The French bank Credit Agricole is planning on major changes to the way it operates in order to avoid new capital requirements being imposed by global financial regulators.
In his first interview with an international newspaper since becoming head of Credit Agricole’s corporate and investment banking arm, Jean-Yves Hocher tells the Financial Times that the third-largest bank in France has found a way to continue to pursue project and trade finance deals, despite unfavorable capital treatment under the Basel III rules.
Many banks in Europe, including French rivals BNP Paribas and Societe General, have been shrinking or exiting the project finance business altogether. Others are attempting to find ways to stay in the business while partially avoiding the new capital requirements — which is what Credit Agricole plans to do.
“Crédit Agricole CIB is number three in project financing worldwide; we are a big player and this is a very safe business with very good margins...we will defend our leadership position,” Hocher says in the interview.
Under the Basel III rules, the cost of funding project finance deals will increase by 10 basis points, according to this report on how to handle Basel III from McKinsey. Project finance includes providing credit for ships, aircraft, and energy-related ventures.Page 1 of 5 | Next Page