Bank balance sheets are what they were. "They were still balanced five years;" "they cannot be today that hardly without recourse to the market," notes Michel Eydoux, responsible for the asset-liability management and cash to BNP Paribas. In the long-term credits, banks adossaient housing (CEL) savings accounts and Plans savings housing (PEL) and deposits, extremely stable. Today, the gap is growing between the development of medium and long-term credits and long savings. "With growth of 4 per annum on deposits against 6 of progress on securities and 10 on life insurance, there is a real savings to paying financial supports migration." "The France approaches and other European countries where a small proportion of the savings of households is devoted to the deposits", confirms Paul de Leusse, a partner at Bain and Company.
This trend has two implications. On the one hand, the first source of income for banks, the margin of interest on deposits, will gradually slow for the benefit of the second, commissions, and more specifically those collected on life insurance and securities. The Bank net proceeds will therefore become less sensitive to the risk of rates but more exposed to the evolution of financial markets (read here).
The other outcome relates to the refinancing of mortgages in the medium and long term. Credits to households reached 806 billion EUR ( 12 per year) in mid-2006, a very similar level of 936 billion in bank deposits ( 4). "In this context, retail banks must find other sources of deposits for mortgage funding," said Paul de Leusse. In reality, they do are not poor. They already have at least two ways to give new margins for manoeuvre.
First, the securitization of credits, which is for the Bank to get a portfolio of loans from its balance sheet for the benefit of an AAA rated vehicle, support for him to then issue shares purchased by investors. This solution is already running. "But the new prudential rules related to Basel 2 could make obsolete securitization because real estate risk is very low and renders a priori this type of operation," said Michel Eydoux.
Then, the use of the market by programs such as the Euro medium term notes (EMTN), investments offered to the investors for the medium term. The problem is precisely a maturity not more than five years in General which does not really correspond to the duration of a mortgage...
Use of debt collatérisée
"In the future, banks should increasingly turn to the so-called debt collatérisée", explains Thierry Dufour, Chief Financial Officer of Credit Foncier. After careful consideration by the rating agencies, emissions are guaranteed by the credits (see opposite). "Most of the French settlements will rather use the bond or equivalents to issue destined for hexagonal investors," said Thierry Dufour.
According to our information, reflections are underway to Crédit Mutuel, the Crédit Agricole and Société Générale. The Banques Populaires and Caisses d'Epargne, they should have recourse to the company housed in the Credit Foncier land funding.
For its part, BNP Paribas chose to innovate, by launching a "covered bonds" program amounting to 25 billion euros represents half of its portfolio of residential mortgages (mortgage and bonded). "This product is a little more expensive than the bond, from 1 to 2 more basis points, but it will allow us to appeal to European investors and subsequently launch broadcasts in other countries, such as the Italy," explains Michel Eydoux. The Bank should carry out two to three emissions annually rated AAA for an amount between 5 and 6 billion euros.