Annual results for 2023:
Record business achieved solid results, confirming the appeal of the AFL model
On December 31, 2023, AFL Group reported a significant improvement in its operating results.
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Highest one-year gross operating profit since the founding of AFL Group (+81% compared to 2022).
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Consolidated net income more than doubled compared to 2022.
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Net interest margin increased by 55% compared to 2022.
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New loans soared to 1,907 million euros.
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The number of new members reached a record high, bringing the total number of local government members to 776.
Record increase in collusion between loan activities and local governments
Loan origination amount in 2023 hits record high
In 2023 alone, the AFL was sanctioned 1.9 billion euro loan This is an unprecedented level for member authorities. This trend comes in the context of increased borrowing by local authorities due to large-scale investments in ecological transition.
In this context, AFL offered competitive financing terms while proving its market share.1 will be maintained in 55% between member local governments and 8% AFL ranks 3rd at national levelrd Largest bank lender to local governments throughout the year (Source: Finance Active). AFL was chosen because 85% Of the tenders participated in 2023.
Approximately 200 new local government members
Buoyed by this lending trend and the strengthening of its reputation, AFL was registered. 177 new local government members With four capital increases, the total number of members has increased to 776 As of December 31, 2023.
Growth has been particularly strong among sectors, with at least five departments voting to participate in 2023: Ile-et-Vilaine, Landes, Yvelines, Maine-et-Loire and Gironde.2.
It also includes the Eurométropole de Metz, three urban communities (Grand-Rheims, Caen-la-Mer, Grand-Paris-Seine-et-Oise), the Duchy of Bassin-Seine-Grand-Lac, and nine agglomeration communities, 12 municipal communities, 13 unions and 133 municipalities.
This represents an additional capital commitment. 21.4 million eurosvoted in 2023, with a total of 293.6 million euros.
Efficient refinancing by distributing issues
AFL raised funds in 2023 2.1 billion euros In a bond market with weighted average maturity 8.5 years:
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Two syndicated bond issues: 750 million euros The maturity is 7 years and the issue amount is 500 million euros 15 year maturity.
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Two additions to the issuance of sterling bonds due June 2025.
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Some euro-denominated private placements include, for the first time, private placements (referred to as “'') with an option for AFL to redeem prior to maturity.callable”).
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Private placement of a fixed amount of sustainable bonds 215 million euros.
The weighted average spread for these stocks is: 49 basis points over- National debt assimilation obligation (OAT) curve, increased compared to the previous fiscal year (41 basis points on average for OAT in 2022). This deterioration concerns the French and European public sector as a whole and is explained in particular by the end of the ECB's securities purchase program.
Performance in 2023 will grow significantly
Historical best result
As of December 31, 2023, AFL Group reported sharp revenue growth.
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Net banking income (NBI) reached 23,355,000 euros (vs. 17,608,000 euros as of December 31, 2022) That's an increase of 33%.
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net interest margin AFL Group 55% increase to reach 24,267,000 euros (vs. €15,651,000 at December 31, 2022), driven by lending operations, margin stabilization and interest rate increases.
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Gross operating profit 81% increase reaching unprecedented levels compared to 2022; 7.62 million euros (vs. 4,206,000 euros as of December 31, 2022).
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Excluding non-recurring items (excluding gains on sales of securities and income from hedge accounting), gross operating profit is 8,656,000 euros, (vs. 2,357,000 euros as of December 31, 2022).
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General operating expenses Regarding the period represented 15,734,000 euros As of December 31, 2023 (€13,403,000 as of December 31, 2022), a proven balance between strict budgetary control and support for business expansion (IT investments, personnel costs, etc.) .
This is the fourth consecutive year of positive results. Net income Towards fiscal year 2023 more than doubled compared to 2022 and reached 5 euros.739 million (vs. €2,775,000 as of December 31, 2022) This confirms the strong resilience of the AFL model in a changing economic and financial environment.
Lower cost of risk
AFL risk cost Due to its model as a public development credit institution, the company's prudent management, and the superior solvency of local governments, it is inherently limited.
On December 31, 2023, the AFL Cancellation of clause Regarding advance impairment of expected losses on financial assets under IFRS 9, 117,000 euros, against the net clause of 404,000 euros For the previous financial year.
The cancellation of this provision in fiscal year 2023 reflects a favorable change in the weighting of the underlying macroeconomic scenario, taking into account the stabilization of the geopolitical and macroeconomic environment and the very high quality of the loan portfolio. There is.
Operating profit after risk cost reached 7,738,000 euros (3,801,000 euros as of December 31, 2022), which means the amount will double. This gain contributed to a significant improvement in operating results. cost/income ratio Towards 2023 67.4%, AFL Group's capital base will be strengthened by 76.1% in the 2022 financial year.Operating expenses as a percentage of loan balance 20 basis pointsdemonstrating the efficiency and agility of the model.
Strong financial structure that enables balanced growth
AFL Group has a very strong financial structure.
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CET1 solvency ratio (consolidation) is 13.23%, The internal limit is 12.5% and 13% after March 31, 2024.
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leverage ratio (CRR2), Calculated using the methodology applied to public development credit institutions. 8.86% (for 3% of regulatory limit);
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LCR ratio was standing 541% Exceeds the regulation value of 100%;
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12-month internal liquidity ratio, NCRR, the amount is 80% As of December 31, 2023, liquidity reserves amounted to EUR 1,976 million. This allows AFL to meet all its needs without relying on the market for almost 12 months.
This solidity has been reaffirmed by the rating agencies, with Standard & Poor's reaffirming AFL's long-term and short-term financial ratings on May 24, 2023 and Moody's on June 1, 2023.
AFL Credit Rating as of December 31, 2022
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Moody's |
Standard & Poor's |
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long term rating |
ah 3 |
Ah~ |
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Outlook |
Stable |
Stable |
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short term rating |
P-1 |
A-1+ |
A resilient model under market stress
“In 2023, local governments operated in a tense environment (wars on European borders, Israeli-Palestinian conflict, inflation, changes in monetary policy, etc.) that caused interest rates to rise. The urgent need for academic transition is generating large-scale investments at local level. In this context, AFL Group is committed to issuing and It has demonstrated its ability to live up to its raison d'être by pursuing lending activities.” AFL Board Chair Eve Millade said:
A climate and sustainable finance roadmap is at the heart of the model. Its development will accelerate in 2023
As a public development credit institution, AFL aims to fulfill its public policy mission in the general interest, making it the right tool for local governments to finance energy and climate change. AFL is rolling out a climate and sustainable finance roadmap structured in accordance with the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures).
Strengthening governance for ESG issues
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AFL-ST level: In 2023, we focused on strengthening governance with the aim of clarifying roles and responsibilities from a CSR perspective. The role of the board of directors is central and determines CSR strategy. Submitted every 3 years Submit it to the general meeting of shareholders.
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at AFL level: Strategy Committee Strategy and Responsible Initiatives Committee; Identify the role of supervisory boards in defining the climate change and sustainable finance roadmap and overseeing its development.
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Finally, internally it looks like this: CSR Climate and Sustainable Finance Committee Created to guide the climate change and sustainable finance roadmap. Quarterly meetings bring together Board members and employees from all departments.
Roadmap with enhanced implementation
AFL pursues its desire to provide the best possible support to member local authorities in transition financing and has sought to make that commitment clearer through a number of achievements, including:
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Presentation of new research For the benefit of local governments: Funding energy retrofits for buildings, barometers of fiscal health, small town surveys, etc.
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publication of ethics charter;
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its first realization carbon audit;
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Realization of Environmental risk mapping;
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Self-publishing is Occupational Equality Index Even though the AFL is not obliged to do so because of its size (score). 87/100 (within national average)
Leveraging the significance of AFL's existence
“We embody responsible finance that meets the current and future needs of our residents. This is what AFL is all about, and it is becoming more and more important each day through AFL’s support for local government transition funds and internal initiatives. I’ll go.” Marie Ducamin, Chair of the AFL-ST Board of Directors, said:
Post-closing events and prospects
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The AFL-ST Board of Directors 39th capital increaseconcluded on March 19, 2024. 61 new local authorities Taking this opportunity to participate in AFL, the total amount of capital pledged is 12 million euros.
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AFL's ambitions are The number of members exceeds 1,000. By the end of 2024.with 3 billion euros AFL aims to have the capacity to support the needs of its member municipalities in terms of financing the transition at the best price, through a refinancing program that will include sustainable bond issues of at least €500 million.
On 13 March 2024, AFL's Executive Committee approved AFL's 2023 annual accounts. On March 27, 2024, AFL's Audit Committee approved AFL's annual financial statements.
On March 27, 2024, the Board of Directors of AFL-ST, Societe Territoriale, approved the financial statements of its parent company, Societe Territoriale, and the consolidated financial statements of AFL Group.
The audit procedures relating to the annual financial statements and consolidated financial statements relating to the period from January 1, 2023 to December 31, 2023 were performed by the statutory auditor, whose report is available at the following address .
http://www.agence-france-locale.fr
This press release contains certain forward-looking statements. Although AFL Group believes that these statements are based on reasonable assumptions as of the date of this press release, they by their nature are subject to changes in geopolitical tensions, macroeconomic forecasts and monetary policy. We are subject to, and may have real consequences for, the risks and uncertainties associated with change. Numerical values shall differ from those expressed or implied in these statements.
AFL Group's financial information for 2023 consists of this press release and the report available on the website: https://www.agence-france-locale.fr/actualite/annual-results-2023-record -business-generates-solid results/
1 Estimation of composition based on consultation details
2 Three of them: Yvelines, Maine-et-Loire and Gironde will not join the AFL until 2024 due to the date of their first capital contribution.
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