Posted on July 28, 2022, 8:30 PM
La Banque Postale filled out mortgage loans in the first half. In the context of rising interest rates, the subsidiary of La Poste, which published its financial results on Thursday, a day before the parent company, witnessed a jump in mortgage production by 21% compared to last year, to 6.6 billion euros.
Unprecedented pace, far outpacing the rest of the market. In May, the growth rate of housing loans reached 6.8% according to the Banque de France, which is already a very high level.
The real estate market remained dynamic in the first half. Philipp Heim, chairman of La Banque Postale, explained that the French rushed to bank branches to finalize their loans, well aware that prices would rise. However, the situation should not continue.
The group is already anticipating a slowdown in the market, given the rise in interest rates, which should continue and approach the limit of the usury rate, which increases more slowly, forcing banks to be more selective. “Production will inevitably slow in the third quarter,” warns Philipp Heim.
CNP hack in Italy
For La Banque Postale as for its competitors, mortgages, which remain low yielding, remain an important tool of conquest. It helps build customer loyalty, which the bank can then hope to sell other financial products (insurance, savings, etc.).
In the first half, the group benefited from the strong momentum of its business activity, while consumer credit also held up well (+7.4% in production). Thus France’s bank insurance revenue, which accounts for more than two-thirds of the activity, rose by 3.1%, with a sharp rise in profitability.
Internationally, La Banque Postale has benefited from the good performance of its subsidiary CNP Assurances, in which it now controls 100% of the capital following its takeover and delisting offer in June. Results are up in Brazil and Italy in particular, where the life insurance company has just bought the balance of the stake in ex-Aviva Italy from UniCredit and thus solidified its presence in the transalpine market.
The Group’s Corporate and Investment Banking division was formally established on 1Verse January, which focuses on the corporate market, also contributed to an increase in profits. In total, La Banque Postale saw the share of the net income group rise by 53%, to €765 million, and revenue increased by 5.2%, to €4.2 billion.
stable financial provisions
The economic slowdown in business does not affect the bank’s optimism at the moment. “We don’t see any particular incident at this point, either at the corporate or individual level,” testifies Philip Heim, who nevertheless recognizes that persistently high inflation can create hardships for certain populations and businesses.
As evidence of this relative optimism, the cost of risk has remained globally stable for the group, and at a low level, even if the financial provision in the bank insurance business doubles, to deal with potential defaults.
The La Poste subsidiary intends to benefit, in the second half of the year, from higher interest rates initiated by the European Central Bank (ECB). “This is generally good news for the banks,” admits the president of La Banque Postale. Which cautions, however, that the impact on the accounts will not necessarily be immediate. Because the increase cannot be automatically transferred to the granted loans. »
La Poste subsidiary will also see Livret A’s bill increase, with the rate of return doubling to 2%. The public bank is most vulnerable to this increase, with just over a quarter of savings accounts opened.