Slumps in profits for the major banks, 40 percent fewer mortgages, fewer jobs: the momentum of the French banks is slowing down.

The end of 2023 was disappointing for the French banks. The biggest bank in the country, BNP Paribas, suffered a decline in profits in the fourth quarter down to 1.1 billion euros – around half of the same quarterly figure in the previous year.

Nevertheless, when looking at the year as a whole, there was still a positive development (11 billion euros compared to 9.8 billion in 2022). The Paris-based bank reported a return on equity target of 12 percent from 2025 to 2026.

For Société Générale, the operating profits dropped by more than 25 percent in 2023, reaching just under 5.6 billion euros. Crédit Agricole also recorded a decrease in profits in 2023, with 1.7 billion euros compared to the previous year’s figure of 2.2 billion euros.

Fewer Jobs

The stock markets are not amused. BNP Paribas shares have lost almost five percent over the last six months. For Société Générale, this was around 13 percent.

The job market in banking also worsened in 2023. As French financial newspaper «Les Echos» reports (paid article), with reference to the recruitment business Michael Page, job vacancies decreased by 15 percent compared to 2022.

With a considerably slower fourth quarter, 25 percent fewer job vacancies were posted compared to the same period in the previous year.

Reduction from the Previous Year

Unlike the majority of Swiss banks, where interest-related business brought about good figures in 2023, the French financial sector is losing momentum. It should be noted, however, that the interest rates in the eurozone are significantly higher than in Switzerland.

The possibilities of the French banks to profit from these rates are limited. Mortgages – a key line of business for many French banks – are largely arranged over a very long term in France, which means that the banks are sitting on many low-interest contracts. In contrast, the number of new contracts dropped by 40 percent compared to the previous year, to the lowest level since 2015.

Politically-defined Interest

At the same time, in investments, the so-called Livret A is enjoying a great deal of popularity. Its interest rate, currently 3 percent, is set by the government. This limits the possibilities of the French banking sector of riding the interest wave.