1st quarter 2023 results of Groupe BPCE
KEY FIGURES1
Net banking income of €5.8bn, reflecting a limited decline of 5% vs. Q1-22 related to changes in interest rates and, notably, in regulated savings
Net banking income up by 1% excluding the impact of regulated savings (-€380m)
Expenses remain stable vs. Q1-22 in a context of high inflation; cost/income ratio at 67.9%2 in Q1-23
Net income of €533m, down 29% YoY and up 8% if the impacts of regulated savings are excluded (-€282m)
BUSINESS LINES/ACTIVITIES
Retail Banking & Insurance:
Retail Banking & Insurance: continued development of the Banque Populaire and Caisse d'Epargne retail banking networks in all customer segments and successful diversification of revenues; higher lending rates in Q1-23; €19bn YoY increase in deposits; net banking income down by a limited 7% owing to the impact of regulated savings
- Local & regional financing: 6% YoY growth in loan outstandings rising to a total of €706bn at end-March 2023
- Insurance: gross inflows of €3.2bn in life insurance, 10% increase in non-life insurance premiums vs. Q1-22
- Financial Solutions & Expertise: +7% growth in net banking income chiefly driven by financing activities
Global Financial Services:
Global Financial Services: 2% increase in revenues vs. Q1-22 driven by the strong development of CIB franchises (net banking income +7%) and good momentum in new fund inflows in Asset Management
- Corporate & Investment Banking: net banking income up 7% YoY thanks to continued diversification and expansion of the client base. Global Markets revenues up 4% YoY; Global Finance revenues down 8% YoY due to lower contribution from Real assets activities partially offset by a renewed positive performance by Trade Finance
- Asset & Wealth Management: €1,112bn in assets under management at end-March 2023, +3% QoQ, for Natixis IM; positive fund inflows during the quarter; commission rate up to 25.2 bps, +0.7pp YoY; net banking income down by a limited 4%.
P&L/CAPITAL1
Strict discipline on operating expenses, stable vs. Q1-22; cost/income ratio of 67.9%2 in Q1-23
Cost of risk: low level during the quarter on account of existing provisions for future risks
- Cost of risk for the Group of €326m in Q1-23, or 16bps, including €70m in additional provisions for ‘Stage 1’/’Stage 2’ future risks
- Group cost of ‘Stage 3’ proven risk of €257m, or 12bps, vs. 21bps in Q4-22 and 14bps in Q1-22
Capital adequacy at a high level: CET13 ratio of 15.0% at the end of March 2023
Nicolas Namias, Chairman of the Management Board of Groupe BPCE, said: “In a context of economic slowdown and persistently high inflation, Groupe BPCE continued its commercial development thanks to the very strong commitment of all its teams. The Banques Populaires, Caisses d'Epargne, and all the retail banking business lines expanded their customer bases in all their market segments with their support of local and regional financing activities. The global CIB and AM business lines continued their development by serving their clients against a background of volatility in the financial markets.
As we had previously anticipated, the effects of the rapid rise in interest rates, especially those of regulated savings products, have had an impact on the financial performance of our business lines. This situation is expected to remain unchanged in the coming quarters and reflects the prominence of the role played by Groupe BPCE in financing the French economy.
The current context further confirms the relevance of our robust cooperative business model, useful to our customers and our cooperative shareholders, and working at the heart of our regional ecosystems in pursuit of a long-term vision.”
1 See note on methodology 2 Underlying figures and excluding contributions to the Single Resolution Fund 3 Estimate at end-March 2023
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About Groupe BPCE
Groupe BPCE is the second-largest banking group in France. Through its 100,000 staff, the group serves 35 million customers – individuals, professionals, companies, investors and local government bodies – around the world. It operates in the retail banking and insurance fields in France via its two major networks, Banque Populaire and Caisse d’Epargne, along with Banque Palatine and Oney. It also pursues its activities worldwide with the asset & wealth management services provided by Natixis Investment Managers and the wholesale banking expertise of Natixis Corporate & Investment Banking. The Group's financial strength is recognized by four credit rating agencies with the following senior preferred LT ratings: Moody's (A1, stable outlook), Standard & Poor's (A, stable outlook), Fitch (AA-, negative outlook) and R&I (A+, stable outlook).
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