Crédit Mutuel Group - 2018 Activity Report CRÉDIT MUTUEL, Focus on results BANKING GROUPFRANCE’S BEST _ Crédit Mutuel, represented by the National Confederation, won the award for Best French Banking Group 2018 for the 7thtime. The award is given by the British magazine World Finance. A forum for fi nancial and economic news since 1994, this bimonthly magazine is known for its high-quality analysis and excellent contributors. It has been rewarding best practice in fi nance and business + 17.2% since 2007. TOTAL NET PROFIT GROWTH IMPRESSIVE FINANCIAL RESULTS Results | Net profi t by segment Number of customers In millions Net profi t attributable to the group by business line The profi t for the year refl ects good business Net additions to provisions for loan losses (€988 million) In € millions performance against a backdrop of persistent increased by 2.4% but improved on a like-for-like basis. Impairments classed as level 3 under IAS 39 (objective indication 2,500 – low interest ratesand a sharp correction in the of impairment) fell by 13.7%, demonstrating the good quality of fi nancial markets at the year-end. the assets and their management. Doubtful loans represented + 2.9% 2,000 – 1,993 2,042 • 2017 In this environment, net banking income (€17,526 million) was 3.0% of total loans, compared with 3.3% the previous year. + 2.4% • 2018 ully kept at a very good level (down 1.3%, or up 0.3% The overall coverage ratio was 62.7% of total loans, compared 1,500 – successf with 59.9% the previous year. when restated for exceptional items). This was driven by strong Application of the new IFRS 9 accounting standard led to an 996 1,035 momentumin the group’s core retail bankng business (up 1.8%i ) increase in the provision on performing loans of €149 million. 32.5 1,000 – and by growth in the insurance business (in particular, there are 31.6 610 585 now over 29 million property and casualty insurance policies, In 2018, the group expanded to include Banque du Luxembourg 500 – up 3.9%); as with other banking groups, results in 2018 were rious fi ntech fi rms and the Veritas group in German 30.9 187 198 Investments, va y constrained by the situation in the fi nancial markets. in the scope of consolidation. 0 – General operating expenses (€11,332 million) grew at a Retail Insurance BGE*/ Private measured rate (up 2.4%). The merger in 2018 of the insurance entities GACM (Groupe des banking Investment banking/Asset Assurances du Crédit Mutuel) and NEA (Nord Europe Assurances) banking management The employee benefi ts expense refl ects the group’s proactive had no impact on the consolidated group. social policy. Most staff members received a general increase in Results | General operating expenses salaries of 1% (plus 1.5% in 2019) and the payment of a one-off Net profi t attributable to thegroup was €3,504 million, purchasing power bonus of €1,000 (€73 million). an increase of 17.7%. This high fi gure is linked to the resilience €11,069M €11,332M These undertakings were accompanied by a 1.6% increase in of earnings, good control over general operating expenses and 641 626 • Depreciation and amortization headcount. In total, the employee benefi ts expense rose by 3.0%, provisioning for loan losses, and to the effects of non-recurring + 2.4% in service of the group’s growth. exceptional items in 2017. 3,992 4,075 • Other expenses - 2.3% • Employee benefi ts expense Continued spending on technology and higher levies, in particular the €166 million contribution to the Single Resolution Fund + 2.1% (an increase of€33 million) also contributed to an increase in general operating expenses. 6,436 6,631 + 3% 64.7% Cost/income ratio 2016 2017 2018 2017 2018 *BGE: Boutique de Gestion pour Entreprendre. 26 27