Businesses: Banque de France adopts a new rating scale

On January 10, the Banque de France decided to modify the rating rules used to determine the financial situation of companies. This new rating scale will now be applied to the 300,000 French companies rated by the institution. What changes are expected?

What is the Banque de France quotation?

The purpose of the Banque de France rating is toanalyze a company's solidity, by estimating its ability to meet its financial commitments over a period ranging from one to three years. The Banque de France's rating has a major impact on a company's ability to meet its financial commitments over a period of one to three years, as it enables banks to assess the company's risk profile and thus determine whether or not a loan will be granted.

The rating applies to all companies with annual sales in excess of €750,000. Banque de France analysts base their assessment on a number of factors: they scrutinize the company's accounts, study outstanding loans and take into account any payment incidents.

They also take into account the company's environment and the evolution of the market in which it operates. They study financial links with other companies, relations with suppliers and customers, as well as the company's strategy, shareholding and communications, not forgetting its approach to corporate social responsibility (CSR).


Why apply a new rating scale?

Since January 10, the Banque de France has been applying a new rating scale, designed to provide a more detailed analysis and to harmonize practices at European level.

The rating scale, which until now comprised 13 levels, has now been increased to 22 levels for greater precision. As a result, banks will be able to assess risk more accurately, enabling them togrant or refuse loans with greater discernment.

In addition, of these 22 rating levels, 10 will give access to refinancing from the European Central Bank, i.e. twice as many as before. The companies concerned will thus be able to benefit from better lending conditions.

Other changes: start-ups will no longer be subject to the same requirements, and payment behaviour will be subject to more detailed analysis. According to Pierre-Yves Gauthier, Head of the Economic Services Department, the consequences should be positive for the majority of companies, avoiding " threshold effects ".

Doubtful debts will be analyzed using more subtle criteria, with the aim of helping companies to overcome the impact of the health crisis. The aim is to avoid a general downgrading of ratings, without the Banque de France rating system losing relevance and credibility.