Half Year 2024 Credit Agricole SA Earnings Call (English, French) Transcript

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

Question: Tarik El Mejjad - Bank of America Merrill Lynch - Analyst : Just couple of quick questions, actually. The first one, maybe it's not fair to ask you that soon, but there were some headlines or some news in the Republica about potentially new solidarity levy for Italian banks and actually insurance as well this time. Do you have any comments on that? If there is any -- anything has been discussed before? It looks like this time it would be more consultation with banks before coming good proposals on how that would be calculated. Any views? Second question, you commented on Credit Agricole being willing to be active on conservation in Europe? Were you referring mostly to the deals you have done so far within the wealth management and those smaller bolt-on? Or are you taking something bigger? And maybe I'll add a quick one on Degroof Petercam, and if you can give us some update on potential impacts on post full integration if you have any update to the ones from the ones that you gave us pre-consolidation. 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. AUGUST 01, 2024 / 10:00AM, CAGR.PA - Half Year 2024 Credit Agricole SA Earnings Call (English, French)

Question: Giulia Aurora Miotto - Morgan Stanley - Analyst : My first question would be on capital. Can you please remind us of the impacts coming, especially from the regulatory front and now that [effort] has been postponed. So that's a simple numbers question. And then secondly, French retail. You seem the encourage by the development in client deposits, can you give us some outlook on how you expect that revenue line to develop for the rest of the year? And I have a very quick one on slide 21, where you comment large customers. Basically, the slide has good level of activity supported by structured equity. And my question is just what do you mean by structure of equities? Because I know this was a strong quarter for equity derivatives. That's what we heard from every bank but as reported before you, but I didn't think that was a big area for [a categorical] at all? So I'm surprised by this comment. 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. AUGUST 01, 2024 / 10:00AM, CAGR.PA - Half Year 2024 Credit Agricole SA Earnings Call (English, French)

Question: Giulia Aurora Miotto - Morgan Stanley - Analyst : Thank you. The French retail outlet? (technical difficulty)

Question: Delphine Lee - JP Morgan - Analyst : I just have really two quick ones. Just of all that is on the insurance. Just get a bit of color on the strength of this quarter. Is there anything that you can highlight [on the pricing] or product mix or anything on P&C or life insurance that you can just help us understand better. My second question is on capital. You previously talked about optimizing a bit RWA, if I so remember this correctly. I mean, you still have EUR4 billion of on TRIM impact that is coming on maybe in '25. Just wondering what we should expect because organic growth was relatively strong this quarter. And also just a very quick one on the capital increase [for employees] that you are doing in Q3. You intend like last year to offset this dilution with the buyback? Thank you.

Question: Guillaume Tiberghien - Exane BNP Paribas - Analyst : Two very small question in French retail. Number one is on the current account deposit. You say that you see possibly tentative signs of improvement. Could it be due to the last three weeks of June where people were better paralyzed because of the elections and they decided to put money even if it doesn't remunerate much on very liquid deposits. The second question is on trying to quantify because you don't give it -- the one-off in NII in French retail and I noticed that the tax rate is only 22% in French retail instead of normally 25%. So can I work it backwards and basically say that this is a roughly EUR35 million [un]taxed private equity gain in there. Thank you.

Question: Stefan Stalmann - Autonomous research - Analyst : I wanted to ask first about the insurance business, please. I think this is the first time in probably five years that you had net inflows into euro life policies. Do you think there's a more permanent maybe an early sign of a more permanent which of clients who actually never quite like the unit-linked and now have an opportunity to go back into euro policies given the better rate environment. And if that isn't the case, what do you think this means for, let's say, solvency and capital management in the insurance business in the medium term, if anything? And the second question is on your dividend plans or the payout plans. The accrual rate that you apply every quarter seems to be a bit uneven. It's now 54% of EPS for the first half. So it's close to 50%, but it's not exactly at 50%. How should we think about the accrual for the second half of the year? Is it going to follow just 50% of EPS? Are there other considerations? And what does this all mean for the dividend for the full year. If anything? Thank you.

Question: Stefan Stalmann - Autonomous research - Analyst : There was maybe -- oh, sorry.

Question: Stefan Stalmann - Autonomous research - Analyst : There was about a EUR200 million negative [81] FX effect, I think, in the first quarter and I'm not sure how you treated that for your payouts, but maybe you look through that.

Question: Joseph Dickerson - Jefferies - Analyst : Can you just discuss the strength in the consumer finance business because it stood out versus your peers quite strong. I think last quarter you talked about some of the front book margins now starting to pick up and I suppose that might accelerate with some whatever happens with interest rates coming down over the rest of the year. So I guess what's the outlook for that business? And what are the drivers there because that was quite a standout performance versus peers? Thank you.

Question: Jacques-Henri Gaulard - Kepler Cheuvreux - Analyst : Two questions which are linked really. The first one is about the increase in the stake of the regional banks into (inaudible), which is now at 62.8. So the question is, can you remind us where they are bound if they've communicated of where they can actually go up to? And the second question, which is linked to that clearly, and we're back a bit to acquisition. You clearly have, and that's a tribute to what you've done with [Zenvia and Philippe] over the last 10 years, your multiple is more or less doubled, which is not necessarily the case of every French bank. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 01, 2024 / 10:00AM, CAGR.PA - Half Year 2024 Credit Agricole SA Earnings Call (English, French) You have to basically buy something, maybe not big. I'm not talking about big consideration, but you have an optionality to use that multiple, to actually develop. Is it something that might be considered or it's not at all on the cards.

Question: Flora Bocahut - Barclays - Analyst : Two questions from my side. The first question is actually regarding the ECB rate cuts that happened at the end of the quarter. So in June, I finally, when I look at your business mix at (inaudible) that rate cuts may actually benefit a lot of your businesses. So I was just wondering of the (inaudible), but have you seen any impact whether on your business, on your clients' behavior, on the way your competitors react to the (inaudible) market post the ECB rate cut? The second question is regarding your net profit guidance for this year. You did obviously very strong H1. You've achieved now EUR3.7 billion of net profit in H1. I know you don't like to change the target too often, but the question is simply is there any -- anything that we need to expect in H2 beyond the normal seasonality that would explain why you keep the guidance unchanged despite the strong H1.

Question: Anke Reingen - RBC Capital Markets - Analyst : Just two small questions. The first is on the underlying cost growth of the 5.7% year over year. Just confirming that this likes be almost like a peak as your second half last year was already a higher cost base? Or should I be concerned continue to (inaudible) this rate considering inflation as well as potential investments. And then secondly, I was just wondering if you have anything to add on the ECB review of the leveraged finance exposures and what if you're happy to provide any indication about the size of the exposure that will be in scope at your bank? Thank you very much.

Question: Chris Hallam - Goldman Sachs - Analyst : So first one, just on Italy. On the volume side, clearly a bit of a change, I guess, in approach to mortgages. Production was trending down 13% in the first quarter and now it's up 40% year over year in Q2 -- stable, I guess, Q2 versus Q1, I think it was also stable Q1 versus Q4 last year. So just looking through the rest of the year for Italy, how do you expect that business to trend both in terms of volumes and in terms of margins? And then secondly, maybe just a bit of a broader question on M&A. And perhaps it's a bit of a follow-up to Jacques-Henri's question earlier, but you've done quite a few transactions now, right? Like Alpha, Degroof, Petercam, RBC, Wordline. How confident are you in your process and your team in identifying targets, assessing potential value creation, delivering the integration? Is that machine up pretty much as well-oiled as it can be? And does that give you greater confidence in doing something bigger than perhaps you would have felt comfortable doing beforehand?

Question: Pierre ChTdeville - CIC Market Solutions - Analyst : A follow-up question on consumer credit and insurance. Consumer credit, you mentioned a decrease in production and you mentioned China, could you explain exactly what happened there? Is something which is a heavy trend or is it something (inaudible) there? And concerning insurance, you mentioned, of course, the good commercial dynamism, but you also mentioned technical gaps of experience. I wanted to know what is the part of this gap in the growth of revenues compared to the growth of revenue due to commercial dynamism. And last question, you also mentioned good development of creditor insurance at the international level, I wanted to know what you mean by international. Is it Italy, which is actually your second market or other countries? Thank you very much.