Integrated Report 2020-2021

Confronting an uncertain context

A new world order

• Slowdown in the world economy, economic fragmentation and erosion of the globalisation trend accelerated by the pandemic and geopolitical tensions
• State intervention, deterioration of multilateralism, challenging of institutions and international agreements
• Strengthening of regional growth hubs, with a shift towards Asia

OPPORTUNITIES

• Positions reinforced in Asia
• Decisive role of banks to support the transformations and sectors in difficulty

RISKS

• Increase in legal risks due to the growing number of regulations

OUR ACTION

• Creation by Amundi and Bank of China of the first wealth management firm in China with a foreign majority shareholder
• Launch of a cash management offer in India

An uncertain financial environment

• Increased volatility of financial variables
• Persisting low interest rate environment compounded by very accommodative monetary policies
• Sharp rise in public and private debt
• Vulnerability of the financial system to exogenous factors (health, climate, etc.) and complex assessment of risks

OPPORTUNITIES

• Development of credit solutions to support people launching new projects
• Customer support in their savings and wealth strategies as well as their personal and ecological transitions
• Reconfiguration of business modelsand differentiation of revenue sources
• Capitalising on our relevant and efficient risk models

RISKS

• Exposure of bank balance sheets to the abrupt movements in assets valuations
• Decline in Retail Banking margins

OUR ACTION

• A business line for multi-activity intermediate-sized companies was created and will be steered by CACIB

Increased regulatory requirements

• Plurality of regulatory authorities and tighter prudential rules
• Stronger protection for customers and investors
• Fight against money laundering and financing of terrorism
• Transparency requirement
• Incorporation of climate and ESG risks

OPPORTUNITIES

• Confirmation of the Group’s role in providing committed support to its customers
• Continuous improvement in the Group’s processes and ethical framework
• Continued management of new risks and better customer knowledge

RISKS

• Higher capital requirements and stricter liquidity management
• Rise in operating costs
• Distorted competition with new, less-regulated players

OUR ACTION

• Group solvency at 17.2%
• Creation of an extra-financial reporting platform

*Environmental, social and governance.