Crelan: a cooperative group
Crelan is one of the five largest banks in Belgium in terms of assets. It focuses on retail customers (83.3%), the self-employed, and SMEs.
Crelan is a cooperative banking group owned by individual cooperative shareholders, with a capped maximum amount of shares owned. This structure helps Crelan maintain strong stability and organic capital generation higher than peers.
In December 2021, CRELAN SA/NV acquired AXA Bank Belgium (ABB) and fully integrated the latter by June 2024, which led to a Moody’s rating upgrade from A1 to A2. On 21 May 2025, the Crelan Group and the Crédit Agricole Group announced that they have formed a strategic partnership to expand Crelan’s product offerings and foster commercial development. The agreement involves Crédit Agricole acquiring a 9.9% minority stake in Crelan SA and includes collaborations in asset management, private banking, wealth management and leasing. We see this as a positive development that should allow Crelan's spread to tighten further across the capital structure, as it would give credence to management’s plans to grow the business.
Best-in-class solvency & asset quality metrics
CET1 ratio of 27%, well above the minimum CET1 requirement of 11.26% under the Supervisory Requirement and Evaluation Process (SREP), which is also among the highest in Europe, along with UK building societies and other cooperative groups in Europe, reflecting Crelan’s strong conservative culture. Comfortable liquidity metrics, with a LCR ratio of 196% and NSFR of 133%.
Very strong asset quality metrics. Stage 3 & POCI loans at 1.37%, cost-of-risk ratio of 4.3bp as of FY24.
Profitability and C/I ratios are weaker than peers due to a strong focus on low-risk and low-margin mortgages; NII was also under pressure in 2024 due to the increase of junior liabilities at the bank following the issuance of junior senior debt and Tier 2 securities and the non-recurring IT migration and platform optimisation costs related to the integration of ABB.
Belgium: macro & fiscal outlook
Cautiously optimistic macro outlook, with modest GDP growth (1.2%). Belgium’s debt burden remains among the highest in the eurozone, at 104% of GDP in 2024, and is expected to rise further to 106% by 2028 if consolidation efforts falter. S&P revisited its outlook on Belgium’s sovereign credit rating from stable to negative on 25 April.
The unemployment rate remains historically low, but some vulnerabilities persist. Potential geopolitical developments, including trade tariffs, pose downside risks to the economic outlook.
The banking sector is solid, with substantial customer deposits and healthy and stable net interest margins.
Despite these concerns, Belgium’s economy retains some strengths. Domestic consumption remains resilient, and Belgium’s external position is sound, with a projected net asset position of 60% of GDP in 2025.
Crelan Home Loan SCF covered bond programme
Crelan, despite being a 100% Belgian issuer, uses the French covered bond framework (obligations foncières or covered bonds, Bloomberg ticker CRLNCB) in its covered bond programme. Thus, Crelan Home Loan SCF benefits from the support provided by the French legal framework.
Crelan Home Loan does not conduct any operational business of its own, instead serving exclusively as a provider of specialised financing within the Group under French law for refinancing by means of covered bonds. It is 100% owned by Crelan SA/NV.
We believe that the configuration of a covered bond issuer that applies the French legal framework as part of its programme while simultaneously having recourse to Belgian mortgage financing would have certain diversification effects.
Crelan SCF’s cover pool is centred around prime residential assets (92.1%). Moody’s collateral risk score of 4% is at the very low end of the European covered bond programmes, highlighting the underlying quality. Moody’s assigns a TPI leeway for the Aaa-rated covered bonds of three notches. Outstanding covered bonds add up to EUR10bn, leading to an overcollateralisation (OC) ratio of 31.1%. The legally binding minimum OC in France is 5%. In addition, Crelan undertakes to ensure that the issuer will maintain at least 12% OC; under Moody’s COBOL model, the minimum nominal OC consistent with the Aaa rating is 7.5%.
Based on Moody’s top rating (Aaa), a preferred risk weight of 10% is applicable for the covered bonds of Crelan Home Loan in accordance with CRR. In addition, EUR benchmark transactions are eligible as Level 1 assets for LCR management purposes. Moreover, Crelan Home Loan covered bonds are suitable as collateral in transactions with the ECB and can be marketed under the European Covered Bond (Premium) label.
Crelan Home Loan SCF is planning its inaugural issue to the primary market for covered bonds in EUR benchmark format in 2025, following the full consolidation of ABB. We expect Crelan to become a regular issuer in the EUR covered bond market from now on, with at least two yearly benchmarks. Crelan’s covered bonds have historically traded at the tight end of the Belgian market.