The recession has put an end to this state of affairsNew York the Dow Jones completed the month at 9Little by little the city is specific argues its DirectorOr is someone authorized to the franchisorObjective enact standards for January 1 2010But this suggestion is far from making unanimity in the professionBut they are this time clearly tinted greenYet in private experts are much less reserved on their doubtsThe risk the facetoface with a dead leaf and the location of development projects is preserveIn 2008, it was a hot topic. In the first quarter, it still was. The "goodwill" or "goodwill" goodwill will continue talk of them this year. Differences for the acquisition of several billion euros are indeed recorded in French banks balance sheets. This is the case of Credit Agricole SA, with more than 19 billion of goodwill, or BNP Paribas, which indicates in its report 2008 annual to account for more than 11 billion. These are mainly related to prior to mid-2006 acquisitions in retail banking (3.6 billion euros to BancWest in the United States and 1.7 billion for BNL in Italy).
Little accustomed to talk to him since he had not achieved major acquisition for ten years, credit mutual-CIC has, also, part of goodwill in its accounts for the redemption of Citibank Germany, just before the peak of the crisis. It is 2.8 billion euros of "goodwill" are registered, or more than half of the price paid (4.8 billion). The redemption of Cofidis, this year, could also be subject to registration.
By contrast, with the acquisition of Fortis in full financial storm, BNP Paribas should save a "badwill" (negative goodwill), from inflating its own funds. Some analysts assess it to EUR 1.5 billion (for the Bank of Fortis, the insurance being rather recorded part part in "goodwill") only.
It is since 2005 and the application of the IFRSs in France that the inclusion of goodwill in the accounts shall be imposed on listed companies. This inscription, deduced the regulatory own funds, pose no problem in itself if it were not necessary each year apply tests of impairment losses ("impairment tests") which may lead, in some cases, to impairment losses (see below); and if, at the announcement of these risks, the stock exchange is charged not kick brutally.
In all likelihood, the degradation of the environment in the countries of the East (including the Ukraine for Credit Agricole and BNP Paribas) and the rise of risks in the activities of credit consumption could cause this year the most important impairment.
Margin of manoeuvre
Yet these are not so disturbing. "The"goodwill"are already fully deducted from own funds: their value is already reduced to zero.". Therefore their depreciation has no impact on regulatory own funds. "And the recipient ability of banks means before the"goodwill"depreciation", explains Jean Sassus, analyst at Raymond James Euro Equities.
Leaders, in addition, a margin of manoeuvre relatively broad to decide or not if they impairments. According to the institutions, the assumptions of "impairment test" may be more or less conservative. "He must first verify that the value is permanently lost," said the Financial Director of a large French Bank. "Banks establish a"business plans"and" rotate their model. If they do not depreciate the value of their "goodwill", it is that they feel with their statutory auditors, their model is valid and justified their "plans business". "Of course, if the crisis continues, they may have to be these"business plans"", said Marie-Christine Jolys, associated with KPMG. For the time being, in any case, it is likely that most will seek to "smooth" as much as possible of any impairment losses.
