The French Banking Sector in 2016

The French banking industry currently finds itself in an unprecedented situation. It must meet three major challenges at the same time: digital transformation, a low interest rate environment and an increasing number of regulatory constraints.

A Strategic industry

The strength of the French banking industry was confirmed in 2016.

The universal banking model and the diversification of revenue and risks allow French banks to survive in an uncertain banking environment.

A robust sector

The strength and competitiveness of the financial industry in an increasingly competitive European and international context are crucial for a country’s independence. A powerful and efficient banking system supports growth to the fullest. Without strong banks, a strong economy is impossible.

With banks that rank highly among international banks, which means that critical decision-making centers are based in France, finance is a strategic industry in our country. Four French banks are ranked among the top nine European banks and the top twenty worldwide.

French banks continued to improve their financial structure in 2016: at the end of the year, the CET1 ratios of all four major French banking groups were higher than the minimum required (11.50%). The average CET1 ratio is 12.95% versus 12.13% the previous year.

A universal banking model serving all clients

The universal banking model is an innovative business model that is unique to France, bringing together a full range of banking and financial business lines within a single institution.

Banks provide all of the services that businesses, individuals and institutional investors may require: deposits and loans, insurance, savings and asset management, Corporate and Investment Banking (CIB), specialized services, etc. This model helps diversify revenue sources by client and region.

Universal and local banking is an efficient way to help finance the economy under favorable conditions. With 37,567 bank branches in France in 2015, the French bank network is denser in France than in other European countries.

A dynamic player in the labour market

The banking industry played a major role in the labour market with more than 39,000 hires (FBF scope). That was 4,000 more than in 2014. These are stable jobs: more than 60% of hires were for permanent positions (versus 20% on average in France) and required qualifications: +47% were for holders of bachelors’ or masters’ degrees (AFB scope).

The total number of people employed by the French banking sector is more than 371,600. However, this number has been trending downward for three years.(-1.2% and -1.5 %). In France, the banking sector represents 2.3% of private sector employment (INSEE, 2015).

Training: a special focus

The French banking sector dedicates 3.5% of its payroll to training its employees (the average among French businesses is 2.7%).

French banks place high importance on professional integration, especially in connection with work-study programs that provide many young people with on-the-job training as they pursue their studies.

In 2015, French banks pursued an active work-study policy with more than 6,000 contracts.

A strong commitment to professional integration

The industry has embarked on the implementation of a plan to integrate young people who face difficulties finding employment. With this initiative, it encourages partnerships with associations. Two such partnerships have been signed with the Agency for Education with Sport (APELS) and the Federation for companies working for professional integration.