Banque Postale driven by record loan production in the first half of the year

Sent on July 28, 2022, 8:30 pm

The Banque Postale filled up on real estate loans in the first half of the year. In a context of rising interest rates, the La Poste subsidiary, which released its financial results on Thursday, a day before the parent company, saw mortgage production jump 21% from last year, to 6.6. billion euros.

An unprecedented pace, far superior to the rest of the market. In May, according to the Banque de France, the growth rate of real estate loans had reached 6.8%, an already very high level.

“The real estate market remained dynamic in the first half. The French rushed to bank branches to finalize their loans, well aware that rates would rise, ”explained Philippe Heim, chairman of the board of La Banque Postale. However, the situation is not expected to continue.

In fact, the group expects a slowdown in the market, given the rise in rates, which should continue and approach the limit of the usury rate, which is growing more slowly, and forces banks to be more selective. “Production will inevitably slow down in the third quarter,” warns Philippe Heim.

The turning point of CNP in Italy

For La Banque Postale as for its competitors, mortgages, which remain low-yield, remain an important means of conquest. It helps build customer loyalty, to whom the bank can hope to sell other financial products (insurance, savings, etc.).

In the first half of the year, the group benefited from the strong momentum of commercial activity, while consumer credit also held up well (+ 7.4% production). Revenues from bancassurance in France, which represents more than two-thirds of the business, therefore grew by 3.1%, with a sharp increase in profitability.

At international level, La Banque Postale benefited from the good performance of the subsidiary CNP Assurances, of which it now controls 100% of the capital following the takeover bid and the delisting in June. Growth results in Brazil and in Italy in particular, where the life insurer has just taken over from UniCredit the balance of the stake in the former Aviva Italy, thus consolidating its presence in the transalpine market.

The new corporate and investment banking division of the group, officially created on 1uh January, which focuses on the corporate market, also contributed to the increase in earnings. In total, La Banque Postale saw its group share of net profits rise 53%, to 765 million euros, with revenues up 5.2%, to 4.2 billion.

Stable financial arrangements

The current economic slowdown does not affect the bank’s optimism for the moment. “We do not see any particular incident at this stage, both at the level of companies and individuals”, testifies Philippe Heim, who nevertheless acknowledges that persistent high inflation could create difficulties for some categories of the population and businesses.

A sign of this relative optimism, the cost of risk remained stable overall for the group, and at a low level, even though the financial reserves in the bancassurance business doubled, to deal with possible payment defaults.

The La Poste subsidiary intends to exploit, in this second part of the year, the rate hike initiated by the European Central Bank (ECB). “This is generally good news for banks,” acknowledges the boss of La Banque Postale. Which warns, however, that the effect on the accounts will not necessarily be immediate. “Because the increase cannot be automatically transferred to the loans granted. “

The La Poste subsidiary will also see the Livret A account increase, with the doubling of the rate of return to 2%. The public bank is the most exposed to this increase, with just over a quarter of savings accounts open.

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