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Have You Considered These Key Risks For Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine (EPA:CIV)?

Brent Freeman

Improving credit quality as a result of post-GFC recovery has led to a strong environment for growth in the banking sector. As a small-cap bank with a market capitalisation of €567.00m, Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s (EPA:CIV) profit and value are directly affected by economic growth. This is because borrowers’ demand for, and ability to repay, their loans depend on the stability of their salaries and interest rates. Risk associated with repayment is measured by bad debt which is written off as an expense, impacting Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s bottom line. Today we will analyse Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s level of bad debt and liabilities in order to understand the risk involved with investing in the bank. View out our latest analysis for Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine

ENXTPA:CIV Historical Debt June 26th 18

How Good Is Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine At Forecasting Its Risks?

Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s forecasting and provisioning accuracy for its bad loans indicates it has a strong understanding of its own risk levels. If the level of provisioning covers 100% or more of the actual bad debt expense the bank writes off, then it is relatively accurate and prudent in its bad debt provisioning. Given its high bad loan to bad debt ratio of 104.87% Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine has cautiously over-provisioned 4.87% above the appropriate minimum, indicating a safe and prudent forecasting methodology, and its ability to anticipate the factors contributing to its bad loan levels.

How Much Risk Is Too Much?

If Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine does not engage in overly risky lending practices, it is considered to be in good financial shape. Typically, loans that are “bad” and cannot be recuperated by the bank should comprise less than 3% of its total loans. Loans are written off as expenses when they are not repaid, which comes directly out of Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s profit. Since bad loans only make up 2.15% of total assets for the bank, it exhibits prudent bad debt management and faces an industry-average risk of default.

Is There Enough Safe Form Of Borrowing?

Handing Money Transparent

Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine makes money by lending out its various forms of borrowings. Deposits from customers tend to bear the lowest risk given the relatively stable amount available and interest rate. As a rule, a bank is considered less risky if it holds a higher level of deposits. Since Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s total deposit to total liabilities is very high at 95.35% which is well-above the prudent level of 50% for banks, Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine may be too cautious with its level of deposits and has plenty of headroom to take on risker forms of liability.

Next Steps:

How will CIV’s recent acquisition impact the business going forward? Should you be concerned about the future of CIV and the sustainability of its financial health? I’ve bookmarked CIV’s company page on Simply Wall St to stay informed with changes in outlook and valuation. This is also the source of data for this article. The three main sections I’d recommend you check out are:

  1. Future Outlook: What are well-informed industry analysts predicting for CIV’s future growth? Take a look at our free research report of analyst consensus for CIV’s outlook.
  2. Historical Performance: What has CIV’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.