With a 14% increase in new business and a 14.5% rise in earnings* (+ 18 % on a like-for-like basis), 2004 saw Cetelem combining development with profitability. As a result, this was Cetelem’s most successful year since BNP Paribas was created.
With 31 billion euros worth of outstandings (other than those managed on behalf of the parent company), including 18 billion euros in France, Cetelem confirmed its place as the market leader both in continental Europe and in France.
With a 16% increase in new business, an 18% rise in outstandings and a 60% increase in earnings*, the international business continued its rapid growth. It now accounts for 52% of Cetelem’s new business and 59% of its workforce.
In France, 2004 was marked by two promising developments for Cetelem:
– a significant drop in the cost of risk, which was down from 1.9 % of outstandings to 1.6 %. This is a crucial point when it comes to profitability in the face of competition on margins. And this is also a factor which, thanks to a well-managed credit extension policy, contributes actively to the fight against excess debt: while the number of cases of excess debt in France increased by 6% overall in 2004, the number involving Cetelem fell by 2%,
– an extremely healthy online credit (Internet) business, which grew by a factor of 4.4 in 2004. Today, this accounts for almost 10% of Cetelem’s direct business in terms of monetary value (not including point-of-sale finance). This trend can also be observed in Cetelem’s other European countries, where online credit is developing rapidly:
Belgium, Spain, Portugal, Italy and the Czech Republic.
By 2007, Cetelem hopes to set up at least 15% of its new direct credit business in Europe via the Internet.
In France, where Cetelem is the market leader, new business has grown steadily in what is a highly competitive environment.
New financing rose to 10.8 billion euros. This increase, in a climate of slowing growth and intensified competition, as a result of a spate of attractive promotional campaigns, was achieved thanks to the development of a multi-channel offering, in particular the public Internet service.
Financing provided by majority-owned subsidiaries via major retailers was up 9% on the previous year. In particular, Facet, which supplies credit through Conforama stores, saw its output grow by 11% compared with 2003, allowing it to break through the billion-euro mark. This growth was the fruit of the various operational measures set up in 2003 after Cetelem’s capital increase.
* contribution to the consolidated earnings of BNP Paribas
Financing supplied within the scope of partnerships with banks and insurance companies was up 25% in 2004, thanks to the steady development of this side of the business in partnership with Caisse d’Epargne and Axa.
As a result of intra-group synergies, 2004 was also marked by the development of the “Aurore” revolving credit offering within BNP Paribas’s “Banque de Détail en France” network, and by Cetelem’s takeover of the management of the revolving credit business, Provisio.
Also to be noted, in the first full year, was 74 million euros worth of new business for Domofinance, a common subsidiary of EDF and Cetelem.
At 11.9 billion euros, new business outside France was up 16% and represented 52% of all new financing supplied.
This performance illustrates the acceleration of Cetelem’s development and confirms the strong contribution made by the International business to group earnings. Its position at the top of the rankings in Europe – no.1 in Italy and Hungary, No.3 in Spain, Portugal and the Czech Republic, etc… – is the icing on the cake.
– Southern Europe, in particular Italy, Spain and Portugal, remained the primary source of development for Cetelem’s international business. Cetelem’s diversified strategy in this zone enabled a 17% increase in new financing compared with 2003.
– In Central Europe, growth remained high with new financing up 22%. Cetelem is now established as one of the market leaders in Hungary, the Czech Republic and Slovakia. In addition, at the end of 2004, Cetelem was awarded bank status in Poland, allowing it to complete the range of products offered to customers.
– In Northern Europe, Cetelem strengthened its partnership with Dresdner Bank in Germany and signed a new deal with KBC in Belgium.
– In Latin America, the growth of the new financing business leapt 30% between 2003 and 2004. In addition to boosting the development of its distribution activities, Cetelem Brazil entered into a significant banking partnership with the bank BMG, for the management and development of consumer credit. In Argentina, the amount of new financing set up increased threefold.
Total outstandings outside France, which rose 18% from 2003, stood at 13 billion euros. These represented 40% of all Cetelem’s outstandings in 2004, compared with 38% in 2003.
More than 50 years after it was founded, Cetelem is still a rapidly expanding company. With 59% of its staff located outside France, Cetelem, which has a presence in 20 countries around the world, is a truly international firm that has made Europe its domestic market.