The boards of two of the three regional bank federations which make up CMA (not rated) recently voted to initiate action designed to separate them from the overall Crédit Mutuel (CM) group. Scope reviews the reasons underlying CMA’s recent moves, including opposition to new regulatory decisions taken by the CM group’s primary supervisor, the European Central Bank, and actions taken by the CM group’s central body, the Confederation Nationale du Crédit Mutuel. CMA views the latest developments as imposing an unwanted degree of centralised regulation and control upon it.

“The intensified level of disagreement between the managements of CM and CMA somewhat increases the likelihood of the smaller CMA’s exit from the CM group”, notes Jennifer Ray, Scope bank analyst and author of the report. Whether CMA leaves or remains, Scope views either scenario as manageable for the CM group. CMA’s desire to pursue a diverging strategy has been evident for some time, and so far, it has not led to either the CM group or CMA adopting a strategy that is evidently riskier than before. The financial positions of both groups remain reassuring.

The report, entitled “Crédit Mutuel: Arkéa Exit Manageable and Would End a Long-Running Saga“ can be downloaded here.