François Pérol Interview

Groupe BPCE recently published its results for the 3rd quarter of 2009. What are the principal highlights?

Groupe BPCE is profitable. After a difficult first half of the year when the Group announced substantial losses, we have now moved out of the red with a quarterly profit of 447 million euros. This result is extremely similar to that of our principal competitors: Société Générale or Crédit Agricole.
It’s good news for our customers and for all the Group’s employees who have all – each at their particular level of responsibility – contributed to this result.

Could you tell us more about the principal growth drivers of the retail banking division?

All our core business activities have made a positive contribution to our results: Natixis, retail banking, and our real estate business activities.
As far as our retail banking division is concerned, several factors played an important role:

• First of all, a real commercial dynamism, particularly noticeable in the area of home loans,
• Next, an interest-rate differential working in our favor thanks to a significant decline in short-term rates that helps us to obtain less expensive funding,
• And, lastly, extremely tight control over the operating expenses of all our different retail banking activities.

I would like to return to Natixis, which announced a profit. Can we now look forward to a more untroubled future?

After five loss-making quarters, Natixis has returned a profit with net income of 268 million euros for the 3rd quarter of the year. This profit is not the result of non-recurring items, it was generated by the three core business lines upon which Natixis has refocused its activities, namely: corporate & investment banking, investment, and specialized financial services.
All these core businesses made a positive contribution. And I think that this, too, is extremely good news both for Natixis’ employees and for our customers.
We are working with Laurent Mignon (the Chief Executive Officer of Natixis) and his teams to ensure that Natixis stays on the path of long-term profitability. We consequently think that Natixis will again return a profit in the 4th quarter of the year… indeed just like Groupe BPCE as a whole.

Another topical issue: the principal banking institutions announce that they intend to reimburse the support given by the French State. What is BPCE’s position in this respect?

We have already started to do so, reimbursing 750 million euros out of the capital injection of 7 billion euros provided by the French State.
We are going to continue reimbursing these funds but in a way that never jeopardizes the solvency of the Group. We will do so gradually as and when we are capable of generating profits, we will do so in line with our ability to reimburse the French State by turning to the market to refinance this capital. We have adopted a dynamic yet gradual approach to reimbursing the French State.

Final question: we have seen advertisements in the press and on certain bus shelters where the Group claims it is supporting the French economy through its two retail banking networks. Could you explain what this support consists of exactly?

It is not merely claiming it, the Group is effectively doing so. Our loans outstanding position increased by 3.3% in September 2009 compared with September 2008. The figure of 3.3% may seem rather abstract but it’s twice the rate of growth of the French market overall.
This has led to strong growth in home loans and to a new funding envelope made available to local authorities by the Caisses d’Epargne network: an envelope for a total of 3 billion euros. This has resulted in a very significant increase in our targets for new loan production in the area of social housing, instead of 1.2 billion euros in 2009, we have increased our target to 1.5 and 1.8 billion euros.
And this also means that businesses now have access to a new monthly funding envelope of one billion euros provided by the Banque Populaire banks. These are all concrete measures and they are having a visible impact at a local level. This is why we wanted to say so in the press through two advertising campaigns: one campaign under the Caisse d’Epargne brand emphasizing – and this is true – that nobody is forgotten by the French savings banks, and one campaign devoted to the Banque Populaire banks saying that when you finance a garage owner, when you finance a private individual, when you provide financing for an apartment, you are financing the economy and that we are doing our job as bankers.
And this is what we will continue to do in the months and the years to come…