Full Year 2024 Credit Agricole SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tarik El Mejjad - BofA Global Research - Analyst : Hi, good morning, Jerome. Congratulations, excellent results, really, great quality. So I won't ask you again as I usually do on, are you reviewing your guidance up? I think we'll have all to wait for another few months. But still related to that, I mean you've been delivering record high ROTE, so 14% for the full-year '24, and it seems that you are not yet firing on all cylinders. So do you think the bank has structurally shifted to materially high ROTE versus previous plans? If I remember the last few plans, you basically increase your ROE by 50 to 100 basis points, ROTE plan after plan. Now we are way above the previous planned targets. So is this a structural shift, or there are some elements that flatter a bit you're -- are we, for example, I'm thinking of the CET1 ratio of 11%, but you seem to be adamant this is the right level for you. And then related to that still on the Capital Markets Union, you wrote a very detailed article a few weeks ago on the securitization, the benefits of it Europe linkage report. Should we expect in your new plan after (inaudible) Maybe there's a new plan where you are more trying to leverage on the European working together and securitization within the CMU. One of your competitors yesterday start to embed the CMU even within the medium term outlook for their profitability. Are you in the same situation? And then the last question, I mean, I have to ask it. Let's see how much you can say on that, but on Italy. I know the situation remains very fluid, but I wanted to see where is your position in here. You often present it more as defending your interests. There was a few headlines this morning again, but I think it's quite the opposite. I think you have a big opportunity here to leverage on your stake. So can you (inaudible) -- can you maybe update us on where you sit there and what kind of timeline we should watch? Thank you.

Question: Tarik El Mejjad - BofA Global Research - Analyst : Thank you, Jerome.

Question: Giulia Aurora Miotto - Morgan Stanley & Co. International Plc - Analyst : Yes, hi, good morning, Jerome. Can you hear me now? Let's try again. Okay. Wonderful. Thank you. I'm sorry. I don't know what happened earlier with my phone. So two questions from me as well, and slide 22, shows how you created value, via, Boltons. I think it's a nice slide. You are currently ahead the 11%, CET1 target, and I hear, of course there is buzzle coming, but. What are you most focused on, with your excess capital at the moment at the margin, what sort of business or geographies are you looking to deploy that -- that's, and would this be mostly bolt on or could it be a larger, deal? That's the first question. And then second question in terms of you mentioned risk migration on RWAs. Is there something that we should start to worry about perhaps with respect to France, in terms of asset quality deterioration or not really? What are you seeing there? Thank you.

Question: Giulia Aurora Miotto - Morgan Stanley & Co. International Plc - Analyst : Thank you very much.

Question: Delphine Lee - JPMorgan - Analyst : Yes, good morning. (multiple speakers) Thanks for taking my question, Jerome. Just to, I mean, maybe just to a follow up a little bit more sort of on strategy in general in Italy, so I get your point on that you don't decide on the landscape in Italy, but sort of what is the -- what would be the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:00AM, CAGR.PA - Full Year 2024 Credit Agricole SA Earnings Call best scenario for you and for Amundi in general, like what's your -- what's on your wish list? And then a second question also on M&A, I mean you've been very successful on bolt ons and, completely agree that it's easier to integrate, but like if you were to look at opportunities that are slightly bigger, what countries would you focus on first in your view?

Question: Delphine Lee - JPMorgan - Analyst : Great. Thank you very much.

Question: Kiri Vijayarajah - HSBC Bank Plc - Analyst : Yes, good morning, Jerome. A couple of questions from my side. So, firstly, on the interim dividend, or rather the lack of it, I have to say I'm a bit surprised because I know when we talked in the past you've sounded quite amenable to the idea and I know you mentioned your big shareholder would probably be in favor of it as well. So what's the rationale for not following what your peer announced yesterday with regards to the interim dividend. And then just more a technical question on the exchange rate effects in CIB on a slide 14, the EUR2.7 billion of RWAs, presumably that's from a stronger US dollar. So I guess I'm a bit surprised you're not better hedged, but is it fair to assume that there's more of that to come through in Q1, given what's been happening with the EUR, dollar, exchange rate year-to-date? So just, yeah, guidance on the, non-euro denominated RWAs, please? Thank you.

Question: Kiri Vijayarajah - HSBC Bank Plc - Analyst : Okay. That's very clear. Thank you, Jerome.

Question: Flora Bocahut - Barclays Investment Bank - Analyst : Yes, good morning, Jerome. So two questions, from me as well. I'd like to go back to dividend, but more to discuss the payout here because obviously you have excess capital. There are moving parts in Italy. There is, Bolton, M&A that you do here and there. I know there is Basel IV also coming. But, yeah, what's your appetite here to potentially look into the payout again, or is there absolutely none. No will from your side to change the 50% payout. And then the second question is actually regarding the announcement today from the regional banks that they're going to buy up to EUR500 million of Credit Agricole SA shares and that they have no intention to go be beyond 65% ownership. I know I should ask them rather than you, but you're also part of the group, more generally. So I'd be interested in your view on a few things there. First, why that 65% limit, if you could explain that would be helpful. And then obviously they continue to pile up excess capital in the regional banks. So what is the view, once they are at 65%? Are you considering within the group changes to the capital structure or there is absolutely no discussion there? You think it's optimal as it is. Thank you.

Question: Flora Bocahut - Barclays Investment Bank - Analyst : Understood. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:00AM, CAGR.PA - Full Year 2024 Credit Agricole SA Earnings Call

Question: Pierre Chedeville - CIC Market Solutions - Analyst : Yes, (multiple speakers) hello, Jerome. One question regarding insurance. I remember that when you launched the previous plan, Philippe Brassac was very optimistic regarding the development with SME customers, and I remember at that time I was a little bit skeptical considering the fact that these types of clients were very targeted by AXA, for instance, or over a pure pleasure and insurance. And then when I look at your beautiful slide 21, I can see that your P&C business in terms of market share is quite stable and I wanted to have a view maybe in the development and SMEs. Was it as good as Philippe thought at that time? First question. My second question relates to Asia. We have seen yesterday that Amundi is performing very well in Asia and not only in the GVs with more than EUR400 billion of assets under management ex JVs in Asia, and I wanted to know if you can link this development with other parts of your business, especially CACIB. And if you have seen this last day, these last year during the plan, a significant increase of your revenues in Asia, and do you see a link between Amundi and other parts of your business in Asia? And last question is regarding LCL. Could you come back a little bit on the impact of macro aging? This quarter, I did not really understand why this quarter, your margin is decreasing and could you confirm that in 2025 regarding the evolution of rates, this margin should increase? Thank you.

Question: Pierre Chedeville - CIC Market Solutions - Analyst : And have you seen the revenues progress during the plan?

Question: Pierre Chedeville - CIC Market Solutions - Analyst : But not an increase, a significant increase -- not a significant increase.

Question: Pierre Chedeville - CIC Market Solutions - Analyst : Okay. Okay. Thank you, very clear. Thank you very much.

Question: Alberto Artoni - Intesa Sanpaolo S.p.A (Research) - Analyst : Good morning. Thank you for taking my questions. I have two questions on the asset gathering business. The first is, do you expect a lower rate to continue to support good business momentum, particularly life insurance as wealth management. And the second question is more general. There has been a debate around the active fixed income funds and products, and some people say that going forward we should expect the same level of competition that we've seen in active equities. Other people say that given the difference between fixed income and equity markets, the competition will not be as tough and active fixed income products, and a much brighter future compared to the active traditional products. So what's your take on that debate? Thank you.

Question: Alberto Artoni - Intesa Sanpaolo S.p.A (Research) - Analyst : Yeah, asset management, but that also fits into life insurance products and directly wealth management indirectly also.

Question: Alberto Artoni - Intesa Sanpaolo S.p.A (Research) - Analyst : Okay. Thank you very much.

Question: Matthew Rosso - RBC Capital Markets - Analyst : Good morning. Thanks for taking my question. Morning, just a couple on most finance, so based on the just what your assumptions on the provisions you've taken, do you make an assumption on the Supreme Court really coming up in the UK? And then secondly related to that, are there anywhere else, any other things in Europe and other parts of business where you'd expect some more action to be taken, by European regulators in terms of discretionary commissions? Thank you very much.

Question: Matthew Rosso - RBC Capital Markets - Analyst : Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:00AM, CAGR.PA - Full Year 2024 Credit Agricole SA Earnings Call

Question: Sharath Kumar - Deutsche Bank AG London - Analyst : Thank you, Jerome, for taking my question. So I still have a couple. So firstly, coming back to French retail, again, expanding a bit on Pierre's question. So I would say it was encouraging to see, the mortgage loan production pick up. Where do you think is the current appetite for a further improvement in the current political climate? I know that the ECB lending service suggested some softness in the first quarter versus the prior quarter, so any comments there would be appreciated. Second one is on personal finance, again encouraging to see a good sequential recovery, although I know someone of elements, but nevertheless, the underlying growth is still encouraging. So where do you see the development of margins and volumes in the wake of lower interest rates in 2025? Thank you.

Question: Sharath Kumar - Deutsche Bank AG London - Analyst : Personal finance or (multiple speakers)

Question: Sharath Kumar - Deutsche Bank AG London - Analyst : Thank you, Jerome.

Question: Matthew Clark - Mediobanca SpA - Analyst : Hi, two questions please. One going back to the macro hedging in LCL, sorry if I missed it. I just wanted to confirm, is this macro hedging on the mortgage portfolio. And then second, and if not, what is the macro hedging on specifically in terms of products. And then second question is just on the tax rate. Can you give us a guide for the year ahead, please? Thank you.

Question: Matthew Clark - Mediobanca SpA - Analyst : Understood. Thank you.

Question: Matthew Clark - Mediobanca SpA - Analyst : Understood. Thank you.