Crédit Agricole has chosen Olivier Gavalda to replace outgoing chief executive Philippe Brassac, appointing a company veteran to steer France’s second-largest bank through a rocky economic period in its domestic market and fresh challenges in Italy.
Like Brassac, Gavalda has spent his entire career at Crédit Agricole and is considered a safe pair of hands who knows the co-operative bank’s network well, having led its operations in both Champagne Bourgogne and Ile-de-France, the region that includes Paris.
He will be charged with maintaining the bank’s steady performance of recent years, which has helped Crédit Agricole surpass Société Générale to become the second-largest French bank by market capitalisation.
But French bank stocks have been hit by political turmoil, including the collapse of Prime Minister Michel Barnier’s government and a budgetary crisis. Moody’s earlier on Tuesday downgraded Crédit Agricole and six other French banks over a weakening outlook for the country’s public finances.
Gavalda will also face the delicate task of protecting the bank’s interests in Italy, its second-largest market after its home country.
Crédit Agricole has recently sought to increase its stake in Italy’s Banco BPM from 9.9 to 15.1 per cent, and is seeking approval from Italian regulators to own as much as 19.9 per cent of the Italian lender.
The move is considered a means of defending Crédit Agricole’s interests in Italy and gain leverage in talks with UniCredit chief executive Andréa Orcel, who launched a surprise €10.1bn takeover bid for Banco BPM last month.
During his time in the role, Brassac has succeeded in selling off less strategic areas of the business, simplified Crédit Agricole’s structure and reaped gains from its asset management arm Amundi.
Brassac has also expanded the bank’s Italian operations since his appointment in 2015, including through Amundi, the European asset management giant in which Crédit Agricole holds a near 70 per cent stake.
Amundi has a close relationship with UniCredit through its acquisition of the Italian bank’s asset management division Pioneer division in 2017. But that relationship is “indirectly at stake” as part of the discussions over Banco BPM, analysts from Barclays said in the wake of the Banco BPM bid.
Brassac will not step down until May 2025, after the bank’s next general assembly, when he will be over the age of 65 and too old to seek a renewal of his term, according to Crédit Agricole’s protocols.
People familiar with the bank said that Gavalda was considered a “safe pair of hands” who would be able to communicate effectively with the many different regional banks that form part of the co-operative Crédit Agricole operations.
“Succession is important at any bank but it’s very, very important at Crédit Agricole,” said one banker. “There are 39 regional banks to manage. Brassac has been very good at that.”
But several people familiar with the bank said prior to the announcement that one drawback was Gavalda’s age.
At 61, he will have limited time to make his mark as the head of the bank before he too is forced to step aside.
