Creation and growth of Crédit Foncier de France 1848 › 1880
The economic and financial crisis that rocked France at the end of the 1840s was due in large part to a lack of credit. Partly responsible for the fall of the July Monarchy, the crisis spurred the State to take a more active role in the economy, which resulted in the creation of lending institution under the authority of the State whose purpose was to contribute to the modernisation and development of financing channels.
Mortgage lenders are never sure to be paid back; buyers are never sure they will, one day, actually own their home; renters are never sure they are paying the actual owners.
General Dupin, public prosecutor.
The “Banque foncière de Paris”, the first société de crédit foncier, is created in 1852
The first société de crédit foncier, named “Banque foncière de Paris”, founded by Louis Wolowski himself, receives authorisation, one month later, by a decree issued on 28 March 1852.
It is created as a public limited company (société anonyme) with share capital of 25 million francs.
It is granted the exclusive right to conduct business, over a period of 25 years, in the departments under the jurisdiction of the Paris appeals court (Seine, Seine-et-Oise, Seine-et-Marne, Eure-et-Loir, Aube, Marne-et-Yonne). It is authorised to take non-interest bearing deposits that are invested into mortgage-backed loans and converted into obligations foncières. Its founders included bankers and businessmen such as Émile Pereire, a follower of Saint-Simon, parliamentary leaders and a few property owners, including Polish nobles linked to Wolowski, who pledged an agricultural guarantee to the project. The promoters of sociétés de crédit foncier, such as Léon Faucher and Adolphe Dailly, were also present. Antoine Hailig was Chairman of the Board of Directors and Louis Wolowski was appointed to be its director. Illustrating the imperial backing of the project, the emperor subscribed to 100 shares in the new company; in fact, the imperial family would take out several loans from the company in the 1860s.
Louis Wolowski (1810-1876)
One of the main founders of Crédit Foncier de France in 1852.
Born in Poland, Louis Wolowski completed part of his studies in France between 1823 and 1827. His father, a lawyer, was asked to fill an important position in the provisional government that emerged from the liberal revolution in Poland in 1830. Subsequently, when the revolution was repressed, the family had to seek exile in Paris at the end of 1831. He founded the Revue de législation et de jurisprudence, a review specialising in law and jurisprudence in 1834. His work opened the door to a professorship at the Conservatoire national des arts et métiers in 1838. In 1843, he was named Chair of Industrial Legislation at the conservatory.
From 1854 to 1873 he was a director of Crédit Foncier.
His liberal convictions seem to have prevented him from becoming governor of the institution. Alongside his professional career, Louis Wolowski got involved in politics. As a supporter of the July Monarchy upon his arrival from Poland, he supported the Second Republic and was elected to the National Assembly as a representative of the Seine Department. Under the Second Empire, he abandoned his political career before taking it back up again under the Third Republic. Elected to the National Assembly, he voted in favour of the constitutional laws of 1875, which reinforced the republican system. He became a permanent senator shortly before his death.
Baron Georges Eugène Haussmann, (1809-1891)
He was the driving force behind the urban transformation of Paris
Haussmann’s transformation: a catalyst for change
Wishing to give the Empire a capital worthy of the regime and capable of rivalling London, Napoléon III charged Baron Haussmann this ambitious endeavour as Préfet de la Seine, a position he filled from 1853 to 1870.
The broad outline of the transformation of Paris is clear: improve the circulation of air, people and goods.
The first part of the public works, two-thirds of which was subsidised by the State, was designed to create avenues forming a grid in the centre of Paris, notably a West-East thoroughfare extending the rue de Rivoli to faubourg Saint-Antoine and a North-South boulevard connecting boulevard de Sébastopol and boulevard Saint-Michel. The administrative core of Paris was also modified. An “administrative zone” was created that included the central Police station, a fire station and the courthouse. On the right bank of the River Seine, the central marketplace (Les Halles) was rebuilt.
To facilitate the movement of goods and people, a circular network of rail stations was created. Its stations were linked together and connected to the major avenues as part of the construction of the second network in 1858. Its funding was more problematic and relied on granting concessions to property companies and a system of short-term notes issued by the Caisse des travaux de Paris, specially created by Haussmann for the project.
The third network, halted in the mid-1860s and entirely financed by the city of Paris, extended these works and succeeded in connecting all neighbourhoods in a capital that had been expanded considerably. In fact, in 1860, the neighbouring towns were integrated within the Paris city limits, doubling the city’s population, which reached 1.7 million inhabitants and jumped from 12 to 20 arrondissements.The long real estate depression 1880 › 1945
The long real estate depression 1880 › 1945
Once the euphoria of the Haussmann era had dissipated, the real estate sector went through a more depressed time from the mid-1880s. The situation would last until the eve of the second world war and was the impetus behind the first construction stimulus measures.
Crédit Foncier de France was faced with increased competition in property lending and criticism about the way in which the company was being managed.
While campaigns were launched against Crédit Foncier in the press in the early 1890s, some newspapers came to the company’s defence and derided its detractors.
First World War, the end of a new period of growth?
The upheaval of the Second World War
Crédit Foncier de France wept the loss of 21 employees during the Second World War. During the war, the company fully supported its employees.
In October 1939, it paid the full salaries of employees who had been drafted and received no compensation and the difference between the military pay and the pay of employees on active duty as officers and subordinates, who were paid according to rank.
Under the shortages of the Occupation, management tried to improve to the fortunes of its employees, especially in terms of ensuring their basic needs were met. Steps were taken with the authorities to make it easier for the cafeteria, which was struggling considerably, to receive supplies. A cooperative was created with retired and active employees. Some of the basics, such as fruit and vegetables, were bought by the company then resold to members of the cooperative at a loss and for less than market price. A collection was set up and management decided to create a special loan for 100,000 francs available to the victims of the bombings. Buildings that were not under siege were made available on a temporary basis to employees who had lost their home.
A mixed post-war environment
The global economic crisis weighed heavily on the period between the two world wars.
The instability of the economic and financial backdrop and regulations on rents, which weakened property values, created an unfavourable environment for a housing recovery in the post-war period.
Lending institutions, such as Crédit Foncier de France, tightened property lending conditions and focused increasingly on lending to local authorities, which were seen as more creditworthy. The situation improved at the end of the 1920s but was snuffed out by the consequences of the global economic crisis that depressed the construction sector, to such an extent that the State was compelled to implement measures to stimulate building prior to WWII.
The upheaval of the Second World War
During the Second World War, Crédit Foncier actively supported its employees on active duty.
First World War, the end of a renaissance?
The war disrupted Crédit Foncier’s business activity considerably. Measures were taken to ensure that business carried on, despite the mobilisation, and preserve the continuity of the company’s activities.
To do so, Crédit Foncier’s employees worked overtime and outside workers were brought in, particularly women. During wartime, a maximum of 772 temporary employees helped fill the gap. As soon as the war was over, the number dropped to 75.
The bank wept the loss of 104 employees on the battlefield, out of a total of 1,179, i.e. 8% of the workforce.Les Trente Glorieuses 1945 › 1977
Les Trente Glorieuses 1945 › 1977
In the post-war period, Crédit Foncier de France and the Sous-Comptoir des entrepreneurs were gradually given the responsibility, by the State, of a host of general interest assignments, the most prominent of which was managing premiums and subsidised loans that were created by a law passed on July 21, 1950. They played a very important role in financing housing and grew exponentially.
Reconstruction and modernisation of the economy were the main priorities upon the country’s liberation.
From 1945, the business of Crédit Foncier de France and that of the Sous-Comptoir des entrepreneurs expanded and developed considerably at the behest of the State, which was inspired by economic considerations and the state of buildings and homes in France. Collaboration with the public authorities culminated in the implementation of the subsidised construction sector, with management responsibility being granted to the two companies.
This system for subsidising housing was a real turning point for the two companies, which had become the executive arm of the post-war housing strategy. General interest responsibilities, led separately or together, were decisive factors in their recovery from the difficult interwar period.
In January 1945, he became the governor of Crédit Foncier de France and was a driving force behind the company’s renaissance until 1955.
“Crédit Foncier, which had to endure three wars, is now facing other challenges […].
However, although the company’s business slowed under the Occupation, we are confident it is poised to play an important role in the major lending operations that will be required for France to rebuild from the ground up and to restore economic life to the country.”
Henri Deroy, Governor of Crédit Foncier, during the Shareholders’ Meeting on 6 June 1945.
“Help my friends!”
The appeal made by Abbé Pierre on February 1, 1954
The homelessness scandal surged to the media forefront with the appeal of Abbé Pierre in February 1954, which led to the construction of emergency housing for the homeless. Crédit Foncier de France contributed to the effort by issuing 1 million notes of 5,000 francs each. The income from these securities was used to finance the construction of these housing schemes.
Up until that point, measures promoting social housing had been moderate. However, there was a precedent for wide-scale measures being undertaken by the public powers to stimulate the recovery in private property construction. In fact, the law of June 1, 1948 liberalised the rents of new housing in order to enhance the attractiveness of property investment. More importantly, the law of July 21, 1950 and subsequent official texts created building incentives that were payable over 20 years. Companies benefiting from the incentives could borrow a sizeable portion of the cost of works through a performance guarantee from the State. Crédit Foncier de France was responsible for paying out these incentives.
Privatisation of property finance
Banking intervention encouraged
The system of incentives and special loans developed in 1950 was designed as a temporary solution to the construction finance problem. In the 1960s, the housing crisis eased and the State sought to disengage. The subsidised sector had failed to resolve the financing problem of certain housing properties. The public authorities encouraged the intervention of banks through a series of measures in an effort to broaden the means of financing the housing sector and to draw down public resources allocated to this issue.
Although the subsidised sector remained core businesses for the two companies, the new backdrop contributed to the Sous-Comptoir des entrepreneurs diversifying its portfolio of business activities.
Crédit Foncier, for its part, was included in this new property finance strategy.
Modernisation of structures and social progress
Companies: driving social progress
The new responsibilities in housing finance taken on by Crédit Foncier de France, marked the company’s return to prosperity and led to a veritable renaissance in the business of the Sous-Comptoir des entrepreneurs. They entailed substantial structural reforms and the modernisation of work methods, including adapting to the computer age.
From the end of the 1960s, banking competition in property finance began to intensify, leading banks to take a more sales-oriented approach that, in turn, led to greater decentralisation. From a personnel management point of view, the paternalistic practices, left over from the end of the 19th century, combined with post-Liberation labour laws to grant employees a host of workplace, material and intellectual advantages.Changes in property finance 1977 › 1999
Changes in property finance 1977 › 1999
A profound rethinking of the French banking sector occurred in the last two decades in the 20th century.
The overhaul of housing assistance
The law dated January 3, 1977 ushered in a new focus for State action in favour of housing and proposed a simplification of housing assistance schemes.
Housing, a national priority in the early 1980s
From the 1980s, housing became a national priority.
The banking law of January 24, 1984
Seeks to establish a shared legal and institutional framework for all home loan lenders and simplified the housing assistance schemes.
The banking law of January 24, 1984 triggered a move to break down barriers in lending and deregulate the banking sector.
Lending institutions were divided into five categories: banks, cooperative banks and credit unions, the Caisses d’Épargne and the Caisses de crédit municipal, financial companies, specialised financial institutions. The latter category includes companies that have received general interest assignments from the State: Crédit Foncier de France, the Comptoir des entrepreneurs, created in the mid-19th century, alongside Crédit national, the Caisse d’aide à l’équipement des collectivités locales, the Caisse centrale de coopération économique, the Crédit d’équipement des petites et moyennes entreprises (CEPME), the Société française pour l’assurance du capital-risque des PME and the sociétés de développement régional.
The Groupement des institutions financières spécialisées (GIFS) represented this category of establishments with the Association française des établissements de crédit (AFEC), which covered the entire new banking landscape. The Governor of Crédit Foncier de France, Georges Bonin, was designated Chairman of GIFS upon its creation.
Structures and business lines undergoing profound change
New channels for residential property lending and marketing.
Profound changes in the banking landscape and competition challenges made it indispensable for banks to adapt their structure the way in which they managed their personnel.
The 1980s saw the development of internal sales applications and customer-oriented initiatives: creation of databases, decision-making tools. Communication strategies were ramped up and marketing tools used to reach customers were diversified. For instance, Crédit Foncier launched television ad campaigns.
Considerable efforts were made in terms of professional training. Investments focused on controlling the IT system and training management teams and sales teams (customer relations, sales, advisory services).Ambitions renewed 1999 › 2015
Ambitions renewed 1999 › 2015
Crédit Foncier becomes a part of Groupe Caisse d’Epargne.
Crédit Foncier turns a page in its history: State oversight was replaced by integration in a cooperative banking group with ambitious goals.
The Caisses d’Épargne acquire 90.6% of Crédit Foncier’s capital.
The search for synergies with GCE
In June 2000, a joint development plan between Crédit Foncier and Groupe Caisse d’Epargne was unveiled with a clear goal: become the leading property division in France and be a benchmark on the capital markets, particularly specialised finance and refinancing property loans via Compagnie de Financement Foncier.
Acquisition of Entenial, A3C and CFCAL
Crédit Foncier sold its historic head office, bought Entential, a competitor, in 2003 and continued external growth in 2004 and 2005.
In July 2003, the AGF and Crédit Foncier entered into exclusive talks to buy AGF’s 72.15% stake in Entenial. With the approval of the central works council and Crédit Foncier’s Supervisory Board, the contract was finally signed on October 21, 2003 for a total amount of €575 million.
This particularly intelligent tie-up was an integral part of the group’s quest to become the French leader in real estate finance.
2009: Creation of Groupe BPCE
Merger between Groupe Caisse d’Epargne and Groupe Banque Populaire. The new entity (BPCE) was formed.
The new “Branch Concept”
2013-2015, Crédit Foncier rolls out “the new branch concept”: next-generation branches that are attractive, modifiable and friendly.
The new concept is based on four key principles:
- Creating an impact with an exciting façade
- Increasing the visibility and identity of the brand
- Defining a new store set-up, reflecting innovation and dialogue in a setting that is friendly, reassuring and professional.
Designing a point of sale, including a transparent front window, that speaks to customers from both the outside and the inside.