Credit Agricole Sa

Good morning everyone. Thank you for the for attending our call very happy to present these results for 2024 and for the last quarter of 2024 which are absolutely excellent results Let me start directly on page 4 of the presentation and let me start by comparing our results for 24 with the targets that we had initially set for 2025 in the course of our latest medium term plan As we have stated several times since the beginning of last year We are indeed meeting as soon as 2024 all targets that we had Initially set for 2025 and I should say that it's the habit because it's the third time in a row That we manage to meet our Profitability targets one year ahead of schedule But actually we are talking about meeting the targets and I should also insist on the fact that we are by far Exceeding the different targets. It's the case for the net profit which is 20% above the target. It's the case for the return on tangible equity Which is two percentage points above the target and it's also the case for the cost-income ratio Which is far below the ceiling that we had set at 58% So it's definitely a very strong performance posted by the group globally But especially by credit agricultural essay for the quarter and for the full year 24 If we go now on page 5 we have some key messages regarding this set of results First message it's clearly a strong increase as compared to the previous Year and to the last quarter of 2023 it's also a level that is a record level in terms of Profit for the fourth quarter of any year and for a full year level of profitability It's also a result that has been reached and we will dig a little bit into that Especially thanks to a very high level of revenues The level of profitability is also very high because 14% is indeed the best return on tangible equity we've posted Solid the capital position and liquidity positions are very very strong and we are Proposing to the General Assembly meeting that is going to be held in May An increase of the dividend the cash dividend that is going to be at 1.1 euro Plus 5 percent as compared to the one we've paid on 2023 If I go on the following page We see all the figures for the group globally and for credit agricultural essay Specifically for the full year and the quarter What I can say is that for these stated figures all indicators are up Up for the revenues for the gross operating income and for the net profit up for the quarterly results and for the full year results and up for the group and for critical essay cost income ratio improves on both perimeters and The cost of risk continues to be very very low compared to historical standout Let me now switch to page eight Starting with actually the level of activity that we've had in all business lines in the last quarter of the year and in the full year At 2024 it's been a year again of very high level of activity across the board in every business and every entity of the group It's been very much the case for retail banking activities and all activities Directly oriented towards individual households with a specifically good news in France Which is the rebound of home loan activity in the last quarter? It's up in terms of production of new loans up 18 percent as compared to the last quarter of 2023 we continue to see an increase also in corporate loan production as well as in the level of Loan activity credit activity in international retail banks and When it comes to consumer finance, we see a level of activity which is stable and high As compared to the last two or three quarters So a good level of activity also in the consumer credit business Lastly, I want to commend the fact that we continue to see this Stabilization of the deposit mix in France, which is very important Going forward for the further future improvement of the net interest margin When it comes to CID asset management and insurance activities We are posting very high level of activity and sometimes records It's the case for the insurance activities where we have a record level of Outstandings in life activities and we have had also a record level in terms of net premium income in 2024 with a level of 43.6 billion of premium for the full year it's the case also for Amundi with a level of net inflows of 55 billion euros for the full year and Outstandings of a two trillion two hundred and forty billion euros of assets Under management and it's also been a year and a quarter of record level of revenues for cash If I dig a little bit more in the Analysis of the revenues that we've posted in the last quarter of 2024 you can see on page 9 that actually this sharp increase in the level of revenues plus 17.4 percent on a stated basis and plus 18.2 percent on an underlying basis this Increase sharp increase is spread Over almost all our business lines. It's the case very very much because in the asset gathering activities with a High level of activity overall plus also favorable best effect In the insurance activities you may remember that back in the fourth quarter of 23 we had a significant level of weather related claims which we do not have In the fourth quarter of 24 and we have also the benefit of the integration of the group better cam Which was not there back in 23, but nevertheless the level of revenues is high and increasing rapidly It's also the case in the large customers Division so Cassie plus Cassie's no scope effect But simply a very good performance of all activities in this business division in the Specialized financial services business division. The good news is that the revenue increase indeed by 35 million euros Which is the first time in 2024 and it's illustrating the fact that In ca pfm, so the consumer credit entity plus car leasing entity We are now seeing the positive effect of this increase in the margin for new loans Translating into a slight improvement of the margin on the outstanding Lastly on retail banking activities Stable level of revenues with some slight ups and downs between France Italy and the other international retail banks entities Lastly in the corporate center a sharp increase in the level of revenues that is partially driven by evaluation of Banco BPM shares that is Higher than the one we already had back in the fourth quarter of 2023 but nevertheless the other elements in this Business division or in this corporate center are also well oriented on the right hand side of the page you may see that the annual growth rate of the revenues in the last 10 years was Six and a half percent and it's been very regular So it's a very positive Elements that we are happy to to illustrate there On the following page we have some elements regarding the evolution of the cost basis so what you can see is that the increase plus five point six percent on a stated basis and plus four point four percent on an underlying basis is a Less dynamic than the one we had on the first nine months of the year. So there is clearly slowing down of the evolution of the cost base it's perfectly coherent with the the evolution of the inflation in most countries in which we operate especially in France and this is also illustrated by The right hand side graph of this page in which you can see that the recurring expenses Increased by a mere three percent on this quarter Which compares quite favorably to the same calculation we did for the first three quarters of the year Which were more in the region of four to five percent Beginning of this year. So definitely of course we continue to invest we continue to Remunerate our staff but There is a slowing down in line with the evolution of the inflation on page 11 some elements regarding the cost of risk. So there is an apparent Increase in the level of the cost of risk be it compared to the fourth quarter of 23 or to the third quarter of 24 On the perimeter of critical essay But what you can see immediately is that actually this increases driven mainly and essentially by IFRS 9 provisions so as stage one and stage two provisions and if you really dig into the numbers and look at only the Stage three provisions they are down as compared to both The third quarter of 24 and the fourth quarter of 23 and this increase in stage one and stage two provisions come from both Revision of certain IFRS 9 models in certain entities it's especially the case in the consumer credit business and also at Cassie but and there is also a positive migration of certain counterparts from s 3 to s 2 so from a doubtful loan to on the Sensitive loans I would say which is positive definitely and of course the provisions Attached these loans migrate in the same direction Overall what we can see is that the net the non-performing loans ratios both on the group and on Casa are Slightly down in Q4 24 as compared to Q3 24 and the coverage ratios continue to improve On the following page you have some more precise information regarding the cost of risk in the different business lines So maybe just to highlight two of them in the financing activities of Cassie There is apparently a significant increase but first point it is And it continues to be very low seven Bips Is definitely a very low level and the second point is that this level is only made of stage one and state? Stage two provisioning so in terms of cost and incurred risk it continues to be around zero and Within ca PFM there is apparently also a sharp increase But actually this is triggered by two specific elements. I wanted to mention First element it's a 50 million Provision that is booked With regards to revision of IFRS 9 models as I mentioned earlier, so it's a one-step Increase in the level of provision and of course the model is going to evolve going forward but it's only the the updating of the of the outstanding reserve in face of this provision of this provisioning model and then the third a second element, it's a Reserve that has been set aside of 30 million euros in regards with legal risks including of course this Issue in In UK in the UK with car loans you perfectly know about this story Which is a story for the whole banking sector in which we represent only a very modest one to two percent of market share On the following page you have an analysis of the evolution of the Net profit on the quarterly basis by business line and what you can see is that for this quarter the contribution of asset gathering business division and retail banking business division improve Quite significantly it is stable for the large customers division Because of this increase in the level of provisioning at Cassie, but again at a very low level And it's also slightly down at the SFS business division again in connection with the cost of risk I was mentioning which is a made of amongst other elements of two significant one-offs On the right hand side of the page a breakdown of the evolution of the net profit on a yearly basis by Lines of the PNL and what you can see is that All in all the sharp increase in the net profit plus eleven point six percent on a stated basis and even plus 21.1 percent on an underlying basis is Mainly driven by the increase in the level of revenues plus two billion only 750 million euros of increase in the in the cost base Then a slight increase in the cost of risk for the full year Of course a sharp increase in the level of taxes and a decrease of the other line In which you have the equity accounted entities because of some modification in our perimeter, but Definitely the increase in the level of net profit is driven by the evolution of the revenues and by the evolution of the gross operating income on the following page some elements regarding the solvency ratio at CASA the target continues to be 11 percent and We are stable at eleven point seven percent There is a high level of retained earnings after the distribution reserve There is also a certain Dynamic in the evolution of the business line Organic growth of RWAs which is partially driven by some rating migrations and then we have some bits and pieces Which are gathered with M&A effect regulatory effects and so on and so forth but the main point there is the fact that we have started now in the fourth quarter of 24 to Credentially consolidate the leading activity which is one of the the the provisions of battle for And so this is leading to a one-off cost in terms of solvency of 12 bips Over the full year the the the solvency ratio decreased by 10 bips Despite the sharp organic growth of our activities despite also some technical elements like the one I just mentioned in the leading and despite also some M&A operations that were closed in the course of the year. So definitely Wide margin of maneuver in terms of solvency considering the target of 11 percent and This of course takes place in the context of a group that continues to be to have a very high margin above any regulatory requirement 17.2 percent of a CT1 ratio for the group plus 740 bips of margin above a step requirement. So definitely no Issue regarding the solvency of the group the same effect on the solvency in the quarter with a slightly different overall Impact which is of course perfectly connected to the high level of solvency of the group with such a high level every Additional billion of RWA needs a higher level of capital to be covered If you want to maintain the ratio In terms of other solvency ratio beat leverage, TILAC, MRAIL, no Issue and always a significant margin above all the requirements that apply to the group On the following page page 16 some elements regarding the liquidity of the group Nothing significant to signal reserves continue to increase slightly over the quarter Customer deposits have also increased a little bit over the quarter and the breakdown of these customer deposits Continue to be very stable after the sharp shift that we've seen when The the increase in rates started now. It seems that we have reached the level which is again very very stable and The Solvency the liquidity ratios the LCR ratios continue to be very Significantly above the target of 110% 131 for 3D I call SA and 127% for the group global Let me now spend some Rapidly some time on on the following pages on page 18 you have an update of our transition plan and The strategy that we develop in order to accompany our customers in their own energy transition with the acceleration of the development of the financing of renewable and low-carbon energy sources the second point which is all We provide to our customers to help them Transition and then the third point which is a consequence of the first two which is the progressive Reduction and and Targeting the exit from the financing of carbon based energy Going forward and and what we can tell on this point is that we are far ahead of the curve in terms of reaching our medium term targets and This is translated on the following page page 19. You can see that the breakdown of The financing that you we provide to Energy production has very significantly shifted between 2020 and 2024 and now every time we Free four euros of Fossil fuel financing we are able to allocate 14 euros to low-carbon energy financing Some Elements regarding the the rollover of our medium term plan besides of course the fact that we've reached the target one year ahead of Schedule what is interesting to note on page 21 is that we continue to increase Our market shares in most of the business lines in which we're engaged and this is the perfect rollout of the Organic part of the development plan of the group And we continue to gain customers 1.9 million new customers in our retail banks per year since the Inception of the present medium term plan So definitely the the organic growth trajectory of the group continues to work exactly the same way according to its DNA and this is complemented on page 22 by The inorganic growth initiatives that we have taken we felt it was interesting to Look a little bit backwards in all on all the transactions that we've Concluded and closed in the last four or five years We've invested a significant amount of capital in those transactions This amount was definitely self financed be it by our capital or earnings Generation capacity and also Thanks to some disposals and these Operations are representing a significant complement to the level of revenues If you add up the transactions that we've concluded in the 2019-2021 period which we consider as fully integrated and the ones that we've concluded more recently All in all this is going to represent close to four and a half billion revenues in 2025 with a Level an average level of cost-income ratio, which is very close to the one that we are targeting in average so a very positive Lesson that we can take of all these initiatives of Inorganic operations On page 23 and 24 some elements regarding the trajectory that we've been able to follow in the last 10 years Overall, we've managed to grow the top line steadily year after year and in average by a very high 5.6 percent ratio every year so it's a very high rhythm of increase of our top line and in the meanwhile, we've improved the cost-income ratio at casa by 15 15 percentage points over the last 10 years, so with a very very steady very linear trajectory On page 24 again with the same level of Historical data the trajectory of return on tangible equity Actually, we should have started in 16 in 2016 not in 2015 because 2016 was the year of completion of the Eureka transaction through which we Reorganized the group completely and so we started with the level of return on tangible equity around eight and a half percent We are now reaching 14 percent and we've been permanently above 10 percent with the exception of 2020 Which was the year of kovid? But definitely even in this year we've managed to post a return on tangible equity which was above nine percent and in the same period of time we've multiplied the dividend per share in cash by more than three three point one to be very precise reaching this level of one point Ten Euro per share so I will stop here I think this is the relevant conclusion for this Presentation and now leaving you the floor for the questions

Thank you, sir. This is a conference operator. We will now begin the question and answer session Anyone who wishes to ask a question may press star and one on the touchstone telephone To remove yourself from the question queue, please press star and two Please pick up the receiver when asking questions The first question comes from Julia Aurora Miyoto of Morgan Stanley

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