In addition, Edenred may contract commodity hedges to hedge against unfavorable changes in fuel prices. Financial institution counterparty risk


The Group is exposed to banking counterparty risk, especially with regard to funds invested. Its counterparties are financial institutions with which its available cash is invested and from which interest rate and currency instruments are purchased. Default by one of these institutions or a deterioration in its financial position could result in financial losses for Edenred.


Measures to manage the risk

Exposure to counterparty risk is reduced by dealing only with leading counterparties according to correlated country risks. The Group uses a wide range of counterparties, sets exposure limits by counterparty and uses a monthly reporting procedure to track their concentration and their credit quality based on their credit ratings.

Details of the Group’s counterparties are presented in Note 6.6 “Financial instruments and market risk management” to the consolidated financial statements, paragraph “Credit and counterparty risk”, page 281.

Group policy consists of investing available cash in the currency of the country in which its solutions are proposed. It is therefore exposed to country risks, which could, in particular, arise from a financial crisis affecting one or more of its host countries.

A significant proportion of the Group’s available cash (corresponding to cash denominated in euros) is invested with the holding company, Edenred SE, under the worldwide centralized cash management scheme. Under this system, the subsidiaries’ available cash is transferred to Edenred SE in all cases where this is allowed under local law or the law governing the business concerned, and where financial conditions permit. Regular centralized monitoring of these funds helps to reduce the Group’s exposure to counterparty risks on the leading financial institutions with which the funds are invested.

Moreover, pooling available cash in this way is one of the main reasons for the Group’s very limited exposure to counterparty risks in countries on review for a potential credit rating downgrade. As part of this prudent policy, the Group selects financial institutions independently of the country from which the available cash originates.

Invested funds amounted to €5,107 million at December 31, 2021, of which €2,679 million (gross) reported as cash and cash equivalents and other marketable securities (see Note 6.3 “Cash and cash equivalents and other marketable securities” to the consolidated financial statements, page 270) and €2,428 million reported as restricted cash (see Note 4.7 “Change in Restricted cash”, page 258).

The average interest rate was 1.2% at December 31, 2021 and 1.3% at December 31, 2020. Instruments with maturities (after any hedging) of more than one year represented 23% of the total at December 31, 2021 versus 22% at December 31, 2020.


4.1.2 Legal risks

The five main legal risks to which the Group is exposed are as follows:

  • risks related to personal data protection regulations, presented in section below;
  • risks related to changes in the laws or regulations governing solutions qualifying for a specific payroll and/or income tax regime, presented in section below;
  • risks related to competition law, presented in section below;
  • risk of tighter control over the Group’s activities via banking regulations, presented in section below;
  • risk of being caught up in activities that involve bribery, money laundering and/or the financing of terrorism, presented in section below. Risks related to personal data protection regulations


Edenred’s activities involve processing at times vast volumes of personal data from users of the Group’s solutions, particularly digital solutions, as well as for other stakeholders in its business, to a lesser extent. Protecting this data is a priority for Edenred and the bedrock of stakeholder trust (see also section “Priority issue: personal data”, page 141).