Governance

Risk management, a key point in a context of high global volatility

On a geopolitical level, 2024 was marked by a rise in the number of sources of instability, with the policy of the new US administration accentuating existing tensions and creating new ones. While they have not yet been assessed, the impacts on international trade flows, particularly for Europe, could prove significant. This new context overlays the specific situation in France, not particularly conducive to economic momentum.

For 2025, the international context remains a source of major uncertainties, on the one hand due to the continued conflicts in Ukraine and the Middle East and the risk of their regional extension, and on the other hand due to initiatives likely to be taken or favoured by the Trump administration in the geopolitical arena, breaking with traditional cooperation through NATO and with the allied States in the OECD.

In France, the dissolution of the National Assembly, which resulted in a government without a majority, has raised fears of uncontrolled public spending. In this context, a resurgence of political uncertainty could result in renewed tension surrounding the sovereign debt (rating downgrades and higher spreads), which would reinforce the wait-and-see attitude or even lack of confidence of economic players.

Faced with the potentially significant effects of these events, the meticulous management of the Group’s risks (credit, financial and operational, particularly those linked to the global geopolitical context) and the quality of its assets are a major advantage for its continuing role in financing the economy and supporting its customers and transitions.

See also Chapter 3 “Trends“.

“In a still very uncertain environment, the Risk department helps maintain control of the Crédit Agricole Group’s development in financing the economy by coordinating a prudent and consistent risk management policy across all its entities.”

  • Breakdown of gross outstanding loans to Crédit Agricole Group customers

    Crédit Agricole Group: €1,177bn1

    • Home loans: 45%
    • Corporates: 33%
    • Consumer finance: 9%
    • Professionals: 5%
    • Agriculture: 4%
    • Leasing: 3%
    • Private banking: 1%
    1 Gross outstanding loans to customers excluding credit institutions as at 31 December 2024

  • Credit risk, at the heart of the Crédit Agricole Group’s business and major risks

    Breakdown of risk-weighted assets (RWA) of the Crédit Agricole Group at 31 December 2024

    • Credit risk: 88%
    • Operational risk: 10%
    • Market risk: 2%

    Detailed information on risks is available in Chapter 5 of the Universal Registration Document (for Crédit Agricole S.A.) and in Chapter 4 of its update A01 (Crédit Agricole Group). In particular:

    • Breakdown of risk-weighted assets (RWA) by type of risk;
    • Breakdown of credit risk exposure by geographic area and counterparty type;
    • Loan loss reserves for credit risk, including on performing loans;
    • VaR (Value at Risk) figures;
    • Amount of provisions for litigation;
    • Insurance sector risks.

    High coverage ratios2 boosting the Group’s financial strength

    74.1% Crédit Agricole S.A. +3.3 pp Q4-24/Q4-23
    96.5% Regional Banks Stable Q4-24/Q4-23
    84.9% Crédit Agricole Group +2.3 pp Q4-24/Q4-23

    2 Provisions for performing loans and proven risks/loans and receivables due from customers in default

    Non Performing Loans ratio under control, reflecting the quality of our assets and of our customers

    2.3% Crédit Agricole S.A. -0.3 pp Q4-24/Q4-23
    1.9% Regional Banks +0.1 pp Q4-24/Q4-23
    2.1% Crédit Agricole Group Stable Q4-24/Q4-23

    A robust and evolving internal control system

    3 lines of defence

    • 1st line of defence: Operational business lines
    • 2nd line of defence: Risk Management and Compliance business lines
    • 3rd line of defence Audit business lines

    A risk identification process/Specific committees

  • Every year, the major risks system is updated

    While the level of measured risk has returned to normal following the low levels observed in the aftermath of the health crisis, the global geopolitical context (Ukraine, the Middle East, China, role of the United States etc.) and the new balances of power that could emerge from it are creating a climate of uncertainty:

    • The military conflicts in Ukraine and the Near East, rivalry between the United States and third countries, as well as the protectionist measures put in place by the Trump administration are increasing risks in the short term for all economic players.
    • In the case of inflationary expectations, the ability of some corporates and professionals to meet their high levels of debt could be called into question in a context of rising interest rates and costs, particularly wage costs.
    • Added to this, in France, is the possibility, in the case of a new dissolution of the National Assembly, of a new series of political uncertainty and budgetary problems.

    Sectors such as commercial and office real estate, construction and public works and those involved in global supply chains (automotive, maritime transport) are particularly exposed to these risks.

    Major risks include strategic risks…

    Risks related to losses, revenue or income decreases due to decisions related to our strategic choices and/or competitive positioning, as well as the macroeconomic, political, regulatory and technological environment.

    …and climate and environmental risks

    Environmental risks include transition risks, related to the development of a low carbon and more sustainable economy, physical risks, whether intense or chronic, and other risks, notably environmental damage, the depletion of natural resources or the loss of biodiversity.

    These risks are a result of the Group’s exposure to counterparties that may be negatively affected by these factors. They are considered to be risk factors that influence the other categories of existing risks, notably credit, but also market, operational, legal, reputational etc.

Control and Audit department, the 3rd line of defence in the internal control system

“In all the business lines and countries where Crédit Agricole operates, the Control and Audit department verifies that regulations are correctly applied, analyses the security of systems and operations, and assesses the Group’s risk management policies. From the inside, the Control and Audit department applies an external and independent perspective to verify that actions are in line with the Group’s strategic guidelines and to assess the security and effectiveness of operational systems. Where necessary, it calls for corrective action to reduce the areas of risk identified.

In 2024, the Crédit Agricole Group undertook work to integrate the use of generative artificial intelligence into customer-facing processes and services to reinforce its universal banking model. The Control and Audit department is continuing to reinforce the skills of its auditors in using data science and analytical and generative artificial intelligence in its audit assignments.

As a key player in securing the Crédit Agricole Group’s activities, thanks to the quality of its continuously trained teams, the Control and Audit department is constantly strengthening its capacity to audit the Group’s major strategic challenges. This includes mitigating the impact of global warming on activities, supporting the transition to a low-carbon economy, delivering services that respect the interests of each customer; strengthening the protection of personal data and preserving its sovereignty.”

Laurence Renoult, Head of Internal Audit at Crédit Agricole S.A.