Crédit Mutuel Arkéa Group’s 2020 Results Release (AcT)

Press Release

Annual results

Fully mobilised to support its members and customers during the health crisis, Crédit Mutuel Arkéa confirms its solid fundamentals and the resilience of its original development model

Brest, February 25, 2021 - The Board of Directors of Crédit Mutuel Arkéa today approved the financial statements for 2020. In an environment deeply marked by the economic and health crisis, Crédit Mutuel Arkéa posted solid results and a strong financial structure. The cooperative and regional banking group was particularly mobilized during this unprecedented year to support its members and customers through concrete and immediate measures, including a considerable strengthening of solidarity measures. Continuing on from a very fine 2019, with revenues* at their highest level ever, the group once again posted a remarkable performance in 2020 in this exceptional context. It is continuing its growth trajectory and asserting its unique identity in the service of its stakeholders. In a world subject to unprecedented challenges, and on the strength of its convincing results, the company is confidently committed to its new strategic plan, Transitions 2024, to achieve a positive impact.

Sustained commercial activity at the service of its members and customers in the context of the health crisis

Throughout this year deeply marked by a major economic and health crisis, the directors and employees of Crédit Mutuel Arkéa were mobilised to ensure the continuity of activities and banking and insurance services, and to support members and customers - individuals, professionals, businesses and associations - throughout its territories.

• The portfolio of members and customers grew by 4% to nearly 4.9 million. 190,000 new individual, professional, business and institutional clients (net new business) have chosen to place their trust in the local banking group. This client acquisition is mainly driven by online banking (Fortuneo and Keytrade), the personal assistant “Aumax pour moi” developed by the group, and the insurance business. It reflects the quality and attractiveness of the range of products and services designed and developed by Crédit Mutuel Arkéa. It is also an illustration of the relevance of the group's diversification strategy.

• Gross outstanding loans increased by 7.6% to €67.7bn, with production of €16.3bn, of which €1.8bn was in State Guaranteed Loans (PGE). The local networks of Crédit Mutuel de Bretagne, Crédit Mutuel du Sud-Ouest and Arkéa Banque Entreprises et Institutionnels were particularly mobilised throughout the year to support their business customers, and granted nearly 11,000 PGEs.

To support members and customers facing cash flow difficulties due to the decline or total cessation of their activities during the health crisis, 61,000 business, real estate or consumer loans were also subject to maturity extensions granted by Crédit Mutuel de Bretagne, Crédit Mutuel du Sud-Ouest, Arkéa Banque Entreprises et Institutionnels, Arkéa Banque Privée, Fortuneo, Financo, Arkéa Crédit Bail and CFCAL, for an outstanding amount of €5.8 billion.

• Total outstanding savings increased by 10.2% to €137.7 billion. This increase, which benefited all saving categories, was driven by net inflows of €7.9 billion. In particular, the Group posted positive net inflows in life insurance, in contrast to the net outflows observed in the French life insurance market in 2020. This performance is the result of the actions undertaken for many years in favor of unit-linked products, which allow clients to give meaning to their savings. Unit-linked policies will account for 56% of gross life insurance inflows in 2020, and 32% of total outstandings.

• In property, life and health insurance, earned premiums in the portfolio increased by €17 million (+4%) to €441 million. The share of distribution networks outside the Group, both physical and digital, increased again in 2020. They now represent 58% of new business premiums and 32% of earned premiums in portfolio (+2 points).

A resilient model driven by the diversification of income sources

• The group's revenues*, on a like-for-like basis and excluding remarkable non-recurring operations, were stable at over €2 billion for the fourth consecutive year. This demonstrates the relevance and resilience of Crédit Mutuel Arkéa's development model. They amounted to €2.16 billion. This excellent performance in this environment was driven by strong sales momentum and by the proceeds from the deconsolidation and revaluation of Fintech Younited shares invested by Crédit Mutuel Arkéa. Net interest margin and commissions increased, driven in particular by the growth in outstanding loans and the increase in stock market volumes (x1.6) achieved by customers during the lockdowns. The group benefited from its strategy of diversifying its revenue sources, with a 17% contribution from the BtoB and white label banking services division (€375 billion). Lastly, these revenues*, which in 2019 included an exceptional capital gain of €194 million related to the disposal of the stake in the Primonial group, are suffering from the impact of the health crisis on the valuation of life insurance and private equity assets.

• Net income group share amounted to €356 million. It was impacted by a cost of risk of €160 million, up 62%, i.e. 23 basis points relative to outstanding customer commitments, including 13 basis points related to the provisioning of performing loans. This controlled increase in the cost of risk makes it possible to anticipate, in a prudent and reasoned manner, the expected economic effects of the Covid-19 crisis. It also results from the good quality of the credit portfolio and the group's limited exposure to sectors considered vulnerable.

A robust financial structure with high solvency ratios

• Total assets increased by 7.8% compared with 31 December 2019, to €169 billion, with a gross loan-to-deposit ratio of 99%.

• Group shareholders' equity increased by 5.1% to €7.7 billion, of which €2.4 billion in member shares.

• The Common Equity Tier One (CET1) solvency ratio stands at 16.8%, more than 8 points above the requirements set by the European Central Bank (excluding P2G). With the overall solvency ratio at 21.6%, these two indicators are well above regulatory requirements.

Hélène Bernicot, Chief Executive Officer of Crédit Mutuel Arkéa, said: "The quality of Crédit Mutuel Arkéa's results for 2020 once again illustrates the attractiveness and resilience of its cooperative and collaborative model in this unprecedented context, and is a source of pride in more ways than one. It is the result of the commitment of our employees, the group's diversity, the quality of its customer portfolio and the relationships we maintain on a daily basis with our members and customers. It is also a reflection of the attractiveness of our range of products and services that we offer to support everyone in their life projects. The group's dynamism is also illustrated by the more than 1,000 employees on permanent contracts who joined Crédit Mutuel Arkéa in 2020, at a time when the European banking sector is being hit by a massive wave of job cuts. These observations show that our unique model of agile, innovative and bold territorial banking makes sense. It is this model that we intend to promote and develop through our strategic plan that we have just unveiled. Transitions 2024 expresses the group's ambition to contribute to sustainable, ethical and inclusive finance and to be the agile financial partner for all its stakeholders in the transitions of the future".

Anne Le Goff, Deputy Chief Executive Officer of Crédit Mutuel Arkéa, added: "Crédit Mutuel Arkéa's results demonstrate the group's resilience in the turbulent period we have just gone through. Our solid fundamentals, high solvency ratios and sustainable growth trajectory are all assets that will enable us to pursue our development in our territories and pursue our own strategy, as we have always done. Throughout this very special year, all of the group's directors and employees have been fully committed, together, to their mission of accompanying and supporting our individual, professional and corporate members and customers. Their commitment and dedication, their sense of teamwork have made it possible to provide all those who needed it with attentive listening and concrete and immediate solutions, notably through the solidarity measures that we have particularly deployed in 2020. »

* Net banking and insurance income including gains on disposal or dilution in investments in associates.

About Crédit Mutuel Arkéa

Crédit Mutuel Arkéa is made up of two regional federations representing two main French geographic zones (Brittany in the West and the South West) and their member local savings banks. Crédit Mutuel Arkéa also has a presence across Europe thanks to its corporate and online subsidiaries (Fortuneo, Monext, Financo, Arkéa Investment Services, Suravenir, CFCAL…). Crédit Mutuel Arkéa is entirely owned by its customer shareholders. Crédit Mutuel Arkéa employs nearly 11,000 people, counts 2,800 directors and has a total of 4.9 million customers. The bank has 169 billion euro in total assets. Crédit Mutuel Arkéa ranks among the leading banks with headquarters in the regions. A detailed presentation for the first half of 2020 is available on the group's website at the following address:

https://www.arkea.com/banque/assurance/credit/mutuel/ecb_5037/en/investor?presentations

Source : Actusnews