00:00Lars, good morning. Is it all down to your traders? Is that where we're seeing the benefit coming through right
00:04now? Is this turbulence working for you guys? I spoke to Sergio Mossi yesterday. His traders knocked it out of
00:09the park. Are you seeing a similar thing?
00:13Good morning. Yeah, well, if you look at it, the overall results, it's when you look at the CIB activities,
00:21they came in solid. And indeed, you see two things. If you look at what we call a global markets
00:26activity, it was strong, and particularly given the volatility, and particularly in March. And that was a bit compensating what
00:33you saw in a rather wait and see on the corporate side. So that is the compensating event. But if
00:38you look at it overall for the group, there's basically two numbers.
00:41Just to remember, there's 9%, which is the top line growth and the bottom line growth. And there's 12.8%,
00:47which is the ROE, so the return on equity, and the common equity tier one. So all in all, the
00:53bank is accompanying its clients very strongly.
00:56Sorry, you said something really interesting there. You said corporate clients are in wait and see mode. Is that what
01:00you said? Is that what we're seeing right now? Are we in wait and see mode? Are we in wait
01:04and see mode because of the geopolitics? Are we in wait and see mode because of the upcoming French elections?
01:10Oh, no. If you look at it, what we saw is in March. It's a bit the macroeconomic uncertainty, which
01:17is basically having the corporates have a bit of a wait and see.
01:22So the pipeline is there. The execution is maybe a bit delayed. So if the situation would crystallize out, that
01:32flow would see a transaction coming.
01:36Lars, how concerned are you about what we're seeing in terms of oil price increases, inflation, the economic impact as
01:41well? To what extent are you factoring that in as you think about the quarters ahead and the potential impacts
01:47across your business?
01:49Yes. So listen, if we if we if we if we take a scenario with whatever you've mentioned earlier, so
01:55it's possible that there's going to be a couple of rate hikes could be that that is because there is
02:00inflation.
02:00So GDP growth could shrink a bit. But GDP overall would remain in our view would remain positive.
02:07Yeah. But there is this uncertainty. And we haven't seen it with our clients. We haven't seen it in the
02:12results.
02:13Nevertheless, we took a macroeconomic provision in the cost of risk in anticipation if the situation could be continued.
02:23OK. Yeah. And on those provisions are credit provisions of nine hundred and twenty two million, nine hundred and twenty
02:27two million euros that came in slightly higher than expected.
02:32How does does that what is that looking like in the current quarter? Have you pulled that forward or is
02:37the current quarter you putting expecting to put aside additional provisions?
02:40What is what is the credit sustainability looking like that? Are you seeing cracks now in terms of some of
02:46your clients?
02:46Now, well, there's two things. If you look at the amount, typically what you see, if there is really a
02:52pickup in cost of risk, so if companies run somewhat into trouble,
02:55what you typically have in this European accounting standards is you have right back from provisions that you took.
03:02But what I mentioned earlier, we have those right backs to basically compensate the provisions.
03:06But those right backs, we basically compensated it by taking a macroeconomic provision for uncertainty.
03:12So that is basically what you see. So the pickup that we saw intrinsically in this quarter was companies that
03:19we already saw were having difficulties.
03:21We don't see this at this stage going forward. So we don't anticipate that this is the rate at which
03:28the current the next quarters would unfold.
03:30But again, this depends on how the macroeconomics will evolve.
03:35Okay. Can I ask you about private markets, Lars? Such a talking point over the last 12 months, more than
03:39that, in fact, private credit in particular.
03:42Are you seeing any kind of slowdown in demand, any change in the conversation that you're having with investors around
03:49private credit?
03:51Yeah. Listen, Anna, for us, credit is credit, be it public, be it private. For us, it's the same thing.
03:58So the underwriting that we do, the checks and balances, the collateral that we go for is basically the same.
04:04So for us, if there is a point of attention, it is not specifically to private credit or public credit.
04:10It's going to be on the underlyings. Yeah. So that's basically where we stand.
04:14So as in every evolution, there are some sectors that we look at that we see how we can speed
04:21up or slow down.
04:21But it's not necessarily the sector of public or private credit that we look at.
04:28We were carrying a story here at Bloomberg, Lars, a few days ago. Over in Germany, of course, we've seen
04:34Unicredit trying to buy Commerce Bank.
04:36And the German government, according to our reporting, is looking around to see if there might be any other interest
04:41in Commerce Bank, any possible white knight.
04:44Has BNP Paribas been approached? What would you think about a move into the German market, about any interest in
04:51the German market at this time?
04:55Listen, Anna, for us, sadly, in Europe today, cross-border mergers are not on the agenda because the overall environment,
05:02be it regulatory, be it all of the other authorities, all of the other products, that does not work.
05:07So we are very pleased with the things we're doing. We're finalizing the integration of AXA-IEM and of ATLON.
05:16And that's what we're going to continue to do. And we're very pleased with that.
05:22Lars, sorry, can I just come back to the issue of credits broadly?
05:27Are you seeing less interest from – are your clients less interested in investing in private credit as a result
05:34of the gating of credit funds that we are seeing?
05:37Is there less interest now in participating in that space of financial markets?
05:44So, again, when we look at private credit, it's the sliver that we take.
05:49For example, 90 – so we have a very small exposure. It's 3% of our overall outstanding. 90%
05:56is basically senior.
05:57So that's the segment in which we are. That is towards, let's say, the counterparties that we react on.
06:04And in this sphere, as I said, all over, that atmosphere for what we see and those clients that we
06:10stand with, that is continuing.
06:12I understand that in some sectors and some players, if you think of insurance companies and whatever, that are going
06:19into other segments of this, we see a difference.
06:22But for us, as we basically focus on senior, we stay as we are.
06:27Yeah, but Lars, are your clients, are your private investors in particular, is there less interest in putting money into
06:36private credit right now?
06:40If you – again, if you look at what we are seeing with the counterparties, for us, there is generically
06:48– how would I say – a review of the underlying.
06:51It's, again, not necessarily related to the fact that is the vehicle private credit or is the vehicle being public
06:58credit.
06:58What we do see is a focus on there is probably more attention on segments like software and what have
07:04you not.
07:05That is where the focus is, not intrinsically on the vehicle to finance it.
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