N° 36 : The international banking activities of France’s main banking groups since 2006

With total banking assets equivalent to 280% of French gross domestic product (GDP), these five groups have developed a presence extending far beyond their national borders: all rank as major international players, classified as “significant banks” by the European Union, and therefore fall under the ECB’s direct supervision as of 4 November 2014; moreover, on a global level, the four largest groups (BNPP, GBPCE, GCA and SG) qualify as global systemically important banks (G-SIBs). One of the main factors taken into account in these two classifications is the scale of their international business.

At the end of 2013, all five groups featured a far-reaching international presence, although their activities were concentrated primarily in advanced economies, with the top ten countries in terms of exposure accounting for 72% of their total crossborder (or foreign) claims. The majority of these exposures are denominated in euro (45.6%) and in dollars (34.5%), and correspond to medium- to long-term loans and advances to counterparties such as major corporations, retail customers, other credit institutions and central banks, originated by local branches of the parent company.

Since 2006, the international activities of these groups have undergone a number of transformations, linked in part to changes in the macroeconomic environment, and to new regulatory requirements concerning liquidity and own funds. Banks have been forced to rethink their strategies in terms of exposure, and broaden their international footprint and the scope of their activities. This has in turn added another level of risk to their banking and trading books. Between end-2006 and end-2013, the total foreign exposures of France’s main banking groups went from EUR 1,716 billion to close to EUR 2,550 billion (i.e. excluding guarantee commitments, from 26% to 35% of total banking assets); the rise proved particularly rapid up until December 2010, but exposures subsequently fell sharply due to the financial crisis and the global process of deleveraging, as French banks cut back their lending to foreign banks and, to a lesser extent, to non-bank private counterparties. Exposures to the public sector, meanwhile, continued to rise at more or less the same pace as before the crisis, although this mainly reflects large claims on central banks, especially towards the end of the period, when the economic and regulatory context was more favourable towards this kind of exposure.