BNP Paribas SA ($BNP)

Good afternoon, ladies and gentlemen, and welcome to the presentation of the BNP Paribas First Quarter 2026 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 to now hand the call over to Jean-Laurent Bonnafe, Group Chief Executive Officer. Please go ahead, sir.

Thank you. Good afternoon, ladies and gentlemen. We are pleased to present a strong first quarter, which confirms we are well on track for our previously announced '26 and '28 trajectories. Our presentation will be short because it seems that today is a busy day. So on Slide 4. As you can see, our first quarter results continued the sharply positive trend we showed in the previous quarter. Revenue rose at a very strong rate of 8.5%. Jaws effect was at high 3 points, and our cost/income ratio improved 2 points compared to the first quarter '25. As a result, our gross operating income was up a significant 13.7% this quarter. Cost of risk reached 39 bps within our trajectory of less than 40 bps through the cycle. All in all, our net profit was up 9%, confirming our very positive momentum. Our CET1 reached 12.8%, up 20 basis points this quarter, and we're getting very close to our CET1 target of 13% for '27. Let me also remind you that our final '25 dividend of EUR 2.57 would be paid on 20th May. If we focus on our revenues, they are up 8.5% with well-balanced growth between the businesses. CIB revenues were broadly stable but were impacted by unfavorable FX impact, a high base effect and perhaps a slightly less favorable geographical mix than our U.S. peers. The base for the second quarter is a lot more favorable. CPBS revenues sustained a strong upward trend, confirming the pivot we described in the fourth quarter last year. And finally, IPS generated double-digit organic growth, but also benefited from the AXA IM integration, leading to a transformational 33% increase in revenues. Slide 5 now. The first quarter built on an already strong end to '25 with revenues up 7.3%. This very strong top line growth reflects the strong momentum we expected and shared with you last year. It also translates into a sharp increase in profitability. You will have noticed that our Eurozone commercial banks grew their pretax profit by a strong 19% and Personal Finance 23%. Our deposit mix remains stable, which enables the reinvestment of our non-remunerated site deposits on the mid- to long end of the curve. Given the current economic outlook, we expect this positive environment to continue well into the next strategic plan, which will take us to 2030. CPBS profitability will also improve substantially, thanks to the strategic plans that are already well underway, demonstrating our ability to execute transformative change programs at pace. New plans for Belgium, Italy and Arval as well will be launched by year-end. This is well illustrated on Slide 6. After a strong first quarter, we reconfirm both our '26 and '28 trajectories. We expect more than 10% earnings growth CAGR over '25, '28, and this will be amplified at EPS level by our share buybacks. We expect our return on tangible equity to exceed 30% in '28, and this will be driven by strong revenue momentum, very well illustrated in the first quarter, but also tight cost control. We will discuss the costs later. You see on the right that we are well underway with our strategic plans. We've already presented the plans for Personal Finance, CPBF in France, Bank Polska and Asset Management. Next will be CPBB in Belgium, followed in the second half by Arval and BNL. These plans cover most of CPBS and half of the group's risk-weighted assets. They have in common a very ambitious cost/income ratio improvement trajectory as well as tight risk weight control. Overall, we expect our cost-income ratio to fall below 56% in '28 with more improvement to come by 2030. Finally, our CET1 at 12.8% shows that we are well on track to achieve our trajectory at 16% by end '27, with excess capital to be considered for distribution on an annual basis. Moving on to Slide 7. Let me remind me about our thought process regarding the transformation plan for our support functions. We are strengthening our foundations ahead of our '27-2030 plan and the comprehensive review of our support functions will pull and streamline our application portfolio, amplify the use of AI and simplify organization, reducing silos. The support functions account for about half of our cost base, and we expect that our action will help accelerate our cost savings for about 700 million per year over '22-'26 to close to EUR 1 billion per year over '27-'30. All divisions, geographies and functions will be impacted by our actions. Let me now hand over to Lars, who will present our first quarter results.

Thank you, Jean-Laurent. Good afternoon, everybody. It's a busy day for you all, so I will focus on the key points. I will not spend much time on Slide 10, but I wanted to highlight that there are a few exceptional items this quarter, which together accounted for EUR 109 million, very close to the level we saw last year and accounting for 3% of our earnings. This suggests that reported and underlying growth are aligned. In particular, the exceptional elements this quarter are booked mostly in the Corporate Center, whereas last year, they were included for half in the business line. So in the comparison, you have to take that into account. If I highlight some of them this quarter, there is a EUR 372 million gain on Allfunds coming from the reclassification of our stake following the loss of significant influence in the company. Secondly, there is the pretax income charge of EUR 219 million from U.K. Motor Finance, which is reduced to EUR 98 million after tax, given also minority interest. And finally, there is EUR 262 million restructuring charges, reflecting, in particular, the acceleration of the AXA IM integration, as we mentioned before. Let me now move to Slide 12, where you see that our revenues are up 8.5% or 8.1% at constant scope and exchange rates. The 2 main elements this quarter are the strong impact of ForEx, notably the U.S. dollar and the integration of AXA IM impacting the year-on-year comparison as it was not part of the group a year ago. Let me comment on CIB first. The revenues are reported stable, but are up 3.1% at constant exchange rates. And our underlying performance in the U.S. is particularly strong and similar to what you saw with U.S. local banks. When looking at our CIB, you will see that our market shares and rankings underscore a solid quarter even against a strong first quarter of '25 and also the ForEx impact that I mentioned and European markets that were slower compared to the U.S. If you now look at the subparts of CIB, starting with Global Banking, there was a high base effect given the first quarter of '25. And we saw this quarter the impact of lower rates and ForEx, but the business had strong momentum, as you can see in the market share and the ranking gains. And particularly, if you look at EMEA, we maintained our leadership amongst European banks with a 5.1% market share. If we look at Global Markets, where we saw that Equity and Prime Services were up strongly, 9.3% at constant FX. The business benefited from high volumes, higher market levels and very strong client engagement. Next to EPS, if we look at FICC, it was more balanced, up 3.9% at constant ForEx with particularly strong commodities and currencies, so the 2 Cs of FICC and local markets as well, but less favorable rates and primary activities. If with this, we move to the second division, CPBS. And as Jean-Laurent explained earlier, the Eurozone Commercial Banks are enjoying very strong top line growth on the back of favorable interest rate environment favorable for BNP Paribas. On the other hand, the specialized businesses benefited from strong organic growth, for example, at Arval before used car sales and also higher volumes and improved margins at Personal Finance. If with this, we move to the third division, IPS, they reported, I don't know how to qualify, but a whopping 33% revenue growth, which, of course, reflects the integration of AXA IM compared to a year ago. But the division, even if you look through the AXA IM, it's up 10% in organic growth at constant scope, thanks to the strong business momentum in each of the 3 subdivisions, Insurance, Asset Management, Wealth Management. If with this, you can follow me to Slide 13, and let's take a look at the costs. At the bottom left, you can see that our costs grew 5.5%, but only 2% when you look at constant scope and constant ForEx. Our divisions posted positive jaws of 1.5 points and the group 3 points. So we are on track for substantial cost income improvements to below 56% in 2028, laying a firm foundation for our next strategic plan that will ramp up to 2030. So this will be enabled in large part by the review of our support functions as outlined by Jean-Laurent earlier. These functions represent approximately half of our total cost base and providing a significant opportunity for optimization and efficiency gains. Moreover, as you see from the bottom right this time, a significant portion of the restructuring charges for AXA IM integration will be booked this year in total, EUR 400 million, roughly half have already been taken in the first quarter. And so these are booked in the Corporate Center together with our traditional adaptation costs. If with this, we can look at our asset quality, and this you can see on Slides 4 to 16. If we start with 14. So during the quarter, our cost of risk reached 39 basis points over outstanding within the guidance of below 40 basis points for the year. In the first quarter of '26, the increase in the cost of risk is primarily driven by Stage 3 provisions. Stage 1 and Stage 2 provisions remain stable as the forward-looking provisions related to the geopolitical environment are booked in the Corporate Center for around EUR 60 million and broadly offset the releases we have in the business as usual to accompany the Stage 3 provisions. Moreover, note on that same page that our NPL ratio stays at a low level of 1.6% and that the group cost of risk has been managed to remain in a narrow range throughout the cycle. And here, it is important to highlight that we are diversified and not much reliant on the French economy. You know that less than 10% of our pretax profit that is in France. And moreover, what you saw is France showed a somewhat mixed performance in the first quarter given the late budget and also related to investments related to the elections. If we now go on to Slide 15, we provide you with an overview of our strong risk through the cycle. So you see that our portfolio offers significant sectoral diversification and a high exposure to investment-grade counterparties. This enables us to reduce the volatility of our cost of risk. You can also see our selective approach to private credit, which accounts for around 3% of our loan book with 90% of that senior portfolio financing. We have no NPLs on the segment, which is built through moderate loan to values, high diversification and exposure to the strongest private credit players. And if we now look at the cost of risk by business line, which is on Slide 16. And if we set aside Personal Finance, you can see that the increase in provision on mostly from Global Banking from a low base and a normalization in Belgium. You can also see B&L reaching an impressive level of 13 basis points, helping its profitability to lift to 17% pretax return this quarter. If we now we end on the capital on Slide 17. Our common equity Tier 1 reached 12.8%, up 20 basis points during the quarter. So what drove this improvement? 30 basis points of capital generation, net of RWE growth, 20 basis points return to investors to distribution and the other elements for 10 basis points. Just under half is the deconsolidation off. Moreover, you know that this week, the Ageas transaction closed earlier this week. It will generate EUR 840 million of gain that will be booked in the second quarter. Moreover, this deal next to bringing all of the commercial relationship, it also will generate more P&L as well as capital. Moreover, as you saw yesterday, we are accelerating our disposals with the signing of BMCE. We are on track to deliver 30 to 50 basis points of disposals. You will also have noted that our SREP requirement decreased by 10 basis points at the beginning of the year and that the ECB decided to increase our O2I buffer required to 2% by the 1st of January 2028 based on our score under its updated framework that was released earlier this week. This decision is consistent with our new trajectory of 13% by '27 and '28. So we do not expect material acquisitions in the medium term. And for reference, we remind you on this page the history of the redeployment of the capital released from the disposal of Bank of the West we sold at the right moment at a very attractive price. And if I look at it in total, I remind you, there was 170 basis points of capital that have been redeployed in 3 waves of similar magnitude with each wave delivering a higher ROIC than the previous one, while progressively preparing the group for the next growth cycle. So wave 1 was an immediate EUR 4 billion share buyback, generating a 4% yield after funding cost. Wave 2 involves targeted redeployment of capital over the years '23, '24. So on one hand, selective organic investments, in particular in CIB, which reinforced the franchise you know today as well as targeted acquisitions in IPS and CPDS with limited integration risk. Overall, this wave delivered a roughly 17% yield in 2026, in line with what we communicated in '24, meaning above 16%. And then the third wave of redeployment of another 55 basis points of capital with an expected return of 21% by '29 is mainly driven by AXA IM, Alon and HSBC Wealth Management in Germany. So that is a bit the synthesis of where we stand. And I'll now hand it back to Jean-Laurent, who will offer some final remarks and conclude our presentation.

Thank you, Lars. To conclude, our first quarter '26 results are a very clear illustration of our equity story in action. We are delivering strong, balanced and resilient earnings growth. Group revenues grew by 8.5% with good momentum across all businesses. Costs remain tightly controlled, generating a strong positive jaws effect and driving a nearly 14% increase in gross operating income and 9% increase in net profit. The performance is not exceptional or cyclical. It reflects execution. In CIB, we continue to gain market share and rankings. In CPBS, Eurozone Commercial Banks benefit structurally from the rate environment, while Personal Finance and Arval delivered strong organic growth. In IPS, the AXA IM integration is already translating into scale, momentum and value creation, while our core Tier 1 ratio reached 12.8%. The geopolitical situation will inevitably have an impact on our economies with likely divergence across countries. While the duration of the conflict remains difficult to predict, it is precisely in this type of uncertain and volatile environment that BNP Paribas can demonstrate its full value that it has consistently done in the past. We entered this new cycle with growth levers already in place. We will present our '27, 2030 trajectory next year, but we have not waited. Most of the group's risk weights are already covered by strategic plans currently in execution. Our priority over the coming quarters will be to execute our road map with discipline in line with our announcements. I've set 2 clear priorities: first, accelerating operating -- operational efficiency on our transformation agenda, notably through AI. Second, reaching our CET1 target of 13% as early as possible. This concludes our presentation, and we are now happy to take your questions.

[Operator Instructions] Question is from Delphine Lee, JPMorgan.

So first of all, if I could ask on Eurozone retail, where we can see that the NII is progressing nicely. I'm just wondering just more big picture, if the potential increase in short-term rates could derail a little bit that in terms of changing the mix and create a bit of lag versus peers in Europe, which are maybe a little bit more sensitive to short-term rates. Just thinking a little bit about the impacts we have seen in the past and sort of what has changed. My second question is on disposals. Considering the uncertainty in macro and because of the war, just wondering if we should expect a little bit of a delay in the delivery of that 30 to 50 basis points of disposals impact that you're still expecting?

Thank you for that. Yes, you are right asking for that question about short-term rates. Lars will answer that point.

Yes, Delphine. So indeed, as a reminder, what we are operating in both in Belgium and in France is in one hand that we have mortgages that have a fixed rate. And at the same time, we have site deposits nonremunerated that we redeploy over that same period. And so that's why we've guided that as long as there is a steepening of the curve and the short end is, let's say, between 2% and 3%, that basically generates a lift of around 5% every quarter. So every quarter, when you compare it to the year before, that's going to be 5% and that's going to continue, let's say, until the end of the decade. So that's the situation where we stand. So as long as the short end, let's say, remains between 2% and 3%, we feel comfortable with that outlook.

About disposals, looking at what happened recently, we are rather accelerating the I would say, the exit. And we are screening a number of different options. We do not see or we do not feel so far anything new in terms of values of the assets that could be potentially considered in that program. So, so far, so good.

Next question is from Tarik El Mejjad, Bank of America.

Just following up on the first question about the impact on rates environment on your revenue growth targets. I mean, thanks for the indication on the short end of the rates -- I mean, short rates impact on margins. But what about the volumes and the growth and sentiment? I mean, you -- I'm sure you are working now in middle of your long-term plan and what kind of assumptions or view you think of the different components of impact on growth and how that will feature within your overall expectations? And then second question is on the OSII disclosure, I think it was yesterday or day before. Did the 50 basis points came as a surprise and the fact that actually it came higher than the G-SIB and in the future, managing your balance sheet and size and versus the incremental capital buffers to charge? Is there any more optimization that should come as you bid for the G-SIB in the past?

On the first point, looking at commercial banks, typically in that kind of an environment when growth is slightly down, at least in the countries in which we are operating, France, Belgium, Italy, so on, there's a tendency to see additional savings. So -- and in those markets, volumes in savings are the key dimensions. So we do not believe this will have an impact looking at the volumes within the commercial banks. Looking at Personal Finance, it's slightly different because when short-term rates are slightly higher, we tend to adapt the risk approach. And doing so, we refrain a little bit the growth. So I would say, to make it simple, as of today, looking ahead, considering, I would say, reasonable scenarios, we do not see much impact knowing that at Personal Finance, this is slightly different because one day, you can have to opt for something slightly more stringent in terms of risk policy. And then you are restricting a little bit volumes. On the second question, to some extent, there is nothing new because as you know, the 13% is not the target. The new target is not the result of the regulation or the supervision. This is a fact we ultimately considered that was, I would say, looked at by investors markets, and we were supposed to be at 13%, and we decided to be at 13%. That was a kind of new normal, I don't know, but this was a request, let's say, in the financial markets coming from financial investors. So this is the 13%. Then you have the regulation. One way or the other, the global CF buffer that is today at 150 bps would have reached looking at the growth of CIB, 200 bps. So the 13% target is something that is valid starting end of '27 down to 2030. And in that trajectory, one way or the other, you will have seen the CF buffer moving from 150 up to 200 bps. So at the end of the day, the OC buffer, the one coming from DCB, not the SSM typically, but the ECB is just something that is coming in advance. And what is important for us is you take the maximum of the 2. You do not add the 2 buffers. It's the highest that you take into account when you do the computation for the request at group level. So away from the OC announcement or adaptation, in any case, we would have reached 300 bps through the global CFI buffer. So the certain percent is a given factor, I would say, no choice. This is the market. And the other is a kind of double mechanism, one being the European one, one being the global one. And in any case, at the end of the day, you are 200. And the 30%, again, are valid for the next plan, and they are covering, as you can see, this add-on of 50 bps.

Next question is from Giulia Miotto, Morgan Stanley.

And one more on capital, please. So CET1 is at 12.8% and BNP generates capital every quarter, plus you've got the disposals. So I would think -- so when we see on the Slide 6, 13% in end of '27, '28, why is that not also end of '26? Is there any headwind coming? Or we can just assume that you will hit 13% sooner than what's planned there? And then secondly, I noticed in the appendices on Arval that basically you call out a marked deterioration in used car results in March. And I was wondering if that continues into Q2, if we should have any special impact in mind for Arval?

So on the 13% target, we set the target for end of '27, away from any exceptional items, looking at the situation as of today, we could, I would say, reach the 13% by year-end. This is the normal trajectory. So we said end of '27, 30%. Looking at the good, I would say, trajectory in the second part of last year, the last quarter of last year and the first quarter of this year, we can say 13% by year-end. This is typically a target we will try to deliver away from any, of course, exceptional events. But the fact that we said end of '27 was very much linked to the, I would say, the fact that we had to start the process. The process started last year and it's progressing well. And if you look at the trajectory, we should reach the 13%. And in any case, we're doing everything we can to release the 13% by year-end. So this is the story.

And just as a complement, remember when we gave our guidance, we took a conservative stance that there could be 10 basis points coming from regulatory and supervisory, which so far we haven't seen. On your other question on the retail value of secondhand cars at Arval. So what indeed, what you saw in March is given the environment probably in the Middle East, you saw a pickup in demand for electrical vehicles and a lower demand for thermal vehicles. So that is a bit what you see. We have, at this stage, a more internal combustion vehicles than electric vehicles. And here, the interesting point is that with the integration to come of Atlon, which has a higher fraction of electrical vehicles, that trend will become even better. So that is the situation, Guilia, on Arval.

Next question is from Andrew Coombs, Citi.

Just one follow-on, please, and then a fresh question. So on the capital point, I mean to allude to the previous question, it looks like you're going to hit the 13% a year early potentially. If that does prove to be the case, given you said no material acquisitions, only 2% organic RWA growth per annum, would you consider revising the 60% payout policy at year-end if you hit that target earlier than expected? And then second question, just on Asset Management. Since you did the integration, the quarterly numbers have moved around a little bit, big increase in Q4, decrease in Q1 back to Q3 levels. absent the market moves, is there anything to call out on performance fees? Is there a case that there's more performance fees booked in Q4? Anything you'd like to say there?

I'll take your question on -- first on asset management. So within the divisions -- within the division of IPS, what you have, we have recalibrated it. So we had in the past, we had Wealth and Asset Management as one. And now we have separated those. And then we have rephrased that because the real estate removed it from the other. So it's basically the basis that is driving that difference. So on your capital, so indeed, we are on track, as you mentioned, to get to 13% as soon as we can related to the RWA, we are at this stage at a 60% yield. And we said that as of the moment, we are at 13%. We will see what we do with the excess capital.

And just to revert on the former question, thank you for reminding me about the real estate shift. I mean if I look at it, that explains the asset management, but I'll move on.

Next question is from Pierre Chedeville, CIC Market Solutions.

I want a precision regarding what you said in your conclusion saying that the bank was well positioned to benefit from geopolitical situation. I do not really understand what you mean. You mean in absolute terms or you mean in relative terms compared to your peers? Because at the end of the day, this geopolitical situation seems not good for everybody. So it's not very clear your comment there. And regarding the insurance business, you mentioned a very good performance in P&C. Could you elaborate a little bit on that? Is this due to an increase in equipment rate in your networks? Is this due to a better combined ratio? And also, what do you expect or should we forecast in terms of revenues with your Ageas partnerships in Belgium?

Looking at the insurance business, typically, so in the transaction with A, of course, there is the capital gain, EUR 140 million, an add-on of 5 bps in the core equity Tier 1, an additional EUR 40 million every year in net result post tax compared to the previous situation. But operationally, looking at the business in Belgium, this will go also with a strong investment plan. Altogether, the bank in Belgium and the insurance company in Belgium, AG Insurance, will invest close to EUR 80 million, EUR 100 million to grow the business within Belgium. AGI is the leader in Belgium already, but this plan encompasses also a number of investments, customer journey, digitalization, AI and so on and so on. So it's a kind of not only a renewal of the long-term contract in between the bank and the insurance business, but it's more a new cycle with additional development. This will be illustrated within the deep dive of the Belgium bank in the second part of that year or first part, 1st of June to be precise. Then about the geopolitical situation, the point was about resilience and diversification. The group is very well diversified. If you look at the story of the company, probably this is one of the banking group that offered a good level of resilience. So this was basically the comment. In that context, probably a platform like BNP Paribas that is so diversified is offering a strong level of resilience compared maybe to some other models that are more, I would say, concentrated or less diversified.

Pierre, I mean, it's not that we are protecting and everything. Look at the extra cost of risk that we provisioned on the macro aspect. And then on your question on insurance. So on P&C, the main thing what has been performing well is all our joint ventures and activities in Latin America. Whereas in France, it's rather stable. It's even the combined ratio isn't that deteriorating. So it is LatAm who is the -- all the activities we put in place that is driving it.

Next question is from Matt Clark, Mediobanca.

It's a question on the 10 basis points benefit from model updates and others to CET1 this quarter. Is there any reason to think that, that wouldn't be permanent? Do you see that as just kind of like happened, I guess, in the third quarter last year, it's just a favorable outcome that's here to stay and will stick? Or should we see it as part of volatility and you stick to your expectation of a 10 basis point headwind over the course of the full year and so some normalization of that benefit and then maybe a bit more of headwind to come?

No, Matthew, these 10 basis points are here to stay. A small part is what you've done, what we've seen with all funds, but then there are indeed model updates and the like. But that's here to stay. What I mentioned is we took a conservative view initially and we said, listen, there could be. So this is permanent, but there could be other elements that are regulatory or supervisory driven that we put -- we labeled in for 10 basis points. But those we see not coming, we have not had it. But those 10, they are tangible, they are here to stay.

Next question is from Anke Reingen, RBC.

I just wondered in terms of your corporate customer behavior, I guess, in the first quarter, you might see some different trends. And I just wondered how Q1 sort of like ended in terms of corporate customer engagement? Are the sort of like more wait and see or kind of active in hedging just in terms of overall trends? And then in terms of one numbers question on the Corporate Center, the Q1 performance, there -- is there any reason to assume that should reverse in the course of the year?

So if you look at the corporate bank at CIB, year-on-year, the evolution is very much penalized because you have, first of all, the U.S. dollar effect. Second, you have a rate effect, anything that is cash management deposit at the bank is penalized. And ultimately, last year, we were having a very high level. And this was slightly different starting in the second quarter of the first tariff announcements. So if you look ahead, starting in the second quarter, we do not have any more the rate effect. That was about short term. So this is down. You do not have the U.S. dollar effect and you do not have the base effect. So the Corporate Bank in the second quarter will have a much more favorable trend. And looking at what we are having already in our hands, meaning number of transactions, situations, there is a lot coming much more than in the first quarter. So this is the situation looking at the corporate bank within CIB as of today.

Anke, I'll take your corporate center, and I understand your question. So I take it you're guiding to the top line. The top line that we said we guided to be around 0 for the year, and you see that it is higher than this. So the thing is I have to remind you that in it, the elements are quite volatile, yes. So there is, for example, DVA, which I remind you was negative last year. Then there is the liquidity charge, Same thing. It was negative last year. It's positive this year. Also in there is the effect of all. Now let me be fair. The guidance of 0 was conservative. And so this is how you should see it. Do keep in mind that there are volatile elements, but the guidance of 0 was very conservative.

Next question is from Sharath Kumar, Deutsche Bank.

Belgium, I know you have a deep dive coming up shortly. But if I look at consensus, pretax ROE is around 18% versus your 20% target. So what is, in your view, underestimated? Also, if you can comment on the competitive positioning and sustainability of current NII strength, it would be helpful. Second, going back to Arval and Leasing Solutions, if you can decompose the moving parts in revenues, surprised to see a 12% revenue decline despite a strong organic growth of 10% in Arval. So if you can comment if there is any significant weakness in leasing or any notable FX weakness or any negative contribution from used car sales, it would be helpful.

I think you should rephrase at the end to your question on Belgium. I'm not sure I grasped it. But I'll start with Arval and Leasing. So indeed, what we publish is the segment Arval and Leasing. And indeed, you see a drop in the top line, which is like around EUR 100 million. If you look at what it is, first of all, as we said, last year and particularly in Arval, there was a contribution, a positive contribution of the retail value of cars. So that's one thing. And the second thing, if you look at leasing, even if we don't publish separately the leasing P&L, but you see the outstandings and you see the outstandings going down a bit. So you can also assume that there is some of that impact in there. So therefore, you can assume that there is an impact of the resale value of the car, which is a couple of tens of million, not EUR 100 million. And on those, that's what I said earlier, in March, you saw a pickup in the demand for EVs and a lowering of ICE. As at this stage, we have more ICE. This is a bit wide weighed on it. And as I mentioned, going forward with the integration of Atlan, which is coming, that balance will shift more towards EVs. So that's my answer on Agvaleni. Could you rephrase your question on Belgium?

Yes. I know you have a deep dive coming up shortly. But if I look at consensus pretax return on normative equity, it is around 18% for the future years, whereas you have a 20% target. So I wanted to understand what is underestimated by consensus. Also, if you can comment on the competitive positioning and sustainability of current NII growth?

Yes. So if you look, there's a couple of things. To read the pretax of our Belgian activities, you always have to be "careful" and particularly, if you look at the first quarter, the pretax income is gravitating around 0. But you should not interpret this in whatever way. It is because in Belgium, next to the European banking taxes, there is also a local banking tax, which if you look at it at the level of BNP Paribas is half of the total that we pay. And so that is why the profit in the first quarter is always gravitating at such a low level because of those taxes. If you look at the other elements you see that we are positioned very well. So you know that we are a full-scale bank, providing all of the services. And so if we look at the market shares, we are basically #1. This is where we stay. And if you look at our profitability, if you look at the first quarter and in what we've guided, the profitability is up. And so one of the other elements is there is what we said earlier. So given the fact that we operate at fixed rates and in size deposits, the pickup took time to realize. And so we realized it at the end of the year. We saw it again in the first quarter. And therefore, we are comfortable with the trend in Belgium, and we will highlight it on June 1.

Next question is from Chris Hallam, Goldman Sachs.

Yes, I just have one question left again on capital build. So if you're well on track to hit 13% by year-end, would you consider once again doing the buyback element of 2026 distribution early like you did in 2025 because that would then give you the space to apply for excess capital distribution with Q4 results, and it shouldn't impact your in-year CET1 ratio because it's already accrued for?

So far, we have not considered this, but maybe this is an option. So thank you for the idea.

We have no more questions registered at this time.

So thank you so much. So once again, we believe those results are strong, very much in line with our trajectory, not only for '26, but for '28. We are preparing very actively the next plan, particularly in the efficiency dimension. We know as question showed it again that there is something around capital distribution, return to shareholders. If we are good, I would say, reaching the 13% by year-end, clearly, the possibility in the next plan to, I would say, increase one way or the other, the level of return to shareholders is becoming more, I would say, a reality every day than just a probability. And we're also focusing on this dimension. But this is also going to be the result of good momentum at the top line and additional cost efficiency, of course. These are the 2 major, I would say, drivers on top, obviously, of anything that would be potentially investments within the portfolio of the company. So thank you very much again for your time and see you soon in the -- at the end of the second quarter. All the best.

Thank you very much.

Ladies and gentlemen, this concludes the call of BNP Paribas First Quarter 2026 Results. Thank you for participating. You may now disconnect.