Home French banking sector Overview Overview of the french banking industry  
 
 
 

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28 may 2015

Overview of the french banking industry

The banking sector is one of the leading private economic sectors in France. In January 2015, the French banking industry numbered 383 banks.

 
  • The contribution of finance corporations to the total value added in France is 4.9%, including approximately 60% for the banking industry(1). There are five French banks among the 35 largest banks in the world in terms of Tier 1 capital(2).


  • The results of the combined asset quality assessment and stress testing, conducted by the European Banking Authority and the European Central Bank, demonstrate the high level of capitalisation of French banks. The aggregate common equity Tier 1 capital (CET1) of French banks, calculated according to CRD IV/CRR rules, stands at 11.3% and is projected at 9% in 2016 under a stressed scenario, which places them among the most resilient banks in the eurozone.


  • The six largest French banking groups reported excellent financial performance in 2013:
    • total net banking income of 136.5 billion euros (+1.1% compared to last year), of which retail banking activities account for 71.2%;
    • total cost of risk of 15.7 billion euros, down 2.7%;
    • group net income has more than doubled, rising from 8.4 to 18 billion euros (Chart 1).


    French banks are contending with a general economic downturn, a growing number of international and European regulatory requirements and heavier tax burdens.



Chart 1 - Aggregate financial performance of the largest french bankins groups (in billions of euros)
  • Aggregate core shareholders' equity for the main French banking groups increased by 32% between the end of 2008 and the end of 2013 (Chart 2).

  • Return on equity (ROE) of large French banks (5.9% at the end of 2013) remained lower than that before the financial crisis and that for large French companies (6.6%(3)). It has recovered faster than the ROE of European banks (3.3%), but still remains lower than that of American banks (8.1%) (Chart 3).

  • The banking industry employed more than 370,000 people at the end of 2013, representing 2.3% of the private workforce in mainland France. The workforce declined in 2012 and 2013 due to restructuring of some activities, regulatory restrictions and the growth of digital banking. Nevertheless, the banking sector continues to recruit (24,000 new hires in 2013), and 6 out of 10 new hires are employed on permanent employment contracts compared to 2 out of 10 at the national level.

  • French banks dedicate nearly 4% of their payroll to occupational training, compared to an average of 2.8% among corporations.

  • Employee shareholding is highly developed in the three largest quoted banking groups, with an average capital interest of 5.7% (7.6% voting rights) at the end of 2013.



Chart 2 - Core tier 1 capital of the largest french banking groups and Chart 3 - return on equity of the main worldwide banking groups

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(1) INSEE, National Accounts, base 2010

(2) The Banker, July 2014, Top 1,000 World Banks

(3) Banque de France, Companies observatory

 
 
 
 
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