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

Andrew Edmonds

Improving credit quality as a result of post-GFC recovery has led to a strong environment for growth in the banking sector. Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine (ENXTPA:CIV) is a small-cap bank with a market capitalisation of €554.85M. Its profit and value are directly impacted by its borrowers’ ability to pay which is driven by the level of economic growth. This is because growth determines the stability of a borrower’s salary as well as the level of 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 I will take you through some bad debt and liability measures to analyse the level of risky assets held by the bank. Looking through a risk-lens is a useful way to assess the attractiveness of Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s a stock investment. View our latest analysis for Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine

ENXTPA:CIV Historical Debt Jun 11th 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 ability to forecast and provision for its bad loans indicates it has a good understanding of the level of risk it is taking on. If the bank provisions for more than 100% of the bad debt it actually writes off, then it is considered to be relatively prudent and accurate 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.

What Is An Appropriate Level Of Risk?

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. Loans that cannot be recuperated by the bank, also known as bad loans, should typically form less than 3% of its total loans. Bad debt is written off as expenses when loans are not repaid which directly impacts Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s bottom line. 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 profits from lending out its various forms of borrowings and charging interest rates. Deposits from customers tend to carry the lowest risk due to the relatively stable interest rate and amount available. The general rule is the higher level of deposits a bank holds, the less risky it is considered to be. Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s total deposit level of 95.35% of its total liabilities is very high and is well-above the sensible level of 50% for financial institutions. This may mean the bank is too cautious with its level of its safer form of borrowing and has plenty of headroom to take on risker forms of liability.

Next Steps:

Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine exhibits prudent management of risky assets and lending behaviour with sensible levels for all three ratios. It has a strong understanding of how much it should provision for lower quality borrowers and has maintained a sensible level of deposits against its liabilities. Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine is deemed a less risky investment given its sound and sensible lending strategy which gives us more confidence in its operational risk management. Today, we’ve only explored one aspect of Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine. However, as a potential stock investment, there are many more fundamentals you need to consider. Below, I’ve compiled three key aspects you should look at:

  1. Valuation: What is CIV worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether CIV is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Caisse Régionale De Crédit Agricole Mutuel D’ille-Et-Vilaine’s board and the CEO’s back ground.
  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.