05.Credit Agricole SA , Paris , France

Credit Agricole SA , Paris , France




Crédit Agricole SA (CASA) (Euronext: ACA) is the largest retail banking group in France, second largest in Europe and the fifth largest in the world by Tier capital according to The Banker magazine. It is also part of the CAC 40 stock market index.
It is the main sponsor of a professional road cycling team.

Structure of the group

Crédit Agricole SA is a semi co-operative bank, being majority owned by 41 French Caisses Régionales de Crédit Agricole Mutuel. Its subsidiaries are:

* Calyon, the investment banking division of Crédit Agricole.
* Calyon Financial, global futures and options brokerage serving institutional investors.
* CLSA, the Asian securities brokerage division.
* Predica and Pacifica, the insurance divisions
* LCL (Previously Crédit Lyonnais), the nationwide retail banking network, acquired in 2003.

History
France's "green bank" was nicknamed for its roots in agriculture. Crédit Agricole, composed of the Caisse Nationale de Crédit Agricole and 90 regional banks, which together own 90% of the Caisse Nationale, is a unique cooperative organization and one of the most important banking groups in France.

In the mid-1800s, it became clear that there was a need for agricultural credit in France, especially after a crop failure in 1856, which left rural areas in dire straits.By 1866, though some steps towards improvement had been suggested, the outbreak of the Franco-Prussian War prevented their implementation. The society folded in 1876.


In 1894, the Chamber of Deputies proposed a law to organize personal or short-term rural credit, based on the methods of the small credit societies already in existence. The law formalized the requirements for the societies' formation, made them exempt from taxes, and gave them a monopoly on state-subsidized loans to farmers. In 1897, the Bank of France made funds available to the banks through the minister of agriculture, and in 1899, a law was passed to create regional banks to act as intermediaries between the local societies and the minister of agriculture.

In 1910, a law established long-term personal credit for the purchase of land to encourage young men to farm. Only small holdings could acquire these loans, which could not exceed $1,600, and only young farmers were eligible; their characters were the basis for their credit.

In 1920, a law was passed to organize the office National du Crédit Agricole, a national society run by civil servants and the elected representatives of the regional banks but controlled by the government--the minister of agriculture would name its director. Office National du Crédit Agricole also became responsible for the distribution of treasury loan funds and for rediscounting the short-term loans of local and regional societies. In 1926, the name was changed to Caisse Nationale de Crédit Agricole (CNCA).


In 1966, the state decided to allow Crédit Agricole to widen its operations to become more flexible than a bank strictly for farmers. Under the new reform, Crédit Agricole was allowed to make loans to individuals and organizations not specifically connected with agriculture. It was also allowed to create subsidiaries.

In 1967, the government announced that all resources collected by Crédit Agricole's regional and local banks, previously deposited in the French Treasury, would now be deposited with the Caisse Nationale de Crédit Agricole.

In 1971, the Union d'Etudes et d'Investissements, with an eye on important developments in the food processing business, created another subsidiary, L'Union pour le Developpement Régional, which was mainly to provide loans to agricultural and food processing industries.

In 1977, when the U.S. dollar was low, Crédit Agricole ranked briefly as the biggest bank in the world. In 1978, Crédit Agricole's profit of FFr400 million was more than the other three main French banks combined.

Crédit Agricole continued to push forward with international expansion. In 1979, it opened its first international branch, in Chicago; London soon followed, and a New York City branch opened in 1984. By then, Crédit Agricole was also extremely active in funding development in rural areas for roads, telephones, and airports, and the government was encouraging the bank to help out small industry.

By 1981. Crédit Agricole had several strong subsidiaries: Segespar, which headed the investment-and-deposit service group; Voyage Conseil, a French travel agency; Eurocard France, a payment-card company; Soravie, an insurance company for sales in local branches; Unimat (now Ucabail) and Unicomi, which financed equipment and industrial and commercial building; Unicredit, which provided loans for businesses; and Union d'Etudes et d'Investissements, now heavily involved with rural development.

In January, 1981, Crédit Agricole's charter was changed again to allow the bank to provide loans to companies with fewer than 100 employees, whether or not they were connected with agriculture. The government also eased its credit limits for farmers and stockbreeders, and Crédit Agricole was no longer limited to lending in towns with fewer than 12,000 inhabitants.

In May, 1981, the Socialists won the national election. Soon all major French banks that weren't already nationalized became state controlled, and over the next few years, the government imposed a domestic policy of economic austerity in an attempt to reduce inflation, renew industry, and balance its foreign trade account.

In 1985, Crédit Agricole established a subsidiary called Predica to enter the life insurance market. Capitalizing on Crédit Agricole's extensive branch network, Predica had become the second-largest life insurer in France by 1988.

Finally, in 1987, the government began to take steps towards freeing CNCA from state control. On February 1, 1988, the state sold 90% of CNCA's common stock to its regional banks and the company was incorporated with FFr4.5 billion in capital stock. Most of the rest of its stock went to employees, and the government holds a small stake.

In 1989 Crédit Agricole ceased to have a monopoly on the shrinking number of subsidized loans to farmers. In losing this monopoly, Crédit Agricole lost an important, captive customer group. The bank should be able to compensate for this loss, however, with the new business it expects to pick up as a result of the lifting of restrictions on its business. When Crédit Agricole lost its monopoly on subsidized farm loans, it was also freed of the unusual government restrictions on its business. Now Crédit Agricole operates in much the same way as any other French bank, and it expects its business to improve rather than suffer as a result of this status.