Moody's affirms BFCM's and CIC's Aa3 ratings with = stable outlooks

From: Subject: Moody's affirms BFCM's and CIC's Aa3 ratings with stable outlooks Date: Thu, 19 Mar 2009 13:46:05 +0800 MIME-Version: 1.0 Content-Type: multipart/related; type="text/html"; boundary="----=_NextPart_000_0000_01C9A899.0CFCDA50" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.5579 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01C9A899.0CFCDA50 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.moodys.com/moodys/cust/research/MDCdocs/16/2007400000587201.asp?doc_id=2007400000587201&frameOfRef=corporate&namedEntity=Rating+Action Moody's affirms BFCM's and CIC's Aa3 ratings with = stable outlooks

Global = Credit=20 Research

Rating=20 Action

16 MAR=20 2009

Rating Action: Banque Federative du Credit Mutuel=20

	Moody's affirms = BFCM's=20 and CIC's Aa3 ratings with stable outlooks

BFCM's BFSR is affirmed at C but the outlook is changed from = stable to=20 negative

Paris, March 16, 2009 -- Moody's announced today that it has = affirmed=20 the Bank Financial Strength Rating (BFSR) and Long-Term debt and = deposit=20 ratings of BFCM at respectively C and Aa3. The outlook on the BFSR = is=20 changed to negative from stable. At the same time, Moody's also = affirmed=20 CIC's BFSR at C- and changed the outlook from positive to stable. = The=20 outlooks on BFCM's and CIC's Long-Term debt and deposit ratings = remain=20 stable. Both BFCM and CIC are members of Credit Mutuel Centre Est = Europe=20 Group (CM5-CIC) (unrated).

Last week, CM5-CIC announced a EUR509 million consolidated net = income=20 for 2008, down from EUR2,161 million the previous year. BFCM's=20 consolidated net income for 2008 stood at EUR138 million, down = from=20 EUR1,704 million for 2007. The main elements that affected the = group and=20 BFCM's results were significant impairments stemming from the = securities=20 portfolio as well as a steep increase in the cost of risks, both = in the=20 market activities and in the retail activities. Moody's further = notes that=20 the Group reclassified a large chunk of its securities under IAS39 = as of=20 July, 1st 2008, which prevented it, as well as BFCM and CIC, from=20 recording a net loss for the year.

The change of outlook from stable to negative on BFCM's C BFSR = reflects=20 Moody's view that financial markets activities and assets induce = higher=20 volatility than expected in BFCM's P&L. It also takes into = account the=20 expected deterioration of the French retail activities given the=20 challenging macro environment, as well as the addition of = potentially more=20 volatile consumer finance activites in BFCM's business-mix, = following the=20 acquisitions of Citibank Deutschland (unrated) and Cofidis = (unrated).

The outlook on CIC's C- BFSR was changed from positive to = stable. The=20 positive outlook was based on the expectation that the improvement = of=20 CIC's financials over 2006 and 2007 would prove sustainable in the = longer=20 term. In Moody's view, the positive outlook is no longer justified = given=20 the 2008 results and the prospects for 2009.

BFCM's and CIC's Aa3 Long-Term debt and deposit ratings carry = stable=20 outlooks. They benefit from a very high likelihood of support from = CM5-CIC=20 group and in turn the group benefits from a very likelihood of = systemic=20 support given its size in the French retail market (it is France's = third=20 largest retail network in terms of both deposits and lending = market=20 shares) and its importance in flow processing payments in France. =

Last rating action was on 11 July 2008, when the outlook on = BFCM's BFSR=20 was changed to stable from positive, following the announcement by = the=20 bank that it had reached a final agreement to buy Citibank = Deutschland, to=20 reflect the weakened solvency ratios. At the time, Moody's also = affirmed=20 CIC's BFSR at C- with a positive outlook and CIC's Long-Term debt = and=20 deposit ratings at Aa3 with a stable outlook.

The principal methodology used in rating BFCM and CIC are the = "Bank=20 Financial Strength Ratings: Global Methodology" and "Incorporation = of=20 Joint-Default Analysis into Moody's Bank Ratings: A Refined = Methodology",=20 which can be found at www.moodys.com in the Credit Policy &=20 Methodologies directory, in the Ratings Methodologies = sub-directory. Other=20 methodologies and factors that may have been considered in the = process of=20 rating these issuers can also be found in the Credit Policy &=20 Methodologies directory.

Based in Strasbourg, France, BFCM is a majority owned = subsidiary of=20 CM4-CIC group.

At year-end 2008, BFCM reported unaudited consolidated net = income of=20 =80138 million, down (-91.9%) from =801,704 million at year-end = 2007 (figures=20 for 2008 are impacted by the IAS 39 reclassification. For more = details,=20 please refer to the issuer's press release). At year-end 2008, = total=20 assets amounted to =80425.2, up 3.0% from =80395.9 billion at = year-end 2007.=20 No capital adequacy ratios are disclosed at the level of BFCM. =

Based in Paris, France, CIC is a majority owned subsidiary of = BFCM.=20

At year-end 2008, CIC reported unaudited consolidated net = income of=20 =80206 million, down (-82.9%) from =801,204 million at year-end = 2007 (figures=20 for 2008 are impacted by the IAS 39 reclassification. For more = details,=20 please refer to the issuer's press release). At year-end 2008, = total=20 assets amounted to =80251.7 billion, in line with year-end 2007. = CIC's Tier=20 1 ratio stood at 8.6% at year-end 2008.

Frankfurt
Carola Schuler
Senior Vice = President
Financial=20 Institutions Group
Moody's Deutschland GmbH
JOURNALISTS: 44 = 20 7772=20 5456
SUBSCRIBERS: 44 20 7772 5454

Paris
Stephane Le Priol
VP - Senior Credit = Officer
Financial=20 Institutions Group
Moody's France S.A.
JOURNALISTS: 44 20 = 7772=20 5456
SUBSCRIBERS: 44 20 7772 5454


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