French banks’ strong capitalisation and sound profitability going into the Covid-19 crisis has enabled them to come out of it in better shape than most, as shown by their Top 1000 results.

France was hit harder by the Covid-19 pandemic than many of its euro area peers, as gross domestic product contracted by 8.2% in 2020. The effect of these difficulties was to squeeze the size of the economy as a whole to more than 5% below its pre-pandemic level.

Despite these challenges, swift and extensive support by the French government has prevented the kind of deep economic scarring that initially concerned analysts and observers. Private employment, for example, experienced only a 1.8% drop in 2020, much less than originally feared, while household wealth was also broadly preserved. 

French banks have also emerged from the crisis in good health, partly as a result of the banking system’s underlying strength going into it. They boasted high capitalisation and generally solid profitability, thanks to their diversified and prudent business models.

BNP Paribas is crowned the best performer of the largest five French banks in The Banker’s 2021 Top 1000 World Banks ranking, with an overall performance score of 5.36. Helping it to achieve this position is its strong profitability — partly a reflection of BNP Paribas’s efforts to reduce its cost base — as well as robust trading income from its investment banking arm, over the review period. 

Crédit Agricole, the country’s largest lender by Tier 1 capital, comes a close second in the overall best-performance ranking, with a score of 5.33. This strong showing reflects Crédit Agricole’s commendable asset quality metrics, as well as its impressive soundness, leverage and operational efficiency scores. The bank is the highest ranked French institution globally, placing 12th in the Top 1000 main ranking.

These two French banks once again feature in the top 20 lenders by Tier 1 capital — making France the only European country to have more than one bank featured among this global elite.

Crédit Mutuel, Groupe BPCE and Société Générale round out the best-performing table in third, fourth and fifth place, respectively. Notably, Crédit Mutuel achieves an overall performance score of 5.31, putting it within touching distance of the top two performers. It securing first place in the growth, operational efficiency, soundness and leverage metrics. After topping the overall performance table in the 2020 rankings, the group has once again underscored its position as a heavyweight in the French banking market.

Groupe BPCE, meanwhile, takes second place for its asset quality metrics. This was accompanied by a relatively strong performance in the soundness and leverage stakes. Société Générale finishes last in terms of overall performance against its peers, but it managed to maintain its 31st place world ranking with a Tier 1 increase of 18.8%. 

As France emerges from the worst of the Covid-19 pandemic, its banks are better positioned than most to bounce back from a period of turmoil. Boasting diversified business lines and reaping the rewards of heavy investment into digital technology, French lenders are primed to capitalise on the opportunities of a post-crisis world.


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