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Paris
Luxembourg
Brussels
Lille
Annual Report 2011
2
|Annual Report 2011
Presentation of the CMNE Group
5 Editorial
6 Profile, Key figures and Highlights
7 Locations
8 Financial Organisation Chart
9 Group Organisation
Management Report
11 Businesses structured into specific areas Bancassurance France 11 Bancassurance Belgium 14 Business Finance 16 Insurance 18 Third-Party Management 20 Miscellaneous Services and Businesses 22
23 Consolidated Balance Sheet Total balance sheet 24 Consolidated accounts at 31/12/11 25 Equity capital 26 Risks 26 Controls and audits 34
Annual Report
2011 11
3
36 Employment-Related Information
41 Social Responsibility of the Company
42 Recent Trends and Outlook
Governance and Internal Auditing
44 Composition of the Board of Directors and mandates
46 Composition of the Management Committee and mandates
48 Report from the Chairman of the Board of Directors
57 Report from the Auditors (on the report from the Chairman of the Board)
58 Details of Group companies
4
| Presentation of the CMNE Group
5 Editorial
6 Profile, Key Figures and Highlights
7 Locations
8 Financial Organisation Chart
9 Group Organisation
Annual Report
2011 11
5Editorial
After the financial turmoil of 2008, 2011 saw a particularly turbulent summer. In the space of a few weeks, the sovereign debt crisis, volatility on the financial markets and liquidity tensions emerged to weaken European growth that was already on the fragile side.
In parallel to these events, changes to the banking environment were speeding up: the rapid development in distance banking, new forms of customer behaviour, which were becoming both more consumer-oriented and displayed greater suspicion of banks, the tightening of regulations, particularly prudential – all of which were elements requiring banks to adjust quickly.
Against the background of this unstable environment, Crédit Mutuel Nord Europe succeeded in drawing on its local banking model to return performances solid enough to enable it to withstand the negative effects of the crisis. The commercial energy of the bank’s 3 900 staff, the commitment of its 1 776 elected members and the trust of its million customers and shareholders enabled CMNE to weather the storm of 2011 without too many difficulties.
In 2011 Bancassurance France recorded new loans of €1 834 million, which was slightly below target, but with strongly defended margins and good risk control. Savings deposits were €650 million, with the balance tilting back in favour of bank savings. The retail banking arm turned in a very good commercial performance, illustrated by the success of structured funds and ‘C’ shares. Added to this was the success of expanding the range of "Eurocompte" and bankcards, the revival of PEA share savings plans and the sale of 111 000 insurance policies.
Bancassurance Belgium continued to restore its profitability while at the same time developing commercially. At the end of December 2011, an agreement was signed with Citigroup aimed at acquiring all of Citibank’s retail banking business in Belgium. This investment will enable CMNE Belgium to develop its presence in Belgium significantly.
Business Finance saw resumption in investments at the beginning of 2011. Despite the regional economy trending downwards again after the summer, business failures remained limited. BCMNE is now positioned as an overall provider, with good recognition on the market for mid-sized companies and SMEs.
Insurance – and life insurance in particular – have been affected by the crisis. Even if the exposure of ACMN-Vie to sovereign debt remained very limited and its investments in shares were controlled, the way the markets collapsed had an impact on its results. The Company provided prudent asset management, closed down unprofitable sales channels and strengthened its equity capital to step in step with the regulatory changes underway (Solvency 2).
Third-Party Management withstood the economic climate well and continued its development, which is balanced in terms of assets managed and sales channels. This enabled Third-Party Management to suffer less than its competitors and demonstrated the relevance of the merger between LFP and UFG, resulting in La Française AM. Despite the fall in the markets, funds under management remained stable at €35 billion.
And so it was that the 2011 financial year recorded good results, to which all of the group’s business arms made a contribution. In total, consolidated NBI ended at €684 million, with the net profit at €84 million. In addition, with €1.8 billion of equity capital and a Basle II solvency ratio of 17.27%, CMNE is built on solid fundamentals, enabling it to take advantage of any opportunity that may present itself once the ‘green shoots’ of recovery return.
While all this was going on, we worked throughout 2011 prepare our Medium-Term Plan 2015 and prepared for our future. Our strategy is clear: to give priority to customers, placing them at the heart of everything we do, being proactive and providing them with the appropriate advice they need.
Our aim with this new strategic plan is to have a dynamic, confident view of our development, one that is receptive to our environment, capable of dealing with the new technological issues that face us and more than holding our own in terms of banking competition.
The past has shown that we are able to deal with new challenges successfully; 2012 and the years ahead will confirm this strength. In a world where everything is going faster, we need to perform well and be efficient, while demonstrating our ability to adapt to our everyday business world.
“We are all creators of value”. More than just a promise, this is a commitment designed to encourage all of our elected members and staff in building the bank of tomorrow: a local bank, a modern bank, a profitable bank and a responsible bank.
Philippe VasseurChairman
Eric CharpentierGeneral Manager
Éric Charpentier Philippe Vasseur
6Profile, Key Figures and Highlights
• A pioneer and leader in bancassurance, itself an original concept in the banking relationship.
• CMNE has a transparent cooperative status: it is a participative organisation that links directors closely with staff members.
• A Group structured into five business areas: – Bancassurance France – Bancassurance Belgium – Business Finance – Insurance – Third-Party Management
• Federal departments located in Lille and Arras supporting the network of 160 local branches and 9 business centres dedicated to companies.
• CMNE operates in: – 7 départements in France spread across 3 regions:
Nord - Pas-de-Calais, Picardy, Champagne-Ardenne, – Belgium, – Luxembourg
� CMNE is…
2011 was devoted largely to preparing the Medium-Term Plan 2015. This strategic plan was presented on 20th October at the Convention attended by over 3 200 staff and elected members.
Bancassurance France: • Six new sales outlets opened • Continued rollout of the New Branch Design • Implementation of the Major Towns Strategy in Roubaix
and Tourcoing • Renewal of the range and launch of new products
Bancassurance Belgium: • Paul Lembrechts, appointed chairman of the BKCP
Management Committee • Year one of the “By 2015” commercial strategy • Signing of the agreement to purchase Citibank Belgium
Business Finance: • Launch in spring 2011 of a sales campaign aimed at MSB
(Mid-Sized Businesses) • Launch on the market for Regional Institutionals and
Market Activities (investments, rate hedging, etc.) • Ongoing programme to capture flows
Insurance: • Hervé Bouclier appointed chairman of the executive board
at NEA • Continued development of revenue from account units and
the prudential offering • Optimisation of distribution channels
Third-Party Management: • UFG-LFP became La Française AM • Partnership with Cholet-Dupont in terms of product dis-
tribution • Partnership with Nexity on property management / real
estate transactions business • Continued international development
� Group Highlights in 2011
� Key Figures (at 31/12/2011)
> People Customers and Shareholders (1) 1 169 275 Directors 1 776 Salaried staff 3 897
> Networks Local branches and business centres (2) 307 ATMs (3) 411
> Business (in millions of EUR) Outstanding accounting resources 12 748 Outstanding financial savings and Insurance 34 646 of which Insurance 10 754 Outstanding loans 12 467 Insurance policies (number) 311 001
> Balance sheet (in millions of EUR) Consolidated total 33 570 Statutory equity capital under Basle II 1 817
> Results (in millions of EUR) Consolidated net banking income 684 Consolidated net accounting profit 84
(share of group)
> Ratios Basle II solvency ratio (%) 17.27 Basle II solvency ratio Tier One (%) 16.94 Capital Adequacy Directive 182 (1) Customers of the networks in France and Belgium. (2) France: 255 bank branches and 9 BCNME business centres
Belgium: 43 bank branches (3) Including 13 in Belgium
Annual Report
2011 11
7Locations
� Situation at 31st December 2011
PAYS-BAS
ALLEMAGNE
Mer du Nord
Bureau de Crédit Mutuel Nord EuropeCaisse de Crédit Mutuel Nord Europe
50 kilomètres
Agence du réseau Crédit ProfessionnelAgents délégués
Paris
Bruxelles
Amsterdam
Luxembourg
LILLE
Bruges Anvers
Gand
Louvain Hasselt
LiègeWavre
Mons Namur
Arlon
Arras
Amiens
Beauvais Laon
Charleville-Mézières
Reims
Châlons en Champagne
8Financial Organisation Chart
� Situation at 31st December 2011
Bancassurance France Bancassurance Belgium Business Finance Insurance Third-Party Management
CMNE BELGIUMCompagnie Financière
Holding
BCMNEBanque Entreprises
Holding
LA FRANÇAISE AM. Gestion Comptes de tiers
Holding
NORD EUROPE ASSURANCES
Assurances Holding
99%
CRÉDIT PROFESSIONNEL SABanque
Tête de réseau Belgique
BAIL ACTEACrédit bail mobilier 99%
BAIL IMMO NORDCrédit bail immobilier
BATIROC NORMANDIECrédit bail immobilier
99%
NORMANDIE PARTENARIAT
Capital Risque88%
ACMN VIEAssurance vie 99%
NORD EUROPE LIFE LUXEMBOURG
Assurance vie99%
ACMN IARDAssurance dommages 51%
CPBK RÉRéassurance Luxembourg
99%
COURTAGE CMNECourtage assurance 100%
PÉRENNITÉENTREPRISES
Courtage assurance99%
VIE SERVICESCourtage 77%
LA FRANÇAISE REAL ESTATE MANAGERS
Gestion de SCPI86%
LA FRANÇAISE AM FINANCE SERVICES
Distribution de produits de placements
100%
LA FRANÇAISE DES PLACEMENTS
Gestion d'OPCVM99%
LA FRANÇAISE AMPRIVATE BANK
Banque privée60%40%
UFG SIPAREX Private Equity 66%
BKCP SCRLBanque de détail
99% 100% 80%1%
1%
160 Local Branches for Crédit Mutuel Nord Europe
Caisse Fédérale du Crédit MutuelNord Europe
100%
99%
100%
95%
LA FRANÇAISE AMINTERNATIONAL
CLAIMS COLLECTIONRecouvrement de Créances
100%
Annual Report
2011 11
9Group Organisation
� Situation at 31st December 2011
Réseaudu Crédit Professionnel
PÔLESERVICES
ET ACTIVITÉSDIVERSES
Réseau des Caisses Locales
PÔLE
ENT
REPR
ISES
PÔLE
GES
TIO
N PO
UR C
OM
PTE
DE T
IERS
BanquePME-PMI
Crédit-bailmobilier
Crédit-bailimmobilier
PÔLE BANCASSURANCE FRANCE
PÔLE BANCASSURANCE BELG
IQUE
PÔLE ASSURANCES
PÔLE VALEURS MOBILIÈRES
UFG SIPAREX Private Equity
PÔLE DÉVELOPPEMENT
LA FRANÇAISE AM FINANCE SERVICESDistribution de produits
de placements
PÔLE IMMOBILIER
LA FRANÇAISE REAL ESTATE MANAGERS
Gestion de SCPI
LA FRANÇAISE DES PLACEMENTS
Gestion d’OPCVM
BANQUE PRIVÉE
LA FRANÇAISE AMPRIVATE BANK
Banque privée
10
| Management Report 11 Businesses structured into specific areas
Bancassurance France 11 Bancassurance Belgium 14 Business Finance 16 Insurance 18 Third-Party Management 20 Miscellaneous Services and Businesses 22
23 Consolidated balance sheet and results
26 Equity capital and risk management Equity capital 26 Risks 26 Controls and audits 34
36 Employment-related information
41 Social Responsibility of the Company
42 Recent Trends and Outlook
Annual Report
2011 11
11Bancassurance France
Aim of the Medium-Term Plan 2011: “to be THE nº 1 bank for its customers”
2011 saw a financial crisis of exceptional scope and size. Against this difficult background, Crédit Mutuel Nord Europe was undaunted in pursuing its main aim: to help and guide its 1 044 738 customers in all of their projects, whether personal or business.
� Business activity
Customer satisfaction at the heart of strategy Thanks to the professionalism of its staff, Crédit Mutuel was able to maintain and even expand its relationship with customers as their local, listening bank. CMNE’s image as a ‘different’ bank, not listed on the stock exchange, was strengthened through a range of national advertising campaigns. In 2011, Crédit Mutuel was elected “Bank of the Year” for the second time in France by The Banker, a Financial Times publication. The judging panel recognised the way the bank has withstood the crisis, its local network and the quality of its products and services geared to the needs of its customers.
Sustained sales programme In 2011, CMNE made changes to the “Eurocompte Club”, adding greater clarity and transparency to its offering. Customers were issued with a payment card suited to their individual situation. With simplicity in mind, CMNE rationalised its range of OPCVM products and revamped its range of consumer loans, introducing the “Credit Passport” and “Etalis”. CMNE’s bancassurance model demonstrated its soundness with the sale of 111 000 insurance policies for goods and individuals.
Enhanced quality of service Aimed at improving the service it provides to its customers, CMNE continued its “New Branch Design” programme throughout the year, based on internal architecture that combines both service and advice areas. By the end of 2011, 111 of the bank’s 255 outlets had been completed or work was underway. For the business market, the bank consolidated the development of its Business Advice Spaces. It also increased its presence with farmers in funding amenities and equipment via Actimat. Finally, CMNE tightened its links with associations. More generally, CMNE oversaw changes in terms of the way its network is organised (finalisation of the Major Towns Strategy, etc.) and made active preparation for the Medium-Term Plan 2015.
Development of multi-access banking Running in parallel with its commercial network, CMNE offers a comprehensive and structured distance banking service. Customers are now able to choose the way they deal with the bank, from visiting a local branch to banking on a smartphone, as well as using online services or the CMNA platform. Throughout 2011, CMNE continued its policy of innovation (life insurance area, online subscriptions, dedicated applications on touchscreen tablets, etc.) and equipped its customers with DVI facilities (DVI = Documents Via the Internet and includes electronic account statements). 238 294 customers are now using distance banking services, 97.5% of whom bank online.
� Savings
CMNE achieved overall savings deposits of €650 million in 2011, excluding current accounts. Total savings reached €16 billion, an increase of 2.3% over the year.
In millions of €
Deposits 2011 Outstanding resourcesend 2011
Changes to outstandingresources 2010/2011
Bank savings 218 7 200 +5.0%Insurance savings 508 6 214 +3.4%Financial savings -12 1 404 -7.8%Shares -64 1 183 -5.2%ToTAL 650 16 001 +2.3%
Bank savings up 5% Savings deposits tilted back in favour of bank savings. Three years after going on general sale, Livret A passbook accounts grew again. This form of saving, which is synonymous with security during troubled financial times, again attracted savers. At CMNE, the revival of interest in passbook savings accounts saw new deposits of €264.7 million, compared with €177.2 million in 2010, which was an increase of 49%.
12Bancassurance France
Financial savings down 7.8% 2011 was a rollercoaster year on the stock markets, with spectacular movements both up and down. The Paris Stock Exchange ended the year at 3 159.81, after peaking at 4 169 in mid-February and falling by 25% between 1st July and 10th August. Financial savings continued to suffer from the general financial climate. At CMNE, deposits for financial savings were down by €12 million, following on from a fall of €75 million in 2010. The number of PEA share savings plans rose by 13% from the beginning of the year, with 45 133 accounts opened as of 31st December, representing funds of €500 million. No new CMNE loans were introduced to the network in 2011. Structured issues took place via ACMN Vie.
Insurance savings up 3.4% As a consequence of the crisis, life insurance deposits nationally fell sharply over the five final months of the year along with a decrease in total deposits. At CMNE, though, life insurance bucked the trend with total funds held increasing by 3.4%. Over the year, gross deposits into insurance savings were €508 million (compared with €629 million in 2010) with the level of Account Units doubling (14.13% compared with 7.10%). CMNE also saw other good performances, with the successful marketing of three “Future Strategy” structured funds (respectively generating €30 million in April, €23.5 million in June and €21 million in November).
Launch of ‘C’ shares The sale of ‘B’ and ‘F’ shares ended on 1st June 2011 and was replaced by the new ‘C’ shares created in October 2010. Over the year, revenue for ‘B’, ‘C’ and ‘F’ shares was down by €64.5 million. This trend was reversed over the final quarter of 2011, with deposits for ‘C’ shares (up €91 million) offsetting the drop in ‘B’ shares (minus €74 million).
Average balances for current accounts up 5.6% Elsewhere, average balances for current accounts rose 5.6% in 2011 (+€103 million) after rising by 7.5% in 2010 (+€127 million). Worth noting was the strong increase in the average balance of business accounts of 7.6% in 2011 (+€44 million).
� Loans
The loans business was adversely affected by the crisis in 2011. Overall outstanding loans were €9.2 billion at the end of 2011, which was slightly down on 2010. Despite this poor background, CMNE was able to maintain its margins, adjust to the new regulatory constraints (Lagarde Act, etc.) and generally ensure good risk management.
In millions of €
Revenue 2011 Outstanding loans end 2011
Changes to outstanding loans 2010/2011
Consumer 546 1 063 -0.7%Housing 960 6 377 -0.6%Business 328 1 762 -2.8%ToTAL 1 834 9 203 -1.0%
Combined revenue from loans €1.8 billion The loans business saw a reduction in revenue and an increase in early redemptions. At the end of December 2011, combined revenue was €1 834 million, which was down 8.4% compared with 2010. The margin rate was 1.3%, compared with 1.6% in 2010. This was caused by the increase in the average cost of cash, which rose from 0.6% in 2010 to 1% in 2011.
Successful launch of the Credit Passport in September 2011 Renewable loans (€83 million) continued to perform well in 2011, exceeding the annual target set. Consumer loans (€463 million) were down by 3% compared with the previous year, while there have been good results from the Credit Passport (€63 million) since it was launched in September.
Revenue from Housing loans down by 11%, with margins retained Revenue for 2011 decreased by 11% compared with 2010, reaching €960 million as opposed to €1 080 million in 2010. The margin on Housing loans was maintained at 0.3%.
Revenue from non-private loans down 9.68% compared with 2010 Non-private loans issued were €328 million at 31st December 2011. Investment loans for agriculture were down 2.4% at €152 million. This figure takes account of the impact of working capital reconstitution loans taken out in 2010 and not renewed in 2011. Excluding this latter aspect of the business (i.e. €32.7 million), revenue was up 23.4%.
At €176 million, revenue on business loans was down by 15.2% compared with 2010 (€207 million). We should note here the impact of €45 million in SCI Patrimoniales loans (SCI = property investment partnerships) being transferred to housing loans since June 2010. In comparable terms, revenue was up by 8.3%. Revenue from lease-purchase agreements (€24.8 million) was stable compared with the end of December 2010.
Annual Report
2011 11
13
Retail banking results in France are measured within the scope of the Caisse Fédérale and the network of local branches. Added to this is Immobilière du CMN, which with the associated SCI property investment partnerships, carry the operating property business.
IFRS consolidated accounts in thousands of €
ASSETS 31/12/11 31/12/10Financial assets by fair market value by result 399 688 686 646 Derivative cover instruments 57 856 26 785 Financial assets available for sale 2 566 868 2 294 573 Loans and debts on crédit establishments 5 067 335 4 792 546 Loans and debts on customers 9 448 940 9 560 227 Difference in revaluation of portfolios covered on rates 71 687 76 151 Assets held to maturity 1 717 446 1 776 375 Accruals and miscellaneous assets 315 252 336 934 Holdings in equity companies - 2 179 Tangible and intangible fixed assets 123 885 98 830 ToTAL 19 768 957 19 651 246
LIABILITIES 31/12/11 31/12/10Financial liabilities by fair market value by result 38 806 44 234 Derivative cover instruments 162 987 144 412 Debts to credit establishments 1 720 007 2 300 932 Debts to customers 9 208 445 8 877 412 Debts represented by a security 6 275 855 5 950 728 Difference in revaluation of portfolios covered on rates 992 1 522 Accruals and miscellaneous liabilities 387 603 294 244 Provisions 17 161 57 709 Subordinated debts 150 482 150 552 Minority interests 401 435 Equity capital excluding reult (share of group) 1 733 174 1 761 014 Result for the period (share of group) 73 044 68 052 ToTAL 19 768 957 19 651 246
PROFIT-AND-LOSS ACCOUNT 31/12/11 31/12/10NET BANKING INCoME 404 673 389 201 Overheads (290 574) (278 676) GRoSS oPERATING PRoFIT 114 099 110 525 Cost of risk (15 427) (11 997) oPERATING PRoFIT 98 672 98 528 Share of companies consolidated using the equity method - 12 Gains or losses on other assets (2 533) (4 166) oPERATING PRoFIT BEFoRE TAX 96 139 94 374 Tax on profits (23 120) (26 309) ToTAL NET PRoFIT 73 019 68 065 Minority interests (25) 13 NET PRoFIT (share of group) 73 044 68 052
Notes and clarification: Corrections to incorrect valuation calculations relating to cover swaps have resulted in the amounts published in 2010 being adjusted; the effects are presented in detail in the annexe to the consolidated accounts. As a result, the profit for 2010 was €68 million (published at €71.5 million) and corrected equity capital was €1 761 million (published at €1 766.5). The main changes recorded in the assets result from the maturing and choice of cash investments made by the finance committee in the uncertain context of the financial markets. In this regard, the Caisse Fédérale holds no outstanding sovereign debt. On the liabilities side, the favour granted to accounting deposits and to passbook accounts in particular explains the increase in outstanding customer debt. Elsewhere, the options and terms for issuing securities on the interbank market and negotiable debt securities favourable affected movements in outstanding debt represented by a security to the detriment of more conventional loans. The fall in outstanding liabilities provisions is explained by the outcome of the court case with Banque Delubac, detailed in note 18 in the annexe. The reduction in equity capital was generated by the fall in company capital resulting from the decrease in company shares recorded in 2011. In the profit-and-loss account, the increase in NBI results mainly from the improvement in margins on customer business and the terms of borrowing enjoyed by the Caisse Fédérale. The increase in overheads is explained mainly by staffing costs. These were impacted specifically in 2011 by the absorption of the systemic risk tax (€1.6 million) and the provision set aside for the URSSAF audit conducted in 2011 and which is disputed (€1.7 million). The change in cost of risk is associated partly with the outcome of the dispute with Banque Delubac (minus €1 million) and partly with the writebacks made in 2010 following the disposal of the Lehman Brothers securities (€3.4 million).
14Bancassurance Belgium
Aim of the Medium-Term Plan 2011: “to be the natural point of contact for self-employed workers and assets-based customers”
2011 saw a recovery in the growth of funds under management, a strengthening of the commercial network and an ongoing effort in terms of training staff.
From a product bank to a customer bank “BKCP Bank” redefined its relational approach by beginning a clear-cut return to self-employed customers. The aim was to move from being a product bank to a customer bank. The bank’s aim is to place its customers at the heart of its strategy, above all by meeting their needs through a comprehensive range of products and effective services.
The branch network has been restored to the centre of the bank’s commercial approach and reorganised into seven geographic sectors. The BKCP brand is becoming established on the Belgian banking scene based on clear positioning. This is the direction taken by the bank’s communication campaigns: a bank on a human scale where being local is its main strength.
2011: a year full of achievements The bank standardised its commercial approach by developing its distribution channels and placing the emphasis on its customer target audience by launching its BKCP Leasing offering. Its internal culture as a commercial bank was strengthened, both through an enhanced training plan and by the active management of staff. On the operations side, IT was migrated to Clearstream, the bank’s property was rationalised and work was completed on the Boulevard de Waterloo building in Brussels. It is now an integrated group in terms of legal, IT and way it is organised. The year ended with the signing in December of the agreement to purchase Citibank Belgium. This investment will enable CMNE Belgium to develop its presence in Belgium significantly and to bolster CMNE’s aim of becoming recognised as a major player north of Paris and in Belgium.
Sustained business in deposits and loans Restarting revenue from deposits and loans was considered the main strategic task for this arm of the business in 2011. Outstanding funds at “BKCP Bank” rose by 6.2% (+€318 million), of which almost two-thirds was generated during the fourth quarter of the year.
Revenue from deposits (including non-balance sheet) increased from €106 million to €292 million (+175%), while revenue from loans rose from €238 million to €269 million (+13%), including an increase of 45% in business loans alone.
Positive resultsThe MTP 2011, which was revised as a result of the financial crisis in 2008, set itself the target of the company accounts returning to breakeven in 2010, based on the gross operating result, and again in 2011, based on the net accounting profit.
The 2011 financial year was impacted by reductions in value on the bank’s securities portfolio. Despite this, the effects of the rationalisation and the optimisation of resources conducted for the past few years, as well as good controls over cost of risk, enabled this arm of the business to make a positive contribution to the group’s results.
Annual Report
2011 11
15
The Belgian banking business is made up of entities owned by the CMNE Belgium holding company: Crédit Professionnel SA, BKCP SCRL, BKCP Securities and the companies and groups that contribute to the operation of this set of businesses. Its contribution to the consolidated accounts of the CMNE Group can be seen from the figures below.
IFRS consolidated accounts in thousands of €
ASSETS 31/12/11 31/12/10Financial assets at fair market value by results 9 580 9 827 Derivative cover instruments 4 452 1 474 Financial assets available for sale 473 108 101 906 Loans and debts on credit establishments 1 334 337 1 732 898 Loans and debts on customers 1 408 061 1 433 695 Assets held to maturity 84 502 84 343 Accruals and miscellaneous assets 29 319 34 919 Tangible and intangible fixed assets 68 413 68 821 Goodwill 2 343 2 343 ToTAL 3 414 115 3 470 226
LIABILITIES 31/12/11 31/12/10Financial liabilities at fair market value by results 472 - Derivative cover instruments 23 639 15 859 Debts to credit establishments 232 542 444 224 Debts to customers 2 711 661 2 517 430 Debts represented by a security 91 803 116 914 Accruals and miscellaneous liabilities 17 161 19 775 Provisions 3 864 7 260 Subordinated debts 90 092 90 534 Minority interests 9 724 10 263 Equity capital excluding result (share of group) 231 374 242 533 Result for the period (share of group) 1 783 5 434 ToTAL 3 414 115 3 470 226
PROFIT-AND-LOSS ACCOUNT 31/12/11 31/12/10NET BANKING INCoME 68 277 71 379Overheads (64 018) (62 405)GRoS oPERATING RESULT 4 259 8 974Cost of risk (2 169) (9 151)oPERATING RESULT 2 090 (177)Gains or losses on other assets 1 428 422oPERATING RESULT BEFoRE TAX 3 518 245 Tax on profit (1 983) 4 672 ToTAL NET RESULT 1 535 4 917 Minority interests (248) (517) NET RESULT (share of group) 1 783 5 434
Notes and clarification: The main changes recorded in the assets result from the maturing and choice of cash investments made by the finance committee in the uncertain context of the financial markets. BKCP SCRL holds €2.5 million of outstanding Greek sovereign debt securities valued at the market price at the end of 2011 (€0.7 million). In the liabilities, revenue from deposits, particularly on passbook accounts, is the driving force in outstanding debt on customers. Equity capital was affected mainly by the variation in the value of financial assets caused by movements in the markets. In the profit-and-loss account, changes in NBI were adversely affected by the margin conditions on cash and customer business. Overheads include a termination indemnity paid out in 2011 following a change of IT service-provider (€2.3 million). The change in cost of risk was due mainly to events specific to the 2010 financial year, in particular with regard to the customer credit risk, an item brought under control in 2011.
16Business Finance
Aim for the Medium-Term Plan 2011: “to be the partner bank of SMEs / SMIs”
In 2011, Business Finance began to gain better visibility, which was sustained until the summer. But the outbreak of the sovereign debt crisis led to a new slowdown in business through to the end of the financial year. Overall, investments increased compared with 2010, with businesses adjusting to the prevailing uncertain environment. Keeping risk well under control remained a highlight of the 2011 financial year for all of the Business Finance entities.
On the commercial front, BCMNE conducted an ongoing mission to capture business flows from SMEs-SMIs and in the spring of 2011, it launched a campaign aimed at Mid-Sized Businesses (MSB). BCMNE asserted its position in financial and asset engineering operations and developed in the market for regional institutionals and deal-related activities (investments, rate hedging, etc.). The group’s other companies developed their growth paths.
� BCMNE
In 2011, BCMNE reiterated its desire to assist and guide SMEs while remaining a partner in the real economy. Helped by advisers with an in-depth knowledge of the local economic fabric, BCMNE not only maintained but also increased its support for regional business players. Banking resources linked to SME customers increased by 41.3%, of which 7.3% was for at-call deposits. Revenue from investment finance rose by 96.2% to €231 million in the face of a sharp increase in demand for credit from SMEs at the beginning of the financial year. At the same time, BCMNE pursued its targets for funding the operating cycle. Guarantees given or other commitments by signature increased in particular under the effect of counter-guarantees given to lease companies as part of the Business Finance synergy agreement. Overall, BCMNE’s on-balance sheet and off-balance sheet commitments increased by 10.9%.
In millions of €
APPLICATION OF FUNDS (average outstanding) 2011 2010 Change 2010/2011
Short-term 116 93 24.4%Medium and Long-Term loans 415 377 10%Total loans 531 470 13%Commitments by signature 108 106 2%ToTAL APPLICATIoN oF FUNDS 639 577 11%
New business developmentIn 2011, six Financial and Assets management operations were carried out, contributing €15 million to revenue from investment financing. In addition, two equity capital operations were conducted via Normandie Partenariat for almost €1 million. In the area of company and salary savings, the campaign run on PEE/PERCO company savings and collective retirement savings schemes, end-of-career payouts and “key man” policies made it possible to increase the number of policies significantly (336, up 18%), as well as outstanding funds (€10.4 million, an increase of 14%).
Better resultsExcluding dividends received from leasing subsidiaries, BCMNE’s NBI increased by 3.9%. Overheads remained under control. Cost of risk fell by 13% to €2.23 million. Excluding dividends received, BCMNE ended with a pre-tax operating profit of €5.9 million, compared with €5.2 million in 2010, representing a growth of 13.3%.
� BAIL ACTEA
The revenue generated by Bail Actea was €331 million, compared with €283 million in 2010 (+ 17%). Net outstanding financial funds under management rose by 2.9% to €750 million. The financial margin improved by 15.9% to reach €19.3 million, driven by revenue with correct margins for 2009 and 2010 and the renewal of lines of refinancing on good terms. Business NBI rose by 14.5% to €19.6 million. Cost of risk was steady at €1.7 million. The net book result was €4.7 million.
� BAIL IMMO NORD & BATIROC NORMANDIE
The volume of new business generated during the year by the two property leasing entities was €68 million, compared with €44.5 million (+ 53%); the results for 2011 were in excess of the development targets set. Outstanding financial funds under management rose to €314 million, an increase of 13%. The commercial margin on this new business was in line with the target set. NBI increased by 7.9% to €6.3 million. Overheads were down overall after the heavy cost of the IT migration that affected 2010. Cost of risk in 2011 remained contained, as it did in 2010. All of these elements produced a net profit of €1.9 million.
Annual Report
2011 11
17
Business Finance is part of the BCMNE holding company which, in addition to its banking business for SME-SMIs, owns shares in companies that specialise in property leasing transactions: Bail Actea, Bail Immo Nord, Batiroc Normandie and Normandie Partenariat. The accounts for SDRN (which handles the extinctive management of debts recorded in its assets) round to this group of companies.
IFRS consolidated accounts thousands of €
ASSETS 31/12/11 31/12/10Financial assets at fair market value by result 96 1 Derivative hedging instruments 26 399 Financial assets available for sale 16 872 14 928 Loans and debts on credit establishments 133 525 135 462 Loans and debts on customers 1 675 243 1 483 967 Difference in revaluation of TFPs covered on rates 3 132 - Assets held to maturity - - Accruals and miscellaneous assets 13 106 10 392 Tangible and intangible fixed assets 2 863 2 982 ToTAL 1 844 863 1 648 131
LIABILITIES 31/12/11 31/12/10Financial liabilities at fair market value by result 94 1 Derivative hedging instruments 4 326 172 Debts to credit establishments 1 269 377 1 153 961 Debts to customers 285 537 213 648 Difference in revaluation of TFPs covered on rates - 355 Accruals and miscellaneous liabilities 99 649 104 513 Provisions 5 389 1 726 Minority interests 44 38 Equity capital excluding result (share of group) 168 857 163 165 Result for the period (share of group) 11 590 10 552 ToTAL 1 844 863 1 648 131
PROFIT-AND-LOSS ACCOUNT 31/12/11 31/12/10NET BANKING INCoME 44 322 42 010 Overheads (22 932) (21 352) GRoSS oPERATING PRoFIT 21 390 20 658 Cost of risk (3 435) (5 259) oPERATING RESULT 17 955 15 399 Gains or losses on other assets 6 (17) oPERATING RESULT BEFoRE TAX 17 961 15 382 Tax on profits (6 369) (4 829) ToTAL NET PRoFIT 11 592 10 553 Minority interests 2 1 NET PRoFIT (share of group) 11 590 10 552
Notes and clarification: The customer business generated by BCMNE and the leasing companies in revenue from loans and finance, and deposits in the form of term accounts explain any movements shown in the balance sheet; the refinancing of the business is provided solely by the Caisse Fédérale of CMNE and advances in association with development. In the profit-and-loss account, the increase in NBI can be explained by the margin generated on customer business, as well as by the rise in commissions generated by the business flows entrusted to BCMNE and the development of its factoring and finance engineering business. The cost of risk relates only to customer business and remained under control in 2011.
18
Aim for the Medium-Term Plan 2011: “to be a multi-channel European regional insurance group”
Marked by the sovereign debt crisis and the uncertainty associated with tax reforms on assets, 2011 was an unfavourable one for life insurance.
CMNE’s Insurance business demonstrated its strength against this background. Controlled growth, the closing down of unprofitable sales channels, greater equity capital to go with the regulatory changes underway (Solvency 2), all of these measures were key in ensuring the sustainable long-term development of the company. With limited exposure to sovereign debt, investments in shares kept under control and enhanced solvency, the business remained well positioned to deal with the challenges of the new business environment and continue to guide its customers, as dictated by its corporate mission.
� NEA
Turnover for the Insurance business in 2011 was €1.4 billion, a fall of 26% caused by an environment in which the savings market was in decline. By contrast, the IARD and prudential business continued to progress. 51% of revenue came from the network, with the balance generated by the BKCP network and La Française AM, as well as by networks outside CMNE. Total mathematical and technical provisions increased by 3% to €10.8 billion. Outstanding savings policies represented €10.4 billion, of which 12.4% was invested in Account Units.
Outstanding funds under management in millions of €
2011ACMN Vie 9852NELL 573ToTAL 10 424
Results in 2011 were impacted by the effects of the financial crisis and include provisions constituted in line with regulations: for conventional bonds, there is a provision for long-term depreciation when there is a risk of default. For other securities, taking account of market volatility there is a provision for long-term depreciation in place on a security-by-security if the latent loss is greater than 40% at the inventory date, or higher than 30% on a constant basis over the past six months. The total of provisions established in this way was €69 million and affected ACMN Vie in particular.
� ACMN Vie
ACMN VIE recorded a turnover of €1.2 billion, which was 27% lower than in the previous year. The share of account units in revenue increased, ending up at 13.1%, compared with 7.3% in 2010. Outstanding mathematical provisions were €10.1 billion, up 3%. There was a net loss of €19.7 million (+€25.5 million in 2010). This figure was impacted by total financial provisions of €62 million over the period and by recording a provision for liability of €51 million. 2011 also saw two capital raisings: the first in June 2011 by paying the dividend in equities. The second took place in December 2011. As of 31st December 2011, equity capital, including the loss for the financial year, was €583 million (compared with €450 million at the end of 2010) and the solvency margin was 142% (compared with 115% at the end of 2010).
� ACMN IARD
IARD confirmed its dynamism by capitalising its quotes and the good sales performance by the networks. Revenue of €125 million was up 7%, representing 9% of overall revenue for the insurance business. AIRD’s prudential products are mainly health-related and represent 21% of annual revenue with a total of €26.4 million. Turnover for possessions insurance products (car – multi-risk) was €98.7 million, which was up 6%. The profit of €8 million was up sharply compared with 2010 (€2.3 million). This good performance was associated mainly with a good claims level on Car and Home.
� NELL
Turnover was €75.7 million, down by 38%. Revenue generated by BKCP was €11.4 million (compared with €25.3 million in 2010). The Myriad product, aimed at Belgian brokers, produced most o f the revenue: €63.2 million (compared with €74.2 million in 2010). Mathematical provisions at 31st December 2011 were €229 million (78% of which was invested in account units). Profit for Nell was €0.2 million (compared with €2.1 million in 2010). This figure was impacted by total depreciation of assets of €6.6 million.
Insurance
Annual Report
2011 11
19
CMNE’s Insurance business is made up of entities owned by the Nord Europe Assurances holding company (NEA): ACMN IARD, ACMN Vie, CPBK Re, Nord Europe Life Luxembourg, Courtage Crédit Mutuel Nord Europe, Pérennité Entreprises and Vie Services. The contribution from Insurance to the consolidated account of the CMNE Group is shown by the figures below.
IFRS consolidated accounts in thousands of €
ASSETS 31/12/11 31/12/10Financial assets at fair market value by result 8 881 556 8 373 748 Financial assets available for sale 2 834 774 3 366 870 Loans and debts on credit establishments 69 686 34 918 Loans and debts on customers 44 022 48 884 Assets held to maturity - - Accruals and miscellaneous assets 541 053 126 052 Tangible and intangible fixed assets 5 754 7 221 Goodwill 5 640 5 640 ToTAL 12 382 485 11 963 333
LIABILITIES 31/12/11 31/12/10Debts to credit establishments 39 924 5 629 Debts to customers 58 020 59 484 Accruals and miscellaneous liabilities 866 424 863 755 Technical provisions from insurance policies 10 757 476 10 493 126 Provisions 4 422 14 744 Subordinated debts 53 024 78 073 Minority interests 19 571 17 603 Equity capital excluding result (share of group) 581 020 399 362 Result for the period (share of group) 2 604 31 557 ToTAL 12 382 485 11 963 333
PROFIT-AND-LOSS ACCOUNT 31/12/11 31/12/10NET BANKING INCoME 76 499 116 917 Overheads (58 442) (71 185) GRoSS oPERATING PRoFIT 18 057 45 732 Cost of risk (10 252) - oPERATING PRoFIT 7 805 45 732 Gains or losses on other assets - - oPERATING PRoFIT BEFoRE TAX 7 805 45 732 Tax on profits (1 925) (12 924) ToTAL NET PRoFIT 5 880 32 808 Minority interests 3 276 1 251 NET PRoFIT (share of group) 2 604 31 557
Notes and clarification: Outstanding funds managed in the balance sheet are carried mainly by ACMN Vie. Outstanding funds representing Greek sovereign debt were €75.6 million, valued at the market price on 31/12/2011. Depreciation was 72% of outstanding funds on average. This explains the cost of risk stated in the profit-and-loss account, presented as the net amount of participation in profits of policyholders. The reason for the reduction in overheads is the absorption in 2010 of a provision intended to cover any unfavourable change in the claims rate of the borrowing group. Its use in 2011 has been processed in the technical accounts and is stated in the margin on the insurance business included in the NBI. The reduction in the NBI results from the margin on the insurance business and the effects of the financial markets on the valuation of the portfolios stated at their fair market value by result.
20
Aim for the Medium-Term Plan 2011: “to be a benchmark player in every segment of assets management”
In 2011, the model developed by the Third-Party Management business demonstrated its strength, despite unfavourable movements in the financial markets, as well as an aversion to risk that remained high on the part of investors and a complex regulatory environment.
This satisfying result showed that the model put in place at the time of the merger between UFG La Française des Placements in 2009 was built on strong foundations. In 2011, the Group adopted a new name, La Française AM, which replaced UFG-LFP. As a multi-specialist assets manager, the aim of La Française AM is to become one of the leaders in its market in Europe.
Record revenue in property in a difficult business environment Revenue from property (in excess of €1.1 billion), which is a safe haven for savers, largely offset the difficulties encountered in selling funds of transferable securities. In the area of collective property investment trusts (OPCI), we should note the creation of dedicated OPCI products for institutional investors (€400 million of funds under management); the creation of an OPCI dedicated to the outsourcing of the walls of a supermarket chain (€365 million of funds under management) and the launch of sales for a mass public OPCI product called Opsis Patrimoine.
in millions of €
Net revenue Outstanding funds under management
2010 2011 2010 2011
Transferable securities 721 -805 26 975 25 814Property 292 1 138 5 812 7 001Other 96 -19 1 984 1 951ToTAL 1 109 314 34 771 34 766
Functional reorganisation to establish developmentTo ensure its development is properly established, La Française AM (LFAM) is now organised around a number of separate businesses: “Transferable Securities Management”, with La Française des Placements and LFP Sarasin; “Property”, with La Française REM; “Distribution” and “Private Management”, with LFAM Gestion Privée and LFAM Private Bank in Luxembourg. The other parts of the business are the recovery of commercial debt (LFAM ICC), investment capital (UFG Siparex) and taking holdings in entrepreneurial management companies (NEXT).
New strategic partnershipsThe 2011 financial year saw the establishment of two strategic partnerships, which enabled the Group to consolidate its overall business.
The first of these agreement resulted in LFAM taking a 33.4% holding in the capital of the Cholet Dupont holding company and 51% in the capital of the Cholet Dupont Partenaires distribution platform. This transaction strengthened the ability to distribute funds to the customer base of private individuals through the intermediary of the platform. It also created synergies between the two groups in the market for private customers.
The second agreement involved bringing the services and property transactions business with Nexity into the holding company, LFP Nexity Services Immobiliers, which is owned 24.65% by LFAM and 75.35% by Nexity. This new entity has become one of the leading companies in France in the market for property services and transactions.
Going international2011 also saw the continued international development of La Française AM. Highlights for the year were the establishment of a partnership in Germany; the constitution of the distribution team in Madrid (LFAM Iberia); commercial development in Scandinavia; and the opening of a branch in Milan (LFAM International - Italian Branch).
Results The account for 2011 ended with the business contributing €40 million to the Group, including the effects of the new partnerships (Cholet Dupont and Nexity).
Third-Party Management
Annual Report
2011 11
21
The Third-Party management business is now part of the “La Française AM” holding company, which in the main owns La Française AM Real Estate Managers, La Française AM Finance Services, La Française des Placements, La Française AM GP, LFP Sarasin AM, the Cholet Dupont holding company, Convictions Asset Management, UFG Siparex and UFG Courtages. Its contribution to the consolidated accounts of the CMNE Group can be seen from the figures below.
IFRS consolidated accounts in thousands of €
ASSETS 31/12/11 31/12/10Financial assets available for sale 84 384 104 964 Loans and debts on credit establishments 67 108 44 277 Loans and debts on customers 24 373 21 891 Assets held to maturity - - Accruals and miscellaneous assets 63 790 87 681 Holdings in equity companies 35 878 2 182 Tangible and intangible fixed assets 29 337 37 938 Goodwill 168 916 182 860 ToTAL 473 786 481 793
LIABILITIES 31/12/11 31/12/10Debts to credit establishments 52 540 66 004 Debts to customers 72 917 42 184 Accruals and miscellaneous liabilities 92 353 131 118 Provisions 1 991 1 893 Minority interests 8 695 6 930 Equity capital excluding result (share of group) 205 649 200 102 Result for the period (share of group) 39 641 33 562 ToTAL 473 786 481 793
PROFIT-AND-LOSS ACCOUNT 31/12/11 31/12/10NET BANKING INCoME 139 217 168 532 Overheads (95 145) (117 257) GRoSS oPERATING PRoFIT 44 072 51 275 Cost of risk 25 (247) oPERATING PRoFIT 44 097 51 028 Share of profits from equity companies 1 882 640 Gains or losses on other assets 9 096 (202) Variations in value of goodwill 1 966 - oPERATING RESULT BEFoRE TAX 57 041 51 466 Tax on profits (15 048) (16 969) ToTAL NET PRoFIT 41 993 34 497 Minority interests 2 352 935 NET PRoFIT (share of group) 39 641 33 562
Notes and clarification: The accounts for 2011 were impacted by the partial contribution of assets from UFG Property Management to the Nexity Group after the creation of LFP Nexity Services Immobiliers, which is owned 25%. This operation, which took effect on 1st January 2011, had an impact on: - outstanding holdings in equity companies (+€23.9 million) - the amount of goodwill in the assets (-€14.8 million), - revenue from other business incorporated into NBI (€29 million in 2010), - overheads (€25 million in 2010), - gains on other assets, taking account of a €9 million gain. In addition, the holding in the Cholet Dupont Group resulted in: - the equity accounting of securities from the holding companies, entered in the assets for €9.2 million - badwill entered as a variation in value for goodwill in the profit-and-loss account for €2 million.
22
This area of the business encompasses all activities that are not part of the Group’s strategic business lines: NEPI (consolidated base includes the real estate non-operating business), CMN Tel, Euro Information, Financière Nord Europe, Sicorfé maintenance, Transactimmo, Actea Environnement and CMNE Environnement.
IFRS consolidated accounts in thousands of €
ASSETS 31/12/11 31/12/10Financial assets available for sale 23 836 44 826 Loans and debts on credit establishments 241 6 791 Loans and debts on customers 22 22 Accruals and miscellaneous assets 5 584 6 733 Holdings in equity companies 74 889 69 333 Tangible and intangible fixed assets 27 914 29 744 Goodwill 724 724 ToTAL 133 210 158 173
LIABILITIES 31/12/11 31/12/10Financial liabilities at fair market value by result - - Derivative hedging instruments - - Debts to credit establishments 11 964 13 002 Debts to customers - 1 Accruals and miscellaneous liabilities 1 108 1 476 Provisions 5 20 Subordinated debts - - Minority interests - 142 Equity capital excluding result (share of group) 111 496 131 653 Result for the period (share of group) 8 637 11 879 ToTAL 133 210 158 173
PROFIT-AND-LOSS ACCOUNT 31/12/11 31/12/10NET BANKING INCoME 6 134 12 090 Overheads (1 411) (4 749) GRoSS oPERATING PRoFIT 4 723 7 341 Cost of risk (36) 1 373 oPERATING PRoFIT 4 687 8 714 Share of profits from equity companies 5 008 4 693 Gains or losses on other assets 127 3 oPERATING LoSS BEFoRE TAX 9 822 13 410 Tax on profits (1 185) (1 473) ToTAL NET PRoFIT 8 637 11 937 Minority interests - 58 NET PRoFIT (share of group) 8 637 11 879
Notes and clarification: The fall in the contribution from Miscellaneous Services and Businesses to the result is explains mainly by gains that boosted the 2010 financial year, in particular at NEPI and Fininmad.
Miscellaneous Services and Businesses
Annual Report
2011 11
23
| Consolidated balance sheet
24 Total balance sheet
25 Consolidated accounts at 31/12/11
26 Equity capital
26 Risks
34 Controls and audit
24
Nature and remuneration of company shares Shares in the local branches, constituting the capital of the CMNE Group, are held exclusively by the shareholders.
There are four types of share: • ‘A’ shares, non-transferable, with a par value of €1, • ‘B’ shares, which may be traded, with a par value of €1, • ‘C’ shares, which may be traded giving a notice period of
5 years, with a par value of €1, • ‘F’, which may be traded giving a notice period of 5 years,
with a par value of €500.
‘A’ shares receive no remuneration, ‘B’, ‘C’ and ‘F’ shares receive an amount of remuneration set by the general meeting of shareholders of each local branch, within the limits laid down by the articles of association of the Cooperation and in line with the directives set by the Federal Board of Directors.
In 2011, the annual yield of ‘B’ shares was 2.20%, for ‘C’ shares 3.25% and for ‘F’ shares 3.58%.
Total balance sheet
Total balance sheet (in millions of €)
33 570
30 248 31 10532 849
10000
15000
20000
25000
30000
35000
2011201020092008
Capital (‘A’, ‘B’, ‘C’ and ‘F’ company shares) (in millions of €)
1 2681 2671 363 1 339
0
300
600
900
1200
1500
2011201020092008
Equity capital – share of group excluding result (in millions of €)
1 835 1 838 1 871 1 866
1000
1500
2000
2011201020092008
Annual Report
2011 11
25
After offsets between businesses, in thousands of €
Contribution to NBI Contribution to GOP Contribution to the consolidated result
Contribution to the total consolidated
balance sheet2010 2011 2010 2011 2010 2011 2010 2011
Bancassurance France 342 303 351 964 72 624 56 761 28 623 18 053 16 879 565 16 863 163
Bancassurance Belgium 71 315 68 277 8 910 4 259 5 271 1 930 1 991 195 2 181 128
Business Finance 42 010 42 584 20 658 21 390 10 552 11 590 1 514 490 1 718 905
Insurance 117 075 76 266 45 890 17 824 31 667 2 442 11 885 713 12 276 251
Third-Party Management 168 532 139 217 51 275 44 072 33 562 40 869 432 919 397 731
Miscellaneous Services and Businesses 11 412 5 900 6 663 4 723 11 202 8 636 152 280 133 210
ToTAL 752 647 684 208 206 020 149 029 120 876 83 520 32 856 161 33 570 388
Contribution to results: 83.5 million EUR
2010 20110
10000
20000
30000
40000
50000
Miscellaneous Servicesand Businesses
Third-PartyManagement
InsuranceBusiness FinanceBancassuranceBelgium
BancassuranceFrance
28 623
18 053
5 2711 930
10 552
31 667
2 442
33 562
40 869
11 2028 636
11 590
in thousands of €After offsets between businesses
Contribution to balance sheet total: 33.6 billion EUR
0
5000000
10000000
15000000
20000000
Miscellaneous Servicesand Businesses
Third-PartyManagement
InsuranceBusiness FinanceBancassurance Belgium
Bancassurance France
2010 2011
16 879 565 16 863 163
1 991 195 2 181 1281 514 490
11 885 713 12 276 251
432 919 397 731 152 280 133 210
1 718 905
in thousands of €After offsets between businesses
Consolidated accounts at 31/12/11
26
Under the provisions of CRBF regulation n° 2000-03, networks of establishments with a central body must comply with management ratios on a consolidated base (market risks and credit risk, major risks, shareholdings, internal auditing).
The consolidating entity and Crédit Mutuel Nord Europe’s scope of prudential monitoring are identical to those used for the Group’s consolidated accounts. Only the method of consolidation changes, in particular for the insurance companies, whose accounts are consolidated by total integration and prudentially using the equity method. This principle is identical to the one applied by the other entities in the Crédit Mutuel – Group.
The overall cover ratio defines the amount of equity capital needed to cover credit and market risks. Overall equity capital corresponds to the sum of the base equity capital (a hard core that includes super-subordinated securities of unspecified duration) and additional equity capital (including TSR and TSDI) products, as well as regulatory deductions (certain holdings in financial establishments that are not consolidated or accounted for using the equity method).
CMNE calculates the overall cover ratio for equity capital on the basis of IFRS consolidated accounts, using the prudential method. Book equity capital is withdrawn to take account of the effect of prudential filters, which are designed to reduce the volatility of equity capital
induced by international standards, in particular through the introduction of fair market value. CMNE also complies with the declaratory obligations created by the European Directive that applies to conglomerates. One of the results of this is the additional monitoring of cover by equity capital consolidated from the combination of the requirements of banking equity capital and the solvency margin of insurance companies. This monitoring also has an effect on measuring other management standards, with the difference of accounting for the consolidated entities in the insurance sector using the equity method being eliminated from base equity capital.
CMNE complies with all of the regulatory ratios to which it is subject.
In millions of €Regulatory ratios 31/12/2011 31/12/2010
Basle I Basle II Basle I Basle IIBasic equity capital (Tier One) 1 793 1 782 1 809 1 800Additional equity capital 42 35 35 34Further additional equity capital 0 0 0 0 Weighted risks 12 666 10 518 12 199 9 638Overall Ratio 14.49% 17.27% 15.11% 19.03%Tier One Ratio 14.16% 16.94% 14.83% 18.67%
The CMNE Group has established a risk support line by grouping the departments for ongoing audits, compliance and risk control within the General Secretariat. These three departments have a direct operating responsibility within Bancassurance France and a functional responsibility to their counterparts in the Group’s subsidiaries.
The risk support line handles implementation of the systems used to measure and monitor risk, as well as the compatibility of the risks taken with directions set by the deliberating body. The regular examination of the way level 1 audits operate makes it possible to monitor the system on an ongoing basis. In particular it takes account of the analysis of the main incidents recorded and the results of checks conducted remotely. The risk support line also actively monitors best practices and constantly suggests adjustments to the auditing tools and procedures.
For its part, the Inspectorate General, which is responsible for the periodic business line and network audits, remains a strictly autonomous structure.
The headcount allocated to audit duties continued to rise in 2011, reaching 50 individuals in the audit business lines that report hierarchically or functionally to the General Secretariat, and 43 staff for those that report to the Inspectorate General. Approximately 2% of the Group’s total headcount is now assigned to Level 2 and 3 auditing duties.
The Federal Board of Directors, or its offshoots in the form of the Audit Committee and Risk Committee are kept informed regularly of the management and monitoring of risks. The summary reports presented deal mainly with the monitoring and control of credit risk, financial risks and operating risks, as well as measuring the requirement of equity capital linked to the Group’s various business lines. They approved the Group’s internal audit charter, as well as the annual updating of the policy on risk management.
The quality of CMNE’s consolidated balance sheet contri–butes to the rating of the whole of the Crédit Mutuel – CIC Group by Standard & Poor's: "A+, outlook stable" for the long term, and “A1” for the short term, confirmed in December 2011, despite the overall tendency to downgrade bank ratings.
> Credit risksThe granting of loans has to go through a specific procedure at Crédit Mutuel Nord Europe. Beyond the delegation of powers granted to the managers of local branches, the Loans Committee for each branch, made up of directors and the manager, meets weekly to rule on applications.
Equity capital / Risks
� Equity capital
� Risks
Annual Report
2011 11
27
If an application exceeds the threshold of €500 000 or is subject to special terms, it must be analysed by the Caisse Fédérale’s Credit Department and is submitted to the Federal Loans Committee.
In Belgium, loan applications in excess of €750 000 are granted by the group’s Management Committee only.
For Business Finance, an overall limit per counterparty or group of counterparties has been set at €30 million. Applications with a unit value higher than €150 000 require a decision from the Committee.
For Bancassurance France and Business Finance, internal ratings in line with the principles set by Basle II are in place for customers from the various markets. These ratings are taken fully into account in the process of customer follow-up. Alongside the usual criteria, the rating is now incorporated as part of the parameters used to set the pricing for loans. The rating is also a determining component for the system of assignment when it comes to granting support.
For Bancassurance Belgium, the availability of a single information system since 2009 has made it possible to make data reliable through the establishment of a specific datawarehouse and the ability to work with Euro Information Development (CM-CIC Group) to implement the latest generation of customer rating algorithms. This should result in total ratings homogeneity with France during the course of 2013.
For the banking business in France, which represents 90% of the Group’s outstanding loans (Bancassurance France and Business Finance), the way outstanding loans are broken down by rating category and rating algorithm is as follows:
• Ratings equal to or above C-, which represents the best customers, total 78% to 91%,
• Ratings between D+ and E+, which represent healthy loans with a fairly high risk profile, total 2% to 9%,
• Doubtful (E-), compromised doubtful (E=) and bad loans (F), total 1% to 6%.
This breakdown remains stable in comparison with previous years, with a slight improvement in the profile of higher risks (D+ to E+). The category for private individuals and legal entities improved its average risk profile very slightly.
A+A-B+B-
C+C-
D+D-E+E-
E=F Private individuals
€7 336 millions1%
0%
0%
2%
3%2%
5%
9%
18%
20%33%
6% A+A-B+B-
C+C-
D+D-E+E-
E=F Farmers
€740 millions0%
0%
3%
2%
3%
4%
5%
7%
7%
12%
21%
37%
A+A-B+B-
C+C-
D+D-E+E-
E=F Non-trading
property companies (SCI)€824 millions
3%
3%5%
6%
13%
15%
10%
27%
15%
2%0%
1%
A+A-B+B-
C+C-
D+D-E+E-
E=F Associations
€33 millions6%
0%
0%
9%
3%
4%
12%
5%
10%
30%
18%
3%
Individual Business Persons€734 millions
A+A-B+B-
C+C-
D+D-E+E-
E=F 4%
0%
1%
5%6%
4%
8%
5%
7%
9%
18%
35%
Legal entitiesand Corporate€2 517 millions
A+A-B+B-
C+C-
D+D-E+E-
E=F 2%
0%
1%
3%
4%
8%
12%
13%
16%
14%
16%
11%
28
The overall breakdown of credit risk by business sector for the same area is as follows:
in thousands of €
Quality of risks 31/12/11 31/12/10
Debts written down individually 396 924 447 053
Provision for individual writedowns - 257 021 - 283 165
Collective provision for debts - 17 210 - 17 595Overall level of cover 69.1% 67.3%Level of cover (individual provision only) 64.8% 63.3%
Risks
Privateindividuals
Housing57% Private
individualsConsumer
10%
Professional +services + retail
17%
FarmingFood6%
Transport3%
Industry + BTP4%
Others3%
Follow-up of credit risks 31/12/11 31/12/10 VariationLoans and debtsCredit establishments 3 438 859 3 380 706 58 153 1.7%Customers 12 666 884 12 607 783 59 101 0.5%Gross exposure 16 105 743 15 988 489 117 254 0.7%Provisions for writedowns -274 231 -300 760 26 529 -8.8%Credit establishments - - - Customers -274 231 -300 760 26 529 -8.8%Net exposure 15 831 512 15 687 279 144 233 0.9%Financial commitments givenCredit establishments 64 960 78 921 -13 961 -17.7%Customers 1 110 812 900 992 209 820 23.3%Guarantee commitments givenCredit establishments 19 470 38 756 -19 286 -49.8%Customers 123 409 184 656 -61 247 -33.2%Provision for risks on Customer commitments -1 051 -760 -291 38.3%Net exposure 1 317 600 1 202 565 115 035 9.6%Debt securitiesGovernment securities 186 870 104 612 82 258 78.6%Bonds 9 555 700 9 732 206 -176 506 -1.8%Derivative instruments 37 987 24 129 13 858 57.4%Pensions & loans of securities - 0 - Gross exposure 9 780 557 9 860 947 -80 390 -0.8%Provision for writedown of securities -64 572 -5 215 -59 357 1 138.2%Net exposure 9 715 985 9 855 732 -139 747 -1.4%
in thousands of €
Payment arrears 31/12/11
NBV of assets written down
Total assets that are the subject of payment arrears
and assets written down
Guarantees and other credit
raisings received relative to assets
written down
Less than
3 months
3 months to
6 months
6 months to 1 year
More than
1 year Total
Equity capital instruments 29 882 29 882 0Debt instruments 0 0 0 0 0 5 827 5 827 0Loans and advances 319 562 21 120 12 874 979 354 535 139 949 494 484 372 633of which large corporations and similar 99 283 3 242 458 916 103 899 11 697 115 596 101 655
of which retail customers 220 279 17 878 12 416 63 250 636 128 252 378 888 270 978ToTAL 319 562 21 120 12 874 979 354 535 175 658 530 193 372 633of which actual non-payment on due date 9 849 1 906 1 123 393 13 271
Annual Report
2011 11
29
> Market risks Management of the CMNE group’s refinancing is centralised at the Caisse Fédérale, for transactions by the French, Belgian and Luxembourg entities. The back-office side of these transactions is centralised in Lille.
There are two types of transaction handled by the Group Treasury Department:
• One: the Group’s medium and long-term refinancing transactions and, more generally, assets-liabilities management transactions designed to control the margin of intermediation based on the figures for the risk rate and liquidity analysed by the Finance Committees for each entity in the Group.
• Two: own account transactions conducted on behalf of the Caisse Fédérale or BKCP.
These transactions fall into two groups:
• Arbitrage transactions structured to generate only a marginal rate risk while still extracting their prof-itability from the taking of a counterparty risk and a liquidity risk. This type of transaction only concerns the Caisse Fédérale and comes under the direct responsibil-ity of the Group treasurer, who receives an allocation of equity capital, an overall limit on outstanding funds and a standard framework for authorised transactions for the purpose.
• Investments in dedicated OPCVM products managed by La Française AM in SCPIs, shares, bonds and negotiable debt securities or structured products. These are always implemented in the context of the finance committees of the entities concerned and hence are the result of a collective decision. Investments in bonds and similar securities are particularly important for BKCP on account of its high level of deposits collected through passbook deposit accounts.
Structural management transactions on the balance sheet, as well as transactions as conducted as principal, come under the tight control of the Group’s Finance Committee and are the subject of individual reports that are then merged to measure the liquidity risk.
Counterparty risk At the proposal of the Risk Department, counterparty limits are agreed by the Group’s Finance Committee. The methodology used to define risks is based on the internal rating of major counterparties, as redefined by Crédit Mutuel’s National Confederation within the context of Basle II ratification. The centralisation of CMNE’s risk through the overall control of risk in turn feeds the centralised counterparty risk management for the whole Crédit Mutuel – CIC Group.
In June 2011, the Finance Committee modified the ceiling for unit risks and now refers to the equity capital of the Caisse Fédérale, Crédit Professionnel SA and Nord Europe Assurances, rather than the Group’s consolidated equity capital. Thus, while still remaining within the national reference framework for banking limited imposed by Crédit Mutuel’s National Confederation, each part of the overall business has rules that are consistent with the development of its outstanding funds and its equity capital. This system was approved at the meeting of the Board of Directors held in December 2011 as part of its annual review of the CMNE Group’s policy on risk.
As a result, the overall limits became:
• State risk: 100% of the equity capital of each part of the business,
• Bank risk: minimum of between 100% of the equity capital of each part of the business and a proportion of the national guideline set by the CNCM,
• Corporate risk: 10% of the equity capital of each part of the business for risks taken in the context of market activities.
These limits are intended for A+ risks (Crédit Mutuel – CIC internal rating) and are then scaled down based on the rating of the counterparties.
For corporate risk taken as part of market activities, the Federal Board of Directors approved the rules, taking account of the issuer’s rating, the volume of bonded debt issued, the business sectors of the issuers and the outstanding funds of the insurance company. For most corporate counterparties, this restricts the unit risk to €55 million. On an exceptional basis and for investments by the insurance company, the unit risk may rise to as much as €260 million for a very limited number of public or quasi-public companies.
30
Market risk All of the transactions conducted by the Treasury Department as part of its own management as principal, or entrusted to La Française AM as part of dedicated management, are carried out in a specific context defined by the Group’s Finance Committee and are the subject of a report submitted monthly to the Committee, which includes five of the seven members of the management committee. Twice each year, a presentation is made to the Board of Directors of the whole of the financial risks carried by the Caisse Fédérale. In addition, the Board of Directors has decided on an overall allocation of equity capital to market activities of up to €185 million for the banking book and €95 million for the trading book. Business where the Group acts as principal is divided into two parts. One: an arbitrage business on European money market securities (eurozone), conducted exclusively by the CMNE Caisse Fédérale; and two: medium or long-term investments in dedicated OPCVM products, direct shares, bonds and negotiable debt securities or structured bonds. These medium and long-term investments are accommodated both within the Caisse Fédérale and at BKCP. There is also a portfolio of de CDOs of €7.5 million. These investments are accommodated within the Caisse Fédérale. Based on assumptions common to the whole of the Crédit Mutuel – CIC Group, CMNE conducts a stress impact measurement test each quarter. Five stress tests
from the past (1994 rate rise, 1997 Asia crisis, 1987 Black Monday, 11th September 2001, subprime crisis) and four hypothetical stress events (fall in share prices of 25%, rise in credit spreads of 100 bp, increase in rates of 50 bp, rate cut of 50 bp) are measured in the tests. The three most punitive of these are Black Monday, the subprime crisis and the 25% fall in the share market, with a negative varying between €10 and 21 million on the profit-and-loss account and between €8 and 19 million on equity capital.
Arbitrage
Arbitrage transactions, which are carried out based on terms of between three months and three years, consist of buying negotiable credit instruments or variable-rate or fixed-rate bonds converted into variable rates through rate swaps, financed by the regular issue of investment certificates with terms at the outset of between one and six months. The maximum outstanding amount in this arbitrage portfolio, set by the Group’s Finance Committee, is €1.2 billion, while its actual outstanding remained stable at around €1.1 billion. Its average consumption of equity capital for credit risk was €23 million, significantly less than the allotted limit of €30 million. Arbitrage generated a result estimated at €7.3 million.
The duration of securities purchased (75% are equal to or less than two years), as well as the bulk of securities at indexed rates, provides very strong insurance against market risks in the sense of regulation 95-02, since the
Risks
For the whole of the CMNE Group, banking and insurance combined, the counterparty risk is broken down as follows:
Sovereign (9%)€959 millions
Total outstanding€10 395 millions
A+
13%
A-
36%B+
33%
B-
4%
C+
5%
A+
78%
B+
8%
Financial institutions (79%)€8 258 millions
Corporates and insurance (11%)€1 178 millions
A+
4%A-
4%
B+
26%
B-
10%C+
21%
C-
23%
C-
3%C-
4%
D+
8%
D+
2% D-
3%D-
1%
N.C.
2%
D+
2% E+
1%
C+
4%A+
7%
A-
45%B+
37%
B-
3%
B-
2%
E+
7%
N.C.
1%
Annual Report
2011 11
31
NPV sensitivity of this portfolio is approximately 1%. The rate risk is practically zero and the liquidity risk is monitored very closely as part of overall liquidity risk management procedure.
Bonds portfolio
The following table summarises the gains and losses at 31st December 2011 on bond portfolios affected in accounting terms by “marked to market”.
In millions of €
Capital valued at 31/12/2011
Variation in value compared with 31/12/2010
AFSportfolio
JVORportfolio Total Equity
capital
Profit-and-loss
accountTotal
France: arbitrage 879 879 - 8.8 - 8.8
France: invest. 33 138 171 - 3.4 - 1 - 4.4
Belgium: invest.
396 9
396 9
- 15.6 + 7.9* -0.4
+ 0.7 - 0.4
ToTAL 1 308 147 1 455 - 27.8 + 6.5 - 21.3* latent gain associated with cover swaps of securities classified in the AFS
portfolio
Dedicated OPCVM
CMNE’s Caisse Fédérale now holds only three dedicated funds managed on its behalf by La Française AM after the Richebé 2011 fund matured in December. The total outstanding amount of these funds at 31st December 2011 was €250 million, but the negative performance of Richebé Gestion ended with an overall loss of €8.7 million.
The Richebé fund represents an outstanding amount of €208 million and is dedicated to dynamic cashflow management, generating a negative yield of minus 5.76%. BKCP also holds €15 million of this fund.
The Nord Europe Gestion fund represents an outstanding amount of €37.5 million and acts as counterparty to CMNE customers on a number of funds skewed towards equities. The fund has no specific management orientation. It generated a yield close to 1%. The outstanding funds within this fund are guaranteed in capital up to €21 million.
The Richebé Recovery fund was created in April 2009 to take advantage of the recovery of certain alternative funds affected badly by the financial crisis. Its outstanding funds are designed to reduce as this segment of the market recovers. The fund now has €4.5 million only and yielded 10.8% in 2011.
Shares
The Caisse Fédérale holds approximately 1% of CIC securities directly acquired for an average historic value of €50 million. These securities represent a holding in a common entity of the Crédit Mutuel – CIC group. Taking account of the low volume of activity handled on the market, the market value has not been used to value this holding, which as a consequence is valued based on the net asset per share. This value is almost 2 times greater than the acquisition price and any variation in value has an effect on equity capital. Excluding CIC securities and the share of securities contained in dedicated OPCVM
products (trading book), the share risk was €37 million at 31st December 2011, in market value. This is made up of the share component of the OPCVMs, representing the investments made on behalf of CMNE and BKCP (banking book).
CDO portfolio
CNME’s portfolio of CDOs now consists only of “Regent Street” and “New Court” vehicles from KBC Bank with a par value of €12 million and a net book value of €7.5 million. Booked as securities held to maturity in France, their variation in value affects neither equity capital nor the profit-and-loss account. Only the Regent Street securities are totally or partially funded, depending on the tranches. The New Court securities continued to bear a latent loss of €3.6 million as of 31st December 2011.
Other investments
Other investments on the bank’s own behalf realised from collective media (rate products, alternative management or SCPI stocks), represented a total of €182 million in market value. CMNE also holds a portfolio of structured securities valued at €302 million, which carry €19 million of latent losses. There were no speculative foreign exchange transactions.
Downgraded securities
CMNE’s downgraded securities now consist only of ‘C’ and ‘A’ in the Regent Street securitisation, representing €2 million and €4 million of par value respectively. The two tranches were the subject of an additional provision, reaching 95% on the ‘C’ tranche and 65% on the ‘A’ tranche.
Outstanding funds on countries at risk in the eurozone
Within the CMNE Group, only the Insurance business holds Greek sovereign debt to any significant extent (€75.6 million in par value). The Richebé Gestion fund and BKCP hold €5 million and €2.5 million respectively. The Caisse Fédérale holds none.
The agreement reached on 21st February 2012 on the restructuring of Greek debt prompted each entity holding securities of this nature, including Insurance, to value them based on market price, resulting in an average writedown of 72% of outstanding funds at par. As the securities held by Richebé Gestion are accounted for as JVOR assets, any variation in the value of these securities has an impact on the profit-and-loss account. The situation in other European countries benefiting from the EU-IMF aid programme cannot be compared with the situation in Greece. The assessments made by the IMF and ratings agencies highlight this differentiation and, as a result, these countries are not the subject of any writedowns.
As a result, these securities remain entered as assets available for sale and any variation in their value impacts equity capital negatively amounting to €3.3 million for Portugal, €3.7 million for Ireland, €1.3 million for Spain and €8.1 million for Italy.
32Risks
Liquidity riskIn thousands of €
31/12/11
Residual contractual maturities ≤ 1 month > 1 month ≤ 3 months
> 3 month ≤ 1 year
> 1 year ≤ 2 years
> 2 year ≤ 5 years > 5 years Unspecified Total
Assets
Financial assets held for transaction purposes 256 577 1 021 2 130 1 106 126 0 0 260 960
Financial assets designated at fair value through the profit-and-loss account 0 0 0 44 666 70 616 32 990 43 148 315
Financial assets available for sale 47 243 115 148 336 881 302 974 301 105 391 344 417 441 1 912 136
Loans and debts (including finance lease contracts) 1 108 367 543 670 1 307 402 1 408 386 2 952 944 8 254 358 290 450 15 865 577
Investments held to maturity 92 026 224 041 327 770 259 933 784 758 112 465 955 1 801 948
Liabilities
Deposits from central banks 0 0 0 0 0 0 0 0
Financial liabilities held for transaction purposes 205 3 691 7 526 11 371 15 138 880 0 38 811
Financial liabilities designated at fair value through the profit-and-loss account 0 0 0 0 0 0 0 0
Financial liabilities valued at depreciated cost 11 204 179 1 816 571 2 484 067 646 106 1 444 996 1 516 861 38 389 19 151 169
Liquidity risk CMNE measures its liquidity risk based on three time parameters:
• In the long term by applying the national provisions of the Crédit Mutuel – CIC Group aimed at managing the conversion of liquidity. The general principle here consists of disposing of all assets and liabilities based on the conventions already used in the context of rate risk measurement and also measuring a ratio of the application of funds equivalent to different maturity terms. This measurement is carried out on a static base and the 5-year ratio must be greater than or equal to 87%. Measured each quarter, it is regularly in excess of 100%.
• In the short term, also by applying a national scenario for liquidity stress aimed at measuring the impact over a time period of 3 months of the sudden disappear-ance of 10% of customer at-call resources. The resulting cashflow requirement must remain below the ECB’s repurchase capability.
• In the very short term by calculating the regulatory liquidity ratio at 1 month, which must be greater than 100%. In 2011, this figure remained stable at around 200%.
In terms of refinancing, the CMNE’s Caisse Fédérale, which has two programmes approved by the Bank of France to issue deposit certificates (€3.8 billion) and NMTN (€2.5 billion), as well as a programme approved by the FMA to issue bonds (€4 billion), holding outstanding securities eligible with the ECB for approximately €1.5 billion. Crédit Professionnel SA rounds out this device with outstanding funds of approximately €400 million. The Caisse Fédérale du CMNE also holds market assets that can be disposed of in the short term worth approximately €1.6 billion. It also has a refinancing of around €600 million with the Housing Refinancing Funds.
Finally, on 26th March 12012, the Board of Directors approved the implementation of a Common Securitisation Fund (CSF) for €1 billion. This represents the raising of the CMNE network’s mortgage debts. Funds should start being issued from the CSF during the summer of 2012, half at 4 years and half at 7 years.
Annual Report
2011 11
33
Rate risk The aim of risk rate management is to protect the margin generated by the various activities of the banking arm of the business. Each company within this area of business has its risk analysed by a specific Finance Committee on a quarterly or six-monthly basis, depending on the size of the company or the inertia of its balance sheet structure. The Committee for each company decides on the implementation of rate cover, such as liquidity.
The CMNE Group measures the rate of risk using the sensitivity of the net interest margin (NIM) and the sensitivity of the net present value (NPV). The latter of these makes it possible to measure overall risk in the sense of regulation 97-02 and the Basle II regulations. These measures are subject to regulatory limits (NPV) or management limits (NIM) in accordance with the recom-mendations of Crédit Mutuel’s National Confederation and the Prudential Monitoring Authority.
The following limits apply identically to all of the Group’s banking subsidiaries.
• NPV: a linear movement in the rate curve of 200 bp may not represent more than 20% of equity capital. The equity capital retained must be consistent, in terms of consolidation, with the risk rate basis analysed.
• NIM: a linear movement in the rate curve of 100 bp must not induce sensitivity in excess of 5% of net banking income for the consolidation being analysed for the year underway and for the two subsequent years. Added to this limit is a risk indicator equivalent to 10% of the NIM for the consolidation being analysed for the year underway and for the three subsequent years.
These limits were complied with in 2011 with an NPV sensitivity VAN below 10% and a NIM sensitivity below 5% at all times for each quarter observed.
CMNE also supplemented its NPV sensitivity analyses with curve distortion simulations (rate variations at 3 months, 3 years and 7 years, based on stress of +1% or -1%). The process used was aimed at identifying scenarios featuring elevated NPV variations. This work showed up only minor variations in NPV, consistent with the results already observed.
> Operating risks The aim of managing operational risks at CMNE is to avoid a major claim, or series of claims, creating a threat to the Group’s financial results and hence its future development.
To achieve this aim, CMNE applies the operating risks management system developed by Crédit Mutuel – CIC, which meets the requirements laid down in the Basle II regulations. The Crédit Mutuel – CIC Group has drawn up a reference document entitled “Sustainable Mode Procedure”, which sets out the responsibility of the management bodies and periodic auditing, both nationally and regionally, as well as the role and positioning of the management function of operating risks, the method used for measuring and controlling operating risks, reporting and overall guidance.
Within CMNE, the main points of this process are as follows:
Organisation for managing operating risks within the Group:
The job of the Risk Control Function is to manage operating risks. It implements the methods and tools developed by Crédit Mutuel – CIC. It logs any operating incidents and lists them in the risk management tool. The Risk Control Function instigates the work of the operating risk managers in the Group’s subsidiaries. It also takes part in work carried out nationally, as well as by CMNE’s Operating Risks Committee. This latter Committee meets regularly and provides coordination, communication and reporting on the work carried out for General Management (business continuity plan, crisis management). Working for the Risks Department, the Committee is made up of the person in charge of the Group’s insurance programmes and all of the operating managers who may be involved directly in a crisis situation. If required, the Committee also includes any specialist structures required, depending on the topic being dealt with.
Information system and operating risk management tool:
The operating risk management tool incorporated into the IT system has logged all claims and incidents that have occurred since 2001. The documentary databases relating to the tool, risk mapping and modelling and the business continuity plan process are shared by the whole of Crédit Mutuel – CIC. The aim of this mapping is to identify the risk areas in a consistent manner, by type of business line and by event (in the sense of Basle II) and to assess the overall cost of risk. A general procedure for gathering claims has been established at a Crédit Mutuel – CIC level. This document sets out the general definition of the operating risk produced by the Basle Committee and sets standards for the data to be entered in the Riskop tool relative to claims for a unit amount in excess of €1 000.
34Controls and audits
Programmes to reduce and fund risks:
The reduction of risks is based on effective preventative programmes identified in particular when carrying out risk mapping and implemented directly by operating staff via internal audits. Protection programmes are aimed mainly at disseminating and regularly updating the continuity plans for the “business lines” and “support” activities. A crisis management procedure within the Group has been defined to deal with the two potentially most serious crises: a total crash of the entire computer system and the major destruction of head office premises. The procedure was tested in 2011 and will result in a number of modifications. The funding of risks is based mainly on an appropriate insurance policy. CMNE Group insurance covers the three main risk areas: people, liability and assets.
In terms of operating risk and net of any insurance recovery, the CMNE Group recorded €4.3 million of losses in 2011. This figure included a €2.1 million case of fraud in Belgium, absorbed by insurance in 2012. In addition, the provision stock at 31st December was €7.1 million.
> Provision for disputes Following an agreement reached in April 2011, the dispute that had been running for many years between CMNE and Banque Delubac was finally concluded and CMNE is no longer a shareholder of Banque Delubac.
Note 18 on page 98 of the accounts annexe outlines the details of the terms and effects of the agreement reached between the parties. This is done with the full knowledge of the supervisory authority.
The way Level 2 internal audits are organised is based around central structures that handle ongoing audits and compliance, and dedicated structures put in place within each of the Group’s business areas. The actions of these structures are coordinated by the Ongoing Audits and Compliance Control Committee, placed under the authority of the General Secretary, responsible for the CMNE Group’s risk support line. Between the three departments at a Caisse Fédérale level and the staff seconded operationally in the subsidiaries, there are now 50 staff working on Level 2 internal auditing.
> Compliance controlThe Compliance Control Department covers three major areas: compliance per se, anti-money-laundering and auditing investment services.
In 2011, the main topics dealt with by this department were as follows:
• Extension of the procedure for centralising malfunc-tions at BCMNE.
• Checks on compliance with the rules of proper conduct relating to assessment of the appropriate nature of the investment advice given when selling FIP and FCPI investment products.
• Monitoring compliance with professional standards relating to banking mobility.
• Mapping the major risks involved in insurance interme-diation.
• Updating and regular communication of the operating procedures and methods on combating money-launder-ing. Ongoing staff training.
> Ongoing audits The role of the Ongoing Audit Department is to define the nature and frequency of the points of audit that have to be followed by operating managers. The Ongoing Audit Department is also required to organise the reporting side and conduct quantitative and qualitative checks on the content of these audits. This role is carried out in the three major areas of operating risks, credit risks and market risks, as well as in non-compliance risk and the risk associated with information systems (SMSI).
In 2011, the main programmes conducted by this department were as follows:
• Extension of the internal audit portal to include the Business Advice Spaces (BAS).
• Rollout of a module to monitor corrective action. • Implementation of internal quality control monitoring
at local branches, enabling local branch boards to be involved more effectively in this monitoring.
• Completion of the review looking at the IT skills of staff at Bancassurance France.
• Definition and dissemination of the major risks reference system for all Group companies.
� Controls and audits
Annual Report
2011 11
35
> Risk control The purpose of the Risk Control Department is to deal with questions relating to the back-office side of deals, as well as issues relating to risk monitoring.
The back office checks the transactions carried out by the dealing room and then ensures they are completed, both for the Caisse Fédérale and for BKCP (Belgium) and La Française AM Private Bank (Luxembourg).
Risk monitoring is responsible for checking rate, liquidity and market risks in dealing room activities, Basle II reporting and reports on the credit dimension and equity capital intended for the finance committee. It also deals with qualifying claims reported by the various correspondents in the RISKOP tool and maintains business continuity plans (BCPs) for Bancassurance France and Business Finance, as well as supervising the BCPs of the Group’s other business areas. It was for the purpose of maintaining these BCPs that this department was the spearhead for a crisis management test conducted in September 2011.
> Periodic audits Audits of the local branch network62 local branches, or 39 % of the network, were the subject of an audit assignment. 31 of these assignments were in the form of a full audit, while 31 others were topic-based. 4 Business Advice Spaces were also audited.
As part of these audits, the main points for improvement identified were the following: completeness of customer records, conformity or regulated credit applications, controls over cost of risk, improvements in organisational efficiency following the removal of back-office positions in local branches. 83 recommendations were made.
During the topic-based assignments, 64 recommenda-tions were made on 4 main topics.
Audits of “business line” entities The Periodic Audit Department for the CMNE Group’s business lines conducted 29 audit assignments, including 16 in the subsidiaries.
These assignments, which affect all Group entities, related in the main to the purchase of life insurance products, the management of guarantees, measuring the profitability of market transactions, the IT system at La Française AM, monitoring risks at Bail Actéa, the commissioning of authorised agents at BKCP.
The monitoring assignments conducted in 2011 missions revealed that 92% of the recommendations made during network audit assignments and 84% of those made during auditing assignments of business lines and subsidiaries had already been put in place or were underway.
Audits of branches and business lines in Belgium The scope of BKCP is now 43 branches and 299 staff, as well as 28 authorised agents.
The extension of audit points in 2011 and the continued reorganisation of the network highlighted a certain number of weaknesses in the way internal audits are organised and conducted, both for the branch network and for authorised agents. Specific work was begun in September 2011 to implement the recommendations made by the National Bank of Belgium.
36
� Structure of staff within the Group
> Breakdown by business area
31/12/2010 31/12/2011Open-ended
contracts
Fixed-term
contractsTotal
Open-ended
contracts
Fixed-term
contractsTotal
Bancassurance France 2 730 150 2 880 2 735 105 2 840Bancassurance Belgium 323 7 330 331 2 333Business Finance 151 3 154 158 3 161Insurance 235 5 240 241 3 244Third-Party Management 615 23 638 423 17 440Miscellaneous Services and Businesses 33 3 36 9 1 10ToTAL GRoUP HEADCoUNT 4 087 191 4 278 3 897 131 4 028
Overall, Group staff number were down by 5.8% at 31/12/2011, which is explained mainly by the disposals of UFG PM (194 staff on open-ended contracts) and SNP Sicorfé (36 staff). Bancassurance France represents more than 70% of total headcount, with Third-Party Management nearly 11%, Belgium approximately 8%, Insurance 6% and Business Finance 4%.
> Breakdown by gender and status
Open-ended contracts at 31/12/2010
Open-ended contracts at 31/12/2011 Variation
Men Women Total Men Women Total 2011/2010
Managers 1 057 457 1 514 1 031 430 1 461 -3.5%Bank officers or Supervisors 766 635 1 401 727 639 1 366 -2.5%Employees 361 811 1 172 326 744 1 070 -8.7%ToTAL oPEN-ENDED CoNTRACTS 2 184 1 903 4 087 2 084 1 813 3 897 -4.6%
Women with open-ended contracts represented 46.5% of headcount. Manager represented 37.5% of headcount with open-ended contracts within the Group, with Bank Supervisors representing 35% and employees 27.5%.
> Breakdown by age Headcount with open-ended contracts at 31/12/2011
0 100 200 300 400 5000 100 200 300 400 500Under 25 25 to 30 31 to 35 36 to 40 41 to 45 46 to 50 51 to 55 56 to 60 Over 60 52
259
263
283
353
425
281 439
149
19
18
177
180
209
205
241
286
58
Men Women
100200300400500
The average age of employees with open-ended contracts at the end of 2011 was approximately 41.13% of employees with open-ended contracts were aged under 31, 35.5% were between 31 and 40, 38.5 % between 41 and 55 and 13% were aged over 55.
Employment-Related Information
Annual Report
2011 11
37
> Breakdown by years of service Headcount with open-ended contracts at 31/12/2011
Men Women
0 100 200 300 400 500500 400 300 200 100 0Less than 1
01 to 05 06 to 10 11 to 15 16 to 20 21 to 25 26 to 30 Over 30
224
89
402
480
232
99
150
137
321
78
327
354
364
234
201
205
The average length of service for employees with open-ended contracts is just a bit less than 10 years.
> Working hoursPart-time
31/12/10 31/12/11Men Women Total Men Women Total
Managers 7 55 62 9 47 56Bank Officers or Supervisors 6 152 158 8 169 177Employees / Non-managers 15 166 181 20 162 182Staff on fixed-term contracts 1 9 10 2 4 6NUMBER oF PART-TIME EMPLoYEES 29 382 411 39 382 421
The main reasons for working part-time were parental leave, study leave and leave for personal convenience. After a significant increase in the number of part-time workers in 2010 (+ 6%), the increase in 2011 was 2%. Part-time staff represent approximately 10.5% of the group’s total headcount (9.6% in 2010).
> Employment management Recruitments on open-ended contracts
31/12/10 31/12/11Men Women Total Men Women Total
Managers 100 50 150 67 34 101Bank Officers or Supervisors 6 19 25 7 13 20Employees / Non-managers 19 40 59 33 93 126NUMBER oF STAFF RECRUITED oN oPEN-ENDED CoNTRACTS 125 109 234 107 140 247
In 2011, almost 41% of new employees hired were for management positions. The employment rate for women was approximately 57% (compared with 46.5% in 2010).
38
> Departures of staff on open-ended contracts
2010 2011Managers Officers Employees Total Managers Officers Employees Total
Severance of contract 15 3 4 22 17 1 10 28Resignations 29 20 27 76 40 14 33 87Redundancies for economic reasons 9 0 18 27 0 0 0 0Redundancies for other causes 14 4 10 28 13 9 23 45Departures during trial period 3 4 3 10 5 1 9 15Departures for pension or early retirement 13 17 17 47 15 16 8 39
Group transfers 2 1 1 4 1 0 4 5Death 0 4 3 7 2 3 2 7Disability 0 2 1 3 0 0 0 0NUMBER oF DEPARTURES FoR STAFF oN oPEN-ENDED CoNTRACTS 85 55 84 224 93 44 89 226
> Promotions within the Group
2011Men Women Total
Employees promoted to Bank Officers/Supervisors 24 51 75Bank Officers/Supervisors promoted to Managers 37 17 54Employees to Managers 4 7 11ToTAL 65 75 140
� Individual and collective remuneration
> Average individual remuneration in €
2011 Bancassurance France All businesses
Men Women Total
Managers 56 563 51 010 55 519Bank Officers or Supervisors 37 411 36 245 36 974Employes / Non-managers 28 738 27 278 27 771ToTAL 44 254 35 181 40 826 45 163
> Collective remuneration in €
2011 Amount Average amount Shareholding 5 186 430 1 394Incentive 16 815 538 4 540Employer contribution to savings scheme 4 612 842 1 459
Employment-Related Information
Annual Report
2011 11
39
� Absenteeism
in calendar days
2011Men Women
Total Managers Officers Employees Total Managers Officers Employees Total
Illness 5 718 6 596 4 758 17 071 5 559 9 811 14 331 29 700 46 771Accident at work or travelling to/from work 62 116 31 209 102 749 111 962 1 171
Maternity/Nursing/Paternity 404 470 159 1 033 3 607 6 531 9 249 19 387 20 420Unpaid leave (*) 367 474 91 932 1 447 1 331 6 193 8 971 9 903Other absences (**) 634 495 270 1 399 377 437 791 1 605 3 004ToTAL DAYS 7 185 8 151 5 309 20 644 11 092 18 859 30 675 60 625 81 269
(*) Unpaid leave is understood to mean parental leave, sabbaticals, business creation, etc. (**) Other absences, paid or unpaid: birth, marriage, sick child, house move, or any other family event provided for under the Collective Agreement
Absence on account of illness represented 57.5% of the total number of days of absence, with maternity/paternity leave accounting for 25%, unpaid leave 12%, other absences (under contract) 3.7%. The Group’s rate of absence for illness in 2011 increase very slightly, with a rate of 3.2%, compared with 3.1% in 2010.
� Training
Number of trainees attending at least one course during the year:
2011Men Women Total
Managers 1070 524 1594Bank Officers or Supervisors 686 598 1284Employees 351 768 1119ToTAL 2107 1890 3997
The average percentage of the wages bill devoted to training was 4.3%.
40
� Enterprise agreements or amendments signed in 2011
Bancassurance France (agreements applying to both CFCMNE and BCMNE): 5 agreements or amendments were signed: • Pay agreement – signed on 9th February 2011 by the CFDT, CFTC and SNB • Agreement relative to the employment and integration of persons with a handicap within CMNE – signed on 13th July
2011 by the CFDT, CFTC, SNB and SUD Banques • Amendment to article 18 of the CMNE Collective Agreement (time savings account) – signed on 29th September 2011
by the CFTC and SNB • Amendment to the PERCO agreement – signed on 29th September by the CFTC • Agreement relative to the prevention of stress in the workplace and psychosocial risks – signed on 14th December 2011
by the CFDT, CFTC and SNB
Business Finance: 6 agreements or amendments signed for Bail Actéa: • NAO (Mandatory Annual Negotiations) agreement 2011 • Amendment N° 1 to the incentive agreement • Amendment N° 3 to the shareholding agreement • Amendment N° 4 to the Company Savings Plan • Amendment reviewing the Time Savings Account • BAIL ACTEA enterprise agreement relative to the professional equality of Men/Women
Insurance: 2 amendments signed for ACMN VIE: • Incentive amendment • Shareholding amendment
Third-Party Management: 5 agreements or amendments signed for La Française AM group: • Agreement to extend the mandates of staff representatives, signed by the CFTC on 31/01/2011 • Amendment N° 1 to the incentive agreement of UES UFG LFP, signed by the secretary of the Works Council on
30/06/2011 • Amendment N° 1 to the agreement of staff participation in the company results of UES UFG LFP, signed by the secretary
of the Works Council on 30/06/2011 • Collective agreement on the introduction of a profit-sharing bonus within La Française AM Finance Services, signed on
26/10/2011 • Agreement to extend the mandates of staff representatives, signed by the CFTC on 31/12/2011
1 agreement for UFG SIPAREX : • Agreement on incentives and company savings plan
Miscellaneous Services and Businesses: 1 agreement signed for CMN TEL: • Agreement regarding annual pay negotiations, signed on 28/03/2011
Employment-Related Information
Annual Report
2011 11
41
On 20th October 2011, at the presentation of the Strategic Plan 2015 to all elected members and staff, Philippe Vasseur, Chairman of CMNE, reiterated the importance of corporate social responsibility: “CSR is a great lever for giving direction to what we do and guiding us resolutely towards the future. The MTP 2015 will enable us to continue our aim of bringing together social and business aspects, as well as responsibility and profitability.”
Crédit Mutuel Nord Europe, traditionally and by vocation, is extremely active in a range of areas that form the applications of the company’s social responsibility. The new economic and social setting reinforces the legitimacy of mutualistic values and gives full sense to the notion of corporate social responsibility. Simply by conducting its business, CMNE intends to accept its corporate and environmental responsibility as a major French company. CMNE is working to preserve the environment and places socially responsible investing at the forefront of the way it manages assets. As a supportive and philanthropic company, CMNE will be launching a Foundation in 2012 designed to strengthen its action in these areas.
A bank working on behalf of its customers Fundamentally different, Crédit Mutuel is regularly acknowledged for the quality of the way it receives and listens to customers, as well as the excellent availability of its advisers. CMNE devotes particular importance to handling complaints from its customers so that it is able, wherever possible, to give satisfaction to justified requests, resolve any malfunctions that may occur and focus on gaining the loyalty of its customers.
A bank that listens to its staff CMNE encourages equality between men and women, promotes the integration of the disadvantaged and defends the notion of wellbeing in the workplace. Among the programmes conducted 2011, on 13th July CMNE signed an agreement relating to employment and the integration of workers with a disability. The social partners have planned a number of programmes that work in favour of employees who have a handicap. These include the attention paid to professional training, guidance processes designed to provide aid in recruitment and professional mobility, and closer monitoring of employee health. In addition, CMNE has improved the working conditions for staff and made it easier to access premises. A further agreement was signed on 14th December 2011 in relation to the prevention of stress at work and psychosocial risks. Aware of the commitments of employees outside their working lives, CMNE has also decided to develop support programmes. For example, the ‘Planète Urgence’ programme enables employees who also devote time to work as volunteers to apply for support leave so that they can lend their skills to campaigns in the field (e.g. teaching people to read and write in Africa). As part of the partnership with the Alliances Network, CMNE staff help and guide young people who are finding it difficult to integrate through dynamic recruitment groups.
A bank firmly attached to its local area through its elected members With the aim of providing the best possible response to the needs and expectations of its shareholders, participation within the company is a decisive factor in the way CMNE works. The representativeness of our 1776 volunteer directors who sit on 160 boards within the company is an essential criterion in this area.
The wind of change that has blown through these boards in recent years has seen their representative members become younger and include a greater number of women. As the highlight of life within the group, in 2011, the various general meetings were attended by over 30 000 shareholders, which was slightly more than in the previous year. “Open Door” events were held by one-third of local branches. Training our elected members is another special way of helping our directors to perform better in their role. As part of the training plan, a course dedicated to the issues of CSR was run on 5th November 2011.
A bank committed to providing support Crédit Mutuel helps disadvantaged people living on the margins of our society to remain in the economic mainstream. Microcredits are provided to remedy situations where there is a lack of security, thereby enabling people to access or return to the workforce. In 2011, the CMNE Solidarity Fund granted 245 microcredits and signed two new partnership agreements with the Secours Populaire Français and Emmaüs support organisations. Running parallel to this, the programme of mutualistic support initiatives created in 2002 continued during the year. In 2011, based on proposals presented locally, over thirty programmes were given guidance in the seven départements on a range of topics (integration, health, support, etc.). CMNE is a longstanding partner of France Initiative, which is based on “local initiative platforms” (sponsoring business creators, funds to finance business creation projects: loans granted on a ‘gentleman’s agreement’, interest-free and with no guarantee) and the Second Chance Foundation, which provides assistance and guidance to individuals in highly insecure situations.
A bank that respects its environment Reducing our environmental footprint is all about investing sustainably on behalf of the planet. CMNE is committed to and encourages the introduction of responsible behaviour when it comes to consuming energy or paper for its customers. After paperless account statements, distributing documents via internet (DVI) and the development of electronic document management (EDM), in July 2011 CMNE introduced chequebooks made using FSC-certified paper. Also in 2011, all IT machinery in bank office was upgraded to “both-sides printing”. In the same way, the selective sorting of waste paper is now handled by Elise, a company that employs workers enduring hard times. The New Branch Design also features an energy-saving dimension (low-energy lightbulbs, limited lighting of signs at night, changes to air-conditioning units, double-glazing, etc.). CMNE is preparing for its Carbon Assessment in 2012
A bank developing socially responsible investingSocially responsible investing (SRI) is a range of ethical and responsible investment products. Through SRI, investors become interested not only in the financial criteria of profitability and risk, but also in the ethics and social and environmental impact of companies. As a result of its association with Banque Sarasin, itself a pioneer in sustainable development, La Française AM now goes even further in its commitment, developing a responsible process for proposing products, as well as providing practical and sustainable answers to the aims and constraints of investors.
Social Responsibility of the Company
42
2012 has all the hallmarks of being a pivotal year. Affected by the Greek debt crisis, Europe is at a crossroads, with the difficult problem of striking a balance between hardening its budget-related policies and providing the support needed for growth.
The return to worldwide growth, a situation that some people expect to see during the second half of the year, could come from the United States, which saw an upturn in job creation at the beginning of the year and signs of recovery in real estate. The Chinese economy continues its expansion strategy, with investments in Europe, which became the biggest target for Chinese capital in 2011.
The European Summit held on 9th December 2011 demonstrated that there is a political will to prevent the euro from imploding and to begin consistent, across-the-board reconstruction. Nevertheless, Europe remains fragile, with an economic situation that continues to deteriorate. The jolt to confidence caused by last summer’s crisis is still weighing heavily on industrial production, which has further to fall.
The ratings agencies drew their own conclusions. On 13th January 2012, Standard & Poor's downgraded France’s sovereign credit rating by one notch along with eight other European countries. In its annual report, the Court of Auditors highlighted the uncoupling of France compared with Germany in the area of debt (90% of GDP at the end of 2012) and called for fresh budget cuts (removing pensions totally or partially from the index, increasing the financial charge on health insurance policyholders, reducing subsidies to local government, etc.).
The ECB vigorously supported banks through long-term refinancing operations (LTRO). While they were required to increase their provisions against Greek debt, the banks continued their exchanges with the regulators, with France and Germany seeking a softening of some Basle III regulations in order to avoid a further credit crunch. These various elements all placed the launch of the new Medium-Term Plan “CMNE 2012-2015” in a particularly uncertain light. As a result, the Group is approaching this plan with caution tinged with confidence. In fact, the assessment of the previous 2011 plan has been mainly positive, with numerous projects bearing fruit. CMNE confirmed its position as a major player in retail banking in the north of France, returning solid results in spite of the various crises.
Éric Charpentier, General Manager, set the course for 2015: to better meet the needs of our customers and shareholders by adopting a varied approach (a range of channels, advice, etc.), to increase Group profitability by controlling risks and optimising equity capital, and to continue developing in a context of tighter regulation. The aims set by the MTP 2015, called “We all create value” and presented on 20th October 2011 at the Zénith arena in Lille, are based along four main lines: Proximity, Modernity, Profitability and Responsibility.
For Bancassurance France, the main issues are to develop customer relationship, innovate in its services and branches, develop a results-focused culture and mobilise all of the talents in the network and federal departments.
• The first priority, “Proximity”, consists of taking a more targeted approach and introducing personalised
communication through events at various stages of a customer’s life. This involves new segmentation, a rela-tionship plan geared to each type of customer and the organisation of distance relationships with customers who are not in the local area.
• Through the second priority, “Modernity”, CMNE aims to develop multi-access banking, with the branch at the heart of the process. Thought will be given in 2012 to creating a “Multi-Access Customer Relationship Centre”. The bank will also take full advantage of technologi-cal innovations (mobile banking, contactless payment, touchscreen tablets, etc.).
• The third priority for Bancassurance France, “Profita-bility”, consists of strengthening commercial efficiency across the organisation, improving processes to the sat-isfaction of customers and controlling costs.
• The fourth and final priority, “Responsibility”, will see the adjustment of business line skills and performance management. This will also involve the development of professional mobility, employing seniors and equality between men and women. Finally, CMNE will be seeking to develop its eco-responsible approach through CSR and its mutualistic commitment to society through the launch of a new Shareholder Charter and the creation of a Foundation.
For Bancassurance Belgium, the aim is change from being a product-based bank to become a customer-focused bank. In 2012, the bank will strengthen its offering by developing cross-selling, as well as its range of business products and distribution channels. On an operating level, it will improve its loans processes and optimise the way the branches operate. The acquisition of Citibank Belgium is scheduled to take effect during the second quarter of 2012.
Business Finance has set itself the goal for 2015 of achieving a good reputation based on demanding and acknowledged professionalism. In 2012, Business Finance will continue its commercial development while strengthening within the business vis-à-vis the Group.
Against a background of economic, fiscal and regulatory uncertainty, Insurance will be resolutely focused on controlling business and risk. With this in mind, the company will be promoting the business of the CMNE Group networks (France and Belgium) in each of these segments: revenue from account units, asset-based products, IARD, prudential offering, etc. This arm of the business will put a halt to unprofitable partnerships within the confines of the MTP. In the area of finance, Insurance will strengthen its preparations for the switch to Solvency II. The challenge here is to develop the offering and products with the aim of achieving a broadly improved level of profitability that is in line with the requirements of equity capital and future changes to regulations.
Finally, Third-Party Management wishes to make the most of its single “La Française AM” brand, position itself on its core business expertise and ensure self-financed international growth. As a business, it aims to emphasise its knowledge and abilities by basing itself on a small range, the development of property Account Units in life insurance and the reaffirmation of its commitment to SRI. In parallel, La Française AM will be continuing its international development in 2012, as well as enhancing its internal organisation aimed at promoting efficiency.
Recent Trends and Outlook
Annual Report
2011 11
43
| Governance and Internal Auditing
44 Composition of the Board of Directors and mandates
46 Composition of the Management Committee and mandates
48 Report from the Chairman of the Board of Directors
57 Report from the Auditors (about the Chairman’s report)
44Composition of the Board of Directors and mandates
� Fédération du Crédit Mutuel Nord EuropeSituation t 30th May 2012
� Mandates of the Directors of the Caisse Fédérale du Crédit Mutuel Nord Europe
Chairman: Philippe VASSEUR [1]
Vice-Chairmen: Jacques CHoMBART [2] André HALIPRE [2] Francis QUEVY [2]
Maurice ToME [2]
Secretary : Michel HEDIN [4]
Treasurer: Catherine LETELLIER [3]
Honorary Chairmen: Gérard AGACHE [5] Elie JoNNART [5]
Directors: Jean Louis BoUDET [3] Jean Marc BRUNEAU [3] Christine DEBoUBERT [3] Philippe LELEU [3] Patrick LIMPENS [3] Bertrand oURY [3] Jacques PETIT [3] Nathalie PoLVECHE [3] Fabienne RIGAUT [3] Christine THYBAUT [3] Jacques VANBREMEERSCH [3]
Also at the Caisse Fédérale du Crédit Mutuel Nord Europe: [1] chairman - [2] vice-chairman - [3] director - [4] secretary - [5] honorary chairman
Philippe VASSEURIn France
Chairman of the Board of Directors
CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) LilleCAISSE DE CRÉDIT MUTUEL LILLE LIBERTÉ (Cooperative credit company with variable capital) LilleSOCIÉTÉ DE DEVELOPPEMENT RÉGIONAL DE NORMANDIE (SA) RouenCHAMBRE DE COMMERCE ET D’INDUSTRIE RÉGION NORD-PAS-DE-CALAIS (EP) Lille
Chairman of the Monitoring Committee
BANQUE COMMERCIALE DU MARCHÉ NORD EUROPE (SA) LilleLA FRANçAISE AM (SA) ParisNORD EUROPE ASSURANCES (SA) Paris
Director
CIC (SA) ParisGROUPE EUROTUNNEL (SA) ParisCAISSE SOLIDAIRE DU Crédit Mutuel NORD EUROPE (Cooperative credit company with variable capital) LilleBONDUELLE (SA) ParisNORMANDIE PARTENARIAT (SA) Rouen
Permanent representative GROUPE DES ASSURANCES DU CRÉDIT MUTUEL (SA) Paris - PR of CFCMNE (Director)LOSC LILLE METROPOLE (SA) Lille - PR of CFCMNE (Observer)
AbroadChairman of the Board of Directors CRÉDIT MUTUEL NORD EUROPE BELGIUM (SA-Belgium)
Director:CRÉDIT PROFESSIONNEL SA (SA-Belgium)LA FRANçAISE AM PRIVATE BANK (SA-Luxembourg)BKCP (SCRL-Belgium)
Permanent representative MOBILEASE (SA-Belgium) – PR of CMNE BELGIUM (Director)Jean Louis BOUDET
In FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille Chairman CAISSE DE Crédit Mutuel in Fretin (Cooperative company)
Jean Marc BRUNEAUIn France
Director CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) LilleCAISSE DE Crédit Mutuel Saint-Amand-Les-Eaux (Cooperative company) (Vice-Chairman)
Member of the Monitoring Committee NORD EUROPE ASSURANCES (SA) ParisJacques CHOMBART
In France
Director CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille (Vice-Chairman) CAISSE DE Crédit Mutuel in Fournes-en-Weppes (Cooperative company) (Vice-Chairman)
Christine DEBOUBERTIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille Chairman CAISSE DE Crédit Mutuel in Tourcoing République (Cooperative company)
André HALIPREIn France
DirectorCAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille (Vice-Chairman)GENE + in Érin (SAS) CIRHYO in Montluçon (Cooperative company)
Member of the Management Board MULTIGENE in Dijon (SA)
Chairman CAISSE DE Crédit Mutuel in Vitry le Francois (Cooperative company) SCAPAAG in Dijon (Cooperative company)
Member of the Monitoring Committee BANQUE COMMERCIALE DU MARCHÉ NORD EUROPE (SA) Lille (Vice-Chairman)La Française AM (SA) Paris
AbroadPermanent representative Crédit Mutuel NORD EUROPE BELGIUM (SA Belgium) – PR of CFCMNE (Director)
Annual Report
2011 11
45
Michel HEDINIn France
DirectorCAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille LA PROSPÉRITÉ FERMIÈRE (Cooperative company)CAISSE DE Crédit Mutuel in Étaples (Cooperative company)
Member of the Monitoring Committee La Française AM (SA)
Permanent representative INGREDIA (SA) PR of LA PROSPÉRITÉ FERMIÈRE (Director) PROJEFI (SA) PR of LA PROSPÉRITÉ FERMIÈRE (Director)
Philippe LELEUIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) LilleChairman CAISSE DE Crédit Mutuel in Desvres (Cooperative company)
Catherine LETELLIERIn FranceMember of the Board of Directors NORD EUROPE ASSURANCES (SA) Lille Member of the Monitoring Committee CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille Chairman CAISSE DE Crédit Mutuel in Méru (Cooperative company)
Patrick LIMPENSIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) LilleChairman CAISSE DE Crédit Mutuel in Saint-Quentin (Cooperative company) Business Manager SCI RÉSIDENCE in Remicourt (SCI)Member of the Monitoring Committee NORD EUROPE ASSURANCES (SA) Paris
Bertrand OURYIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille Chairman CAISSE DE Crédit Mutuel in Crépy-en-Valois (Cooperative company) Member of the Monitoring Committee BANQUE COMMERCIALE DU MARCHÉ NORD EUROPE (SA) Lille AbroadDirector Crédit Mutuel NORD EUROPE BELGIUM (SA Belgium)
Jacques PETITIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille Chairman CAISSE DE Crédit Mutuel de Marquion (Cooperative company) Member of the Monitoring Committee BANQUE COMMERCIALE DU MARCHÉ NORD EUROPE (SA) Lille
Business ManagerSCI FLANDRES ARTOIS (SCI) ArrasSCI BOLDODUC (SCI) ArrasSCI PETIT (SCI) Arras
Nathalie POLVECHEIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) LilleChairman CAISSE DE Crédit Mutuel in Avion (Cooperative company)
Francis QUEVYIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille (Vice-Président)Chairman CAISSE DE Crédit Mutuel in Friville-Escarbotin (Cooperative company)Business Manager SCI IKD CENTRE DE SOINS (SCI)
Fabienne RIGAUTIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille Chairman CAISSE DE Crédit Mutuel in Le Quesnoy (Cooperative company)
Christine THYBAUTIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille
Chairman CAISSE SOLIDAIRE DU Crédit Mutuel NORD EUROPE (Cooperative company) LilleCAISSE DE Crédit Mutuel in Hazebrouck (Cooperative company)
Maurice TOMÉIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) Lille (Vice-Président)
ChairmanCAISSE DE Crédit Mutuel in Cambrai (Cooperative company)CM PIERRE 1 (SCPI)UFG PIERRE (SCPI)
Member of the Monitoring Committee BANQUE COMMERCIALE DU MARCHÉ NORD EUROPE (SA)AbroadDirector Crédit Mutuel NORD EUROPE BELGIUM (SA Belgium)
Jacques VANBREMEERSCHIn FranceDirector CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) LilleChairman CAISSE DE Crédit Mutuel in Steenvoorde (Cooperative company)
46Composition of the Management Committee and mandates
General Manager: Éric CHARPENTIER
Deputy General Manager with responsibility for operations: Christian NoBILI
Deputy General Manager - Resources: Denis VANDERSCHELDEN
Secretary-General: Nicolas SALMoN
Central Director - Accounting and Management Auditing: Florence DESMIS
Finance Director: Christian DESBoIS
Secretary of the Management Committee: Jérôme PAVIE
Inspector-General: José DRUoN
Company Auditors: aCéa et DELoITTE
The Management Committee is chaired by the General Manager, who has the most extensive powers to manage the CMNE group within the context of the strategy decided by the Federal Board of Directors. The Committee meets once a week as well as once every quarter in an extended form, when it also hosts the managers of Insurance, Bancassurance Belgium, Business Finance and La Française AM. It bases itself on the work carried out by a number of specialist committees:
• The Group Finance Committee manages rate and liquidity risks. It is supported by quarterly or six-monthly finance committee meetings with the financial entities within the Group.
• The Major Risks Committee examines any risks every quarter that are greater than a threshold set by General Management per entity and in a consolidated fashion.
• The Development Committee proposes changes to pricing, as well as managing the range of products and services and providing guidance for sales campaigns.
• The Performance Improvement Committee is responsible for developing and monitoring the budget, as well as proposing cost cuts.
� Management Committee Situation at 30th April 2012
Annual Report
2011 11
47
Eric CHARPENTIERIn FranceGeneral Manager CAISSE FÉDÉRALE DU CRÉDIT MUTUEL NORD EUROPE (Cooperative SA) LilleChairman of the Board of Directors ACMN Vie (SA) ParisChairman of the Monitoring Committee
La Française AM Finance Services (SAS) ParisLA FRANçAISE Real Estate Managers (SAS) Paris
DirectorBATIROC NORMANDIE (SA) RouenSDR DE NORMANDIE (SA) Rouen
Member of the Monitoring Committee
BANQUE COMMERCIALE DU MARCHÉ NORD EUROPE (SA) LilleLa Française AM (SA) Paris LA FRANçAISE DES PLACEMENTS (SAS) ParisNORD EUROPE ASSURANCES (SA) Paris (Vice-Chairman)UFG PIERRE (SCPI) Paris
Permanent representative
ACM IARD (SA) Strasbourg – PR of CFCMNE (Director) CCCM PARIS (Cooperative SA) Paris – PR of CFCMNE (Director) ACMN IARD (SA) Lille – PR of NEA (Director) BAIL ACTEA (SA) Arras – PR of BCMNE (Director) BAIL IMMO NORD (SA) Lille – PR of CFCMNE (Director) CMNTEL (SAS) Lille – PR of CFCMNE (Member of the Management Committee) COURTAGE Crédit Mutuel NORD EUROPE (SAS) Lille – PR of NEA (Member of the Chairman’s Committee) Crédit Mutuel PAIEMENT ÉLECTRONIQUE (SAS) Paris – PR of CFCMNE (Director)EURO INFORMATION (SAS) Strasbourg – PR of CFCMNE (Member of the Management Committee) MULTIHABITATION (SCPI) Paris – PR of CFCMNE (Member of the Monitoring Committee) MULTIHABITATION 3 (SCPI) Paris – PR of CFCMNE (Member of the Monitoring Committee) PÉRENNITÉ ENTREPRISES (SA) Paris – PR of NEA (Director) UFG PIERRE (SCPI) Paris – PR of CFCMNE (Member of the Monitoring Committee) VIE SERVICES (SAS) Paris – PR of NEA (Member of the Management Committee)
Abroad
Chairman of the Board of DirectorsCRÉDIT PROFESSIONNEL SA (SA-Belgium)BKCP (SCRL-Belgium)NORD EUROPE LIFE Luxembourg (SA-Luxembourg)
DirectorCrédit Mutuel NORD EUROPE BELGIUM (SA-Belgium)La Française AM PRIVATE BANK (SA-Luxembourg)
Permanent representativeSOFIMPAR (SA-Belgium) – PR of CFCMNE (Director) MOBILEASE (SA –Belgium) – PR of BCMNE (Director)
Christian NOBILIIn FranceDeputy General Manager CAISSE FÉDÉRALE DU Crédit Mutuel NORD EUROPE (Cooperative SA) LilleChief Executive Officer L'IMMOBILIÈRE DU CMN (SA) Lille
Chairman of SAS
NEPI (SASU) LilleSOFIMMO III (SASU) ParisACTEA ENVIRONNEMENT (SAS) ArrasTRANSACTIMMO (SASU) Lille
Director BAIL ACTEA (SA) ArrasBusiness Manager CMN ENVIRONNEMENT (SNC) LilleMember of the Monitoring Committee BANQUE COMMERCIALE DU MARCHÉ NORD EUROPE (SA) Lille
Member of the Management Committee CMNTEL (SAS) Lille
Permanent representative
ACMN IARD (SA) Lille – PR of CFCMNE (Director)ACMN VIE (SA) Paris – PR of CFCMNE (Director)COURTAGE Crédit Mutuel NORD EUROPE (SAS) Lille – PR of CFCMNE (Membre du Comité de la Présidence)La Française AM (SA) Paris – PR of CFCMNE (Member of the Monitoring Committee) NORD EUROPE ASSURANCES (SA) Paris – PR of CFCMNE (Member of the Monitoring Committee) PÉRENNITÉ ENTREPRISES (SA) Paris – PR of ACMN VIE (Director) LA FRANçAISE DES PLACEMENTS (SAS) Paris – PR of CFCMNE (Member of the Monitoring Committee) La Française AM Finance services (SAS) Paris – PR of CFCMNE (Member of the Monitoring Committee) LA FRANçAISE Real Estate Managers (SAS) Paris – PR of CFCMNE (Member of the Monitoring Committee) SCI CENTRE GARE (SCPI) Lille – PR of NEPI (Business Manager) SCI C.M.N. (SCI) Lille – PR of L’IMMOBILIERE DU CMN (Business Manager) SCI C.M.N.1 (SCI) Lille – PR of L’IMMOBILIERE DU CMN (Business Manager) SCI C.M.N.2 (SCI) Lille – PR of L’IMMOBILIERE DU CMN (Business Manager) SCI C.M.N.3 (SCI) Lille – PR of L’IMMOBILIERE DU CMN (Business Manager) SCI C.M.N. LOCATIONS (SCI) Lille – PR of L’IMMOBILIERE DU CMN (Business Manager) SCI C.M.N. LOCATIONS 2 (SCI) Lille – PR of L’IMMOBILIERE DU CMN (Business Manager) SCI RICHEBE INKERMANN (SCI) Lille – PR of L’IMMOBILIERE DU CMN (Business Manager)
AbroadDirector CMNE BELGIUM (SA-Belgium)
Permanent representative NORD EUROPE LIFE Luxembourg (SA-Luxembourg) PR of CFCMNE (Director)SOFIMPAR (SA-Belgium) PR of NEPI (Director)
� Mandates and functions of the company trustees
48
I – Terms for preparing and organising the work carried out by the Board of Directors
1 – Presentation of the Board of DirectorsOn the closing date for the 2011 financial year, the composition of the Board of Directors of the Caisse Fédérale du Crédit Mutuel Nord Europe was as follows:
Chairman: Philippe VASSEUR. Vice-Chairmen: Jacques CHoMBART, André HALIPRE,
and Maurice ToME. Secretary: Michel HEDIN.
Directors: Jean-Louis BoUDET, Jean-Marc BRUNEAU, Christine DEBoUBERT, Philippe LELEU, Catherine LETELLIER, Patrick LIMPENS, Bertrand oURY, Jacques PETIT, Nathalie PoLVECHE, Francis QUEVY, Fabienne RIGAUT, Christine THYBAUT and Jacques VANBREMEERSCH
Honorary Chairmen: Gérard AGACHE and Elie JoNNART.
2 – Organisation and preparation of the work carried out by the Board of Directors
• The Board of Directors derives its powers from the articles of association and the general operating regulations. Where required, codes of ethics and proper conduct regarding in particular preventing and dealing with irregular situations involving elected officers round out the operating rules that apply to the Group’s delib-erating body.
• The Board of Directors lays down the Group’s strategy based on proposals put to it by General Management. It also controls their implementation. The Board is elected by the 160 local branches, each of which also has its
own Board of Directors, made up of members elected by the shareholders at a general meeting, in accordance with the cooperative statute of “one person, one vote”. Some of its members also sit on the Boards of the Group’s holding companies: BCMNE, CMNE Belgium, Nord Europe Assurances and La Française AM Group.
• An Executive Committee, made up of 7 members, met on 7 occasions during the year. The Executive Committee is a consultative body that examines items that are sub-sequently submitted to the Board of Directors.
• The Board of Directors has delegated powers to four specialist committees:
the Audit Committee, chaired by the Chairman of the CMNE Federation, the Audit Committee is made up of four other federal directors. The General Manager, the Deputy General Manager, the Inspector-General, the Secretary-General and members of the Management Committee also attend Committee meetings. The Company Auditors also attend the Audit Committee when it is examining the company’s individual and consolidated financial statements.
Internal policies and procedures define the Audit Committee’s operations and purpose. The Committee met on ten occasions and its work focused in particular on:
– monitoring changes to the regulations, – approving the annual audit programme of the General
Inspectorate, – the overall monitoring of risks, – the results of assignments conducted by the General
Inspectorate, in terms of local branches, federal departments and subsidiaries,
– examining the company and consolidated accounts, – examining the work carried out by the Company
Auditors.
the Risks Committee, chaired by the Chairman of the Fédération du CMNE, is identical in composition to the Audit Committee. The Risk Committee’s operations and purpose are also defined by a set of internal policies and procedures. The Committee met on four occasions in 2011.
Report from the Chairman of the Board of Directors
Ladies and Gentlemen,
In accordance with the provisions of article L.225-37 of the Commercial Code, the Chairman of the Board of Directors submits a report dealing with:
• the terms for preparing and organising the work carried out by your Board of Directors,• the internal auditing procedures implemented by the Group,• any restrictions placed on the powers of the General Manager.
It is my privilege to present this report to you, which has been finalised under my authority, based on the work carried out by the persons with responsibility for the matter at the Inspectorate General, Ongoing Audits and Compliance Control. In accordance with article 26-5 of the Act of 3rd July 2008, this report was submitted for the approval of the Board of Directors on 26th March 2012.
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Its work focused in particular on:
– approving the annual plans of the Compliance and Ongoing Audit departments, as well as the work carried out by these two departments,
– monitoring reports on compliance activities and especially the fight against money-laundering and the funding of terrorism, operating risk, financial risks, credit risks,
– approving the mapping of major risks and the mapping of non-compliance risks,
– approving the proposed acquisition of Citibank Belgium.
the Federal Loans Committee meets twice a month to rule on matters relating to loans with unit amounts greater than €500 000 or which are subject to terms that override the rules laid down by the Federation. A set of internal policies and procedures defines the Committee’s operations and purpose.
the Remuneration Committee, made up of the Chairman of the Federation and the Vice-Chairmen, meets at least once a year to determine the overall remuneration of the company trustees of the Caisse Fédérale. It also examines the remuneration of the company’s directors who are not company trustees and sets the principles that apply to the remuneration of company trustees in the Group’s principal companies. Its operations are defined by a set of internal policies and procedures.
2.1 - Meetings of the Board of Directors: The Board of Directors met on 11 occasions, once a month, except in July. The attendance rate of 83% indicates the strong involvement of the directors. The average length of Board meetings was two hours and thirty minutes.
• The agendas for the meetings systematically included a point relating to the economic situation and the current institutional background, as well as to business results and monitoring credit risks. From August onwards, a monthly assessment was also presented to the Director, covering market developments and their impact for CMNE.
• The Board also expressed its views about the commercial offering.
• The Board examined the quarterly updates of the interim management results for the period underway.
• The other items appearing on the Board’s agenda included:
24th January– Information about the appointment of Mr Vasseur to
the Chairmanship of CCIR. – Assessment of the activities of the Audit and Risks
Committee in the second half of 2010. – Proposed modification of article 9 at the local
branches of articles 215 - 219 and 221 of the General Operating Regulations and article 153 of the Finance Regulations.
– Presentation 2010 activity report from the Solidarity Fund.
21st February– Presentation of the management results for 2010
and the 2011 forecasts for Bancassurance France. – In the presence of the Company Auditors and
after hearing their report, the Board approved the overall company accounts for the Caisse Fédérale, the Federation and the Local Branches. These accounts had been presented previously to the Audit Committee.
– Implementation of a bonds programme.
28th March– In the presence of the Company Auditors and
after hearing their report, the Board approved the Group’s consolidated accounts. These accounts had been presented previously to the Audit Committee. Examination of the reports on internal auditing and the measurement of risk monitoring. The Chairman also presented his report on the work carried out by the Board in 2010 and the internal auditing procedures, in particular in the areas of finance and accounting.
– Presentation of the 2010 business report for the Group.
– Replacement of Mr LE BRAS by Mr Hervé BOUCLIER, appointed General Manager at ACMN Vie.
26th April – Examination of the Basle II reports on the risk credit
at 31st December 2010.
19th May – Election of the Chairman of the Board of Directors,
the Vice-Chairman and members of the Executive Committee.
27th June – Presentation of the MTP 2015. – Consequences of the agreement reached in the
DELUBAC matter. – Modification of articles 151 & 152 of the Finance
Regulations. – Composition of Committees and Commissions.
24th August– In the presence of the Company Auditors, pres-
entation of the Group’s consolidated accounts at 30th June 2011.
– Assessment of the activities of the Audit and Risks Committee in the first half of 2011.
– Presentation of developments in the credit business and loans offices.
26th September– Presentation of the policy paper for the Bancassurance
for 2012 and the Commercial Action Plan. – Subscription to the capital raising at Nea (Solvency II). – Funding of real estate structures. – Initial presentation of a proposed acquisition in
Belgium (Citibank).
24th october – Presentation of the Citibank situation and presenta-
tion of the timetable.
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28th November – Information about the 2011 results forecasts,
updated to 30th September. – Summary of Assets and Liabilities management for
the first half of 2011. – Basle II reporting and rate and liquidity risk at
30th June 2011. – Internal policies and procedures for the Remunera-
tion Committee.
19th December – Presentation of the updated risks policy. – Updating of finance regulations. – Disposal of the holding owned by CFCMNE in SNP. – Finalisation of the purchase of Citibank.
The General Manager had reported regularly to the Directors on developments in the case with Delubac, which required meticulous monitoring for over 10 years. At the meeting of 26th April, Mr Charpentier gave a detailed presentation of the protocol that enabled CMNE to close this matter once and for all. On 11th May, he announced that an agreement had been reached with Banque Delubac and three of its associates. This agreement, reached as part of legal mediation ruled on by the Court of Appeal in Paris, stipulated that the other parties undertook to repay to CMNE in full all monies received in July 2009 (€191 million) and that CMNE was authorised to withdraw from the capital of Banque Delubac subject to participating in the financial support of the bank to the tune of €40 million.
• When first convened, all meetings complied with the conditions for establishing a quorum and majority, as required by the articles of association.
The minutes of Board meetings are approved at the subsequent meeting. This approval confirms that a faithful record has been taken of the work carried out.
• The Works Council was represented at all times.
2.2 – Dispatch of working documents: • The members of the Board of Directors received all of
the information they needed to carry out their work, based on a predetermined timetable.
Digital media are sent by e-mail. A complete hard-copy file is given to each Director at the time of the Board meeting.
• The documents and information provided and required for the duties of the directors were mainly the following: – the news memo, – the monthly business memo, – the monthly risk update, – the company accounts and consolidated accounts, – proposals on the new terms for products and services, – presentation notes on topics submitted to the Board
members for approval, – written support material published in the form of
notes to the PowerPoint presentations used during the meeting.
All of the persons attending meetings of the Board of Directors are bound by an obligation of confidentiality and non-disclosure with regard to the information provided or received within the context of these meetings.
3 – The powers of the General manager and Deputy General Manager
In accordance with the Group’s ongoing practices, which distinguish between the functions of direction, decision-making and audit on the one hand, and executive functions, and the functions of Chairman and General Manager on the other, are separate.
At its meeting on 24th April 2006, the Board of Directors appointed Mr Éric CHARPENTIER as General Manager from 1st June 2006, granting him all powers to act alone in the name and on behalf of the Caisse Fédérale du Crédit Mutuel Nord Europe.
At its meeting on 21st January 2008, the Board of Directors appointed Mr Christian NOBILI as Deputy General Manager from 1st February 2008, with the same powers as the General Manager.
II – Internal auditing procedures
1 – Internal audit method Internal auditing is a process that is defined and implemented by the Board of Directors, as well as the company’s management and staff. It is designed to provide reasonable assurance regarding the following objectives:
• the reliability of accounting and financial information, • the efficiency and effectiveness of the operations
conducted by the company, • the protection of the organisation’s assets, • compliance with laws and regulations.
Within this context, the Board of Directors receives information about the organisation, business and results of the general internal auditing system. The Board approves CMNE’s risk limits, in particular through the document entitled “Risk Management Policy”, and is informed about the use of these limits.
1.1 – The audit environment • External frames of reference:
– The Caisse Fédérale operates in a highly regulated environment and is required to comply with regulation CRBF 97-02 relating to internal auditing.
– It is subject to the regulatory and reporting obligations that apply to credit establishments (regulatory ratios, annual internal audit report, etc.).
– It is subject to audits by regulatory banking and insurance bodies (Prudential Audit Authority) and the financial markets (Financial Markets Authority).
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– It is also subject to the controls conducted by Crédit Mutuel’s National Confederation, pursuant to the General Character Decision relating to the organ-isation of auditing by Crédit Mutuel.
• Internal frames of reference: – Articles of Association. – General Operating Regulations – Finance Regulations. – Policies and procedures of the various committees. – Group Internal Audit Charter / Periodic Audit Charter
/ Compliance Charter / Financial Activities Charter. – Codes of Ethics and Proper Conduct. – Policy on risk management. – Definition of the assignments to be carried out by the
various departments and their functions in the form of organisation charts.
– Summary of powers.
1.2 – Parties or structures conducting audit activities In accordance with the regulatory provisions of the supervisory bodies and the standards of Crédit Mutuel’s National Confederation, CMNE’s internal audit system applies to all of the entities in the Group, including credit establishments and non-banking subsidiaries.
The CMNE Group’s risk support line is made up of departments for ongoing audits and departments for compliance and risk control, working within the General Secretariat, as well as departments for ongoing audits and departments for compliance in the subsidiaries, which are linked functionally to the manager of the Group’s risk support line.
The manager of the risk support line is kept informed regularly of auditing work and the results generated, in particular at: • weekly meetings held with the managers of the
departments for ongoing audits, compliance and risk control in relation to the Caisse Fédérale of CMNE,
• meetings of the ongoing audit and compliance committee for the whole Group.
The Group has a staff of 93 to conduct all of the internal auditing assignments. They are broken down as follows:
Ongoing audits, compliance control
and risk auditsPeriodic audits
Caisse Fédérale 23 40Subsidiaries 27 3ToTAL 50 43
Internal auditing covers the Group’s six business areas: Bancassurance France, Bancassurance Belgium, Business Finance, Insurance, Third-Party Management, and Miscellaneous Services and Businesses. With regard to their own regulations, each area of business adjusts and implements its own audit organisation.
1.2.1 - Ongoing audits and compliance control are provided as follows:
• Level 1 ongoing operating auditing is carried out in the operating entities under the direct responsibility of hier-archical reporting lines,
• Level 2 of ongoing auditing is carried out by structures that are separate from the operating entities and organised around: – central structures: a permanent auditing directorate,
to which is attached the manager responsible for the security of information systems and the manager for ongoing audits, a compliance control directorate and a risk directorate,
– ongoing auditing and compliance structures in the Group’s various business areas (Bancassurance France, Bancassurance Belgium, Business Finance, Insurance, Third-Party Management); operating links are in place between the central directorates and the business area auditing structures,
– an Ongoing Audit and Compliance Committee that brings together the managers of the central structures for each area of business.
1.2.2 - Periodic audits:
Level 3 comes under the responsibility of the Inspector-General, who acts for all of the entities within the Group: the branch network, the federal departments and Group companies. The Inspector-General certifies the company accounts for the Local Branches. The Inspector-General is a member of the Audit Committee in France, Belgium and Luxembourg.
He is member of the committee that makes proposals in terms of setting the levels of delegation for granting loans given each year to the managers in the Bancassurance France network. He attends meetings of the Ongoing Audit and Compliance Committee.
Periodic audits are made up of two directorates: one for the Network, and the other for Business Lines.
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1.3 – Auditing systems 1.3.1 - Ongoing audits and compliance control
The main systems implemented by the directorates for ongoing audits and compliance control at CMNE are shown below.
There are a number of procedures and methods involved for ongoing audits:
• the ongoing audit procedures for the operating entities (network and federal departments), organised and standardised as part of dedicated applications (internal auditing portals),
• procedures to analyse and review the internal audits conducted by the operating entities,
• Level 2 ongoing audit plans (audits carried out directly by the ongoing audit directorate), based on a process that is standardised and organised for each individual area (market activities, loans, accounting, information system security, operating risk management, etc.),
• procedures for monitoring the security of payment methods,
• procedures for monitoring the security of information systems,
• the process of assessing essential external service-pro-viders,
• the procedure for monitoring and analysing significant operating incidents.
In the area of compliance:
• Procedures for examining compliance
The compliance control department was consulted on 33 matters relating to new products direction or significant modifications made to existing products. It issued 13 compliance opinions. In 12 cases, examining the information provided did not require the procedure to be launched, yet recommendations were nevertheless made. Final, 8 cases required neither opinion nor recommendation.
• The process for escalating and monitoring malfunctions
The procedure for centralising malfunctions was extended to BCMNE in 2011. The system provides for escalating information from a variety of sources (including customer complaints) with a request for corrective action if required. 16 malfunctions were the subject of requests for corrective action from the Compliance Control department. 11 have been carried out, with 5 still underway.
• Investment services audits
Checks into compliances of the regulations governing financial products (opening securities accounts, selling specific products, etc.) are conducted regularly, with any corrective action required notified to the
operating managers in question. The compliance control department also intervenes in the context of training relating to the assessment of the professional knowledge required when selling financial products.
• The fight against money-laundering
The procedures here are updated and made available to all staff at each entity on their local intranet. Processes to train and update the knowledge of employees are regularly monitored (self-learning process using specific learning software, training courses presented in the classroom, the issue of reminders about the rules that have to be complied with, etc.). The process and tools for conducting analyses and dealing with atypical and/or unusual transactions are in place.
1.3.2 - Periodic audits
For Local Branches, the effectiveness of the internal auditing systems implemented by the managers at the branch is measured regularly, either by reviews or theme-based assignments.
For the federal departments, the audit systems revolve around theme-based audit tasks, as well as assignments to evaluate internal auditing and the follow-up on recom-mendations.
Each of the Group’s companies is responsible for implementing its own internal auditing system, as well as how it is conducted and updated. In most companies, an internal audit correspondent is appointed, while others have dedicated inspectors.
The General Inspectorate carries out its work using standardised methods and IT tools whose suitability is reviewed regularly. There is also a frame of reference for the auditing of local branches.
An annual audit plan is drawn up and presented by the Inspector-General for the approval of General Management and the Audit Committee. This plan is organised in such a way that all risks are examined and audited over a maximum period of four years.
62 local branches (or 39 % of the network) were the subject of an audit: 31 received full audits and 31 involved theme-based assignments. In addition, 4 business advice spaces were also audited. In Belgium, 42 of branches with salaried staff (98% of the network), as well as 9 authorised agents (35%) were inspected.
29 audit assignments were conducted across all of the Group’s businesses: Bancassurance France (13), Bancassurance Belgium (5), Insurance (3), Third-Party Management (5) and Business Finance (3).
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1.4 – Organisation of internal audits on business conducted abroad
1.4.1 - The main parties involved and auditing systems in Belgium
Internal audits are organised as follows:
• Level 1 ongoing audits carried out in operating entities under the direct responsibility of the hierarchy. The branches follow an internal auditing procedure that is updated regularly. The internal auditing system in departments at head office is based on hierarchi-cal checks, the separation of functions and automated controls.
• Positions dedicated to internal audits: – Ongoing auditing, which is responsible in particular
for organising, strengthening and assessing the way Level 1 audits operate,
– The Compliance Officer, who is responsible for implementing compliance systems (analysis of non-compliance risks, the policy for accepting new customers, code of ethics, systems for combating money-laundering and the financing of terrorism, etc.),
– Periodic Audits: internal auditing conducts its tasks as part of a multiannual schedule based on the analysis of risks and approved by the BKCP’s Management Committee. Branch inspections are carried out by the audit department using a methodology based on a checklist of points that is reviewed regularly. A six-monthly report of assignments is submitted to the Management Committee.
• An Audit Committee assists the Board of Directors at Bancassurance Belgium. In particular it examines the results from the various audit assignments, as well as the follow-up of recommendations and reports relating to measuring and monitoring risks.
1.4.2 - The main parties involved and auditing systems in Luxembourg
Internal auditing at La Française AM Private Bank (formerly UFG-LFP Private Bank) is organised as follows:
• Level 1 ongoing operating audits carried out in operating entities under the direct responsibility of the hierarchy, with monthly standardisation of the audits conducted in each department.
• Positions dedicated to internal audits: – The Risk Manager, who is responsible mainly for
identifying and assessing risks, contributing to the implementation and monitoring of Level 1 audits,
– The Compliance Officer, who is responsible for implementing compliance systems (analysis of non-compliance risks, exhaustive auditing of the opening of new accounts, systems for combating money-laundering and the financing of terrorism, etc.),
– Periodic audits are conducted by the Audit Control Inspectorate of the CMNE Group. In this context, a number of specific audit assignments were conducted in 2011.
The Board of Directors of La Française AM Private Bank examined the report into the ICAAP methodology regarding the “internal process for assessing the adequacy of equity capital”. This report is aimed at assessing the risks and defining the direction to take for risk cover, as well as the way it should be applied in operating terms. The Board was assisted in its work by an Audit and Accounts Committee.
1.5 – Organisation of the internal auditing of outsourced activities
As part of the Group’s audit policy applied to outsourced services, the ongoing audits and compliance departments conduct checks to ensure that the policy defined is being complied with and assess its application. The audit process includes an annual assessment supervised by the Ongoing Audit Department. The aim of this assessment is to ensure that the regulations, quality and continuity of services are complied with.Periodic auditing conducts at least one assignment per year with an external service-provider.
1.6 – Methods used to measure and monitor risks 1.6.1 - Credit or counterparty risk
The rating systems are audited on a national level. A procedure for monitoring algorithms has been developed for this purpose by the unit that monitors ratings. This procedure includes all of the analyses required to measure the performance of models. Each federal unit within Crédit Mutuel is able to position itself in relation to the national performance of a particular algorithm. Any significant discrepancies observed would then be analysed. Internal ratings are integrated within CMNE in a highly operational way. This information is included when it comes to developing the commercial proposition of a credit level. Ratings are the subject of various dashboards used by management bodies and the risk monitoring committees.
Loans are selected in accordance with risk assessment rules applied as soon as loan applications are made, based on fixed internal standards and an assignment system placed under automated a priori control. Risk assessment and the documentation for loan applications are part of procedures designed to analyse and retain recent elements relating to the business and financial situation of the beneficiary. The case records, both for private individuals and business applicants and the farming market, are created applying the provisions of internal loan regulations.
Case managers at the branches check on the way the analysis rules are applied to finance files in the context of the internal auditing process. As part of its “network” assignments, the General Inspectorate also makes sure that the audit is efficient and that federal standards are effectively applied.
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• A level-based system of delegation enables the General Manager, on the proposal of an allocations committee that meets during the first quarter of each year, to assign a level of authority for providing technical advice to each of the members of staff involved. This delegation is supplemented by a power attributed by the Board of Directors of the Local Branches.
• The profitability of loan transactions is examined as part of the procedures for granting loans, which includes a decision-making loop on the terms for exemption rates. The Management and Forecasting Audit Department and the Assets and Liabilities Function, whose work is com-plementary, handle the task of monitoring, forecasting and guiding matters relating to margin.
• In terms of how the quality of commitments develops, the downgrading of credits into doubtful debts, based on BAFI and Basle II criteria, is carried out automatically by applying the contagion principle. Funding, calculated by the systems based on the type of debt and the nature of the guarantees given, is updated and written into the accounts at the end of each month. A report into the measurement and development of risks is sent regularly to General Management and the Federal Board of Directors. Monitoring the quality of commitments is also carried out by the periodic network audit during audit assignments, theme-based audits and balance sheet audits.
• Risk measurements using sector-based breakdowns and internal ratings are also conducted through specific analyses carried out on the bank’s four main markets: private individuals, professionals, farmers and businesses.
• Each year the Board of Directors of the Caisse Fédérale approves a reference document each year on risk policy within the Group. The directors set limits for counter-party risks that apply to the whole of the CMNE Group, whether it is for dealing room transactions, Business Finance or the insurance companies.
1.6.2 - Concentration risk
Measuring the risks in relation to a counterparty or group of counterparties is handled by CMNE’s Major Risk Committee which every quarter analyses and monitors risks that exceed a threshold defined by General Management, singly and overall, for each of the Group’s financial entities.
1.6.3 - Market risk
Market risk forms part of the arbitrage transactions carried out by the Group Treasury Department as part of its own management of CMNE. These transactions, conducted within a precise context defined by the Finance Committee, are the subject of a monthly report submitted to that same Committee.
This reporting system, established by the Risks Department, makes it possible to measure the rate, liquidity and counterparty risks associated with this management, as well as the margin it generates and its sensitivity to rate movements. The system also enables a check on the consumption of equity capital generated by the assets held. Finally, on a quarterly basis and using scenarios common to the whole of the Crédit Mutuel – CIC Group, this activity is also subjected to stress tests.
1.6.4 - Overall interest rate risk and liquidity risk
• Each company within the banking business has its risk analysed by a specific Finance Committee on a quarterly or six-monthly basis, depending on the size of the company and the inertia of its balance sheet structure. The committee of each company decides on the imple-mentation of cover both for rates and liquidity.
• In view of its single counterparty role in managing the rate risk of the subsidiaries and their refinancing, the quarterly analysis of the report from the Caisse Fédérale enables a consolidated overview to be created of the Group’s rate risk and liquidity risk.
1.6.5 - Intermediation risk
• When providing investment services for third parties, the CMNE Group authorises BFCM and CMCIC Titres to represent it with third parties and the markets and also to handle the management of its customers’ securities.
• Through its role as a player on the financial markets, BFCM complies with the various accredited systems for settling investments.
• The risk of default by the party issuing the order is managed within the CMNE Group’s information system through a number of devices. When orders are registered, multiple automatic checks are conducted to make sure the amount of the order is feasible, as well as ensuring that there is sufficient cover from the buyer. These checks meet the minimum conditions laid down by the Financial Markets Authority.
• A system based on a questionnaire to be filled in as part of the process of opening a securities account has been implemented to meet the new requirements of the FIM Directive. This questionnaire makes it possible to understand better the customer’s experience, objectives and financial situation and is part of the process of finding a service that meets the customer’s needs.
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1.6.6 - Settlement risk
• Management of the liquid assets involved with the Group’s banking arm (Bancassurance France, Bancassur-ance Belgium and Business Finance) is handled as a whole in the Finance Treasury Department.
• With regard to business on its own account, the CMNE Group’s membership of the centralised high-speed settlement and delivery system (RGV), which handles immediate simultaneous and irrevocable settlements/deliveries, enables it to cover the risk of settlement.
• Transactions on international instruments that are not part of RGV are processed by the CMNE Group via BFCM as a client bank.
• For Belgium, securities transactions are carried out via the CEDEL settlement-deliver platform.
1.6.7 - Operating risks
The management of operating risks within the Group is organised as follows:
• The Risk Guidance Function is responsible for managing operating risks. This function implements the methods and tools required, catalogues operating incidents and handles monitoring in the risk management tool.
• The Operating Risks Committee meets regularly and provides coordination communication and reporting on work carried out. This Committee reports on its work to General Management, as well as to the Audit Committee and the Board of Directors.
• Documentary databases relating to the operating risks management tool (integrated into the IT system), risk mapping and modelling, claims data and the steps taken for business continuity plans, are also available.
• The person responsible for the security of the Group’s information systems is attached to the CMNE Group’s Ongoing Audit Department. A system has been developed for managing the security of information.
1.6.8 - Measures taken to ensure business continuity
Protective programmes are aimed at generalising computer recovery plans and business continuity plans.
• These programmes are run by the Risks Department in conjunction with the Organisation Management department.
• This work is monitored regularly by the Operating Risks Committee. A progress report is presented once a year to the Federal Board of Directors, which enables it to be kept informed of the system in place to enable the continuity of the CMNE Group’s businesses in the event of a major disaster.
• A crisis management system has also been developed. It is aimed at defining and organising the structures and procedures for crisis communication.
1.6.9 - Consolidated internal auditing
In line with CMNE’s principles, the internal auditing system applies to all consolidated companies. The parties responsible for auditing make sure that there is a suitable system in place within each of the subsidiaries so that business and risks can be monitored in a consolidated manner. The individuals responsible for Ongoing Audits and Compliance within the various businesses are placed under the operational control of the Group Secretary-General, responsible for support line risk. The Ongoing Audit and Compliance Committee is the body that runs internal audits on a CMNE Group level.
2 - Special procedures relating to finance and accounting
2.1 - Frames of reference: • Accounting plan, regulatory texts and procedure
manuals• General operating regulations• Financial regulations• Group financial management agreement
2.2 - The Central Director responsible for Accounting and Management Auditing has three departments under him:
• The Accounting and Fiscal management department, which in particular: – assists with implementing the overall accounting
system plan and procedures, and handles their application,
– organises and monitors the accounting for financial bodies and companies for which the department is responsible,
– organises specific works to provide statements for financial periods and to draw up interim positions,
– handles tax management for the CMNE Group, – develops and implements the resources required
to enhance the security of accounting entries and auditing of Group accounts,
– puts forward any adaptations needed or new rules to be inserted into financial regulations or into individual contracts governing relations between the various companies in the Group,
– handles contacts with internal and external auditing bodies.
• The Consolidation and Group Reporting department, which in particular: – organises, coordinates the various parties and carries
out the specific assignments for drawing up the con-solidated accounts and any reporting required for the Group,
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– defines and updates the consolidation procedures used by the Group, consistent with the procedures laid down by the National Confederation,
– in the context of regulatory requirements, analyses, monitors and comments on the various ratios and handles the implementation of new rules in relation with the functions involved,
– assists with the implementation of the overall operating scheme of the accounting system and its procedures, consistent with regulatory requirements,
– handles contacts with internal and external auditing bodies.
• The Management Audit and Forecasting department, which in particular: – provides General Management with regular forecasts
for the CMNE Group’s financial results, broken down by business area and including comments and proposed corrective action,
– makes all budget-monitoring items and all perfor-mance and risk analysis items available to the various echelons of the CMNE organisation, enabling them to contribute towards improving the Group’s financial results and, in particular, to the various Technical Committees (Financial, Development, Performance Improvement and Requests for IT Resources),
– designs and monitors all financial estimate quantifica-tion that is incorporated into the planning process, and drafts stage reports for the departments concerned,
– suggests adaptations to financial regulations or associated contracts in terms of structural develop-ments in the CMNE Group. It also updates the rules issued regarding relations between the companies in the Group,
– draws up the periodic analysis of regulatory ratios, comments on any changes to them and carries out all forward-looking simulation work for the Finance Committee in order to make the most of these constraints,
– establishes and monitors the profitability analysis for each product, market, Customer, etc.
– designs dashboards at all levels of CMNE and draws up the operating specifications in conjunction with the operating managers, making them available to the parties in the CMNE Group within the deadlines set and also maintains them,
– measures and analyses the financial impact and risks that the strategic companies have on the consolidat-ed result,
– handles any management and training programmes that are specific to the various bodies in the Group,
– handles relations with internal and external auditing bodies.
2.3 - Reporting directly to the Central Director responsible for Accounting and management Auditing, the datawarehouse function:
• monitors the quality and consistency of the data used to feed the warehouse, in particular through the “data qualification” module developed on a confederal level in the context of the regulations for Basle II,
• suggests corrective actions in collaboration with the support lines concerned,
• provides information about validated data for the purpose of enhancing monitoring tools and ensuring they are consistent,
• prepares and runs meetings for the Warehouse Committee, enabling there to be coordination between the various specialist business lines and providing monthly information about the quality allocated to the data and any actions undertaken,
• takes part in and works with the working groups organised on a confederal and interfederal level, aimed at implementing and organising audits for all of the support lines and ensuring the continuity of the tools put in place.
2.4 - The accounting and financial audit system
On an initial level, the accounting department has resources to ensure that the proper quality of the data produced or transmitted for all of its tasks. On a second level, the ongoing audit department monitors level 1 quality controls and conducts additional audits.
Chairman of the Board of Directors of the Caisse Fédérale du Crédit Mutuel Nord Europe
Philippe VASSEUR
Report from the Chairman of the Board of Directors
Annual Report
2011 11
57Report from the Auditors (about the Chairman’s report)
Ladies and Gentlemen,
In our capacity as Company Auditors for Caisse Fédérale du Crédit Mutuel Nord Europe and pursuant to the provisions of article L. 225-235 of the Commercial Code, we present to you our report on the report drafted by the Chairman of your company, in accordance with the provisions of article L. 225-37 of the Commercial Code, regarding the financial year ending on 31st December 2011.
It is the responsibility of the Chairman to draft and submit to the Board of Directors a report on the procedures for internal auditing and risk management implemented within the company. The report also provides the other information required by article L. 225-37 of the Commercial Code relative in particular to the corporate governance mechanism.
It is our duty:• to inform you of any observations that we have about
the information provided in the Chairman’s report regarding the internal auditing procedures relating to the production and processing of accounting and financial information, and
• to certify that the report contains the other information required by article L. 225-37 of the Commercial Code, having pointed out that it is not our duty to verify the genuine nature of this other information.
We have carried out our work in accordance with the standards of professional practice that apply in France.
Information regarding the internal auditing and risk management procedures relating to the drafting and processing of the company’s accounting and financial information
Professional practising standards require us to implement all due care in assessing the sincerity of the information regarding the internal auditing procedures relating to the drafting and processing of the accounting and financial information stated in the Chairman’s report. This diligence consists in particular of:
• familiarising ourselves with the internal auditing procedures relating to the production and processing of the accounting and financial information underlying the information presented in the Chairman’s report, as well as the existing documentation;
• familiarising ourselves with the work carried out that enabled this information and the existing documenta-tion to be produced;
• determining whether any major deficiencies in the internal auditing process relative to drafting and processing the accounting and financial information that we might have observed in the context of our assignment might constitute appropriate information in the Chairman’s report.
On the basis of this work, we have no observations to make about the information regarding the company’s internal auditing and risk management procedures regarding the drafting and processing of the accounting and financial information contained in the report by the Chairman of the Board of Directors, drawn up in accordance with the provision of article L. 225-37 of the Commercial Code.
Other information
We hereby certify that the report by the Chairman of the Board of Directors contains the other information required by article L. 225-37 of the Commercial Code.
Report from the Company Auditors, drawn up pursuant to article L. 225-235 of Commercial Law, on the report from the Chairman of the Board of Directors
of Caisse Fédérale du Crédit Mutuel Nord Europe. Financial year ending 31st December 2011
Drawn up at Villeneuve d'Ascq and Neuilly-sur-Seine, 18th April 2012
The Company Auditors
aCéa Deloitte & AssociésVéronique HOTTIN-DOUCHET Sylvie BOURGUIGNON
58
Situation at 30th April 2012
Caisse Fédérale du Crédit Mutuel Nord Europe (CFCMNE)4, Place Richebé - BP 1009 - 59011 Lille Cedex Tel: 00 33 3 20 78 38 38 Fax: 00 33 3 20 30 86 59 Website: www.cmne.fr• Chairman of the Board of Directors: Philippe VASSEUR • General Manager: Éric CHARPENTIER • Deputy General Manager: Christian NoBILI
Bancassurance Belgium
CRÉDIT MUTUEL NORD EUROPE BELGIUM (CMNE BELGIUM)Boulevard de Waterloo, 16 - 1000 Brussels (Belgium) Tel: 00 33 0 32 22 89 82 00 Fax: 00 33 0 32 22 89 89 90
• Chairman of the Board of Directors: Philippe VASSEUR • Chairman of the Management Committee: Éric CHARPENTIER
CRÉDIT PROFESSIONNEL SABoulevard de Waterloo, 16 - 1000 Brussels (Belgium) Tel: 00 33 0 32 22 89 82 00 Fax: 00 33 0 32 22 89 89 90 Website: www.bkcp.be• Chairman of the Board of Directors: Éric CHARPENTIER• Chairman of the Management Committee: Paul LEMBRECHTS
BKCP SCRLBoulevard de Waterloo, 16 - 1000 Brussels (Belgium) Tel: 00 33 0 32 22 89 82 00 Fax: 00 33 0 32 22 89 89 90 Website: www.bkcp.be• Chairman of the Board of Directors: Éric CHARPENTIER • Chairman of the Management Committee: Paul LEMBRECHTS
Business Finance
BCMNEBanque Commerciale du Marché Nord Europe4, place Richebé - 59000 Lille Administrative head office: 7, rue Frédéric Degeorge - 62000 ARRAS Tel: 00 33 3 21 71 71 51 Fax: 00 33 3 21 71 71 59 Website: www.bcmne.fr• Chairman of the Monitoring Committee: Philippe VASSEUR • Chairman of the Executive Board: François CHABRoL
BAIL ACTEAProperty Leasing 7, rue Frédéric Degeorge - 62000 Arras Tel: 00 33 3 21 71 44 11 Fax: 00 33 3 21 71 44 22 Website: www.bail-actea.fr • Chairman of the Board of Directors: François CHABRoL • General Manager: Christian RoUSSEAU
BAIL IMMO NORDReal Estate LeasingTour de Lille - 60 Boulevard de Turin - 59777 Euralille Tel: 00 33 3 20 30 73 74 Fax: 00 33 3 20 57 62 56
• Chairman of the Board of Directors: Guy CoURBoT • General Manager: François CHABRoL
BATIROC NORMANDIEReal Estate Leasing 2 rue Andreï Sakharov - BP 148 - 76135 Mont St Aignan Cedex Tel: 00 33 2 35 59 44 20 Fax: 00 33 2 35 59 13 82
• Chairman of the Board of Directors: Guy CoURBoT • General Manager: François CHABRoL
NORMANDIE PARTENARIAT2 rue Andreï Sakharov - BP 148 - 76135 Mont St Aignan Cedex Tel: 00 33 2 35 59 44 20 Fax: 00 33 2 35 59 13 82
• Chairman of the Board of Directors: François CHABRoL • General Manager: André TRUFFIN
Insurance
NORD EUROPE ASSURANCES (NEA)9 boulevard Gouvion-Saint-Cyr - 75017 PARIS Tel: 00 33 1 43 12 90 90 Fax: 00 33 1 43 12 90 93
• Chairman of the Monitoring Committee: Philippe VASSEUR • Chairman of the Executive Board: Hervé BoUCLIER
ACMN IARDAssurances Crédit Mutuel Nord Iard4, Place Richebé - 59000 Lille Tel: 00 33 3 28 14 59 02 Fax: 00 33 3 28 14 59 05
• Chairman of the Board of Directors: Hervé BoUCLIER• General Manager: Xavier LECoMPTE
ACMN VIEAssurances Crédit Mutuel Nord Vie9 boulevard Gouvion-Saint-Cyr - 75017 PARIS Tel: 00 33 1 43 12 90 90 Fax: 00 33 1 43 12 90 93 Website: www.acmnvie.fr• Chairman of the Board of Directors: Éric CHARPENTIER• General Manager: Hervé BoUCLIER
NORD EUROPE LIFE LUXEMBOURG62 Rue Charles Martel - L- 2134 Luxembourg Tel: 00 33 0 352 42 40 20 1 Fax: 00 33 0 352 42 40 20 40 Website: www.nellweb.com• Chairman of the Board of Directors: Éric CHARPENTIER • Managing Director: Hervé BoUCLIER
COURTAGE CRÉDIT MUTUEL NORD EUROPE (CCMNE)4, Place Richebé - 59000 Lille Tel: 00 33 3 20 78 39 84 Fax: 00 33 820 360 900
• Chairman: Hervé BoUCLIER• General Manager: Jacques NoIZE
PÉRENNITÉ ENTREPRISES9 boulevard Gouvion-Saint-Cyr - 75017 PARIS Tel: 00 33 820 352 352 Fax: 00 33 1 43 12 90 93
• Chairman of the Board of Directors: Hervé BoUCLIER• General Manager: odile EZERZER
VIE SERVICES9 boulevard Gouvion-Saint-Cyr - 75017 PARIS Tel: 00 33 1 43 12 90 90 Fax: 00 33 1 43 12 90 93
• Chairman: Hervé BoUCLIER
Details of Group companies
Annual Report
2011 11
59
Third-Party Management
LA FRANçAISE AM173 Boulevard Haussmann - 75008 Paris Tel: 00 33 1 44 56 10 00 Fax: 00 33 1 44 56 11 00 Website: www.lafrancaise-am.com• Chairman of the Monitoring Committee: Philippe VASSEUR • Chairman of the Executive Board: Xavier LEPINE • General Manager: Patrick RIVIèRE
LA FRANçAISE DES PLACEMENTSAsset Management 173 Boulevard Haussmann - 75008 Paris Tel: 00 33 1 43 12 01 00 Fax: 00 33 1 43 12 01 20 Website: www.lafrancaise-am.com• Chairman of the Monitoring Committee: Alain WICKER• Chairman: Xavier LEPINE• General Manager: Pascale AUCLAIR
LA FRANçAISE AM GESTION PRIVÉEAsset Management 173 Boulevard Haussmann - 75008 Paris Tel: 00 33 1 73 00 73 00 Fax: 00 33 1 73 00 73 01 Website: www.lafrancaise-am.com• Chairman of the Board of Directors: Michel DIDIER • General Manager: Jacques BELLAMY-BRoWN
LFP-SARASIN AMAsset Management 173 Boulevard Haussmann - 75008 Paris Tel: 00 33 1 44 56 10 00 Fax: 00 33 1 44 56 10 01 Website: www.lafrancaise-am.com• Chairman of the Monitoring Committee: Xavier LEPINE • Chairman: Pascale AUCLAIR
UFG SIPAREXCapital Investment 27 Rue Marbeuf- 75008 Paris Tel: 00 33 1 53 93 02 20 Fax: 00 33 1 53 93 02 30 Website: www.siparex.com• Chairman of the Monitoring Committee: Xavier LEPINE • Chairman: Bertrand RAMBAUD• General Manager: Denis RoDARIE
LA FRANçAISE AM FINANCE SERVICESDistribution and sale of investment products173 Boulevard Haussmann - 75008 Paris Tel: 00 33 1 44 56 10 62 Fax: 00 33 1 44 56 41 65 Website: www.lafrancaise-am-partenaires.com• Chairman of the Monitoring Committee: Éric CHARPENTIER • Chairman: Patrick RIVIèRE • General Managers: Thierry SEVoUMIANS and Nicolas DUBAN
LA FRANçAISE REAL ESTATE MANAGERSReal estate investment 173 Boulevard Haussmann - 75008 Paris Tel: 00 33 1 44 56 10 00 Fax: 00 33 1 44 56 11 00 Website: www.lafrancaise-am.com• Chairman of the Monitoring Committee: Éric CHARPENTIER• Chairman: Xavier LEPINE• General Managers: Jean-Marc CoLY and Marc BERTRAND
LA FRANçAISE AM INTERNATIONAL CLAIMS COLLECTION International collection173 Boulevard Haussmann - 75008 Paris Tel: 00 33 1 44 56 10 00 Fax: 00 33 1 44 56 11 80 Website: www.lafrancaise-am.com• Chairman: Xavier LEPINE • General Managers: Guy LEPAGE and Alain GREC
LA FRANCAISE AM PRIVATE BANKPrivate Bank 4A, Rue Henri Schnadt - B.P. 1556 - L-1015 Luxembourg Tel: 00 33 0 352 45 45 22 1 Fax: 00 33 0 352 44 98 80 Website: www.lafrancaise-am-pb.com• Chairman of the Board of Directors: Alain GERBALDI • Chairman of the Management Committee: Philippe VERDIER
LA FRANCAISE AM INTERNATIONALManco and international distribution 4A, Rue Henri Schnadt - B.P. 1556 - L-1015 Luxembourg Tel: 00 33 0 352 45 45 22 1 Fax: 00 33 0 352 44 98 80 Website: www.lafrancaise-am-pb.com• Chairman of the Board of Directors: Alain GERBALDI• Managing Director: Philippe VERDIER• Directors: Pascal LE BRAS and Jérôme CARBoNNELLE
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4, place Richebé - 59000 Lille - FranceTel. : 33 (0)3 20 78 36 42 - Fax : 33 (0)3 20 78 39 87 - www.cmne.fr
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