Paris: French banking heavyweight Crédit Agricole has raised the stakes on its medium-term ambitions, announcing a target of more than €8.5 billion in net profit by 2028 surpassing analysts’ expectations and signaling readiness for further acquisitions, particularly in Italy. The bank’s bold move underscores its drive for growth, scale and competitive strength in a rapidly evolving European financial landscape.
The €8.5 billion target compares favourably with the average forecast of €8.2 billion tallied by analysts surveyed by Barclays. Alongside this, Crédit Agricole aims for a return on tangible equity (ROTE) above 14% by 2028, outpacing peer banks that have set 13%–13.1% goals. The bank further stated its cost-to-income ratio will fall below 55% a marker of improved operational efficiency and productivity.
A key pillar of the strategy is boosting growth through European investments, particularly in customer acquisition, automation and streamlined IT infrastructure. Crédit Agricole emphasized that with its 2025 goals already achieved a year early, the bank is now in a position of strength to deliver ahead of plan.
Italy has emerged as a focal point in the bank’s expansion plan. The lender holds slightly more than 20% of Italian peer Banco BPM and is seeking regulatory clearance to raise its stake to 29.9%. Quelque negotiation avenues are open, and the Banco BPM CEO referenced a potential merger with Crédit Agricole’s Italian unit as the “clearest opportunity.” Crédit Agricole’s deputy CEO, Jérôme Grivet, explained that organic growth remains the current focus but that the bank expects to generate more capital than its own expansion will consume. In the absence of acquisitions, the bank estimates excess organic capital of €6 billion-€7 billion by 2028.
The strategy surfaces at a time when European banks face both heightened competition and structural challenges, including regulatory demands for digitalization, cost discipline, and the pressing need to underpin Europe’s strategic autonomy. Crédit Agricole’s CEO Olivier Gavalda stressed that “Europe must strengthen itself to become more competitive and to ensure its strategic autonomy. And that means Europe will have to invest heavily.”
Analysts observe that Crédit Agricole has a history of issuing conservative targets and then outperforming a track record that may lend credibility to its elevated ambitions. For investors, the announcement signals confidence not only in the bank’s internal levers efficiency, digital transformation, customer growth but also in the broader opportunity set for banking consolidation across the continent, especially in Italy.
However, the path ahead is not without risk. Achieving an ROE target above 14% while keeping the cost-income ratio below 55% will require tight execution, favourable market conditions and successful integration of future deals. Further, any large-scale acquisition will bring integration hurdles, regulatory scrutiny and potential capital dilution factors that could weigh on the returns expected.
In summary, Crédit Agricole is positioning itself as a major contender in Europe’s mid-to-long-term banking race: setting ambitious internal targets, focusing on operational efficiency, and keeping a vigilant eye on strategic M&A particularly in Italy. Whether the bank can translate its numerical ambition into delivered results will be closely watched by shareholders, competitors and regulators alike.