2 - BPCE
2 - BPCE 2 - BPCE
REPORT OF AN EVENTFUL YEAR
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REPORT OF AN EVENTFUL YEAR
CONTENTS<br />
1 ESSENTIALS<br />
Message from the Chairmen . . . . . . . . . . . . . . . . . . . . 2<br />
2006 key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4<br />
2006 highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6<br />
Strategy and objectives . . . . . . . . . . . . . . . . . . . . . . . . . 8<br />
Organizational structure<br />
and corporate governance . . . . . . . . . . . . . . . . . . . . 12<br />
2 CAISSE D’EPARGNE, RETAIL BANKING . . . . . . . . . . . 18<br />
3 GROUPE CAISSE D’EPARGNE, THE SPECIALIST<br />
BANK FOR REGIONAL DEVELOPMENT . . . . . . . . . . . 34<br />
4 THE SPECIALIZED SUBSIDIARIES . . . . . . . . . . . . . . . 48<br />
Commercial banking . . . . . . . . . . . . . . . . . . . . . . . . . . 50<br />
Investment banking . . . . . . . . . . . . . . . . . . . . . . . . . . . 61<br />
5 SKILLS & RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . 78<br />
6 RISK MANAGEMENT,<br />
COMPLIANCE & SECURITY . . . . . . . . . . . . . . . . . . . . . 88<br />
7 SOLIDARITY AND SOCIAL COMMITMENT . . . . . . . . . 94<br />
8 SIMPLIFIED FINANCIAL STATEMENTS . . . . . . . . . . 108
Corporate structure<br />
(at December 31, 2006)<br />
440 local savings<br />
companies (LSC)<br />
3.4 million cooperative<br />
shareholders<br />
Fédération Nationale<br />
des Caisses d’Epargne<br />
80% (shares)<br />
Caisses<br />
d’Epargne<br />
100%<br />
20% (CCIs) (1)<br />
Caisse Nationale des Caisses d’Epargne<br />
34.44%<br />
COMMERCIAL BANKING<br />
INVESTMENT AND PROJECT<br />
BANK – NATIXIS 8<br />
Banking<br />
networks*<br />
Banque Palatine<br />
Financière OCÉOR 2<br />
Banque BCP<br />
(France 3 – Luxembourg 4 )<br />
CIH (Morocco) 5<br />
Corporate and Investment Banking<br />
Asset Management<br />
Insurance<br />
Ecureuil Assurances IARD<br />
CNP 6 , Ecureuil Vie 7<br />
Private Equity and<br />
Private Banking<br />
Services<br />
Specialized<br />
financial<br />
institutions<br />
Crédit Foncier<br />
GCE Habitat<br />
GCE Immobilier<br />
Recevables Management<br />
Financial Guaranty<br />
* Other than the Caisses d’Epargne.<br />
(1) Cooperative Investment Certificates (CICs) representing 20% of the capital of the Caisses d’Epargne entitling holders<br />
to receive dividends but including no voting rights.<br />
(2) The Financière OCÉOR holding company owns the Group’s investments in its overseas banks.<br />
(3) 50.1% owned by the Caisse d’Epargne Ile-de-France Paris and 30% owned by the CNCE.<br />
(4) 50.1% owned by Financière OCÉOR and 30% owned by the CNCE.<br />
(5) Indirect interest of approximately 25% held by GCE Maroc (OCÉOR).<br />
(6) 15.76% held by Sopassure, a 49.98% subsidiary of the CNCE.<br />
(7) Ecureuil Vie became a subsidiary of CNP Assurance in February 2007.<br />
(8) The Caisse Nationale des Caisses d’Epargne and Banque Fédérale des Banques Populaires each own a 34.44%-stake in<br />
Natixis, which itself owns 20% of the capital of the Caisses d’Epargne and Banques Populaires in the form of Cooperative<br />
Investment Certificates (CICs).
Groupe Caisse d’Epargne: core business lines<br />
COMMERCIAL BANKING<br />
Insurance<br />
Life insurance<br />
General insurance<br />
Health/Provident<br />
insurance<br />
RETAIL BANKING<br />
Individual customers<br />
Professional customers<br />
French overseas territories and the international market<br />
Real Estate<br />
Financing solutions<br />
Transactions/sales<br />
Development<br />
and promotion<br />
Surveying and valuation/<br />
property management<br />
Principal commercial banking networks<br />
SPECIALIST BANK FOR<br />
REGIONAL DEVELOPMENT<br />
Businesses<br />
Local authorities<br />
and institutions<br />
Social economy<br />
and social housing<br />
Public-private partnerships<br />
Individuals Professionals Local authorities<br />
Businesses<br />
Investment and Project<br />
Bank – Natixis (1)<br />
Corporate and<br />
investment banking<br />
Asset management<br />
Private equity<br />
and Private banking<br />
Services (2)<br />
Receivables management (3)<br />
Financial guaranty<br />
(1) The Caisse Nationale des Caisses d’Epargne and the Banque Fédérale des Banques Populaires each hold a 34.44%-interest<br />
in Natixis, which itself owns 20% of the capital of the Caisses d’Epargne and of the Banques Populaires in the form of CICs.<br />
(2) Custody, electronic banking, insurance, guarantee, employee benefits, consumer credit.<br />
(3) Credit insurance, factoring, corporate information, other receivables management.<br />
A MULTI-BRAND, MULTI-BUSINESS, FULL SERVICE UNIVERSAL BANK
Groupe Caisse d’Epargne, one of the largest retail<br />
banking institutions in France with the networks<br />
of the individual Caisses d’Epargne, Crédit Foncier,<br />
Banque Palatine, OCÉOR and its array of specialized<br />
subsidiaries, has now become a front-ranking<br />
full-service, universal bank. Combining economic<br />
performance with social utility is a vocation<br />
and a source of expertise that have set Groupe<br />
Caisse d’Epargne apart from other banking<br />
institutions from the moment of its creation.<br />
Groupe Caisse d’Epargne enjoys a high profile in all the different regions<br />
of metropolitan France and French overseas territories, serving a clientele<br />
of individual and professional customers for whom it develops, through its different<br />
activities and subsidiaries, a comprehensive range of savings products, financing<br />
solutions and banking services. The Group also acts as a partner of regional<br />
development by offering local authorities, the hospital sector, social housing<br />
organizations, entities active in the social economy, real estate professionals and<br />
local businesses a comprehensive array of products and services designed to finance<br />
their projects, simplify their management and optimize their investments.<br />
For the development of its activities related to corporate and investment<br />
banking, asset management and financial services, GCE now draws on<br />
the expertise of Natixis, its joint banking venture with Groupe Banque Populaire.<br />
Boasting shareholders’ equity of €20bn, net income of €3.8bn and credit<br />
ratings confirmed at the highest level awarded to French banks, Groupe Caisse<br />
d’Epargne enjoys a particularly robust financial profile.<br />
With a total of almost 56,000 employees, Groupe Caisse d’Epargne is active<br />
in all the segments of the banking industry, serving all types of clientele and<br />
present in the principal international financial markets. It runs a network of<br />
4,700 branches in France, and boasts a total of 26 million customers.<br />
Its ambition: to play an active role in the consolidation of the European<br />
banking industry and step up its commitment in favor of social progress, the very<br />
ideal that inspired the creation of the French savings banks.<br />
Credit ratings: AA/Aa2/AA.<br />
1
CHAPTER1<br />
ESSENTIALS<br />
MESSAGE FROM THE CHAIRMEN<br />
I<br />
n 2006, Groupe Caisse d’Epargne took a decisive step in the transformation of its structures.<br />
We can now look back with pride and see just how far we have traveled since 1999. Although it is<br />
true that we have enjoyed a number of successes in recent months and that the Group has been<br />
under the constant glare of the media spotlight, we must not lose sight of the fact that the major<br />
operations completed in 2006 are, in fact, but the culmination of a long maturing process.<br />
Since the 1999 reform, Groupe Caisse d’Epargne has changed both in nature and in size. Having<br />
become a true full-service, universal bank, the Group has managed continuously to enhance the skills<br />
and expertise that represent its principal assets. As a result, the efforts we have made to restructure<br />
our organization allow us today to meet the needs of all types of clientele without compromising<br />
our profitability criteria. Thanks to the active contribution of all our employees, the Group’s net<br />
banking income rose by 13.4% in 2006 to reach a total of €11.3 billion, following what had already<br />
been an outstanding year in 2005. Net income (after minority interests) also enjoyed substantial<br />
growth, reaching a total of €3.8 billion (including exceptional items). Our financial strength, reflecting<br />
the changes brought about in our Group structure, seems more satisfactory than ever before thanks to<br />
consolidated equity of €20 billion allowing Groupe Caisse d’Epargne to boast one of the best Tier One<br />
ratios enjoyed by a French banking institution.<br />
Our aim now is to pursue this ongoing development, to improve our performance still further, and to<br />
reassert the identity of Groupe Caisse d’Epargne at a time when competition in the European banking<br />
industry is growing in intensity. In this respect, of course, the creation of Natixis represents a decisive<br />
development for the future of the Group. Launched in March 2006 and concluded in December the<br />
same year with a major stock market operation, this initiative was handled with a degree of efficiency<br />
and professionalism that fully deserves our praise. Our teams, in constant liaison with their<br />
counterparts from the Banque Populaire Group, managed to bring this project to a successful<br />
conclusion despite the added complication that it pioneered a new type of alliance between two major<br />
cooperative banks.<br />
A front-ranking player in the areas of corporate and investment banking, asset management and<br />
financial services, Natixis is destined to play a decisive role in the consolidation of the European<br />
banking industry. Above and beyond the strategic ambition embodied in this initiative, Natixis will also<br />
prove to be a major springboard for the continued growth of Groupe Caisse d’Epargne. Indeed, the<br />
powerful distribution network of the French savings banks will now be able to tap into the resources<br />
of production mills equal to their needs. All our customers will benefit from the products utilizing<br />
the expertise of our new subsidiary.<br />
An innovative structure allowing Groupe Caisse d’Epargne harmoniously to blend its cooperative model<br />
with a more immediate access to the financial markets, Natixis represents a further step in the<br />
achievement of our strategic objectives. This operation, apart from the prospects it opens up for future<br />
growth, will also have a considerable impact on the organization and corporate governance of Groupe<br />
Caisse d’Epargne to the extent it has allowed us completely to redefine our partnership with<br />
Caisse des Dépôts. 2007 will therefore represent the beginning of a new phase in the relationship<br />
between the French savings bank group and its historic partner.<br />
2
The sheer scale of the success enjoyed with Natixis confirms the Group in its ambition to reconcile growth<br />
with economic performance. It is in this spirit that we have pursued our efforts to merge individual<br />
Caisses d’Epargne, marked in 2006 by the creation of the Caisse d’Epargne de Bourgogne Franche-Comté<br />
and the launch of nine other merger projects. These developments – a logical continuation of the history<br />
of Groupe Caisse d’Epargne itself – will significantly help to consolidate our role as a local and regional<br />
banking institution. With stronger savings banks as far as human resources and their capital funds<br />
are concerned, the Group will be in a strong position to provide its services more efficiently to a customer<br />
base expressing an increasingly wide variety of needs.<br />
To provide efficient support for this consolidation, Groupe Caisse d’Epargne has decided to put<br />
the convergence of all the savings banks’ IT resources to a single information system at the very heart<br />
of its strategy for the next three years. This project will not only guarantee enhanced technical<br />
and commercial performance but also pave the way to substantial savings in operating expenses.<br />
Alongside this major initiative, our aim is also to anticipate changes in the banking industry with respect<br />
to both our major operational challenges and the expectations of our clientele. To do this, it is vital<br />
to satisfy the current needs of the French economy in terms of investment. This is why the Group intends<br />
to focus its efforts in 2007 on the real estate market: by creating a powerful core business in this area,<br />
we will be in a position to strengthen the ties forged over the years with our customers and to accompany<br />
new clients in the realization of their projects. We also intend to actively pursue the expansion of our<br />
insurance business.<br />
Jacques Mouton<br />
(left)<br />
Charles Milhaud<br />
(right)<br />
In this area, as well as in its other activities, Groupe Caisse d’Epargne has set itself an ambitious<br />
objective: to achieve a high level of operational efficiency allowing it to combine rapid growth with a high<br />
degree of profitability. This will allow us to capitalize fully on our identity as a socially responsible bank<br />
and to pursue our actions in the area of social solidarity via, in particular, the funding of local and social<br />
economy projects and the activities of the Caisse d’Epargne Foundation for Social Solidarity.<br />
The successes achieved by Groupe Caisse d’Epargne in recent months have reinforced our status as<br />
a front-ranking player in the banking industry, enhanced our visibility and heightened the expectations<br />
of our customers and partners. Thanks to the active commitment of all its employees, the Group<br />
– we are certain – shall both satisfy and exceed these expectations. We fully intend to build our future<br />
on our continued ability to surprise.<br />
Charles Milhaud<br />
Chairman of the Management Board<br />
of the Caisse Nationale des Caisses d’Epargne<br />
Jacques Mouton<br />
Chairman of the Supervisory Board<br />
of the Caisse Nationale des Caisses d’Epargne<br />
3
1<br />
CHAPTER<br />
ESSENTIALS<br />
2006 KEY FIGURES<br />
GROUPE CAISSE D’EPARGNE<br />
EARNINGS TRENDS<br />
in billions of euros<br />
Pro forma 2004 2005 2006 2006/2005<br />
French GAAP<br />
Net banking income 9.7 10.0 11.3 13%<br />
Gross operating income 2.6 2.3 2.8 25%<br />
Income before tax 2.4 2.5 5.2 106%<br />
Net income (after minority interests) 1.8 1.8 3.8 115%<br />
Consolidated equity (1) 18.0 20.0 20.0 0.3%<br />
(1) Including Reserve for General Banking Risks in 2004, and including other comprehensive income (OCI) in 2005 and 2006.<br />
(2) RoE determined on the basis of average equity, excluding OCI;<br />
in 2006, RoE adjusted for non-recurring items (related, in particular,<br />
to the creation of Natixis).<br />
(3) Recorded under French GAAP in 2005.<br />
TIER ONE RATIO: 8.7% IN 2006<br />
CNCE GROUP<br />
EARNINGS TRENDS<br />
in billions of euros<br />
Pro forma 2004 2005 2006 2006/2005<br />
French GAAP<br />
Net banking income 4 4.4 5.4 23%<br />
Gross operating income 0.8 0.9 1.2 34%<br />
Income before tax 1.2 1.5 4.3 195%<br />
Net income (after minority interests) 0.9 1.1 3.3 192%<br />
Consolidated equity (1) 11.5 13.2 10.6 – 20%<br />
(1) Including Reserve for General Banking Risks in 2004, and including other comprehensive income (OCI) in 2005 and 2006.<br />
(2) RoE determined on the basis of average equity, excluding OCI;<br />
in 2006, RoE adjusted for non-recurring (related, in particular,<br />
to the creation of Natixis).<br />
(3) Recorded under French GAAP in 2005.<br />
TIER ONE RATIO: 8.9% IN 2006<br />
4
OUTSTANDINGS OF GROUPE CAISSE D’EPARGNE<br />
An excellent year for loans<br />
Group outstandings advanced 13% to reach a total of<br />
€230 billion, driven by strong demand for real estate loans<br />
and consumer credit.<br />
Customer savings remain stable following<br />
the incorporation of Natixis<br />
The outstandings of the Commercial Banking division enjoyed<br />
strong 6% growth to €325 billion buoyed up by the extremely<br />
good performance of insurance activities and the sharp increase<br />
in demand deposits following the launch of interest-bearing<br />
current accounts. The outstandings of the Investment Banking<br />
division declined in line with the inclusion of 34.44% of IXIS CIB<br />
outstandings, reflecting the Group’s interest in Natixis.<br />
IXIS AM Group delivers an excellent performance<br />
in asset management<br />
Assets under management rose by 13% (at constant euro<br />
rates). This growth reflects the combined impact of positive<br />
net fund inflows and good market performance, despite<br />
a negative currency impact following the sharp depreciation<br />
in the value of the dollar during the year.<br />
CACEIS, leader for institutional custody services<br />
Assets under custody reached a total of €1,787 billion<br />
at the end of 2006, a 16% year-on-year rise. CACEIS<br />
confirms its ranking in the top 10 custodians worldwide.<br />
(1) Data for 2005 relate to IXIS Investor Services and Crédit Agricole<br />
Investor Services.<br />
OTHER DATA<br />
4,700 BRANCHES IN 2006<br />
CREDIT RATINGS: AA /Aa2/AA (STABLE OUTLOOK)<br />
5
CHAPTER1<br />
ESSENTIALS<br />
2006 HIGHLIGHTS<br />
The Caisses d’Epargne<br />
now own 100% of the CNCE<br />
In accordance with the memorandum of<br />
understanding signed in June 2006, the Caisse<br />
des Dépôts has transferred its 35% interest in<br />
the capital of the CNCE. The individual Caisses<br />
d’Epargne now own 100% of the equity capital<br />
of the CNCE, thereby completing an historic step<br />
for the Group, which has now obtained its full<br />
independence. In parallel with this reorganization<br />
of its capital structure, however, new industrial<br />
partnerships are being forged with the Caisse<br />
des Dépôts.<br />
New shared premises<br />
The employees of the CNCE, along with the staff<br />
of several Group subsidiaries, moved into their<br />
new offices on the banks of the Seine, not far from<br />
the French Finance Ministry in Bercy and the Lyon<br />
and Austerlitz railway stations.<br />
New organizations<br />
• Two major divisions have been created within<br />
the Group – Retail Banking and the Specialist Bank<br />
for Regional Development – with a view to improving<br />
commercial efficiency.<br />
• The risk management system has been the subject<br />
of unprecedented tightening up at Group level.<br />
• At the CNCE, a Management Committee has<br />
been created within the Management Board.<br />
Several specialized committees have been set up<br />
to strengthen cross-functional management<br />
processes.<br />
• The quality approach has been given a fresh boost<br />
in order to create new dynamics and boost overall<br />
performance.<br />
Merger between individual<br />
Caisses d’Epargne for greater efficiency<br />
and profitability<br />
The Caisse d’Epargne de Bourgogne and<br />
the Caisse d’Epargne de Franche-Comté merged in<br />
2006 to expand their presence as a major regional<br />
bank. Nine other merger projects have been<br />
initiated: Champagne-Ardenne and Lorraine;<br />
Flandre, Pas-de-Calais and Pays du Hainaut;<br />
Alpes and Rhône-Alpes Lyon; Aquitaine-Nord,<br />
Pays de l’Adour and Poitou-Charentes; Centre-Val<br />
de Loire and Val de France-Orléanais; Ile-de-France<br />
Nord, Ile-de-France Ouest and Ile-de-France Paris;<br />
Martinique and Provence-Alpes-Corse; Basse-<br />
Normandie and Haute-Normandie; Bretagne and<br />
Pays de la Loire. 2007 and 2008 will consequently<br />
see the creation of new major regional banks,<br />
enjoying more extensive commercial resources<br />
and a stronger financial base.<br />
The Group organizes its real estate division…<br />
The Group has begun to develop its real estate<br />
strategy with a view to creating a major listed core<br />
business specializing in real estate services and<br />
property financing solutions. In 2006, two structures<br />
were created:<br />
• GCE Immobilier, an organization dedicated to real<br />
estate professions and services (excluding banking<br />
activities and social housing) in the competitive and<br />
semi-private sector;<br />
• GCE Habitat, an entity specializing in social housing,<br />
nursing homes and healthcare institutions.<br />
… enhances its private equity resources…<br />
Working alongside regional structures,<br />
GCE Capital is actively pursuing its mission<br />
of reinforcing the Group’s private equity and<br />
LBO/LBMO activities, and will set up a fund<br />
of funds activity.<br />
… and gives shape to its partnership<br />
with MACIF and MAIF<br />
CEMM, a holding company owned by the CNCE<br />
(50%) and by the MACIF and MAIF mutual<br />
insurance companies (with a 25% stake each),<br />
has been set up to assume responsibility for joint<br />
projects, to manage equity interests and coordinate<br />
the partnership existing between the three groups.<br />
6
Moving towards a single IT system<br />
Performance SI (IT Efficiency), a major project<br />
designed to create a single information system for<br />
Groupe Caisse d’Epargne, has now been launched.<br />
This strategic decision, of essential importance<br />
for boosting the competitiveness of the bank’s<br />
operations, represents a new step in improving<br />
service quality and operational excellence.<br />
Natixis in action: on time, in full!<br />
It did not take more than six months to bring<br />
this industrial project – of major importance<br />
for the future growth of Groupe Caisse<br />
d’Epargne – to a satisfactory conclusion.<br />
Created legally on November 17, 2006, the new<br />
Investment and Project Bank jointly owned by<br />
Groupe Caisse d’Epargne and the Banque<br />
Populaire group made its successful debut on<br />
the Paris Bourse on December 5, 2006.<br />
Natixis has already attracted more than<br />
2.86 million individual shareholders.<br />
The largest operation in the French financial<br />
market in 2006 in terms of value, it was also<br />
the banking industry’s most attractive<br />
investment since 1999. Nearly 670,000 Groupe<br />
Caisse d’Epargne customers – including almost<br />
390,000 Caisses d’Epargne cooperative<br />
shareholders – have bought shares in Natixis.<br />
Creativity, innovation, customer loyalty<br />
The first major bank to pay interest on current<br />
accounts, Caisse d’Epargne continued to bank<br />
on innovation in 2006 to distinguish itself from its<br />
competitors.<br />
• It joined the S’Miles loyalty program, becoming<br />
the program’s exclusive banking partner. More than<br />
1.6 million Caisse d’Epargne customers adopted it<br />
in the space of just four months.<br />
• It launched a package of personal care services in<br />
partnership with the MAIF, MACIF and MGEN<br />
mutual insurance companies.<br />
• It became one of the four banks entitled to issue<br />
multi-purpose employment service checks<br />
(known as CESU in France), in partnership with<br />
Accor Services.<br />
• It has developed positions in the complementary<br />
health insurance market.<br />
• It has launched movo, the first service enabling<br />
individual customers to send and receive money<br />
with their mobile phone.<br />
International: targeted operations<br />
for retail banking<br />
Four operations were concluded during the year:<br />
• the acquisition of an 80% interest in<br />
the French and Luxembourg subsidiaries of<br />
the Portuguese bank Millennium bcp;<br />
• the creation of Banco Primus in Portugal,<br />
a bank specializing in the restructuring of loans<br />
with mortgage guarantees in which Crédit<br />
Foncier holds a 35% interest;<br />
• an increased equity interest in Banca Carige in<br />
Italy – 15% of the capital held by the CNCE – and<br />
the creation of a joint subsidiary in Italy<br />
specializing in consumer credit;<br />
• the acquisition, in partnership with the Caisse<br />
de Dépôt et de Gestion, of an interest in<br />
Crédit Immobilier et Hôtelier (CIH) in Morocco,<br />
a financial institution specializing in banking<br />
services for the family.<br />
10,000 PELS funded since 2001<br />
Tangible proof of the commitment of the<br />
Caisses d’Epargne to social solidarity,<br />
2,718 local and social economy projects (PELS)<br />
were financed in 2006 for an aggregate total<br />
of nearly €54 million. Since 2001, the Caisses<br />
d’Epargne have supported more than 10,000 PELS,<br />
providing funding for a total of €240 million.<br />
The Caisses d’Epargne Foundation<br />
for Social Solidarity: new targets<br />
to combat exclusion<br />
Created in 2001 and committed to the fight<br />
against all forms of exclusion, the Foundation<br />
has become, in terms of the number of its<br />
employees, one of the largest public-interest<br />
foundations in France.<br />
To celebrate the fifth anniversary of its creation,<br />
it has set itself three key targets for 2010 and<br />
beyond:<br />
• 10,000 beds for the dependent elderly (current<br />
capacity is for 4,800 individuals);<br />
• 10,000 individuals provided with home support<br />
services (6,300 today);<br />
• 10,000 young people supported by the<br />
campaign against illiteracy, Savoirs pour réussir<br />
(“Knowledge for Success”).<br />
7
CHAPTER1<br />
ESSENTIALS<br />
Groupe Caisse d’Epargne has very rapidly transformed, expanded and<br />
reinforced its structures since the adoption of the reform bill of 1999.<br />
Its continued growth is driven by its multi-clientele, multi-business,<br />
multi-brand business model while its operational efficiency is constantly<br />
improving. The Group has more than doubled the size of its consolidated<br />
equity since 1999 and its results have been multiplied by a factor of more<br />
than three. With its comprehensive range of banking business lines and<br />
activities, its considerable financial strength and a freedom of action<br />
enhanced by the stock market listing of Natixis, Groupe Caisse d’Epargne<br />
boasts major advantages enabling it to reassert its status as one of the<br />
front-ranking players actively involved in the competition between<br />
banking institutions in the European market.<br />
STRATEGY AND OBJECTIVES<br />
The year 2006 marked an historic<br />
turning point in the history of Groupe<br />
Caisse d’Epargne: it became fully<br />
independent following the withdrawal<br />
of Caisse des Dépôts from the capital<br />
of the CNCE (1) and, with Natixis, it<br />
boasts a stronger wholesale bank and a powerful<br />
listed vehicle that considerably improves its<br />
prospects for future growth.<br />
Headway made in these areas is fully in line with<br />
the 2004-2007 strategic plan aimed at achieving<br />
three key objectives:<br />
• to combine sustained growth with high levels of<br />
profitability;<br />
• to achieve a high level of quality and operational<br />
efficiency;<br />
• to make the Group’s commitment to society a factor<br />
that distinguishes it from other financial institutions.<br />
The individual Caisses d’Epargne, which now own<br />
100% of the CNCE, represent the foundations upon<br />
which the Group is built. All these new advantages<br />
will be put to full use for their benefit.<br />
The strengthening of the sales teams and the<br />
measures taken to enhance their efficiency, the new<br />
impulse given to the quality approach, the organization<br />
of Commercial Banking activities into two major<br />
divisions – Retail Banking and the Specialist Bank<br />
for Regional Development – are all different vectors<br />
for future growth and enhanced performance.<br />
The mergers completed, or currently in progress,<br />
between a number of individual savings banks, the<br />
work done to facilitate convergence towards a single<br />
information system, the optimization of industrial<br />
and administrative platforms, the strengthening<br />
of partnerships with Natixis along with the MACIF<br />
and MAIF mutual insurance companies will allow<br />
the Group to move more rapidly from the stage<br />
of objectives to that of tangible results.<br />
(1) December 18, 2006 and January 29, 2007.<br />
8<br />
Commercial Banking<br />
• Retail Banking: leadership, performance,<br />
and innovation<br />
Retail Banking chiefly covers the private<br />
individual and professional customer markets;<br />
it is the core business activity of Caisse d’Epargne<br />
and should make a vital contribution to the ongoing<br />
development of the Group.<br />
Caisse d’Epargne boasts an extremely large<br />
customer base, and has begun to tap this potential<br />
with the extension of banking services for savers,<br />
for young people and self-employed professionals.<br />
It is also taking steps to enhance the loyalty of<br />
its customers by improving the quality of their<br />
welcome, by being receptive to what they have to<br />
say and providing appropriate advice, and by<br />
adopting a segmented approach to their needs that<br />
combines the industrialization of processes with<br />
the customization of relationships. The decision<br />
to pay interest on current accounts and to join<br />
the S’Miles program fully meet these objectives<br />
of expanding the use of banking services and<br />
ensuring customer loyalty.<br />
Interest-bearing<br />
current accounts<br />
and the S’Miles<br />
loyalty program<br />
Caisse d’Epargne also boasts major growth<br />
potential in certain market segments: unregulated<br />
savings products, private asset management,<br />
insurance, consumer credit, personal care services,<br />
etc. The Group has already organized its offerings<br />
in the area of private asset management and real<br />
estate loans. It has also set up a powerful industrial
platform dedicated to consumer credit allowing it<br />
to increase the pace of its development in this area.<br />
• The Specialist Bank for Regional<br />
Development: speeding up the pace of growth<br />
With the individual Caisses d’Epargne deeply<br />
rooted in their particular regions and enjoying a<br />
privileged understanding of the grassroots dimension<br />
and strong ties with local decision-makers,<br />
the Specialist Bank for Regional Development<br />
emphasizes the Group’s local presence and knowhow<br />
at the service of public and private entities<br />
involved in the life of the regions. The bank offers<br />
its know-how to local authorities, organizations<br />
specializing in social housing and the social economy,<br />
businesses, real estate professionals and all the<br />
partners of complex operations such as public-private<br />
partnerships (PPP) or joint development initiatives.<br />
As joint leader for the financing of local authorities<br />
and institutions, Caisse d’Epargne intends to<br />
extend its lead in this area by leveraging the offerings<br />
developed, in certain cases, in association with Natixis<br />
and Crédit Foncier: structured finance solutions,<br />
dynamic debt management, asset allocation, or<br />
services such as the multi-purpose employment<br />
service checks (known as CESU), a promising new<br />
market where Caisse d’Epargne has successfully<br />
established itself in partnership with Accor Services.<br />
The Group has developed a sophisticated range<br />
of investment and financing solutions in its capacity<br />
as the leading banking partner of the social<br />
housing movement. It boasts a strong presence in<br />
the governance bodies of the social housing<br />
organizations and it is also one of the leading<br />
private HLM social housing groups with more than<br />
170,000 social housing units under management.<br />
The Group aims to further consolidate the three<br />
dimensions of its activities in this area.<br />
Caisse d’Epargne, which is already the largest<br />
financial institution providing services for protected<br />
individuals, is simultaneously pursuing a dynamic<br />
policy aimed at reinforcing its presence among<br />
organizations active in the social economy:<br />
associations, mutual insurance companies and<br />
foundations, notably those specializing in education<br />
and health.<br />
As the largest private operator in regional private<br />
equity funds, the Group provides small- to mediumsized<br />
companies with a wide range of solutions in the<br />
areas of long-term financing, company transmission<br />
or buyout. Thanks to the expertise of the Caisses<br />
d’Epargne and Banque Palatine, the Group aims to<br />
become a premium banking partner for corporate<br />
customers by basing its action, in particular,<br />
on the deployment of Trade, the international trade<br />
financing program, and on an offering enriched with<br />
new services developed by Natixis.<br />
• Insurance<br />
After life insurance, cover for fire, accident &<br />
miscellaneous risks, and medical & health<br />
insurance, the Group developed in 2006 its<br />
presence in the market for complementary health<br />
insurance. It also started operations in the<br />
promising market for personal care services within<br />
the framework of its partnership with the MACIF<br />
and MAIF mutual insurance companies.<br />
This partnership should also expand into other<br />
areas such a long-term car rentals or legal<br />
protection.<br />
• Real estate<br />
With the creation of a real estate division, the<br />
Group wants to position itself as a major player in<br />
this business area; it will be able to improve<br />
its overall support for local authorities in their<br />
development projects but also expand its offering<br />
aimed at individual customers. In this respect,<br />
GCE Immobilier will be an additional advantage,<br />
enabling the Group to forge partnerships with<br />
property developers and real estate investors.<br />
The subsidiary is already the reference shareholder<br />
of Arthur l’Optimist, the fifth largest network<br />
specializing in real estate transactions in France.<br />
As far as public-private partnerships are<br />
concerned, the Group is aiming to capture a 30%<br />
share of the market.<br />
170,000<br />
More than<br />
social housing units under management<br />
• New key advantages with Natixis<br />
The Retail Banking core business and the Specialist<br />
Bank for Regional Development will both directly<br />
benefit from the contribution made by Natixis, with a<br />
more extensive offering and lower production costs.<br />
The Caisses d’Epargne will continue to offer products<br />
and services designed for them by the subsidiaries<br />
transferred to Natixis; they will also benefit from new<br />
and complementary expertise derived from companies<br />
originally owned by the Banque Populaire group.<br />
The range of products and services will be enlarged,<br />
notably in the areas of employee savings, equipment<br />
leasing for SMEs, receivables management, and<br />
mutual funds. Customers will enjoy access to products<br />
that are both more competitive and more efficient<br />
thanks to scale effects making it possible to amortize<br />
high development costs.<br />
9
CHAPTER1<br />
ESSENTIALS<br />
Natixis: an innovative industrial project,<br />
creating new value for the Group<br />
With Natixis, Groupe Caisse d’Epargne is giving<br />
itself the means it needs to step up the pace<br />
of its growth in corporate and investment banking,<br />
asset management and financial services, areas<br />
in which size and an international presence are two<br />
essential factors.<br />
The Caisse Nationale des Caisses d’Epargne<br />
and the Banque Fédérale des Banques Populaires<br />
each hold a 34.44% stake in Natixis, which,<br />
as a result, enjoys the support of two major local<br />
cooperative banking networks. Natixis itself owns<br />
a 20% stake in each of these two networks in<br />
the form of Cooperative Investment Certificates<br />
(CICs) (1) issued by the Caisses d’Epargne and<br />
Banques Populaires, a fact that further strengthens<br />
the ties between the two banking groups.<br />
By combining their highly complementary<br />
wholesale banking activities, the two partners have<br />
given birth to a major new player in the international<br />
banking arena while simultaneously retaining two<br />
factors that have been key to their success, namely:<br />
their strong regional presence and the ability to<br />
make decisions as close as possible to the local<br />
level.<br />
For Groupe Caisse d’Epargne, this strategic<br />
initiative represents an industrial project capable<br />
of creating new value, which will simultaneously<br />
give its local customers access to a more extensive<br />
offering and range of expertise and benefit from<br />
the development of clienteles specific to the<br />
corporate and investment banking business among<br />
major corporations and institutionals.<br />
Thus, Groupe Caisse d’Epargne is acquiring<br />
a new dimension and giving itself the listed vehicle<br />
it needs to continue its growth: from the very<br />
outset, Natixis is the 4 th largest listed French bank<br />
with a market capitalization in excess of €22 billion<br />
(at April 3, 2007).<br />
(1) The CICs entitle their bearers to dividends<br />
but confer no voting rights.<br />
(2) 2006 pro forma.<br />
10<br />
With a total of almost 23,000 employees,<br />
net banking income of €7.3 billion (2) and shareholders’<br />
equity (excluding minority interests) of €17.5 billion,<br />
Natixis is one of the leading players in its sector,<br />
commanding front-ranking positions in its core<br />
business activities in France, Europe and around<br />
the world.<br />
Natixis boasts a particularly strong customer<br />
base thanks to the outstanding match between<br />
IXIS, which was extremely active with institutionals,<br />
and Natexis Banques Populaires, historically<br />
enjoying a strong presence among major<br />
corporations. The new company pursues its<br />
activities in five key areas.<br />
15<br />
In the<br />
TOP<br />
worldwide for asset<br />
management<br />
• Corporate and investment banking<br />
Natixis is a front-ranking player in the European<br />
market and one of the leading operators in France.<br />
It combines the expertise of IXIS Corporate &<br />
Investment Bank in the capital markets with the<br />
skills of Natexis BP in the area of financing<br />
solutions, notably structured finance and<br />
commodities. It boasts strong positions in Europe<br />
and in the United States.<br />
• Asset management<br />
Natixis is a pre-eminent Franco-American<br />
specialist, with assets under management worth<br />
a total of €583 billion at the end of 2006. It is one<br />
of the world’s top 15 asset management specialists,<br />
boasting well-established positions for standard<br />
products as well as for extremely sophisticated<br />
solutions designed for institutional customers.<br />
• Private equity and private banking<br />
In the area of private equity funds, Natixis is<br />
the leading French player in the medium-sized<br />
enterprise segment, with more than €3.2 billion<br />
invested at the end of 2006, more than one half<br />
of which invested for third parties. It manages<br />
funds worth approximately €14 billion on behalf of<br />
wealthy private individuals.
No. 3<br />
worldwide in credit insurance<br />
• Services<br />
Natixis commands front-ranking positions in<br />
the areas of custody services for retail and<br />
institutional customers (no.10 worldwide), electronic<br />
banking and payment systems, life insurance and<br />
cover for fire, accident and miscellaneous risks,<br />
consumer credit, financial securities and guarantees<br />
as well as employee benefits.<br />
• Receivables management<br />
Natixis is a leading player worldwide with<br />
a comprehensive array of services designed for both<br />
French and international companies: credit insurance<br />
(no.3 worldwide), financial information, factoring,<br />
and receivables management.<br />
International: new ambitions<br />
Having set up the organization it needs and<br />
further strengthened its resources, Groupe Caisse<br />
d’Epargne is now in full marching order, ready<br />
to begin a new stage in its growth outside its<br />
domestic French market.<br />
In the area of commercial banking, the Group<br />
has already developed a business specializing<br />
in public authority financing in Switzerland, Italy<br />
and the Netherlands.<br />
Crédit Foncier has opened offices in Belgium,<br />
the UK (London) and Portugal where it is a partner<br />
of the newly created Banco Primus.<br />
More generally, Groupe Caisse d’Epargne is<br />
determined to play an active role in the consolidation<br />
of the European banking industry, to export its<br />
know-how and seize the growth opportunities<br />
emerging in Europe, notably in the Mediterranean<br />
basin, which it has made a priority objective for its<br />
retail banking business.<br />
The cooperation agreements with the Portuguese<br />
bank Millennium bcp and the acquisition of its French<br />
and Luxembourg subsidiaries with their strong ties<br />
with customers of Portuguese origin, the purchase<br />
of an equity interest in Crédit Immobilier et Hôtelier<br />
(CIH) in Morocco, the creation with Banca Carige of<br />
a joint consumer credit subsidiary in Italy… are all<br />
examples of the realization of these international<br />
ambitions in 2006.<br />
Social commitment and solidarity:<br />
a leading private player in the social sector<br />
Beyond the performance of its core business<br />
activities, the Group also remains faithful to<br />
the ideal of social progress that presided over<br />
the creation of the first French savings bank.<br />
More than ever before, it is determined to be a<br />
socially responsible banking institution capable<br />
of providing fresh answers to the major challenges<br />
facing society such as retirement savings, the<br />
alleviation of dependency, the promotion of social<br />
housing, the fight against social exclusion, etc.<br />
Groupe Caisse d’Epargne, the historic partner<br />
of the HLM subsidized housing movement, is the<br />
only institution involved in all areas of the social<br />
housing sector – of which it is the largest private<br />
banker – in addition to being an active operator<br />
of social housing organizations. The Group also<br />
plays a major role in financing healthcare<br />
infrastructures and in providing assistance to<br />
vulnerable or dependent individuals.<br />
By helping to create new jobs, promoting<br />
economic and social integration, continuing its<br />
drive to combat banking exclusion, illiteracy, and<br />
the dependency of elderly or vulnerable people,<br />
the Group strives every day to build a more<br />
mutually supportive society.<br />
Through the financing of local and social economy<br />
projects – the écureuil & solidarité PELS – whose<br />
annual funding envelope increases in pace with<br />
the results of the Caisses d’Epargne, and through<br />
the activities of the Caisses d’Epargne Foundation<br />
for Social Solidarity actively engaged in the struggle<br />
against dependency and exclusion, the Group lends<br />
its support to economic and social players actively<br />
committed to strengthening the essential cohesion<br />
within society.<br />
The Group is also involved in sustainable<br />
development and helps its customers to develop<br />
their own actions in this area, with a view<br />
to becoming their benchmark banking partner.<br />
These are just some of the achievements that<br />
make Groupe Caisse d’Epargne a unique banking<br />
institution, different by virtue of its active<br />
commitment to society.<br />
11
CHAPTER1<br />
ESSENTIALS<br />
ORGANIZATIONAL STRUCTURE<br />
AND CORPORATE GOVERNANCE<br />
Mutual benefit structures<br />
The Caisses d’Epargne, which represent the very<br />
foundations upon which the Group is built, are<br />
regional cooperative banks. 80% of their share<br />
capital is owned by local savings companies, which<br />
also hold 100% of all voting rights. Natixis, the joint<br />
venture between Groupe Caisse d’Epargne and<br />
the Banque Populaire group, owns the remaining<br />
20% of the share capital in the form of Cooperative<br />
Investment Certificates (CICs), which represent<br />
a portion of net assets and entitle bearers to receive<br />
dividends but confer no voting rights.<br />
Every customer of an individual Caisse d’Epargne<br />
– whether a private individual or legal entity – may<br />
acquire shares in a local savings company and<br />
thereby become a “cooperative shareholder”.<br />
To ensure a true local relationship with the cooperative<br />
shareholders, there are at least seven local savings<br />
companies affiliated to each individual savings bank.<br />
Each local savings company invites its cooperative<br />
shareholders to an Annual General Meeting.<br />
The cooperative shareholders elect a board of<br />
directors, which then appoints a Chairman<br />
responsible, in particular, for representing the local<br />
savings company at the Annual General Meeting<br />
of Caisse d’Epargne. It is during this meeting that<br />
the amount of dividend paid on the shares and CICs<br />
is decided every year.<br />
The local savings companies also represent a<br />
forum for discussions and the sharing of information.<br />
The Caisses d’Epargne regularly use them to organize<br />
meetings devoted to the everyday preoccupations of<br />
their cooperative shareholders.<br />
At December 31, 2006, the Caisses d’Epargne boasted<br />
a total of 3.4 million cooperative shareholders grouped<br />
within 440 local savings companies.<br />
Each Caisse d’Epargne is administered by a<br />
Management Board of between two and five<br />
members, which is itself supervised by a Steering<br />
and Supervisory Board (COS) comprised of<br />
18 members, including a majority of local savings<br />
company representatives.<br />
12<br />
The regional Caisses d’Epargne have owned 100%<br />
of the Caisse Nationale des Caisses d’Epargne<br />
(CNCE) since January 29, 2007, when they received<br />
from the Caisse des Dépôts the 35% interest this<br />
institution previously held in the CNCE.<br />
The Caisse Nationale des Caisses d’Epargne<br />
The CNCE is a financial institution having the legal<br />
status of a limited liability company (French société<br />
anonyme) governed by a Management Board and<br />
a Supervisory Board. It has three main roles and<br />
responsibilities within Groupe Caisse d’Epargne.<br />
• As the central institution of the Group, it represents<br />
the credit institutions affiliated to it in dealings with<br />
the supervisory authorities and, within this framework,<br />
makes sure that the legal and regulatory provisions<br />
specific to these institutions are applied. It takes all<br />
necessary steps to preserve the cohesion of the<br />
network of individual Caisses d’Epargne and generally<br />
supervises the proper management of the affiliated<br />
entities.<br />
The CNCE also takes all necessary measures to<br />
guarantee the liquidity and solvency of the affiliated<br />
entities.<br />
It defines the products and services distributed<br />
to customers, and coordinates the commercial<br />
policy. It promotes the Group’s common interests in<br />
terms of human resources, and approves the<br />
appointment of senior management staff in the<br />
entities affiliated to it.<br />
• As the holding company of the Group, the CNCE<br />
carries out activities related to its status as head<br />
of the Group. It owns and manages its equity<br />
interests in the subsidiaries.<br />
It also defines the Group’s strategy and<br />
development policy.<br />
• As the banker to the Group, the CNCE is<br />
responsible, in particular, for the centralized<br />
management of any surplus funds held by the<br />
regional savings banks and for proceeding with any<br />
financial transactions useful for the development<br />
and refinancing of the Group. It also offers services<br />
of a banking nature to Group entities.
Corporate governance of the CNCE<br />
The CNCE is administered by a Management<br />
Board consisting of between two and five members.<br />
Its Supervisory Board is comprised of 20 members.<br />
Since the withdrawal of Caisse des Dépôts, 18 seats<br />
are reserved for representatives of the individual<br />
Caisses d’Epargne; the remaining two seats are<br />
reserved for representatives elected directly by the<br />
network employees.<br />
The Supervisory Board of the CNCE also<br />
includes six non-voting members (censeurs): one<br />
senior executive from the Caisses d’Epargne<br />
network, one representative from Natixis, one from<br />
the Fédération Nationale des Caisses d’Epargne,<br />
and three directors from major corporations.<br />
The censeurs act in an advisory capacity. They bring<br />
the advantage of their independent advice, their<br />
knowledge of the economic and financial<br />
environment, and their expertise as managers<br />
without taking part in any votes.<br />
Three specialized committees – whose existence<br />
and composition are provided for by the bylaws<br />
adopted by the CNCE – also assist the Supervisory<br />
Board in its deliberations. They are comprised<br />
of between five and seven members (including<br />
the Chairman). The committees in question are the<br />
Audit Committee, the Remuneration & Selection<br />
Committee, and the Strategy & Development<br />
Committee, which together prepare the<br />
deliberations and decisions of the Supervisory<br />
Board.<br />
The Management Board of the Caisse<br />
Nationale des Caisses d’Epargne<br />
Appointed on January 1, 2004 for a period of six years.<br />
Charles Milhaud<br />
Chairman<br />
Nicolas Mérindol<br />
Chief Executive Officer<br />
Guy Cotret<br />
Group Executive Director,<br />
responsible for human resources,<br />
IT and banking operations<br />
Alain Lacroix<br />
Group Executive Director,<br />
responsible for corporate development<br />
Alain Lacroix was appointed to the Management Board<br />
of the CNCE to replace Anthony Orsatelli,<br />
who resigned, for the remainder of his term of office,<br />
i.e., until December 31, 2009.<br />
This appointment became effective on<br />
November 17, 2006.<br />
Pierre Servant was a member of the Management<br />
Board, responsible for finance, until<br />
November 17, 2006, when he resigned his position.<br />
From left to right:<br />
Alain Lacroix<br />
Nicolas Mérindol<br />
Charles Milhaud<br />
Guy Cotret<br />
13
CHAPTER1<br />
ESSENTIALS<br />
• The Audit Committee is responsible for ensuring<br />
the accuracy of information provided to<br />
the Supervisory Board. It examines, in particular,<br />
the Group’s annual financial statements and<br />
monitors the application of the recommendations<br />
resulting from the work of the Internal Audit<br />
Department and the French Banking Commission<br />
concerning the Group’s different entities.<br />
The Audit Committee met 14 times in 2006.<br />
• The Remuneration & Selection Committee<br />
is chaired by the Chairman of the Supervisory Board<br />
of the CNCE. It is responsible for submitting<br />
recommendations to the Supervisory Board<br />
regarding the appointment and forms of<br />
compensation granted to the members of<br />
the Management Board of the CNCE. It verifies<br />
the nature and implementation of the criteria drawn<br />
up by the Management Board of the CNCE governing<br />
the appointment and renewal of the senior<br />
management personnel of the companies affiliated<br />
to the CNCE, and submits these managers to<br />
the approval of the Supervisory Board. One of its<br />
members is also a censeur with a seat on the<br />
Supervisory Board.<br />
The Remuneration & Selection Committee met<br />
nine times in 2006.<br />
• The Strategy & Development Committee<br />
is responsible for preparing the decisions of<br />
the Supervisory Board of the CNCE concerning<br />
the adoption of the Group’s strategic objectives<br />
and growth priorities, the definition and revision<br />
of the strategic plan, and projects related to<br />
operations or partnerships. It is kept informed<br />
on a regular basis about progress in completing<br />
operations and partnerships and, twice a year,<br />
about the achievement of targets included in<br />
the strategic plan.<br />
The Strategy & Development Committee met<br />
seven times in 2006.<br />
(1) Member of the Remuneration & Selection<br />
Committee, chaired by Jacques Mouton.<br />
(2) Member of the Strategy & Development<br />
Committee, chaired by Yves Hubert.<br />
(3) Member of the Audit Committee,<br />
chaired by Dominique Marcel until<br />
July 6, 2006, then by Bernard Comolet<br />
until January 30, 2007 and<br />
by Alain Lemaire since March 7, 2007.<br />
14
The Supervisory Board of the Caisse Nationale des Caisses d’Epargne at December 31, 2006<br />
Appointed by the Annual General Meeting on December 15, 2003 for a period of six years.<br />
Jacques Mouton (1)(2) , Chairman<br />
Chairman of the Steering and Supervisory Board<br />
of the Caisse d’Epargne Aquitaine-Nord<br />
Bernard Comolet (3) , Vice-Chairman<br />
Chairman of the Management Board of the Caisse d’Epargne<br />
Ile-de-France Paris and of the Caisse d’Epargne Ile-de-France<br />
Ouest (since February 12, 2007)<br />
REPRESENTATIVES OF<br />
THE INDIVIDUAL CAISSES D’EPARGNE<br />
Catherine Amin-Garde<br />
Chairwoman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne Loire Drôme Ardèche<br />
Jean-Charles Cochet<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne de Lorraine<br />
Dominique Courtin (2)(3)<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Bretagne<br />
Jean-Claude Créquit (3)<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne Côte d’Azur<br />
Resignation effective December 31, 2006 replaced by Bruno Dugelay<br />
Michel Dosière<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne Poitou-Charentes<br />
Resignation effective March 21, 2007<br />
Marcel Duvant (3)<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne des Pays du Hainaut<br />
Yves Hubert (1)(2)<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Picardie<br />
Alain Lemaire (3)<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne Provence-Alpes-Corse<br />
Jean Levallois (1)<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Basse-Normandie<br />
Alain Maire<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne de Bourgogne Franche-Comté<br />
Bernard Sirol (1)<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Midi-Pyrénées<br />
Yves Toublanc<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne des Alpes<br />
Hervé Vogel (2)<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne Rhône-Alpes Lyon<br />
Resignation effective January 31, 2007 replaced by Jean-Marc Carcelès<br />
REPRESENTATIVES OF<br />
THE CAISSE DES DÉPÔTS<br />
The Caisse des Dépôts represented by<br />
Dominique Marcel (2)(3)<br />
Chief Financial Officer, Caisse des Dépôts Group<br />
Resignation effective January 29, 2007 replaced<br />
by Jean-François Paillissé<br />
Francis Mayer<br />
Chief Executive Officer, Caisse des Dépôts<br />
Died on December 9, 2006 replaced by Gérard Lunel<br />
Jean Sebeyran (1)(2)(3)<br />
Corporate Secretary of the Caisse des Dépôts Group<br />
Resignation effective January 29, 2007 replaced by Bernard Monier<br />
REPRESENTATIVES OF<br />
THE BANK NETWORK EMPLOYEES<br />
Serge Huber<br />
Jacques Moreau<br />
CENSEURS (NON-VOTING MEMBERS)<br />
Joël Bourdin<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Haute-Normandie<br />
Jean-Marc Espalioux<br />
Chairman and CEO, Financière Agache<br />
Jean-Charles Naouri<br />
Chairman and CEO, Casino Group<br />
Henri Proglio (1)<br />
Chairman and CEO, Veolia Environnement<br />
Natixis represented by<br />
Anthony Orsatelli, member of the Management Board of Natixis<br />
Fédération Nationale des Caisses d’Epargne<br />
represented by<br />
Nicole Moreau (Chairwoman of the Board of Directors of the FNCE)<br />
GOVERNMENT REPRESENTATIVE<br />
Antoine Mérieux<br />
REPRESENTATIVES OF<br />
THE WORKS COUNCIL OF THE CNCE<br />
Abdel Babaci<br />
Jean-Luc Débarre<br />
Philippe Malizia<br />
Patrick Mellul<br />
15
CHAPTER1<br />
ESSENTIALS<br />
The Fédération Nationale des Caisses d’Epargne<br />
The Fédération Nationale des Caisses d’Epargne<br />
(FNCE) is a non-profit association acting<br />
simultaneously as a think tank, and as the voice and<br />
representative of the individual Caisses d’Epargne<br />
and their cooperative shareholders.<br />
• The FNCE helps to coordinate and develop relations<br />
between the Caisses d’Epargne and their cooperative<br />
shareholders.<br />
• It helps to define the overall strategic objectives of<br />
the network.<br />
• It provides national guidelines for financing local<br />
and social economy projects (known as “PELS”) and<br />
actions taken by the Group in the general public<br />
interest.<br />
• It organizes, in liaison with the CNCE, training<br />
sessions for the Group’s senior management team<br />
and for representatives of cooperative shareholders.<br />
• It defends the common interests of the Caisses<br />
d’Epargne and their cooperative shareholders,<br />
notably in dealings with the public authorities and<br />
professional bodies both within and outside France.<br />
• It ensures compliance with the rules of deontology<br />
within the Caisses d’Epargne network.<br />
• It contributes to the active involvement of the<br />
French savings bank network within European bodies<br />
of the same nature.<br />
It is consulted by the CNCE regarding all reform<br />
projects concerning the Caisses d’Epargne.<br />
The organization of the Fédération is based on<br />
several statutory bodies: the annual general meeting,<br />
the Board of Directors, the Office of the Chairman<br />
(“bureau“), the Federal Board and various committees.<br />
Each Caisse d’Epargne is represented at the<br />
Annual General Meeting of the FNCE by its Chairman<br />
and one member of its Steering and Supervisory<br />
Board in addition to the Chairman of its Management<br />
Board.<br />
The Board of Directors of the FNCE is comprised<br />
of 18 members elected by the AGM in equal numbers<br />
from among the Steering and Supervisory Board<br />
Chairmen and the Management Board Chairmen.<br />
For the preparation of its work and decisions,<br />
the Board is assisted by three committees – social<br />
commitment, cooperative life and training,<br />
communications and international relations – and<br />
bodies of experts specializing in areas having<br />
a major impact on the activities or organization of<br />
the French savings banks.<br />
The Office of the Chairman (“bureau“) is a collegiate<br />
body that acts in an advisory capacity with a view to<br />
facilitating the deployment of the Fédération’s<br />
activities. It is comprised of six members from the<br />
Board of Directors, three Management Board<br />
Chairmen and three Steering and Supervisory Board<br />
Chairmen. It convenes meetings whenever<br />
necessary, and at least five times every year.<br />
The Federal Board, comprised of all the Chairmen<br />
of the different Management and Steering and<br />
Supervisory Boards, is a forum for reflection<br />
and debate between the individual Caisses d’Epargne.<br />
It is invited by the Board of Directors to coordinate<br />
reflection about corporate strategy, to express an<br />
opinion about the structural goals adopted by the<br />
Group or take part in the process leading to the<br />
appointment of Caisses d’Epargne representatives in<br />
the national bodies. It convenes meetings whenever<br />
necessary, and at least once every quarter, as<br />
decided by the Board of Directors.<br />
The key event in 2006 was the preparation of the<br />
Natixis operation, for which the Fédération gave its<br />
support among the cooperative shareholders and<br />
directors of the local savings companies,<br />
shareholders of the regional savings banks.<br />
The implications of this project in terms of corporate<br />
governance were the subject of major work organized<br />
as a continuation of the consultation process<br />
launched in 2005.<br />
• New corporate governance<br />
The Fédération has applied the corporate<br />
governance principles approved by the network and<br />
incorporated several provisions into its bylaws<br />
concerning the way in which the Caisses d’Epargne<br />
are represented in the Group’s national<br />
administrative bodies and the creation of channels<br />
for expressing positions jointly held by the French<br />
savings banks.<br />
The principle of equal representation by<br />
Management Board and Steering and Supervisory<br />
Board Chairmen has been applied to the members<br />
of the Fédération’s Board of Directors and bureau.<br />
The Federal Board, a new joint advisory body, was<br />
set up in 2006.<br />
In December, the annual general meeting of the<br />
Fédération, renewed half of the members of its<br />
Board which again expressed its confidence in<br />
Nicole Moreau by appointing her as Chairwoman<br />
for a further three years.<br />
The Fédération’s operational team has been<br />
expanded and reorganized with a view to more fully<br />
satisfying the expectations of the Caisses<br />
d’Epargne in areas related to corporate strategy,<br />
cooperative activities, social commitment and the<br />
representation of their interests.<br />
16
The Board of Directors of the Fédération Nationale des Caisses d’Epargne<br />
at December 31, 2006<br />
OFFICE OF THE CHAIRMAN<br />
Nicole Moreau, Chairwoman<br />
Chairwoman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne Ile-de-France Paris<br />
Jean-Paul Ducept, Vice-Chairman, Treasurer<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne de Picardie<br />
Jean-Luc Grandjean<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne de Bretagne<br />
Robert Romilly<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne du Val de France-Orléanais<br />
Michel Sorbier<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne d’Auvergne et du Limousin<br />
Bernard Toublanc<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne Ile-de-France Nord<br />
Jean-Claude Créquit<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne Côte d’Azur<br />
Jean-Paul Ferry<br />
Acting Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Lorraine<br />
Bernard Fougère<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne Poitou-Charentes<br />
Joël Gelas<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne des Alpes<br />
Eric Grimonprez<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Flandre<br />
Jean-Pierre Hallier<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne de Haute-Normandie<br />
Victor Hamon<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne Pays de la Loire<br />
Francis Henry<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne Champagne-Ardenne<br />
Marie-Louise Lota<br />
Chairwoman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne Provence-Alpes-Corse<br />
Alain Mansillon<br />
Chairman of the Management Board of<br />
the Caisse d’Epargne de Basse-Normandie<br />
Jean-Claude Passier<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne de Bourgogne Franche-Comté<br />
Pierre Valentin<br />
Chairman of the Steering and Supervisory Board of<br />
the Caisse d’Epargne Languedoc-Roussillon<br />
17
18<br />
No. 1 bank for young people<br />
with almost 7 million<br />
customers aged under 26
CAISSE D’EPARGNE,<br />
RETAIL<br />
BANKING<br />
19
CHAPTER2<br />
RETAIL<br />
BANKING<br />
The individual Caisses d’Epargne –the foundations upon which the Group is built–<br />
together form the third-largest banking network in France with 4,300 branches<br />
(4,700 for the Group), 6,300 ATMs and the full array of online and telephone banking<br />
services. Nearly one out of every two French people is a Caisse d’Epargne customer<br />
and more than three million are cooperative shareholders. Open to the widest possible<br />
public and faithful to the notion of social progress – the basic principle underlying<br />
the creation of the French savings banks – the Caisses d’Epargne are constantly looking<br />
for innovative ways to make life easier for their individual or professional customers<br />
and to assist them in the realization of their projects. With solutions covering<br />
investments, general and provident insurance, asset management, loans, real estate,<br />
payment methods, etc. Caisse d’Epargne provides the full panoply of services and<br />
support that people require from their banking partner.<br />
A STRATEGY FOUNDED ON BANK-CUSTOMER RELATIONS<br />
The Caisses d’Epargne committed<br />
more than €750 million optimizing<br />
their sales methods and distribution<br />
network between 2005 and 2007.<br />
The objective is to reach out to more<br />
customers more often and to satisfy<br />
more fully the needs of every one of them.<br />
This program, known as Fréquence Client, is<br />
based on a seven-way segmentation of the Caisses<br />
d’Epargne’s 26 million individual customers.<br />
Accessible on the workstations of all sales staff,<br />
Fréquence Client is a way of tailoring contact<br />
methods, products and services to each customer<br />
and of adjusting to their changing needs over time.<br />
Thanks to this system, 80% of customers eligible<br />
for portfolio management now have their own<br />
account manager.<br />
In 2006, a further program named Fréquence Client<br />
Pro was set up, with its own specific segmentation<br />
and training, designed to further improve the<br />
service offered to professional customers.<br />
The branch: the heart of the sales network<br />
Fréquence Client has been paralleled by a farreaching<br />
transformation of the network, which will<br />
be largely renovated by 2007. 614 branches were<br />
created or entirely refurbished in 2006, some 1,297<br />
in all since the launch of the program.<br />
Caisse d’Epargne’s new branches offer higher<br />
quality service, greater security and extensive<br />
automation of basic transactions, so that sales<br />
staff can allocate all the time needed to give their<br />
customers personalized advice.<br />
Four types of branches have been developed,<br />
reflecting the diversity of local conditions: one is<br />
entirely automated, while the other three offer a<br />
combination of automated and manned spaces,<br />
geared to local customer profiles. This policy<br />
corresponds to the fact that 32% of Caisse<br />
d’Epargne branches are situated in rural areas,<br />
and more than 5% are either in or close to<br />
sensitive urban areas.<br />
An unprecedented<br />
training drive<br />
To underpin this major development, Caisse<br />
d’Epargne is conducting an unprecedented training<br />
drive with its sales teams focusing on new methods<br />
of approach and selling, and dynamic management<br />
of a portfolio of customers. 10,000 members of staff<br />
have already received training.<br />
20
From direct marketing to mobile banking:<br />
an innovative approach<br />
Sales growth has also received a boost from a<br />
national marketing campaign management tool<br />
called Crescendo. In 2006, it was used in all the<br />
national multi-channel campaigns, providing the<br />
Caisses d’Epargne with more than a hundred<br />
readymade marketing solutions.<br />
There have also been improvements to the<br />
different online and telephone banking channels.<br />
These systems work in parallel with the branch<br />
network, using the Internet – where security has<br />
been tightened up – and telephone banking.<br />
Customer relations centers can be accessed<br />
via Internet. A new national telephone banking.<br />
infrastructure and customer relations centers are<br />
gradually being rolled out. The Caisses d’Epargne<br />
employ the services of 17 customer relations<br />
centers and 700 telephone advisers. In 2006, these<br />
channels handled more than 9.5 million telephone<br />
calls and 550,000 emails.<br />
Mobile banking has continued to expand: the<br />
Direct Ecureuil Mobile based on WAP and i-mode<br />
technology, and AlertEcureuil SMS services are<br />
available in all the Caisses d’Epargne.<br />
The French savings bank confirmed its capacity<br />
to out-innovate its competitors by launching movo,<br />
the first system for person-to-person money<br />
transfers by mobile phone.<br />
MOVO: CASH BY SMS<br />
Mobility and simplicity: ever responsive to changing<br />
lifestyles, Caisse d’Epargne has introduced<br />
its innovative movo facility, which enables individual<br />
customers to transfer money between accounts<br />
by mobile phone.<br />
Caisse d’Epargne customers are the first in France to<br />
be offered this subscription-based service. It employs<br />
two technological innovations developed by<br />
GCE Newtec, the Group’s specialized subsidiary:<br />
the Id-tronic ID solution and the SP PLUS secure<br />
payment system. Reimbursing friends after a meal<br />
out, sending money to your children: movo fits in<br />
with many aspects of day-to-day living, making life<br />
easier for France’s 46 million mobile phone users.<br />
2nd<br />
most popular<br />
banking website in France<br />
With more than 2.6 million hits a month<br />
in 2006, and visitor levels up by 20%, the Caisse<br />
d’Epargne website is France’s second most visited<br />
Internet banking site and a powerful information<br />
and sales tool.<br />
Practical and comprehensive, everything in the<br />
website is designed to guide and advise customers,<br />
and to help them in the decision-making process.<br />
Additional security systems – such as the virtual<br />
keyboard – have been introduced.<br />
21
Sustainable<br />
development:<br />
is it really<br />
important?<br />
handling<br />
fees<br />
Sustainable development is good for the planet and can also be good for the pocket.<br />
For example, Ecureuil Crédit Développement Durable, the Caisse d’Epargne sustainable<br />
development loan, is a way of financing energy efficient house improvements or<br />
the purchase of an eco-friendly vehicle. There are no handling fees and ADEME (1) also<br />
provides free specialist advice. On the investment side, EDF Energies Nouvelles, which was<br />
launched on the stock market in November 2006 by Groupe Caisse d’Epargne’s specialist<br />
teams, at a share price of €28, was worth more than €40 by the end of the year. For people<br />
looking for a more diversified portfolio, Banque Palatine has created two innovative mutual<br />
funds: Energies Renouvelables (“renewable energies”) and Palatine Or Bleu (“Palatine blue<br />
gold”) invested in the water industry.<br />
(1) The French agency for environment and energy management.<br />
22
SAVINGS AND LIFE INSURANCE<br />
Savings – the Caisses d’Epargne’s<br />
historic area of expertise – have seen<br />
strong growth in new deposits.<br />
Average savings levels in 2006 rose<br />
to almost €270 billion, up by nearly<br />
5% year-on-year. Net aggregate<br />
savings deposits taken by Caisse d’Epargne<br />
from individual and professional customers<br />
stood at €4.3 billion on December 31, 2006, up by<br />
€2.5 billion.<br />
Individuals maintained high savings rates,<br />
estimated at 15.1% (2) , reflecting an increase in<br />
purchasing power of some 2.8% (3) . There were two<br />
successive interest rate rises on the Livret A<br />
passbook account, to 2.25% on February 1, 2006<br />
and 2.75% on August 1, 2006. The reform of<br />
the PEL home purchase savings plans prompted<br />
a massive shift into life insurance, which confirms<br />
its position as France’s favorite investment vehicle.<br />
Buoyant stock market conditions and the so-called<br />
Fourgous amendment boosted unit-linked policies<br />
and investment in mutual funds.<br />
The Caisses d’Epargne also marketed three<br />
Ecureuil bonds, issued by the CNCE, for<br />
a total amount of €736 million, and collected<br />
€357 million in shares.<br />
THE ANIMAL ADVERTISING SAGA:<br />
STILL A HIT WITH THE FRENCH!<br />
The performance index for the saga’s four advertising<br />
campaigns, measured by the BVA Institute for the year<br />
2006, stood at 223 compared with a baseline of 100.<br />
This is a combined index employing the criteria of<br />
recognition, attribution and approval. It is based on<br />
1,000 interviews a month with a representative<br />
sample of the French population. Year-on-year,<br />
therefore, this survey proves that the saga is France’s<br />
favorite bank advertising campaign. In addition,<br />
at the beginning of 2007, for the third time in four<br />
years, Caisse d’Epargne won the Impact 66 award for<br />
the campaign that achieved the best impact score<br />
with readers of the regional daily press over<br />
the previous year.<br />
Sustained promotion<br />
Three major campaigns punctuated the savings<br />
year. Caisse d’Epargne resumed its sales offensive<br />
in January 2006 by enhancing the clarity and scope<br />
of its investment offering. In June and July 2006,<br />
the L’Eté Gagnant (“Winning Summer”) campaign<br />
boosted bank savings through the offer of<br />
promotional interest rates. In December 2006,<br />
Les Etrennes de l’Epargne (“New Year’s Savings<br />
Gift”), a major promotional campaign with 800,000<br />
greetings cards and 200,000 cuddly toys, ran for<br />
the third consecutive year with a highly successful<br />
outcome for passbook accounts.<br />
At the end of 2006, deposits on Livret A passbook<br />
accounts stood at €61.6 billion (4) , with 23.4 million<br />
passbooks. Average 2006 savings in home<br />
purchase plans stood at €42.7 billion.<br />
(2) Source: INSEE (National accounts, fourth quarter of 2006,<br />
March 30, 2007).<br />
(3) 2.3% after adjustment to reflect the consumer price index.<br />
(4) Before capitalization.<br />
23
2<br />
CHAPTER<br />
RETAIL<br />
BANKING<br />
Record uptake for Natixis shares<br />
Following outstanding efforts by the entire<br />
network, almost 670,000 customers signed up to<br />
acquire Natixis shares for a total of €1.35 billion<br />
within the framework of the company’s stock<br />
market floatation. A total of €932 million was<br />
invested.<br />
The Caisses d’Epargne’s market share represented<br />
39% and 191,000 new securities accounts were<br />
opened.<br />
Order processing and securities account<br />
management was handled by the subsidiary<br />
Gestitres, which once again demonstrated its ability<br />
to deal with extremely large volumes of business.<br />
Guaranteed funds were also a success story,<br />
making the Group one of the leading players with<br />
market share in excess of 24%. The funds launched<br />
in 2006 (mainly the Al dente range) attracted a total<br />
of €1.7 billion.<br />
Excellent year for life insurance<br />
Sales of new life insurance policies by Caisse<br />
d’Epargne grew 17% to €6.2 billion in 2006, with<br />
strong growth in unit-linked policies.<br />
Nuances 3D, Nuances Plus and Nuances Privilège<br />
policies consolidated their success, stimulated by<br />
favorable stock market conditions.<br />
With products ranging from the Ricochet policy,<br />
designed to provide a safe start in life savings, to<br />
Nuances Privilège, the tailored private management<br />
contract, Caisse d’Epargne boasts a clear and<br />
comprehensive range of policies, covering all<br />
its customers’ life plans.<br />
670,000<br />
customers<br />
holding shares in Natixis<br />
Mutual funds: a new momentum<br />
Caisse d’Epargne possesses a range of some<br />
100 products (guaranteed, feeder, money market,<br />
equity, bond-based funds, etc.) devised by<br />
Ecureuil Gestion. The financial management of<br />
some of these mutual funds is outsourced to<br />
IXIS Asset Management.<br />
At the end of 2006, funds under management stood<br />
at €36.9 billion, up by 10%.<br />
13 AWARDS FOR CAISSE D’EPARGNE’S<br />
LIFE INSURANCE SOLUTIONS<br />
• Gestion de Fortune<br />
Life insurance “Oscar”: Nuances Privilège,<br />
Nuances Plus<br />
• Le Journal des Finances<br />
Quality and Performance award: Nuances Privilège,<br />
Initiatives Plus<br />
• Le Revenu<br />
2006 Innovation Prize: Nuances Privilège<br />
Gold Trophy: Initiatives Plus<br />
Silver Trophy: Nuances 3D<br />
Bronze Trophy: Nuances Plus<br />
• Les Dossiers de l’Epargne<br />
Label of excellence: PERP Caisse d’Epargne (pension<br />
savings plan), Nuances Privilège<br />
Positive opinion: Nuances 3D, Nuances Grenadine,<br />
Nuances Plus<br />
The Collection Finance Ecureuil range of mutual<br />
funds includes the Sélectionnés (Selected) funds for<br />
knowledgeable customers who already invest in<br />
mutual funds, the Garantis (Guaranteed) funds for<br />
customers who want risk-free access to the<br />
performance of the financial markets and Bourse<br />
“Esprit Ecureuil” funds for stock market novices.<br />
A winner of the Innovation Prize awarded by the<br />
Forum de l’Investissement savings and investment<br />
fair, Bourse “Esprit Ecureuil” was extended to all the<br />
Caisses d’Epargne in 2006.<br />
More than 122,000 accounts had been opened and<br />
€338 million invested by the end of 2006.<br />
24
PRIVATE ASSET MANAGEMENT<br />
Caisse d’Epargne has maintained<br />
its positive momentum in the area of<br />
private asset management, attracting<br />
deposits of €2.9 billion, up by 48%<br />
compared with the end of 2005. As a<br />
result, the private asset management<br />
customers represent the majority of the Caisses<br />
d’Epargne’s aggregate new life insurance<br />
business with the Nuances Plus and Nuances<br />
Privilège products.<br />
Complementary skills<br />
Caisse d’Epargne’s private asset management<br />
operations designed for its wealthier clientele boast<br />
76,000 active customers, with a target of attracting<br />
almost 100,000 by the end of 2007. The activity’s<br />
sales effort is entrusted to 470 specialized account<br />
managers, while the technical side is based on the<br />
Group’s estate planning and wealth management<br />
specialists whose expertise covers all asset classes<br />
and all management styles.<br />
The specialists from La Compagnie 1818 –<br />
Banquiers Privés –, the Group’s private banking arm,<br />
provide on-demand and tailored services for<br />
the Caisses d’Epargne’s wealth management teams.<br />
The Scan Patrimoine service, launched in 2006,<br />
offers customers a snapshot of their current asset<br />
situation and recommends appropriate solutions,<br />
employing a very different format from the often<br />
tedious process of traditional wealth analysis.<br />
76,000<br />
active customers<br />
In the area of real estate investment, Caisse<br />
d’Epargne’s subsidiary Iselection offers a<br />
comprehensive and market-ready range of rental<br />
property investments and tax management<br />
solutions. This offering, available in 14 Caisses<br />
d’Epargne at the end of 2006, is marketed by<br />
several dozen real-estate investment advisers.<br />
A comprehensive and differentiated offering<br />
A further enhancement to the asset management<br />
offering is Elite 1818, a solution that provides access<br />
to the best market funds selected by the experts<br />
from La Compagnie 1818. This offering represents<br />
an alternative to discretionary management.<br />
Loyaltie 1818 and Multiance Cap 1818 – new<br />
contracts targeted at customers who are liable for<br />
wealth tax (ISF) under French law – constitute two<br />
further additions to the core Nuances Plus and<br />
Nuances Privilège products.<br />
The tax management range, the only offering of<br />
its kind in the French market, boasts four new<br />
products: OCÉORANE garanti (industrial<br />
investments in French overseas departments and<br />
territories under the provisions of the Girardin act),<br />
shares in forestry groups, a refocused Robien real<br />
estate investment company–SCPI– (Atout Pierre<br />
Habitation 2) and SofiCapital which invests in<br />
independent filmmaking.<br />
THE VISION<br />
PATRIMOINE<br />
NEWSLETTER<br />
This new quarterly<br />
newsletter goes out to<br />
the Caisse d’Epargne’s<br />
76,000 private asset<br />
management<br />
customers.<br />
25
Can a major bank<br />
help your children<br />
to write<br />
their essays?<br />
to access<br />
Ecureuil Sérénité Services<br />
(in France)<br />
By listening to its customers and observing their lifestyles and working<br />
patterns, Caisse d’Epargne is able to devise products and services that<br />
reflect their aspirations and make their lives easier. This is how<br />
the Ecureuil Sérénité Services package of personal care services came into<br />
being: a single telephone number provides access to several hundred<br />
trustworthy service providers. They are selected by Séréna, the specialized<br />
subsidiary created with three of the big mutual insurance companies:<br />
MAIF, MACIF and MGEN. Assistance for the elderly, disabled or<br />
dependent, housework, ironing, gardening, childcare, help with school<br />
work: Séréna has a rapid and effective response to all these needs.<br />
26
BANKING SERVICES<br />
As the day-to-day banking partner<br />
of one out of every five French<br />
people, Caisse d’Epargne is one of<br />
France’s front-ranking financial<br />
institutions. In 2006, its offer to pay<br />
interest on current accounts – with<br />
no minimum balance and no extra charges –<br />
helped to persuade almost 400,000 customers to<br />
sign up for a Satellis service package; this mutually<br />
profitable relationship was reinforced in September<br />
by the launch of the S’Miles loyalty program.<br />
Almost 800,000 additional interest-bearing<br />
service packages taken out in the space<br />
of two years<br />
The payment of interest on current accounts, an<br />
advantage included in the service packages taken<br />
out by individual customers, boosted subscriptions<br />
for the Satellis Essentiel and Satellis Intégral products<br />
whose total exceeded 4.7 million units at the end of<br />
the year with more than 360,000 new subscribers.<br />
Caisse d’Epargne remains the leading issuer of Visa<br />
cards and the second-largest issuer of bank cards,<br />
irrespective of brand, with more than 5.5 million cards<br />
in total.<br />
In addition, the Domilis product, by which customers<br />
can transfer all their account transactions was rolled<br />
out through the network and implemented for more<br />
than 84,000 customers.<br />
Funds deposited in individual demand deposit<br />
accounts grew by 4.8% to reach a total of<br />
€20.5 billion at the end of 2006. This takes Caisse<br />
d’Epargne’s market share to 8.6%.<br />
No. 1 bank for young people:<br />
new dedicated offerings<br />
Young people represent 30% of new bank<br />
customers. Caisse d’Epargne is committed to<br />
helping them achieve independence, manage their<br />
finances and bring their various projects to<br />
a successful conclusion.<br />
S’MILES:<br />
LOYALTY RECOGNIZED AND REWARDED<br />
Since September 2006, Caisse d’Epargne’s five million<br />
customers with Satellis account packages have been able<br />
to join the free S’Miles loyalty program, which has big<br />
players such as Casino, Galeries Lafayette, Monoprix,<br />
the French national railways (SNCF) and Shell on board.<br />
Customers collect S’Miles when they use their Caisse<br />
d’Epargne Carte Bleue Visa and receive bonuses when<br />
they present their S’Miles loyalty card in participating<br />
outlets.<br />
The accumulated S’Miles can then be exchanged for<br />
savings vouchers or gifts. If customers want, they can<br />
also use S’Miles to contribute to two of the<br />
environmental protection programs run by the WWF,<br />
with which Caisse d’Epargne has an active partnership.<br />
Caisse d’Epargne also rewards the partner brands’<br />
12 million S’Miles customers when they withdraw<br />
money from its 6,300 cash machines.<br />
The S’Miles Alliance reflects strong demand in France:<br />
more than 80% of French people favor a loyalty card<br />
that primarily involves the big retailers, leisure stores<br />
and a bank.<br />
Caisse d’Epargne is the exclusive banking partner of<br />
S’Miles, which was a runaway success right from<br />
the launch: 1.6 million Caisse d’Epargne customers<br />
had already joined the program by the end of 2006.<br />
In 2006, Caisse d’Epargne focused on addressing<br />
three major areas of concern for young people:<br />
jobs, accommodation and mobility.<br />
27
2<br />
CHAPTER<br />
RETAIL<br />
BANKING<br />
On the employment side, Caisse d’Epargne has<br />
joined forces with the M6 TV channel to create<br />
a program called Parés pour l’avenir (“All set for the<br />
future”). Watched by a million viewers every day, it<br />
gave advice on getting a first job based on real cases.<br />
A link with the monster.fr website, the world leader<br />
in web-based recruitment, has been placed on the<br />
Ecureuil.fr website dedicated to young people.<br />
In addition, Caisse d’Epargne offers a wide range<br />
of student loans up to an amount of €30,000 over<br />
10 years.<br />
As regards mobility, Caisse d’Epargne has also<br />
teamed up with Virgin Mobile France to market a<br />
phone deal consisting of a mobile phone subscription<br />
package with insurance against loss or theft.<br />
As well as finance for a first vehicle, car insurance<br />
has been opened up to all young people with no price<br />
discrimination, whether or not they have been<br />
through the accompanied driving program.<br />
In response to the problem of finding<br />
accommodation, the Crédit Première installation<br />
(a loan for young people moving into their own<br />
place for the first time), which combines a personal<br />
loan with a Teoz card, was extended in June 2006<br />
with a 0% interest €1,000 loan offering which can<br />
also be used for purchases to enhance<br />
geographical mobility.<br />
CARTE BLEUE<br />
VISA LAGON<br />
Restricted to the<br />
under 25s and with<br />
a maximum issue<br />
of 90,000 cards,<br />
this transparent,<br />
aquamarine blue<br />
Caisse d’Epargne<br />
Carte Bleue Visa<br />
enjoyed an<br />
outstanding<br />
success.<br />
36<br />
%<br />
of young people are<br />
Caisse d’Epargne customers<br />
Personal care services:<br />
a comprehensive offering<br />
At the beginning of 2006, through its partnership<br />
with the MACIF and MAIF mutual insurance<br />
companies, Caisse d’Epargne launched its Ecureuil<br />
Sérénité Services range of personal care services,<br />
which will be available in all the individual Caisses<br />
d’Epargne by the end of June 2007.<br />
This represents a genuine innovation in the<br />
domestic support sector. Ecureuil Sérénité Services<br />
offers customers a single gateway to a wide range<br />
of home-based services, whether one-off or<br />
recurrent, without any administrative formalities or<br />
the obligation to become employers, with all the<br />
standard tax advantages (tax reduction or tax credit<br />
of half of the amount spent).<br />
At the same time, Caisse d’Epargne has<br />
established a strategic partnership with Accor<br />
Services to offer its customers, businesses and<br />
local authorities, the new prepaid multi-purpose<br />
employment service checks (known as CESU).<br />
The bank now boasts a global package promoting<br />
access and growth in the sphere of personal care<br />
services.<br />
Complementary health cover:<br />
three simple and competitive<br />
start-up policies<br />
In partnership with the MACIF Group, Caisse<br />
d’Epargne launched three complementary health<br />
insurance policies at the end of 2006 designed<br />
for different age brackets, with three levels of cover<br />
offering ascending levels of reimbursement on the<br />
costs of dental and eye care: Côté Je (I Side) for<br />
young people without children, Côté Nous (Us Side)<br />
for families, and Côté Master (Master Side) for<br />
seniors. This range will be available throughout the<br />
network in 2007. The aim is to achieve growth of<br />
around 120,000 policies a year once the offering<br />
has reach cruising speed.<br />
28
LOANS AND GENERAL INSURANCE PRODUCTS<br />
The year 2006 was characterized by<br />
sustained lending activity and, in<br />
particular, strong growth in nonrevolving<br />
consumer loans. New loans<br />
granted to individual customers reached<br />
a total of €19.8 billion at the end of 2006.<br />
Caisse d’Epargne:<br />
No. 2 in real-estate transactions<br />
More than one in 10 French people buy their<br />
houses through Caisse d’Epargne. This represents<br />
more than 10.7% of the overall market, and new<br />
mortgages granted by Caisse d’Epargne in 2006<br />
exceeded €15 billion.<br />
The relationships developed with partner networks<br />
in the real-estate sector account for a significant<br />
proportion of new loans.<br />
The Caisses d’Epargne can now offer their<br />
customers the recently introduced hypothèque<br />
rechargeable (home equity loan) on new mortgages.<br />
10<br />
in<br />
1people in France buy their homes<br />
through Caisse d’Epargne<br />
Consumer lending:<br />
an extended offering<br />
Consumer loans (excluding revolving credit<br />
facilities) rose to an aggregate total of €3.9 billion,<br />
up by 9% over 2005 levels. A full range of personal<br />
loans has been rolled out to meet all the financing<br />
needs of individual customers: new or used<br />
vehicles, setting up home, household goods, home<br />
improvements, cash flow, etc. A new addition to the<br />
range in 2006 was the Ecureuil Crédit Développement<br />
Durable sustainable development loan, which is<br />
supported by ADEME, France’s environment and<br />
energy management agency. In addition, a yachtleasing<br />
package with option to buy was launched.<br />
The Teoz card, managed by the subsidiary Caisse<br />
d’Epargne Financement (CEFi), lies at the heart of<br />
consumer credit solutions, notably revolving credit<br />
facilities. The Caisses d’Epargne sold 193,000 accounts,<br />
taking the overall number of Teoz accounts to<br />
691,200, up by 11% compared with 2005.<br />
CEFi has provided the Caisses d’Epargne branches<br />
with IZICEFi, an innovative IT solution that boosts the<br />
opportunities to sell personal loans. At the end of<br />
2006, more than €1 billion in personal loans had<br />
been financed through IZICEFi.<br />
General insurance:<br />
strong growth<br />
In 2006, Caisse d’Epargne sold almost 574,000<br />
general insurance policies, managed by its<br />
subsidiary Ecureuil Assurances IARD.<br />
This dynamic level of growth (16%) reflects<br />
increased sales efforts and the success of the<br />
discounts offered to customers subscribing<br />
multiple policies. There are four main products in<br />
the range: car insurance, home insurance,<br />
personal accident insurance and legal protection.<br />
29
2<br />
CHAPTER<br />
RETAIL<br />
BANKING<br />
No.<br />
2<br />
in comprehensive accident<br />
and healthcare insurance (1)<br />
The easing of rules governing the acceptance of<br />
young drivers was reflected in particularly dynamic<br />
growth in car insurance sales. A motorcycle<br />
insurance policy for existing policyholders or their<br />
children was launched.<br />
There was a major awareness-raising campaign<br />
around the provident insurance range consisting of<br />
Garantie Urgence, Garantie Famille, Garantie des<br />
Accidents de la Vie and Protection Juridique, a series<br />
of products providing emergency, family, accident<br />
and legal cover. Almost 320,000 contracts were sold<br />
in 2006 (up by 40% on 2005 levels).<br />
A new loyalty offering was launched with a 7% to 10%<br />
discount on comprehensive accident/home & health<br />
and car insurance, throughout the life of the policy.<br />
Finally, the year was marked by a comprehensive<br />
review of the general terms and conditions of sale.<br />
Presented in a clearer and more uniform manner,<br />
they are easier for customers to understand.<br />
No. 3<br />
in car insurance,<br />
comprehensive home insurance (2)<br />
and legal protection (3)<br />
MEDIATION: MORE THAN 1,400 APPEALS<br />
HANDLED IN 2006<br />
Originating under the so-called “Murcef act”, banking<br />
mediation now plays a major role in customer relations.<br />
Above and beyond the legal obligations, which apply<br />
only to deposit accounts, the Group has decided to<br />
extend the scope of these provisions to almost all the<br />
products and services supplied to individual customers.<br />
Every year, the mediator receives around 3,500 requests,<br />
of which less than half actually fall within his remit.<br />
In 2006, he handled 1,405 cases, 1,160 of which were<br />
judged “on the merits of the case”, with the ruling<br />
finding partially or totally in favor of the customer<br />
in 40% of the cases.<br />
As well as settling disputes, mediation helps<br />
to improve the way complaints are handled and<br />
contributes to practices that benefit all customers.<br />
This is particularly true for compensation relating<br />
to bank cards, the settlement of problems associated<br />
with deposit account transactions, and information<br />
and advice on investments. “It is important to be<br />
aware of the personal and human aspects of each case<br />
and to employ an approach that also reflects ethical<br />
values and fairness”, stresses Jean-Pierre Thiolon,<br />
GCE mediator since 2003. As a former Chairman of the<br />
Management Board of the Centre National des Caisses<br />
d’Epargne, he enjoys considerable moral authority and<br />
is listened to in the highest echelons of the Group.<br />
(1) Source: FFSA.<br />
(2) Source: G9.<br />
(3) Source: G9.<br />
30
PROFESSIONAL CUSTOMERS<br />
Thirty-five thousand professional<br />
customers chose Caisse d’Epargne<br />
as their bank in 2006.<br />
Caisse d’Epargne now boasts a total<br />
clientele of 200,000 retailers,<br />
tradespeople, and self-employed<br />
professionals… 140,000 of whom also bank with<br />
the savings bank in a private capacity. Boosted by<br />
the payment of interest on current accounts, all<br />
the targets for the distribution of banking services,<br />
deposits and loans were met or, indeed, exceeded.<br />
A buoyant market<br />
Overall, professional customers represent 13%<br />
of new loan production, savings surpluses and<br />
average current account deposits in retail banking,<br />
and a significant contribution to asset<br />
management business.<br />
1,500 specially trained branch managers and<br />
950 specialized customer account managers are<br />
dedicated to serving this clientele. They make use<br />
of Fréquence Client Pro to help them to pursue<br />
a targeted strategy designed to attract new<br />
customers: 24 priority sectors have been selected<br />
for their dynamism and profitability, with the aim<br />
of building up a balanced portfolio of tradespeople,<br />
retailers and self-employed professionals.<br />
Sustained advertising, partnerships with a large<br />
number of professional associations, welcome<br />
packs: in 2006, this aggressive policy led to a 6%<br />
growth in the number of active customers and<br />
to the signature of 25,000 new service packages:<br />
Libre Convergence for tradespeople and retailers,<br />
and Labelis for self-employed professionals.<br />
These packages include cash transaction and<br />
remote transmission software – such as Datalys,<br />
specifically designed for chartered accountants –<br />
account management and overdraft facilities,<br />
insurance, assistance with legal and tax matters,<br />
and online collaborative accounting services.<br />
The 100,000 mark for business account packages<br />
was reached in the course of the year.<br />
FRANCHISE, QUITE FRANKLY<br />
Caisse d’Epargne pursues a sustained strategy to attract<br />
franchise holders, supported by Group subsidiary SACCEF<br />
in the provision of loan guarantees. Partnerships have<br />
been signed with 28 national and regional franchise<br />
networks. Franchise & Vous, a package specially<br />
designed for franchise professionals, was launched in<br />
2006. This solution notably offers interest on current<br />
accounts, but also commitments such as the provision<br />
of a national center linking franchisors, the needs of<br />
the franchisee and Caisse d’Epargne.<br />
Electronic banking and online commerce:<br />
growth and innovation<br />
Caisse d’Epargne has continued to reinforce its<br />
electronic banking and e-business services with<br />
competitive and innovative solutions. On the electronic<br />
banking side, active contracts are up by 7%, with<br />
steady growth in the Paiement trois fois card paiement<br />
service that allows retailers to offer their customers<br />
the option of paying in three installments.<br />
100,000<br />
forfaits pro<br />
business packages<br />
31
250,000 small businesses<br />
for sale over the next five years:<br />
is there a way to make it<br />
easier to buy and to sell?<br />
of professionals<br />
will sell their business<br />
One quarter of professionals have plans to sell their business. To make this process<br />
easier, Caisse d’Epargne, working with the different French Chambers of Commerce<br />
and Industry and Chambers of Trade, has reinforced its partnerships with the<br />
support networks active in France. The Association of Business Sellers<br />
and Buyers (CRA) and the Réseau Entreprendre enterprise network have volunteers<br />
with experience in business management who give advice to customers sent by<br />
Caisse d’Epargne. At the same time, Caisse d’Epargne offers entrepreneurs<br />
additional sources of finance on top of the subsidized finance available from the<br />
support networks. The different Caisses d’Epargne offer professionals the expertise<br />
of 1,000 “pro” account managers and 250 business account managers.<br />
32
On the Internet, transactions via SP PLUS,<br />
the Group’s secure payment server, have continued to<br />
enjoy strong growth: the number of active contracts<br />
is up 42% to 2,552 while the number of transactions<br />
is up 43% to around 6 million and amounts<br />
processed rose 44% to more than €595 million.<br />
The turnkey solution SP PLUS Site, which consists<br />
of a website and a secure payment system, was<br />
launched successfully.<br />
In this sphere, GCE Newtec, the subsidiary<br />
specializing in new information and communication<br />
technologies (NICT), offers highly effective services<br />
such as Id-tronic, an antifraud solution that<br />
identifies buyers in real time whenever they pay for<br />
purchases on the Internet, and 3D Secure,<br />
a system that guarantees retailers peace of mind<br />
when they sell to customers outside France,<br />
by providing them with a secure payment system<br />
via Visa or MasterCard accounts.<br />
Sustained growth in lending<br />
Caisse d’Epargne offers professional customers<br />
a comprehensive array of borrowing options, covering<br />
needs ranging from the creation of a new business<br />
to the transfer or buyout of an existing company<br />
to loans for capital goods. For example, Ecureuil<br />
Crédit Express provides finance to replace and<br />
acquire equipment or vehicles and to carry out<br />
building work. Unsecured loans of up to €40,000<br />
excluding tax can be approved within 48 hours.<br />
A comprehensive<br />
range of loans<br />
to professionals<br />
€40,000<br />
in just<br />
48hrs<br />
As a result, lending to professionals grew by 15%<br />
in 2006, passing the €3 billion mark. New<br />
production in the area of medium/long-term<br />
lending and leasing grew by 9%. Consumer credit,<br />
promoted through a dedicated offering, and real<br />
estate loans, are up by 21% and 24% respectively<br />
over 2005 levels. Private lending to professionals<br />
is up by 23%.<br />
Savings stimulated by private asset<br />
management<br />
Caisse d’Epargne offers a wide range of savings,<br />
general & provident insurance and retirement<br />
products, together with advice on the management<br />
and transfer of assets.<br />
These activities enjoyed buoyant growth in 2006.<br />
Net new business in this area rose by 15% to reach<br />
a total of €400 million.<br />
4,000 policies covering accidents or prolonged<br />
absence from work – Protection Activité<br />
Professionnelle (“Professional Activity Protection”) –<br />
have already been sold.<br />
With respect to pensions, Ecureuil Retraite Pro,<br />
a product offering significant tax advantages for<br />
self-employed workers, was launched in 2006.<br />
In 2006, Caisse d’Epargne launched a new<br />
guarantee, in the form of a financial security,<br />
covering up to 100% of mortgages used to finance<br />
business or mixed-use premises. Previously<br />
restricted to professionals in the health sector, this<br />
guarantee is now available to all professionals.<br />
33
34<br />
Two out of every<br />
three French<br />
municipalities<br />
bank with<br />
Caisse d’Epargne
GROUPE CAISSE D’EPARGNE,<br />
THE SPECIALIST BANK FOR<br />
REGIONAL<br />
DEVELOPMENT<br />
35
3<br />
CHAPTER<br />
THE SPECIALIST<br />
BANK FOR REGIONAL<br />
DEVELOPMENT<br />
Building on its strong local presence, Groupe Caisse d’Epargne is partner<br />
to regional social and economic development players of all sizes. Proximity,<br />
innovation, services: Groupe Caisse d’Epargne offers local authorities, the<br />
hospital sector, social housing bodies, entities active in the social economy,<br />
local businesses and real estate professionals a comprehensive range of<br />
products and services designed to finance their projects, simplify their<br />
management and optimize their investments. In 2006, Groupe Caisse d’Epargne<br />
set up a new cross-functional organization – the Specialist Bank<br />
for Regional Development – with a view to meeting even more fully the needs<br />
of players active in the local and regional economy.<br />
LOCAL AUTHORITIES AND INSTITUTIONS<br />
As the historical partner of local<br />
authorities and institutions,<br />
Groupe Caisse d’Epargne is actively<br />
involved in helping its customers<br />
to satisfy the needs of their fellow<br />
citizens. As joint leader providing<br />
finance for the regional public sector and hospitals,<br />
Groupe Caisse d’Epargne offers banking advice<br />
to local authorities and institutions, designing<br />
tailor-made packages for their development projects,<br />
targeted solutions for managing their debt portfolio<br />
and a wide range of products and services to assist<br />
them on a day-to-day basis.<br />
The local public and healthcare sectors account<br />
for more than 70% of aggregate public investment.<br />
Their capital goods spending, which grew by 8%<br />
in 2006, helps to create and maintain 850,000 jobs<br />
per year in the construction, services and<br />
manufacturing sectors (GCE-French Regions<br />
Association survey, December 2006). France’s<br />
départements and regions are boosting their<br />
investment in infrastructure projects, with a<br />
particular focus on middle and high schools. Towns<br />
and inter-municipal organizations, which still<br />
represent some 60% of public investment,<br />
generally have responsibility for schools, crèches,<br />
transport and water networks, sewerage and waste<br />
processing infrastructures. Hospitals, under the<br />
impetus of the Hospital 2007 plan, are particularly<br />
active, with investment up by 9.2% (Ministry of<br />
Economy, Finance and Industry).<br />
These circumstances explain the increase in<br />
borrowing and the recent development of publicprivate<br />
partnerships (PPP) for projects of all kinds.<br />
Commitments up by 7%<br />
With more than €8.2 billion in new mediumand<br />
long-term finance, Groupe Caisse d’Epargne is<br />
consolidating its commitment to all local authorities<br />
and local institutions: towns, inter-municipal<br />
organizations, départements, regions, public health<br />
institutions and semi-private national and regional<br />
development and service companies.<br />
HIGH-PERFORMANCE FINANCE<br />
FOR THE RHINE-RHONE HIGH-SPEED TRAIN<br />
High performance is the primary feature of the<br />
€100 million financing package arranged for the<br />
Franche-Comté region. The aim is to finance the Eastern<br />
branch of the Rhine-Rhone high-speed rail link that,<br />
ultimately, will connect Germany to the Mediterranean.<br />
The region benefited from a specially tailored package<br />
designed to combine flexibility, competitiveness and<br />
security. This three-phase financing package combines<br />
several interest-rate strategies, provides access to funds<br />
in line with progress made on the construction work<br />
– which started in July 2006 – and provides the right<br />
conditions to take advantage of market opportunities.<br />
With aggregate outstandings of €32 billion –<br />
equal to growth of 12% in the space of one year –<br />
Groupe Caisse d’Epargne further strengthened<br />
its position in the local authorities and institutions<br />
market in 2006.<br />
36
This growth was underpinned by the greater skills<br />
of the sales teams, by the support of IXIS CIB, whose<br />
specialists operate in tandem with the Caisses<br />
d’Epargne teams, and by effective implementation of<br />
the synergies between the CNCE, IXIS CIB and Crédit<br />
Foncier.<br />
Groupe Caisse d’Epargne was particularly active<br />
in the area of public transport in 2006. It is involved<br />
in the financing of trams in Clermont-Ferrand, Douai,<br />
Le Mans, Montpellier, Reims and Valenciennes –<br />
which began operating in July 2006.<br />
Six new interest rate strategies were added to<br />
the Bonifix range of structured loans, developed with<br />
IXIS CIB. In all, Groupe Caisse d’Epargne has set up<br />
€1.8 billion of structured loans for local authorities<br />
and local institutional borrowers.<br />
The G2D dynamic debt management activity<br />
continued to grow: €1.7 billion of debt was subject to<br />
tailor-made restructuring measures, after analysis of<br />
the debt position of each of the customers concerned.<br />
Active structured product management (GAPS)<br />
operations accounted for 41% of G2D business in<br />
2006. Thanks to GAPS, Groupe Caisse d’Epargne is<br />
able to meet its commitments by supporting<br />
its customers throughout the period of the loan.<br />
With the support of Credit Foncier’s consultancy<br />
service, Groupe Caisse d’Epargne is also able to offer<br />
advice in dynamic asset management (GDP). In the<br />
light of rising public sector financing requirements in<br />
the regions, active management of public real estate<br />
(land and buildings) is as crucial as active debt<br />
management, and can enable local public sector<br />
operators to significantly boost the scope of<br />
their action.<br />
To meet the demand for longer loan repayment<br />
periods – which sometimes run for more than 30 or<br />
40 years in the case of investment by local authorities<br />
and institutions in social housing and public-private<br />
partnerships – Compagnie de Financement Foncier<br />
launched in 2006 the first public issue of obligations<br />
foncières (covered bonds) with a term of 50 years,<br />
for an amount of €1 billion.<br />
Innovative services<br />
The Ligne de Trésorerie Interactive (LTI, or<br />
interactive line of credit) confirmed its appeal<br />
with facilities of more than €4.4 billion set up,<br />
representing an increase of 25%. LTI is a credit<br />
facility that can be drawn on at any time and very<br />
quickly – online – to meet short-term cash flow<br />
requirements.<br />
123<br />
local authorities use<br />
SP PLUS<br />
Groupe Caisse d’Epargne also offers local<br />
authorities and local institutions a secure online<br />
payment service, ServicePublicPLUS, which allows<br />
users to pay for municipal services such as:<br />
canteens and sports facilities online.<br />
This service is enjoying extremely rapid growth,<br />
related to the wider availability of high-speed<br />
broadband Internet access.<br />
In 2006, a purchasing card, the Carte Achat<br />
Public, was tested for potential rollout in 2007.<br />
This public, interoperable, interbank card can be<br />
used to buy goods from all suppliers affiliated<br />
to the Carte Bleue and Visa networks, and allows<br />
local authorities and institutions to streamline<br />
the ordering and payment process for public sector<br />
procurement needs.<br />
The prepaid multi-purpose employment service<br />
checks (known as CESU in France), which employers<br />
can use to help their employees to finance personal<br />
care services, was launched at the beginning of<br />
2006 in association with Accor Services, the world<br />
leader in service payment solutions.<br />
Groupe Caisse d’Epargne, with IXIS CIB and<br />
Ecureuil Assurances IARD, working alongside<br />
the Syndicat national des téléphériques de France<br />
(French ski lift Federation), also set up Nivalliance,<br />
a structured solution that covers all of France’s ski<br />
resorts against loss of income arising from lack<br />
of snow, bad weather or even strikes.<br />
THE INTERDEPARTMENTAL CESU: A MAJOR<br />
SUCCESS FOR GROUPE CAISSE D’EPARGNE<br />
In 2006, Groupe Caisse d’Epargne and its partner Accor<br />
Services won a three-year contract from the French<br />
government for the use of CESU to finance childcare<br />
services for state employees. There are some<br />
100,000 potential beneficiaries, and the estimated<br />
sum involved is €18 million per year. The density<br />
of the Caisse d’Epargne network and the expertise<br />
of Accor Services in managing this complex system<br />
were the deciding factors in the decision to award<br />
the contract to Groupe Caisse d’Epargne and its partner.<br />
One major subscriber to the LTI was the Ile-de-<br />
France region, which arranged a €600 million line<br />
of credit at the end of 2006.<br />
37
What do a symphony<br />
and the financing<br />
of a tram network<br />
have in common?<br />
An investment of € million financed<br />
over a 30-year period<br />
38<br />
Orchestration. Putting together a successful financing package means that all the banks must<br />
play the same tune. For example: the Reims Metropole tramway was the first such system in<br />
France to benefit from private financing within the scope of a public service concession<br />
arrangement. This concession represents an investment of some €350 million over a period of<br />
30 years. Groupe Caisse d’Epargne is the project’s private finance partner and plays several<br />
instruments in the orchestra: it is a shareholder in the company that holds the concession via<br />
the Caisse d’Epargne Champagne-Ardenne and FIDEPPP (1) ; it provides financial engineering<br />
services and arranges the concession holder’s financing and interest rate hedging operations<br />
through IXIS CIB, and provides finance through a pool that includes the Caisse d’Epargne<br />
Champagne-Ardenne, which is also the account holder.<br />
(1) Investment fund for the development of the Groupe Caisse d’Epargne’s public-private partnerships.
New investment products<br />
New investment packages designed for the<br />
needs of local authorities and institutions have<br />
been developed with the subsidiaries GÉRER,<br />
Ecureuil Gestion and IXIS Asset Management.<br />
Within the framework of its partnership with the<br />
Fédération nationale des sociétés d’économie mixte<br />
(National Federation of Semi-Public Companies),<br />
Groupe Caisse d’Epargne has created SEM<br />
Optimum, the first mutual fund specifically<br />
dedicated to semi-public companies. This dynamic<br />
money market fund is designed to yield a higher<br />
return on the funds of this type of company.<br />
Sustained activity with public health<br />
institutions<br />
As one of the two largest lenders to public health<br />
institutions, the Group has set up a dedicated<br />
organization with a health correspondent in each<br />
Caisse d’Epargne.<br />
In 2006, loans worth a total of €1.2 billion were<br />
granted, up by 13% over one year, taking lending<br />
to public health establishments to more than<br />
€3 billion. The projects financed included: the<br />
modernization of the Haute-Saône intermunicipal<br />
hospital (€91 million), the financing of the<br />
Sant’Hainaut health cooperation group (€98 million),<br />
and the Greater Lyon Private Hospitals group’s<br />
construction of a surgical center, a project<br />
implementing so-called High Environmental Quality<br />
standards (€27.5 million).<br />
The Ligne de Trésorerie Interactive attracted new<br />
health sector clients, including the Amiens teaching<br />
hospital, with a credit line of €80 million. The same<br />
was true of the G2D service. The Alsace region’s<br />
private hospital group chose the Pentifix solution to<br />
restructure debt worth a total of €40 million.<br />
At the same time, the Caisses d’Epargne<br />
Foundation for Social Solidarity, working through its<br />
health care and social welfare operations, continues<br />
to support the Group’s activities in this sector.<br />
Promising development abroad<br />
Groupe Caisse d’Epargne is also expanding<br />
its activity with local authorities and institutions<br />
outside of France, using CIFG’s credit enhancement<br />
capacity, the assets of Compagnie de Financement<br />
Foncier and IXIS CIB’s expertise in financial<br />
engineering. €7.3 billion of new lending was<br />
arranged in 2006, up by 150% over one year, mainly in<br />
Italy and Switzerland. Finance to local authorities and<br />
institutions included: the city of Rome (€224 million),<br />
Aargavische Kantonalbank (€38 million), and<br />
Geneva’s Industrial Services for a total of 100<br />
million Swiss francs (€64 million) as part of a total<br />
€1.2bn<br />
for hospitals<br />
funding envelope of 200 million Swiss francs over a<br />
30-year term. There were also first-time operations<br />
in Iceland (€15 million), in Hungary (€50 million)<br />
and in Poland (€40 million).<br />
In Morocco, Caisse d’Epargne is working closely<br />
with CDG Développement, a subsidiary of the<br />
Caisse de Dépôt et de Gestion and Morocco’s Local<br />
Authorities Directorate, to help to modernize the<br />
financial administration of local authorities<br />
and institutions.<br />
Close ties with local authority associations<br />
Groupe Caisse d’Epargne has consolidated its<br />
presence with associations that represent regional<br />
and local authorities, with whom a number of joint<br />
surveys have been carried out:<br />
• Local public investment and jobs (with the<br />
Association des régions de France – Association<br />
of French Regions – presented during the<br />
Association’s conference);<br />
• Spending in the départements: unplanned and<br />
planned (with the Association des départements<br />
de France, Assembly of French Departments);<br />
• Impact of the business tax reform (with the<br />
Association des maires des grandes villes de France,<br />
Association of Mayors of Large Cities in France);<br />
• How much do Small Towns “count”? (with the<br />
Association des petites villes de France, Association<br />
of Small Towns in France);<br />
• Debt management: what strategy? (with the<br />
Fédération des maires des villes moyennes,<br />
Federation of Mayors of Medium-Sized towns).<br />
In addition, the monthly Ecodefi Collectivités and<br />
Ecodefi Santé surveys of local authorities and<br />
healthcare services, which measure and assess<br />
the interest rate expectations of financial decision<br />
makers, have now been reinforced through<br />
discussions with major national and regional<br />
clients.<br />
Groupe Caisse d’Epargne, as a partner of<br />
ADEME, the French environment and energy<br />
management agency, also took part in the<br />
development of the Bilan Carbone ® Collectivités<br />
(local authority Carbon Audit). This method is used<br />
to assess carbon emissions as a basis for<br />
improving the design of new amenities and<br />
services. Through all these measures, local<br />
authorities, which are at the forefront of the drive<br />
to educate citizens on reducing greenhouse gas<br />
emissions, are progressively beginning to introduce<br />
Local Climate Plans.<br />
39
3<br />
CHAPTER<br />
THE SPECIALIST<br />
BANK FOR REGIONAL<br />
DEVELOPMENT<br />
SOCIAL HOUSING AND THE SOCIAL ECONOMY<br />
As the leading bank for social housing<br />
in France and the number one loan<br />
provider for associations and persons<br />
in state protection programs, Caisse<br />
d’Epargne is a major partner to all<br />
players in the social economy. It is<br />
also strongly committed to providing banking<br />
services for society’s most vulnerable individuals<br />
and supports numerous local community action<br />
and job creation initiatives.<br />
Social housing and the social economy are big<br />
contributors to the Caisses d’Epargne’s activity.<br />
The Caisses d’Epargne have specially trained<br />
account managers for this sector, and are boosting<br />
their sales effort with a focus on major accounts.<br />
With €10 billion in loans and the equivalent in<br />
savings (excluding protected customers), in 2006<br />
social housing and the social economy represented<br />
net banking income (excluding subsidiaries) of<br />
€159 million.<br />
1<br />
No.<br />
private banker<br />
to the social housing sector<br />
SOCIAL HOUSING<br />
As the historic partner to the low-rent housing<br />
movement (HLM), Groupe Caisse d’Epargne is<br />
actively involved in the social housing sector as<br />
a banker, shareholder and housing operator.<br />
As the leading private bank in this sector, it manages<br />
more than a third of the funds and almost 50% of<br />
the private debt of Social Housing Enterprises (ESH)<br />
and HLM Offices, most of whose buildings are<br />
financed through Livret A passbook accounts. Livret A<br />
deposits collected by the Caisses d’Epargne for social<br />
housing stood at €65.6 billion at the end of 2006.<br />
Sustained growth in lending<br />
Groupe Caisse d’Epargne provides a comprehensive<br />
array of credit solutions, with the distribution of stateregulated<br />
rental accommodation and construction<br />
loans (prêts locatifs sociaux – PLS, and prêts locatifs<br />
intermédiaires – PLI) along with an extremely wide<br />
range of fixed or adjustable rate and structured loans.<br />
Activity remained strong in 2006, with €1.7 billion<br />
of new lending, taking the total loans outstanding<br />
position to €7.6 billion.<br />
Groupe Caisse d’Epargne and Credit Foncier<br />
obtained €505 million of PLS loans for the construction<br />
of subsidized housing in 2006. Demand among social<br />
housing bodies was largely focused on these solutions,<br />
which were also popular with local authorities and<br />
housing associations. The Group continued to offer<br />
its Package PLS, which combines a Crédit Foncier<br />
PLS social housing loan with a Caisse d’Epargne PLI<br />
loan for the construction of intermediate housing<br />
units. Within the framework of operations initiated<br />
The PLS social housing<br />
loan is used to finance<br />
building work on<br />
retirement homes and<br />
homes for the disabled<br />
40
y the social housing organizations, Caisse d’Epargne<br />
also offers special subsidized loans to help facilitate<br />
home ownership by low-income households (PSLA).<br />
The G2D dynamic debt management solution<br />
was further developed in 2006 to meet the new<br />
rules governing Livret A passbook account interest<br />
rates and demand for financial engineering.<br />
Under the social cohesion plan launched by<br />
the French government in 2004, social housing<br />
organizations are accelerating the creation of new<br />
housing units, a policy that places heavy demands<br />
on their available funds. Deposits stand at €4.6 billion,<br />
down by almost €700 million.<br />
New investment products have been designed with<br />
the help of Group subsidiary GÉRER, in particular<br />
term deposit accounts and structured Euro Medium<br />
Term Notes (EMTN).<br />
Caisse d’Epargne also provides day-to-day support<br />
for social housing bodies: automated cash flow<br />
management, remote transmissions, rent collection<br />
by interbank payment orders (TIP) or via the Internet<br />
with SP PLUS, and employee savings plans. All these<br />
services enjoyed sustained growth in 2006.<br />
No. 1 private shareholder in the social<br />
housing sector<br />
The Caisses d’Epargne are active players in<br />
the management of social housing bodies and<br />
semi-private companies (SEM).<br />
The Caisses d’Epargne:<br />
directors of 100 Social<br />
Housing Enterprises (ESH)<br />
and 106 Public Agencies<br />
for Development<br />
and Construction (OPAC)<br />
The Caisses d’Epargne are shareholders and<br />
directors of more than one hundred Social Housing<br />
Enterprises, or one in three of all such entities<br />
in France. As private players in the social housing<br />
sector, the Social Housing Enterprises manage<br />
almost 2 million housing units and are actively<br />
involved in the policy to revive construction in the<br />
social housing sector. The governance of these bodies<br />
was reformed under the Borloo law of August 1, 2003.<br />
The Caisses d’Epargne have provided strong<br />
support for this development, becoming the key<br />
shareholders in 65 Social Housing Enterprises.<br />
The Public Housing Offices (HLM offices and<br />
OPAC – Public Agencies for Development and<br />
Construction) manage 2.2 million units.<br />
In 2006, the change in the bylaws and governance<br />
of the HLM offices and of the OPAC was consolidated<br />
through the “National Housing Commitment Act”.<br />
The Caisses d’Epargne are on the boards of a large<br />
majority of the OPAC: 106 in all.<br />
The Caisses d’Epargne are also the leading<br />
private shareholders in semi-public real estate<br />
companies – whose main shareholders are<br />
the local authorities – which own a total of<br />
458,000 housing units. Finally, Groupe Caisse<br />
d’Epargne is also one of the main private operators<br />
in the social housing sector, with more than<br />
170,000 units under ownership or management in its<br />
national subsidiaries GCE Habitat and Erilia, or in<br />
subsidiaries owned by the individual Caisses d’Epargne.<br />
THE SOCIAL ECONOMY<br />
Caisse d’Epargne is a key partner to entities<br />
active in the social economy and voluntary service<br />
sector: more than one in four French associations<br />
is a Caisse d’Epargne customer and the Group<br />
provides more than 19% of bank financing in this<br />
area, making it the premier lender to the social<br />
economy. Caisse d’Epargne is pursuing rapid<br />
expansion in this growing sector, which includes<br />
voluntary associations and charitable foundations,<br />
mutual health insurance companies, not-for-profit<br />
health and social agencies, private education,<br />
cooperatives, works councils, and not-for-profit<br />
recreational bodies. More than 300 Caisses d’Epargne<br />
employees specialize in services to the social<br />
economy, including 150 full-time account managers.<br />
Strong growth in business<br />
Net deposits from the social economy sector<br />
grew by more than €500 million in 2006, taking<br />
total investment deposits to €4.1 billion. New loans<br />
rose to almost €700 million, part of which is<br />
guaranteed by Group subsidiary GCE Garanties.<br />
Total lending to the social economy stood at<br />
€2.6 billion at the end of 2006, mainly concentrated<br />
in the health and social sector and in private<br />
education.<br />
Caisse d’Epargne increased its presence among<br />
large-size associations with tailored proposals<br />
for optimizing their debt structure; specific loans<br />
for health, social, educational and training<br />
establishments and innovative investments such<br />
as Mélioris 2, a guaranteed capital fonds à formule<br />
(structured fund) launched in 2006.<br />
41
3<br />
CHAPTER<br />
THE SPECIALIST<br />
BANK FOR REGIONAL<br />
DEVELOPMENT<br />
For small associations, the Associatis Essentiel<br />
service package, specifically designed for current<br />
account management, offers an array of secure<br />
products and services. It also includes a range of<br />
special insurance solutions, including Associatis<br />
Assurances, a general liability insurance policy for<br />
heads of associations. Caisse d’Epargne also<br />
provides online services such as a solution<br />
enabling members to pay their membership fees<br />
online, via SP PLUS Site, even if the association has<br />
no website of its own.<br />
An active policy of communication and dialogue<br />
Three new guidebooks were published in 2006:<br />
Associations, comment se financer autrement?<br />
(Associations, alternative sources of financing), Guide<br />
des subventions européennes pour les associations<br />
(Guide to European subsidies for associations) and<br />
Le Comité d’entreprise n°2 (Works Councils, no.2).<br />
They are available from the associatis.com web portal,<br />
which also offers other publications on a regular<br />
basis: Alinéa, A comme Association and the newsletter<br />
Je Tutelle for providers of guardianship services.<br />
L’OBSERVATOIRE<br />
CAISSE D’EPARGNE<br />
The 2006 survey carried<br />
out by l’Observatoire<br />
Caisse d’Epargne (the<br />
Group’s annual market<br />
monitor) focused on<br />
personal care services.<br />
The findings of this first<br />
significant national<br />
survey on the topic were<br />
presented to the major<br />
players in the social<br />
economy throughout<br />
the regions.<br />
A competition was organized within the framework of<br />
the Group’s partnership with WWF and under the aegis<br />
of the French Ministry of National Education on the<br />
topic of protecting nature and the environment, involving<br />
all private and public primary schools.<br />
PERSONS IN STATE PROTECTION<br />
PROGRAMS<br />
Caisse d’Epargne has a strong commitment<br />
to the most vulnerable members of society, and is<br />
the leading bank for people under judicial protection,<br />
with 250,000 minor and adult customers. This special<br />
position reflects a long-standing commitment to<br />
vulnerable members of society, and is underpinned by<br />
the quality of the specialist teams and their relations<br />
with providers of family guardianship services and the<br />
statutory organizations.<br />
1<br />
No.<br />
bank<br />
for persons in state protection programs<br />
Caisse d’Epargne manages €4.5 billion of<br />
savings on behalf of this client group, and provides<br />
a service geared to their needs with the Satellis<br />
Autonomie service package and the secure cash<br />
card, individually tailored to each customer, or<br />
the Equilibra interbank card.<br />
In 2006, Caisse d’Epargne worked hard<br />
to prepare for the upcoming reform to the legal<br />
framework protecting vulnerable individuals.<br />
PROTECTED INDIVIDUALS AND THEIR RIGHTS<br />
In March 2006, Caisse d’Epargne teamed up with<br />
Handijustice, a non-profit association dedicated to<br />
the disabled, in the organization of the first symposium<br />
devoted to the rights of protected individuals:<br />
human rights, individual rights and rights to property.<br />
Coordinated by professionals recognized for their<br />
expertise in this area, this event attracted almost<br />
300 participants from among professional and private<br />
guardianship bodies.<br />
As a partner to many family and disability<br />
or dependency associations (such as FEGAPEI<br />
or UNASSAD) and to all the member associations<br />
of the fire service movement, Caisse d’Epargne<br />
is in its 13 th year as sponsor of the annual Ecureuil<br />
Association competition, which awards prizes for<br />
the most outstanding achievements.<br />
42
CORPORATE CUSTOMERS<br />
Caisse d’Epargne provides support<br />
for businesses throughout their life<br />
cycles – from initial start-up to<br />
ultimate transfer or buyout – with<br />
a full range of financing solutions<br />
and banking services, and offers them<br />
an array of equity solutions through its regional<br />
and national investment funds. A total of 90 centers<br />
and 250 specialized account managers are dedicated<br />
to corporate customers.<br />
This commercial panoply also includes the resources<br />
of Banque Palatine, which supports the individual<br />
Caisses d’Epargne through a series of cooperation<br />
agreements.<br />
110<br />
VEHICLE<br />
business<br />
in<br />
is a Caisse d’Epargne customer<br />
In a dynamic market, Caisse d’Epargne has<br />
increased its market penetration by two points,<br />
taking it to 10%. The creation of Natixis will give the<br />
Caisses d’Epargne a highly effective, state-of-the-art<br />
technical strike force in areas as important as<br />
receivables management, employee savings plans or<br />
specialized financing packages. Plans to merge<br />
several Caisses d’Epargne to form larger, stronger<br />
and more efficient regional banks will also be a<br />
powerful force enabling the French savings banks to<br />
speed up their expansion into this market and<br />
become one of the top-ranking banks for their<br />
clientele of corporate customers.<br />
Sustained commercial activity<br />
The Caisses d’Epargne’s aggressive sales<br />
strategy attracted 2,000 new SME-SMI customers<br />
in 2006, increasing the portfolio of business<br />
customers to almost 20,000 companies.<br />
The development of banking services led to an<br />
8% growth in business flows, which rose to a total<br />
of €30 billion at the end of 2006. Activity was<br />
remarkably dynamic in short-term finance, with<br />
lending of almost €1.6 billion, up by 25%.<br />
In terms of new savings deposits, Caisse d’Epargne<br />
took full advantage of its pioneering position in the<br />
payment of interest on current accounts to increase<br />
deposits to €1.6 billion, a rise of 17% over 2005 levels.<br />
A SUBSIDIARY<br />
SPECIALIZING<br />
IN LONG-TERM<br />
RENTAL<br />
Created from the activities<br />
of the Walter Spanghero<br />
company, GCE Car Lease<br />
offers long-term contract<br />
rental solutions as an<br />
alternative to standard<br />
loan finance. In this<br />
rapidly growing market<br />
segment, the solutions<br />
provided by GCE Car Lease<br />
are mainly aimed at microand<br />
small- to mediumsized<br />
business customers<br />
of Caisse d’Epargne and<br />
Banque Palatine.<br />
43
Can a major<br />
bank help<br />
a gazelle<br />
run faster?<br />
of “gazelles” held back<br />
by financing<br />
problems<br />
The “Gazelles” label refers to the fastest growing small and medium-sized<br />
companies in France – firms whose payroll is growing by more than 15%<br />
every two years –. But one “gazelle” in three is held back owing<br />
to a lack of finance.<br />
To help these SMEs speed up their development under the best possible<br />
conditions, Caisse d’Epargne provides a comprehensive programme of<br />
advice and finance: needs analysis, optimized funding of operating cycles,<br />
free customized support for international activities, and equity investment<br />
if necessary.<br />
44
An enhanced offering<br />
Caisse d’Epargne further enhanced its offering<br />
of products and services for businesses in 2006.<br />
For example, the Prêt Express is a loan that can be<br />
released within 48 hours for investment projects<br />
worth up to €40,000. An electronic certificate is<br />
available so that companies can make VAT payments<br />
online; there is also an online guarantee offering,<br />
issued through the specialized subsidiary CEGI, which<br />
is much appreciated for its speed of implementation<br />
and flexibility of use.<br />
In international trade finance, Groupe Caisse<br />
d’Epargne has formed a partnership that allows its<br />
corporate customers to use the technology and<br />
network of the ABN AMRO Group, one of the world’s<br />
top three players in international trade flow<br />
management. These customers have access to a<br />
business center with a highly effective management<br />
tool developed by ABN AMRO and customized for<br />
the Caisses d’Epargne.<br />
In parallel, a team of account managers<br />
specializing in international trade has been set up<br />
within Banque Palatine.<br />
They can be called in to support Caisse d’Epargne’s<br />
account managers in offering SMEs and SMIs<br />
solutions tailored to their needs.<br />
www.<br />
horizonentrepreneurs.fr<br />
the Caisse d’Epargne website<br />
for entrepreneurs<br />
Caisse d’Epargne has also created a website<br />
– www.horizonentrepreneurs.fr – specifically dedicated<br />
to small and medium-sized businesses, where they<br />
can increase their visibility by creating their own video<br />
identity, using nothing more than a webcam. Internet<br />
users can view these ID kits on the site, which also<br />
offers a “News Blog” on current topics affecting<br />
small companies.<br />
No. 1 PRIVATE PARTNER<br />
OF FRANCE INVESTISSEMENT<br />
Groupe Caisse d’Epargne is a founding member<br />
of France Investissement, the new equity investment<br />
solution for small and medium-sized companies,<br />
alongside the Caisse des Dépôts and private investors.<br />
As part of this process, the Group is setting up a fund<br />
of funds worth more than €100 million, which will<br />
focus its operations on venture capital, development<br />
capital or transmission capital funds.<br />
Company development and transfer:<br />
Caisse d’Epargne steps up its role<br />
With a presence in more than 60 funds, Groupe<br />
Caisse d’Epargne is the leading private banking<br />
investor in regional investment capital.<br />
In addition, it was one of the first banks to launch<br />
local investment funds (FIP): since 2003, some 20 of<br />
these funds have been set up, to the tune of some<br />
€90 million.<br />
Finally, the regional investment capital teams<br />
(Alliance Entreprendre in Paris, Sodéro Gestion<br />
in Nantes, Galia Gestion in Bordeaux, Midi Capital<br />
in Toulouse, Viveris Management in Marseille)<br />
manage regional investment funds designed for<br />
institutional investors.<br />
In 2006, Groupe Caisse d’Epargne created<br />
GCE Capital, a new national instrument to accompany<br />
its regional offerings. The new entity will consist of<br />
two divisions:<br />
• a direct investment division via Alliance Entreprendre;<br />
• a fund of funds management division, working via<br />
the Masseran Gestion company, which is currently<br />
being set up.<br />
45
3<br />
CHAPTER<br />
THE SPECIALIST<br />
BANK FOR REGIONAL<br />
DEVELOPMENT<br />
REAL ESTATE AND COMPLEX TRANSACTIONS<br />
The creation of a new real estate and<br />
complex transactions department<br />
within the CNCE in 2006 brings real<br />
estate and public-private partnerships<br />
within the ambit of a single structure<br />
with a view to offering global solutions<br />
to customers, mainly local authorities working on<br />
development projects.<br />
At the same time, the creation of GCE Immobilier,<br />
an entity that encompasses the Group’s real estate<br />
services companies, will enable the savings banks<br />
to reinforce and round out the range of services with<br />
the development of skills in real estate promotion,<br />
development, land, transactions, etc. GCE Immobilier<br />
will also make it possible to foster and organize<br />
synergies between the real estate subsidiaries.<br />
25 %<br />
of the French PPP market<br />
Target:<br />
Real estate projects:<br />
strong growth in lending<br />
In a very dynamic business environment,<br />
lending by Groupe Caisse d’Epargne for real estate<br />
projects was up by 73%, with new loan production<br />
of €13.5 billion. With total lending and off-balance<br />
sheet commitments of almost €16.2 billion, up<br />
almost 66% in the space of one year, Groupe Caisse<br />
d’Epargne is the second largest financial partner<br />
to real estate professionals.<br />
By way of example, in flagship operations in which<br />
the Group is involved, the Caisse d’Epargne Rhône-<br />
Alpes Lyon (CERAL) is both a shareholder in the Lyon<br />
Confluence semi-private company (see opposite),<br />
which is running France’s biggest urban development<br />
operation (worth a total of €800 million for the first<br />
phase), and a participant in the main banking pool.<br />
In Marseille, the Cœur Méditerranée operation is<br />
an example of the successful exploitation of synergies<br />
between the Group’s different companies: the<br />
developer, Constructa, a long-standing partner of<br />
the Caisse d’Epargne Provence-Alpes-Corse<br />
(CEPAC) and of the Group’s Socfim subsidiary, has<br />
been on the site since 2003. The development<br />
component (construction of a building complex with<br />
a surface area of 20,000 m 2 , including two hotels,<br />
6,000 m 2 of offices, shops and car parks), which is<br />
the subject of a short-term loan worth €16 million<br />
and a completion guarantee, was taken over by<br />
Socfim in 2005. In June 2006, Crédit Foncier and<br />
CEPAC acquired the building for €48 million via<br />
an ad hoc investment structure, and then set up an<br />
appropriate long-term finance package. The assets<br />
are managed by the subsidiary Crédit Foncier REIM.<br />
This program is located at the heart of the<br />
Euroméditerranée site, which is the largest business<br />
real estate operation in Marseille. Having thus<br />
positioned itself very early on in the proceedings,<br />
the Group is now a player in one of Marseille’ flagship<br />
operations where total profits are divided between<br />
the various participants.<br />
Caisse d’Epargne also offers real estate<br />
management and transaction professionals<br />
a comprehensive array of solutions. These notably<br />
include escrow accounts and financial guarantees in<br />
accordance with the requirements of the Hoguet law.<br />
46
authority resources by enabling increased public<br />
investment without increasing debt, and open up<br />
new markets for banks and companies.<br />
In 2006, Groupe Caisse d’Epargne signed PPP<br />
contracts worth more than €500 million, i.e., four<br />
times as much as in 2005 reflecting the rapid<br />
expansion of business in this sector.<br />
The biggest contract is the Group’s participation in<br />
the Reims tramline project. This €300 million<br />
initiative is the first significant PPP operation<br />
carried out by a local authority.<br />
LYON CONFLUENCE<br />
The Lyon Confluence semi-private company manages<br />
the mixed development zone established for the<br />
regeneration of the western part of the confluence,<br />
south of the peninsula formed by the Rhône and the<br />
Saône. The first section of this zone is a construction<br />
area of 75,000 m 2 , corresponding to 620 housing units<br />
(23% social housing) and 14,000 m 2 of shops. Added to<br />
this program is the Dockland district, along the Saône,<br />
which will notably house the future headquarters of the<br />
Le Progrès newspaper and of TLM, the local Lyons TV<br />
station, a French customs building and a 4-star hotel.<br />
Caisse d’Epargne Rhône-Alpes Lyon is involved in<br />
the designated development zone through its stake in<br />
the semi-private company and its position as a censeur,<br />
or non-voting board member, and a line of credit on<br />
the semi-private company of some €12 million. As regards<br />
the Dockland component, there is a long-term loan of<br />
€14 million on the real estate company promoting the<br />
Le Progrès building, another of €6 million on the real<br />
estate company for the former customs building and<br />
a medium-term loan on the La Sucrière building,<br />
which is hosting the Biennial of Contemporary Art.<br />
Enhanced project monitoring<br />
As far as the management of its transactions is<br />
concerned, the Group is optimizing the follow-up<br />
of real estate projects by deploying the V.bank promo<br />
system in all its companies. This drive to provide<br />
an enhanced management framework has been<br />
enhanced with the development of a Basel II rating<br />
tool for the Caisses d’Epargne and the subsidiaries.<br />
Finally, the sharing of information and best<br />
practices between individual Caisses d’Epargne has<br />
been reinforced with the publication of an<br />
operational manual on the short- and long-term<br />
financing of real estate projects and the creation of<br />
a document library.<br />
Public-private partnerships (PPP):<br />
off to a strong start<br />
Hospitals, schools, police stations, tram<br />
systems, sports facilities, etc.: public-private<br />
partnership contracts are becoming increasingly<br />
common. They offset the lack of state and local<br />
2006 was also marked by the success of the<br />
SAGI, which won the contract to renovate the<br />
accommodation provided by the Ecole Polytechnique<br />
school of engineering. This operation, worth some<br />
€40 million, is a benchmark public-private<br />
partnership in the sphere of public real estate.<br />
Infrastructure<br />
PPPs will run into<br />
billions of euros over<br />
the next 5 years<br />
Operating in a combined role as investor, arranger,<br />
adviser and lender, the Group is present in all the<br />
major projects. Significant growth is expected<br />
in 2007, following the completion of several existing<br />
tender processes, which represented a deal flow of<br />
€2 billion at the beginning of 2007.<br />
Two specialized structures, capable of providing<br />
support for the Caisses d’Epargne, operate as<br />
investors. The FIDEPPP, the leading PPP<br />
investment fund, created in 2005 with funds of<br />
€200 million entirely subscribed by the Group, has<br />
25% of its assets invested in infrastructure projects.<br />
The Crédit Foncier subsidiary Cicobail specializes<br />
in real estate lease financing for medium size<br />
PPPs, such as the construction of police stations<br />
or various public buildings.<br />
PUBLIC-PRIVATE<br />
POLICE STATIONS<br />
The Caisse d’Epargne<br />
de Midi-Pyrénées and<br />
Cicobail have signed<br />
a contract with five<br />
towns in the Gers<br />
département to build<br />
police stations.<br />
This €15 million program<br />
is being carried out<br />
in the form of a publicprivate<br />
partnership.<br />
47
48<br />
Several<br />
of Caisse<br />
d’Epargne’s<br />
specialized<br />
subsidiaries<br />
occupy<br />
front-ranking<br />
positions in<br />
their markets<br />
in France<br />
or abroad
THE SPECIALIZED<br />
SUBSIDIARIES<br />
49
COMMERCIAL BANKING<br />
Several specialized brands complement Caisse d’Epargne’s core banking<br />
activities: Banque Palatine for medium-sized companies, the OCÉOR network<br />
for France’s overseas territories and development abroad, La Compagnie 1818<br />
– Banquiers Privés – the specialists in private asset management. In insurance,<br />
credit guarantees, consumer credit, personal care services or custody services<br />
for private securities accounts, the Group’s networks are supported by a<br />
panoply of dedicated subsidiaries. Several of them now support Groupe Caisse<br />
d’Epargne’s development from within Natixis. The Group has also begun<br />
working on its real estate strategy with the aim of creating a major,<br />
stock-market listed services and financing structure. Two entities were set up<br />
in 2006: GCE Immobilier, which operates in the competitive real estate market,<br />
and GCE Habitat, specialized in social housing.<br />
RETAIL BANKING<br />
BANQUE PALATINE:<br />
BANKING ADVICE FOR SMALL-<br />
AND MEDIUM-SIZED COMPANIES<br />
AND PRIVATE INDIVIDUALS<br />
Banque Palatine, a subsidiary 62.69% owned by<br />
the CNCE and 37.31% by the Intesa Sanpaolo<br />
Group, works mainly with dynamic medium-sized<br />
companies (Mid-Cap Plus). It also works with<br />
well-off private customers and provides asset<br />
management services for institutional customers.<br />
Banque Palatine cooperates closely with the<br />
Caisses d’Epargne and La Compagnie 1818.<br />
In 2006, it opened branches in Douai, Mulhouse,<br />
Saint-Etienne and Villepinte, expanding its network<br />
to a total of 63 branches. It also launched an<br />
efficient and up-to-the-minute e-banking solution:<br />
Palatine Comptes.<br />
It continued to develop its activities with<br />
corporate customers in synergy with Groupe<br />
Caisse d’Epargne, notably with the roll-out of<br />
the Trade program. This comprehensive range<br />
of foreign trade services and finance solutions<br />
is founded on a partnership with ABN AMRO.<br />
Banque Palatine has reinforced its wealth<br />
analysis function to meet the needs of high-rate<br />
taxpayers and company directors.<br />
As part of this process, it has also formed a new<br />
partnership with Iselection, the Group’s real-estate<br />
investment specialist. The bank has added an<br />
innovative new life insurance vehicle to its existing<br />
range with the so-called Palatine Dimensions policy<br />
devised by Ecureuil Vie.<br />
BANQUE PALATINE REWARDS AMBITION<br />
In 2006, Banque Palatine launched the Prix de<br />
l’Ambition prize in partnership with the La Tribune<br />
Group. Open to small and medium-sized companies<br />
with net sales in excess of €3 million, this prize is<br />
awarded to companies that have performed<br />
particularly well in terms of growth, international<br />
development or recovery. It illustrates Banque<br />
Palatine’s commitment to helping companies<br />
to achieve their ambitions. The prizes were awarded<br />
in all the different regions of France at the beginning<br />
of 2007; the national Prix de l’Ambition was awarded<br />
on March 28, 2007, in Paris, to the firm Naturex.<br />
Confirming its position as a banking consultant<br />
to medium-sized companies, Banque Palatine was<br />
the lead manager in the IPOs for Société Foncière<br />
Paris Ile-de-France and Terreïs-Groupe Foncia.<br />
It also arranged finance for several takeovers,<br />
in particular the senior debt financing of 3i’s<br />
acquisition of a 40% stake in Empruntis.com<br />
in a leveraged buyout operation (LBO).<br />
50
Palatine Asset Management (PAM) continued to<br />
strengthen its relations with institutional customers<br />
and introduced two new products with the launch of<br />
Palatine Or Bleu and Energies Renouvelables.<br />
Several of its mutual funds performed well in awards<br />
and rankings, in particular the Palatine Mediterranea,<br />
Palatine Institutions and Palatine Court Terme<br />
Dynamique funds.<br />
Banque Palatine’s net banking income was<br />
€232.8 million in 2006, up by 9.4%, and its net<br />
earnings (IFRS) rose 60% to reach a total of €50.1<br />
million.<br />
LA COMPAGNIE 1818 – BANQUIERS<br />
PRIVÉS – MEETING THE PRIVATE BANKING<br />
NEEDS OF HIGH-NET-WORTH CLIENTS<br />
Created in 2005, La Compagnie 1818 – Banquiers<br />
Privés – operates in three areas:<br />
• wealth management for its own clients, with<br />
a global, open offering that enables it to offer them<br />
the best products and the best managers;<br />
• private asset management in support of Groupe<br />
Caisse d’Epargne’s networks, in particular<br />
the Caisses d’Epargne;<br />
• asset management for a clientele of independent<br />
asset management advisers, grouped together under<br />
the banner of the Centre Français du Patrimoine.<br />
These three specialist areas showed strong<br />
growth in 2006. La Compagnie 1818 attracted close<br />
to €1 billion in new deposits through these different<br />
channels: more than €280 million of this came from<br />
the Caisse d’Epargne network. Aggregate assets<br />
under management exceeded the €10 billion mark.<br />
The reinforcement of its multi-management offering,<br />
with the launch of the Elite 1818 fund of funds range,<br />
was highly successful, attracting investment of more<br />
than €100 million in the space of six months.<br />
La Compagnie 1818 – Gestion – also performed well<br />
in mutual funds and in discretionary management.<br />
In September 2006, the bank also took over the<br />
business of Bryan Garnier Asset Management.<br />
The net banking income generated by<br />
La Compagnie 1818 was in excess of €50 million<br />
in 2006, compared with €32.5 million in 2005, while<br />
net income came to a total of €4 million.<br />
This subsidiary was transferred to Natixis, which<br />
also incorporates the two wealth management<br />
entities of Banques Populaires: Banque Privée<br />
Saint Dominique and Natexis Private Banking<br />
Luxembourg.<br />
OCÉOR: THE COMMERCIAL BANKING<br />
ARM IN FRENCH OVERSEAS<br />
TERRITORIES AND ABROAD<br />
2006 was a particularly active year for the<br />
OCÉOR Group, Groupe Caisse d’Epargne’s banking<br />
network outside of metropolitan France.<br />
It now has two specialized finance structures<br />
reporting to it – OCÉORANE and INGEPAR –<br />
together with the retail banking interests acquired<br />
by Groupe Caisse d’Epargne in 2006 outside<br />
France: Banque BCP Luxembourg and Crédit<br />
Immobilier et Hôtelier (CIH) in Morocco.<br />
To underpin these changes and maintain its growth<br />
dynamics, especially in foreign markets, the OCÉOR<br />
Group’s holding company Financière OCÉOR has<br />
drawn up a strategic action plan to consolidate<br />
its role as the network head. As part of this process,<br />
the focus in 2006 was placed on establishing a new<br />
structure based around “business line” departments,<br />
responsible for centralized operational activities<br />
and the management and monitoring of their<br />
different activities in the banks and subsidiaries.<br />
The OCÉOR Group continued to enjoy buoyant<br />
commercial growth in retail banking. New products<br />
were launched, notably in general insurance, loan<br />
insurance, account guarantees, payment methods<br />
insurance and life insurance.<br />
Another significant event in 2006 was the creation<br />
of a “Major Accounts” structure, essentially<br />
responsible for setting up medium- and long-term<br />
loans for banks in the OCÉOR Group.<br />
It generated €212 million in new loans, based on<br />
a number of significant operations, in particular<br />
in Polynesia, the West Indies and New Caledonia.<br />
Almost<br />
1bn €<br />
in new deposits<br />
51
CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
COMMERCIAL BANKING<br />
The activities and results of the OCÉOR Group<br />
are all performing well with net banking income up<br />
13% at €261.4 million and net income up 34% to<br />
a total of €23.8 million.<br />
BANKS AND SUBSIDIARIES<br />
BELONGING TO FINANCIÈRE OCÉOR<br />
• Banque de Tahiti<br />
• Banque des Antilles<br />
Françaises<br />
• Banque des Iles<br />
• Crédit Saint-Pierrais<br />
• Banque de la Réunion<br />
• Banque de Nouvelle<br />
Calédonie<br />
• Caisse d’Epargne<br />
de Nouvelle Calédonie<br />
• Banque des<br />
Mascareignes<br />
• Banque BCP Luxembourg<br />
• GCE Maroc<br />
• OCÉORANE<br />
• OCÉOR LEASE<br />
• INGEPAR<br />
With the takeover of the Orane Group – renamed<br />
OCÉORANE – at the beginning of 2006, the OCÉOR<br />
Group became the first banking institution to offer<br />
small and medium-sized companies in the French<br />
overseas territories a combination of finance and<br />
tax planning services for mainland investors.<br />
Indeed, OCÉORANE specializes in tax-efficient<br />
transactions governed by the so-called “Girardin<br />
law,” which allows reduced rate overseas financing<br />
of business equipment. It holds 30% of this market.<br />
INGEPAR, previously a part of the CNCE,<br />
specializes in the design of complex asset financing<br />
solutions, notably through tax leveraging. Set up<br />
in 1999, INGEPAR has become a benchmark player<br />
in the financing of aircraft, ships, trains, and<br />
hotel and energy production projects, and of public<br />
service concessions, especially in France’s<br />
overseas territories.<br />
Financière OCÉOR has owned 50.1% of Banque<br />
BCP Luxembourg SA since 2006 alongside the<br />
CNCE, which holds a 30% interest. Banque BCP<br />
Luxembourg SA has a particularly strong customer<br />
base among people of Portuguese origin. This<br />
acquisition has allowed Groupe Caisse d’Epargne<br />
to strengthen its multi-brand positioning in<br />
the Luxembourg market.<br />
Financière OCÉOR also holds Groupe Caisse<br />
d’Epargne’s interest, alongside the Caisse de Dépôt<br />
et de Gestion du Maroc, in Crédit Immobilier et<br />
Hôtelier (CIH), a banking institution that plans to<br />
develop its general banking activities for individual<br />
customers with a full range of innovative products<br />
and services.<br />
BANQUE BCP FRANCE, CATERING<br />
TO PORTUGUESE CLIENTS IN FRANCE<br />
Banque BCP France joined Groupe Caisse<br />
d’Epargne with Banque BCP Luxembourg in 2006<br />
within the framework of a long-term partnership<br />
agreed with the Portuguese banking group<br />
Millennium bcp.<br />
Thirty percent owned by the CNCE and 50.1% by the<br />
Caisse d’Epargne Ile-de-France Paris, Banque BCP<br />
France boasts a total of 63 branches, 43 of them<br />
in Paris and in the greater Paris region. It works<br />
with both individual and business customers.<br />
Taking advantage of the soccer World Cup<br />
in 2006, Banque BCP launched a campaign<br />
specifically designed to maintain the loyalty of<br />
existing clientele and attract new customers by<br />
distributing gifts in the colors of the Portuguese<br />
team to promote the opening of new accounts and<br />
encourage customers to sign up for new products.<br />
On the corporate side, the bank launched<br />
garantie Sofaris, a guaranty covering the financing<br />
needs of business organizations: start-up, capital,<br />
innovation, business transfers and buyouts.<br />
Banque BCP France recorded net banking income<br />
of €65.3 million in 2006 and net income of<br />
€9.5 million. At December 31, 2006, its outstanding<br />
deposits stood at €1 billion and its loans outstanding<br />
position at €569 million.<br />
52
INSURANCE<br />
Insurance is one of the most dynamic growth<br />
vectors for Groupe Caisse d’Epargne, which is<br />
one of France’s foremost bancassurance<br />
operators. A distributor and operator of<br />
insurance companies providing cover for fire,<br />
accident and miscellaneous risk, life insurance,<br />
bonds and guaranties, the Group is also the main<br />
shareholder in CNP Assurances, and France’s<br />
largest provider of personal insurance.<br />
LIFE ASSURANCE:<br />
No. 2 BANCASSURANCE SPECIALIST<br />
IN FRANCE<br />
In 2006, life insurance consolidated its position<br />
as the leading savings vehicle for individuals: total<br />
life funds exceeded €1,000 billion in the course of<br />
the year. For their insurance needs, the Group’s<br />
networks go through CNP Assurances – France’s<br />
premier personal insurance company in which<br />
the CNCE and the French post office, La Poste, hold<br />
a 36% interest – and through Ecureuil Vie. At the<br />
beginning of 2007, the CNCE sold its 50% stake in<br />
Ecureuil Vie to CNP Assurances. At the same time,<br />
the distribution agreements between Groupe<br />
Caisse d’Epargne and CNP Assurances were<br />
extended until 2015 for life insurance and loan<br />
protection insurance, with an adjustment of<br />
the commission rates on distribution.<br />
Distributed by the Caisses d’Epargne network,<br />
Ecureuil Vie products generated life business<br />
worth a total of €10.5 billion in 2006, up by 11%,<br />
with more than 624,000 new policies taken out.<br />
Net investment reached a record level of €6 billion,<br />
and the total value of life funds reached<br />
€80.5 billion, on a total of 4.8 million contracts.<br />
2006 saw very strong growth in the Nuances 3D,<br />
Nuances Plus and Nuances Privilège unit-linked<br />
policies. Private management was extremely<br />
dynamic, contributing 28% to revenues. The Garantie<br />
Famille and Garantie Urgence provident insurance<br />
range was successfully re-launched: 91,000 policies<br />
were sold, as compared with 34,000 in 2005.<br />
The CNCE and La Poste together own 36% of<br />
CNP Assurances through a joint holding company.<br />
CNP Assurances recorded net sales of €32 billion<br />
in 2006, up by 20.6%, and net income of €1.1 billion,<br />
representing an increase of 18%.<br />
Foncier Assurance, a subsidiary 60% owned by<br />
CNCE and 40% by Crédit Foncier, provides life<br />
cover and loan protection products for Groupe<br />
Caisse d’Epargne’s companies and for outside<br />
partners. Specializing in innovation and personalized<br />
life insurance solutions, its products received<br />
numerous awards in 2006.<br />
Foncier Assurance became a part of Natixis,<br />
joining the Natixis Assurances entity.<br />
GENERAL INSURANCE:<br />
No. 3 BANCASSURANCE SPECIALIST<br />
IN FRANCE<br />
Groupe Caisse d’Epargne’s networks confirmed<br />
their efficiency in the distribution of insurance<br />
products protecting against fire, accident and<br />
miscellaneous risks in 2006, selling 574,000 new<br />
stand-alone or loan-linked policies. These policies<br />
are designed by Ecureuil Assurances IARD,<br />
the third-ranked bancassurance player in the<br />
market (by volume of sales). It recorded net sales<br />
of €272 million, up 22% over the year, and net<br />
income of €11.5 million, representing an increase<br />
of 55%. This dynamic level of growth reflects<br />
increased sales efforts and the success of<br />
the discounts offered to customers taking out<br />
multiple policies.<br />
FIRE, ACCIDENT AND MISCELLANEOUS RISK<br />
INSURANCE PORTFOLIO AT DECEMBER 31, 2006<br />
Number of policies<br />
2006 Change/2005<br />
Automobile insurance 240,000 +20%<br />
Comprehensive home insurance 621,000 +16%<br />
Medical and health insurance 340,000 +14%<br />
Legal protection 346,000 +46%<br />
Total 1,547,000 +22%<br />
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CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
COMMERCIAL BANKING<br />
Muracef covers the risks of the Group’s companies<br />
and provides non-bank insurance products to private<br />
customers. After its mobile phone insurance policy in<br />
2005, Muracef introduced a further innovation in 2006<br />
with the market launch of savings insurance, a<br />
product that covers all the savings built up by the<br />
policyholder against accidental death. Another event<br />
in 2006 was the launch of Garanties Santé, an<br />
additional health policy based around a solution<br />
aimed at private and business customers in<br />
partnership with the MACIF mutual insurance<br />
company. With this product from Muracef, Groupe<br />
Caisse d’Epargne marks its move into the health<br />
insurance field.<br />
In 2006, Muracef recorded net sales of €55.5 million,<br />
annual growth of 8.4% in high-risk insurance, and<br />
19% in non-bank insurance products. Net income<br />
stood at €6.3 million.<br />
includes three levels of protection tailored to different<br />
policyholder profiles and adjusted in line with their<br />
needs for each type of health service. A contract<br />
enjoying tax-deductible status under the so-called<br />
Madelin provisions has been specifically designed for<br />
the self-employed. The aim is to have approximately<br />
120,000 contracts taken out per year once this offer<br />
has been rolled out throughout the entire network<br />
of Caisses d’Epargne.<br />
FINANCIAL GUARANTEES:<br />
THE ONLY “MULTI-BUSINESS”<br />
PLAYER IN FRANCE<br />
GCE Garanties is the holding company of three<br />
specialized insurance companies: Saccef, CEGI and<br />
Socamab Assurances. It also provides credit<br />
guarantees directly to entities active in the social<br />
economy and subsidized housing sector, in addition<br />
to small to medium-sized companies. It generated<br />
revenues of a total of €194 million in 2006, up 5%<br />
compared with 2005.<br />
MACIF-MAIF PARTNERSHIP:<br />
SERIOUS AMBITIONS<br />
Groupe Caisse d’Epargne has entered into a<br />
strategic partnership with two mutual insurance<br />
companies: MACIF, France’s premier family insurance<br />
provider, and MAIF, number one insurance provider to<br />
the voluntary sector. The goal of the partnership is to<br />
offer members and customers of the three groups a<br />
global solution for their needs in insurance, banking,<br />
assistance and personal care services. The holding<br />
company CEMM – 50% Groupe Caisse d’Epargne,<br />
25% MACIF and 25% MAIF – holds the funds invested<br />
by the three partners in their joint activities.<br />
In 2006, CEMM took a 50% stake in Séréna,<br />
the personal care services platform in which<br />
the MGEN (1) also has an interest. Groupe Caisse<br />
d’Epargne distributes these services under<br />
the name Ecureuil Serénité Services; they provide<br />
Caisses d’Epargne customers with assistance<br />
in organizing domestic help. The branches only<br />
provide access to the personal care services platform<br />
(the selling is done by Séréna). Two other projects<br />
were confirmed: the merger of legal protection<br />
management by the end of 2007 and a long-term<br />
vehicle contract hire service for individual customers.<br />
CEMM helped to develop Groupe Caisse<br />
d’Epargne’s offering in the area of complementary<br />
health insurance in partnership with the MACIF<br />
Group, responsible for managing the products, and<br />
with Muracef acting as the insurer. This offering<br />
(1) Mutuelle Générale de l’Education Nationale – the mutual<br />
insurance company of the French education system.<br />
54<br />
SIMPLIFYING ACCESS TO LOANS AND INSURANCE<br />
In July 2006, Groupe Caisse d’Epargne signed the AERAS<br />
agreement, which came into force on January 6, 2007.<br />
Thanks to loan protection insurance, this agreement<br />
makes credit and insurance more readily accessible<br />
for people in higher health risk categories. An AERAS<br />
referral agent has been appointed in every Caisse<br />
d’Epargne and information has been circulated to all<br />
potential borrowers. 23,000 employees within<br />
the network have received training on this new facility.<br />
Saccef provides loan guarantees for private<br />
borrowers and self-employed professionals. In this<br />
capacity, it has underwritten 63% of the real estate<br />
loans granted to individual customers of Groupe<br />
Caisse d’Epargne. It recorded sales of €139 million<br />
in 2006, up by 4% over the year.<br />
CEGI is the no. 1 issuer of legal guarantees for<br />
the builders of single-family houses and a major<br />
player in regulated guarantees in the area of sales<br />
on future completion (VEFA), and in the customs<br />
and excise fiscal guarantees market. Its sales grew<br />
9% in 2006, to reach a total of €44 million.<br />
Socamab Assurances is a major player in the<br />
market for legal guarantees granted to real-estate<br />
management companies. It recorded sales of<br />
€8 million in 2006, up by 4% over the year.<br />
GCE Garanties, along with its three subsidiaries,<br />
has now been transferred to Natixis; it took<br />
advantage of this transfer in ownership to change<br />
its corporate name to Natixis Garanties.
OTHER SPECIALIZED SUBSIDIARIES<br />
CEFi:<br />
THE CONSUMER CREDIT SPECIALIST<br />
The consumer loans issued by the Caisses<br />
d’Epargne are managed by CEFi.<br />
CEFi, which manages the Teoz card, the core<br />
component in several revolving credit facilities<br />
(whether linked to a personal loan or not), offers a<br />
full range of personal loans. The IZICEFi application<br />
and the IZIBOX server, both available to the branch<br />
network, help to optimize sales and margins on<br />
these loans.<br />
In 2006, 193,000 accounts were marketed, taking<br />
the aggregate number of Teoz accounts to more<br />
than 691,200. New loan production was up by 3%, to<br />
€624.4 million, and total outstandings grew by 8%<br />
to reach a total of €855.6 million. CEFi’s net income<br />
stood at €11.9 million, equal to growth of 69%.<br />
The new consumer credit subsidiary, Creditis,<br />
created by Groupe Caisse d’Epargne and the Italian<br />
Carige Group, is taking full advantage of CEFi’s<br />
expertise and know-how to capture significant<br />
market share in Italy.<br />
CEFi joined the Natixis group at the end of 2006,<br />
to form – along with Novacrédit and Creditis –<br />
a new entity, Natixis Consumer Finance.<br />
Natixis Consumer Finance’s target is to become<br />
a benchmark European player in the area of<br />
consumer credit distributed via banking networks.<br />
GESTITRES: 2006, A YEAR OF<br />
STRUCTURAL CONSOLIDATION<br />
In 2006, several key events affected the business<br />
activities of Gestitres, a company specializing in<br />
securities custody services for individual customers.<br />
A subsidiary 66% owned by Groupe Caisse<br />
d’Epargne and 34% by LCL, Gestitres experienced a<br />
dual shift in its capital structure in the last quarter<br />
of 2006. After the sale of LCL’s shares to the Caisse<br />
Nationale des Caisses d’Epargne within the<br />
framework of the Crédit Agricole SA securities<br />
strategy, CNCE transferred 100% of the capital of<br />
Gestitres to Natixis. Now part of Natixis’ financial<br />
services division, Gestitres – alongside Natixis<br />
Services Financiers – now shares the ambition of<br />
building a leading platform in the custody of retail<br />
and private banking securities in France.<br />
The initial public offering of Natixis shares at<br />
the end of 2006 was also a high point in the year.<br />
With more than one million buy orders processed,<br />
this operation was a technical success for<br />
Gestitres, demonstrating its expertise in the area of<br />
securities custody.<br />
Other large-scale projects were also managed<br />
during the year: the roll-out of the securities<br />
workstation across the Caisses d’Epargne network,<br />
continued improvement in the information systems<br />
for the Bourse “Esprit Ecureuil” offering, transfer<br />
of the company’s head office and implementation of<br />
a quality process focused on operational excellence.<br />
1 million<br />
buy orders<br />
processed for Natixis<br />
Finally, business activities in 2006 were marked<br />
by particularly high volumes for Gestitres:<br />
13 million mutual fund orders and 3.5 stock market<br />
orders were handled. The subsidiary manages<br />
5.7 million securities accounts, 2.5 million of which<br />
for the Caisses d’Epargne; its revenues are close<br />
to €90 million and it has more than €106 billion<br />
of assets in custody.<br />
55
CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
COMMERCIAL BANKING<br />
REAL ESTATE<br />
The 2 nd largest real estate bank for<br />
individuals and number one for real<br />
estate professionals, a front-ranking<br />
player in social housing, service<br />
provider, institutional investor, asset<br />
manager: Groupe Caisse d’Epargne is<br />
the largest and most comprehensive service<br />
provider on the French market.<br />
THE CRÉDIT FONCIER GROUP<br />
As the leading French banking institution<br />
specializing in real estate finance, Crédit Foncier<br />
operates in four major areas: real estate finance for<br />
individuals, property finance for businesses and<br />
investors, secure financing with Compagnie de<br />
Financement Foncier, and surveying and valuation.<br />
Sustained growth in lending to individuals<br />
Lending to individual customers grew by<br />
€8.4 billion in 2006, taking aggregate loans under<br />
management to €37.6 billion. The 10.7% increase<br />
in new loan production over the year was achieved<br />
with the same margins and longer maturity periods.<br />
Crédit Foncier is very active in subsidized loans and<br />
is the second largest distributor of guaranteed<br />
interest-free solutions, an area where it boasts 24.6%<br />
market share, and of below-market rate home loans<br />
for low-income households (25.2%).<br />
However, lending in the competitive sector accounted<br />
for three-quarters of its business. Several new<br />
products were launched, including the Relais Plus loan<br />
aimed at the growing buy-to-resell market; a range<br />
of loans, in particular for home improvements, designed<br />
to take advantage of mortgage reform (the Prêt Viager<br />
Hypothécaire, scheduled for introduction in 2007);<br />
and services to non-residents settling in France.<br />
Companies and investors: enhanced<br />
synergies with the Caisses d’Epargne<br />
In what was largely a buoyant market, all types<br />
of lending to companies and investors rose<br />
to €4.8 billion in 2006, an increase of 11% in the<br />
space of one year.<br />
In the structured real estate financing market,<br />
production reached €1.4 billion. The Crédit Foncier<br />
Group grew in all categories of corporate real<br />
estate assets: logistics, offices and the medicosocial<br />
sector.<br />
In the growing public-private partnership (PPP)<br />
market, Crédit Foncier took an equity interest in<br />
FIDEPPP (an investment fund for the development<br />
of the public-private partnerships of Groupe Caisse<br />
d’Epargne) and completed several operations<br />
within the framework of company-builder<br />
partnerships. One notable example is the PPP<br />
agreed with the French Ministry of Foreign Affairs<br />
for the construction, financing and maintenance<br />
of its new diplomatic archive center.<br />
Crédit Foncier<br />
funds police<br />
stations via PPP<br />
In the extremely competitive social housing<br />
market, Crédit Foncier consolidated its positions<br />
in synergy with the Caisses d’Epargne. It is one of<br />
the main providers of regulated loans (PLS, PLI,<br />
and PSLA state-sponsored rental accommodation,<br />
construction and “rent-to-buy” loans) and is also<br />
actively involved in the unregulated market, offering<br />
very long-term lending solutions. New loan<br />
production rose to €0.7 billion in 2006.<br />
In less dynamic conditions, production levels at<br />
Cicobail – Groupe Caisse d’Epargne’s specialized<br />
real estate leasing subsidiary – also enjoyed<br />
growth, reaching a total of €0.3 billion, with a<br />
significant contribution from the first medium-sized<br />
real estate leasing PPP operations, such as the<br />
financing of police stations.<br />
56
Setting up shop<br />
in London to help<br />
the British settle<br />
in France: does<br />
that make sense?<br />
Almost transactions a year<br />
with British and Irish buyers<br />
The British and Irish account for 48% of all foreign nationals acquiring property in<br />
France, with almost 20,000 transactions completed every year. This is why Crédit Foncier<br />
has opened an office in the heart of London City, the perfect place to forge strong relations<br />
between key British opinion leaders and Crédit Foncier’s French branches, which offer<br />
a comprehensive array of real estate loans designed for their customers across<br />
the Channel. This combines with Foncier French Touch Services, an exclusive offering<br />
designed to make life easier for cross-Channel buyers: from a bilingual adviser for one<br />
day to a full home maintenance service. Crédit Foncier’s goal is to achieve a 50%<br />
increase in its market share of real estate loans to non-residents bringing it up to<br />
a total 9% of the French market. To find out more: www.creditfoncier.co.uk<br />
57
CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
COMMERCIAL BANKING<br />
COMPAGNIE DE FINANCEMENT FONCIER:<br />
FRANCE’S LARGEST ISSUER AFTER THE FRENCH STATE<br />
In the continuingly buoyant real estate<br />
development market, Crédit Foncier maintained its<br />
progress in 2006. Following the inclusion of business<br />
contributed by Socfim, which became a Crédit<br />
Foncier subsidiary in 2006, new loans (excluding<br />
syndicated facilities) grew to almost €1 billion<br />
in cash and €1.2 billion in signature commitments.<br />
Crédit Foncier works with the big national developers,<br />
with many regional developers, and in close<br />
collaboration with the individual Caisses d’Epargne.<br />
Crédit Foncier is also the leading player on the<br />
highly specialized market in joint ownership loans<br />
and has developed a package of banking services for<br />
the regulated professions, as well as for real estate<br />
agents. The average value of banking services in 2006<br />
was €3 billion, divided between €1.9 billion in deposits<br />
and €1.1 billion in investments.<br />
CRÉDIT FONCIER GROUP: KEY FIGURES (2006)<br />
• 3,975 employees<br />
• 200 offices<br />
• €17.3 billion of covered bonds issued in 2006<br />
• €94 billion in total assets<br />
• €70 billion customer loans and receivables<br />
• €1 billion net banking income<br />
• €350 million net income<br />
Secured financing: record activity<br />
Compagnie de Financement Foncier (CFF) issued<br />
covered bonds for a total of €17.3 billion in 2006,<br />
representing growth of almost 32% over 2005 levels.<br />
75% of these were public issues, including<br />
one €1 billion operation with a term of 50 years,<br />
the longest secured bond issue ever made. This<br />
operation demonstrates Crédit Foncier’s ability<br />
to extend the duration of its resources to match<br />
the development needs of Groupe Caisse d’Epargne,<br />
which often requires financing with maturity<br />
horizons in excess of 30 to 40 years. Other projects<br />
such as the Prêts Viagers Hypothécaires will also<br />
require very long maturity terms.<br />
With an AAA credit rating, Groupe Caisse d’Epargne’s<br />
mortgage bank is:<br />
• Europe’s 2 nd largest issuer of secured bonds.<br />
• Europe’s 3 rd largest non-sovereign issuer.<br />
• The world’s 7 th largest non-sovereign issuer.<br />
In 2006, Crédit Foncier extended its financing<br />
activity with local authorities in synergy with<br />
the Group’s different companies: the individual<br />
Caisses d’Epargne, the CNCE, IXIS, etc.<br />
Its direct lending to the regional public sector<br />
reached a total of €1.8 billion at the end of 2006.<br />
It conducted its first dynamic debt management<br />
(G2D) operations in partnership with the CNCE.<br />
Virtually all the Caisses d’Epargne took advantage<br />
of the possibility of providing 25- to 50-year fixedrate<br />
loans to local authorities directly from Crédit<br />
Foncier’s balance sheet assets. Working through<br />
Compagnie de Financement Foncier, Crédit Foncier<br />
also developed the refinancing of the Caisses<br />
d’Epargne’s loans in the regional public sector on<br />
special AAA-rated terms. Six Caisses d’Epargne<br />
sold assets in 2006, together worth a total of<br />
€300 million.<br />
Finally, 2006 confirmed the growth of loans<br />
granted by the Crédit Foncier Group to the<br />
international public sector, with aggregate new loan<br />
production of €7.6 billion. These assets were<br />
financed by Compagnie de Financement Foncier.<br />
Surveying and valuations: a growing role<br />
The subsidiaries Foncier Expertise and Serexim<br />
employ 122 surveyors and appraisers spread across<br />
24 regional offices, completed 34,000 appraisal<br />
assignments in 2006 and generated revenues for<br />
a total of €23.5 million.<br />
These subsidiaries also developed appraisal services<br />
in new sectors such as homes for the elderly, clinics<br />
or industrial concerns. They played an expanded role<br />
with the Group’s other companies, and developed<br />
their customer base of foreign banks. Keeping pace<br />
with Crédit Foncier’s innovations in other areas,<br />
Foncier Expertise set up a system of specific<br />
appraisal procedures for the future real estate<br />
investment funds (OPCI), and developed the special<br />
IT processes and estimation procedures required for<br />
Prêts Viagers Hypothécaires.<br />
58
GCE IMMOBILIER:<br />
A NEW SERVICES DIVISION DEDICATED<br />
TO COMPETITIVE REAL ESTATE<br />
GCE Immobilier, a holding company wholly-owned<br />
by the CNCE, was created in February 2006 from<br />
PEREXIA, whose holdings in the social housing<br />
enterprises (ESH) were transferred to GCE Habitat.<br />
The role pursued by GCE Immobilier is the<br />
centralization and development of service activities<br />
both in the competitive real estate market and in<br />
the semi-public sector, and the provision of assistance<br />
– notably to entities within Groupe Caisse d’Epargne –<br />
in the definition of their real estate asset strategies.<br />
Under the agreements made with the Caisse des<br />
Dépôts in 2006, SAGI has now been sold to Société<br />
Nationale Immobilière (SNI).<br />
In 2006, GCE Immobilier chiefly focused its attention<br />
on real estate services with the completion of several<br />
development projects.<br />
A new real estate services division<br />
In the field of real estate services, Crédit Foncier<br />
has transferred its majority holding in Foncier Services<br />
Immobiliers to GCE Immobilier. This services holding<br />
company, wholly owned by GCE Immobilier, has<br />
changed its name to “GCE Services Immobiliers”.<br />
In the spheres of business and residential real estate,<br />
this holding company encompasses the KEOPS,<br />
GEMCO, Gestrimelec, GCEI REIM, GCEI Conseil<br />
Immobilier and Ciloger businesses. All these entities<br />
are active in real estate sales, the management of<br />
rental properties, consultancy services, asset<br />
management and the administration of non-trading<br />
real estate investment companies (SCPI). Together,<br />
they boast a total of 210 employees and generated<br />
combined sales of €47.8 million in 2006.<br />
Several of these companies enjoy dominant<br />
positions in their markets. The business real estate<br />
consultancy firm KEOPS is ranked sixth in its sector<br />
in France. The management company Ciloger is a<br />
major market player; it manages nine non-trading<br />
real estate investment companies (more than<br />
53,000 members) in both the business and<br />
residential sectors. At the end of 2006, it took steps<br />
to position itself on the new market for the recently<br />
created real estate investment funds (OPCI).<br />
A 45%-owned subsidiary, a joint venture with the<br />
Banque Postale (45%) and the CNP (10%), Ciloger plans<br />
to promote its combined development, drawing on the<br />
resources of the Groupe Caisse d’Epargne and Banque<br />
Postale networks to attract new business in 2007.<br />
In the area of property management, Gestrim<br />
and Lamy continued to merge their activities in the<br />
course of 2006 and settled on the name Lamy for the<br />
joint entity. With net sales of almost €340 million, a<br />
portfolio of 920,000 housing units and more than<br />
3,800 employees, Lamy is a major force in the real<br />
estate management field in France, ranking in<br />
second place, a long way ahead of the number three<br />
in the sector.<br />
In the sphere of semi-public companies,<br />
Sogima (Marseille) and Sacogiva (Aix-en-Provence)<br />
in the South of France maintained their growth<br />
and consolidated their partnerships with local<br />
authorities. With more than 8,600 housing units<br />
under management, they are both major players<br />
in their markets.<br />
External growth operations in 2006<br />
GCE Immobilier acquired 34% of Iselection and<br />
supervised the market launch of real estate<br />
investment products distributed by the Caisses<br />
d’Epargne for private investors.<br />
In residential real estate, Groupe Caisse d’Epargne<br />
took a 34% stake – 22% held by GCE Immobilier and<br />
12% by Crédit Foncier – in Arthur Communication,<br />
the entity controlling the Arthur l’Optimist brand<br />
license, France’s fifth-largest network of estate agents<br />
with 450 branches and completing more than<br />
23,000 transactions a year. The aim is to double the size<br />
of this network by 2009. This partnership gives Groupe<br />
Caisse d’Epargne a significant role in a sector that<br />
enjoys strong synergies with the Caisses d’Epargne<br />
network and the other real estate businesses.<br />
GCE Immobilier also acquired a 34% stake in the<br />
Aegide Group, which develops assisted living facilities<br />
for the elderly. It markets them through the Aegide<br />
brand, while operations are carried out under the<br />
Domitys label. Aegide operates five sites and at least<br />
ten new projects are due to come on stream by 2008.<br />
GCE HABITAT: A MAJOR DIVISION<br />
DEDICATED TO SOCIAL HOUSING<br />
Created in 2006 and wholly-owned by the CNCE, GCE<br />
Habitat took over all of PEREXIA’s holdings in social<br />
housing enterprises and HLM production cooperatives.<br />
On January 19, 2007, GCE Habitat sold EFIDIS – which<br />
manages 44,800 social housing units in Ile-de-France<br />
– to SNI, and is also going to take over Crédit Foncier’s<br />
10% stake in the Sonacotra state-run semi-public<br />
company specializing in the management of migrant<br />
worker hostels and social residences.<br />
59
CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
COMMERCIAL BANKING<br />
Structured around four activities – rented social<br />
housing, below market-rate home loans for lowincome<br />
households, nursing homes and health<br />
centers, and real estate-related services – GCE Habitat<br />
is a major division dedicated to social housing and<br />
actions taken in the general public-interest.<br />
Thanks to the subsidiaries of GCE Habitat and<br />
to ERILIA, Groupe Caisse d’Epargne is committed<br />
to active growth in all spheres of social housing.<br />
Its aim is to make its own contribution to solving two<br />
major challenges facing society: firstly, the housing<br />
crisis and soaring property prices, which are forcing<br />
ever more families to turn to social housing; and<br />
secondly, the ageing of the French population and<br />
rising dependency, which also call for the development<br />
of new housing solutions.<br />
and the number of social housing construction<br />
projects from 1,517 in 2006 to 2,900 in 2007.<br />
Enhancing the quality of customer service,<br />
applying the sustainable development policy,<br />
adapting accommodation to the ageing of the<br />
population… all these actions taken in 2006 will be<br />
actively pursued in the future.<br />
First-time buyers:<br />
increase in new building starts<br />
DOMEFI in the Ile-de-France region and Escaut<br />
Habitat in Nord-Pas-de-Calais build and sell single<br />
family houses available at low rates to low-income<br />
households. The 2006 financial year saw a further<br />
rise in the number of new building starts: 141 new<br />
housing units (up from 100 in 2005). Ambitious targets<br />
have been set for the coming years. Escaut Habitat is<br />
actively pursuing its ambition to become the leading<br />
promoter of new home ownership in its region.<br />
GCE HABITAT: KEY FIGURES<br />
Housing units under management 104,200<br />
Rental housing units under construction 1,517<br />
Rental housing units delivered 1,545<br />
First-time buyer homes under construction 141<br />
SUSTAINABLE DEVELOPMENT IN ACTION<br />
Within the framework of a GCE Habitat charter of<br />
commitments, each subsidiary has earmarked one pilot<br />
building or regeneration project and one project related<br />
to water, energy or waste management. More than<br />
15 projects were undertaken in 2006.<br />
Starting in 2007, GCE Habitat has decided to seek<br />
“Habitat & Environnement” certification for all<br />
its housing development projects, and “Patrimoine<br />
et Habitat” certification for all its refurbishment projects.<br />
Subsidized rental accommodation:<br />
sharp rise in new construction work<br />
At the end of 2006, the rented social housing stock<br />
managed by the EFIDIS (Ile-de-France), SIA (Nord-<br />
Pas-de-Calais) and LOGIREM (Provence-Alpes-Côte<br />
d’Azur) groups boasted a total of 104,200 units. In<br />
response to the housing crisis, GCE Habitat’s social<br />
housing enterprises have made a firm commitment:<br />
they will increase the number of rented housing<br />
units from 1,545 in 2006 to 1,700 in 2007,<br />
Nursing homes and health establishments:<br />
working in synergy with the Foundation<br />
GCE Habitat and the Caisses d’Epargne<br />
Foundation for Social Solidarity have established<br />
a major long-term partnership providing, firstly,<br />
for the transfer of ownership of the real estate<br />
holdings of some Foundation’s homes and<br />
establishments to Axentia and Sofari (two subsidiaries<br />
of GCE Habitat) and, secondly, for the construction<br />
and acquisition of existing establishments from<br />
local operators.<br />
The preliminary legal, technical and financial<br />
analyses were completed in 2006. The finance is<br />
being restructured to optimize the conditions<br />
governing the transfer of property. Ownership of<br />
17 establishments will be transferred during 2007,<br />
representing a total of 1,398 beds managed by<br />
the Foundation. Work began in 2006 on three new<br />
projects for the Foundation, totaling 204 beds. In<br />
addition, 64 of the Foundation’s 71 establishments<br />
underwent a technical and real estate audit carried<br />
out by teams from GCE Habitat’s specialized<br />
service subsidiaries, and the rest will be audited by<br />
the end of 2007 prior to the launch of a modernization<br />
program.<br />
60
INVESTMENT BANKING<br />
In November 2006, Groupe Caisse d’Epargne and Banque Populaire group<br />
brought together their activities in corporate and investment banking, asset<br />
management and financial services to create Natixis, which has now become<br />
their jointly-owned listed banking institution. Boasting a staff of almost<br />
23,000 people (more than 7,000 of whom work outside France), offices<br />
in 68 countries, net banking income of €7.3 billion and consolidated equity<br />
of €17.5 billion, Natixis is one of the front-ranking players in its sector<br />
in Europe. It enjoys business relations with all the groups included in the CAC 40<br />
share index, more than 80% of the companies included in the SBF 250, and<br />
the majority of leading institutional investors. It is one of France’s four largest<br />
corporate and investment banks. In asset management, it is the leading French<br />
bank and one of the world’s top 15, as well as being the world’s third largest<br />
player in credit insurance. IXIS Corporate & Investment Bank, IXIS AM Group,<br />
CACEIS and CIFG – the subsidiaries comprising Groupe Caisse d’Epargne’s<br />
investment banking arm – were all transferred to Natixis.<br />
NATIXIS<br />
A joint industrial strategy<br />
Backed by an alliance between two major local<br />
banking networks, each owning 34.44% of its<br />
equity, Natixis in turn owns a 20% stake in both<br />
these networks in the form of cooperative<br />
investment certificates (CICs), a fact that further<br />
strengthens the ties between Banque Populaire<br />
group and Groupe Caisse d’Epargne.<br />
20 BANQUES POPULAIRES<br />
100%<br />
28 CAISSES D’EPARGNE<br />
100%<br />
20%<br />
CCIs<br />
BFBP<br />
(central institution)<br />
CNCE<br />
(central institution)<br />
20%<br />
CCIs<br />
34.44% 34.44%<br />
Free float: 31.12%<br />
including DZ Bank: 1.9%<br />
SPIMI: 1.7%<br />
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CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
INVESTMENT BANKING<br />
A combined portfolio of complementary and diversified activities<br />
– percentage contribution to the net income of the core business lines (€2.33 billion in 2006)<br />
Pro forma 2006 figures excluding holding company activities.<br />
Front-ranking positions both in France and around the world<br />
CIB (1)<br />
Asset<br />
management<br />
PEPB (2)<br />
Services<br />
Receivables<br />
management<br />
• No. 4 lender<br />
to large-and<br />
medium-sized<br />
companies<br />
in France.<br />
• No. 10 on the<br />
primary bond<br />
market in euros.<br />
• In the top 10<br />
worldwide for<br />
aero-industry<br />
finance.<br />
• No. 2 in France<br />
for real estate<br />
finance.<br />
• No. 10 worldwide<br />
for CDO issues (3) .<br />
• The front-ranking<br />
bank in France.<br />
• No. 5<br />
in Europe.<br />
• No. 13<br />
worldwide.<br />
• Leading French<br />
player in<br />
the SME segment.<br />
• France’s leading<br />
manager of<br />
employee savings<br />
schemes.<br />
• France’s leading<br />
provider of<br />
guarantees.<br />
• No. 10 worldwide<br />
in institutional<br />
custody services (4) .<br />
• No. 3 in France for<br />
electronic banking<br />
operations.<br />
• No. 3<br />
worldwide in<br />
credit insurance.<br />
• No. 3 in France<br />
for factoring<br />
services.<br />
• No. 6 worldwide<br />
in receivables<br />
management.<br />
• No. 7 worldwide<br />
in corporate<br />
information.<br />
(1) CIB: corporate and investment banking.<br />
(2) PEPB: private equity and private banking.<br />
(3) Collateralized Debt Obligation.<br />
(4) With CACEIS.<br />
62
CAPITAL MARKETS & FINANCING<br />
IXIS CORPORATE & INVESTMENT BANK<br />
Ten years of growth and innovation<br />
Building on its strong ethos of excellence and<br />
specialization, IXIS Corporate & Investment Bank<br />
(IXIS CIB] focuses its development on high value-added<br />
activities with issuers, banks, institutional investors,<br />
local authorities and major corporations. The bank is<br />
active in the fixed-income and equity markets,<br />
and also offers an array of financial engineering<br />
and financing services.<br />
IXIS CIB, which became a subsidiary of Natixis<br />
in November 2006, achieved its best results since<br />
its creation 10 years ago with net banking income<br />
of €1.8 billion, up 43%, and net consolidated income<br />
of €573 million, up 90%.<br />
In synergy with the Caisses d’Epargne<br />
IXIS CIB assists the Caisses d’Epargne and<br />
the Group’s other subsidiaries in the area of<br />
intermediation and sales, advice on asset allocation,<br />
and support with complex offerings.<br />
Its teams help the Caisses d’Epargne to achieve<br />
an optimum investment spread in the markets<br />
for their surplus capital, by selecting the most<br />
highly qualified managers for each asset class,<br />
as a complement to the offering provided<br />
by IXIS Asset Management Group.<br />
Record results<br />
In very favorable conditions, characterized by<br />
strong growth in equity markets and in its financial<br />
operations, IXIS CIB enjoyed an exceptional year,<br />
especially in its equity businesses.<br />
2006 saw strong growth in the range of products<br />
and services available for large corporations, reflecting<br />
the success of the partnership with Lazard bank and<br />
the impact of the inclusion of Nexgen within the group.<br />
In March 2006, IXIS CIB increased its 38% stake in<br />
Nexgen and took full ownership of the Irish group,<br />
which specializes in turnkey solutions for large<br />
companies in equity derivatives, structured loans and<br />
reinsurance. Nexgen has offices in Dublin, Singapore,<br />
Paris and Milan.<br />
New offices<br />
in Madrid<br />
and Dubai<br />
IXIS CIB continued to expand its international<br />
network with the opening of a new branch in<br />
Madrid, an increase in staff numbers in London,<br />
Hong Kong and Tokyo, and the launch of<br />
its subsidiary IXIS Middle East Limited in Dubai.<br />
A DOUAI-PARIS-TOKYO FINANCING PACKAGE<br />
FOR THE DOUAI STREETCAR SYSTEM<br />
The Caisse d’Epargne des Pays du Hainaut is financing<br />
the future Douai tramway to the tune of €10 million.<br />
At the heart of this success are local contacts and<br />
financial engineering. In putting together its financing<br />
package, Caisse d’Epargne turned to the expertise of IXIS<br />
CIB, which designed a structured loan with a 30 year<br />
term. For the first 10 years, the loan benefits from an<br />
extremely low guaranteed fixed interest rate, thanks to<br />
a solution tied to the Swiss franc exchange rate. The final<br />
development of this product, which goes by the name<br />
of Helvetix, required input from the Tokyo traders.<br />
Caisse d’Epargne has concluded other significant<br />
operations with the support of the teams from IXIS CIB:<br />
the €98 million hospital complex in Valenciennes,<br />
working in tandem with the Caisse d’Epargne du<br />
Pas-de-Calais; the €42 million Douai hospital project;<br />
and 24% of the second Valenciennes tramline, as part<br />
of a G2D dynamic debt management operation.<br />
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CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
INVESTMENT BANKING<br />
IXIS CIB also devises debt securitization<br />
products such as Collateralized Debt Obligations<br />
(CDO), which allow the Caisses d’Epargne to offset<br />
their sector exposure and better spread their risks.<br />
The bank is one of the top 10 specialists worldwide<br />
for this type of product. Although they are<br />
specifically designed for the French savings banks,<br />
these CDOs are also available to outside investors.<br />
IXIS CIB supports the Caisses d’Epargne in all<br />
complex services to local authorities and institutions:<br />
debt restructuring advice, structured finance, bond<br />
issues, exchange rate hedging. More than 16% of<br />
the loans granted to local authorities by the Caisses<br />
d’Epargne are arranged by IXIS CIB, which also<br />
carries part of the commitments on its balance sheet.<br />
CAPITAL MARKET ACTIVITIES<br />
Innovative complex products<br />
Capital market activities, founded on research<br />
and complex products, make the largest<br />
contribution to the results recorded by IXIS CIB,<br />
which boasts a substantial clientele of financial<br />
institutions, banks, management companies and<br />
insurers. IXIS CIB offers these clients an array of<br />
innovative investment products for the management<br />
of their equity, and highly efficient tools designed<br />
for their own customers.<br />
The bank is also developing its activities with<br />
large corporations by building on the agreement<br />
with Lazard Bank to cooperate in the primary<br />
market for shares of companies with a market<br />
capitalization in excess of €500 million. On its side,<br />
Lazard offers its customers the complex products<br />
developed by IXIS CIB, such as structured finance<br />
solutions, securitization or bond issues.<br />
In Europe, capital market activities boasted<br />
improved results from most of the business lines.<br />
Capitalizing on its acknowledged expertise in<br />
bonds, IXIS CIB took full advantage of its proven<br />
expertise in new products such as hybrid<br />
derivatives and structured products. The activities<br />
of the equities business line were particularly<br />
strong across all market segments.<br />
In the USA, the IXIS Capital Markets subsidiary<br />
recorded net banking income of $637 million, up by<br />
26%, with net income of $118 million, representing<br />
an increase of 30%. These positive trends are<br />
mainly due to securitization activities on<br />
the CMBS (1) and ABS (2) desks.<br />
64<br />
In Asia, the Hong Kong-based subsidiary<br />
IXIS Asia Limited had a successful second year;<br />
this company distributes structured products based<br />
on equity, fixed-income and forex derivatives,<br />
develops guarantees and sets up funds of funds.<br />
Its business more than doubled in 2006. It generated<br />
a flow of transactions with a large number of<br />
customers in the Chinese zone, and entered into<br />
distribution agreements with retail banking networks<br />
in Hong Kong, Taiwan and Singapore.<br />
Fixed-income markets:<br />
record activity<br />
The year saw significant growth in the volume<br />
and profitability of activities in fixed-income<br />
derivatives, in particular plain vanilla products,<br />
where volumes doubled.<br />
IXIS CIB confirmed its positions in French<br />
government bonds as the third highest ranked<br />
primary dealer in French government securities<br />
(spécialiste en valeurs du Trésor, SVT) on the primary<br />
market and number one in the quality ranking.<br />
French no. 1 and<br />
world no. 4 (3)<br />
in covered bonds<br />
With 235 public issues for an aggregate total of<br />
almost €41 billion (3) , the bank confirmed its position<br />
on the primary Eurobond market and reinforced its<br />
global positions, notably on the secured bond market,<br />
where it is one of the world’s top four with issues<br />
worth more than €15 billion in 2006.<br />
LAUNCH OF A MORTALITY-LINKED BOND<br />
FOR AXA (OSIRIS OPERATION)<br />
IXIS Corporate & Investment Bank acted as co-bookrunner<br />
for AXA on the first issue of a shelf program set up<br />
to transfer mortality risk to the financial markets.<br />
CIFG Europe, Groupe Caisse d’Epargne’s mono-line insurer<br />
and IXIS CIB’s sister company, guaranteed the B1 notes<br />
issued. The total value of the shelf program was<br />
€1 billion. IXIS CIB was responsible for bringing the<br />
“mortality bonds” to the market in Europe and for<br />
increasing investor interest in the product. The operation<br />
was highly successful in Europe and in the USA:<br />
the issue was three to six times oversubscribed,<br />
depending on the tranche.<br />
(1) Commercial Mortgage–Backed Securities.<br />
(2) Asset–Backed Securities.<br />
(3) Within the framework of the tie-up with Natixis, the respective<br />
positions of IXIS CIB and Natixis were merged in the 2006 league<br />
tables. Source: IFR.
IXIS CIB ran several innovative operations<br />
in 2006, in particular the first issue of 50-year<br />
covered bonds (obligations foncières) for Compagnie<br />
de Financement Foncier, the first issue of<br />
mortality-linked bonds for AXA and, jointly with<br />
Natexis, an inflation-indexed CADES issue.<br />
The bank also led the first issue of covered bonds<br />
by HSBC in London and 14 issues of cédulas<br />
hipotecarias in Madrid.<br />
It maintained its development on the large<br />
corporation market as joint lead manager<br />
and bookrunner on a new 10-year, €1 billion<br />
benchmark issue for Veolia Environnement.<br />
Equities and arbitrage:<br />
outstanding performance<br />
IXIS CIB is a trader and distributor of high<br />
value-added equity derivatives. Growth in this activity<br />
was very dynamic, driven by new additions to the<br />
product range and the internationalization of its<br />
business. Among other developments, the bank set<br />
up a multi-asset hybrid product, which is distributed<br />
in Italy by the insurer Centrovita.<br />
IXIS CIB boasts a substantial arbitrage business<br />
and 2006 was a particularly good year. Taking full<br />
advantage of a buoyant market, the dedicated teams<br />
achieved an outstanding performance on directional<br />
positions and on mergers and acquisitions.<br />
IXIS SECURITIES, FRANCE’S THIRD-RANKED<br />
FINANCIAL RESEARCH BUREAU<br />
With 25 places in the top 3 of the L’Agefi 2006 awards<br />
for financial analysis, IXIS Securities confirms<br />
the quality of its research and its services:<br />
• no. 2 in share selling, trading & execution;<br />
• no. 3 in market strategy research, economics<br />
and French securities;<br />
• no. 3 in sector research with 1 st or 2 nd ranked<br />
status in many industries where French companies<br />
command strong positions, including food processing<br />
and utilities (no. 1), beverages, aerospace,<br />
the automative industry, telecoms, services,<br />
pharmaceuticals, media, recreation and hotels,<br />
building and construction materials (no. 2).<br />
IXIS CIB operates as a broker through<br />
IXIS Securities – one of France’s four leading<br />
stockbrokers – and IXIS Midcaps, which together<br />
cover 350 European securities. IXIS Securities has<br />
reinforced its positions with institutional customers<br />
and gained market share in France, the UK and<br />
the USA.<br />
FUND STRUCTURING<br />
Good opportunities<br />
The fund structuring activity based on alternative<br />
management funds enjoyed strong growth, both<br />
in Europe and in Asia. In May 2006, IXIS CIB set up<br />
a unit dedicated to discretionary management<br />
in this field to enhance the security and quality<br />
of related activities to a higher level.<br />
IXIS ENVIRONNEMENT & INFRASTRUCTURES:<br />
FOCUS ON SUSTAINABLE DEVELOPMENT<br />
IXIS E&I, a subsidiary of IXIS CIB, sets up, invests<br />
and manages investment funds for the equity funding<br />
or quasi-equity funding of environmental and<br />
infrastructure projects.<br />
IXIS Environnement & Infrastructures already manages<br />
three investment funds:<br />
• FIDEME, a €45 million fund, finances renewable<br />
energy and waste recycling projects;<br />
• European Carbon Fund (ECF), with assets of almost<br />
€143 million, combats the greenhouse effect<br />
by acquiring emission credits and quotas;<br />
• FIDEPPP, with assets of €200 million, invests<br />
in public-private partnerships.<br />
In Asia, the bank has taken advantage of the<br />
partnership set up with SPARX Asset Management,<br />
Japan’s premier independent asset management<br />
company. It consolidated its position in the area of public<br />
offerings of hedge fund-indexed structured products.<br />
The London-based subsidiary IXIS Alternative<br />
Investments gave new impetus to the development<br />
of alternative products. In particular, it launched its<br />
managed funds platform, characterized by controlled<br />
investment risk and greater transparency for<br />
investors.<br />
IXIS Capital Partners, the fund management<br />
subsidiary specializing in real estate investment,<br />
completed a number of acquisitions on behalf of its<br />
Captiva 2 fund. In particular, it reinforced its position<br />
in Germany, where it was extremely active in<br />
purchasing 39 office buildings in Hamburg for a total<br />
value of €815.5 million. These assets are let to<br />
the city of Hamburg at market rates.<br />
65
Can a large<br />
banking group<br />
combat<br />
the greenhouse<br />
effect?<br />
Reduced emissions of almost<br />
metric tons CO 2 equivalent<br />
between 2007 and 2010<br />
Energy consumption and economic development are closely linked, but they generate<br />
greenhouse gas emissions that threaten the long-term equilibrium of our planet. Annual CO 2<br />
emission quotas are one way of encouraging firms to cut their emissions: they can sell<br />
their emission credits if they have not used them all; if they exceed the threshold, they offset<br />
their emissions by funding projects that contribute to the fight against the greenhouse effect.<br />
Managed by IXIS Environnement & Infrastructures and partly underwritten by Groupe Caisse<br />
d’Epargne, the European Carbon Fund is dedicated to these operations. In 2006, it completed<br />
the largest-ever private transaction in this field with the French chemicals group Rhodia.<br />
This deal will provide funding for projects in Brazil and South Korea that will reduce<br />
emissions by the equivalent of almost 5 million metric tons of CO 2 between 2007 and 2010.<br />
66
CORPORATE FINANCE<br />
Accelerated growth<br />
The Corporate Finance division covers activities<br />
in primary equity markets in association with<br />
Lazard, and provides consultancy services.<br />
The partnership with Lazard generated<br />
a substantial volume of business in the large<br />
corporation market. Working together under<br />
the Lazard-IXIS banner, the two companies were<br />
global coordinator for the €5.5 billion Natixis<br />
initial public offering.<br />
Lazard-IXIS was the lead manager and global<br />
coordinator for three other major IPOs: Icade,<br />
the biggest real estate company listed in Paris;<br />
Parrot, the only technology firm to have survived<br />
difficult market conditions in the early summer;<br />
and EDF Energies Nouvelles, a world leader<br />
in renewable energy, a stock that enjoyed<br />
exceptional demand.<br />
In the area of new equity issues, Lazard-IXIS<br />
took part in the operations successfully completed<br />
by Vinci and by BNP Paribas, and managed<br />
the reclassification of a block of 238 million<br />
Mercialys shares, having managed the latter’s<br />
IPO six months earlier.<br />
Lazard-IXIS also managed Lagardère’s sale of<br />
its 7.5% stake in EADS.<br />
The inclusion of Nexgen made it possible<br />
to generate strong growth in activities with large<br />
corporate customers throughout Asia.<br />
Under the IXIS Corporate Solutions brand,<br />
IXIS Corporate & Investment Bank designs and sets<br />
up tailor-made structured financing solutions.<br />
IXIS CIB also provides consultancy services on<br />
mergers & acquisitions and balance sheet<br />
enhancement, in particular in the infrastructure,<br />
real estate and local authority services sectors.<br />
In the real estate market, the bank provided<br />
advisory services for various real estate mutual<br />
funds (OPCI) covering assets worth several billion<br />
euros, and also advised the firm Les Nouveaux<br />
Constructeurs prior to its Eurolist launch.<br />
There was strong growth in consultancy services<br />
in the area of infrastructure, energy and utilities<br />
in 2006. In particular, IXIS CIB was adviser to<br />
the Caisse des Dépôts for the acquisition of the<br />
49% stake held by Eiffage in the Compagnie Eiffage<br />
du Viaduc de Millau.<br />
FINANCING AND LOANS<br />
Extremely buoyant activity<br />
The financing activity was marked by extremely<br />
buoyant new loan production generated in liaison<br />
with, and in support of, the Caisses d’Epargne<br />
and the other Group companies. IXIS CIB obtained<br />
mandates as lead arranger and coordinator<br />
in 17 operations.<br />
The year saw sustained growth in structured<br />
loans with financing arranged for infrastructure,<br />
acquisitions and leveraged buyouts, securitization,<br />
and real estate.<br />
MAJOR SPONSOR OF THE MUSÉE DU QUAI BRANLY<br />
In 2006, IXIS CIB was one of the seven major sponsors<br />
of the new museum of indigenous arts, in Paris.<br />
The bank is backing the creation of a documentary web<br />
portal, specifically designed to provide online access<br />
to the 300,000 works in the museum’s collections,<br />
and the setting up of a multimedia mezzanine focused<br />
on world music, anthropology and language.<br />
These two projects perfectly match the values promoted<br />
by IXIS CIB: creativity, research and innovation.<br />
In the corporate market, IXIS CIB was arranger<br />
and coordinator in the financing of the acquisition<br />
of the Autoroutes Paris-Rhin-Rhône company by<br />
Eiffarie, a group set up by Eiffage and Macquarie,<br />
and in the financing of France’s biggest wind farm<br />
by the German corporation Volkswind GmbH.<br />
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CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
INVESTMENT BANKING<br />
The bank was the arranger mandated by AXA<br />
Private Equity to finance the leveraged buyout of<br />
the firm AIXAM-MEGA, the European leader for cars<br />
that do not require a driving license.<br />
ARRANGING FINANCING FOR FRANCE’S<br />
LARGEST WIND FARM PROJECT<br />
The German group Volkswind GmbH appointed IXIS CIB<br />
lead manager to arrange a senior debt issue for a total<br />
of €69.1 million to finance the wind farms based<br />
in Cormainville and Guillonville in the Eure-et-Loir<br />
département south of Paris. This operation represents<br />
the most ambitious wind-energy project undertaken in<br />
France with a total of five wind farms generating a total<br />
of 60 megawatts.<br />
Vestas has been selected for the supply, management<br />
and maintenance of 30 wind turbines, whose electricity<br />
will be bought by EDF at official rates. The FIDEME<br />
investment fund is financing the mezzanine tranche<br />
of the issue. The senior debt is entirely underwritten<br />
by IXIS CIB.<br />
The bank also launched a new intermediation<br />
activity in the secondary market for corporate and<br />
structured syndicated loans.<br />
In the area of securitization operations, apart<br />
from the CDOs designed for the Caisses d’Epargne<br />
and placed in part with third-party investors,<br />
IXIS CIB was arranger and lead manager of<br />
a managed CDO on behalf of New Bond Street.<br />
It was arranger and lead manager for the first<br />
commercial mortgage-backed securities (CMBS)<br />
operation in Europe, within the framework of the<br />
Infinity CMBS program recently created by the bank.<br />
It was also arranger and lead manager for<br />
a collateralized loan obligation (CLO), with a bipolar<br />
fund management structure comprised of IXIS CIB<br />
and LightPoint Capital Management.<br />
In the USA, the securitization specialist<br />
IXIS Capital Markets is very active in the mortgagebacked<br />
securities (MBS) market. The dynamic<br />
nature of the securitization business (MBS/ABS)<br />
and the growth in activity in structured products<br />
(CDO) were reflected in markedly improved results.<br />
The firm securitized $4.1 billion of ABS in eight<br />
operations, worth a total of $5.6 billion.<br />
It also sold and securitized more than $3.3 billion<br />
of CMBS in seven securitization operations totaling<br />
$19.5 billion.<br />
In the commercial real estate sector, IXIS Capital<br />
Markets generated $4.8 billion of fixed or variable<br />
rate loans and mezzanine financing for real estate<br />
acquisitions and recapitalizations in the USA.<br />
It also set up and placed CLO for a total of $14.6 billion.<br />
IXIS CIB was also arranger and lead manager<br />
of a mortgage financing package based on<br />
commercial mortgage-backed securities (CMBS),<br />
development loans and a corporate loan on behalf<br />
of ALTAREA, a fast-growing real estate company<br />
operating in the shopping center segment in France<br />
and Europe.<br />
It provided hybrid debt and equity financing for<br />
IFE Conseil, the investment adviser for IFE Fund<br />
and IFE II, two specialized mezzanine financing<br />
vehicles in mainland Europe.<br />
Project financing<br />
IXIS CIB is one of Europe’s leading providers of<br />
financial advice in the infrastructure, environment<br />
and energy sectors. With this expertise, it is well<br />
placed to meet the needs of local authorities and<br />
to aspire to a significant role in the field of publicprivate<br />
partnerships (PPP), drawing on the skills<br />
and financing capacity of its different entities.<br />
In PPP projects, IXIS CIB aims to provide global<br />
financial engineering expertise and to act as lead<br />
manager for debt syndication operations.<br />
68
8 th<br />
largest<br />
European adviser and arranger for project<br />
and infrastructure financing (1)<br />
In 2006, IXIS CIB contributed to several major<br />
projects, including the €100 million financing<br />
package for the eastern branch of the Rhine-Rhone<br />
high-speed rail link, which will eventually connect<br />
Germany to the Mediterranean.<br />
Extremely active in the sphere of public<br />
transport, IXIS CIB’s teams lent their support to<br />
the Caisses d’Epargne in putting together a<br />
financing package for the tram systems in Douai,<br />
Le Mans, Montpellier and Reims. Built within<br />
the framework of a public-private partnership<br />
with a public service component, the €250 million<br />
Reims tram system was the first privately funded<br />
trolley car project in France.<br />
A dozen other PPP projects were set up in 2006<br />
to fund police stations, a police school and a<br />
nursing school, an archive center and various<br />
hospital buildings.<br />
IXIS CIB ADVISES<br />
THE FRENCH RAILWAYS ON EUROPE’S BIGGEST<br />
PPP INFRASTRUCTURE PROJECT<br />
IXIS CIB is the financial advisor to Réseau Ferré<br />
de France (RFF), the entity responsible for France’s rail<br />
network, for the tender on the public service project<br />
to build the South Europe Atlantic high-speed railway<br />
line (SEA HSL).<br />
The aim is to construct a new high-speed link between<br />
Tours in central France and Bordeaux on the west coast<br />
in order to bring Bordeaux within two hours 10 minutes<br />
of Paris, as compared with the current three hours.<br />
IXIS CIB is assisting RFF and the French government<br />
throughout the project allocation process. In this role,<br />
the bank is responsible for promoting it to potential<br />
partners, manufacturers and investors. It sets up and<br />
implements the allocation procedure. It assesses the<br />
financial aspect of the bids submitted within the call<br />
for tender process. Worth some €5 billion, this is the<br />
largest privately financed infrastructure project in<br />
Europe to date.<br />
A PPP FOR THE QUAI D’ORSAY<br />
The construction of the new complex for the French<br />
Ministry of Foreign Affairs in Seine-Saint-Denis north<br />
of Paris is being financed as a PPP. Crédit Foncier, Icade<br />
and Caisse des Dépôts have all injected capital into<br />
the project. The Caisse d’Epargne Ile-de-France Paris and<br />
Compagnie de Financement Foncier are providing<br />
the bank financing for this project, which represents<br />
a total of €48 million.<br />
8 th<br />
largest<br />
MLA (2) in France<br />
(1) ) In the first half of 2006. Source: Thomson Financial,<br />
Second Quarter 2006.<br />
(2) Mandated Lead Arranger. Source: DEALOGIC.<br />
69
Can an insurance<br />
company help<br />
to develop<br />
wind power?<br />
39 wind farms<br />
with a total production capacity<br />
of 330 megawatts<br />
CIFG moved into the wind power sector in April 2006,<br />
when it underwrote part of the bond issue conducted<br />
by the securitization specialist, Breeze 2. CIFG persuaded<br />
various investors to come into this innovative financing<br />
package, inviting them to acquire securities covered<br />
by its triple-A guaranty. Breeze 2 is funding a portfolio<br />
of 39 wind farms located in France and Germany, of which<br />
only 15 were operational at the time of the issue. These<br />
39 farms represent total production capacity of 330 megawatts.<br />
70
FINANCIAL GUARANTY – CIFG<br />
Europe’s 1 st native credit enhancer<br />
By offering investors an unconditional guaranty<br />
of payment, CIFG Group facilitates investment in<br />
structured products and the financing of public-private<br />
projects or partnerships. It allows issuers to obtain<br />
financing more cheaply and offers investors new risk<br />
profiles in the form of enhanced products.<br />
Created in 2002, CIFG is the only provider of<br />
financial guaranties to have developed both in Europe<br />
and the USA. Its subsidiaries, CIFG Europe,<br />
CIFG Assurance NA and CIFG Guaranty, all boast<br />
the highest possible credit ratings: AAA/Aaa/AAA.<br />
The Group operates in all market segments: local<br />
authorities, public-private partnerships, project<br />
financing and structured finance. Its ability to cover<br />
possible losses on its guaranties was in excess<br />
of $1.3 billion on December 31, 2006. CIFG has<br />
been a subsidiary of Natixis since November 2006.<br />
Strong rate of growth<br />
Despite persistent pressure on loan margins<br />
and stringent requirements regarding the quality<br />
of the risks covered, CIFG has maintained a good<br />
rate of growth. The net par written in 2006 rose<br />
to $36.1 billion, up by 70% on 2005.<br />
CIFG guaranteed 625 new projects, including<br />
almost 500 US local authority financing operations.<br />
Public investment operations grew once again.<br />
In the US local authority sector, primary issues<br />
represented 98% of the net par written by CIFG.<br />
In structured financing, 12 public issue operations<br />
were underwritten by CIFG in the USA and Europe,<br />
in different sectors: residential mortgages,<br />
leasing operations and mortality risk bonds.<br />
These operations were very well received by<br />
investors and confirmed the perceived reliability<br />
of CIFG, which receives the same respect as<br />
its older competitors.<br />
CIFG consolidated its positions on the<br />
collateralized debt obligations (CDO) and<br />
collateralized loan obligations (CLO) markets,<br />
notably with a 20% market share in CLO issues<br />
in Europe. In 2006, as in 2005, CIFG was the only<br />
company to provide a primary guaranty on<br />
a public issue of “non-conforming” residential<br />
mortgage-backed securities (RMBS) in the UK.<br />
In terms of infrastructure and project financing,<br />
as well as sovereign and sub-sovereign risk,<br />
CIFG extended its scope of action with operations<br />
that now cover nine European countries, some of<br />
them new European Union members.<br />
SUCCESS OF THE 1 ST MORTALITY-LINKED<br />
BONDS ISSUED BY AN INSURANCE COMPANY<br />
CIFG provided a €100 million guaranty on the bond<br />
issue launched by AXA in November 2006.<br />
Under this operation, the risk of a change in mortality<br />
rates is transferred to the financial markets.<br />
The operation was completed successfully, in particular<br />
with the support of IXIS CIB, in Europe and the USA,<br />
and was very largely oversubscribed. This outcome<br />
and the interest aroused by the operation has paved<br />
the way for similar transactions in 2007.<br />
Over the year, CIFG expanded its activities to<br />
include new asset classes: wind farms, sovereign<br />
issues by new European Union member states,<br />
securitization of film catalogue revenues,<br />
equipment lease financing portfolios, portfolios<br />
of loans to retailers and small companies in the US<br />
and portfolios of net interest margin securities.<br />
CIFG has also moved into insurance-related<br />
market transactions, in particular – apart from<br />
the mortality bonds – developing a presence<br />
in so-called “Triple X securitization,” arising from<br />
the US regulations of the same name.<br />
71
CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
INVESTMENT BANKING<br />
ASSET MANAGEMENT – IXIS ASSET MANAGEMENT GROUP<br />
Once again, 2006 was a year of strong growth<br />
for IXIS Asset Management Group (IXIS AMG).<br />
Its portfolio of assets under management increased<br />
by 13% (excluding exchange rate effects),<br />
to €468.2 billion. Revenues were up 22%, to more<br />
than €1.2 billion.<br />
In November 2006, IXIS AM Group became a part<br />
of the asset management division of Natixis, which,<br />
in addition to IXIS AM Group and its subsidiaries,<br />
includes Natexis’ former subsidiaries, Natexis AM,<br />
Natexis Asset Square, Natexis AM Immobilier and<br />
Axeltis Limited. Natixis is now France’s leading<br />
asset management company, number four in<br />
Europe and one of the top 15 worldwide (1) .<br />
In 2006, the new division boasted a total<br />
of €584 billion of assets under management.<br />
IXIS AM Group also includes specialized<br />
distribution entities: Ecureuil Gestion for<br />
the Caisses d’Epargne network, IXIS AM Advisors<br />
Group in North America and IXIS AM Global<br />
Associates for cross-border sales.<br />
This means that even the smallest of IXIS AMG’s<br />
asset management companies enjoys substantial<br />
commercial strength.<br />
Assets under management by asset class<br />
As a percentage<br />
IXIS AM GROUP<br />
• Assets: €468.2 billion; +13%<br />
• Increase in assets: €53 billion<br />
• Net deposits: €25.1 billion<br />
• Net sales: €1.2 billion; +22%<br />
• Staff: 2,320<br />
IXIS AM Group offers a wide range of skills to<br />
a clientele of institutional investors, companies,<br />
distribution networks and large private investors.<br />
It has some 15 asset management subsidiaries<br />
in France, Europe, the US and Asia. This federal<br />
model attracts talent and fosters, creativity and<br />
new entities of various sizes.<br />
Assets under management by investment vehicle<br />
As a percentage<br />
(1) Source: based on data from the IPE (Investment & Pensions Europe)<br />
survey of June 2006 (assets under management December 2005).<br />
72
Sustained activity in Europe and Asia<br />
In Europe and the Asia-Pacific region, assets<br />
under management grew by 7% to reach a total<br />
of €280.5 billion.<br />
In France, the assets managed by IXIS Asset<br />
Management France, IXIS AMG’s leading<br />
management company, stood at €244 billion at the<br />
end of 2006, up by 6% over the year. IXIS AM France<br />
gained the trust of 26 new corporate clients, banks,<br />
mutual insurance companies and pension and<br />
health providers, and actively increased its role with<br />
its clientele of independent asset management<br />
consultants.<br />
A new team focused on structuring, analysis,<br />
modeling and solutions (SAM’S) is responsible<br />
for developing tools for the in-depth analysis of<br />
proposed structures, handling quantitative aspects<br />
and structuring products.<br />
IXIS AM France:<br />
€244 billion<br />
under management<br />
Five new funds were launched: IXIS Actions Euro<br />
Value and IXIS Actions Euro Croissance; IXIS CDO<br />
Fund; Insertion Emplois Equilibre – in the socially<br />
responsible investment range – and Natixis Optimio,<br />
a mutual fund focused on regular returns.<br />
IXIS AM France also enhanced its offering with<br />
new dynamic money market products, creating highly<br />
diversified instruments that deploy all IXIS AMG’s<br />
expertise in a combination of alternative management,<br />
senior bank loans and securitization vehicles.<br />
IXIS AM FRANCE’S FLAGSHIP FUNDS IN 2006<br />
• The dedicated institutional fund IXIS ABS PLUS<br />
increased its assets from €106 million at the end of<br />
2005 to €1,531 million at the end of 2006.<br />
• The assets in IXIS AM Emerging Europe and<br />
IXIS Europe Avenir grew by some 300% over the year.<br />
• IXIS Trésorerie Plus more than doubled its assets.<br />
AWARDS FOR IXIS AM FRANCE<br />
Investir Magazine<br />
• Silver award to IXIS AM Emerging Europe RCA,<br />
5-year investment fund category.<br />
L’Agefi Grand Prix for Asset Management<br />
• 1 st prize: Ecureuil Harmonie, Diversified category<br />
Euro-3 year.<br />
• 2 nd prize: IXIS AMA Pacific Rim Equities,<br />
Asian Equities category (excluding Japan).<br />
Le Revenu<br />
• Bronze Trophy awarded to CDC Trésor Première Oblig,<br />
10-year Eurobonds category.<br />
Mieux Vivre Votre Argent<br />
• 7 labels awarded.<br />
Lipper Fund Awards France<br />
• Best fund certificate for IXIS Europe Avenir,<br />
5-year European Equities category.<br />
• Best fund certificate for IXIS Euro Première 7-10,<br />
10-year Euro Zone Bonds category.<br />
“Talents de la gestion 2006” Prize, Multi Ratings-<br />
Groupe Euronext<br />
• 3 rd place for IXIS AM in the Government Bonds<br />
category.<br />
Despite the reduction in credit spreads, there<br />
was sustained growth in CDO activity: the six<br />
products created in 2006 generated 61% growth<br />
in CDO investments.<br />
IXIS Private Capital Management (IPCM),<br />
the subsidiary specializing in open architecture<br />
multi-management, recorded excellent commercial<br />
results: its net inflow of funds doubled to<br />
€1.3 billion, taking total assets under management<br />
to €2.8 billion, up by 75%. IPCM’s six diversified<br />
funds regularly receive a 4 or 5 star S&P Micropal<br />
or Morningstar rating for their three-year<br />
risk/return ratio.<br />
The equity funds and the absolute performance<br />
funds are generally ranked in the first quartile in<br />
their category.<br />
The funds distributed by Ecureuil Gestion<br />
grew by 10%, to €36.9 billion, with a net inflow of<br />
€1.3 billion.<br />
Ecureuil Gestion successfully contributed to<br />
the distribution of Collection Finance Ecureuil in all<br />
the individual Caisses d’Epargne: guaranteed<br />
capital funds; the Sélectionnés funds (five funds)<br />
and Bourse “Esprit Ecureuil”. A new range<br />
of guaranteed capital funds, known as Robusta,<br />
was introduced together with a guaranteed capital<br />
and performance fund, offering 14% on maturity,<br />
called Parka.<br />
73
Can an investment<br />
fund reconcile<br />
profitability with<br />
new job creation?<br />
More than jobs<br />
created or consolidated<br />
since 1994<br />
It does not represent a massive change in investors’ preoccupations but,<br />
over the years, socially aware investment has attracted more and more savers<br />
who would like to include an ethical component in their savings strategies:<br />
today, more than 200,000 individuals invest a proportion of their savings in<br />
socially aware vehicles, either directly or indirectly through employee savings<br />
schemes. With funds of €181 million, the Insertion Emplois job creation fund is<br />
a leader in this field. Created in 1994, it is the oldest fund of its kind in France.<br />
Since then, it has contributed to the creation or consolidation of more than<br />
20,400 jobs, while still providing high returns: average returns on the Insertion<br />
Emplois fund are similar to SBF 120 levels. In 2006, it grew by 17.5%.<br />
74
Record growth in the USA<br />
Funds managed by the USA subsidiaries grew<br />
by 22%, to a total of €187.7 billion ($247.1 billion).<br />
This growth, the highest ever achieved by these<br />
subsidiaries, reflects a major inflow of new funds,<br />
78% of which originated in the distribution<br />
companies.<br />
Loomis Sayles, in particular, attracted net<br />
inflows of $22 billion, mostly in bonds, and recorded<br />
exceptional performances with Loomis Sayles Bond<br />
Fund and Loomis Sayles Strategic Income Fund.<br />
Harris Alternatives also had a very good year<br />
across its whole range in terms of the inflow<br />
and performance of its funds, in particular with<br />
its Aurora offshore products. Harris Associates<br />
progressed well with the successful launch of<br />
Oakmark Global Select Fund.<br />
The distribution companies IXIS AM Advisors<br />
Group and IXIS AM Global Associates contributed<br />
extensively to these developments, with a net<br />
global inflow of $18 billion.<br />
IXIS AM Advisors Group, which further reinforced<br />
its links with Merrill Lynch and UBS, is now<br />
responsible for more than $64 billion of assets<br />
under management, representing growth of 37%<br />
over 2005 levels.<br />
SAMPLE OF AWARDS IN THE USA<br />
• David Herro was named Manager of the Year<br />
by Morningstar for international equity funds.<br />
Dan Fuss and Kathleen Gaffney were named<br />
runners-up for fixed-income funds.<br />
• The Lipper/Barron’s survey on US mutual funds put<br />
IXIS AM Group in first place for its fund performance<br />
over five years and second for performance over<br />
10 years and one year.<br />
• SmartMoney ranked the Delafield Fund and the Oakmark<br />
International Fund among the top five in 2006.<br />
• The magazine Consumer Reports Money Adviser<br />
selected Delafield as one of the best mid-cap funds<br />
and Oakmark Equity and Income as one of the funds<br />
with the best allocation.<br />
US funds continued to perform well in 2006,<br />
with 94% of funds in international equity and 99%<br />
of funds in bonds ranked in the first quartile.<br />
Excluding money market funds, 85% of the funds<br />
outperformed the average over three and five<br />
years. The Group’s ten biggest funds in the USA<br />
were ranked in the top quartile for one year,<br />
three years or five years.<br />
22 %<br />
growth in funds managed<br />
in the USA<br />
New growth in cross-border activities<br />
IXIS AM Group achieved growth in several<br />
international markets thanks to IXIS Asset<br />
Management Global Associates, which markets the<br />
management companies’ expertise to institutional<br />
clients and brokers outside France and the USA.<br />
2006 was a year of strong growth combined with<br />
organizational changes designed to further improve<br />
customer service.<br />
IXIS AM Global Associates attracted almost<br />
€6.3 billion in cross-border funds, taking total<br />
assets to €21.5 billion.<br />
The company reinforced its global presence<br />
and created two new companies registered in Dubai<br />
and Luxembourg. The sales entities in the UK,<br />
Dubai and Australia recorded a particularly high<br />
level of activity.<br />
The assets under management within the<br />
IXIS International Funds (Lux) umbrella vehicle<br />
grew by 10%, to reach a total of $4.2 billion.<br />
Real estate asset management:<br />
€26.1 billion invested in 2006<br />
The management of real estate assets is<br />
handled by the subsidiaries IXIS AEW Europe<br />
and AEW Capital Management in the US and<br />
Singapore. Together, these companies form<br />
the world’s 7 th -largest real estate manager,<br />
with €26.1 billion of assets under management<br />
at the end of 2006.<br />
Present in 10 European countries, including<br />
France and the UK, IXIS AEW Europe boasts<br />
an extensive European platform of operations,<br />
enabling it to take advantage of cyclical<br />
opportunities in increasingly competitive markets.<br />
(1) EuroProperty/INREV ranking – May 2006.<br />
75
CHAPTER4<br />
THE SPECIALIZED<br />
SUBSIDIARIES<br />
INVESTMENT BANKING<br />
IXIS AEW Europe’s growth is focused around<br />
four major activities: discretionary management,<br />
the structuring of Club Deal operations, the creation<br />
and management of closed-end investment funds,<br />
and advice on investing in open-ended funds<br />
distributed by Europe’s major banking networks.<br />
€26<br />
More than<br />
bn<br />
of real estate assets under management<br />
Since 1999, IXIS AEW Europe has consistently<br />
outperformed the IPD index, the benchmark in this<br />
business sector.<br />
In the USA, AEW Capital Management had<br />
assets of $15 billion under management at the end<br />
of 2006, representing an increase of 28%.<br />
A promising outlook<br />
With its combination of high value-added<br />
products, solid expertise in products for the retail<br />
banking sector and a global distribution platform,<br />
IXIS AM Group is set to take full advantage of growth<br />
and the greater international dimension in asset<br />
management activities.<br />
Its goal within Natixis is to further increase<br />
its resources so that it can offer its customers<br />
the expertise they require – notably in the area<br />
of retirement pensions – maintain a high level<br />
of service quality and aspire to excellence in risk<br />
management, internal control and regulatory<br />
compliance.<br />
IXIS AEW Europe created two new funds in 2006:<br />
Euroffice and PBW II.<br />
A dedicated fund for French institutional investors,<br />
Euroffice specializes in office assets in the eurozone.<br />
€317 million in capital funds has been raised.<br />
PBW II specializes in investment in offices, shops<br />
and logistics facilities in central Europe. It succeeds<br />
PBW I, which has reached its investment ceiling<br />
of €530 million.<br />
For the second year running, IXIS AEW Europe<br />
invested more than €2 billion in Europe. Across the<br />
continent, it manages total assets worth almost<br />
€15 billion.<br />
76
ASSET CUSTODY AND SERVICES – CACEIS<br />
A benchmark European specialist<br />
CACEIS was set up in 2005 following the merger<br />
of the securities activities of Groupe Caisse<br />
d’Epargne and Crédit Agricole SA, and is now<br />
present in France, Luxembourg, Belgium, Ireland,<br />
Switzerland and the Netherlands.<br />
The group has a staff of 2,500, 40% of whom work<br />
outside France. It has three core activities:<br />
• depository/custodian bank;<br />
• fund administration, via the Fastnet network;<br />
• issuer services.<br />
Its global cross-border, multi-business offering<br />
is geared to management companies, institutional<br />
investors, insurance companies, pension funds,<br />
mutual insurance and employee benefit organizations,<br />
banks and large corporations.<br />
CACEIS is France’s leading mutual fund custodian<br />
and administrative and accounting manager,<br />
with market share of 30% and 40% respectively<br />
in the two fields.<br />
In Luxembourg, CACEIS is the third-ranked<br />
administrator in terms of the numbers of funds<br />
under its responsibility. CACEIS is ranked fourth<br />
in Europe and in the top 10 of custody service<br />
providers worldwide. Since November 2006,<br />
Crédit Agricole SA and Natixis have held equal<br />
shares in CACEIS’ equity.<br />
An active and profitable year<br />
One year after its creation, CACEIS has reaped<br />
the rewards of its strategic choices. Its results<br />
and commercial successes bear witness to the<br />
dynamism of its European teams. Its net banking<br />
income was €508 million, outstripping forecasts.<br />
It held custody of assets worth a total of<br />
€1,787 billion, an increase of 15.5%. Assets<br />
under administration stood at €860 billion.<br />
In France, its activities were merged in record<br />
time. CACEIS now enjoys a strong base from which to<br />
pursue its growth targets both in France and abroad.<br />
In Spain, CACEIS decided to sell its stake in<br />
IXIS Urquijo to Banco Sabadell, following the latter’s<br />
takeover of Banco Urquijo. In Switzerland,<br />
in December 2006, CACEIS acquired the fund<br />
administration business of FidFund Management SA,<br />
a subsidiary of the Banque Bénédict Hentsch<br />
& Cie SA. As a result of this operation, it can now<br />
offer local services to its Swiss customers.<br />
CACEIS is currently studying potential new<br />
partnership and acquisition projects in several<br />
other countries.<br />
Innovative products<br />
CACEIS has added to its offering and improved<br />
the quality of its services. It has significantly<br />
developed its alternative management services:<br />
these represent 50% of the assets under<br />
administration in Luxembourg, Ireland and<br />
the Netherlands. A structure has been created in<br />
Luxembourg to support its private equity activities.<br />
CACEIS is also developing outsourcing solutions<br />
in support activities for cross-border mutual<br />
fund distribution [European TA] and for the tracking<br />
of OTC derivative, exchange-rate and lending/<br />
borrowing transactions.<br />
All these different examples illustrate CACEIS’<br />
capacity for constant innovation.<br />
CACEIS<br />
Standard & Poor’s rating: AA-/Stable/A-1+<br />
Global Custodian 2006 survey<br />
• Top Rated - Agent Banks survey<br />
– In France and Spain<br />
– Domestic and cross-border<br />
• Top Rated - Hedge Fund survey<br />
2006 survey by Global Investor magazine<br />
(Survey of Surveys)<br />
• Best Sub-Custody Provider-France<br />
77
78<br />
€103 million devoted<br />
to staff training
SKILLS &<br />
RESOURCES<br />
79
5<br />
CHAPTER<br />
SKILLS<br />
& RESOURCES<br />
Human resources, information systems, procurement and general<br />
resources work in unison to ensure that all the business lines have<br />
the staff, skills and tools they need to guarantee the success of<br />
the Group’s strategic plan. This ambitious plan increasingly requires<br />
resources to be pooled in order to reinforce the effectiveness<br />
and competitiveness of the Group’s solutions and to maintain an<br />
impeccable quality of service. The specialists responsible for resources<br />
contribute fully to meeting these challenges.<br />
HUMAN RESOURCES<br />
Putting management at the heart<br />
of change, offering motivating career<br />
paths that both facilitate recruitment<br />
and enhance the loyalty of existing<br />
staff, providing dynamic training<br />
programs and opportunities for<br />
professional mobility, transforming management/<br />
employee relations: these are the priorities that<br />
guide the human resources policies of Groupe<br />
Caisse d’Epargne. 2006 was marked, in particular,<br />
by record recruitment levels.<br />
Recruitment: a record year<br />
Groupe Caisse d’Epargne remained extremely<br />
active on the job market, hiring more than 4,000 new<br />
staff. In a highly competitive climate, the Group<br />
launched an initial “employer image” campaign<br />
underpinned by the launch of a new, dedicated website<br />
and by the roll-out of a job application and mobility<br />
management IT package called Multitalent.<br />
All new employees (with the exception of senior<br />
executives whose induction is managed by the Caisse<br />
d’Epargne University) follow a single new recruit<br />
program applied across the entire Group.<br />
This program has three strands – sales, support and<br />
management – to match the newcomer’s job profile.<br />
IN THE<br />
“TRAINING<br />
BRANCH”<br />
During their new<br />
recruit program,<br />
sales staff spend<br />
a fortnight at a<br />
branch dedicated<br />
to staff training.<br />
Groupe Caisse d’Epargne has a total of<br />
55,800 employees [average full-time equivalent<br />
in 2006, excluding companies accounted for<br />
by the equity method].<br />
A new “mobility space” has been created on<br />
the Group’s intranet, providing staff with all<br />
the relevant information and an alert system when<br />
a job comes up that matches their requirements.<br />
New management tools<br />
The Group is reinforcing its forward management<br />
tools for jobs, skills and careers. It is developing<br />
structured and consistent career paths to enhance<br />
staff loyalty, a process actively sustained on a<br />
day-to-day basis by line managers in their relations<br />
with their teams.<br />
The forward-looking careers and qualifications<br />
observatory published three surveys in 2006 on staff<br />
numbers, the impact of longer working lives,<br />
and careers in sales.<br />
58 %<br />
of staff work in sales<br />
An inventory of jobs and skills is available<br />
to all entities and employees. An individual career<br />
management program is gradually being<br />
implemented across the Group’s different<br />
companies. More than 130 career management<br />
specialists already work within the Group.<br />
CAP 25 MOBILIZES “SENIOR” EMPLOYEES<br />
Cap 25 is the individual career management program<br />
dedicated to staff over the age of 45 who have worked<br />
in the Group for more than 25 years. It includes a career<br />
review and analysis, and a week-long residential seminar<br />
to learn about the opportunities opened up by the wider<br />
scope of the Group’s activities. These are followed by<br />
the drafting of an action plan and career development<br />
plan. More than 540 staff have followed this program in<br />
the past two years.<br />
80
The Services module is currently in the design<br />
stage. It will provide a single solution for managing<br />
payroll, working hours and professional training.<br />
With Office RH, employees will have access to new<br />
functionalities, and the human resources teams<br />
will have indicators they can use to track their<br />
activities in all spheres.<br />
New training programs<br />
Against the background of a new legal framework,<br />
2006 was marked by significant additions to the<br />
number of available training programs, to which the<br />
Group devotes more than 5% of its aggregate payroll.<br />
AGREEMENT ON THE RECRUITMENT<br />
OF THE DISABLED<br />
A national agreement covering the period 2006-2008<br />
provides for the recruitment of an additional<br />
170 people with disabilities, their long-term<br />
employment within the Group with appropriate career<br />
opportunities, together with an increased use<br />
of the protected sector in outsourcing operations.<br />
An annual sum of €3.5 million has been allocated<br />
to this program, coordinated by the Handicap and<br />
Diversity Unit deployed at Group level, and represented<br />
by disability correspondents in each company.<br />
The human resources approach to the Group’s<br />
senior management has been reinforced to bring<br />
on the new generation destined to lead the Group<br />
in the next 10 to 15 years.<br />
Two key processes have been set up:<br />
• the senior management succession plan system,<br />
designed to prepare for the extensive changes over<br />
the period 2006-2008;<br />
• the Directors’ career path, created in consultation<br />
with the Caisse d’Epargne University to promote<br />
dynamic career management for senior executives<br />
and high-potential employees likely to move up to<br />
higher positions.<br />
As regards day-to-day management, Office RH,<br />
the program dedicated to the human resources<br />
information system, is currently being deployed.<br />
Following Multitalent, the second module – Pilote –,<br />
a tool for managing the variable component<br />
of salaries, competencies and the development<br />
of human resources, will gradually be rolled<br />
out over 2007.<br />
Employees will be able to go online to check the<br />
information held about them.<br />
The national programs – the New Recruit Program,<br />
Professional Platform and Management Program – have<br />
all been newly created or redesigned, and the latter<br />
now confers a qualification recognized by the ESSEC<br />
school of business administration. Managers in<br />
the networks and support functions now enjoy access<br />
to specific training programs. The range of online<br />
training programs has been substantially extended,<br />
and the pooling of resources has improved the funding<br />
process for the different programs.<br />
eLICE: ONLINE MANAGEMENT TRAINING<br />
Facilitating your management tasks, improving your<br />
managerial posture, assessing your environment:<br />
eLice provides some 20 distance learning modules<br />
on these three topics. It has been adopted by 37<br />
of the Group’s companies.<br />
More than 9,000 sales personnel in the retail<br />
banking arm received training to support the<br />
Fréquence Client distribution program. A seminar<br />
devoted to advanced negotiation skills has been made<br />
available to the companies. The Compétences<br />
Business Client (business customer skills) e-learning<br />
solution has been enhanced and upgraded,<br />
and 3,000 courses have been organized.<br />
Specific training schemes have been developed<br />
for the different business lines. As part of this<br />
process, a new DESS one-year post-graduate<br />
diploma in wealth management has been set up<br />
with Paris-Dauphine University.<br />
The training programs in the risk management<br />
function have been substantially extended. 350 experts<br />
in this field have received specialist training and<br />
further additions will be made to the program in<br />
2007, in particular in the area of operational risk,<br />
with the introduction of a specific qualification.<br />
1,600 employees affected by changes in the<br />
business lines and in the organization of banking<br />
production have received training to enhance their<br />
professional skills and develop their versatility.<br />
81
4,000 new<br />
employees in a year:<br />
is that really<br />
enough?<br />
job applications on the dedicated website in the space<br />
of months<br />
Welcome to the youngest of the major universal banks! Once again<br />
in 2006, Groupe Caisse d’Epargne was one of France’s biggest<br />
recruiters, in pursuit of a single objective – to attract and to keep<br />
the very best –, an essential prerequisite for the achievement<br />
of the Group’s ambitious goals. In a highly competitive climate,<br />
the Group’s first employer campaign was right on target. Focusing<br />
on the variety and diversity of the talents required, it effectively<br />
reflected the Group’s identity in a playful and attractive way.<br />
The outcome: 70,000 high-quality applications on the new jobs<br />
website were received in the space of 8 months.<br />
82
350<br />
experts<br />
trained in Risk management<br />
Induction and assumption of duties, vocational<br />
training, reinforcement of managerial skills, career<br />
development and prospects: training programs have<br />
been introduced to prepare managers for the different<br />
stages in management careers. They are aimed at<br />
sales executives, branch directors and group directors,<br />
as well as managers in the support functions.<br />
The ESSEC Program, created in partnership<br />
with the ESSEC Business School and addressed<br />
to existing or potential department heads, marked its<br />
10 th anniversary by conferring an official qualification.<br />
Since 1996, more than 250 managers from all the<br />
Group’s companies have followed this high-level<br />
business management program with its very<br />
international ethos.<br />
SCHOLARSHIPS<br />
FOR HEC<br />
STUDENTS<br />
In 2005 and 2006,<br />
some one hundred<br />
HEC business<br />
school students<br />
received grants<br />
from Groupe<br />
Caisse d’Epargne,<br />
allocated on<br />
the basis of social<br />
and/or excellence<br />
criteria.<br />
New tools for managing change<br />
In terms of internal communication, further<br />
measures were taken to help employees adapt<br />
to the large-scale changes facing the Group.<br />
In order to enhance understanding of the internal<br />
issues, diagnostic research was carried out on<br />
the basis of quantitative and qualitative surveys in<br />
all the Group’s different companies.<br />
The Group uses a wide range of different media<br />
to communicate with its employees. The in-house<br />
journal Culture Groupe boasts a circulation of<br />
60,000 and is distributed to all members of staff.<br />
The electronic newsletter Culture Manager is sent<br />
to more than 5,000 executives, and the intranet<br />
portal provides a channel of information<br />
and communication for all Group companies.<br />
A program to reinforce the Group’s multimedia<br />
capacities was launched, and a new version of<br />
the intranet site is currently in development.<br />
As part of this process, an in-house TV channel is<br />
currently in the process of deployment.<br />
INTERNATIONAL BUSINESS, FOCUS OF THE 10 TH<br />
ANNIVERSARY OF THE ESSEC PROGRAM<br />
The first stage in this anniversary program brought<br />
together all participants – students, tutors, human<br />
resources directors – at the Maison de la Chine<br />
for a conference with André Chieng, a graduate<br />
from the prestigious Ecole Polytechnique and specialist<br />
in business relations with China. The topic: cultural<br />
differences in spheres such as work, action and<br />
effectiveness.<br />
83
5<br />
CHAPTER<br />
SKILLS<br />
& RESOURCES<br />
SYSTEMS AND RESOURCES<br />
Reinforcement of IT resources and their<br />
adaptation to commercial priorities,<br />
increased automation of bank<br />
production and centralization<br />
of certain activities, centralization<br />
of procurement, general resources<br />
and premises for greater efficiency: the Group<br />
is optimizing its resources to enhance its efficiency<br />
and productivity.<br />
Information technology:<br />
creating a common architecture<br />
Following the shift from seven to three IT<br />
communities between 1999 and 2003, the Group<br />
is now launching a major IT platform convergence<br />
project to create a single companywide information<br />
system. This strategic project is essential<br />
to increasing operational competitiveness and<br />
represents a new step towards operational<br />
excellence. The first stage has been planned with<br />
the introduction of an overarching management<br />
structure in 2007. The single system should be<br />
created and in place by 2010. Ultimately,<br />
the shift to a single system should generate savings<br />
of some €115 million per year, the equivalent<br />
of a two-point reduction in the cost/income ratio<br />
of the Caisses d’Epargne.<br />
The Group’s first annual IT plan<br />
For the first time, the Group has adopted<br />
an annual IT plan. Almost 100 people, representing<br />
the business lines, were involved in its development.<br />
160<br />
projects<br />
representing 75,000 man-days<br />
The IT plan will harmonize the projects<br />
developed across the three communities and<br />
will make it easier for new customer products<br />
and services to be launched simultaneously.<br />
160 projects, representing a total of 75,000 mandays,<br />
have been selected.<br />
Almost 50% of the IT plan is allocated to sales<br />
development in order to underpin the Group’s<br />
strategic plan. The major component is the<br />
upgrading of branch workstations. The goal is to<br />
provide sales staff with a simple, comprehensive<br />
and user-friendly screen. This will provide a<br />
real-time display of all the available information<br />
about the customer and a full catalogue of products<br />
and services, combined with information about<br />
the rules governing each product. Other priority<br />
goals are the development of customer portfolio<br />
and customer relations management tools, and<br />
remote banking systems with enhanced security<br />
of access. In the area of IT security, a system<br />
of checks on unusual online and branch terminal<br />
transactions was rolled out during 2006.<br />
The other components of the plan mainly relate<br />
to regulatory projects, particularly in connection<br />
with risk management. The technical support tasks<br />
relating to the Fermat GEM (Basel II credit risks)<br />
project was a major focus of the development<br />
teams’ work. A dedicated architecture for sensitive<br />
contracts was successfully implemented in the first<br />
half of the year.<br />
Optimization of production performance<br />
Banking production at the CNCE was reorganized<br />
with the separation of middle and back office tasks<br />
in the Branch Network Department, and the creation<br />
of cross-functional divisions, and an internal control<br />
and compliance function. Another feature of the<br />
year was the increased focus on responsiveness<br />
and quality in the handling of transactions –<br />
complex transactions, in particular – and the<br />
introduction of new, more efficient tools<br />
to streamline part of the installed software base.<br />
84
In 2006, the CNCE processed more than 583 million<br />
checks and more than 2.5 billion interbank<br />
transactions.<br />
Domestic flows increased with the deployment<br />
of the Carte Achat Public, a public sector payment<br />
card, the launch of the multi-purpose employment<br />
service check (CESU) and the development of the<br />
Ligne de Trésorerie Interactive (interactive cash<br />
facility) for local authorities. This last facility,<br />
distributed by 26 Caisses d’Epargne, grew from<br />
900 to 1,600 credit lines over the year.<br />
New projects were also introduced in 2006. An<br />
acquirer bank function was set up for several mobile<br />
phone operators; a national partnership agreement<br />
was signed with the PMU bookmaker chain to<br />
facilitate bet management; and clearing bank services<br />
were developed for banks operating in the French<br />
financial market.<br />
2.5bn<br />
operations handled<br />
The production mills continued to step up<br />
the services they provide to the Group’s different<br />
companies, supporting growth or the launch of new<br />
products: IZICEFi personal loans, Bourse “Esprit<br />
Ecureuil”, a new range of accident insurance vehicles<br />
Garantie Urgence and Garantie Famille, personal<br />
care services, and complementary health products.<br />
Another new facility was the Trade program, which<br />
offers customer firms a full array of documentary<br />
credit, foreign exchange and currency account<br />
products within the framework of a partnership set up<br />
with ABN AMRO.<br />
Cash management is now fully centralized for<br />
the whole Group.<br />
Rationalization of the Group’s<br />
flow management platforms<br />
The SWIFT platforms have been merged:<br />
the CNCE now enjoys a single system of<br />
communication with the other banks in the French<br />
financial market.<br />
9001<br />
ISO<br />
A major project in 2006 was the implementation<br />
of the new euro unit flow system (PFU) and its<br />
peripheral intraday cash position tracking and bank<br />
reconciliation tools. The CNCE now boasts the most<br />
efficient technical architecture in the market.<br />
Finally, significant projects relating to marketplace<br />
deadlines remain on track: replacement of the SIT<br />
interbank clearing system dedicated to bank<br />
payment transactions by CORE; convergence<br />
of standards related to payment instruments for<br />
small amounts in the Single Euro Payments Area;<br />
and the TARGET system for single large-value<br />
transfers within the euro area.<br />
In rapidly changing banking conditions, and in<br />
an ever more demanding regulatory environment,<br />
the renewal of ISO 9001 quality certification on<br />
bank transfers for large-value euro and currency<br />
amounts reflects the commitment of the CNCE’s<br />
teams to serving the Group’s companies and<br />
their customers.<br />
Automation of procurement<br />
and general resources<br />
The consolidated figure for purchases in 2006<br />
was in excess of €2.5 billion. The Group had<br />
set itself a total savings target of €300 million for<br />
the period 2004-2007. Savings in 2006 were close<br />
to €75 million, of which €19 million were shaved<br />
from recurring costs and €56 million from<br />
investment projects. The Group decided to set up<br />
a Procurement Economic Interest Grouping in 2007<br />
for its companies and subsidiaries.<br />
Procurement:<br />
savings of<br />
€75 million<br />
in 2006<br />
The implementation of the operational<br />
procurement plans continued in 2006 with<br />
the involvement of more than 30 Group companies.<br />
These plans were accompanied by vocational<br />
training courses for 164 professional buyers in<br />
the course of the year.<br />
85
5<br />
CHAPTER<br />
SKILLS<br />
& RESOURCES<br />
Projet SGM, a new resource management<br />
software tool, will be rolled out in 2007 while the<br />
Ivalua Buyer solution has been adopted to update<br />
the Procurement information system.<br />
The continued development of the system set up<br />
to create Groupe Caisse d’Epargne’s bank branches<br />
was confirmed. The process whereby the work was<br />
contracted out was based on software applications<br />
that made it possible to track the completion of<br />
more than 544 branches in 2006 within contractual<br />
budget limits.<br />
FRÉQUENCE FOURNISSEURS,<br />
DETERMINED<br />
TO CREATE VALUE<br />
For the first time, the Group<br />
invited its suppliers<br />
to a meeting attended<br />
by 307 people to mark<br />
the launch of the Fréquence<br />
Fournisseurs program.<br />
The aim: to harmonize<br />
and optimize relations with<br />
suppliers, enhance<br />
performance and create value.<br />
31 progress plans are<br />
already in place.<br />
Focus on quality: a national program<br />
The quality program, which is deployed in all<br />
the commercial banking companies, is geared<br />
to generating enhanced customer satisfaction and<br />
loyalty. The main objective is that by the end of 2007<br />
all these companies should have a comprehensive<br />
system for monitoring the quality of service<br />
they give their customers, whether from within or<br />
outside the Group.<br />
A Quality Charter defines the joint commitments<br />
made by the financial institutions, together with<br />
the contribution expected from the specialized<br />
subsidiaries and IT communities. Each business<br />
translates this charter into operational action plans<br />
that reflect its individual priorities.<br />
In order to help the different structures build<br />
a quality management system, a Caisses d’Epargne<br />
Excellence Model was created for the financial<br />
institutions in 2005. In 2006, a version of this model<br />
– incorporating the main requirements of ISO 9001 –<br />
was designed for the business production mills<br />
and IT communities.<br />
In 2006, all the companies carried out<br />
a self-assessment on the basis of this model.<br />
These self-assessments are used to measure the<br />
maturity of existing quality management systems,<br />
to put together appropriate action plans and<br />
to identify best practices for implementation across<br />
the whole Group.<br />
As regards customers, the national customer<br />
satisfaction barometer surveys 35,000 customers<br />
every year: a total of 89% are satisfied, and 34%<br />
of this number very satisfied (TNS Sofres, second<br />
half of 2006). The system for handling complaints<br />
is a major improvement priority. To achieve this,<br />
a new complaint input and management tool<br />
is in the pipeline, designed in particular to cut<br />
response times.<br />
An in-depth study was conducted in 2006 on<br />
the quality of customer reception. It resulted<br />
in the introduction of Ecureuil Attitude, a set<br />
of very specific reception criteria combined with<br />
a measurement system. Ecureuil Attitude will<br />
be implemented by the Caisses d’Epargne<br />
throughout 2007.<br />
For the business line subsidiaries, a business<br />
satisfaction barometer was created in 2006<br />
and implemented at the beginning of 2007. Under<br />
this system, 5,000 Caisses d’Epargne employees<br />
are questioned every year about their level<br />
of satisfaction with the services provided by the<br />
Group’s subsidiaries and business production mills.<br />
This barometer will help them to target their quality<br />
action plans more effectively.<br />
For the information systems, an Operational<br />
Excellence division has been set up at Group level<br />
with monitoring committees and a dedicated cell<br />
tracking data quality and reliability.<br />
Each year, the IT satisfaction barometer surveys<br />
a cross-section of 4,000 users: the average<br />
satisfaction score was 6.7/10 in the fourth quarter<br />
of 2006.<br />
86
Can a banker<br />
learn from<br />
a hotelier?<br />
customer<br />
satisfaction<br />
Offering the best possible welcome and developing good relations are key<br />
prerequisites for customer loyalty. To maximize its effectiveness in this area,<br />
and as part of its Fréquence Client program, Caisse d'Epargne successfully<br />
turned to the Académie Accor Services, a top specialist in customer relations.<br />
More broadly in 2006, the Group set up Ecureuil Attitude, a set of highly<br />
specific criteria for good customer reception practices, combined with<br />
a measuring system. The objective: to improve the results of the national<br />
satisfaction barometer which surveys 35,000 customers every year.<br />
In the second half of 2006, 89% of customers were satisfied, and 34%<br />
of these very satisfied (source: TNS Sofres).<br />
87
88<br />
With a view<br />
to implementing<br />
the Basel II framework,<br />
internal rating methods<br />
have been introduced<br />
for all the major<br />
asset classes
RISK MANAGEMENT,<br />
COMPLIANCE &<br />
SECURITY<br />
89
CHAPTER6<br />
RISK<br />
MANAGEMENT,<br />
COMPLIANCE &<br />
SECURITY<br />
Risk management and supervision are two fundamental priorities<br />
in Groupe Caisse d’Epargne’s strategic plan. The process of adapting<br />
to regulatory changes has intensified.<br />
All aspects of internal control – risks, compliance, auditing – have<br />
been reinforced. Supervision systems have been optimized throughout<br />
the Group and its business lines. These changes include compliance<br />
with the new prudential standards laid down by the Basel II framework<br />
and Regulation 97-02 of the Banking and Financial Regulations<br />
Committee (CRBF) relating to internal control in credit institutions.<br />
RISKS AND INTERNAL CONTROL<br />
The focus in 2006 across the entire<br />
Risk Management function was on the<br />
reinforcement of human resources and<br />
information systems. The main project<br />
emphasis was on the continuing<br />
modernization of risk monitoring and<br />
control systems at Group level and in the individual<br />
entities, the preparation for Basel II prudential<br />
standards, and the adaptation of structures and<br />
methods following the creation of Natixis and the joint<br />
shareholding position with Banque Populaire group.<br />
Group Risk Management (GRM):<br />
staff numbers up by 34%<br />
Group Risk Management (GRM) continued to<br />
increase its workforce, up from 73 at the end of 2005<br />
to nearly 100 at the end of 2006. The dynamic was<br />
the same across the whole Risk Management<br />
function, comprising the GRM and the Risk Units<br />
set up in every Caisse d’Epargne and subsidiary.<br />
At the end of 2006, total headcount in Risk<br />
Management stood at 745, excluding Natixis.<br />
Within the CNCE, GRM is responsible for<br />
maintaining the consistency of the Group’s Risk<br />
Management processes by:<br />
• setting exposure limits for each Group entity<br />
and for all significant counterparties representing<br />
exposures in excess of the entity-level limit.<br />
These limits are determined and officially<br />
documented in a number of decision-making<br />
committees;<br />
• monitoring entities’ compliance with these limits<br />
and tracking any overruns;<br />
• approving the methods used to rate and calculate<br />
risks throughout the Group;<br />
• defining the risk control, processing and monitoring<br />
standards to be applied by all entities, and the<br />
permanent oversight of their implementation by the<br />
companies;<br />
• supervising major national projects, such as<br />
Basel II, and implementing national tools<br />
for quantifying, analyzing and controlling risks.<br />
Credit risks<br />
Global exposure limits have been set at group<br />
level for each major counterparty which is a<br />
customer of several Group entities. Maximum<br />
exposure limits per country and per economic<br />
sector have also been established at consolidated<br />
level. The financial operations of the Caisses<br />
d’Epargne are contained within a detailed<br />
framework of limits, which notably take account<br />
of asset types, ratings and economic sectors.<br />
A dedicated system has been developed to<br />
manage the risks associated with SMEs.<br />
It takes account of each Caisse d’Epargne’s<br />
degree of development on this customer segment.<br />
In the context of forthcoming Basel II<br />
compliance, internal rating methods are now<br />
in place for all the major asset classes present<br />
within Groupe Caisse d’Epargne.<br />
All customers or counterparties for these asset<br />
classes are automatically re-rated using either<br />
expert or statistical methods, as required.<br />
These rating methods have been reviewed and<br />
approved by the CNCE’s Internal Audit Department.<br />
The GRM ensures that rating systems are in place<br />
and are applied in accordance with exposure limits<br />
assigned to the entity and credit decisions.<br />
In the last quarter of 2006, the Banking<br />
Commission conducted a Basel II compliance<br />
check on Investment Banking asset classes<br />
assessed by the “internal ratings – foundation”<br />
method. The results of this inspection are<br />
expected in 2007. Another compliance inspection,<br />
on the asset classes involved in Retail Banking<br />
(individual and business customers) is scheduled<br />
for the first four months of 2007.<br />
In addition, the GRM pursued its program to<br />
modernize the instruments employed in the control<br />
and consolidation of credit risks.<br />
90
Following the creation of Natixis, the GRM has<br />
worked to harmonize internal rating and credit<br />
risk quantification methods within the new structure.<br />
The internal rating methods to be used on the asset<br />
classes common to Natixis and the two shareholder<br />
networks were determined in October 2006. A detailed<br />
convergence plan for credit risk systems, procedures<br />
and quantification was close to finalization at the end<br />
of the year. It will be executed in 2007 and 2008.<br />
Market risks<br />
The GRM continued to set up a centralized system<br />
for monitoring market risks within the Group’s<br />
different entities. This monitoring system takes<br />
account of the segmentation of financial operations<br />
between proprietary trading on the one hand, and<br />
asset-liability management (ALM) and the<br />
management of medium and long-term positions<br />
on the other. These principles are formally stated<br />
in the Financial Charter.<br />
The day-to-day tracking of proprietary trading<br />
operations is based in particular on the monitoring<br />
of compliance with the following regulatory limits:<br />
• consolidated 1-day Value-at-Risk (VaR) based<br />
on a 99% confidence level up to a maximum €7 million<br />
for the Caisses d’Epargne and €0.5 million for<br />
the Group’s specialized subsidiaries;<br />
• 1-day VaR based on a 99% confidence level up to an<br />
absolute limit of €25 million and an average annual<br />
limit of €20 million over one year for IXIS CIB.<br />
Scénarisk, IXIS CIB’s VaR calculation system,<br />
has been extended to all the Group’s market<br />
operations. This means that the Group now has a<br />
day-to-day market risk measurement, monitoring<br />
and control tool for each of its companies and<br />
for the whole Group, which takes account<br />
of correlations between the different portfolios.<br />
To complete its risk monitoring system, the GRM<br />
has drawn up stress scenarios in consultation with<br />
the Group’s economists and the Risks and ALM<br />
departments of its different companies: IXIS CIB,<br />
IXIS AM, Retail Banking. Immediate variations<br />
in the market value of the portfolios can be<br />
instantaneously measured against a dozen scenarios.<br />
These scenarios, which are the same for<br />
proprietary trading and dealing operations,<br />
are divided into themes (falling stock markets,<br />
bond market crisis, credit spread crisis, hedge fund<br />
crisis, etc.) and calibrated by IXIS CIB’s economists.<br />
At the same time, the catastrophe scenario is<br />
maintained on Retail Banking’s ALM positions,<br />
as are the specific Investment Banking scenarios.<br />
Investing in funds:<br />
a new monitoring and control tool<br />
Groupe Caisse d’Epargne’s investments in funds<br />
grew by €8.1 billion in 2006, reaching €12.2 billion<br />
at the end of December. Since ABIS – a system for<br />
tracking, monitoring and managing fund investment<br />
requests – came on line at the beginning of 2006, the<br />
GRM’s teams have been able to handle 911 investment<br />
reports and requests, as compared with 388 in 2005.<br />
This system is used by all financial and risk divisions<br />
in Groupe Caisse d’Epargne companies whose<br />
financial operations include fund investments. It is<br />
also available for consultation by the Group’s audit<br />
departments in the performance of their functions.<br />
The 530 funds in which Groupe Caisse d’Epargne<br />
held assets at the end of December 2006 were<br />
analyzed and rated by the GRM teams in 2006.<br />
And finally, as part of its role in managing the licenses<br />
granted by the CNCE to some 50 management<br />
companies outside the Group, the GRM made on-site<br />
visits to nine management companies to obtain<br />
additional information on their risk control processes<br />
in the run-up to their annual license reviews.<br />
Operational risks<br />
The operational risk monitoring system<br />
continued to be deployed in 2006. The companies’<br />
operational risk committees receive quarterly<br />
reports which both they and management use as a<br />
basis for their decisions, taking account of the main<br />
potential risks, of actual incidents over a given<br />
period and of the environment in which<br />
the business operates.<br />
A half-yearly assessment of the system is<br />
conducted for each company. This enables<br />
companies to assess progress from one period to<br />
the next, and to compare themselves with the<br />
Group’s other entities.<br />
Under this system, capital funds are calculated<br />
by a Bayesian quantification framework which<br />
uses historical data and predictive analyses.<br />
This calculation system will be adjusted in 2007.<br />
The predictive analysis based on the mapping of<br />
44 risk scenarios, due to be updated in early 2007,<br />
now also includes an analysis of some 20 major<br />
risk scenarios.<br />
Preparations for AMA compliance should be<br />
finalized in 2007, with the Group’s Internal Auditors<br />
set to review the Operational Risks system<br />
in the second quarter of the year. The compliance<br />
inspection by the French Banking Commission is<br />
scheduled for the first half of 2008.<br />
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6<br />
CHAPTER<br />
RISK<br />
MANAGEMENT,<br />
COMPLIANCE &<br />
SECURITY<br />
COMPLIANCE AND SECURITY<br />
AGroup Compliance and Security<br />
Unit was set up in 2006. It replaces<br />
the Ongoing Controls organization,<br />
whose structures have been<br />
reorganized into departments<br />
allocated to the different business<br />
lines and cross-functional projects. The Group<br />
Security Unit is included in this new structure.<br />
Business continuity plans<br />
adopted for each Caisse d’Epargne<br />
Business continuity plans have been drawn up<br />
for each Caisse d’Epargne.<br />
Critical processes have been identified and<br />
analyzed in the light of three scenarios: inability<br />
to access the premises; inability to access<br />
the information system; absence of more than 40%<br />
of employees, e.g. following an epidemic.<br />
Measures have been determined for each scenario.<br />
The business continuity plans are underpinned<br />
by a dedicated structure, specific management<br />
software and an emergency email solution.<br />
A Business Continuity Officer has been appointed in<br />
each Caisse d’Epargne, and all the Group’s entities<br />
are covered by an overarching structure under the<br />
aegis of the Group Security Department in the<br />
CNCE. Following a joint consultation process, a<br />
single business continuity plan has been<br />
established, which each Caisse d’Epargne then<br />
adapts to suit its own specific structure and needs.<br />
49processes<br />
of critical importance<br />
identified and analyzed<br />
The implementation and effectiveness of these<br />
plans have been successfully tested through dry<br />
run exercises. Procedures have been set up<br />
to ensure that the plans are constantly updated.<br />
Information system security has been enhanced<br />
by the introduction of new antifraud procedures.<br />
Technological intelligence on system and network<br />
vulnerability has been extended and accentuated.<br />
A new risk analysis consolidation tool is now in<br />
operation. Special training courses have been run<br />
throughout the Group to raise employee awareness<br />
about software security.<br />
The security rules have been widely<br />
implemented across the branch network, together<br />
with coordination procedures to combat fraud.<br />
Standards genuinely integrated<br />
into operating methods<br />
The role of the Compliance function is to<br />
ensure that regulations and ethical practices are<br />
fully applied in all operations.<br />
In 2006, this function was reorganized into<br />
departments, with the exception of anti-moneylaundering<br />
processes, which are applied across<br />
all functions.<br />
The following additions were made in 2006<br />
to the standards pertaining to the Group’s<br />
organization and goals:<br />
• a Compliance charter;<br />
• a reporting standard on compliance incidents,<br />
applicable as of 2007;<br />
• a Compliance Management Review charter,<br />
applied since the autumn of 2006;<br />
• recommendations to ensure that customers are<br />
well informed of their rights, their responsibilities<br />
and, more generally, of the legal and regulatory<br />
framework governing their decisions;<br />
• recommendations regarding outsourced<br />
operations.<br />
92
A new set of standards on products, services<br />
and cross-functional rules is available on the Group<br />
intranet. Compliance standards have been<br />
incorporated into the companies’ procedures<br />
and operational systems. The conditions and<br />
authorization procedures for accessing reference<br />
systems on the intranet have been improved.<br />
The SIDECO ethics<br />
and compliance<br />
information system<br />
has been enhanced<br />
The Compliance function, whose systems<br />
received a positive assessment from the French<br />
Banking Commission, has been reorganized<br />
within the companies where the CNCE’s<br />
recommendations were not being respected.<br />
Its management has been reinforced through<br />
Compliance Management Reviews.<br />
The conditions governing the role of Head<br />
of Investment Services Compliance were the focus<br />
of particular attention.<br />
The Group has adopted and implemented a<br />
warning system to guarantee that the regulations<br />
on market abuses are fully applied: prevention,<br />
detection, notification, compliance with<br />
professional obligations.<br />
The monitoring of decision-making processes<br />
stipulated in article 5 of CRBF regulation 97-02 has<br />
been reinforced. The approval procedure for<br />
commercial products has also been reinforced,<br />
and is backed up locally by procedures for bringing<br />
approved products to the market. This monitoring<br />
of commercial processes will be extended in 2007,<br />
upstream at the product design stage, and<br />
downstream right through to advertising.<br />
All this means that the CNCE has a Compliance<br />
function that covers banking operations<br />
and investment services, fraud prevention and<br />
detection, and customer referencing, with<br />
particular emphasis on the ethical basis of<br />
the business relationship and the provision<br />
of information to vulnerable customers.<br />
Fight against money laundering<br />
and the financing of terrorism<br />
On the basis of its obligations regarding the fight<br />
against money laundering and the financing<br />
of terrorism, Groupe Caisse d’Epargne has steadily<br />
developed a culture, and therefore tools, for<br />
the prevention of money laundering and of the<br />
financing of terrorist activities. Through different<br />
channels, all employees (both in sales and<br />
after-sales), all managers and senior executives<br />
have, over the years, systematically adopted<br />
the constantly changing detection methods<br />
and management systems, which demonstrate<br />
that the Group remains committed to its obligations<br />
in this area.<br />
Its real contribution to a system that demands<br />
civic commitment from all stakeholders is<br />
illustrated in particular by the steady rise<br />
– initially in quantity, and subsequently in quality –<br />
in suspicious activity reports submitted by<br />
the Group’s companies to TRACFIN, the French<br />
Finance Ministry’s anti-money laundering unit.<br />
Thus in 2006, despite an almost 16% reduction in<br />
reports, it would appear that those reports were<br />
more frequently effective in contributing<br />
to measures for combating money laundering<br />
and the financing of terrorist activities.<br />
In addition, the combination of widespread<br />
education and ever greater expertise has led<br />
to the establishment of a truly professional<br />
surveillance function. The departments dedicated<br />
to the prevention of money laundering and<br />
the financing of terrorist activities constitute<br />
a sub-structure of almost 200 people, most<br />
of them full-time, who operate in all the Group’s<br />
entities and activities.<br />
The main functions of these departments are:<br />
to train all the teams concerned but also to keep<br />
all staff informed about the latest developments<br />
– changes in regulations, detection of new<br />
profiles, etc. –; to maintain permanent secondary<br />
level surveillance, in synergy with the formal<br />
management systems, to assess the degree and<br />
effectiveness of the vigilance exercised by all parties;<br />
to follow up and process reports (submission to<br />
TRACFIN, transaction monitoring, etc.).<br />
Groupe Caisse d’Epargne has put in place<br />
the human and practical resources, but also<br />
the structures and procedures, that it needs<br />
to fulfill its obligations, in particular through<br />
real-time transaction filtering.<br />
93
94<br />
Over the past six years, the Caisses d’Epargne have funded<br />
10,000 local solidarity projects, for a total of €240 million
SOLIDARITY AND SOCIAL<br />
COMMITMENT<br />
95
CHAPTER7<br />
SOLIDARITY<br />
& SOCIAL<br />
COMMITMENT<br />
The founders of the French savings banks, Francois de La Rochefoucauld-<br />
Liancourt and Benjamin Delessert, were driven by the desire to be<br />
“friends of humanity”: social progress is what motivated the creation of<br />
Caisse d’Epargne, and the Group remains loyal to that original aspiration.<br />
On the ground, its actions demonstrate the social utility and civil responsibility<br />
of the Group. It is a bank, but also a social housing operator, a driving force<br />
in local development, a promoter of sustainable development, an adversary<br />
of all forms of social exclusion whether through old age, disability or illiteracy.<br />
The Caisses d’Epargne are living testimony to the fact that economic<br />
profitability can coexist with a concern for the general public-interest and,<br />
indeed, it is this very profitability that finances social action and makes<br />
it possible to promote a more mutually supportive and engaged society.<br />
ÉCUREUIL & SOLIDARITÉ LOCAL AND SOCIAL ECONOMY PROJECTS<br />
More than 2,700 projects<br />
worth €53.9 million supported in 2006<br />
Caisse d’Epargne is the only bank to put a<br />
percentage of all its profits back into local solidarity<br />
projects. The Caisses d’Epargne are committed<br />
under French law to general public-interest<br />
initiatives and, more specifically, to the provision<br />
of financial support for local and social economy<br />
projects, the so-called écureuil & solidarité PELS.<br />
These projects are typically run by not-for-profit<br />
associations to help people in vulnerable<br />
circumstances. Finding jobs for people on the<br />
fringes of the employment market, helping socially,<br />
physically or psychologically vulnerable people<br />
achieve autonomy, and re-establishing social<br />
connections, are the three main areas where the<br />
PELS focus their action.<br />
The annual funding envelope dedicated to the<br />
écureuil & solidarité PELS is approved every year at<br />
the annual general meeting of each Caisse d’Epargne.<br />
It is calculated on the basis of the interest paid<br />
to holders of shares in each Caisse d’Epargne.<br />
In 2006, this envelope was almost €54 million and<br />
was used to finance more than 2,700 projects.<br />
96<br />
PELS OBJECTIVES<br />
• To help create a more mutually supportive and more<br />
entrepreneurial society.<br />
• To promote business start-ups and new job creation.<br />
• To provide easier access to banking services and<br />
help people understand how money works.<br />
• To combat dependency and isolation arising from<br />
old age, disability, illness or illiteracy.<br />
• To incorporate principles of sustainable development<br />
into the Caisses d’Epargne’s business operations.<br />
Local and social economy projects:<br />
selection, monitoring and assessment<br />
Each Caisse d’Epargne sets its priorities for action<br />
on the basis of the needs of its region and the goals<br />
established by the Fédération Nationale des Caisses<br />
d’Epargne. The directors of the local savings<br />
companies are encouraged to submit projects,<br />
to express their opinions and to get involved in their<br />
implementation. Their knowledge of the local<br />
economic and social fabric is invaluable to<br />
the success of these initiatives.<br />
DEVELOPMENT OF THE ÉCUREUIL & SOLIDARITÉ PELS<br />
Number Amount in €m<br />
2001 952 20.3<br />
2002 1,316 23.0<br />
2003 1,977 41.3<br />
2004 2,350 50.6<br />
2005 2,556 51.5<br />
2006 2, 718 53.9<br />
Total 11,869 240.6<br />
Each Caisse d’Epargne has an officer specially<br />
trained in public-interest activities to manage<br />
the local and social economy projects. The Group<br />
intranet provides a discussion space and a<br />
framework for analyzing, qualifying, managing<br />
and reporting projects.<br />
Once a project is complete, Caisse d’Epargne<br />
assesses whether it has been implemented<br />
effectively and weighs up its impact on its<br />
beneficiaries. This evaluation process also enables<br />
Caisse d’Epargne to strengthen its ties with<br />
the bodies it supports and to gain a better<br />
understanding of the needs of the most vulnerable<br />
populations. More than 900 administrators have<br />
received training in the evaluation process.
Supporting new job creation<br />
or the return to active employment<br />
Caisse d’Epargne can offer loans and specific<br />
banking services to people on the fringes<br />
of the job market or who do not have access<br />
to standard funding mechanisms to help them to<br />
create or buy a business. These small businesses<br />
need support from a professional network.<br />
To provide this, national agreements have been<br />
established with five major support networks:<br />
Adie, Boutiques de Gestion, Entreprendre, France<br />
Initiative and France Active. Their services can be<br />
adapted to local needs. Within this framework,<br />
Caisse d’Epargne can provide interest-free loans<br />
and mutual guarantee funds, contribute<br />
to equipment grants or offer appraisal services.<br />
To boost the chances of unemployed people<br />
getting into the employment market, Caisse<br />
d’Epargne supports integration projects run by<br />
associations or companies to help people obtain<br />
qualifications and acquire the new skills they need<br />
to prosper in a professional context.<br />
Combating banking exclusion<br />
Access to banking services is nowadays<br />
essential to everyday life. Aware of the role that<br />
they can play in fostering and maintaining<br />
a banking relationship, the Caisses d’Epargne<br />
extended their involvement in this area in 2006<br />
with the launch of the Parcours Confiance program.<br />
This program places Caisse d’Epargne at the centre<br />
both of its banking role and of its commitment to<br />
social cohesion.<br />
Areas of involvement<br />
by the PELS in 2006<br />
as a % of the total amount<br />
Breakdown of PELS funding<br />
in 2006<br />
as a % of the total amount<br />
Apart from high-quality banking services,<br />
Parcours Confiance also offers micro-loans for<br />
individuals in severe financial and social difficulties<br />
and for entrepreneurs who are unable to obtain<br />
financing solutions through traditional banking<br />
channels. The aim is to help them re-establish<br />
stability and equilibrium both through banking<br />
facilities and through educational and social<br />
support.<br />
Parcours Confiance is a comprehensive and<br />
personalized support package. It includes<br />
diagnosis, a targeted range of banking services,<br />
group courses in financial management provided<br />
by the Finances & Pédagogie association, and<br />
support from social agencies.<br />
THE FINANCE & PÉDAGOGIE ASSOCIATION<br />
Specializing in providing education and training<br />
for the young, vulnerable or highly indebted<br />
individuals, the Finances & Pédagogie association was<br />
created 50 years ago by the Caisses d’Epargne. Thirty<br />
regional correspondents organize training and<br />
information programs devoted to handling money,<br />
managing finances, loans, and banking relations,<br />
all combined within an entertaining and accessible<br />
learning package. These courses are in great demand<br />
with social workers attached to associations<br />
and local authorities, to help them with their social<br />
and professional integration programs.<br />
In 2006, Finances & Pédagogie signed almost<br />
250 partnership agreements and conducted<br />
3,875 training courses, reaching almost 72,000 people,<br />
including approximately 24,000 young people.<br />
In particular, the association signed a partnership<br />
agreement with the Secours Catholique charitable<br />
organization to provide educational support for<br />
the volunteers and staff in its working groups, to help<br />
them in their work providing financial and social<br />
support for people in difficulty. This training program<br />
is part of the Social Cohesion Fund.<br />
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7<br />
CHAPTER<br />
SOLIDARITY<br />
& SOCIAL<br />
COMMITMENT<br />
In order to provide these services, each Caisse<br />
d’Epargne has set up an association responsible<br />
for the Parcours Confiance program, or works with<br />
an existing association. One or more branch<br />
employees are seconded to the Parcours Confiance<br />
association and are responsible for helping<br />
their clients until their personal situations have<br />
stabilized. The Finances & Pédagogie association,<br />
created and supported by the Caisses d’Epargne,<br />
organizes the Group training sessions.<br />
Partnerships can be established with other local<br />
associations, which provide their own specific<br />
expertise.<br />
Promoting autonomy<br />
There is a wide variety of support for initiatives<br />
designed to help elderly, sick or disabled people<br />
to live independently. Caisse d’Epargne finances<br />
equipment that can help people to achieve greater<br />
mobility in day-to-day or recreational activities, to<br />
continue living at home and to avoid social isolation.<br />
It also supports associations working to help<br />
people in situations of extreme deprivation, and<br />
funds the investment required for such activities:<br />
vehicles, work tools, premises and equipment<br />
for accommodation or food storage, training of<br />
volunteers, information channels.<br />
This innovative program is financed out of<br />
the PELS funding envelope with a guarantee from<br />
the Social Cohesion Fund in partnership with<br />
the Caisse des Dépôts. At the end of 2006,<br />
eight Caisses d’Epargne (1) had begun the program,<br />
while three others had developed local<br />
partnerships based on the same principle.<br />
Parcours Confiance will continue to be<br />
implemented, and will apply across the whole<br />
network by the end of 2007.<br />
PELS UNDERTAKEN IN 2006<br />
BY AREA OF OPERATION<br />
Amounts in millions of euros<br />
Employment 21.7<br />
Funding and access to banking<br />
services for the entrepreneur 6.2<br />
Backing for support professionals 8.3<br />
Integration through work 7.2<br />
Autonomy 24.1<br />
Autonomy for elderly,<br />
sick or disabled people 14.8<br />
Training in basic skills,<br />
including money management 5.2<br />
Fulfilment of fundamental needs:<br />
food, accommodation, etc. 4.1<br />
Social integration 8.1<br />
Environmental protection<br />
to foster social cohesion 1.8<br />
Access to banking services<br />
and banking support for individuals 2<br />
Integration through culture and sport 4.3<br />
Total 53.9<br />
FIRST “ÉCUREUIL & SOLIDARITÉ<br />
COUPS DE CŒUR” AWARDS<br />
In the last six years, the Caisses d’Epargne have<br />
funded 10,000 PELS, for an aggregate total of<br />
€240 million. To celebrate the event and pay homage<br />
to the associations supported, six “écureuil &<br />
solidarité Coups de Cœur” (panel’s special choice)<br />
prizes were awarded to associations for their<br />
exemplary role in promoting employment, autonomy,<br />
social integration and education.<br />
98<br />
(1) Caisses d’Epargne de Poitou-Charentes, Ile-de-France Ouest,<br />
Champagne-Ardenne, Pays du Hainaut, Midi-Pyrénées,<br />
Provence-Alpes-Corse, Bretagne and Picardie.
Can a major<br />
banking corporation<br />
take an interest<br />
in a micro-business?<br />
More than<br />
new jobs created<br />
since 2001<br />
Many unemployed people and people on minimum wages would like<br />
to set up their own businesses, but they don’t know how to go about<br />
it and are afraid of failing without a helping hand. For them, Caisse<br />
d’Epargne has created Parcours Confiance Professionnels. This program,<br />
which is currently being rolled out across France, works in partnership<br />
with support networks and local initiative platforms Adie, Boutiques<br />
de Gestion and France Active. Convinced that employment is a major<br />
factor in integration, the Caisses d’Epargne have contributed, since 2001,<br />
to the creation of more than 6,000 jobs by funding écureuil & solidarité<br />
local social and economy projects.<br />
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7<br />
CHAPTER<br />
SOLIDARITY<br />
& SOCIAL<br />
COMMITMENT<br />
Caisse d’Epargne also supports programs<br />
to help adults to master basic skills. Learning<br />
to read, write, and to count, attending computer<br />
workshops or learning how to manage their<br />
finances: the initiatives financed by the French<br />
savings banks are very concrete and designed<br />
to prepare people for the modern workplace.<br />
Integration through culture,<br />
sport, and the environment<br />
As a local bank, Caisse d’Epargne supports<br />
initiatives to re-establish links with society, such<br />
as neighborhood events, organization of sporting<br />
events or shows.<br />
Local heritage protection projects can also<br />
receive PELS funding, as can associations<br />
involved in environmental protection provided<br />
that the project contributes to social cohesion.<br />
For example, Caisse d’Epargne supports riverbank<br />
regeneration projects or operations to rehabilitate<br />
damaged natural sites, when the work is done by<br />
people signed up for social integration programs or<br />
with the aim of facilitating access to the disabled.<br />
PELS UNDERTAKEN IN 2006<br />
BY CAISSE D’EPARGNE<br />
Amount in thousands of euros<br />
Alpes 1,486<br />
Alsace 1,400<br />
Aquitaine-Nord 1,552<br />
Auvergne et Limousin 1,940<br />
Basse-Normandie 925<br />
Bourgogne Franche-Comté 3,233<br />
Bretagne 1,791<br />
Centre-Val de Loire 1,000<br />
Champagne-Ardenne 1,168<br />
Côte d’Azur 1,735<br />
Flandre 1,517<br />
Haute-Normandie 1,526<br />
Ile-de-France Nord 1,104<br />
Ile-de-France Ouest 1,119<br />
Ile-de-France Paris 5,475<br />
Languedoc-Roussillon 2,127<br />
Loire Drôme Ardèche 1,854<br />
Lorraine 2,368<br />
Martinique 193<br />
Midi-Pyrénées 2,468<br />
Pas-de-Calais 2,030<br />
Pays de l’Adour 1,005<br />
Pays de la Loire 1,835<br />
Pays du Hainaut 1,000<br />
Picardie 1,470<br />
Poitou-Charentes 1,685<br />
Provence-Alpes-Corse 4,436<br />
Rhône-Alpes Lyon 2,902<br />
Val de France-Orléanais 1,558<br />
Total 53,902<br />
100
THE CAISSES D’EPARGNE FOUNDATION FOR SOCIAL SOLIDARITY<br />
The Caisses d’Epargne Foundation for<br />
Social Solidarity, an institution created<br />
in 2001 and granted official recognition<br />
as a public-interest entity, carries the<br />
fight against all forms of dependence<br />
and social exclusion resulting from old<br />
age, illness, disability or illiteracy. Through the<br />
development of its actions, the commitment of its<br />
personnel backed up by a host of volunteers, the<br />
Foundation embodies the determination of Groupe<br />
Caisse d’Epargne to be in the vanguard of the<br />
struggle for greater social solidarity by forging a<br />
network of interpersonal support at a local level.<br />
An annual budget<br />
of €143.3m<br />
The Caisses d’Epargne Foundation for Social<br />
Solidarity operates in three ways:<br />
• as an operator in the non-profit-making sector, it<br />
develops and runs France’s largest network of homes<br />
for the dependent elderly with 76 establishments and<br />
facilities offering accommodation for 4,810 people;<br />
• as a direct player in the campaign against illiteracy, it<br />
offers support for young people in difficulty;<br />
• as a social experimenter, it selects and finances<br />
innovative projects in favor of personal autonomy and<br />
the fight against social exclusion.<br />
Tailoring its support as closely as possible to<br />
regional needs, the Foundation acts as an umbrella<br />
organization for eleven other foundations created<br />
under its aegis by individual Caisses d’Epargne,<br />
including two such foundations set up in 2006.<br />
Combining social solidarity with efficiency,<br />
compassion with modernity<br />
The Caisses d’Epargne Foundation for Social<br />
Solidarity has been expressing this commitment every<br />
day for the past five years, with particulary spectacular<br />
developments over the last four years: the network of<br />
residential homes has grown from 21 to 76; the Savoirs<br />
pour réussir (Knowledge for Success) initiative<br />
designed to combat illiteracy boasted ten centers at<br />
the end of 2006; and 308 social innovation projects<br />
have been financed in the space of three years.<br />
Dependent individuals:<br />
rapid growth in reception capacity<br />
In 2006, in the area of facilities for elderly people<br />
increasingly unable to take care of themselves, the<br />
Foundation opened a day care center in Paris for some<br />
sixty individuals suffering from Alzheimer’s disease.<br />
It also completed two restructuring operations<br />
and launched seven others. Finally, it launched the<br />
construction of seven new residences and drew up<br />
applications for 14 extension projects and the creation<br />
of 19 new establishments.<br />
With respect to the disabled, the Foundation<br />
dedicated two establishments entirely to the reception<br />
of people suffering from disabilities, and two residences<br />
have opened reception facilities for disabled people<br />
over the age of 60. The first stone of a complex of three<br />
establishments grouped together to provide premises<br />
and work for the disabled was laid in Paris.<br />
In this way, the 76 establishments comprising<br />
the network include 67 residences under direct<br />
management providing health care and social welfare<br />
services (the majority of which are designated as<br />
nursing homes for the dependent elderly – EHPAD),<br />
one residence under a management contract, three<br />
centers providing follow-up care or physical<br />
rehabilitation that accommodate 4,000 patients every<br />
year, and five platforms providing home support<br />
services or telephone assistance with a total of<br />
approximately 6,300 subscribers.<br />
platforms<br />
5providing services allowing<br />
6,300 subscribers to continue<br />
living in their own homes<br />
More than 500 new employees joined the<br />
Foundation in 2006 taking the total headcount<br />
to almost 3,000. In 2007, the Foundation is expected<br />
to become the largest institution of its kind in terms<br />
of staff numbers: 98% are employed in residences and<br />
care centers doing both difficult and demanding work.<br />
101
What has<br />
promoting literacy<br />
got to do<br />
with a bank?<br />
for young people with little or no education<br />
Savoirs pour réussir (Knowledge for Success) is an initiative that helps young people, every year,<br />
to acquire the basic skills of reading and writing. Savoirs pour réussir is a program organized<br />
by the French savings banks and their partners who, in liaison with the Caisses d’Epargne<br />
Foundation for Social Solidarity, have opened ten sites in France capable of welcoming young<br />
people aged 16 to 25 with little or no formal education. Savoirs pour réussir is a team of volunteer<br />
tutors trained by the Foundation, including cooperative shareholders of the Caisses d’Epargne,<br />
current or former employees and members of associations. By allowing these young people<br />
to acquire a taste for learning, Savoirs pour réussir gives them the means they need to regain<br />
self-confidence and have faith their own future. Isn’t it also the role of a banker to help everyone<br />
contributing to the life of the economy to bring their projects to a successful conclusion?<br />
102
Training and quality<br />
Support given to the elderly, infirm or disabled<br />
calls for an ever greater degree of professionalism,<br />
whatever its nature: the quality of reception, relations<br />
with the families, individual safety, medical services<br />
(including terminal care), managerial rigorousness,<br />
the completion of investments. A concerted effort has<br />
been made to train the least qualified employees to<br />
higher professional standards and to improve skills.<br />
The Foundation devoted more than one million euros<br />
to training in 2006.<br />
2,242<br />
employees<br />
trained in 2006<br />
The Foundation was one of the first to adopt,<br />
as early as 2005, the quality and appraisal approach<br />
provided for by the French Law reforming social and<br />
medico-social actions. This approach is already<br />
operational in 40 establishments and will be<br />
extended further in 2007. The Foundation is also<br />
using this approach to develop a specific reference<br />
system for the support of the disabled and individuals<br />
unable to leave their own homes.<br />
The campaign against illiteracy:<br />
extension of the training program<br />
Three new Savoirs pour réussir centers were<br />
created in 2006 with the support of individual<br />
Caisses d’Epargne, local authorities and other<br />
partners, to offer assistance to young people with<br />
literacy problems. A total of 17 centers should be up<br />
and running by the end of 2007.<br />
The identification of young people who have not<br />
mastered the basic skills of reading and writing uses<br />
the national service call-up screening system and the<br />
local literacy structures. In 2005, the Foundation<br />
signed a national agreement providing for the<br />
deployment of the Savoirs pour réussir initiative with<br />
five French government ministries – Defense;<br />
Employment, Social Cohesion & Housing; Agriculture<br />
& Fisheries; Youth, Sport & Voluntary Associations;<br />
National Education, Higher Education & Research –<br />
along with the Catholic Education Organization, the<br />
National Council of Local Missions and the National<br />
Agency for the Promotion of Literacy (ANLCI).<br />
General public-interest activities:<br />
97 projects given financial support<br />
In 2006, the Group’s different companies paid out<br />
almost €5.7 million to finance general public-interest<br />
initiatives defined and conducted by the Foundation.<br />
These funds went to a total of 97 projects.<br />
In the field of support for independent living,<br />
permanent contact with vulnerable individuals<br />
allows the Foundation to devise support policies<br />
based on a detailed understanding of the real-life<br />
situation. In 2006, the Foundation provided funding<br />
for nearly €5.7 million in support of a large number<br />
of projects. In particular, it teamed up with the<br />
National Federation of French Mutual Insurance<br />
Companies (FNMF) to create eight centers<br />
specializing in low vision and hearing aids to provide<br />
home-based rehabilitation solutions for the elderly.<br />
With Ecureuil Assurances IARD and the involvement<br />
of three individual Caisses d’Epargne, the Caisses<br />
d’Epargne Foundation for Social Solidarity has<br />
enabled seriously disabled individuals to take to<br />
the road once again in specially adapted vehicles.<br />
A CONFORT DE VIE PRIZE<br />
FOR MADE-TO-MEASURE ACCOMMODATION<br />
The Caisses d’Epargne Foundation for Social Solidarity<br />
and Crédit Foncier de France have created the Confort de<br />
vie (Life Comfort) prize to give official recognition<br />
to real estate developments satisfying two essential<br />
criteria: universal accessibility and compliance with<br />
the demands of sustainable development. State-run or<br />
private retirement homes (whether providing nursing<br />
facilities or not), hospitals and private clinics, public<br />
or private HLM subsidized housing organizations,<br />
semi-public real estate companies, local authorities,<br />
non-profit associations and mutual insurance<br />
companies, real estate developers and builders of singlefamily<br />
houses can all compete for this prize worth a<br />
total of €150,000. The Foundation has also undertaken<br />
to provide funding of €168,000 over a two-year period<br />
for projects designed to promote accessibility in housing<br />
under an agreement with the Confédération de<br />
l’artisanat et des petites entreprises du bâtiment<br />
(CAPEB, or Confederation of craftmen and small<br />
businesses in the building sector). In addition, it has<br />
established a partnership with the CEA and the<br />
A.P.P.R.O.C.H.E. network to promote robotics for people<br />
with disabilities in order to develop a home-based<br />
rehabilitation system for people who suffer from<br />
impaired use of their arms and a robot capable of<br />
picking up objects using an intelligent optical camera<br />
mounted on an articulated arm.<br />
Mr. N., beneficiary of the 1 st innovation prize in the “Technological<br />
Innovation” category of the 2006 Confort de vie prize for the construction<br />
of accommodation perfectly tailored for his particular disability.<br />
103
7<br />
CHAPTER<br />
SOLIDARITY<br />
& SOCIAL<br />
COMMITMENT<br />
THE BAROMETER OF SOLIDARITY IN FRANCE<br />
New partnerships<br />
Regarding the campaign against illiteracy, the<br />
Foundation has concluded two new partnerships: with<br />
the French Red Cross to carry out joint actions<br />
targeted at young people aged 16 to 25, and with the<br />
L’Etudiant press group based on an invitation to submit<br />
projects on the theme of “L’illettrisme : l’affaire de<br />
tous” (Illiteracy is everybody’s business). Six initiatives<br />
were rewarded with an overall award of €100,000.<br />
Other projects were given financial support<br />
in areas related to the fight against lead poisoning<br />
with the Médecins du Monde organization,<br />
the combat to reduce poverty with the Agence<br />
nouvelle des solidarités actives (New Agency for<br />
active solidarity) and training in social emergency<br />
professions with the public-interest grouping<br />
Traces de pas.<br />
2006 also provided an opportunity to take stock<br />
of three years’ support given to general publicinterest<br />
initiatives in areas related to the conversion<br />
of accommodation and adaptation of service<br />
networks. This appraisal led to the identification<br />
of the best practices and initiatives with a view to<br />
facilitating their promotion.<br />
The Foundation also published a document<br />
containing ten recommendations for social housing<br />
enterprises to encourage them to include<br />
converted accommodation in their construction<br />
or renovation programs.<br />
What is more, two new foundations operating<br />
under the aegis of, and in the same areas as,<br />
the Caisses d’Epargne Foundation have joined the<br />
other nine foundations already in the umbrella<br />
organization. The first of these new foundations<br />
is the Caisse d’Epargne Val de France-Orléanais<br />
Foundation and the second, created in response<br />
to an idea developed by Professor Etienne-Emile<br />
Baulieu and named Fondation Vivre Longtemps<br />
(or the Long Life Foundation) is dedicated<br />
to research into the prevention of ageing and<br />
to the struggle against all the different forms<br />
of old age-related dependence.<br />
At the request of the Foundation, the first barometer<br />
survey of family solidarity in France was carried out<br />
in 2006 by the CRÉDOC – the Research Centre for the<br />
Study and Monitoring of Living Standards – in partnership<br />
with the magazines Notre temps, Seniorscopie.com<br />
and Phosphore. Despite the rise in individualism,<br />
the dispersion of families and geographical mobility,<br />
inter-generational assistance is still a widespread practice<br />
benefiting both the younger and older, more elderly<br />
and dependent members of the family. This research<br />
was published in the CRÉDOC’s monthly newsletter<br />
– Consommation et Modes de Vie (no. 200, February 2007).<br />
Known as the Diagonales seminars, these<br />
meetings provide an opportunity for a great many<br />
prominent figures and representatives from<br />
the healthcare and social welfare sectors to meet,<br />
discuss and exchange their different points of view<br />
regarding major challenges facing society. The<br />
most recent Diagonales seminar in October 2006<br />
was devoted to solidarity between the generations;<br />
the next meeting, held in May 2007, focused on<br />
the struggle against economic exclusion.<br />
Ambitious targets for 2010<br />
As a continuation of its rapid development, the<br />
Caisses d’Epargne Foundation for Social Solidarity<br />
has set itself three targets for 2010:<br />
• 10,000 places in its different establishments to<br />
satisfy the needs of the elderly, infirm or disabled<br />
and to enhance their autonomy;<br />
• 10,000 elderly, disabled or infirm people offered<br />
care in their own homes by the Foundation’s services;<br />
• 10,000 young people offered assistance every year<br />
within the framework of the Savoirs pour réussir<br />
program designed to combat illiteracy.<br />
The resources of the Caisses d’Epargne<br />
Foundation for Social Solidarity<br />
in millions of euros (2006, provisional figures)<br />
A contribution to the debate<br />
over the major challenges facing society<br />
Twice a year, the Caisses d’Epargne Foundation<br />
for Social Solidarity organizes a series of meetings<br />
devoted to each of its two key areas of activity:<br />
the autonomy of the elderly, infirm or disabled,<br />
and the struggle against social exclusion, notably<br />
via the campaign to promote literacy.<br />
104
SUSTAINABLE DEVELOPMENT<br />
The general public-interest, a<br />
preoccupation central to the Group’s<br />
activities since its creation, lends<br />
particular significance to its more<br />
general drive in favor of sustainable<br />
development, an approach that forms an<br />
integral part of the bank’s 2004-2007 strategic plan.<br />
The deployment of this approach is based on a<br />
national steering committee and a new Sustainable<br />
Development and General Interest division created<br />
within the CNCE in 2006 and reporting directly to<br />
the senior management team in order to put<br />
sustainable development at the very heart<br />
of all the business activities pursued by the Group.<br />
This division enjoys the support of a network<br />
of sustainable development managers in each<br />
Groupe Caisse d’Epargne entity.<br />
The programs adopted all satisfy three priority<br />
objectives: environmental protection (which includes<br />
real estate and contributes to the creation of “green”<br />
products for the benefit of its customers), socially<br />
responsible investment (SRI), and integration through<br />
employment.<br />
Protecting the environment…<br />
A trial carbon audit scheme – known as the Bilan<br />
Carbone ® – has been launched by the CNCE,<br />
the Caisse d’Epargne Provence-Alpes-Corse and<br />
the Caisse d’Epargne des Alpes. Developed by<br />
the French Environment and Energy Management<br />
THE GUIDE TO<br />
ECO-RESPONSIBLE<br />
PRACTICES<br />
IN THE OFFICE<br />
Designed with<br />
the WWF, of which<br />
the Group is a<br />
partner, this guide<br />
contained on a<br />
CD-ROM is circulated<br />
to the head offices<br />
and branches by the<br />
Group’s sustainable<br />
development managers.<br />
ENERGY<br />
EFFICIENCY OF<br />
BUILDINGS<br />
Energy efficiency<br />
is enhanced by<br />
the appropriate<br />
choice of materials<br />
and equipment, and<br />
building insulation.<br />
Agency (ADEME), this carbon audit quantifies direct<br />
or indirect emissions of six greenhouse gases for<br />
a given activity or site. Bilan Carbone ® audits will be<br />
continued throughout the Caisses d’Epargne network<br />
in 2007.<br />
Employees’ business travel accounts for a major<br />
proportion of greenhouse gas emissions. The CNCE<br />
has adopted a tool designed to calculate the amount<br />
of emissions related to the organization of major<br />
meetings, and provides a number of recommended<br />
ways to reduce their number. This tool was applied<br />
for the first time to the seminars staged in Lyon by<br />
the Retail Banking arm in November 2006 attended<br />
by some 2,000 employees.<br />
The Group applies environmental quality standards<br />
in its new buildings – such as the headquarters of<br />
the Caisse d’Epargne de Bourgogne Franche-Comté<br />
– and in its renovation operations. These standards<br />
are based on the High Environmental Quality (HEQ)<br />
benchmark.<br />
The Group’s subsidized housing subsidiaries,<br />
supported by the Foundation’s pilot projects, make a<br />
considerable effort to improve the quality and energy<br />
efficiency of their housing units when they are first<br />
designed and during their subsequent renovation.<br />
The CNCE’s procurement and general services<br />
division takes account of sustainable development<br />
criteria in the selection, referencing and tracking<br />
of its suppliers. It also includes HEQ requirements<br />
in building specifications and proposes standards<br />
to facilitate the selection of environmentally<br />
responsible products.<br />
105
7<br />
CHAPTER<br />
SOLIDARITY<br />
& SOCIAL<br />
COMMITMENT<br />
… and helping our customers to do the same<br />
Working in partnership with the European<br />
Investment Bank or the French Environment and<br />
Energy Management Agency (ADEME) where<br />
appropriate, the Caisses d’Epargne offer<br />
advantageous financing packages to local authorities<br />
involved in projects contributing to sustainable<br />
development. As no. 1 partner to social housing<br />
bodies, they raise awareness about the importance<br />
of environmental quality in new buildings and<br />
renovation projects.<br />
The Group lends its support to ADEME in the<br />
deployment of the Bilan Carbone ® Collectivités<br />
scheme – the carbon audit tailored for local<br />
authorities – which allows local government to take<br />
account of greenhouse gas emissions in their<br />
various investment decisions.<br />
THE CHILDREN’S APPEAL FOR THE ENVIRONMENT<br />
The Group teamed up with this operation launched by<br />
the WWF in 2006 under the aegis of the French Ministry<br />
of National Education, Higher Education and Research.<br />
A total of 25,000 schools entered the competition to<br />
create a poster to illustrate the topic of “water and<br />
solidarity”. Several French savings banks supported this<br />
project by offering the prize-winning pupils teaching<br />
manuals designed by the WWF. At the same time, the<br />
children of Group employees were invited to create a<br />
work devoted to the topic of “Water, Life, Mankind”.<br />
For its business customers, Caisse d’Epargne<br />
continued to roll out its Cordé sustainable<br />
development self-diagnosis tool developed with<br />
Vigeo, an extra-financial social responsibility rating<br />
agency. Twelve Caisses d’Epargne have already<br />
launched Cordé or plan to do so in 2007.<br />
In 2006, Ecureuil Crédit Développement Durable,<br />
a sustainable development credit facility, was<br />
launched for individual customers. This loan can be<br />
used to finance the acquisition of a clean or<br />
eco-friendly vehicle (based on criteria drawn up by<br />
ADEME) and work undertaken to achieve savings<br />
in energy consumption, eligible for French tax relief.<br />
Project financing and development<br />
of socially responsible investment<br />
Groupe Caisse d’Epargne is one of France’s<br />
most active banks regarding the financing<br />
of infrastructure projects, a great many of which<br />
help to protect the natural environment.<br />
106<br />
This is the case with tram systems, wind farms or<br />
the construction of high speed rail links that cause<br />
less pollution than cars or planes.<br />
A pioneer in the area of socially responsible<br />
investment (SRI) with its Insertion Emplois (Job<br />
Integration) mutual fund, the Group further expanded<br />
its offering in this area in 2006 with the creation of its<br />
Insertion Emplois Equilibre fund. Just like its equitybased<br />
counterpart, this fixed-income, diversified<br />
management product makes it possible to invest up<br />
to 10% of the fund in unlisted companies working in<br />
the “solidarity” economy, selected by France Active.<br />
Several Group entities also manage funds dedicated<br />
to socially responsible investment, notably in areas<br />
related to water, new sources of energy and<br />
the treatment of waste.<br />
Promoting integration through employment<br />
Groupe Caisse d’Epargne is extremely active in<br />
the area of integration through employment through<br />
its écureuil & solidarité local and social economy<br />
projects, which devoted more than €21 million to this<br />
area in 2006. This approach is based on partnerships<br />
forged with the principal support bodies in France.<br />
In this respect, 2006 was marked by the launch of<br />
a series of Parcours Confiance (Trust Approach) social<br />
support initiatives, combined with the possibility of<br />
credit facilities. An agreement was signed with the<br />
Caisse des Dépôts to allow the Social Cohesion Fund<br />
to underwrite these subsidized loans.<br />
Almost €22m<br />
devoted to<br />
integration through<br />
employment in 2006<br />
Within the Group itself, the increase in the number<br />
of disabled employees, and the drive to keep<br />
employees who develop disabilities in employment, are<br />
the object of a major effort. A Disability and Diversity<br />
Taskforce created in the CNCE and 40 disability<br />
correspondents in the Group’s different companies are<br />
responsible for promoting and giving tangible<br />
expression to action in this area.<br />
In 2006, a national agreement in favor of the<br />
employment of the disabled was finalized. Apart from<br />
setting aside 170 additional positions for the disabled,<br />
this agreement also provides for the adaptation of<br />
training programs, personalized assistance for each new<br />
recruit, experimental modifications of work stations to<br />
facilitate the integration of employees who are partially<br />
sighted or hard of hearing, and a greater contribution to<br />
the training of young people with disabilities with student<br />
grants, the reception of interns, and the donation of<br />
equipment to schools and universities.
CORPORATE PHILANTHROPY AND SPONSORSHIP<br />
Caisse d’Epargne is a major partner of<br />
national, regional and local sporting<br />
activities. It focuses its attention<br />
on popular sports, accessible to<br />
the greatest number, notably football,<br />
athletics, jogging and cycling. As far<br />
as the sponsorship of cultural activities and our<br />
heritage is concerned, the Group is the sole patron<br />
of the Belem, France’s last surviving merchant<br />
sailing ship, and the long-standing partner of the<br />
International Comic Book Festival in Angoulême.<br />
Supporting accessible and popular sports<br />
The Group has been a partner of the French<br />
athletics movement since 1978, supporting both the<br />
French Athletics Federation and the French team. It is<br />
also a founding partner and sponsor of the Destination<br />
Athlé 2012 project, an ambitious federal program<br />
designed to detect and support the new athletic talents<br />
of the future. Several Caisses d’Epargne, as well as the<br />
CNCE, provide direct financial support for a number of<br />
athletes and two training squads. The French savings<br />
bank also supports more popular forms of athletics.<br />
Under the Esprit Running label, it is one of the<br />
foremost partners of jogging in France, sponsoring<br />
more than 300 races including the Paris Marathon<br />
and the Caisse d’Epargne Lyon Marathon.<br />
Since 2003, the Group has helped to support major<br />
popular sports by becoming an official partner of<br />
the France Football Cup, the most highly prestigious<br />
event in the French football calendar. It also supports<br />
the best amateur clubs entering this competition<br />
with the Caisse d’Epargne Trophy.<br />
In 2006, the Group continued to back the Caisse<br />
d’Epargne-Illes Balears cycling team, which,<br />
since 2007, has been racing under the colors of its<br />
principal sponsor, Caisse d’Epargne. The team<br />
ended the year at the top of the combined UCI<br />
ranking, reasserting its position as one of the<br />
major, front-running teams worldwide. Two of its<br />
members distinguished themselves in particular:<br />
Oscar Pereiro came second in the Tour de France<br />
and Florent Brard was 2006 Champion of France<br />
in the road-racing category.<br />
Corporate sponsorship: long-term commitments<br />
For 27 years, Groupe Caisse d’Epargne has been<br />
the patron of the Belem, the last living testimony<br />
to the French fleet of ocean-going trading vessels<br />
in the 19 th century.<br />
In acknowledgement of this commitment,<br />
Charles Milhaud was awarded the Remarkable<br />
Patronage Medal by the French Minister of Culture<br />
and Communication.<br />
Created in 1979, the Belem Foundation<br />
– state-approved – operates the ship, which was<br />
classified as an historical monument in 1984.<br />
Equipped as a civilian training ship, the Belem<br />
welcomes trainees and companies for six months<br />
of the year to discover the know-how and traditions<br />
of the great sailing vessels of the past.<br />
The 110 th anniversary of the Belem was celebrated in<br />
several French ports in 2006. This anniversary was also<br />
marked by the creation of the Belem Prize for Maritime<br />
Authors, attributed this year to Isabelle Autissier and<br />
Jean-Pierre Mélis, and by the publication of the first<br />
comic book based on the history of the ship, created by<br />
the Belgian graphic artist Jean-Yves Delitte.<br />
As the no.1 bank for young people, Caisse<br />
d’Epargne has also been a partner, for the past<br />
22 years, of the Angoulême International Comic<br />
Book Festival, an event that has become the world’s<br />
leading festival in this area. The bank supports<br />
young creative artists at this festival, and has been<br />
sponsoring the national schools comic book<br />
competition since it was first created.<br />
Several Caisses d’Epargne at a regional level also<br />
lend their support to major events devoted to this<br />
literary genre, whose popularity continues unabated<br />
in France. In 2006, the Group also sponsored<br />
the second Fête de la BD (Comic Book Festival) in<br />
partnership with the French Publishers Association.<br />
Several Groupe Caisse d’Epargne companies pursue<br />
their own sponsorship programs such as, for example,<br />
IXIS CIB, one of the foremost patrons of the Quai Branly<br />
museum of indigenous arts, or the financial support<br />
provided by several regional Caisses d’Epargne and<br />
Group companies that allowed the Splendeur de Venise<br />
1500-1600 (Splendor of Venice, 1500-1600) exhibition to<br />
be staged in Bordeaux and Caen.<br />
107
108<br />
Enhanced<br />
financial<br />
strength
SIMPLIFIED<br />
FINANCIAL<br />
STATEMENTS<br />
Groupe Caisse d’Epargne boasts extremely strong growth in its annual<br />
results for 2006. Net banking income, up by 13.4%, rose to a total<br />
of €11.3 billion. Consolidated net income doubled in size, increasing<br />
to €3.8 billion.<br />
The Group’s financial strength has been reinforced with consolidated<br />
equity of €20 billion, providing it with one of the best Tier One ratios<br />
in the French banking industry, at 8.7%. The €7 billion consumed<br />
by the withdrawal of the Caisse des Dépôts from the Group’s capital<br />
has already been restored.<br />
109
IFRS CONSOLIDATED BALANCE SHEET<br />
of Groupe Caisse d’Epargne<br />
ASSETS<br />
in millions of euros Dec. 31, 2006 Dec. 31, 2005<br />
Cash and amounts due from central banks and post office banks 5,048 8,288<br />
Financial assets at fair value through profit or loss 69,831 128,694<br />
Derivatives used for hedging purposes 3,291 3,696<br />
Available-for-sale financial assets 51,115 51,310<br />
Loans and receivables due from credit institutions 147,073 178,807<br />
Loans and receivables due from customers 230,184 203,660<br />
Remeasurement adjustment on interest-rate risk hedged portfolios 167 580<br />
Held-to-maturity financial assets 4,846 2,162<br />
Current and deferred tax assets 1,485 2,182<br />
Accrued income and other assets 17,352 27,157<br />
Investments in companies accounted for by the equity method 3,140 2,729<br />
Investment property 808 447<br />
Property, plant and equipment 2,771 2,499<br />
Intangible assets 402 379<br />
Goodwill 2,198 1,983<br />
Total assets 539,711 614,573<br />
LIABILITIES AND EQUITY<br />
in millions of euros Dec. 31, 2006 Dec. 31, 2005<br />
Due to central banks and post office banks 258 47<br />
Financial liabilities at fair value through profit or loss 53,122 131,833<br />
Derivatives used for hedging purposes 2,867 2,741<br />
Due to credit institutions 71,908 98,798<br />
Due to customers 206,241 218,633<br />
Debt securities 134,396 102,533<br />
Remeasurement adjustment on interest-rate risk hedged portfolios 238 333<br />
Current and deferred tax liabilities 709 480<br />
Accrued expenses and other liabilities 25,107 25,470<br />
Technical reserves of insurance companies 11,291 1,506<br />
Provisions for contingencies and charges 2,870 3,211<br />
Subordinated debt 10,245 8,509<br />
Consolidated equity 20,459 20,479<br />
Attributable to equity holders of the parent 20,032 19,965<br />
Share capital and additional paid-in capital 3,955 6,069<br />
Retained earnings 10,425 10,351<br />
Net income for the period 3,832 1,780<br />
Unrealized or deferred gains and losses 1,820 1,765<br />
Minority interests 427 514<br />
Total liabilities and equity 539,711 614,573<br />
110
IFRS CONSOLIDATED STATEMENT OF INCOME<br />
of Groupe Caisse d’Epargne<br />
in millions of euros 2006 2005<br />
Interest and similar income 23,778 20,089<br />
Interest and similar expense (19,515) (16,006)<br />
Commission income 5,265 4,609<br />
Commission expense (916) (795)<br />
Net gains or losses on financial instruments at fair value<br />
through profit or loss 1,628 1,200<br />
Net gains or losses on available-for-sale financial assets 641 525<br />
Income from other activities 1,379 1,255<br />
Expense on other activities (940) (897)<br />
Net banking income 11,320 9,980<br />
Operating expenses (8,058) (7,257)<br />
Depreciation, amortization and impairment of property,<br />
plant and equipment and intangible assets (420) (442)<br />
Gross operating income 2,842 2,281<br />
Cost of risk (23) (150)<br />
Operating income 2,819 2,131<br />
Share in net income of companies accounted for by the equity method 407 274<br />
Net gains or losses on other assets 2,009 137<br />
Changes in value of goodwill (3) (1)<br />
Income before tax 5,232 2,541<br />
Income tax (1,281) (683)<br />
Net income 3,951 1,858<br />
Minority interests (119) (78)<br />
Net income attributable to equity holders of the parent 3,832 1,780<br />
111
IFRS CONSOLIDATED BALANCE SHEET<br />
of CNCE Group<br />
ASSETS<br />
in millions of euros Dec. 31, 2006 Dec. 31, 2005<br />
Cash and amounts due from central banks and post office banks 3,989 7,419<br />
Financial assets at fair value through profit or loss 64,374 123,976<br />
Derivatives used for hedging purposes 3,105 3,570<br />
Available-for-sale financial assets 29,890 31,701<br />
Loans and receivables due from credit institutions 132,120 157,533<br />
Loans and receivables due from customers 114,398 96,632<br />
Remeasurement adjustment on interest-rate risk hedged portfolios 149 577<br />
Held-to-maturity financial assets 2,713 281<br />
Current and deferred tax assets 549 1,220<br />
Accrued income and other assets 12,521 22,615<br />
Investments in companies accounted for by the equity method 4,591 6,393<br />
Investment property 512 118<br />
Property, plant and equipment 1,160 1,050<br />
Intangible assets 277 256<br />
Goodwill 2,179 2,051<br />
Total assets 372,527 455,392<br />
LIABILITIES AND EQUITY<br />
in millions of euros Dec. 31, 2006 Dec. 31, 2005<br />
Due to central banks and post office banks 229 4<br />
Financial liabilities at fair value through profit or loss 52,963 132,205<br />
Derivatives used for hedging purposes 2,749 2,667<br />
Due to credit institutions 101,232 127,476<br />
Due to customers 27,441 44,136<br />
Debt securities 133,626 102,131<br />
Remeasurement adjustment on interest-rate risk hedged portfolios 166 137<br />
Current and deferred tax liabilities 360 446<br />
Accrued expenses and other liabilities 20,092 21,556<br />
Technical reserves of insurance companies 11,217 1,434<br />
Provisions for contingencies and charges 716 705<br />
Subordinated debt 10,789 8,813<br />
Consolidated equity 10,947 13,682<br />
Attributable to equity holders of the parent 10,583 13,201<br />
Share capital and additional paid-in capital 6,561 9,298<br />
Retained earnings (699) 1,415<br />
Net income for the period 3,299 1,130<br />
Unrealized or deferred gains and losses 1,422 1,358<br />
Minority interests 364 481<br />
Total liabilities and equity 372,527 455,392<br />
112
IFRS CONSOLIDATED STATEMENT OF INCOME<br />
of CNCE Group<br />
in millions of euros 2006 2005<br />
Interest and similar income 17,261 13,445<br />
Interest and similar expense (16,301) (12,813)<br />
Commission income 3,140 2,630<br />
Commission expense (818) (690)<br />
Net gains or losses on financial instruments at fair value<br />
through profit or loss 1,498 1,169<br />
Net gains or losses on available-for-sale financial assets 279 341<br />
Income from other activities 1,038 890<br />
Expense on other activities (712) (599)<br />
Net banking income 5,385 4,373<br />
Operating expenses (4,044) (3,337)<br />
Depreciation, amortization and impairment of property,<br />
plant and equipment and intangible assets (187) (172)<br />
Gross operating income 1,154 864<br />
Cost of risk 88 (5)<br />
Operating income 1,242 859<br />
Share in net income of companies accounted for by the equity method 692 462<br />
Net gains or losses on other assets 2,406 136<br />
Changes in value of goodwill (43) (1)<br />
Income before tax 4,297 1,456<br />
Income tax (878) (251)<br />
Net income 3,419 1,205<br />
Minority interests (120) (75)<br />
Net income attributable to equity holders of the parent 3,299 1,130<br />
113
You would like<br />
further details?<br />
The Group’s institutional website: www.groupe.caisse-epargne.com<br />
The reference document: the annual report may be consulted on the website, where orders<br />
for printed copies may also be placed.<br />
The Sustainable Development report: this document may be consulted on the website.<br />
Orders for printed copies may be placed with the Direction du Développement durable et<br />
de l’Intérêt général – CNCE, 50, avenue Pierre-Mendès-France, 75201 Paris Cedex 13 – France.<br />
The Observatoire Caisse d’Epargne 2007: les PME, les entrepreneurs et leurs territoires<br />
(SMEs, entrepreneurs and their local dimension). Orders for printed copies may be placed<br />
on the site.<br />
114
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; CNCE, External Communications Department.<br />
Photos: Alastair Miller – Pascal Dolémieux/Rapho – Getty Images – Corbis – Sylvain Modet<br />
– Damien Chavanat – Erick Saillet for Lyon Confluence – Musée du Quai Branly – Stevens Frémont –<br />
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This label certifies that forest management techniques comply with the requirements of sustainable development.
CAISSE NATIONALE DES CAISSES D’EPARGNE<br />
50, avenue Pierre-Mendès-France – 75201 Paris Cedex 13 – France<br />
Tel.: (33) 1 58 40 41 42 – Fax: (33) 1 58 40 48 00<br />
Website: www.groupe.caisse-epargne.com<br />
A limited liability company governed by a Management Board and a Supervisory Board<br />
(Société anonyme à directoire et conseil de surveillance)<br />
Head office: 5, rue Masseran – 75007 Paris – France<br />
Share capital of €5,985,452,644.50<br />
Registered in Paris under registration number: 383 680 220