The asset-gathering businesses of Crédit Agricole SA (rated AA-, Stable), comprising insurance and asset and wealth management, generated just 16% of reported group revenues in 2017 but they produced 26% of reported net income group share (excluding Corporate Centre).

The group benefits from leading market positions in these markets: Crédit Agricole Assurance (CAA) is the largest insurer in France and the eighth largest in Europe based on premium income, while asset manager Amundi is Europe’s largest asset manager and ranks top 10 worldwide.

“Crédit Agricole’s asset-gathering suite underpins the group’s universal banking model and provides opportunities to strengthen customer relationships and support customer retention,” noted Pauline Lambert, bank analyst at Scope Ratings, author of a new report on Crédit Agricole’s asset gathering businesses.

Strategic Ambition 2020, the medium-term plan, is aiming for increased revenue and net income contributions from both insurance and asset management: 2019 insurance targets include a EUR 100m net income group share uplift from 2017 levels to approximately EUR 1.3bn, a cost-income ratio below 30%, 10% growth in savings and retirement AuM, and growth of 25%-plus in property and casualty premium income.

In asset management, Amundi is targeting EUR 1bn-plus in net income by 2020, up from EUR 700m in 2017. The two-year integration of Pioneer Investments (UniCredit’s former asset-management subsidiary) is projecting EUR 150m and EUR 30m annual cost and revenue synergies respectively. These goals will be facilitated by the higher proportion of international AuM, increase in equities and multi-asset AuM, and the shift in customer mix to higher-margin retail assets stemming from the acquisition.

There are powerful internal synergies that the group can capitalise on: in 2017, over 35% of AuM stemmed from the French banking networks and insurance companies of CA Group and Société Générale. Amundi, meanwhile, manages CA Group’s insurance assets and is a key supplier of asset management products for the group’s retail networks. Over 90% of CAA’s premium income stems from the group’s banking networks, under a bancassurance model.

The full report can be found here.