Coface has transferred French State export guarantees activity to Bpifrance
In line with previous communication, Coface has ceded its State export guarantees activity to the French public investment bank, Bpifrance. The transfer took place on 31 December 2016. The teams and IT systems dedicated to this activity are transferred to Bpifrance as of today.
Management of French State export guarantees - or public guarantees - was a service that Coface carried out on behalf of the French State. In 2015, the activity represented 4% of Coface’s consolidated turnover.
In consideration for this transfer, and as previously announced, Coface will receive a payment corresponding to a non-recurring gain of an estimated amount of €75m before tax; this will be accounted for in Q4 2016.
- a decrease in consolidated turnover corresponding to the remuneration that Coface received for this activity. This remuneration amounted to €57.3m in 2015 ;
- a reduction in general expenses, linked mainly to the transfer of staff dedicated to this activity. These transferable costs were €26.0m in 2015.
COFACE WILL CONTINUE TO DEVELOP ITS CORE CREDIT INSURANCE BUSINESS
Launched in September 2016, its new strategic plan called Fit to Win aims to position Coface as the most agile global trade credit insurance partner in the industry, while evolving to a more capital efficient business model.
Covering a 3 year period,Fit to Wincomprises three strategic priorities: strengthen risk management & information, improve operational efficiency & client service, and implement differentiated growth strategies, based on each market’s realities.
One of these priorities, improve operational efficiency, aims at cost savings of €30m in 2018, which will entirely offset the loss of margin as a result of the cessation of the French state export guarantees activity. The non-recurring gain received will enable financing of restructuring costs and investments necessary to transform the Group’s technology and processes so as to improve client service and productivity.
With the implementation of Fit to Win, Coface’s objective is to achieve a return on average tangible equity over 9% across the cycle.
The implementation of Fit to Win is currently progressing in line with expectations.
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