Best bank: Crédit Agricole
French banks have not had the net interest margin bonanza that higher interest rates have offered many southern European banks recently. In fact, some French banks saw profit decreases in their domestic retail divisions last year, while areas like markets and vehicle leasing have been less of a support to group profit compared to the immediate post-pandemic period.
This environment has underlined the advantages of a diversified model, especially in French retail banking, where fee-earning business are as valuable as ever. Firms with bigger insurance and asset management divisions are generally doing well, especially when this is combined with strategic consistency – and, of course, an eye on costs.
Crédit Agricole ticks all of these boxes. Net income at the mutual group’s listed entity, Crédit Agricole SA, rose by 19.6% to €6.3 billion in 2023, with a cost-to-income ratio of 55.4% and return on equity of 12.6%. At the group level, where the bulk of its retail business sits, net income rose by 3% to €8.3 billion, while the group cost-to-income ratio was a relatively healthy 60.2%.
Unlike many of its peers, its stock was trading well above book value by early 2023. This stock price outperformance is largely due to keeping a lid on costs and risk in its corporate and investment bank over the past decade, allowing a degree of stability and affinity with the regulatory environment that investors appreciate.
Crédit Agricole SA’s return on tangible equity and cost-to-income ratio has consistently beaten its large European peers, including other French banks. Its dividend per share has tripled over the past decade.
Jérôme Grivet, Crédit Agricole SA’s deputy chief executive officer, in charge of steering and control, says the firm has reached its financial targets one year early in each of the previous three medium-term plans – including, probably, the 2025 targets, meaning the bank will probably publish new targets in 2025.
“We like the idea of under-promising and overdelivering,” says Grivet. But that works much better if the promise is relatively appealing, which has not always been the case recently in French banking. Grivet, however, can point to consistently rising revenues at his firm, up 30% in 2023 compared with 2017, despite the low rates environment during much of that period.
Other banks, in France and elsewhere Europe, might be forgiven for wishing they could emulate Crédit Agricole’s pan-European scale for product factories like asset management, insurance, consumer finance, and custody. And lately Crédit Agricole has tried to learn from some of its rivals’ successes, for example, in car leasing and payments.
According to data in its most recent full-year results presentation, one in three French citizens use Crédit Agricole’s services. One of Crédit Agricole’s biggest advantages is how many of its clients have multiple products from the firm, such as asset management and insurance – its so-called equipment rate – and not just mortgages.
“A high return on tangible equity and a low cost/income ratio allows us to pay a high and steadily growing dividend, and to fuel growth,” says Grivet.
“We are steadily improving the equipment ratio by covering all customers’ needs, which provides us a very important growth engine over time. At the same time, thanks to this very high customer base in France, we have been able to build businesses with the critical size to develop their own customer base and consolidate on the European market.”
Best investment bank: BNP Paribas
In corporate and institutional banking, BNP Paribas has been a rare European growth story in recent years – something that was in evidence both in France and across Europe in 2023.
The firm’s global banking division has reported record results recently, with revenues rising 12.4% in 2023. According to Dealogic, in 2023 it was the only European firm in the top-five banks by investment banking revenue in Europe, Middle East and Africa.
The bank has made most progress and is closest to where it wants to be in continental Europe, including France, where it is now consistently number one, according to Dealogic data. The firm retained its top slot in French investment banking revenues in 2023, according to Dealogic, with share of almost 10%, one of the highest for a number-one firm in any big European market.
The bank’s position is clearly strongest in the debt capital markets, where its successes ranged from a €3.025 billion triple-tranche bond for Engie in January 2023 to leverage finance deals for firms such as Altice.
But it also rose in Dealogic’s equity capital market league table in France. Examples of its work include a €650 million convertible bond for Schneider Electric, on which it was global coordinator and a €494.5 million convertible bond for Ubisoft Entertainment, on which it was global coordinator and structuring bank, as well as other deals for clients such as Wendel and Neoen.
The firm has also been growing in M&A. One example in 2023 was its work as adviser to CMA CGM in the €5 billion acquisition of Bolloré Logistics.
According to head of global banking Yannick Jung, where the bank stands today in corporate and institutional banking is the result of decisions taken as far back as 2016. “All of this is coming on the back of years of careful planning and targeted investments – building up our teams, our product capabilities, our sectoral expertise and client access,” he says.
The strategy has been to capture market share where competitors were retrenching, at the same time as leveraging the diversity of BNP Paribas’ business, especially in Europe, in areas such as car leasing and consumer loans.
Importantly, it recognized relatively early the need to act as bridge between issuers and investors –rather than relying on its own balance sheet – in anticipation of the finalization of Basel III. “We have favoured a disciplined and thoughtful approach to building up our distribution and structuring capabilities,” Jung says.
Best digital bank: Societe Generale
Societe Generale overhauled its digital transaction services last year, introducing innovative improvements and application programming interfaces (APIs) to modernize its platforms.
This included streamlining transactions, enhancing cybersecurity and improving efficiency in internal operations. To this end, the bank leveraged platforms by external providers, such as EuroTrade, Komgo, SogeTrade and Swift’s MT798, alongside new APIs for real-time banking interactions.
In trade finance, the bank rolled out its EasyTrade platform, which simplified and streamlined transactions for clients across western Europe. Developed in collaboration with the fintech Komgo, the platform replaced paper-based communications with a digital interface accessible via the bank’s business-to-business open banking platform, significantly improving speed, efficiency and security.
In cash management, the bank has increased its investment in IT from €300 million (2017 to 2021) to €500 million (2022 to 2025). This came following the introduction of the bank’s Cashfit internal transformation project, aimed at enhancing agility, transparency and automation.
Best bank for SMEs: Crédit Agricole
Crédit Agricole demonstrated a strong commitment to the small and medium-sized enterprise segment by leveraging strategic partnerships last year.
In collaboration with the payment services provider Worldline, the bank launched a joint venture focused on facilitating digital payments for merchants in France. The new entity combined Worldline’s advanced technological capabilities in acceptance solutions and Crédit Agricole’s extensive banking network to deliver fast payments across the country.
Crédit Agricole also played a pivotal role in aiding the digital transformation of SMEs. In collaboration with France Num, a government facility for digital transformation, and Bpifrance, a public-sector investment bank, the firm provided loans to French businesses to bolster their digital transformation initiatives. The loan guarantee scheme backed by these entities covered up to 80% of the loan amounts, with a cap of €50,000. This scheme significantly reduced the financial risks for Crédit Agricole, while ensuring SMEs have access to vital funding for their digital investments.
Best bank for ESG: Societe Generale
Societe Generale has made important progress on its sustainable transformation journey. It undertook important internal initiatives and participated in key sustainable transactions and investments in 2023.
The lender achieved a notable 34% reduction in greenhouse gas emissions in its operations, which put it well on track towards its 2030 target. This was driven by initiatives such as reducing its real estate footprint, reducing energy consumption and transitioning to renewable energy sources.
Internally, the bank merged its two French retail networks, Societe Generale and Crédit du Nord Group, into a single entity with corporate responsibility as a core principle. This involved appointing corporate social responsibility (CSR) directors in each region and establishing regional councils to engage local stakeholders, support community development initiatives and enhance CSR awareness.
Additionally, the bank launched its Building Together transformation plan, aimed at accelerating the integration of environmental, social and governance (ESG) criteria throughout the group. This initiative included the implementation of an ESG maturity grid and the rollout an extensive training regimen for all employees.
The bank played a prominent role in several largescale sustainable transactions. Notable examples included serving as the global coordinator for Engie’s €900 million triple-tranche green bond and acting as senior mandated lead arranger for the $5 billion financing of Northvolt’s lithium-ion battery plant.
Societe Generale also established a transition investment fund comprising a €700 million equity and a €300 million debt component. This fund aims to back emerging leaders in energy solutions and impact-driven projects linked to the United Nation’s sustainable development goals.
Best bank for corporates: BNP Paribas
BNP Paribas had a strong year in the corporate space, demonstrating a range of achievements in trade finance and cash management.
The bank launched Easy Treasury, a plug-and-play treasury-as-a-service solution for spinoffs. This tool reduces the time required by new entities to implement a treasury organization to a mere four months, compared with the typical nine to 18 months common in the industry. It also offers competitive pricing and a comprehensive control framework.
Other innovative cash management products included Benetracker, an inbound payment tracking tool offering secure, real-time payment progress visibility, and INQUIRO, a novel web-based enquiry app that facilitates digital compliance requests.
In trade finance, the bank registered 50% market penetration among large European corporates. BNP Paribas was highly active in transactional work for these clients, including issuing large guarantees for the likes of Deutsche Bahn and Stellantis.
