Annual report 2009 - Crédit Mutuel · 2 Crédit Mutuel Annual report 2009 3 Chairman's message 3 ... Board of Directors of Confédération nationale du Crédit Mutuel 8 ... A decentralised

Annual report 2009

Annual report

2009

Contents Chairman's Message

2 Crédit Mutuel Annual report 2009 3

Chairman's message 3

GROUP PROFILE 4

Business profile, 2009 7Board of Directors of Confédération nationale du Crédit Mutuel 8

CRÉDIT MUTUEL, THE MUTUAL BANK 10

A decentralised structure 14Governance and membership 16A pro-active human resources policy 18La Fondation du Crédit Mutuel 20Banking for all members of society 24

RESULTS AND KEY FIGURES 26

BANKINSURANCE 34

One of France's leading retail banks 38The preferred bank of private individuals 40A key player in housing finance 42A dedicated offer for young people 44The leading bank for non-profit associations 46Number three for SMEs 48At the cutting edge of technology 50The challenger in the farming sector 51Retail banking subsidiaries 52

Insurance 56

OTHER ACTIVITIES 60

Corporate and investment banking 62Asset management and private banking 65Technological services 68

FINANCIAL REPORT 72

Board of Directors' management report 76Financial statements 101Notes to the financial statements 108

Independent Auditor’s report 164

2 0 0 9

Development, solidity and identity

Crédit Mutuel withstood the crisis intact. While subject to a certain, controlled impact,above all it showed determination by affirming its ability to grow and taking the necessarystrategic decisions.

It contributed to the financing of the economy, notably by supporting households, self-employed professionals and SMEs by offering a range of increasingly competitivebankinsurance products to its members and customers.

It developed its new technologies, mobile telephony and electronic money and paymentsactivities, and tested numerous new remote payment solutions to facilitate banking for its customers, all the time remaining true to its commitment to local banking.

It expanded its local mutual bank and branch network, saw new interfederal partnershipsemerge and promoted internal sharing of applications to help cut costs.

Lastly, it acquired Targobank (formerly Citibank Deutschland) and Cofidis, and grew its international insurance business, thus increasing the proportion of business doneoutside France from 5% to 17%, while developing its consumer credit activities.

This commitment to growth relies on the group’s increased solidity: it now has €29.6 billion of capital and an 11.8% Tier 1 ratio. This financial profile makes it the only French bank with unchanged credit ratings and one of the eurozone’s most highly rated institutions.

At the same time, the Crédit Mutuel group has once again shown the strength of its cooperative business model. Thanks to its democratic governance structure, its regional organisation based on a network of 2,045 local mutual banks run by 24,000 unpaid elected directors, and its staff’s responsiveness and ability to providesolutions, it was able to fulfil its role of economic support by, as always, helping its 23 million members and customers to realise projects and overcome difficulties. At a deeper level, the long-lasting relationship of trust and closeness it has built with these customers was once again recognised with the year’s top award for customerrelations from BearingPoint-TNS Sofres.

The end of 2009 sees the group’s choices vindicated: the strategic choice to extend its scope for growth, and the choice to be a mutual bank upholding the values of responsibility and solidarity. Every day, its directors and employees make Crédit Mutuel what it is as they work to serve its members and customers and help them build their future.

Etienne PFLIMLIN

Leading the way in banking technology

The branch network is supported by a compre-hensive multi-channel banking offer based on cutting edge technology. In 2009, remotebanking clocked up over a billion contacts, morethan half of them via the Internet.

The group is gaining prominence in upcomingfields such as mobile telephony, which providesanother channel for bankinsurance, bankingservices and electronic payments, which are keyEuropean markets.This new strategic direction broadens thegroup’s know-how and expertise, adding highlyinnovative services that bolster its leadershipposition.

It ranks number two in France in electronic payments, with a 20.1% share of the overall market and a 26% share among retailers.

A solid, highly rated bank

The crisis has not dented the group’s financialstrength, and its 11.8% Tier 1 ratio is one of thebest among French banks.

Despite an economy marked by falling demandand increased risk, Crédit Mutuel is the only Frenchbank to have had all its ratings maintained.

It was the first bank to repay state aid in September2009 and remains one of the eurozone’s mosthighly rated issuers, with an A+/A-1 rating andstable outlook from Standard & Poor’s. BanqueFédérative du Crédit Mutuel, the holding companyfor the Centre Est Europe group and a directshareholder of CIC, is rated Aa3/P1 by Moody’sand AA-/F1+ by Fitch.

Annual report 2009 5

The Crédit Mutuel group, which is one of France's leading bankinsurers, comprises the Crédit Mutuel branch network and all the bank’s subsidiaries.

The group offers a comprehensive range of financial expertise to its 23.3 million customers, which include 21.4 million retail customers.

Its overriding priority, and the key to its development, is the quality of its customer relationships and services.

Its strategy is one of controlled growth centred on local retail banking, bankinsurance and technological excellence.

The group focuses on closeness to the customer, combining the strengths of Crédit Mutuel – a cooperative, mutual bank with extensive regional and local ties - with those of CIC, a commercial bank.

Crédit Mutuel and CIC – the group’s two leading brands – combined with the 2008 acquisitions of Targobank (formerly Citibank Deutschland) and CIC Iberbanco and the 2009 acquisition of Cofidis have a network of almost 6,000 points of sale.

Crédit Mutuel is composed of local mutual banks organised into 18 regionalfederations, which in turn form the Conféderation Nationale du Crédit Mutuel,the central body that heads the network.

CIC operates a branch network in the Paris region and is the holding companyfor a group of five regional divisions, along with subsidiaries specialised in all areas of finance and insurance.

The group now carries out nearly a fifth of all its business abroad.

Group profile

4 Crédit Mutuel

2 0 0 9

“The Crédit Mutuel Group comprises the Crédit Mutuel branch network

and all the bank’s subsidiaries”

Financial structureIFRS (in € billions)

30.6

25

Shareholders’ equity(of which, group share)

2007 2008 2009

26.9

26.4 24.7 29.6

Tier 1 ratio

9.6% 9.8%11.8%

+22%

+20%


A bank with stronger international presence

Whether in financing, insurance or electronicpayments and wherever in the world they are based, Crédit Mutuel is always there for itscustomers.

Adding to existing operations in Europe, NorthAfrica, the United States and Asia and CIC’s 40or so foreign branches, over recent months thegroup has realised a number of major strategicgoals abroad.

By acquiring Citibank Deutschland, renamedTargobank, at the end of 2008, Crédit Mutuelaffirmed its European development strategy invarious retail banking fields – consumer credit inparticular – and in insurance and internationalfinancial services. The acquisition also opens upa second domestic market in Germany.

The group’s acquisition of a controlling interestin Cofidis in 2009 gives it a firm foothold in theEuropean consumer credit market, where it nowranks fourth.

The creation of RACC Seguros, a joint holdingof Assurances du Crédit Mutuel (ACM) and RoyalAutomobile Club de Catalogne, has strengthenedthe group’s Spanish insurance division.

Crédit Mutuel also acquired Banco Popular Español’s French subsidiary, renamed CIC Iberbanco, and is negotiating commercial cooperation agreements with this group.

This controlled development opens up a muchbroader avenue of growth for the group andconfirms its position as a major bank both inFrance and elsewhere in Europe.

www.creditmutuel.comwww.cic.fr

6 Crédit Mutuel

Business profile,2009

Net banking income: €13.6 billionNet profit, group share: €1,831 million

Shareholders’ equity: €29.6 billionTier 1 ratio: 11.8%

5,831 points of sale*72,465 employees

23.3 million customers

Customer deposits amounting to €543.8 billionLoans amounting to €304.2 billion

A leading retail bankinsurance player in France

17.5% market share in loans11.9% market share in deposits

N° 1 bankinsurer in non-life insuranceN°1 bank for non-profit associations and works councils

N° 2 bank in electronic bankingN° 2 bank for the farming sector

N° 3 bank in housing loansN° 3 bank for the SME sector

N° 3 banking network for consumer credits

N° 4 bankinsurer for life insurance

Un émetteur de qualité

Standard & Poor’s : A+/A-1with a stable outlook for Crédit Mutuel

Fitch : AA-/F1+ with a stable outlook for BFCM and CIC

Moody’s : Aa3/P1 with a stable outlook for BFCM and CIC

* of which 5,441 in France

Annual report 2009 98 Crédit Mutuel

Auguste Jacq,Vice-Chairman of Crédit Mutuel BretagneRonan Le MoalChief Executive Officer of Crédit Mutuel ArkéaJean-Luc MenetChief Executive Officer of Crédit Mutuel Océan

Albert Peccoux,Chairman of Crédit Mutuel Savoie-Mont Blanc

Jean-Noël Roul,Vice-Chairman of Crédit Mutuel Loire-Atlantique et Centre-Ouest

Denis SchitzVice-Chairman of Crédit Mutuel Centre Est Europe

Eckart Thomä,Chairman of Crédit Mutuel Normandie

Christian Touzalin,Chairman of Crédit Mutuel Sud-Ouest

Michel Vieux,Chairman of Crédit Mutuel Dauphiné-Vivarais

Joseph Vrignon,Chairman of Crédit Mutuel Océan

Christine Zanetti,Chief Executive Officer of Crédit Mutuel Loire-Atlantique et Centre-Ouest

The following also sit on the Board:

Michel Lucas, Chief Executive Officer

Daniel Baal, Deputy Chief Executive Officer

Alain Fradin, Deputy Chief Executive Officer

Gilles Le Noc,Corporate Secretary

Other directorsJean-Louis Boisson,Vice-Chairman of Crédit Mutuel Centre Est Europe

Eric Charpentier,Chief Executive Officer of Crédit Mutuel NordEurope

Jacques Chombart,Vice-Chairman of Crédit Mutuel Agricole et Rural

Gérard Cormorèche,Chairman of Crédit Mutuel Sud-Est

Louis Crusol,Chairman of Crédit Mutuel Antilles-Guyane

Roger Danguel,Director of Crédit Mutuel Centre Est Europe

Jean-François Devaux,Chairman of Crédit Mutuel Massif Central

Pascal Durand,Chief Executive Officer of Crédit Mutuel Maine-Anjou, Basse-Normandie

Bernard Flouriot,Chairman of Crédit Mutuel Anjou

Jean-Louis Girodot,Chairman of Crédit Mutuel Ile-de-France

André Halipré,Vice-Chairman of Crédit Mutuel Nord Europe

BureauChairmanEtienne Pflimlin, Chairman of Crédit Mutuel Centre Est Europe

Deputy ChairmanGeorges Coudray, Honorary chairman of Crédit Mutuel Bretagne

Vice-ChairmanChristian Péron, Chairman of Crédit Mutuel Agricole et Rural

Chief Financial OfficerPhilippe Vasseur, Chairman of Crédit Mutuel Nord Europe

Group SecretaryPierre Filliger, Chairman of Crédit Mutuel Méditerranéen

Other members of the BureauMichel Bokarius,Director of Crédit Mutuel Centre Est Europe

Gérard Bontoux,Chairman of Crédit Mutuel Midi-Atlantique

Alain Delserieys,Deputy Chief Executive Officerof Crédit Mutuel Centre Est Europe

Jean-Pierre DenisChairman of Crédit Mutuel Bretagne

François Duret,Chairman of Crédit Mutuel Centre

Daniel Leroyer,Chairman of Crédit Mutuel Maine-Anjou, Basse-Normandie

Alain Têtedoie,Chairman of Crédit Mutuel Loire-Atlantique et Centre-Ouest

Bureau: Philippe Vasseur (1), Alain Têtedoie (2), Daniel Leroyer (3),François Duret (4), Pierre Filliger (5), Christian Péron (6), Alain Delserieys (7), Michel Bokarius (8), Gérard Bontoux (9), Etienne Pflimlin (10), Georges Coudray (11) and Jean-Pierre Denis (12).

Board of Directors of Confédération nationale du Crédit Mutuel as at 30 May 2010


The Group's main entity, Crédit Mutuel, is a cooperative bank under the 10 September 1947Act governing French cooperatives. It belongsexclusively to its members, who own its capital and determine its strategy within a framework of democratic governance.

THE mutual bank

A cooperative bank belongs exclusively to its members

As a mutual bank, Crédit Mutuel places its members, who are both co-ownersand customers, at the heart of all its decisions. Its growth is exclusively basedon its founding values of solidarity, responsibility, equality, closeness andtransparency.

These values have the same strategic importance for the bank as servicequality. They are the Crédit Mutuel hallmarks, and they testify to the relevanceof its business model in modern France.

At end-2009, Crédit Mutuel had 7.4 million members and 12.1 million customersin more than 2,000 local mutual banks run by 24,000 member-electedrepresentatives.

To serve its customers and society, Crédit Mutuel's strategy combinessustainable development and solidarity1. Historically, the bank has played a key social role, notably through its action in support of society’s mostvulnerable members.

Crédit Mutuel is a company based on people rather than capital. It is not listedon the stock exchange. Because it plays an important role in the socialeconomy, its sustainable development strategy is not bound by an all-outquest for short-term profitability. Sound management, crucial to thecompany’s durability, is not geared towards the enrichment of a group ofshareholders: rather it serves to ensure growth and first-rate service qualityin the most cost effective way.The shares held by members constitute the capital classed as Tier 1regulatory capital. They can be redeemed only at their face value. As a financial cooperative, Crédit Mutuel is inalienable, meaning it canneither be sold nor taken over; it can be wound up only on the decision of its members. Its decentralised organisation encourages staff to become more involvedat every level, be it local, regional or national, thus enhancing the group’sresponsiveness and service quality. It makes possible short decision-makingcircuits, better risk diversification and a highly effective control system.

(1) Crédit Mutuel's Corporate Social Responsibility (CSR) report is available on www.creditmutuel.com.

Every year, 20,000 board and supervisory board meetings and 2,000general meetings take place in the 2,045 local mutual banks, of which morethan a third are located in rural areas. These meetings aim to assemble 10%of members; they provide a basis for truly democratic corporategovernance. The local mutual banks are organised into 18 regionalFederations, which in turn are part of the national Confederation.

Crédit Mutuel’s three levels operate according to the principle ofsubsidiarity, the local mutual banks – which are closest to members and customers – carrying out all the key functions of bank branch offices,and the other two levels exercising only those functions for which the localentities are not equipped.

The governing bodies are made up of representatives of the bank'smembers, from the level of local general meetings – where they elected on a “one person one vote” basis – right up to the Board of Directors at national level.

With its solid local base, Crédit Mutuel cannot be moved offshore and stands as an independent entity that contributes to job creation and economic vitality in all the areas in which it operates.

12 Crédit Mutuel

Crédit Mutuel - THE mutual bank


2,045 local mutual banks3,329 branches

12.1 million customers,including 11 million privateindividuals

7.4 million members

24,000 directors

41,000 employees**in Federations and subsidiaries(not including CIC, Targobank and Cofidis)

THE CRÉDIT MUTUELNETWORK

“Crédit Mutuel is a company based on people rather than capital.

It is not listed on the stock exchange.”

The national confederation andthe central financing bankThese bodies make up the third and top level of organisation.

The Conféderation Nationale or nationalconfederation, which has the legal status of a non-profit organisation, is the central bodygoverning the network under the Banking Act of 1984. The 19 Fédérations and the Caisse Centrale duCrédit Mutuel are affiliates of the ConféderationNationale, which represents Crédit Mutuel vis-à-vis the authorities and is responsible fordefending and promoting its interests.The Conféderation Nationale also oversees theproper operation of its member establishments,supervises the regional groups and ensures the overall cohesion of the network, as well as co-ordinating business development andproviding shared services.

The Caisse Centrale, or central financing bank,manages treasury for the regional groups and organises the pooling of Crédit Mutuel's financial resources. Its capital is jointly ownedby the Caisses Fédérales.


2,045 local mutual banksThe first level of organisation is made up oflocal mutual banks, or caisses locales, whichhave the legal status of cooperative companieswith variable capital (sociétés coopératives à capital variable). These are credit institutionsgoverned by French banking law, with the capital owned by their members, who are both shareholders and customers. Financiallyindependent, the local mutual banks take deposits, distribute loans and provide a fullrange of banking services. Most decisions concerning customers are taken at this level.Each local mutual bank is governed by a boardof directors and/or a supervisory board, madeup of unpaid members elected at generalmeetings on a “one person, one vote” basis.In all, there are more than 2,000 local mutualbanks, whose 24,000 directors represent 7.4 million members.

A decentralised structure

18 regional groupsAt the next level up, there are 18 regional groups,each of which comprises a regional federationand a federal bank or caisse fédérale (or an interfederal bank or caisse interfédérale, as is thecase for the Centre-Est-Europe, Ile-de-France,Sud-Est, Savoie-Mont Blanc and Midi-Atlantiquefederations; the Bretagne, Massif Central and Sud-Ouest federations; and the CréditMutuel Méditerranéen and Dauphiné-Vivaraisfederations).

The local mutual banks and the federal bank, of which they are shareholders, are members of a regional federation.The regional federation is responsible for strategyand supervision, and represents Crédit Mutuel inits region.The federal bank is responsible for functions suchas cash management and providing technicaland IT services.The federation and the federal bank are governedby boards elected by the local mutual banks.

In addition to the 18 regional federations, thereis a federation with nationwide scope specificallyfor the farming sector – Crédit Mutuel Agricoleet Rural (CMAR).

14 Crédit Mutuel


7.4 million members

12.1 million customers

3,329 branches including

2,045 local mutual banks

18 regional groups(Fédérations and Caisses Fédérales)

1 farming federation (CMAR)

Confédérationnationale

Caissecentrale

Crédit Mutuel’s customers(millions)

12.112.0

Customers

Members

2007 2008 2009

11.0

7.1 7.2 7.4

+1.3%

+1.6%

Crédit Mutuel’s network

3,3293,285

Branches

Local mutual banks

2007 2008 2009

3,151

1,988 2,017 2,045

+1.3%

+1.4%

Participation and democracyParticipation and democracy are the cornerstoneof Crédit Mutuel’s operation as a cooperative.The 7.4 million Crédit Mutuel members supervisethe management of the local mutual banks and elect the directors at general meetings, ensuring genuinely democratic governance.

The 24,000 elected voluntary directors presentat all three levels of the organisation - local, regional and national - are responsible for the group’s management and supervision. Attentive to the needs and aspirations of themembers they represent, these directors arethemselves committed, active members andparticipate in the administration of the localmutual banks alongside the employees. Asmembers of the local communities, they alsoexemplify the values that Crédit Mutuel standsfor, and help to ensure their implementation.The 41,000 Crédit Mutuel staff members are responsible for implementing companystrategy and operating the business under thesupervision of the elected directors.

Business operationThe decentralised structure with decision-making processes at regional and local level favours entrepreneurship, a sense of personalresponsibility and team spirit.The ties between the local mutual banks and the regional federations and banks ensure thecohesion of the various entities as regionalgroups that operate as fully-fledged credit institutions within the framework of French banking regulations.

The regional groups cooperate freely to ratio-nalise resources and costs through technicalpartnerships, notably in areas such as informationtechnology and financing. Other avenues for cooperation are provided by the Caisses Inter-fédérales serving more than one regional bankand by joint subsidiaries in insurance, leasing,factoring, corporate banking, investment banking,asset management and private banking.

Regional groups’ membership of the Con-fédération Nationale and the Caisse Centrale ensures cohesion and shared responsibility atnational level.

As the central body for the whole Crédit Mutuelgroup, the Confédération Nationale approvesappointments to management positions and regional audit teams in the regional federations,and takes all necessary steps to ensure thegroup’s proper operation, with responsibility foroverall control and the coherence of businessdevelopment.

Jointly with Internal Control committees at regionalfederation level, the Confédération Nationalereviews audit reports and reports its findings tothe boards concerned. The Confédération Nationale's Board of Directorscomprises representatives of all the regional federations, elected by the general meeting ofConfédération Nationale shareholders.The general meeting also elects the Chairmanand Deputy Chairman for five years. Mutual members are thus represented at all threelevels of the organisation through the directorsthey elect.

“One person, one vote”

The Annual General Meetingsthat members and customers of the local mutual banks are invited to attend each year are the basis of Crédit Mutuel'sdemocratic structure. Generalmeetings provide members witha special opportunity to meet thebank’s directors and employeesand learn more about the business and express their ownviews. They also offer a forumfor suggestions and discussionof ways to enhance services, reflecting the values that distin-guish Crédit Mutuel from otherbanks.Required items on the agendainclude a report on the man-agement and activities of themutual and on its specific actionas a cooperative bank, leadingup to approval of the financialstatements and the election ofdirectors on the basis of oneperson, one vote. A second partof the meeting is devoted to thepresentation and discussion ofcurrent themes and events.Some 500,000 members attendthe regional and local annualmeetings held between Februaryand May.


Governance and membership

16 Crédit Mutuel


As a mutual bank, Crédit Mutuel receives capital contributions throughsubscriptions to member shares (1) that earn interest at a fixed rate set by the general meeting of member shareholders, who are associates and co-owners of the local mutual bank.

Reserves serve to back the shared obligations of members and as securityfor deposits. They are also used to finance long-term development.

At the end of 2009, Crédit Mutuel member shares represented a total of €8.4 billion, up 29.6% compared with the previous year, while dividendspaid to members had risen by 30% to €294 million, representing nearly35% of the net earnings of the core cooperative business carried out by the local mutual banks and Caisses Fédérales.

(1) 'A' shares are those shares initially subscribed to by persons wishing to become members of a local mutual bank and toacquire the right to vote at general meetings on a “one person, one vote” basis.'B' shares represent additional amounts paid in by members. They earn dividends but carry no voting rights.

“Decisional power at Crédit Mutuel is determined not by the number of shares

owned but by membership, on a “one person, one vote” basis”


The marked rise in the number of Crédit Mutuelgroup employees (up by 6,857, or 10.5%, to 72,465) mainly reflects recent acquisitions.At constant scope the headcount rose by 0.4%.

To keep pace with its robust growth and antici-pate future needs, Crédit Mutuel recruited 1,574 people in 2009 (excluding CIC).The vast majority of these new hires were newlyqualified students in branch based sales posts.The average headcount in 2009 was 41,000*.

Nearly 1,000 vocational training contracts were signed, enabling over 350 young peopleat Bac to Bac +2 level to move rapidly to account manager posts for retail or professionalcustomers, while just over 600 ongoing trainingprogrammes helped experienced staff train in new disciplines.

A pro-active human resources policy

Crédit Mutuel provides staff members withtraining opportunities throughout their careers,reflected by a training budget equivalent in2009 to almost 5% of the payroll.

The group has set up an internal labour statisticsdatabase. This will notably contain group-widejob stratification data and comparative datarelating to the number of men and women employed, in application of the gender equalityagreement signed by the Crédit Mutuel divisionin March 2007.

Following the signing in 2008 of a frameworkagreement for the employment of people withdisabilities, at the end of 2009 the group signedan equivalent agreement for seniors.

18 Crédit Mutuel

The marked rise in the number of Crédit Mutuel group employees (up by 6,857, or 10.5%, to 72,465) mainly reflects recent acquisitions. At constant scope the headcount rose by 0.4%.

Agreement for the employment of seniorsThe negotiations on employment of seniors started at the beginning of 2009 and concluded in December with an agreement signed by half of Crédit Mutuel’s employee representative bodies.

This agreement reflects the government’s efforts to encourage the employment of seniors inFrance and is part of a three-yearly negotiation obligation covering forward jobs and skillsmanagement for employees in the latter stage of their career.

It also provided a wealth of additional data for Crédit Mutuel’s employment database, in the form ofindicators for age groups up to 60 years and above covering workforce structure, recruitments anddepartures, pay, promotion, professional training, etc.

This framework agreement is separate from the obligation created by the 2009 Social SecurityFunding Act (LFSS), which, from 1 January 2010, requires all regional groups to have in place anagreement or action plan for seniors, complete with figures and targets, failing which they are liablefor a penalty equivalent to 1% of the total payroll.


* Federations and subsidiaries but excluding CIC, Targobank and Cofidis

“Nearly 1,000 vocational training contracts were signed in 2009”

Combating illiteracyMaking people understand the importance of reading first involves getting them to want to read, which means offering children and their families access to the knowledge that willstimulate their curiosity and help them developintellectually. Such is the challenge faced by associations working to combat illiteracy. Theyfocus on providing people with quality books andliterature, targeting childcare establishments,hospitals, street corners, prison workshops andrural areas, which they visit in mobile libraries.

The Foundation has long been involved in harnessing this ground-level energy and poolingand promoting local efforts. It has actively supported – at the launch and on an ongoingbasis – the “Quand les livres relient” (“the bindingpower of books”) network, which has become anational benchmark thanks to its work on youthliterature. In parallel the Foundation remainsattentive to the needs of people experiencinglanguage learning difficulties and supportsFrench language-based training programmesdesigned to help people back into work. Indeed, with 38 initiatives sponsored in 2009,this is the Foundation’s most active area of engagement.

‘Lire la Ville’A town's architecture and spatial structure andfeatures can, like any landscape, be read justlike a book – provided you know the relevantcodes.This was the principle – along with the host ofplayers that such an idea makes it possible to bring together, such as students, teachers,writers, historians, architects and those with an interest in a town’s cultural life – that led the Foundation to design and put in place theLire la Ville programme in 1993.

The Foundation has well established partnershipswith the regional educational authorities ofStrasbourg, Rouen, Clermont-Ferrand andLimoges, and in 2009 extended this model, incollaboration with the Crédit Mutuel regionalfederations, to the Lille, Bordeaux, Nice andMarseille areas.


Crédit Mutuel runs an innovative corporatesponsorship programme through its regionaland national foundations under the aegis of the new Fondation du Crédit Mutuel, which wascreated in early 2009 and oversees the variousstrands of the group’s patronage initiatives atnational level:- promoting the reading and use of French in all

its forms through the Fondation du CréditMutuel pour la Lecture,

- combating financial and social exclusion,- implementing independent, sustainable banking

networks in developing countries throughfunding of the Centre International du CréditMutuel (CICM).

These initiatives demonstrate the group’s ongoingcommitment to ground-level social solidarity.

A unique corporate patronage initiative in France: la Fondation duCrédit Mutuel pour la LectureAwareness raising, help with reading and writing,innovative learning methods, a non-profit network

Fondation du Crédit Mutuel, a new framework for broadercorporate sponsorshiphttp://fondation.creditmutuel.com

to prevent illiteracy, social insertion programmesand fostering openness to literary culture areall initiatives that the Crédit Mutuel ReadingFoundation has been pursuing for nearly 20years. The Foundation seeks to give childrenand marginalised population groups or peoplein difficulty access to knowledge and to help allpeople of all ages feel supported, encouragedand understood and so become confident,knowledge-hungry and responsible citizens.In 2009, the Foundation sponsored almost 90 initiatives. Its budget is supplemented bycontributions from Crédit Mutuel Enseignantand any of the 18 Crédit Mutuel federations orlocal mutual banks that choose to support localvoluntary projects. Priority is given to long-term initiatives on theground drawing active support from people inevery part of Crédit Mutuel.The year 2009 was marked by the launch of the Foundation’s first international project, in association with the Trait d’Union associationin Madagascar. This association has sent brandnew French language books to the country andsuccessfully set up 21 village libraries. These facilities cater for nearly 250,000 Malagasychildren, adolescents and young adults every year.The Foundation helps to train the librarians andsupport staff.

20 Crédit Mutuel

“Books tell a different story for every reader”

Alberto Manguel


More than 5,000 school children nowtake part in the scheme, at the end ofthe school year presenting the workthey have done in the form of plays,3D exhibitions, alphabet charts andphoto stories.A ten-year-old offshoot of Lire la Villeis Lire le Théâtre (“read the theatre”),which involves regular sessions with producers, playwrights and actorsproviding older school children with an approachto the theatre based on curiosity, freedom ofexpression and sharing.Reading workshops linked to teaching pro-grammes enable pupils to discover classical andcontemporary theatre in a way that connectswith their everyday lives. In 2009, the Foundation supported a nationalinitiative undertaken by the Ecrivains associésde théâtre (“writer friends of the theatre”)group, which is helping train pupils from Paris,Créteil, Bordeaux and French Guyana in theatre arts.

The power of literatureThe Foundation’s participation in national andregional festivals gives people everywhere – children in particular – the chance to becomeinvolved in France’s literary life.Reflecting its keenness to make reading an instinctive activity, it supports groups that carryout year-round projects related to literary festivals, such as writing competitions, readingaloud workshops and meetings with writers.One such initiative is the flagship Incorruptiblesawards, in which 160,000 pupils from nearly3,000 schools across France read books selected according to their respective levelsbefore voting for their favourite.

Development aid through Centre International du Crédit Mutuel (CICM)Active for some 30 years in building mutualbanking networks in developing countries, CentreInternational du Crédit Mutuel (CICM) continuesto work to promote access to banking servicesfor all.

It works in several areas: extending banking services to communities as a means of improvingtheir welfare, helping to develop the local socio-economic fabric, disseminating the cooperativemodel and its democratic values, and prom-ulgating professional savings and credit management.

This non-profit association, to which the 18 CréditMutuel regional federations contribute, works toset up independent, sustainable cooperativenetworks in countries where individuals cannotalways access existing banking services. Its aim is to help local populations to take chargeof their own development by enabling them to create their own cooperative networks forsavings and credit.

CICM's approach is based on Crédit Mutuel'sguiding principles: the responsibility of its members,the use of voluntary directors and a communityapproach that gives priority to local bankingservices.

In often unstable political and economic environments, the CICM networks enable localpeople to protect their assets, build up personalsavings and fund work projects.

Through the provision of tailored banking services, these cooperative networks make amajor contribution to the development of localeconomies by fostering social cohesion and thesettlement of nomads. CICM's operations are financed by the federations with contributionsfrom external sponsors.


Research, social assistance initiatives and promotion of cooperativesPart of Fondation du Crédit Mutuel’s remit is toforge partnerships with research organisations,or think tanks, and to invest in research intoeconomics and finance. In this role it worksalongside such entities as Institut français desrelations internationales (IFRI), ConfrontationsEurope, Fondation Robert Schuman, the FrenchEuropean Movement, Semaines sociales deFrance, the European League for Economic Cooperation, Centre interprofessionnel derecherche en droit bancaire de l’université de Lyon 3 (Lyon University interprofessionalbanking law research centre), Centre des pro-fessions financières and Institut de l’Entreprise.

The foundation is dedicated to supporting workin the social economy and cooperative fields,such as that of Réseau national des Juniors Associations, France générosité and Semainede la coopération. Likewise, it provides fundingfor initiatives in connection with its partnershipswith Adie, for publications such as Revue desétudes coopératives, mutualistes et associa-tives (Recma) and for Fonda projects and initiatives linked to specific organisations suchas Groupement national de la coopération(Gnc) and Finansol.

By supporting these research groups throughcontributing to the financing of specialisedstudies, Crédit Mutuel helps raise awarenessconcerning banking, cooperative ventures andsocial aid.

22 Crédit Mutuel


New shared tools to assist the networks

2009 saw the launch of the CICMnetwork’s new information systemenabling centralised transactionmanagement. This paves the wayfor implementation of a real-timemanagement control application.

Project Afric@rte was also launchedin the MUCODEC banks last year.Initially, the card will replace the account book and serve as a meansof identifying members who visit thebank. It will then be incorporatedinto the group’s long-term project toimprove access to banking servicesvia the installation of ATMs in CICMbranches.ATMs will be installed in the MUCODECbanks in 2010 as part of a globalplan covering all CICM networks.

In response to the massive destruc-tion caused by the earthquake of 12 January 2010, Crédit Mutuel harnessed its resources in a show ofsolidarity for the Haitian people.

It focused on practical measures,providing immediate relief for urgentneeds as well as helping with morelong-term rebuilding projects.

It worked toward two major objectives:carrying out short-term repair workand providing logistical assistanceat the French hospital in Port-au-Prince, and helping with longer-termplanning work and the constructionof 154 housing units in Titanyn.

Working under the aegis of Fondationde France, Fondation du Crédit Mutuelcentralises donations from groupentities and members via its website,which also enables it to keep conti-nuous track of the use of collectedfunds.

http://fondation.creditmutuel.com

The CICM is active in seven african and asian countries- Central African Republic through Crédit Mutuel

de Centrafrique,

- Cameroon through Mutuelle de développementet d’investissement du Cameroun (MdiC),

- Republic of the Congo through Mutuelles congolaises d’épargne et de crédit (MUCODEC),

- Niger through Crédit Mutuel du Niger (CMN),

- Burkina Faso through Crédit Mutuel du BurkinaFaso (CMBF), a new project which aims to recruit7,500 members over the next five years,

- The Philippines through the Mutual Saving andCredit Cooperative of Philippines (MSCCP), and

- Cambodia through the Crédit Mutuel Savingsand Credit network (CMSC).

it was set up and in 20091 it financed 9% of alllending by this organisation, which granted1,300 loans averaging €2,318, representing atotal of €3 million.

For over 20 years, the group has been workingwith France Initiative, the leading network ofassociations set up to promote local economicdevelopment that handles 17% of bank-financedbusiness start-ups in France. The group is activelyinvolved with over 60% of its local initiativeplatforms and a member of its "Entreprises"collegial body of partner companies. In 2009,it lent nearly €139 million via the network, repre-senting over 18% of its overall financing volume.

Crédit Mutuel also works alongside the FranceActive network, which offers grants and loansto initiatives aimed to promote economicallydriven social integration. It sits on half of the organisation’s financing committees, and in2009 backed 16% of the guarantees extended,representing a commitment of almost €9 million.

Members in financial difficulty:specific assistance programmesCrédit Mutuel’s social assistance converts wordsinto action. Through its regional federations,the group runs a number of initiatives, of whichseveral are described below. They offer a dailyreminder of the group’s commitment to itsmost vulnerable members.

Since 1986, the Association de gestion du fondd’entraide du Crédit Mutuel de Bretagne(CMB) has been providing aid to membersfaced with loan repayment difficulties resultingfrom unforeseen circumstances. The associationcovers up to 75% of instalments for a period of upto 12 consecutive months, with a maximum of€16,000 available per borrower or household.

Operational since 2006 in Lille, Caisse Solidairedu Crédit Mutuel Nord Europe was created toenable people to re-enter the banking systemafter being excluded from it, and to providebasic financial services to people with little moneyor who are encountering temporary difficultiesdue to their professional situation or to healthor other problems.

It grants micro-loans of €500 to €2,000, repayable over six to 24 months and at marketrates, and can in some cases finance the pur-chase of subsidised housing.

This entity works in partnership with a numberof aid organisations, some of which have a seaton its Board of Directors.

At the end of 2007, Crédit Mutuel Maine-AnjouBasse-Normandie set up Crédit Mutuel Solidaire(CMS), which acts both as a social aid fund anda micro-credit organisation. Its primary aim is to support members in difficulty who havepersonal recovery projects by helping them toobtain aid from the specialised associationsand bodies with which CMS has partnershipagreements.CMS works closely with the local mutual banks,which are responsible for identifying the potentialpartner associations and handling relations withthese partners with help from CMS. Repaymentson loans granted, which amount to between€500 and €4,000 over six to 48 months, cannotexceed €100 per month.

In early 2008, the Nantes federation set upCréavenir Budget, a special initiative to helpcustomers with payment difficulties. Aimed atlocal members only, this association is a vehiclefor the group’s “individual solidarity micro-credit”programme, and aims to support those in financialdifficulty by providing budget management advice and help with certain administrative procedures. In doing this, the group – while notseeking to act as a substitute social securitysystem – shows its commitment to seeking solutions that require input from its directorsand employees. Créavenir Budget relies on twovoluntary directors for each area, with one employee per area acting in a consulting role.The Economic and Social Action task force(AES) is responsible for coordinating the scheme.

Since the second half of 2009, the Ark'ensolassociation has housed Crédit Mutuel Arkéa’ssolidarity-oriented initiatives, and it is now theone-stop entity for all the group’s social under-takings.There are two specialised sub-associationsworking under the Ark'ensol banner: Ark’ensolCréavenir and Ark’ensol Entraide. The first, whichis continuing in another form the work done by Créavenir, provides business start-up assis-tance, while the second - a continuation of the social aid fund – helps families in difficulty.


Social micro-credit Crédit Mutuel assists the most vulnerable sectionsof the population by extending micro-creditwithin the framework of partnerships.More than 100 experimental projects are underway throughout France through regional orlocal partnerships with social and insertion assistance organisations such as SecoursCatholique, COORACE, UDAF and a number ofother family-oriented social aid networks such asADMR, Familles Rurales, Emmaüs and Restos duCœur, together with neighbourhood agencies,local employment agencies, community socialaid centres (CCAS) and local social integrationorganisations.

The goal is to develop a joint approach to helpingpeople in difficulty implementing a project that willenable them to find a job. By opening accountsfor them and extending loans that are partlyguaranteed by the Fonds de Cohésion Sociale(French social aid fund), Crédit Mutuel enablesthem to regain access to the banking systemand to become regular bank customers onceagain.

Crédit Mutuel assumes 50% of the risk on theseloans.

Banking for all members of society

The Fonds de Cohésion Sociale (and SecoursCatholique for its own network) covers the remaining risk under an agreement signed in January 2006 with Caisse des Dépôts etConsignations.

These loans, for amounts ranging between€500 and €3,000, are granted to people who do not have a chequebook, have little or noaccess to credit, have no stable employment or are living on social welfare but are activelylooking for work.

Since its launch in 2006, Crédit Mutuel hasbeen responsible for granting over 16% of allmicrocredits distributed via this system, while in2009 it funded 13% of the total.

Professional micro-creditIn 2009, the group financed €151 million in loansthrough three networks: Association pour leDroit à l’Initiative Economique (ADIE), FranceActive and France Initiative.

Crédit Mutuel has been a partner of Adie, thepioneer of micro-lending in France, ever since

24 Crédit Mutuel


More than a year after an unprecedented economic and financial crisis that caused turmoil on a global scale, the group’s choices - its commitmentto strategic development and its decision to operate as a cooperative,mutual bank - have been vindicated.

It leads the way in promoting social cohesion, as can be seen in its responsibleinitiatives and solidarity-driven goals, implemented directly on the ground.

Its initiatives cater for the needs of the most vulnerable members of society:it operates a low-income and business microcredit activity, for example,both directly and in close cooperation with integration assistance andsocial aid networks. Crédit Mutuel underwrites 50% of the risk associatedwith loans granted under such schemes.

It also offers a special assistance programme for members facing financialdifficulties.

Spanning past and present and embodying commitment for the future, the ethic of social responsibility is the cornerstone of the group’s actions,the driving force behind a socially supportive, responsible bank.

A socially supportive bank

Crédit Mutuel helps develop social ly beneficial savingsschemes through two Finansol*-accredited products: Livretd’épargne pour les autres(LEA) and Crédit Mutuel FranceEmploi.

Launched in 2006 and graduallyrolled out by all Crédit Mutuelregional federations, the LEAoperates like a traditional savingsaccount but with an interest-sharing component.

Crédit Mutuel France Emploi isa mutual fund (FCP) allowingholders to donate half of the interest income they earn to the France Active association.The association uses these fundsto grant loans to business start-ups by unemployed people or toinject core funding into socialenterprises, such as integrationinitiatives and intermediation andresidential services companies.

* This professional association, of whichCrédit Mutuel is a founder member, is a federation of organisations that provide finance for social aid initiatives.Its aims are to support and promote the principle of socially beneficial savingand financing, to coordinate the collectionand investment of related funds and to guarantee the social usefulness and transparency of accredited financialinvestments.


Despite a downbeat and still very competitive environment in the retail banking market, Crédit Mutuel’s net profit, group sharecame in at €1,831 million, the third highest among French banks.This takes into account the Cofidis and Monabanq takeovers and 11/12ths of that of Targobank, and is 4.2 x higher than in 2008(4.4 x excluding acquisitions).

2009 results

26 Crédit Mutuel


A good year for resultsDespite the particular economic and financialcontext, marked not only by a confidence crisisbut also by a contraction of investment expen-diture and loan requests, most of the group’sdivisions recorded stronger performances andhelped make 2009 a good year in terms ofboth growth and earnings.

The defining features of the year were sustainedgrowth and new acquisitions, with a significantexpansion of the group’s European banking andinsurance activities. The year should be assessed in light of the majorchanges in consolidation scope brought aboutby the acquisitions of Cofidis, Monabanq and LaFrançaise des Placements, together with thefirst-time consolidation of Banca popolare diMilano and the full-year impact of the integrationof Citibank Deutschland, or, as has it has beenknown since February 2010, Targobank.

Net banking income rose by 61.1%, or 37.5%excluding acquisitions*, to €13,573 million. Thiswas due to the combined effect of the interbankmarket’s normalisation, increased fee incomeand new acquisitions.The 14.6% increase in net income from non-banking activities, of which net income from

insurance accounts for 89%, underscores onceagain the strength of the bankinsurance model.Net income from securities and derivativestransactions (€586 million) clearly reflects the normalisation of market conditions, whichbenefited players industry wide.

Retail bankinsurance, the group’s core businessline, accounted for 82% of overall net bankingincome. It totalled €11,822 million, comprising€10,500 million in retail banking and €1,322million in insurance. The contribution by corporateand investment banking activities represented12.7% (€1,832 million), while the asset manage-ment and private banking arm accounted for 3.5% (€512 million) and other activities 1.8% (€258 million).

The increase in operating expenses to€8,368 million (+25.3%, +8.2% excluding acquisitions*) stems largely from the wideningof the group’s consolidation scope through acquisitions and the creation of new local mutualbanks and branches. They increased at a slowerrate than net banking income, a testament toefficient management and sustainable growth.Pay-related expenses rose by 3.4% at constantscope. Employee incentive payments and profitsharing also increased sharply, reflecting thegroup's higher earnings.

28 Crédit Mutuel

2009 Results

In an environment marked by a fall-off in financing applications, a normalisation of financial markets and increasing credit risk, the groupturned in a resilient, efficient performance on behalf of all its customers. Its dynamism enabled it to embark on a period of European growth in bankingand insurance, a new strategic direction which gives it a broaderdevelopment sphere.

The network’s vitality and the quality and depth of the group’s banking and insurance offer enabled it to win new customers and increase market share,once again demonstrating the strength of its bankinsurance model.

With almost €30 billion of shareholders’ equity, group share, the bank has increased its financial solidity, with an 11.8% Tier 1 capital ratio that placesit in the upper echelons of French banks.

The combination of strong revenues and efficiently controlled overheadsresulted, despite a rise in the cost of risk, in a marked improvement in the cost-to-income ratio: at 61.6% it is back at the 2007 level, reflectingwell controlled growth.

With solid revenues, a high savings rate and providing constant support to all economic players, Crédit Mutuel stands as a major banking player on the French and European stage, providing its services to over 23 millioncustomers.

(1) figures excluding acquisitions, at constant scope, i.e. based on the group’s balance sheet not taking into account Cofidis, Monabanq and 11/12ths of Targobank’s contribution, and thus reflecting the situation as in 2008.

at 31 December 2008 2009€ millions IFRS IFRS

Total assets 581,709 579,038

Shareholders’ equity 25,036 30,619- of which attributable to group 24,676 29,616

Tier 1 solvency ratio 9.8% 11.8%

Customer deposits 478,194 543,766o/w- Deposits 197,219 219,279- Debt securities issued 199,712 235,130- Insurance-linked savings 81,264 89,357

Outstanding loans 295,497 304,153

Net banking income 8,424 13,573

Operating expenses (6,677) (8,368)

Gross operating profit 1,747 5,205

Cost of risk (1,405) (2,370)

Operating profit 342 2,835

Pre-tax profit 409 2,742

Income tax 33 -860

Net profit 442 1,882

Net profit, group share 440 1,831

Points of sale 5,746 5,831

Customers (millions) 19.5 23.3

Workforce 65,608 72,465

2009 Key figures

International growth:a key year

The proportion of internationalbusiness grew from 5% to 17%under the combined effect oftwo acquisitions:- Citibank Deutschland at the end

of 2008, renamed Targobankin February 2010; and

- Cofidis, in March 2009.

These two acquisitions makeCrédit Mutuel the fourth largestplayer in European consumercredit and strengthen its positionin this market.

The group pursued its growthstrategy in the insurance field withthe creation in Spain of insurancecompany RAC Seguros, the fruit ofan alliance with Royal AutomobileClub de Catalogne.

The group also launched fresh ITprojects in Spain, Morocco andTunisia.


The respective changes in net banking incomeand operating expenses led to a sharp im-provement in the cost-to-income ratio, to 61.6%. It has returned to the 2007 level, reflecting the group’s well controlled growth.

The group tripled its gross operating profit to€5,205 million (x 2.5 excluding acquisitions)thanks to the strong rise in net banking income,which exceeded that of operating expenses.

Net profit, group share came to €1,831 million,despite the increase in the cost of risk. This grewby 68.7%, a significant rise - albeit starting froma very low level prior to 2008 - that is directlyrelated to the economic climate, as the economiccrisis stepped in where the 2008 financial crisisleft off to weigh heavily on the year’s results.

Bankinsurance accounted for 89% of net profitfor a total of €1,629 million, of which €1,042million came from retail banking and €587 mil-lion from insurance.

Corporate and investment banking contributed€733 million (40% of the total), while incomefrom asset management and private bankingtotalled €95 million (5.2%).

Shareholders’ equity, group share stood at€29.6 billion at 31 December 2009, up 20%.

A good year for growthThe difficult economic conditions stimulatedactivity in the branch network, which showedeven greater responsiveness at local, regionaland national level. In an intensely competitive climate, at constantscope Crédit Mutuel won 265,000 new customers,of which 160,000 private individuals. It now hasalmost 16.5 million customers, or 23.3 milliontaking into account those added by Targobankand Cofidis. 85 new local mutual banks andbranches were opened in order to increase thebank’s local reach, bringing the total number ofoutlets to 5,831, of which 5,441 in France.

Alongside the network’s development there was increased sharing of applications betweenthe regional groups. Further interfederal partnerships developed around the Caisses Interfédérales, subsidiaries and work platforms.On 1 January 2009, Crédit Mutuel Midi-Atlantique joined the Caisse Interfédérale comprising the Centre Est Europe, Ile-de-France, Sud-Est and Savoie-Mont Blanc federations, following a partnership agreementsigned the previous year between these fivefederations and the Marseille and Valencegroups, and other similar projects are beingconsidered. Operational development work toincrease CM-CIC Services’ (CCS) productionand logistics capacity also gathered pace.

These developments allowed the group to become more competitive, enhance product andservice quality, control its costs and profitabilityand strengthen and optimise its equity capital.

Total customer deposits increased by 13.7% in 2009, to €543.8 billion.Activity remained upbeat, carried by new deposits (up 11.2% to €219.3 billion, or 6.2% excluding SFEF and acquisitions) and the securities segment (up 17.7% to €235.1 billion).This trend applied for all savings accounts(+2.8%) except for the LDD and the LEP, whichlost some of their attraction on account oflower interest rates and consequently saw aslight contraction. Term deposits continued toincrease (up 16.5% for regulated deposits and18.3% for non-regulated deposits). Life insurance deposits posted a 10% increaseto €89.4 billion, in line with the market.

The securities segment also saw significant inflows for money market funds and benefitedfrom the BFCM and Crédit Mutuel Arkéa bondissues, the growth of employee savings (up 25%)and a positive performance from the CIC securitiescustody activity (up 8%).

30 Crédit Mutuel

2009 Results

Regulatory capital, of which Tier 1as a %

11.8

9.5

Regulatory capital

Tier 1 capital As from 2007 figures have been calculated using themethods laid down in the decree of 20 February 2007(Basel II).

2007 2008(with floor)

2009

11.3

9.6 9.8

12.3

2008(without floor)

12.7 10.9

Cost of risk

2,370

1,405

Overall cost of risk

Cost of customer risk(1) Cost of customer risk excluding collective provisions / average credit outstandings (%)

2007 2008 2009

186

2,072

609

219

Cost of risk(1)

0.19%0.61% (HA* 0.33%)Net profit, group share

(in € millions)

1,831

440

2007 2008 2009

2,730

Cost-to-income ratioIFRS

61.6%

79.2%

2007 2008 2009

61.6%

Net banking incomeIFRS (in € millions)

13,573

8,424

2007 2008 2009

10,56811,579HA*

Retail banking and insurance net banking incomeIFRS (in € millions)

11,822

8,480

Retail banking Insurance

(1) before elimination of inter-sector transactions

2008 2009

9951,322

7,485

10,500

1

1

Total retail bankinsurance(1)

+40.3%HA* +8.6%

+32.9.%

+39.4%

*Excluding acquisitions


These performances boosted fee income, whichwas up 27.8%, or 4.9% excluding acquisitions,to €3,342 million.

The group’s share of the French deposits marketremained relatively stable at 11.9%.

Lending remained upbeat despite the depressedeconomy and the slowdown in demand, leadingto an €8.6 billion, or 2.9% increase in loan outstandings to €304.2 billion, for all financialintermediaries and loan types combined.

Housing loans (up 2.7%) and consumer loans(up 23.5%) performed well thanks to a prudentcredit policy.The outlook for mortgage lending, which wasadversely affected by the weak economic andfinancial environment in the first half, brightenedin the final quarter of 2009 as production rose,while the consumer credit business was helpedby the group’s new acquisitions and contributedto improving its positioning in this field.

While overall outstandings remained stable,corporate lending told a contrasting tale. Microbusinesses and SMEs saw their loan outstandings grow, which was not the most predictable outcome given the year’s economicclimate. The same cannot be said of large caps,however, which resorted more to the bond markets for financing.

Equipment lending increased for companiesacross the board as from October 2009,whereas there was less demand for operatingloans linked in particular to the downturn. Unused authorised credit lines (mainly treasuryfacilities) increased by €2.4 billion, or 12% overthe year, while amounts drawn down fell by €1.5 billion (1.5%), reflecting mainly a 15.6% decrease in cash facilities.

The group increased its market share of bank-distributed loans by 0.6 points to 17.5%.

Insurance came out firmly as the group’s second largest business line, occupying the leadposition in the French bankinsurance marketwith a 4% increase in non-life premium incometo €2.3 billion and the fourth position in life insurance with premium income of €10.1 billion(up 26.4%).The insurance subsidiaries generated total premium income of €12.4 billion (up 21.5%) on 28 million contracts under management (of which 23.8 million in non-life) for more than11 million policyholders (+2.2%).

The group asserted its position in new tech-nologies in 2009.Having been the first bank to offer trade customers secure online payments, the firstFrench bank to trial remote payment by mobilephone as well as the first to develop remotecard payment solutions, Crédit Mutuel now offers,under the NRJ Mobile, Crédit Mutuel Mobile and CIC Mobile brands, a new approach to payment means and services within the frameworkof Europe’s emerging pay-by-mobile market. It released a number of major new products andservices in 2009 giving each customer accessto solutions tailored to his or her needs. This personalised service is also a feature of itsrange of residential and commercial remotesurveillance solutions. With a 30% market shareand 180,000 subscribers the group is numberone in this market.

The group solidly defended its position asFrance’s second biggest provider of electronicpayment systems, where it has a 20.1% overallmarket share and 26% of the retail market.In the area of acquiring, which involves actingas reconciling agent for a service’s payer andsupplier banks, revenues were up by 40%. Thegroup is France's leading and Europe's secondlargest acquirer.

32 Crédit Mutuel

2009 Results

Customers(millions) 23.3

19.5

o/w retail customers

2007 2008 2009

15.0

13.3

17.8

21.4

+19.3%

+20.6%

Network(points of sale)

5,8315,746

2007 2008 2009

5,206

+1.5%

Headcount Average number of employees 72,465

65,608

2007 2008 2009

59,455

+10.5 %(+0.4% excluding acquisitions)

Market share(1) (France)Deposits

11.9%12.0%

(1) excluding repurchase transactions and SFEF

2007 2008 2009

11.5%

53 %

8%

11%

28%

Breakdown of new loans (2009)

Home loansConsumer creditEquipment loans, leases and operating loansOther

40.3%

43.3%

16.4%

Breakdown of customer deposits (2009)

DepositsSecurities segmentInsurance-linked savings

Deposits(€ billions)

543.8

478.2

Customer deposits(1)

Total deposits

Insurance-linked savingsSecurities segment

(1) including short-term notes

2007 2008 2009

482.3

230.5

171.6

80.2

197.2

81.389.4

235.1

219.3

199.7

+13.7%

+11.2%

+10.0%

+17.7%

Market share(1) (France)Loans

17.5%16.9%

(1) excluding repurchase transactions

2007 2008 2009

16.6%

Credit risk

58.6%62.0%

Coverage rate (1)

2008 and 2009 figures reflect the consolidation of Targobank

(1) Excluding collective provisions

2007 2008 2009*

62.4%

Impaired loans

2.4% 3.0%3.6%

The group boostedits position in new

technologies in 2009


Bankinsurance, the group's core business, covers retailbanking and life and non-life insurance activities.

In a depressed economic environment, in 2009 it generated net banking income of €11.8 billion and net profit, group share of €1.6 billion, respectively 82% and 89% of overall net bankingincome and net profit, group share.

Bankinsurance


Bankinsurance

The group assists its customers in all their projects, providingsolutions in the areas of investment and borrowing, electronicpayments and technology, life and non-life insurance, real estate,personal services and wealth management.

One of France’s biggest retail banks and its leading non-lifebankinsurer, the Crédit Mutuel group has over 21 million retailcustomers, including 11.2 million in its life and non-life insurancedivisions. It was to better address these customers’ needs that in the 1970s Crédit Mutuel developed bankinsurance activities,i.e. the sale of insurance products through its bank branches,and it was this same responsiveness that led it to become theleader in remote home surveillance, with a 30% market share.

As a local bank with more than 5,800 branches and almost7,500 ATMs, the group has increased its geographic coveragewith an appropriate balance between physical networks andremote banking technology. It thus offers a truly local bankingservice backed up by state-of-the-art, multi-channel technology:remote banking services alone have now recorded over a billion contacts, more than 50% of them via Internet, an ever expanding channel.

The group is a leader in breakthrough areas such as mobiletelephony, which is a major strategic development priority withinthe context of Europe’s emerging pay-by-mobile market.

The customer relationship is the key to successful development,and in 2009 Crédit Mutuel was once again recognised for its qualityand efficiency in this area.

23.3 million customers ofwhich 21.4 million retailcustomers

11,2 million policyholders and 28 million insurancecontracts

5,831 outlets

7,421 ATMs

1 billion remote bankingcontacts

KEY FIGURES FORBANKINSURANCECrédit Mutuel, number 1 bank

for customer relationships in 2009Good customer relations are crucial for successful development,and Crédit Mutuel was once again recognised for its customerservice quality and efficiency in 2009.

For the second consecutive year, Crédit Mutuel came first inthe BearingPoint – TNS Sofres customer relationship survey (1).These awards differ from others in that businesses are judgednot by panels of experts and professionals but by consumersthemselves.

Le Revenu’s Super Trophée 2009: Crédit Mutuel voted top 1

On 1 September 2009, Crédit Mutuel topped the rankings in the general category of Le Revenu’s SuperTrophée 2009 awards for the best bank.

In the individual categories, which cover lowest prices,best customer service, innovation, property loans, life insurance and fund management, Crédit Mutuelpicked up triple honours:

• first place for innovation,

• second for property loans,

• and third equal with CIC for fund management.

(1) Survey carried out in France in April 2009 on a sample of 4,000 customers and users of more than 100 businesses and organisations in 11 sectors: insurance, automobile, banking, specialised retail,services companies, mass retail, public services, fixed telephony/Internet access providers, mobile telephony, tourism and transport.

“A major retail bank, the group assists its customers in all their projects”

The group continued to develop new productsand services, such as in mobile telephony,where it pressed ahead with the roll-out of itsoffer within the context of Europe’s emergingpay-by-mobile market.

It has continued to diversify its offer so as tomeet all the needs – from the simplest to themost sophisticated – of its retail customersand, more generally, of its various customersegments, i.e. young people, who constituteone of its priority areas of development, but also associations, farmers, self-employed professionals and microbusinesses and SMEs.

For the more financially marginalised membersof its customer base, the Crédit Mutuel groupoffers a full range of services for withdrawingcash and making payments in all circumstances:Facil’accès at Crédit Mutuel and Service Accueilat CIC.

The group has made specialised online bankingtools available to its customers, such as Monabanq and Fortuneo.

As a major housing loans player with an 18%share of new loans granted, the group is a key player in the financing of programmes to facilitate home ownership among the lesswell-off sections of society, particularly throughthe distribution of interest-free home loansunder recently introduced legislation.

Crédit Mutuel members have access to a rangeof green financing solutions for home purchasesand improvements, such as the zero-rate ecoloan and Crédinergie. Also available is the ACM“Pack Ecologique”, a new home insurance packagecovering environment friendly installations.

Following the acquisition of Germany's leadingconsumer credit provider, Targobank (formerlyCitibank Deutschland), and Cofidis, which has operations in around ten countries acrossEurope, the group is now France’s third and Europe’s fourth largest player in this sector.


Retail banking generated net banking incomeof €10,500 million in 2009 (77.2% of the grouptotal) and €1,042 million of net profit, groupshare (56.6% of the group total).

As the day-to-day banking partner of 21.4 millionretail customers, Crédit Mutuel has an 11.9%share of the market for deposits and a 17.5%share of the bank loans market.

After the enormous upheaval caused by the financial crisis of 2008, 2009 was marked by afall-off in investment and financing applications,the return to normal of financial markets and anincrease in credit risk.Against this sombre economic backdrop, thegroup continued to provide solid support to allof its customers.

The retail banking business sustained its momen-tum to emerge from the crisis unscathed.

One of France's leading retail banksRetail banking, the group's main business, encompasses the offers of Crédit Mutuel’s 18 regional federations and CIC's five regional divisions. It also covers the specialised products and services marketed through the network, notably leasing, factoring, fund management and real estate.

Faced with extremely high short-term refinancingrates in the first half of 2009, the group stoodfirm thanks to the healthy level of deposits on its books (PEL home savings plans, term deposits, regulated savings accounts, etc.). Thisenabled it to continue lending at acceptablerates to households and businesses alike whilemanaging potential risks more tightly.In the second half of the year the refinancingdifficulties subsided and the bank was able tolower its lending rates.

In these conditions, the group maintained itsmarket share and business by relying on its core products and services: portfolio activities,regulated savings accounts, home savingsschemes and term deposits; housing loans,where it prioritised first-time buyers and continued to serve low-income customers; and insurance and provident solutions, where it continued to win new business.

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Crédit Mutuel Enseignant:a special relationship

Union nationale du Crédit MutuelEnseignant (UNCME) now hasmore than 40 mutuals throughoutFrance*.

They offer a service combiningclear terms and conditions, highquality products and mutualist values to civil servants employedby the departments of education,research, youth and sports andculture.

Since 2008, the CME mutuals havebeen able to extend membershipto teachers and non-teaching staffin the private education sector withinthe framework of a partnership withthe State.

*www.creditmutuel.com

Mediation: more than

2,000 opinions issued in 2009

Created by the Murcef Act, bankmediation has become an integralpart of the customer relationship.

Initially linked to retail depositaccounts, the scope was extendedin January 2008 to cover disputeslinked to financial instruments,savings products, loans and investment services, insofar asthese concern a contract’s execution rather than its negoti-ation.

Crédit Mutuel's ombudsman received 3,520 claims in 2009, a rise of 25.3% from 2008. Morethan half of these fell within its ambit, and 81% received a response within a month.

The ombudsman issued 2,090opinions in 2009, 54.5% of whichwere partly or totally in the customer’s favour.

Although the ombudsman'sopinion is not binding for thenetwork, it has been followed in all cases by Crédit Mutuel’s regional federations and CIC'sregional banks.

(in € millions)

Net banking income: 10,500

Gross operating profit: 3,515

Net profit, group share: 1,042

KEY FIGURES FORRETAIL BANKING

Livret A/bleu: the group strengthens its position as a leading distributor

Distribution of regulated savings accounts (Livret A/Livret Bleu) was opened up to all bankson 1 January 2009.

This reform, which was implemented at the request of the European Commission, in no waychanges the group’s philosophy. As a traditional distributor of Livret A/Bleu savings books,Crédit Mutuel will continue to distribute this popular savings product, frequently the first rungon the savings ladder for retail customers.

Generalised distribution has not affected the group’s market share in these products, withthe number of active savers rising to 6.5 million for total deposits of €26 billion, a 2.3% increase, despite the decrease in the account’s interest rate between August 2008 and August 2009, from 4% to 1.25%.

The Livret A/Bleu continues to be what it has always been: a popular basic savings productoffering availability and reliability, and Crédit Mutuel will continue to distribute this product,sharing costs between large and small savings accounts in another example of its commitmentto solidarity.

Sustainable development lies at the heart ofCrédit Mutuel’s activity; accordingly, it offers its retail customers a range of competitive solutions for environmentally oriented homepurchases, refurbishment work and insurance.Similarly, Crédit Mutuel has gained a genuinelead concerning the quality and performanceof new technological services provided to customers in the areas of remote banking, remote home surveillance, electronic paymentsand mobile telephony. The group has produced a new energy savingguide for retail customers covering financingsolutions, administrative procedures, tax breaksand other information on its attractive financepackages for energy saving projects. It is availableat www.creditmutuel.com.

Crédit Mutuel’s tailored financing solutions forits customers’ projects include:

The zero-rate eco-loan for home improvements: this interest-free loan is arranged free ofcharge and is designed to cover energy savingwork up to €30,000 on a property classed as amain residence, whether owned or rented. It isavailable for owners or lessees of buildingscompleted before 1 January 1990, irrespectiveof their income. In 2009, Crédit Mutuel financed24% of all eco-loans granted by banking institutions.

Crédinergie home improvement loan:this loan offers preferential financing terms for certain types of energy saving work. The work must be eligible for the “sustainabledevelopment” tax credit and carried out in ahouse built more than two years ago.

The Pack Ecologique (‘eco-pack’) equipment insurance offer:energy saving projects require significant investment, which is why Assurances du CréditMutuel (ACM) has designed the Pack Ecolo-gique home insurance solution for environmentfriendly equipment.


The preferred bank of private individuals

40 Crédit Mutuel

Bankinsurance

Crédit Mutuel endeavours to anticipate and respond to customers’ needs with an appropriate and particularly innovative offer of bankinsuranceproducts and services.

Annual bank chargesstatement:

clearer than everIn accordance with current regu-lations applicable to all banks, as of January 2009 customersnow receive a yearly statementsummarising the charges theyhave incurred in connection withtheir current accounts.

This statement provides anoverview of the charges leviedover the past year, reflects CréditMutuel’s ongoing commitment totransparency and clarity, madesome years ago, and results in theprovision of straightforward, usefuladvice and enhanced access toinformation.

NRJ Mobile – the bestmobile telephony

servicesCrédit Mutuel’s mobile telephonyactivity, marketed under the "NRJMobile", "Crédit Mutuel Mobile"and "CIC Mobile" brands, providesa new channel for bankinsuranceand services and constitutes anew approach to payments.

In 2009, the bank introduced newdeals incorporating unlimitedtext messaging and Internetconnections.

There are offers to meet the requirements of all member-customers, with free add-onservices such as phone insurance,emergency assistance and linksfrom the mobile to the Cyber-MUT/Filbanque online bankingfacilities for access to new valueadded services.

Remote surveillance:number 1 in FranceCrédit Mutuel’s residential and professionalremote surveillance solutions are a primeexample of its commitment to offering innovative products and services that aretailored to customers’ needs.

With a 30% market share and 180,000subscribers the group is number one in thismarket in France.

Linked to the EPS surveillance centre bytraditional phone line, ADSL or GSM/GPRS,the group’s alarm system manages multiplefunctions and communicates in real timewith the customer’s mobile phone.

A number of new services were added tothe remote surveillance range in 2009:

• Detection IMAGE system, which takesphotos of any intruders detected andsends them via email or directly to thecustomer’s mobile phone;

• Signo, a free SMS/email alert service providing subscribers with information onpeople entering or leaving their property;

• Top Alarme, another free service enablingcustomers to check remotely whethertheir alarm system is working and activateit online or via mobile phone.

A full range of remote banking servicesThe group aims to be within easy reach of its customers wherever they are, providing themwith a full range of remote banking services in addition to its branch network. Internet bankingcontinues to grow, thus confirming customers’ interest in managing their accounts and seeking information online. The group’s large number of ATMs plays an important part in developing its remote services.

In millions of connections 2009 2009/2008

Internet 569.6 +24%

Mobile Internet 8.4 +11%

Customer relations centres 33 +6%

ATMs 383.5 +7%

Minitel-Audiotel 8.9 -20%

Total remote connections 1,003.5 +16%

interest-free loans, reduced VAT rate of 5.5%and carrying of the cost of land by the CILcross-sector housing committees thanks to thePass Foncier scheme).

Since 2009, this activity has benefited frommeasures to stimulate new-builds, such as theraising of the interest-free loan ceiling to twiceits former level and the gradual roll-out of legaland tax arrangements for using the PassFoncier for multi-occupancy housing.

The group is an active player in several regions,with a range of activities:• it has capital stakes in around 40 subsidised

housing bodies (Entreprises sociales de l’habitat- ESH) to which it offers intermediate rentalloans (PLS and PSLA). It also contributes itsknow-how in the sale of social housing (HLM)through subsidised homebuyer loans;

• it is a close partner of social housing cooperativesfor construction programmes under subsidisedhomebuyer schemes, which it finances throughinterest-free loans or tenant home purchaseschemes;

• it has extended its direct presence throughpartnership agreements with the OPH socialhousing bodies, which manage half of France’sexisting subsidised housing and have projectsfor the priority zones designated in the government's urban development policy.

As a traditional partner of the French agency forhousing improvement (Agence nationale pourl’Amélioration de l’Habitat - ANAH), the groupaims to work more closely with social housingbodies in sensitive urban areas covered byFrench urban renovation agency (Agence Nationale pour la Rénovation Urbaine - ANRU)programmes.


A key player in housing finance

An active partner in subsidisedhousingThe group is one of the biggest banking partnersfor first-time buyers, with extensive experiencein providing government subsidised loans via thenew interest-free loan (Nptz) scheme, for whichit is one of the leading distributors with a 16%market share, the PAS subsidised acquisitionloan, the Pass Foncier deferred land purchaseloan and the PSLA subsidised rental-acquisitionloan. It also plays an increasing role in financinglow cost rented accommodation by distributingPLS loans. The bank seeks to broaden loan coverage at a national level and was one of the first organisations to offer higher limit zero-rate expertise in France’s most marginalised areas.

Crédit Mutuel has a longstanding relationshipwith operators of the “1% logement” subsidisedhousing scheme, which have traditionally beenactive in the rental sector for low-incomehouseholds and are now involved in subsidisedacquisition schemes.

The group has begun to set up schemes forseparating the purchase of land from that ofthe homes built on it. It is committed to workingalongside the main bodies involved in collectingthe “1% logement” contribution, by providing financing in conjunction with the local authorities’contributions (aid in addition to higher limit

42 Crédit Mutuel

Bankinsurance

The fragile economic and financial environment weighed on new home loanissuance in the first half of the year, with high refinancing costs and cautiousbuyers making for a slow market.

The market recovered starting in the third quarter, leading to a rise in the production of new home loans by the networks in the second half of the year.

Crédit Mutuel’s 18% market share makes it France’s third biggest issuer ofhome loans1, with outstandings of almost €160 billion, up 2.7% from 2008.

(1) Ranking after the 2009 BPCE merger, which created a new group comprising the Caisses d’Epargne, Banques Populairesand Crédit Foncier.

Crédit Mutuel signs the 100,000th interest-free eco-loanAs the provider of over a quarter of all interest-free eco-loans issued in 2009, Crédit Mutuel was invited byJean-Louis Borloo, Secretary of State for the Environment,Energy, Sustainable Development and Maritime Affairs,to sign the 100,000th loan of this type on 1 April 2010.

This symbolic number underscores the commitment anddynamism of the Crédit Mutuel network, which in 2009alone studied applications for, prepared and issued21,000 zero-rate eco-loans.

Having been actively involved from the launch of thismajor commitment made at the Grenelle environment summit, the group began operationalroll-out of the eco-loan starting in April 2009. This achievement bears testament to the group’s values of closeness to and high quality relations with its member-customers, particularly as regards those on modest incomes with strong ties to their area of origin.

The interest-free eco-loan is a new addition to the range of products and services dedicated toenergy saving and renewable energies, in particular the Crédinergie loan and, since April 2009,the Pack Ecologique, a new home insurance solution offering special terms for environmentfriendly equipment cover.

All the Crédit Mutuel financing solutions are presented in the “Energy saving and sustainabledevelopment” guide on www.creditmutuel.com.


■ Pop Corn covers the period from birth to11 years and features the livret bleu savingsbook account, a key product for the children'ssegment given the opening up of the savingsbook market and the demand for insurance andsavings products and assistance with startingand continuing to save;

■ VIP caters for customers aged between 11 and 25, whatever stage of their schooling or career they are at (secondary school pupil,apprentice, student or graduate employee), in three major areas:

- day-to-day banking needs, notably throughEurocompte VIP, a service package enablingcustomers to manage their budgets;

- accommodation, with Clic-Clac, a packagecomprising a loan to finance a guarantee deposit, a bank guarantee for the landlordand a home insurance policy. These productscan be subscribed to separately if required;

- projects: computer loans, the €1 per day driving licence scheme, and flexible studentloans, including, since the end of 2008, theOséo government backed student loan, whichenables the student to borrow up to €15,000over a two- to ten-year period and comeswith a government guarantee of 70% for the unpaid portion of capital. This loan is specifically tailored for young people withouta parental guarantee.

A dedicated offer for young people

New products for young people include a prepaidbank card which enables 12 to 17 year olds to manage their pocket money securely and independently. It can be used for purchases inFrance or abroad, including online.

The VIP offer is mainly marketed through CréditMutuel’s advertising on educational materialshanded out to students throughout their schoolyears, including at key moments in terms ofacademic and career decisions.

CIC offers both Parcours J and the StartsJeunes Actifs package for under 28s.

As well as these specific products, the groupdistributes intergenerational savings productswhich can be subscribed by parents or grand-parents to set aside money for their offspring’sfuture.

The group is particularly closely involved withyoung people who undertake ‘responsible citizenship’ projects, through partnerships withnon-profit associations such as Trophées J.Passand Junior Associations and initiatives launcheddirectly by the Crédit Mutuel federations (CréditMutuel Centre Est’s Les Jeunes qui osentcompetition and Les jeunes qui s’engagentprogramme, Crédit Mutuel Maine-Anjou andBasse-Normandie’s Challenge Jeunes Créavenircontest, Crédit Mutuel du Sud-Ouest’s Coup dePouce programme, etc.).

44 Crédit Mutuel

Bankinsurance

In 2009, the Crédit Mutuel group invested further in developing its offer forpeople under the age of 26, who represent nearly a quarter of its customer base.

Teaching young people how to use basic banking services, encouragingsavings from an early age and assisting young people along the road toindependence are the main facets of the bank’s offer for a customer segmentthat is central to its development strategy.

Crédit Mutuel, official banking partner

to Disneyland ParisThis partnership governs theuse of the promotional rights tothe Disney and Disneyland Parisbrands and establishes CréditMutuel as the official bankingpartner to Disneyland Paris.

It makes Crédit Mutuel the onlybank to be able to offer itsyounger customers special dealsfor Disneyland Paris, including forfamily visits with accommodation.The agreement will ultimatelyenable the bank to offer a broadrange of financial services toDisneyland Paris employees andto roll out cutting edge paymentmanagement projects.

Helping young talentemerge with Cercle

Passeport TélécomsThe Cercle Passeport Télécomsinitiative enables young peoplefrom disadvantaged backgroundsin marginal urban areas to attendengineering or business schools(including at the preparatoryyear stage) by eliminating all financial discrimination.

This association’s work is supported by nine corporatepartners*, including CréditMutuel, which has been involvedin the project since 2007through the provision of studentloans requiring no parentalguarantee and the joint runningof educational workshops in thepartner schools.

The Ministry for Higher Educationand Research, the Secretary ofState for Urban Areas andACSè, the national agency forsocial cohesion and equal opportunities, are also partners.

This public-private partnershiphas grown substantially: Cerclestudent numbers have risenfrom 125 in 2005 to more than542 in 2009 and tutor numbersfrom 100 to more than 485, whilestudents have enjoyed a 90%success rate in entrance examsfor the leading educational institutions.

This initiative serves Crédit Mutuel’sgoal of becoming the bank behindyoung talent.

* SFR, Orange, Nokia SiemensNetworks , A lcatel-Lucent , Devoteam Group, Ericsson,Gemalto and Hôtel F1.

The bank for every kind of musicAllowing our customers to express themselves is the cornerstone of our relationship with them,and sponsoring their music is one way of thanking them for the trust they place in us. Crédit Mutuel therefore gives its support to some of the leading music events and programmeson television and radio, such as the Victoires de la Musique on France 2 and France Inter,Taratata, N'oubliez pas les paroles and Fête de la Musique.

It partners music programmes and discussions on France Inter, France Info and Le Mouv’, as well as the France Bleu talent showcase night.

Crédit Mutuel is also involved in major music events such as the Printemps de Bourges festival,Francofolies de la Rochelle, the Arras Main Square Festival, Musilac in Annecy, Marseille’s Fiesta des Suds and last but by no means least the Fête de la Musique, of which it is the officialsponsor. In addition, it promotes numerous regional events.

With a view to bringing live music to as many people as possible, Crédit Mutuel is associatedwith Jeunesses Musicales de France and with the 2,000 concerts they give each year in primaryand secondary schools, as well as with Confédération Musicale de France which groups some700,000 musicians in 6,000 music academies, orchestras and choirs.

Since 2008, Crédit Mutuel has been making its voice heard over the Internet, notably withGoomradio, through which it broadcasts two exclusively digital radio programmes targetingyoung people: Pop Corn radio for 8-to-12 year olds and VIP radio for 12-to-18 year olds.

Again through music, Crédit Mutuel works to help sick children by supporting the “Tout lemonde chante” cancer prevention and support endeavour.

In 2009, Crédit Mutuel launched a major competition giving all performers in the Fête de laMusique the chance to earn the title of one of the new acts of the year (les RévéLAtions). It involved five different musical categories, with vouchers for musical equipment and arecording studio session to be won.

CIC also supports young performers, through its patronage, since 2003, of the Victoires dela Musique Classique classical music awards. This event, which enables young musicians tobuild a reputation, helps to promote classical music to an increasingly wide audience in Parisand throughout France.

Channelling energies, being attentive and developing individual talents and goals are justsome of the values to be found in music and which justify the group's commitment to thisform of expression.

As one of RNJA’s leading banking partners,Crédit Mutuel also contributes to the financingof the guides it publishes. In 2009, it helpedfund a study of the impact of involvement involuntary work on the career paths of youngpeople.

Crédit Mutuel has been a partner to COORACEfor more than ten years, and in 2009 renewedits ties with this national federation for sociallycohesive economic development.COORACE’s purpose is to assist people who aretemporarily out of work and contribute to devel-oping employment at national level. It notablyhelps its 500 members to implement qualitycertification procedures (Cedre and AfnorServices) to heighten their professionalism andability to create jobs and produce high qualitygoods and services. Crédit Mutuel financed the 2009 First Prize forInnovation designed to stimulate and rewardingenuity and entrepreneurship in COORACE’smembers.


At end-2009, the group was managing €12.8 billion in non-profit association deposits,representing an 8.6% increase year-on-year,and had over €2 billion in loan outstandings(up 10.2%).

A specifically targeted banking offering, assistancefacilities for voluntary workers and close relationships with associations and their federations at national and regional level havehelped to make Crédit Mutuel their naturalpartner.

The leading bank for non-profit associations

These close relationships, built as much on thegroup's values as on its professional efficiency,have created a climate of trust: CNRS-Matisse’s survey, which was launched in 2005and introduces new evaluation criteria everyyear, ranks Crédit Mutuel as the leading bank for medium-sized and large associations, witha 33% market share.

Crédit Mutuel manages 22% of the funds of allthe associations in France: it is their leadingbanking partner in the areas of healthcare, social work, education, training, social integrationand humanitarian aid, and the second largestbank in the areas of sport, culture, human rights,charities, local economic and development initiatives, and campaign groups.

Renewed partnershipsIn 2009, Crédit Mutuel renewed its partnership withthe Familles Rurales (rural families) association,the Réseau National des Juniors Associations(RNJA) network and COORACE.

For the fifth year in a row, through the TrophéesJ.Pass competition in partnership with FamillesRurales it has provided financial support for humanitarian, ecological, cultural and socialprojects handled by young people aged 12-25.

The Group has partnered RNJA since its creationin 1998. This association enables young peopleunder eighteen to organise initiatives and carryout projects within an association framework.During the 2008/2009 school year there weremore than 1,000 active Junior Associations.

46 Crédit Mutuel

Bankinsurance

With a customer base comprising nearly 400,000 associations, Crédit Mutuel is the active partner of more than one out of every three associations and one of every two works councils. It responds to the needs of this sector, which plays a key role in reinforcingsocial cohesion and creating new community ties.

In September 2009, Crédit Mutuel launched Associ@thèque, a public information and services website designed to consolidate the group’s position in the non-profitassociations market.

Designed for everyday use by voluntary workers and current and future associationdirectors, Associ@thèque provides a wealth of information (legal, tax, accounting,community and events news, along with useful guides, downloadable informationsheets and templates, Partenaire Associations and other newsletters, etc.). It also offers numerous online services to help manage and promote an association, suchas a directory, small ads, legal and tax advice from a partner law firm and data uploadto the local CM-CIC branch.

Associ@thèque is regularly updated and enhanced by our specialist partner companies*.It is a free service with a subscriber area reserved for customer associations with a remote banking contract or a Eurocompte account (subject to region-specific termsand conditions). The public part of the site offers various useful features, such asguides on setting up and managing associations.

As well as providing assistance to associations, Associ@thèque is a means for CréditMutuel to win new customers, secure the loyalty of existing ones, and burnish its image.

www.associatheque.fr

* Editions Juris associations (an Editions Dalloz company), In Extenso, an accounting firm belonging to theDeloitte group, and Service 1901, a consultancy specialised in the associations sector

The committed bank

Children, young people, the elderly, social aid, and social, cultural and sporting activities: Crédit Mutuel supports numerous networks under long-term agreements,including:

• Union nationale interfédérale des oeuvres et organismes privés sanitaires et sociaux(UNIOPSS), a national federation of private healthcare and social work organisations.As a member of its Club des partenaires (partners’ club), Crédit Mutuel provides financial support for a number of projects and is well represented at the federation’sconventions and annual meetings;

• Union Nationale pour l’Habitat des Jeunes (UNHAJ), a housing scheme formerlyknown as Foyers de jeunes travailleurs. The bank provides financial support and communication tools to ensure more publicity for the scheme’s action and notablyfor its development programme aimed at building 10,500 new housing units and renovating 3,500;

• Association des Directeurs au Service des Personnes Agées (AD-PA - care for the elderly).Crédit Mutuel is providing financial support over three years for communication, the organisation of events and the development of networks linking retirement homes,home care services and families;

• Fédération sportive et culturelle de France (FSCF). This sporting and cultural association is present in 74 departments throughout France and comprises morethan 3,700 associations and sub-associations with 500,000 members, of which halfare under 17, and 40,000 voluntary supervisors;

• Fédération nationale des jardins familiaux et collectifs (FNJFC), which focuseson nature conservation and the environment, sustainable development and enhancement of the living environment. Crédit Mutuel contributes to the developmentof this national association, which is becoming increasingly involved in developingpublic policies on land planning and health (dietary, physical and mental);

• Fédération française des Bde (FfBde), a student union federation with a membershipof over 2 million students and 150,000 voluntary workers;

• Fédération des carnavals et festivités (Fcf), a central body for events committeesand popular culture organisations.

The group helps to promote voluntary work, a considerable force for good inFrance. On behalf of France Bénévolat, it is funding a comprehensive study of thequantitative development of France’s voluntary sector as well as a qualitative studyby socio-economic research body Cerlis (Centre de recherches sur les liens sociaux)on the impact, input and difficulties associated with carrying out regular voluntary workfor non-profit associations.

The group supports France Active, a networkthat aids and finances social inclusion througheconomic initiatives. As founder of six of the 38 local funds, Crédit Mutuel is present on half of the loan acceptance committees andaccounted for 21% of the guarantees given in2009.

Since January 2009, Crédit Mutuel has been apartner of Réseau des Boutiques de Gestion,a non-profit association and the leading independent network for business start-up aid,with 430 branches nationwide. Through thispartnership it helps businesses from the ideasstage through to their third anniversary. Theboutiques de gestion initiate and manage a variety of schemes (experimental business incubators, financial engineering for projects,enterprise zones and entrepreneur networks) to encourage job creation, initiative-taking,wealth creation and social cohesion.In 2009, initiatives were taken at regional levelin Pays de la Loire, PACA (Provence-Alps-Coted’Azur) and Burgundy to strengthen cooperationbetween the Crédit Mutuel federations and theboutiques de gestion.

Working alongside SMEs andmicrobusinessesDespite the decline in demand for loans, fundslent by Crédit Mutuel to microbusinesses andindependent SMEs rose by 1.56% in 2009, whileavailable credit lines – i.e. those confirmed butunused – increased by 1.47%.Investment loans increased by 4.36% for businesses as a whole (i.e. including affiliatedSMEs and large companies), while treasuryloans contracted by 15.65%, reflecting both the strong dip in requirements resulting fromsluggish economic conditions and governmentmeasures (tax and social security payment deferrals).

In parallel with the roll-out of products designedto rebuild or consolidate cash flow, complete withOseo insurance cover, Crédit Mutuel continued toreview files submitted by the credit ombudsman.The group had a successful mediation rate of40%, compared with a national average of 65%.This rate highlights the network’s more in-depthapproach to referrals and its excellent level of localknowledge: for a great number of companies,notably very small businesses, the mediator approved the Crédit Mutuel and CIC’s decisions.


Business financing activities are carried out by the network and specialised subsidiaries:Banque de l’Economie du Commerce et de laMonétique (BECM), a subsidiary of Crédit MutuelCentre Est Europe; Banque Commerciale pourle Marché de l’Entreprise (BCME), a subsidiaryof Crédit Mutuel Arkéa and Crédit Mutuel deLoire-Atlantique et du Centre-Ouest; BanqueCommerciale du Marché Nord Europe (BCMNE),holding company for the business banking division of Crédit Mutuel Nord Europe – themajority shareholder in SA Crédit Professionnel,the central body for Crédit Professionnel Belge,and CAMEFI Banque, a jointly-owned subsidiaryof Crédit Mutuel Arkéa and Crédit MutuelMéditerranéen.CIC has put in place a system ensuring the localpresence of account managers and rapid responsetimes thanks to a short decision-making circuit.

Number 3 for SMEs

The group is a major financer of independentprofessionals, tradesmen and microbusinessesin the services and light manufacturing sectors,with more than 700,000 customers and a 23.8%penetration rate.It is also strongly positioned among businessstart-ups, notably through the assistance providedto entrepreneurs and the distribution of businessstart-up loans (Prêts à la Création d’Entreprise– PCE), in which it holds third place with a marketshare of 19.7% for start-up financing.

The group’s insurance activity, comprising Oseo,Siagi and France Active Garantie, continues togrow.

The group is also a long-standing partner of theFrance Initiative, France Active, Boutiques deGestion and ADIE business development networks.

It has worked for more than 20 years to helpdevelop local economies with France Initiative,the largest business creation aid network inFrance.The group is a member of the France Initiative"Entreprises" collegial body. It is actively involvedwith more than 60% of this network’s local initiative platforms, with Crédit Mutuel covering152 and CIC 122. In 2009, it distributed 2,403loans totalling nearly €139 million and accountingfor more than 18% of total bank financing.

48 Crédit Mutuel

Bankinsurance

Crédit Mutuel plays an active role alongside all those involved in the regionaleconomy, whether independent professionals, microbusinesses or small and medium-sized enterprises.

It ranked as the number three bank for the sector in 2009 with nearly €70 billionin outstanding loans to SMEs.

Specialised mutuals for the healthcare sectorCMPS, which was created more than 30 years ago, is a network of branches dedicated exclusivelyto professionals working in the healthcare sector*.

Representatives from all segments of the medical and paramedical sectors sit on the boards andsupervisory bodies of these mutuals.

The banks assist practitioners with their strategic and financial decisions, whether professional orprivate. In each case they offer personalised solutions, from bankinsurance, electronic paymentsand financing packages for individual projects to wealth management from a savings strategyperspective, retirement planning and tax planning.

In addition to banking expertise, the CMPS have developed active partnerships with professionalassociations, unions, specialised management associations, professional guilds and regional andnational institutional bodies.

*www.cmutuel.com

Leading the way in electronic paymentsThe group’s capabilities in electronic payments make it France's second largest player, with a 20.1%overall market share and a 26% share with retailers. With 8.7 million cards in issue it ranks secondin the bank cards market, and the market leader for public sector purchasing cards.

The group’s large number of ATMs (nearly 7,500) plays a large part in developing its remote services.This network ensures customer access to a comprehensive range of domestic banking transactions,such as withdrawals, account viewing, making transfers and deposits and ordering cheque books.The group’s ATMs can also be used to top up an increasing number of facilities such as mobile phoneaccounts, Monéo cash payment cards and travel passes (Navigo, Badgéo, etc.).

The bank has incorporated new, cutting edge services in its card based solutions:• for younger customers, prepaid ‘pocket money’ cards that can be topped up as needed;• an enhanced deferred payment solution for certain card ranges, which allows the customer to

designate transactions for immediate or deferred debit directly from CyberMUT; plus the launchof jointly branded cards;

• development of Flotte - Districash cards:• launch of a foreign currency card specially designed to meet the needs of ‘cross-border’ customers.

In the area of acquiring, which involves acting as reconciling agent for a service’s payer and supplierbanks, transaction volume was up by 40% in 2009. The group is France's leading and Europe's secondlargest acquirer.

To meet its quality requirements, the group uses monitoring tools that provide quasi-real time qualitativeand quantitative data analysis for processed transactions.The way corporate customers and banks interact is currently being transformed, with the ElectronicBanking Internet Communication Standard (EBICS) and SWIFTNet protocols due to replace X25by 2011.

In response to this change, the group has introduced a range of targeted solutions perfectly tailoredto the various needs of small, medium and large businesses.

• the Web CM-CIC service, designed specifically for small companies, has been complemented bythe HUB-Transfert product, which, in conjunction with EBICS or SWIFTNet for external multi-banktransactions, enables the company to manage all transactions using a single system. Based oncutting edge technology, it is extremely user friendly and includes an electronic signature function;

• CM-CIC’s SWIFTNet Plug & Play for medium-sized and large businesses;• Service Bureau SWIFTNet for major companies.


Close to customers at all times, the group providesa wide range of remote banking channels,which, with over a billion uses in 2009, accountfor more than 90% of customer contacts.Online banking continued to grow, with nearly600 million connections, a 24% increase.Whether for motor or home insurance quotes,consumer loan simulations or basic informationrequests, customers are showing an increasingappetite for online services.

At the cutting edge of technology

A few highlights:• Our mobile Internet service is becoming

an increasingly prominent alternative to fixedInternet, with 8.4 million connections in 2009.In July we introduced a new platform equippedto handle all current mobile phones, from thetraditional WAP devices to the more sophis-ticated Apple iPhone and Google Android, aswell as a special site for mini PCs. In additionto the http://m.cmut.fr and http://m.cic.frportals, which are the entry point for our mobileInternet services, we now offer dedicatedsmartphone sites for Windows, Blackberry,Nokia phones etc.

• the www.cmcicpaiement.fr website, the entrypoint for the new remote payment servicelaunched in early 2009, has processed aggregate payments of more than €2 billion,a 10% increase;

• there were new developments in the area ofe-commerce transaction security. CM CIC hasfurther strengthened the identification processassociated with its bar code, thanks to the recent introduction of 3D Secure, the Visa andMasterCard authentication technology usedto offer added security for web purchases;

• the bank’s provision of ten-years’ free storageof statements in electronic rather than paperform - as PDF files consultable online - alreadycovers more than 9 million documents. This 40%growth for the year is testament to the stronginterest of member-customers in a serviceprovided as part of the bank’s sustainable development approach.

We now show the relationship manager’s nameon all account documentation, particularly onCyberMUT. This illustrates the bank’s commitmentto making its remote services complementaryto the face-to-face services provided by thenetwork.

50 Crédit Mutuel

Bankinsurance

Using its technological skills to serve its customers is a central element of the group's development strategy. Each year it adds new, innovative services to its range.

Electronic payments

ATMs

2008 2009

7,1707,421

Affiliated retailer payments(in millions)

2008 2009

1,617

1,707

Interbank cards(in millions)

2008 2009

8.4 8.7

Electronic payments market share

2008 2009

20.0%20.1%

Retailers market share

2008 2009

26% 26%

+ 3.5%

+ 5.6%

+ 3.1%


Bankinsurance

FactoringFactoCIC, the group's factoring subsidiary, is the fifth largest bank factor in France. It has a market share of 7.95% in terms of volume ofreceivables purchases, 3,011 active contracts,turnover of more than €10 billion and totalmanaged outstandings of €1.8 billion.It posted new production records in 2009 bothin terms of new contracts (1,000) and potentialturnover (€4.1 billion). Net profit came to €13.2million.

Consumer creditThe consumer credit offering marketed throughthe network is rounded out by those of spe-cialised subsidiaries Financo (Crédit MutuelArkéa) and Sofemo, which is jointly owned byCrédit Mutuel Centre Est Europe and CIC.The acquisition at the end of 2008 of CitibankDeutschland (renamed Targobank), Germany'sleading consumer credit provider, and in thefirst quarter of 2009 of a controlling stake inCofidis, the 3 Suisses International consumercredit subsidiary with operations in around tenEuropean countries, has enabled the group to enter a new phase of strategic development:it is now Europe’s fourth largest consumer creditprovider, with outstandings of €33.4 billion (up 23.5%).

Real EstateThe Crédit Mutuel group is active in all areas of theproperty market from sales and developmentthrough to land development and real estatemanagement.

The main subsidiaries are Ataraxia (CréditMutuel de Loire-Atlantique et du Centre-Ouestand Crédit Mutuel de Bretagne), which is activein all segments, UFG-LFP (Crédit Mutuel NordEurope), CM-CIC Agence Immobilière (CréditMutuel Centre Est Europe) and Soderec.

Against the backdrop of an international crisis,having started to seize up at the end of 2008the property market went through a particularlytough time in 2009, a year characterised by acontraction in sales and housing starts in thenew-build segment as well as a decline in prices,particularly for old properties.Taken all together, in 2009 the subsidiariesmade almost 3,200 property sales (down 8.2%),mainly in new property, for a total amount of€558 million, corresponding to a 7.2% decrease.

Ataraxia, the only subsidiary to operate inproperty management, manages almost 6,000individually owned and 19,420 collectivelyowned properties. The market downturn led to a far-reaching reorganisation of activities at the end of 2008 to focus on project modeoperation with an emphasis on synergy betweenthe production and sales businesses.Business volumes were contrasting, with a recordnumber of reservations of new housing units,helped by the Scellier scheme tax benefits, buta decrease in building plot sales. CM-CIC Participations Immobilières, CM-CICAménagement Foncier, CM-CIC Agence Immo-bilière and CM-CIC Réalisations Immobilièresmake up the CMCEE-CIC group’s property division.

Retail banking subsidiaries

The group has been a close partner of thefarming community for 20 years.

With more than one-third of its local mutualbanks located in rural areas, along with Fédérationdu Crédit Mutuel Agricole et Rural (CMAR), a dedicated nationwide entity run by electedfarmers, Crédit Mutuel is particularly attentiveto changes in the agricultural sector, in touchwith all types of farming and responsive to theirvarious requirements.

During a year marked by a sharp contraction infarmers’ income, all network branches offeredthe loans provided for under the exceptionalfarming support programme implemented bythe government at the end of the year.

Crédit Mutuel’s loans, savings products and insurance offer are all suited to the specific needsand constraints of agricultural production.

The challenger in the farming sector

Its financing solutions cover the entire range offarming projects.The Modul’agri professional loan with adjustablematurities enables borrowers to tailor repaymentsto their cash flow.Actimat is a farm machinery financing offerdistributed directly through farm machinerydealers on special, fast track terms, with no set-up fee.Agridispo provides farmers with a range of short-term cash facilities to enable them to respondrapidly to sudden financing needs.New medium- and long-term loans granted in 2009 totalled €1.2 billion, and the overallfarming loan book came to €4.8 billion.

In terms of investment and cash managementproducts, Crédit Mutuel’s range enables customers to balance their requirements forasset availability, profitability and security.Assur Horizons Agri, which enables holders toenjoy a regular additional income on reachingretirement age, is available for farmers and theirspouses as well as paid helpers.Tonic Agri provides a way of building up a rainyday fund and offers both capital appreciationand the tax benefits implemented under the‘Dotation pour Aléas’ freak events provisionfund legislation. Préviris provides online access to grain futuresmarkets, with an internal control system thatensures orders are secure.

Crédit Mutuel is the number two bank for the farming sector with 14.1% of subsidised loans to young farmers and 11.9% of the medium- and long-termloan market.

It markets properties to three broad customercategories: retail (through the sales networkdeveloped by UFG Partenaires, which becameUFG-LFP France on 1 January 2010), institutional(through a dedicated institutional sales team)and customers introduced through the CréditMutuel Nord Europe networks.

Soderec, a nationwide Crédit Mutuel subsidiary,operates in the field of public works projects,where it acts as an agent or site manager onbehalf of the State, local authorities or affiliatedbodies. It also undertakes private contractingwork for these clients.Revenues rose 4.41% in 2009 to €6 million.Soderec won several tenders for new projectssuch as residential homes for dependent seniors,the multi-modal interchange at Chambéry railway station, the Rueil-Malmaison hospital,the new branch of the overseas departments’issuing house in French Guyana, the Chalon-sur-Saône multimedia library and research labsat the Franche-Comté university.It also completed a number of major contractsin 2009, including secondary schools in Burnhaupt-le-Haut and l’Isle-sur-le-Doubs,Villeurbanne’s central catering unit, two policestations in Doubs, and the “Le Lawn” commercialbuilding in Strasbourg for CIC Est.

Equipment leasingCM-CIC Bail, (Crédit Mutuel Centre Est Europe),Bail Actéa (Crédit Mutuel Nord Europe) andSodelem (a subsidiary owned jointly by severalCrédit Mutuel groups in the west of France) to-gether manage 215,000 contracts representinga total of €6.3 billion of assets, correspondingto an increase of 1.7% in 2009.Aggregate production on 88,000 contractscame to more than €3 billion, giving the groupa 13.9% share of the overall market (up 1.8 points).

Property leasingAs well as medium- and long-term loan financing,business customers are offered specialisedproperty leasing products through CM-CICLease (jointly owned subsidiary of Crédit MutuelCentre Est Europe and CIC), Bail Entreprises(Crédit Mutuel Arkéa), Bail Immo Nord andBatiroc Normandie (Crédit Mutuel Nord Europe).Production grew by 6.6% to €664 million, i.e.12.7% of the market (0.7 points up from 2008),while managed outstandings increased 16.1% toover €3 billion.


CM-CIC Participations Immobilières SAsupportsproperty developers by helping finance non-trading real estate companies (Société CivileImmobilier – SCI) used for residential propertydevelopment programmes throughout France.

CM-CIC Aménagement Foncier SA: CM-CICSarest, a land and property developer with operations in the east of France, pressed aheadwith the projects set up through the newlyopened branches in Lyon, Lille and Paris.

CM-CIC Agence Immobilière SAS: CM-CICAfedim is a broker marketing new property developments within the framework of the HoquetAct and on behalf of the Crédit Mutuel and CICnetworks – including CIC private banking – to investors and homebuyers.

CM-CIC Réalisations Immobilières SAS: thiscompany, which trades under the name CM-CICSofedim, undertakes a range of services for theCM-CIC group such as sales, renovation projectownership and various assistance assignments.

UFG Real Estate Managers (UFG REM) is the property management subsidiary of theUFG-LFP group (Crédit Mutuel Nord Europe).

The French leader in property investment fundswith a 24% market share in France (managedfunds of €5.5 billion, 2.3 million square metresof property assets and 1,400 properties managedon behalf of 80,000 shareholders), UFG REMmanages a wide range of property investmentfunds: SCPI, SCI and OPCI. In early 2009 it launched the first OPCI dedicatedto socially responsible investment, a product ofUFG’s partnership, via UFG REM, with BanqueSarasin. UFG REM offers expertise in all areas of propertymanagement, from product innovation, assetmanagement, investment and sales to transactionprocessing, marketing, and the maintenanceand development of portfolio properties.

54 Crédit Mutuel

Bankinsurance

The company’s entire product range was upgraded with improved cover offers and services.

The life insurance range was extended with several high profile new products to coincidewith the reduction in the cash savings rates:• the Livret Assurance savings account was

launched to provide customers of the CréditMutuel and CIC networks with a simple, accessibleand reliable savings solution,

• the Banque Fédérative du Crédit Mutuel(BFCM) bond was launched as a complement tounit-linked contracts, which sharply increasedfund inflows,

• the Plan Assurance Vie multisupport policy,launched at the end of 2009, attracted nearly85,000 subscriptions in just a few weeks.

Assurance Accidents de la Vie, a policy insuringagainst everyday accidents, was added to thepersonal insurance range, while the Sécuritysfuneral insurance solution was enhanced withnew service packages.The Pack Entreprises product was rolled out asa comprehensive social security solution forSMEs and counterpart to the Pack ProtectionSociale, designed to cater for the health insurance,personal protection and retirement needs of thegroup’s independent professional customers.

The Pack écologique, an optional add-on tostandard home insurance policies, gives ACM afoothold in the market in renewable energyequipment cover. A new range of services was alsorolled out for motor insurance policyholders.Abroad, RACC Seguros, the company createdas a result of the partnership agreement betweenACM and Royal Automobile Club de Catalogne,rolled out its motor insurance contract. Despitea tough economic environment in Spain, thefirst year of business in this country yielded aportfolio of 103,800 contracts.The Belgian non-life insurance company, Partners,migrated to the ACM IT platform, thereby acquiring tools that are better suited to its development.The ICM Life activity was revived through a newoffering devised within the framework of the recent agreements with Banque de Luxembourg.


The group retained its position as the leadingnon-life bankinsurer with a 4% increase in premiums to €2.3 billion. It is France’s fourthlargest bank for life insurance, netting €10.1 billionin premium income in 2009, a 26.4% increasefrom 2008.

In 2009, the group's insurance subsidiaries collected aggregate premiums of €12.4 billion,up by 21.5%. The number of contracts managedincreased by 4.4% to 28 million, of which 23.8million were non-life contracts, while policyholdersnumbered more than 11 million, a 2.2% increase.

The insurance activity is carried out throughGroupe des Assurances du Crédit Mutuel(GACM), Suravenir (life), Suravenir Assurances(non-life) and Assurances du Crédit MutuelNord (ACMN) (life and non-life).

Insurance

Groupe des Assurances du Crédit Mutuel, the flagship of the bankinsurance concept invented by Crédit Mutuel in 1970, is nearly 53%owned by Banque Fédérative du Crédit Mutuel,20.5% by CIC and 26.7% by the Crédit Mutuelfederations. GACM’s range of insurance products is marketedby the 15 Crédit Mutuel federations and all ofthe CIC regional banks, which represent morethan 5,000 sales outlets in total.

GACM’s net premium income exceeded €8 billionin 2009, representing an increase of over 20%,more than twice the corresponding growth inthe French insurance market as a whole (9%).The increase was particularly marked in life insurance.Life insurance company premiums totalled morethan €6 billion, up by 27%, while premiums for non-life subsidiaries came in at nearly €2 billion (up 3.1%).With nearly 1.3 million new contracts subscribedin 2009, by year-end the insurance division was managing almost 21.5 million contracts for more than seven million policyholders.

Consolidated net profit (per IFRS) grew by 15.4%to €457 million.

Provisions for asset impairment ceased to weighon results in the 2009 financial year, and writebacks of provisions for liquidity risk enabledthe group to rebuild reserves for policyholders’profit share. Shareholders’ equity was consoli-dated, bringing it to €5.8 billion. Underwriting results remained good overall,boosted by personal insurance revenues. However,in line with the market, property insurance was hit by a strong increase in claims due to asignificant natural disaster rate and a worseningof the claims rate in motor insurance.

56 Crédit Mutuel

Bankinsurance

No. 1 in non-life insurance

No. 4 in life insurance

11.2 million policyholders

28 million contracts

(in € millions)


Net profit, group share: 587

KEY FIGURESInsurance is the group's second-largest business. In 2009, it generated netbanking income of €1.3 billion, i.e. 9.2% of the total, and net profit, groupshare of €587 million (32% of the total).

ACM in the financialpress

Life insurancePlan Assurance Vie, a multi -support life insurance contractreleased at the end of 2009, received a “Label d'Excellence”from Dossiers de l’Epargne in its2010 life insurance guide. It wasalso shortlisted for Le Revenu’sspecial prize for innovation.

The group’s other life insurancecontracts also proved their compet-itiveness, with Plan Patrimonioreceiving a “Label d'Excellence2010” from Dossiers de l’Epargneand a “Trophée d’or” from LeRevenu for aggressive multisup-port contracts.Plan Assur Horizons and LivretAvenir received Le Revenu’s“Trophée de bronze” in the diver-sified multisupport and euro contract categories.

Property insuranceThe Dossiers de l’Epargne panelawarded the Assurance Habi-tation contract a “Label d'Excel-lence 2010”.

Personal insuranceThe Plans Prévoyance, XL Pré -voyance, Sécuritysand AssuranceSanté contracts all received a“Label d'Excellence 2010” fromDossiers de l’Epargne.

Insurance, the group’s second biggest business

Non-life premium income

(in € millions)

2008 2009

2,258 2,349

+4.9%

+4.0%

Life insurance premium income

(in € millions)

2008 2009

7,974

10,080

+26.4%

Total premium income

(in € millions)

2008 2009

10,232

12,429

+21.5%

Non-life contracts(millions)

2008 2009

22.523.8

Life contracts(millions)

2008 2009

4.1 4.2

+5.5%

Total contracts(millions)

2008 2009

26.628.0

+5.4%

Crédit Mutuel Nord Europe manages nearly 2 million life and non-life contracts through two subsidiaries: ACMN Vie and ACMN Iard.

In 2009, in an economic and financial environ-ment that was particularly favourable for life insurance, ACMN Vie recorded a marked 29.2%increase in premium income to €1.6 billion.

While this growth can be attributed partly to itsmerger with La Pérennité, most of it came froman overall 29% increase in insurance business,outstripping both management targets and the life insurance market average of 12%.Accordingly, contract sales by the BKCP networkin Belgium increased significantly, while onlinesales now account for 11% of new business,compared with 6% a year earlier.

The company upgraded a number of its productsover the course of the year.The ACMN Horizon Patrimoine range was entrusted to La Française des Placements(UFG-LFP) under an enhanced managementagreement. A number of new partnerships wereset up and new contracts were introduced online, earning widespread recognition from the financial press for both innovation and performance.A new euro fund marketed exclusively onlinewas also started. Managed funds amounted to €8.34 billion,spread over nearly 332,000 life insurance contracts. AMCN Vie posted net profit of €29.2 million in2009, compared with €14 million in 2008, while

ACMN Iard’s premium income continued to rise, gaining 1.5% to €112 million.In a highly competitive environment, new signingsincreased and existing contracts attracted additional deposits, while the adoption raterose. Net profit decreased 43% to €2.8 millionowing to an increase in claims.

ACMN Iard continued to adapt its offer to itspolicyholders’ requirements and develop itsportfolio while working hard to secure loyaltyamong existing customers.With this in mind, it focused on its strongestproducts, enhanced its day-to-day managementand prioritised asset protection initiatives.


Suravenir, a Crédit Mutuel Arkéa / CréditMutuel de Loire-Atlantique et du Centre-Ouestsubsidiary, manages 3.2 million life and personalinsurance contracts on behalf of 2.2 millioncustomers. Sales were up 23% to €2.4 billion,yielding net profit of €90.4 million (up 4.2%).

The group’s multi-distribution strategy wasstepped up. It is based around four distributionchannels: a banking network channel made upof the Crédit Mutuel shareholder federations –Bretagne, Sud-Ouest, Massif Central and Loire-Atlantiqueet Centre-Ouest, together with Banque PrivéeEuropéenne; a “white label” channel for distributionunder other brand names (Fortuneo, BanqueAccord, Meilleurtaux.com, Fidelity, Linxea andFinanco); a channel dedicated to independentfinancial advisers; and a company retirementsavings channel.

The new partnerships developed with brokers,CGPI, the online bank and mass retailers are resulting in a corresponding amount of newbusiness, thereby reducing costs for Crédit Mutuelmembers. The Crédit Mutuel federations and

other partner networks together constitute adistribution network with a sales force of 10,000customer advisers.This high quality service, which focuses on innovation and customer satisfaction, regularlyattracts praise from specialised publications.

Suravenir Assurances, a wholly owned subsidiaryof Crédit Mutuel Arkéa, manages 1.5 millioncontracts covering a comprehensive range ofnon-life insurance products on behalf of390,000 customers.This company supports environmentally respon-sible consumption, notably through its limiteddistance packages for motor insurance and, in itshome insurance contracts, cover of renewableenergy equipment and stipulating the replacementof electrical goods by ‘A’ category equivalents.Its products are marketed by Crédit Mutuel Arkéa’s340 branches, its Banque Privée Européenne(BPE) subsidiary and, for 10% of production, byNovélia, Arkéa’s broker network.

2009 premium income exceeded €200 million(up 15.5%) for net profit of €16 million.

58 Crédit Mutuel

Bankinsurance

Crédit Mutuel Arkéa: main awards in 2009 Life insuranceFortuneo Banque’s Symphonis-Vie won the top prize in the online multisupport contracts category (Journal des Finances), top prize for ‘attractive contracts’ from Le Revenu, second prizein the ‘multisupport contracts for experienced investors’ category (Investir Magazine) and a “labeld’excellence” from Dossiers de l’Epargne. Prévi-Options, a Suravenir contract distributed by alarge number of Group networks, also received a Dossiers de l’Epargne “label d'excellence”.

Non-life insurance“Labels d’Excellence” for Suravenir Assurances’ home cover, personal accident and automobilecontracts, as well as for Novélia’s e.Nov health contract (Les Dossiers de l’Epargne)

2009 Le Revenu awards: Crédit Mutuel’s subsidiaries well placed

The group received numerous awards at the 32nd edition of Le Revenu* magazine’sTrophées life insurance awards.

Euro-denominated contracts: Trophée d’Argent (silver) for ACMN Horizon Patrimoine (ACMN Vie),Trophée de Bronze (bronze) for Livret Avenir (ACM Vie).

Active multisupport category, “high-potential contracts”:ACMN Avenir (ACMN Vie)

Diversified multisupport category, “attractive contracts”:Accord Avenir (Suravenir)

Diversified multisupport category, “promising contracts”: Prévi-Options (Suravenir)

Diversified multisupport category, “high-potential contracts”:Plan Assur Horizons (ACM Vie)

Aggressive multisupport category, “attractive contracts”: ACMN Horizon Patrimoine (ACMN Vie), Hedios Vie (ACMN Vie), MeilleurTaux Vie(Suravenir) and Symphonis-Vie (Fortuneo).

Aggressive multisupport category, “promising contracts”: Plan Patrimonio (ACM Vie)

* April 2009


The Crédit Mutuel networks draw on the expertise of specialised subsidiaries for the benefit of all its customers.Some activities of group-wide strategic importance,such as corporate and investment banking, assetmanagement and private banking and technologicalservices, are largely carried out through shared entitiessuch as CM-CIC Asset Management, CM-CIC EpargneSalariale, CM-CIC Securities and CM-CIC Marchés.

Other activities

The group’s position in this market meant thatit was frequently selected in cash managementtender operations by its customers in 2009.Another defining feature of the year was themarked increase in financial investment by our customers, via euro and foreign currencydeposits as well as domestic certificates of deposit and mutual funds. Also of note in 2009was a rising contribution by major accounts tothe development of our specialised business lines.

Capital marketsThird party and own account capital marketsactivities are carried out by CM-CIC Marchés,which has run a shared trading room with BFCMand CIC since 2005 and is the group’s main operator in this field, and by Crédit Mutuel Arkéa.

To facilitate access to the financial markets,BFCM created the CM-CIC Covered Bonds subsidiary in 2007, thereby providing the additional refinancing capacity that is essentialto the network’s commercial development.

The debt market gradually reopened in 2009,which allowed first-rate banking institutions to resume issuing under their own name. Nevertheless, in order to sustain this recoverythe ECB and the SFEF continued to provide refinancing support to banks for the majority of the year.In September 2009, the Crédit Mutuel groupwas the first bank in France to repay the stateaid it had received in the form of a capital injection.

The CM5-CIC group seized this opportunity to further enhance and secure its strategy foraccessing funding, by: - focusing on the international placement of

short-term paper (sterling CDs and eurocommercial paper), thereby helping to diversifyits sources of funding and reducing the proportion of domestic certificates of depositin its money market portfolio. Accordingly, the share of domestic certificates of deposit fellfrom 48% at end-2008 to 33% at end-2009;

- increasing its holdings of transferable, ECB-eligible cash assets in order to ensurethe group's access to short-term refinancingin the event of a liquidity crisis;

- extending the average maturity of depositsreceived, mainly through the SFEF, with respectto which BFCM acts as centralising agent forthe whole CM-CIC group, as well as through:

- two public bond issues, in the form of BFCMEMTN with 18-month and two-year maturitiesfor a total of €2.75 billion, which it placed with around 100 mainly foreign (i.e. 66%) investors, thereby confirming the level ofconfidence the market has in the group;

- two four-year and eight-year bond issues,placed with the group’s network customers fora total of €1.4 billion.

Moreover, the ceiling of the CM-CIC CoveredBonds programme was raised to €30 billion in order for it to be able to carry out issues in 2010 and to promptly take advantage of thenew legislation on housing financing companies(Sociétés de Financement de l’Habitat - SFH)soon to be implemented in France.CM5-CIC’s cooperation with the EIB continuedin 2009, notably with the drawingdown of an initial amount in con-nection with a new SME loan fund.


Following an unusual year in 2008, which wasmarked by losses (net banking loss of €64 millionand net loss of €736 million), business recoveredin 2009.Net banking income for the business line cameto €1,832 million and net profit, group share totalled €733 million, representing 12.7% of thegroup’s consolidated net banking income and40% of its overall net profit, group share.

Corporate bankingCorporate banking covers all the banking andrelated services provided to companies withannual revenues of more than €50 million.Investment banking covers capital markets,merchant banking, venture capital, developmentcapital, broking and trading.

Corporate banking, capital markets activitiesand investment banking are carried out byBanque Fédérative du Crédit Mutuel (BFCM),Crédit Mutuel Centre Est Europe’s holding company, and by Crédit Mutuel Arkéa.

Corporate and investment banking

Tight access to credit in the first half of 2009led companies to turn in priority to the bondmarket, and, to a lesser extent, to club dealtransactions or bilateral lending agreements.The group nevertheless was able to play its part in extending or renewing loans to largecompanies. The syndicated loan market remained virtuallyclosed, with new deals very thin on the ground.Also of note was a slackening in the use of existing credit lines, with 25% less drawn downyear-on-year - a sign of large businesses’ determination to maintain or even reduce theirgearing. By contrast, asset backed lending was up substantially, both for operating and propertyleases, testament to the group’s ongoing support of its customers.In addition to credit-related activities, our majoraccounts continued to work actively with theirown customers, enabling the group to claim the position of one of the undisputed leaders of the French cash management market. The implementation of the single Europeanpayments area (SEPA) and the gradual replacement of Etebac 5 represent vectors for further developing our relationships with European customers.

62 Crédit Mutuel

Other activities

(in € millions)


Gross operating profit: 1,444


KEY FIGURES

The turnaround was the most spectacular in this business line. Capital markets activities benefited from the return to normal of financial markets while financing activities suffered from the harshbusiness environment, leading to a considerable decline in investment by major accounts.

Asset management covers fund management,employee savings plans, and securities andcustodian services.This activity is carried out through CM-CICAsset Management, the fund managementspecialist that provides the Crédit Mutuel andCIC banking networks with a broad, innovativerange of financial products, CM-CIC Gestion fordiscretionary and advisory management, andspecialised subsidiaries Federal Finance, a CréditMutuel Arkéa subsidiary, and Crédit MutuelNord Europe subsidiary UFG-LFP, a multi-specialist asset manager serving institutionalcustomers, intermediaries and private individuals.

CM-CIC Epargne Salariale and Federal Finance Banque, subsidiaries specialised inemployee savings schemes, offer a variety ofproducts catering for corporate customers ofall sizes, notably very small companies (i.e. withfewer than ten employees).At end-2009, assets under management(1)

came to €115 billion (up 33.3 %), of which €74.7 billion in mutual funds through the CréditMutuel and CIC networks, €35.3 billion underdiscretionary and advisory management forprivate customers (€6 billion) and institutionalcustomers (€29.3 billion) and €5 billion in employee savings.

Combined with the SCPI property investmentbusiness (€5.5 billion overall for the group, with the majority through UFG REM), assetsunder management came to €120.5 billion,representing a 31.6% increase from 2008.

The asset management subsidiaries earn regular recognition for their consistent performances and first class contracts.


Services for investors and listed companiesInvestment company CM-CIC Securities coversall the needs of institutional investors, privateasset management companies and securitiesissuers. A global broker, it is a member of ESNLPP, a multilocal network composed of ten brokers operating in 14 countries in Europe, and accordingly can trade in all European and American equity markets.In its capacity as a clearer and custodian, atend-2009 CM-CIC Securities provided servicesto 102 asset management companies andmanaged 38,000 individual customer accountsand 226 mutual funds, representing almost€15.6 billion in assets.Its issuing department serves 150 differentcompanies, providing a comprehensive rangeof services including financial transaction engineering, financial communication, investorrelations, financial registrar services and a dedicated trading room.

Development capitalWith an investment portfolio of more than €2 billion at the end of 2009, the CM5-CIC grouphas holdings in nearly 500 French companies.Its investments are made to support the economy rather than for speculative purposes,with 50% of its lines held for more than fiveyears and 20% for more than ten years.

Crédit Mutuel Centre Est Europe is one of France’sleading regional investment players, throughthree CIC entities that operate individually andjointly to cover the whole of France:- CIC-Finance, which operates in private equity

and M&A advisory services, covering north-eastFrance;

- IPO, covering the west of France for the past30 years and the south-west region since 2006.The main event of 20081 was its merger byabsorption of the Ar Men financial companyand its takeover of Financière Voltaire, bothsubsidiaries of CIC Banque CIO-BRO, man-aged by IPO since 2006 under an extinctionmanagement mandate;

- Banque de Vizille, which offers a compre-hensive range of investment banking services,covering the south of France.

Crédit Mutuel has several dedicated structures:Sobrepar, Synergie Finance, Océan Partici-pations, CM-CIC Participations Immobilières,FCPR CM Arkéa and UFG Private Equity. Their combined net investments amounted to €222 million at the end of 2009.

64 Crédit Mutuel

Other activities

Asset management and private bankingIn 2009, with net banking income of €512 million and net profit, group shareof €95 million (up 28.4%) asset management and private bankingcontributed in relatively similar proportions to group net banking income and net profit, group share (3.5% and 5.2% respectively).

(in € millions)

Net banking income: 512

Gross operating profit: 133


KEY FIGURES

(1) Includes mutual fund management (including master funds), discretionary and advisory management and mana-gement of FCPE employee savings vehicles

€32 billion in assets under management with UFG-LFUFG-LFP is an asset management group created in the summer of 2009through the merger of UFG, a multi-specialist asset manager, and independent asset management company La Française de Placements.

UFG-LFP had €32 billion in assets under management at end-2009.

Driven by common values and goals, this new group combines expertisein both securities and real estate. Its majority shareholder is Crédit MutuelNord Europe, alongside private shareholders from the group’s managementand staff, and institutional investors MACSF and Groupe Monceau.

UFG-LFP is a market leader in themed management, socially responsibleinvestment and alternative multimanagement.

A real estate major with both asset management and service provisionactivities, the group is also active in private equity.

It has a broad customer base, ranging from institutions to banking networks, investment platforms and intermediaries, and plans to extendits offer to cover private and international customers.

UFG-LFP seeks to re-inject meaning into finance, by committing to in-depth research into major trends and their impact on the economyand the financial markets, devising solutions adapted to its customers’long-term constraints and needs, and prioritising socially responsiblemanagement in all asset classes in order to serve its customers’ interest.


Through its network and through specialisedsubsidiaries in France, Luxembourg and Switzerland,the Crédit Mutuel group offers a comprehensiverange of private banking wealth managementand advisory services for customers with financialassets in excess of €1 million.

CIC Banque Private Banking is the umbrellaorganisation for Crédit Mutuel-CIC’s global privatebanking activities, which are conducted mainlyin Europe (Luxembourg, Switzerland and Belgium)and Asia (Singapore and Hong Kong).

The group’s French business is handled by theCIC Banque Privée business line, which provideshigh-end services to company directors, CICBanque Transatlantique, which offers a rangeof customised solutions, including in privatebanking, principally to French citizens residingabroad, Dubly-Douilhet SA, Banque PrivéeEuropéenne (BPE), a Crédit Mutuel Arkéa subsidiary, and Nord Europe Private Bank SA,a Crédit Mutuel Nord Europe subsidiary.

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Trophies and performance awards for CM-CIC AMin 2009: a testament to rigorous management In 2009, CM-CIC AM received numerous awards for all of its three- and five-year investment products, which offer bond, equity and diversifiedmanagement. This illustrates the high quality of the service provided to the group's networks by its equity and fixed-income managers. The main awards for performances to 31 December 2009 were:

Lipper Fund Awards: the Lipper-Reuters awards go to the best fundsmarketed in France with three-, five- and ten-year investment horizons(35 categories).

Union Obli Long Terme received two prizes, as the best euro-denominatedlong-term fund (Obligations Euro Long Terme), in the five and ten-yearcategories;

Mieux Vivre Votre Argent “labels”: these recognise mutual fundsexperiencing positive growth and ranked among the first decile in their category over five years. Union Obli Court Terme and CM-CIC Dynamique International won Regular Performance awards;

Victoire La Tribune: CM-CIC AM received the Victoire du meilleur Groupe(best group) prize in the “Obligations Gamme Large” (diversified bonds)category.

Novethic SRI 2009 award for the CM-CIC Valeurs Ethiques fund.

Crédit Mutuel Arkéa: main 2009 fund awardsFederal Finance was ranked second in Mieux Vivre Votre Argent’s corbeille d’or and thirdin the long-term category. These awards are for the best SICAV and FCP mutual fundsavailable via banking networks with more than 100 branches.

The Federal Trimestriel fund won a prize for excellence in the euro-denominatedmedium-term bond category and the Federal Indiciel Apal fund won a performance awardin the Asia ex. Japan equity category (Mieux Vivre Votre Argent).

Federal Finance won a bronze award from Le Revenu for its funds’ performances overthree years.

Novethic awarded the SRI 2009 label to the Federal Europe ISR and Federal ActionsEthiques funds for their rigorous and transparent management approach.

Nearly €300 billion in securities under custodyCM-CIC Titres is CM-CIC’s centre of expertise for account keeping and custody, fundcentralisation and financial services for issuers. It provides these services to all CréditMutuel federal banks, CIC banks and group subsidiaries – including CM-CIC AM, CM-CICGestion, CM-CIC Securities and the private banking arm - as well as the bank’s majorcorporate and institutional customers and its ACM insurance division.

CM-CIC Titres provides the same range of services to financial institutions, investmentcompanies and third-party management companies through the Crédit Mutuel CentreEst Europe subsidiary, Boreal. Backed by the latest technology and relevant expertisein the group’s teams, these products and services have a strong customer focus andcan be adjusted and tailored to suit individual needs.

Having suffered from the effects of the financial downturn of 2008, this division hasnow begun to thrive again.

At end-2009, CM-CIC Titres was managing almost €300 billion of assets, or 25% of allretail business in France, 2.5 million active accounts, making it the fourth biggest playerin the French market, and nearly 1,000 mutual funds. It processed 13.5 milliontransactions in 2009, representing a slight 3% decline from 2008. These included 2.3million stock market orders (up by 7.2%) and 4.4 million fund transactions (down 12%).

The company continued to upgrade the tools it provides to the networks and endcustomers, as well as its specialised back office systems. CM-CIC Titres acquired andimplemented new services and continued to adapt its systems in line with changes inthe market.

ProCapital Securities Services, a subsidiary of Crédit Mutuel Arkéa with operations inFrance and Belgium, is a provider of securities services to financial institutions - fundmanagement companies, private banks, retail banks, insurance companies and onlinebrokers and banks – that require flexible solutions ranging from account-keeping andtransaction execution services on behalf of customers to the development oftransactional websites.

Since its creation in 2000, ProCapital has been providing its institutional customerswith quality assured service thanks to its integrated platform based on cutting edgetechnology.

It boosted its offering in 2009 with the creation of ProCapital Banking Services, a banking services subsidiary dedicated to customers in the asset management,insurance and payment services sectors. ProCapital Securities Services had €19 billionin assets under custody and 380,000 active accounts as at 31 December 2009.

TelephonyNRJ Mobile is 90% owned by Euro-Informationand 10 % by NRJ Group. It uses the services of two network operators, Orange and SFR, although all new lines are now opened on theOrange network and benefit from new rateagreements that allow the company to offereven more attractive packages.

NRJ Mobile markets its products in the CréditMutuel and CIC networks under the Crédit MutuelMobile, CIC Mobile and NRJ Mobile brands. The latter brand targets younger customers vialarge retailers such as Carrefour and specialisednetworks such as FNAC and Internity as well as local outlets such as tobacconists, throughdirect online sales on nrjmobile.fr and via thecompany’s 1080 telesales platform.

NRJ Mobile grew exponentially in 2009, acquiring300,000 new customers on post-paid contracts(subscription or one-off, renewable limited calltime deals).It marketed a number of high profile productsduring the year: its first limited call time deals withunlimited text messaging and two free concerttickets, a special seniors contract including tailored assistance, and, in preparation for the marketing of smartphones, unlimited textmessaging, Internet access and emails.

A player at the cutting edge of technology, NRJMobile was the only operator in 2009 to roll outnew contact-free payment pilots, in partnershipwith Casino (in Marseille) and Eurodisney.

It has strong ambitions for 2010 too, as can beseen from the release at the beginning of theyear of new deals offering generous talk time(three unlimited numbers) and 'everything unlimited' (text messaging, Internet access andemails) at the most competitive rates on themarket.

In mid-2010, NRJ Mobile, Crédit Mutuel and CICtook part in the Near Field Communication eventin Nice, in which the mobile phone featured as anall-embracing, contact-free facility for payments,transport, ticket reservations, cultural and touristinformation, etc.


Information technologyThis activity, focused on ongoing optimisation,is organised around two information systemplatforms provided by Euro-Information andCrédit Mutuel Arkéa.

Euro-Information, the holding company forCrédit Mutuel Centre Est Europe-CIC's technologysubsidiaries, provides financial and technicalservices that meet the IT needs of the group’svarious entities: Crédit Mutuel federations, CICbanks, insurance subsidiaries, business linecentres and other subsidiaries. In this context,Euro-Information acts as a centralised pro-curement and financing platform and alsomanages relations with suppliers, the logisticsof leasing and selling equipment and software,payment authorisations and remote depositsand banking channels. Euro-Information is supported by dedicated technical structures in charge of operating, developing and main-taining the group's IT resources and developingtelephony-related activities, document dema-terialisation and card and cheque processingand personalisation.

Euro-Information Production serves as an information system platform for the Crédit Mutuelfederations – of which there are now 15 sincethe integration in May 2009 of the Crédit MutuelAnjou and Crédit Mutuel Océan federations –and for all of the CIC banks.

Technological services

The system is connected to stock market networks, electronic payment systems, and the Target2 settlement system, as well as dataexchange systems such as STET (Systèmetechnique des échanges et des traitements) forSEPA and European Bank Area (EBA) transactions,and, of course, international systems. It is supported by five high-security, highly productiveinterconnected IT centres (Lille, Lyon, Nantes, Parisand Strasbourg), a help centre, a broadbandnetwork and Euro-Information Développements,a company dedicated to the development andmaintenance of the applications used by CréditMutuel Centre Est Europe-CIC and its partnerfederations and subsidiaries. Euro-InformationServices and Sicorfé Maintenance install andmaintain the equipment and workstations, the networks, the EFTPOS terminals, ATMs andtelephony and video surveillance equipment.

The Arkéa platform is shared by the threeCrédit Mutuel Arkéa federations (Crédit Mutuelde Bretagne, Crédit Mutuel du Sud-Ouest andCrédit Mutuel du Massif Central).

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A comprehensive range of technological services – IT, payment-related,telephony, remote surveillance and electronic document management –are available to the Crédit Mutuel group and its customers.

Other servicesCommunication and media

Crédit Mutuel Centre Est Europe owns 98.8% of the capital of printing company SFEJIC, the holding company for the L’Alsace group.

Banque Fédérative du Crédit Mutuel (BFCM) holds100% of the capital of Républicain Lorrain,which it bought in 2007, as well as 80% ofFrance East SAS, which in turn owns 18% of EstRepublicain.

It also owns Ebra, which has controlling stakesin Le Bien Public, Le Journal de Saône-et-Loire,Le Progrès and Le Dauphine Libéré.

Travel

ACTA Voyages, the leading travel agency network in western France, is jointly owned byCrédit Mutuel Arkéa and Carlson WagonlitTravel. It specialises in three areas – tourism,business travel and business conventions.


Payment servicesPayment-related services are managed throughEuro P3C, a subsidiary specialised in the personalisation of cheques, cards and otherelectronic components and which works for all Crédit Mutuel and CIC entities as well as foroutside customers and partners. Two productionsites enable it to offer permanent back-up.

Euro TVS (Traitement des Valeurs et Services) isnumber two in France in batch cheque processing.It provides processing services to Crédit MutuelCentre Est Europe-CIC and partner federations,large retail groups, institutional customers and,more generally, any large document issuer wishingto dematerialise documentary and financial exchanges. Euro TVS also forms part of theproject to offer invoice management servicesto customers.

Residential remote surveillanceand document managementCrédit Mutuel is the French leader in residentialremote surveillance through Euro-ProtectionSurveillance (EPS), which provided services to180,800 subscribers and had a 30% share ofthe market at end-2009. Its customer base,which grew by more than 14% in 2009, has doubledover the past four years.

Euro Télé Services (ETS) is a 24/7 incomingcall centre, providing top-quality service toCentre Est Europe-CIC, partner federations and their respective customers (cardholders,merchants and NRJ mobile users).

Euro Information Direct Services (EIDS) plansand executes telemarketing campaigns for CréditMutuel Centre Est Europe-CIC and partner federations. These campaigns use outgoing callcentres with the aim of winning new customersand boosting the loyalty of existing ones.

In 2009, Euro GDS (Gestion de Documents etServices) dematerialised 13.4 million documentsat its Lyon and Laval sites, up from 6.9 millionthe previous year, representing 43.8 millionpages in 2009 compared with 17.3 million in2008.

Keynectis has 95% of the electronic certificationmarket and is the only French player with twoproviders of digital certification services (PSCE),a benchmark sign of professionalism and quality.

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Financial Report

Financial Report

74 Crédit Mutuel Annual report 2009 75

Contents

MANAGEMENT REPORT OF THE BOARD OF DIRECTORS OF CONFEDERATION NATIONALE DU CREDIT MUTUEL 76

Economic and financial background 76Activity and results 79Analysis by sector of activity 81Results by activity 82Shareholders' equity and risk exposure 84Recent trends and outlook 100

FINANCIAL STATEMENTS 101

Statement of financial position 101Income statement 102Statement of changes in shareholders' equity 104Statement of cash flows 106Notes to the financial statements 108

INDEPENDENT AUDITORS' REPORTON THE CONSOLIDATED FINANCIAL STATEMENTS 164


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76 Crédit Mutuel

Management report of the board of directors of confederation nationale du credit mutuel on the 2009 consolidated financial statements

Economic and financial background

A crisis on a scale not seen for half acentury

In the economic annals, 2009 will go down as anexceptional year as it marked the first global recessionsince 1945. The first signs of the global economy returningto growth did not appear before the spring. By the summer,large tracts of the world economy had staged a rebound,following the United States and the euro zone out ofrecession. However, annual indicators for 2009 bear theimprint of the exceptionally strong economic contractionthat got under way mid-2007 and gathered momentum inthe last months of 2008 and into the first months of 2009,brought about by a virtual paralysis of the financial systemtriggered by the collapse of Lehman Brothers. Thesuddenness of this contraction was due to the amplifiereffect of globalisation through international trade and tothe fact that the crisis was caused to a large extent by thedysfunction of the global financial system. World tradeshrank by 13.5%, a downturn on a scale not seen since theGreat Depression. As a result, global GDP declined by 1% in2009. Even so, the recession experienced by the UnitesStates and the euro zone contrasts with the strong growthrecorded by China, which was one of the first countries toshow signs of recovering thanks to the effects of hugeeconomic stimulus plans. Chinese GDP grew by 8.7% in2009 compared with 9% in 2008. Other emergingcountries, notably Brazil, were also quick to emerge fromthe crisis. Apart from Mexico, which fared even more poorly,Japan experienced the worst recession of all G20 countries,

its economy contracting by 5.3% in 2009. On average, GDPdeclined by 2.4% in the United States and by nearly 4% inthe euro zone. If the global economy did not slip into adepression this was due as much to the Chinese economicstimulus plan or to India’s growth as to the measures takenin developed countries to help their economies. As a result,a new global economic order emerged at last October’sPittsburgh Summit, with emerging countries given greaterrepresentation in a drive to achieve a more balanceddevelopment at world level.

Europe reacted but not in real unison

As the economic crisis deepened, European countries tookmeasures to support their economies that were tailored totheir economic profile. The euro zone moved back onto thegrowth track in the third quarter of 2009. As yet, this growthremains moderate at just 1.6% on annualised basis and itdoes seem more in the nature of a technical rebound thana solid recovery. Household consumption has been penalisedby the labour market’s deterioration, notwithstandingmeasures taken by the authorities to bolster theautomobile market, and low production capacity utilisationrates caused investment to plummet. Not all economieswere affected in the same way by the crisis. Germany, whichwas hit full force by the collapse in world trade, is probablythe European country that experienced the deepestrecession, with a 5% decline in GDP in 2009. Italy’sindustrial sector staged a recovery in the third quarter, butit is estimated that GDP declined by 4.8% over the year asa whole. The United Kingdom, whose economy is intimatelytied to the financial sector, was one of the last developedcountries to emerge from the recession. Spain and Irelandremain in the throes of recession, with both economies

affected by property bubbles. Eastern European countries,which were already affected by external imbalances, werehit particularly hard by the financial and banking crisis, withGDP in these countries falling by more than 8%.

Recession in France was not as severe asin other European countries

The 2.2% decline in GDP recorded by France in 2009 wasone of the slightest recorded by a European economy. Thisparticularity is explained by the fact that exports did not fallas much as in other euro zone economies that are moredependent on world trade. In addition, France experienceda more moderate decline in investment expenditure, whilehousehold consumption expenditure proved more resilient.Resistant as the French economy was, this should not beallowed to mask the extent of the downturn, which was thesharpest in seventy years. Thanks to support from certainspecific programmes contained in the economic stimuluspackage adopted end-2008 (notably the scrappingincentive), industrial activity did pick up from the springonwards, but this was without effect on employment. On thedownside, the reduction in capital expenditure and thesignificant destocking weighed on economic activitythroughout the year. However, these two factors did reduceconsiderably the external financing requirements ofcompanies. Inflation was weak at 0.9% year on year and 0.1%on average, which contributed to boosting purchasing powerby around 2% and, given their wait-and-see attitude, thisenabled households to increase their savings rate to 16.5%of disposable income despite a temporary, unparalleleddecline in payrolls in the market sector in the first half.Households and non-financial companies also started todeleverage. To stem the crisis, France, like other G20countries, opted to increase the public deficit, in France’scase to around 8.2% of GDP. This course of action meantthat the public debt ballooned to more than 77% of GDP.

Proactive economic policies, resulting inexcess liquidity and a deepening of publicdeficits, staved off a great depression

Close international cooperation between economic policydeciders could not prevent a serious recession but it didstave off a great depression. To stimulate economicactivity, central banks slashed key policy rates to a whiskerabove zero. In the United State, the federal funds rateobjective was kept at between 0% and 0.25% throughout2009. In the United Kingdom, the Bank of England cut itsbank rate to 1.5% on 9 January 2009, its lowest level since

the institution’s creation three centuries ago. It went on tocut the bank rate to 0.5% on 5 March. In the euro zone, theEuropean Central Bank has kept its repo rate at 1% since 13 May 2009, apparently reluctant to pursue a zero interestrate policy, although it has allowed the Eonia rate to holdbelow the repo rate, at 0.35%, since July. Central banks alsoimplemented exceptional measures to support the financialsystem, inundating it with liquidity. Given the cost of thevarious stimulus plans and of the bank support programmes,the erstwhile discipline, which had been about maintainingbalanced budgets, took a back seat. Between 2007 and2009 public deficits widened by nearly 7 points of GDP to10% in the United States and by 6 points to more than 6%in the euro zone. At the same time, there was a ballooningof public debt. In the case of the euro zone, it is expected to increase at least until the end of 2011 when it is expectedto represent 86.5% of GDP on average, and far more incertain Member States.

Signs of a recovery visible in the financial andcommodity markets at the start of 2009

The commodity markets started to rebound at the end of2008. The price of Brent crude doubled in six months tojust under $80 per barrel in early December. Prices forindustrial commodities tracked pretty much the samecourse, displaying firmness throughout the year. Buckingthis trend, foodstuff commodities were more hesitant. Thegeneral upturn in commodity prices was due to therestoration of investor confidence in a context of abundantliquidity. As for the stock markets, they resumed their rise in2009. Generally speaking, however, the profile charted bystock markets showed that after picking up there followed agradual tapering off. Stock market rallies were far morepronounced in emerging countries, which posted gains of78.6% on average, than in developed countries, whichposted gains of 28.7% on average. Over one year, New Yorkclosed 19% higher, Tokyo 16%, London 35%, Frankfurt 28%and Paris 27%. With investors moving back in, marketvolatility declined.Page 78

Normalisation of 3-month interest ratesand of bond yields at relatively low levels

2009 will go down as the year of normalisation at the shortend of the yield curve. After peaking around 5% at the startof October 2008, 3-month rates converged graduallytoward key policy rates, which central banks kept athistorically low levels throughout the year. Long rates,


While the group pressed ahead with its development…

2009 was marked by significant changes in the consolidationscope, with notably the acquisition of Cofidis, of Monabanqand of the La Française des Placements group. Note too,that Banco Popolare di Milano (BPM) and Ebra group wereconsolidated for the first time.

… business was subdued, with a strongincrease in deposits but a limited rise inloans and advances

There was another increase in customer deposits, up11.2% to €219.3 billion. Excluding SFEF and the Cofidisgroup, deposits increased by 6.2% to €207.5 billion.

On this basis, the group’s market share of deposit taking inFrance reached 11.9% at the end of 2009.

Demand deposits rose to €134,671 million, with increases:- in non-regulated demand deposits of 13.1% to €65,301

million, reflecting 10.8% growth in customer creditbalances as well as higher overnight deposits by financialcustomers; and

- in regulated demand deposits of 2.8% to €69,461 million,as more savings were channelled into the various types ofsaving book deposits.

There was another increase in regulated term deposits, up16.5% to €34,985 million. Non-regulated depositsincreased by 18.3% to €48,685 million. They include loanscontracted with Société de Financement de l’EconomieFrançaise (SFEF).There was another increase in loans and advances tocustomers1, up 2.9% to €304.2 billion with the acquisitionof Cofidis. In France, Crédit Mutuel’s share of bank lendingreached 17.5% at the end of 2009, up 0.2 percentage pointat constant consolidation scope (excluding Cofidis).

Home loans reached €159.8 billion at the year end, up 2.7%on the preceding year. The distribution of home loans was penalised by the fragile economic and financialenvironment, notably the higher refinancing costs in thefirst half (driving up rates charged to customers), thecaution shown by home buyers, and the slowdown of theproperty market. However, prospects brightened in the lastquarter of 2009, with network loan production picking uponce again.

Consumer credits reached €33.4 billion, with €6.7 billioncontributed by Cofidis and €10.2 billion contributed byTargobank. These two acquisitions have increased andstrengthened the group’s presence in this business line.Since 2007, the consumer credit loan book has doubled insize, from €15.4 billion in 2007 to €33.4 billion in 2009.

Equipment loans to businesses and professionals to helpdevelop their activity and improve their performancesincreased by 3.6% to €48.3 billion. Leasing financing alsoincreased, up 5.8% to €9.5 billion. However, because theeconomic slowdown reduced working capital requirementsfor these customers and certain of them experienced adeterioration in their financial positions, due notably to asharp increase in doubtful debts, operating loans did notincrease and totalled €27.7 billion at the end of 2009.

The increase in deposits and the lesser demand for loansand advances reduced the group’s refinancing requirements.As a result:- amounts due to credit institutions declined to

€38,800 million because of the trend in long-term loans.- debts represented by securities declined by 12.5%,

notably negotiable debt instruments; and- subordinated debts declined by 13.8%, mainly because

of the repayment at the end of September of the supersubordinated securities subscribed to by Société de Prisede Participation de l’Etat (SPPE) in connection withFrance’s economic stimulus plan.

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78 Crédit Mutuel

which had declined to abnormally low levels at the end of2008, picked from the start of 2009 as visibility over theeconomic outlook improved. In the second half of the year,however, yields did tend to ease. Bond markets were notdestabilised by the widening public deficits. The US 10-yearrate finished the year at 3.8%, near its June high, while theeuro zone 10-year rate reached 3.5% at the year end, downfrom 4% in the spring. The risk premium between privatesector and public sector issuers narrowed gradually, butremained above levels seen pre-crisis.

Currency markets were paradoxical onoccasions

At the height of the crisis, the dollar played its role as a safehaven. The euro declined to 1.25 against the US dollar atthe start of 2009, down from a high of almost 1.60 duringthe summer of 2008. Thereafter, however, the US dollarweakened as signs multiplied that the US economy wasemerging from recession, causing a series of currencies toappreciate but thereby penalising economies trying to haulthemselves out of the crisis. Towards the end of 2009, theUS currency elicited renewed interest from investors onexpectations that the Federal Reserve would move morequickly than expected to tighten monetary policy. TheJapanese yen tended to appreciate against the greenback,with the US currency falling back to 93 yen. Finally, afterfalling sharply in 2008, sterling tended to trade sidewaysagainst the euro in 2009. Yet, in contrast to the euro zone,the British economy did not emerge from recession untilthe fourth quarter of 2009. As regards emergingcurrencies, the South Korean won had a particularly jaggedprofile. However, what attracted most attention in Asia wasthe Chinese yuan’s renewed stability against the US dollar.The Chinese authorities had permitted a gradualappreciation of the country’s currency, but they stepped into check this uptrend, thus accentuating foreign exchangedistortions against other currencies, notably the euro.

Signs of reduced strain in the bankingsystem confirmed in 2009

The banking system, which seized up at the end of 2008,gradually started to function normally in 2009. Banks in theeuro zone, the United States and the United Kingdomsucceeded in repairing their balance sheets. The easing ofmonetary policies and the bank support plans put in placeby governments, together with the improvement in theeconomic environment and the turnaround of the financialmarkets contributed largely to restoring the profitability of

the banks, which also made efforts to rein in their costs.Attractive lending rates failed to bolster demand from theprivate sector, which increased by only 1.8% in 2009, butthe upturn in lending to households was confirmed inDecember.

Treaty of Lisbon

The Lisbon Treaty came into force on 1 December 2009,ushering in a new era for the European Union by providingmodern institutions and working methods to address itsenlargement. The issue of unemployment will be the firstchallenge faced by the European Union and its new systemof governance. The euro zone, which celebrated its tenthanniversary in 2009, will need to restore budgetarycredibility in at least half of the 16 euro zone countries.

Will 2010 mark a return to economicgrowth?

The global economy can be expected to return to growth ofalmost 4%, but the recovery will be fragile and largelydependent on just when emergency measures are withdrawnand lending resumes. Uncertainties about what lies aheadhave caused markets to turn more hesitant since September2009, but this is likely to be just a pause before aresumption of their uptrend. In France, growth should bebuoyed by the launch of the national loan to financeinnovative investments.

Activity and resultsThe Crédit Mutuel group is not listed and is consequently under no obligation to present financial statements inaccordance with International Financial Reporting Standards (IFRS). However, for the sake of greater transparency and topromote comparability with other leading financial institutions, the Board of Directors of Confédération Nationale duCrédit Mutuel, which is the group's central governing body within the meaning of Article L.511-31 of the French Monetaryand Financial Code, has opted to prepare consolidated financial statements in accordance with International FinancialReporting Standards as approved by the European Union.

The Board of Directors approved the consolidated financial statements for the year ended 31 December 2009 when it meton 17 March 2010 and is presenting them, together with this report, to the General Meeting for its approval.

(1) Analysis of activity with customers includes management accounting data


Retail Banking comprises the networks of Crédit Mutuel'sregional federations and those of CIC's regional banks. Thissegment also includes some of the specialised activitieswhose products and services are marketed by the networksuch as finance leasing, factoring, real estate businesses(investment, facilities management, distribution andproperty development) and collective management ofproducts distributed by the network.

Insurance is considered as a separate segment given itsimportance in the group's activities. The group hashistorically been the leading bank in this activity, havingstarted its bankinsurance activity in 1970. The activitycovers both life and non-life insurance.

Corporate and Investment Banking covers financing forlarge corporates and institutional customers, added-valuefinancing activities, private equity, international activitiesand market activities, whether on its own behalf or onbehalf of customers, including stock market intermediation.

Asset management and private banking comprises thesubsidiaries that are mainly engaged in private banking,both in France and abroad, together with the assetmanagement and employee savings activities.

Other activities cover all the activities that cannot beattributed to any of the above segments, together withsubsidiaries involved purely in logistical support, whoseexpenses are generally re-billed to the other entities. Theyinclude intermediate holding companies, companiesowning the property used in the group’s operations and ITsubsidiaries.

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In terms of the income statement, these balance sheetchanges and the favourable interest rate environmenthelped the interest margin increase by €3,422 million(€2,044 million excluding acquisitions) to €7,392 million(€6,014 million excluding acquisitions).

Net income from other activities increased to €2,253 million,up by 14.6% (mainly insurance).

The rebound on financial markets wasfavourable for the securities portfolio…

Net gains on securities at fair value through profit or lossincreased by €587 million to €599 million, thanks mainlyto securities trading, which made a positive contribution of€1,984 million in 2009.

… paving the way for a substantial increasein net banking income to €13,573 million,up 61.1% (37.5% excluding acquisitions)…

… despite an increase in general operatingexpenses...

General operating expenses increased by 25.3% (8.2%excluding acquisitions), mainly because staff costs reached€4,777 million (of which €495 million resulting fromacquisitions). Because of the improvement in the results,amounts due under mandatory and discretionaryemployee profit sharing plans increased sharply.

A high level of services is provided to the bank’s customer-members at the network’s 5,831 branches, of which 5,441 arein France. On average, the Crédit Mutuel group employed72,465 people in 2009 (of which 62,852 in France),equivalent to an increase contained to 0.4% at constantconsolidation scope.

… and a substantial increase in cost of risk…

The financial crisis, by bringing to its knees a number of banks,pushed up the cost of risk in 2008. The economic crisisdominated in 2009, which weighed on the group’sperformances. Adjusted for the impact of Lehman Brothersand Iceland’s banks, which cost €720 million in 2008, costof risk doubled to €1,429 million in 2009 (excludingacquisitions). Impaired loans increased sharply between 2008and 2009, from 3% of total loans to 4.2%. Acquisitionsaccount for around half this increase, due to the policy ofreclassifying loans as doubtful on a timelier basis.

Before taking into account general provisions, the coveragerate for these loans reached 58.2% (58.6% excludingacquisitions) at 31 December 2009 compared with 62% at31 December 2008.

Group’s share of net profit more than quadrupled to€1,831 million, up 4.2 times (up 4.4 times excludingacquisitions)

Shareholders’ equity benefited from this performance, increasing by 20% to €29,616 million

Shareholders’ equity (excluding minority interests) increasedby €5 billion to €29,616 million. There were three reasonsfor this increase:- capital contributions by members;- the growth in earnings; and- an increase in unrealised gains on the portfolio of

securities available for sale stemming from the improvedconditions in the financial markets.

Minority interests increased significantly, up €643 millionto €1 billion, following the acquisition of the Cofidis group.

Crédit Mutuel group confirmed it was one the most highlyrated banks in the euro zone. Standard & Poor’s affirmedthe A+/A-1 ratings assigned to all group entities with aStable outlook. Banque Fédérative du Crédit Mutuel (theholding company for the Crédit Mutuel Centre Est Europegroup, and a direct shareholder in CIC) is rated Aa3 byMoody’s and AA- by Fitch.

Analysis by sector of activityThe Crédit Mutuel group is organised into five operating segments.


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Retail Banking recorded a 40.3% increase in net bankingincome. This increase includes net banking incomecontributed by acquisitions. Excluding these acquisitions,net banking income increased by €643 million, up 8.6%,reflecting:- the effect on the intermediation margin of the significant

decline in the cost of deposits, due notably to successivecuts in the rate offered on regulated savings products,while the rates charged on loans and advances alsodeclined, as they did at all other banking institutions;

- the slightly lower refinancing allocated to customerlending given the weaker growth in customer loans andadvances and the further increase in customer deposits;at the same time, refinancing costs were more moderatethan in the liquidity crisis of 2008.

Commission income from customers continued to grow,generated mainly by account management and services,credit cards and payment instruments.With the integration of Targobank, Cofidis group and CICIberbanco, the group now has 23.3 million customers intotal, including 21.4 million retail customers. In 2009, it attracted 265 thousand new customers, not taking

into account the contribution by Cofidis of 3.5 millioncustomers.

Gross operating profit was affected by a rise in generaloperating expenses as the group continued to develop its activities and to invest in extending its network. In 2009, the number of branches increased by 85 to 5,831at the end of the year.At constant consolidation scope, general operating expensesincreased mainly because of the higher amounts due undermandatory and discretionary employee profit-sharingplans.

The increase in cost of risk held back earnings growth. This increase was due both to specific and general provisions.Acquisitions accounted for half this increase, due to thepolicy of reclassifying loans as doubtful on a timelier basis.

Against the backdrop of an economic crisis, Retail Bankingposted a net attributable profit of €1,042 million. It contributedalmost 73% of the group’s net banking income and 57% of its net profit.

Results by activityNote that the weight of the data by sector of activity is calculated before elimination of intra-group transactions.

Retail Banking

Variation(in €m) 2009 2008 2009/2008

Net banking income 10,500 7,485 40.3%Gross operating profit 3,515 2,081 68.9%Profit before tax 1,605 1,565 2.6%Net profit, group share 1,042 1,017 2.5%

Insurance

Variation(in €m) 2009 2008 2009/2008

Net banking income 1,322 995 32.9%Gross operating profit 809 535 51.2%Profit before tax 829 543 52.7%Net profit, group share 587 420 39.8%

The group pressed on with its development in the highlycompetitive non-life insurance market. The almost 24 millioncontracts in portfolio generated €2.3 billion of premiumincome, up 4%.Non-life insurance had to contend with a quite high claimsexperience. General operating expenses increased sharplybecause of the significant rise in taxes. As cost of risk was negligible, the group’s share of net profit increased by €167 million to €587 million, up 39.8%.Insurance contributed more than 9% of the group’s netbanking income and nearly 32% of its net profit.

In Insurance, the group’s subsidiaries manage 28 millioninsurance contracts (of which 23.8 million non-life contracts),up 5.4% in 2009, for 11.2 million policyholders, up 2.2%.Whereas business was slack in 2008, life insurancebenefited from favourable conditions in 2009, notablybecause of the significant yield differential compared withliquid savings products and also because life insurancepresents only a slight risk exposure. Life insurancesubsidiaries generated €10.1 billion of premium income in2009, up 29% on the preceding year, while assets undermanagement increased by 10% to €89.4 billion.

Corporate and Investment Banking

dented by cost of risk. From €725 million in 2008, duemainly to the collapse of Lehman Brothers and Iceland’sbanks, cost of risk declined to €378 million. This activityaccounted for 16% of cost of risk at group level comparedwith 51.6% in 2008. Nonetheless, this sector of activitycontributed significant earnings in 2009.

Corporate and Investment Banking naturally benefitedfrom the recovery of the financial markets (derivatives andsecurities portfolios).Overall, net banking income increased by €1,896 million,while the business moved back into the black with a grossoperating profit as well as a net profit, though the latter was

Variation(in €m) 2009 2008 2009/2008

Net banking income 1,832 (64) n.m.Gross operating profit 1,444 (440) n.m.Profit before tax 1,066 (1,163) n.m.Net profit, group share 733 (736) n.m.

Asset Management and Private Banking

increase in managed assets reflected especially:- an excellent level of collection for money market UCITS as

well as the first-time consolidation of La Française desPlacements;

- the issue of bonds by BFCM and Crédit Mutuel Arkéasubscribed to by network customers;

- growth of almost 25% in employee savings plans; and- the satisfactory 8% increase in securities custody to

€139 billion recorded by CIC.

Asset Management and Private Banking recorded a slight,€37 million decline in net banking income. The increase inearnings was due to the non-recurrence of the costsincurred in 2008 in connection with the collapse of LehmanBrothers.

Not taking into account life insurance, off balance sheetsavings increased to €235.1 billion. While there was afavourable valuation effect compared with 2008, the 17.7%

Variation(in €m) 2009 2008 2009/2008

Net banking income 512 549 -6.7%Gross operating profit 133 211 -37.0%Profit before tax 135 103 31.1%Net profit, group share 95 74 28.4%

Other Activities

General operating expenses increased mainly because ofacquisitions.

The significant increase in net banking income contributedby Other activities is explained by a favourable base effect as 2008 performances were affected by losses ondisposals and impairment losses on listed investments.

Variation(in €m) 2009 2008 2009/2008

Net banking income 258 6 n.m.Gross operating profit (696) (640) 8.8%Profit before tax (893) (639) 39.7%Net profit, group share (626) (335) 86.9%


As part of the overall group risk policy adopted by theConfédération's Board of Directors, each regional group isresponsible for defining a general policy for managing risksat its level. This policy is then applied by each regionalgroup through rules for approving loans and advances, in the main orientations defined for its lending activity(notably in terms of customer segmentation), and by setting and monitoring limits. Financing limits are set so that they are adapted to the level of the entityconcerned and are consistent with the system in place atnational level.

National and regional procedures are based on an internalrating system, put in place to comply with Basel IIrequirements. This internal rating system is used by allgroup entities. It allows for the rating of all counterpartseligible for internal ratings-based approaches. The systemis based on different statistical models for customersegments for retail exposures and on manual rating gridsdeveloped by experts for bank exposures, large corporateexposures and specialised market activities. All counterpartseligible for internal ratings-based approaches are positionedon a single rating scale reflecting the progressive nature of the risk: there are nine levels for unimpaired loans

(from A+ to E+) and three for impaired loans (E-/E for non-performing and F for default).

The systems for reclassifying and provisioning loans areintegrated into the information systems and operate on amonthly basis, reclassifying performing loans as doubtfulloans where applicable. The software also integrates thenotion of contagion to a third party. Provisions arecalculated according to the outstanding amount and theguarantees received, and adjusted by the risk managersdepending on the estimated expected loss.

At national level, data retrieval and steering applications havebeen enhanced. These applications generate managementreports of credit risks that analyse exposures by the maincategories defined in the internal rating system. These reports,which are produced at national level and then analysed by regional entity, provide information on the quality of thegroup’s commitments and compliance with national limitsplaced on credit risks. They are sent to the senior managementof the regional groups (Chief Executive Officers, RiskManagement Directors, Commitments Directors) and to theexecutive and deliberative bodies of ConfédérationNationale du Crédit Mutuel.

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84 Crédit Mutuel

shareholders’ equity

Under CRBF Regulation 2000-03, the networks of bankinginstitutions with a central body must comply with managementratios both on an individual basis (for each of the groups makingup Crédit Mutuel) and on a consolidated basis at national level(market risk and credit risk, large risks, and equity holdings).The consolidating entity and the scope of prudential supervisionof the Crédit Mutuel group are identical to those used forthe group's consolidated financial statements. Only theconsolidation method changes, notably as regards theinsurance companies, which are consolidated for accountingpurposes using the full consolidation method andconsolidated using the equity method for prudential purposes.The overall capital adequacy ratio defines the capitalrequirement needed to cover credit and market risks. Total shareholders' equity corresponds to the sum of coreshareholders' equity (Tier 1 including undated super-subordinated securities), additional shareholders' equity(including redeemable subordinated securities and undated

subordinated securities) and regulatory deductions (someinvestments in non-consolidated or equity-accountedfinancial institutions and investments in insurance companies).

Accounting shareholders' equity is restated to take intoaccount the effect of prudential filters, whose purpose is toreduce the volatility of shareholders' equity induced by theinternational standards, notably by the introduction of fairvalue.The group also complies with the reporting requirementsarising from the EU Directive applicable to financialconglomerates. This requires, among other things, additionalmonitoring of the coverage by consolidated shareholders'equity of the cumulative capital adequacy requirements ofbanking activities and those of the insurance companies.

The Crédit Mutuel group complies with all the applicableregulatory ratios.

Capital adequacy* 31.12.2009 (IFRS) 31.12.2008 (IFRS)

Tier 1 capital 27,479 25,599Total prudential shareholders' equity 25,469 24,761Weighted risk 212,101 201,966Overall capital adequacy ratio 10.9% 9.5%Tier 1 ratio 11.8% 9.8%

Risk management policy

As the group's central governing body, risk measurementand monitoring form part of Confédération Nationale duCrédit Mutuel's supervisory duties. At regional level, eachCrédit Mutuel group is responsible for managing its own riskexposures.

Credit risk

Crédit Mutuel’s credit risk management policy seeks toachieve several objectives, which are to:

- measure capital requirements;- help steer the group by managing commitments (in

compliance with limits in terms of unit amount, and sectorand geographic exposures and risks;

- reduce cost of risk over time; and- respond efficiently to Basel II and internal control regulations

and ensure that regulatory compliance investmentsgenerate a return.

31.12.2009 31.12.2008

Loans and receivables Credit institutions 44,042 48,374Customers 312,834 302,150Gross exposure 356,876 350,524Provisions for impairment (8,796) (6,549)Credit institutions (548) (344)Customers (8,248) (6,205)Net exposure 348,080 343,975

Credit risk exposure arising from commitments increased by 12.4%, reflecting increases in risk exposure on financingcommitments of 14.9% and on guarantee commitments of 5.9%.

31.12.2009 31.12.2008

Financing commitments givenCredit institutions 1,860 1,758Customers 54,444 47,236Guarantee commitments given Credit institutions 4,776 3,282Customers 15,742 16,090Provisions for risk on commitments given 178 151

There was a 1.2% increase in the net exposure to credit risk. This reflects a 2.9% increase in exposure to customers, partlyoffset by a 9.4% decrease in net exposure to credit institutions.

Shareholders' equity and risk exposure

Les données présentées dans les tableaux des pages suivantes sont exprimées en millions d’euros. Les chiffres qui figurentdans ce chapitre sont audités sauf ceux expressément indiqués par un astérisque.

Credit risk exposure on loans and receivables

Credit risk exposure on commitments given


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86 Crédit Mutuel

31.12.2009 31.12.2008

Debt securities (*)

Government securities 21,240 20,569Bonds 108,860 111,936Derivatives 5,498 13,109Repurchase agreements and securities lending 16,671 12,767Gross exposure 152,269 158,381Provisions for impairment (141) (383)Net exposure 152,128 157,998

(*) Excluding securities classified under loans and receivables

Credit exposure on debt securities decreased by 3.7%.

Rating structure of interbank outstandings and geographic breakdown of interbank loans

The two tables below concern the group's retail banking and insurance activities.

Rating structure of interbank outstandings 31.12.2009 31.12.2008 as a % as a %

AAA and AA+ 4.7% 5.4%AA and AA- 6.8% 20.6%A+ and A 48.8% 50.5%A- 26.4% 11.2%BBB+ and below 13.3% 12.3%

The significant reduction in the proportion of interbank outstandings rated AA and AA- reflects the deterioration in theratings of several large banks due to the difficult operating conditions prevailing in 2009, notably in lending. Nevertheless,nearly 87% of the group’s exposure to banks is concentrated on counterparts rated above A- in 2009, compared with 88%the preceding year.

Geographic breakdown of interbank loans 31.12.2009 31.12.2008 as a % as a %

France 31.6% 33.7%Rest of Europe 49.2% 50.6%Rest of world 19.2% 15.7% 100.0% 100.0%

The geographic breakdown of interbank loans changed little from one year to the next. Some 81% of these loans were toFrench and European banks. There was a rebalancing in favour of countries outside Europe, which increased in relativeterms from 15.7% to 19.2%.

Customer credit risk

Breakdown of loans and advances 31.12.2009 31.12.2008by customer segment as a % as a %

A - Central governments and banks 13.9% 15.5%B – Credit institutions 10.6% 11.8%C- Corporates 19.4% 20.6%D - Retail 56.1% 52.1%

Taking all commitments into account (loans, off balance sheet and securities), the average unit amount of the 76 risksexceeding €300 million was €609 million (2008: €616 million) while the average unit amount of the 31 risks between€200 million and €300 million was €206 million (2008: €217 million).

Concentration of customer risk 31.12.2009 31.12.2008

Commitments exceeding €300 million Number 76 74Loans (€m) 14,370 16,634Off balance sheet commitments (€m) 16,435 13,949Securities (€m) 15,490 15,024Commitments of between €200 million and €300 million Number 31 34Loans (€m) 2,325 2,765Off balance sheet commitments (€m) 3,008 2,037Securities (€m) 1,065 2,581

Retail customers account for over 50% of the group’s exposure.

Geographic breakdown of customer risk 31.12.2009 31.12.2008 as a % as a %

France 91.8% 92.1%Germany 4.0% 4.3%Rest of Europe 3.3% 2.5%Rest of world 0.9% 1.1%

The bulk of customer risk is concentrated in France (including French overseas departments).

Exposure to credit risk on debt securities

Impaired loans increased sharply to 4.2% of total loans in 2009, up from 3% in 2008. Acquisitions accounted for half thisincrease, due to the policy of reclassifying loans as doubtful on a timelier basis.

Quality of risk 31.12.2009 31.12.2008

Loans and advances written down individually 13,257 8,975Individual provisions (7,713) (5,562)General provisions (535) (643)Overall coverage ratio 62.2% 69.1%Coverage ratio (individual provisions only) 58.2% 62.0%


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88 Crédit Mutuel

Past dues

< 3 months > 3 months > 6 months > 1 year Total31.12.2009 (€m) < 6 months < 1 year

Debt instruments - - - - -Central governments - - - - -Credit institutions - - - - -Financial institutions other than credit institutions - - - - -Large corporates - - - - -Retail customers - - - - -Loans and advances 6,176 103 16 14 6,309Central governments 5 - - - 5Credit institutions 19 - - - 19Financial institutions other than credit institutions 47 - - - 47Large corporates 648 2 - - 650Retail customers 5,457 101 16 14 5,588Other financial assets - - - - -Total 6,176 103 16 14 6,309

< 3 months > 3 months > 6 months > 1 year Total31.12.2008 < 6 months < 1 year

Debt instruments - - - - -Central governments - - - - -Credit institutions - - - - -Financial institutions other than credit institutions - - - - -Large corporates - - - - -Retail customers - - - - -Loans and advances 3,000 75 22 15 3,112Central governments 12 - - - 12Credit institutions 14 - - - 14Financial institutions other than credit institutions 22 - - - 22Large corporates 442 14 10 6 472Retail customers 2,510 61 12 9 2,592Other financial assets - - - - -Total 3,000 75 22 15 3,112

Past dues concern mainly retail customers (89%) and large corporates (10%).

31.12.2009 31.12.2008Breakdown of risk by economic sector en % en %

Private individuals 45.8% 42.4%Public administrations 13.7% 15.4%Banks and financial institutions 9.4% 10.5%Business services 4.6% 3.5%Sole traders 3.9% 3.9%Retail trade 3.3% 3.8%Food processing and agriculture 3.2% 3.2%Real estate 2.6% 2.7%Construction & building materials 2.3% 2.8%Other financial activities 2.2% 2.3%Specialised financing 1.4% 1.4%Industrial transport 1.0% 1.1%Travel & leisure 1.0% 1.0%Automobile 0.7% 0.7%Household products 0.7% 0.7%High technology 0.6% 0.7%Media 0.6% 0.7%Utilities 0.6% 0.6%Healthcare 0.5% 0.6%Telecommunications 0.5% 0.3%Raw materials 0.4% 0.6%Sundry 1.1% 1.2%

Source: CM-CIC group – Basel 2 calculator


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90 Crédit Mutuel

Exposures linked to the financial crisis

In response to the financial crisis, the Financial Stability Board(FSB) issued recommendations relating to transparency,aimed at improving financial information in respect of certainrisk exposures.

The Crédit Mutuel group elected to apply these recommen-dations with a view to improving its financial communication.The information below is expressed in millions of euro

Exposure to residential mortgage backed securities (RMBS)

Carrying value Acquisition cost Carrying value 31.12.2009 31.12.2009 31.12.2008

Trading 1,067 1,080 1,169Available-for-sale (AFS) 2,124 2,193 3,020Loans (held-to-maturity/loans and receivables) 2,487 3,058 3,306

Total 5,678 6,331 7,495

In their very great majority, residential mortgage backed securities are valued based on analyses of information providedby external sources (counterparts, brokers, etc.).

Exposure to RMBS issued in the United States

Carrying value Acquisition cost Carrying valueAnalysis by year of origination 31.12.2009 31.12.2009 31.12.2008

2005 and earlier 529 633 7102006 716 990 1,2442007 722 886 1,115Since 2008 115 121 53

Total 2,082 2,630 3,122

These exposures consist mainly of collateralized mortgage obligations (CMO).

Carrying value Acquisition cost Carrying valueAnalysis by rating 31.12.2009 31.12.2009 31.12.2008

Agencies 697 687 1 227 AAA 93 101 472 AA 41 55 49 A 7 10 69 BBB 18 28 422 BB 31 34 101 B or less 1,195 1,715 782

Not rated 0 0 0

Total 2,082 2,630 3,122

Guarantees received from monoliner insurance companies

Carrying value Acquisition cost Carrying valueCommitments by type of obligation 31.12.2009 31.12.2009 31.12.2008

RMBS issued in the United States 61 73 64Non covered bonds 4 4 4

Total 65 77 68

These exposures have arisen in connection with market activities carried out for own account.

Carrying value Acquisition cost Carrying valueCommitments on monoliner insurers 31.12.2009 31.12.2009 31.12.2008

FSA 4 4 4MBIA 4 5 7Ambac 22 22 34FGIC 35 46 23

Total 65 77 68

Exposure to commercial mortgage backed securities (CMBS)

Carrying value Carrying value 31.12.2009 31.12.2008

Trading 23 67Available-for-sale (AFS) 285 405Loans (held-to-maturity/loans and receivables) 118 143

Total 426 615

Carrying value Carrying valueBreakdown by geographic area 31.12.2009 31.12.2008

France 49 69Rest of Europe 259 345United States - -Other 118 201

Total 426 615


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92 Crédit Mutuel

Exposure to collateralized debt obligations (CDO)


Trading 4 5 4Available-for-sale (AFS) 104 110 331Loans (held-to-maturity/loans and receivables) 1,858 1,864 1,786Total 1,966 1,979 2,121

Carrying value Acquisition cost Carrying valueBreakdown by geographic area 31.12.2009 31.12.2009 31.12.2008

France 30 30 76Rest of Europe 920 924 620United States 72 74 513Other 944 951 912

Total 1,966 1,979 2,121

Carrying value Acquisition cost Carrying valueBreakdown by rating 31.12.2009 31.12.2009 31.12.2008

AAA 1,521 1,533 1,794AA 343 348 115Other 102 98 212

Total 1,966 1,979 2,121

Exposure to CDO not hedged by credit default swaps


Trading 715 733 1,061Available-for-sale (AFS) 534 539 780Loans (held-to-maturity/loans and receivables) 389 399 568Total 1,638 1,671 2,409

Carrying value Acquisition cost Carrying valueBreakdown by geographic area 31.12.2009 31.12.2009 31.12.2008

France 577 588 581Rest of Europe 991 1,012 1,715United States - - -Other 70 71 113

Total 1,638 1,671 2,409

Exposure to other asset-backed securities not hedged

Carrying value Acquisition cost Carrying valueBreakdown by rating 31.12.2009 31.12.2009 31.12.2008

AAA 1,276 1,301 1,978AA 150 161 180A 13 13 87Other 199 196 164

Total 1,638 1,671 2,409

Asset-backed securities hedged by credit default swaps amounted to €995 million at 31 December 2009.

Exposure to leveraged buy-out (LBO) financing

Transactions with special purpose vehiclesAt 31 December 2009, liquidity lines totalling €298 million had been granted to three mutual loan funds.

Breakdown by geographical area of LBO financing Carrying value Carrying valuevia special purpose financing vehicles 31.12.2009 31.12.2008

France 1,501 1,692Rest of Europe 494 572United States 140 228Other 50 46

Total 2,185 2,538

12%

10%

11%

9%

24%

6%

6%

6%16%

Travel & leisure

Retail trade

Telecommunications

Services

Media

Industrial transport

Construction

Healthcare

Other

Détail par secteurs des structures de financements dédiées au 31.12.2009


BASEL II SYSTEM – CREDIT RISK

To better take into account the quality of the borrower, aFramework for the Convergence of Capital Measurementsand Capital Standards (Basel II), including notably theimplementation of an internal system of ratings specific toeach institution, has been instituted by the BaselCommittee on Banking Supervision and by the EuropeanCommission. In France, these new prudential requirementswere published on 20 February 2007 in the form of adecree issued pursuant to the recommendations of theAdvisory Committee on Financial Legislation andRegulation (Comité Consultatif de la Législation et de laRéglementation Financières - CCLRF) dealing with capitalrequirements for credit institutions and investmentcompanies.

That decree describes the three pillars:- the First Pillar introduces new minimum capital

requirements, with the calculation of a capital ratio forcredit, market and operational risks;

- the Second Pillar requires banks to perform their ownassessment to determine they have adequate capital tosupport all the risks in their business and to perform stresstests to assess their capital requirements in the event ofa deterioration in the economic environment.

- the Third Pillar tightens up market discipline by requiringmore extensive disclosure and transparency regardingthe risk profile of banks governed by the new Framework.To this end, the Crédit Mutuel group will release a specificreport in the first half of 2010 that will be available on itsinstitutional website.

Regarding the minimal capital requirements of Pillar I, themajor changes compared with the Cooke ratio concern thetreatment of credit risk, with a modification of thecalculation of weighted risks related to unexpected losses(UL) included in the ratio’s denominator and possiblecorrection of the capital on the basis of the differentialbetween expected losses (EL) and provisions included inthe ratio’s numerator.

Banks must choose between three approaches of rising risksensitivity subject to the authorisation and under thecontrol of their national supervisory bodies: standardisedapproach, foundation internal ratings-based approach,and advanced internal ratings-based approach. Eachbanking institution is required to adopt the approach bestsuited to the stage of development of its activities and toits organisation.

Standardised approach

The so-called standardised approach is similar to the BaselI Framework in so far as it is based on the application of fixedrisk weightings to the different categories of exposures asdefined by the regulations. The main modifications resultfrom the possibility to differentiate applicable riskweightings on the basis of credit assessments provided byreputed external institutions and from the broader range ofsureties, guarantees and credit derivatives that may betaken into account by banks.With the agreement of the French Banking Commission(Commission Bancaire), claims on sovereigns and onregional governments and local authorities will bemeasured using the standardized method over theforeseeable future.

Internal ratings-based approaches

These approaches are more sophisticated. Credit risk is afunction of the characteristics of each exposure (or pool ofexposures) based on the four following parameters:probability of default (PD) by the debtor over a 1-yearhorizon, loss given default (LGD), credit conversion factors(CCF) for off balance sheet exposures, and the effectivematurity (M). The use of internal ratings-based approachesis conditional upon complying with a series of quantitativeand qualitative requirements aimed at guaranteeing theintegrity and credibility of the processes as well as theestimation of parameters used for calculating theregulatory capital.

There are two main approaches:- Foundation internal ratings-based approach (F-IRB),

under which banks provide their own empirical model toestimate the probability of default. Other risk components(LGD, CCF and M) are defined in the regulations.Confédération Nationale du Crédit Mutuel has beenauthorised by the French Banking Commission to use itsinternal ratings models on exposures to credit institutionsat 31 December 2008.

- Advanced internal ratings-based approach (A-IRB),under which banks provide their own internal estimates forthe PD, CCF, LGD and M risk components. This approachrequires historical records stretching back over a longenough period of time for statistical purposes. ConfédérationNationale du Crédit Mutuel has been authorised by theBanking Commission to use its internal ratings models onexposures to retail customers since 30 June 2008.

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94 Crédit Mutuel

As a cooperative bank owned by its members, Crédit Mutuelgroup’s purpose is not to redistribute any capital gain to itsshareholders. By opting for an internal ratings-basedapproach for most of its exposures, the group has:- complied with requirements laid down in the regulations

and by the French Banking Commission;- adopted a national framework that has helped standardise

practices;- improved its customer risk segmentation, helping fine-tune

its management and steering; and- brought up to standard its information systems and work

methods at all levels of its organisation given theobligation to use ratings in its management.

All in all, Crédit Mutuel has structured it management andcredit risk management system by capitalising on the BaselII Framework, based upon:- a single counterparty rating system that is based very

largely on statistical algorithms;- a harmonised definition of default that is consistent with

the approach for accounting purposes;- the use of national parameters incorporating a margin of

prudence; and- significant investments in its information systems.

Interest rate risk

Interest rate risk arises from the bank’s commercialactivities. It results from differences in interest rates andbenchmark indices for customer loans and advances onthe one hand and customer deposits on the other hand,based on a prospective analysis of expected changes inthese components, taking into account embedded options(early repayments, extensions, drawdowns againstconfirmed credit lines, etc.).The regional groups are responsible for defining their interestrate risk management and hedging strategies. As requiredby the regulations (CRBF Regulation 97-02 as amendedand extended to central bodies), CNCM’s Risk Managementdepartment is responsible for the consolidated andhomogeneous measurement of this risk by co-ordinatingmethodologies and by regular measurement of overall riskat group level.The Crédit Mutuel group has established harmonised risk agreements and risk limits, which are set out in the"Group asset and liability management guidelines".

Measurement and supervision of interest rate risk is carriedout at regional level by the Crédit Mutuel regional groupsand at national level by CNCM.

At regional levelEach of the Crédit Mutuel regional groups has an asset/liabilitymanagement (ALM) unit dedicated to monitoring overallinterest rate exposure.The Crédit Mutuel group entities all use a common base formeasuring overall interest rate risk (application of commonmethodology for scheduling, scenarios and early repayment),which is measured excluding the trading book. The tradingbook is monitored at the level of the dealing room.Group entities have introduced systems of limits that areconsistent with the national system. Management andhedging decisions are taken by the regional committees.Interest rate risk is analysed and the residual balance sheetposition is hedged, if appropriate, by entering into so-calledmacro hedging transactions. These transactions areaccounted for in accordance with IAS 39 as adopted by theEuropean Union, i.e. in accordance with the carved outversion. High-value or special-purpose vehicle customertransactions may be hedged specifically.

At national levelInterest rate risk is measured by two indicators:- risk relating to future income, analysed in terms of the

sensitivity of the margin over the short-to medium-term(1 to 5 years);

- risk relating to the instant value of the entity, measured as thesensitivity of net present value over a long-term horizon.

At national level, the sensitivity limit for net banking incomeover one or two years includes new loan production basedon a scenario of moderate changes in interest rates (+/- 1%for variable rates and +/- 0.5% for regulated interest rates).

Sensitivity of net banking income to a differentiatedrise in interest ratesDynamic approach

The Crédit Mutuel group’s sensitivity to a rise in interestrates is moderate.Other scenarios (including stress scenarios) are calculatedat the level of CNCM.

20082009

Year 1 Year 2

0.18%

0.80%

1.00%

1.20%

0.60%

0.40%

0.20%

0.00%

0.80%0.44%

1.07%


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96 Crédit Mutuel

Liquidity risk

Like all credit institutions, the Crédit Mutuel group isexposed to the risk of insufficient liquidity to meet itscommitments at a given moment.

The regional federations each have an ALM unit orcommittee tasked notably with ensuring there is sufficientliquidity to meet their commitments. They have concludedagreements with CCCM, BFCM or Compagnie Financière tocover their refinancing needs.

Liquidity risk is monitored by the regional groups usingnotably the following indicators:- the liquidity ratio as defined by regulations, which

compares resources maturing in less than one year withapplications maturing in less than one year. Some of theregional federations and Caisses Fédérales apply limitsthat are stricter than those required by the regulations;

- a medium- to long-term liquidity ratio defined at nationallevel, the general principle being to match all assets and allliabilities and to measure the coverage ratio of applicationsby resources of equivalent duration at different maturities.A system of limits has been put into place.

- projected refinancing requirements over 5 years.

Residual contractual < 1 month > 1 months > 3 months > 1 year > 2 years > 5 years No set Totalmaturities (€m) < 3 months < 1 year < 2 years < 5 years maturity

Assets

Financial assets held for trading 3,256 1,052 3,657 3,383 5,509 5,989 330 23,176

Financial assets at fair value through profit and loss 7,914 5,194 2,390 145 1,634 169 997 18,443

Derivatives used for hedging 25 4 514 96 209 144 1,010 2,002

Financial assets available for sale 1,202 781 3,996 3,594 13,507 10,922 4,668 38,760

Loans and advances (including leasing) 41,791 13,521 27,393 31,636 73,451 152,189 8,860 348,841

Financial assets held to maturity 30 68 1,086 581 1,827 1,275 - 4,867

Liabilities

Central bank deposits 260 - 1,005 - - - - 1,265

Financial liabilities held for trading 870 216 1,331 965 2,770 3,920 11 10,083

Financial liabilities at fair value through profit and loss 15,907 14,312 7,907 65 65 2 - 38,258

Derivatives used for hedging 58 45 1,666 144 2,085 410 1,005 5,413

Financial liabilities valued at amortised cost 178,891 46,463 50,484 24,293 44,556 29,478 9,849 384,014

Breakdown of financial assets and financial liabilities

Breakdown of maturities for liquidity risk at 31 December 2009

Residual contractual < 1 month > 1 months > 3 months > 1 year > 2 years > 5 years No set Totalmaturities (€m) < 3 months < 1 year < 2 years < 5 years maturity

Assets

Financial assets held for trading 1,071 1,046 7,312 4,659 5,938 7,333 767 28,126

Financial assets at fair value through profit and loss 4,328 7,579 1,512 456 1,336 504 729 16,444

Financial assets available for sale 2,035 1,655 3,192 4,805 8,934 15,756 5,250 41,627

Loans and advances (including leasing) 41,413 14,970 26,596 30,827 71,907 148,560 9,982 344,255

Financial assets held to maturity 804 1,081 824 1,221 1,168 1,500 10 6,608

Liabilities

Central bank deposits 1,963 306 50 - - - - 2,319

Financial liabilities held for trading 896 632 5,770 943 2,803 3,353 502 14,899

Financial liabilities at fair value through profit and loss 10,912 14,982 5,204 124 11 4 - 31,237

Financial liabilities valued at amortised cost 193,901 67,176 38,656 16,699 36,031 29,862 14,270 396,595

Breakdown of financial assets and financial liabilities

Breakdown of maturities for liquidity risk at 31 December 2008

Comments:This table was established using the FIN50 grid in application of CB instruction 2006-04. The entities included are thoseincluded within the prudential scope.

The scheduling rules are as follows:- Outstandings as reported in the balance sheet drawn up in accordance with IFRS.- Maturities are the contractual maturities for repayment of the principal.- Shares are recorded under “No set maturity”, as are undated loans and securities- Debts and related liabilities are broken down according to their actual maturity and, failing that, under “less than 1 month”.- Provisions are analysed in the same way as the assets concerned.- Non-performing loans are analysed according to their contractual date, if not yet past, and, failing that, under “No set

maturity”. Receivables in litigation are recorded under “No set maturity”.- The market value of derivatives is recorded in the flow corresponding to the end date of the contract.- When it is not possible to establish a reliable repayment schedule, the carrying amount is recorded under “No set maturity”.


Management report

98 Crédit Mutuel

Foreign exchange risk

Each bank hedges the currency risk on customertransactions. This risk is not material at the Crédit Mutuelgroup level.

Market risk

The main group entities engaged in market activities areCrédit Mutuel Centre Est Europe-CIC and Crédit MutuelArkéa. They trade on their own account and on behalf ofthe other federations. Their activities include refinancingthe local mutual banks' activities, securities managementand commercial activities for corporate customers (foreignexchange transactions, interest-rate risk and foreignexchange hedging).

The dealing room activities are the subject of regularreports covering risks as well as economic and accountingperformances.

The permitted activities and terms and conditions of capitalmarkets activities are included in each regional group'sinternal regulations. At operational level, these areanalysed by the various Committees involved and reportedupon regularly to the Boards of Directors concerned.Internal controls for these activities are performed at thelevel of the regional groups concerned. The organisation ofthe internal control system and the conditions under whichcontrols are performed are described in the annual reportsof those entities.

At national level, reports produced in respect of marketactivities are used to monitor the main risk indicators.Market risk is not material at the group level.

Operational risk

In response to Basel II requirements, the Crédit Mutuelgroup has since 2002 progressively implemented acomprehensive operational risk management systemunder the responsibility of the executive bodies concerned,with group risk management guidelines and commonquantitative measurement methods. At the group level, a global function with responsibility for operational risk management has been clearly identified. In practice,this function is carried on at national level as well as atregional levels. This global function oversees operationalrisks, business continuity plans and insurance cover forthese risks.

The system for measuring and controlling operational riskrests on foundations common to the entire Crédit Mutuelgroup and is based on approaches first to identify and thenmodel risks leading to the calculation of final capitalrequirements for operational risk.The group has put into place an operational riskmanagement system that is structured and coherent,enabling risk mappings to be performed for each genericpotential risk, featuring summaries according to the eightbusiness lines and the seven loss event types (actual lossesand potential risks) defined in the Basel II Framework.The group is in the process of homologating the advancedmeasurement approach (AMA) for operational risk. The bankingsubsidiaries located abroad (Belgium, Luxembourg,Switzerland, etc.) and the subsidiaries involved in factoringare the only group entities that continue to apply thestandardised approach for the time being.

Main objectivesThe operational risk management policy is designed toachieve the following:- improve group management by controlling risks and

related costs;- at human level, protect people, foster individual

responsibility, autonomy and controls, and capitalise onthe skills within the group;

- at economic level: preserve margins by managing risksclose to the ground in all activities, ensure a return oninvestment from regulatory compliance, optimise capitalallocated to the cost of risk, and adapt insuranceprogrammes to the risks identified;

- at regulatory level: meet effectively the requirements ofBasel II and of supervisory authorities, draw on theinternal control system (CRBF Regulation 97.02),optimise business continuity plans for key activities, andensure appropriate financial communication (Basel II,Pillar 3).

Role and positioning of the operational riskmanagement functionThe national operational risk management functioncoordinates and consolidates the entire system. It has itsown staff in the service of the group’s interests and works in liaison with operational risk managers in the regionalgroups.The operational risk management function at regional levelimplements the system and measures its effectiveness,ensuring that it is consistent with the system in place atnational level. The regional function is coordinated byregional operational risk managers.

Measurement and control of operational risk Homogenous risk mapping by business lines and by type ofrisk is performed for all activities based on experts’assessments and then using probabilistic models. Thesemodels are validated by the operational risk technicalcommittee. Allocated capital is calculated at national leveland then allocated at regional level.

The general guidelines for reducing operational risk include:- efficient preventive actions (identified during the risk

mapping) that are implemented directly by operationalstaff or through permanent controls; and

- protective measures that focus primarily on generalisingbusiness continuity plans in all key areas (businessactivities, logistics and information systems) to limit theseverity of any catastrophic event.

A coherent crisis management plan – dovetailed into thegeneral crisis management plan for the interbank sectorhas been implemented throughout the group. This plancovers crisis communication and the efficient organisationof the three phases of the business continuity plan: rescueplan, continuity plan and resumption plan.

Operational risk financing programmes are reviewed as andwhen risk assessments are performed, taking into accountremedial action to mitigate these risks. They are based onthe following principles:

- insure risks when justified by their size and severity to theextent they are insurable and develop self-insurancewithin the group for amounts before insurers’ deductiblesand for intra-group risks;

- insure risks when justified by their frequency or financethem through self-retentions at P&L level;

- risks that are uninsurable due to their severity andresidual uninsured risks are the object of reserves againstprudential capital;

- major risks for the interbank payment and exchangesystems are the object of liquidity reserves, which are setaside and allocated by the system concerned.

Reporting and general supervisionThe application of the operational risk management policyand risk profile are monitored using key indicators,thresholds and warning systems for the measurement ofpotential risk, loss events, effectiveness of risk reductionmeasures and allocated financing. Reports are submittedto the group’s management and supervisory bodies atregular intervals and comply with the requirements of CRBFRegulation 97-02.

Documentation and proceduresThe group has implemented permanent procedures thathave been approved by its executive bodies, which cover:- governance: general governance defining the role and

composition of the decision-making bodies, the contentsof reports, their periodicity and the recipients, the scopefor identifying losses and intervals at which updated;

- loss event collection: general procedure for collectingand processing risk frontiers, and quality assurancereview of the loss event database;

- measurement system: general procedure for theapplication of the advanced measurement method,methodology for mapping and for probabilistic models,the process for retrieving risk indicators from theinformation systems, calculation of net banking income by business line, capital allocation keys, andCOREP filings.

Business continuity plans (BCPs)Business continuity plans (BCPs) are amongst themeasures implemented by the group to safeguard itsassets by limiting the severity of occurrences threateningthe continuation of its activities. They form part of theprogramme for management of operational risks.A methodology for drawing up business continuity planshas been developed that constitutes the referencedocument within the Crédit Mutuel-CIC group. It is availableto all staff members concerned by these plans and isapplied at the level of the regional groups.

There are two types of business continuity plans:- business-specific BCPs that concern a precisely defined

banking activity (per the mapping of business lines forBasel II purposes);

- cross-functional BCPs that concern activities whichsupport the other activities; there are three planscovering respectively logistics, human resources andinformation systems.

These plans are organised into three phases:- rescue plan, applied immediately and consisting of

measures to address emergencies and to implementsolutions that will enable operations to continuetemporarily in degraded mode;

- continuity plan, consisting of measures to resume activityin a degraded mode in the condition defined pre-crisis;

- resumption plan, consisting of measures implementedimmediately after the start-up of the continuity plan, thetime taken to initiate this phase being dependent on theextent of the damage.


Crisis management and organisationThe crisis management system implemented at the groupand regional levels seeks to attain the highest level ofefficiency in all aspects of communication and organisationduring all three phases of the business continuity plan:rescue plan, continuity plan and resumption plan.This system is organised around the following units:- a crisis committee, tasked with taking key decisions,

defining priority actions and overseeing internal andexternal communication; the regional committee ischaired by the region’s chief executive officer, thenational committee by the group’s chief executive officer;

- a crisis cell, tasked with centralising information,implementing decisions taken, and monitoring theirapplication;

- a crisis platform at each activity, tasked with coordinatingcrisis management plans on the ground in liaison with thecrisis cell, in particularly activity business continuity plans,until operations have resumed normally.

Insurance used to reduce capital requirementsThe group has arranged a comprehensive insuranceprogramme covering property damage, professionalliability and management liability, and also featuring bankerand fraud blanket coverage.This programme helps reduce capital requirements in respectof operational risk.

TrainingEach year, the group arranges training courses on operationalrisks for branch directors, internal controllers and operationsstaff responsible for risk monitoring.

2009 inventory of loss events in the groupLoss events in the group amounted to €92.5 million,including incurred losses of €58.2 million and provisionstotalling €38.4 million.

They break down as follows:- fraud: €33.9 million; - employment practices: €22.2 million;- human error or failed processing: €18.6 million;- legal: €14.4 million; - natural disasters and disruption of systems: €3.4 million

Fraud, employment practices – individual disputes withcurrent or past employees, resulting in workout agreementsor legal proceedings – and involuntary errors remain themain source of loss events.

Other risks• Legal riskLegal risk forms part of operational risk and includes, but isnot limited to, exposure to fines, penalties, or punitivedamages as a result of fault committed by the group in theconduct of its operations.• Industrial and environmental risksIndustrial and environmental risks form part of operationalrisk and are analysed in terms of the disruption of systemsand the occurrence of natural disasters (100-year floods,deluges, earthquakes, pollution, etc.), their impact on thegroup and the measures that could be taken to prevent ormitigate the risks, notably in terms of crisis managementand business continuity plans.

Recent trends and outlook

The opening months of 2010 have been characterised bythe continuing development of the group’s commercialactivities, with confirmation of renewed growth in loanproduction and further increases in deposit taking acrossall product lines.

In 2010, in what will be an uncertain economic environment, thegroup will press ahead with its development, participating in the financing of the local, regional and national economy.It will draw on the expansion of its network of local mutual banksand neighbourhood branches, as well as the broadening ofits activities thanks to the recent acquisitions in France andneighbouring countries.

Management report

100 Crédit Mutuel

Financial statements for the year ended 31 December 2009

Statement of financial position Assets

€m 31.12.2009 31.12.2008 Notes

Cash in hand and balances with central banks 10,674 18,090 1aFinancial assets at fair value through profit or loss 67,994 69,257 2a, 2c, 4, 9Derivative hedging instruments 2,053 4,984 3a, 4Available for sale financial assets 102,435 96,135 5a, 5b, 9Loans and advances to credit institutions 44,324 48,734 1a, 9Loans and advances to customers 304,511 295,837 6a, 9Re-measurement adjustment on portfolios hedged for interest rate risk 882 729 3bFinancial assets held to maturity 12,500 13,710 7, 9Current tax assets 1,740 1,785 10aDeferred tax assets 1,570 2,176 10bPrepayments, accrued income and other assets 18,912 18,638 11aNon-current assets classified as held for sale 6 3 Deferred profit-sharing 41 2035 Investments in companies accounted for using the equity method 516 257 12Investment property 1,624 1,328 13Plant, property and equipment 3,566 3,358 14aIntangible assets 1,244 801 14bGoodwill 4,446 3,852 15Total assets 579,038 581,709

Liabilities and shareholders’ equity

€m 31.12.2009 31.12.2008 Notes

Central banks 1,265 2,319 1bFinancial liabilities at fair value through profit or loss 48,350 48,334 2b, 2c, 4Derivative hedging instruments 5,413 8,617 3a, 4Amounts due to credit institutions 38,800 54,030 1bAmounts due to customers 218,431 196,507 6bDebt securities 117,580 134,373 16Re-measurement adjustment on portfolios hedged for interest rate risk (1,811) (1,414) 3bCurrent tax liabilities 658 504 10aDeferred tax liabilities 934 958 10bAccrued charges, deferred income and other liabilities 15,146 17,275 11bLiabilities directly associated with non-current assets classified as held for sale - - -Technical provisions for insurance contracts 94,670 85,274 17Provisions for risks and charges 1,612 1,345 18Subordinated debt 7,371 8,551 19Shareholders' equity 30,619 25,036 Shareholders' equity – group share 29,616 24,676 Share capital and related reserves 8,735 6,826 20aConsolidated reserves 19,047 18,920 20aUnrealised or deferred gains or losses 3 (1,510) 20bProfit for the year 1,831 440 Minority interests 1,003 360 TOTAL liabilities and shareholders’ equity 579,038 581,709


Financial statements

102 Crédit Mutuel

Statement of comprehensive income

€m 31.12.2009 31.12.2008 Notes IFRS

Total consolidated profit 1,882 442

Translation differences - 33Re-measurement of available for sale financial assets 1,542 (2,118)Re-measurement of derivative hedging instruments (22) (69)Re-measurement of non-current assets - -Share of unrealised or deferred gains and losses on companies accounted for using the equity method (2) - Total gains and losses recognised directly in equity 1,518 (2,154) 32, 33 Profit and gains and losses recognised directly in equity 3,400 (1,712)Of which Group share 3,344 (1,667)Minority interests 56 (45)

Income statements – IFRS

€m 31.12.2009 31.12.2008 Notes IFRS

Interest and similar income 22,265 25,538 22Interest and similar expense (14,873) (21,568) 22Fees and commissions (income) 4,411 3,734 23Fees and commissions (charges) (1,069) (1,119) 23Net gains (losses) on financial instruments at fair value through profit or loss 599 12 24Net gains (losses) on available for sale financial assets (13) (139) 25Income from other activities 19,005 11,582 26Expenses on other activities (16,752) (9,616) 26

Net banking income – IFRS 16,573 8,424

General operating expenses (7,795) (6,210) 27a, 27bProvisions, amortisation and depreciation for non-current assets (573) (467) 27c

Gross operating profit – IFRS 5,205 1,747 Cost of risk (2,370) (1,405) 28

Operating profit – IFRS 2,835 342

Share in net profit or loss of companies accounted for using the equity method 22 24 12Net gains (losses) on other assets 9 20 29Changes in goodwill (124) 23 30

Profit on ordinary activities before tax – IFRS 2,742 409

Corporation tax (860) 33 31

Total consolidated profit 1,882 442

Minority interests 51 2 Profit, group share 1,831 440



104 Crédit Mutuel

Statement of changes in shareholders' equity

Share capital and reserves Consolidated Unrealised or deferred gains/losses (after tax) reserves €m Share capital Other paid Elimination Consolidated Translation Revaluation Changes in the value of Profit, Group Minority Total in capital of treasury share reserves differences differences financial instruments group share of interests consolidated (excluding share shareholders' shareholders' financial equity equity instruments) Changes in Changes in the fair value the fair value of AFS of derivative securities hedging instruments

Balance at 1 January 2008 6,629 37 - 16,449 - 33 2 632 (4) 2,730 26,442 422 26 864

Capital increase 159 1 - - - - - - - 160 - 160

Appropriation of profit for 2007 - - - 2,730 - - - - (2,730) - - -

Dividends paid in 2008 in respect of 2007 - - - (196) - - - - - (196) (11) (207)

Sub-total of changes in capital linked to relations with shareholders 159 1 - 2,534 - - - - (2,730) (36) (11) (47)

Gains and losses recognised directly to equity - - - - 33 - (2,071) (69) - (2,107) (47) (2,154)

Profit for the year 2008 - - - - - - - - 440 440 2 442

Sub-total - - - - 33 - (2,071) (69) 440 (1,667) (45) (1,712)

Impact of acquisitions and disposals on minority interests - - - (67) - - - - - (67) 5 (62)

Changes in accounting methods - - - (3) - - - - - (3) - (3)

Share of changes in the capital of companies accounted for using the equity method - - - (1) - - - - - (1) (1) (2)

Changes in foreign exchange rates - - - 18 - - - - - 18 4 22

Other changes - - - (9) - - - - - (9) (14) (23)

Shareholders' equity at 31 December 2008 6,788 38 - 18,920 - 2 (1,439) (73) 440 24,676 360 25,036

Shareholders' equity at 1 January 2009 6,788 38 - 18,920 - 2 (1,439) (73) 440 24,676 360 25,036

Capital increase 1,908 1 - - - - - - - 1,909 - 1,909

Appropriation of profit for 2008 - - - 440 - - - - (440) - - -

Dividends paid in 2009 in respect of 2008 - - - (229) - - - - - (229) (21) (250)

Sub-total of changes in capital linked to relations with shareholders 1,908 1 - 211 - - - - (440) 1,680 (21) 1,659

Gains and losses recognised directly to equity - - - - - - 1,516 (3) - 1,513 5 1,518

Profit for the year 2009 - - - - - - - - 1,831 1,831 51 1,882

Sub-total - - - - - - 1,516 (3) 1,831 3,344 56 3,400

Impact of acquisitions and disposals on minority interests - - - (122) - - - - - (122) 585 462

Changes in accounting methods - - - 6 - - - - - 6 0 6

Share of changes in the capital of companies accounted for using the equity method - - - 31 - - - - - 31 3 34

Changes in foreign exchange rates - - - 12 - - - - - 12 0 13

Other changes - - - (12) - - - - - (12) 21 9

Shareholders' equity at 31 December 2009 8,696 39 - 19,047 - 2 77 - 76 1,831 29, 616 1,003 30,619



106 Crédit Mutuel

Statement of cash flows€m 31.12.2009 31.12.2008

Profit for the year 1,882 443Corporation tax 860 (33)Profit before tax 2,742 410=+/- Net provision for depreciation of tangible and intangible non-current assets 588 466- Impairment of goodwill and other non-current assets 1 1+/- Net charges to provisions 5,052 1,323+/- Share of results of companies accounted for using the equity method (22) (24)+/- Net loss/income from investment activities (12) (56)+/- (Income)/charges on financing activities +/- Other movements 2,825 (2,271)= Total of non-monetary items included in profit before tax and other adjustments 8,432 (561)+/- Flows relating to transactions with credit institutions (a) (17,917) 4,666+/- Flows relating to transactions with customers (b) 19,433 (11,722)+/- Flows relating to other transactions affecting financial assets or liabilities (c) (18,809) 11,162+/- Flows relating to other transactions affecting non-financial assets or liabilities (1,952) (3,924)- Taxes paid (864) (1,051)= Net reduction/(increase) in assets and liabilities from operating activities (20,109) (869)TOTAL NET CASH FLOW GENERATED BY OPERATING ACTIVITIES (A) (8,935) (1,020)

+/- Flows relating to financial assets and holdings (d) 1,812 (2,057)+/- Flows relating to investment property (e) (280) 12+/- Flows relating to tangible and intangible non-current assets (f) (736) (674)TOTAL NET CASH FLOW RELATING TO INVESTMENT ACTIVITIES (B) 796 (2,719)

+/- Cash flows from or to shareholders (g) 1,658 (48)+/- Other cash flows from financing activities (h) (2,701) 3,211TOTAL NET CASH FLOW RELATING TO FINANCING ACTIVITIES (C) (1,043) 3,163

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (D) 19 8Net increase/(reduction) in cash and cash equivalents (A + B+ C + D) (9,163) (568)Net cash flow from operating activities (A) (8,935) (1,020)Net cash flow relating to investment activities (B) 796 (2,719)Net cash flow relating to financing activities (C) (1,043) 3,163Effect of exchange rate changes on cash and cash equivalents (D) 19 8

Cash and cash equivalents on opening 16,316 16,884Cash and central banks (assets and liabilities) 15,774 8,239Accounts (assets and liabilities) and lending/borrowing with credit institutions 542 8,645

Cash and cash equivalents on closing 7,153 16,316Cash and central banks (assets and liabilities) 9,409 15,774Accounts (assets and liabilities) and lending/borrowing with credit institutions (2,256) 542 CHANGE IN NET CASH (9,163) (568)

€m 31.12.2009 31.12.2008

(a) Flows relating to transactions with credit institutions break down as follows:+/- Inflows and outflows linked to loans and advances to credit institutions (other than items included in cash and cash equivalents), excluding related receivables8,701 (830)+/- Inflows and outflows linked to amounts due to credit institutions, excluding related liabilities (26,619) 5,496

(b) Flows relating to transactions with customers break down as follows:+/- Inflows and outflows linked to loans and advances to customers, excluding related receivables (2,367) (25,981)+/- Inflows and outflows linked to amounts due to customers, excluding related liabilities21,800 14,259

(c) Flows relating to other transactions affecting financial assets or liabilities break down as follows:+/- Inflows and outflows linked to financial assets at fair value through profit and loss(3,758) 29,061+/- Inflows and outflows linked to financial liabilities at fair value through profit and loss 1,508 (19,262)- Outflows on acquisitions of fixed income available for sale securities (*) 2,288 (1,989)+ Inflows on disposals of fixed income available for sale securities (*) +/- Inflows and outflows on derivative hedging instruments +/- Inflows and outflows on debt securities (18,847) 3,352

(d) Flows relating to financial assets and holdings break down as follows: - Outflows on acquisitions of subsidiaries, net of acquired cash + Inflows on disposals of subsidiaries, net of cash ceded - Outflows linked to purchase of securities of companies accounted for using the equity method + Inflows linked to sales of securities of companies accounted for using the equity method 8 + Inflows from dividends received - Outflows linked to purchases of held-to-maturity financial assets (1,779) (3,304)+ Inflows linked to sales of held-to-maturity financial assets 3,754 1,550- Outflows on acquisitions of variable income available for sale securities (275) (1,196)+ Inflows on disposals of variable income available for sale securities 104 893+/- Other flows linked to investment transactions + Inflows from interest received, excluding accrued interest not yet due

(e) Flows relating to investment property break down as follows: - Outflows linked to acquisitions of investment property (350) (273)+ Inflows linked to sales of investment property 70 285

(f) Flows relating to non-current assets break down as follows: - Outflows linked to acquisition of non-current assets (953) (827)+ Inflows linked to sales of non-current assets 217 153

(g) Flows from or to shareholders break down as follows:+ Inflows from issuance of shares and similar securities 1,908 159+ Inflows from sales of shares and similar securities - Outflows linked to dividends paid (250) (207)- Outflows linked to other remuneration paid

(h) Other net cash flows from financing activities break down as follows: + Inflows linked to issuance of bonds and debt securities 3,704 13,821- Outflows linked to repayment of bonds and debt securities (4,955) (12,411)+ Inflows linked to issuance of subordinated debt 27 1,984- Outflows linked to repayment of subordinated debt (1,477) (183)- Outflows linked to interest paid, excluding accrued interest not yet due

* Including re-measurements linked to the purchase or sale of variable income financial assets available for sale


Part I - Accounting policies

Note 1: Consolidation scope

1.1 Determination of the consolidation scope

The group's main entity, Crédit Mutuel, is a co-operativebank under the 10 September 1947 Act governing Frenchco-operatives. It is owned solely by its members, who holdmember shares ('A' shares). Members are each entitled toone vote at general meetings, where their powers includethe election of directors.The three levels of organisation—local, regional andnational—operate on a decentralised basis in accordancewith the principle of subsidiarity, which means that decisionsare taken as close to the ground as possible. The localmutual banks, which are in closest contact with membersand customers, carry out all the principal functions of bankbranch offices, with the other two levels exercising only thosefunctions the local entities are not equipped to carry out.Under Article L511-30 of the French monetary and financialcode, Confédération Nationale is the central body for thegroup. As such it is responsible for:- ensuring the liquidity and solvency of the Crédit Mutuel

network,- representing Crédit Mutuel vis-à-vis the public authorities

and defending and promoting its interests,- and, more generally, ensuring the overall cohesion of the

network and overseeing its business development while at the same time exercising an administrative, technicaland financial control over the regional groups and theirsubsidiaries.

The method for consolidating a group with such a distinc-tive capital ownership structure is based on determining aconsolidating entity that reflects the community of mem-bers linked by shared financial solidarity and governance.The analysis of the control exercised by the consolidatingentity complies with IAS 27, thus enabling the group to presentconsolidated financial statements according to IFRS.

• Consolidating entity

The consolidating entity for the Crédit Mutuel group iscomposed of all the local mutual banks, the CaissesFédérales (general purpose or farming and rural), theRegional Federations, Caisse Centrale du Crédit Mutuel,Confédération Nationale du Crédit Mutuel, and Fédérationdu Crédit Mutuel Agricole et Rural.The capital of the consolidating entity is owned exclusivelyby all the members of the local mutual banks.

• Basis of consolidation

The general principles for the inclusion of an entity withinthe consolidation scope are as defined in IAS 27, IAS 28and IAS 31.All the entities included in the consolidation scopes of theregional groups are included in the national consolidationscope. Joint companies, not consolidated at regional level,are excluded from the national consolidation scope if theirtotal balance sheet or earnings have an impact of less than 1% on the consolidated equivalent. However, an entitythat does not reach this threshold may be consolidated if its activity or development is considered a strategicinvestment.

The consolidation scope comprises:

- Entities controlled exclusively: exclusive control is presumedto exist when the group controls directly or indirectly a majority of the voting rights, or has the power to appointthe majority of the members of the administrative, man-agement and supervisory bodies, or has the power togovern the financial and operating policies of an entity by virtue of regulations or a contract. The accounts ofentities controlled exclusively are fully consolidated.

- Entities controlled jointly: joint control arises when, inaccordance with the terms of a contractual agreement,control of an economic activity is shared with one ormore third parties regardless of the structure or form inwhich the activities are undertaken. Entities controlledjointly are consolidated using the proportional method.

- Entities over which significant influence is exercised: theseare entities over whose financial and operational policiesthe group exerts significant influence but does not havecontrol. Entities over which significant influence is exercisedare consolidated using the equity method.

Special-purpose entities are consolidated when the conditionsdefined in SIC 12 are met, namely that the entity’s activitiesare carried out exclusively on the group’s behalf, the grouphas decision-making or management power to obtain themajority of the benefits deriving from the entity’s ordinaryactivities and the capacity to profit from the entity’s benefits,and retains the majority of the risks.

Holdings belonging to private equity companies and overwhich joint control or significant influence is exercised areexcluded from the consolidation scope and are recognisedat fair value by option


108 Crédit Mutuel

Notes to the financial statementsThe Crédit Mutuel group is not listed and is consequently under no obligation to present financial statements inaccordance with IFRS. However, for the sake of greater transparency and comparability with other leading financialinstitutions, the Board of Directors of Confédération Nationale du Crédit Mutuel, which is the group's central governingbody within the meaning of Article L511-31 of the French Monetary and Financial Code, has decided to presentconsolidated financial statements according to IFRS. These financial statements are presented in accordance with CNCRecommendation 2009-R04 relating to summary financial statements. They comply with International FinancialReporting Standards as adopted by the European Union and, in particular, with the standards that are effective for annualperiods beginning on or after 1 January 2009 (notably IAS 1 revised, IFRS 7 and IFRS 8). Information regarding riskmanagement is presented in the group’s management report.

Table of contentsPart i – Rccounting policies

Note 1: Consolidation scope p. 109

1.1 Determination of the consolidation scope p. 1091.2 Composition of the consolidation scope p. 110

Note 2: Consolidation methods and policies p. 118

2.1 Consolidation methods p. 1182.2. Closing date p. 118

2.3. Elimination of intra-group transactions p. 118

2.4. Translation of accounts denominated in a foreign currency p. 118

2.5. Goodwill p. 118

Note 3: Accounting policies and methods p. 119

3.1. Loans and receivables p. 119

3.2. Provisions for impairment of loans and receivables, loan commitments and guarantees p. 119

3.3. Leases p. 1203.4. Securities p. 1203.5. Derivatives and hedge accounting p. 1233.6. Debt securities p. 125

3.7. Subordinated debt p. 125

3.8. Distinction between liabilities and shareholders’ equity p. 125

3.9. Provisions p. 125

3.10. Amounts due to customers and credit institutions p. 1263.11. Cash and cash equivalents p. 126

3.12. Employee benefits p. 1263.13. Insurance activities p. 127

3.14. Non-current assets p. 128

3.15. Fees and commissions p. 129

3.16. Corporation tax p. 1293.17. Interest payable by the State on certain loans p. 129

3.18. Financial guarantees and financing commitments p. 130

3.19. Transactions denominated in foreign currencies p. 1303.20. Non-current assets classified as held for sale

and discontinued operations p. 130

3.21. Judgements and estimates used in preparation of the financial statements p. 130

Note 4: Segment reporting (IFRS 8) p. 131

Note 5: Related parties p. 131

Note 6: Standards and interpretations adopted by the european union not yet applied due to their application date p. 132

Part II – Rables p. 133

1. Notes to the statement of financial position p. 133

2. Notes to the income statement p. 152

3. Notes to the statement of comprehensive income p. 158

4. Segment reporting p. 159

5. Other information p. 162



110 Crédit Mutuel

1.2 Composition of the consolidation scope

The following entities were included in the Crédit Mutuel group's consolidation scope at 31 December 2009:

Consolidated entities are presented according to the sectors 31.12.2009 31.12.2008 Commentsused for preparing segment information under IFRS 8. Accordingly, for example, entities included under Retail % Method % MethodBanking do not necessarily have the legal status of credit institutions Control Interest + Control Interest +

A. Retail Banking Acman 100.00 100.00 FC 100.00 100.00 FC Actéa Environnement 100.00 100.00 FC 100.00 100.00 FC Actimo 100.00 100.00 FC 100.00 100.00 FC Agence de l'Hotel de Ville 100.00 100.00 FC 100.00 100.00 FC Agerim 100.00 100.00 FC 100.00 100.00 FC Amofi (formerly ERIF) 100.00 100.00 FC 100.00 100.00 FC Amofi B 100.00 100.00 FC 100.00 100.00 FC Ataraxia Distribution 100.00 100.00 FC 100.00 100.00 FC Ataraxia Finance 100.00 100.00 FC 100.00 100.00 FC Ataraxia Gestion 100.00 100.00 FC 100.00 100.00 FC Ataraxia Production 100.00 100.00 FC 100.00 100.00 FC Ataraxia Sud Aménagement 100.00 100.00 FC 100.00 100.00 FC Bail Actea 100.00 100.00 FC 100.00 100.00 FC Bail Entreprises 100.00 100.00 FC 100.00 100.00 FC Bail Immo Nord 100.00 100.00 FC 100.00 100.00 FC Banca Popular di Milano 4.99 4.88 EM - - NC Consolidated for first timeBanque de Tunisie 20.00 20.00 EM 20.00 20.00 EM Banque Delubac 20.98 20.98 EM 20.98 20.98 EM Banque Privée Europeenne 100.00 100.00 FC 100.00 100.00 FC Bâtiroc 100.00 100.00 FC 100.00 100.00 FC BCME 100.00 100.00 FC 100.00 100.00 FC BCMI 100.00 100.00 FC 100.00 100.00 FC BCMNE 100.00 100.00 FC 100.00 100.00 FC BECM 100.00 100.00 FC 100.00 100.00 FC BECM Francfort 100.00 100.00 FC 100.00 100.00 FC BECM Saint Martin 100.00 100.00 FC 100.00 100.00 FC BEDE 99.99 99.99 FC 99.99 99.99 FC BKCP Noord - - NC 91.14 91.14 FC Absorbed by BKPC SCRLBKCP SCRL 95.41 95.41 FC 93.80 93.80 FC BKCP Wallonie - - NC 98.36 98.36 FC Absorbed by BKPC SCRLBSD 100.00 97.52 FC 100.00 97.33 FC C2C 100.00 34.17 FC - - - AcquiredCaisse de Bretagne de CMA 92.44 92.44 FC 92.48 92.48 FC Camefi Banque 100.00 100.00 FC 100.00 100.00 FC Centrale des Marchés de l'Immobilier - - - 100.00 100.00 FC Wound-upCIC Est 100.00 97.52 FC 100.00 97.33 FC CIC Iberbanco 100.00 100.00 FC 100.02 100.00 FC CIO 100.00 97.52 FC 100.00 97.33 FC CM Arkea Covered Bonds 100.00 100.00 FC 100.00 100.00 FC CMCIC AM 99.98 99.39 FC 99.98 99.35 FC CMCIC Bail 99.99 97.53 FC 99.99 97.35 FC CMCIC Covered Bonds 100.00 100.00 FC 100.00 100.00 FC CMCIC Epargne Salariale 100.00 97.52 FC 100.00 97.33 FC CMCIC Gestion 100.00 97.52 FC 100.00 97.33 FC CMCIC Lease 100.00 98.66 FC 100.00 98.56 FC


CMCIC Lease Belgium (formerly CMCIC Bail Belgium) 100.00 97.53 FC 100.00 97.35 FC CMCIC Lease GmbH 100.00 97.53 FC - - - CreatedCMN Environnement SNC 100.00 100.00 FC 100.00 100.00 FC CMO Immobilier NC 100.00 100.00 FC Wound-upCofidis Argentine 66.00 22.55 FC - - NC AcquiredCofidis Belgique 100.00 34.17 FC - - NC AcquiredCofidis Espagne 100.00 34.17 FC - - NC AcquiredCofidis France 100.00 34.17 FC - - NC AcquiredCofidis Hongrie 100.00 34.17 FC - - NC AcquiredCofidis Italie 100.00 34.17 FC - - NC AcquiredCofidis Portugal 100.00 34.17 FC - - NC AcquiredCofidis République Tchèque 100.00 34.17 FC - - NC AcquiredCofidis Roumanie 100.00 34.17 FC - - NC AcquiredCofidis Slovaquie 100.00 34.17 FC - - NC AcquiredCPSA 100.00 100.00 FC 100.00 100.00 FC Creatis 100.00 34.17 FC - - NC AcquiredCréfidis 100.00 34.17 FC 50.00 50.00 Eole - - NC 100.00 85.00 FC Absorbed by FinancoErmaxia 50.00 50.00 PM 50.00 50.00 PM Factocic 66.00 64.73 FC 66.00 64.64 FC FCC Libravou 100.00 34.17 FC - - NC AcquiredFCP Nord Europe Gestion 100.00 100.00 FC 100.00 100.00 FC FCP Richebe Gestion - - NC 99.66 99.38 FC Absorbed by FCP Haussmann

GestionFCP Richebé Gestion 99.73 99.53 FC 100.00 100.00 FC Formerly FCP HaussmannFCT Cofitirisation 100.00 34.17 FC - - NC AcquiredFédéral Equipements 100.00 100.00 FC 100.00 100.00 FC Fédéral Service 96.80 96.77 FC 97.86 97.80 FC Federale Kaas voor het BeroepsKrediet (FKBK) - - NC 96.66 96.66 NC Absorbed by BKCP SCRLFilaction 100.00 100.00 FC 100.00 100.00 FC Financo 100.00 100.00 FC 85.00 85.00 FC Fininmad SA 100.00 100.00 FC 100.00 100.00 FC Foncière d’Investissement 100.00 100.00 FC 100.00 100.00 FC France Luxembourg Invest Holding 100.00 100.00 FC 100.00 100.00 FC Gesteurop 100.00 97.52 FC 100.00 97.33 FC GICM 100.00 96.87 FC 100.00 98.17 FC GIE CMA 100.00 100.00 FC 100.00 100.00 FC GIE MAT 100.00 100.00 FC 100.00 100.00 FC Golfimmo 25.00 25.00 EM 25.00 25.00 EM Habitat Gestion 100.00 100.00 FC 100.00 100.00 FC Immobilière des Marsauderies 100.00 100.00 FC 100.00 100.00 FC Immobilière du CMN 100.00 100.00 FC 100.00 100.00 FC Immoprix Gestion 90.00 90.00 FC 90.00 90.00 FC Investlaco 100.00 100.00 FC 100.00 100.00 FC La Française des Placements Gestion Privée 99.98 99.98 FC - - NC AcquiredLacocim 100.00 100.00 FC 100.00 100.00 FC Laviolette Financement 100.00 97.51 FC 100.00 97.32 FC LFP-Sarasin AM 100.00 100.00 FC - - NC AcquiredLyonnaise de Banque 100.00 97.52 FC 100.00 97.33 FC Mobilease 100.00 100.00 FC 100.00 100.00 FC Monabanq 66.00 22.55 FC - - NC AcquiredMonabanq Belgique 100.00 22.55 FC - - NC AcquiredNord Europe Private Bank 100.00 100.00 FC 100.00 100.00 FC Oostvlaamse Invest Company 99.96 95.37 FC 99.96 91.10 FC Pythagore Investissement BP 43.04 43.04 EM - - - Acquired

Method: FC = Full Consolidation, PM = Proportional Method, EM = Equity Method, NC = Not Consolidated Method: FC = Full Consolidation, PM = Proportional Method, EM = Equity Method, NC = Not Consolidated



112 Crédit Mutuel


B. Corporate and Investment Banking Actimut 100.00 100.00 FC 100.00 100.00 FC Banque de Vizille 97.69 95.35 FC 97.69 95.18 FC BFCM Francfort 100.00 100.00 FC 100.00 100,00 FC BKCP Securities 100.00 100.00 FC 100.00 100.00 FC CEOI 100.00 100.00 FC 100.00 100.00 FC CIC Finance 99.99 97.50 FC 99.94 97.27 FC CIC Investissement 100.00 97.50 FC 100.00 97.27 FC CIC Investissement Alsace 100.00 97.50 FC 100.00 97.27 FC CIC Investissement Est 100.00 97.50 FC 100.00 97.27 FC CIC Investissement Nord 100.00 97.50 FC 100.00 97.27 FC CIC Vizille Participation 100.00 96.41 FC 100.00 96.23 FC Cigogne Management 100.00 98.65 FC 100.00 98.54 FC Cloe - - NC 100.00 100.00 FC Absorbed by CMMABNCM-CIC Securities 100.00 97.52 FC 100.00 97.33 FC Compagnie Financière du Crédit Mutuel - - NC 100.00 100.00 FC Absorbed by

Crédit Mutuel ArkéaFCP Richebé 2011 100.00 100.00 FC CreatedFCP Richebé Recovery 100.00 100.00 FC CreatedFCT Home Loans 100.00 100.00 FC CreatedFinancière Voltaire 100.00 97.52 FC 90.63 88.63 FC Fortunéo (formerly Symphonis) 100.00 99.98 FC 100.00 99.98 FC groupe Victor Hugo 99.96 99.96 FC 100.00 100.00 FC IPO 100.00 97.52 FC 90.63 88.63 FC IPO Ingenierie 100.00 97.52 FC 90.63 88.63 FC Normandie Partenariat 99.65 99.63 FC 99.65 99.63 FC Océan Participations 100.00 100.00 FC 100.00 100.00 FC Procapital 99.98 99.98 FC 99.98 99.98 FC SDR de Normandie 99.79 99.79 FC 99.79 99.79 FC Sobrepar 100.00 100.00 FC 100.00 100.00 FC Sudinnova 57.21 54.55 FC 50.32 47.89 FC Synergie Finance 100.00 100.00 FC 100.00 100.00 FC UFG Private Equity (formerly NEPE) 100.00 100.00 FC 100.00 100.00 FC Vizille Capital Finance 100.00 95.35 FC 100.00 95.17 FC Vizille Capital Innovation 100.00 95.35 FC 100.00 95.18 FC Volney Développement 100.00 100.00 FC 100.00 100.00 FC C. Asset Management and Private Banking Agefor SA Genève 70.00 68.26 FC 70.00 68.13 FC Alternative Gestion SA Genève 45.00 60.46 EM 45.00 60.34 EM Banque Pasche (Liechtenstein) AG 52.50 51.20 FC 52.50 51.10 FC Banque Pasche Monaco SAM 100.00 97.51 FC 100.00 97.33 FC Banque de Luxembourg 100.00 98.20 FC 100.00 98.07 FC Banque Pasche 100.00 97.51 FC 100.00 97.33 FC Banque Transatlantique 100.00 97.52 FC 100.00 97.33 FC Banque Transatlantique Belgique 100.00 95.69 FC 100.00 95.49 FC Banque Transatlantique Jersey - - NC 100.00 97.33 FC Activity discontinuedBanque Transatlantique Londres 100.00 97.52 FC 100.00 97.33 FC Banque Transatlantique Luxembourg 100.00 98.51 FC 100.00 98.40 FC BLC Gestion 100.00 97.52 FC 99.99 97.32 FC Calypso Management Company 70.00 68.26 FC 70.00 68.13 FC CIC Suisse 100.00 97.52 FC 100.00 97.33 FC CM Habitat Gestion 99.98 99.98 FC 99.98 99.98 FC


SA Ataraxia 100.00 100.00 FC 100.00 100.00 FC SA Sofimpar 100.00 100.00 FC 100.00 100.00 FC Saint Pierre SNC 100.00 97.52 FC 100.00 97.33 FC SBCIC 100.00 97.52 FC 100.00 97.33 FC SCI Astrée 100.00 100.00 FC 100.00 100.00 FC SCI Cafimmo Gap 100.00 100.00 FC 100.00 100.00 FC SCI Cafimmo Marseille 100.00 100.00 FC 100.00 100.00 FC SCI Centre Gare 100.00 100.00 FC 100.00 100.00 FC SCI CMDV 100.00 100.00 FC 100.00 100.00 FC SCI CMN 100.00 100.00 FC 100.00 100.00 FC SCI CMN 1 100.00 100.00 FC 100.00 100.00 FC SCI CMN 2 100.00 100.00 FC 100.00 100.00 FC SCI CMN 3 100.00 100.00 FC 100.00 100.00 FC SCI CMN Location 100.00 100.00 FC 100.00 100.00 FC SCI CMN Location 2 100.00 100.00 FC 100.00 100.00 FC SCI CMN Richebé Inkerman 100.00 100.00 FC 100.00 100.00 FC SCI des Antons 100.00 100.00 FC 100.00 100.00 FC SCI DVPT CMM 100.00 100.00 FC 100.00 100.00 FC SCI Familia 99.96 99.96 FC 100.00 100.00 FC SCI Fontainebleau 100.00 100.00 FC 100.00 100.00 FC SCI Gambetta Immob 100.00 100.00 FC 100.00 100.00 FC SCI Gueydan 100.00 100.00 FC 100.00 100.00 FC SCI Jeanne d'Arc 100.00 100.00 FC 100.00 100.00 FC SCI Les Trois Rues 100.00 100.00 FC 100.00 100.00 FC SCI Maurice Faure 100.00 100.00 FC 100.00 100.00 FC SCI Mende 100.00 100.00 FC 100.00 100.00 FC SCI Merlet Immobilier 100.00 100.00 FC 100.00 100.00 FC SCI Nice Avenue 100.00 100.00 FC 100.00 100.00 FC SCI Nice Joffre 100.00 100.00 FC 100.00 100.00 FC SCI Nice République 100.00 100.00 FC 100.00 100.00 FC SCI Palais de la Mer 100.00 100.00 FC 100.00 100.00 FC SCI Plantagenets 100.00 100.00 FC 100.00 100.00 FC SCI Provence Languedoc 100.00 100.00 FC 100.00 100.00 FC SCI Puget 100.00 100.00 FC 100.00 100.00 FC SCI SCMDV 100.00 100.00 FC 100.00 100.00 FC SCI Sud-Est Gestion Immobilière 99.96 99.96 FC 100.00 100.00 FC SCI Vercoulor 100.00 100.00 FC 100.00 100.00 FC Selaco 100.00 100.00 FC 100.00 100.00 FC SI du Vivier 100.00 100.00 FC 100.00 100.00 FC SNC Crédit Mutuel Anjou Immobilier 100.00 100.00 FC 100.00 100.00 FC Sodelem 100.00 100.00 FC 100.00 100.00 FC Sofemo 100.00 99.17 FC 100.00 99.11 FC Sofim 100.00 97.52 FC 100.00 97.33 FC Sofimmo3 100.00 100.00 FC 100.00 100.00 FC Sud-Est Transactions Immobilières 99.96 99.96 FC 100.00 100.00 FC Targo Bank AG & Co, KGaA (formerly Citibank Privatkunden AG & Co. KGaA) 100.00 100.00 FC 100.00 100.00 FC Targo Finanzberatung GmbH (formerly Citi Finanzberatung GmbH) 100.00 100.00 FC 100.00 100.00 FC Transactimmo 100.00 100.00 FC 100.00 100.00 FC Trefliere SCI 100.00 100.00 FC 100.00 100.00 FC UFG Property Management 100.00 100.00 FC 78.79 78.79 FC UFG Transaction 100.00 100.00 FC 100.00 100.00 FC UFG LFP France 100.00 100.00 FC 100.00 100.00 FC Union Immobilière Océan SCI 100.00 100.00 FC 100.00 100.00 FC West-Vlaamse Bank SCRL - - NC 95.52 95.52 FC Absorbed by BKPC SCRL




114 Crédit Mutuel


ICM Life 100.00 99.49 FC 100.00 99.46 FC ICM Reinsurance 100.00 99.49 FC 100.00 99.47 FC Immobilière ACM 100.00 99.49 FC 100.00 99.46 FC Infolis 100.00 100.00 FC 100.00 100.00 FC La Pérennité - - NC 100.00 100.00 FC Absorbed by ACMN VieLa Pérennité Entreprises 90.00 90.00 FC 90.00 90.00 FC Massena 99.88 98.49 FC 99.88 98.42 FC Massena Property 100.00 99.49 FC 100.00 99.46 FC Massimob 100.00 99.51 FC 100.00 99.47 FC MTRL 100.00 100.00 FC 100.00 100.00 FC Nord Europe Assurances 100.00 100.00 FC 100.00 100.00 FC Nord Europe Life Luxembourg 100.00 100.00 FC 100.00 100.00 FC Nord Europe Retraite 100.00 100.00 FC 100.00 100.00 FC Novelia 100.00 99.99 FC 99.99 99.99 FC Partners 100.00 99.45 FC 100.00 99.46 FC Procourtage 100.00 99.49 FC 100.00 99.46 FC RMA Watanya 20.00 20.00 EM 20.00 20.00 EM Royal Automobile Club de Catalogne 49.00 48.76 EM - - NC AcquiredSCI ADS 100.00 99.08 FC 100.00 99.04 FC Serenis Ass 99.59 99.08 FC 99.59 99.04 FC Serenis Vie (formerly Televie) 100.00 99.49 FC 100.00 99.45 FC Société de Réassurance Lavalloise 99.99 99.99 FC 99.99 99.99 FC Suravenir 100.00 100.00 FC 100.00 100.00 FC Suravenir Assurances 100.00 100.00 FC 100.00 100.00 FC Suravenir Assurances Holding - - NC 100.00 100.00 FC Absorbed by

Crédit Mutuel ArkéaVie Services 77.60 77.60 FC 77.60 77.60 FC F. Other Acta Voyages 40.00 40.00 EM 40.00 40.00 EM Agence Générale d’Informations Régionales 99.80 99.80 FC - - NC Consolidated for first time

(EBRA group)BKCP IT 100.00 100.00 FC 100.00 100.00 FC Carmen Holding Investissement 67.00 67.00 FC - - NC AcquiredCIC Migrations 100.00 97.52 FC 100.00 97.33 FC CIC Participations 100.00 97.52 FC 100.00 97.33 FC Cicor 100.00 97.52 FC 100.00 97.33 FC Cicoval 100.00 97.52 FC 100.00 97.33 FC CM Akquisition 100.00 100.00 FC 100.00 100.00 FC CMCIC Services 100.00 100.00 FC 100.00 100.00 FC CMCP 100.00 99.98 FC 100.00 99.98 FC CMN Tel 100.00 100.00 FC 100.00 100.00 FC CMNE Belgium 100.00 100.00 FC 100.00 100.00 FC CNCP - NKBK Pool SA 100.00 100.00 FC 100.00 100.00 FC Cofidis Participations 51.00 34.17 FC - - NC AcquiredCofisin 100.00 34.17 FC - - NC AcquiredDarcy Presse 99.80 99.73 FC - - NC Consolidated for first time

(EBRA group)Documents AP 100.00 100.00 FC - - NC Consolidated for first time

(EBRA group)EFSA 100.00 97.52 FC 100.00 97.33 FC EI Développements 100.00 99.69 FC 100.00 99.65 FC EIP (formerly GTOCM) 100.00 100.00 FC 100.00 100.00 FC Euro Information 100.00 99.69 FC 100.00 99.65 FC Gestunion 2 100.00 97.52 FC 100.00 97.33 FC


Dubly-Douilhet 62.61 61.05 FC 62.19 60.53 FC Elite Opportunities (Liechtenstein) AG - - NC 100.00 97.33 FC DeconsolidatedFédéral Finance Banque 100.00 100.00 FC 100.00 100.00 FC Fédéral Finance Gestion 100.00 100.00 FC 100.00 100.00 FC Financière Nord Europe 100.00 100.00 FC 100.00 100.00 FC Franklin Gérance 100.00 100.00 FC 100.00 100.00 FC GPK Finance SA 88.58 86.38 FC 87.83 85.48 FC La Francaise des Placements (LFP) 100.00 100.00 FC 99.99 99.99 FC LRM Advisory SA 70.00 68.26 FC 70.00 68.13 FC Multi Financière de l'Anjou SA 100.00 100.00 FC 100.00 100.00 FC Nord Europe Gestion SA (NEGE) 100.00 100.00 FC 100.00 100.00 FC Pasche Bank & Trust Ltd Nassau 100.00 97.51 FC 100.00 97.33 FC Pasche Finance SA Fribourg 100.00 97.51 FC 100.00 97.33 FC Pasche Fund Management Ltd 100.00 97.51 FC 100.00 97.33 FC Pasche International Holding Ltd 100.00 97.51 FC 100.00 97.33 FC Pasche SA Montevideo 100.00 97.51 FC 100.00 97.33 FC Serficom Family Office Inc 100.00 97.51 FC 100.00 97.33 FC Serficom Family Office Ltda Rio 51.98 50.69 FC 51.00 49.64 FC Serficom Family Office SA 100.00 97.51 FC 100.00 97.33 FC Serficom Investment Consulting (Shangaï) Ltd 100.00 97.51 FC 100.00 97.33 FC Serficom Maroc Sarl 100.00 97.51 FC 100.00 97.33 FC Synergie Finance Gestion 100.00 100.00 FC 100.00 100.00 FC Transatlantique Finance 100.00 97.52 FC 100.00 97.32 FC UFG Alteram - - NC 100.00 100.00 FC Absorbed by LFPUFG Courtage 100.00 100.00 FC 100.00 100.00 FC UFG REM (formerly UFG Immobilier) 100.00 100.00 FC 100.00 100.00 FC Valeroso Management Ltd 45.00 60.46 EM 45.00 60.34 EM D. Multisector BFCM 100.00 100.00 FC 100.00 100.00 FCCIC IDF 97.52 97.52 FC 97.33 97.33 FCCIC London 100.00 97.52 FC 100.00 97.33 FCCIC New York 100.00 97.52 FC 100.00 97.33 FCCIC Singapore 100.00 97.52 FC 100.00 97.33 FC E. Insurance ACM Iard AIR 100.00 99.51 FC 100.00 99.47 FC ACM Services 100.00 99.49 FC 100.00 99.45 FC ACM Vie SAM 100.00 100.00 FC 100.00 100.00 FC ACM Vie 100.00 99.49 FC 100.00 99.45 FC ACMN Iard 100.00 99.75 FC 100.00 99.73 FC ACMN Vie 100.00 100.00 FC 100.00 100.00 FC Adepi 100.00 97.52 FC 100.00 97.33 FC Alverzele 100.00 100.00 FC 100.00 100.00 FC Astrée 30.00 29.86 EM 30.00 29.84 EM Atlancourtage Anjou 100.00 100.00 FC 100.00 100.00 FC Atlancourtage Entreprise 100.00 100.00 FC 100.00 100.00 FC Atlancourtage Ouest Atlantique - - CI 100.00 100.00 FC Asset-liability transfer

to CMLACOCourtage CMN 100.00 100.00 FC 100.00 100.00 FC Courtage Océan 100.00 100.00 FC 100.00 100.00 FC CP-BK Reinsurance (Lux) 100.00 100.00 FC 100.00 100.00 FC Euro Protection Services (EPS) 100.00 99.49 FC 100.00 99.46 FC GIE ACM 100.00 99.49 FC 100.00 99.46 FC




116 Crédit Mutuel


Gestunion 3 100.00 97.52 FC 100.00 97.33 FC Gestunion 4 100.00 97.52 FC 100.00 97.33 FC GIE BCMNE Gestion 100.00 100.00 FC 100.00 100.00 FC GIE CMN Gestion 100.00 100.00 FC 100.00 100.00 FC GIE CMN Prestations 100.00 100.00 FC 100.00 100.00 FC GIE UFG Trésorerie 100.00 100.00 FC 100.00 100.00 FC Groupe EBRA 100.00 100.00 FC - - NC Consolidated for first timeGroupe Progrès 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)Immo W16 100.00 100.00 FC 100.00 100.00 FC Immocity 100.00 99.93 FC - - NC consolidated for first time

(EBRA group)Impex Finance 100.00 97.52 FC 100.00 97.33 FC Information pour la Communication 50.00 49.98 FC - - NC consolidated for first time

(EBRA group)Jean Bozi Communication 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)La Gazette Indépendante de Saône et Loire 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)La Tribune 100,00 99.97 FC - - NC consolidated for first time

(EBRA group)Le Bien Public 99.93 99.93 FC - - NC consolidated for first time

(EBRA group)Le Dauphiné Libéré 99.97 99.97 FC - - NC consolidated for first time

(EBRA group)Les Journaux de Saône et Loire 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)Lyon Plus 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)Lyonnaise de Télévision 60.00 60.00 FC - - NC consolidated for first time

(EBRA group)Marsovalor 100.00 97.62 FC 100.00 97.33 FC Nord Europe Participations et Investissements (NEPI) 100.00 100.00 FC 100.00 100.00 FC NRJ Mobile 90.00 89.72 FC 90.00 89.69 FC Pargestion 2 100.00 97.52 FC 100.00 97.33 FC Pargestion 3 - - NC 100.00 97.33 FC DeconsolidatedPargestion 4 100.00 97.52 FC 100.00 97.33 FC Pargestion 5 - - NC 100.00 97.33 FC DeconsolidatedPlacinvest 99.96 97.46 FC 99.96 97.26 FC Poujoulat Belgique 34.53 34.53 EM 34.53 34.53 EM Presse Diffusion 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)Promopresse 100.00 99.97 FC - - NC consolidated for first time

(EBRA group)Publiprint Dauphiné 100.00 99.97 FC - - NC consolidated for first time

(EBRA group)Publiprint Province no 1 99.96 99.96 FC - - NC consolidated for first time

(EBRA group)Rhône Offset Presse 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)SCI de Palais 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)SCI Hotel de Ville 100.00 100.00 FC - - NC consolidated for first time

(EBRA group)SCI Le Progrès Confluence 30.17 30.17 EM - - NC consolidated for first time

(EBRA group)

Method: FC = Full Consolidation, PM = Proportional Method, EM = Equity Method, NC = Not Consolidated


SCI 6 Place Joubert 100.00 100.00 FC - - NC consolidated for first time(EBRA group)

Services et Crédits aux Professions Indépendantes et PME 56.22 53.64 FC 56.22 55.30 FC Sicorfé Maintenance 90.00 87.20 FC 90.00 87.19 FC SNP Sicorfé 92.29 92.29 FC 92.29 92.29 FC Société d’Edition des Hebdomadaires et Périodiques Locaux 99.67 99.67 FC - - NC consolidated for first time

(EBRA group)Sodelem Services 100.00 100.00 FC 100.00 100.00 FC Sofiholding 2 100.00 97.62 FC 100.00 97.33 FC Sofiholding 3 100.00 97.62 FC 100.00 97.33 FC Sofiholding 4 100.00 97.62 FC 100.00 97.33 FC Sofinaction 100.00 97.62 FC 100.00 97.33 FC Sopreg SA 49.66 49.66 EM - - NC consolidated for first timeTargo Akademie GmbH (formerly Citicorp Akademie GmbH) 100.00 100.00 FC 100.00 100.00 FC Targo Deutschand GmbH (formerly Citicorp Deutschand GmbH) 100.00 100.00 FC 100.00 100.00 FC Targo Dienstleistung GmbH (formerly Citicorp Dienstleistung GmbH) 100.00 100.00 FC 100.00 100.00 FC Targo IT Consulting GmbH (formerly Citicorp Consulting GmbH) 100.00 100.00 FC 100.00 100.00 FC Targo IT Consulting Singapore (formerly Citicorp Consulting Singapore) 100.00 100.00 FC - - NC AcquiredTargo Management AG (formerly Citicorp Management AG) 100.00 100.00 FC 100.00 100.00 FC Targo Realty Services GmbH (formerly Citicorp Realty Services GmbH) 100.00 100.00 FC 100.00 100.00 FC UFG ICC 100.00 100.00 FC - - NC CreatedUFG-LFP 100.00 100.00 FC 100.00 100.00 FC Ufigestion 2 100.00 97.62 FC 100.00 97.33 FC Ufigestion 3 - - NC 100.00 97.33 FC DeconsolidatedUgépar Service 100.00 97.62 FC 100.00 97.33 FC Valimar 2 100.00 97.62 FC 100.00 97.33 FC Valimar 4 100.00 97.62 FC 100.00 97.33 FC Ventadour Investissement 100.00 100.00 FC 100.00 100.00 FC VTP1 99.98 97.60 FC 99.97 97.29 FC VTP5 100.00 97.62 FC 100.00 97.33 FC

Method: FC = Full Consolidation, PM = Proportional Method, EM = Equity Method, NC = Not Consolidated


Note 3: Accounting policies and methods

International Financial Reporting Standards (IFRS) offer achoice of accounting methods in certain areas. The mainoptions adopted by the group concern:

• Opening balance sheet:- use of fair value or re-measurement as the presumed

cost of non-current assets at the time of transition: this option may be applied to any tangible or intangiblenon-current asset that satisfies the re-measurementcriteria, or to any investment property stated on a costbasis. The group chose not to adopt this option;

- immediate recognition in shareholders’ equity ofactuarial differences linked to employee benefits; this has not been applied by the group;

- the group has opted to zero out translation reserves.

• The mark to market valuation of certain liabilities issuedby the enterprise that are not included in a tradingportfolio.

• The eligibility for fair-value hedging relationships ofmacro-hedging transactions entered into in the contextof the asset-liability management of fixed-rate positions(notably including customer demand deposits)authorised by EU Regulation 2086/2004 has beenapplied by the group.

• The group availed itself of the amendments to IAS 39issued in October 2008 permitting the reclassification ofsome financial instruments from the fair-value-through-profit-or-loss category to loans and receivables orassets held to maturity. Note that reclassifications toavailable-for-sale assets are permitted (see Note 3.4).

3.1 Loans and receivables

Loans and receivables are fixed or determinable-incomefinancial assets not listed on an active market, which arenot intended for sale when acquired or granted. Theyinclude loans granted directly or the bank’s share ofsyndicated loans, loans acquired and unlisted debtsecurities. When first recorded on the balance sheet, theyare recognised at their fair value, which is generally the netamount disbursed. The rates applied are presumed to bemarket rates in that the rate scales are constantly adjustedas a function, in particular, of the rates applied by the largemajority of competitor institutions. At subsequent periodends, they are measured at their amortised cost using theeffective interest rate method (other than thoserecognised using the fair value by option method).

All commissions received or paid relating directly to thesetting in place of the loan and resembling interest arespread over the life of the loan in accordance with theeffective interest rate method and are recorded in theprofit and loss account as an interest item.

The fair value of loans and advances is disclosed in thenotes to the financial statements on each closing date: itcomprises the present value of projected future cash flowsdiscounted using a zero-coupon interest rate curve, whichincludes the signature cost inherent to the debtor.

3.2 Provisions for impairment of loans andreceivables, loan commitments and guarantees

• Individual provisions for impairment of loans andreceivables

Impairment is recognised once there is objective evidenceof the existence of an event or events occurringsubsequent to the granting of the loan – or group of loans– likely to generate a loss. An analysis is performed on acontract-by-contract basis at each period end. Theamount of impairment is equal to the difference betweenthe carrying amount and the present value of the projectedfuture cash flows discounted at the original effectiveinterest rate on the loan, taking into account anyguarantees. For variable rate loans, the last knowncontractual rate is used.The existence of unpaid past due amounts for more than 3months (or 6 months for mortgages and localgovernments, or for current accounts that have beenirregular for more than 3 months) represents objectiveevidence of a loss event. Similarly, an objective indicationof loss is identified when it is probable that the debtor willnot be able to repay all the amounts due or when a defaultevent has taken place or in the event of a court-orderedliquidation.

Impairment losses and provisions are recognised as acomponent of cost of risk. When reversed, impairmentlosses and provisions are treated as a reduction in cost ofrisk with the exception of the portion relating to the impactof the passage of time associated with the discountingmechanism. The provision is deducted from loans andreceivables when it related to impaired assets and isrecognised as a liability under provisions for risks when itrelates to loan commitments and guarantee obligations(see Note 3.9)

Irrecoverable receivables are written off and thecorresponding provisions are written back.


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Note 2: Consolidation methods and policies

2.1 Consolidation methods

The following consolidation methods have been used:

• Full consolidationThis method consists of substituting the various assets andliabilities of the subsidiary concerned for the value of thesecurities held and of recognising the share of minority interestsin shareholders’ equity and net profit. It is applied to allexclusively-controlled entities, including those with a differentaccounts structure, regardless of whether or not the activityconcerned forms part of the consolidating entity’s activities.

• Proportional consolidationThis method consists of including in the accounts of theconsolidating entity the proportion of the subsidiary’sassets and liabilities represented by the interest held in theconsolidated entity, as restated where required; minorityinterests are therefore not recognised. It is applied to all jointly-controlled entities, including those with adifferent accounts structure, regardless of whether or notthe activity concerned forms part of the consolidatingentity’s activities.

• Equity method of consolidationThe equity method of consolidation consists of substitutingthe group’s share of the shareholders’ equity and net profitof the equity affiliate for the value of the securities held. Itis applied to all entities over which significant influence isexercised.

2.2 Closing date

All the companies included in the group consolidationscope close their accounts on 31 December of each year.

2.3 Elimination of intra-group transactions

Intra-group accounts and any effects resulting from intra-group transfers that would have a material impact in termsof the consolidated financial statements are eliminated.Intra-group receivables, liabilities, reciprocal commitments,charges and income are eliminated for entities consolidatedusing the full or proportional methods.

2.4 Translation of accounts denominated in a foreigncurrency

Concerning foreign entities whose accounts aredenominated in a foreign currency, the balance sheet

is translated using the official exchange rate on the closingdate. The translation difference arising on the capital, reservesand retained earnings is recognised in shareholders’ equity,under “Translation reserves”. The profit and loss account istranslated using the average exchange rate for the year.The resulting translation differences are recognised directlyin the translation reserve. Such differences are transferredto the profit and loss account in the event of the disposalor liquidation of all or part of the holding in the foreignentity.

2.5 Goodwill

• Valuation differencesOn the date that control of a new entity is acquired, the assets, liabilities and contingent operating liabilities are measured at their fair value. Differences between the carrying amount and the fair value are recognisedunder 'valuation differences'.

• Goodwill on acquisitionIn compliance with IFRS 3, on the date that control of a newentity is acquired, those identifiable assets, liabilities andcontingent liabilities of the acquiree meeting criteria forrecognitions under IFRS 3 are measured at fair value on thedate of acquisition, except for non-current asset classifiedas assets held for sale, which are recognised at fair valueless costs to sell. The difference between the price paid forthe securities and the total valuation of the assets,liabilities and contingent liabilities constitutes the goodwill.If goodwill is positive, it is recorded as an asset, and if it isnegative, it is recognised immediately in profit or loss,under “Changes in goodwill”.

If the group’s percentage holding in a controlled entity isincreased, the difference between the acquisition cost ofthe securities and the incremental share of consolidatedshareholders’ equity represented by such securities on theacquisition date is recognised in shareholders’ equity.

The group regularly (at least once each year) tests goodwillfor impairment. These tests are intended to ensure thatsuch goodwill has not experienced any permanentimpairment. If the recoverable value of the cash-generating unit (CGU) to which the goodwill is allocated isless than its carrying amount, the difference is recognisedas an impairment. This impairment, recognised in profit andloss, is irreversible. In practice, the group’s CGUs are itsvarious business lines.


In all instances, the adjustments made by the group arereasonable and appropriate, with reliance placed onjudgement.

• Fair value hierarchy

The amendment to IFRS 7 published in March 2009 defineda three-level hierarchy for fair value measurement:

- Level 1: quoted prices in active markets for identicalassets or liabilities;

- Level 2: inputs other than quoted prices included withinlevel 1 that are observable for the asset or liability, eitherdirectly (i.e. as prices) or indirectly (i.e. derived fromprices); and

- Level 3: inputs for the asset or liability that are not basedon observable market data (unobservable inputs).

• Classification of securities

Securities may be classified in one of the followingcategories:

- financial assets at fair value through profit or loss;- available-for-sale financial assets;- held-to-maturity financial assets; or- loans and receivables.

Classification in one or other of these categories reflectsthe group’s management intention and determines how aparticular financial asset is recognised and measured in thefinancial statements.

Financial assets and financial liabilities at fair valuethrough profit or loss

• Classification criteria and transfer rules

Securities are classified in this category when acquired forthe purpose of selling them in the near term or because,upon initial recognition, they were designated as at fairvalue through profit or loss.

a) Instruments held for tradingSecurities are classified as held for trading if they wereacquired principally for the purpose of selling them in thenear term or if they are part of a portfolio for which there is evidence of a recent actual pattern of short-term profit-taking. Market conditions may prompt the group to review theinvestment strategy and management intention for thesesecurities. When it would be untimely to sell securitiespurchased initially for the purpose of selling them in the

near term, these securities may be reclassified inaccordance with the provisions of the amendments to IAS39 issued in October 2008. Transfers to financial assetsheld for trading or to financial assets held to maturity arepermitted in limited circumstances. Transfers to loans andreceivables are permitted when the group has the positiveintention and ability to hold these securities over theforeseeable future or until their maturity, and when assetstransferred meet criteria for recognition as loans andreceivable, in particular the requirement that they not bequoted in an active market. These portfolio transfers areintended to better reflect the current managementintention for these instruments and to reflect more fairlytheir impact on the group’s results.

b) Instruments designated at fair value through profit on lossFinancial instruments may be designated as at fair valuethrough profit or loss upon initial recognition. Oncedesignated as such, financial instruments cannot bereclassified. This classification is permitted in the followingcircumstances:

- financial instruments containing one or several separableembedded derivatives;

- instruments for which the accounting treatment would beinconsistent with that applied to another relatedinstrument, were the fair value option not applied; and

- instruments belonging to a pool of financial assetsmeasured and accounted for at fair value.

The group has used this option in particular for unit-linkedinsurance policies, for consistency with the treatmentapplied to liabilities, and for private equity securities andcertain liabilities issued that contain embedded derivatives.

• Basis for the measurement and recognition of incomeand charges

Securities classified as assets and liabilities at fair valuethrough profit or loss are recognised on the balance sheetat fair value when they are first recorded and at allsubsequent balance sheet dates until such time as they aredisposed of.Changes in fair value and revenues received or accrued on

fixed-income securities classified in this category arerecorded in the profit and loss account under “Net gains(losses) on financial instruments at fair value through profitor loss”.Purchases and sales of securities measured at fair valuethrough profit or loss are recognised on the settlementdate. Changes in fair value between the transaction andsettlement dates are recognised in profit or loss.


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• General provisions for impairment of loans andreceivables

All loans to customers not written down for impairment onan individual basis are grouped together into homogenouspools of exposures. Exposures at risk are subject to animpairment provision based on the actual loss rate and theprobability of default to maturity observed internally andexternally applied to the loan outstandings. This provision isrecognised as a deduction from the corresponding assetsin the balance sheet and changes during the period arerecognised in cost of risk in profit and loss.

3.3 Leases

A lease is an agreement under which the lessor grants tothe lessee, for a predetermined period, the right to use anasset in exchange for a payment or series of payments.

A finance lease is a lease under which virtually all of the risksand benefits inherent in ownership of an asset aretransferred to the lessee. Ownership of the asset may ormay not eventually be transferred.

An operating lease is any lease that is not a finance lease.

• Finance leases – lessor

In accordance with IAS 17, finance lease transactions withnon-group companies are reported on the consolidatedbalance sheet at their financial accounting amount.

Analysis of the economic substance of transactions results,in the accounts of the lessor, in:

- recognition of a financial receivable due from thecustomer, amortised by the lease payments received;

- breakdown of the lease payments between interest andthe amortisation of the principal, known as financialamortisation;

- recognition of a net unrealised reserve, equal to thedifference between:

- the net financial outstanding: the amount due bythe lessee, comprising the remaining capital dueand accrued interest at the closing date;

- the net carrying amount of the leased non-currentassets;

- the deferred tax provision.

• Finance leases – lessee

In accordance with IAS 17, the non-current assetsconcerned are recorded on the balance sheet as assetsand the borrowing from credit institutions is recorded as aliability. Lease payments are broken down between interestexpense and repayment of principal.

3.4 Securities

• Determination of fair value

Fair value is the amount for which an asset could beexchanged, or a liability settled, between knowledgeable,willing parties in an arm's length transaction.On initial recognition of a financial instrument, fair value isgenerally the transaction price.When measured subsequently, fair value must bedetermined. The measurement method applied variesdepending on whether the financial instrument is traded ina market considered as active or not.

Financial instruments traded in an active market

When financial instruments are traded in an active market,fair value is determined by reference to their quoted price as this is considered to represent the best estimate of fair value. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker orpricing service, and those prices represent actual and regularly occurring market transactions on an arm’slength basis.

Financial instruments not traded in an active market

When the market is illiquid, market prices may be used as anelement in determining fair value, but cannot be theoverriding element.

When there is no observable data or when adjustments to market prices require reliance to be placed on non-observable data, the entity may use internal assumptionsregarding future cash flows and discount rates, integratingadjustments for market risks in the same way as the marketwould (i.e. credit risk and liquidity risk). Observable marketdata is used when this data reflects the reality of atransaction in an arm’s length exchange motivated bynormal business considerations and do not require materialadjustments to the valuation obtained in this way.Otherwise, the group uses non-observable data, applying amark-to-model approach.


since the recognition of the impairment is also recognisedto profit or loss under “Cost of risk” when there has been animprovement in the borrower’s credit situation.

Held-to-maturity financial assets


Held-to-maturity financial assets are securities with fixedor determinable payments and a fixed maturity, and whichthe group has the positive intention and ability to hold tomaturity.Transactions to hedge the interest rate risk in respect ofthis category of securities are not eligible for hedgeaccounting under IAS 39.Possibilities for selling or transferring held-to-maturitysecurities are extremely restricted under IAS 39 which,depending on the circumstance, may require the entireportfolio to be reclassified at the level of the group and toprohibit the use of this category for two years.

• Basis for measurement and recognition of income andcharges

Held-to-maturity securities are recognised at fair valuewhen acquired. Subsequently they are measured atamortised cost using the effective interest rate method,which factors in the amortisation of any premium, discountand acquisition costs if material.Purchases and sales of securities are recognised on thedate of settlement.Income received from these securities is recorded under“Interest and similar income” in the profit and loss account.

• Credit risk

An impairment loss is recognised when there is objectiveevidence that the asset is impaired as a result of one or more events having occurred after initial recognition of the asset and when this could generate a loss (provencredit risk). Impairment testing is carried out at eachbalance sheet date for each security in turn. The amount of the loss is measured as the difference between the asset's carrying amount and the present value ofestimated cash flows discounted at the asset's originaleffective interest rate, taking into account any guarantees.The impairment loss is recognised to profit or loss under“Cost of risk”. Any subsequent appreciation resulting from an event having occurred since the recognition of the impairment loss is also recognised to profit or lossunder “Cost of risk”.

Loans and receivables


IAS 39 authorises certain securities to be classified as loansand receivables when they have fixed or determinablepayments and they are not quoted in an active market.Classification as loans and receivables may take placeupon initial recognition of the securities or upon theirtransfer from financial assets at fair value through profit orloss or from available-for-sale securities pursuant to theamendments to IAS 39.


Loans and receivables are recognised initially at fair value.Subsequently they are accounted for and measured inaccordance with the rules applied to loans and receivablesdescribed in Note 3.1 dealing with loans and receivables.

• Credit risk

An impairment loss is recognised when there is objectiveevidence that the asset is impaired as a result of one ormore events having occurred after initial recognition of theasset and when this could generate a loss (proven creditrisk). The amount of the loss is measured as the differencebetween the asset's carrying amount and the present valueof estimated cash flows discounted at the asset's effectiveinterest rate, taking into account any guarantees. Theimpairment loss is recognised to profit or loss under “Costof risk”. Any subsequent appreciation resulting from anevent having occurred since the recognition of theimpairment loss is also recognised to profit or loss under“Cost of risk”.

3.5 Derivatives and hedge accounting

Determination of fair value of derivatives

The majority of over-the-counter derivatives, swaps, futurerate agreements, caps, floors and simple options arevalued using standard, generally accepted models (presentvalue of future cash flows, Black and Scholes model,interpolation techniques), based on observable marketdata such as yield curves. The valuations given by thesemodels are adjusted to take into account the liquidity riskand the credit risk.Derivatives are recognised as financial assets when theirmarket value is positive and as financial liabilities when theirmarket value is negative.


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If there is a transfer to one of the three other categories,the asset’s fair value on the transfer date is treatedsubsequently as representing cost or amortised cost. Nogain or loss recognised prior to transfer may be reversed.

Financial assets and financial liabilities available for sale


Available-for-sale financial assets comprise financialassets not classified as loans and receivables, as held-to-maturity financial assets, nor as at fair value through profitor loss.Fixed income securities may be reclassified as:- held-to-maturity financial assets if there is a change in

management intention, providing these assets meet theclassification criteria for this category;

- loans and receivables if there is a change in managementintention and a positive intention and ability to hold thesesecurities over the foreseeable future or until theirmaturity, providing these assets meet the classificationcriteria for this category.


These assets are recognised on the balance sheet at fair market value when they are acquired and atsubsequent balance sheet dates until such time as they are disposed of. Changes in fair value are recorded inshareholders’ equity under a specific heading entitled“Unrealised or deferred gains or losses”, excluding accruedincome. Unrealised gains or losses recognised inshareholders’ equity are recognised in the profit and loss account only when the assets are disposed of or when evidence of permanent impairment is observed. On disposal, the unrealised gains or losses previouslyrecognised in shareholders’ equity are transferred to theprofit and loss account under “Net gains (losses) onavailable-for-sale financial assets”, together with the gainor loss on disposal. Purchases and sales of securities arerecognised on the settlement date. If securities with a fixed maturity are transferred out toheld-to-maturity financial assets or to loans andreceivables, and in the absence of impairment losses,unrealised gains or losses previously recognised directly toequity are reversed over the residual life of the asset. Ifsecurities with no fixed maturity are transferred out to loansand receivables, unrealised gains or losses previouslyrecognised directly to equity are maintained in equity untilthe sale of the securities.

Income accrued or received on fixed-income securities is recognised in profit or loss using the effective interestmethod under “Interest and similar income”. Dividendsreceived on variable-yield securities are recorded in profitor loss under “Net gains (losses) on available-for-salefinancial assets”.

• Impairment and credit risk

a) Lasting diminution in the value of shares and otherequity instrumentsImpairment losses are recognised in respect of variableincome financial assets classified as available for sale in theevent of a prolonged and material decline in fair valuerelative to cost.

In the case of variable income securities, Crédit Mutuelconsiders that a loss in the value of an instrument relativeto its acquisition cost of 50% or a loss in value over a periodof 24 consecutive months triggers the recognition of animpairment loss, except in those instances where it isconsidered that the fair value determined by the groupdoes not reflect a probable loss of all or part of the amountinvested. Impairment testing is carried out on a line by linebasis. Judgement is also exercised for securities notmeeting the aforementioned criteria when managementestimates that the recovery of the amount invested cannotbe expected reasonably in the near future. The probableloss is recognised in profit and loss under "Net gains(losses) on available-for-sale financial assets".

Any subsequent impairment is also recognised in profit and loss.

Losses for permanent impairment of equities and otherequity instruments recorded in profit and loss may not be reversed as long as the instrument is carried on the balance sheet. Any subsequent appreciation isrecognised to equity under “Unrealised or deferred gainsand losses”.

b) Impairment losses in respect of credit riskImpairment losses relating to fixed-income securitiesavailable for sale (mainly bonds) are recognised under“Cost of risk”. The existence of a credit risk alone may justify recognising impairment losses against fixed income securities, whereas a decline in value due simply to an increase in interest rates does not. In the event an impairment loss is recognised, all accumulatedunrealised losses taken to equity must be reversed to profit or loss. Impairment losses may be reversed. Anysubsequent appreciation resulting from an event occurring


The group has availed itself of the possibilities offered by the European Commission as regards accounting for macro-hedging transactions. The European Union's so-called carve out amendment to IAS 39 enablescustomer demand deposits to be included in hedged fixed-rateliability portfolios with no effectiveness measurement if under hedged. The maturities of the deposits areestablished as a function of the run-off rules defined forasset-liability management purposes.

For each portfolio of fixed rate assets or liabilities, thematurity schedule of the hedging derivatives is reconciledwith that of the hedged items to ensure that there is noover-hedging.The accounting method for fair value macro-hedgingderivatives is the same as for fair value hedges.

Changes in the fair value of the hedged portfolios arerecorded in a specific line of the balance sheet,“Revaluation difference on portfolios hedged for interestrate risk”, the other side of the entry being to the profit andloss account.

Cash flow hedgesIn the case of cash flow hedging relationships, thederivatives are recognised in shareholders’ equity on thebalance sheet at their fair value for the portion consideredeffective while the portion considered as ineffective isrecorded in the profit and loss account in “Net gains(losses) on financial instruments at fair value through profitor loss”.Amounts recorded in shareholders’ equity are reversedthrough profit or loss under “Interest income and charges”symmetrically to the flows of the hedged item affecting theprofit and loss account.

The hedged items continue to be recognised in accordancewith the rules specific to their accounting category. If thehedging relationship is interrupted or the effectivenesscriteria are not met, hedge accounting ceases to beapplied. The cumulative amounts recorded in shareholders’equity for the re-measurement of the hedging derivativeare maintained in shareholders’ equity until such time asthe hedged transaction itself affects the profit and lossaccount or when it is determined that the transaction willnot take place. These amounts are then transferred toprofit or loss.If the hedged item has been derecognised, the cumulativeamounts recorded in shareholders' equity are immediatelytransferred to profit or loss.

3.6 Debt securities

Debt securities (interest-bearing notes, interbank marketsecurities, bond loans etc.) that are not classified at fairvalue through profit or loss by option are recognisedinitially at their issue amount, when applicable net oftransaction costs.

These securities are subsequently measured at amortisedcost using the effective interest rate method.

3.7 Subordinated debt

Both dated and undated subordinated debt is separatedfrom other debt securities as, in the event of the issuer’sliquidation, it is repaid only after claims by other creditorshave been extinguished. Subordinated debt is measured atamortised cost.

3.8 Distinction between liabilities and shareholders’equity

In accordance with IFRIC 2, the interests of members areclassified as shareholders’ equity if the entity has theunconditional right to refuse to redeem such interests, or ifthere are legal or statutory provisions that prohibit orstrictly limit such redemption. Under existing statutory andlegal provisions, shares issued by the structures comprisingthe consolidating entity of the Crédit Mutuel group arerecognised under shareholders’ equity.

The other financial instruments issued by the group qualifyfor accounting purposes as debt instruments if the grouphas a contractual obligation to deliver cash to the holdersof such instruments. This is the case, in particular, for all thesubordinated securities issued by the group.

3.9 Provisions

Provisions and reversals of provisions for risks are classifiedby type under the corresponding item of income orexpenditure.

A provision is set aside whenever it is probable that anoutflow of resources representing economic benefits will benecessary to extinguish an obligation arising from a pastevent and when the amount of the obligation can beestimated accurately. Where applicable, the net presentvalue of this obligation is calculated to determine theamount of the provision to be set aside.


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Classification of derivatives and hedge accounting

• Derivatives classified as financial assets or financialliabilities at fair value through profit or loss

As a rule, all derivatives not designated as hedginginstruments under International Financial ReportingStandards are classified as financial assets or financialliabilities at fair value through profit or loss, even when forfinancial purposes they were entered into to hedge one ormore risks.

Embedded derivativesAn embedded derivative is a component of a hybridinstrument that, when separated from its host contract,meets the definition criteria for a derivative. It has theeffect, notably, of changing certain cash flows in a manneranalogous to a separate derivative.The derivative is detached from the host contract andrecognised separately as a derivative instrument at fairvalue through profit or loss only if all of the following threeconditions are satisfied:- the hybrid instrument hosting the embedded derivative is

not measured at fair value through profit or loss;- the economic characteristics of the derivative and the

associated risks are not considered as being closelyrelated to those of the host contract; and

- separate measurement of the embedded derivative issufficiently reliable to provide relevant information.

AccountingRealised and unrealised gains and losses are recognised toprofit or loss under “Gains and losses on financialinstruments at fair value through profit or loss”.

• Hedge accounting

IAS 39 provides for three types of hedging relationship. Thechoice of the hedging relationship is made according to thenature of the risk being hedged.A fair value hedge is a hedge of the exposure to changes inthe fair value of financial assets or financial liabilities.A cash flow hedge is a hedge of the exposure to thevariability in cash flows of financial assets or financialliabilities, firm commitments and forward transactions. Hedges of net investments in foreign operations, which areaccounted for in the same way as cash flow hedges, are notused by the group.Hedging derivatives must meet the criteria required by IAS39 to be designated as hedging instruments for accountingpurposes. The hedging instrument and the hedged itemmust both qualify for hedge accounting.

The relationship between the instrument covered and thehedging instrument is documented formally immediatelyupon inception of the hedging relationship. Thisdocumentation includes the management objectives of thehedging relationship, the nature of the risk hedged, theunderlying strategy, the identification of the hedginginstrument and of the item hedged, and the methods usedto measure the effectiveness of the hedge.

Hedge effectiveness is assessed immediately uponinception of the hedging relationship and subsequentlythroughout its life, at the very least at each balance sheetdate. Changes in the fair value or cash flows of the hedginginstrument must approximately offset changes in the fairvalue or cash flows of the hedged item. Actual results mustbe within a range of 80% to 125%. If this is not the case,hedge accounting is discontinued prospectively.

Fair value hedge of identified assets and liabilitiesIn the case of a fair value hedge, derivatives are measuredat their fair value as an offset to the profit and loss accountin “Net gains (losses) on financial instruments at fair valuethrough profit or loss” symmetrically to the revaluation ofthe hedged items. This rule is also applied if the hedgeditem is recognised at its amortised cost or in the case of afinancial asset classified as available for sale. Changes in the fair value of the hedging instrument and hedged risk component will offset partially or totally; only the ineffective portion of the hedge is recognised in profitor loss.

The portion corresponding to the rediscounting of thederivative financial instrument is recognised in the profitand loss account in “Interest income and charges”symmetrically to the interest income or charges for thehedged item.

If the hedging relationship is interrupted or the effectivenesscriteria are not met, hedge accounting is discontinued on aprospective basis. Hedging derivatives are transferred tofinancial assets or financial liabilities at fair value throughprofit or loss and are accounted for in accordance with theprinciples applicable to this category. The carrying amountof the hedged item is subsequently no longer adjusted toreflect changes in fair value. In the case of identifiedinterest rate instruments, valuation adjustments areamortised over their remaining life. If the hedged item hasbeen derecognised, due notably to early repayments, thecumulative adjustments are recognised immediately in theprofit and loss account.


Differences arising from changes in these assumptions andfrom differences between previous assumptions and actualexperience constitute actuarial differences. When the planis funded by assets, these are measured at fair value andrecognised in the profit and loss account for their expectedyield. Differences between actual and expected yields alsoconstitute actuarial differences.The group has opted to set aside provisions so as torecognise immediately to profit or loss any actuarialdifferences, rather than to spread it over the residual activelife of employees. Any plan curtailments or terminationsgenerate a change in the obligation, which is recognisedimmediately to the profit and loss account.

Post-employment defined contribution plans

Group entities contribute to various retirement plansmanaged by independent organisations, to which theyhave no formal or implicit obligation to makesupplementary payments in the event, notably, that thefund’s assets are insufficient to meet its commitments.

As such plans do not represent a commitment for thegroup, they are not subject to a provision. The charges arerecognised in the period in which the contribution is due.

Other long-term benefits

These represent benefits other than post-employmentbenefits and end-of-service indemnities payable morethan 12 months after the end of the financial year in whichstaff rendered the corresponding service. They include, forexample, long-service awards and time savings accounts.

The group’s commitment in respect of other long-termbenefits is measured using the projected unit creditmethod. Actuarial differences are recognised immediatelythrough profit or loss as the corridor method cannot beused.Certain commitments in respect of long-service awards arecovered by insurance policies. Only the portion not coveredis provisioned.

• End-of-contract indemnities

These indemnities consist of benefits granted by the groupwhen an employment contract is terminated before theusual retirement age or following the employee’s decisionto leave the group voluntarily in exchange for an indemnity.End-of-contract indemnity provisions are discounted ifpayment is expected to be made more than 12 monthsafter the balance sheet date.

• Short-term benefits

These are benefits, other than end-of-contract indemnities,payable within the 12 months following the closing date andinclude salaries, social security contributions and certainbonuses.

A charge is recognised in respect of short-term benefits inthe period in which the services giving rise to theentitlement to the benefit are provided to the entity.

3.13 Insurance activities

The accounting principles and measurement rules relatingto assets and liabilities arising from the writing of insurancepolicies, including inwards and outwards reinsurance, and financial contracts that include a discretionary profit-sharing clause (which entitles subscribers to receive a shareof the entity’s financial results in addition to anyguaranteed remuneration) are in accordance with IFRS 4.

Other assets held and liabilities issued by fully-consolidated insurance companies are recognised inaccordance with the rules common to all assets andliabilities of the group. Financial assets representingtechnical provisions relating to contracts denominated inunits of account are therefore presented under “Financialassets at fair value through profit or loss” and the asset andcorresponding liability are measured on the closing date atthe realisable value of the investment instrumentsconcerned.

Moreover, contracts governed by IFRS 4 continue to berecognised and consolidated in accordance with Frenchaccounting standards and are measured and recognised inaccordance with the same rules, other than for certainlimited restatements. These are, notably, restatementslinked to the elimination of regulatory equalisation reservesand the recognition of deferred interests in accordancewith the French regulations applied to valuation differences.They relate mainly to provisions for the deferred sharing ofincome relating to unrealised gains and losses recognisedon assets in accordance with IAS 39 (which, according to IFRS 4, corresponds to the application of mirroraccounting: to reflect the share of such unrealised gainsand losses, the “discretionary income sharing component”being recognised entirely in provisions and not inshareholders’ equity). These provisions for the deferredsharing of income are shown under assets or liabilities byeach legal entity and are not netted off between entities inthe consolidation scope. When on the asset side, they arereported under a separate heading.


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The provisions constituted by the group cover, in particular:- operating risks;- employee commitments (see Note 3.12);- execution risks on signature commitments;- legal disputes and liability guarantees;- tax risks; and- risks related to home savings (see Note 3.10).

3.10 Amounts due to customers and credit institutions

These are fixed- or determinable-rate financial liabilities.They are initially recognised at fair value and measured atsubsequent balance sheet dates at amortised cost usingthe effective interest rate method, except in the case ofthose recognised at fair value by option.

Regulated savings contracts

Home savings accounts (comptes épargne logement -CEL) and home savings schemes (plans épargne logement- PEL) are French regulated products available to individualcustomers. These products provide retail investors withinterest-bearing savings vehicles during a first phase, andgrant them access to a mortgage during a second phase.

They generate two kinds of commitments for theestablishments that distribute them:- a commitment to pay a fixed rate of interest in the future

on the savings (solely for home savings schemes, as theinterest rate on home savings accounts is comparable toa variable rate and is periodically revised in accordancewith an indexation formula);

- a commitment to extend a loan based on predeterminedconditions to customers who request one (bothproducts).

These commitments are estimated on the basis ofcustomer behavioural statistics and market data. Aprovision is set aside on the liability side of the balancesheet to cover future charges related to the potentiallydisadvantageous conditions of these products incomparison with the interest rates offered to individualcustomers for products that are similar but whoseremuneration is not regulated. This approach is carried outby homogeneous generation in terms of the regulatedconditions for both products. The impact on the profit andloss account is recorded as interest paid to customers.

3.11 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, depositsand demand loans and borrowings with central banks andcredit institutions.For cash flow statement purposes, UCITS are classified as an “operating” activity and are not therefore reclassifiedas cash.

3.12 Employee benefits

Employee benefits are recognised in accordance with IAS19. Where applicable, employee obligations are recognisedunder “Provisions for risks and charges”. Changes in suchprovisions are recognised in the profit and loss accountunder “Staff costs”.

• Post-employment defined benefit plans

These comprise retirement, early retirement and supplementaryretirement plans under which the group has a formal orimplicit obligation to provide employees with pre-definedbenefits.

These obligations are calculated using the projected unitcredit method, which involves allocating entitlement tobenefits to periods of service by applying the contractualformula for calculating plan benefits. Such entitlements arethen discounted using demographic and financialassumptions such as:- a discount rate, determined by reference to the rate on

long-term private-sector bonds as a function of the termof the commitments;

- the rate of salary increases, assessed as a function of agebrackets, manager/non-manager classification andregional characteristics;

- inflation rates, estimated by comparing treasury bondrates and inflation-linked treasury bond rates at differentmaturities;

- staff turnover rates, determined by age bracket, using thethree-year average for the ratio of resignations anddismissals relative to the year-end number of employeeswith permanent contracts;

- retirement ages: estimated on a case-by-case basisusing the actual or estimated date of commencement of full-time employment and the assumptions set out inthe so-called Fillon law, with a ceiling set at 65 years ofage; and

- life expectancy rates set out in INSEE table TH/TF 00-02.


Depreciable non-current assets are tested for impairmentat each period end whenever there is evidence of loss ofvalue. Non-depreciable non-current assets such as leaserights are tested for impairment once a year.

If evidence of impairment is found, the asset’s recoverableamount is compared with its net carrying amount. In theevent of a loss of value, impairment is recognised in theprofit and loss account, thus modifying the basis for futuredepreciation. Impairment losses are reversed if there is animprovement in the estimated recoverable value or there isno longer any evidence of impairment. The net carryingamount following the reversal of an impairment provisioncannot exceed the net carrying amount that would havebeen calculated if the impairment had not beenrecognised.

Impairment charges on operating non-current assets arerecognised under “Provisions, amortisation anddepreciation for operating non-current assets” in the profitand loss account.Impairment charges and reversals on investmentproperties are recognised in the profit and loss accountunder “Charges on other activities” and “Income from otheractivities”, respectively.

Gains or losses on disposals of operating non-currentassets are recorded in the profit and loss account on theline “Net gains (losses) on other assets”.Gains or losses on disposals of investment properties arerecorded in the profit and loss account on the lines“Income from other activities” and “Charges on otheractivities” respectively.

The fair value of investment property is disclosed in thenotes to the financial statements at the end of eachfinancial year end based on an appraisal carried out byindependent valuers.

3.15 Fees and commissions

Fees and commissions in respect of services are recordedas income and charges according to the nature of theservices involved.Fees and commissions linked directly to the grant of a loanare amortised (see Note 3.1).Fees and commissions remunerating a service provided ona continuous basis are recognised to profit or loss over theperiod during which the service was provided.Fees and commissions remunerating a significant serviceare recognised to profit or loss in full upon execution of theservice.

3.16 Corporation tax

The tax charge includes all tax, both current and deferred,chargeable in respect of the income for the period underreview.Current taxes are determined in accordance with applicabletax regulations.

The 2010 Finance Act repealed the local business tax (TaxeProfessionnelle) and replaced it by the Territorial EconomicContribution (Contribution Economique Territoriale – CET),which is composed of two different taxes: Real PropertyContribution (Cotisation Foncière des Entreprises - CFE)and Contribution on the Added Value (Cotisation sur laValeur Ajoutée des Entreprises - CVAE). Based on therecommendation issued by the French NationalAccounting Board (Conseil National de la Comptabilité –CNC) on 14 January 2010, the group elected to treat thiscontribution as an operating charge and, accordingly, didnor recognise any deferred taxes in the consolidatedfinancial statements.

Deferred tax

As required by IAS 12, deferred taxes are calculated inrespect of temporary differences between the value on theconsolidated balance sheet of an asset or liability and itstax value, with the exception of goodwill.

Deferred taxes are calculated using the liability method,applying the corporation tax rate known at the end of theperiod and applicable to subsequent years.Deferred tax assets net of deferred tax liabilities arerecorded only when there is a high probability that they willbe utilised. Current or deferred tax is recognised as incomeor a charge, except for that relating to unrealised ordeferred gains or losses recognised in shareholders’ equity,for which the deferred tax is allocated directly toshareholders’ equity.

Deferred tax assets and liabilities are netted if they arise inthe same entity or in the same tax group subject to thesame tax authority and if there is a legal right of set off.Deferred tax is not discounted.

3.17 Interest payable by the State on certain loans

In the context of government measures to assist theagricultural sector and the rural economy, and to assist withhome purchases, certain group entities grant loans atreduced rates that are set by the State. Such entitiestherefore receive State subsidies equivalent to the


128 Crédit Mutuel

Apart from the various provisions recognised and reversedon the liability side of the balance sheet, the othertransactions generated by these contracts are measuredand recognised in accordance with the same rules. Theserelate notably to contract acquisition costs, receivablesand liabilities arising on contracts, advances on policiesand recourse and subrogation features resulting frominsurance and reinsurance contracts.

At the balance sheet date, a test is performed to determineif the liabilities recognised in connection with the contracts(net of other related assets and liabilities such as deferredacquisition costs and portfolio securities acquired) areadequate to cover estimated future cash flows at that date.Any shortfall in technical provisions is recognised in theprofit and loss account for the period, and maysubsequently be reversed if appropriate.

The capitalisation reserve constituted free of tax in theaccounts of French companies as a result of the sale ofredeemable transferable securities, for the purpose ofdeferring a part of the net gains realised in order tomaintain the actuarial return on the portfolio in line with thecontractual commitments, is cancelled on consolidation.Movements in the reserve during the period are recognisedin the profit and loss account of the companies concernedbut are reversed in the consolidated profit and lossaccount. As required by IAS 12, a deferred tax liability hasbeen recognised in relation to the effective reclassificationin shareholders’ equity of the capitalisation reserve. Incontrast, if there is a strong probability that profits will beshared with policyholders, notably to reflect theirentitlements in respect of certain insurance portfolios ofgroup entities, a deferred profit share is recognisedfollowing restatement of the capitalisation reserve.

3.14 Non-current assets

Non-current assets reported on the balance sheet includetangible and intangible assets used in operations as well asinvestment properties. Operating non-current assets areused for the production of services or for administrativepurposes. Investment properties are property assets heldto generate rental income and/or gains on the investedcapital. The historical cost method is used to recogniseboth operating and investment properties.

Non-current assets are initially recognised at acquisitioncost plus any directly attributable costs required to bringthem into working order with a view to their use. Financecharges incurred during the construction or transformationof property assets are not capitalised.

Non-current assets are subsequently measured at amortisedhistorical cost, i.e. their cost less accumulated depreciationand amortisation and any impairment.

When a non-current asset comprises several componentslikely to be replaced at regular intervals, with different uses or providing economic benefits over differing lengthsof time, each component is recognised separately from the outset and is depreciated or amortised in accordancewith its own depreciation schedule. The componentapproach is applied to both operating and investmentproperties.

The depreciable or amortisable value of a non-currentasset is determined after deducting its residual value net ofdisposal costs. As the useful life of non-current assets isgenerally equal to their expected economic life, residualvalues are not recognised.

Non-current assets are depreciated or amortised overtheir estimated useful lives at rates reflecting the holdingentity’s estimated consumption of the assets’ economicbenefits. Intangible assets with an indefinite useful life arenot amortised.

Depreciation and amortisation charges on operating non-current assets are recognised under “Provisions,amortisation and depreciation for operating non-currentassets” in the profit and loss account.

Depreciation charges on investment properties arerecognised under “Expenses on other activities” in theprofit and loss account.

The following depreciation and amortisation periodsare used:

Property, plant and equipment:- Land improvements: 15-30 years- Buildings – shell: 20-80 years

(depending on the type of building)- Buildings – equipment: 10-40 years- Fixtures and fittings: 5-15 years- Office furniture and equipment: 5-10 years- Safety equipment: 3-10 years- Vehicles and moveable equipment: 3-5 years- IT hardware: 3-5 years

Intangible assets:- Software purchased or developed internally: 1-10 years- Business goodwill acquired 9-10 years

(if customer contract portfolios acquired)


Accounting estimates requiring the formulation ofassumptions are used mainly for measurement of thefollowing items:- fair value of financial instruments not quoted on an active

market. The distinction between an active and not activemarket, the definition of a forced transaction, and thedefinition of an observable parameter all require theexercise of judgement (see Note 3.4 Securities);

- retirement plans and other future employee benefits;- permanent impairment losses;- impairment of receivables;- provisions;- impairment of intangible assets and goodwill; and- deferred tax assets.

Note 4: Segment reporting (IFRS 8)

In terms of segment reporting, the group has two levels ofdisclosure that are based on the group’s own internalreporting system. Data by sector of activity is the primarylevel and data by geographic sector is the secondary level.

• Segment reporting by activity (primary level)

Sector data for the Crédit Mutuel group is organised intofive operating segments:- Retail Banking;- Corporate and Investment Banking;- Insurance;- Asset Management and Private Banking; and- Other Activities.

Retail Banking covers the network of Crédit Mutuel’s localmutual banks, CIC's regional banks as well as all thespecialised activities marketed through the network: allbusiness banking (other than for large corporates), financeand property leasing, factoring, real estate, etc.

Corporate and Investment Banking comprises the followingactivities:- corporate banking, which covers banking and related

services provided to large companies through a specificdepartment or subsidiary; and

- investment banking, which covers market activities,merchant banking, venture capital, private equity,financial intermediation, mergers and acquisitions, etc.

Insurance comprises the life and non-life insuranceactivities (life insurance, property and casualty insuranceand insurance brokerage).

Asset Management and Private Banking comprises twoactivities:- asset management: fund management (UCITS, real

estate funds), employees savings schemes, custody anddepositary services for its own customer base, asopposed to that of the network; and

- private banking: wealth management and estateplanning.

Other Activities comprise technical support subsidiariesthat cannot be included in the retail banking segment(technology, electronic payments, media, travel).

Transactions between the different operating segments arecarried out at market conditions.

• Segment reporting by geographic zone (secondary level)

Three geographic zones have been defined for thissecondary level of reporting:- France;- rest of Europe; and- rest of world.

The geographic analysis of assets and earnings is based onthe country in which the activities are recorded foraccounting purposes.

Note 5: Related parties

Parties related to the Crédit Mutuel group are theconsolidated companies, including companies accountedfor using the equity method, and the third-leveladministrative entities (Caisse Centrale du Crédit Mutueland Confédération Nationale du Crédit Mutuel).

Transactions between the Crédit Mutuel group and relatedparties are carried out at the normal market conditionsprevailing at the time of the transaction.

The list of consolidated companies is provided in note 1.2.As transactions carried out and any outstandings at theend of the period between group companies consolidatedusing the full method are eliminated on consolidation, onlytransactions between companies over which the groupexercises joint control (consolidated using the proportionalmethod) are included in the tables in the notes for theportion not eliminated on consolidation, and transactionsbetween companies over which the group exercisesconsiderable influence, consolidated using the equitymethod, are included in the tables in the notes.


130 Crédit Mutuel

differential between the interest rate granted to thecustomer and a pre-determined benchmark rate.Accordingly, these subsidised loans are not discounted.The terms and conditions of the compensation mechanismare periodically re-examined by the State.

The State subsidies received are recognised under “Interestand similar income” and are spread over the term of therelevant loans, in accordance with IAS 20.

3.18 Financial guarantees and financingcommitments

A financial guarantee is similar to an insurance policy if itprovides for a specific payment to be made to reimbursethe holder of the guarantee for a loss incurred as the resultof the failure of a specific debtor to make a payment onmaturity of a debt instrument.

In accordance with IFRS 4, such financial guaranteescontinue to be measured using French accountingstandards, i.e. they are treated as off-balance sheet itemsuntil such time as the current standards are revised.Accordingly, they are subject to a provision for liabilities ifan outflow of resources is probable.

By contrast, financial guarantees requiring a payment to be made in the event of a change in a financial variable (price, rating, credit index, etc.) or a non-financialvariable, provided that in such a case the variable is notspecific to one of the parties to the contract, are coveredby IAS 39 and are therefore treated as derivativeinstruments.

Financing commitments that are not considered asderivatives within the meaning of IAS 39 are not shown onthe balance sheet. However, they give rise to provisions inaccordance with the provisions of IAS 37.

3.19 Transactions denominated in foreigncurrencies

Financial assets and financial liabilities denominated in acurrency other than the local currency are translated at theexchange rate ruling at the balance sheet date.

Monetary financial assets and liabilities

Foreign exchange gains and losses arising on thetranslation of such items are recognised to profit or lossaccount under “Net gains (losses) on portfolios at fair valuethrough profit or loss”.

Non-monetary financial assets and liabilities

Foreign exchange gains and losses arising on thetranslation of non-monetary assets and liabilities arerecognised to profit or loss under “Net gains (losses) onportfolios at fair value through profit or loss” if the item isclassified at fair value through profit or loss, or under“Unrealised or deferred gains or losses” if the item isclassified under available-for-sale financial assets.When consolidated securities denominated in a foreigncurrency are funded by a borrowing in the same foreigncurrency, the future cash flows relating to the borrowing arehedged.

3.20 Non-current assets classified as held for saleand discontinued operations

Non-current assets and or groups of assets are classifiedas held for sale if their carrying amount will be recoveredthrough a sale and provided a sale is highly probable andlikely to be completed within the next 12 months.The related assets and liabilities are presented on two distinctbalance sheet lines under, respectively, “Non-currentassets classified as held for sale” and “Liabilities directlyassociated with assets classified as held for sale”. They arerecognised at the lower of their carrying amount and theirfair value less the costs to sell, and are no longerdepreciated or amortised.Any recognised impairment loss on such assets andliabilities is recognised to profit and loss.Discontinued operations are a component of an entity thateither has been disposed of or is classified as held for sale,or they correspond to a subsidiary acquired exclusively witha view to resale. They are shown on a separate line of theprofit and loss account under “Gains and losses ondiscontinued operations, net of tax”.

3.21 Judgements and estimates used inpreparation of the financial statements

The preparation of the group’s financial statementsnecessitates the formulation of assumptions in order toeffect the required measurements, which carry risks anduncertainties concerning their future outcome.

The future outcome of such assumptions may beinfluenced by several factors, in particular:- the activities of national and international markets;- changes in interest rates and foreign exchange rates;- economic and political conditions in certain business

sectors or countries; and- regulatory and legislative changes.


2 - Financial dataThe notes to the financial statements are expressed in millions of eurounless indicated otherwise.

1. Notes to the statement of financial position

Note 1: Cash in hand, balances with central banks and post office accounts


132 Crédit Mutuel

IAS / IFRS Title Application date Impact of application

IFRS

IAS 27

IFRS 3 revised

IAS 32

IAS 39

IFRIC 12

IFRIC 15

IFRIC 16

IFRIC 17

IFRIC 18

Consolidated and Separate Financial Statements

Business Combinations

Financial Instruments: Presentation – Disclosure

Financial Instruments: Recognition and Measurement (amendment relating to elements eligible for hedging)

Service Concession Arrangements

Agreements for the Construction of Real Estate

Hedges of a Net Investment in a Foreign Operation

Distributions of Non-cash Assets to Owners

Transfers of Assets from Customers

Effective for annual periods beginningon or after 1 January 2010









Impact already anticipatedin the case of a partial disposal of an investment in a subsidiary while controlis retained

No impact on opening balance sheet

Amendment concerns the classification of rightsissues

Not material

Not concerned

Not concerned

Not material

Not concerned

Not concerned

31.12.2009 31.12.2008

Cash in hand, balances with central banks and post office accounts Central banks 9,412 16,939of which mandatory reserves 1,810 1,869Cash in hand, post office accounts 1,262 1,151Total 10,674 18,090Loans and advances to credit institutions Crédit Mutuel network accounts (1) 27,809 28,865Other ordinary accounts 3,103 2,575Loans 3,569 5,877Other receivables 1,074 1,223Securities not listed on an active market 6,107 9,024Repurchase agreements 855 739Loans having given rise to specific provisions 1,706 376Accrued interest 649 399Provisions (548) (344)Total 44,324 48,734

(1) Relates mainly to outstandings with CDC (LEP, Codevi, Livret Bleu)

31.12.2009 31.12.2008

Central banks 1,265 2,319Total 1,265 2,319Amounts due to credit institutions Crédit Mutuel network accounts - -Other ordinary accounts 1,637 1,688Loans 31,289 49,190Others liabilities 893 711Repurchase agreements 4,842 2,182Accrued interest 139 259Total 38,800 54,030

Note 6: Standards and interpretations adopted by the european union not yet applied dueto their application date

1a - Loans and advances to credit institutions

1b - Amounts due to credit institutions



134 Crédit Mutuel

Note 2: Financial assets and liabilities at fair value through profit or loss

2a - Financial assets at fair value through profit or loss

31.12.2009 31.12.2008 Trading Fair value Total Trading Fair value Total by option by option

Securities(1) 19,744 29,733 49,477 20,013 28,951 48,964- Government securities 4,768 160 4,928 4,273 167 4,440- Bonds and other fixed-income securities 12,474 8,233 20,707 15,200 11,985 27,185

. Listed 12,474 7,991 20,465 15,194 11,051 26,245

. Not listed - 242 242 6 934 940- Shares and other variable-yield securities 2,502 21,340 23,842 540 16,799 17,339

. Listed 2,502 19,333 21,835 540 15,060 15,600

. Not listed - 2,007 2,007 - 1,739 1,739Trading derivatives 8,445 - 8,445 8,124 - 8,124Other financial assets - 15,072 15,072 - 12,169 12,169of which repurchase agreements - 14,974 14,974 - 12,028 12,028Total 28,189 44,805 67,994 28,137 41,120 69,257

The maximum exposure to credit risk on loans and receivables classified at fair value by option through profit and lossamounted to €43,510 million in 2009.

31.12.2009 31.12.2008

Financial liabilities held for trading purposes 10,083 14,907Financial liabilities at fair value by option through profit or loss 38,267 33,427Total 48,350 48,334

31.12.2009 31.12.2008

Short sales of securities 4,169 3,568- Bonds and other fixed-income securities 3,496 3,316- Shares and other variable-yield securities 673 252

Debt securities under repurchase agreements - -Trading derivatives 5,572 8,150Other financial liabilities held for trading purposes 342 3,189Total 10,083 14,907

• Financial liabilities held for trading purposes

Level 1 Level 2 Level 3 Total

Financial assets • Available for sale 94,615 5,329 2,491 102,435

- Government securities – Available for sale 15,501 - - 15,501- Bonds and other fixed-income securities - Available for sale 69,931 4,966 1,427 76,324- Shares and other variable-yield securities - Available for sale 7,898 - 52 7,950- Participating interests and other long-term investments – Available for sale 1,284 308 568 2,160- Investments in related companies 1 55 444 500

• Trading and fair value option 39,790 25,919 2,285 67,994 - Government securities - Trading 4,671 97 - 4,768- Government securities - Fair value option 160 - - 160- Bonds and other fixed-income securities - Trading 8,472 3,562 440 12,474- Bonds and other fixed-income securities - Fair value option 3,970 4,192 71 8,233- Shares and other variable-yield securities - Trading 2,486 - 16 2,502- Shares and other variable-yield securities - Fair value option 19,750 - 1,590 21,340- Loans and receivables from credit institutions - Fair value option - 7,385 - 7,385- Loans and receivables from customers - Fair value option - 7,687 - 7,687- Derivatives and other financial assets - Trading 281 2,996 168 3,445

• Derivative instruments entered into for hedging purposes 2 2,050 1 2,053 Total 134,407 33,298 4,777 172,482

Financial liabilities • Trading and fair value option 4,617 43,708 25 48,350

- Due to credit institutions - Fair value option - 27,197 - 27,197- Due to customers - Fair value option - 7,251 - 7,251- Debt securities - Fair value option - 3,819 - 3,819- Subordinated debt - Fair value option - - - -- Derivatives and other financial liabilities - Trading 4,617 5,441 25 10,083

• Derivative instruments entered into for hedging purposes 52 5,333 28 5,413 Total 4,669 49,041 53 53,763

- Level 1: values based on quoted prices on an active market- Level 2: values based on quoted prices on an active market or on valuation models for which key model inputs derive from observable market data- Level 3: values based on internal models for which some key model inputs are unobservable data.In 2009, there was no material transfer (i.e. exceeding 10% total assets or total liabilities) from level 1 to level 2 or from level 2 to level 1.As required by IFRS 7, financial assets available for sale are analysed in the above table for the first time in 2009.

31.12.2009 31.12.2008 Carrying Amount due Total Carrying Amount due Total amount at maturity amount at maturity

Debt securities 3,819 3,811 8 3,777 3,763 14Due to credit institutions 27,197 27,178 19 28,576 28,499 77Due to customers 7,251 7,250 1 1,074 1,073 1Total 38,267 38,239 28 33,427 33,335 92

2b - Financial liabilities at fair value through profit or loss

• Financial liabilities at fair value by option through profit or loss

2c - Fair value hierarchy



136 Crédit Mutuel

Note 3a: Hedging

3a -Instruments dérivés de couverture

3b - Revaluation difference on portfolios hedged against interest rate riskx

Note 4: Breakdown of derivatives

31.12.2009 31.12.2008 Assets Liabilities Assets Liabilities

Cash flow hedges 9 140 3 134Fair value hedges (change through profit or loss) 2,044 5,273 4,981 8,483Total 2,053 5,413 4,984 8,617

The ineffective portion recognised in profit or loss is not material.No amounts relating to changes in cash flow were recognised in profit or loss.

Fair value hierarchy - Details of level 33

Opening Purchases Issue Sales Closing Transfers Gains and Gains and Other Closing balance balance losses to P&L losses to balance equity Shares and other 1,573 102 - (87) - (1) 23 - (20) 1,590variable -yield securities - Fair value option

In 2009, there was no material transfer (i.e. exceeding 10% total for the asset category) from level 1 or level 2 to level 3 orfrom level 3 to level 1 or level 2.

Fair value Change in fair value 31.12.2009 31.12.2008

Fair value of interest rate risk by portfolio - Financial assets 882 729 153- Financial liabilities (1,811) (1,414) (397)

31.12.2009 31.12.2008 Notional Assets Liabilities Notional Assets Liabilities

Trading derivatives Interest rate instruments

Swaps 372,094 2,031 4,375 433,746 6,447 6,892Other firm contracts 15,736 24 1 27,502 120 19Options and conditional instruments 64,267 475 477 55,085 735 343

Foreign exchange instruments Swaps - 21 43 - 76 100Other firm contracts 231 147 123 205 365 334Options and conditional instruments 14,799 158 158 11,603 182 180

Other instruments Swaps 24,090 289 230 29,744 27 24Other firm contracts 6,078 - 3 4,506 - 11Options and conditional instruments 14,394 300 162 4,569 172 247

Sub-total 511,689 3,445 5,572 566,960 8,124 8,150

Hedging derivatives Fair Value Hedges

Swaps 82,048 1,991 5,273 63,369 4,920 8,483Other firm contracts - - - - - -Options and conditional instruments 14 53 - 90 61 -

Cash Flow Hedges Swaps 710 8 140 86 3 134Other firm contracts - - - - - -Options and conditional instruments - 1 - - - -

Sub-total 82,772 2,053 5,413 63,545 4,984 8,617

Total 594,461 5,498 10,985 630,505 13,108 16,767



138 Crédit Mutuel

Note 5: Financial assets available for sale

5a - Financial assets available for sale

Note 6: Customers

6a - Customer loans and receivables

Finance leases with customers

31.12.2009 31.12.2008

Government securities 15,323 14,600Bonds and other fixed-income securities 75,726 71,692

- Listed 74,166 68,697- Not listed 1,560 2,995

Shares and other variable-yield securities 7,985 6,616- Listed 7,279 6,075- Not listed 706 541

Long-term investments 2,616 2,483- Investments in associates 1,494 1,366- Other long-term investments 663 658- Investments in related undertakings 459 459- Securities lent - -- Non-performing current account advances - -

Accrued interest 785 744

Total 102,435 96,135o/w unrealised gains or losses recognised in shareholders' equity 78 (1,439)o/w impaired bonds 67 259o/w provisions for impairment (1,895) (990)o/w listed investments 1,023 888

% held Shareholders' Total Net banking Net profit equity* Assets* income or loss* or revenue*

Républicain Lorrain Not listed 100% 65 89 82 (2)Caisse de Refinancement de l'Habitat (CRH) Not listed < 34% 182 38,525 8 4Banca di Legnano Not listed < 10% 1,217 4,616 n/a 67Crédit Logement Not listed < 10% 1,430 11,671 169 85Veolia Listed < 5% 9,532 49,126 36,206 709Foncière des Régions Listed < 5% 5,797 17,447 1,094 (832)BMCE Bank Listed < 5% 733 13,341 534 127

The above information, except for percentages held, relates to 2008.

31.12.2009 31.12.2008

Performing receivables 289,772 283,824• Receivable-related claims 4,177 5,313• Other customer loans and advances 284,422 277,283

- Home loans 159,402 155,205- Other loans and receivables including repurchase agreements 125,020 122,078

• Accrued interest 815 888• Securities not quoted on an active market 358 340

Insurance and reinsurance receivables 237 270Loans having given rise to specific provisions 13,056 8,810Gross loans and advances 303,065 292,904Specific provisions (7,571) (5,449)General provisions (535) (643)

SUB-TOTAL I 294,959 286,812

Finance leases (net investment) 9,694 9,138• Equipment 6,391 6,293• Property 3,102 2,680• Receivables having given rise to specific provisions 201 165

Provisions for impairment (142) (113)SUB-TOTAL II 9,552 9,025

TOTAL 304,511 295,837Of which participating loans 27 21Of which subordinated loans 173 155

(1) In 2009, customer loans and advances contributed by acquisitions amount to €7.8 billion.

31.12.2008 Increase Decrease Other 31.12.2009

Gross carrying amount 9,138 1,596 (1,051) 11 9,694Impairment of uncollectable lease payments (113) (55) 26 - (142)Net carrying amount 9,025 1,541 (1,025) 11 9,552

5b – List of main unconsolidated investments



140 Crédit Mutuel

6b – Amounts due to customers Note 8: Change in impairment provisions

31.12.2009 31.12.2008

• Regulated savings deposits 104,340 97,529- On demand 69,450 67,586- Term (1) 34,890 29,943

• Liabilities associated with savings deposits 106 96Sub-total 104,446 97,625• Demand accounts 64,809 57,200• Term accounts and borrowings 46,263 40,382• Repurchase agreements 1,876 326• Related liabilities 948 860• Insurance and reinsurance liabilities 89 114Sub-total 113,985 98,882Total 218,431 196,507

(1) The increase was due mainly to a €3.7 billion transfer in Germany from non-regulated term deposits having matured to regulated term deposits offering attrac-tive terms.

31.12.2009 31.12.2008

• Securities 12,439 13,706- Government securities 791 1,332- Bonds and other fixed-income securities 11,648 12,374

. Listed 11,089 10,341

. Not listed 559 2,033

. Conversion - -• Accrued interest 79 155Total – gross 12,518 13,861

Of which written down for impairment 26 158Provisions for impairment (18) (151)Total – net 12,500 13,710

31.12.2008 Charges Write-backs Other 31.12.2009

Loans and receivables due from credit institutions (344) (221) 9 8 (548)Customer loans and receivables (6,205) (2,556) 1,351 (838) (8,248)Securities available for sale (990) (92) 224 (1,037) (1,895)Securities held to maturity (151) (11) 146 (2) (18)Total (7,690) (2,880) 1,730 (1,869) (10,709)

Note 7: Financial assets held to maturity

Note 9: Reclassifications of financial instruments

There was no reclassification in 2009. The information below concerns reclassifications made in 2008.

31.12.2009 31.12.2008 Carrying value Fair value Carrying value Fair value

Portfolio of loans and receivables 7,121 6,763 8,730 7,986Portfolio of financial assets available for sale 13,590 13,590 15,436 15,436Total 20,711 20,353 24,166 23,422

31.12.2009 31.12.2008

Gains (losses) that would have been recognised to profit or loss in application of fair value rule had the assets not been reclassified 1,468 (973)

Gains (losses) that would have been recognised to equity had the assets not been reclassified (849) (256)

Gains (losses) recognised to profit or loss in respect of reclassified assets (410) (35)

Assets reclassified



142 Crédit Mutuel

Note 10: Taxes

10a - Current taxes

Note 11: Accrual accounts and other assets and liabilities

11a - Prepayments, accrued income and other assets

31.12.2009 31.12.2008

Prepayments and accrued income Securities collection accounts 1,048 1,036Currency adjustment accounts 419 96Accrued income 511 620Sundry accruals 2,858 3,646

Sub-total 4,836 5,398Other assets Settlement accounts on securities transactions 232 296Other debtors (1) 13,382 10,453Inventories and similar 66 28Sundry (9) 2Sub-total 13,671 10,779Other assets of insurance companies Other 405 2,461Sub-total 405 2,461Total 18,912 18,638

(1) 2008 has been restated for the "deferred profit-share", which is now shown as an asset on the balance sheet (summary statement).

31.12.2009 31.12.2008

Accrued charges and deferred income Blocked accounts on collection transactions 1,022 606Currency adjustment accounts 641 1,698Accrued charges 1,031 959Sundry accruals 8,034 9,542Sub-total 10,778 12,805Other liabilities Settlement accounts on securities transactions 368 428Payments to be made on securities 252 134Other creditors 3,603 3,772Sub-total 4,223 4,334Other liabilities of insurance companies Security deposits and guarantees received 145 136Other - -Sub-total 145 136Total 15,146 17,275

31.12.2009 31.12.2008

Current tax assets (to profit or loss) 1,740 1,785Current tax liabilities (to profit or loss) 658 504

31.12.2009 31.12.2008

Deferred tax assets (to profit or loss) 1,284 1,402Deferred tax assets (to equity) 286 774Deferred tax liabilities (to profit or loss) 769 937Deferred tax liabilities (to equity) 165 21

31.12.2009 31.12.2008 Assets Liabilities Assets Liabilities

• Tax losses carried forward 522 - 658 -• Temporary differences 2,076 1,962 1,830 1,272

- Deferred gains or losses on available-for-sale securities 376 227 780 21- Other unrealised or deferred gains or losses 28 - - -- Provisions 508 10 347 210- Unrealised finance leasing reserve 1 79 - 34- Results of transparent companies - 3 6 12- Other temporary differences 1,163 1,643 697 995

• Offsetting (1,028) (1,028) (313) (313)Total deferred tax assets and liabilities 1,570 934 2,175 959

Deferred tax is calculated using the liability method. For French companies, the deferred tax rate is 34.43%

Breakdown of deferred tax by main category

10b - Deferred taxes

11b - Accrued charges, deferred income and other liabilities



144 Crédit Mutuel

Note 12: Investments in companies accounted for using the equity method

Share in net profit or loss of companies accounted for using the equity method

31.12.2009 31.12.2008 Investment Share of net Investment Share of net profit or loss profit or loss

RMA Watanya 198 19 194 14BPM 172 9 RACC 85 1 Banque de Tunisie 46 8 42 7Other 15 (15) 21 3Total 516 22 257 24

Note 13: Investment property

31.12.2008 Increase Decrease Other 31.12.2009

Historical cost 1,542 350 (70) 54 1,876Depreciation and impairment (214) (32) 3 (9) (252)Net carrying amount 1,328 318 (67) 45 1,624

The fair value of property recognised at cost came to €2,046 MILLION AT 31 December 2009 (€1,750m at 31 December 2008).

Note 14: Non-current assets

14a - Property, plant and equipment

Other 31.12.2008 Increase Decrease changes 31.12.2009

Cost Land used in operations 462 38 - 4 504Buildings used in operations 4,310 346 (102) 142 4,696Other property, plant and equipment 2,350 335 (246) 59 2,498Total 7,122 719 (348) 205 7,698Depreciation and impairment Land used in operations (1) - - - (1)Buildings used in operations (2,117) (224) 58 (82) (2,365)Other property, plant and equipment (1,646) (239) 126 (7) (1,766)Total (3,764) (463) 184 (89) (4,132)Net carrying amount 3,358 256 (164) 116 3,566

Other changes relate mainly to acquisitions made in 2009, notably EBRA group.

31.12.2008 Increase Decrease changes 31.12.20099

Gross carrying amount 177 - - 29 206Depreciation and impairment (56) (2) - (3) (61)Total 121 (2) - 26 145

Other 31.12.2008 Increase Decrease changes 31.12.2009

Historical cost . Non-current assets produced internally 27 30 (1) 2 58. Non-current assets acquired 1,367 204 (69) 401 1,903- Software 372 53 (8) 285 702- Other 995 151 (61) 116 1,202

Total 1,394 234 (70) 403 1,961Amortisation and impairment Non-current assets produced internally - - - - -. Non-current assets acquired (593) (127) 25 (22) (717)- Software (320) (74) 7 (23) (410)- Other (273) (53) 18 1 (307)

Total (593) (127) 25 (22) (717)Net carrying amount 801 107 (45) 381 1,244

Other changes relate mainly to acquisitions made in 2009, notably Cofidis, Monabanq and EBRA group.

Of which buildings rented under finance leases

14b - Intangible assets



146 Crédit Mutuel

Note 15: Goodwill

• Acquisition of Cofidis Participations group

The group took control of Cofidis Participations group inMarch 2009. This was accomplished by acquiring 51% ofthe capital of Cofidis Participations through CarmenHolding Investissement, a holding company controlled byBFCM (67% of the capital) and 3 Suisses Internationale(3SI) (33% of the capital). Under existing agreements, BFCM has the possibility to increase its interest in Cofidis

Participations to 67% of the capital and voting rights by2016 at the initiative of one or other of the parties.

Price including acquisition costs 663Fair value of assets acquired and liabilities assumed 274Goodwill on acquisition 389

Note 16: Debt securities

Note 17: Insurance technical reserves

31.12.2009 31.12.2008

Certificates of deposit 831 696Interbank certificates and negotiable debt securities 77,820 93,540Bonds 37,995 38,817Accrued interest 934 1,320Total 117,580 134,373

31.12.2009 31.12.2008

Life 80,285 73,258Non-life 2,376 2,389Unit-linked 11,720 9,347Other 289 280Total 94,670 85,274

Subsidiaries Carrying amount Increase Decrease Impairment Carrying amount of goodwill of goodwill at 31.12.2008 at 31.12.2009

Cofidis/Monabanq - 406 - - 406UFG/La Française des Placements 2 159 - - 161Citibank 2,800 - (40) - 2,760Groupe CIC 515 - - - 515Procapital 122 - - - 122Fortunéo 107 - - - 107NRJ Mobile 78 - - - 78Other 228 193 - (124) 297Total 3,852 758 (40) (124) 4,446

Note 18: Provisions

Provisions

2009 31.12.2008 Increases Reversals Reversals Other 31.12.2009 for the for the changes period period (used) (not used)

Provisions for retirement commitments 249 94 (11) (59) 29 302Provisions for risks 455 199 (50) (70) (6) 528Other 641 242 (41) (71) 11 782Total 1,345 535 (102) (200) 34 1,612

2008 31.12.2007 Increases Reversals Reversals Other 31.12.2008 for the for the changes period period (used) (not used)

Provisions for retirement commitments 249 12 (12) (9) 9 249Provisions for risks 346 182 (20) (68) 15 455Other 545 221 (25) (109) 9 641Total 1,140 415 (57) (186) 33 1,345



148 Crédit Mutuel

• Provisions for home savings accounts and schemes

0-4 years 4-10 years +10 years Total

Deposits in respect of home savings schemes during the savings phase 3,104 7,801 6,699 17,604Provisions in respect of home savings schemes 61 - 40 101Deposits taken on home savings accounts during the savings phase 4,438Provisions in respect of home savings accounts 89Provisions set aside in respect of home-savings products (9)Reversal of provisions set aside in respect of home-savings products 34

Outstanding loans granted in respect of home-savings products 1,818Provisions in respect of these loans 55

Home saving scheme deposits excluding the Capital range of products.

31.12.2008 Increases Reversals Other 31.12.2009 changes

Obligations relating to defined benefit retirement plans and similar, excluding pension funds

Retirement indemnities 87 76 (8) (41) 114Top-up retirement benefits 98 5 (1) 8 110Premiums linked to long-service awards (other long-term benefits) 56 9 (1) 4 68

Total recognised 241 90 (10) (29) 292Top-up defined benefit plans covered by the group's retirement funds Commitments to employees and retired employees 8 3 - (1) 10Fair value of assets - - - - -Total recognised 8 3 - (1) 10Total 249 93 (10) (30) 302

Other changes relate mainly to Targo Bank.

• Commitments for retirement and similar benefits

Discount rates

31.12.2009 31.12.2008

Discount rates based on maturity of commitments at level of regional groups 3.6% to 5.0% 3.9% to 5.6%

Note 19: Subordinated debt

31.12.2009 31.12.2008

Subordinated debt 4,901 4,972Participating loans 162 161Perpetual subordinated debt 2,072 3,294Other debt* 127 -Accrued interest 109 124Total 7,371 8,551

* Other debt relates to EBRA group

Issuer Type Date Amount Amount Maturity of issue issued outstanding date at year-end

Banque Fédérative du Crédit Mutuel Redeemable December 2006 624,314 624,314 December 2016Banque Fédérative du Crédit Mutuel Redeemable December 2008 500,000 500,000 December 2016Banque Fédérative du Crédit Mutuel Redeemable September 2003 500,000 500,000 September 2015Banque Fédérative du Crédit Mutuel Redeemable July 2001 400,000 400,000 July 2013Banque Fédérative du Crédit Mutuel Redeemable December 2002 300,000 300,000 July 2013Banque Fédérative du Crédit Mutuel Redeemable February 2004 300,000 300,000 September 2015Banque Fédérative du Crédit Mutuel Redeemable June 2008 300,000 300,000 June 2016Banque Fédérative du Crédit Mutuel Redeemable December 2007 300,000 300,000 December 2015Crédit Mutuel Arkéa Redeemable May 2007 300,000 300,000 May 2017Crédit Mutuel Arkéa Redeemable May 2006 300,000 300,000 February 2016Crédit Mutuel Arkéa Redeemable September 2008 267,309 267,309 September 2018Crédit Mutuel Arkéa Perpetual July 2004 250,000 250,000 Undated

• Principal subordinated debt issues (in € thousands)



150 Crédit Mutuel

Note 20: Shareholders' equity and reserves

Shareholders' equity - group share (excluding unrealised gains or losses)

31.12.2009 31.12.2008

• Capital and capital reserves 8,735 6,826- Share capital 8,696 6,787- Share premium 39 39

• Consolidated reserves 19,047 18,920- Legal reserve - -- Contractual and statutory reserves - -- Regulated reserves 12 12- Translation reserves (25) (47)- Other reserves (including impact of first-time adoption) 19,037 18,882- Retained earnings 23 73

Total 27,782 25,746

Unrealised or deferred gains and losses

31.12.2009 31.12.2008

Unrealised or deferred gains or losses(*) on: - Available-for-sale assets 78 (1,439)- Cash flow hedges (76) (73)- Other 1 2Total 3 (1,510)

* Net of tax and after adjustment for mirror accounting

Note 21: Commitments given and received

Commitments given 31.12.2009 31.12.2008

Financing commitments Commitments given to credit institutions 1,860 1,758Commitments given to customers 54,444 47,236 Guarantee commitments Commitments given to credit institutions 4,776 3,282Commitments given to customers 15,742 16,090 Commitments on securities Securities acquired under resale agreements - -Other commitments given 2,019 2,321

Commitments received 31.12.2009 31.12.2008

Financing commitments Commitments received from credit institutions 18,006 8,146Commitments received from customers - 14 Guarantee commitments Commitments received from credit institutions 25,976 25,594Commitments received from customers 14,292 11,077 Commitments on securities Securities sold under repurchase agreements - -Other commitments received 1,565 2,273

Cofidis contributed €5,096 million towards the increase in financing commitments given to customers



152 Crédit Mutuel

2. Notes to the income statement

Note 22: Interest and similar income and charges

31.12.2009 31.12.2008 Income Charges Income Charges

Credit institutions and central banks 2,041 (1,918) 4,534 (4,826)Customers 16,738 (6,705) 15,978 (7,648)

- Of which finance leases 3,062 (2,630) 3,028 (2,560)Hedging derivative instruments 2,236 (2,984) 3,272 (2,748)Financial assets available for sale 881 - 1,503 -Financial assets held to maturity 369 - 251 -Debt securities - (3,029) - (6,191)Subordinated debt - (237) - (155)Total 22,265 (14,873) 25,538 (21,568)Of which interest income and charges calculated at the effective interest rate 20,029 (11,889) 22,266 (18,820)Of which interest on liabilities at amortised cost (11,889) - (18,820)

L'impact des acquisitions sur les produits d'intérêts nets est de 1,4 Mds €.

31.12.2009 31.12.2008 Income Charges Income Charges

Credit institutions 26 (8) 30 (6)Customers 1,229 (20) 1,087 (28)Securities 909 (75) 860 (62)

Of which activities managed on behalf of third parties 577 - 575 -Derivative instruments 11 (11) 14 (23)Foreign exchange 21 (4) 30 (17)Loan commitments and guarantee obligations 45 (10) 19 (5)Services rendered 2,170 (941) 1,694 (978)Total 4,411 (1,069) 3,734 (1,119)

Acquisitions had an impact of €0.6 billion on net fees and commissions.

Note 23: Fees and commissions

Note 24: Net gains (losses) on financial instruments at fair value through profit or loss

31.12.2009 31.12.2008

Trading instruments 569 503Instruments at fair value by option (6) (626)Ineffective portion of hedges (35) 78- On cash flow hedges 2 -- On fair value hedges (37) 78

. Change in fair value of hedged items 586 854

. Change in fair value of hedging items (623) (776)Foreign exchange gain (loss) 71 57Total changes in fair value 599 12Of which trading derivatives (1,415) (150)Including €42 million estimated based on a valuation model comprising non-observable market data

Note 25: Net gains (losses) on financial assets available for sale

31.12.2009 Dividends Gains/losses Impairment Total realised

Government securities, bonds and other fixed-income securities - (78) - (78)Shares and other variable-yield securities 20 6 (5) 21Long-term investments 83` 1 (39) 45Other - (1) - (1)Total 103 (72) (44) (13)

31.12.2008 Dividends Gains/losses Impairment Total realised

Government securities, bonds and other fixed-income securities - (46) (1) (47)Shares and other variable-yield securities 52 105 (171) (14)Long-term investments 236 32 (343) (75)Other - (3) - (3)Total 288 88 (515) (139)



154 Crédit Mutuel

Note 26: Income and charges from other activities Note 27: General operating expenses

27a: Staff costs

27b: Other operating charges

27c: Depreciation, amortisation and impairment of property, plant and equipment and intangible assetsrecognised and reversed

31.12.2009 31.12.2008

Income from other activities . Insurance policies 18,153 10,833

- Premiums earned 12,258 10,090- Net investment income 4,810 103- Technical and non-technical income 1,085 640

. Investment property: 4 7- Reversal of provisions/depreciation - 2- Gains on disposal 4 5

. Charges rebilled 13 4

. Other income 835 738Sub-total 19,005 11,582

Charges on other activities . Insurance policies: (16,312) (9,249)

- Cost of benefits (5,921) (5,200)- Changes in provisions (5,559) (968)- Technical and non-technical charges (4,832) (3,081)

. Investment property: (36) (30)- Changes in provisions/depreciation (depending on method used) (36) (30)- Losses on disposals - -

. Other charges (404) (337)Sub-total (16,752) (9,616)Total other net income (charges) 2,253 1,966

31.12.2009 31.12.2008

Staff costs (4,777) (3,871)Other charges (3,591) (2,806)Total (8,368) (6,677)

31.12.2009 31.12.2008

Wages and salaries (2,962) (2,431)Social security costs (1,173) (1,011)Short-term benefits (10) (9)Employee profit-sharing and incentives (329) (124)Payroll and other similar taxes (300) (303)Other (3) 7Total (4,777) (3,871)

Acquisitions (Targo Bank, Cofidis) accounted for €0.5m of the increase in staff costs

Average staff numbers 31.12.2009 31.12.2008

Operational staff 45,857 41,861Executives 26,608 23,684Total 72,465 65,545

31.12.2009 31.12.2008

Taxes other than corporation tax (369) (322)External services (2,519) (1,921)Sundry expenses (transport, travel, etc.) (130) (96)Total (3,018) (2,339)

Acquisitions (Targo Bank, Cofidis) contributed €0.6 billion to the increase in other operating charges.

31.12.2009 31.12.2008

Depreciation and amortisation: (572) (467)- Property, plant and equipment (449) (407)- Intangible assets (123) (60)Impairment: (1) -- Property, plant and equipment - -- Intangible assets (1) -Total (573) (467)



156 Crédit Mutuel

Note 28: Cost of risk

Note 29: Gains or losses on other assets

Note 30: Changes in goodwill

31.12.2009 Increases Recoveries Uncollectable Uncollectable Collections of TOTAL receivables receivables receivables covered not covere previously

written off

Credit institutions (220) 8 - (2) - (214)Customers (2,439) 1,272 (525) (497) 117 (2,072. Finance leases (13) 10 (5) (4) - (12). Other (2,426) 1,262 (520) (493) 117 (2,060)Sub-total (2,659) 1,280 (525) (499) 117 (2,286)Held-to-maturity assets (9) 141 (138) - - (6)Available-for-sale assets (6) 179 (160) (14) 2 1Other (150) 80 - (12) 3 (79)Total (2,824) 1,680 (823) (525) 122 (2,370)

Acquisitions contributed €0.9 billion towards cost of risk in 2009.Targo Bank sets aside provisions in respect of doubtful loans on a statistical basis. As a result, when loans are written off, this is recognised under uncollectablereceivables not covered. In 2009, the amounts concerned came to €418 million out of a total of €497 million recognised in respect of customers.

31.12.2008 Increases Recoveries Uncollectable Uncollectable Collections of TOTAL receivables receivables receivables covered not covere previously

written off

Credit institutions (323) 2 (2) (2) - (325)Customers (1,295) 1,036 (317) (58) 25 (609). Finance leases (9) 9 (5) (3) - (8). Other (1,286) 1,027 (312) (55) 25 (601)Sub-total (1,618) (1,038) (319) (60) 25 (934)Held-to-maturity assets (154) 8 - - - (146)Available-for-sale assets (215) 7 (8) (4) - (220)Other (170) 64 - (1) 2 (105)Total (2,157) 1,117 (327) (65) 27 (1,405)

31.12.2009 31.12.2008

Property, plant and equipment and intangible assets 9 20. Losses on disposals (37) (22). Gains on disposals 46 42Gains (losses) on disposals of consolidated securities - -Total 9 20

31.12.2009 31.12.2008

Impairment (124) (2)Negative goodwill charged to profit and loss - 25Total (124) 23

31.12.2009 31.12.2008

Current taxes (996) (534)Deferred taxes 126 565Adjustments for prior years 10 2Total (860) 33

31.12.2009 31.12.2008

Theoretical tax rate 34.43% 34.43%Impact of special tax regime for venture capital companies and real property leasing companies 0.33% -5.36%Impact of reduced tax rate on long-term capital gains -0.50% -34.82%Impact of specific tax rates at foreign entities 0.50% -5.85%Permanent timing differences 2.76% 23.24%Other 3.99% -19.69%Effective tax rate 33.53% -8.05%Taxable income 2,757 410Tax charge (860) 33

• Breakdown of tax charge for the period

• Reconciliation of actual tax charge and theoretical tax charge

Note 31: Tax charge for the period



158 Crédit Mutuel

3. Notes to the statement of comprehensive income

Note 32: Reclassification of gains and losses recognised directly to equity

Note 33: Tax in respect of each category of gains and losses recognised directly to equity

31.12.2009 31.12.2008 Gross amount Tax Net amount Gross amount Tax Net amount

Translation differences - - - 33 - 33

Re-measurement of available for sale financial assets 2,188 (646) 1,542 (2,837) 719 (2,118)

Re-measurement of derivative hedging instruments (34) 12 (22) (106) 37 (69)

Re-measurement of non-current assets (2) 2 - - - -

Actuarial differences on defined benefit plans n/a n/a n/a n/a n/a n/a

Share of unrealised or deferred gains and losses on companies accounted for using the equity method (2) - (2) - - -

Total 2,150 (632) 1,518 (2,910) 756 (2,154)

31.12.2009 31.12.2008 Mouvements Mouvements

Translation differences Reclassified to profit and loss - -Other - 33Sub-total - 33

Re-measurement of available for sale financial assets Reclassified to profit and loss 221 (640)Other 1,321 (1,478)Sub-total 1,542 (2,118)

Re-measurement of derivative hedging instruments Reclassified to profit and loss - -Other (22) (69)Sub-total (22) (69)Re-measurement of non-current assets Actuarial differences on defined benefit plans n/a n/aShare of unrealised or deferred gains and losses on companies accounted for using the equity method (2) -Sub-total 1,518 (2,154)

4. Segment reporting

Breakdown of results by activity

31.12.2009 Retail Insurance Corporate and Asset Other Total Elimination Consolidated banking investment management of intra-group total banking and private transactions in €m banking

Net banking income 10,500 1,322 1,832 512 258 14,424 (851) 13,573General expenses (6,985) (513) (388) (379) (954) (9,219) 851 (8,368)Gross operating profit 3,515 809 1,444 133 (696) 5,205 - 5,205Cost of risk (1,925) 2 (378) 2 (71) (2,370) - (2,370)Income (loss) on non-current assets and share in net profit or loss of companies accounted for using the equity method 15 18 - - (126) (93) - (93)Profit before tax 1,605 829 1,066 135 (893) 2,742 - 2,742Corporation tax (517) (240) (329) (38) 264 (860) - (860)Consolidated net profit 1,088 589 737 97 (629) 1,882 - 1882Minority interests 46 2 4 2 (3) 51 - 51Net profit, group share 1,042 587 733 95 (626) 1,831 - 1,831

31.12.2008 Retail Insurance Corporate and Asset Other Total Elimination Consolidated banking investment management of intra-group total banking and private transactions in €m banking

Net banking income 7,485 995 (64) 549 6 8,971 (547) 8,424General expenses (5,404) (460) (376) (338) (646) (7,224) 547 (6,677)Gross operating profit 2,081 535 (440) 211 (640) 1,747 - 1,747Cost of risk (558) (9) (725) (108) (5) (1,405) - (1,405)Income (loss) on non-current assets and share in net profit or loss of companies accounted for using the equity method 42 17 2 - 6 67 - 67Profit before tax 1,565 543 (1,163) 103 (639) 409 - 409Corporation tax (530) (121) 418 (24) 290 33 - 33Consolidated net profit 1,035 422 (745) 79 (349) 442 - 442Minority interests 18 2 (9) 5 (14) 2 - 2Net profit, group share 1,017 420 (736) 74 (335) 440 - 440



160 Crédit Mutuel

Breakdown of total assets by business line

Retail Insurance Corporate and Asset Other Total Elimination Total banking investment management of intra-group banking and private transactions in €m banking

2009Total assets 750,302 105,273 153,083 28,961 17,957 1,055,576 (476,536) 579,040 71.1% 10.0% 14.5% 2.7% 1.7% 100.0% 2008Total assets 737,630 95,118 187,803 28,213 35,432 1,084,196 (502,487) 581,709 68.0% 8.8% 17.3% 2.6% 3.3% 100.0%

Analysis of balance sheet by geographic zone

• Assets

31.12.2009 31.12.2008 France Rest of Rest of Total France Rest of Rest of Total Europe world (*) Europe world (*)

Cash in hand and balances with central banks 7,282 2,337 1,055 10,674 16,362 1,660 68 18,090Financial assets at fair value through profit or loss 67,082 535 377 67,994 68,107 593 557 69,257Derivative hedging instruments 2,018 32 3 2,053 4,903 81 - 4,984Available for sale financial assets 95,363 6,185 887 102,435 87,349 7,231 1,555 96,135Loans and advances to credit institutions 35,687 5,679 2,958 44,324 39,860 6,632 2,242 48,734Loans and advances to customers 279,548 22,086 2,877 304,511 272,589 20,151 3,097 295,837Financial assets held to maturity 12,390 109 1 12,500 13,358 352 - 13,710Investments in companies accounted for using the equity method 123 133 260 516 20 2 235 257

* United States, Singapore and Tunisia

• Passif

Analysis of profit and loss by geographic zone


Central banks - 1,265 - 1,265 - 2,319 - 2,319Financial liabilities at fair value through profit or loss 43,947 4,207 196 48,350 43,581 4,394 359 48,334Derivative hedging instruments 4,945 464 4 5,413 8,218 389 10 8,617Amounts due to credit institutions 42,679 (5,959) 2,080 38,800 53,459 (3,735) 4,306 54,030Amounts due to customers 191,692 25,877 862 218,431 170,935 25,018 554 196,507Debt securities 100,957 11,572 5,051 117,580 122,692 9,006 2,675 134,373

* United States, Singapore and Tunisia


Net banking income 11,277 1,982 314 13,573 8,006 595 (177) 8,424General expenses (6,987) (1,312) (69) (8,368) (6,196) (432) (49) (6,677)Gross operating profit 4,290 670 245 5,205 1,810 163 (226) 1,747Cost of risk (1,326) (769) (275) (2,370) (1,138) (216) (51) (1,405)Gains on other assets (**) (7) 8 30 31 18 6 20 44Change in goodwill (124) - - (124) - 23 - 23Profit before tax 2,833 (91) - 2,742 690 (24) (257) 409Consolidated net profit 1,960 (49) (29) 1,882 605 (17) (146) 442Profit attributable to equity holders 1,810 (48) 69 1,831 599 (19) (140) 440

* United States, Singapore and Tunisia** including net profit or loss of companies accounted for using the equity method and goodwill impairment



162 Crédit Mutuel

5. Other information

Note I1

Fair value

Fair value of financial instruments recognised at amortised cost

The fair values given here are estimates based on observableparameters as at 31 December 2009. They are based ondiscounted future cash flows estimated based on a yield curvethat takes into account the debtor's inherent signature risk.The financial instruments referred to in this note are loansand borrowings. They do not include non-monetaryinstruments (equities), trade payables, other assets, otherliabilities or accrual accounts. Non-financial instrumentsare not covered by this note.The fair value of on-demand financial instruments andcustomers' regulated savings contracts is the amount that canbe demanded by the customer, i.e. the carrying amount.

Some group entities also apply the following assumption,which is that the market value is the carrying amount forcontracts based on variable rates and for contracts with aresidual maturity of one year or less.Note that, excepting financial assets held to maturity,financial instruments recorded at amortised cost cannot besold or, in practice, disposed of before maturity.Accordingly, capital gains or losses are not recognised.However, if a financial instrument recognised at amortisedcost were to be sold, the disposal proceeds could besignificantly different to the fair value calculated as at 31December.

31.12.2009 31.12.2008 Market Carrying Unrealised Market Carrying Unrealised value amount gain or loss value amount gain or loss

AssetsLoans and receivables due from credit institutions 44,064 44,324 (4,260) 46,746 48,734 (1,988)Loans and receivables due from customers (*) 302,750 304,511 (1,761) 292,226 295,837 (3,611)Held-to-maturity financial assets 12,290 12,500 (210) 13,722 13,710 12

LiabilitiesDue to credit institutions 38,460 38,800 340 53,773 54,030 257Due to customers 208,951 218,431 9,480 190,599 196,507 5,908Debt securities 117,022 117,580 558 133,149 134,373 1,224Subordinated debt 7,473 7,371 (102) 8,572 8,551 (21)

Note I2

Dividends

The consolidating entity intends to pay €305 million in dividends outside the Crédit Mutuel group.

Note I3

Related parties

31.12.2009 31.12.2008 Companies Companies Companies Companies consolidated using accounted for consolidated using accounted for the proportional using the the proportional using the method equity method method equity method

Assets Loans and advances to credit institutions - - 16 -Of which ordinary accounts - - - -Loans and advances to customers - - - -Assets at fair value trough profit and loss - - - -Assets available for sale - - - -Assets held to maturity - - - -Derivative hedging instruments - - - -Other assets - - - -

Liabilities Due to credit institutions - - 5 -Of which ordinary accounts - - 5 -Derivative hedging instruments - - - -Liabilities at fair value through profit and loss - - - -Due to customers - - - -Debt securities - - - -Subordinated debt - - - -

The small amounts above reflect the extremely small number of companies consolidated using the proportional method or accounted for by the equity method atnational level. Amounts relating to companies consolidated under the full consolidation method are wholly eliminated on consolidation and are therefore notincluded in the above table.

Remuneration of corporate officers

Salary- Salary- Benefits- Social security Total(in €000) fixed portion variable portion in-kind adjustment

Main corporate officers 1,844 - 9.7 17.7 1,871.4

These amounts relate to overall remuneration paid to the main corporate officers of CNCM in respect of their functions in the various group entities.In addition, most members of senior management benefit from group retirement and supplementary pension schemes. However, those who are remunerated for their corporate function but who, due to their status, cannot benefit from the usual entitlement in respect of incentive schemes, profit sharing and retirementindemnities will receive a compensating indemnity when they leave office. At 31 December 2009, the provision recognised amounted to €2.53 million.The group’s senior management receive no other specific benefits. They have not been granted any equity instrument or other instrument giving access to the capitalof CIC. No stock options have been issued because of the mutual bank status. Note that senior management does not receive board attendance fees in respect oftheir functions at group companies or at other companies, only in respect of their functions in the group.Senior management may hold assets in the group or receive loans from the group on the same conditions as applicable to all the staff.


Independent Auditors' Report

164 Crédit Mutuel

To the Shareholders,

In fulfilment of the assignment entrusted to us by your General Meeting of Shareholders, we present to you our report forthe year ended 31 December 2009 on:- the audit of the consolidated financial statements of Crédit Mutuel, as attached to this report;- the basis of our opinion; and- the specific verifications required by law.The consolidated financial statements have been prepared under the responsibility of the Board of Directors. It is ourresponsibility, based on our audit, to express an opinion on these financial statements.

I - Opinion on the consolidated financial statements

We conducted our audit in accordance with auditing standards applied in France. Those standards require that we plan andperform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement.An audit includes examining, on a sample basis or via other means of selection, the evidence supporting the amounts anddisclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the information we have obtained provides an adequate and reasonable basis for our opinion.

In our opinion, having regard to International Financial Reporting Standards (IFRS) as adopted by the European Union, theconsolidated financial statements give a true and fair view of the Group’s financial position and its assets and liabilities at31 December 2009, and of the results of operations of the companies and entities included in the consolidation scope forthe year then ended.

II – Basis of our opinion

Accounting estimates that were relied upon for the preparation of the financial statements for the year ended 31 December2009 were drawn up when the economic environment and conditions in the financial markets remained depressed. It is againstthis backdrop that, pursuant to the provisions of article L823.9 of the French Commercial Code requiring that we indicate thebasis for our opinion, we draw your attention to the following elements:

• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods that havebeen applied, the group uses internal models and methods for valuing financial instruments that are not quoted on an activemarket and for determining certain provisions. We examined the system of controls used to determine that a market is notactive, to check the models used, and to determine the parameters used.

Independent Auditors' Reporton the consolidated financial statements

Year ended 31 December 2009

MAZARS ERNST & YOUNG ET AUTRES

• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods and in Note5, impairment losses in respect of available-for-sale assets are recognised when there is objective evidence of a prolonged orsignificant diminution in an asset’s value. We examined the system of controls used to identify evidence of impairment and tovalue the most material holdings and the estimates relied upon to recognise provisions in respect of these impairment losses.

• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods and in Notes6, 8, 18 and 28, impairment losses and provisions are recognised to cover credit risks inherent to the group’s activities. Weexamined the system of controls used to monitor credit risks, to assess the risks of non recovery, and to cover these risks byrecognising specific or general provisions.

• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods and in Note10b, deferred tax assets have been recognised in respect of tax losses carried forward. We examined the key estimates andassumptions used to recognise these deferred tax assets.

• As explained in Note 3 to the consolidated financial statements describing the accounting policies and methods and in Note18, provisions are recognised in respect of employee benefits. We examined the assumptions and calculation methods usedto determine these obligations.

These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and thereforecontributed to determining the unqualified opinion expressed in the first part of this report.

III – Specific verifications

We have also verified the information on the Group contained in the Management Report. This work was performed inaccordance with French auditing standards.

We have no comment to make as to its fair presentation and its consistency with the consolidated financial statements.

Courbevoie and Neuilly-sur-Seine, 4 May 2010

The Independent Auditors

MAZARS ERNST & YOUNG ET AUTRES

Pierre Masieri Olivier Durand

Confédération nationale du Crédit Mutuel

88-90, rue Cardinet - 75847 Paris Cedex 17

Tel.: +33 (0)1 44 01 10 10 - Fax: +33 (0)1 44 01 12 30

www.creditmutuel.com

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