and in the specialized businesses (€558 million, up 13.4%), demonstrating the solidity of the integrated universal bankinsurance model.

The asset management and private banking businesses generated income of €161 million, up 39%. Corporate banking made income of €105 million, up 17%. Private equity turned in a normative performance after two exceptional years (€181 million).

Confirmed operational efficiency

The mutual group maintained one of the strongest levels of operational efficiency among European banks, with a cost/income ratio of 58.2%.

General operating expenses came to €4.6 billion (+6.7%). They reflect sound strategic choices, in particular investment in human resources (53% of the increase) and technologies. The first French company to join the IBM Quantum Network, Euro-Information announced it is continuing to invest in quantum computing. Following a successful initial phase, specific use cases have been identified in many areas of interest to financial services, including customer experience research, fraud management and risk management. These investments are part of the innovation strategy being applied since 2015, particularly around artificial intelligence. In 2023, a volume equivalent to 1,700 FTEs was freed up to carry out numerous administrative tasks (input, signature, research) for customers and members seeking a closer relationship with their dedicated local advisor.

The period also saw an increase in the cost of risk, which returned to a normative level. At €679 million, it rose by 44%. The cost of risk was especially affected by the increase in proven risk on network customers, consumer credit and corporate banking.

The non-performing loan ratio (2.7%) remained lower than at the end of 2019 (3.1%). The cost of risk to customer ratio was 24 basis points, also close to the end-2019 level (27 basis points).

Read full press release on BFCM website:

1 Unaudited financial statements as at 06/30/2023, limited review procedures by the statutory auditors are in progress. As of January 1, 2023, Crédit Mutuel Alliance Fédérale applies IFRS 17 “Insurance Contracts” at the Group level as well as IFRS 9 “Financial Instruments” for its insurance entities. To ensure a consistent benchmark, data for the first half of 2022 have been restated on a pro forma basis.
2 Estimated at June 30, 2023, the incorporation of the net income into the regulatory capital is subject to ECB approval.
3 2023 Podium de la Relation Client – Banking category / Kantar & Bearing Point.
4 Consumer price index (CPI), INSEE, June 2023.
5 The Good Economie Prix d’Or for 2023 in the category of products and services that promote a social impact.