00:00Can I just ask what message we should be taking away from these earnings?
00:03Because it seems as if we might see the stock go a little weaker at the start.
00:07There's a bit of concern that maybe the costs associated with revamping the Italian business
00:12are weighing a little too heavily on the company.
00:14What's your take this morning?
00:17All right, well, thank you for having me.
00:19It's true that we have the fourth quarter results that are impacted by the first-time consolidation
00:24of our participation in Banco BPM.
00:27And you were talking about costs in Italy.
00:29We also have restructuring in Italy that is planning for the future to develop digital
00:34customer capture, Salesforce expertise.
00:38So these are investments that we're putting in place in the context of our medium-term
00:42plan.
00:43But if we take a step back and look at the yearly results, the income is stable thanks to very
00:50strong activity in all of the business slides in insurance, in asset management, in retail
00:55banking, in CIB.
00:56And despite an additional corporate tax.
01:00So we have a profitability that is very strong at 13.5% in ROTE, very high capital and liquidity
01:08levels.
01:08And all this bodes well for 2026 because in 2026 we have a number of strong, favorable factors
01:17coming.
01:17We're going to have a continued commercial momentum in all of these business lines.
01:22We're integrating our recent acquisitions and this is going to support us in terms of
01:27synergies.
01:28We're going to have personal finance and retail banking that are going to continue to benefit
01:34from the upterm in margins.
01:36Mobility is going to recover profitability.
01:38And the CIB is, of course, going to continue to perform very well.
01:43And finally, going forward, thanks to this first-time consolidation of our stake in Banco BPM, we're
01:49going to have a very high and recurring profit every quarter based upon previous figures, which should be around 100 million per quarter.
01:59Okay, so a more positive story that you're telling.
02:03Just to take us back to the numbers for the fourth quarter, loan loss provisions did seem to come in ahead of estimates.
02:09Is that a warning sign?
02:11Is that telling us something cyclical or are these one-offs?
02:15We have a certain number.
02:16We have two main one-offs this quarter.
02:19The first one is a provision we're increasing for a UK litigation on car loans.
02:27We have 2% market share.
02:29It's very small.
02:30But we're provisioning in the same way as other players are provisioning.
02:34And the second one is also a market provisioning linked to the bailing out of a small digital Italian bank, which is Banca Progetto.
02:45And if you take off these two provisions, about 40 million, 30 million, you'll see that our cost of risk in terms of incurred stage three cost of risk is very stable.
02:59So we have a stable cost of risk as a share of outstandings, and we have a very strong position in terms of provisions and in terms of coverage ratio, which at the level of the group is among the highest in Europe.
03:13Okay, Claudia, so that gives you some strength.
03:16Where across the loan book are you seeing distress or the most distress at this point?
03:21Well, we have very strong positions in large corporates, for example.
03:26Low cost of risk for large corporates because of our diversified activity, exposure, and investment-grade customers.
03:37What we're looking at more closely is consumer finance and is small corporates.
03:42Small corporates in Europe, in particular around construction, retail distribution, the sectors that are considered for the past quarters to be under scrutiny.
03:54So we're very cautious. We have always been cautious in terms of the conditions at which we extend loans.
04:01We're going to continue to be cautious in this respect, but we don't see any surge in the cost of risk today.
04:09You mentioned Banco BPM, the strategy in Italy. What is the longer-term strategy?
04:14Executives have talked about the fact that they might want to increase that shareholding, which is above 20% right now.
04:18What would be the catalyst? What would need to come together to increase that holding in Banco BPM?
04:25What are the factors that would play into that?
04:28Well, in the fourth quarter, we obtained the authorization of the ECB to go beyond the 20% threshold.
04:36And this is really to crystallize our position as a long-term shareholder and partner of Banco BPM.
04:44We don't intend to exercise any control over Banco BPMs.
04:50We're very comfortable with this position today, which allows us in our accounts to have a very high and recurring profit going forward,
04:57and which also allows us to really settle as a long-term partner in Banco BPM.
05:04Good morning, it's Guy. How much are you spending on technology at the moment, and what's the rate of return from it?
05:15We have strong spending at the level of the group in terms of IT technology, several tens of billions of euros.
05:23What's important for us, though, is not so much the extent of the spending, but the nature of the spending.
05:29We want to make this spending more efficient. We want to develop AI.
05:34We want to also develop synergies at the level of the group, sharing more efficiently data, reducing the costs of KYC, reducing the administrative costs.
05:45And so one of our targets, in particular in our medium-term plan, is to divide by two the time to market.
05:51What's important is not the IT spending, but the way that it allows us to contribute to the development of our business efficiently,
06:00and how it improves administrative costs.
06:04Just coming with, KYC is a really interesting area.
06:08So is that an area in which you think AI could do the job that people are doing at the moment?
06:12We're starting to see real concern within the software space that actually you don't need humans anymore.
06:18The products that are being produced by the big AI companies are going to do that job.
06:23How quickly do you think areas like KYC, Know Your Customer, could change as a result of what AI can deliver?
06:31We're always going to need humans in banks, and in particular in Crédit Agricole.
06:36But it's true that we really want to use AI to improve the personalization of the solutions we provide to our customers.
06:45So it's really improving, increasing what the humans can provide.
06:50That's for customers.
06:51So advice, helping for the treating of emails.
06:55But in the administrative dimension, the time spent on KYC is too high for our advisors in the branches, for example, or in the different businesses.
07:05So we want to help these advisors concentrate on what's important, i.e. developing a long-term relationship with our customers, understanding their needs, providing a whole array of offers and services for them.
07:19So yes, AI is going to help us with KYC.
07:22It's going to help us with all of the compliance, fraud, all of the analysis of documents.
07:28All of these elements are going to benefit from AI, but all of this is in the interest of our customers providing strong expertise, digital solutions for them in order to make their day-to-day banking easier.
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