Societe Generle Ord

Ladies and gentlemen, welcome to the Societe Generale conference call. Gentlemen, please go ahead.

Good morning, everyone, and thank you for joining us today. I'm very proud to report strong performance numbers for 2025. As a result, we are upgrading our 2026 target for profitability and confirming all other CMD targets as well. 2025 was a defining year. We set new records for revenues with €27.3 billion and for group net income which reached the €6 billion mark. The successful transformation sets the stage for us to sustain long-term profitable growth. Significant improvement in our financial results in 2025 cuts across all metrics, outperforming the targets we upgraded in Q2 2025. Our revenues were up by almost 7%, excluding asset disposal. That's more than double our target of more than 3%. Even more remarkable is that all our businesses contributed to this strong performance. As you know, our commitment to reduce our cost base, both structurally and significantly, is absolute. The proof point here is the 2% decrease in costs excluding asset disposal over the past year. That 2% is far better than what we targeted, which was a decrease of at least 1%. And it translates into a cost-to-income ratio of 63.6% in 2025, an improvement of more than 5 percentage points over the last year. Keep in mind this is also better than the 2025 target we set of the cost to income below 65%. Cost of risk is within our guidance at 26 basis points reflecting the strength or asset quality and our capacity to effectively manage risks across the cycle. All of this has significantly boosted our profitability with a ROTI reaching 10.2% for the year and 9.6% excluding capital gains on disposals. This is above our 2025 target of around 9%. These earnings allowed us to further strengthen our capital by 20 basis points. Each year ratio now stands at 13.5% after Basel IV regulatory impact and after the extraordinary distribution of 2 billion euro through two additional share buybacks. As a result, The Board has decided to propose a total ordinary distribution of €2.7 billion, up 54% compared to 2024, including a dividend per share of €1.61 and a share buyback of €1.462 billion. Let me put all this into perspective. These results underscore the priorities we established two and a half years ago and have consistently executed on ever since. Our first decisive step to significantly strengthen the bank's capital, ensuring us both ample capital buffers as well as means to support our growth. Today, with a CTO ratio of 13.5%, the group is fully dedicated to fostering a sustainable long-term growth and consistently creating value for shareholders. Our second strategic priority, to enhance efficiency. The decrease in our cost-to-income ratio of more than 10 percentage points versus 2023 is a significant accomplishment. We still have a lot more work to do, and we will do everything to make sure this positive trend continues. Third, to significantly improve profitability. In 2025, we achieved exactly that. Our ROTI is now more than 4 percentage points higher compared to the 2018-2022 average. The result, sustainable value creation is now a reality with a total shareholder return of 237% over the past three years. As I mentioned a moment ago, all our businesses contributed to the strong performance. First, French retail, private banking, and insurance recorded strong revenue growth of 4.2% versus 2024, restated for asset disposals and the impact of short-term hedges. It was driven by a pickup in the net interest income and also by record-high assets under management, both in life insurance and private banking activities. Osobonk gained 1.9 million new clients, and that brings its total close to 9 million It is leading the market as a fully-fledged bank. Its average client maintains a balance of around €9,000 in assets under administration. It remained profitable for a third year in a row, proving the strength and sustainability of its business model. BIS had a record year in terms of revenues, delivering another excellent performance with a high RONI of 16.7% under Basel IV. The result of our strategy, global markets continue to deliver current and predictable revenues, reaching in 2025 a 16-year high and with a high RONI above 20%. FMA increased substantially its origination volumes at a high marginal rate of return thanks to increased capital velocities. Business also benefits from strong positioning on key sectors like energy and infrastructure. In international retail, KB and BRD consistently demonstrated solid commercial performance with the successful optimization and continued digitalization of their respective distribution networks. And last, our teams at Avent have done an outstanding job managing all the challenges that come with a complex integration. that integration is progressing as planned, and our decision to focus on profitability and risk management has resulted in a steady margin improvement throughout the year, but also allowed Havens to maintain a sound position while reaching its 2025 financial targets. In light of this performance, the total distribution for 2025 will amount to 4,679,000,000 euros, a growth of 169% versus last year. On ordinary distribution for 2025, we are proposing a dividend per share of 1.61 euro, of which 61 cents were already paid in October 2025 through the introduction of our first interim dividend. To resolve the final dividend of 1 euro per share will be paid in June 2026, subject to the AGM approval. In all, the total dividend per share represents an increase of 48% versus last year. Our ordinary distribution also includes a share buyback of €1,462,000,000, up 68% versus last year. We have already obtained the ECB approval for this program. There is no change in our ordinary distribution policy with a 50% payout ratio, an interim dividend, and a balance mix between cash dividends and share buybacks. In terms of extraordinary distribution, as you know, in 2025, the group launched two extraordinary share buybacks for a total amount of €2 billion. Please note here that in the resolutions, authorizing share buybacks is mandatory to include a maximum purchase price. The resolution voted during the last AGM, when the share was around €40, maximum purchase price authorized was €75. Therefore, as the share price reached the maximum purchase price authorized by shareholders, we had to pause the buyback launched in November 2025 to remain compliant. This does not change our capital return strategy, and obviously we will submit a new resolution to the next AGM to increase this limit substantially. Going forward, distribution of excess capital will continue to depend on our capital allocation decisions. And as stated last year, in the best interest of shareholders, we are proactively managing our capital above a 13% CET1 ratio. This may include both extraordinary distributions and disciplined profitable growth. We will address potential extraordinary distribution once a year during the release of the Q2 results. At the same time, we will continue to apply strict capital allocation criteria towards the most profitable businesses. Given our current capital position, we are increasing our RWA growth target for the businesses, and in 2026, we expect an organic RWA growth of around 2%. Now, our 2026 targets reflect our continued focus on value creation through growth, operating leverage, and sound risk management. Execution of our roadmap to date leads us to upgrade our routine target versus the one set at the CMD in 2023. So for 2026, we expect an NBI growth above 2% versus 2025 on a reported basis. A net cost decrease of around 3% versus 2025 on a reported basis. Cost-to-income ratio below 60%. Cost of risk within the 25-30 basis points range. And finally, a royalty above 10%. In 2026, we will continue to deliver solid revenue growth plus strict cost discipline. We expect revenues to grow by more than 2%, driven by strong commercial momentum across all businesses. We will support that growth by allocating higher levels of capital to the most profitable businesses. Revenue growth will also benefit from a strong decrease in Boursauban's client acquisition costs as we target a net profit above €300 million in 2026 at Boursauban. Global markets revenues are expected to be above the top end of the guidance range between 5.1 and 5.7 billion euro. This new range is in line with our former guidance actually as we fully consolidate Bernstein US starting January the 1st. And of course, cost control remains a top priority for the group. We're confident in our ability to further reduce operating expenses by around 3% in 2026. What makes this possible is our ongoing group-wide transformation process. Now, at the business level, all of our 2026 financial targets are confirmed. Mentioned before, the global market target is adjusted for the consolidation of Bernstein US and is now between 5.1 and 5.7 billion euro. Also consistent is our resolve to pursue these goals with precision, determination, and a strong sense of discipline. I will now turn things over to Leo, who will review our Q4 performance.

Thank you, Slavoj Mir and good morning, everyone. Let's now dive deeper into the details of Q4 25 performance. The group's net income stands at 1.4 billion euros, up 36% versus Q4 24, resulting in a ROTI of 9.5% versus 6.6% in the same period the previous year. These solid results are supported by the continuation of the strong commercial momentum in all businesses, as well as by a tight discipline over costs. Looking more closely, revenues are up 6.8% versus Q4-24, excluding disposals, well above our natural target of above 3%. Meanwhile, costs fall further in absolute terms, down by minus 1.4% excluding asset disposals, and confirming, therefore, our constant cost control. As a result, our operational leverage improves further. The cost to income of 64.6% in Q4-25, down from 69.4% in Q4-24. As a quality-wise, the cost to bridge remains contained at 29 basis points within our annual guidance of 25 to 30 basis points. Let's move now to slide 12 to further explain the main revenue and cost drivers in Q4. Group revenues increased by 6.8% in Q4 compared with the previous year. When removing for comparison purposes, around €325 million of revenues related to completed disposals. In French retail, private banking and insurance, revenues grew by 7.9% in Q4 excluding disposals. The increase is mainly driven by NII, which is up by 8.5%, excluding asset disposals. In global banking and investor solutions, revenues eased by 2.3% compared to a very strong Q4-24. It was the best quarter ever in global markets. Revenues in mobility, international retail banking, and financial services were up by 8.6% versus Q4-24, excluding disposals. Finally, revenues at the corporate center grew by 157 million euros, supported by efficient management of our liquidity position. Regarding costs, operating expenses, excluding disposals, declined further by 1.4% this quarter. Group reports a structural cost reduction of 89 million euros, which more than offsets the 26 million euros of higher CTA. Moving on to cost of risk on slide 13. Cost of risk stands at 29 basis points in Q4-25 and 26 basis points for the whole year 25. This is in the lower range of our through-the-cycle guidance. Cost of risk this quarter mainly comprises Stage 3 provisions, which account for €435 million and remain broadly stable versus Q3-25. In Stage 1 and Stage 2 provisions, we had a limited net reversal of €26 million, which conceals our prudent approach. As a result, total outstanding Stage 1 and Stage 2 provisions remain high at €2.9 billion and stable from last quarter. As a quality remains solid, as illustrated by the NPL at 2.8% in Q4, probably stable when compared with last year and last quarter. And finally, the net coverage ratio remains high at 82% in Q4-25 and stable versus Q3-25. Let's now turn to slide 14, where we can see the evolution of our strong capital position. The CT1 ratio closed at Q4 at 13.5%, which is 320 basis points above MPA. The ratio also reflects the minus 27 basis point impact from new additional share buyback of 1 billion euros, which we announced and started executing in November. Before adjusting the additional buyback, the CT1 ratio increases by nine basis points from Q3-25, reflecting the following impacts shown from left to right in this slide. Retained earnings contributed with 16 basis points after accruing a 50% payout. LWA evaluation represents an impact of minus one basis point. We had minor regulatory adjustment that had an impact of five basis points. And finally, other impacts account for one basis point. In addition, as you can see in the bottom right-hand side of the slide, All other capital ratios are comfortably above the regulatory requirements. On slide 15, liquidity reserves remain high at €318 billion in Q4-25, with a relatively balanced mix between cash and securities. The liquidity profile of the group remains strong, with strong sound liquidity ratios. The LCR ratio was 144 this quarter, and the NSFR ratio was 116, both well ahead of regulatory requirements and in line with our steering targets. 45% of the 2026 long-term funding program has already been completed. We maintain good access to liquidity in all currencies on the back of strong long-term ratings from all agencies. The deposit base remains strong, granular, and highly diversified. Overall, the loan-to-deposit ratio remains at 77% at group level. In slide 16, we show a summary of the P&L for the group for Q4-25. which we will cover in more detail in the following slides. Let's move now to the individual businesses on slide 18, starting with subject network, private banking, and insurance. In Q4-25, loans outstanding increased by 1% compared to last year, or by 2% if we exclude state-guaranteed loans, this is PGEs. Corporate loans production was sound and increased 19% versus Q3-25. Absentee deposits fell 3% versus Q4-24, but increased 2% versus Q3-25, in a context of continued strong growth of retail savings and investment products. Lease of balance sheet products contribute to the continued strong momentum in overall asset gathering. The one-side AUM in private banking increased by 9% versus Q4-24, with just four disposals. and reached 137 billion euros at the end of December 25. This is 2 billion higher than at the end of September 25. On the other side, life insurance outstanding reached 158 billion, increasing by 8% versus Q4 24, or by 5 billion versus Q3 25, thanks to continued strong net inflows. Moving now to BursaBank. In Q4, Brazil Bank acquired a record number of 575,000 new clients. In Q4-24, it represents an increase of 1.9 million new clients, or 22%, with a consistently low turn rate, which remains below 4%. Assets under administration continue to grow steadily, reaching 78 billion at the end of December, or around 9,000 euros per client. This represents an 18% increase versus Q4-24, thanks in particular to the continued strong increase in deposits of 15% versus Q4-24. Similarly, life insurance outstandings increased by 13% versus Q4-24. Deutsche Bank also saw record high openings of brokerage accounts, which grew by 25% compared to the previous year. On the lending side, total loans outstanding are up 9% versus Q4-24. Looking now at the whole pillar on slide 20. Retail banking, private banking, and insurance posted a solid increase in revenues of 4.2% versus 2024 when we exclude disposals and the impact of short-term hedges. And this included a sound 3.1% growth in NII. At the same time, operating expenses fell by 3.9% from 2024, excluding disposals. As a result of both, the GEOs widened it significantly, and therefore the cost-to-income ratio, it stood at 61.1% in 2025, to represent a substantial improvement of 10 percentage points from 76.4% in 2024. All in all, net income lands at 1,815 million euros for the year, or up 80% versus 2024, to the RONI above 10% under Basel IV, versus 6% last year under the previous Basel III standards. Let's move now to global markets and investor services on site 21. Global markets consolidated a fairly strong year in 2025, with revenues reaching a record since 2009 of 5.98 billion euros. while growing 2.7% versus 2024 in constant currency. In Q425, revenues eased by 8% versus Q424. Equities posted 5% lower revenues affected by a high base in Q424 and currency headwinds. Performance also reflected the lower commercial activity in Europe and Asia, as well as our geographic mix. where Europe and Asia represent around three-quarters of 2025's total revenues. However, if we focus on the Americas, where market conditions were more conducive, we posted a very strong performance, with revenues up by 24% versus Q4-24. In fixed income and currencies, revenues fell by 13% from an also very strong Q4-24, and affected by negative currency impacts. Performance reflects, as well, the more challenging commercial dynamics in rates products, notably in Europe. Lastly, security services revenues grew by 3% versus Q4-24, on the back of sound activity levels and the continuation of a strong commercial momentum in all the main markets. Let's turn to slide 22 on the evolution of financing and advisories. Again, it maintained a very strong performance with revenues growing by 5.1% versus Q4-24. Its strong momentum is even more visible when focusing on global banking and advisory, with revenues grew by 8.6% versus Q4-24, accelerating from last quarter. It represents our best quarter ever, driven by the solid performance in financing activities, combined with the continuation of good momentum in both originated and distributed volumes. In addition, our DCM and ECM franchise delivered one more quarter of sound revenue growth. Lastly, in transaction banking and payment services, revenues declined by 5% versus Q4-24 due to negative interest rates and currency impacts. That, however, shadows the good underlying commercial momentum and the continued growth in deposits. For the whole of 2025, GDPS total revenues eased marginally by 1.2% versus 2024. Moving now to slide 23 for the overall view of the GBIS pillar. You can see that GBIS recorded record revenues this year at 10.4 billion, growing by 2.6% versus 2024. That combined the 1% growth in global markets and investor services with a 5% growth in financing and advisory. Moreover, we managed to grow our revenue base while maintaining our strict cost discipline, showed by reduction of operating expenses by minus 1% versus 2024. The results just widened and the cost of income cuts to income ratio improved 2.3 percentage points from 64.4 in 24 to 62.1 in 25. At the same time, cost of which remained moderate at 18 basis points in 25. So all in all, GBIS posted a net income of 2.9 billion euros in 25. up by 3.7% versus 24, which translates into high ROEMI of 16.7% under password 4. Let's now focus on international retail banking in slide 24. Overall, revenues improved by 2.7% versus Q4 24 at constant perimeter and exchange rate. Europe posted a solid commercial momentum in both countries. with an 8% increase in loans outstanding and a 7% in deposits versus Q4-24 at constant perimeter and exchange rates. The revenues were slightly down, 1%, at constant perimeter and exchange rates, with lower fees in the Czech Republic compared to an exceptionally high Q4-24 level. The situation is different in Africa. Outstanding loans and deposits were broadly stable versus Q4-24 at constant perimeter and exchange rates, while revenues increased strongly by 9% in the same period, driven by strong free income growth. On mobility and financial services, in Site 25, the revenues increased by 11.7% in Q4. At constant perimeter, this is excluding SCAF. Havens revenues grew by 15% versus Q4-24 on a reported basis, while when adjusted for depreciations and non-recurrent items, they fall by 8%. This evolution reflects the continued normalization of used car sales results as anticipated. In Q4-25, the results per unit sold was 702 euros compared to 1,267 euros in Q4-24. On the other hand, the margin increases to 567 basis points in Q4-25 or 26 basis points higher than in Q4-24. It highlights the continued ramp-up in synergies and the strategic focus on profitability and asset risk. In 2025, Avian successfully reached all its financial targets, delivering total synergies by €360 million, while the average UCS results for the full year 2025 stand at €1,075 per unit. This is at the high end of the 700 to 1,100 guidance. And the cost-to-income ratio was finally 56.1%, better than the guidance range of 57 to 59%. Regarding consumer finance, the business delivered a solid revenue growth of 5.9% thanks to better margins. In slide 26, focusing on the whole MIPS pillar, you can see that revenues increased by 6.1% in 25, excluding disposals and FX impacts, notably driven by AVENS. Costs in 2025 fell by 3.3% versus 2024, excluding also disposals and effects impacts. The strong positive Joe's evolution drove a substantial improvement in the cost-to-income ratio, from 59.6% in 2024 to 54.2% in 2025, highlighting the strict cost discipline across the pillar, despite the high inflation in certain geographies and the additional banking tax in Romania. Costs of risk improved from 42 basis points in 24 to 33 basis points in 25. And all these led to a net income of 1.5 billion euros in 25, increasing by 28% after disposals and FX adjustments. This translates into a robust ROANI of 13.9% in 25, up versus an 11% in 2024. To conclude with the quarterly results, let's move on to slide 27 with the corporate center. In 2025, revenues increased by more than 160 million euros thanks to continued efficient liquidity management and improving funding conditions. Operating expenses in 2025 include 100 million euros related to the global employee share ownership program recorded in Q2 this year, which compared to only 3 million euros in 2014. In addition, the accounting impacts for the various asset disposals closed this year, mostly SGA Equipment Finance, private banking in Switzerland and the UK, generated a positive impact accounted in net profits or losses from other assets of around €300 million. On a quarterly basis, revenues increased by more than €150 million for the same reasons I just mentioned for the full year, while costs are up by around €50 million compared to a very low base in Q4-24. and more in line with the quarterly historical average. May I give back the floor to Saboumeh?

Thank you, Leo. 2025 has been a year of accomplishments for the group in ESG as well. We are maintaining our pace and continuing to deliver on the commitments that we have set, both in the decarbonization of portfolios and in the opportunities we see to support our clients with sustainable finance. Emerging leaders of the energy transition see us as a partner of choice. We are now deploying the €1 billion investment envelope established at the CMD to support innovation in this sector. We have joined forces with partners like the EIB or the IFC to help design the best solutions to address the challenges of the environmental transition. Our Scientific Advisory Council helps us stay ahead in this world of rapid change. All these efforts have been recognized by external stakeholders. They have been upgraded to AAA by MSCI, making us one of only two major European banks to have received the Star ESG rating. In conclusion, 2025 was a defining year for us. gives strong improvement in our performance, we still have a lot more work to do to realize our ambitions. Our objectives are clear, our progress is consistent, and we remain focused on delivering on the upgraded 2026 targets, and we will give you more details on the next phase of our plan during our CMD on September the 21st. Thank you very much, and let's now start the Q&A with our usual polite request to stick to two questions per person. The floor is yours.

Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1 on your telephone keypad. The first question comes from Flora Bocahut of Barclays.

Yes, thank you. Good morning. The first question I wanted to ask you is specifically on Burso Bank because I think you said in the presentation that this is your third year in a row of being profitable, if I quote it right, on Boursault. Could you give us a number, you know, because you give us the net profit target for next year. I mean, this year, 26 of 300 million. But so we have an idea of how big a swing this could be for the profit in French retail and at group level. And the next question is a broader question. I don't want to preempt, obviously, the September CMD, but I can't ignore either, you know, that you're not running at one time the tangible book and you have this ROTI that is upgraded for this year, but still at 10% plus. So we need to start to have a better understanding, you know, on where it could go into the next two to three years. So can you maybe Anything you can tell us there, what you think is plausible over the next two to three years, what can get you there would be helpful. Thank you.

Thank you. Thank you. Good morning. The short answer is no. We're not providing this number, but I'm, of course, going to try and give you a little bit of color. We had said minus 100 at the CMD, minus 150 million euro of GOI to support the growth ambition. It has actually been positive. But think about it as with the 1.9 million additional new clients this year, you can see or feel that it can't be a big number because the level of our investment in client acquisition was very high, 1.9 is, if not the best ever in terms of growth close to it, right? So basically it's been positive, so huge improvement over the minus 150 million euro GUI that was initially our thinking, but obviously at the annual level, not something that is very significant at this point. So the €300 million improvement in terms of net income is the important number here and it's a very strong commitment that we have for 2026. In terms of the CMD, so as mentioned in the presentation or in the past, we have basically close to doubled our reported ROE, our key performance if we compare the current performance versus the average of 2018 to 2022, for instance. So first, spoiler alert, we're not going to double in the next phase of the plan. So that's one thing. But equally, you should take comfort in what we've done so far and in the way we try to speak about ourselves. So when we say that we do firmly intend to close progressively yet decisively the gap with our most comparable peers, you should build your reasoning around that, right? And we are committed, in terms of the means, to continue, and I know it's clear in the numbers, to continue reducing our cost base regularly through deep transformational change in the way we operate the business, in efficiency, right, in terms of sustainability. cost savings because they are based on seeking out efficiency gains first that result in cost reductions. While growing, and remember growing not like in the phase we're in right now or finishing right now, meaning with a lot of fixing to do from a capital perspective, a lot of constraints, self-imposed constraints on, for instance, organic growth, right? These things, because of our capital position right now, are behind us, and so we will be able, in a very controlled way, very mindful of risk management strategy and commitments from this perspective, that we will have means to sustain healthy levels of organic capital allocation to the most profitable business. So the combination of all this, an absolute commitment in terms of cost and efficiency, with an ability to support and sustain basically higher level of profitable growth will be the main ingredients of the next plan.

Understood.

Thank you. Thank you. The next question, Sarah, is from Tariq El-Majad of Bank of America.

Hi. Good morning. A couple of questions on my side as well, please. First, on costs, just taking on the previous question, I want to go all the way to the plan, which I understand that costs would be a cornerstone of your strategy. But looking at 27, I mean, you said 26 costs were down, but there's still some effect of 3% effect of disposals. 27 would be a cleaner year from that aspect of scope effect. Should we still expect costs to go down in 27 versus 26? I mean, you've talked in your introduction remarks about continuing the trend and relentless effort to to pursue that. So can you give an indication on 27? And on capital return, I mean, you took a decision to do it once a year in Q2. Your competitor yesterday brought up FLTB as a kind of still a question mark, similar to what you've been doing last year, actually, same time. Are you also factoring in into your buffer as potentially still a possibility that it will be a headwind? If not, doing the math as usual, you will be at 13.67%. In Q2, keeping small buffer, there is still a $2 billion headroom of buyback. I mean, you've asked for $1.5 billion for the full-year ordinary buyback. Is $2 billion not too much to ask ECB in one go? I'll leave it there. Thank you.

All right. So, first of all, thank you. And hi, Tarek. First of all, I have to dissent the cost number for 26 is a pretty clean one because actually it is unreported. Obviously, that's everything we do, right? And everything is on a reported basis. And we will not have major differences because most of the disposals were closed early last year. And so the 3% cost reduction in 2026 is actually a pretty clean number and doesn't benefit substantially from perimeter changes. So that's one. Second, on 2027, well, let me put it this way, right? It obviously depends also on the growth and the other opportunities that we will have, but certainly what you should take away from these conversations is that we are committed to operating leverage. So imagine a 2027 which is very buoyant in terms of growth, obviously maybe the cost base doesn't go down in absolute terms, but definitely we are deeply committed should we experience higher levels of growth to a significant value creation through operating leverage. If everything continues as it was in the last few years, yeah, further cost reductions are likely. It remains the bedrock of the improvement that we will continue to execute on in terms of transforming the group. As far as capital distribution is concerned, first, you should think about this Q2 trend decision, right, to discuss this at Q2 as the reflection of the fact that, and I want to say this very clearly, this is a strategic decision for us, right? Last year, you know, we had to make it a couple times because, you know, we were getting out of a phase which was, as you know, completely different, one of saving capital, one of restricting distribution, et cetera, et cetera. And because of all the progress we had made, we were able to shift quite rapidly from one, let's say, regime to a different one. But it is always a strategic decision, like I said in the past, between organic growth, return to shareholders, or inorganic growth opportunities. And so from this perspective, we believe that this, let's say, once a year communication on this topic fits the idea that this is a strategic decision. It's not an accounting decision that we make during closing or we have the Texas capital that's just disposed of it immediately right now. I think the base for strategic decisions is the one we're setting here. So it's not about some logistics in terms of approval. At the end of the day, you know, obviously we have a very deep permanent dialogue with the supervisors who have insights into long-term capital projections and, you know, understand that trajectory at a very deep level. It's not about logistics of approval. It's really about this idea that we have, and frankly, from a logistics perspective, we haven't even completely finished the share buyback from November. We're having an ordinary one coming our way right now. The dividend payment, et cetera, the decision switching, the decision on exceptional distribution in Q2, and so on and so forth. So that's how you should think about this.

Thank you.

The next question is from Giulia Mioto of Morgan Stanley.

Good morning. Thank you for taking my question. I have two. If I look at your target for 26, so first of all, taking a step back, you beat 25 where you had already upgraded the target. And so 26 doesn't seem particularly difficult to beat, especially on the cost side. So Can you give us, you know, some color on how comfortable are you with these targets? Any initiatives, especially on the cost side, that gives us conviction that you can do, you know, minus three or even more? And then secondly, S&A was quite high in the quarter. You talk about financing activities led by infrastructure, transportation, and fund financing. So is there, when we forecast looking forward, Is there any seasonality we should keep in mind? Was this an exceptional, you know, catch-up booking of some deals you had in the pipeline? Or, yeah, is it basically your growth strategy in this business coming through, and we should expect more of the same going forward? Thank you.

Thank you. Thank you very much. Listen, on whether the minus 3% target is easy or difficult, well, I'll leave that obviously with everybody on the call to make their own mind, but I'm going to still share my view. I mean, we're talking about 3% absolute decrease on a reported basis. And as I said earlier, without major perimeter changes. So from where we are, I mean, it's a fairly ambitious target. Let me put it this way. Now, you do have our track record. So do we have the habit of giving you stretched targets that we're not going to meet? No, right? On the base case scenario, we do definitely intend to meet the target. If we can do better, we will. But again, right, I think it is an ambitious target. an ambitious target from where we sit. We are doing everything we can to make sure that we will deliver on this, say, in normal circumstances, but on the cost side, I mean, normal circumstances are the rule. How? You know, it's everything we've already been doing, but as we go, right, so be it technology, efficiency of the technology spent, We need organizational changes that allow us to operate the same process better, actually in the interest of everybody, both internally and externally, in the interest of clients, getting a smoother client experience. Working on efficiency and deepening the work on efficiency across the entire group. through new programs, new ideas, et cetera, as you may have seen in the press recently. So it's really the continuation and the deepening of the work group-wide that we have been doing on efficiency throughout the group, right? And so this will continue to deliver, not only actually in 2026, but it's gonna be a process which we intend to make basically permanent to make sure that the company operates as close as possible to its highest potential in terms of efficiency. So that's the spirit here. And then, you know, some technicalities, you know, you will have lower CTA expenses because we, for the program that we had during the CMD, we've spent most of the CTA already. So there's a marginal spent to come in 2026. So that also, you know, like supports the trajectory. But fundamentally, it's all the work we're doing. And as you may have seen in the latest adjustment project of adjustment that we announced and filed with the unions in France, we are also very careful to optimize execution, right? And for instance, this leg of our efficiency plan comes with no CTA, right? It's important to also recognize that pattern, which is not only are we working hard, but also trying to make sure that overall, right, overall the expense stays under control and is optimized even in terms of the CTA itself. For the F&A question, you should think about this as, no, there's no particular, you know, accumulation of closings or things like that. It's a genuine, pretty wide momentum within this business, which, as you know, of course, has been historically a growth engine of GBIS and with a very good risk-return profile. It will continue as such with a very controlled approach in terms of risk still. But, yes, it is an investment spot, a natural and very efficient investment spot for organic RWA growth, and it yields substantial marginal rates of return.

Thank you very much. The next question is from Delphine Lee of J.P. Morgan. Good morning.

Thanks for taking my questions. So my first one is on your comments around 26, the 2% increase in RWA, which is clearly a little bit of an acceleration. It looks like, I mean, volumes are still somewhat, you know, very moderate in France and feed volumes at events also are you know, sort of still going down. So just wondering, kind of like, if you could give us a bit of color where that's coming from and where do you intend to step up a little bit growth? And my second question is on global markets. I was just trying to understand if you take a step back, why, you know, compared to not just US peers, but like some of the French peers, you know, the trends have been a little bit weaker this year. Is that you know, sort of less risk-taking from your side or any, you know, color on how we should think about the trends going forward as well. Thank you.

Thank you. Hi. So on the 2% RWA increase on an organic basis allocated to businesses, so yes, it is an acceleration, like I said earlier. One of the means that we have now is this one to support our growth in a very reasonable way. So I agree with you. The loan growth in France, especially on the retail side, should remain positive, but not very dynamic in 2026. In terms of the events opportunities, I would point to a slightly different statement, which is what we have done these past two and a half years was to focus on a very significant merger, which we discussed in the past, but also on making sure that the business adjusts itself to both some, you know, rate environment and margin compression trends and working a lot on the margin, on extracting the right contracts, on making sure that we do the right thing from this perspective, that we protect the value, basically, from a margins perspective, and you've seen the results of that. And the second piece is obviously risk management. In a world which, you know, in this business is was potentially challenged by some of the shifts in residual value or in all the electric vehicles topics, right? And so we've been very conservative from this perspective, precisely to come to, let's say, the new phase, both done with the restructuring, done with the integration, which will more or less be achieved during 2026, but also at the same time have a very healthy base to resume growth. So while it shouldn't be an extremely high pace, let's say in 2026, AVENS is clearly well positioned today to be also an investment spot from this perspective. Now, moving on, clearly, international retail has the capacity to deploy capital in a good way, in an efficient and profitable way. And finally, GBIS, starting with S&A, financing and advisory, but also within the cash management business as well as as well can do better and will be one of the preferred spots for investments and again providing higher marginal returns. So that's the story on the organic growth and your second question on global markets. It's really, I mean, if you take a step back, it's a mix of, if you look at the entire year, we're talking about the very good performance, which is, you know, the best revenue generation in 16 years. One. Two, and consolidating at 2025, which was a high point. And we're now close to 6 billion, as you have seen. So that's one. Two, we've discussed this in the past. There is a perimeter, a business mix difference between us and a lot of our peers in the following way, right? One, we have exited commodities way back, and commodities were a driver of performance this quarter. Two, fixed income in our house is weighted towards rates and towards Europe more than the other jurisdictions. Three, we have prime brokerage businesses which are smaller or substantially smaller than some of our peers. And so whenever the market dynamic is one which is particularly favorable to this business, you will always see us basically slightly different from this perspective. We are investing there. We are progressing, but in a very controlled way. But today, if you take a snapshot, it's a much smaller business at our shop than in some of the others. And finally, our share in the business mix in terms of the U.S. business is also smaller, obviously, than American peers, but also competitors, more accurately, but also when you compare to some of our European competitors. And so when you combine all of this, You have most of the difference of Q4, but again, within a year, which has been good. I'm not going to go through some technical aspects. There are still some of the day one. I mean, we were actually very dynamic in producing some of the solutions that carry negative day one accounting as they are originated when the origination is more dynamic, stronger. But this is like a couple percentage points, let's say, of difference since we're at minus 8 and the others are basically plus 5 in Europe. The rest of the gap is almost entirely explained by business and geographical mixed differences. Two last comments on this topic. One, our U.S. business has grown in dollars. In dollars, remember also that we're reporting in euros. has grown 39%, which is actually well above the market average even in the U.S. So just showing you how we operate there successfully. But it's a 20%, 25% share of our global market business. So that's one. And the last comment is going to your risk perspective. and capital consumption consideration. Yes, in the last five years, we have dramatically turned the way of doing this business and while reducing by 20%, 30% our market risk RWA, we discussed that in the past, even much more so stress test consumption, we have been able to grow this business at a controlled pace with much lower capital allocation and a high RONI of 20%. I gave it all so that you have all the facts.

Great. Thank you so much. The next question is from Jeremy Siggy of BNP Paribas Exxon.

Thank you. My first question is just continuing on the global markets discussion, if we could. The guidance is unchanged today. at a level that's lower than both the 2025 run rate and the consensus. Is that just maintaining the existing target? It's conservative. It doesn't mean much. You could well be better again. Or is there any kind of directional significance in that number that you're maintaining? And then a different question on AVENS. The UCS results are normalizing down significantly. And both from your comments and from their comments this morning, the indication is it could continue to go lower in 2026. And I just wondered, is that taken into account in your own guidance, including the 2% revenue growth?

So thank you. Hello. So first topic on the... markets global markets target so yes I mean we don't want to touch this at this point so we simply adjusted for the perimeter change if you will and this is how we're we're ending up with that 5.7 top of the range we're also saying that in our base case we should be above the top of the range in 2026 So that's what we're saying, right? And the indication that you should, you know, my view take from these statements is that we recognize and, you know, in fact support this recognition that this is a target which – a target range which has been conservative in a world which was, again, to say the least unusual, if you compare this last few years versus, let's say, the previous decade. And so today we think that, again, while maintaining this range, adjusting it for the perimeter change, we're also giving you the color that we believe that in a base case scenario, we should be above the top of the range in 2026. In terms of the UCS, it's exactly what you said, right? It is decreasing substantially, and we do forecast at this point that it will continue. And, yes, this is taken into account in the projections, including in the growth projections and every other aggregate.

That's really helpful. Thank you very much.

Thank you.

The next question, sir, is from Chris Hallam of Goldman Sachs.

Yeah, good morning, everybody. So I guess a couple of questions for me. A little bit of a follow-up on the markets. I think, sir, you know, great explanation as to how the footprint differs. I just wanted to take it forward a level. Do you feel any need to further address that sort of footprint imbalance versus the industry more broadly, aside from what you've already done in Bernstein, i.e., going to grow faster in the US, put more balance sheet to work, expand the product offering in FIC, or should we just sort of assume that you're comfortable with the footprint and the plans you already have in place? And the reality is some quarters that'll be a bit of a headwind versus peers and other quarters that will be a bit of a tailwind. So that's the first question. And then second, it seems as though there is a bit of a sort of growing tech spend arms race across the industry. And you mentioned your real focus on transformational change in the way that you operate and how you become more efficient by design, I guess. With that in mind, there were some Press headlines recently suggesting you've decided to focus your in-house AI infrastructure around co-pilot. So just can you help us understand what the relative financial and non-financial advantages are of pivoting to a completely off-the-shelf solution versus the alternatives? Thank you.

So on the first question, on markets, I think a few – it's a very important question. Thank you. Thank you. So one – Yes. It's an unreserved yes. We are continuing to work on the footprint. And you have, you know, some anecdotal at least, if not more, evidence of that through some of the hires we've made in fixed income, for instance, through some of the investments we're making, through what I said earlier about continuing investment in the our prime brokerage business through also historically a real push to grow our business in the Americas and obviously in the Americas in particular and mostly in the U.S. So yes, we are, and Bernstein is the other example that you gave, of course. And so, yes, we are continuing to work on all these fronts to balance the business more from a mixed perspective. And in order, yes, to make it both bigger over time, but also even more diversified, basically. But so far, it's exactly what you described. And actually, if you look at the patterns over the last few quarters and years, These were sometimes headwinds, like in Q4 2025, but sometimes significant tailwinds when we were in some of the years of more significant trends and moves on the rate markets, and in particular in Europe. So it's exactly what you described, but we are working on making them different. Just one, for instance, example is the U.S. business – is now double the size it was 10 years ago in a very diversified, in a very sound way, which points to my last comment on the topic, right? Nothing will be done in terms of investments and execution on these investments in a hasty or oversized way. I'm explaining myself. In the past, we've tried that, right? We've tried that. Let's have this very big program, you know, to increase very substantially the fixed size, and, you know, we're going to be competing with everybody across all the sub-assets, et cetera. Never worked, right? So what we're doing right now is very controlled, slow progress, both to make sure, right, that we don't destroy profitability as we invest. That's one. But two, that the investments are successful, right? And I don't believe in big moves, except when, you know, we had the opportunity to buy Bernstein. We did it. But I don't believe in, let's say, huge accelerations, revolutionary accelerations in organic investments in the market. That's not working usually. And, you know, when we're trying to do something right now, we're trying to make sure that this is going to work. That's for the market in terms of the AI question and, you know, internal off-the-shelf, et cetera. I mean, it's the idea more accurately that you need to use the best tools available at the moment in time where, you know, this whole AI opportunity and potentially threat, et cetera, is still, you know, partially unclear, right? Today what works is effective summary and translation of text, effective extraction of data from large pools of more or less structured data. And where it really works is indeed in IT services and coding, et cetera. These are the three areas where this new technology is actually able to perform at scale at a high level of reliability. And I remind you that in our business, level of expectations from supervisors on, for instance, model validation is extremely high, right? So building on that, clearly we prefer to use something which has a proven capacity to enhance the adoption, the understanding, and the work on these topics in the somewhat still infancy stage of this technology. And from this perspective, we felt that it was much more efficient to use, again, an outside-proven reliable tool at this point in time. Now, as you may know, or if you're interested in the topic, may have read, we have also created a specific structure dedicated to, let's say, the research on these topics and to the selection of the biggest at-scale opportunities in terms of efficiency or cost reductions, et cetera, to make sure that all this, let's say, bottom-up interest and an activity is channeled towards value creation, right, and that we have a level of control on the underlying costs that obviously this whole revolution potentially carries with itself. So it's a combination of we have our own internal approach to look at the use cases and at the opportunities, et cetera, but, yes, trying to use the best of the breed in terms of technology. Okay, thanks very much. Thank you.

The next question is from Andrew Combs of Citi.

Good morning. If I could first have a follow-up on global markets. You mentioned in answer to Jeremy's question that the 5.1 to 5.7 billion range is purely because you left it unchanged, but your base case is that you expect to be above that range. With that in mind, can you just confirm the sub-65% cost income ratio target for global banking investor solutions? Is that predicated on the 5.1 to 5.7 billion, or is it predicated on your base case that you're going to be above that range? That's the first question. Second question, France, net interest income. Another big improvement in the net interest margin Perhaps you can just elaborate on if there was anything one-off in that NII result, and also how you expect the net interest margin to trend going forward into 2026. Thank you.

So, on your first question, so again, maybe a precision. The range is what it is. It's proven to be on the conservative end in the last few years, again, in markets which were in the end particularly conducive for this business overall, for the industry and for us. So the idea that today we're saying that we, in a base case scenario, expect to be above that range, it's a little more than just a target discussion. It's a sense of what we think will be the market conditions and our ability to navigate them in 2026. So it's an indication of where we think we will be in 2026. Now, in terms of the relationship between this target and the cost-to-income target of GBIS, it is predicated on in the end, to keep it simple, on our budget, right? So on what we see as being our operational target and on the basis of which we communicate the annual targets for the group. So that's the underlying process, right? And so you should take away that it's, yeah, based on this range, But it's not based on the low end of that range. It's based on the budget. And since I also gave you a sense of what the vision we have for the year, I think you have all the pieces to make your judgment. So that's that in terms of the MAI in Q4. You have a few things. There's no one-off. There's no one-off. It's the full effect of the Livrea repricing down, which happened in August. So you have that. You have a good momentum in deposit gathering, and the deposits are up 1.5% versus Q3 2025 in the French retail market. And you have the continued process of repricing of the back book, right? And so the combination of all these things and, you know, in a loan growth dynamic which was fairly stable but the slight price effect which was positive because you have basically, you know, commercial loans, you know, marginally down, individual loans marginally up, overall stable. but from a pricing perspective, a side pay win. So you have the pieces that explain the Q4 dynamic, which is indeed positive. Going forward, what we expect is basically a continuation of a moderate growth trend because now there is no more perimeter effect, right, because in 2023, Five, we still have a perimeter effect linked to private banking, which is within that pillar. We no longer will have that in 2026. So you have no more hedges, of course, no more perimeter impact, and something which would normally be a continuation of this trend, which is, you know, moderate tailwinds supporting moderate growth. which will also obviously depend on the macro dynamics in France, which at this point in time, we forecast to be, in terms of loan growth, typically, you know, a slight increase during the year.

Next. The next question, sir, is from Joseph Dickerson of Jefferies.

Hi. Good morning. Thank you for taking my question. One question on the assumptions behind the greater than 10% return on tangible equity. If I look at the range that you have for markets revenues, if we assume the 10% return on tangible is the floor, does that assume, for instance, that the floor on market revenues is at the bottom end of your range? So in other words, if you were to print greater than the 5.7% We could assume a return on tangible above that. So I'm just trying to calibrate the bottom end of your ROE range, which let's say is 10%, versus the bottom end of your market's range of the two can be compared. So that's question number one. And then question number two is on how you define your balanced payout between DPS and share buyback. because if we look this year, it was 45, 55 in favor of buybacks. And then I think last year it was 50, 50. You know, could it be 40 divvy and 60 buyback next year? I guess how do we think about calibrating that going forward? Thanks.

Thank you. Thank you very much. On the first question, so once again, our targets overall, the targets that we – disclose here and commit to for the year are based on what we target operationally and the process that underpins this is obviously the process of budgeting. So the 10% ROTI target above 10% ROTI target is not based on the bottom range of the market target. It is based on the target that we have for the year, and I commented upon that earlier, saying that right now we believe that it's going to be, you know, at the slightly above top of the range. So that's how you should think about this, right? Now, slightly above top of the range, it's still less than what we've done this year. So just to make sure that this is clear, if we were to have a year better than 2025, it would support, obviously, mechanically, the performance from a group ROTI perspective. But that's how you should think about this. Targets are our best view of what we're going to achieve next year. So that's for the first question. And the second one, sorry, I'm blanking out. Okay, the distribution. So 50, 55, 45. So first, the balanced mix between... Dividend and share buybacks, we were clear in the past about this, was always something which meant that we had leeway between basically 40 and 60 indeed to fine-tune the decision when it is made by the board at the end of the year. So indeed, balance means it's between 60-40, 50-50 as a base case scenario, but between 60-40 both ways, if you will. This year, the calibration was simply you have a few inputs into the decision. One is the growth rate of the Dividend, too, is the buyback opportunity in the context of a certain price to book. And the choice was made that with a 48% increase in dividend and the share where they traded, this seemed within the policy that I just referred to, the right choice. Thank you.

The next question, sir, is from Pierre Cheveville of CIC Market Solutions.

Yes, good morning. One question regarding Boursaubanque. I was wondering if you think that maybe you have to revise your future plan regarding investments, and particularly marketing investments, considering the strong competition, particularly from one of your peers. which is targeting 10 million clients, I think, in 2027. And I was wondering if at the end of the day, your target of 300 million euros in 2026 will remain at this level for the coming years because of this investment to counter-attack this type of competition. My second question regards protection and PNC revenues which are quite stagnant this year compared to last year. While when we look at other competitors, they are rather in good shape in this area. So I was wondering why it's not so good for you. And are you trying to hide that? I don't know, but something like a bad contract combined ratio, for instance, can you give us a few numbers regarding undiscounted combined ratio in these two businesses, protection and PNC? Thank you.

Thank you. So on the first question of basically the decision, the arbitration between growth and profitability. From a strategic standpoint, this is a growth asset. I was always very clear about this. This is why we took the decision at a time where we had lots of challenges, but we still took the decision in 2023 to continue investing substantial amount of money, energy, and support to grow this asset. Now, the growth at Boursaubanque is not only about the number of clients, right? And we've been also very consistent providing some color about the assets under administration, which have simply nothing to do with most of our peers and certainly the one that you have in mind. And we have spent a lot of time and efforts also deepening the product offer making sure that as a full-fledged bank, it can support customers in every single area of their banking needs and be able to do it at the highest level of client satisfaction. And for the nth year in a row, Boursaille Bank remains the leading bank in France in terms of client feedback, which also is reflected in a very low churn. which, again, despite the very dynamic acquisition of clients, almost doubling in the last few years, you have a turn rate which is substantially below 4%. So the point I'm making here is what we care about is that this bank, this full-fledged bank with the complete product offer and a very high culture in terms of client satisfaction continues to deliver the service. The number of customers is the headline number, which in the end doesn't mean anything, right? Because what you really want to do is to provide the right service and generate the long-term profitability that you can extract from that particular business. So we're focused on this. Now, is there going to be a slowdown in expenses in 2026 in particular? Yes. But that doesn't mean that there's going to be a mechanical effect. one-for-one mechanical effect in terms of growth, because obviously we're not all so static in the way we think about client acquisition and in the way we think about managing, let's say, this cycle of growth, which is going to continue way past 2026. So I hope that gives you some color. On the protection side, there's, let's say, I mean, in the end, you know, you have choices to make. There are a lot of products in a bank that are offered to the customers. And you're focusing on this particular one, which has been basically stable, the premium premium are basically stable year on year. But, you know, you could point to the other piece of the insurance business, which is the investment piece, life insurance, where for a second year in a row, our pace of asset gathering is twice our market share, right? And we're leading the market from this perspective in a very substantial and meaningful way. So this is how you should look at this, right, that we make choices, including from a commercial standpoint, across all the businesses, and in French retail in particular. It has nothing to do with combined ratio, which is more than comfortable. Thank you.

Thank you. The next question is from Matthew Clark of Mediobanca.

Hi. A couple of questions, please. Firstly, on the fee revenues in the French retail, banking business. I mean, I think you've just described that the acquisition cost part of that's going to be coming down next year. But if we set that aside, does the 2% organic growth that you reported this year, is that a kind of good run rate for you? Or are there tailwinds or headwinds to that? Again, if we set aside the bursar bank acquisition cost aspect. And then other question is on the transaction banking business. in financing and advisory. Is the lower rate impact now digested there? And just your thoughts in terms of the outlook here. We had a very strong period of growth that seems to be slipping a bit more recently. Thank you.

Thank you. Thank you. So on your first question, I mean, you got it right. I think the base case scenario is the stability around the numbers that you have in mind. That's the base case scenario for the fee income with with a substantial, you know, if you dig into the details, a substantial increase, as you would imagine, in terms of the financial fees, more than compensating a slight decrease in service fees, completely aligned with what I said earlier. And to your point, you know, setting BolsaBank aside, the underlying trend should be – In terms of the transaction banking, yes, most if not all of the effect of the rates obviously reducing and decreasing and thus impacting the NII generated in that business. So that trend is mostly behind us for 2026. And remember, on the flip side, it's a business which we have been investing in for the last, now I would say, eight years. And we absolutely are determined to continue to invest in this business, both commercially and in terms of the technology itself. that is used there. But like everything else we do, in a controlled way, and making sure that there's both an ability to self-finance, so to speak, this growth, but also that the returns remain meaningful. But from a rates perspective, the headwind that it was in particular in 2025 is mostly behind us. Thank you very much. Thanks.

The next question is from Anke Ringen of RBC.

Yeah, thank you very much for taking my questions. The first is just on the core tier one ratio at the end of 2026. Can you just talk about your thinking wise now specified at about 13% versus the 13% before? And then when you come to the second quarter and assess your potential extra distribution, what factors would you take into account? And should we look at the base last year, the one or two billion as a base, basically? And then maybe just lastly, a tricky one, I guess you have the capital markets there only in September, but is capital distribution another area that could be a topic? Thank you very much.

So, if I forget something, you know, please remind me, right? So, first was TT1, so the fact that we added a little sign. So, don't read too much into this. It's just like, think about above 13 as... 13.00001 is above 13, right? Just to be clear, I mean, it was just a way of confirming that we do not intend, you know, in normal circumstances, as a general rule, to ever go below 13%, but it absolutely doesn't mean that there's any kind of accumulation above 13 as a matter of Second question is – I'll take the last one first because I remember it. So would distribution and capital policy be a topic for the CMV? Yes, of course. There should not be major surprises from an intent, from a general strategic approach, which is above 13%. We consider we have excess capital that we intend to use either in organic growth or in exceptional distribution or in organic growth. But, of course, you will get much more color on these topics and a perspective that will cover the plan, you know, the entire plan, right? So I think there's going to be a lot of content, but, again, with the strategic thinking framework, which will remain unchanged. In terms of the one or two billion in Q2, basically, well, we'll discuss that in Q2, right? Let me put it this way.

But what factors will you be looking at? Basically, the capital ratio?

The factors is always the same. Okay, thank you. No, listen, it's always the same story, right? It's always the same answer. I want to come back to this and make sure that this part is really heard. It's a strategic decision. This is not some everyday housekeeping. I have something left on my table, so I'm going to dispose of it the fastest way I can. It's a strategic decision about a strategic resource for the company. And so the factors, very simple, is the level of capital, the performance, the current performance, and the strategic opportunities between organic growth, distribution to shareholders as an exceptional distribution, or inorganic growth.

Okay, thank you. The next question is from Alberto Artoni of Intesa San Paolo.

Good morning. Thank you for taking my questions. I have two, please. On The first one is on the tax rate. What do you expect for the tax rate for next year, also taking into account the changes in French low? And secondly, on the cost of risk on the French retail, what is the outlook there? Lee, thank you.

Thank you. On the tax rate, I'll leave that with Leo. He's going to give you some color. Just one comment on the French context, which is that, as we've said in the past, because of the international nature of our business and the way it is operating mostly locally outside of France and the structure of the head office in France, et cetera. We are not experimenting a massive impact of some of the tax decisions in France. The impacts are rather marginal. But on the details, I'll let Leo answer. answer in a second. In terms of the NCR for the retail in France, what you have is something which is fairly stable, as you see in the numbers, and that has a small increase on the SME side, very consistent, very granular, nothing specific, and consistent with the increase in bankruptcies that we've seen throughout the year. for the SMEs, a trend which is, by the way, decelerating recently, right? So right now, our vision for 2026 is fairly constructive. You know, you have growth, albeit, you know, sluggish and small, but still you have growth and you have, you know, resilience in the system. So very consistent with the market trends at the granular level, nothing specific, neither from a specific file perspective or specific sector to report this point. Leo, on the tax rate, some more color.

So good morning, Alberto. So basically in 2025, we've had a tax rate which has been lower than the one that we had in 2024. That's basically been driven by the fact that we've had quite a few capital gains through the P&L, and those have a relatively lower tax rate. So they had an impact on the mix. Now, going forward for 2026, I think we're going to have a tax rate which is going to be higher than 2024 because of the reasons mentioned. So, this year, we're not going to have so many capital gains coming to the P&L, and therefore, we'll not have that mixed impact, if you wish. So, it will be higher than 2025. Most likely, it will be perhaps lower than the one that we had in 2024 because the mix of our revenues from outside of France are still quite high. So, we don't expect any big impact coming from the potential tax changes within France for the overall tax rate. So basically, higher than 2025, but lower than 2024.

Thank you very much.

The final question, sir, is from Sharaf Kumar of Deutsche Bank.

Good morning. Thank you for taking my questions. I have two. So I hear you. I hope I'm audible. So I hear your previous criteria for inorganic growth, but hypothetically speaking, should the relative valuation between Soxgen and Avenshare turn more favorable for you? Would you still be hesitant to buying out Aven's minorities? In other words, is the IE residual value risk considering the fast-evolving automotive market a constraint in your thought process? That is the first one. And second is a small follow-up on the equities question. Can you provide the revenue mix between the various products, i.e., cash equities, derivatives, prime, and also by geography? Thank you.

All right. So thank you. Hi. On the inorganic growth question and specifically pointing to the, you know, let's say theoretical opportunity of buying minority stakes in A events to increase our ownership there. So across any topic of using excess capital, first cornerstone statement, it has to make sense from a financial perspective. It's a decision that we always take rationally. Is the opportunity good for the company and for the shareholders? So if we're talking about growth, whether organic or inorganic, the question is going to also be, always be, what is the expected marginal return and what is the risk attached to this investment, be it again organic or inorganic. So in that framework, it's clear that especially as, at least from a theoretical standpoint, the obvious return of SBB hopefully will continue to decrease you will have opportunities, theoretically, like the one that you're referring to in events, that would, in an Excel spreadsheet, look potentially more and more attractive, for sure. Now, the second comment I've made in the past and today I want to point you to is, decisions we intend to make there need to be strategic, right? So, today, the thinking is, right, we have control of this great asset, and we can continue to both improve its efficiency, improve its performance, and position it for further growth without making, from a strategic standpoint, any further investments. So I'm not saying never because you never should say never, but today, you know, there's no strategic intent to do this because we believe that between the zero execution risk share buyback opportunity and organic growth that we are able to do things that are strategically more meaningful for the group and for the shareholders. at a level of risk which we believe is acceptable. So that's how we think about this. In terms of the mix, we do not disclose the overall mix, but I gave you a few ideas in terms of the geographic split, the U.S. overall. So here I'm not talking about the markets only, but the U.S. overall is roughly 27%, 30%, say 25% to 30%. of the overall GBIS business in terms of the market. more or less the same, 25 to 30% U.S. from a geographical perspective, then you can imagine a pretty significant weight of Europe and the more marginal representation in Asia, but it's so meaningful, but it's more than the other two regions. And in terms of the businesses, what we do disclose is that you have basically a 60-40, more or less, split between equities and fixed income. And in fixed income, You need to think about the mix as, you know, versus the average market, basically less commodities because there's none. So obviously less commodities and a credit business which is smaller and more focused on securitization and private credit than, let's say, on traditional marketable securities credit. So that's the color on fixed income and from a geographical standpoint there, you know, heavyweighting towards Europe and Asia versus the U.S. In terms of the equity, you know that historically our business has a big focus on the investment solutions, right? It remains true even if... As intended and explained five years ago when we spoke at the investor day for GBIS when I took over, we did grow substantially the flow businesses both on the equity derivative side as well and linear businesses as we call them and as well notably through the acquisition of Burns in the cash equity piece. But we don't disclose further percentages. Thank you. Thank you.

Mr. Krupa, there are no more questions registered at this time, sir.

Okay. Thank you very much. Thank you, everybody. Thank you for joining us this morning and sharing your valuable time with us. I thank you for your questions, and I wish you a nice day, a nice weekend, and I'll talk to you during the next release for Q1. Thank you very much. Take care.

Thank you. Bye-bye.

Ladies and gentlemen, thank you for your participation. You may now disconnect.