Crédit Agricole Assurances and EIP acquire 25% of Repsol Renovables – 06/10/2022 at 11:24

(AOF) – Crédit Agricole Assurances and Energy Infrastructure Partners (EIP), a benchmark investor in the field of energy transition, have announced the signing of an agreement with Repsol SA for a 25% stake in Repsol Renovables, the branch of Repsol SA dedicated to renewable energies, based on an implicit enterprise value of 4.4 billion euros.

Repsol Renovables currently has an installed generation capacity of 1.6 GW, made up of wind farms, photovoltaic farms and hydroelectric plants spread across Spain, Chile and the United States. Alongside Crédit Agricole Assurances and EIP, Repsol will pursue its strategic plan to increase its total installed capacity to 20 GW by 2030.

The consortium formed by Crédit Agricole Assurances and EIP will own 25% of Repsol Renovables following the final closing, which is expected to take place in the fourth quarter of this year, subject to customary closing conditions and regulatory approvals.

Philippe Dumont, Chief Executive Officer of Crédit Agricole Assurances, said: “In line with the Crédit Agricole Group’s societal project in favor of the climate, Crédit Agricole Assurances reaffirms its commitment to a low-carbon economy through its investments in the energy transition. This operation, alongside Repsol and EIP, is a new step in this strategy, and will contribute to achieving our objective of 14 GW of installed capacity by 2025”.

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Key points

– Listed vehicle of the mutualist group of the same name, 1st French bank and 8th worldwide;

– Net banking income of €22.7 billion, generated by retail banking at 65%, by specialized financial services at 12%, by wholesale banking at 14% and by savings management and insurance ;

– Business model in 3 points – relational excellence by becoming the preferred bank of individuals, entrepreneurs and institutions, local responsibility to support digitalisation and societal commitment by amplifying mutualist commitment;

– Capital held at 55.3% by the regional mutuals, hence the strong presence of their representatives on the Board of Directors (10 out of 21 members) chaired by Dominique Lefebvre, Philippe Brassac being Chief Executive Officer;

– Solid financial position – CET 1 ratio of 17%, return on equity of 11.6% and cash reserves of €472 billion.

Challenges

– Investor response to the new 2025 plan, the objectives of the 2019-2022 plan having been achieved a year ahead of schedule;

– Innovation strategy, one of the 3 levers of the business model: internally: 90% of Group entities having a “data-centric” architecture in 2022, and €300 million in IT efficiency gains , 100% of IT employees trained in new technologies in the University of Information Systems and 100% of emerging technologies tested on new business services / towards customers: expansion of the range of leading applications (Ma banque Pro, Pro&Entreprises LCL , etc…), offer of digital and mobile checkout solutions for small/medium merchants, European electronic banking offer for major retailers and complete e-commerce range;

– Reinforced environmental strategy: carbon neutrality by 2050 for the own footprint and on investment and financing portfolios / in 2022: total cessation of financing for unconventional hydrocarbon extraction projects, no extraction financing or gas in the Arctic region / in 2025: reduction to 20% in oil extraction, for all open funds under active management by Amundi, an energy rating higher than that of the competition and €20 billion committed in funds at impact, renewable energies: doubling of the production capacity of renewable energy installations financed by Crédit Agricole Assurances to 10.5 GW

– 60% growth in investment banking exposure to non-carbon energies and development of the platform dedicated to hydrogen projects / 50% increase in financing of renewable energies in France by Unifergie;

– Benefits from penetrating the Chinese (first foreign asset management company) and Indian (cash management offer) markets;

– Reinforcement in the financing of mobility via the partnership with Stellantis, operational in 2023 and the launch of an internal entity specializing in car financing, rental and mobility.

Challenges

– Net assets of €13.2 per share, compared to the stock market price;

– Russia-Ukraine war: strong impact on earnings in the 1st quarter due to provisions made on the risks of the 2 countries and stoppage of financing for Russian companies;

– Integration of Italian CreVal and Lyxor;

– 2021 dividend of €1.05 (including €0.2 for the 2019 catch-up).

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