BanqueAccord RA07_couvs GB NEW.indd

Transcription

Contacts
Headquarters
Banque Accord
4-6 rue Jeanne Maillotte
59110 La Madeleine
France
Tel.: (33) 03 28 38 58 00
Fax: (33) 03 28 38 59 35
China
Accord Business
Consulting
5F, Zhong Tong Building
n° 1 Huangxing Road
200090 - Shanghaï-PRC
Tel.: (86) 21 65 18 37 94
Fax: (86) 21 65 18 68 44
Spain
AccordFin
Avenida de la Industria,
n° 49
28108 Alcobendas Madrid
Tel.: (34) 91 484 58 21
Fax: (34) 91 484 58 22
France
Banque Accord
59110 La Madeleine
Tel.: (33) 03 28 38 58 00
Fax: (33) 03 28 38 59 35
Oney.fr
2-8 rue Gaston Rebuffat
75940 Paris Cedex
Tel.: (33) 01 44 89 29 05
Fax: (33) 01 44 89 29 19
Hungary
Accord Magyarorszag
Tölgyfa u.28
1027 Budapest
Tel.: (36) 188 73 952
Fax: (36) 188 73 999
Italy
Accord Italia
Via Messina, 38 – Torre C
20154 Milano
Tel.: (39) 02 30 37 00 10
Fax: (39) 02 30 37 00 99
Ireland
Oney Life / Oney Insurance
The Metropolitan Building
Third Floor
James Joyce Street
Dublin 1
Tel.: (353) 1 266 6079
Fax: (353) 1 266 6066
Analysts
Treasury department
Tel.: (33) 03 28 38 58 00
Media
Communications
department
Tel.: (33) 03 28 38 59 26
innovative
mobile
sustainable
Poland
AccordFinance
Ul. Ogrodowa 58
00-876 Warszawa
Tel.: (48) 71 79 97 020
Fax: (48) 71 79 97 003
Portugal
Crediplus / Oney.pt
Avenida José Gomes
Ferreira, n° 9
Sala 01 Miraflores
1495 - 139 Algés
Tel.: (351) 214 125 293
Fax: (351) 21 412 68 77
Romania
Accord Intermed Consumer
Finance SRL
Hipermarket Auchan Titan
Bd. 1 Decembrie 1918 4A, etaj 3
011351 Bucarest
Tel.: (4) 021 408 01 09
Fax: (4) 021 408 01 09
2007
ANNUAL REPORT
Russia
BAFinans
1, building 14, Nagatinskaya
street
117105 Moscow
Tel.: (7) 495 662 82 00
Fax: (7) 495 662 82 01
www.banque-accord.com
www.oney.com
Editorial staff: Banque Accord Communications
department
Photo Credits: DDB Nouveau Monde, Banque
Accord – DR
Design – Production:
leadership
BanqueAccord RA07_couvs GB NEW.iIV IV
mobility
innovation
commitment
4/04/08 17:33:43
Banque Accord 2007 annual report
Auditors’ report
on the consolidated
financial statements
Contents
2
Corporate
governance
3
Message
from the CEO
4
Highlights
5
Key figures
6
Conquest
10
14
Sharing
Year ended December 31, 2007
18
Financial
report
Banque Accord S.A.
Registered office:
40, avenue de Flandre
– 59170 Croix
Share capital: €28,200,300
Innovation
To the shareholders,
In accordance with the
terms of our appointment
at the Annual General
Meeting, we have examined
the accompanying
consolidated financial
statements of Banque
Accord SA for the year
ended December 31, 2007.
These consolidated financial
statements were prepared
by your Board of Directors,
and it is our task to express
an opinion on these
statements, based on our
audit findings.
Innovation
Increasingly mobile
financial services
Page 6
BanqueAccord RA07_couvs GB NEW.iII II
1. Opinion on the
statements
We have conducted our
audit in accordance with
the professional standards
applying in France. These
standards require that
we plan and perform the
audit in such a way as
reasonably to ensure that
the consolidated financial
statements are free from
material misstatement. An
audit includes sampling
the data contained in
these financial statements
to examine the evidence
supporting the amounts and
disclosures they contain.
An audit also includes an
appraisal of the accounting
principles used, and
significant estimates made,
by management, as well
as evaluating the overall
presentation of the financial
statements. We believe
that our audit provides a
reasonable basis for our
opinion.
In our opinion, these
statements, prepared in
accordance with the IFRS as
adopted by the European
Union, constitute a fair
representation the results
of business conducted
during the year ended 31
December 2006, and the
financial position and assets
of the Group at that date.
2. Basis of opinion
In accordance with Article
L.823-9 of the French
Commercial Code, which
governs the basis of our
opinion, we would draw
your attention to the
following matters:
As shown in notes 3.16
Impairment of financial
assets, 7.2 Impaired
receivables, 7.3 Changes
in impairment and 22
Impairment losses to the
financial statements, your
company records provisions
covering the credit risks
inherent in its business. Our
task is to give our opinion of
the data and assumptions
upon which these estimates
are based, review the
calculations made by the
company, compare the
estimates contained in the
financial statements for
previous fiscal years with
the corresponding actual
figures and examine the
procedures used by the
board of directors when
approving these estimates.
We have therefore assessed
the reasonableness of
management’s estimates.
The assessments were made
in the context of our audit of
statements as a whole, and
therefore contributed to the
formation of the unqualified
opinion expressed in the first
part of this report.
3. Specific verification
professional standards
applicable in France, we
have also examined the
information contained in
the Group management
report. We have observation
to make regarding the
fairness of this information
or its consistency with the
statements.
Paris La Défense, March 12, 2008
Villeneuve d’Ascq, March 12, 2008
KPMG Audit – A department of KPMG S.A.
Didier de Menonville
Partner
aCéa
Christian Chounavelle
Partner
4/04/08 17:33:49
1
Empowering
consumers
Profile
Core business
Banque Accord is the Auchan Group’s financial services division,
offering payment solutions and consumer finance. It maintains
a substantial presence in 9 countries, where its 1,500 employees
serve over 5.4 million customers and manage the bank’s
partnership with leading retail chains.
Customer vision
In all its operating countries, Banque Accord applies its
corporate vision “To improve purchasing power for the greatest
number of customers”. It achieves this by adapting and applying
the rules of successful retailing to financial services, at the same
time as minimizing costs and passing on savings to its customers.
Reliability
From the very beginning, our growth has been built in the proven
reliability of our back-office systems.
The bank’s payment systems team processed 470 million
transactions in France during 2007.
Leadership
Together with our innovative talents, our dual expertise in
banking and retailing has established us as a European leader
in store card management services. Today, we are committed
to becoming the “payment company”.
BanqueAccord_RA07_GB NEW.indd 1
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2
MANAGEMENT
COMMITTEE
Damien Guermonprez
Chief Executive Officer
1 - Hervé Ketelers
Risk and Projects Director
2 - Benoît Derville
Internal Audit Director
3 - Jacques Guillaume
Human Resources Director
4 - Jean-Pierre Viboud
France Managing Director
5 - Nicolas Dreyfus
Chief Financial Officer
1
3
4
2
5
Corporate
governance
BOARD OF DIRECTORS
Jérôme Guillemard
Chairman
Vincent Fauvet
Henri Mathias
Xavier de Mézerac
Gérard Mulliez
John Roche
Jérôme Guillemard
Chairman
BanqueAccord_RA07_GB.indd 2
Damien Guermonprez
2/04/08 0:30:26
3
Ten years of
double-figure
growth!
Message from the CEO
The 2007 results reported by Banque Accord were demonstrated, once again, a strong
trend. We’ve achieved strong growth, in all of our Group companies and in our
financial results. During the year, we increased our customer base by 13%, our loan
book by 14% and our Net Banking Revenue by 18%. The total amount of purchases
paid with our cards in the world increased by near 10%, driven by the commercial
dynamics in all our countries. All these figures confirm the dynamic expansion we have
been able to sustain over 10 years, as well as the relevance of our international growth,
new product and customer relationship consolidation strategies. Standard & Poor’s
reconfirmed our A/A-1 rating at the beginning of September.
International, innovation and initiative
The process of internationalizing the Bank began in 2000, and has never faltered.
In fact, we have accelerated that process, with the opening of a company in China
and the laying of foundations for a new insurance business in Ireland. In France, we have
been working with our longstanding partner, the Santander Group, to create Santander
Financements and launch a full range of automobile finance products.
Our products are more innovative than ever. In France, the launch of the Auchan
PayPass™ card through Auchan positions us as a pioneer in contactless cards alongside
those banks involved in testing mobile payment products. Our CardOps electronic
banking division was able to offer tailored products for specialist retail chains, and has
shot to the top of the market to become the leader in the gift card sector in France, with
3.5 million cards issued. Lastly, the launch of our MACSF (healthcare) and Flouss.com
(money transfer) cards has allowed us to capitalize in the French market on the European
experience we established in co-branded cards since 2002.
2007 saw the development of our CRM system, with improved customer segmentation in
our mature countries, and substantial growth in our web-based operations in France and
Portugal. This effort delivered very strong growth in our direct and crossover sales.
2008 will see the practical implementation of many projects initiated in 2007, including
our launch in Ukraine, deployment of the Auchan PayPass™ card, the takeoff of our
gift card business in France and internationally, and the expansion of mobile payment
in China. In many other countries, we will also be focusing on the insurance and money
transfer markets, both of which are natural areas of diversification. We will refine our
CRM system even further.
In ensuring that these results and the associated impetus are sustained over the longer
term, we will continue to rely substantially on its unique corporate vision and the
commitment of all its people, whose diversity constitutes its key asset. For them, 2008
will be a very important year, because, with the full support of our shareholders, we will
be introducing our employee shareholding scheme. This is the best way we know of
thanking the men and women who work so hard for the Group, giving them a personal
stake in their own futures and encouraging everyone to work together to achieve
future challenges.
Working
together
to build
a different
kind of
bank and
succeed
in the
challenges
of innovation.
Damien Guermonprez
2/04/08 0:30:34
4
Highlights
A new brand
1,450
employees
In June 2007, Banque Accord passed the 5 million customers
milestone to end the year with a total of 5.4 million.
Over nine countries (France, Portugal, Spain, Poland, Italy,
Romania, Hungary, Russia and China), its customers now
enjoy an even more comprehensive range of products, from
payment to loans, insurance and money transfer facilities.
Sharing value
Sharing comes naturally
to Banque Accord,
and 2007 was a pivotal
year in this respect, with
the introduction of an
employee share ownership
scheme. The first step in
implementing the scheme
will be the launch of
Valaccord in France during
2008. This aspect of our
sharing policy will then
be introduced in other
countries, depending
on the context of each
Group company and local
legislation.
The leader in payment solutions
Electronic banking has
always been a particular
strength at Banque
Accord, and once again
played an important role
in 2007.
The year was marked
by the launch of many
new payment solutions.
Mobile payment in China,
contactless payment
in France, gift cards
in France and in Spain,
France’s first co-branded
card in partnership with
MACSF and the first money
transfer card (with Flouss.
com) are all helping
to make Banque Accord
a major player in
the payment solutions
market. The Bank has just
launched an electronic
banking blog
(www.a-payment.com)
to encourage discussion
between all those involved
in supplying this market
(banks, retailers and P.O.S
manufacturers).
2/04/08 0:30:35
5
Key figures
Consolidated
data
Financial ratios
(in %)
5.4 M
+13%
customers
(in € million)
281
25.1
238
202
20.1
21.5
21.1
18.8
159
138
€7,398 M
+9%
in transactions paid with
Banque Accord cards
2003 2004 2005 2006 2007
Net banking
revenue
37
2003 2004 2005 2006 2007
Return on equity
€1,990 M
+10%
€2,531M
+14%
€281 M
+18%
of credit granted
38
13.9
34
12.0
10.5 10.4 10.9
24
in outstanding loans
19
2003 2004 2005 2006 2007
Net profit
2003 2004 2005 2006 2007
Capital
adequacy
of Net Banking Revenue
242
202
174
2,4
2,3
S&P A/A-1 rating
in 2007
138
113
1,3 1,2
1,5
2003 2004 2005 2006 2007
2003 2004 2005 2006 2007
Equity
after incorporation
of profit
Risk cost
Building
our
profitability
2/04/08 0:30:36
6
Winning
new markets
840,000
new customers
in 2007
CONQUEST
New countries, new partners, new products…
The three strands of growth on which Banque Accord has
built its success for the last 8 years became even stronger
in 2007 through Oney, a new brand, which will be launched
in all countries. Everywhere Banque Accord operates,
whether new markets or more mature, the product range
is broadening to serve the customers of a fast-growing
number of brands and chains.
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7
Banque Accord is successfully developing
co-branded cards and insurance products in
all its countries.
New countries,
new partners and new products
New countries
get off the ground
Both Russia and China, where
Banque Accord began
operations in 2005 and
2007 respectively, are now
delivering consistent growth.
Since its launch in China, the
Red Bird Card has been a
huge success, and is still way
ahead of other retail cards in
terms of revenue. At the end
of 2007, the teams at Accord
China were already serving
16 Auchan stores. Barely two
years after its inception, our
Russian company already
serves three major chains:
Auchan, Leroy Merlin and
Décathlon. The success of
the Auchan credit card and
complementary products,
like money transfer, have
given this Group subsidiary
the resources it needs to
continue investing in new
brands and products.
In Romania, Banque Accord
has been able to offer
finance facilities to Auchan
customers from the first day
of opening of every store.
New partners
for new horizons
In line with the Banque
Accord commitment to
support the business done by
its partners, all our countries
established new partnerships
in 2007. Décathlon and Leroy
Merlin in Russia, Décathlon
in Spain, Leroy Merlin and
Norauto in Poland all invited
Banque Accord to provide
finance solutions for their
customers. Décathlon in
France has also adopted
the Accord transaction
acceptance network.
The challenge for Banque
Accord France in 2007
was to extract maximum
advantage from the lifting
of co-branding restrictions,
and to build relationships
with non-retail brands. We
succeeded in that challenge
with the launch of the MACSF
(Mutuelle d’Assurance du
Corps de Santé Français)
co-branded card.
Ground-breaking
new products
Banque Accord also
The average
strengthened its existing
checkout value
partnerships during the year,
for Dual card holders with the development of
in Russia is twice
products to support partner
compared to the
businesses. This was especially
average checkout
true of insurance. The launch
value of Auchan
by Accord Hungary of a
customers. In China, range of extended warranties
the Red Bird card
to cover 700 household
has been a huge and electrical products enabled
unrivalled success.
Auchan to be the first
Cityper-Accord in
hypermarket chain in the
Italy is now in the
country to offer this service.
deployment phase,
Since November last year,
whilst Leroy Merlin
Banque Accord China has
and Norauto have
been testing a new process
just launched their
to sell insurance for household
own Visa cards in
products and bicycles
Poland, Decathlon
costing over €10.
has launched its
The idea of this new scheme is
MasterCard with
to offer customers immediate
Accord Spain.
free cover for three months,
followed by a traditional
insurance product.
2007 also saw Portugal
All about…
2/04/08 0:30:48
8
launch its car insurance
range in Jumbo
hypermarkets.
Russia, Spain and Poland
have developed their
money transfer activities
in extending the scope
of Banque Accord even
further.
Everywhere it operates,
Banque Accord is offering
its customers more services
all the time; services that
address their needs,
their concerns and their
lifestyles.
New channels
for new customers
As part of supporting ecommerce and making
online purchasing
easier, Banque Accord
is developing a series
Portuguese car insurance on
offer in Jumbo hypermarkets.
of simple, rapid-access
online payment solutions.
In France, oney.fr has
launched Oney FlexPay
to complement its range
of e-commerce web site
payment solutions.
This solution gives web
shoppers direct access
to finance and no
delay in receiving their
orders. For the 3 million
customers of Banque
Accord France, access
to this form of finance is
even easier, requiring no
more than a few mouse
clicks when making a
purchase on a partner
web site, and no need to
complete an application.
For e-commerce
operators, Oney FlexPay
therefore opens the door
immediately to over
3 million customers; for
those customers, it provides
rapid access to a great
payment solution.
In customer relations too,
Banque Accord is focusing
on the direct route by
increasing the number of
services accessible online,
to include insurance,
personal loans, savings
products, online bank
statements and electronic
signatures, all of which
make it possible to win
new customers without
the involvement of
partner intermediaries,
and therefore to have
access to a much broader
customer base.
Santander Financements
The Santander Group is the European market leader in car loans, a long-standing
partner of Banque Accord in Spain and is now starting to do business alongside us
in France. Set up in 2007 under a joint venture between our two groups, Santander
Financements is owned 70% by Santander and 30% by Banque Accord. Naturally
enough, the new company specializes in car finance, and will initially target car
dealerships of all brands. This promising business is expected to do very well in 2008.
2/04/08 0:30:50
9
+14%
outstanding loans
500,000
customers in Portugal
SUPPORTING THE GROWTH OF OUR PARTNERS
Our aim in working with Banque Accord was to be
early to market with co-branded cards, and this
international MasterCard gives Mutuelle d’Assurance
du Corps de Santé Français (MACSF) a new product
to add to its existing range.
Now that co-branding is permitted in France,
MACSF can become part of the daily lives of its
clients. The card carries our logo and the caduceus
as a reference to the medical profession.
Every time one of our members uses it, the MACSF
will be involved. The partnership with Banque Accord
is very attractive to us, because it diversifies our
image into a channel we see as favorable and
positive, where we are seen as offering a regular,
personal and beneficial service.
Stéphane DESSIRIER,
Director of Non-Life
and Protection Insurance Products, MACSF.
The country management teams
Left to right in the back row:
Julien Cailleau, Managing Director Russia – Hervé Ketelers,
Managing Director Romania – Stéphane Schersach, Managing Director
Poland – Jean-Pierre Viboud, Managing Director France – Franck Duprez,
Managing Director Italy – Thierry Vinualez, Managing Director Spain.
Left to right in the front row:
Kinga Bors, Managing Director Hungary – Denis Mardon, Managing
Director Portugal – Tang Loaec, Managing Director China – Brigitte Galliez,
Insurance Managing Director.
Auchan, Décathlon,
Leroy Merlin, the
three partners of the
russian subsidiary.
2/04/08 0:30:53
10
Anticipating
the needs of
our customers
and partners
INNOVATION
In a payment solutions and loans market that is changing
rapidly in response to new legislation and technology, and
in a world where virtual solutions are becoming increasingly
important, Banque Accord continued to bring forward new
products and services during 2007 to anticipate the needs
of our partners and customers.
500
Portuguese customers
on average, every month,
chat online to their
financial advisors.
2/04/08 0:31:04
11
In 2007, Banque Accord expanded its Internet presence
substantially to serve its customer and respond to their
needs wherever they may be.
Co-branding, contactless
cards and the Internet:
performance through innovation
In 2007, Banque Accord
continued to launch projects
that deliver real added
value to its partners and
customers. Gift cards not only
add extra impetus to brand
loyalty campaigns, but also
attract new customers: after
all, a potential customer
who receives a gift card is
inevitably going to become
a customer. Co-branded
cards deliver tangible
benefits for both the brand
(in the form of loyalty) and
the cardholder (by opening
the door to a personalized
program and exclusive
services) by strengthening
the bond between the
two. Like gift cards and
contactless payment cards,
online finance solutions also
offer real advantages to
customers (by saving time
and making it easier to
budget), at the same time
as considerably boosting
the sales of the brands
concerned, as a result of
higher spend and increased
frequency of visits. These are
the reasons why Banque
Accord puts its customers
and partners at the nucleus
of its development plans, by
offering them straightforward,
discounted products that
help them simplify their lives
or businesses.
Increasing our online
presence
Convinced of the growing
influence of multimedia on
consumer buying patterns,
Banque Accord increased its
web presence in 2007, whilst
our www.banque-accord.fr
web site has been given a
totally new look. With over
500,000 hits every month, this
web site is now one of the
most important customer
contact channels for Banque
Accord in France as well as
www.oney.fr with 600,000
visits per month. Amongst
many other innovations,
Banque Accord was the
first French bank and credit
provider to introduce a 3-D
on-screen character with
artificial intelligence named
Béa. Other developments
include electronic signatures,
electronic bank statements,
special instant loan offers and
Created in July 2007,
even a webzine. In Portugal,
Béa is the Banque
customer relations are also
Accord in France
being strengthened online
virtual advisor. Béa
greets visitors, guides using a system that allows
customers to chat directly
them around the
to their own (human) advisor.
web site, advises
On average, 500 customers
them, gives them
every month use this method
product information
of contact. The Portuguese
and answers their
subsidiary of Banque Accord
questions as part of
also uses SMS text messaging
her job as our online
as a personal and dynamic
advisor! In three
months, she answered way of informing customers of
over 60,000 questions, special offers and credit limits.
Oney is a specialist in online
improving customer
relationships, and has now
service.
gone one step further with
the launch of two new
products in France The first is
a paper-free 3- or 4-installment
card payment option that is
fully secure for the merchant
site. The second is “À mon
rythme”, which allows
customers to decide which of
their purchases they would like
pay for over a longer term.
All about…
2/04/08 0:31:06
12
Increasingly-efficient
payment solutions
Banque Accord once
again consolidated its
position as the payment
cards market pioneer in
2007, with the launch
of many innovative new
products. The MACSF and
Flouss.com cards launched
in the first half of the year
were the first-ever cobranded cards in France.
In October last year,
Banque Accord testlaunched the Auchan
PayPassTM* card under
a partnership with
MasterCard and Auchan
France. This new card
allows cardholders to pay
for purchases under €25
without entering a PIN.
A first in France, this new
Number of
customers
(in millions)
5.4
4.8
4.2
3.8
3.3
2003 2004 2005 2006 2007
card will be marketed
on a wider scale in 2008
to customers in the Lille
metropolitan area, and
rolled out to the rest of
France in 2009. Other chains,
including Leroy Merlin,
Bizzbee, Flunch and Pizza
Paï, have since joined the
project, and many other
partnerships are planned
for 2008. The Auchan
PayPassTM card received
the 2007 Altenor Consulting
Oscard for Technologies
in recognition of its
groundbreaking innovation
in the French market. In a
childish market, the Auchan
PayPassTM card represents
the first step towards mobile
payment, which is already
widely used in countries like
Korea or Japan.
In China, Banque Accord is
the one and only European
bank to be involved in the
development of mobile
payment systems, following
the launch of a pilot project
conducted in partnership
with China Union Pay.
*Project supported by the Center
for Competitiveness in Business
Industries.
CardOps
Its CardOps electronic banking division allowed Banque Accord to consolidate its
position as the French gift card market leader in 2007. With 3.5 million cards sold and
a face value of some €110 million, 2007 saw 300% growth in Banque Accord’s gift
cards business (excluding Auchan). GrosBill, Cultura, Cocktail Scandinave and Pimkie
all launched cards with CardOps, joining existing partners like Auchan, Brice, Bizzbee,
Jules, Picwic and Alinéa. Many new partnerships are already in place for 2008,
including top names Leroy Merlin and Le Furet du Nord. Following on from the launch
of the Alcampo card in Spain at the end of 2006, CardOps will continue to extend its
geographical reach in 2008, with the issue of gift cards in the Benelux.
2/04/08 0:31:08
13
470 M
in electronic banking transactions
processed in 2007
300%
growth in gift cards in 2007
(excluding Auchan)
PAYPASSTM, LEAVING THE COMPETITION STANDING
“It’s the first time that any retailer launched
a co-branded contactless card in France, and we’re
very proud that Banque Accord and Auchan chose
MasterCard PayPass™ for that honour. With over
19 million PayPassTM cards already issued,
73,000 points of sale worldwide accepting them, and
pilot projects now underway in another 20 countries,
MasterCard is a pioneer and leader in this new
technology, which makes life faster and easier at
the checkout for shoppers and retailers alike.”
George REY,
Auchan PayPassTM Project Manager
at MasterCard Europe.
“A Payment” is the payment solutions blog launched by
Banque Accord at the beginning of 2008 as a discussion forum
for a fast-changing market.
A mon rythme (At my own pace) is a new service offered by
oney.fr, which allows customers to choose directly from their online
account statement which payments they would like to spread.
2/04/08 0:31:17
14
Developing
sustainably
SHARING
For a long time, it was assumed that the finance industry
was not affected by the need for sustainable development.
Nevertheless, it is now measuring the impact of its influence
on the economies, societies and environment of the
countries it operates in. For Banque Accord, as part of a
group that has pioneered employee incentive schemes,
combining financial performance with the long-term
interests of stakeholders is a basic commitment.
850
people recruited under
open-ended contracts
in the last five years
2/04/08 0:31:23
15
Banque Accord has supported the Crésus
Federation since 2005. The federation provides
a listening ear and practical information to
assist people affected by overindebtedness.
Crésus will launch its own radio station in 2008.
Mobility, feedback and
open-mindedness: our sustainable
employee relations policy
A policy built on sharing
Banque Accord is committed
to allowing every employee
to share in the fruits of our
growth. Every feature of our
team-based pay structure
reflects this willingness to
share, and an enthusiasm for
encouraging our employees
to accept responsibility
based on solid training in
the financial aspects of the
company.
Following on from the profitsharing and incentive bonus
schemes introduced in 2003,
Banque Accord launched
its own Valaccord employee
share ownership scheme in
France at the end of 2007.
In accordance with
current legal provisions, this
scheme will be progressively
extended to all the countries
the Bank operates in.
Portugal already has its own
incentive scheme.
Mobility for all
At the end of 2005, Banque
Accord was in the first wave
of French companies to sign
the Charte de la diversité
(corporate diversity charter),
whose provisions encourage
equality of opportunity in
the workplace.
Banque Accord has
increased the size of its skills
development and mobility
teams as part of introducing
its own policy
to address these issues.
For 2008, these teams have
developed detailed action
plans to employ disabled
employees and older people
in proportion to their numbers
in French society as a whole.
The number of the Bank
employees who are of
foreign nationals has
increased by 83% since 2003.
In 2006 and 2007, Banque
Accord joined forces with
the Association Alliances
to host the Stages pour la
diversité (diversity training
courses) forum, designed
to bring major European
corporates together with
post-graduate candidates of
ethnic origin.
The Bank now employs
All about…
Banque Accord
recruits staff full-time
in all the countries it
operates in.
It doesn’t impose
part-time working.
85% of employees
are employed
under open-ended
contracts, including
those working in
the Bank’s own call
centers.
approximately 1,450 people
of 18 nationalities. Men
and women are equally
represented on the French
and Portuguese executive
committees.
Listening to employees
and customers
Banque Accord commissions
regular independent
satisfaction surveys amongst
its employees and customers.
Since 2001, Banque Accord
France has surveyed its
employees every two years,
and has used the results as
the basis for targeted action
plans. Since 2005, the Bank’s
customers have also been
asked for their opinions and
satisfaction levels twice a
year as part of incentive
bonus calculation process.
Banque Accord in Portugal
introduced its customer
and employee feedback
systems in 2007, achieving
excellent response rates and
results, with a 85% customer
satisfaction rate, and 75%
employee commitment rate.
2/04/08 0:31:25
16
Banque Accord supports
employee-driven initiatives.
In Benin, the Bank has helped
to finance the establishment
of a school and an orphanage
(the Mam’ Jo House).
A company open
to the wider society
Combating
overindebtedness
At the end of 2005, Banque
Accord became the
second credit provider in
France to sign a national
agreement supporting
the work of the Crésus
Federation, a group
of regional agencies.
Now ten years old,
this organization was
set up to help prevent
overindebtedness, and
to assist people in that
position.
In 2007, Crésus and Banque
Accord published and
distributed an instructional
guide for borrowers,
entitled Pour bien vivre
avec son argent (How to
Manage Your Money). In
addition to its own teams,
the Bank has also trained
nearly 1,000 Auchan
France employees in how
overindebtedness can
be avoided by effective
budgeting and money
management. This training
has proved extremely
popular with those who
have taken the course,
and received a Prix
All about…
In 2008,
Banque Accord
is committed to:
– developing new
ethical and/or green
products;
– continuing to
implement energy
saving initiatives;
– increasing efforts
to promote social
cohesion;
– raising employee
awareness of
sustainable
development
challenges.
Citoyens Alliances 2007
award along with other
initiatives implemented
by the leading companies
of northern France.
Banque Accord is also
supporting Crésus in
pressing for the creation
of a central consumer
credit database for
France. Access to such
a database would help
Banque Accord to
reduce the risk of causing
the additional levels of
overindebtedness found
in 75% of such cases.
Together with Laser
Cofinoga, Banque Accord
is a founder member
of the Crésus foundation
for the development
of social microcredit
created in January 2008.
The Bank is also a partner
of the social contract
multi-partners launched
by the European
Council, and designed
to provide long-term
support for the long-term
unemployed through
reintegration (Banque
Accord supplies them with
free payment solutions)
under an experiment
beginning in 2008.
Promoting microcredit
began a long-term
collaboration with the
ADIE, France’s leading
microcredit organization.
In 2007, the Bank provided
financial support for
France’s Microcredit
Week, and hosted
regional forums involving
its employees. It has also
introduced a voluntary
skills initiative supported by
the experts at its Tours call
center in France, which is
opening the way to new
collaborations.
Caring for the
environment
In all its operating countries,
Banque Accord is gradually
introducing a policy to
minimize its own energy
consumption, and that of
its customers.
Banque Accord in France
has been recycling its
paper since 2005, with
the help of the Élise social
reintegration organization.
2/04/08 0:31:35
17
4.02%
of payroll applied to training in France
100%
of people employed under
part-time contracts have decided it
BUILD WITH WELL KNOWN ASSOCIATIONS
“The partnership formed nearly three years ago between the French
Crésus Federation and Banque Accord is all about dialog, openness
and the quest to find better ways of preventing overindebtedness.
This partnership has enabled the development of initiatives to
educate people in budget management, and has included the
publication of the How to manage your Money guide designed
and produced jointly by the Crésus and Banque Accord teams.
This commitment is built on mutual trust and, in my opinion, offers the
immensely valuable opportunity of bringing the economic realities
of life into the field of social initiative. The long-term commitment of
Banque Accord to work alongside us has enabled the Federation
to extend its support network for families struggling to cope with
excessive debt, with the result that we now have a presence in
15 regions of France. We are extremely proud of what we have
already been able to achieve together.”
Jean-Louis KIEHL,
Chief Executive Officer of Crésus Alsace
Voluntary Executive Chairman of the Crésus
Federation (regional agencies preventing
overindebtness).
© Maxime Dufour photographies
Banque Accord is
an official sponsor of
Alliances, corporate
social responsibility
association, and was
the official partner of the
World Forum Lille hosted
in 2007 by Alliances on
the diversity and equity
of chances.
Initiatives undertaken in 2007
In 2007, Banque Accord France replaced paper account statements with
electronic ones (which consume less paper), and launched a new version
of its www.banque-accord.fr web site for visually-impaired customers.
2/04/08 0:31:41
18
Banque Accord annual report 2007
ACCREDITATION
Bâle II - IRBA
2007
FINANCIAL REPORT
risk
management
19 Credit
funding
20 Group
report
21 Management
financial
25 Consolidated
statements
28
55
Auditors report
on consolidated
Notes to the
consolidated
financial
statements
2/04/08 0:31:47
Managing our risks
Credit risk management
In common with the wider
market, the Banque Accord
Group saw signs of credit
risk tightening in 2007.
The resulting downturn in the
general economic climate
has fed through in varying
degrees to the figures
reported by a number of
group companies, in the
form of bad debts and
collection problems.
This is particularly true of
our Spanish company,
operating as it does in a
country where household
indebtedness is rising
steeply, and which is
currently experiencing a
pronounced increase in risk
levels.
Despite being forecast, the
rise in credit risk experienced
by our Italian company was
also very marked. A return
to more normal levels is
expected in 2008.
At consolidated group
level however, the risk
remains contained, thanks
to the good financial
performance and
contribution made by our
most mature companies in
France and Portugal, as well
as the controlled growth of
our operations in Central
Europe.
Global economic
conditions have only
confirmed the Group’s
conviction of the urgent
need to implement a Basel
based risk monitoring
system in all its operating
countries, based on the
French model.
Banque Accord was granted
Basel II – IRBA credit risk
assessment accreditation
in spring 2008. The success
of the Basel II compliance
project demonstrates
the credit risk management
system expertise of the
bank’s team.
The Basel II project is
therefore now underway in
our Portuguese and Spanish
companies. In 2008,
Banque Accord France will
intensify the use of its Basel
based system in day-to-day
risk management to ensure
the optimized allocation
of capital.
In line with Basel II, Banque
Accord will also continue
implementation of its “Cap
clients” customer data
segmentation project
in 2008. This project was
begun in 2007.
will focus specifically
on containing risk by
reducing its exposure to
new customers, preferring
to concentrate its efforts
on its existing portfolio
of customers, whose
behaviours are well-known
to the bank.
For the same reasons, the
bank will place greater
emphasis on the store
distribution channel.
At december 31, 2007, the
consolidated cost of risk
was 2.4 %, compared with
1.5 % at December 31, 2006.
2/04/08 0:31:47
20
Banque Accord annual report 2007
Managing
our resources
Group funding
controlled liquidity at
a time of market crisis
I _ Controlled liquidity
as a result of a
secured funding
Banque Accord increased
its long-term resources with
a €200 million bond issue
in May. In accordance
with the Group’s policy of
securing the source of its
funding, Banque Accord
issued a new variable-rate
bond in 2007. The 5-year
€200 million issue was
accompanied by a coupon
rate equivalent to 3-Month
Euribor + 0.17%. This issue
brings the Group’s bond
liabilities to €750 million.
Balanced sources
of guaranteed funding
During 2007, Banque
Accord maintained a
balanced liquidity structure,
with a 50-50 balance
between long-term (bond)
market funding and
confirmed lines of credit.
Banque Accord made
use of the market and
its resources to optimize
funding costs. Averaged
across the year, 70% of
the financial resources
used by the Group were
sourced in the financial
markets (bonds, BMTNs and
certificates of deposit), with
the remaining 30% coming
from bank funding lines or
our parent company.
Banque Accord has
suffered very little from
the lack of market liquidity
Its prudent funding policy
means that Banque Accord
uses chiefly guaranteed
long-term sources (bond
issues) and unused
confirmed lines of credit
with a pool of top-quality
banks. At the height of the
market turbulence seen
in 2007, short-term market
funding (commercial paper)
was reduced to an average
of approximately €200
million over the second half
of the year. Banque Accord
made the decision to favor
parent company funding,
and did not use its confirmed
available banking resources,
which amounted to €600
million at the end of the year.
II _ Banque Accord
further increases its
liquidity in 2008
Given the continued
absence of visibility in longterm credit (bond) markets,
the start of 2008 has seen
the consolidation of Group
liquidity. Banque Accord has
significantly increased the
total amount represented by
its confirmed lines of credit
with its established banking
partners, and extended its
pool of funding banks.
III _ The role
of international
activities in Group
funding
companies by increasing
the amount of short- and
medium-term intra-group
loans.
In 2007, the Group
increased its available
intra-group credit lines
by €75 million to end
the year at €458 million
(compared with
€373 million in 2006).
Intra-group and bank
lines of credit are used for
periods matched to those
of the assets funded.
Group companies use these
lines of credit to manage
interest rate fluctuations.
IV _ Banque Accord
maintains its financial
rating
Following the upgrade of
September 2006, the ratings
agency Standard & Poor’s
has left its rating of Banque
Accord unchanged:
– A for the long-terme;
– A1 for the short-term.
This continued rating
confirms the Core Business
status of Banque Accord
within the Auchan Group,
the relevance of our policy
of expanding our range of
financial products and our
increased involvement in
the trading activities of our
partner retail chains.
Banque Accord S.A. is
consolidating its funding
position in respect of its
Group companies in the
eurozone
In addition to local bank
funding, the Group has
supported the growth of its
2/04/08 0:31:47
Management report
for the fiscal year ended
december 31, 2007
(based on the consolidated financial statements )
I _ Economic
environment
Growth in the (27-country)
Eurozone was 2.9% in 2007,
down from 3% the previous
year. The OECD forecast for
2008/2009 is around 2.4%.
2007 was marked by
fluctuations in interest
rates, whilst the monetary
policies of central banks
became circumscribed by
the financial crisis that hit in
July and continued for the
rest of the year. Institutions
that began the year by
raising their base rates were
forced to interrupt their
upward cycle; some even
had to reverse them. The
ECB principal base rate is
currently 4%, compared
with 3.5% in 2006.
Inflation in the Eurozone
was 3.1% in 2007, compared
with 1.9% in 2006. Prices
were driven higher by
the hike in the cost of oil,
which reached the $100
per barrel mark, and by
rises in commodities and
foodstuffs. There are fears
that inflation will rise further
in 2008.
French GDP grew by 1.9%
in 2007, compared with
2% in 2006. Growth for
2008 is forecast to remain
weak, and household
consumption rather ran out
of steam at the end of 2007.
Inflation averaged 1.5% over
the year. At 8.3% of the adult
population, unemployment
continued to fall to a level
last seen in 1982.
In Spain, the dynamic
economic growth seen
since 2003 slowed
significantly in Quarter 4 of
2007. Nevertheless, growth
for the full year was 3.8%.
The consumer credit market
is slowing and the risk of bad
debts is rising. Investment
in capital goods continued
to rise, but the construction
industry experienced
its lowest annual rate of
growth for five years. The
labor market was hit by an
increase in unemployment
to 8.2%, with many of the
job losses coming from the
construction sector.
Despite a growth rate
approaching 1.9%, Italy
remains at the back of
the European bunch.
Unemployment was 5.9%
in 2007, compared with
6.8% in 2006. The budget
deficit fell from 2.8% to 2.4%
of GDP, as a result mainly
of unexpected receipts
generated by an anti-tax
evasion policy.
BanqueAccord_RA07_GB-MF.indd 21
In Russia, 2007 was
remarkable for strong
growth in GDP (+7%) driven
by rising oil prices, inward
investment and higher
household consumption.
At 10%, inflation remained
high. Purchasing power
is increasing (average
household incomes are
rising by 10% annually) in
a context where credit
is facilitating access to
attractive consumer goods.
Still powering ahead, the
Chinese economy slowed
almost imperceptibly at the
end of 2007, after a year in
which growth approached
11.5%, up by nearly one full
point on 2006.
Anticipating changes
in our markets
2/04/08 12:38:15
22
II _ Significant events
of the fiscal year
and business review
The Banque Accord Group
has 1,437 employees, serves
5.4 million customers in
9 countries and operates
933 Accord in-store
financial services desks.
New customers targets
have been overpassed.
Total production exceeded
€7.4 billion, including
€2 billion in loans.
The year also saw many
successes for the bank:
the 5 million customer
mark was passed in June,
and in December, the
total amount of credit
outstanding exceeded
€2.5 billion for the first time.
the automobile finance
company Santander
Financements
in partnership with
Santander Consumer
Finance. Banque Accord
owns 30% of the equity in
this company.
Basel II
Works engaged in 2006
now give results : Banque
Accord was granted Basel II
– IRBA credit risk assessment
accreditation end February
2008.
S&P rating maintained
In 2007, the ratings agency
Standard & Poor’s reiterated
its long-term/short-term
rating for Banque Accord
at A/A1
together with shorterterm market operations
via deposit certificate
programs, have enabled
Banque Accord to acquire
diverse and secure
refinancing from the
markets, and avoid any
problems. The bank credit
spread increased slightly for
a period of a few months.
Electronic banking
• With 3.5 million gift cards
issued, Banque Accord’s
electronic banking
subsidiary CardsOps now
leads the French gift card
market.
• 470 million transactions
and authorizations were
processed in France during
the year.
Cash
In overall terms, we would
point out two fundamental
market trends in 2007:
• Higher refinancing costs
linked to rate rises in the
Eurozone and the impact
of the financial crisis, which
has resulted in increased
spreads
• A rise in the credit risk
ratio, following the rise in
borrowing rates and/or the
economic slowdown
Changes in scope
On February 1, 2007, the
assets and liabilities of
the Portuguese branch
of Banque Accord were
transferred to Crediplus.
The branch has therefore
been closed.
The bank set up a
company called Accord
Business Consulting in
China during the year,
and in France, created
In January 2005, the
bank arranged a 5-year
syndicated credit of
€500 million with 8 partners.
The corresponding
agreement provided
the option to extend
the initial period by two
separate periods of one
year, and the bank has
exercised these options
to extend this line of credit
until January 2012.
continued its involvement
in the bond market,
which began in 2003.
In partnership with the
company Auchan Group,
the Banque Accord EMTN
program has grown from
€350 million in 2003 to
€750 million. Under this
same arrangement,
Banque Accord released
a new 5-year €200 million
issue in June 2007.
All these transactions,
Events in our operating
countries
France
The highlights of 2007 in
France were:
• The relaunch of Oney.fr
in Quarter 3, 2007, which
significantly exceeded the
targets set.
• Increased loan income
via our two leading partner
chains of Auchan and Leroy
Merlin.
• The extension of our
sharing policy, with the
creation of the Valaccord
share ownership scheme,
which we believe will prove
an effective employee
motivational and loyalty
initiative, and which should
attract a large portion
of their salary savings.
• The banking card
marketing agreement
2/04/08 0:31:48
23
signed with the MACSF
(a French mutual fund for
healthcare professionals).
opening of five new
financial services branches
in Alcampo stores.
Cumulative loan production
rose by 4 % and overall
production by 7 %. Overall
outstanding grew by 7 %
and the total customer
base by 9%.
• Banking Cards were
introduced in all Decathlon
stores.
Portugal
Italy
• The Crediplus IT systems
migration begun in 2006
was completed successfully
during the year.
• Business levels were
sustained throughout the
year.
• 2 new partnerships were
launched and deployed
during the year: Leroy Merlin
(4 stores) and Decathlon
(2 stores).
• Annual production grew
by 18 %, compared with
2006, with revenue streams
coming from Auchan, Leroy
Merlin, Cityper and direct
channels (chiefly personal
loans).
• The network of bank
branches in shopping
malls grew to 12 during the
year. These branches offer
personal loans, money
transfer facilities and
currency exchange.
• The loan book grew by
7%, compared with 2006.
• The range of in-store
products (product-specific
credit and co-branded
cards) was expanded
during the year, with
the summer launch of
the new Auchan store
card, which is issued instore.
• The Banque Accord
branch business was
incorporated (revolving
personal loan marketing
and management).
• Business levels held up
well throughout the year,
Crediplus reported
a record level of new
customers and the
500,000 customer barrier
was broken. New business
grew by 10% compared
with 2006, thanks to
the dynamic efforts
of the sales teams and
the consistent card
strategy.
• Direct sales, via the
Lyberdade brand and
cross-selling, also grew by
nearly 10% compared with
2006.
Spain
• New loan volumes rose
by 23% following the
introduction of new sales
channels, although a
controlled reduction in
sales was observed in the
final quarter. The loan book
grew by 42%.
• In-store business
expanded, with the
• Increase of credit risk rate
over the last 2007 quarter.
Poland
• Accord Finance signed a
partnership agreement with
Leroy Merlin in 2007, leading
to the launch of new
products and the opening
of 23 financial branches.
• Operation of the 61
Banques Accord (POK)
financial branches
was taken over by the
company’s own staff during
the year, with the result that
revenue from personal loans
rose
by a very significant 97 %.
• 200 in-store staff were
recruited during the year.
Russia
• BA Finans continues to
support the regional
growth of Auchan.
Following 4 new openings
during the year, the
company ended 2007
with a presence in
18 Auchan hypermarkets.
• The increased number
of sales outlets and
successful sales campaigns
resulted in a marked rise
of 127% in customer
numbers during 2007.
China
• Presence in 16 Auchan
stores.
• Mobile payment tests
were conducted in
Shanghai.
Hungary
• Customer numbers rose
by 28%.
• The loan book increased
by 35%, despite difficult
economic conditions.
2/04/08 0:31:48
24
III _ Results for the
fiscal year
Net Banking Income for the
year totaled approximately
€281 million, reflecting an
increase of 17.8 % over 2006.
The gross credit loss ratio
rose from 1.47% to end the
year at 2.36%.
The figure for gross loans
advanced rose by 11.63 % to
€2.369 million.
sheet totaled €2.753 million,
compared with €2.399
million in 2006.
Equity rose to €242.4 million
from €213.3 million in 2006.
The capital adequacy
ratio fell slightly to 10.93 %
from the 10.46% reported
for 2006.
The liquidity ratio calculated
on a social basis was 138 %,
compared with the 2006
consolidated figure of 214 %.
Operating income was
€59.4 million, compared
with €56.7 million in 2006,
reflecting a rise of 4.8%.
IV _ Prospects for 2008
Consolidated net profit
after tax was up by 1.6% to
€37.9 million, compared
with €37.4 million in 2006.
plans to consolidate and
implement many of the
projects begun in 2007,
starting with the opening
of a company in Ukraine.
The Auchan PayPassTM
The consolidated balance
card will be deployed
with 150,000 customers
in France, the French
Santander Financements
automobile finance
operation will begin, and
mobile payment solutions
will be introduced in China.
2008 will also see the
launch of the Valaccord
employee shareholding
scheme in France. The gift
cards business will continue
to grow, and many new
brands and chains – some
of them international – will
become Banque Accord
partners for these products.
All countries will build
further on their existing
partnerships, develop new
ones and launch innovative
products.
2/04/08 0:31:48
25
Consolidated financial statements
at December 31, 2007 (in euro thousands)
ASSETS
IFRS-EU
NOTES
31.12.2007
Cash, central banks and post office accounts
59,612
Financial assets held for transaction
IFRS-EU
31.12.2006
4
5,863
504
Financial assets at fair value through profit and loss
Derivative instruments
Loans and advances to banks
3,675
5
5,377
128,856
6
82,584
Demand loans and advances
40,012
17,146
Term loans and advances
86,841
63,428
Subordinated loans
2,003
Customer loans
2,011
2,145,830
7
1,921,696
Financial assets held until maturity
4,579
8
9,699
Equity investments
5,502
9
0
Property and equipment
5,052
10
4,752
Intangible fixed assets
22,113
11
22,587
Deferred tax assets
13,346
11
11,712
363,912
12
Current tax assets
Other assets and accruals
Total assets
335,065
2,752,981
2,399,335
LIABILITIES
Central bank deposits
Financial liabilities held for transaction
Financial liabilities at fair value through profit and loss
Financial liabilities valued at amortized cost
Loans and advances from banks
Customer deposits
Debt securities
Subordinated debt
2,353,764
13
543,179
402,581
195,278
1,372,891
1,311,513
35,113
35,097
1,597
5
Provisions
1,884
14
Current tax liabilities
3,815
Total Liabilities
2,204
4,776
2,251
Deferred tax liabilities
Other liabilities and accruals
2,022,654
480,766
0
149,480
15
154,187
2,510,540
2,186,072
Share capital
28,200
28,158
Share premium account
47,359
46,742
127
71
126,274
100,513
EQUITY
Other equity
Revaluation reserves
Reserves
Profit for the year
Group share of equity
Minority interests
Total Equity
Total equity and liabilities
0
37,864
37,426
239,824
16
2,617
17
212,910
353
242,441
213,263
2,752,981
2,399,335
2/04/08 0:31:48
26
INCOME STATEMENT
IFRS-EU
NOTES
31.12.2007
Interest and similar income
Interest and similar income on transactions with
banks
Interest and similar income on customer transactions
Interest and similar income on fixed income
securities
234,540
Interest and similar expense on customer
transactions
Interest and similar expense on bonds and other
fixed income securities
4,549
229,477
193,759
257
421
77,583
16,804
3,083
131
55,424
33,334
Fee and commission income
Net fee and commission income
50,269
19,076
Net interest income
Fee and commission expenses
198,729
4,806
Interest and similar expense
Interest and similar expense on transactions with
banks
IFRS-EU
31.12.2006
156,957
18
84,194
19
148,460
57,937
113,140
85,598
28,946
27,661
Net Profit/Net Expense from hedge accounting
4,277
630
Gains on financial instruments
5,525
878
Losses on financial instruments
1,248
247
Net exchange rate variances
(13)
0
Net Profit/Net Loss on disposals of assets other than
those held for sale
504
0
36,710
32,711
Other income from banking operations
Other expenses arising as a result of banking operations
Financial and operational income and expenses
Administrative expenses
Employee expenses
Other administrative expenses
2,019
1,665
280,610
238,074
164,587
53,114
146,529
20
111,473
Asset amortization expenses
47,460
99,069
3,544
3,181
(3,028)
424
Impairment expenses
0
0
Gross operating profit
115,507
Provision expenses
Cost of risk
55,974
Operating profit
59,533
Proportion of net profit contributed by companies
consolidated using the equity method
(504)
Gains and losses on disposals of intangible assets and
property and equipment
59,404
Profit-related tax expenses (income)
21,474
Total profit
Minority holdings
Number of shares
Group share of net profit per share (€)
31,271
56,669
0.00
375
Total profit before tax
Group share of profit
87,940
21
3
56,672
22
19,330
37,930
37,342
37,864
37,426
66
(84)
1,408,439
1,407,913
26.88
26.58
2/04/08 0:31:49
27
CONSOLIDATED CASH FLOW STATEMENT
2007
(€thousands)
2006
Net profit before tax
A
59,404
56,672
Adjustments:
B
26,423
27,752
Depreciation and amortization
3,545
3,181
Net reversals of customer receivables
25,430
23,737
Net reversals of provisions for liabilities and charges
(3,028)
(1,567)
Net capital gains
Other
Net cash generated from operations
(375)
3
851
2,398
A+B
85,827
84,424
Increase in assets/reduction in liabilities (–)
Reduction in assets/increase in liabilities (+)
Cash from operations
Customer loans and advances
C
(247,083)
(268,814)
Loans and advances to/from banks
C
35,775
(165,495)
Debt securities
C
61,567
426,579
Non-financial assets and liabilities
C
(35,931)
(44,454)
Income taxes paid
C
(20,740)
(30,428)
C
(204,628)
Other
Net cash from operations
D= A+B+C
(27,081)
84,044
(25,270)
Cash from investments
Purchases and sales of intangible assets and property and equipment
Purchases and sales of financial assets
Variation in scope
Net cash from investments
E
(3,254)
(3,245)
(375)
0
0
0
(3,629)
(3,245)
(10,292)
0
Cash from financial activities
Shareholder dividends
Proceeds from share issues
Other
Net cash from financial activities
F
3,035
415
116
(103)
(7,141)
312
Net cash from operations
D
84,044
(25,270)
Net cash from investments
E
(3,629)
(3,245)
Net cash from financial activities
F
(7,141)
312
33
9
Change in cash and cash equivalents
Exchange rate effects
73,307
(28,195)
Cash and cash equivalents at the start of the period
(9,034)
19,161
Cash and cash equivalents at the end of the period
64,273
(9,034)
Net change in cash and cash equivalents
73,307
(28,195)
2/04/08 0:31:49
28
Notes to the consolidated
to 12/31/07
produced in accordance with IFRS,
as adopted by the European Union
(Figures are shown in thousands euro)
Note 1 _ Concise
description of the
Group
1.1 _ Legal information
about the Bank
Banque Accord SA is a
company under French
law, registered under no.
546 380 197 00105, with its
head office at 40 avenue
de Flandres, Croix (59170)
France.
The Bank’s corporate
purpose is to carry out
any and all banking and
related transactions,
including receiving and
transmitting orders on
behalf of third parties,
to conduct insurance
brokerage transactions and
to represent any and all
insurance companies.
It is 99.48%-owned by
Société Groupe Auchan,
a French Limited Liability
Company with a Board of
Directors whose registered
office is in Croix, France.
1.2 _ Simplified Group Structure
Groupe Auchan
Banque Accord
Crediplus
Portugal
Accord Italia
Italy
AccordFin
Spain
Santander
Consumer
France
Accord
Finance
Poland
Accord Intermed
Consumer
Finance Romania
Accord
Maggyorzag
Hungary
Gefirus
France
Accord Business
Consulting
China
BA FINANS
Russia
2/04/08 0:31:49
29
Note 2 _ Significant
events and
main changes in
consolidation scope
In 2007, the rating agency
Standard & Poor’s
reiterated its long-term/
short-term ratings for
Banque Accord at A/A1.
In overall terms, we would
point out two fundamental
market trends in 2007:
• Higher refinancing
costs linked to interest
rate rises in the euro zone
and the impact of the
financial crisis, which
has resulted in increased
spreads. Banque Accord
and its subsidiaries
companies have made
no investissement in CDO
- or subprime mortgaged
- based stocks.
• A rise in the credit loss
ratio, following the rise in
borrowing rates and/or the
economic slowdown.
– The establishment of
Santander Consumer
France, an automobile
finance company, in
partnership with Santander
Consumer Finance.
Banque Accord owns
30% of the equity in this
new company. It will be
consolidated using equity
method.
Changes in consolidation
scope
– The Consulting Company
entered the consolidation
scope.
– Integration of the Portuguese
branch into Crediplus.
No material events
occurred between the
balance sheet date and
8 February 2007, the
date when the financial
statements were approved
by the Board.
2/04/08 0:31:49
30
Note 3 _ Rules and
methods
3.3 _ Format and
statements
3.1 _ Regulatory framework
Banque Accord uses the
documents and formats
(balance sheet, income
statement, statement of
changes in equity and
cash flow statement)
format recommended by
the French accounting
authorities (CNC
recommendation 2004-R.03
of October 27, 2004).
Under European Commission
regulation 1606/2002/EC
of July 19, 2002, European
companies whose shares are
listed on a regulated market
are required to prepare
statements under IFRS from
2005 onwards.
Other regulations have
since been added – more
specifically Regulation
1725/2003/EC of September
29, 2003 adopting
international accounting
standards, and Regulation
2086/2004/EC of November
19, 2004 adopting IAS 39 in
an amended form.
The French Finance Ministry
ministerial order (204/1382)
issued on December 20,
2004 allows companies to
apply IAS to the preparation
of their consolidated
financial statements from
2005 onwards. The Auchan
Group took up this option in
respect of all its companies.
3.2 _ Applicable standards
and comparability
Since the 2005 fiscal year,
the consolidated annual
have been prepared in
accordance with IFRS. The
Group has applied only those
standards and interpretations
whose adoption has been
announced in the Official
Journal of the European
Union at the balance sheet
date and are applicable at
that date. Standards and
interpretations applicable
after December 31, 2007
have not been adopted.
The cash flow statement
has been prepared by the
indirect method, using profit
before tax as the starting
point for the analysis of cash
flows.
The corporate purpose of
Banque Accord forms the
basis for determining the
scope of consolidation
in terms of operations,
investment and finance.
Cash flows from customer
loans and advances and
their related funding are
therefore included in the
operational scope.
Banque Accord is now
applying IFRS 7 for the first
time.
3.4 _ Scope and method
of consolidation
The disclosures in the notes
to the consolidated financial
statements include all
material information relevant
to fair appraisal of the
Group’s assets and liabilities,
financial position, risks and
results of operations.
The consolidated financial
statements include the
financial statements of
Banque Accord and the
main French and foreign
companies comprising the
Banque Accord Group.
The financial statements for
foreign subsidiary companies
are prepared in accordance
with local accounting
standards, and have been
adjusted and reclassified to
comply with Banque Accord
accounting policies.
Cash and cash equivalents
as shown in the cash flow
statement correspond to
the definition of “Cash”,
“Central Banks” (assets
and liabilities), “Post office
accounts” (assets and
liabilities), “Settlement
accounts” (assets and
liabilities) and “Loans
and advances to/from
banks”, as contained in
Recommendation 2004R-03, and appear as
such in the consolidated
balance sheet of Banque
Accord for the fiscal years
concerned.
2/04/08 0:31:50
31
SUBSIDIARY COMPANIES
Country
ACCORD ITALIA
Italy
%
holding
%
control
100%
100%
Consolidation method
Full consolidation
ACCORD MAGYARORSZAG
Hungary
60%
100%
Full consolidation
ACCORD FINANCE
Poland
60%
100%
Full consolidation
CREDIPLUS
Portugal
100%
100%
Full consolidation
ACCORDFIN
Spain
51%
50%
GEFIRUS
France
60%
100%
Full consolidation
BA FINANS
Russia
60%
100%
Full consolidation
Proportional consolidation
ACCORD INTERMED
Romania
100%
100%
Full consolidation
ACCORD BUSINESS CONSULTING
China
100%
100%
Full consolidation
SANTANDER CONSUMER FRANCE
France
30%
30%
a) Scope of consolidation
The proportional
consolidation method is
used to where decisions
affecting the development
policies of the company
require the joint consent of
the shareholders.
b) Control and
consolidation methods
Consolidation methods are
determined by IAS 27, IAS
28 and IAS 31, depending
on the level of control
exercised by Banque
Accord. These standards
apply to all incorporated
and unincorporated entities
capable of consolidation,
regardless of the nature of
their business.
Full consolidation
Companies controlled
exclusively by Banque
Accord are fully
consolidated. Control is
defined as the power
to govern the financial and
operating policies
of a company for the
purpose of benefiting
from its business activities.
Exclusive control is
presumed to exist when
Banque Accord owns,
whether directly or indirectly
via subsidiaries, more than
half of a company’s voting
rights. It also exists when
the Bank has the power
to govern the financial
and operational policies
of a company under an
agreement or to appoint
or remove the majority of
the members of its board
of directors or equivalent
governing body.
Proportional consolidation
Jointly controlled entities
are proportionately
consolidated. The Group
has joint control where
the strategic financial
and operating decisions
affecting the company
are taken unanimously
by the controlling parties
under a contractual
agreement between the
latter.
Consolidation using the
equity method
Companies whose
management and financial
policies are influenced
significantly by the
Group, whether directly
Consolidated using the equity method
or indirectly, but are not
controlled fully by the
Group are consolidated
using the equity method.
3.5 _ Foreign currency
transactions (IAS 21)
The financial statements
of companies whose
presentation currency is
not the euro are translated
into euro using the closing
rate method. Under this
method, all balance sheet
items are translated at the
exchange rate applying on
the balance sheet date.
All income statement
items are translated at the
average exchange rate for
the period.
The portion of the resulting
exchange differences
attributable to shareholders
is recognized as equity, in
the “Exchange differences”
item, whilst the portion
attributable to minority
interests is recognized
under “Minority interests”.
In line with the optional
exemption from full
retrospective application of
IFRS available to first-time
adopters under IFRS 1,
2/04/08 0:31:50
32
translation differences
attributable to The Group
and minority interests
were deemed to be
zero in the opening IFRS
balance sheet at January
1, 2004.
On liquidation or disposal
COUNTRY
Currency
of all or part of a foreign
operation, the cumulative
exchange difference
shown under equity is
transferred to the income
statement as part of the
gain or loss on disposal
in direct proportion to
its significance as part
of the overall amount
concerned.
The exchange rates used
to translate the main
currencies used in the
financial statements of
foreign operations into
euro are as follows:
Period-end rate
Dec. 2007
Average rate
Dec. 2006
Dec. 2007
Dec. 2006
China
Yuan
0.093002
0.097283
0.095728
0.100737
Hungary
Forint
0.003941
0.003972
0.004000
0.003776
Poland
Zloty
0.278280
0.261028
0.265675
0.254436
Russia
Rouble
0.027789
0.028835
0.028499
0.029359
Romania
Lei
0.277185
0.295552
0.297926
0.282852
3.6 _ Treatment of
acquisitions and goodwill
(IFRS 3)
Goodwill is the difference
between the acquisition
cost and the fair value
of the identifiable assets
acquired and liabilities
and contingent liabilities
assumed on the date of
acquisition. It is recognized
as an asset if it is positive
and in profit if it is negative.
Goodwill is recognized in
the functional currency of
the acquired company,
and translated into euro at
the exchange rate applying
on the balance sheet date.
In accordance with IFRS 3
– Business Combinations,
goodwill is not amortized,
but is tested for impairment,
during the second half of
the fiscal year.
3.7 _ Share-based
payments (IFRS 2)
IFRS 2 – Share-Based
Payments requires that the
cost of services share-based
payment transactions is
recognized in the company
income statement and
balance sheet. This
standard, which applies to
schemes introduced after
November 7, 2002 and not
vested at January 1, 2005,
applies to two different
circumstances:
– transactions where
payment is share-based
and is settled in equity
instruments
– transactions where
payment is share-based
and settled in cash
This value is determined
by application of the
two-option model
➢ The specific conditions
are then accommodated
by applying a coefficient
of probability to the
underlying value.
The IFRS 2-compliant
share-based payment
schemes operated by bank
Accord use only the equitysettlement method.
The underlying value of
the option is the value
of a call determined by
application of the twooption model on the basis
of the following:
➢ Option period (fixed by
the option scheme)
➢ The option exercise price
➢ Interest rate (the rate
adopted is that of the
4-year French treasury
bond)
➢ The share price at the
time of allocation
The option valuation
method applied is based
on the following criteria:
➢ Determination of the
underlying value of the
option on the date the
option is granted, subject
to all the conditions set
out in the option scheme.
The balancing entry
increases equity as and
when these options are
exercised and shares issued,
and is spread over the
period during which staff
members exercise their
options.
2/04/08 0:31:50
33
➢ Market sector volatility
(in the absence of an
underlying valuation)
The underlying value
adopted includes the
impact of those dividends
paid during the restricted
period.
Entitlements are recognized
as expenses under
“employee expenses”.
3.8 _ Financial instruments
(IAS 32 and 39, and IFRS 7)
Financial assets and
liabilities are recognized
and measured in the
2007 financial statements
in accordance with the
carve-out version of
IAS 39 adopted by the
European Commission on
November 19, 2004, and
with Regulations 1751/2005/
EC of October 25, 2005 and
1864/2005/EC of November
15, 2005 concerning the use
of the fair value option.
value (including transaction
costs and revenues) and are
subsequently measured at
amortized cost, determined
by the effective interest
method.
3.8.2 _ Derivative instruments
The Group uses fixed or
optional financial derivative
instruments within the
scope permitted by IAS 39
to hedge its exposure to
interest rate risks.
are initially recognized
in the balance sheet at
fair value. At each periodend, they are measured
at fair value, regardless
of whether they are
held for transaction or
hedging purposes. Their
fair value is determined
using internal valuation
systems; that value then
being compared with
the valuations provided
by the Group’s banking
counterparties.
hedge is demonstrated
from the time of its
application and for its full
duration.
A cash flow hedge is
a hedge of the exposure
to variability in cash flows
that is attributable to a
particular risk associated
with a recognized financial
asset or liability.
Changes in the fair value
of derivatives qualifying
for hedge accounting
are recognized as follows:
➢ Fair value hedges:
the gain or loss from
re-measurement of the
derivative at fair value is
recognized in the income
statement on a symmetrical
basis with the gain or
loss on the hedged item
attributable to the hedged
risk, with any ineffective
portion recognized directly
in profit.
3.8.1 _ Financial liabilities
The carve-out version
of IAS 39 adopted by the
European Union recognizes
two categories of financial
liability:
➢ Financial liabilities
measured at fair value
through profit or loss.
Changes in the fair value
of these financial liabilities
are recognized directly
in the income statement.
Since Banque Accord has
elected not to use the fair
value option, no financial
liabilities are classified in
this category.
➢ Other financial liabilities
are all those financial
liabilities not measured at
fair value through profit or
loss. These financial liabilities
are initially recognized at fair
The gain or loss arising
from re-measurement
as recognized in the
balance sheet is balance
by a contra-entry in the
income statement (except
those relating to cash flow
hedges).
Hedge accounting
A fair value hedge is a
hedge covering exposure
to changes in the fair value
of a recognized financial
asset or liability. It is applied
when the eligibility criteria
set out in the standard are
met:
➢The hedge relationship
is clearly defined and
documented on its date
of application
➢ The effectiveness of the
2/04/08 0:31:50
34
➢ Cash flow hedges:
the portion of the gain or
loss made on a hedging
instrument determined
as an effective hedge is
recognized as a separate
component of equity, and
the ineffective portion is
recognized directly in profit.
Accrued interest on the
derivative is recognized in
the income statement on a
symmetrical basis with the
hedged item.
In the case of portfolio
hedges of interest rate
risks (also referred to as
macro-hedges), the
Group documents the
hedging relationship
based on future cash
flows for Group’s asset and
liability cash flows remains
unchanged.
The hedging relationship’s
effectiveness is
demonstrated by quaterly
comparisons between
current and forecast
financing indexed to
the EONIA and the
portfolio of hedging
instruments, supported
by prospective and
retrospective tests.
The hedges used by
Banque Accord are CAP
and swaps.
CAP are used as cash flow
hedges and are tested for
effectiveness. The intrinsic
value of CAP is separated
from their time value, which
is recognized directly in
profit.
Under IAS 39, these
instruments – which are
used to hedge the Group’s
exposure to market risks
(interest rate, currency
and equity risks) – are
recognized in the balance
sheet at fair value.
“Cash flow hedges”), and
the ineffective portion is
recognized directly in profit.
Gains and losses from remeasurement at fair value
are always recognized in
profit, except in the case of
cash flow hedges.
Gains and losses from
re-measurement at
fair value of derivative
instruments that are
not held as hedges
in a documented risk
management strategy
are recognized in profit.
The application of hedge
accounting reduces
the earnings volatility
associated with changes
in the fair value of the
derivative in the hedging
relationship.
IAS 39 defines three types
of hedging relationship: fair
value hedges, cash flow
hedges and hedges of a
net investment in a foreign
operation. The Group is only
concerned by the first two
types.
Most derivatives used
by the Group qualify for
hedge accounting and,
accordingly, are accounted
for as follows:
• Gains and losses from remeasurement at fair value
of derivative instruments
held as fair value hedges
of assets and liabilities
in a documented risk
management strategy are
statement and are offset
by the gain or loss on the
hedged asset or liability
attributable to the hedged
risk.
• The effective portion of
gains and losses from remeasurement at fair value
of derivative instruments
held as cash flow hedges
of highly probable
future transactions in
a documented risk
management strategy is
recognized in equity (under
Embedded derivatives:
An embedded derivative
is a component of a hybrid
(combined) instrument
that also includes a nonderivative host contract.
The embedded derivative is
recognized separately from
the host contract when:
– The hybrid instrument is
not measured at fair value
through profit or loss.
– A separate instrument
with the same terms as
the embedded derivative
would meet the definition
of a derivative.
– The economic
characteristics and
risks of the embedded
derivative are not closely
related to the economic
characteristics and risks of
the host contract.
2/04/08 0:31:50
35
Trading account recognition
In order to meet an EONIAlinked funding target,
Banque Accord has also
introduced a swap to
convert some EURIBORlinked loans to EONIA.
Basis swaps have been
recognized with trading
account. It has not been
possible to document a
hedging relationship for
these instruments. Variations
in the value of these
financial instruments are
recognized directly as profit
or loss.
Deferred taxes are
calculated at the tax
rates that are expected
to apply to the period
when the asset is realized
or the liability is settled,
based on tax rates (and
tax laws) that have been
enacted or substantively
enacted by the balance
sheet date. The effect
of changes in tax rates
is recognized in profit,
except to the extent that
the changes relate to
items recognized directly in
equity.
3.8.3 _ Financing commitments
Deferred tax assets and
liabilities are set off at the
level of each taxable entity.
They are not discounted.
Financing commitments
that do not meet the
definition of a derivative
under IAS 39 are not
recognized in the balance
sheet where they are
granted under normal
conditions (where this is
not the case, and asset
or liability is recognised).
However, they are covered
by provisions in accordance
with IAS 37.
3.9 _ Deferred taxes (IAS 12)
Deferred taxes are
recognized on all temporary
differences between the
carrying amount of assets
and liabilities and their tax
base. No deferred taxes are
recognized in respect of the
following items:
(i) non-deductible goodwill
(ii) the initial recognition of
an asset or liability in a
transaction that is not a
business combination
and does not affect
either accounting profit
or taxable profit
(iii)time differences arising
from investments in
subsidiaries that are not
expected to reverse in
the foreseeable future.
Deferred tax assets are
recognized for tax losses
and other deductible
temporary differences
only when it is probable
that taxable profit will be
available against which
the tax loss or temporary
difference can be utilized,
or when the deferred
tax asset can be set off
against deferred tax
liabilities.
3.10 _ Intangible
assets and property
and equipment
(IAS 16, 36, 38 and 40)
Banque Accord accounts
for intangible assets and
using the component
method. In accordance
with IAS 16, the basis for
depreciation reflects any
residual asset value.
The main depreciation
periods are as follows:
Property and equipment:
Fixtures, fittings and
security systems: 6 years
2/3rds to 10 years
Other assets: 3 to 5 years
Intangible assets:
Purchased software is
recorded under “Other
intangible assets” and is
amortized over three
years.
Intangible assets and
are tested for impairment
whenever there is an
indication that they may
be impaired and at least
once a year in the case
of intangible assets. If the
recoverable amount of an
asset is less than its carrying
amount, an impairment
loss is recognized in
the income statement
under Depreciation and
amortization expense.
Impairment losses may
be reversed if there is
an indication that the
impairment no longer exists
or has decreased.
Gains and losses on sales
of operating assets are
recognized under Gains
and losses on disposals
of intangible assets and
property and equipment.
Property and equipment
are impaired on the basis
of their useful working
life on a straight-line or
reducing balance basis.
2/04/08 0:31:51
36
3.11 _ Impairment of assets
(IAS 36)
IAS 36 – Impairment of
Assets describes the
procedures to be followed
to check that the carrying
amount of assets does not
exceed their recoverable
amount, defined as the
amount expected to be
recovered through the use
or sale of the asset.
The recoverable amount
of an asset is defined as
the higher of its fair value
less costs to sell and its
value in use. Fair value less
costs to sell is the amount
obtainable from the sale
of an asset in an arm’s
length transaction between
knowledgeable, willing
parties, less the costs of
disposal. Value in use is the
present value of the future
cash flows expected to be
derived from the continued
use of an asset and its
disposal at the end of its
useful life.
The weighted average cost
of capital is determined by
reference to the observed
market yield of French retail
stocks.
The recoverable amount of
and intangible assets
is estimated whenever
there is an indication of
impairment.
Impairment tests are also
performed once a year (at
the year-end) on assets with
an indefinite life, such as
goodwill.
3.12 _ Borrowing costs
(IAS 23)
Borrowing costs are
recognized as an expense
when they are incurred,
benchmark treatment
under IAS 23.
This treatment has been
applied to a funding
transaction of € 177 million.
the effect of discounting is
significant.
3.14 _ Employee benefits
(IAS 19)
The Group provides pension
benefits to employees in
accordance with the laws
and practices in its host
countries. All employee
benefit obligations are
recognized and measured
in accordance with IAS 19
– Employee Benefits.
In France, pensions
and post-employment
benefits management
has been fully outsourced.
Recognized actuarial gains
and losses are recorded
in equity and not in profit.
A provision is recorded in
the financial statements
for obligations arising from
a “time savings” scheme
allowing employees to
accumulate, for up to five
years, the extra time off
granted under the 35-hour
week agreement.
3.13 _ Provisions (IAS 37)
After-tax cash flows are
estimated based on the
three-year business plan.
Cash flows beyond the
projection period are
estimated by applying
a constant growth rate
over the asset’s remaining
estimated useful life.
For impairment tests of
goodwill, cash flows are
estimated over a period of
nine years and a terminal
value is calculated by
discounting cash flows for
the ninth year to perpetuity.
The discount rate
corresponds to the Group’s
weighted average cost
of capital after tax, plus a
risk premium determined
separately for each country.
Provisions other than
those related to credit risks
and employee benefits
represent liabilities of
uncertain timing or amount.
They are recognized
when the Group has a
current obligation (legal
or constructive) arising as
a result of a past event, it is
probable that an outflow
of resources embodying
economic benefits will
be required to settle the
obligation and a reliable
estimate can be made
of the amount of the
obligation. Provisions are
estimated on the basis
of the most probable
assumptions.
They are discounted when
2/04/08 0:31:51
37
3.15 _ Minority shareholder
put options
The Group has granted
put options to the minority
shareholders of certain
subsidiaries. The option
exercise price was
determined according to a
formula agreed when the
subsidiary was acquired,
based on the subsidiary’s
projected future business
performance.
In accordance with IAS 32,
a liability was recognized in
the opening balance sheet
at January 1, 2005 for the
discounted present value of
the options’ exercise price,
by reducing the underlying
minority interests and
recognizing any balance in
goodwill.
At the end of each period,
goodwill and minority
interests are adjusted for
any changes in the option
exercise price and in the
carrying amount of minority
interests. In light of the
requirement to recognize
a liability although the put
options have not been
exercised, in the interest
of consistency, the same
accounting treatment was
applied on initial recognition
of the liability as that used to
recognize increases in the
Group’s percentage holding
in subsidiaries.
Where put options are
not exercised by minority
interest by the contracted
date, all those transactions
previously recognized are
reversed. The effect of this
is to recognize the gain
created by the reversing of
the discounting of the debt,
to reattribute the debt to
the minority interests in the
minority interests reserve
and to cancel any goodwill
recognized.
3.16 _ Impairment of
financial assets
At each period-end, the
Group determines whether
there is objective evidence
that any assets may be
impaired as a result of one
or several events that have
a measurable impact on
estimated future cash flows.
Two series of impairment
tests are performed:
• Impairment testing
of groups of assets with
the same or similar
characteristics, where
there is clear evidence
of impairment and the
impairment loss can be
allocated among the
individual assets. These
include loans that have
been transferred to a debt
collection agency for
recovery.
The impairment loss on
these loans is equal to
the difference between
their carrying amount
and the present value of
estimated recoverable
future cash flows (taking
into account the value
and recoverability of any
guarantees), discounted at
the loans’ original interest
rate. The impairment loss is
statement as Impairment
losses, and deducted from
the carrying amount of the
financial asset.
• Impairment tests of groups
of assets with the same
or similar characteristics,
when there is an indication
– but not clear evidence
– of impairment and any
impairment losses cannot
be allocated among
the individual assets.
The impairment loss on
these assets is determined
based on the probability
of default, loss given default
and exposure at default.
The impairment loss is
losses, and deducted from
the carrying amount
of the financial asset.
Any subsequent increase
or decrease in the
impairment loss is also
recognized under
Impairment losses, while
discounting adjustments
to reflect the passage of
time are recognized as
Interest and similar income.
For restructured loans
at below market rates
the loss arising from any
change in the loan terms is
losses when the estimated
recoverable future cash
flows discounted at the
loan’s original interest rate
represent less than the
amortized cost of the loan.
Discounting adjustments
to reflect the passage of
time are recognized in
the income statement as
Interest and similar income.
The main indications of
impairment are as follows:
➢ One or more installments
are at least three months
past due
➢ The debtor has not
defaulted on any
installments but available
information about the
debtor’s situation represents
a clear indication of
impairment
➢ Legal proceedings are in
progress to recover the loan.
2/04/08 0:31:51
38
3.17 _ Measurement
of financial assets
Loans and advances to
customers and lending
institutions are recognised
at their impaired cost.
3.18 _ Related party
transactions
Related party transactions
disclosed in the notes to
the financial statements
include transactions with
the parent company,
Groupe Auchan SA,
and the percentage of
transactions with AccordFin
not eliminated due to
the application of the
proportionate method to
account for this subsidiary.
the Group share of net
profit for the fiscal year
by the weighted average
number of equity shares in
circulation during the fiscal
year.
3.19 _ Profit per share
The figure for the average
number of shares in
circulation during the fiscal
year is arrived at by adding
the number of shares issued
during the fiscal year to the
number in circulation at the
beginning of the fiscal year.
The Group presents profit
per share figures calculated
on the basis of operating
profit and net profit.
Basic profit per share is
calculated by dividing
Note 4 _ Cash, central banks and post office accounts
CASH, CENTRAL BANKS AND POST OFFICE ACCOUNTS
Central banks
Retailers – In-store finance desks
Other
Total
12/31/2007
12/31/2006
Change
50,036
49
49,987
9,196
5,794
3,402
380
20
360
59,612
5,863
53,749
Note 5 _ Derivative hedging instruments
DERIVATIVE HEDGING INSTRUMENTS
Fair value hedges
12/31/2007
12/31/2006
Asset
Liability
Asset
Liability
849
1,291
974
2,204
849
1,291
974
2,204
2,826
306
4,403
2,405
306
3,899
Interest rate instruments:
Futures
Options
Cash flow hedges
Interest rate instruments
Futures
Options
Total
421
3,675
504
1,597
5,377
2,204
2/04/08 0:31:51
39
Derivative instruments held
as hedges of interest rate
risks totaled €2,987 million at
12/31/2007, compared with
€2,441 million at the end of
2006. These instruments are
classified into four groups:
➢ Amortizing swaps where
the Group is the fixed rate
borrower, used to hedge
interest rate risks on the
financing of fixed rate loans.
➢ CAP used to hedge the
risk of an increase in the
cost of financing variable
rate loans due to a sharp
rise in interest rates.
➢ An interest rate swap on
bonds issued in connection
with a structured finance
transaction, converting the
interest rate on the bonds
from fixed to variable.
➢ Swaps to convert debts
linked to a variable rate
(3-month EURIBOR) into
a debt linked to another
variable rate common to
all finance (EONIA).
Note 6 _ Loans and advances to banks
12/31/2007
12/31/2006
Change
Demand loans and advances to banks:
40,012
17,146
22,866
Term loans and advances to banks:
Principal
Accrued interest
o/w related parties
Subordinated loans:
Principal
Accrued interest
o/w related parties
86,841
85,995
846
86,841
2,003
1,999
4
2,003
63,428
62,866
562
63,428
2,011
1,999
12
2,011
23,413
23,129
284
23,413
(8)
0
(8)
(8)
a) Schedule
Term loans and advances to banks:
Principal
Accrued interest
o/w related partiess
Subordinated loans:
Principal
Accrued interest
o/w related parties
Term loans and advances to banks
Principal
Accrued interest
o/w related parties
Subordinated loans
Principal
Accrued interest
o/w related partiess
Less than
3 months
3 months to
1 year
1 year to
5 years
more than
5 years
12/31/2006
40,203
39,641
562
40,203
12
7,300
7,300
15,925
15,925
0
7,300
0
15,925
0
63,428
62,866
562
63,428
2,011
1,999
12
2,011
12
12
1,999
1,999
1,999
Less than
3 months
3 months to
1 year
1 year to
5 years
more than
5 years
12/31/2007
58,127
5,880
22,834
0
86,841
57,281
5,880
22,834
85,995
5,880
0
22,834
0
1,999
1,999
86,841
2,003
1,999
4
1,999
2,003
846
58,127
4
846
4
4
2/04/08 0:31:51
40
Note 7 _ Loans and advances to customers
a) Schedule
Less than
3 months
3 months
to 1 year
1 year
to 5 years
more than
5 years
12/31/2006
Total loans and advances (gross)
366,757
577,527
1,100,715
77,297
2,122,296
Sound loans and advances
339,718
505,448
908,429
49,096
1,802,691
331,748
505,448
908,429
49,096
1,794,721
LOANS AND ADVANCES
Accrued interest
7,970
Impaired loans and advances:
7,970
27,039
72,079
192,286
28,201
319,605
Less than
3 months
3 months
to 1 year
1 year
to 5 years
more than
5 years
12/31/2007
Total loans and advances (gross)
499,004
589,073
1,172,649
108,364
2,369,090
449,752
519,977
970,327
62,002
2,002,058
439,565
519,977
970,327
62,002
1,991,871
69,096
202,322
46,362
367,032
LOANS AND ADVANCES
Accrued interest
Impaired loans and advances:
10,187
10,187
49,252
b) Impaired receivables
IMPAIRED RECEIVABLES
12/31/2007
12/31/2006
Change
1,991,871
1,794,721
197,150
+
Impaired loans and advances
+
367,032
319,605
47,427
Impairment
–
223,260
200,600
22,660
Total principal net of impairment
Accrued interest
Net loans and advances at the end of the fiscal year
=
2,135,643
1,913,726
221,917
+
10,187
7,970
2,217
=
224,134
2,145,830
1,921,696
Impaired loans as a percentage of total loans:
15.49%
15.06%
Provision rate on impaired loans
60.83%
62.76%
c) Change in impairment
CHANGE IN IMPAIRMENT
Impairment at the start of the fiscal year
Adjustments to reflect IFRS and changes of method
Impairment losses recognized during the period
Impairment losses reversed during the period
Reclassification of interest discounts on restructured loans
Other reclassifications and translation adjustment
Impairment at the end of the fiscal year
12/31/2007
12/31/2006
200,600
175,559
0
399
35,245
27,850
9,824
4,643
(2,795)
(2,454)
34
3,889
223,260
200,600
2/04/08 0:31:51
41
Note 8 _ Held-to-maturity investments
12/31/2007
HELD-TO-MATURITY INVESTMENTS
12/31/2006
Change
Equities
4,579
9,699
(5,120)
Total
4,579
9,699
(5,120)
The year-on-year change in held-to-maturity investments corresponds to redemptions net of
reimboursemendt received. The redemption date is May 2008. These are not quoted stocks.
Note 9 _ Holdings in companies consolidated using the equity method
SETTLEMENT ACCOUNT AND OTHER ASSETS
At January 1
Issues of shares
2007
2006
0
0
6,000
Share of profit
(504)
At December 31
5,496
0
Note 10 - Property and equipment and intangible assets
INTANGIBLE ASSETS
Gross value at 01/01/2007
Acquisitions during the fiscal year
Goodwill
Software
licenses
Other
TOTAL
20,038
7,489
358
27,885
(260)
1,204
944
Sales and disposals
2
2
Translation adjustment
0
0
19,778
Accumulated amortization and depreciation at 01/01/2007:
Amortization and depreciation
8,692
358
28,828
5,051
247
5,298
1,416
1
1,417
Amortization and depreciation written off
on disposals
1
1
1
1
Accumulated amortization and depreciation at 12/31/2007
6,467
248
6,715
Carrying amount at 12/31/2007
19,778
2,225
110
22,113
20,038
2,438
111
22,587
Goodwill is calculated
on the basis of the fair
value of the net asset
situation of the acquiring
company at the acquisition
date: October 23, 2001
for AccordFin and July
1, 2000 for Crediplus.
Until 31 December 2003,
goodwill was amortized
over a period of 20 years.
Additional goodwill was
recognized in the opening
balance sheet at January
1, 2005, reflecting the
purchase of the
Cofinoga holding in
Crediplus.
Goodwill is no longer
amortized, but is tested
annually for impairment.
No impairment losses were
recognized.
Acquisitions of intangible
assets in the sum of
€1,143,000 apply to France.
2/04/08 0:31:52
42
Office and IT
equipment
PROPERTY AND EQUIPMENT
Acquisitions during the fiscal year
Sales and disposals
Fixtures and Outstanding
fittings
Other
TOTAL
8,833
4,622
17
978
14,450
1,133
764
(1)
532
2,428
1
11
12
17
301
301
9,665
5,386
1,521
16,589
Accumulated amortization and depreciation at 01/01/2007
7,134
2,178
387
9,698
Amortization and depreciation
1,296
518
319
2,133
Amortization and depreciation written off
on disposals
300
300
6
6
712
11,537
Accumulated amortization and depreciation
at 12/31/2007
8,130
1,535
2,690
17
810
5,052
1,699
2,444
17
592
4,752
2,696
Acquisitions of property and equipment relate principally to France (€1,815,000), Italy (€173,000)
and Poland (€174,000).
Note 11 _ Deferred tax assets
CHANGES IN PROVISION
Non-deductible provisions
Untaxed provisions
12/31/2006
Movements
recognized
in profit
Movements
recognized
in equity
Reclassification
12/31/2007
13,648
1,334
6
(32)
14,956
(1)
(446)
(538)
(347)
(571)
13,346
(676)
231
(1,541)
40
Other
281
(90)
TOTAL
11,712
1,515
Financial instruments
684
690
(817)
Deferred tax assets on tax losses carried forward of €1.5 million, have not been recognized due to uncertainty
over how they may be allocated in the future.
Schedule of all deferred tax assets not used
AMOUNT
3 ,451
Less than 1 year
1 year to 5 years
Over 5 years
265
3,186
0
Note 12 _ Settlement account and other assets
SETTLEMENT ACCOUNT AND OTHER ASSETS
Items presented for collection
12/31/2007
12/31/2006
Change
342,274
317,372
24,902
Prepaid expenses
3,078
2,584
494
Accrued income
4,991
1,681
3,310
Other accruals
1,138
3,508
(2,370)
12,430
9,920
2,510
363,911
335,065
28,846
Other assets
Total
Items presented for collection refers to direct debits on customer accounts.
2/04/08 0:31:52
43
Note 13 _ Financial liabilities
DEBT
12/31/2007
12/31/2006
Change
543,179
480,766
62,413
35,684
32,042
Demand loans and advances
Term loans and advances
507,495
448,724
402,581
195,278
Demand deposits
202,088
195,278
Term deposits
200,493
Deposits
207,303
Bonds
927,897
746,622
181,275
Other debt securities (medium-term Notes and commercial paper)
444,994
564,891
(119,897)
2,318,651
1,987,557
331,094
Total
Bonds:
This item refers to the following bond issues:
Five-year bonds issued in May 2003 for €176 million
Five-year bonds issued in September 2004 for €150 million
Five-year bonds issued in September 2005 for €200 million
Five-year bonds issued in June 2006 for €200 million
Five-year bonds issued in June 2007 for €200 million
Issued by
Nominal
interest
Effective
interest rate
Issue date
Maturity
12/31/2007
12/31/2006
176,701
176,701
Banque Accord
3.46%
3.26%
May 2003
May 2008
Banque Accord
3-month Euribor
+ 10 bps
3-month Euribor +
10 bps
May 2004
May 2008
Banque Accord
3-month Euribor
+ 22 bps
3-month Euribor +
22 bps
September 2004
September 2009
150,000
150,000
Banque Accord
3-month Euribor
+ 18 bps
3-month Euribor +
18 bps
September 2005
September 2010
200,000
200,000
Banque Accord
3-month Euribor
+ 17.5 bps
3-month Euribor +
17.5 bps
June 2006
June 2011
200,000
200,000
Banque Accord
3-month Euribor
+ 17 bps
3-month Euribor +
17 bps
June 2007
June 2012
200,000
20,000
Undrawn medium and long-term bank lines of credit totaled €662.8 million at December 31, 2007.
Subordinated debts
This item corresponds to five subordinated debt issues as follows:
€15
million 10-year subordinated notes issue in December 2004 underwritten by Groupe Auchan.
€18
million 10-year subordinated notes issue in November 2006 underwritten by Auchan Coordination Service.
€0.750 million 10-year subordinated notes issue in June 2002 underwritten by the Santander Group
€0.875 million 10-year subordinated notes issue in December 2004 underwritten by the Santander Group.
€0.375 million 10-year subordinated notes issue in November 2006 underwritten by the Santander Group.
All of the issues may be redeemed early, in full or in part, at the Group’s initiative, subject to approval by the
French banking supervisor (Commission Bancaire).
12/31/2007
Subordinated debt
o/w Debt issued to related parties
12/31/2006
35,113
35,097
33,110
33,086
The balance of subordinated debt refers to the €2 million contribution made Banque Accord’s Spanish partner to
subordinated debt issued by the Group’s local subsidiary.
2/04/08 0:31:52
44
Note 14 _ Provisions
PROVISIONS
Employee benefits
Provisions for business development costs
01/01/2007
Increase
216
86
TOTAL
Reclassification
change
12/31/2007
91
136
347
3,800
Provisions for tax inspections
Provisions for claims and litigation
Decreases
3,800
0
648
889
889
760
733
845
4,776
1,708
4,736
136
1,884
Note 15 _ Other liabilities and settlement accounts
OTHER LIABILITIES
12/31/2007
12/31/2006
Change
(4,250)
Trade payables
4,992
9,242
Employees
7,628
6,327
1,301
Cash back
8,472
5,913
2,559
Tax and VAT
780
1,090
(310)
Other
5,847
7,737
(1,890)
TOTAL
27,719
30,309
(2,590)
12/31/2007
12/31/2006
Change
60,775
68,529
(7,754)
Deferred income
17,048
15,432
1,616
Accrued expenses
40,589
36,943
3,646
Other
3,349
2,974
375
TOTAL
121,761
123,878
(2,117)
LIABILITY SETTLEMENT ACCOUNTS
Items presented for collection
Note 16 _ Equity – Group share
16.1 _ Number of equity shares issued
At January 1
Employee share options
At December 31
2007
2006
1,407,913
1,407,913
2 ,102
1,410,015
1,407,913
At December 31, 2007, equity capital totaled €28,200,300 and comprises 1,410,015 ordinary €20 voting shares.
16.2 _ Legal reserve
The legal reserve of Banque Accord S.A. totaled €2.816 million at December 31, 2007.
2/04/08 0:31:52
45
16.3 _ Reserves by type
Translation reserve
Poland
Hungary
Russia
Romania
China
TOTAL
Cash flow hedge reserve (exc. deferred tax)
At January 1
Change
At December 31
12/31/2007
12/31/2006
82.9
(12.1)
0.2
2.7
5.6
79.3
3.5
13.4
2.1
(0.5)
47.5
2007
2006
4,084
1,722
(1,975)
2,362
2,109
4,084
16.4 _ Changes in equity (Group share)
Share capital Share premium
Reserves and
account retained earnings
At December 31, 2005
Movements
Appropriation
Net impact of cash flow hedges
Impact on opening equity
Exchange rate gains/losses
Actuarial gains/losses
Other
Movements
Appropriation
Distribution of dividends
Share issues
Net impact of cash flow hedges
Exchange rate gains/losses
Net actuarial gains/losses
Other
28,158
28,158
46,764
64,858
(22)
46,742
34,540
1,468
(398)
3
104
(39)
100,536
37,426
(10,292)
42
Profit for
the year
Currency
gains/losses
Total equity
34,540
12
174,332
37,426
(34,540)
36
37,426
48
37,864
(37,426)
509
(1,295)
31
28,200
108
47,359
7
(60)
126,322
37,864
79
37,426
0
1,468
(398)
39
104
(61)
212,910
37,864
0
(10,292)
551
(1,295)
31
7
48
239,824
16.5 Dividends for the last three years
DIVIDENDS PAID
Dividends paid as shares for the 2004 fiscal year
Dividends paid as shares for the 2005 fiscal year
Cash dividends paid for the 2006 fiscal year
Amount
Dividend per share
23,543
18.30
0
10,292
7.31
2/04/08 0:31:52
46
Note 17 _ Minority interests
At January 1
2007
2006
353
39
Profit for the fiscal year
Share issues
Settlement of the put option for Hungary
66
(84)
1,244
415
928
0
Other (including currency gains/losses)
26
(17)
2,617
353
12/31/2007
12/31/2006
664,808
810,458
5,548
3,412
670,356
813,870
COMMITMENTS GIVEN
12/31/2007
12/31/2006
Finance commitments
9,513,014
8,196,933
93,164
144,624
87,609
95,847
9,693,787
8,437,404
Position at 12/31/2007
Note 18 _ Commitments and contingencies
Commitments given and received
COMMITMENTS RECEIVED
Finance commitments
Received from banks and customers
Guarantees
Received from banks and customers
Total
Given to banks and customers
Guarantees
Given to banks and customers
Securities commitments
Securities receivable
Total
Securities commitments are measured based on the terms of the agreements with partners, and are discounted.
With the exception of a put option for Spain, these are options which the bank may choose to exercise or not.
€ MILLION
12/31/2007
Active - 2 years
France
Central Europe exc. France
Rest of the world
12/31/2006
Global
Active - 2 years
Global
3,210
8,451
2,816
7,192
816
1,006
672
962
30
30
14
14
Based on the Commission Bancaire definition for the ratios calculation (i.e. excluding customers inactive for over
2 years) commitments to customers totaled €4,056 million.
2/04/08 0:31:53
47
Note 19 _ Interest and similar income and expenses
INTEREST AND SIMILAR INCOME AND EXPENSES
12/31/2007
Expense
12/31/2006
Income
Expense
Income
Transactions with banks
19,076
4,806
16,804
4,549
Customer transactions
3,083
229,477
131
193,759
Financial instruments transactions
55,424
257
33,334
421
Total
77,583
234,540
50,269
198,729
Note 20 _ Fee and commission income and expenses
FEE AND COMMISSION INCOME AND EXPENSES
12/31/2007
Expense
Transactions with banks
Customer transactions
Financial services transactions (including card fees)
Other
Total
12/31/2006
Income
Expense
4,401
6,420
2,372
510
62,951
23,963
43,475
Income
5,641
42,560
25,241
37,315
72
294
48
82
28,946
113,140
27,661
85,598
Note 21 _ Employee expenses
EMPLOYEE EXPENSES
12/31/2007
12/31/2006
Wages and salaries *(1)
32,592
28,059
Social security contributions
12,181
11,237
Tax payable
3,302
3,069
Employee profit-sharing and bonus schemes
Total
5,039
5,095
53,114
47,460
Note 22 _ Impairment losses
IMPAIRMENT LOSSES
Charges to provisions for impairment losses on
customer transactions
12/31/2007
12/31/2006
Expenses
Income
Expenses
Income
35,245
9,824
27,850
4,643
Charges to provisions for non-performing loans
Credit losses covered by provisions
26
39,132
Recoveries of loans and advances written off in prior
periods
8,579
Total
74,377
Balance
55,974
24,364
18,403
16,326
52,240
20,969
31,271
2/04/08 0:31:53
48
Note 23 - Tax
TAX CHARGE
12/31/2007
Current taxes
22,989
23,216
Change in deferred tax assets
(1,515)
(3,886)
Total
21,474
19,330
TAX PROOF
Amount
Profit before tax and goodwill
Tax payable at standard French tax rate
Permanent differences
Unrecognized deferred tax assets
Effect of different tax rates
Impact of rate changes at the beginning of the
fiscal year
Total tax
Directors’ remuneration
Total remuneration of €0.98
million (including directors’
fees) was paid to corporate
Group officers of Banque
Accord in 2007.
The accounted cost of
stock-options granted to
2006 rate
+34.43%
+34.43%
(0.74%)
20,626
157
0.26%
1,806
3.01%
1.70%
(1,099)
(1.83%)
(1.26%)
(16)
(0.03%)
21,474
Effective rate
Number of employees
In 2007, the Group had
1,306 full-time equivalent
employees (including
all those employed by
proportionally-consolidated
companies), compared
with 1,103 in 2006.
2007 rate
59,908
Standard French tax rate
Note 24 _ Other
information
12/31/2006
35.84%
corporate officers was
below €0.1 million in 2007.
Note 25 _ Employee
benefits
Group employees receive
long-term and postemployment benefits
in accordance with
the rules and practices
applying in each
country.
These additional
benefits take the form
either of defined
contribution schemes
or defined benefit
schemes.
34.11%
Defined contribution
schemes
Under these schemes,
contributions are paid
periodically to external
bodies that provide the
necessary administrative
and financial management
services. These contributions
are recognized as expenses
as they are incurred.
Defined benefit schemes
The main schemes are
subject to independent
annual actuarial valuation.
These schemes are
retirement packages
in France, and legal
severance payments (TFR)
in Italy.
2/04/08 0:31:53
49
ACTUARIAL ASSUMPTIONS
2007
2006
Discount rate at January 1
4.35%
4.00%
Discount rate at December 31
5.35%
4.35%
Forecast scheme yield at January 1
4.35%
4.00%
Forecast scheme yield at December 31
2.50%
2.50%
2007
2006
6
312
RECONCILIATION OF THE NET LIABILITY BETWEEN JANUARY 1 AND
DECEMBER 31
Net liability at January 1
Expense recognized in the financial statements
Contributions paid
Employer’s contributions
Actuarial losses (gains) recognized in the SORIE
Net liability at December 31
Note 26 _ Share-based
payments
Details of a Banque Accord
share options scheme
• Options may not be
exercised within 4 years of
the date on which they are
granted
• They may be exercised
between June 1 and 20
or September 15 and
October 7 of the year in
which the scheme matures
• The exercise of options is
conditional upon effective
and continued employment
with the issuing company
or one of its subsidiaries.
Suspension of contract for
any reason other than illness
or maternity invalidates the
right to options (as does any
other any other condition
84
73
(80)
(275)
0
0
(10)
(104)
0
6
specific to the issuing
company)
• The price at which options
are exercised takes the
form of an ex-coupon. In all
cases, options are deemed
exercised following
detachment of the coupon.
• The shares subscribed
by option recipients are
entered in the Banque
Accord share register.
Change in the number of options and the weighted average price between the 2006 and 2007 fiscal years
2007
Exercise price
Options at fiscal year start
Options granted during the fiscal year
2006
Number of options
€262.09
6,333
Options exercised during the fiscal year
0
Options canceled or lost
0
Options expired
0
Options at fiscal year end
Options exercisable at fiscal year end
Exercise price Number of options
17,258
€218.65
23,591
0
11,525
€226.65
6,263
€188.66
530
0
0
€202.71
17,258
0
2/04/08 0:31:53
50
Weighted average values of the schemes granted in 2006 and 2007
Schemed granted during fiscal year
2007
2006
€25.33
€54.42
Share price
€262.09
€226.65
Exercise price
€262.09
€226.65
Fair value of options
Forecast volatility
16.20%
22.27%
Option period
4 years
4 years
Forecast dividends
4.80%
4.93%
Risk-free interest rate
4.14%
3.64%
binomial
binomial
Model
Volatility has been calculated on the basis of an analysis examining the inherent volatility
of company shares relative to Banque Accord business levels over the 4-year period
preceding the scheme granting date.
Impact on the income
statement
The annual impact of each
scheme is €0.1 million,
and the total (cumulative)
impact of those schemes
recognized since 2005 is
€0.25 million.
business sector and
geographic sector.
Note 27 _ Sector
information
Level 2: geographic sector
• France
• Western Europe, excluding
France: Spain, Portugal
and Italy.
Sector information is
presented at 2 levels:
• Rest of the World: Poland,
Hungary, China, Russia
and Romania.
Level 1: business sector
• Consumer credit
• Other (payment
processing, insurance,
savings, online banking,
ATMs, etc.)
Geographic sector
income, expense, assets
and liabilities are broken
down on the basis of
the location in which
the related transactions
are recorded in the
accounts.
Credit
Other
External
350,591
36,710
Internal
12,439
Eliminations
Total
Sector revenues:
Depreciation and amortization expenses
Sector expenses
Provisions
Impairment losses
Sector income
387,301
(9,319)
3,120
(9,319)
162,926
3,544
165,098
3,544
7,146
(3,028)
(3,028)
55,974
141,443
55,974
29,563
Non-sector expenses
0
171,006
111,602
Tax charge
21,474
Net profit
37,930
Sector assets
2,680,248
52,000
2,732,248
Sector liabilities
2,384,937
86,675
2,471,612
Capital expenditure
7,387
7,387
2/04/08 0:31:53
51
Sector revenues
Sector assets
Capital expenditure
Note 28 _ Fair value
Assets and liabilities have
been recognized and
measured in accordance
with IAS 39 since January 1,
2005. The following
accounting methods are
applied:
Cash, settlement accounts,
other assets and liabilities
These financial assets and
liabilities are measured at
nominal value, where this
represents a reasonable
estimate of their fair value,
given their short-term
nature.
Variable rate loans
There is no mark-to-market
measurement of variable
rate loans.
Fixed rate loans
Fixed rate loans are
measured at nominal value,
where this represents a
reasonable estimate of their
fair value, given their shortterm nature.
Financial instruments
Banque Accord values its
financial instruments using
a standard method which
discounts estimated future
cash flows from each
instrument at the market
rate for zero-coupon bonds
at 12/31/2007.
France
Western Europe
Rest of the World
Total
286,362
78,401
25,658
390,421
2,157,015
540,008
35,224
2,732,248
6,117
797
473
7,387
Bond debt
The fair value of bonds is
determined by discounting
future cash flows at the
market rate for zero coupon
bonds with the same
maturity, plus a spread
equivalent to that applying
at the time the bonds were
issued.
Loans and
advances from banks
They are valued at their
nominal value insofar
as they constitute a
reasonable estimate of their
market value, given their
short-term nature.
Note 29 _ Risk
exposure and
management
In the normal course of
business, Banque Accord
is exposed to interest
rate, currency and credit
risks. Interest rate risks are
managed using derivative
financial instruments.
Market risks (liquidity, interest
rate and currency risks)
are managed centrally at
Group level.
29.1 _ Counterparty risk
By virtue of the nature
of its business, Banque
Accord is consistently in
a net borrower position.
Counterparty risk therefore
mainly concerns offbalance sheet transactions.
To contain this risk,
Banque Accord deals
only with leading banks
for its financing and
interest rate and currency
hedging transactions.
Interest rate and currency
derivative transactions
are conducted only with
banking counterparties
that are rated at least “A”
by Moody’s, Standard and
Poor’s or Fitch.
In countries outside
France, where the country
risk rating is below A,
local Group companies
obliged to deal with local
banks, are authorized
to do business with
counterparties whose
rating is equivalent to the
country risk rating.
29.2 _ Interest rate risks
The Banque Accord
financial policy aims to
protect its financial margin
against the effects of future
changes in interest rates
by hedging all the interest
rate risks applying to
its fixed-rate loans. The
hedging strategy consists
of matching fixed rate
installment loans with
fixed rate financing of
the same repayment
2/04/08 0:31:53
52
profile, or using derivative
instruments.
The derivatives portfolio
includes swaps, CAP
and/or collars, but
excludes deactivating
barrier options.
Interest rate risks on
variable rate loans are
not hedged as a matter
of course,
since Banque Accord
is generally able to pass
on any rate increases
to its customers.
Nevertheless, where
Banque Accord does
hedge against this risk,
it uses only one-year
interest rate options.
The hedging policy is
reviewed quarterly by the
bank’s Treasury Committee.
Hedging policies are
determined jointly with
Banque Accord’s partners
principles outlined above.
They are approved by
the Boards of Directors
of Group companies
for local application
under the supervision
of both partners.
2007
Exposure to interest rates risk
Fixed-rate financial assets
693
Fixed-rate financial liabilities
406
Variable-rate financial assets
1,682
Variable-rate financial liabilities
1,949
The schedules of financial assets are shown in notes 6 and 7, and chose of financial
liabilities in note 29.4.
Sensitivity analysis method
Assumptions :
•Rate rises applying to
variable-rate liabilities are
reflected in variable-rate
assets 3 months later.
•Rate falls applying to
variable-rate liabilities are
reflected in variable-rate
assets 3 months later.
•With the exception of the
cash flow hedge reserve,
there is no equity exposure
to interest rate risk.
•Only part of fixed rate
assets are hedged using
variable rate liabilities.
Fixed rate assets and
liabilities are scheduled by
forecast due date, and
a variable rate exposure
gap calculated for a 12-
month period. The impacts
on the income statement
have been calculated on
the basis of upward and
downward interest rate
movements of 100 bp.
In respect of the impact
on equity, the financial
instruments used to provide
cash flow hedging have
been recognized individually
on the basis of upward and
downward movements of
100 bp.
•The impact of swaps
on equity has been
calculated on the basis of
the difference between the
marked to market value in
the balance sheet date and
the new post-adjustment
value.
•In the case of CAP, only
the variance in their intrinsic
value following a 100 bp
adjustment has been
recognized in equity.
Sensitivity analysis
Impact on the income
statement
On the basis of our financial
position at December 31,
2007, a 1% rise in interest
rates across all currencies
would result in an increase
of €1.1 million in our cost
of finance.
2007, a 1% fall in interest rates
across all currencies would
result in a reduction of €4.7
million in our cost of finance.
2/04/08 0:31:54
53
Impact on equity
2007, a 1% rise in interest
would result in an increase
of €10.7 million in our equity
via the cash flow hedge
reserve.
2007, a 1% fall in interest
would result in a reduction
DERIVATIVE-BASED FINANCIAL
LIABILITIES
Interest rate swaps
of €7 million in our equity
via the cash flow hedge
reserve.
29.3 _ Interest rate hedges
Fair value hedges
Derivatives transactions
described as fair value
hedges are swap
transactions where Banque
Accord is the fixed rate
lender and the variable
rate borrower (3-month or
6-month Euribor). These
swaps are set up at the time
fixed rate debt securities
or banking facilities are
agreed to convert interest
streams from fixed to
variable rate
All swap transactions are
denominated in euro.
The aggregate fair value
of these swaps, as shown
in the balance sheet, is
€1.2 million.
Book value
1,174
Contractual cash flows
Total
Less than 1 year
1,184
1,184
1 year to 5 years
More than 5 years
Net profit (loss) on hedged items is a loss of €6,918,000, and the net profit (loss)
on the related hedges is a profit of €4,722,000.
Cash flow hedges
Derivatives transactions
described as cash
flow hedges are swap
transactions where Banque
Accord is the fixed rate
borrower and the variable
rate lender. Their purpose
is to fix interest rates on
part of Banque Accord’s
forecast variable rate debt
issues, in order to limit the
possible volatility of future
interest spreads over
the next one to three years.
No cash flow hedges
cover period of more than
three years.
All swap transactions are
denominated in euro.
The following table shows
the periods over which
Banque Accord expects
cash flow hedge-related
cash flows to occur.
The ineffective portion
statement as cash flow
hedge is equivalent to the
variance in the time value
of CAP, and represents a
charge of €322,000.
Book value
Total
Interest rate swaps
CAP
29.4 _ Liquidity risk
Banque Accord manages
its liquidity risk by applying
financing policies based on:
➢ The diversification of
banking counterparties
in order to guarantee
Less than 1 year 1 year to 5 years
2,221
2,292
1,703
737
325
325
a satisfactory spread
of funding sources, in
accordance with the
recommendations of
the French banking
regulator (the Comité de
réglementation bancaire
More than 5 years
589
et financière).
➢ 100% coverage
of average funding
requirements using longterm facilities (due beyond
one year) and confirmed
bank lines of credit.
2/04/08 0:31:54
54
Medium- and long-term
bank funding contracts
contain the type of
commitment and default
clauses normally seen in this
type of contract, i.e. paripassu, negative pledge and
material adverse change.
The Banque Accord Euro
Medium Term Note (EMTN)
program, which includes
bond issues, contains
a negative pledge and
a mutual default clause.
No financial debt includes
any commitment or default
clause relating to a decline
in the Group’s rating.
With regard to Commission
Bancaire regulations on
liquidity ratio calculation,
the regulatory assumptions
adopted are: a credit
take-up rate of 5 % of
the funds advanced to
customers active within
the last two years. This risk is
therefore managed monthly
via the liquidity ratio.
Furthermore, on an historical
basis, the probability of
customer credit take-up is
below 5 %.
Liquidity risk exposure
The remaining financial
liability contract periods
are analyzed below, and
include interest payments.
Book value
Total Less than 1 year 1 year to 5 years
Bonds
927,897
1,041,376
216,096
825,280
133,312
543,179
563,142
429,830
Loans and advances to customers
402,581
403,433
403,433
DDebt securities
444,994
449,747
403,885
45,862
35,113
49,316
1,825
7,657
4,992
4,992
4,992
22,727
22,727
22,727
3,815
3,815
3,815
Subordinated debt
Trade payables
Other current debts
More than 5 years
39,834
Other non-current debts
Current taxes payable
29.5 _ Currency risk
Banque Accord’s exposure
to currency risk is limited
to its capital investment in
its Polish, Hungarian, Russian
and Romanian subsidiaries
(Accord Finance,
Accord Magyarorszag,
BA Finans and Intermed
Consumer Finance).
The amounts involved are
not considered significant
enough to warrant specific
hedging policies.
29.6 _ Customer risk
management
1. General information
The major part of creditrelated risk concerns
personal loans. This risk is
spread over a large number
of personal customers, each
with a limited commitment.
2. Credit risk management
methods
At Banque Accord, credit
risk is monitored and
managed by the Group
subsidiary and partner risk
departments, the Group
Risk Department and
internal compliance via risk
committees.
In France and Portugal,
credit risk is monitored and
managed by the local risk
departments.
In other countries, the
bank’s partners are
responsible for credit
risk management,
since it is their customer
management processes
and system that quantify
the risk.
In those joint ventures
where we have access
to a local risk resource, as
is the case in Spain and
Russia, risk is monitored
by that resource and the
Group Risk Department.
Where appropriate, the
local resource may develop
projects jointly with the
partner.
In all cases, risk is monitored
by the Group Risk
Department.
2/04/08 0:31:54
55
The mission of these
committees is to manage
credit risk and act as
project manager for those
projects impacting on
these risks. They validate risk
management, ensure the
effectiveness of the existing
system and take decisions
regarding changes to the
risk chain and scoring system
and validate the budget
forecasts for the provisioning
and cost of risk for new
products. They are also
responsible for maintaining
documentation on the
following subjects: opening
all loan and payment
product accounts, credit
limit management and
collection.
Regular national and
Group committee meetings
validate risk strategy,
methodologies and
performance.
3. The process used to grant
loans and credit, and set
personal credit limits
The credit granting decisionmaking systems are based
on a statistical evaluation
and individual consideration
of applications, and are
applicable to all types of
customer and income level.
They include:
• Credit scoring
• Clearly-stated rules for
declining applications
• Rules governing the
supporting documentation
to be supplied.
Strict compliance with the
decisions arrived at after
applying the rules and credit
scoring (very few exceptions
are made) ensures a very
precise control of the
associated credit risks. The
reasons for exceptions and
those persons authorized
to make them are defined
by procedures and are
normally checked after
granting: such exceptions
are used mainly to enable
personalized management
of the process involved in
granting larger amounts
of credit and the
management of targeted
customer groups.
4. Granting of guarantees
Group policy restricts
the granting of financial
guarantees to subsidiaries
and selected partner
companies only.
5. Inside the Group
In common with the wider
market, the Banque Accord
Group saw signs of credit risk
tightening in 2007.
The damage done to the
credit environment by the
subprime crisis is reflected
in the financial figures of
several Group subsidiaries
and, to varying degrees, in
the rise in bad debts and
problematic debt collection.
This is particularly true of
our Spanish company,
operating as it does in a
country where household
indebtedness is rising steeply,
and which is currently
experiencing a pronounced
increase in risk levels.
Despite being forecast, the
rise in credit risk experienced
by our Italian company was
also very marked. A return
to more normal levels is
expected in 2008.
At consolidated group level
however, the risk remains
contained, thanks to the
good financial performance
and contribution made by
our most mature companies
in France and Portugal, as
well as the controlled growth
of our operations in Central
Europe.
In France, the rising trend
in loans subject to the
Neiertz low continued in
2007. Global economic
conditions have only
confirmed the Group’s
conviction of the urgent
need to implement a
Basel based risk monitoring
system in all its operating
countries, based on the
French model.
The Basel II project is
therefore now underway
in our Portuguese and
Spanish companies. In 2008,
Banque Accord France will
intensify the use of its Basel
agreement-based system in
day-to-day risk management
to ensure the optimized
allocation of credit.
As required by the Basel
II guidelines, Banque
Accord will continue
implementation of its
CAP Clients customer
knowledge consolidation
project in 2008. This project
was initiated in 2007.
6. Aged balance
of overdue payments
Customers loans and
advances are impaired
as soon as a bad debt is
registered. Banque Accord
has no outstanding liabilities
in the form of unimpaired
bad debts.
7. Restructured loans
The amount of
loans restructured or
rearranged, whether
2/04/08 0:31:54
56
Consolidated equity
242.4
Cash flow hedge and IFC provision discounting reserves (net of tax)
(1.4)
Property, equipment and goodwill
(22.1)
Tier 1
218.9
Subordinated debt
35.0
Equity holdings in lending institutions accounted for using the equity method
(5.5)
Tier 2
29.5
internaly of following
a overindebtedness
commission ruling, totaled
€158.3 million. This figure is
impaired to €91.1 million.
are pending or impaired.
the reserve allocated to
customers cannot be
accessed where repayments
remain outstanding.
8. Maximum exposure
The maximum level of
exposure credit risk is
estimated at €367 million.
It comprises repayments
outstanding for less than
90 days and not provisioned
and impaired loans. It does
not include funds allocated
to customers, but which
29.7 _ Equity management
The equity referred to is that
defined in instruction 2007-02
of March 26, 2007 relating
to the equity requirements
applicable to lending
instructions. Banque Accord
is required to maintain
the 8 % solvency ratio
imposed by the Commission
CONSOLIDATED RATIOS
Bancaire. The amount of
equity monitored throughout
the year using an internal
reporting system based on
the Basel II regulations. It is
also projected on a general
basis during compilation
of the annual plan, and
monitored on the quaterly
accounting dates.
The amount of regulatory
equity at December 31,
2007 was €248.4 million.
This figure is broken down
as follows:
2007
2006
2005
Ratio / Tier 1 (in %)
9.6 %
8.7 %
8.6 %
Ratio / Tier 2 (in %)
1.3 %
1.7 %
1.9 %
Creditworthiness ratio (in %)
10.9 %
10.4 %
10.5 %
Liquidity ratio
138 %
214 %
213 %
Note 30 _ Appropriation of profit
Subject to approval by the Annual General Meeting, the total amount of profit for
the fiscal year will be appropriated to the reserves.
2/04/08 0:31:54
Auditors’ report
on the consolidated
Contents
2
Corporate
governance
3
Message
from the CEO
4
Highlights
5
Key figures
6
Conquest
10
14
Sharing
Year ended December 31, 2007
18
Financial
report
Banque Accord S.A.
Registered office:
40, avenue de Flandre
– 59170 Croix
Share capital: €28,200,300
Innovation
To the shareholders,
terms of our appointment
at the Annual General
Meeting, we have examined
the accompanying
statements of Banque
Accord SA for the year
ended December 31, 2007.
These consolidated financial
statements were prepared
by your Board of Directors,
and it is our task to express
an opinion on these
statements, based on our
audit findings.
Innovation
Increasingly mobile
financial services
Page 6
BanqueAccord RA07_couvs GB NEW.iII II
1. Opinion on the
statements
We have conducted our
audit in accordance with
the professional standards
applying in France. These
standards require that
we plan and perform the
audit in such a way as
reasonably to ensure that
statements are free from
material misstatement. An
audit includes sampling
the data contained in
these financial statements
to examine the evidence
supporting the amounts and
disclosures they contain.
An audit also includes an
appraisal of the accounting
principles used, and
significant estimates made,
by management, as well
as evaluating the overall
statements. We believe
that our audit provides a
reasonable basis for our
opinion.
In our opinion, these
statements, prepared in
accordance with the IFRS as
adopted by the European
Union, constitute a fair
representation the results
of business conducted
during the year ended 31
December 2006, and the
financial position and assets
of the Group at that date.
2. Basis of opinion
In accordance with Article
L.823-9 of the French
Commercial Code, which
governs the basis of our
opinion, we would draw
your attention to the
following matters:
As shown in notes 3.16
Impairment of financial
assets, 7.2 Impaired
receivables, 7.3 Changes
in impairment and 22
Impairment losses to the
financial statements, your
company records provisions
covering the credit risks
inherent in its business. Our
task is to give our opinion of
the data and assumptions
upon which these estimates
are based, review the
calculations made by the
company, compare the
estimates contained in the
financial statements for
previous fiscal years with
the corresponding actual
figures and examine the
procedures used by the
board of directors when
approving these estimates.
We have therefore assessed
the reasonableness of
management’s estimates.
The assessments were made
in the context of our audit of
statements as a whole, and
therefore contributed to the
formation of the unqualified
opinion expressed in the first
part of this report.
3. Specific verification
professional standards
applicable in France, we
have also examined the
information contained in
the Group management
report. We have observation
to make regarding the
fairness of this information
or its consistency with the
statements.
Paris La Défense, March 12, 2008
Villeneuve d’Ascq, March 12, 2008
KPMG Audit – A department of KPMG S.A.
Didier de Menonville
Partner
aCéa
Christian Chounavelle
Partner
4/04/08 17:33:49
Contacts
Headquarters
Banque Accord
59110 La Madeleine
France
Tel.: (33) 03 28 38 58 00
Fax: (33) 03 28 38 59 35
China
Accord Business
Consulting
5F, Zhong Tong Building
n° 1 Huangxing Road
200090 - Shanghaï-PRC
Tel.: (86) 21 65 18 37 94
Fax: (86) 21 65 18 68 44
Spain
AccordFin
Avenida de la Industria,
n° 49
28108 Alcobendas Madrid
Tel.: (34) 91 484 58 21
Fax: (34) 91 484 58 22
France
Banque Accord
59110 La Madeleine
Tel.: (33) 03 28 38 58 00
Fax: (33) 03 28 38 59 35
Oney.fr
2-8 rue Gaston Rebuffat
75940 Paris Cedex
Tel.: (33) 01 44 89 29 05
Fax: (33) 01 44 89 29 19
Hungary
Accord Magyarorszag
Tölgyfa u.28
1027 Budapest
Tel.: (36) 188 73 952
Fax: (36) 188 73 999
Italy
Accord Italia
Via Messina, 38 – Torre C
20154 Milano
Tel.: (39) 02 30 37 00 10
Fax: (39) 02 30 37 00 99
Ireland
Oney Life / Oney Insurance
The Metropolitan Building
Third Floor
James Joyce Street
Dublin 1
Tel.: (353) 1 266 6079
Fax: (353) 1 266 6066
Analysts
Treasury department
Tel.: (33) 03 28 38 58 00
Media
Communications
department
Tel.: (33) 03 28 38 59 26
innovative
mobile
sustainable
Poland
AccordFinance
Ul. Ogrodowa 58
00-876 Warszawa
Tel.: (48) 71 79 97 020
Fax: (48) 71 79 97 003
Portugal
Crediplus / Oney.pt
Avenida José Gomes
Ferreira, n° 9
Sala 01 Miraflores
1495 - 139 Algés
Tel.: (351) 214 125 293
Fax: (351) 21 412 68 77
Romania
Accord Intermed Consumer
Finance SRL
Hipermarket Auchan Titan
Bd. 1 Decembrie 1918 4A, etaj 3
011351 Bucarest
Tel.: (4) 021 408 01 09
Fax: (4) 021 408 01 09
2007
ANNUAL REPORT
Russia
BAFinans
1, building 14, Nagatinskaya
street
117105 Moscow
Tel.: (7) 495 662 82 00
Fax: (7) 495 662 82 01
www.banque-accord.com
www.oney.com
Editorial staff: Banque Accord Communications
department
Photo Credits: DDB Nouveau Monde, Banque
Accord – DR
Design – Production:
leadership
BanqueAccord RA07_couvs GB NEW.iIV IV
mobility
innovation
commitment
4/04/08 17:33:43

BanqueAccord RA07_couvs GB NEW.indd

Transcription

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