It seems that French banks have given up on becoming universal banks, either by choice or by constraints. They prefer to stay multi specialists on national territory and focus on some of their activities abroad. The challenge remains. Indeed, banks have an incentive to increase their capitalization to avoid falling under the blows of external financial institutions.
Agricultural credit was created in 1894 to allow farmers to have a French bank that can provide a funding system best suited to their business by offering loans for a longer period and that are more flexible. Initially the farm credit is created in a mutual form. It is therefore the basis of a set of local branches of subsidized agricultural credit by the Bank of France.
With the aid of power and the gathering of local funds, in 1899 to create nine regional offices of Credit Agricole Mutuel, and the Act of August 5, 1920 allows the creation of the Office National de Credit Agricole, which is a focal control and financial coordination of the entire institution. This body became in 1926 the National Fund of Agricultural Credit.
In 1945 the National Federation of Credit Agricole was created, which is a forum for reflection and expression of regional funds from the government, the national fund and the agricultural profession. From there, the services of the Credit Agricole multiplied and the company went on to services and more banking through the introduction of several laws that allowed it to offer loans to a broader clientele of farmers and the National Fund gradually strengthened its activities in the financial markets.
In 1980, Credit Agricole had the legal authority to finance businesses and households throughout the French territory. Parallel to the banking services, agricultural credit is now becoming more and more financially autonomous, through the National Fund which now assumes the full role of central bank for regional banks, reducing the role of government in the institution.
Tags: Credit Agricole, agricultural credit, French banks
[...] ) Diversity of financial products 2 - What analysis can you make of Credit Agricole (with the 5 forces model)? Competition - pressure - Many competitors (Societe Generale, BNP Paribas, CIC . ) - Obligation to remain competitive Clients - Pressure due to the limited number of bank charges when changing bank - customers may still be able to change the bank with the diversified range of market New entrants: - pressure - are many (supermarkets, insurers, car manufacturers) - arrival of the postal bank, which will create difficulties in the market - Nuance: entry barriers State: - Highly regulated market (the French and European) - Control rates (interest earnings) - Privatization policy - Role as shareholder and regulator: ambiguity 3 - Explain what strategy was intended by Crédit Agricole in 2003? [...]
[...] - Services, asset management, insurance and private banking: CA is the leader of the management of UCITS in France with the Segespar which has 347 billion Euros of assets under management, and the third largest player in France on the insurance market with Predica and Pacifica. - Bank financing and investment with Calyon is number one in French investment banking, and is included among the leaders in Europe by revenue. With a target in the heart of France, Calyon currently reaffirms its growth ambitions in the European market. In the rest of the world, its strategy is to develop according to the needs of local customers and local markets. [...]
[...] - Complementarities which affect the delivery devices. Reconciliation can expand its local network (agencies). Bank reconciliations provide opportunities in a recent reduction in overheads of about 8 to 10% on 3 to 4 years. At the European level there is currently no real significant player. For example, Credit Agricole, the largest European player, has only market share at the European level. The objective would be to partner with major players in Europe, but initially the concentration overlooks the national sector. [...]
[...] Experience in the - Possible loss of banking identity Organizational system - Possible problem of that has proven itself (mutualism) leadership Dynamism of the network - Difficulties related to since the purchase the restructuring: jobs, business management OPPORTUNITIES THREATS new perspectives in all - Arrival of the postal our businesses both in the domestic bank: possible support of its market and abroad parent, the Post Office (itself New European horizon: supported by the State) alliance with European banks - International reach an international competition (U.S. and European dimension banks) 5 - What are the prospects for Credit Agricole-Credit Lyonnais? What elements must the group control to ensure its sustainability? [...]
[...] They combine their skills which are recognized in another industry, and their ability to operate a customer base which has already been acquired, to exploit this new market for them. They take the opportunity to develop innovative and competitive offers. Of course they rely on banks, only to manage financial products. French banking sector The French banking sector suffers from a number of handicaps. The main problem is related to the low profitability of banks in general, even if the return on equity has improved. [...]
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