Créd Ag readies to ‘switch’ off next year after capital gain

By Jasper Cox
05 Aug 2019

Crédit Agricole said it could start to unwind the ‘switch 2’ capital guarantee provided by its regional banking network in 2020 after it revealed a small boost to its common equity tier one (CET1) ratio in its second quarter results on Friday. Meanwhile, capital markets and investment banking operations did not perform well over the quarter.

Under the switch 2 mechanism, put in place in 2014, the regional banking network guarantees €9bn to Crédit Agricole, allowing a transfer of €34bn of risk-weighted assets (RWAs). The bank said in June this was equivalent to 120bp of its CET1 ratio. Based on second ...

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