A consumer is defined by the French legislation as an individual (physical persona who acts for aims that do not pertain) to any commercial, industrial, craft or service providing activity. Thefinancial consumer is not defined as such but can be inferred from the preceding definition as the individual who engages in a transaction to purchase afinancial product or service.
Legally, the consumer must be distinguished from the professional: they are not protected by the same legal regime when they purchase goods or services, the consumer is especially protected.
1.2 Economic Situation of Financial Consumer
1.2.1 Total Population, Age Structure, Income Structure (Nominal, Real)
As is reflected in Exhibit1here below the median age in France is 40 years, the age at which the number of women exceeds the number of men but close to equality.
The pyramid is less inversed than in the rest of Europe thanks to a fertility rate of 2.08 which ranks 110 in the world butfirst in the EU, the only country above 2.
French demography is one of the most dynamic in Europe and it has specific demographic indicators: the number of birth is in constant increase since 1994 (770,900 in 2001) but decreased slightly in 2002 (762,000). However, with the
Exhibit 1 French population on Jan 1, 2017—SourceINSEE
Age Men Women Total % of total
0/9 4,143,408 3,959,928 8,103,135 12.10%
10/19 4,252,317 4,055,139 8,307,456 12.40%
20/29 3,848,128 3,851,685 7,699,813 11.40%
30/39 4,060,940 4,219,566 8,280,506 12.30%
40/49 4,387,994 4,471,847 8,859,841 13.20%
50/59 4,308,162 4,513,788 8,821,950 13.10%
60/69 3,814,743 4,211,194 8,027,935 12.00%
70/79 2,233,964 2,694,919 4,928,983 7.35%
80/89 119,704 1,978,139 3,174,843 4.70%
90/99 206,584 563,246 769,830 1.15%
100 & over 3015 15,617 18,632 0.30%
Total 32,455,859 34,534,967 66,990,826 100.00%
% 48.45% 51.55% 100%
Republic of Ireland it remained at the highest level of fertility in Europe and the fertility index is now at 2.08, as stated above. However, the age offirst pregnancy has increased to 29.4 years.
Infertility is in the range of 12/14% whereas in Germany, the Netherlands and the UK it is in excess of 20%. Mortality is one of the lowest rate and life expectancy one of the highest with 72.3 years for men and 83.0 for women (European average is 81.2).
Immigration plays an important role in the demographic dynamic in France;
even though it is lower than in other European countries with an average of 50,000 foreigners welcomed in France every year.
Other indicators make de difference too:
• A decline in out of wedlock’s birth since 2000, whereas the were increasing;
• An increase in marriage rate;
• A lesser aging of the population, as young people under 20 represent over 25%
of the overall population the 20/64 three fifths and onefifth for over 65 (see Exhibit1);
• Higher age for maternity: 1.85 child at 30 and 2.04 at 40 (total 2.08).
As far as wealth is concerned the Exhibit2gives an idea of the total wealth in nonfinancial assets.
Year after year, French citizens remain, just behind the Germans, the thriftiest among members of the EU. At the end of the third quarter of 2015 the savings rate reached 15.5% of disposable income. Although this is not a record breaking level as it was over 16% between 2010 and 2011 but it shows steady increase. Over the total year in 2015 the average rate was 14.5% (196 billion€) of whichfinancial assets represented 5.5% (74.6 billion€) and housing 8.6% (116.7 billion€).
Over the long run (1950–2015), financial assets have always represented a smaller share than housing. Real estate remains the preferred investment vehicle for French citizens and they have invested between 8 and 10% of their disposable income towards housing in the period 2001–2015.
Exhibit 2 National wealth by institutional sector of nonfinancial assets in 2016—France Total assets Household
(including ISBLSM)
Non financial companies
Financial institutions
Public administrations
National economy Nonfinancial
assets (NFA)
7507 4459 270 1951 14,187
Of which
Housing 3580 680 41 61 4362
Other buildings and public works
167 784 63 935 1949
Machinery and equipments
44 518 15 33 611
Land 3546 1468 105 760 5879
SourcesBank of France; Insee—National Account—base 2010
Salary Distribution In 2013, median net salary in France was €1730, and any worker earning more than€3500 is in the top 10% salary.
High Income A recent study by Insee on high income is based on consumption unit rather that real income per head does not provide information on its sources but it still provides an interesting insight on the 1% wealthiest segment, i.e. with more than€84,469 per consumption unit. As a reminder, the concept of consumption unit makes possible a comparison of the standard of living of the households of different sizes. The household income is divided by the number of members of the household: 1 for thefirst adult, 0.5 for any member above the age of 14, and 0.3 for members under the age of 14. Thus to be in thefist 10%, a household income must be:
• €35,677 for a single person;
• €53,515 for a couple;
• €85,625 for a couple with 3 young children.
This concept allows for comparing households and their capacity of savings but it does not provide a real picture of the dispersion of total income. Therefore, it would be interesting to contrast both indexes.
Te total revenue index that the 3000 wealthiest household have revenues around
€3 million.
It is also interesting to note that income taxes are only high for very wealthy households. However, theôwell offằpay comparatively more income taxes than the wealthiest. This is due to taxes loopholes, and among the 3000 wealthiest
• 25% pay their fait contribution;
• 20% enjoy some loopholes that reduce their taxes;
• 55% benefit hugely from the system, of whom 25% scandalously.
Income distribution in France in 2010
Group Adult
population (millions)
Yearly income per adult
Monthly income per adult
Share of total income (%)
Total population 50 33 000€ 2 800€ 100
Working class: 50%
^poorest
25 18 000€ 1 600€ 27
Middle class: 40% in the middle
20 35 000€ 3 000€ 42
Upper class: 10%
wealthiest
5 103 000€ 8 600€ 31
Of which upper– upper: 1% wealthiest
0.5 363 000€ 30 300€ 11
Of which upper middle: 9%
remaining
4.5 73 000€ 6 100€ 20
Assets distribution in France in 2010
Group Adult population
(millions)
Total asset per adult
Share of total income (%)
Total population 50 182 000€ 100
Working class: 50%^poorest 25 14 000€ 4
Middle class: 40% in the middle
20 154 000€ 34
Upper class: 10% wealthiest 5 1 128 000€ 62
Of which upper–upper: 1%
wealthiest
0.5 4 368 000€ 24
Of which upper middle: 9%
remaining
4.5 768 000€ 38
Furthermore, the income is not age related as common sense would dictate.
There are a number of young people among the wealthy. Contrary to the USA, the number of“wealthiest”is not exploding. And only 0.01% of the wealthiest (6000 persons) have seen their wealth increase at the expense of all the others.
1.2.2 Social Security System (Basic Structure, Participants, Benefits and Expenses)
French Social security has three main components: health insurance, family ben- efits, and pension insurance. In France, unemployment and dependency benefits are not managed within the Social Security system.
Health Insurance Heath insurance funds are in charge of illness; maternity, dis- ability, death, ordinary accident, workers comp (accident and occupational illnesses).
Family Benefits Since Jan 1, 2006, it is in charge of 14 benefits, as follows:
• Benefits without resource requirements – family benefits,
– family support benefits,
– Education benefits for handicapped children, – child minder benefits,
– parents presence benefits, and
– daily allowance of paternity when covered by Health Insurance.
• Benefits depending of level of resources – Young children’s early days benefit (PAJE), – Family supplement benefits,
– Single parent benefits, – Back to school benefits, – Handicapped Adults Benefits, – Family Housing benefits,
– Relocation Benefits, and
– Minimum Insertion Income financed by local authorities (department) and paid out by the Family Benefits funds.
Pension Insurance Since January 1, 2004 the fund manages the following nine benefits
• Contributory benefits – Old age pension, – Survivorship pension,
– Old age pension of surviving spouse.
• Non-contributory benefits
– Old workers allowance and lifelong support, – Mothers Allowance,
– Additional allowance of the national fund of solidarity, – Increase of pension, and
– Special allowance.
Other Risks of Social Protection As mentioned here above, joblessness and dependency are not part of the 2006 system. The National Solidarity Fund is in charge of managing the special allowance for handicapped adult (L. 2004-626 & D.
2004-1384).
1.2.3 Additional Social Protection
There are two types of additional social protection the compulsory national systems and other that are freely negotiated in eachfirm.
Complementary Social Protection Thefirst level of compulsory national schemes comprises:
• The complementary pension regimes (Agirc et Arrco) are contributory pension schemes for all salaried personnel,
• Joblessness compensation (UNEDIC).
Both have paritarian management where trade union and employers’organisa- tions share equally the responsibilities. Both systems comply with all the criteria that European jurisprudence has defined for Social Security schemes: premium are independent of risk, they are proportional to income, not for profit management, compulsory affiliation, exemption from contribution under given circumstances (disability, joblessness).
The schemes are within the scope or the coordination of schemes for migrating European workers within the EU.
The UNEDIC manages also the solidarity allowance granted by the state.
Negotiated at the Branch Level or at the Enterprise Level These schemes result from collective conventions, inter-professional agreements, group or enterprises.
They can only cover death, healthcare, maternity, disability, joblessness and pen- sion funds contributions. The issue of end of work life indemnity is open to self insurance.
Individual Social Protection Individuals can opt to add to the schemes mentioned above their own covers that they can purchase from insurance companies or from mutual companies.
1.2.4 Pension Systems—The Three Pillars
During International conferences, speakers often refer to the three pillars defined originally by Swiss Insurers:
• First Pillar: National Compulsory Schemes;
• Second Pillar: Social Protection negotiated at the branch, group or company level;
• Third Pillar: All protection and pension contracts entered into by the individuals.
1.2.5 Bank Deposit Holders, Total Number of Bank Accounts, No. of Employees, Financial Statements
Although, there is no formal published statistics only 500,000 French citizens did not have a bank account in 2016. With a population of close to 67 million and taking into account the fact that some have several account it would not be sur- prising if private accounts were over 200 millions.
The structure of the banking industry in France is much diversified with over 200 institutions of very different sizes and activities. Some are local and cooperative, some have a national network, and some are International players. There are also some investment banks.
In spite of the improvement in the economic environment and the excellent level of credit activity, French banks are still engaged in costs reduction plans. In 2016, the level of staff in constant contraction since 2011 has declined by 0.3%.
With 370,300 staff, banks remain a major private employer in France. They have recruited 41,000 persons in 2016, but the number of hiring did not compensate the number of retirees, as is the case since the economic crisis of 2007–2008. However, the sector continues to propose durable and qualified jobs and still two thirds of the recruitments are for“undetermined duration”. The academic level of young recruits continues to rise with 44% holding a post-graduate degree. Financial institutions are
strengthening their compliance and IT teams. A new trend has come to light in the banking industry with an upsurge of resignation, and this seems to come mostly from the newly hired.
France has a concentrated market with four banks among the 28 major players in the world banking system according to balance sheet size and known as G20 systemic banks:
• CREDIT AGRICOLE with€2008 billion is number 5
• BNP-Paribas with€1907 billion is number 7
• SOCIETE GENERAL with€1251 billion is number 19
• BPCE with€1148 billion is number 21
• CIC CREDIT MUTUEL with€605 billion is number 41
• ALL OTHER BANKS in France total€1157 billion.
Thus France is at par with China but ahead of Germany who has the largest bank in the world, number 1, but none other among the 28. As a matter of fact the large SME’s that exports a lotfindfinancing with 1500 local banks contrary to the much more concentrated field in France. The sector is heavily concentrated; as the numbers here above show the 2first banks represent 50% of the market and thefirst 5 86%. This situation leads to a cartelisation at the expense of consumers.
Terminons par une analyse de la structure de nos banques: On constate le poids très important des activités de marché—sauf pour le crédit Mutuel-CIC qui arrive semble-t-il fort bienàservir 30 millions de clients sans avoir besoin de produits dérivés….
Banking Online French are more and more to open account online and Boursorama Banque has reached the 1 million clients threshold and is nearing the historical leader ING Direct. Online offer are growing to include credit and insurance, thus the players are becoming real competition for traditional banks.
French Bank Strategy The interest rate margin is even narrower and the banks are trying to compensate through the development of activities that bring in commis- sions such as insurance and other bank services. The cost of risk seems under control in 2016, thanks to a more favourable economic environment, and French banks benefit from it.
Top even Banks in France in Terms of Balance-Sheet
• BNP Paribas: Slight increase of the net banking product of 1.1% to€43.411 billion. The bank remains the number 1 in France and its net profit reached
€7.702 billion.
• Groupe Crédit Agricole: Consolidate regional branches, the holding CASA and its subsidiaries including LCL. The group suffered a decrease in its net banking product at €30.427 billion. The activity is stable after retreatment of specific elements. The margin is slightly down to€4.825 billion, due in part to depreciation for an acquisition gap on LCL. The bank remains the number 2 in France.
• SociétéGénérale: The net banking product is down 1.3% to €25.298 billion.
Retail banking has suffered from low interest rate in spite of a sustained com- mercial activity. The net result of Socgen was€3.874 billion.
• Groupe BPCE: The group result from the merger of Banque Populaire, Caisses d’Epargne, Natixis and all the subsidiaries. The banking product in 2016 is
€24.158 billion, an increase of 2% benefiting from a higher outstanding credits amounts and higher savings. This increase allows the bank to retina its 4th rank.
The consolidated result is higher at€3.988 billion.
• Groupe CM11-CIC: The group comprises 11 federations of Crédit Mutuel, Crédit Industriel and Commercial (CIC) and its subsidiaries. The mutualist group has experienced an increase in its net banking product at€13.302 billion (+1.8%). IN a low interest context, the activities bringing in commissions help the bank result set at€2.410 billion.
• La Banque Postale: The group La Banque Postale has seen its NBP decrease to
€5.602 billion, as its performance was impacted by lower revenues on interest rates. The profitability has declined to €694 millions. En 2018 La Banque Postale will launch its 100% digital bank to better fulfil the bank’s clients expectations.
• Crédit Mutuel Arkéa: The group comprises de 3 regional branches (Bretagne, Sud-Ouest, and Massif Central) and numerous subsidiaries (online bank, lease, factoring, insurance…).The Briton group has a NBP of €1.852 billion, an increase of 4.1%, and a profitability of €336 millions. The performance is carried by insurance and asset management. The year has been enriched by several partnerships with start-up andfin techs.
Ranking in Terms of Ratio
The ratio measures the banks performance, the lower the ratio, the more efficient the bank. It is computed by dividing the general expenses by the net bank product.
1. Caisses Régionales of CAà61.3%
2. Groupe CM 11—CIC 61.7%
3. SociétéGénérale 65.6%
4. BNP Paribas 67.7%
5. Groupe BPCE 69.0%