By Ed Frankl
Crédit Agricole SA announced on Wednesday its objective to take on one million additional customers, increase its net profit and add two new businesses and as part of a new strategic plan for 2025.
The French lender said it would target an additional million retail banking customers as well as an annual net income of 6 billion euros ($6.32 billion), based on a strong potential for organic growth and an increased offering of protection insurance, savings solutions and real estate.
In addition, the Paris-based company will target an average annual revenue growth rate of around 3.5% between 2021 and 2025, with a return on tangible equity – ROTE – of more than 12%.
It comes despite what its president Dominique Lefebvre described as the current “opaque short-term environment”.
“The ‘medium term’ is no longer observable. It has given way to a particularly opaque ‘short term’ horizon under the combined effects of multiple crises,” the company said in its strategic presentation.
As part of its previous plan for 2022, which it carried out a year in advance, Crédit Agricole was aiming for net income of more than 5 billion euros and a ROTE of more than 11%.
He said he would continue to target a 50% cash dividend payout ratio and was aiming for a common equity tier 1 capital ratio – a measure of financial strength – of 11%, compared to more than 11% under the 2022 goals.
The bank will also launch two new business lines, one focused on renewable energy and the other on healthcare.
“It is now easier to think long term than to predict the short term,” said chief executive Philippe Brassac.
“By creating two new professions to make the energy transition accessible to all and to facilitate access to aging care and services, we are extending our mission as shapers of the future”, he added.
The company has indicated that it will pursue its strategy of targeted acquisitions, while respecting its profitability constraints of more than 10% return on investment.
In order to keep pace with digital transformation, Crédit Agricole said it would allocate around €20 billion to IT and digital spending over the period.
Write to Ed Frankl at [email protected]