Regional Banks of Crédit Agricole: One year after

I finished my last post on the regional banks of Credit Agricole by saying that I took a smaller position in the regional bank active in Paris (around 3.3% portfolio weight as of Q2 2025).

Almost exactly one year after buying this position I decided that it’s time for a review. Performance-wise, the price of the CCIs increased by around 70% within one year.

While this is a very good return it is a slightly behind the return of the CCIs by the fellow regional banks (mentioned in my last post) which increased by around 95% on average.

The area shaded in red depicts the time since October 2024, the time I purchaded the CCIs.

The most recent financial results are in line with expectation, a slight increase compared to the previous year. The company is still buying back the certificates and shows no sign of price sensitivity. The CET1 ratio remains very high, even for a conservatively financed bank.

A significant increase in stock price paired with more or less unchanged financials inevitably lead to more expensive valuation metrics. This can be seen in an updated chart:

The CCIs might still look cheap on a comparative basis to other banks, the P/E ratio and (past) payout yield are now way above or below their historic average. While past valuation metrics do not tell us much about the future performance in general, in this particular case they might still be worthwile to consider.

As the annual payout on the CCIs and the parts sociales is caped depending on a rate set by the french government (by law, see the current rates here) it is not possible to recieve too much of the value in the form of dividends. The company is continously buying back certificates. Nevertheless, this is also caped by the 25% rule of the European Market Abuse Regulation.

Please find an extract of the law here:

Cooperatives may serve their capital only an interest, determined by the general meeting under the conditions laid down by the articles, the rate of which is at most equal to the average, over the three calendar years preceding the date of the general meeting, of the average rate of return on the bonds of private companies, plus two points. This rate is published by the Minister in charge of the economy under conditions fixed by decree.

Source: Article 14, Law No 47-1775

With the recent inrease in the CCIs price, the (past) payout ratio almost halved to now around 2.5% from previously 5%. On the other hand, as the published rate on “bonds of private companies” increased in line with market rates, a higher payout seems likely for the next couple of years.

Yet, as a consequence of this change in valuation, and as I am currently in the process of consolidating my portfolio positions to gather funds for a new idea, I decided to sell the certificated for a price of 103.8 EUR.