Crédit Agricole has set Amundi a €1trn (£83bn) target requiring 30% growth in assets under management in less than three years with multiple acquisitions on the cards.
Speaking at an investor event in London yesterday, the French banking giant said it would increase net profit by 60% to over €4bn in 2016, helped by cost cutting and cross-selling of product lines, with savings and insurance products said to be key areas of focus.
According to newswire reports, the group also promised to increase its dividend payout ratio to 50% in 2015 from its current level of 35%, with half as a cash component.
Amundi was created four years ago by merging its asset management business with that of its French rival Société Générale. The unit had €777bn of assets at end December 2013.
One-third of the growth is expected to be organic, through expanding into the new markets, while two-thirds is expected to be through picking up mid-sized rivals in Europe.
Gaining on BNPP
Recent research from Nomura relating to the French banking sector said the gap had been narrowing between the superior performance of BNP Paribas and its domestic peers since 2008.
“As competitors have rebuilt balance sheets and shed underperforming units, the valuation gap has narrowed substantially, prompting some relative value investors to question whether Crédit Agricole SA [CASA] can continue to outperform given BNP’s still superior balance sheet.”
While Crédit Agricole was deemed a ‘buy’ rating by Nomura, Natixis, praised for having moved to a new trading range, was rated a ‘reduce’.
“We believe that Natixis has shown a way for banks to move to a new trading range. For most of the time post crisis it traded at a discount to CASA, but as it committed first to a 50% payout and then to a greater than 50% payout with its November 2013 investor day it has broken in to a new premium trading range."
On CASA’s dividend plans, Nomura said: “With majority mutual ownership, high dividends from CASA are largely captured intragroup, meaning CASA could also target a 50% long-term payout ratio which on 2015 consensus earnings would give an attractive yield of 5.9%.”
