Nearly 11 billion euros in annual net profit for BNP Paribas, a record; more than 8.2 billion euros for the Crédit Agricole group, at its highest; more than 4.1 billion for Crédit Mutuel Alliance Fédérale, a “historic” result: 2023 was a good year for these three major French banking groups.
The picture is more mixed for Société Générale, which shows a fall of 7.6% in its revenues but a net profit of 2.5 billion euros, up 36.6% compared to that of 2022, weighed down by exceptional charges linked to the group’s exit from the Russian market. The bank, which seeks to improve its profitability, took care to announce on February 5 its intention to eliminate 947 positions at its Paris headquarters to reduce its costs.
For its part, BPCE shows a 25% decline in its annual profits, to 2.8 billion euros. The group which brings together the Popular Banks and the Savings Banks was in fact the most affected in 2023 by the negative impact of the rise in interest rates from the European Central Bank (ECB) on the margins of credit activities .
The five main players in the French banking sector thus post 28.6 billion euros in cumulative profits in 2023, an amount up almost 8% over one year. A more than honorable performance, which they owe in part to the good performance of their financing activities for large companies and markets, which compensated for the deterioration of interest margins in credit to individuals and small businesses.
Increased costs
The problem has been identified for a long time: the domination of fixed rate loans prevents credit institutions from fully passing on the increase in their financing costs, a mechanism that is only amplified by the increase in interest to be paid on loan products. regulated savings, Livret A in mind.
“French banks are today a little “stuck” by portfolios of home loans granted at low fixed rates and for very long terms, which generate very little interestsummarizes Simon Outin, director of credit research in the financial sector at Allianz Global Investors. The trend will be slightly better in 2024, but we should not expect a spectacular rebound. » The prospect of a rate cut by the ECB indeed gives hope for an improvement in the sector. Nicolas Namias, Chairman of the BPCE Management Board, confirms that he is counting on a “inflection” net interest margins in the summer of 2024.
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