Credit Agricole SA Q3 2024 Earnings Call (English, French) Transcript

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

Question: Giulia Aurora Miotto - Morgan Stanley - Analyst : My first question goes to the French budget the increase in taxes. I think Credit Agricole makes about 40% of its income in France. What sort of impact do you expect -- so is this correct? And what sort of impact do you expect coming from the increased corporate tax? That's the first question. And then secondly, more to the business. So insurance. Insurance was a bit volatile this quarter due to crop impacts, crop insurance impact, if I understand it correctly, on a revenue basis. So how much can we extrapolate from that? I mean given the climate change, maybe that's something that tend on a profit before tax maybe basis, does your usual guidance of mid-single-digit growth. stand? Or how do you see the earnings evolving in insurance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / 10:00AM, CAGR.PA - Q3 2024 Credit Agricole SA Earnings Call (English, French)

Question: Giulia Aurora Miotto - Morgan Stanley - Analyst : Just a clarification. On the first -- the tax, the EUR300 million that you quoted for 2017, so we can take that -- I mean, it as the worst case scenario, and it will be lower because that was split with the [cash G&A] I guess.

Question: Guillaume Tiberghien - Exane BNP Paribas - Analyst : Number one is on the insurance again. So you used to guide us for around 5% net profit growth. So should we like in the past, forget the revenue volatility and just put profit growth. The second element back to the tax, I can understand that in '17, you paid EUR300 million more, but your PBT this year is going to be like 50% or 60%. I'm not asking you to confirm that 50% or 60%, but the order of magnitude versus '17. So should we actually grow a similar amount, the tax that you're going to pay? And then a final clarification, if you don't mind. The RWA of LCL seem to have increased by EUR1.6 billion this quarter on hardly any loan growth and loan growth was mostly on mortgages. Is there any change in model? And if so, is it going to be material going forward? Or is it just a one-off adjustment?

Question: Tarik El Mejjad - Bank of America Merrill Lynch - Analyst : Just two questions for me, please. I'll take a small step back and look at your profitability in nine months, close to 15% or 14.5%. I don't expect any major headwind in Q4, actually quite the opposite with some businesses turning the corner and growing faster. So why not actually looking more constructive in terms of outlook? I mean we're not asking for a new plan. But actually, you brought forward the full year above EUR6 billion net profit pre AT1 from '25, '24. That was last quarter. But I mean, what prevents you at this stage to be more constructive on this? . And then the second question is on the M&A. You've been quite eventful today in all aspects. But on the consolidation part or you now more disposed to contemplate some larger opportunities in Italy. I think it's fair to say that the golden power rules in Italy are difficult to be enforced, given how government was vocal on supporting a deal in Germany for your credit? Is that an opportunity for you, you will contemplate. Now Creval is, I think, digested and you never been hiding the -- your ambitions in Italy. So any comments in there would be very useful.

Question: Flora Bocahut - Barclays Investment Bank - Analyst : Yes. The first question is on LCL, where you had a small gain in private equity in Q2 in the NII. And I think this quarter, you seem to mention in the slide pack the positive extraordinary effect from the revaluation of an equity investment. So I was just wondering if you could quantify. So we have a better understanding of the move sequentially in your underlying NII at LCL. And the second question is coming back to insurance. I just want to understand why you're rethinking the financial debt structure. What should we read into this, between the AT1 and the Tier 2? And maybe can you give us a few numbers, the size of the Tier 1 versus Tier 2, so we can assess because you said it's a progressive shift. So it looks like there is more to come, so we can better approach where your revenues could come in the next quarters.

Question: Kiri Vijayarajah - HSBC Bank Plc - Analyst : Firstly, can I just come back to your optimism on the French home loan demand I mean how much of that is reliant on further declines in 10-year, 20-year swap rates going into next year? Or is it more a case that the pipeline that you can see already feels pretty strong, and that's going to come through regardless of where interest rates move in the short term. And I ask because rate expectations have been pretty volatile recently. So just some color on the quality of the mortgage demand and the pipeline there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / 10:00AM, CAGR.PA - Q3 2024 Credit Agricole SA Earnings Call (English, French) And then the second question actually is still on sort of the volume side of things, more on your fleet leasing business. I know you've signed more partnership deals, have done bolt-on acquisitions. But my question is more on the next two to three years, what's the steady pace of asset growth and volume growth in mobility, leasing. And also, it feels like a lot of the consolidation in that little subsector has now happened already. So when it comes to just sort of natural organic growth and if you find it harder to do bolt-on deals there, what's the kind of steady-state growth if you like, that we should pencil in, in the fleet mobility side of the business?

Question: Joseph Dickerson - Jefferies LLC - Analyst : Just one quick thing on consumer finance. I guess I was a little surprised at the revenue yield there in the quarter. I would have thought that business is relatively liability sensitive. And you've talked before about front book margins being better than back book. Is there any change to those dynamics in consumer finance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / 10:00AM, CAGR.PA - Q3 2024 Credit Agricole SA Earnings Call (English, French)

Question: Joseph Dickerson - Jefferies LLC - Analyst : Can I ask one more question on insurance? So just on the crop claims, I mean, I guess if I look at the -- in the current quarter, for instance, there's been some flooding in various parts of the country, notably the South. I mean is this the type of thing that we would expect to recur around these weather events? Or do you feel that through IFRS 17, maybe you've captured even the current weather situation in the present quarter?

Question: Matthew Clark - Mediobanca SpA - Analyst : A few questions, please. Firstly, on the Capital Markets and Investment Banking division. There doesn't seem to be a whole lot of operating leverage coming through there. Can you give some commentary on why is this what you think is the appropriate level of operating leverage, but why are we not seeing costs more contained relative to revenues there? Secondly, in the consumer finance business, thanks for the commentary on the financing cost. But in terms of just the sequential revenue trends, you were up quite strongly in the second quarter and then gave most of it back again in the third quarter. Could you just comment on what's driving that quarter-to-quarter volatility? Was there some kind of lumpy item last quarter perhaps and then third question is on the Worldline stake. If you could just remind us how that's accounted for. Is it mark-to-market? I was a bit surprised that you called out the Bami stake is affecting the corporate [center] I don't think you mentioned the Worldline stake. So just some explanation of what -- if that hasn't impacted, what it hasn't impacted? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / 10:00AM, CAGR.PA - Q3 2024 Credit Agricole SA Earnings Call (English, French)

Question: Matthew Clark - Mediobanca SpA - Analyst : And on consumer finance?

Question: Matthew Clark - Mediobanca SpA - Analyst : Just why the sequential quarterly volatility, it was up, I think, about 4% second quarter versus first quarter then down about 3% third quarter versus

Question: Stefan Stalmann - Autonomous Research LLP - Analyst : Just two small ones left. The first one is looking at the UK where you have the slow-moving train rack of motor finance related legal claims. Is that something where could Agricole is involved and exposed in any material way? And the second question goes back to insurance. I think you mentioned it, but I didn't catch the full explanation. Why the risk-weighted assets in insurance increased by EUR3 billion. Was that a purely organic development? Or was there a capital injection?

Question: Anke Reingen - RBC Capital Markets - Analyst : Somewhat different questions. And on this call, we talked a lot [about flat Sam's Clubs] and so on. And I just wonder, is there a scenario which you would review your credit risk with respect to climate change and potential risk weighting, so as well as take in additional provisions?

Question: Jacques-Henri Gaulard - Kepler Cheuvreux - Analyst : Last question, it doesn't bode well for my career, I tell you. But anyway, two questions. First, one of the big drivers of the stock price, I think, is really the big change of governance that you are facing quite soon. Maybe from where you sit, your perception about the fact that there would be any change of strategy or you would change the country priority all the businesses, knowing that clearly, on the back of what you're reporting