Crédit Agricole: The question of 14 listed entities reopened by an activist investor

A case of blatant economic sub-optimization within a group that has performed relatively well so far? Crédit Agricole, the world's tenth-largest bank, is once again being challenged over its unique structure, which sees 14 listed entities bearing its name on the Paris Stock Exchange. This time, however, the challenge comes backed by a serious, data-driven argument.

In a series of posts published on LinkedIn, investor and finance professor Pascal Quiry challenges a model he deems value-destructive, calling for a wake-up call amongst stakeholders. Quiry emphasizes that he decided to delve into this matter in his capacity as an active investor, rather than in his roles as a finance professor at HEC or co-author of the financial "bible," the Vernimmen. Having invested in the "Green Bank's" listed entities since 2022, he has even become president of the National Association for the Defense of Holders of CCI of the listed Regional Banks of Crédit Agricole (ANDP-CCI). We will explain what CCIs are shortly. But first, we must address the organization of the Crédit Agricole Group, which is no small feat.

What exactly is Crédit Agricole?

Unlike BNP Paribas or Société Générale, whose listed structures reflect a fairly monolithic classical reality (a company and its direct shareholders, whether institutional or individual), Crédit Agricole is a complex web, both in terms of scope and ownership. Bear with us a moment as we attempt to make this as simple as possible.

The Crédit Agricole Group is a cooperative and mutualist institution comprising Crédit Agricole SA, the regional banks, the local banks, their subsidiaries, and the National Federation of Crédit Agricole.

The first complication is that the Crédit Agricole Group is not the listed entity. The listed entity is Crédit Agricole SA (CASA), which encompasses the group's specialized and international activities. Amundi, CA Assurances, Indosuez, CACIB, real estate, international retail banking and leasing all fall under CASA.

However, French retail banking is housed within the 39 regional banks. These 39 regional banks own CASA via SAS Rue La Boétie (which holds 63.5% of CASA). They also hold, via the 100%-owned SACAM Mutualisation, 25% minority stakes... in the capital of all the regional banks. In other words, a substantial self-control loop. We warned you. Group cohesion is ensured by a political body, the National Federation of Crédit Agricole (FNCA).

To spice things up, there are a few exceptions. For instance, LCL, which is undeniably a French retail banking entity, is part of CASA because it was not distributed among the regional banks at the time of its acquisition. Another example: the Regional Bank of Corsica is majority-owned by CASA, not just at 25%.

This brings us to the second complication, which is the source of Pascal Quiry's and several minority shareholders' grievances: 13 of the Regional Banks are listed on the stock exchange, while 26 are not (or no longer).

To summarize, the Crédit Agricole Group is not listed in Paris, but it has 14 listed structures bearing its name (16 in reality, including Amundi and the Monegasque subsidiary Groupe Indosuez Wealth Management, although they do not use the family name and are not the focus today).

Unacceptable levels of profitability

One of the grievances developed in the ongoing series of posts (the 5th of which will be revealed on Saturday) is that these listed regional banks show returns on equity limited to 2%-3% for 2025 and trade at a discount of approximately 75% to their book value. These poor performances place them amongst the lowest-valued banks in Europe. Since 2012, they are estimated to have destroyed nearly €23bn in value, according to the calculations presented, notably due to a policy of earnings retention far exceeding industry standards.

At the heart of the problem lies what is considered an excessive level of capital. With CET1 ratios near 26%—almost double the levels seen in their competitors—these entities are accumulating equity that they use neither to significantly increase credit production nor to reward their investors. A large portion of these surpluses is placed in the low-yield money market, which mechanically weighs on their profitability and fuels the stockmarket discount.

This situation is part of an atypical capital architecture, as described previously. In the current organization, part of the regional banks' excess capital contributes indirectly to the prudential strength of Crédit Agricole SA, whose CET1 ratio is more constrained, without explicit compensation for the minority shareholders of the listed entities. Added to this is a mutualist culture historically unfavorable to dividend distribution, which is out of step with the practices of the group's listed holding company.

Finally, the current structure raises questions of equity among investors. Instruments with identical economic characteristics, such as listed CCIs (similar to shares but without voting rights) and unlisted cooperative associate certificates (CCA), can show very significant valuation gaps depending on the regional bank, fueling a sense of unequal treatment. In this context, Pascal Quiry believes that a simplification of the model—which could involve delisting certain entities or better capital allocation—could be considered without compromising the group's financial strength, while redirecting several billion euros toward the real economy.

To round up, "Crédit Agricole" listed entities:
Crédit Agricole SA (ACA)
CRCAM Alpes-Provence (CRAP)
CRCAM Atlantique Vendée (CRAV)
CRCAM Brie Picardie (CRBP2)
CRCAM Ille-et-Vilaine (CIV)
CRCAM Languedoc (CRLA)
CRCAM Loire Haute-Loire (CRLO)
CRCAM Morbihan (CMO)
CRCAM Nord de France (CNF)
CRCAM Normandie-Seine (CCN)
CRCAM Paris et Île-de-France (CAF)
CRCAM Sud Rhône Alpes (CRSU)
CRCAM Toulouse 31 (CAT31)
CRCAM Touraine Poitou (CRTO)