The 29 rated CRCAMs', LCL's, Lukas Bank's and EFL's ratings are also affected
New York, August 28, 2008 -- Moody's Investors Services announced today that it had placed on
review for possible downgrade the Bank Financial Strength Ratings (BFSRs)
and long-term debt and deposit ratings of Credit Agricole SA (CASA)
and of its subsidiaries Calyon and LCL. The rating action also
affects other subsidiaries' long-term debt and deposit ratings.
All short-term ratings were affirmed. A full list of affected
ratings is at the end of this press release.
Moody's rating action follows the announcement by CASA of its Q2
results. CASA's announcement demonstrated continuing strains
on the Group's profitability and efficiency from Calyon's
poor performances for the fourth consecutive quarter. Regarding
LCL, Moody's notes some improvements in respect of its commercial
performance but the impact of these improvements continues to fall short
of Moody's expectations for a bank with a B- BFSR.
According to Moody's stress tests, Calyon could still have
to recognise further impairments on its Structured Finance portfolios
in the rest of the year, although probably to a lesser extent than
what it has already done in the first half of the year. Additional
impairments could put Calyon's capital levels under stress and thus
also its BFSR. However, Moody's acknowledges the Group's
capacity to provide sufficient capital to Calyon if needed and also to
maintain appropriate capital levels at both Group and CASA consolidated
levels.
Under the present circumstances, Moody's does not believe
that Calyon will be able to restore its profitability and efficiency to
its pre-crisis level. However, Moody's is aware
that the Group will announce in the coming weeks a strategic re-positioning
leading to a restructuring of Calyon.
Moody's will focus its review on the restructuring measures to be
announced and their subsequent implementation. A high likelihood
of Calyon returning to a satisfactory level of profitability and efficiency,
albeit with a reduced nominal contribution to the group's total
income, could lead Moody's to confirm the current ratings.
On the other hand, CASA's BFSR and long-term ratings
could be downgraded if Moody's considers that Calyon will continue
to be a drain on the Group's overall profitability and efficiency.
During its review process, Moody's will also assess the potential
impacts on the Group of an economic slowdown in its main markets.
More specifically, Moody's will monitor possible strains on
retail activities including but not limited to consumer lending.
The following ratings were placed on review for possible downgrade:
- Credit Agricole SA's B BFSR, Aa1 deposit and senior unsecured
debt ratings, Aa2 subordinated and junior subordinated debt ratings
and Aa3 preferred stock ratings;
- the Aa1 deposit and senior unsecured debt ratings of the 29 rated
Caisses Regionales du Credit Agricole Mutuel;
- Calyon's C BFSR, Aa1 deposit and senior unsecured
debt ratings, Aa1 backed senior unsecured ratings and Aa2 subordinated
debt ratings;
- Calyon, New York Branch's Aa1 deposit and senior
unsecured debt ratings;
- CL Capital Trust I's Aa3 backed preferred stock ratings;
- CALYON Finl. Products (Guernsey) Ltd's Aa1 senior
unsecured and backed senior unsecured ratings, Aa2 backed senior
and junior subordinated debt ratings;
- CALYON Finance (Guernsey) Limited Aa1 backed senior unsecured
debt ratings and Aa2 backed junior subordinated debt ratings;
- CA Preferred Funding Trust's Aa3 preferred stock ratings;
- CA Preferred Funding Trust II's Aa3 backed preferred stock
ratings;
- Calyon, Tokyo Branch's Aa1 deposit debt ratings;
- Calyon Financial Solutions' Aa1 backed senior unsecured
debt ratings;
- Credit Agricole S.A., London Branch's
Aa1 deposit and senior unsecured debt ratings and Aa2 junior subordinated
debt ratings;
- Le Credit Lyonnais SA's B- BFSR rating, Aa1
deposit and senior unsecured debt ratings, Aa2 subordinated and
junior subordinated debt ratings;
- Credit Lyonnais Capital S.C.A's Aa3 backed
preferred stock ratings;
- Indosuez Holdings S.C.A's Aa3 backed preferred
stock ratings;
- Lukas Bank SA's A1 local currency deposit ratings;
- Europejski Fundusz Leasingowy SA's A1 issuer rating.
The following ratings are unchanged:
- Cassa di Risparmio di Parma e Piacenza Spa's C+ BFSR
rating, Aa3 deposit and senior unsecured debt ratings;
- Banca Popolare Friuladria's C BFSR rating and Aa3 deposit
ratings;
- Fiat Group Automobiles Financial Services S.p.A.
Co's Baa2 issuer rating;
- Index Bank's E+ BFSR and Baa3/B2 local and foreign
currency deposit ratings;
- Credit Uruguay Banco SA's D BFSR and Ba1/B2 local and foreign
currency deposit ratings;
- Emporiki Bank's C- BFSR, Aa3 deposit and senior
unsecured debt ratings;
- Emporiki Group Finance Plc's Aa3 senior unsecured debt
ratings and A1 backed subordinated debt ratings;
- Lukas Bank SA's C- BFSR rating and foreign currency
deposit rating.
All short-term debt and deposit ratings are unchanged.
Headquartered in Paris, CASA reported IFRS consolidated assets of
EUR 1.4 trillion at year-end 2007, up 12.2%
compared with 2006. CASA's 2007 net income (Group share) declined
by 16.8% to EUR 4 billion. CASA's Tier 1 ratio stood
at 8.1% at December 2007 (2006: 8.2%).
The Crédit Agricole Group disclosed net income (Group share) was
down by 15% to EUR 5.97 billion in 2007.At the end
of December 2007 the Group reported total assets of EUR 1.5 trillion,
up 11.6% compared to 2006, and its Tier 1 ratio stood
at 7.4% in 2007 (2006: 7.7%).
Headquartered in Paris La Défense, Calyon had total assets
of EUR 641.9 billion at year-end 2007. The bank recorded
a negative net income, group share, of EUR -714 million
at year-end 2007.
London
Patricia Dambrine
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Paris
Stephane Le Priol
Vice President - Senior Analyst
Financial Institutions Group
Moody's France S.A.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's places CASA's and Calyon's ratings on review for possible downgrade