par CREDIT COOPERATIF
Rapport financier semestriel AFD 2024
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Half-year financial report
30 June 2024
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Contents
3. Principles for the preparation of the consolidated financial statements of AFD Group at 30
June 2024................................................................................................................................ 21
3.1. Consolidation scope and methods .....................................................................................21
3.2. Accounting principles and methods ..................................................................................25
3.3. Notes to the financial statements at 30 June 2024 .............................................................40
3.4. Risk information ................................................................................................................51
3.5. Additional information ......................................................................................................53
D. Statutory Auditors’ report on the 2024 half-year financial information ..................... 54
E. Person responsible for the half-year financial report .................................................. 56 Due to rounding, the tables’ column totals may differ slightly from the sum of the lines composing them.
The abbreviation €K signifies thousands of euros, €M signifies millions of euros and €bn signifies billions of euros.
A. Management report
1. AFD Group activities
Approvals
The total amount of approvals (excluding Proparco refinancing and sub-participation) at 30
June 2024 amounted to €2,300M, compared with €3,317M at 30 June 2023, a decrease of
-€1,017M. This change was mainly due to a -€1,030M decrease in AFD’s own-account activities in foreign countries and a -€333M decrease in third-party activities, offset by a +€266M increase of Proparco’s activities and a +€80M increase in activities in the French Overseas Departments and Collectivities.
Activities in foreign countries
The AFD's own-account activities in foreign countries (excluding Proparco refinancing and sub-participation) amounted to €793M, compared to €1,823M last year, down by-57%. This decrease was mainly due to approvals for both sovereign and non-sovereign loans (excluding sub-participation), which decreased by €566M and €477M, respectively. Grant awards were higher than last year, by +€55M.
Activities in the French Overseas Departments and Collectivities
Approvals in the French Overseas Departments and Collectivities amounted to €202M at 30 June 2024, compared to €122M at 30 June 2023, up by +66%. This increase was mainly due to subsidised loans to the public sector in the amount of +€69M, as well as loans at market conditions to the private sector of +€48M. Grants were virtually constant and amounted to €10M. On the other hand, loans to the public sector on market conditions were down by €14M, i.e. 19%.
Proparco’s activity
Proparco’s approvals in foreign countries (on loans, guarantees, equity investments and grants, including Fisea) amounted to €1,143M in the first half of 2024, up +30% compared to the same period in 2023 (€877M).
Third party activity
Approvals for activities on behalf of third parties decreased by -€333M, or -67%, from €495M in June 2023 to €162M in June 2024. In addition, activities on behalf of the State and more specifically debt conversions (including C2D) were down sharply: they amounted to €311M at 30 June 2023, but only represented €33M at 30 June 2024.
Disbursements
Group disbursements (excluding Proparco refinancing and sub-participation) amounted to €2,879M at 30 June 2024, compared with €2,896M at 30 June 2023, i.e. a decrease of 1%, mainly due to disbursements of Proparco and French Overseas Departments and Collectivities.
Activities in foreign countries
With regard to current activities in foreign countries on its own behalf (excluding Proparco refinancing and sub-participation), total disbursements stood at €1,912M at 30 June 2024, compared with €1,819M at 30 June 2023 (+5%). The half-yearly change in disbursements on the various types of activities was mainly due to the significant increase in disbursements on concessional sovereign loans of +€296M (€1,056M in June 2024 compared to €761M in June 2023) offset by a decrease in non-sovereign loans of -€131M (€490M in June 2024 compared to €621M in June 2023). Grant disbursements decreased by -€74M, from €533M in June 2023 to €459M in June 2024.
Activities in the French Overseas Departments and Collectivities
AFD’s disbursements in the French Overseas Departments and Collectivities amounted to €206M at 30 June 2024, compared with €354M at 30 June 2023.
Proparco’s activity
Proparco’s disbursements in foreign countries (on loans, guarantees, equity investments and grants, including Fisea) amounted to €430M in the first half of 2024, down by -29% compared to the same period in 2023 (€610M).
Third party activity
Disbursements for activities on behalf of third parties increased by €134M in 2024, from €197M in June 2023 to €331M in June 2024. This increase was mainly due to disbursements on the global budget support (GBS) of +€85M and on debt conversions (including C2D) of +€40M.
2. Recent changes and outlook
2.1. Crises in several countries
Ukraine crisis
AFD was asked by the French State, following the invasion of Ukraine by Russia, to intervene in support of the Ukrainian State, for a first transaction in March 2022 renewed in November 2022. This transaction was made possible by a restricted mandate granted by decision of the cosecretariat of the dematerialised CICID[1] on 15 March 2022, as AFD had no other mandate to operate in the country at the time. In total, AFD granted and disbursed €400M in budget financing in 2022 to support social spending on public services (education, health, social transfers, pensions, etc.).
In 2023, AFD worked with the ministries and Task Force Ukraine (TFUA) led by Pierre Heilbronn, to prepare an intervention in Ukraine, which resulted in an official intervention mandate on 2 January 2024, focused on support for local authorities and non-sovereign financing. Since then, AFD has been fully mobilised at institutional and operational levels.
At the institutional level, first of all with the signature on 7 June 2024 of the intergovernmental establishment agreement for AFD Group, on the occasion of the visit to France of the President of Ukraine. Three weeks after the signing of this agreement, on 1 July AFD opened an office in Kyiv co-established with Expertise France.
At the operational level, three prospecting missions carried out between the end of 2023 and the spring of 2024 made it possible to identify several avenues of intervention for AFD in the short- and medium-term in compliance with the mandate entrusted to it. The presence on the ground will make it possible to intensify prospecting and build activities in the coming years.
At Group level, Expertise France and Proparco have been active in the country since 2006 and 2019 respectively. The mandate entrusted to AFD therefore allows the three entities to be present in Ukraine and to deploy a wide range of financial and technical instruments to support the country’s resilience and its European convergence trajectory.
Expertise France has a long-standing presence in Ukraine, notably through bilateral technical cooperation programmes, twinning and ongoing intervention in the justice sector via the European PRAVO-Justice programme.
In the context of Russian invasion and Ukraine’s candidacy for accession to the European Union, Expertise France has considerably strengthened its activities in the country. The Ministry for Europe and Foreign Affairs has entrusted Expertise France with €14.5M to position French technical cooperation in response to the short-, medium- and long-term needs of Ukraine (mAIDan programme).
The agency focuses its intervention on two strategic areas: support for resilience and reconstruction; and support for European integration. In 2024, Expertise France’s portfolio includes 15 national projects and 3 regional projects for a total amount of more than €50M spread over six sectors: (i) health and social protection, (ii) rule of law and justice, (iii) local governance and decentralisation, (iv) innovation and support for the private sector, (v) economic and financial governance, (vi) defence and security.
In order to meet the needs of its Ukrainian partners, Expertise France plays the role of developer by mobilising French public and private expertise and delegated project management for reconstruction and rehabilitation projects, as well as of manager of grants for SCOs or the private sector. In addition, the agency seeks synergies and positions itself as a facilitator of decentralised cooperation. Lastly, Expertise France is building partnerships with other cooperation local offices in the Member States in order to seek a leverage effect on French and European financing.
Expertise France now has 43 people in Ukraine and the agency will also deploy a dozen international technical experts to support Ukrainian institutions.
In 2023, Proparco, AFD subsidiary dedicated to financing the private sector, also invested $20M in the Horizon Capital IV investment fund to support the Ukrainian private sector, notably new technology sectors (IT).
Middle East crisis
AFD Group, present in Palestine since 1999, has the Palestinian Authority (PA), municipalities, NGOs and the private sector (banks and companies) as traditional partners. Despite the ongoing war, the Group has not stopped its activities in Gaza. In the West Bank, projects under investigation and in execution are continuing.
In the short term, AFD Group is participating in the crisis response. First of all, AFD is present in the health sector in a humanitarian-development nexus approach. A maternal and child healthcare project in Gaza has been implemented by UNICEF, WHO and UNFPA, in coordination with the Palestinian Ministry of Health. At the end of 2024, AFD could support St Joseph’s Hospital in Jerusalem (maternity and intensive care), through cofunding with the Qatar Fund for Development.
AFD Group is also continuing its support for the preservation of basic services and institutional strengthening. Despite the legitimacy crisis affecting the Palestinian Authority, AFD continues to work with the technical departments of the administrations, which are key mechanisms to avoid the collapse of the public service in a context of serious security, economic and social crisis. Expertise France supports the Institut des Finances Publiques, which has been in charge of steering the institutional reform programme since May 2024. Similarly, in June 2024, AFD, alongside other donors, granted new financing to the Municipal Development Programme (€10M), which allows municipalities to continue to deliver essential services in a context of massive budget deficit. This programme includes a component for Gaza, which will only be implemented after approval by the French government.
In addition, AFD Group continues to support the financial sector. AFD and Proparco have been supporting the financial sector for more than 20 years, notably Bank of Palestine. Proparco is preparing new lines of credit for its traditional partners (Bank of Palestine, Cairo Amman Bank, Quds Bank, FATEN, Vitas, Asala in particular). These transactions could be set up in partnership with the EBRD, the IFC and the EU.
Lastly, AFD co-finances civil society projects via its I-CSO Facility. For 2024 and 2025, French and Palestinian CSOs have applied to the I-CSO Facility, notably Médecins du Monde, NGODevelopment Center, Secours Catholique. A programme specifically supports the provision of services of the CSOs of East Jerusalem (AJIR) in favour of vulnerable populations and the preservation of the Palestinian identity.
In the medium term, AFD will contribute to France’s efforts to support post-conflict reconstruction, in the sectors where its added value is the highest: water and sanitation, human capital, municipal development, the private sector, civil society.
The conflict has also spread to Lebanon in the form of exchanges of fire and airstrikes between Israel and Hezbollah, mainly in the south of the country. At this stage, the direct impact of the conflict is limited to a few structures in border areas (health centres, schools) supported as part of projects financed by AFD. AFD supports its partners to adapt projects, including with a view to the possible extension of the conflict to the whole of Lebanon. It is likely that France will be asked to contribute to the reconstruction of the south of the country in the post-conflict period. Major miscellaneous and contingency lines are positioned within projects to respond to the occurrence of new crises. More broadly, in a country hit by a juxtaposition of economic and political crises since 2019, the agency’s interventions combine short-term needs and preparation for the future, while retaining the flexibility to respond to possible future crises. Projects are now structured to adapt to this volatility of the context.
Crisis in New Caledonia
Since 13 May 2024, the metropolitan area of Noumea has been the scene of serious riots at the initiative of a radicalised branch of the independence movement. Initiated in protest to the proposed thaw of the electorate, the violence continues and even spread to the rest of the Caledonian territory at the end of June.
Since the start of the crisis, AFD has been fully mobilised, alongside the State and other players involved in the region, to respond to the emergency and the challenges that await New Caledonia in the coming years.
A reinforced monitoring unit was immediately set up to ensure the safety of AFD employees and support them throughout the crisis. The teams from the agency, the regional department and the registered office have worked to strengthen the Sogefom guarantee tool dedicated to VSEs/SMEs, notably to cover loans to medium-sized companies. Accelerated and streamlined procedures have also been put in place to quickly respond to moratorium requests from counterparties.
The Agency also made available an officer in charge of promoting AFD’s experience in public finances and structural reforms to a task force mobilised by Bercy in order to identify highly operational responses that are quick to implement. The short-term objective is to respond to the local authority’s cash flow difficulties and promote the recovery of activities, and in the longer term, to work on the reconstruction of infrastructure, but also of social links.
2.2. Refinancing and liquidity
The first quarter saw a significant number of transactions on the markets, with higher volumes borrowed from January onwards than in previous years, followed quite logically by a quieter phase, where issuers generally made less use of the market. Investors, anticipating central bank rate cuts, were particularly active. In addition, the prospect of the European and US elections as well as geopolitical tensions across the globe pushed issuers to take advantage of the market as long as it was open.
This half-year was also marked by S&P's downgrade of the rating of France to AA-, thereby downgrading the rating of the French local offices rated by S&P. This downgrade led to a technical blackout for the updating of the borrowing programme for a large number of issuers, which in the specific case of AFD followed the blackout for the annual review of the documentation.
The dissolution of the National Assembly announced by French President Emmanuel Macron on 9 June 2024 led to market volatility. In this context, AFD preferred not to issue a new benchmark in June.
AFD’s bond issues totalled €4,450M in the first half of 2024.
AFD has also undertaken:
- 3 public issues, including one in euros, one in pound sterling and one in US dollars.
Maturity | Currency | Nominal in currency | EUR equivalent |
17/01/2034 | EUR | 2,000,000,000.00 | 2,000,000,000.00 |
22/07/2027 | GBP | 350,000,000.00 | 406,669,379.17 |
05/03/2029 | USD | 2,000,000,000.00 | 1,842,723,545.31 |
- 1 tap issue without opening an order book in US dollars.
Maturity | Currency | Nominal in currency | EUR equivalent |
21/09/2027 | USD | 100,000,000.00 | 93,457,943.93 |
For AFD Group, the overall cash flow indicator expressed in months (or survival horizon) makes it possible to measure whether, at any given time, the cash balance and the monetisation of the liquidity buffer make it possible to cover at least six months of projected sliding activity needs to handle a market closure during that period. The risk appetite framework prescribes an objective of maintaining this indicator within a band of nine to twelve months; the preventive alert threshold is set at eight months and the tolerance threshold at six months. During the first half of 2023, these thresholds were not exceeded. At 30 June 2024, the overall cash flow indicator was
11.54 months.
2.3. Financial results
The financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), show net income – Group share of €231M at 30 June 2024, compared to
€212M at 30 June 2023. This increase was mainly due to a rise in net banking income of +€85M over the period (€538M compared to €453M in June 2023) combined with a negative effect produced by the cost of risk of -€60M between two financial years.
Cost of risk in net reversal stood at +€24M at 30 June 2024, compared with +€84M in the first half of 2023.
Overheads were up by €16M, amounting to €325M at 30 June 2024 compared to €308M at 30 June 2023.
2.4. Capital adequacy ratio and regulatory changes
AFD meets the minimum equity requirements in terms of solvency. The capital adequacy ratio stood at 15.07% at 30 June 2024, up from that at 31 December 2023, i.e. 14.95%. This increase is linked to the strengthening of equity through consolidated income for the second half of 2023 financial year and the conversion of the resources with special conditions (RCS) of €150M.
2.5. Operational outlook
AFD Group’s 2024 activity is aligned with the guidelines of CICID of 18 July 2023, which redefined the main guidelines of the solidarity and sustainable investment policy. The 2024-2026 contractual targets and resources (COM), the framework of which was validated by the Board of Directors of 14 December 2023, is AFD's operational implementation thereof. This COM is based on 24 indicators, including 10 major political objectives, and one geographic priority: least developed countries (LDCs). Finally, 2024 was marked by the implementation of a new sustainable debt doctrine that changes the sovereign loan activity, notably in Africa.
To support its activity, AFD Group benefits from resources from the 110 programme which are equivalent to those of last year (€1.7bn included in the Finance Bill, of which €1.08bn have been reported to date), supporting its lending trajectory in a context of high interest rates. Grant resources, for their part, decreased to €1.08bn following the budget cuts in the first half of 2024.
AFD Group’s objectives in terms of commitments and disbursements should remain stable at €12bn (excluding delegated funds) and €8.8bn respectively. On the other hand, the Group raised its target in terms of signatures to €11.4bn, of which €2bn for Proparco and €0.43M for Expertise France.
3. Risk factors
The total exposure of AFD Group on its own behalf amounted to €87.6bn, up €2bn (+2%) compared to 31 December 2023. This increase was mainly driven by AFD’s cash activity (+€1.7bn, i.e. +17%).
AFD Group’s risk-bearing lending portfolio amounted to €70.4bn (€51.3bn in outstandings and accrued interest not yet due, €19.1bn in undisbursed balance), an increase of €297M (+0.4%) on the first half of 2024. In the first half of 2022 and 2023, this growth was €1,037M (+2%) and €306M (+0.4%), respectively. This increase is concentrated on the non-sovereign scope (+€347M).
AFD Group’s outstanding debt on its own behalf (€51.9bn) was down €268M over the first half of 2024, which breaks down as follows:
o -€175M on the AFD scope mainly due to a decrease in non-sovereign loans (-€373M) but offset by an increase in sovereign loans (+€198M);
o -€93M decrease on Proparco non-sovereign loans.
The Group’s overall rate of non-performing loans dropped from 5.9% at the end of 2023 to 5.2%, with:
o A decrease in the rate of non-performing loans for the AFD sovereign portfolio (6.7% to
5.4% at the end of June 2024); o Stability of the doubtful rate for the Group non-sovereign portfolio at 4.9%, despite a doubtful rate for Proparco which increased to 10.2% (versus 9.3% in December 2023).
The Group’s non-performing loans amounted to €2,746M, down €391M, with the following changes for each segment:
o -€355M for AFD sovereigns amounted to €1,593M; o -€58M for AFD non-sovereigns amounted to €710M; o +€21M for Proparco non-sovereigns amounted to €422M; o +€1M for Sogefom amounted to €20M.
AFD Group's consolidated cost of risk after the transition to IFRS was a net reversal of +€23.6M, comprising +€50.3M in reversals of collective provisions, -€28.7M in additions to individual provisions, -€1M in losses on bad loans and +€3M in reversals of other provisions.
The balance of the reserve account for sovereign risk was €1,412M compared to €1,395M at 31 December 2023.
B. Consolidated financial statements in accordance with IFRS accounting
standards adopted by the European Union
Overview
Agence Française de Développement (AFD) is an industrial and commercial public undertaking tasked with financing development assistance, recorded at the Registry in Paris on 17 July 1998. AFD’s share capital amounts to €4,718M at 30 June 2024.
Registered office address: 5, rue Roland-Barthes – 75598 Paris Cedex 12 – France.
Listed on the Paris Trade and Companies Register under number 775 665 599.
These consolidated financial statements are presented in thousands of euros.
Balance sheet at 30 June 2024
Income statement at 30 June 2024
In thousands of euros | Notes | 30/06/2024 | 30/06/2023 | Change |
Interest and related income | 13 | 2 518 970 | 1 787 996 | 730 974 |
Transactions with credit institutions | 1 141 278 | 764 561 | 376 717 | |
Transactions with customers | 663 732 | 551 966 | 111 766 | |
Bonds and other fixed-income securities | 98 890 | 60 457 | 38 433 | |
Other interest and related income Interest and related expenses | 615 070 | 411 012 -1 571 022 | 204 058 -685 968 | |
13 | -2 256 990 | |||
Transactions with credit institutions | -572 225 | -467 847 | -104 378 | |
Transactions with customers | -220 | -579 | 359 | |
Bonds and other fixed-income securities | -548 090 | -394 848 | -153 242 | |
Other interest and similar expenses Commissions (income) | -1 136 455 | -707 749 71 944 | -428 706 -19 127 | |
14 | 52 817 | |||
Commissions (expenses) | 14 | -1 388 | -2 189 6 703 | 801 -21 979 |
Net gains or losses on financial instruments at fair value through profit or loss, net of foreign currency impact | 15 | -15 276 | ||
Net gains or losses on financial assets recognised at fair value through other comprehensive income | 16 | 29 310 | 9 096 313 504 -163 410 | 20 214 98 828 -38 805 |
Income from other activities Expenses on other activities | 17 | 412 332 | ||
17 | -202 215 | |||
Net banking income | 537 561 | 452 623 | 84 938 | |
Overheads | 18 | -296 098 | -283 342 | -12 756 |
Salary and employee benefit expenses Other administrative expenses Provisions for amortisation of intangible assets and depreciation of property, plant and equipment | -208 134 | -205 065 -78 277 -25 073 | -3 069 -9 687 -3 632 | |
-87 964 | ||||
8 | -28 705 | |||
Gross operating income | 212 758 | 144 208 | 68 550 | |
Cost of credit risk | 19 | 23 599 | 83 535 | -59 936 |
Operating income | 236 357 | 227 742 | 8 615 | |
Share of earnings from companies accounted for by the equity method | 20 | 445 | 1 946 | -1 501 |
Net gains or losses on other assets Changes in the value of goodwill | 135 | 9 - | 126 - | |
- | ||||
Pre-tax income | 236 937 | 229 698 | 7 239 | |
Corporate tax | 21 | -653 | -20 575 | 19 922 |
Net income | 236 284 | 209 123 | 27 161 | |
Non-controlling interests | 5 289 | -3 268 | 8 557 | |
Net income - Group share | 230 995 | 212 392 | 18 603 |
Net income, gains and losses recognised directly in other comprehensive income at 30 June 2024
In thousands of euros | 30/06/2024 | 30/06/2023 | 31/12/2023 |
Net income | 236 284 | 209 123 | 370 191 |
Net gains and losses directly recognised in other comprehensive income to be recycled in profit or loss | -12 733 | 1 653 | -1 171 |
Net gains or losses on debt securities recognised in other comprehensive income to be recycled in profit or loss Net gains and losses directly recognised in other comprehensive income not to be recycled in profit or loss Actuarial gains and losses on retirement benefits Net gains and losses on equity instruments recognised in other comprehensive income not to be recycled in profit or loss | -12 733 | 1 653 -8 699 - -8 699 | -1 171 -55 144 -24 786 -30 358 |
-5 448 | |||
- | |||
-5 448 | |||
Total gains and losses recognised directly in other comprehensive income | -18 181 | -7 047 | -56 315 |
Net income and gains and losses recognised directly in other comprehensive income | 218 103 | 202 077 | 313 876 |
of which Group share | 211 409 | 207 242 | 324 070 |
of which non-controlling interests | 6 694 | -5 166 | -10 194 |
Statement of changes in equity from 1 January 2023 to 30 June 2024
Unrealised
Income for or Equity Equity – non- Total Funding Consolidated the
In thousands of euros Provisions deferred Group controlling consolidated
reserves reserves financial gains or share interests equity year losses
Equity at 1 January 2023 4 417 999 460 000 3 095 831 456 243 161 245 8 591 319 173 319 8 764 639
Share of 2022 income allocated to retained
- - 456 243 -456 243 - - - -
earnings
Dividends paid - - -72 534 - - -72 534 - -72 534
Other changes - - -970 - - -970 -272 -1 242
Changes related to put options - - -4 234 - - -4 234 -4 249 -8 483
AFD capital increase 150 000 - 2 630 - - 152 630 6 302 158 932
2023 net income - - - 371 271 - 371 271 -1 080 370 191
Gains and losses recognised directly in other
- - - - -47 201 -47 201 -9 114 -56 315
comprehensive income in 2023
Equity at 31 December 2023 4 567 999 460 000 3 476 966 371 271 114 044 8 990 281 164 905 9 155 186
Share of 2023 income allocated to retained
- - 371 271 -371 271 - - - -
earnings
Dividends paid - - -65 075 - - -65 075 - -65 075
Other changes - - 810 - - 810 -2 533 -1 723
Changes related to put options - - 3 702 - - 3 702 -1 645 2 057
AFD capital increase 150 000 - - - - 150 000 150 000
Income for the first half of 2024 - - - 230 995 - 230 995 5 289 236 284
Gains and losses recognised directly in other
comprehensive income for the first half of - - - - -19 585 -19 585 1 405 -18 181
2024
Equity at 30 June 2024 4 717 999 460 000 3 787 674 230 995 94 459 9 291 127 167 422 9 458 549
Cash flow statement at 30 June 2024
In thousands of euros | 30/06/2024 | 31/12/2023 |
Pre-tax income (A) | 236 937 | 382 134 |
Net depreciation/amortisation expenses on property, plant and equipment and intangible assets | 25 240 | 35 828 |
Net depreciation/amortisation provisions on fixed assets related to the application of IFRS 16 | 7 313 | 14 807 |
Provisions net of other provisions (including technical insurance provisions) | 4 699 | 90 416 |
Share of earnings from companies accounted for by the equity method | -445 | -1 681 |
Net loss/(net gain) on investment activities | -42 680 | -62 457 |
Net loss/(net gain) on financing activities | 9 640 | 47 221 |
Other items | 873 776 | -98 937 |
Total non-cash items included in net pre-tax income and other items (B) | 877 545 | 25 197 |
Cash received from credit institutions and equivalent | -639 726 | -864 406 |
Cash received from customers | -138 757 | -2 312 814 |
Cash flows from other operations affecting other financial assets or liabilities | -727 213 | -1 936 370 |
Cash flows from operations affecting non-financial assets or liabilities | 80 442 | 1 337 913 |
Taxes paid | -2 045 | -4 756 |
= Net increase (decrease) in cash-related assets and liabilities from operating activities (C) | -1 427 298 | -3 780 434 |
Net cash flows from operating activities (A+B+C) | -312 816 | -3 373 103 |
Cash flows from financial assets and equity investments* | 20 337 | -274 531 |
Cash flows from property, plant and equipment and intangible assets | -189 220 | -182 878 |
Net cash flows from investment activities | -168 883 | -457 409 |
Cash flows related to the application of IFRS 16 | -7 398 | -12 725 |
Cash flows from shareholders** | 300 000 | 671 108 |
Cash flows to shareholders*** | -50 952 | -72 534 |
Other net cash flows from financing activities**** | 527 871 | 3 730 185 |
Net cash flows from financing activities | 769 522 | 4 316 035 |
Net increase/(decrease) in cash and cash equivalents | 287 822 | 485 523 |
Opening balance of cash and cash equivalents | 2 909 976 | |
Net balance of cash accounts and accounts with central banks(1) | 2 497 287 |
|
Net balance of on-demand loans and deposits from credit institutions and customers(2) | 412 689 | 1 414 170 |
Ending balance of cash and cash equivalents | 3 200 718 |
|
Net balance of cash accounts and accounts with central banks | 1 435 469 | |
Net balance of on-demand loans and deposits from credit institutions and customers | 1 765 249 | 412 689 |
Change in cash and cash equivalents | 290 742 | 485 523 |
(1) Composed of the net balance of “Cash accounts and accounts with central banks” as it appears in the Group’s consolidated balance sheet.
(2) Net balance of “On-demand receivables and payables from/to credit institutions”.
* Cash flows from financial assets and equity investments mainly come from the equity investment activity of the Proparco subsidiary and correspond to the flows during the period between acquisitions, disposals and fund raising.
** Cash flows from shareholders correspond to RCS issues.
*** Cash flows to shareholders correspond to the dividends paid by AFD to the French State and to non-controlling shareholders by the Proparco subsidiary.
**** Other net cash flows from financing activities correspond to market borrowings carried out by AFD to meet the growth in its operating activity.
C. Notes to the consolidated financial statements
1. Significant events at 30 June 2024
1.1. Financing of the Group’s activity
To finance the growth of its own activity, in the first half of 2024, AFD issued three public bonds and one tap issue, for a total volume of €4.5bn.
1.2. Appropriation of income for the 2023 financial year
Pursuant to Article 79 of the 2001 amending Finance Bill No. 2001-1276 of 28 December 2001, the amount of the dividend paid by AFD to the French State is set by ministerial decree.
The Board of Directors approved the 2023 financial statements on 25 April 2024.
The French Minister of the Economy and Finance set the 2023 dividend to be paid by AFD to the State. It amounted to €65M, i.e. 20% of AFD’s corporate income (€325M at 31 December 2023), and was paid out after publication in the Official Journal.
This proposal was rendered enforceable by order of the Minister of the Economy and Finance and the Minister of Public Action and Accounts, published on 26 June 2024.
The balance of income after payment of the dividend, i.e. €260M, was allocated to reserves.
1.3. A difficult situation in certain countries
Situation in the Middle East – Palestinian Autonomous Territories
AFD Group continues to support the preservation of basic services and institutional strengthening in the Palestinian Autonomous Territories. AFD continues to work with the technical departments of administrations, which are key to avoiding the collapse of the public service in the context of a serious security, economic and social crisis.
AFD Group’s exposure to the Palestinian Autonomous Territories represented a limited exposure of €108M at the end of June 2024, including €40M in off-balance sheet exposure.
AFD does not bear any credit risk on the State itself, as all exposures relate to the private sector, in loans (€74M including €21M in undisbursed balance) and guarantees on SMEs (€19M). All significant direct exposures were downgraded and provisioned on an individual basis when necessary, the amount of these provisions totalling €9M for a non-performing loan of €15M.
Situation in Niger
The Ministry for Europe and Foreign Affairs announced that it was suspending all its development aid and budget support actions in Niger after the military coup of 26 July 2023.
At 30 June 2024, AFD Group had €194M in balance sheet exposure to Niger (including €10M in Proparco non-performing loans, provisioned individually prior to this announcement) and €198M in off-balance sheet exposure.
The vast majority of exposures are sovereign and covered by the reserve account mechanism.
Situation in New Caledonia
Since 13 May 2024, the metropolitan area of Noumea has been the scene of serious riots at the initiative of a radicalised branch of the independence movement. Initiated in protest to the project to thaw the electorate, the violence continues and spread to the rest of Caledonian territory at the end of June.
As of 30 June 2024, AFD’s exposure to New Caledonia risks amounted to €1,925M in outstandings (including €398M in outstanding loans guaranteed by the State) and €28M in undisbursed balance.
Sogefom’s exposure to risks in the Caledonian territory amounts to €50M in off-balance sheet items.
In addition, AFD holds an equity investment in Société immobilière de Nouvelle- Calédonie (SIC) valued at €38M. As a reminder, AFD exercises significant influence over SIC, which is consolidated using the equity-accounted method.
1.4. Tax audit
An AFD tax audit began in mid-February 2024, covering (i) the audit of value added tax (VAT) for the period from 1 January 2021 to 30 April 2023 and (ii) the audit of payroll tax for the period from 1 January 2021 to 31 December 2022.
As of 30 June 2024, the audit is ongoing and the Group’s financial statements are not impacted.
2. Accounting standards applicable to Agence Française de Développement
2.1. Application of accounting standards adopted by the European Union
The financial statements given in this document include the summary financial statements and the notes to the financial statements. They are presented according to recommendation No. 202201 of 8 April 2022 on the format of consolidated financial statements of banking sector institutions prepared in accordance with international accounting standards.
The consolidated financial statements of AFD Group at 30 June 2024 were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
The content of these financial statements complies with IAS 34 on interim financial information, which provides for the publication of condensed half-year financial statements.
The accounting standards applied in the preparation of AFD’s financial statements at 30 June 2024 are described in Section 4.2.
2.2. IASB and IFRIC texts adopted by the European Union and applied at 1 January 2024
The standards and interpretations used in the financial statements at 30 June 2024 were supplemented by the provisions of IFRS as adopted by the European Union and with mandatory application for the first time during this period. They relate to:
Standards applicable for the current financial year | Provisional date of application |
Amendments to IFRS 16 “Leases – Sale-leaseback obligations” | 1 January 2024 |
Amendments to IAS 1 “Classification of liabilities as current or non-current” | 1 January 2024 |
Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements” | 1 January 2024 |
Unless otherwise stated, when application of the standards and interpretations adopted by the European Union is optional for a period, AFD Group does not take up the option.
AFD Group does not carry out any activities in the insurance sector. Consequently, IFRS 17 has no impact on the Group’s consolidated financial statements.
ü Amendments to IAS 39, IFRS 9 and IFRS 7 “Changes in criteria for hedge accounting requirements”
The index transition project began in early 2019 under the responsibility of the Finance Department with the participation of all relevant AFD Group’s departments (Operations, Legal, Risks, Information Systems and Communication). Working groups with central banks and authorities as well as a customer communication plan were initiated. At the same time, AFD Group regularly monitored the proposals and recommendations of market players.
All our new agreements have included fallback provisions since early 2020.
The work related to operational and systems impacts was carried out in 2021 as part of the “information transformation” programme of the Group’s Finance Department and Risk Department.
Work on the transition in 2022 focused on the transition of the stock of loans and derivatives.
Reminder of key dates and events:
The FCA (Financial Conduct Authority) announced the end dates of the LIBORs on 30 November 2020:
ü 31 December 2021 for all maturities of GBP, JPY, CHF, EUR LIBOR and for USD
LIBOR 1W and 2M (one week and two months);
ü 30 June 2023 for other maturities of USD LIBOR (1M, 3M, 6M and 12M).
The FCA, the UK Financial Conduct Authority, formally prohibited the use of USD LIBOR from 1 January 2022 for new loan agreements.
Following the FCA announcement of the end of the USD LIBOR publication in June 2023, the ARRC, Alternative Reference Rates Committee, in charge of identifying a replacement rate for USD LIBOR, has:
ü formally recommended the CME Term SOFR as the replacement rate for the USD LIBOR for bilateral and syndicated loans;
ü formally recommended the use of the SOFR Compound for derivatives, with the option of using Term SOFR to hedge Term SOFR loans.
In line with the recommendations of the ARRC, AFD Group offered its customers a migration to Term SOFR for bilateral loans and syndicated loans in inventory.
With a few rare exceptions concerning loans in syndication, the entire stock of loans has migrated to Term SOFR for all maturities after 30 June 2023.
For the stock of derivatives, the transition of part of the stock was carried out by the ISDA Protocol in Term SOFR (32%), and part was restructured into Compound SOFR (68%).
In line with the official recommendations, the new agreements in USD will be proposed on the basis of the CME Term SOFR rate.
In September 2019, the IASB introduced amendments to IAS 39, IFRS 9 and IFRS 7 for the first phase of the IBOR reform, which changes the requirements of the criteria for using hedge accounting by allowing the continuation of hedging relationships existing before the effective implementation of that reform. These amendments were adopted by the European Commission on 15 January 2020 with mandatory application for the 2020 financial statements.
In August 2020, the IASB published “Phase 2” amendments, clarifying that amendments related solely to changes in interest rates as part of the reform must not lead to an interruption in hedging relationships. In addition, the data were surveyed and analysed. It was found that the rates AFD Group is largely exposed to in its hedging relationships are EONIA, EURIBOR and LIBOR. Conversely, the “Phase 2” amendments are applicable once the contractual terms of the hedged instruments or hedging instruments have been amended, and the terms and date of transition to the new benchmark interest rates have been clearly stipulated.
These amendments have been applied by the Group since 31 December 2020, which allows it to maintain its existing hedging relationships, which have been amended due to the transition to the new benchmark rates (transition from the EONIA discount rate to €STR).
The other standards and interpretations applicable at 1 January 2024 had no material impact on the Group’s financial statements at 30 June 2024.
2.3. IASB and IFRIC texts adopted by the European Union or in the process of being
adopted, but not yet applicable
The IASB has published standards and amendments, not all of which had been adopted by the European Union at 30 June 2024. They will come into force on a mandatory basis for financial years beginning on or after 1 January 2025 at the earliest, or their adoption by the European Union. They were therefore not applied by the Group at 30 June 2024.
Standards applicable to future financial years | Provisional date of application |
Amendments to IAS 12 “International Tax Reform – Pillar II OECD Model Rules” 1 January 2025
3. Principles for the preparation of the consolidated financial statements of AFD Group at 30 June 2024
3.1. Consolidation scope and methods
3.1.1. Scope of consolidation
Agence Française de Développement's consolidated financial statements cover all fullycontrolled enterprises, joint ventures and companies on which the Institution exerts a significant influence.
The following are not included in the consolidation scope:
- companies of no real significance;
- foreign companies in which AFD holds a minority interest and does not exercise significant influence due to the companies being either fully or partially State-owned.
Significant assumptions and judgments applied to determine the consolidation scope in accordance with IFRS 10-11-12:
The elements used to draw a conclusion on whether AFD exercises control or influence over the entities in which it invests are many. Accordingly, the Group determines its ability to exercise influence over the management of another entity by taking due consideration of the entity’s structure, shareholders, arrangements and the participation of AFD and its subsidiaries in decision-making bodies.
Moreover, materiality with regard to Group accounts is also subject to analysis.
In percentage of ownership | 30/06/2024 | 31/12/2023 |
Fully consolidated companies Soderag | 100,00 | 100,00 |
Proparco | 84,79 | 84,79 |
Sogefom | 58,69 | 58,69 |
Fisea | 100,00 | 100,00 |
Expertise France | 100,00 | 100,00 |
Companies accounted for by the equity method Société Immobilière de Nouvelle Calédonie | 50,00 | 50,00 |
Banque Socredo | 35,00 | 35,00 |
Non-controlling interests:
Non-controlling interests are immaterial with regard to the Group’s financial statements, either separately or cumulatively.
In thousands of euros | % of control and vote held by noncontrolling interests | 30/06/2024 Share of net income | Share of equity (including income) | % of control and vote held by noncontrolling interests | 31/12/2023 Share of net income | Share of equity (including income) |
Proparco Other subsidiaries | 15,21% | 4 816 473 | 162 764 4 658 | 15,21% | -1 090 10 | 160 720 4 185 |
Total non-controlling interests | 5 289 | 167 422 | -1 080 | 164 905 | ||
Total Group share | 230 995 | 9 291 127 | 371 271 | 8 990 281 |
Interests in joint arrangements and associates have a negligible impact on the financial statements of AFD Group.
3.1.2. Consolidation principles and methods
The following consolidation methods are used:
o Full consolidation
This method applies to subsidiaries over which AFD has exclusive control. Such exclusive control is determined by the power to govern the financial and operating policies of the subsidiary. The Group controls an entity when the following three conditions are met:
i. The Group has power over the entity (ability to direct its relevant activities, i.e. those that have a significant impact on the entity’s returns), through the holding of voting rights or other rights; and
ii. The Group is exposed or has rights to variable returns as a result of its ties with the entity; and
iii. The Group has the ability to exercise its power over the entity in such a way as to affect the amount of returns it obtains.
The consolidation method consists of incorporating all the financial statements item by item, with recognition of the rights of “minority shareholders”. The same process is used for income statements.
The following four companies are consolidated:
- The Société de promotion et de participation pour la coopération économique (Proparco), created in 1977.
Proparco’s status change from a credit institution to a finance company became effective on 25 May 2016 on receipt of notification from the ECB.
At 30 June 2024, the company’s share capital totalled €1,353M and AFD’s equity investment was 84.79%.
- The Société de développement régional Antilles-Guyane (Soderag), of which AFD took control in 1995 at the behest of the French State, and was liquidated since 1998 after it lost its licence to operate as a credit institution.
At 30 June 2024, this company’s share capital amounted to €111.9M. It is 100% owned by AFD.
- The Société de gestion de fonds de garantie Outre-mer (Sogefom), whose shares AFD purchased, and which were held by the Institut d’émission d’Outre-mer (IEOM), on 12 August 2003, following the request from the Minister for the Economy, Finance and Industry and the Minister for French Overseas Departments and Collectivities.
At 30 June 2024, this company’s share capital amounted to €1.1M. It is 58.69% owned by AFD.
- The Fonds d’investissement et de soutien aux entreprises en Afrique (Fisea) was created in April 2009. This simplified joint stock company (société anonyme par actions simplifiée) with a share capital of €350.0M at 30 June 2024 is wholly-owned by AFD. Fisea is managed by Proparco.
- Expertise France, of which AFD took control on 1 January 2022 following the publication of the AFD/Expertise France strategic project for an extended group to serve France’s development policy. This simplified joint stock company (société anonyme par actions simplifiée) with a share capital of €829K is wholly-owned by AFD.
o Equity method
Companies over which AFD Group has significant influence are accounted for by the equity method. Significant influence means the power to participate in the financial and operating policy decisions of the subsidiary but without having control or joint control over them. It is usually evidenced by (i) representation on the executive or supervisory bodies, (ii) participation in policy-making processes, or (iii) material transactions between the companies. At 30 June 2024, this method was used for two companies in which AFD directly or indirectly holds an equity investment of between 20% and 50% and over which significant influence may be proven: Société immobilière de Nouvelle Calédonie (SIC) and Socredo.
The consolidation method consists of measuring the equity investment by using the company’s net position and calculating the share of its income restated for reciprocal transactions according to the equity investment held in its share capital.
o Comments on other companies
AFD also has equity investments in a number of companies over whose management it has no significant influence. Through their equity investments, either directly or through investment funds, and through their lending activities, AFD Group subsidiaries aim to contribute to the economic and social development of disadvantaged regions. In no case will the acquisition of control of the entities be pursued. These companies are not consolidated, either globally or using the equity method, with regard to the normative analyses carried out by the Group on the notion of control and materiality. They are recorded under “Financial assets at fair value through profit or loss” or “Financial assets at fair value through other comprehensive income”.
3.1.3. Restatement of transactions
Balance sheet balances and transactions, income and expenses resulting from intra-group transactions are eliminated in the preparation of the consolidated financial statements from the date of acquisition of control. Gains arising from transactions with equity-accounted companies are eliminated by offsetting equity method investments to the extent of the Group’s interest in the entity. Losses are eliminated in the same manner but only when they do not represent an impairment loss.
3.1.4. Business combinations
Business combinations are accounted for using the acquisition method, in accordance with IFRS 3 revised.
The consideration paid is determined at the fair value, on the acquisition date, of the assets delivered, the liabilities incurred and the equity instruments issued in exchange for control of the acquired company.
Any earnouts are included in the acquisition cost at their estimated fair value on the acquisition date and revalued at each closing date, with subsequent adjustments recorded in profit or loss if the earnout meets the definition of a debt security.
The identifiable assets, liabilities and contingent liabilities of acquired entities are recorded at their fair value on the acquisition date.
Contingent liabilities of the acquired entity are only recognised in the consolidated balance sheet if they are representative of a present obligation at the date of the business combination and their fair value can be reliably estimated.
The costs directly attributable to the business combination constitute a separate transaction and are recorded in profit or loss.
Goodwill corresponds to the difference between (i) the acquisition cost of the entity, noncontrolling interests and the fair value of the share previously held, and (ii) the revalued net asset. If it is positive, it is recorded as an asset in the consolidated balance sheet under “Goodwill”; in the event of a negative difference, it is immediately taken to profit or loss. As goodwill is not taxable, no deferred taxes calculation is made.
The analyses required for the initial assessment of these items and any amendments thereto can be made within a period of 12 months from the acquisition date.
Goodwill is recorded in the balance sheet at its historical cost in the reference currency of the acquired subsidiary and translated on the basis of the official exchange rate at the closing date. It is regularly reviewed by the Group and tested for impairment at least once a year and whenever there is an indication of impairment.
When the recoverable value of the underlying asset, defined as the higher of the market value and the value in use of the entity concerned, is lower than its carrying amount, an irreversible impairment of goodwill is recorded in profit or loss.
The carrying amount of goodwill from associates is included in the equity-accounted value.
3.2. Accounting principles and methods
AFD’s consolidated financial statements are prepared using accounting policies applied consistently across all of the periods presented in the consolidated financial statements and applicable in line with the Group’s principles by entities consolidated by AFD.
The main appraisal and presentation rules used in preparing the financial statements of Agence Française de Développement at 30 June 2024 are described below.
3.2.1. Conversion of foreign currency transactions
The financial statements are denominated in euros, AFD’s functional currency.
Monetary assets and liabilities denominated in foreign currencies are converted into the Group’s accounting currency (euros) at the closing rates. Foreign exchange differences are recognised in the income statement.
Non-monetary assets and liabilities in foreign currencies may be recorded at historic cost or fair value. Non-monetary assets denominated in foreign currencies are, in the first case, converted at the exchange rate on the date of the initial transaction or, in the second case, at the rate applicable on the date on which fair value was determined. Foreign exchange differences relating to nonmonetary assets denominated in foreign currencies and recognised at fair value are recognised in profit or loss when the asset is classified as “financial assets at fair value through profit or loss” and in other comprehensive income when the asset is classified as “financial assets at fair value through other comprehensive income”.
3.2.2. Use of estimates
Some items recognised in the consolidated financial statements in accordance with the accounting policies and principles involve the use of estimates made on the basis of available information. These estimates are mainly used for the fair value measurement of financial instruments, impairments and provisions.
The use of estimates notably concerns:
- The assessment of losses expected at 12 months or maturity in application of the second section of IFRS 9;
- Provisions recognised as balance sheet liabilities (provisions for employee benefits, litigation, etc.);
- Some financial instruments that are valued using complex mathematical models or by discounting probable future cash flows.
3.2.3. Financial instruments
IAS 32 defines a financial instrument as any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.
Financial assets and liabilities are recognised in the financial statements in accordance with the provisions of IFRS 9 as adopted by the European Union.
Accordingly, financial assets are classified at amortised cost, at fair value through other comprehensive income or at fair value through profit and loss, depending on the contractual characteristics of the instruments and the business model at the time of initial recognition. Financial liabilities are classified at amortised cost or at fair value through profit and loss.
AFD Group continues to apply the provisions of IAS 39 on hedging while awaiting the future provisions on macro-hedges.
Financial assets
Classification and measurement of financial assets
Upon initial recognition, financial assets are measured at their fair value as defined in IFRS 13 and are classified in the Group’s balance sheet in one of three categories (amortised cost, fair value through other comprehensive income or fair value through profit and loss), as defined in IFRS 9. Purchases/sales of financial assets are recognised at the completion date. The accounting classification defines the way in which the financial assets are subsequently measured. This classification depends on the characteristics of their contractual flows and the way in which the entity manages its financial instruments (business model).
• The contractual characteristics (“Solely Payments of Principal & Interests” or “SPPI” test)
Contractual cash flows which fall into the “Solely payments of principal & interests” category are likened to a basic loan agreement for which interest is paid essentially in consideration of the time value of the money and the credit risk.
The interest may also however contain consideration for other risks (liquidity risk, for example) and charges (admin charges, for instance) for holding the financial asset for a certain period. The interest may include a margin which is in keeping with a basic loan agreement.
However, when the contractual arrangements expose the contractual cash flows to risks or volatility which are not commensurate with a basic loan agreement, for example exposure to variations in the price of equities or goods, the contractual cash flows are not solely payments of principal and interests and the contract is therefore recognised at fair value through profit and loss.
• The management model
The management model defines how the instruments used to generate cash flows are managed.
The management model is identified at portfolio level, and not instrument by instrument, primarily by analysing and observing:
- The performance reports submitted to the Group’s Executive Management;
- The compensation policy for portfolio managers;
- Completed and anticipated asset sales (size, frequency, etc.).
Based on the criteria observed, the three management models for the classification and measurement of financial assets are:
- The collection only model for contractual cash flows of financial assets;
- The model based on the collection of contractual cash flows and the sale of financial assets;
- And any other model, notably the transfer only model.
The recognition method for financial assets resulting from the analysis of the contractual clauses and the qualification of the management model is presented in the diagram below:
a) Debt securities at amortised cost
Debt securities are classified at amortised cost if the following two criteria are met: the contractual cash flows only constitute payments of the principal and interest on the principal and the management model is qualified as collection only. This category of financial assets includes:
ü Loans and receivables
Loans and receivables are initially booked at market value plus transaction costs. In general, this is the amount originally paid (including related loans). After initial recognition, loans and receivables are measured at amortised cost based on the effective interest rate.
In accordance with IFRS 9, loans and receivables are impaired upon initial recognition, on the basis of a collective provisioning. They may also be subject to individual impairment, if there is a default event occurring after the loan was put in place, which has an impact on the estimated future cash flows of the assets and thus, likely to generate a measurable loss. These impairments are determined by comparing discounted cash flows to carrying amount.
ü Securities at amortised cost
This category includes debt securities whose contractual characteristics are SPPI and for which the management model is qualified as “collection”.
They are recognised initially at market value plus transaction costs and then at amortised cost using the effective interest method, which includes the amortisation of premiums and discounts. Interest accrued on coupons that are not yet due are included at their balance sheet value under IFRS.
These financial assets are subject to impairment under the conditions described in the paragraph below “Impairment of financial assets at amortised cost and at fair value through other comprehensive income”.
b) Debt securities at fair value through other comprehensive income
Debt securities are classified at fair value through other comprehensive income if the following two criteria are met: the contractual cash flows are solely comprised of payments on principal and interest on the principal and the management model is qualified as “collection and sale”.
This category essentially corresponds to fixed income and fixed maturity securities that AFD may have to sell at any time, particularly securities held as part of its asset/liability management.
These financial assets are initially measured at their fair value plus transaction costs. They are subsequently measured at fair value and changes in fair value are recorded in other comprehensive income that may be recycled. They are also subject to a calculation of expected credit risk losses on the same terms as those applicable to debt securities at amortised cost (Note 5 “Financial instruments at amortised cost”).
Interest is recorded as income using the effective interest method.
Upon disposal, changes in value previously recognised in other comprehensive income will be transferred to the income statement.
c) Debt securities at fair value through profit and loss
This category includes debt securities that do not comply with the SPPI criteria:
ü Equity investment in investment funds and direct equity investments with put options and other debt securities (e.g. UCITS, etc.)
The characteristics of the contractual flows are such that these do not pass the SPPI test, therefore they cannot be measured at amortised cost.
In line with its procedures, AFD classifies its financial assets using two primary criteria: assets listed on a market and unlisted assets.
Listed assets are divided into two subgroups, those listed on an “active” market, an attribute that is appraised according to objective criteria, or those listed on an inactive market. Assets listed on an “active” market are automatically classified as fair value level 1 according to IFRS 13. Assets listed on an “inactive” market are classified as fair value level 2 or 3, depending on the valuation method used. When there are direct or indirect observable data used for the valuation, the asset is classified as fair value level 2 according to IFRS 13.
When there are no such data or those data are not “observable” (isolated observation, without recurrence), the asset is classified as fair value level 3, just like the unlisted assets. All unlisted assets are classified as fair value level 3 and are evaluated primarily using two methods, the proportionate share of the re-evaluated net asset based on the latest financial statements transmitted by the concerned entities (< six months) and the historic cost for AFD’s real estate subsidiaries.
Valuations are reviewed every six months. In the event of any changes to the parameters that could be cause for changes to the fair value classification level, the Group Risk Department decides to propose the change in classification that is subject to approval by the Group Risk Management Committee.
ü Loans
Some loan agreements have an early repayment clause, the contractual amount of which corresponds to a settlement equal to the cost of unwinding an associated hedge swap. The early repayment flows of these loans are considered to be non-SPPI if they do not purely reflect the effect of changes in the reference interest rates.
As a result, AFD Group has identified a loan portfolio which is measured at fair value through profit and loss. The loans are therefore subjected to a valuation exercise based on the methodology for discounting future flows, with a discount rate specific to each loan.
ü Foreign exchange or interest rate derivatives used in economic hedging
These are derivatives that do not meet the definition of hedge accounting under IAS 39. These assets and liabilities are measured at fair value in the income statement. The change in fair value is recorded in the income statement under “net gains and losses on financial instruments at fair value”. The fair value of the foreign exchange derivatives entered into by AFD frequently includes a hedge of the future margin on loans denominated in foreign currencies. The foreign exchange income from related assets recognised in income or expenses on other activities partially offsets this impact. The amount initially recorded on the balance sheet for a derivative measured at fair value is equal to the consideration given or received, e.g. the premium on an option or commission received. Subsequent valuations are generally calculated based on discounted future cash flows using a zero-coupon curve.
Finally, the last items to be included under this heading are assets and liabilities designated at fair value through profit and loss and the impacts stemming from credit risk (Credit Valuation Adjustment/Debit Valuation Adjustment).
d) Equity instruments
In principle, equity instruments are recognised at fair value through profit and loss. However, there is the option to designate equity instruments at fair value through other comprehensive income not to be recycled on profit or loss. This choice is made on a case-by-case basis for each instrument and is irrevocable.
When the option to designate an equity instrument at fair value through other comprehensive income is chosen:
- Only the dividends that do not represent the recovery of part of the cost of the investment are recognised in the income statement under “Net gains or losses on financial assets at fair value through other comprehensive income”;
- Changes in the fair value of the instrument are only recognised in other comprehensive income and are not subsequently transferred to profit or loss. Consequently, if the investment is sold, no profits or losses are recognised in the income statement, and the gains and losses are reclassified in consolidated reserves.
The IFRS 9 general approach of impairment, does not apply to equity instruments.
e) Reclassification of financial assets
The reclassification of financial assets takes place only in exceptional cases brought about by a change in business model.
A change in the management model for financial assets involves changes in the way the activity is managed operationally, systems, etc. (acquisition of a business, end of a business, etc.) with the accounting consequence of a reclassification of all financial assets in the portfolio when the new management model is effective.
Financial liabilities
The categories of financial liabilities have not been modified by IFRS 9, and are consequently classified in two accounting categories:
- Financial liabilities at fair value through profit and loss by nature or by option are assessed at fair value, and changes in fair value are recognised in the income statement;
- Financial liabilities at amortised cost are initially measured at fair value and subsequently at amortised cost according to the effective interest rate method – there is no change in the amortised cost method compared to IFRS 9.
Financial liabilities measured at fair value through profit or loss under the fair value option are measured at fair value through profit or loss for changes in fair value, with the effect of remeasuring own credit risk to be recognised directly in non-recyclable other comprehensive income.
It is still necessary to separate embedded derivatives from financial liabilities, where applicable.
Financial liabilities within AFD Group (excluding derivative instruments) are measured at amortised cost and correspond to:
- Debt securities in issue which are first recognised at fair value less transaction costs and then measured at amortised cost using the effective interest rate method. Call premiums (difference between the redemption price and par value of securities) and positive or negative share premiums (difference between the issue price and par value of securities) are spread over the maturity of the borrowings using an actuarial method;
- Subordinated debt: in 1998, an agreement was reached with the French State whereby part of AFD’s debt to the French Treasury, corresponding to drawdowns between 1 January 1990 and 31 December 1997, was converted into subordinated debt. This agreement also provides for the general rescheduling of the debt’s repayment period over 20 years with a ten-year grace period, with any new tranche of borrowings after 1 January 1998 recognised as subordinated debt (with a repayment period scheduled over 30 years and a ten-year grace period).
In accordance with riders No. 1 of 19 March 2015 and No. 2 of 24 May 2016, on the initiative of the French State and as per the third stage of additional financing of €280.0M, there was a drawdown of €160.0M on this last tranche of RCS (Resources with special conditions) in September 2017. The drawdown of the balance of €120M took place in September 2018, thereby reaching the €840M total for the 2015-2018 period.
In 2023, AFD received €150M in resources with special conditions. A capital increase of €150M was carried out by conversion of this RCS, in accordance with the order of 9 May 2023 published in the Official Journal.
In 2024, AFD received €150M in resources with special conditions. A capital increase of €150M was carried out by conversion of this RCS, in accordance with the order of 31 May 2024 published in the Official Journal.
Derecognition of financial assets and liabilities
AFD Group derecognises all or part of a financial asset when:
- The contractual rights to the cash flows linked to the asset expire; or
- AFD transfers the contractual rights to receive the cash flows from the financial asset, and transfers almost all the risks and benefits of the ownership of this asset; or
- AFD retains the contractual rights to receive the cash flows from the financial asset, but bears the contractual obligation to pay these cash flows to one or several entities.
When derecognising a financial asset in its entirety, the difference between the carrying amount of that asset and the amount of consideration received should be recognised in the income statement among the gains or losses on disposal corresponding to the financial asset transferred.
AFD Group derecognises a financial liability if and only if it has expired, i.e. when the obligation stipulated in the contract has legally expired, lapsed, been cancelled, or reached expiry.
When derecognising a financial liability in its entirety, the difference between the carrying amount of that liability and the consideration paid must be recognised in the income statement as an adjustment to the interest expense account corresponding to the derecognised financial liability.
Financial hedging derivatives
AFD Group has decided not to apply the third phase of IFRS 9 on “hedge accounting”, since AFD applies fair value hedge accounting as defined in IAS 39. This involves a hedge of the exposure to changes in fair value of an asset or liability recognised on the balance sheet. Changes in the fair value stemming from the hedged risk are recorded in the income statement under “Net gains and losses on financial instruments at fair value through profit or loss”, alongside the change in the fair value of the hedging instruments.
Interest-rate swaps and cross-currency swaps (fixed and variable rates) are used by AFD to shield it from interest and foreign exchange risk.
Hedge accounting is applicable if the effectiveness of the hedging relationship is proven and if the correlation between the effective changes in value of the item hedged and the hedging instrument is between 80% and 125%.
The revaluation of the hedged item is booked either in accordance with the classification of the hedged item, in the case of a hedging relationship covering an identified asset or liability, or under “Revaluation adjustments on portfolios hedged against interest rate risk” in the case of a portfolio hedging relationship.
If the hedge does not meet the effectiveness requirements of IAS 39, the hedging derivatives are transferred to “Financial assets at fair value through profit or loss” or to “Financial liabilities at fair value through profit or loss” and recorded in accordance with the principles applicable to this category.
As for non-zero value swaps involved in a fair value hedge, the accumulated total of changes in fair value of the hedged component that are not zero is spread out over the remaining term of hedged items.
Impairment of financial assets at amortised cost and at fair value through other comprehensive income
In accordance with IFRS 9, the impairment model for credit risk is based on the expected credit losses (ECL). Impairments are recognised on debt securities measured at amortised cost or fair value through other comprehensive income to be recycled in profit or loss that can be recycled, as well as on loan commitments and financial guarantee contracts that are not recognised at fair value.
General principle
AFD Group classifies financial assets into three separate categories (also called “stages”) according to the change, from the origin, of the credit risk associated with the asset. The method used to calculate the provision differs according to which of the three stages an asset belongs to.
These are defined as follows:
- Stage 1 is for “performing” assets, for which the counterparty risk has not increased since they were granted. The provision calculation is based on the expected loss within the following 12 months;
- Stage 2 groups together performing assets for which a significant increase in credit risk has been observed since initial recognition. The method of calculating the provision is statistically based on expected loss at maturity;
- Stage 3 is for assets for which there is an objective impairment indicator (identical to the notion of default currently used by the Group to assess the existence of objective evidence of impairment). The method of calculating the provision is based on expected loss at maturity, as determined by an expert.
Concept of default
The transfer to stage 3 (which meets the definition of “incurred loss” under IAS 39) is linked to the notion of default which is not explicitly defined by the standard. The standard associates the rebuttable presumption of 90 days past due with this concept. It states that the definition used must be consistent with the entity’s credit risk management policy and must include qualitative indicators (i.e. breach of covenant).
Thus, for AFD Group, “stage 3” under IFRS 9 is characterised by the combination of the following criteria:
- Definition of a doubtful third party according to AFD Group; - Use of the default contagion principle.
Third parties with arrears of over 90 days, or 180 days for local authorities, or a proven credit risk (financial difficulties, financial restructuring, etc.) are downgraded to “doubtful” and the doubtful contagion character is applied to all financing for the third party concerned.
The definition of default is aligned with that of the Basel framework, based on a rebuttable presumption that the status of default is applied after no more than 90 days of non-payment. This definition takes into account the EBA guidelines of 28 September 2016, in particular with regard to applicable thresholds in the event of non-payment, and probationary periods.
Significant increase in credit risk
The significant increase in credit risk can be measured individually or collectively. The Group examines all the information at its disposal (internal and external, including historic data, information about the current economic climate, reliable forecasts about future events and economic conditions).
The impairment model is based on the expected loss, which must reflect the best information available at the closing date, adopting a forward looking approach.
The internal ratings calibrated by AFD are by nature forward-looking, taking into account:
- Forward-looking elements on the counterparty’s credit quality: anticipation of adverse medium-term changes in the counterparty’s position; - Country risk and shareholder support.
To measure the significant increase in credit risk of a financial asset since its entry into the balance sheet, which involves it moving from stage 1 to stage 2 and then to stage 3, the Group has created a methodological framework which sets out the rules for measuring the deterioration of the credit risk category. The methodology selected is based on a combination of several criteria, including internal ratings, inclusion on a watchlist and the refutable presumption of significant deterioration because of monies outstanding for more than 30 days.
According to this standard, if the risk for a particular financial instrument is deemed to be low at the closing date (a financial instrument with a very good rating, for example), then it can be assumed that the credit risk has not increased significantly since its initial recognition. This arrangement has been applied for debt securities recognised at fair value through other comprehensive income that may be recycled and at amortised cost. For the purposes of stage 1 and 2 classification, counterparties with a very good rating are automatically classified as stage
1.
Measuring expected credit losses (ECL)
Expected credit losses are estimated as the discounted amount of credit losses weighted by the probability of default over the next 12 months or over the asset’s lifetime, depending on the stage.
Based on the specificities of AFD Group’s portfolio, work was carried out to define the methodological choices for calculating expected credit losses for all of the Group’s assets eligible for recognition at amortised cost or at fair value through other comprehensive income, in line with stage 1 of IFRS 9. The Group’s chosen calculation method was thus based on internal data and concepts, and also adaptations of external restated transition matrices.
Calculation of the expected credit losses (ECLs) is based on three key parameters: probability of default (PD), loss given default (LGD) and exposure at default (EAD), bearing in mind the amortisation profiles.
In addition, IFRS 9 parameters now take into account the economic environment expected over the projection horizon (forward-looking). AFD Group takes forward-looking information into account when measuring expected credit losses.
The adjustment of parameters to the economic environment is based on the upward modulation of provisions according to macroeconomic projections to define groups of countries (i.e. list of non-sovereign counterparties in the portfolio in these countries). The main criteria used are:
- The IMF’s GDP growth outlook;
- The outlook of rating agencies;
- The degree of debt sustainability published by the World Bank.
Cross-referencing these three indicators (with weightings for each indicator value) leads to the definition of two lists of countries corresponding to two distinct scenarios, which are submitted for expert review at Group level.
These expectations are taken into account in collective provisions by applying multiplier factors to collective provisions, the aim of which is to add an additional buffer of provisions in regions where a deterioration in economic conditions is anticipated. The final income is obtained by weighting the incomes of each of the two scenarios.
Probability of default (PD)
The probability of default on a loan can be estimated over a given time span. This probability is modelled:
- From risk segmentation criteria;
- Over a 12-month time period (noted PD 12 months) for the calculation of the expected losses for assets in stage 1; and
- Over the entire duration of loan repayments for stage 2 assets (known as the PD maturity curve, or lifetime PD).
The PD matrix for non-sovereign loans is supplemented in order to favour internal data when available (portfolio with a non-investment grade rating).
Loss given default (LGD)
Loss given default (LGD) is modelled for assets in all three stages. AFD Group has taken into account the collateral valuation in the LGD modelling.
In order to take into account AFD's business model and its recovery capacity, AFD Group relies on the observation of recovery on historical files that have been resolved (i.e. with extinction of the position after repayment and/or transfer to losses).
Exposure at default (EAD)
Exposure at default reflects the amount of debt outstanding at the time of default and thus takes future cash flows and forward looking factors into account. As such, the EAD takes into account:
- The contractual amortisation of the principal;
- Elements of drawdowns of lines recognised off-balance sheet; - Any early repayments.
Financial asset restructuring
Restructuring for the borrower’s financial difficulties results in a change to the terms of the initial contract to allow the borrower to contend with the financial difficulties it is having. If the restructuring does not result in derecognition of the assets and the changes in terms are such that the present value of these new expected future flows at the original effective interest rate of the asset is lower than its carrying amount, a discount must be recognised under “Cost of credit risk” to bring the carrying amount back to the new present value.
Gains or losses on financial instruments
Gains or losses on financial instruments at fair value through profit or loss
Income from financial instruments recognised at fair value through profit and loss is recognised under this heading, and mainly includes:
- Dividends, other revenue and gains and losses realised;
- Changes in fair value;
- The impact of hedge accounting.
Gains or losses on financial instruments at fair value through other comprehensive income
Income from financial instruments recognised at fair value through other comprehensive income is recognised under this heading, and includes:
- Dividends and other revenue;
- Gains and losses realised on financial assets at fair value through other comprehensive income that may be recycled.
3.2.4. Commitments to buy out non-controlling interests
In 2014, 2020 and again in 2023 during the Proparco capital increase, the Group made commitments to buy back the equity investments of Proparco’s minority shareholders.
The strike price is defined contractually depending on the restated net asset value on the exercise date.
In the half-year financial statements at 30 June 2024, these commitments reflect a debt of €125M to the minority shareholders of Proparco, with a corresponding entry of a decrease in “noncontrolling interests” of €138M and an increase in “Consolidated reserves – Group Share” of €13M. The closure of the put window granted in 2020 is scheduled for 2030 and the one related to the put granted in 2023 is scheduled for 2033.
3.2.5. Fixed assets
Fixed assets appearing on AFD’s balance sheet include property, plant and equipment and intangible assets. Fixed assets are recorded at their acquisition cost plus directly similar expenses.
If a fixed asset consists of a number of items that may be regularly replaced and have different useful lives, each item is booked separately according to its own depreciation table. This itemby-item approach has been used for head office. Depreciation and amortisation periods have been estimated on the basis of each item’s useful life:
| Title | Depreciation period |
1. | Land | Non-depreciable |
2. | Structural systems | 40 years |
3. | Building envelope | 20 years |
4. | Technical building services, fixtures and fittings | 15 years |
5. | Sundry fittings | 10 years |
Other property, plant and equipment are depreciated using the straight-line method:
ü Office buildings in the French Overseas Departments and Collectivities are depreciated over 15 years;
ü Residential buildings are depreciated over 15 years;
ü Fixtures, fittings and furnishings are depreciated over five or ten years; ü Equipment and vehicles over two to five years.
With regard to intangible assets, software is amortised according to its type: five years to eight years for management software and two years for office automation tools.
Depreciation and amortisation are calculated using the straight-line method, according to the expected useful period of the asset; its residual value is deducted from the depreciable base. At each closing date, fixed assets are measured at their amortised cost (cost minus total amortisation and any loss of value). When applicable, the useful lives and residual values are adjusted in the accounts.
Leases
Leases, as defined by IFRS 16 “Leases”, are recorded in the balance sheet, leading to the recognition of:
- An asset which corresponds to the right of use of the leased asset over the lease duration; - A debt in respect of the payment obligation.
Measuring the right of use in leases
At the date on which a lease comes into effect, the right of use is measured at its cost and includes:
- The initial lease debt, to which is added, if applicable, advance payments made to the lessor, net of any benefits received from the lessor;
- If applicable, the initial direct costs incurred by the lessee in signing the lease. These are
costs that would not have been incurred if the contract had not been signed;
- The estimated costs to rehabilitate and dismantle the rented asset according to the lease terms.
After the initial recognition of the lease, the right of use is measured according to the cost method, involving the recognition of linear depreciation and impairment in accordance with the provisions of IFRS 16 (the depreciation method reflecting the way in which the future economic benefits will be consumed).
Measuring the right of use of the assets
On the date a lease takes effect, the lease debt is recognised for an amount equal to the discounted value of the rent over the lease period. The amounts taken into account in respect of rent when measuring the debt are:
- The fixed lease payments less incentive benefits received from the lessor;
- The variable lease payments based on an index or rate;
- The payments to be made by the lessee in respect of a residual value guarantee;
- The price paid to exercise a purchase option that the lessee is reasonably certain to exercise;
- The penalties to be paid in the event of the exercise of a cancellation option or the nonrenewal of the lease.
The leases signed by AFD Group do not include a guaranteed value clause for rented assets.
The change in the debt related to the lease involves:
- An increase up to the interest rate expenses set by applying the discount rate to the debt; - And a reduction in fixed lease payments.
The financial expenses for the period relating to the lease debt are recorded under “Interest and similar expenses on transactions with credit institutions”.
In the income statement, the depreciation charge for the right of use of the asset and the finance expense relating to the interest on the lease liability partly replace the operating expense previously recognised for lease payments, but are presented under two different headings (depreciation charge under depreciation and amortisation, interest expense under other interest and related expenses, and the lease payment under other administrative expenses).
The lease debt is estimated again in the following situations:
- Review of the lease period;
- Modification related to the assessment of the reasonably certain exercise of an option (or not);
- New estimate related to the guarantees of residual value; - Review of the rates or indexes on which the rent is based.
3.2.6. Provisions
Provisions for sovereign outstandings
The agreement “on the reserve account" on 8 June 2015 between AFD and the French State for an indefinite term, determines the mechanism for creating provisions for hedging the sovereign risk and the principles for using the provisions recognised thereby.
This reserve account is intended to (i) fund the provisions that AFD would have to recognise in case a sovereign borrower defaults, (ii) serve normal unpaid interest, and (iii) more generally, help compensate AFD in the event of debt cancellation for sovereign loans.
The balance of this account cannot be less than the amount required to establish collective provisions on performing or restructured loans. This calibration is calculated using estimated losses expected across the sovereign loan portfolio (losses at one year, losses at termination, regulatory requirements on provisions or any other data available to AFD that can be used to anticipate the sovereign loan portfolio’s risk profile).
Non-performing sovereign outstanding loans are provisioned. Furthermore, this depreciation is neutralised by deduction from the reserve account.
Net provisions for reversals of provisions are recorded in Net Banking Income.
Provisions on financing and guarantee commitments
Financing and guarantee commitments that are not recognised at fair value through profit and loss and that do not correspond to derivatives are subject to provisions according to the principles defined by IFRS 9.
Provisions for subsidiary risk
As part of the liquidation of Soderag, AFD, as liquidator, sold Soderag’s loan portfolio to the three departmental credit companies of the Antilles-Guyane region of which it was the reference shareholder (Sodega in Guadeloupe, Sodema in Martinique and Sofideg in French Guiana). AFD granted cash lines to each of the three subsidiaries for the purchase of these portfolios and, at the same time, guaranteed its subsidiaries on the underlying loans, thereby sub-participating in risks and cash (protocols signed with each of the subsidiaries in October 1998).
The provisions relating to these transactions are provisions for liabilities insofar as they cover the risks related to the guarantees given.
Provision for employee benefits – Post-employment benefits
Defined benefit plans
Ø Retirement and early retirement commitments
Immediate retirement and early retirement commitments are all transferred to an external insurance company.
Deferred retirement and early retirement commitments are kept by AFD and covered by specific insurance policies. They are valued in accordance with the provisions of contracts signed by AFD and the insurer.
At 30 June 2024, the discount rate observed was 3.45%.
Ø Retirement bonuses and the financing of the health insurance plan
AFD pays retirement bonuses (IFC) to its employees. It also contributes to the cost of its retired employees’ health insurance plans.
At 30 June 2024, the discount rate observed was 3.8% (compared to 3.4% in 2023), so it was not necessary to update the amount of employee benefits compared to end-December 2023. Indeed, at the AFD Group level, the value of employee benefits is updated in the event of a change in the discount rate (between 31/12/N and 30/06/N+1) greater than 0.50%.
3.2.7. Deferred taxes
To produce the consolidated financial statements, deferred tax was calculated on a per-company basis while adhering to the rule of symmetry and using the comprehensive liability method. This method was applied to temporary differences between the carrying amount of assets and liabilities and their tax base.
AFD Group recognises deferred tax mainly over the costs and expenses on the unrealised gains and losses of the equity securities held by Proparco and Fisea, impairment recognised by Proparco on loans at amortised cost and on unrealised gains and losses on loans recognised at fair value through profit and loss by applying the current rates.
3.2.8. Segment information
In application of IFRS 8 “Operating Segments”, AFD has identified and reported on a single operating segment for its lending and grant activity, based on the information provided internally to the Chief Executive Officer (CEO), who is AFD’s chief operational decision-maker.
This lending and grant activity is the Group’s main activity, falling within the scope of its public service role of financing development assistance.
With regard to AFD Group's activity, which is mainly carried out outside mainland France, the NBI in France is not significant.
3.2.9. Principles of the cash flow statement
The cash flow statement analyses changes in the cash position resulting from operating, investment and financing transactions from one financial year to the next.
Agence Française de Développement’s cash flow statement is presented in accordance with ANC Recommendation No. 2017-02 respecting the format of summary statements for institutions in the banking sector drawn up in accordance with international accounting standards.
It is prepared using the indirect method, with net income for the financial year restated for nonmonetary items: provisions for the depreciation of property, plant and equipment and the amortisation of intangible assets, net allocations to provisions and other items not involving cash disbursement, such as accrued liabilities and income.
Cash flows arising from operating, investment and financing transactions are calculated as the difference between items in the accounts for the preceding and current financial years.
Cash flow includes cash funds and on-demand deposits held at the Banque de France and with credit institutions.
3.3. Notes to the financial statements at 30 June 2024
3.3.1. Notes to the balance sheet
Note 1 – Financial assets and liabilities at fair value through profit or loss
30/06/2024 | 31/12/2023 | ||||||
In thousands of euros | Notes | Assets | Liabilities | Notional/ Outstanding | Assets | Liabilities | Notional/ Outstanding |
Interest rate derivatives Foreign exchange derivatives Hedging derivatives of non-SPPI loans/securities Loans and securities that do not meet SPPI criteria CVA/DVA/FVA | 1.2 | 3 799 43 378 40 477 | 60 277 047 46 599 | 173 813 5 118 567 1 029 496 | 6 048 63 879 57 926 4 398 814 32 | 396 197 200 34 256 - 455 | 184 824 5 211 014 1 068 519 4 328 156 - |
3 753 468 | - | 3 708 422 | |||||
92 | 560 | - | |||||
Total | 3 841 213 | 324 266 | 10 030 298 | 4 526 700 | 232 307 | 10 792 513 |
Note 1.1 – Foreign exchange and interest rate derivatives
Foreign exchange and interest rate derivatives are measured at fair value through profit and loss and are therefore treated as financial assets held for trading.
Under IFRS, a derivative is always presumed to be held for trading, unless there is documented evidence of the hedging intention and the derivative is eligible for hedge accounting. At AFD, this category covers the hedging instruments not eligible for hedge accounting or so-called “natural” exchange rate hedging.
Note 1.2 – Loans and securities that do not meet SPPI criteria
In thousands of euros | Notes | 30/06/2024 | Notional/ Outstanding | 31/12/2023 | Notional/ Outstanding |
Loans to credit institutions | 1.2.1 | 547 671 | 554 602 | 582 315 582 297 | 591 184 586 810 |
Performing loans | 547 643 | 554 458 | |||
Non-performing loans | 28 | 144 | 18 | 4 374 | |
Loans to customers | 1.2.1 | 430 928 | 498 592 | 440 551 | 506 114 |
Performing loans | 409 009 | 423 099 | 418 630 | 431 990 | |
Non-performing loans | 21 919 | 75 493 | 21 922 | 74 124 | |
Securities | 2 774 870 | 2 655 228 | 3 375 949 | 3 230 794 | |
Bonds and other fixed-income securities | 1.2.2 | 22 211 | 28 626 | 22 166 | 33 026 |
UCITS | 1 004 785 | 949 322 | 1 622 642 1 726 530 1 537 342 | 1 524 201 1 673 566 1 506 343 | |
Equity investments and other long-term securities | 1.2.3 | 1 747 874 | 1 677 281 | ||
of which equity investments held in investment funds | 1 558 758 | 1 522 638 | |||
of which equity investments held directly with a put option | 189 116 | 154 642 | 189 188 | 167 223 | |
Total | 3 753 468 | 3 708 422 | 4 398 814 | 4 328 092 | |
Note 1.2.1 – Loans that do not meet SPPI criteria
Loan agreements may have an early repayment clause, the contractual amount of which corresponds to a settlement equal to the cost of unwinding the associated hedge swap. Loan contracts may also include a compensation clause indexed to the borrower’s performance. The flows of these loans are not considered as SPPI as they do not only reflect the effect of changes in the benchmark interest rate.
As a result, AFD Group has identified a loan portfolio which is measured at fair value through profit and loss. The loans are therefore subjected to a valuation exercise based on the methodology for discounting future flows, with a discount rate specific to each loan in accordance with the accounting rules applied by the Group.
Note 1.2.2 – Bonds and other long-term securities
Convertible bonds are debt securities for which the contractual flows do not meet SPPI characteristics due to the nature of the flows exchanged, and are consequently assessed at fair value through profit and loss.
Note 1.2.3 – Equity investments
AFD Group aims to encourage private investment in developing countries, mainly via its subsidiaries Proparco and Fisea (Investment and Support Fund for Businesses in Africa). It therefore notably operates through equity investments in investment funds. This activity enables it to multiply the impact of its financing by supporting a large number of companies in other sectors and thus promoting economic growth and the creation of employment-generating businesses.
AFD Group also holds direct equity investments with put options for operational purposes. The contractual flows of these financial assets are not SPPI and are therefore measured at fair value through profit and loss.
Note 1.3 – Equity instruments at fair value through profit and loss
Equity instruments measured at fair value through profit and loss correspond to investments held by AFD for which the classification at fair value through other comprehensive income which may not be recycled has not been selected.
The Group has opted for a classification at fair value through other comprehensive income which may not be recycled for its portfolio of direct equity investments without put options, which make up the majority of the Group’s equity instruments.
Note 2 – Financial hedging derivatives
Note 2.1 - Fair value hedging instruments
In thousands of euros | 30/06/2024 Carrying amount | 31/12/2023 Carrying amount | |
Assets Liabilities | Notional | Assets Liabilities Notional | |
Fair value hedging Interest rate derivatives | 2 451 503 4 100 070 | 63 489 640 | 2 467 657 3 806 431 64 186 799 |
Interest rate and foreign exchange derivatives (cross-currency swaps) | 508 786 457 712 | 17 847 808 | 485 770 582 894 16 109 595 |
Total | 2 960 288 4 557 782 | 81 337 447 | 2 953 426 4 389 326 80 296 394 |
Note 2.2 - Analysis by residual maturity (notional)
The breakdown of the notional amount of hedging derivatives is presented by residual contractual maturity.
In thousands of euros | Less than three months | From three months to one year | From one to five years | Over five years | 30/06/2024 |
Fair value hedging | |||||
Interest rate derivatives | 1 110 330 | 3 611 842 | 15 616 046 | 43 151 422 | 63 489 640 |
Interest rate and foreign exchange derivatives (cross-currency swaps) | 117 980 | 2 489 142 | 10 700 747 | 4 539 938 | 17 847 808 |
Total | 1 228 310 | 6 100 985 | 26 316 793 | 47 691 360 | 81 337 447 |
Control 0
In thousands of euros | Less than three months | From three months to one year | From one to five years | Over five years | 31/12/2023 |
Fair value hedging Interest rate derivatives | 1 355 668 | 3 417 663 | 16 281 844 | 43 131 624 | 64 186 799 |
Interest rate and foreign exchange derivatives (cross-currency swaps) | 5 019 | 978 041 | 10 501 335 | 4 625 200 | 16 109 595 |
Total | 1 360 688 | 4 395 704 | 26 783 179 | 47 756 824 | 80 296 394 |
Note 2.3 – Hedged items
In thousands of euros Interest rate derivatives Loans and receivables due from credit institutions at amortised cost Loans and receivables due from customers at amortised cost Financial assets at fair value through other comprehensive income Interest rate derivatives (currency swaps) Loans and receivables due from credit institutions at amortised cost Loans and receivables due from customers at amortised cost Financial assets at fair value through other comprehensive income | 30/06/2024 | ||||||
Current hedges | Expired hedges | Remeasurement of fair value during the hedging period (incl. hedges that expired over the period) | |||||
Carrying amount | Accrued remeasurement s of fair value hedges | Accrued remeasurements of fair value hedges remaining | Accrued remeasuremen ts of fair value | ||||
19 326 403 -1 930 633 1 145 670 -103 174 16 459 259 -1 795 389 1 721 474 -32 071 | - - - - | -14 111 -87 -1 764 -12 260 | -284 646 -9 072 -270 924 -4 650 | ||||
4 962 206 -68 320 | - | 12 292 | 64 299 | ||||
629 032 -4 902 4 333 174 -63 648 | - - | 841 11 451 | 13 428 50 641 | ||||
- | 230 | - - | 230 | ||||
Total fair value hedging of assets | 24 288 609 -1 998 952 | - | -1 819 | -220 347 | |||
Interest rate derivatives Debt securities in issue at amortised cost Interest rate derivatives (currency swaps) Debt securities in issue at amortised cost | -33 815 834 3 220 355 | 844 -10 730 | 451 777 | ||||
-33 815 834 3 220 355 | 844 -10 730 | 451 777 | |||||
-12 194 558 -30 467 | - | 58 608 | -267 491 | ||||
-12 194 558 -30 467 | - | 58 608 | -267 491 | ||||
Total fair value hedging of liabilities | -46 010 392 3 189 888 | 844 47 879 | 184 286 | ||||
en milliers d'euros Instruments dérivés de taux d'intérêt Prêts et créances sur les établissements de crédit au coût amorti Prêts et créances sur la clientèle au coût amorti Actifs financiers à la juste valeur par capitaux propres Instruments dérivés de taux d'intérêt (swaps de devises) Prêts et créances sur les établissements de crédit au coût amorti Prêts et créances sur la clientèle au coût amorti Actifs financiers à la juste valeur par capitaux propres | 31/12/2023 | ||||||
Couverture existantes | Couverture ayant cessé | Réévaluation de juste valeur sur la période liée à la couverture (y.c cessations de couvertures au cours de la période) | |||||
Valeur comptable | Dont cumul des réévaluations de juste valeur liée à la couverture | Dont cumul des réévaluations de juste valeur liée à la couverture restant à étaler | Dont cumul des réévaluations de juste valeur | ||||
19 124 480 -1 657 492 1 256 686 -94 101 16 808 505 -1 527 491 1 059 289 -35 900 5 221 789 -131 924 728 779 -18 041 4 493 010 -113 524 - -360 | - -55 465 - -14 - -53 454 - -1 997 - -2 219 - 1 790 - -4 009 - - | 1 122 952 63 079 1 029 757 30 115 -37 106 -10 108 -26 602 -396 | |||||
Total de la couverture de juste valeur sur les élèments de l'actif | 24 346 269 -1 789 416 | -57 684 | 1 085 846 | ||||
Instruments dérivés de taux d'intérêt Dettes représentées par un titre au coût amorti Instruments dérivés de taux d'intérêt (swaps de devises) Dettes représentées par un titre au coût amorti | -35 322 231 2 829 245 -35 322 231 2 829 245 -10 420 666 243 065 -10 420 666 243 065 | -50 618 -55 757 -50 618 -55 757 - 7 039 - 7 039 | -1 919 318 -1 919 318 71 813 71 813 | ||||
Total de la couverture de juste valeur sur les élèments du passif | -45 742 897 3 072 310 | -50 618 -48 718 | -1 847 505 | ||||
Note 2.4 – Income resulting from hedge accounting
In thousands of euros | 30/06/2024 | 31/12/2023 | |||
Net income (Income of hedge accounting) | Net income (Income of hedge accounting) | ||||
Change in Change in Ineffective fair value of fair value of portion of hedging hedged hedge instruments items | Change in fair value of hedging instruments | Change in Ineffective fair value of portion of hedged hedge items | |||
Interest rate derivatives | -162 954 156 131 -6 823 | 912 488 | -796 366 | 116 122 | |
Interest rate and foreign exchange derivatives (cross-currency swaps) Other | 201 814 -203 192 -1 378 | -17 784 - | 34 707 - | 16 923 - | |
- | 11 000 11 000 | ||||
Total | 38 859 -36 061 2 798 | 894 704 | -761 659 | 133 045 | |
Note 3 – Financial assets at fair value through other comprehensive income
30/06/2024 | 31/12/2023 | |||
In thousands of euros | Change in fair Carrying value over the amount period | Carrying amount | Change in fair value over the period | |
Debt securities recognised at fair value through equity to be recycled in profit or loss Government paper and equivalent Bonds and other securities Equity securities recorded at fair value through equity not to be recycled in profit or loss Unconsolidated equity investments | 847 396 692 737 154 659 775 496 775 496 | -12 503 -12 700 197 -5 637 -5 637 | 894 775 718 620 176 155 694 825 694 825 | -1 531 -1 074 -457 -30 358 -30 358 |
Total | 1 622 892 -18 140 | 1 589 600 | -31 889 | |
Note 4 – Financial assets and liabilities at fair value measured according to the level of fair value
In thousands of euros | Level 1 | 30/06/2024 IFRS Level Level 2 3 | Total | Level 1 | 31/12/2023 IFRS Level Level 2 3 | Total | ||
Assets/Liabilities Equity instruments at fair value through profit and loss Debt securities that do not meet SPPI criteria Financial assets recorded through equity Hedging derivatives (Assets) Financial liabilities at fair value through profit or loss Hedging derivatives (Liabilities) Derivatives | - 1 627 253 865 498 - - - - | - - 29 615 2 953 426 226 669 4 389 326 124 930 | 1 726 530 1 045 032 694 488 - 5 638 - 2 955 | 1 726 530 2 672 284 1 589 600 2 953 426 232 307 4 389 326 127 885 | ||||
- 1 004 785 817 781 - - | - 1 747 874 - 1 000 809 29 615 775 496 2 960 288 - 322 582 1 684 | 1 747 874 2 005 594 1 622 892 2 960 288324 266 | ||||||
- | 4 557 782 | - | 4 557 782 | |||||
- | 82 426 | 5 319 | 87 745 | |||||
• Sensitivity of the fair value of level 3 instruments
The category of instruments measured at level 3 fair value mainly comprises equity securities.
Valuations using market parameters are very limited within the Group. Sensitivity calculations are therefore not applicable without material sensitivity.
Note 5 – Financial assets measured at amortised cost
In thousands of euros | Notes | 30/06/ On-demand | 2024 At maturity | 31/12/ On-demand | 2023 At maturity |
Debt securities Loans and receivables due from credit institutions | 5.1 | - | 4 353 454 | - | 2 975 130 |
5.2 | 1 775 411 | 11 595 603 | 432 702 | 10 920 610 | |
Loans and receivables due from customers | 5.2 | - | 38 631 693 | - | 38 948 838 |
Total | 1 775 411 | 54 580 750 | 432 702 | 52 844 577 |
Note 5.1 – Debt securities at amortised cost
In thousands of euros | 30/06/2024 | 31/12/2023 | ||
On-demand At maturity | On-demand At maturity | |||
Government paper and equivalent | - | 412 193 | - 443 280 | |
Bonds and other securities | - | 3 952 805 | - 2 546 776 | |
Total | - 4 364 998 | - | 2 990 055 | |
Impairment | - | -11 544 | - -14 925 | |
Total | - 4 353 454 | - | 2 975 130 | |
Note 5.2 – Loans and receivables from credit institutions and customers at amortised cost
In thousands of euros | 30/06/2024 | 31/12/2023 | ||
On-demand At maturity | On-demand | At maturity | ||
Loans to credit institutions at amortised cost Performing loans Non-performing loans Impairment Related loans receivable Valuation adjustments of loans hedged by forward financial instruments | - - - - | 9 032 606 8 829 348 203 258 -197 834 | - - - - | 9 108 434 8 944 859 163 575 -172 500 |
- | 80 619 | - | 158 162 | |
- | -130 108 | - | -115 927 | |
Subtotal | - 8 785 282 | 8 978 169 | ||
Loans to customers at amortised cost Performing loans Non-performing loans Impairment Related loans receivable Valuation adjustments of loans hedged by forward financial instruments | - - - - - - | 41 224 756 38 705 112 2 519 645 -648 301 157 191 -2 101 954 | - - - - - - | 41 226 097 38 282 048 2 944 048 -648 389 172 262 -1 801 131 |
Subtotal | - 38 631 693 | - | 38 948 838 | |
Total loans | - 47 416 975 | - | 47 927 007 | |
Other receivables | ||||
Deposits (available cash) at credit institutions Related loans receivable | 1 775 411 | 2 771 215 | 432 702 | 1 927 136 |
- | 39 106 | - | 15 305 | |
Total other receivables | 1 775 411 2 810 321 | 432 702 | 1 942 440 | |
Total loans and other receivables | 1 775 411 50 227 296 | 432 702 | 49 869 447 | |
Note 6 – Asset impairment
Asset impairment | 31/12/2023 | Provisions | Reversals | Other items | 30/06/2024 |
Credit institutions of which stage 1 | -172 507 -31 381 | -41 612 -2 569 | 17 298 1 270 | -1 013 | -197 834 |
-32 680 | |||||
of which stage 2 | -68 753 | -377 | 16 223 | -52 908 | |
of which stage 3 | -72 373 | -38 666 | -195 | -1 013 | -112 247 |
Credit to customers of which stage 1 of which stage 2 of which stage 3 Bonds and other securities of which stage 1 of which stage 2 of which stage 3 Other receivables | -648 411 -22 731 -196 088 -429 592 -14 926 -4 065 - -10 861 -6 950 | -76 532 | 81 618 | -4 976 | -648 300 |
-3 404 | 176 | -25 959 | |||
-4 520 -68 608 -1 840 -1 441 -399 - | 25 491 55 951 5 368 377 4 991 - | -4 976 -146 -146 -25 | -175 117 | ||
-447 226 | |||||
-11 544 | |||||
-5 129 | |||||
- | |||||
-6 415 | |||||
-6 975 | |||||
Total | -842 793 | -119 985 | 104 284 | -6 160 | -864 653 |
Note 7 – Accruals and miscellaneous assets/liabilities
In thousands of euros | 30/06/2024 | 31/12/2023 | ||
Guarantees against collateral Allocated public funds Other assets and liabilities Accounts payable, French State | Assets 2 435 440 1 363 173 | Liabilities 221 342 78 465 2 906 948 422 097 | Assets 2 247 221 - 1 452 936 - | Liabilities 280 527 75 075 2 006 413 263 604 |
Total accruals and other miscellaneous assets/liabilities | 3 798 613 | 3 628 853 | 3 700 157 | 2 625 619 |
Note 8 – Property, plant and equipment and intangible assets
Note 8.1 – Change in fixed assets
In thousands of euros | Fixed assets property, plant and equipment | intangible asstes | Total | Total | ||
Land & development | Buildings & development | Other | 30/06/2024 | 31/12/2023 | ||
Gross value | ||||||
At 1 January 2024 Purchases Disposals/retirements Other items At 30 June 2024 | 89 639 - - 0 89 638 | 661 780 159 187 -1 555 821 521 | 85 030 2 674 -602 1 950 89 052 | 261 496 37 692 -746 -13 717 284 724 | 1 097 945 199 552 -1 348 -11 213 1 284 936 | 913 434 191 020 -604 -5 905 1 097 945 |
Depreciation/amortisation | ||||||
At 1 January 2024 | -4 034 | -171 624 | -65 137 | -128 046 | -368 841 | -333 545 |
Provisions Reversals Other items At 30 June 2024 | -99 - - -4 133 | -5 420 1 - -177 043 | -3 049 324 - -67 862 | -13 243 199 - -141 091 | -21 811 523 - -390 129 | -35 833 537 - -368 841 |
Net value | 85 506 | 644 478 | 21 189 | 143 634 | 894 807 | 729 104 |
Note 8.2 – Right of use
In thousands of euros | Registered office | Offices | 30/06/2024 |
Gross value At 1 January 2024 | 100 398 | 13 070 | |
113 468 | |||
New contract | - | ||
Modification of contract | - | ||
Other items | 681 | 681 | |
At 30 June 2024 | 100 398 | 13 751 | 114 149 |
Depreciation/amortisation | -71 763 | -9 720 | -81 483 |
Net value | 28 635 | 4 031 | 32 666 |
Note 9 – Financial liabilities measured at amortised cost
Debts to credit institutions and customers and debt securities in issue at amortised cost
In thousands of euros | 30/06/2024 | 31/12/2023 |
Debts to credit institutions at amortised cost On-demand debts | 8 801 | 18 279 |
Debts at maturity | 540 | 2 040 |
Total debts to credit institutions | 9 341 | 20 319 |
Debts to customers at amortised cost | 1 362 | 1 734 |
Total debts to customers | 1 362 | 1 734 |
Debt securities in issue at amortised cost |
2 158 290 50 818 221 559 265 -3 015 365 | |
Interbank market securities Bonds Related debts Valuation adjustments of debt securities in issue hedged by derivatives | 1 827 985 | |
51 671 269 | ||
439 397 | ||
-3 510 105 | ||
Total debts securities in issue | 50 428 546 | 50 520 411 |
Maturity of debt securities in issue at amortised cost
In thousands of euros | Less than 3 months | From 3 months to 1 year | From 1 to 5 years | More than 5 years | 30/06/2024 | |||
Maturity of debt securities in issue Bonds | 1 019 921 | 5 615 985 | 21 847 398 | 20 117 258 | 48 600 561 | |||
Interbank market securities | 1 414 479 | 413 506 | - | - | 1 827 985 | |||
Total | 2 434 399 | 6 029 491 | 21 847 398 | 20 117 258 | 50 428 546 | |||
In thousands of euros | Less than 3 months | From 3 months to 1 year | From 1 to 5 years | More than 5 years | 31/12/2023 | |||
Maturity of debt securities in issue Bonds | 876 348 | 4 566 794 | 23 120 660 | 19 798 319 | 48 362 121 | |||
Interbank market securities | 1 288 605 | 869 686 | - | - | 2 158 290 | |||
Total | 2 164 952 | 5 436 479 | 23 120 660 | 19 798 319 | 50 520 411 | |||
Debt securities in issue by currency
In thousands of euros | EUR | USD | GBP | JPY | CHF | AUD | CNH | DOP | TRY | 30/06/2024 | |||||||
Debt securities in issue by currency Bonds | 35 463 991 | 10 590 322 | 1 649 119 | 84 288 | 312 949 | 211 455 | 193 716 | 4 661 | 90 061 | 48 600 561 | |||||||
Interbank market securities | 1 710 414 | - | 117 571 | - | - | - | - | - | - | 1 827 985 | |||||||
Total | 37 174 405 | 10 590 322 | 1 766 690 | 84 288 | 312 949 | 211 455 | 193 716 | 4 661 | 90 061 | 50 428 546 | |||||||
In thousands of euros | EUR | USD | GBP | JPY | CHF | AUD | CNH | DOP | TRY | 31/12/2023 | |||||||
Debt securities in issue by currency Bonds | 36 966 955 | 9 254 085 | 1 219 391 | 93 217 | 326 347 | 209 149 | 195 078 | 4 687 | 93 213 | 48 362 121 | |||||||
Interbank market securities | 2 158 290 | - | - | - | - | - | - | - | - | 2 158 290 | |||||||
Total | 39 125 245 | 9 254 085 | 1 219 391 | 93 217 | 326 347 | 209 149 | 195 078 | 4 687 | 93 213 | 50 520 411 | |||||||
Note 10 – Provisions
Provisions | 31/12/2023 | Provisions | Reversals | Other items | 30/06/2024 |
Included in the cost of risk French Overseas Department subsidiary risks | 24 521 | 515 | -6 501 | -484 | |
18 051 | |||||
Other provisions for risk of which stage 1 of which stage 2 | 147 569 19 753 88 143 | 26 024 4 065 8 990 | -40 879 -1 837 -30 245 | -1 661 50 -51 | 131 053 |
22 031 | |||||
66 837 | |||||
of which stage 3 Excluded from the cost of risk Provision for expenses – Sovereign loans Salary and employee benefit expenses | 39 674 1 394 784 135 690 | 12 969 60 947 - | -8 797 -43 883 -27 | -1 661 -310 -195 | 42 185 |
- | |||||
1 411 538 | |||||
135 468 | |||||
Provision for risks and expenses | 24 789 | 370 | 2 563 | 27 722 | |
Total | 1 727 352 | 87 856 | -91 290 | -87 | 1 723 832 |
Note 11 – Subordinated debt
In thousands of euros | 30/06/2024 | 31/12/2023 |
Fixed-term subordinated debt | 150 000 | |
Open-ended subordinated debt | 840 006 | 840 006 |
Other | 1 803 | 1 611 |
Total | 991 809 | 841 617 |
Note 12 – Fair value of assets and liabilities at amortised cost
30/06/2024 | 31/12/2023 | ||
Fair Carrying amount value | Carrying amount | Fair value | |
Assets/Liabilities at amortised cost | 2 975 130 50 302 149 50 542 464 841 617 | 2 951 042 48 381 675 49 085 991 841 617 | |
Debt securities at amortised cost | 4 353 454 4 372 571 | ||
Financial assets at amortised cost | 52 002 707 49 833 203 | ||
Financial liabilities at amortised cost | 50 439 249 50 107 647 | ||
Subordinated debt | 991 809 991 809 | ||
3.3.2. Notes to the income statement
Note 13 – Income and expenses by accounting category
In thousands of euros | 30/06/2024 | 30/06/2023 |
From financial assets measured at amortised cost | 973 332 | 752 400 30 356 |
Cash and demand accounts with central banks | 69 948 | |
Loans and receivables | 900 444 | 718 206 |
Transactions with credit institutions | 251 941 | 179 860 |
Transactions with customers | 648 503 | 538 346 |
Debt securities | 2 939 | 3 839 56 618 56 618 29 386 29 386 |
From financial assets at fair value through equity Debt securities From financial assets at fair value through profit or loss | 95 951 | |
95 951 | ||
37 497 | ||
Loans and receivables | 37 497 | |
Transactions with credit institutions | 22 268 | 15 766 |
Transactions with customers | 15 229 | 13 620 949 592 538 580 411 012 |
Interest accrued and due on hedging instruments of which transactions with credit institutions of which other interest and related income | 1 412 191 | |
797 120 | ||
615 070 | ||
Total interest income | 2 518 970 | 1 787 996 |
From financial liabilities measured at amortised cost | -548 815 | -396 215 |
Financial liabilities measured at amortised cost | -548 815 | -396 215 -1 174 660 -148 |
Interest accrued and due on hedging instruments Other interest and similar expenses | -1 702 538 | |
-5 636 | ||
Total interest expenses | -2 256 990 | -1 571 022 |
Note 14 – Net commissions
30/06/2024 | 30/06/2023 | |||||
In thousands of euros | Income | Expenses | Net | Income | Expenses | Net |
Monitoring and investment commissions | 5 624 | -1 040 | 4 584 | 5 533 | -1 026 | 4 507 |
Analysis commissions | 7 861 | - | 7 861 | 10 087 | - | 10 087 |
Commissions on grants and subsidies | 39 217 | - | 39 217 | 51 875 | - | 51 875 |
Miscellaneous commissions | 115 | -348 | -233 | 4 449 | -1 163 | 3 286 |
Total | 52 817 | -1 388 | 51 429 | 71 944 | -2 189 | 69 755 |
Note 15 – Gains or losses on financial instruments at fair value through profit or loss
In thousands of euros | 30/06/2024 | 30/06/2023 | ||
Gains and losses on financial instruments at fair value through profit and loss | o/w Foreign currency impact on derivatives | Gains and losses on financial instruments at fair value through profit and loss | o/w Foreign currency impact on derivatives | |
Financial assets and liabilities at fair value through profit or loss | 12 010 | 6 428 | -29 921 | 1 828 |
Income from financial instruments at fair value through profit and loss | 16 788 | - | 38 382 | - |
Unrealised or realised gains or losses on debt securities that do not meet SPPI criteria | 5 177 | - | -77 060 | - |
Hedging of loans at fair value through profit or loss | -9 956 | 6 428 | 8 757 | 1 828 |
Income resulting from hedge accounting | 2 944 | 22 645 | 80 405 | 2 943 |
Change in fair value of hedging derivatives | 49 965 | -22 754 | 140 020 | -2 979 |
Change in fair value of the hedged item | -47 021 | 109 | -59 615 | 36 |
Natural hedging/Trading | -30 185 | 71 388 | -45 410 | -112 188 |
CVA/DVA/FVA | -46 | - | 1 630 | - |
Total | -15 276 | 100 461 | 6 703 | -107 418 |
Note 16 – Net gains or losses on financial assets recognised at fair value through other comprehensive income
In thousands of euros | 30/06/2024 | 30/06/2023 |
Dividends received on equity instruments recognised at fair value through equity not to be recycled in profit or loss | 2 097 | 3 162 |
Gains or losses on equity instruments recognised at fair value through equity not to be recycles in profit or loss | - | - |
Gains or losses on debt securities recognised at fair value through equity to be recycled in profit or loss | 27 214 | 5 935 |
Net gains or losses on financial assets recognised in other 29 310 comprehensive income | 9 096 | |
Note 17 – Income and expenses from other activities
In thousands of euros | 30/06/2024 | 30/06/2023 |
Subsidies | 151 344 | 140 627 |
Other income | 260 988 | 172 881 |
Total other income from other activities | 412 332 | 313 509 |
Other expenses | -202 215 | -163 410 |
Total other expenses from other activities | -202 215 | -163 410 |
Subsidies on loans and borrowings are paid by the State to reduce the financing cost or to reduce lending costs for borrowers.
Note 18 – Overheads
Salary and employee benefit expenses
In thousands of euros | 30/06/2024 | 30/06/2023 |
Salary and employee benefit expenses Wages and bonuses | -127 943 | -129 445 |
Social security expenses | -55 818 | -52 814 |
Profit sharing | -7 333 | -6 801 |
Taxes and similar payments on compensation | -17 152 | -17 896 |
Provisions/reversal of provisions | 17 | 1 788 |
Rebilling banks’ staff | 95 | 102 |
Total | -208 134 | -205 065 |
Other administrative expenses
In thousands of euros | 30/06/2024 | 30/06/2023 |
Other administrative expenses Taxes | -11 192 | -9 541 |
of which application of IFRIC 21 | -4 736 | -3 933 |
Outside services | -77 468 | -68 588 |
Rebilled expenses | 697 | -148 |
Total | -87 964 | -78 277 |
Note 19 – Cost of credit risk
In thousands of euros | 30/06/2024 | 30/06/2023 |
Impairments on performing (stage 1) or deteriorated (stage 2) assets | 50 254 | 92 824 |
Stage 1: losses assessed at the amount of expected credit losses for the coming 12 months | -7 819 | 6 503 |
Debt securities recorded at amortised cost | -5 590 | -1 395 |
Signature commitments | -2 228 | 7 898 |
Stage 2: losses assessed at the amount of expected credit losses for the lifetime | 58 072 | 86 320 |
Debt securities recorded at amortised cost | 36 817 | 59 669 |
Signature commitments | 21 255 | 26 651 |
Impairments of impaired assets (stage 3) | -25 659 | -9 020 |
Stage 3: impaired assets | -28 702 | -9 243 |
Debt securities recorded at amortised cost | -27 250 | -15 213 |
Signature commitments | -1 452 | 5 970 |
Other provisions for risk | 3 043 | 224 |
Net reversals of impairments and provisions | 24 594 | 83 804 |
Losses on loans and bad loans | -1 171 | -415 |
Recovery of loans and receivables | 176 | 145 |
Cost of risk | 23 599 | 83 535 |
Note 20 – Equity-accounted
In thousands of euros Impact | 30/06/2024 | 31/12/2023 | 30/06/2023 | |||
Balance sheet | Income | Balance sheet | Income | Balance sheet | Income | |
SIC Socredo | 38 071 124 065 | -2 685 3 129 | 40 664 121 947 | -3 392 5 073 | 43 758 113 104 | -297 2 244 |
Total | 162 135 | 445 | 162 611 | 1 681 | 162 862 | 1 946 |
Note 21 – Corporate tax
In thousands of euros | 30/06/2024 | 30/06/2023 |
Corporate tax | -653 | -20 575 |
Taxes due | -2 045 | -12 554 |
Deferred taxes | 1 392 | -8 021 |
Underlying tax position
In thousands of euros | 30/06/2024 | 30/06/2023 |
Net income | 236 284 | 209 123 |
Corporate tax | -653 | -20 575 |
Pre-tax income | 236 937 | 229 698 |
Total theoretical income tax expense (A) | -7 647 | -41 166 |
Total matching items (B) | 6 994 | 20 591 |
Net recorded tax expense (A) + (B) | -653 | -20 575 |
Deferred taxes are estimated on the basis of the following assumptions:
- Deferred taxes based on Impairments have been estimated on the basis of the rate of 25.83%;
- Deferred taxes based on the unrealised gains or losses on loans and convertible bonds was estimated on the basis of the rate of 25.83%. The same rate is used over costs and expenses on the unrealised gains and losses of the equity investments.
Note 22 – Financing and guarantee commitments
Financing commitments given are the amounts to be disbursed under lending agreements with customers or credit institutions.
In thousands of euros | 30/06/2024 | 31/12/2023 |
Commitments received Guarantee commitments received from the French State on loans | 5 355 421 | |
5 263 261 | ||
Guarantee commitments received from credit institutions | 468 837 | 341 993 |
as part of the Group's credit activity | 468 837 | 341 993 |
Commitments given Financing commitments made to credit institutions | 1 907 305 | |
2 223 606 | ||
Financing commitments made to customers | 16 967 646 | 16 739 832 |
Guarantee commitments made to credit institutions | 386 299 | 375 312 |
Guarantee commitments made to customers | 1 034 214 | 1 072 294 |
Financing commitments given are the amounts to be disbursed under lending agreements with customers or credit institutions.
The commitment amount is lower than the figure stated in AFD’s parent company financial statements because the transactions on behalf of third parties (IMF, on behalf of the French government) are not included in the Group’s consolidated financial statements.
3.4. Risk information
ü Concentration of credit risk
Financial loans at amortised cost
Non-sovereign
In thousands of euros | At 30 June 2024 | At 31 December 2023 | ||||||
Performing assets | Doubtful assets | Total | Performing assets | Doubtful assets | Total | |||
Rating from AAA to BBB- (Investment) from BB+ to CCC (Speculative) Not applicable* Doubtful | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||
8 497 664 289 288 - | 8 786 952 | 8 611 998 364 752 - | 8 976 750 | |||||
6 330 541 4 078 207 - 579 699 1 206 152 - - 1 002 183 | 10 408 748 581 057 1 002 183 | 6 224 690 4 382 754 - 576 201 - - - - 1 031 760 | 10 607 444 576 201 1 031 760 | |||||
Total | 15 407 905 4 368 701 1 002 183 | 20 778 940 | 15 412 889 4 747 506 1 031 760 | 21 192 154 | ||||
* Unused assets relate to budgets granted pending allocation to a final beneficiary.
Sovereign
In thousands of euros | At 30 June 2024 | At 31 December 2023 | ||||||
Performing assets | Doubtful assets | Total | Performing assets | Doubtful assets | Total | |||
Rating from AAA to BBB- (RC1 to RC2) from BB+ to CCC (RC3, RC4, RC5) Not applicable* Doubtful (RC6) | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||
9 006 928 - - | 9 006 928 | 8 927 387 - - 14 507 490 3 873 500 567 764 - - - - - 1 390 390 | 8 927 387 18 948 755 - 1 390 390 | |||||
14 727 230 4 158 244 569 028 - - - - - 1 031 974 | 19 454 503 - 1 031 974 | |||||||
Total | 23 734 159 4 158 244 1 601 003 | 29 493 406 | 23 434 877 3 873 500 1 958 154 | 29 266 532 | ||||
* Unused assets relate to budgets granted pending allocation to a final beneficiary. | ||||||||
Securities at fair value through other comprehensive income that may be recycled or at amortised cost
In thousands of euros Rating | At 30 June 2024 | At 31 December 2023 | ||||||
Performing assets | Doubtful assets | Total | Performing assets | Doubtful assets | Total | |||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | |||
from AAA to BBB- (Investment) from BB+ to CCC (Speculative) Not applicable* Doubtful | 4 837 628 - - | 4 837 628 | 3 458 216 - - 414 602 10 218 - - - - - - - | 3 458 216 424 820 - - | ||||
371 986 10 322 - - - - - - - | 382 308 - - | |||||||
Total | 5 209 614 10 322 - | 5 219 937 | 3 872 817 | 10 218 - | 3 883 035 | |||
* Unused assets relate to budgets granted pending allocation to a final beneficiary.
Financing commitments
Non-sovereign
In thousands of euros | At 30 June 2024 | At 31 December 2023 | ||||||
Performing assets | Doubtful assets | Total | Performing assets | Doubtful assets | Total | |||
Rating from AAA to BBB- (Investment) from BB+ to CCC (Speculative) Not applicable* Doubtful | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||
1 503 713 2 200 - | 1 505 913 | 874 387 | 25 200 - | 899 587 | ||||
2 677 832 252 632 - 114 018 - - - - 50 673 | 2 930 464 114 018 50 673 | 2 341 140 147 271 - | 315 382 - - - - 48 547 | 2 656 522 147 271 48 547 | ||||
Total | 4 295 563 254 832 50 673 | 4 601 068 | 3 362 797 | 340 582 48 547 | 3 751 927 | |||
* Unused assets relate to budgets granted pending allocation to a final beneficiary.
Sovereign
In thousands of euros | At 30 June 2024 | At 31 December 2023 | ||||||
Performing assets | Doubtful assets | Total | Performing assets | Doubtful assets | Total | |||
Rating from AAA to BBB- (RC1, RC2) from BB+ to CCC (RC3, RC4, RC5) | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||
2 989 837 | - - | 2 989 837 | 2 837 759 8 756 893 | - - 2 399 681 116 000 | 2 837 759 11 272 574 | |||
8 848 340 | 2 127 659 99 000 | 11 074 999 | ||||||
Not applicable* | - | - - | - | - | - - | - | ||
Doubtful (RC6) | - | - 473 100 | 473 100 | - | - 675 761 | 675 761 | ||
Total | 11 838 176 | 2 127 659 572 100 | 14 537 935 | 11 594 653 | 2 399 681 791 761 | 14 786 094 | ||
* Unused assets relate to budgets granted pending allocation to a final beneficiary
Guarantee commitments
In thousands of euros | At 30 June 2024 | At 31 December 2023 | ||||||
Performing assets | Doubtful assets | Total | Performing assets | Doubtful assets | Total | |||
Rating from AAA to BBB- (Investment) from BB+ to CCC (Speculative) Not applicable Doubtful | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||
12 333 - - | 12 333 | 13 973 19 - 766 515 470 021 - - - - - - 61 781 | 13 992 1 236 537 - 61 781 | |||||
791 769 510 205 - - - - - - 62 266 | 1 301 974 - 62 266 | |||||||
Total | 804 102 510 205 62 266 | 1 376 573 | 780 489 470 040 61 781 | 1 312 310 | ||||
ü Exposure to credit risk: change in the carrying amounts and value adjustments for losses over the period
Value adjustments for losses correspond to impairment on assets and provisions on off-balance sheet commitments recognised in net income (“Cost of risk”) in respect of the credit risk.
Stage 1 | Stage 2 | Stage 3 | Total | |
Provisions at 31/12/2023 | 77 929 | 352 984 | 501 969 | 932 883 |
New signatures | 9 305 | 14 447 | 0 | 23 752 |
Extinct exposures | -2 111 -444 | -3 475 -28 313 | -4 069 47 715 | -9 656 18 958 |
Change in exposure or rating | ||||
Stage change | -13 503 | 12 236 | 32 977 | 31 710 |
Other (including IFRS restatements, Sogefom) | 3 | -12 | 5 120 | 5 111 |
IFRS restatement | - | - | -31 536 | -31 536 |
Total change in operating provisions | -6 750 | -5 117 | - | -11 867 |
Total change in IFRS 9 parameter updates | -2 440 | -4 587 | - | -7 026 |
Total change in provisions (FWL, Ariz) | 15 507 | -48 383 | - | -32 876 |
Provisions at 30/06/2024 Activities + Parameters | 84 247 | 294 897 | 552 177 | 931 321 |
3.5. Additional information
3.5.1. IMF balance sheet
In thousands of euros | 30/06/2024 | 31/12/2023 |
Assets Loans and receivables due from credit institutions | 22 | 150 022 |
On-demand | 22 | 145 610 |
At maturity | - | 4 412 |
Accruals | 673 | 9 227 |
Total assets | 696 | 159 250 |
Liabilities |
154 649 150 000 4 649 4 601 | |
Debt securities in issue Bonds Of which accrued interest Accruals and other miscellaneous liabilities | - | |
- | ||
- | ||
696 | ||
Total liabilities | 696 | 159 250 |
Loans granted to the International Monetary Fund (IMF) for the Poverty Reduction and Growth Facility (PRGF), financed by bonds issued by AFD and supplemented by hedging instruments concluded with different banking counterparties, are provided on behalf and at the risk of the French government. With the exception of management fees totalling €7K, the IMF loans have no impact on AFD Group’s financial position.
Commitments given to the IMF are restated from the consolidated financial statements.
3.5.2. Significant events since 30 June 2024
No significant event having an impact on the company’s financial position occurred after the reporting period ended 30 June 2024.
D. Statutory Auditors’ report on the 2024 half-year financial information
AGENCE FRANÇAISE DE DÉVELOPPEMENT
For the six-month period ended 30 June 2024
This is a free translation into English of the statutory auditors’ review report on the 2024 halfyear financial information issued in French language and is provided solely for the convenience of English-speaking readers. This report includes information relating to the specific verification of information given in the Group’s half-yearly management report. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
To the Board of Directors of Agence Française de Développement,
In compliance with the assignment entrusted to us by your board of directors and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on:
- the review of the accompanying condensed interim consolidated financial statements of Agence Française de Développement, for the six-month period ended June 30, 2024;
- the verification of the information presented in the interim management report.
These condensed interim consolidated financial statements are the responsibility of the Chief Executive Officer. Our role is to express a conclusion on these financial statements based on our review.
I- Conclusion on the Financial Statements
We conducted our review in accordance with professional standards applicable in France.
A review of interim financial information consists of making inquiries primarily with persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34, the standard of IFRSs as adopted by the European Union applicable to interim financial information.
II- Specific verification
We have also verified the information presented in the interim management report on the condensed interim consolidated financial statements subject to our review.
We have no matters to report as to its fair presentation and consistency with the condensed interim consolidated financial statements.
Paris and Paris La Défense, September 19, 2024,
The Statutory Auditors,
French original signed by
KPMG S.A. BDO Paris
Represented by Valéry FOUSSE Represented by Benjamin IZARIE
Partner Partner
E. Person responsible for the half-year financial report
Name and position
Mr Bertrand Walckenaer: Chief Operating Officer (COO)
Certification of the person responsible
I certify that, to the best of my knowledge, the condensed financial statements for the past halfyear are drawn up in accordance with the applicable accounting standards, and give a true and fair view of the assets, financial position and income of the company and all the subsidiaries included in the scope of consolidation. The half-year management report featured on page 4 faithfully presents the significant events having occurred in the first half of the financial year and their impact on the financial statements, and describes the primary risks and uncertainties for the second half of the financial year.
Paris, 18 September 2024
Chief Operating Officer (COO)
Bertrand Walckenaer