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Economy and Banking Sector of France

France
Location
Western Europe
Population  (2017)
67 024 459  (+0.01%)
EU Status
member since 1952
Currency
EUR (Euro)
Nominal GDP (2016)
2 225.3 bln EUR  (+0.02%)
Credit Ratings (as of Sep 2016)
AA/Aa2
Consolidated Banking Assets (2016)
7 215.96 bln EUR  (+3.97%)
Deposit Guarantee
100 000 EUR
Number of Banks
548

France, a founding member of the European Union located in Western Europe, is one of the modern economies in the world and the second largest economy in Europe.

Economy of France is diversified across many sectors: nuclear power, metallurgy, electronics, telecommunications, machinery, chemicals, aircraft, automobiles; textiles, food processing; and tourism.

Financial services and banking are important part of the economy. The major French banks: BNP Paribas, Credit Agricole and Societe Generale are among the largest banks in the world.

List of Banks in France

National Currency

Euro (EUR)

France joined the Euro Area on 1 January 1999.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2016)Real GDP Growth (2016)
2 225.3 bln EUR  (+0.02%)33 400 EUR  (+0.02%)1.2 % (unchanged)

According to Eurostat, nominal GDP of France in 2016 was 2 225.3 bln EUR.

France underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.3% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 1.2% which was below the Euro Area average (1.8%) and below the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

Real GDP Growth in France.

Chart 1. Real GDP Growth in France. Source: Eurostat, International Monetary Fund.

In 2016, nominal GDP per capita in France was 33 400 EUR.

France has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 5.4% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  France; European Union = 100.

Chart 2. GDP Per Capita at Purchasing Power Parity in France; European Union = 100.

Inflation Rate

CPI, MoM (Sep 2017)CPI, YoY (Sep 2017)CPI, Year Average (2016)
-0.2 %  (Aug 2017: 0.6 %)1.1 %  (Aug 2017: 1.0 %)0.3 %  (2015: 0.1 %)

According to Eurostat, inflation rate in France in 2016 expressed as annual percentages of average consumer prices was 0.3% which was above the Euro Area average (0.2%) and equal to the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Inflation Rate in France.

Chart 3. Inflation Rate in France. Source: Eurostat, International Monetary Fund.

Unemployment Rate

Unemployment Rate (2016)
10.1 %  (2015: 10.4 %)

Government Bond Yield

Government Bond Yield (Sep 2017)
0.70 %  (Aug 2017: 0.71 %)
According to Eurostat, government bond yield in France in Sep 2017 was 0.70%, compared to 0.71% in Aug 2017.
Government bond yield of France.

Chart 4. Government bond yield of France. Source: Eurostat.

Credit Ratings (as of Sep 2016)

Fitch Moody's
AA (very high credit quality), outlook stable Aa2 (high grade), outlook stable

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in France: 0.0 - 30.0%

Withholding tax rates applied on payments of interest and dividends in France are shown in Table 1.

Dividends Interest
Natural person, resident 21.0 %24.0 %
Natural person, non-resident 30.0 %0.0 %
Table 1. Withholding tax rates in France.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of France: 113 Signed Agreements

France signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Albania
 Algeria
 Argentina
 Armenia
 Australia
 Austria
 Azerbaijan
 Bahrain
 Bangladesh
 Belgium
 Benin
 Bolivia
 Bosnia and Herzegovina
 Botswana
 Brazil
 Bulgaria
 Burkina Faso
 Cameroon
 Canada
 Central African Republic
 Chile
 China
 Congo, The Democratic Republic of the
 Cote D'Ivoire
 Croatia
 Cyprus
 Czech Republic
 Ecuador
 Egypt
 Estonia
 Ethiopia
 Finland
 Gabon
 Georgia
 Germany
 Ghana
 Greece
 Guinea
 Hong Kong
 Hungary
 Iceland
 India
 Indonesia
 Iran, Islamic Republic of
 Ireland
 Israel
 Italy
 Jamaica
 Japan
 Jordan
 Kazakhstan
 Korea, Republic of
 Kuwait
 Latvia
 Lebanon
 Libya
 Lithuania
 Luxembourg
 Macedonia
 Madagascar
 Malawi
 Malaysia
 Mali
 Malta
 Mauritania
 Mauritius
 Mexico
 Monaco
 Mongolia
 Montenegro
 Morocco
 Namibia
 Netherlands
 New Zealand
 Niger
 Nigeria
 Norway
 Oman
 Pakistan
 Panama
 Philippines
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation
 Saudi Arabia
 Senegal
 Serbia
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sri Lanka
 Sweden
 Switzerland
 Syrian Arab Republic
 Thailand
 Togo
 Trinidad and Tobago
 Tunisia
 Turkey
 Ukraine
 United Arab Emirates
 United Kingdom
 United States
 Uzbekistan
 Venezuela
 Vietnam
 Zambia
 Zimbabwe

There are also several agreements between France and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):

 Kenya

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 29 Signed Agreements

France signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Andorra
 Anguilla
 Antigua and Barbuda
 Aruba (Apr 2013)
 Bahamas
 Belize
 Bermuda
 British Virgin Islands
 Cayman Islands
 Cook Islands
 Costa Rica
 Curacao
 Dominica
 Gibraltar
 Grenada
 Guernsey
 Isle of Man
 Jersey
 Liberia
 Liechtenstein
 Saint Kitts and Nevis
 Saint Lucia
 Saint Vincent and The Grenadines
 San Marino
 Sint Maarten (Dutch part)
 Turks and Caicos Islands
 Uruguay
 Vanuatu

There are also several agreements between France and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):

 Brunei Darussalam

Automatic Exchange: Starts in September 2017

France signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Automatic Excnange: 57 Bilateral Agreements to Receive Information

France has signed bilateral agreements with 57 jurisdictions to automatically receive information:

 Andorra
 Argentina
 Australia
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Brazil
 Bulgaria
 Canada
 China
 Colombia
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 San Marino
 Seychelles
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 United Kingdom
 Uruguay

Automatic Excnange: 69 Bilateral Agreements to Send Information

France has signed bilateral agreements with 69 jurisdictions to automatically send information:

 Andorra
 Anguilla
 Argentina
 Australia
 Austria
 Belgium
 Belize
 Bermuda
 Bonaire, Saint Eustatius and Saba
 Brazil
 British Virgin Islands
 Bulgaria
 Canada
 Cayman Islands
 China
 Colombia
 Costa Rica
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Montserrat
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 Saint Lucia
 Saint Vincent and The Grenadines
 Samoa
 San Marino
 Seychelles
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Turks and Caicos Islands
 United Kingdom
 Uruguay

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in France
IGA in effect since 14 November 2013, Model 1

France has FATCA agreement with the U.S. in effect since 14 November 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in France are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: French financial accounts hold in U.S. financial institutions will be reported to French authorities.

Further Information

Financial Market Development

Financial Market Development
4.5 (max 7.0), 33rd out of 138 countries
Banks' Soundness
5.6 (max 7.0), 31st out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in France is scored 4.5 out of maximum 7.0 and ranked 33rd out of 138 analysed economies, trustworthiness and confidence of financial market is scored 4.7 (40th place).

Financial Market Development in France.

Chart 5. Financial Market Development in France. Source: WEF.


Soundness of banks is scored 5.6 bringing France into the 31st place.

Soundness of Banks in France.

Chart 6. Soundness of Banks in France. Source: WEF.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 EUR

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in France are summarised in Table 2.

Scheme Participantsall credit institutions operating in France, branches of non-EEA banks, branches of French banks abroad
Scheme Exemptionsbranches of EEA-banks (covered by their home countries)
Eligible Depositorsnatural persons, legal entities
Covered Accountsall deposit accounts (current accounts, demand accounts, passbook accounts, term accounts, home savings accounts, home savings schemes, etc.)
Covered Currenciesall currencies
Maximum Protected Amount100 000 EUR
Paid In CurrencyEUR

Table 2. Deposit guarantee scheme in France.

EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Euro) Foreign Currency
Aaa (prime) Aaa (prime)

Local currency (Euro) deposit ceiling for France is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).

Deposit Rates

Average Deposit Rate (Aug 2017, EUR)
0.96 %  (Jul 2017: 1.05 %)
In Aug 2017, an agreed annualised deposit rate in local currency (Euro) of new contracts with agreed maturity up to 1 year between credit institutions and households was 0.96% which was above the Euro Area average (0.36%).
Deposit Rates in France.

Chart 7. Deposit Rates in France. Source: ECB.

Further Information

Banking Sector Structure

Number of Banks
548
Consolidated Assets (2016)
7 215.96 bln EUR  (+3.97%)
Recent Changes (2016)
new banks: 3, closed banks: 15

Currently there are 548 credit institutions operating in France.

In 2016 consolidated banking assets in France were 7 215.96 bln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.

Consolidated banking assets in France.

Chart 8. Consolidated banking assets in France.

Recent structural changes (2013 - 2016) of the banking sector of France are summarised in Table 3.

2013201420152016
Number of Opened Banks8863
Number of Closed Banks11212215

Table 3. Recent structural changes in the banking sector of France.

The list of the most recently opened banks in France is provided in Table 4.

NameStart Date
 BANK OF COMMUNICATIONS (LUXEMBOURG) S.A. (new)November 2016
 Berlin Hyp AG (new)April 2016
 Santander Consumer Banque (new)January 2016
 Crédit Immobilier de France Développement (new)August 2015
 CHINA CONSTRUCTION BANK (EUROPE) S.A (new)July 2015
 Australia and New Zealand banking group limited (new)April 2015
 Lombard Odier (Europe) S.A. (new)March 2015
 AGENCE FRANCE LOCALE (new)January 2015
 Mirabaud et Cie (Europe) SA (new)January 2015
 GE Capital bank limited (closed)November 2014
 

Table 4. The most recently opened banks in France.

All the credit institutions operating in France can be classified into several categories. Table 5 summarises the number of banks in each category.

CategoryNumber of Banks
Banks271
Branches of foreign banks88
Central banks1
Municipal credit banks18
Mutual banks85
Specialized credit institutions85

Table 5. Number of banks by category in France.

There are 87 branches of foreign banks from 24 different countries in France. Table 6 shows 10 countries having the biggest number of branches in France.

Country of OriginNumber of Branches
 United Kingdom17
 Germany16
 Luxembourg8
 Italy6
 Iran, Islamic Republic of4
 Netherlands4
 Spain4
 Belgium3
 Austria2
 India2

Table 6. Number of branches of foreign banks in France grouped by country of origin.

Savings Accounts

Minimal Interest Rate
0.65 %
Maximum Interest Rate
3.60 %
50 offers from 10 banks

Time Deposit Accounts

Minimal Interest Rate
0.56 %
Maximum Interest Rate
1.50 %
29 offers from 4 banks

Credit Cards

Minimal Annual Costs
0.00 EUR
Maximum Annual Costs
330.00 EUR
14 offers from 8 banks

Consumer Loans

Minimal Effective Rate
1.79 %
Maximum Effective Rate
6.60 %
43 offers from 6 banks

Car Loans

Minimal Effective Rate
1.00 %
Maximum Effective Rate
6.00 %
27 offers from 3 banks