Update on the financial situation of Crédit Agricole SA in Ukraine and Russia
In the current situation, of war in Ukraine and crisis with Russia, the Crédit Agricole Group wants to be transparent about its exposure to these two countries.
The Group’s activities in Ukraine and Russia are operated locally through two wholly-owned subsidiaries: the international retail bank Crédit Agricole Ukraine and the subsidiary of Crédit Agricole CIB in Russia, CACIB AO. In 2021, the activities of CA Ukraine and Crédit Agricole CIB AO represented the following contributions:
|The country||Net banking income excluding intragroup eliminations
(in millions of euros)
|Profit before tax
(in millions of euros)
Crédit Agricole SA’s total exposure (on-shore and off-shore) in these two countries represents approximately 0.6% of the total commercial credit portfolio as of December 31, 2021.
Commercial loan commitments1 for Ukraine amount to eq. €1.5 billion as of December 31, 2021, i.e. approximately 0.15% of Crédit Agricole SA’s business loan portfolio. They are almost all accounted for at Crédit Agricole Ukraine level and are financed locally. As of December 31, 2021, Crédit Agricole Ukraine is a short-term liquidity provider for Crédit Agricole SA Crédit Agricole Ukraine’s equity amounted to €226 million as of December 31, 20212.
Commercial loan commitments3 for Russia as of December 31, 2021 represent approximately 0.45% of Crédit Agricole SA’s commercial credit portfolio4.
The exposures accounted for in the subsidiary CACIB AO represent eq. of €540 million as of December 31, 2021. The entire loan portfolio is refinanced locally. The subsidiary’s equity amounts to approximately 150 million euros, including 80 million euros in capital and 70 million euros in subordinated debt. The bulk of the assets are made up of loans to local companies, mainly in rubles, of which 1/3 benefits from the guarantee of the parent multinational5 and a sovereign exposure corresponding to the excess liquidity of the subsidiary deposited in the short term with the Central Bank of Russia within the framework of its regulatory liquidity and ratio requirements.
Exposures recognized outside CACIB AO, known as “off-shore exposures”, can be split into balance sheet and off-balance sheet.
- The share of offshore exposures on the balance sheet amounts to eq. of 2.9 billion euros6 as of December 31, 2021. This portfolio mainly concerns fifteen large Russian companies, in particular producers and exporters of raw materials, market leaders in the key economic sectors of their country. The sector breakdown is as follows: 52% heavy industry (mines, steel, fertilizers), 36% energy (oil and gas), 6% other transport, 4% maritime transport and 2% aerospace. Its quality is strong: 96% of the portfolio is rated investment grade on the internal rating scale at the end of December 2021. This mainly concerns corporate finance for 62% and trade finance for 25%, the rest corresponding to financing assets (aerospace, project, shipping). The portfolio is 56% in USD, 38% in EUR and 6% in CHF.
- The off-balance sheet portion of offshore exposures amounted to approximately €1.5 billion as of December 31, 2021. It mainly corresponds to short-term trade finance activities (in particular documentary credit and financial guarantees), and, to a lesser extent, undrawn committed credit facilities.
The risk of variation related to derivative transactions is limited and amounted to 60 million euros as of December 31, 2021.
Finally, no new financing has been granted to Russian counterparts since the beginning of the conflict.
All in all, these exposures, of limited size and of good quality, are closely monitored.
The assessment of the situation has no consequences on the distribution of the 2021 dividend of Crédit Agricole SA which will be submitted to the General Meeting of 24and March 2022. As a reminder, the Crédit Agricole Group’s solvency ratio stood at 17.5% and that of Crédit Agricole SA at 11.9% at December 31, 2021 (the CET1 capital levels amounted respectively to 102.7 billion euros and 44.9 billion euros).
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1 On and off balance sheet, excluding sovereign debt exposure on the balance sheet of Credit Agricole Ukraine, which amounts to€0.3 billion as of December 31, 2021.
2 Of which eq. of €201 million in equity and eq. €25 million in subordinated debt, pform the distribution of dividends for an amount of 16 million euros and paid on February 23, 2022.
3 On and off balance sheet, no exposure to Russia soverexternal debt as of December 31, 2021
4 Excluding the Russian exposures of CA Indosuez Wealth Management, which represent around 250 million euros.
5 Covering political Russianot risk
6 Portion drawn from credit facilities, net of guarantees from Export Credit Agencies, excluding variation risk
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