In a complex and uncertain economic and financial environment, what are AFL’s current priorities?
Our core priority remains unchanged: to ensure reliable and sustainable access to funding for our shareholder local authorities, under the best possible conditions.
This requires prudent risk management, strong capital and liquidity buffers, and close attention to funding costs. In a more volatile and competitive environment, we have chosen to anticipate market developments by further strengthening the robustness and transparency of our model.
How does this strategy translate into practice in the bond markets?
While AFL was initially focused on the euro market, it has progressively expanded its footprint to other currencies, including sterling in 2022 and Swiss francs in 2024.
More recently, we reached a new milestone with our inaugural benchmark issuance in the Australian domestic market, a 10-year A$600m transaction, fully aligned with our strategy of diversifying funding sources and broadening our investor base.
This diversification enhances our ability to access the market under favourable conditions, regardless of market cycles.
What levers are you using to optimise your cost of funding in the short and medium term?
Our approach is based on two complementary levers.
The first is an operational tool: we have signed an agreement to acquire GE SCF S.C.A., a covered bond issuer (Société de Crédit Foncier). Subject to completion, which we expect in the second half of 2026, this platform will further diversify our funding toolkit and improve our funding conditions alongside our senior unsecured issuance.
The second is a long-term structural lever: the potential recognition of a 0% risk weighting on AFL’s senior debt instruments. The French parliament is currently discussing this development, which is expected to evolve in the near future. Ultimately, it would materially enhance our long-term funding conditions.
What message would you like to convey to investors through these developments?
AFL offers a clear and prudent credit story, underpinned by its exposure to the French local public sector, which has historically demonstrated a strong credit profile. The growth of our shareholder base, the diversification of our funding channels and the strength of our model are progressively improving the liquidity and visibility of our issuance programme.
AFL is positioning itself as a reference issuer in the French public sector space, acting as a long-term funding partner to local governments and offering investors stable and consistent exposure within a tightly controlled risk framework.
AFL Group reports record annual results
Pierre-Jean Bagilet, AFL’s Chief Financial Officer, discusses AFL Group’s Record Annual Results. (IFRS consolidated figures as of December 31, 2025)
Loan growth was the main driver of AFL Group’s increase in revenue in 2025, resulting in strong momentum in both net banking income and operating profit. Net income doubled year-on-year. AFL maintains a very strong financial profile, with a Tier 1 ratio of 68.71% and a very low cost of risk (1.26 basis points). Liquidity remains high, with an LCR of 485%. Demand from capital markets’ investors for AFL remains robust: we raised €2.2bn in 21 transactions in 2025, with an average spread of 15.6 basis points over OATs. |