The bonding market - France

The French surety market showed resilience and growth, particularly in the personal loan sector, where sums guaranteed by surety companies climbed to 765 billion euros in 2020. Although the market for guarantees offered to businesses and professionals shrank by -0.9%, the overall market remained solid, with financial guarantees surging by 18.6% to 17.3 billion euros.

The main market players are Crédit Agricole with 34.7% of outstanding mortgages, Groupe BPCE with 27.5% and Confédération Nationale du Crédit Mutuel with 15.7%.

Regulations have also changed, with new mortgage reforms capping borrowing terms at 25 years and affordability ratios to 35%, and the incorporation of surety bond laws into the civil code to enhance consumer protection.

Despite the global pandemic, the market proved robust and continues to demonstrate significant activity in both the personal and financial sectors.

Continued growth amid economic challenges

In the French surety market, the trajectory of continued growth is evident despite the prevailing economic challenges, which have recently been accentuated by the global pandemic. In particular, the personal loan market has seen remarkable growth, with over 95% of surety company commitments focused on performance bonds for individuals. Outstanding mortgage loans to individuals rose significantly, from around 722 billion euros to a substantial 1,137 billion euros in 2020, underlining the French population's increased propensity to obtain more and larger home loans. In addition, the rate at which individuals use surety bonds for mortgages is rising steadily, reaching around 63.4% in 2020, compared with 54.3% six years earlier.

A more detailed analysis of the market shows that guaranteed sums for personal loans will reach almost 765 billion euros in 2020, a clear sign of market confidence and the reliability of surety services. However, it is worth noting that while figures for individual loans have risen, the sums committed for guarantees to companies and professionals have fallen slightly, probably due to the increased risks associated with the health crisis that has impacted on the economy.

Nevertheless, the size of the surety company market, based on a solid foundation of sustained demand in the personal loans segment, has been estimated at around 1.6 billion euros in 2020. This estimate takes into account total outstanding home loans and the commissions that accrue to surety companies, which range from 150 to 600 euros in addition to a typical payment of 0.8% of the total loan value by the borrower.

The main market players, including banking groups and mutual guarantee companies, have, over the years and as they have expanded, secured their hold on the market, with some of them, such as Crédit Agricole and Groupe BPCE, boasting substantial market shares of between 25% and 35%. The market has seen only moderate changes in market share distribution, with a few exceptions such as HSBC Holdings, which has made notable gains.

Regulatory frameworks also influenced the market landscape, with 2020 seeing reforms that capped borrowing terms and introduced new affordability thresholds. These regulatory adjustments, along with specific new laws targeting surety bonds, reflected a move towards better consumer protection and a streamlined process that embraces digital transitions.

In conclusion, despite the unpredictable nature of global economic health, the French surety market has proved resilient with steady growth.

Key players shaping the French surety market landscape

In the dynamic territory of surety bonding, France boasts a diverse range of participants, from institutions specializing in issuing surety bonds to insurance companies providing financial guarantees. These entities play an essential role in reinforcing contractual commitments and ensuring monetary stability in various sectors. Let's take a look at the main players in this market.

• Banque Publique d'Investissement (BPI) is a major player in the French surety market, widely recognized for the financial support it provides to companies. Serving companies of all sizes, BPI offers comprehensive bonding solutions, facilitating access to credit and supporting economic development in France.
  
  
• Euler Hermes, the world leader in credit insurance, extends its expertise to the surety market, offering companies the protection and confidence they need to meet their financial obligations and commercial transactions. Its risk assessment and management skills are a cornerstone for companies looking for a stable bonding partner.
  
  
• Crédit Logement is a key player for individuals wishing to obtain a home loan. Its offer includes a series of guarantees designed to reassure lenders about the borrower's ability to repay, making it easier for would-be homeowners to obtain mortgages.
  
  
• Casden Banque Populaire focuses primarily on the education sector and civil servants, offering tailor-made financial products including guarantees. Its in-depth knowledge of the needs of the public sector gives it a strategic advantage in providing relevant, targeted solutions.
  
  
• As far as insurance companies are concerned, we have names like CEGC (Compagnie Européenne de Garanties et Cautions) and CAMCA (Caisse d'Assurances Mutuelles du Crédit Agricole), who are diversifying the surety market with their varied offerings aimed at protecting companies and their stakeholders against unforeseen financial risks.
  
  
• Galian provides insurance and financial guarantees to real estate professionals, securing transactions and deposits that are crucial to real estate transactions.
  
  
• On the mutualist front, Siagi (Société Interprofessionnelle Artisanale de Garantie d'Investissements) stands out for its commitment to supporting small businesses, particularly in the craft and trade sectors, by focusing on supporting the craft community and bolstering their financial commitments through surety bonds.
  
  
• SOCAMA (Sociétés de Caution Mutuelle Artisanale) represents the core values of mutual guarantee companies, with an emphasis on community support for local businesses.

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 20/12/2021

Summary and extracts

List of charts

• Guaranteed sums for personal loans
• Bonding rates for mortgages
• Healthy outstanding real estate loans for individuals
• Guarantees provided by surety companies for businesses and professionals
• Outstanding cash and investment loans to non-financial companies
• Total commitments of surety companies
• Total commitments of surety companies year-on-year
• Guarantee company off-balance sheet commitments and year-on-year trends
• Sums committed by surety companies to the financial sector
• Market share of the various groups in terms of outstanding home loans at June 30, 2020
• Gross and net margins on outstanding home loans
• Change in market share between June 30, 2019 and June 30, 2020