BNP Paribas SA (BNP) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the presentation of the BNP Paribas Fourth Quarter 2024 Results with Jean-Laurent Bonnafe, Group Chief Executive Officer; and Lars Machenil, Group Chief Financial Officer. For your information, this conference call is being recorded. Supporting slides are available on BNP Paribas' IR website. [Operator Instructions] I would like now to hand the call over to Jean-Laurent Bonnafe, Group Chief Executive Officer. Please go ahead, sir.

Thank you. So good afternoon, ladies and gentlemen. I'm pleased to present to you today a summary of our strong fourth quarter results. We will also be providing detail on our trajectory of profitability and capital return for '25 and '26. We'll be relatively short on divisional details as you have most of them in our documents. So on Slide 4. On fourth quarter '24, net profit is up a strong 16% year-on-year to EUR 2.3 billion. Earnings growth was reported by an elevated 10.8% revenue growth year-on-year, a very high 6.5 point jaws effect and continued low cost of risk. Our CET1 is up 20 bps quarter-on-quarter to 12.9%, thanks to retained earnings and securitization operations. During the quarter, CIB posted an impressive 20.1% revenue growth with double-digit increases in all businesses. Global Markets stood up, driving revenue up 32.4% in the quarter. CPBS was up 95% despite lower used car sale results at Arval. The quarter confirmed the gradual inflection of our Eurozone commercial banks, but also a strong rebound in Euro-Med, thanks to the reconsolidation of Ukraine and the rebound in Turkey. Finally, IPS posted a strong 8.4% growth driven by Insurance, Wealth Management and Asset Management, but real estate continues to weigh. We obviously confirm our distribution policy of 60%, and I will comment more on this later. On Slide 5, you can see we have fully delivered our '24 targets, so I'm not going to comment that with further details, and I will move on to Slide 6, where I will now be moving -- we present the new trajectory with our ambition remains to reach our return on tangible equity of 11.5% in '25 and 12% in '26 based on 12.3% core equity Tier 1 pre-FRTB. This should lead to more than 8% EPS growth CAGR, as you see on the slide. Our '26 return on tangible equity is a stepping stone towards further improvement. Our targets will be achieved, thanks to 6 key levers. Starting with CIB. We'll continue to grow market shares in a capital conscious manner, thanks to our state-of-the-art CIB platforms that are uniquely positioned to deliver the highest added value products to clients. Moving to CPBS. We launched a new strategic plan for CPBS this summer, and extend the one of Personal Finance. We intend to lift the return on notional equity of these businesses to 17% by '28, adding about 1 percentage point to group return on tangible equity. Our top line is the Eurozone commercial banks should benefit from normalization of the yield curve, and we will prioritize protecting commercial margins in a competitive market environment. Moving to IPS. We continued the dynamic organic growth of Insurance, Asset Management and Wealth Management. This will be amplified by the integration of recent acquisitions, such as HSBC Germany's Wealth Management business and of course, the AXA IM acquisition. We'll continue our efficiency efforts, with additional savings of EUR 600 million in '26 after the EUR 600 million savings announced previously for '25. Moving to Slide 7. Let me now move on to our distribution policy. We reconfirm our payment -- our payout target of 60% for '24. For '24, this means a dividend per share of EUR 4.79 and EUR 1.08 billion share buyback programs. We are on track to distribute the EUR 20 billion we aim to return by the end of '26. We have also decided to implement an interim dividend starting this year, that will be the equivalent of 50% of the first half EPS and paid on the 30th of September. This reflects our confidence in the strength of the business and our ability to drive organic growth. Illustrating with the first half '24 earnings, our total shareholder return would be equivalent to about 13% this year. I'll now hand over to Lars, who will briefly summarize the achievements of the quarter, and then I'll detail our trajectory for '25 and '26.

Thank you, Jean. Good afternoon, everyone. I'll briefly describe the trends in our main businesses, our cost discipline as well as strong cost of risk management and our end up with the capital. So if you accompany me on Slide 11, you'll see that the fourth quarter was driven by solid business performance and this within each division. So group revenues were up 10.8% year-on-year. And CIB, in particular, had an impressive quarter, as Jean-Laurent mentioned, up 20% year-on-year, driven by the strong performance of the 3 business lines within CIB. First, Global Banking up 10.8%, supported by capital markets in EMEA and in the Americas. In particular, trade finance had good momentum and advisory was robust, particularly in EMEA. If we go to the second division, Global Markets, and their activities were up 32%, driven by a strong performance, both in equity and prime services as well as robust performance for FICC, thanks to strong activity in primary, macro and ForEx. The third division, being Security Services, was up 13.4%, driven by a sustained growth in fees as well as higher client balances and transaction volumes and margin resilience. So that's our first division. If we turn to the second one, CPBS, had a good performance, up nearly 5%, supported by the commercial and personal banking activities with higher deposits and stable loans. A few points are worth highlighting. First, a positive inflection point in the revenue trend was confirmed for the commercial banks in the Eurozone, with strong growth in fees across all markets, and net interest revenues stabilizing. The exception is Belgium, where competition remains tough. We have been affected throughout the year by lower current account deposits. But as you can see, the trend is stabilizing. All this gives us confidence in our ability to deliver decent growth in '25 and beyond as we will explain when we come to the '26 trajectory. If we then look at France, side deposits are also stabilizing, and we see positive momentum on corporate and private banking activities, supporting a positive growth in revenues this quarter. We are very pleased also to see that gross operating income was up 2.4% for 2024, which demonstrates our ability to adjust to adverse market conditions. And this supports our ambition to improve the overall profitability of our business in France, as also we will show in our '25 '26 trajectory. If we then look at the other part within CPBS, namely the specialized businesses. They were stable year-on-year, but still impacted by the ongoing normalization of used car prices. Organically, the Arval business again performed extremely well this quarter, up double digit. We anticipate that Arval and Leasing revenues should be down by about 10% in '25, as we announced before, and this is due to used car prices, but specialized business are nonetheless expected to deliver positive growth, as shown in our trajectory Slide in '25, and this includes a 5% growth target for the core perimeter at Personal Finance in '25. Last, a very good performance from the new digital businesses and personal investors, up 10% this quarter, thanks to further growth in client acquisition. So that's our second division. If we now turn to the third one, the last but definitely not the least, IPS. We saw strong growth in fees and assets under management. IPS is about to become a major driver of our growth with -- in particular, the acquisition of AXA IM. All activities in this department, bar real estate performed extremely well this quarter, and revenues for the division were up 8.4% year-on-year. Moreover, activity levels, higher assets under management and strong inflows contributed to our performance. Our recent acquisitions will accelerate growth as we detailed in our trajectory '25, '26. After this, you'll stay with me on Slide 12, which shows the relentless focus on cost discipline and the way it's paying off. Particularly, you've seen we delivered very positive jaws at the group level this quarter at 6.5 percentage points. This demonstrates our capacity to improve efficiency in our 3 divisions, while funding growth. If we now turn to Slide 13, where we focus on our cost savings and efficiency measures. Here you can see that we have managed to fully offset the impact of inflation with cost savings at the promised EUR 1 billion, leaving room to fund our expansion and enabling strong top line growth. We delivered significantly more than the 2 points in jaw in Q4, and as our trajectory, '25 '26 shows, we expect to continue at a pace of about 1.5 points per annum on average. What are the key levers for this jaws effect? Well, there are several of them. Personal Finance, with a comprehensive adaptation plan, delivering positive jaws more than 4% in '24, an easier base of comparison in CIB, outsourcing initiatives of noncore functions, increasing the usage of service centers, where we have actually increased the FTEs by 2,200 since 2023. And finally, our real estate -- our internal real estate rationalization, including branches. In total, we have reduced our office space by 120,000 square meters. So with this, let's talk about cost. I will now turn to Slide 14 and cover our excellent risk management. On this slide, you can see that our diversified balance sheet enabled us to protect profitability. Only 16% of our gross operating income, so revenues minus cost, was absorbed by provision. Focusing on the performance in the fourth quarter, our cost of risk reached 38 basis points over outstanding, meeting our stated intention to stay below 40 basis points, and is down compared to a year ago. If we look in detail, our stock of so-called Stage 1 and Stage 2 provisions is comfortable at whopping EUR 4.2 billion, equivalent to more than 1 year's worth of the current Stage 3 run rate. I will not much elaborate on Slide 15, but let me highlight the key points. So cost of risk in CPBS is up year-on-year and quarter-on-quarter due to one specific file, and we continue to monitor the French economic environment given the political landscape. For now, our portfolio is strong, but we prefer to tighten risk limits that overgrow. Global Banking continues to deliver an impressive performance, with nearly no cost of risk on average in the last 4 years, and actually a release in '24, demonstrating a powerful low-risk CIB platform. Let me end on Slide 16 with the third scarce resource, capital management. As we indicated in the third quarter, we implemented securitization transactions in the fourth quarter for an equivalent of 10 basis points. This enabled us to reach a robust common equity Tier 1 of 12.9%, up 20 basis points compared to the third quarter, including our organic capital generation. This 12.9% at the year-end has become 12.4% on January 1, given the day 1 implementation of Basel IV in Europe. This 12.4% remains significantly above our SREP requirement of 10.3% and above our 12.3% target of pre FRTB or -- 12% fully loaded, so including and assuming an FRTB implementation, enabling us to enter the year 2025 in a comfortable position. In particular, the chart at the bottom of Slide 16 shows you that net of distribution, we built about 30 basis points organically in '24, close to the normal pattern for BNP Paribas. Moreover, we absorbed the impact of Arval reconsolidation, model updates and redeployment of Bank of the West Capital. We intend, as suggested before, to be FRTB ready on January 1 '26 as we await detail on timing, magnitude or even implementation, if any, of FRTB as we continue to ask European authorities to be vigilant and ensure a level playing field between jurisdictions. If we look at other elements, our leverage ratio came in 4.6% and liquidity also remained a key strength, with a liquidity coverage ratio of 137%. I'll now hand back to Jean-Laurent for our '25 '26 trajectory.

So now on Slide 25, let's focus on our priorities for '25 and '26. So as you can see, we have to deliver above 5% top line growth CAGR, more than 1.5% jaws effect on average, cost of risk below 40 bps, net earnings growth of more than 7% CAGR and EPS growth of more than 8% CAGR. And now I'll go through the growth rate respect by division. On Slide 26, focusing on CIB. Our CIB division has been a fantastic growth and profitability story since its refocus on deployment phases. We believe that is now uniquely positioned to continue to gain market shares on high growth, high value segments of customers and products. The intimacy we developed with our clients and our cutting-edge distribution capabilities have led us to become a trusted and needed partner for most of our counterparts. We will obviously be in a strong position to capitalize on the progress to come from the Capital Markets Union, given our strong relationship with both borrowers and investors. This will help us continue to optimize capital consumption. We are well positioned as well to participate in the growth in the U.S.A. is most likely going to see. On Slide 27 and 28, you can see that our growth has been achieved with capital productivity, cost efficiency and a low risk profile, a key feature of our DNA. As a result, we raised our RONE by 10 percentage points over the last 4 years. Our second priority, Slide 29, is to focus on improving profitability at CPBS and Personal Finance, currently significantly below group average. We are launching a new strategic plan for CPBS later this year, which would be submitted to the consultation process of the employee presentative bodies and while extending the personal finance plan until '28. These 2 businesses account for about 24% of group risk weight, and we expect to improve their respective return on notional equity to about 70% in '28. This should add about 1 percentage point to group return on tangible equity, with 0.5 percentage points coming by '26. Regarding CPBS, we will benefit from a better rate curve. We believe that we have a powerful position on corporates, private banking and mass affluent clients. We'll therefore continue to focus on growing market shares in synergy with IPS and CIB. Regarding the retail segment, we transformed the relationship model via digitalization and automization, which will lead us to adapt the operational model. We will elaborate on this at a deep dive on 26th of June. The plan for Personal Finance is already well engaged with a refocus on the core businesses, gradual recovery expected on the margin from front lower rates and a good positioning on mobility. We will extend the plan to '28 to optimize our operational model. This will be presented at a deep dive on the 10th of June. And now before my conclusion, last, we now say a word on NII in our Eurozone Commercial Bank and on IPS.

Yes. If we turn to Slides 30 and 31, where we wanted to comment on the direction of our NII in the Eurozone commercial banks. We expect more than 3% top line growth this year, so top line. And on Slide 30, on the left top, you saw that 2024 suffered from EUR 352 million in, headwinds that are behind us. You know the story well, and I will not elaborate on them, as I said, they belong to the past. Top right, you can see that the interest rate curve was significantly inverted, which triggered a strong price signal that lasted longer than we had anticipated. This led, as you can see on the bottom left, to a significant outflow in current account deposits, down 25% over 2 years. This, in turn, created an opportunity cost, which we estimate at around EUR 300 million as we were not able to reinvest as much as we usually do on the long end of the curve. So if we now turn to '25 '26 on Slide 31, we can see that we believe that NII should return to a growth path that will benefit from more normalized rates, a gradual recovery of the commercial margin and renewed opportunity to reinvest deposits on the long end of the curve. Here, you can see our assumptions and some sensitivities are mentioned at the bottom. So that's CPBS. If we now turn to Slide 32, and we look at the IPS platform, which is on the verge of a significant transformation. We expect IPS to experience a cumulative profit before tax growth of about 1/3 in the next 2 years. It already benefits from synergies with the group, it consumes a little capital and obviously represents a low-risk fee-generating revenue stream. We have consumed a significant fraction of the Bank of the West redeployment plan to accelerate this business via partnerships and acquisitions including more recently, AXA IM and HSBC Wealth Management in Germany. So the division is becoming the biggest driver of growth within the group. And as I mentioned, it will grow -- the pretax profit will grow by around 1/3 in the next 2 years. And if you look at it, it will use the main levers. So 40% of that growth will be organic, 40% will be the AXA and the Wealth Management I talked about, and 20% is real estate that returned to the run of the mill. So finally, if I can end on Slide 34 with the capital trajectory. Our commitment remains to have a balance between distribution and growth, whilst abiding by a continuously demanding regulatory environment. So we have pre-funded FRTB with a target common equity Tier 1 ratio of 12.3% in '25 and '26, until its precise timing and magnitude are finalized. As we have said before, we continue to ask European authorities to be vigilant and ensure a level playing field with other jurisdictions. So with this, Jean-Laurent, back to you for the conclusion.

So on Slide 35, in a nutshell. Our strong fourth quarter has enabled us to exceed our '24 targets. Our '25-'26 trajectory is built on strong growth drivers already in place, and that will continue to build benefits beyond '26. And we confirm our payout ratio at 60% and announced an interim dividend policy starting in '25. This concludes our presentation, and we are now happy to answer your questions.

[Operator Instructions] The first question is from Tarik El Mejjad with Bank of America.

So 2 questions for me. First of all, so you usually like to give longer-term guidance, and I thought you will probably roll over the guidance you have for ROE an extra year, but you limited time frame to 2026, very focused guidance. So if we look at beyond '26, you have the 50 bps extra from CPBS and PF. But then if we add the post '26 growth drivers like the full AXA IM synergies, volume slightly back. What do you think actually BNP as a bank can deliver in terms of ROE, if you see through this kind of growth or transition period? And then maybe linked to that, Jean-Laurent, you did an interview in the [indiscernible]and you mentioned again CMU, Capital Market Union, and you mentioned that actually today in the call again. Do you think this is a now or never for the banks in Europe to -- and the politics to get together and put that forward? What do you think is missing? And you kind of start to integrate your thinking of the bank and how it will evolve. Do you have any indication that there might be some progress now that actually the forces politically has changed? And one quick question on capital. So you've done some securitization and capital build faster without any visible or noticeable impact on revenues. How much more you can do this to build yourself a bit more of a buffer on in terms of capital?

So thank you so much. If we look beyond '26, maybe moving back page -- I don't remember exactly. Page 6. So if you compute 8 percentage point and 24% of total risk weight is basically 2% on the total return on notional equity that is more than 1% on total return on tangible equity rather 1.2%, 1.3%. So after '26, you are left with clearly more than half, it's rather 0.7%. AXA IM, full speed in '28. We'll add 0.3%, so you're already at 1%. And then we have a plan for Wealth Management, not disclosed yet, but that's going to be, I would say, the rollout for Europe of a new platform that we will roll out a little bit like what we did in the recent past with CIB in a number of countries. Of course, we'll start with Germany, but there will be other countries that will come. And this will also add something quite significant. So we have in our hands, not taking into account anything that could be the natural growth of other businesses with only those 4 dimensions. The commercial bank in France, Personal Finance, AXA Investment Managers and Wealth Management, we have more than 1%. So 12 plus 1 is 13. So this is the indication. So we have to go step by step. This is to indicate that 12% is not a kind of a maximum. Continuously, including during that plan, we are investing for the future beyond the horizon of the plan. This is very important for a company like BNP Paribas. So at the end of '26, not only we will have all those levers in our hands. But of course, we will have all the other businesses with their natural growth and ability to deliver additional profitability. So I don't know, between '21 and '26 in the end, we will have delivered 2 percentage points on top of the 10%, moving from 10% to 12% return on tangible equity. Potentially, I don't see any reason why in the mid, long-term plan that could be 26%, 30%, 31%, we cannot deliver 14% and in between 13%. So this is the indication. So in one hand, again, already levels that are being implemented, quite powerful in a number of businesses, wealth Management, Asset Management, Commercial Banking in France and Personal Finance. And then natural growth and optimization at any other businesses, including CIB, but also other businesses like insurance real estate, emergent countries and so on and so on. So the -- I would say, it's an engine. We are gradually moving up in terms of profitability. To that, we are keeping the business focused in a number of dimensions to try in any dimension to deliver the best of those businesses. So we are pushing the model to deliver value-added products, value-added services to grow the franchise the right way and to extract additional profitability instead of looking at the kind of volume type of approach that would, on the contrary, in the end cap the ability of the company to grow in terms of return on tangible equity. So this is the story. For Capital Markets Union, clearly, there are a number of initiatives that are coming. Last could comment that maybe the longing fruits that are coming. And on top of that, yes, indeed, we feel -- we start to feel the kind of, I would say, political will to unlock that emission. There is not yet a kind of a consensus on how to unlock how far to go, but something is coming. And recently, Mrs. Lagarde and [ Mr. Vandelli ] issued a common paper. It was end of last week, if I remember well. And clearly, Capital Markets Union is part of initiatives that the European level could potentially unlock in the coming years. So some things coming. On securitization, maybe Lars, you could complement?

So indeed, Tarik, if you look at the person in charge at the European Commission, she has a mission statement, which is very tangible. So it's not just very fluffy in what they say. So there could be very tangible steps, small steps to come. And that will be indeed an improvement because, as you mentioned, so we optimize our capital by securitization. And so what we've done in the last quarter is put into the market for the equivalent of 10 basis points. And you know, that is -- why do we do this? And as you mentioned rightly so, without impacting it on the P&L, is because we see that is the debt that is available in the market. So what we can currently do in the environment is we can basically place into the market our current issuance. So whatever we -- as the issuance we do in a year, we can place it into the market, and that is what you have seen on the 10 basis points. So the pricing of those is right. Placing it into the market is cost efficient, and so a clear gain. If indeed, the progress would come step-by-step on the Capital Markets Union, that go even go further. So that would mean that a part of the loans we have, like EUR 200 billion of corporate loans in the balance sheet, part of that could be offloaded as well. So that will be the view, Tarik.

[indiscernible].

Operator, are there further questions? Or would there be an issue?

Next question is from Delphine Lee from JPMorgan.

So my first question would be, if you don't mind, on Slide 25. Just trying to understand the revenue sort of guidance for specialized businesses, which looks like it's around revenue growth of around 2% or so. But I think you -- are you still sticking to Arval revenues being down 10% in '25? I'm just trying to reconcile how revenues can grow at 2% if you have this headwind coming from used car sales? And then on the second question is on Eurozone domestic retail revenues, just wondering, I mean, given the performance of France and Belgium this year, which has still been difficult, and I understand, yes, the headwinds are now behind. But just trying to understand a little bit your assumptions for volumes and where is the pickup coming from, mainly? I mean, do you see some progression for France and Belgium in '25 coming from revenue flattish or down 6% in Belgium. If you could provide some color, that would be helpful.

Delphine, thank you for your questions. If we start, first of all, with the guidance. So indeed, -- you remember that in the past quarter, we've guided that for Arval, the resale prices would taper off. And we basically guided that it would be a lowering of EUR 400 million, and so that the contribution of the resale would be basically 0 in that. But then at the same time, there are other parts in there that growth. So on one hand, you have seen that personal finance that we have been separating the noncore activities and the core ones are growing. Look at -- the volumes are growing by 4%. And going forward, the top line would grow by 5%. On top of that, Arval, you also have the organic growth, yes. So the volumes of car going up, so the fees it generates is going up. So that is that dynamic. And then when you look at the Eurozone domestic, what you see there? You have indeed seen that there was, in '24, there was a pressure on the interest income, in particularly from the headwinds. And those headwinds they basically -- if you look at France, they have tapered off. That's basically what you see in the fourth quarter. And in Belgium, they basically come to an end. So there was a situation where, on one hand, the government came with a competitive product. When it ended, some of the other competitors came with that kind of environment. But that should be behind us. So if you look forward, if you look in '25, the main thing is the deposits, as you can see, they are basically stable. So they were down in '24, and that basically generated that foregone revenue, but that should be behind us. And therefore, the reinvestment of those deposits will trigger the growth. The growth that we've guided will be around 3% in '25 and above that even in '26, in particular, if the yield curve would steeper. So Delphine, that will be the 2 guidance on clarifying Arval and on clarifying the Eurozone domestic markets.

And just to clarify, France is also -- French revenues are also growing more than 3% and Belgium as well?

Yes. So if you look at -- we've guided the overall Eurozone that's saying that the top line would grow, like, say, around 3% or more, that basically applies to France and Belgium, indeed.

The next question is from Joe Dickerson with Jefferies.

You've given the 11.5% return on tangible guidance for 2025. Clearly, the consensus is about 10.3. I guess when you look at consensus, do you think that -- where do you see the gap? Is it in a combination of not quite enough revenue growth and not enough jaws? I guess if you could opine upon that, that I'd be grateful. And then you've embedded in your guidance cuts in the Livret A. Is that just what we've seen already in February? Or is this a following Livret A cuts forthcoming this summer? Because it looks like the summer cut could be prospectively quite large given the ECB cut and the falling inflation.

Well, if I remember well, the consensus 1 year ago for BNP Paribas was in the range of EUR 10.5 billion and EUR 10.6 billion net result. These are in billions, and we delivered EUR 11.7 million. So it happens that, I would say, for a number of reasons, there may be businesses that are slightly under, I would say, considered. Probably a global market, if we look at the consensus, there is a certain gap in between the consensus and what we have internally clearly. Probably, I don't know, investors or analysts are not completely factoring in the quality of the platform and this ability to grow efficiently with growing profitability and return through the cycle the way we try to present it today. We will continue that story. So we expect '25 is going to be a year with a lot of volatility for a lot of reasons. So global market and CIB globally will deliver probably much more than the consensus is telling us today. We're also having a certain impact coming from external growth, AXA Investor Managers and the Wealth Management coming from HSBC in Germany and other pieces being [indiscernible] insurance life in France and also [indiscernible] in Italy. The number of, I would say, commitments where we said this is a minimum. So there is also some expectation to deliver more. So well, we described most of the '25-year -- '25 '26 trajectory, probably '26 is going to be, on average, slightly stronger in terms of growth than '25. But nonetheless, we're quite confident with the 11.5% return on tangible equity for '25 and '26 should deliver 12%. And again, looking at the Eurozone commercial banks last year, as we said, they suffered a lot for a number of headwinds last year. Away from those headwinds, those banks would have delivered 3%-plus growth. And typically, '25 is a year that is completely clean in terms of headwinds. And the underlying economy in Europe is going to be of the same nature, same kind of growth, same time of expansion. So on the Eurozone, we are also very confident. So all in all, looking at all the different pieces, looking at the consensus as far as we can understand the consensus -- we don't know everything about the consensus, but we have a certain level of detailed information. Probably for the Eurozone banks, for the global market [ CIB ] as a whole and an external growth, probably these are the reasons why there is a certain gap in between the return on tangible equity you might have in the consensus and the one we are disclosing as a target, being very confident on our ability to reach that target.

On the question of the Livret A, basically, it is -- we assume that the pricing of Livret A comes back to the intrinsic formula. So the negative effects that we saw '24 are behind us. And so within the trajectory that we shared with you, that evolution is embedded.

The next question is from Matthew Clark, Mediobanca. .

So a few questions from me. Firstly, on the EPS trajectory. You dropped your old 2025 growth guidance and replaced it with this 8% over 2 years. How should we expect that to play out? Is that going to be very backloaded to 2026, roughly evenly split between the 2? Just wondering how much of a hockey stick we should expect there or whether it will be a straight line. Second question is on the model updates impact on CET1 that you've got 30 basis points across 2025 and '26 seems like quite a lot versus your historical levels. So I'm just wondering where that's coming from? How much of a surprise that is to you and how confident you are that that's the worst case kind of impact? And then final question is on Arval and the used car sales result. So I just wanted to check for you, is to used car sales result at a normalized level? Or should you be expecting that normalize back to a higher level beyond your forecast horizon? And secondly, I just wanted you to clarify the EUR 400 million headwind to used car sales results, is that a gross headwind for Arval? Or is that a net headwind also considering the volume growth. It wasn't quite clear from your earlier comment, whether the growth headwind is actually greater than that EUR 400 million.

Okay. Matthew, thank you for your questions. So if we look at -- so the earnings that we're going to lift by 8%. You've seen -- if you -- we've guided on the CAGR, but the one thing that you basically see where we've guided on a yearly basis is on the return on equity. And so there, you basically see that we have 50 basis points every year. So you can assume that, that progress is quite linear. And then when you come to the common equity Tier 1 and the impact of the models. Well, there's 2 things. You know that on one hand, we are a prudent bunch. So we basically take that stance. You also know that when it comes to common equity Tier 1, we are flexible. We mentioned it earlier. When we want, we can get 10 basis points from securitization. There are other elements we can optimize. So from that point of view, that's where we stand. Then when we look at Arval, you are right, again, in the sense that we are approved on the bunch, we basically said that we assume that the resale value would be 0. It is true that if you go back into the past, it's always been somewhat positive. So it's not impossible that it's going to gravitate to somewhat a tad higher than that 0. And when it comes to your EUR 400 million on leasing and Arval, it's a net impact.

The next question is from Kiri Vijayarajah with HSBC.

Yes. A couple of questions from my side. So firstly, coming back to Belgium, and I know you've had a fair amount of market disruption on the deposit side, and I know you've talked a lot about that already. But when I look at the mix shift from Central Bank data, it looks like it's already largely stabilized. So is it right to think maybe 4Q Belgian NII really is the trough there? And the growth that you've just been talking about can kick in as early as the first quarter '25 or is you're thinking more the recoveries kind of second half for Belgium NII? So just your thoughts on timing of the return to growth. And then secondly, on Italy, with several of the competitors in that market, a bit inwardly focused on different M&A scenarios. I wonder, is there an opportunity for BNL to ramp things up organically and drive better commercial momentum? Or is it your preference to kind of stick with the kind of conservative risk profile and keep that kind of status quo? I'm really curious just because you don't really talk about Italy as a source of growth in a way that maybe one of some of your peers have done. So a question on Italy and organic growth momentum there, please.

I'll start with Belgium and Jean-Laurent will take over on Italy. So no, you're absolutely right. If you look at the pivot, as you mentioned, it was basically the -- what we've seen impacting the deposits has basically come to an end. So you should indeed start seeing the impact as of the beginning of the year. So that's on Belgium.

So on Italy, I know we are not disclosed numbers from BNL, but to make it very simple, in Italy, all in all, adding up all our businesses and we have many businesses in Italy, to some extent, all the businesses of BNP Paribas are being present in Italy. The top line is slightly more than the double of the BNL and the net result pretax is 3x the 1 of BNL. So for us and cost income is fairly low and cost of risk is more than acceptable, meaning fairly low as well. So for us, the situation is Italy. Of course, there is the BNL at the center being leveraged as a kind of a platform for all businesses. But for us is to run all those dimensions, the right way. And we are growing well in Italy. The BNL is not the BNL we used to have -- we used to acquire more than 15 years ago. I mean we totally transformed the corporate bank instead of being a kind of small cap type of operation. We totally transformed the platform. And in Italy, we're having, I would say, a franchise that is much more kind of mid-cap, allowing us to develop a lot of cross-sell with CIB, for example. We did a push in terms of private banking, wealth management, those 2 dimensions. We are not present at the historical BNL. And the historical BNL is something that today is rather, I would say, rather small. I mean the proximity bank is relatively small, like in France to some extent. And we have no intention to try to grow further in that domain for a number of reasons. And we concentrate on the value-added approaches, business, franchises. And anything that is a consolidation in Italy for us is an opportunity because, well, this is one brand that is vanishing in the air. So it gives some pressure for us, especially in Northern Italy. So this is the situation. And again, and I know that we are only disclosing the numbers, maybe we will have to -- we don't know -- to deliver a deep dive around Italy. But BNL is just a piece of the platform, and the platform is, I would say, is growing quite well over the cycle. And we believe this is the right way for us in Italy. And to some extent, we are moving in Italy, like we are moving in France in terms of value-added franchises, products, services and probably this is the right way for us. So well, concentration. If we have the right services, the right products, it's always an opportunity to grow organically, knowing we are not going to move in any dimension externally in Italy for those the reasons I explained. We don't want to grow in the retail mass market universe. This is not our trajectory. This is not strategy. And again, Italy for us is twice top line BNL, more than twice, and pretax return result is 3x. So it's quite a lot. Cost/income is in the range of, let's say 40% -- 50%, sorry, 50% also but profitable.

Next question is from Flora Bocahut with Barclays.

So on my side, I'd like to discuss actually the capital trajectory. So if I look at the Slide 34, essentially, you're telling you now that the CET1 ratio will be roughly flat in '25 and '26 at 12.3% before FRTB. That means if FRTB happens, whenever that is and whatever form that is, that you would be potentially at 12% exactly at the end of 2026, which would leave limited room for surprise or for optionality. So I think on the CET1, partly the reason why it's flat is because of your payout ratio, which is higher than peers at 60%. But I think there's also 2 other elements on which I'd be interested to get your view. The first is actually the regulatory headwind, because I was looking at the Slide 16, where you show actually that you had, if I accumulate them 55 basis points of regulatory headwinds between the model updates and the other reconsolidation in 2024. Then you're telling us that there is potentially up to 100 bps of additional regulatory headwinds in the next 2 years, if I take Basel IV first time implementation, FRTB and still some model updates. So the first question is what can you do there to try and offset some of those regulatory headwinds? Why not use securitization more? And the second thing is, if I compare your level of profitability to other European banks, I think it's revenue per RWA, that tends to be a bit lower. So is it something that you track and on which you're specifically focused when you consider the plan towards the 2028?

We're considering the fact that moving up from 10% to 12% in 4 years' time, 5 years' time, looking at the return on tangible equity, and we -- we're now considering beyond '26 to continue that uplift, I mean, potentially 13% and maybe 14%, this is the trajectory. Clearly, you can deliver that only if all businesses are focused around this idea that any risk weight should produce a certain level of profitability. So it's clearly the -- I would say, the when we're moving. Why do we in terms of core equity Tier 1, some headwinds coming from the supervision, the regulatory dimension. This is obvious like any bank. The initial target of the group is 12% core Tier 1 equity. So this is after FRTB. And today, we are not moving the target in just the long-term target we have set, 12%. This corresponds to our risk profile. If you look at the P2R of the bank, this is one of the lowest, even maybe the lowest for that type of a bank in the Eurozone. So the fact that we are 12% correspond also to the fact that the supervisor itself give us a certain, I would say, give a certain recognition of the value of the business model that is diversified. The risk profile is quite -- the profitability is quite frequent. So this, all in all, correspond to the target of 12%. There is no reason why we should look at something higher, considering the fact that driving that nice position to have a P2R that is, I would say, best in [indiscernible] this is obviously there is no need for us to go at 13% or 12.5% even. So this is part of the road maps. But again, the strategy is to grow the return on tangible equity. We're moving progressively because you can move up in a sustainable way. Only if you grow the right way, certain franchises -- and to grow the right way, certain franchises is very much about growing value-added products and services. And this, all in all, represents a certain level of investment. Today, in our '25 '26 plan, we have already a certain level of extra investments we're dedicating to the future of the company because we believe that after '26, there is something to come. We were considering that '26 is the maximum with 12%. Maybe we would not consider those investments. And going that way, maybe the return on tangible equity in '26 might be slightly higher, but the future would be less brilliant. So it's a balancing between mid short term and long term. So this is how we I would say, we manage the company. Not that far ago, we're at 8%, then 10%. Now we are going to be at 12%, and we are considering more than 12%. So this is a trajectory. And to be very honest, we were not particularly helped by the red scenario. This is a fact. I mean, it's the way it goes.

Next question is from Anke Reingen with RBC.

The first one is on AXA. I apologies if I missed it, but can you help us a bit in terms of the contribution by '26? I think you gave us around EUR 1 billion revenue number. But is it fair to say, it's relatively a little at the net of it? And is there any impact on capital in terms of intangibles we should consider? And as I said, say that the EUR 3.3 billion of cost savings, you target that include relatively little for potential savings from the acquisition of AXA. And then secondly -- sorry, not really secondly, but second half question. Slide 29 about your improvement in the returns. I realize you have 2 deep dives coming up, but it's really quite a nice step-up in the return. And I just want to make sure it's not that 2025 will be impacted by more material restructuring or disruptions to the business in order to deliver those return up to '26 and then '28.

On AXA Investment Managers, we cannot, I would say, couldn't get that far. We cannot give that many details because we have to wait for the closing. And so in due time, we will give all those numbers. What we can say is that the top line is in the range of 3%. If you just add up AXA Investment Manager to BNP Paribas without any synergies, anything. The top line, this is the equivalent of 3%. So 1.5% this year, '25 and 1.5% next year, '26 because we are going to close by mid-year. So this is the top line. Then in terms of synergies, we do not really communicate. We said that roughly speaking, looking at standards, potentially, it's not -- so 15%, if I remember well. So this is something we already disclosed. So these are standard answer, I would say, numbers. We said also that the return on equity -- the equivalent of the retail tangible equity on that transaction is going to be above 18% after 3 years. So after 3 years is mid-'28. So this is not '26. And probably, yes, the bulk of this acquisition is going to be delivered between '27 and '28. This is why also this transaction is going to play a role beyond '26, and it's going to contribute to the fact that the group globally is going to move from 12% to something that's going to be higher. So this is also part of the -- sorry, we do not particularly count on AXA IM to lift the return on tangible equity from 11% today '24, up to 12% in 2016. The major effect is the top line. So there is not much on top of that looking at '26 considering that transaction.

Next question is from Chris Hallam, Goldman Sachs.

Just on CIB, clearly, strong performance in equities in the quarter and for the year as a whole. I know we've seen a bit of quarterly volatility through 2024. So just how do you expect revenues to trend in that business through 2025? Should we sort of assume steady growth? And then in the banking business, on the one hand, many of your peers are quite upbeat about the outlook for 2025, but then Jean-Laurent, as you mentioned, consensus is sort of penciling in low single-digit growth. I appreciate that the mix differs bank by bank. But how do you see the growth outlook across the CIB businesses in 2025? And then on Wealth Management, I just wanted to dig a bit onto this platform rollout. So what are the specific, perhaps segments of the market you're targeting maybe in terms of average client wealth or AUM being brought on to the platform per client? Is it fair to say that the inorganic growth in wealth is sort of now over and it's sort of full steam ahead on inorganic? Or could we still see some acquisitions in the wealth business as well?

Well, on CIB, as you know, we're having a quite well-diversified platform with BP2S or security services, the corporate bank, global market with 2 dimensions that are fixed income and equities. So a bit early to say, but considering the, I would say the growth we enjoy in '24 for equities, I would assume that equities next year will evolve like CIB on average and we very much count on all the different dimensions of CIB to perform well. And this is very much linked to the fact that the franchise is growing in any dimension, corporates FIC, both ways, and we can service those counterparts in so many different dimensions with CIB. So to some extent, especially global market, is a volatile environment. But in a year like '25 in the environment we're in, with a certain level of volatility, maybe much more than next -- last year to some extent. Yes, there is room for us to position the right way the platform in front of any -- any kind of counterparts. And based on that, we will continue to gain market share, especially in the hands of those, I would say, key clients, key customers for which we can deliver value-added transactions, which means higher return type of transactions. So this is the road map for CIB, and we believe the -- I would say, the target to have internally for CIB in '25 is solid. Looking at the commercial bank, well, the bulk of the Eurozone at BNP Paribas is the French domestic bank and the Belgium domestic bank in terms of size. More than 3% top line is the target. This is the level we would have delivered in '24 away from the headwinds. And if you consider that the Eurozone economy, France, Belgium is going to move roughly like in '25, roughly like in '24. Basically, this is what we delivered in '24 away from the headwinds. And you cannot exclude that based on a good commercial approach, we would even deliver more. So it's a fact. Looking at Wealth Management, well, it's a very simple situation. If you look at the private banking universe, on average, looking at the Eurozone, based on all the different, let's say, domestic private banking operation we have in all those domestic markets, we're probably the #1 private bank Europe throughout the Eurozone by size asset under management and so on and so on. Now there is a bucket in which our share of market is a bit too short is the, let's say, ultra net worth individuals typically family offices. So for that, you need to grow a different approach. You need to roll out certain platforms that are slightly different from, let's say, the regular type of domestic private banking approach. This is what we are building. So we are building a new platform. We will implement the platform in Germany first, and then we will roll out that platform in a number of other countries, including Italy, France, Belgium and some Nordic countries. So this is the game. And that platform will benefit from first, I would say, state-of-the-art approach in terms of technology. And then the platform will be feeded by all products coming from IPS, asset management, in particular, and all products coming from the investment bank. And those family offices, basically, to some extent, we have already, I would say, the good the good relation because most of those offices to some extent that the result of a certain corporate success. So we have already those counterparts in our portfolios in the corporate bank, especially mid caps, mid large caps. So Wealth Management throughout the Eurozone is going to become for us, I would say, a new reality because of the technology we are building and we will deliver soon and we will roll out throughout Europe. And then the availability of products we're having within BNP Paribas, both at the investment bank and at IPS. And on top of that, of course, we will continue to grow in Switzerland and in Asia, where we enjoy good strong positions. So all in all, Wealth Management is going to be part of the new trajectory of IPS. If you look at the IPS today, pretax result, IPS amounts to roughly 14%. Quite soon, we will reach 20%. And you cannot exclude that based on all the initiatives, we can reach 25%. So this is the mid-long-term target for IPS. These are very profitable businesses. These are very low capital consumption type of businesses that are quite stable through the cycle. They are not that dependent upon rates. So I would say, this is typically the type of environment we should consider, we should focus. So within IPS, not only we will have a continuous push from the insurance business, from asset management based on the project we're having with AXA Investment Managers, but also a strong push coming from Wealth Management. This is a mix of some piece of external growth, but most of it is going to be organic growth. To some extent, it's -- it's a kind of parallel move or comparable move looking at what happened with CIB over the last 5, 5, 7 years. This is what we did we build the platforms. We complemented the businesses. We feed the platform with the right services and products, and then we grew organically. And this is typically what we tend to do with Wealth Management. Wealth Management, the way I'm describing it, this is family offices or ultra and network individuals. This is going to be consolidated in the end of quite limited number of global banks without -- within the Eurozone. And you know the NIMs, and we are going to be part of that story. And this is going to be a very strong complement to the fact that we are already the first private bank within the Eurozone because of the domestic private banking platforms that belong to some extent to the domestic banks. A bit too long, but this is the story.

The next question is from Stefan Stalmann, Autonomous Research.

I actually have only one question left, and that is on credit risk provisions. You have enjoyed 2 years of net release of Stage 1 and Stage 2 provisions. Do you expect this to end at some point in time or considering that the macro prospects in some European -- in economies are not that great?

Stefan, thank you for your questions. You know how this goes, right? You have those 3 stages, and particularly 1 and 2 aim to be fronting. So in the sense that when in a certain environment, you have to take more of them so that you can release them in more direct situations. And so as you look at it, we have a lot of S1 S2 as you might have seen. We've even added some in the fourth quarter. And today, our S1 and S2 is more than 1x the S3 of the total year. So from that point of view, I mean, how will we be able to release it? I cannot tell you because it depends a bit on how the economy evolves. But what you do see is that we have a very solid level of S1 S2 provisions, and that is why we remain comfortable with our guidance of 40 basis points over the cycle.

The next question is from Giulia Aurora Miotto, Morgan Stanley.

I have 2 connected, actually. So the first one, Jean-Laurent, this is the first time that I can remember, when I hear you mentioning 14% ROTE. And I understand that this is not in the current plan and it's longer term, I get that. But I was wondering, to get there, I think it requires perhaps some more proactive capital allocation. Would you consider perhaps disposing of businesses that are below the cost of equity? Or how are you thinking about the capital allocation angle? And then secondly, connected to this. Italy is a consolidating market. And I hear you that for you, Italy is very profitable, much larger than what we see in BNL. But BNL itself remains perhaps below the returns that other divisions make. So given that the market is consolidating, could you consider maybe disposing of this and focusing only on the more value-added part with the consumer credit, CIB, et cetera?

Well, any plan we delivered recently is about, I would say, rebalancing and refocusing the businesses towards the products, services that are more profitable, keeping in mind that you need also to grow the franchise. So if you look at CIB, well, it took us some time to refocus then to complement, to upgrade, I would say, the quality, the kind of cutting-edge type of services we would well willing to deliver and maintaining the franchise. So not everything is -- can be delivered in the very short term. But progressively, we delivered a CIB platform that is now north of 23%, 24% return on notional equity even in the new Basel post-completion story, it's well above 14%. This is a fact and it was well below 10% years ago. This is a fact as well. It takes time. If you look at IPS, well, of course, IPS naturally starting at the highest point, but it's small relatively to the size of the group. I mean we were talking recently minutes ago of, let's say, 14% of the total profit pretax. We need to go up to 20 and then 25. This is a way also to rebalance, I would say, the equity and the way we are, I would say, growing the company. And if you look at any bank within the retail or so-called retail units, I mean, Personal Finance, we recently decided to restructure that business because there were a lot geographies for which we were not relevant with return that -- we're far below, I would say, the target. And progressively from a personal finance that went down to, I don't remember exactly 7% return on notional equity in '23. We're going to be up to 17% in '28. So again, and rebalancing towards the best geographies and within a certain country to the type of service that can deliver a return because even in a certain country, a personal finance, consumer lending type of platform can be good with some counterparts and totally nonprofitable with other counterparts. So we are doing that continuously. What we are going to do with the French domestic bank, it's just the same, leveraging the, I would say, the best franchises, the best positioning in corporates. In conjunction with CIB, private banking, wealth management construction with IPS is just the same, I would say. Growing that market, the right way, leveraging the best franchisees with the best return. And then for the rest, the proximity bank, we are going to focus on those counterparts that can deliver certain profitability. Reengineering, I would say, the business model, meaning going down in terms of cost to serve. So this is typically what we are doing in any geography. Some time, some time, we exit. We -- remember, we exited the first Hawaiian Bank. We bought the bank was personally involved back in '98, the bank was around 25% market share. We exited at 42% because there were no way to go to 50%, and we did get -- we got good bargain at that moment. We exited back of the way just the same way, not enough profitability and no way to reinvest. We exited a number of geographies in other regions and some businesses. Then coming to BNL, of course, there is this idea of, I would say, critical mass. But BNL, if you look closely, as I said, it's just a part of what we are doing in Italy. This is just a part. At the end of the day, we are counting Italy and we are moving in Italy in a cohesive and collective way. The CEO of BNL is also the head of Italy at BNP Paribas. And again, the top line is more than twice BNL. The net result is more than 3x BNL. Cost income is around 40% to 50%. And the return is above average BNP Paribas. And BNL is acting as a kind of central platform for that. And we totally reengineered BNL, in terms of franchise, looking at mid caps, private banking, and it's moving that way. So the disposal of BNL for all those reasons is just impossible, and it's not part of the journey. And on the opposite, we are not considering any external growth in Italy because external growth in Italy is very much about consolidating in the mass market universe. This is exactly the situation. This is not the trajectory, not the strategy we are pursuing at BNP Paribas. This is not that type of business we are looking at. So again, even if it's not very easy to follow from outside every day. We're always rebalancing, I would say, the usage, the way we'll look at equity towards those businesses that can deliver more. And again, more in terms of instant return, but also in terms of ability to help the bank grow the right franchise the right way, which is also something we have to keep in mind in terms of risk profile. Risk profile is ultimately, I would say, the ultimate goal for a bank. And well, serving the best counterparts with the best products and services is also, I would say, long term, a certain or shorter cycle, a certain ability to navigate the economy the right way, being a bank, meaning with the best counterparts. So this is also something we need to explain maybe better, I don't know, but this is also a reality at BNP Paribas. So we need BNL. BNL is very different from the bank we bought years ago, and we will continue to grow in Italy that way. If you add everything, we, of course, well behind Intesa and UniCredit, but locally in Italy, the top line at BNP Paribas all in all, probably is #3 in Italy. This is a fact.

Next question is from Tom Hallett, KBW.

So just firstly on the shape of the curve. I know you provided comments on the parallel shift. But if I think about the steepening yield curve, what is the impact on that on your NII and targets? And then the second on the payout ratio, under what conditions would that need -- what conditions would need to take place to lower that back down to 50%? And I mean, particularly curious about bolt-on acquisitions, how that would change that dynamic?

I'll take your question, Tom, on the steepening of the curve. So what we assume, what you basically see is that on the networks, we've guided for '25 that the top line would grow by 3%. And we anticipate that there will be a steepening of the curve coming thereafter, which basically we said that it will lead to a CAGR of 4%. So that basically means that once that happens, the year thereafter, growth will rather be 5%. So that is a bit -- if you want the impact of the steepening. So that's on that. So the other question was on the period of 50%. So why would you want us to go to 50%?

Well, I'm just curious because your obviously, your capital situation is a bit lighter than I'd say your kind of European peers. I'm just thinking, at what point would you start to feel a little bit stressed or constrained at keeping it 60% to move it down? And in light of that, let's say, there's a bolt-on acquisition potential or something that you see in the market that you'd like to acquire, I'm just thinking how would your payout ratio work in that dynamic?

Listen, I'll start by answering the ratio that we have, with 60% return to shareholder and 40% for kind of organic bolt-on growth something that has been working very well. Now if at some point in time, there would be something relevant to do, then we'll see how to structure that at that moment. And it is not by reducing our payout from 60% to 50% that, that would materially change. So we feel very -- that there is a good balance support -- think growth organic, inorganic in what we see and what we want to return to shareholders. So that's basically where we stand on.

The next question is from Pierre Chedeville, CIC.

Yes. I have 2 questions. One question is relating to costs. You mentioned EUR 600 million of additional savings. And I was wondering if this savings are part of the plan that you will present to us in BCF and Personal Finance or if they are aside? And I wanted also to know if you plan to register restructuring cost in face of this savings? And regarding savings, I was also wondering what type of savings you have in mind? Are there just, I would say, IT savings, savings due to the artificial or intelligence, restructuring of the networks, not only in France, but maybe elsewhere. Where do you see the most part of the savings in the coming years? And an anecdotic question, regarding real estate, because I'm interested in this business. I heard this morning, from the CEO of a big asset manager in Europe, that you are seeing a bottom in this activity and a rebound to come in 2025. Do you see the same? And do you think that it could help AXA IM to improve the top line in asset management business as soon as 2025? Thank you very much.

Thank you, Pierre. I'll start. Basically, on the cost savings, so the EUR 600 million, it basically includes the traditional levers that we have. So it includes optimizing IT, which will include deploying artificial intelligence. It means optimizing square meters, it optimizes shoring. So it's basically continuing the levers we have been using before. It includes and basically the adaptations we are considering at BCF. So on our deep dive, you will get some more color. So that's basically what is included in it. When you look at real estate, it really part -- it depends on what you look at, yes. So many of the levers that you have in real state are rebounding. It's a property development, the one that we think will take a little bit more time. So that's basically the view.

And regarding restructuring costs?

So on the restructuring costs. So if you look at the run of the mill, we kind of have mentioned that on a normal basis, we have like around EUR 400 million of costs, which are restructuring adaptation, all this kind of stuff. So that is a bit the run of the mill. We continue to have -- I remind you that our intention is to compensate, in the bottom line, those EUR 400 million, to EUR 400 million, let's say, sales, yes? This is what we've done in the last couple of years and also in last year. So the idea is to have like around this EUR 400 million for the run-of-the-mill adaptation to be compensated. It can be, if we have acquisition in a given period, that there will be some more.

The next question is from Sharath Kumar, Deutsche Bank.

I still have a couple left. Firstly, on Europe-Med, I wanted to decipher the moving elements outside of the noise elements seen from FX and hyperinflation impact. Now excluding all this, what do you think would be a sustainable run rate to be able to model for 2025? Because if I look at consensus, it's about 10% below your 4Q run rate. So any guidance there would be helpful. And on Arval, I hear you when the expectations for organic growth is encouraging, but can you provide some rough guidance, maybe on organic growth and margins, I think that will give some comfort that the higher multiple revenue lines of leasing and service margins are growing. So any guidance there, again, would be helpful.

Within Euro-Med, we have basically 2 major pieces. One is the Polish bank, and the other one is Turkish bank. BNP Paribas is going to deliver the same kind of performance as in '24, with less provisioning when it comes to, I would say, Swiss mortgages. So the bank will stay at a good strong level of profitability, the range of 20% return on notional equity. Then the Turkish bank is very much dependent upon the rate scenario. The trajectory we have is a decrease of the rate. And so far, what we were seeing since December is that decrease taking place regularly. So we are on the trajectory we have anticipated. It is, to some extent, the reverse way we saw in '24. I mean, margins were squeezed to some extent, in Turkey for banks, at least for that type of a bank because of the cost of fund and the red scenario. We're going to be back to '23 probably in terms of profitability, looking at the Turkish bank. It's very difficult to track the Turkish banks through the, I would say, hyperinflation accounting norms. So locally, it's a very profitable bank. So the norm, it's slightly more difficult to see because that norm is not particularly convenient for the banking industry, that one was not designed for the banking industry. That should not be implemented that way for the banking industry, but this is the norm. So we have to stick to it. So basically, '25 is about -- for Turkey is not about volumes. It's not about -- it's very much about the red scenario. And the way it goes, the way the Central Bank is moving so far is the scenario we have in mind. And we are quite confident the bank will be back in terms of profitability at the right level at group level for BNP Paribas after the [indiscernible] norm, which is a very different story from the local, I would say, accounting that is totally different. So these are the 2 major pieces within Euro-med.

And to put a number on it, particularly in Turkey and the hyperinflations. So indeed, if you look at the intrinsic evolution, they are picking up with the rates coming down. However, there is still a hyperinflation environment. So as an orientation, you could take that there's going to be a EUR 50 million impact in the other line at the bottom, which is reflecting the evolutions that IAS 29 was not seen for a bank. And so that you will have to take into account for the year to come. And then when you look Arval, our guiding on organic for '25, '26, if you want on 2 numbers. So fleet, we anticipated to grow by 6%, and the organic top line, we anticipated to grow by 10%. So that basically means it's the fleet, but it's also the services that we step up. So that's how you would have to look at Arval.

Gentlemen, there are no more questions registered at this time.

So thank you very much and a lot to be seen. Bye-bye.

Ladies and gentlemen, this concludes the call of BNP Paribas Fourth Quarter 2024 Results. Thank you for participating. You may now disconnect.