U.S. Markets open in 2 hrs 26 mins

Real Risks To Know Before Investing In Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée (EPA:CRAV)

Ingrid Hart

As a small cap company operating in a heavily regulated financial services sector, an investment in Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée (ENXTPA:CRAV) has many factors to consider. One of the biggest risk it faces as a bank is bad loans, also known as credit risk. As a small bank, Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée’s profits are directly affected by macroeconomic events as the ability for borrowers to repay their debt depends on the stability of their salary and interest rate levels. Bad debt is directly written off as an expense which impacts Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée’s bottom line and shareholders’ value. Today we’re going to assess the level of bad debt and liabilities Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée currently has in order to properly analyse the risk involved with investing in Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée. View our latest analysis for Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée

ENXTPA:CRAV Historical Debt May 6th 18

How Good Is Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée At Forecasting Its Risks?

Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée’s understanding of its risk level can be estimated by its ability to forecast and provision for its bad loans. If it writes off more than 100% of the bad debt it provisioned for, then it has inadequately estimated the factors that may have added to a higher bad loan level which begs the question – does Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée understand its own risk? With a bad loan to bad debt ratio of 88.7%, Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée has under-provisioned by -11.3% which is below the sensible margin of error, illustrating room for improvement in the bank’s forecasting methodology.

What Is An Appropriate Level Of Risk?

By nature, Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée is exposed to risky assets by lending to borrowers who may not be able to repay their loans. Total loans should generally be made up of less than 3% of loans that are considered unrecoverable, also known as bad debt. Bad debt is written off when loans are not repaid. This is classified as an expense which directly impacts Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée’s bottom line. With a ratio of 2.07%, the bank faces an appropriate level of bad loan, indicating prudent management and an industry-average risk of default.

Is There Enough Safe Form Of Borrowing?

Handing Money Transparent

Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée 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. As a rule, a bank is considered less risky if it holds a higher level of deposits. Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée’s total deposit level of 90.44% 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:

Keep in mind that a stock investment requires research on more than just its operational side. Below, I’ve compiled three essential aspects you should look at:

  1. Valuation: What is CRAV 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 CRAV 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 Atlantique Vendée’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.