The ratings of Credit Agricole SA (CASA) are based on the credit fundamentals of the Credit Agricole group. With cooperative and mutual roots, the group is a market leader in France pursuing a universal banking model. In recent years, management has successfully de-risked and refocused on core businesses, primarily domestic and selected international retail while leveraging its size and expertise in savings products (asset management and insurance).

As detailed in its 2016-2020 medium-term plan, the group’s key priorities are to improve operational efficiency and to increase integration in order to cross-sell more products and services offered by CASA and other group entities to customers. This should further support and enhance the group’s earnings; an increasingly important consideration in light of the relatively weak French economic recovery and evolving competitive dynamics. Scope would view negatively a change in strategy that increases the group’s risk profile or moves that lead to divergence in priorities within the group and diminish cohesion.

For full-year 2016, the group reported net income group share of EUR 4.8bn with results being impacted by low interest rates, loan renegotiations and specific items such as the revaluation of deferred tax assets and a write down of goodwill related to CASA’s French retail business. On an underlying basis, net income group share was EUR 6.4bn, up 3% compared to the prior year. The group is positioned well against both capital and TLAC/MREL requirements. As of year-end 2016, the fully loaded CET1 ratio was 14.5% and the reported TLAC ratio was 20.3%.

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