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créée le 13 / 02 / 2014

European Commission’s approbation to French mortgage lender Crédit Immobilier de France

Crédit Immobilier de France

Approbation to French mortgage lender

On the 27th of November 2013 in Brussels, the European Commission has accepted to give a helpful hand to the Crédit Immobilier de France (CIF), under EU state aid, in order to maintain financial stability and avoid a knock-on effect on the French banking system. The refinancing guarantees in favour of the CIF are essential. It was agreed that France will supply up to €28 billion of state guarantees to fund this so-called resolution in 2014.

Furthermore, Joaquín Almunia, commission Vice President in charge of competition policy highlighted that "The French authorities decided to resolve CIF because its business model is no longer viable. I am satisfied that the resolution plan of CIF will preserve financial stability while also minimizing the burden for taxpayers and any distortions of competition resulting from the state aid that the bank received".

The European Commission defines the CIF as being a mortgage lender specializing in loans to low income households in France to promote access to home ownership and is owned by the cooperatives Les Sociétés Anonymes Coopératives d'Intérêt Collectif pour l'Accession à la Propriété (SACICAP). CIF’s market share is about 4 % and its loan book is about €35 billion.

Crédit Immobilier de France accepted by the European Commission

Explanations to the approbation to French mortgage lender Crédit Immobilier de France

  • CIF finances itself almost exclusively on the wholesale market by means of covered bonds and unsecured issuance. Due to a drastic downgrade by Moody's in 2012 and against the background of the financial crisis, CIF faced serious refinancing problems. To avoid CIF's immediate default, France granted refinancing guarantees which were approved by the Commission on a temporary basis.
  • In agreement with CIF’s shareholders, the French government decided to resolve the bank, as the purely wholesale-financed business model is no longer viable. The French government submitted a resolution plan to the Commission, setting out the details of the run-off in accordance with EU state aid rules.
  • CIF will cease new lending and work out its assets over time. CIF will fund the run-off on the wholesale market with the help of the above-mentioned refinancing guarantees provided by the State.