Crédit Agricole S.A. (ACA) Earnings Call Transcript & Summary

Hello. Welcome, everybody. We're pleased to invite you to the Credit Agricole S.A. 2025 Ambitions Medium-Term Plan, which is hosted by Philippe Brassac, our CEO. We're going to have a 1.5-hours presentation, roughly, and then we're going to move on to a Q&A session. So we're going to start with the questions from the people who are here in Montrouge. And welcome to the people who have managed to come here physically to see us. But also welcome to the people who are also joining in virtually. And so we're going to move to the questions that we will receive by chat after the questions from the room. But please don't hesitate to send your questions to us by chat during the presentation, and we'll answer them at the end. Without further ado, Philippe Brassac.

Well, speaking just a total and so professional English accent is probably the first hurdle I have to jump this morning. I guess it won't be the last one perhaps. Anyway, good morning, and welcome, everyone. Before going any further, let me remind us that the economy and the financial system that serves it are, before anything, dedicated to bring prosperity to women and men of this world. This is why I would like to express a very special thought to our Ukrainian colleagues and their families. Today, we present our main ambitions for 2025. May our first objective naturally be lasting piece in the world. I know it's a common practice to introduce the medium-term plan by describing the period ahead as particularly unusual. But very, very specifically today, we can say that this medium term, which usually refers to an average horizon connecting short and long term, this medium term has simply disappeared as an observable time frame. Actually, this horizon has been split between the short term that became absolutely unclear because of the accumulation of multiple crisis, inflation induced by the monetary measures during the COVID crisis, Ukrainian-Russia war, absurd in energy prices, supply chain disruption, transition to more fragmented globalization and so on. But -- and at the contrary, on the other hand, the true long term, what does it mean, what I do mean the true long term, this is the one we believe absolutely necessary this true long term has never been so clearly defined by both public policies and very broad opinion consensus about energy decarbonization, about biodiversity and environment protection, about health care solutions for increasingly aging populations, about necessary technical progress in agriculture and agri food to produce more and better and, on top of this, the urgent priority of social inclusiveness, which is essential for our society's stability. All in all, so surprising paradigm in which it will be easier to think long than to plan short. But our road map remains obviously no less clear: To help all our clients in all our territories to get through situations that can be very difficult in the short term and to commit ourselves in the long term as facilitators and accelerators of all societal transitions which have become both necessary and urgent. The first good news is that Credit Agricole, in this kind of very special paradigm, remains very confident in its ability to continue its development with the same regularity. Its historical model, which combines universal missions and decentralized action, has no concrete reason to be hampered by the current uncertain and cloudy context. Our multiple business drivers and the nature of our necessary services for our customers should enable us to improve once again our operational performance by 2025. On the financial front, we are confidently raising our solvency target for the group to above 17%. Our net income target for Credit Agricole is set to over EUR 6 billion and our return on tangible equity target to over 12%. The second good news is that our DNA as a player regularly committed to major societal transitions. Whether it be the financing of agriculture, which was still emerging at the end of the 19th century, or providing banking services to households in the 50s or supporting ownership at the end of the 20th century, this DNA is once again leading us to preempt the new things of these societal transitions that I already mentioned. And we shall do it with optimism and enthusiasm. And so as we do on average every 25 years in the group's history, we are going to structure new businesses, invest in new territories, convinced that usefulness, development and profitability always managed to align perfectly provided, of course, that it is naturally in this precise order. Today, we announced the creation of Credit Agricole Transition Energy and of Credit Agricole Santé et Territoires. The first one, to accelerate the rise of alternative energies to fossil fuels, advisory solutions, financial engineering, power generation, every possible field, whether through internal resources or through strategic partnerships with specialized players, a business unit that will also have the ambition to spread and democratize this transition for as many people as possible. And then Credit Agricole Santé et Territoires, health solutions and territories to expand and facilitate access to health care especially in areas where it has become increasingly difficult, the so-called medical desert. And then, of course, to facilitate aging well, aging well at home with the deployment of appropriate support and devices but also in collective housing, in particular by increasing the number of housing units for seniors. We are thus extending our vocation as shapers of the future, a motto which expresses nor the claim than that of our usefulness of our utility. Our presentation will, therefore, be organized following those 2 horizons: 2025, with a strong and regular amplification potential, this will be the chapter in which we shall disclose our main financial KPIs; and then the long term, beyond 2030, for which we make strong societal commitments, investing both for the future of our societies and for our own future. But to make sure you understand concretely our models, I think it is useful to give you today an overall view of what the Credit Agricole Group is both in its nature and its current dimensions. I will explain you this kind of magic potion that turn the tiny local of [indiscernible] founded in 1885 to help farmers rejected by the traditional banking system into the largest bank in the world less than 1 century later in 1981. Even if -- since then, the abolition of the Glass-Steagall Act in the United States. And the rise of China have brought us back to a very respectable tenth place. I don't know why but, unfortunately, usefulness is often presented as a kind of extra touch of soul, that companies will manage only on the periphery and not at the heart of their businesses when it is not perceived as a simple communication change. In the history of Credit Agricole, usefulness must be understood in the sense of societal needs, societal necessities, financing agriculture, enabling the largest access to banking services, facilitating ownership, collective goals and actions for the whole society, which have driven and propelled our growth over the years. The first driver of usefulness for Credit Agricole has been multiplied and so magnified by a second principle, universality: any kind of territories from rural areas to the heart of major urban areas; any kind of markets, from individual customers to major international companies; any kind of transactions, from ATMs to structured market transactions; any kind of channels too, from branches to front lines, to the web and now to full digital; and finally and perhaps most importantly, any kind of customers, from the wealthiest to the most modest. What is sometimes analyzed as a kind of lack of optimization, why not focus on the most promising fields, on the most profitable projects, the most profitable businesses, the full digital relationship, or the richest customers, what is sometimes analyzed as a lack of optimization turns out to be so relevant strategy over time. It is this precise but implicit strategy that led to the so-called universal bank model or the synonymous relational model accompanying each client over time by a global approach across the full range of his financial needs. Usefulness and universality, the most magical formula, incredibly efficient and yet, so surprising, still so poorly understood. This model is misunderstood because people tend to analyze it through fragmented approaches, through silos, through verticals, looking first at retail then savings, then insurance, then CIB and so on. People rarely look at the global picture. Many people speak of synergies while we are focusing on orchestrating the global range of solutions at the service of each local needs, while we are focusing to provide the full value of an international group to the service of each customer wherever they are. Our first development engine is then the permanent expansion of our offer range. This dynamic keeps growing with the evolving needs of our customers about their patrimony. It has by nature an unlimited growth potential. Banker, through the relationship and stickiness created with each of his clients, can quite easily become an asset manager because this naturally extends the range of savings advice. In the same way, it can offer life insurance solutions then become the insurer of his client assets with P&C solutions. If he manages its client savings portfolio efficiently, he can then convince them to interest in with their real estate portfolio as well and then to offer them remote surveillance services and so on with no time limit. It will be hard, fortunately, for a real estate agent to become an insurer and for an insurer to become a banker. But the opposite is really easier, seamless and limitless. Yesterday, it was bank Insurance, real estate solutions. Today, we can add long-term leasing and tomorrow, we shall easily add energy transition and health care solutions. Of course, this is on the condition that we provide our customers with a real and concrete global approach, so they can see the added value, not just addressing the different needs through separate business lines. This fundamentally explains where we are and must act as a group, not just a conglomerate of diverse activities. This is the reason we have a group project and not just a juxtaposition of companies' projects. So beyond the permanent extension of our range of offers, we have another organic development axis, which is not simply cross-selling but something that could be called global selling. As you can see, our market share is generally lower on our more recent offers and activities. This is normal, of course. But there is no reason why this triangle of our market shares could then become a rectangle with an increase of market shares on the right side because it is naturally -- on a concrete point of view, it is naturally much easier to convince one of our bank customers to buy insurance from us rather than a non-client. This missing part on the upper-right side of the triangle is a huge source of organic growth. On its own, it mostly explains the incredible consistency and regularity in the growth of our commercial activities and, thus, of our revenues. Finally, our domestic market shares are not saturated because while our banking market, that's true, our banking market shares are in France, that's true -- the reality is that our market shares in our most recent businesses are still moderate and sometimes still very low. When we say that we structurally give priority to get organic growth and that external growth is not a core strategy for us but a matter of opportunities, this does not limit our development potential nor, of course, our willingness to pursue it. I like and I always repeat that organic growth is not growth for the losers but truly that of the leaders. Growing organically means beating your competitors, leveraging on your own strengths. But the icing on the cake is that this model has allowed us to add another -- I do say another dimension to our group, a second level of truly complementary development, the dynamic of our business lines on themselves beyond, of course, the service of our banks, which remains naturally their primary goal. We have 53 million direct customers. This enabled us to create, you know them, Amundi, #1 European asset manager; Credit Agricole Assurance, #1 insurer in France and also #1 bank insurer in Europe; CACIB, the CIB top player in Europe and with excellent sector franchises, including a leading position in green bond arrangement; CACEIS, in the top 3 of asset services in Europe; Credit Agricole Consumer Finance, also in the European top 3; Credit Agricole Leasing & Factoring, #1 private financer of renewable energy in France; Credit Agricole Payment and Services, # in payment services in France; and Credit Agricole Immobilier, already in the top 5 property asset managers. All of these business lines have been built to provide solutions for our clients through this global approach of the relationship model, but they also have their own development capacity because we have decided a long time ago that all of our business lines were intended to be open to any form of partnership with other competitors in the form of commercial agreements or capital participation. We are convinced that while European banking consolidation and particularly cross-border consolidation would be very difficult to achieve, there is definitively a great headroom for consolidation through the business lines as this is the safest, the fastest and most effective way to gain both depth of the services and improved cost-to-income ratio. Our architecture is therefore structurally twofold. Our architecture is structurally twofold: horizontally, the global approach to our clients which constantly extends the scope of our businesses; and vertically, partnerships and consolidation through the same businesses. This is why our international strategy is never complex nor difficult to understand. In fact, it is naturally expressing 2 different but very linked directions: the universal banking model, for which our playing field is clearly mostly the European Union; and the specific strategies of our business lines that can lead them in a complementary way to other regions, Asia, U.S.A., middle East or Gulf States, just for example. So in a nutshell, this is how the little local branch in [indiscernible] has become today the first bank in France as well as the first insurer, the first bank insurer and first European asset manager, the first retail client base in Europe and the largest cooperative bank in the world. For the first time, in 2019, we firmly put into words and stones those key past and present success factors. We wrote our raison d’être on that, a genuine statement of belief for the whole group ultimately based on these 2 very simple principle of usefulness and universality. Because this model dynamic does not rely on the economic environment, we remain very confident that this model will continue its expansion over the coming years, including until 2025, which is now the new short-term horizon. Consistent everywhere within the group, thanks to the uniqueness of our group project, we are easy to accelerate everywhere, helped on this by our extremely decentralized organization. Well, I'm now going to leave the floor to Xavier Musca and Jerome Grivet to present first this 2025 trajectory, the new short term, including our financial KPIs. And then within another chapter, we will move on the longer term, 2030 and beyond, for which Eric Campos and Pierre Gioco will present you -- sorry, will present to you how we are now structuring our new businesses dedicated to the true long term. Thank you so much. Xavier, the floor is yours.

Thank you, Philippe. Very happy to be with you today. I think that before illustrating what has been just said by Philippe about the future, we have to have a very brief look backward in order to explain the way we are seeing the strengths of our model. And I won't comment in detail this chart, but it proves very easily that we are able to grow both our revenues and our profitability in a very steady and regular way. So our ambition for the next medium-term plan is indeed to replicate this kind of regularity and performance. How can we succeed in doing so? Well, basically, well, applying what Philippe has called the winning formula of the group, which is based above all on growth, on organic growth and these with 3 levers: first of all, enriching our offers with new products, new services, and we will try to illustrate this idea during the course of this presentation; second, by increasing the number of services we are bringing to our actual customers, increasing equipment rate, increasing the penetration rate, notably in the insurance business. You know that we are very good at that, and we will prolong this tendency; lastly, by acquiring new customers in our retail banks in France, in Italy, in Poland. We have the objective of 1 million more customers in that terms during the next 3 years, we think that this target is quite conservative. We are convinced that, thanks to the diversity of the offers, the attractiveness of our model, we can do better. And indeed, we will complement this organic growth by multiplying partnership, partnership with industrial partners, for example, Stellantis in the field of leasing, technological leaders like Capgemini, you know the agreement with them on our [ core ]. And obviously, all the financial partners we have, we have the list here. And indeed, we do not consider it's limited. On top of that, we will consider possible acquisition. Every time it reinforces strategically the group, our business lines, every time we are able to absorb these new entities and to make them functions according to the rules of the group, every time also the acquisition is profitable, you see that we will operate under a very strict financial discipline with ROI objective of at least 10% during the next 3 years. Let's now look at the different banks and business lines, and I will, more than anything else, insist on the elements of acceleration we will put in the development of these new businesses, starting with LCL. LCL, which is indeed a real success story of the current medium-term plan with a lowering of the cost-income ratio by 10 points, an increase of the satisfaction of our customers by 20 points, how can we amplify and continue this success, indeed by continuing to acquire new clients, which is illustrated here, by increasing the penetration rate notably in non-life insurance with an objective of 1/3 of our clients equipped. And you see that this objective is, to a certain extent, far below the performance of the regional banks, which shows that LCL has even more capacity to grow in the future. But the point on which I would like to insist today is that we want to reinforce the characteristics which makes LCL a different bank for its customers. And these differentiation elements stem from 3 words: first of all, urban; second, high net worth; and third, companies and mid-corps. LCL is indeed an urban bank, and we will try to develop all the services dedicated to these categories of clients, in particular, with what we call the LCL City Store, which is a cash-back offer. We will also serve better our high-net-worth customers by offering them a very efficient mechanism or advisory we called LCL Mon Patrimoine. And finally, we will strengthen our relationship with mid-corps and companies by offering them new services and also by encouraging the development of green solution through, in particular, what we call LCL Smart Business, which is a platform putting in contact fintech and also companies dedicated to transition with our main clients. When we now touch to Credit Agricole Italia, which is a very successful 2.7 million bank mainly located in the Northern part of Italy, which is at the center of a very strong and profitable Credit Agricole Group in Italy with EUR 38 billion of revenues in 2021. The objective is again to continue, continue to gain new clients, continue to increase the conquest and the penetration rate. You see the objectives in terms of mortgage and agri-food. That's indeed a recipe for growth and also in P&C insurance. Credit Agricole Italia will also continue to lower its cost income ratio below 61%, building in particular on the integration of Creval and on the integration of Friuladria. But the key distinctive factor for Credit Agricole Italia during the course of this next 3 years is indeed the ambition they have on the field of digital. You see the objective of 50% of online current account opening and sell investment products. 50%, it's ambitious, but it's a condition of efficiency and also customer satisfaction. When you look at the other proximity bank we have in Europe, I can be very brief on Ukraine. As you can understand, it's difficult at that stage to make any plan, but we hope that the conclusion of the current conflict will allow us to relaunch this very efficient bank we have in this country. In the case of Egypt, we have again a profitable bank mainly dedicated to multinational companies and to affluent clients, customers in Egypt we will continue exactly on the same path. As far as Bank Polska, Credit Agricole Bank Polska, we launched in 2021 an ambitious plan of doubling the number of customers in order to have a full-fledged universal bank in this country in which we have all the businesses. This objective of doubling by 2027 means that by 2025, we should increase the number of customers by 60%. Is it ambitious? Yes. And it is achievable? Yes. During the year 2021, we have increased the number of customers by 100,000 clients. When you look now at insurance. Insurance, as you know, is key for us. It's a very important business, a very profitable one. And once again, on this sector, we have a strong ambition, Notably, obviously, in the areas in which our presence is once again extremely strong, remarkable even, notably in life insurance, we want to increase even further. But also, we want to diversify our offers with roughly 1/3 of the asset under management being dedicated to unit links. Once again, increasing the development of P&C insurance, you see 2.5 million new contracts we hope to reach at the end of this medium-term plan. But the 2 elements on which we want to put the stress are indeed elements on which there is a real need from our clients, it is pension and health. On retirement, on pensions. We have now EUR 19 billion of assets under management. We want to reach 23%. And we have created a dedicated company within Credit Agricole Insurance in order to better serve those clients. On health, we have a strong position in individual health. We are #5 in the market. We are only #12 in the market -- no, #11 on the market in the field of collective insurance, but we started late on this market, which opened only recently. We will push very much on that, and we have an objective of increasing the number of beneficiaries by at least 40%. So you see that's ambitious and that's very important for us. On Credit Agricole Consumer Finance, once again, continuity with the increase of the managed outstanding for both the subsidiaries of CASA and for the regional banks and LCL. But the keyword for CACF in the next 3 years, will be indeed mobility. You know that in 2023, we will launch the new JV with Stellantis with the objective of 1 million long-term rental fleet. You know also that thanks to this agreement, we will become 100% owner of what we call now FCA Bank, but we will change obviously the brand. FCA Bank, which covers 18 countries in the world -- in Europe, I'm sorry. We shouldn't be too ambitious. 18 countries in Europe, which is dedicated to all the consumer finance and leasing products for both dealers, car dealers and car makers like McLaren, Ferrari, Tesla and others. We are confident that we can gain new clients. And finally, [indiscernible], sorry, which is leasing solution and financing solution of cars for regional banks and LCL. And finally, [ leases rent ], which is a short-term leasing solution we have recently acquired. As far as CAL&F is concerned, CAL&F is Factoring and Leasing, as you all know, we have great international European ambition by building a truely European platform of factoring, by developing marketplaces in France, in Italy, the most recent one has been launched on health care product, which is also an illustration of our priority in the field of health. But for CAL&F, the real and strong objective is mainly concerning, first of all, the development of services; and second, our ambition in the energy sector. On services, we have recently acquired Olinn. And the idea here is to encapsulate the financing solution we offer in a bunch of services, selecting the product, replacing the product, repairing the product. And we are confident that we will be able to triple the revenues stemming from this activity. On energy, Unifergie is now providing EUR 1 billion financing to our partners in France. As mentioned by Philippe, #1 financier in new energies, the objective is to reach EUR 2 billion by the end of this medium-term plan. As far as Amundi is concerned, no need to be too detailed on that because there has been a presentation of Amundi's plan to investors. I just want to reaffirm here that Amundi is #1, should remain, will remain #1. And we are confident that we are able to do that by reinforcing the position of Amundi in passive investment. We see here the objective of 50% of increase in passive investment, building on the recent acquisition of Lyxor. There is also the willingness to develop real assets and differentiating offers. An objective here is EUR 90 billion of assets. We have also international ambition in the case of Amundi EUR 500 billion of assets and the management in Asia. The key differentiating factor on which we want to insist today are stemming from 3 ideas. The first is development of services. I mentioned here from channel which has been built by Amundi and in which Amundi and CACEIS are now joining forces which is a platform distributing fence for other banks, for third bank clientele. Amundi technology is illustrating the second motto Amundi has, which is the development of services in the technological field. Jerome will come back later on that. And finally, the third important word for Amundi is indeed ESG. You remember that Amundi has been the only asset manager in the world to present to its general assembly and say on climate, which has been approved. And Amundi has taken a lot of commitments. I will not remind them at that stage. We will continue on the same path. We are taking now new commitments, in particular, the fact that we will engage into a dialogue with 1,000 more companies in order to verify the alignment on the net-zero objective. As far as Indosuez is concerned, I would say that there is at least one point in common with Amundi, which is the technological dimension, which is illustrated by [ Asco ], as I mentioned a few minutes ago and for which we have a great ambition Jerome will illustrate in depth. But the other important topic for Indosuez, which has the objective of EUR 150 billion of assets in 2025 being refocused on Europe and Asia, is indeed to strengthen a relationship with its preferred customers, which are, as you can see here, entrepreneurs, notably the young generation and also family offices and, obviously, customers. We will offer them new set of services, notably in the field of real estate, ESG and private equity. In the case of CACIB, you know the strength of CACIB, which is a strong investment bank with global coverage, with a unique distribution platform, with strong capabilities in the field of real assets and which has also financing solution either directly or through the market. CACIB will indeed continue on the same path, but we will try once again to reinforce its main areas of strength, which are the fact that it is a European bank. It is a bank dedicated to corporates. It is a green bank. Let me illustrate the 3 dimensions. On the European ambition, we will grow the business by 5%. On the link with corporate, which is not exclusive, we are also serving other categories of clientele, but we still put the stress on corporates. Indeed, we will try to reinforce the link with them, develop the mid-cap segment, thanks to the cooperation with regional banks and Credit Agricole Italia. We will also develop new services, in particular cash management and supply chain financing with an increase by 15% per year, which is obviously an ambitious target but we think credible in order to reinforce the loyalty of those clients and also improve the profitability of the business. On green, it has been referred to this dimension by Philippe a few minutes ago, I will not come back. But indeed, the advisory role of CACIB is enhanced by this dimension in which they have a very strong presence, a very competent team. And as a result, it will -- we will have a greening of the portfolio, which is mentioned here. I won't enter into too much detail. That one, again, will be evoked later. On CACEIS, we have put in place an efficiency program in 2021. And we will try to maintain it, to develop it in order that we keep CACEIS and we develop CACEIS as one of the major European asset servicer. Today, we are #3. We have great ambition for this business. We are confident that it can reduce its cost income ratio. That's the objective of this plan, but it has also agreed possibility to reinforce its revenue by strengthening the links with private equities, with ETF and also by offering to its client new services, thanks in particular to its platform on which 15 fintechs, as you can see, will be connected, helping the clients to realize what they need. This is a very short presentation I can do at that stage of the driven business lines, but maybe we can back later on this point, on which we can also give the floor to our friends leading these different banks and business lines in this room, which are able to answer to all your questions. I want maybe to now switch to another dimension, which is the horizontal dimension on which we are very often questioned, which is the issue of international, what are our objective in this regard. Well, I want to reaffirm here that our long-term objective, as you see, is to develop our model, which is a unique model. It's model of the universal banking network. This model, we are confident it's the best for the client, the best for the economy. We are applying it in France, indeed in Italy. We want to develop it in Poland. I mentioned that. Maybe tomorrow, if we are able to do so in Ukraine. On the rest of Europe, we will continue to develop either by organic growth, partnership M&A, the different business lines. We have a specific dedication to 2 areas, which are Germany and Iberia, Portugal and Spain. In both of these regions, our NBI is slightly below, slightly above EUR 500 million. We want to be even more present. And we want, above all, to make work better the different business lines one with the others according to the synergy model, which serves us very well in all the countries in which we have also a retail bank. Outside Europe, indeed, I mentioned the ambition of Amundi. I also have to mention the fact that CACIB legitly so as a worldwide clientele. We will continue to grow abroad, but we are quite strong on the idea that we have a preference for Europe. And outside Europe, our development will be done cautiously, taking into account the very high level of uncertainties and indeed applying all the very strict discipline in terms of capacity to integrate, in terms of profitability I have mentioned during this presentation. Sorry for being a bit long. Thank you very much for your attention. You see that in all the business lines, there is, at the same time, a lot of continuity from a strategic point of view but also a willingness to innovate. And I think that will be also illustrated by Jerome's intervention. Thanks.

Good morning, everyone. I'm happy to take the floor now and to present the rest of the elements regarding the 2025 Ambition plan. Xavier just shared with you the objectives and the priorities of our business lines as well as the international strategic priorities that we intend to follow. I will now present some elements on the way we want also to accelerate on some very important transversal issues or transversal topics that we have and that will constitute for the group and other important growth driver going forward. Those 4 transversal activities are payments, real estate, digital banking and technology as a service. Let me start now with payments. As you know, it's a very important topic within the relationship that we have with our clients, be it individual customers, be it, of course, merchant customers but also corporate customers or business customers. And secondly, it is an activity, it is an area in which there have been a very significant transformation going on lately and especially an acceleration of the transformation during the pandemic crisis with much more contactless payments, much more mobile payments, much more digital payments. Credit Agricole Group is a significant player in this business. It's actually the #1 in France, as you know. We generate around EUR 2 billion of revenues in the payment industry. Of course, this revenue is not easy to identify because it is spread within the different relationship banks that we have within the group, but it's quite significant. We have a market share in France that is close to 30%, actually 28% on issuing and acquiring, and we are a leader in those 2 businesses, but we have different stakes in those 2 businesses. On individual payments and especially regarding issuance of payments, the goal, of course, is to maintain our strength, to maintain our leadership and to improve regularly our offer in order to be permanently at the top of what is requested by the customers. Let me name buy now pay later proposals, payment initiation schemes or mobile payments. On the merchant side, we continue to gain market shares especially on the acquiring activities where we have a very efficient industrial platform, but we need to improve our competitive offer regarding acceptance. And we are going to invest on e-commerce acceptance solutions with the objective of growing twice as rapidly as the market. So globally, all these initiatives in the payments space should generate an increase of around EUR 300 million of additional revenues for the group in the course of the next 3 years. Going now to real estate, I'm going also to a very, very important and structuring element of the relationship that we have with our customer. First, real estate is key in the wealth of the average of our individual customers. Generally, the real estate position represents 2/3 of the wealth of our customers. And it represents also between 1/4 and 1/3 of their monthly spending. We do have also a very strong position especially in home loans, where we are obviously and by far #1 in France. And we are a very significant real estate investor and real estate savings, investment products. We have also very strong position in home insurance that are growing regularly. But we have much smaller market shares on other real estate-related activities. Let me name transactions. Let me name services, property management, rental management and so on and so forth. We want now to fully integrate going forward a complete offer of real estate services to our customers fully integrated in the banking activities and in the banking relationship. We are going first to start with individuals where we are going to integrate all the real estate services in our customer advisory approach within our bank's networks in France and through digital channel as every time it's possible. It's going to be the case for property transactions, for rental management, property management and a very important and additional topic, which is the support that we intend to provide to our customers in terms of facilitating their energy transition and the transformation of their homes to a more frugal level of CO2 emissions. We will also follow a similar approach for corporates and also local authorities. And lastly, we intend to launch a green and social impact real estate investment fund, EUR 1 billion, to finance green and inclusive housing to contribute to urban centers revitalization and to help reducing the lack of rental offer within the French territory. Coming now to digital banking. We want to fully take into consideration the acceleration of the development of digital offers especially during the COVID crisis. And we want to enhance our positions on digital banking with 2 very important initiatives. The first one is that we are going to relaunch, I would say, B For Bank as a European digital bank for individual customers. The new bank will be on the market, it will be live end of 2022 in France and then going forward in several other European countries, with a new positioning, a best-in-class user experience and banking and nonbanking services platform leveraging on all the capacities of the group and possibly, if needed, external partners. The second one is Blank. Blank is a neobank that is dedicated to small entrepreneurs and self-employed professionals that has been launched beginning of 2021. It has gained since then around 6,000 customers without any significant advertising. And we want now to speed up its commercial development in 2 ways: first, under its own name, meaning that we are going to talk about Blank going forward; and secondly, under a white label approach through the different -- the 2 networks that we have in France, the regional banks and LCL. We have a global objective of reaching 200,000 -- 250,000 customers by the end of 2025. Last point, technology as a service, as Xavier talked a little bit about it. I want to a little bit precise what we have in mind when we talk about this issue. As Philippe explained, our specialized business lines started by serving the group's customers. And considering the size of the group, considering the size of its customer base, they have rapidly reached a critical size, enabling them to become leaders in their markets and to address own customer bases and to develop organically on their own. This has led in some areas to the creation of very valuable technological assets for their own use, of course, but also that we can now open for external clients, leading to a real new business line. As an illustration of this, we can mention 2 examples. Azqore is the technological platform has been created by our private banking activities and that has now an external and third-party investor, which is Capgemini. Azqore is now being used by several private banks, and it has gained last year a very significant new customer, which is Societe Generale International Private Banking. And now the objective is that Azqore manages around EUR 240 billion of assets by the end of 2025. And Amundi Technology, which is a tech offer created some years ago and formally launched in 2021, it provides services to different kinds of customers, fund managers, private banks, distributors, on the entire value chain of savings. And the target is now for Amundi to reach EUR 150 million in revenues by 2025, which would be a multiplication by 4 as compared to the level reached in 2021. So all these action plans presented by Xavier and by myself will allow the group to pursue its growth over the next years. But this -- the implementation of all these action plans, all these priorities will require, of course, significant investments that are going to be financed by each businesses. But it's going also to require a common global approach beyond the specificity of each business within the group. We want actually to provide to our customers across the group everywhere the best of technology enhanced by human responsibility. All our competitors, of course, emphasize that they are providing a best-in-class digital offer, a best-in-class technology, and we claim the same. But we claim the same in a much more ambitious approach, which is to pull together this level of and the quality of our technology and digital offer with a full human responsibility. This is a very important point in order to fully embody our client project that we've been formally announcing already 3 years ago back in 2019 and which was only the formalization of something we've been practicing actually since the inception of the group, I would say. So in practice, we are going to continue and to amplify our digital transformation. We want to complete the full digitization of key customer journeys, onboarding mobile subscription of different products and services, self-care and so on and so forth. We target to have 75% of our customers effectively using these digital channels and to realize more than 15% of our sales through total self-care. We are also working on providing our teams, our own staff, a 360 degrees vision on all our customers' activities, whatever the channel used, in order to ensure a first call resolution every time a customer enters into contact with anybody within our banks. Therefore, we will speed up our IT investments on cloud, API, cybersecurity, artificial intelligence and so on and so forth. And we will allocate in the course of the coming 4 years EUR 20 billion of IT investments for the group globally, EUR 15 billion for CASA versus EUR 15 billion for the group globally in the last period of 4 years. So it's a significant increase. And we will also enhance further our innovation capacities by building on the setups that we've been implementing in the last 5 years. Let me name La Fabrique, which is our start-up studio. Let me name CACD2 or EFEVenture. At the same time, we want to continue to amplify what we've called the human project when we presented the last medium-term plan back in 2019. This human project is aiming at increasing permanently empowerment and team's responsibility. The project has been launched starting with organization simplification, delayering with cultural and managerial transformation, increased delegation, reinforce trust and performance of the teams. And this project indeed proved to be very relevant during the COVID crisis period. We've been able to work remotely almost immediately in all our entities in the very beginning of the first lockdown. We've been able to continue to preserve a high-quality service for all our clients. And we've been able to significantly reduce the time to decision, the time to yes and to shorten actually all our decision-making processes. We are now entering into a Phase II in which we want to deploy this approach in all entities and also in all functions. It's not an approach that is only dedicated to front offices. We want 90% of decisions taken locally at the closest level possible where it has -- where it is supposed to produce its effects. We are putting in place a series of measures and commitments in order to improve the alignment between the employees and the group. And we have the objective actually to increase the employment staff with the idea of including this element as a target in our management KPIs. We will now use an accountability index, Indice De Mise en Responsabilité. That is going to be part of the KPI of the management. And we have the target to become the best responsible employer in financial services in France by 2025. Let me go now to the financial targets. As Philippe mentioned, we are presenting our medium-term plan with 2 time horizons. The first one is the short-term horizon. We have set financial goals as of 2025. And we are confident, as I will explain, that our model will keep delivering growth. And of course, in the longer term, although we are not able to display precise financial figures, financial targets, we clearly see the strength on which we want to build further. So obviously, the 2025 financial targets that I'm going to display right now include all the necessary investments that we intend to make in the coming 3 years in order to prepare this longer-term future, this longer-term horizon. Let me start with the macroeconomic scenario. Of course, the situation is very complicated, but we are used to it because, if you remember back in 2019, when we presented the last medium-term plan, there was also a certain turmoil in the market with a change of stance by the ECB. So we are used to that. What we -- globally, what we foresee is the following. Of course, we fully acknowledge that the current immediate situation is very volatile with an inflation that seems to permanently accelerate, leading to tougher monetary policies, stretching financing conditions or funding conditions both in the U.S. and in the European economies and household losing purchasing power due to the inflation but not really using their COVID savings in order to compensate these losses of purchasing power. However, if we project until 2025, we predict, and we are not the only one to say so, a certain level of stabilization of the economy especially in Europe, which is our main playground, with GDP growth which would be around 2%, more or less; with an inflation rate, which will be definitely above the one that we had in the previous period but which should stabilize at around 2.5%; and with a 10-year interest rate, which should be around 2%, leaving a situation where we would continue to have negative real rates. In this context, of course, we remain cautious as we always do in terms of the assumption of cost of risk that we make. And we keep actually the same assumptions as the one we had in the previous medium-term plan, i.e., 40 bps on the perimeter of CASA and 25 bps globally in the perimeter of the group. It's far above the level that we had reached last year, for example, so it's a quite conservative assumption. The financial targets at a glance. You see that in terms of profitability, we intend to continue to grow the profitability of CASA, the listed vehicle of the group, with a net profit above EUR 6 billion. It's an increase of 20% as compared to the previous target; with a return on tangible equity at 12% or above 12%, which is again an increase of 1 percentage point as compared to the previous target; with the cost-to-income ratio will remain below 60% despite inflationary pressures, despite investments that we will do in order to prepare for the future. And let me add that with the mechanical effects of the transition to IFRS 17, that is supposed to take place beginning of next year, actually, this target will translate into below 59%, thanks to, again, the transition to IFRS 17. And lastly, we maintain our 11% CET1 target in our dividend policy, which is a 50% payout in cash plus, we've said it several times, the intention of next year in May 2023 to make the last repayment on the 2019 dividend that we had skipped. Let me start now with the global picture, how do we intend to reach this objective of being above EUR 6 billion of net income in 2025. Well, the same recipe will play, which is a virtuous combination of a rather dynamic evolution of the top line plus 3.5% in average; a strict monitoring of the expenses, which would grow at a pace below 3% in average, which would leave us with a positive jaws outside the benefit of the ending of the contribution to the Single Resolution Fund, so a positive jaws of 0.5 percentage points year-after-year. And again, this prudent assumption regarding the cost of risk which we expect to normalize at around 40 bps, but it's, again, a prudent assumption. So this is leading us to this EUR 6 billion and above level of profitability in 2025. Let me now go a little bit further regarding the revenue lines. This 3.5% target that we have on average for the group over the period of the plan is also an average between business lines that will encounter different conditions. And so here on the right-hand side of the page, you have some indication that shows that in retail banking activities in France, the pace will be less dynamic. It's clearly the result of the situation of increasing rates where we will have an effect on the liability side that will be more rapid than the effect and the benefits on the asset side. In Italy, on the other hand, the dynamic is more favorable. And we will also benefit from the full effect of the integration of CreVal. In the financial services -- in the specialized financial services division, we will experience a strong organic growth of the activity of the business. And it will be reinforced with the beneficial effects of the Stellantis agreement with the launch of the new long-term rental business and the full take-up of our revenues on the car financing business in what is now called FCA Bank. And finally, CIB and the large customers' activity will continue their progressive and cautious growth momentum. Lastly, the breakdown of our revenues between business lines and between geographies will not change dramatically in the course of the plan. Regarding our operational efficiency. We will continue to stick to the same cost management policy, which is organized around 2, I would say, pillars. The first one is that for each business, we want to have a best-in-class efficiency ratio. And the second key element is that each business is made responsible -- each business line is made responsible for implementing the concrete measures that are necessary for this strict management of the cost base with regards to the evolution -- to the actual evolution of its revenues. In addition, I remind you that as of next year, we are switching from IFRS 4 to IFRS 17 in the insurance business. So this is mechanically lowering very significantly the cost-income ratio of the insurance activities. It's going to be now at 15%. And it's improving the CASA's Coax by around 1 percentage point. And finally, as I already mentioned, we assume that the contributions for the ramp-up of the Single Resolution Fund end in 2023. And as of 2024, we will only have, I would say, maintenance contribution at a much lower level, not 0 but much lower. It's around 1/3 of what we have now in our P&L. And we deem it quite conservative. Let me go now to the solvency. If I look back since 2015, the group solvency significantly improved. It increased by 230 bps, which is 1.5x faster than the average solvency of the major European banks. So we have further strengthened our position of best-in-class banking group in Europe in terms of solvency. And at the same time, what you can see on the right-hand side of the page is that we've significantly improved the quality of our assets with an NPL ratio which is at its lowest or probably close to its lowest levels ever and a very conservative coverage ratio for the group globally close to 90%. So this is leading us to the financial targets that we set for the group globally. No profitability target for the group. It wouldn't be relevant but actually some very conservative robustness targets in terms of financial strategy. CET1 ratio of the group will remain at or above 17% permanently during the coming 3, 4 years. Actually, it's going to probably increase. TLAC ratio at or above 26%, so all these levels are significantly above any regulatory requirement. And of course, we continue not to take into account any element of eligible senior debt in the TLAC ratio. And in terms of liquidity management in a situation where clearly the environment will be necessarily less favorable than in the previous period, we maintain a very strict position, and we maintain an excess of stable resources over our long-term assets that will be kept in the range of EUR 110 billion to EUR 130 billion. Going now to CASA's capital target, just a few elements explaining why we deem that maintaining a CET1 target of 11% is very conservative. Of course, the figure should be read as the capital target of a subpart of a larger group whose solvency will remain permanently above 17% and within which there is a total financial solidarity. Credit Agricole Group, of course, is a G-SIB, but CASA is not a G-SIB. And with this ratio of 11% end of March, we had a buffer of SREP which stood at 310 bps, which places us very comfortably among our European peers, which moreover do not benefit contrary to CASA from the protection of a larger group. How do we project our capital trajectory going forward? Let me start with the 2022 target, 11%. The net income that we foresee in the coming 3 years will generate 570 bps of profit; the distribution dividend plus AT1, 320 bps, and so all in all, it's a building of 280 bps of organic capital. Regulatory impacts that remain ahead of us will represent 80 bps of capital. It's mainly and almost essentially the last layers of TRIM that are going to bite as soon as 2022 that we take into account in these 80 bps. And then this leaves us 117 bps to fuel the development of the business lines and to have a level of security that makes us comfortable to assume this target of 11%. And in addition to that, this figure of CET1 ratio is going to be kept permanently with a buffer -- a management buffer of 250 bps above SREP level. You know that the SREP level can vary over time, and we want to keep this management buffer. These are the main aspects of our financial commitments as of 2025 as the result from our strategy, as the result from our forecast. However, as Philippe said, our presentation today is not limited to this time horizon of 2025, and we are now going to share with you our strategic initiatives to prepare the longer term with a specific focus on the new business lines that we are launching and that Philippe mentioned earlier. Of course, I'm talking about Credit Agricole Transition Energy, Credit Agricole Santé et Territoires. And for that, I will hand over to Eric Campos, who is presently Group Head of ESG; and Pierre Gosh, presently Head of Group Insurance at Credit Agricole Assurance, who are going to head these 2 new businesses to present the intentions. Thank you very much for your attention.

Can you hear me? Yes. Okay. I would like simply to introduce Eric Campos because probably a few people already know him. Eric is, yes, the current responsible of the societal project. He is the new and the first responsible for the new structure, Credit Agricole Transition Energy. So I'm just about to leave him the floor. But perhaps to be more consistent with the agreement of Paris, we could lower the climatization and perhaps try to get the temperature higher in this room. This was simply a very simple message. So Eric, the floor is yours.

Thank you, Philippe. Good morning to everyone. I'm very pleased to be here for presenting the new business line in the frame of the climate strategy of the group. Important to say that the medium-term plan that we are presenting affirms and reaffirms Credit Agricole ambition to place its development path for economic prosperity on track with the Paris Agreement, respectful of nature and bring social justice. In order to achieve the world of tomorrow, mankind will indeed have to decrease its energy consumption by 4% per annum and, in the same time, to build a new world of energy system in which 2/3 of total energy supplies will have to come from wind, solar, bioenergetics, geothermal and hydroelectric power in 2050, 2/3. As for the share of fossil fuels, this will have to decrease from 81% to 58% in 2040 than to 20 -- in 20% in 2050. In France, the share of solar energy will have to be multiplied by 11 by 2050. And at the same time, according to the national low-carbon strategy, companies will need to decarbonize their activities by, for instance, 28% in the transport sector and 35% in the industry. Decarbonizing the economy requires a transition of an unprecedented scale in our history towards a model which has to successfully synchronize the climate clock with that of social acceptance. More than ever, the group plans to contribute to this objective. And by signing the 4 net-zero alliances or the financial sector born of Glasgow Cop26, all group business lines are committed to converging towards the same target, contributing to achieve carbon neutrality to 2050 at the latest. Credit Agricole is working on defining decarbonization pathways for the main sectors of the economy, finance, by the bank applicable to each business and entity. We have been working towards fixing targets for 10 sectors in our financing portfolio, representing 60% of our commitments and 75% of greenhouse gas emission. Our work is based on the net-zero emission scenario of the International Energy Agency and adopts and respect the principles of the Glasgow Financial Alliance for Net Zero. This alliance aim at establishing a path towards a gradual withdrawal from high emitting assets. And this path is complex. It calls for closer dialogue with our client in order to enable a path towards low carbon economy. All the while avoiding a social crisis, this dialogue must also prevent high-emitting assets from being transferred unchanged to company less committed to climate issues. It's true that this needed a spirit of sharing trust and transparency that financial and nonfinancial players will succeed together. Today, we are announcing our pathway to a progressive withdrawal from the oil and gas sector by setting ourselves a target to reduce CO2 emission in absolute value linked to the financial of this sector by 30% between 2020 and 2030. We are also committed to very actively supporting the decarbonization of the automotive industry by reducing the carbon intensity of our sector portfolio by 50% over the same period. Regarding the direct footprint, Scope 1 and Scope 2, it will be reduced by 50% also by 2030. Scope 1, Scope 2 mean fleet, energy and business travel. We will continue, of course, the definition and publication of our sector trajectories by in 2022 and 2023. And they will be accompanied by action plan to guarantee they are implemented. As far as the oil and gas sector is concerned, the action plan will be published in December '22 and will lead to us adopting a new policy in line with the latest recommendation of the Glasgow Financial Alliance for Net Zero. The key to the climate challenge is in taking global commitment but also in the capacity to bring this commitment as locally as possible in all territories by adopting to the specificities of local economic sectors using the strength of the player and the dynamics of the ecosystem. We'll have time and the power to avoid a climate stalemate if we give ourselves the means we need to act quickly and locally and to strengthen resilience as mobilizing purpose to economic models. The opportunities offered by these transformations are as great at what is at stake for civilization. The decarbonization of the economy is complex, but history is offering us an opportunity that of working alongside of our 53 million of clients to create sustainable value for them and to win the climate transition challenge together. To this purpose, as it was announced by our CEO, we have therefore decided to launch a new line of business, named Credit Agricole Transition and Energy. This strategic business will help this operational transformation of the economy with the belief that is by mobilizing all the group's strength that will -- that we will contribute to a sustainable economy serving society and nature. The launch of this new business line will enable us to operationally accelerate and reinforce the implementation of our climate strategy. Critical transition and energy will support its clients from the initial stage of diagnosis and advisory to the determination of the road map including installation, financing and innovative equipment and infrastructure. We could support committing to tangible results and building on the group enter range of expertise and strategic partnership. Through Credit Agricole Transition and Energy and thanks, of course, to the experience acquired by group over the last 20 years in financing renewable energy, we will massively support green investment privileging strategic partnership, local partnership and relocation of production in short supply chain. This business line will allow us to set up installation and exploitation of own account and third-party energy production equipment. We were also strict to roll out green energy consumption solutions for the group client. We'll have the opportunity to get back to you in the coming months to share objectives of critical transition and energies, whose ambition is up to the strategic challenge that it represents for our group. I thank you very much, and I leave the floor to Pierre.

I'd like to introduce Pierre once again because Pierre is today the current responsible of collective insurance within Credit Agricole Assurance and now is the new and the first responsible of this new structure, Credit Agricole Santé et Territoires. And I leave him the floor, please.

So thank you, Philippe. Good morning, everyone. And before going into more details on the new business line, Credit Agricole Santé et Territoires, I would like first to share with you some facts on the expected evolutions of the French health care system so that you perceive how big are the needs and how big as a potential and the opportunities for the group. The French health care system will undergo major changes over the next 10 years. First of all, no need to be a mind reader to predict growing geographical qualities concerning access to health care services. Currently, 7 million people in France live in areas with insufficient access to health care, what we call in French Desert Medical. And this number will grow exponentially by 2030 to 27 million, 27 million. Indeed, 50% of French general practitioners are over 60 years old. The second issue is aging population. We currently have 18 million senior citizens in France. And this number will grow significantly by 2030 to 21 million, of which 3 million with diminished autonomy. We do believe that 140,000 additional places in iPad collective housing units, will be needed by 2030. Finally, we know there is a great complexity in the health care journeys for the French people, multiplicity of stakeholders, capacity for patients, fragmented and insufficient housing solutions for seniors. All this will contribute to huge needs in terms of healthcare and care services during the coming years. With that in mind and given our presence and close links with all the territories, our client market share and, more important, our raison d’être, we started working on possible solutions and answering to several questions. How can we help French people to find their way in such complex health care system? How to make it easier to access to a doctor? How can we use digital services to improve patients and seniors' journeys? How can we support the growing services and accommodation needs for seniors? All these issues are challenging and, at the same time, represent significant opportunities for the group and the growth and development driver. We are happy to announce today, as said Philippe, the accretion -- today's accretion of Credit Agricole Santé et Territoires. The mission of this new activity is to facilitate access to health care and health services for all French people in all the territories in France. We are going to provide our customers and the French with unique and differentiating offers and services to contribute to improving life conditions and reduce in qualities. First, no other player in France offers a global vision of the health care system and care path. We want to make the complexity easier to navigate through and understand. To do so, we will create a health care digital platform to simplify the health journeys, providing advice, prevention and assistance on all health care-related matters, building on the existing Credit Agricole Ma Santé for group health insurance solution. Secondly, in order to address the issue of medical deserts and as we start seeing the premises of changes in health care practices, we will support the development of new medical wave by creating an open telemedicine platform, by deploying health centers and supporting digitalization doctors -- of doctors activity to free up medical time. Thirdly, in the context of strong growth of senior needs and the complexity of the health care system, we will create a digital platform for seniors and their caregivers. The objective is to help them find their way around the system and to offer a set of useful services designed around the individual. We want to adopt a global approach and not by stratum of services or products. Last but not least, to meet the growing need for accommodation for senior citizens, we are going to play an active role in development of nonmedicalized collective housing models in France leveraging on specialized partners. To achieve these ambitions, we will strongly rely on group's internal expertise, in particular, regional mutuals who have developed numerous initiatives in the field of health care. It's a fine start for us. For example, we have health insurance. We have JV with Europe assistance in France, we already invest in health care clinics. We are the #1 banker of health professionals. And as I mentioned before, by developing partnerships with specialized players, clinics, retirement hubs, new networks of health care professionals. All in all, the group is very well positioned to work with a full ecosystem to make health care accessible to hold and to provide unique and differentiating solutions. And this is precisely what the new activity Credit Agricole Santé et Territoires will do. Thank you for your attention.

Thank you so much, Pierre. Thank you so much. This presentation is coming to its end, of course. And I would like at this level simply conclude by summing up what has been explained. First of all, we tried to restate, to reexpress the fundamental characteristics of our development model, probably a much more sophisticated universal banking model that -- than it is very often commented or thought. This model allows us to commit to both ambitious and realistic targets for 2025, both on the commercial point of view and financial point of view. And then looking at 2030 and looking beyond 2030, we explained you that we are investing on the very long term, accompanying societies in its transitions, and we are just launching today 2 new very important business lines, Credit Agricole Transition and Energy and Credit Agricole Santé et Territoires. My executive summary. Yes, my executive summary is probably as simple as it is displayed on the screen today. We do believe more than the -- in the future, yes, of course, there is -- there are a lot of uncertainties all around us. But this is why we have a kind of duty of confidence, duty of confidence simply to act for tomorrow because this is our mission, and this is the way for us to develop on the very long term. So I stop on this point, and we start, if you want, of course, if we start with the Q&A session. And many hands are asking for the microphone, so may you bring a microphone to the first hand in the room? Thank you.

Pierre Chedeville, CIC. I have a lot of questions, but I'll be disciplined.

Let you start by the first one.

The first one is I'm not very at ease regarding the -- your target on cost/income ratio because, on one hand, you stick to the same level as in the previous plan, 60%, below 60%. And at the same time, you explained that you're going to have jaws effect by more than 1.5% excluding the IFRS 17 effect, which, in fact, had 1 point. So I don't understand this kind of cautious stance because, at the end of the day, you should say we will probably have a cost/income ratio below 58% including IFRS 17. That's my first question. My second question, I would like -- if you could give us, because it's one of your main objectives in terms of insurance business, a breakdown of the 2.5 million contract that you plan to obtain in what kind of contracts, is it auto, health? What kind of contracts do you expect? It's not very clear for me because you talk only about individual, but I know that you have also ambitions regarding corporate insurance. And you don't say a lot about that while I know that you have ambition on that and particularly in SMEs. And could you elaborate a little bit on that part of your business plan? And my last question is regarding the creation of your 2 new business lines. It's not very clear for me because you have no target until 2025 in terms of revenues. And it's not clear for me if these 2 new business line are a group or existing business and it's just an internal reporting, I would say, cosmetic -- I don't want to be [indiscernible]. It's not exactly what I want to say but you understand. Is it new revenues or it is a new way of presenting revenues within 2 new business? Or is it new activities that does not exist so far and that will generate revenues? Am I clear on that question?

You are. Thank you. I'll try to answer at the first level. The cost-income ratio is something very special in this very troubled period. To be very simple, first, let me report you that we succeeded to be below 60% on the current medium-term plan. And let me report that we are among best in class in this kind of ratio. Simply, we already reported that it will be difficult to be very precise in terms of prediction for prices, for inflation, for interest rates. So it's more difficult to be precise for revenues and cost than to be able to manage a cost-to-income ratio because this is a matter of management. We did prove on the long period that, thanks to our very decentralized organization, we can really manage the cost-to-income ratio because this is a way of development. You can rise by mastering your cost-to-income ratio. But this is a kind of a target that is really in our health. When we say 60% is judgment that will stay below 60%. So the concrete question should be are you sure for the precise figures for revenues or for cost. This is a difficult question, but this is not a difficult question if the question is cost-to-income ratio because we mastered it and we shall go on mastering it. This is the first point. And then on the business line, but you will be able to complete, of course, Jerome, on this point. I would like to tell you that the target launching these new activities or the new structure is not to start from scratch but to be able to accelerate, to amplify the development of the group that is today not at a scratch level. And that means that to be very transparent with you because we are just organizing 1/3 to above this point, of course, all the costs of these new structures are in the current cost of the group and so included in the cost-to-income ratio for 2025. Of course, revenues are coming from these activities, about transition, energy, health activities and so on, but we didn't put any incremental revenues due to this new organization. This is a message because as we were not so precise 40 years ago when we decided to invest in insurance activities, but it was a very important political decision for the group, we want to explain you that for this kind of matter, it's better and it is much more efficient to organize them, to structure all the group within 2 new business lines. But of course, now we have to be more precise in terms of organization, in terms of main figures. But to be very confident on this point, you have all the figures of the group within the KPIs of 2025. This is not outside of this trajectory on the short term. Jerome, can you complete if you...

Yes. Just on the cost/income ratio, the one point that we are going to benefit from, thanks to IFRS 17, is indeed part of the target because, as I said, we maintain a target of below 60% at constant regulatory accounting framework. But of course, mechanically, this is going to translate to a below 59% as soon as next year. So clearly, we do not, I would say, consume the benefit of the transition to IFRS 17 within this trajectory. For the rest, it's exactly what Philippe said. We do everything and we organize everything in order to maintain a positive jaws between the evolution of the revenue base and the evolution of the cost base. Nevertheless, what we commit is to be below 60%, becoming 59%. And we do not want to commit to a precise figure, but every year, we are going to do whatever we can in order to maintain this positive jaw. And as far as your question on insurance activities is concerned, we do not break down the 2.5 million new policies between the different businesses. It's -- but you know that it compares to a total outstanding of policies that is around 15 million, so it's clearly a significant improvement globally of the number of P&C policies that we manage.

Benoit Valleaux, ODDO BHF. Three questions, if I may, related to Credit Agricole Assurance, 2 on earnings and 1 on capital. Maybe first on earnings, can you share, please, with us what is your expected impact from IFRS 17 on earnings and on the volatility of these earnings and if you plan to take some measures in order to mitigate this volatility? And second question, I need to complete a previous question related to P&C business. We're also seeing some rising claims inflation. So what do you expect in terms of combined ratio over the course of the plan? I mean do you expect that you'll be able to maintain stable or not your combined ratio? And regarding capital, you had a Solvency II margin at 245% under standard formula. Of course, these Solvency II should have benefited from increasing interest rates year-to-date partly mitigated by increase in spread volatility, in equity market. But overall, I will assume a net positive impact. So do you believe that thanks to that and depending on your view on the PPE reserve level at the end of the plan, but do you believe that Credit Agricole Assurance will be able to return some extra capital to the group or not in terms of the ordinary capital return policy?

Well, Jerome, you can, if you need, of course.

So regarding the IFRS -- post IFRS 17 earnings trajectory, actually, we've managed to fine-tune the implementation of -- the foreseen implementation of IFRS 17 in such a way that it's not going to modify materially the earnings trajectory as it would have been under IFRS 4. So clearly, going forward, we will have a real continuity in the earnings trend as compared to what it should have been before under IFRS 4. This has been reached at the price of a cost in solvency because we are and we need, in order to do so, to build up a client service margin that is quite significant and that is going to dent the capital of Credit Agricole Assurance as it is recognized within the solvency of CASA day 1. And precisely, this is making the link with your last question. Thanks to the increase in interest rates, the Solvency II ratio of Credit Agricole Assurance has quite significantly increased. And the intention that we have is that we are going to compensate actually the IFRS 17 transition impact on CASA solvency by an upstreaming of some extra dividends from Credit Agricole Assurance. So net-net, at the end of the day, we will have an unchanged or almost unchanged earnings trajectory at no net cost in terms of solvency at the level of CASA.

Thank you. Next question?

It's a question from me. Thank you, sir, for the thorough presentation of the medium-term plan, which we can tell is really entailed in what the future holds and that should be aligned with Credit Agricole values. However, I can't help but notice that within the crowd in this auditorium and also in the slides that the term women hasn't been mentioned, so I'm wondering why it is so and if there are actions to be undertook in terms of that evolution, both for customers, for shareholders and also for employees.

I'm not sure to have completely understood your question. About the place of men and women in the company or simply women?

Actually, I think women are new customers to be looked after, and I didn't see that strategy being developed and neither for shareholders or for employees' leadership. So it's a question in general, we see that climate change is a key issue in terms of the world changing. Women is another key issue. So -- and I can't help but see the crowd today, and women are painfully underpresented.

Let me tell you that women is not a key issue for us. It's a key ambition, simply. And we do act on this point for a very long time. When you look simply at the Executive Committee of Credit Agricole S.A., we are now almost 40% of women within Executive Committee of Credit Agricole S.A. And we do have a natural and lasting policy for all this kind of issue about balanced situation in terms of gender. So this is not why we don't speak of this especially today because we are not speaking about the group project. The group project has already stated all these kind of targets and we are really acting on this point. We are just now giving you our plan for 2025 within this group project, but I can't really tell you and I can't give you many proofs above the fact that this matter is already managed by the group, not only by Credit Agricole S.A. but by any of our entities and at the global level of the group. But I understand that we have to give you some key figures and the improvement of these key figures on the last years and for the next years. We shall do this. Next question?

Okay. Giulia Miotto, Morgan Stanley. Two questions from me. The first one is on LCL. I was a bit surprised by the 1% to 1.5% revenue CAGR because in the past 3 years, with the negative rates, you delivered much more. So I was wondering what assumptions are behind that sort of very low revenue CAGR on mortgage margins maybe or market levels. So that's my first question. And then the second one, maybe more strategic on payments. I was impressed by your ambition to grow at double the marketplace in e-commerce, which is a place where there's a lot of competition and new entrants that have a completely clean new tech stack. So how are you planning to do that?

Yes. At LCL, what we integrate in the evolution of the revenue stream is simply the fact that when rates increase, it's long-term beneficial to retail banks in France. But in the short term, it may be a little bit less beneficial because it starts with an increase of all the -- the cost of all the outstandings in terms of liabilities, whereas regarding the assets, the repricing is only very progressive. That's the first point. And the second point is that we also take into account the idea that when rates decrease, this is fueling the credit demand because more and more customers have the capacity to repay a reducing level of interests, whereas, again, when rates increase, we may see a weaker evolution of the credit demand in the coming quarter or years. So that's the combination of those 2 elements which are nevertheless prudent. But we think it's reasonable to be prudent even though, again, of course, the increase in rates should be, at the end of the day, better for the net interest margin, not necessarily rapidly for the net interest income.

Simply about payment and e-commerce, and perhaps [ Jean-Paul ] might complete my answer. I would like to answer first of all that, as I said in my presentation, we are currently the #1 in terms of payments in France. But of course, the environment is really modifying very quickly all around us. But we decided, we have always decided to master all the different kind of operations or different fields about payments within our hands, but we need partners and we need cooperation about this point. When we say that we must be quicker than the market for e-commerce, that simply say that on this part, our ambitions is to get a higher level of market share compared to what we are today. And so this is why the implication of this target is to be quicker and faster than the market. But for this point, we are already on this field, but we need to get partners notably for acceptation -- sorry, activities to be able to accelerate. Jean-Paul, would you like to add something or perhaps you simply say that, that my answer is correct? Okay. Thank you so much. Thank you so much, Jean-Paul. Yes. But the main message, the key message is that this is an internal question for Credit Agricole Group. You can say that this is strategic and decide to put that outside of the group. So at the intersection of -- with the rest of the world, we need partners. We don't need to outsource. We need partners. This is not so easy, as you probably know. But no doubt, we shall be able to find new partners with a strong ability on the neutral point of view to help us to reconquest this very special market on e-commerce for the very large corporates.

Guillaume Tiberghien, BNP Paribas Exane. The question is on the capital planning. So in my pack, it's Slide 48. I wanted to double check, sorry, what is your expectation for RWA growth. I suppose 2 to 2.5, for example, so that I can ask the end of the question. That would be a 10% growth over 4 years, which would consume 110 bps of capital. And so is it fair to say you're leaving about 60 bps for acquisitions in the plan? And the second question is on the return on invested capital for the acquisition. Given that you're targeting 12% return on tangible equity, why only target 10% for return on invested capital? Should you not at least target the similar return for new acquisitions, which will always incur some acquisition risk and disruption?

Let me start with the second question. Actually, when Xavier said that we are targeting a return of 10% for the acquisitions, it's a return on investment, not a return on equity. And of course, we want to -- we want all our acquisitions to be relative as much as possible in terms of return on equity, but the return on investment may be lower than the return on equity, depending on the capital structure of what we buy and what is the capital consumption of the activities that we purchase. Regarding the evolution of RWAs, it's true that the evolution -- the average evolution of RWAs during the period is going to be lower than the evolution of the revenues, for example. And we will slightly improve the ratio between NBI and RWAs. But it's going to be the combination of many, many moving pieces which may make the global picture a little bit difficult to read because, actually, we will have at the level of the group certain elements that are going to impact the level of RWAs which are not directly related to the development of businesses. It's going to be the case with the disposal of Credit du Maroc which is going to take place end of this year probably. And that is going to lower a little bit the level of RWAs. It's also going to be the case of the upstreaming of dividends coming from Credit Agricole Assurance because Credit Agricole Assurance is risk-weighted, as you know. And so every time we upstream some capital, we reduce a little bit the consumption linked to this business. And there will be also end of the period the first-time implementation of Basel IV if we read correctly the text. And this is going to translate also into some, I would say, one-off modifications of the RWAs with, in certain businesses, a reduction in the RWA consumption especially in some credit businesses, whereas at the same time we will have an overall increase in the RWA calculation for operational risks. So globally, this is making some moving pieces. But what is true is that globally, we are going to improve slightly over the course of the plan, the ratio between NBI and RWAs. Yes.

Jacques-Henri from Kepler Cheuvreux. I have 4 questions, make them brief. One of your main competitive advantages is governance, right? And governance [indiscernible] there has been a lot of pressure from the supervisor around the mutually structure. You talk to supervisor every time. Is it safe to say that this structure will remain throughout the length of the plan is beyond because the [indiscernible]...

There seems to be a nice problem with your mic.

I'm sorry.

No, that's not your fault.

You have to be closer from the mic, I think.

Well, then kiss the microphone. So the second question -- you got the first question, yes?

Yes.

Okay. On governance. The second is maybe, yes, surprised that payment and real estate were not maybe segregated as separate divisions on the second payment, it's really complicated. Other banks have tried. It doesn't really work. Are they still at corporate center level is the question. Third question on BforBank, it's probably the second or third reboot, I can remember. Will we be better off just selling it? And on Transition and Energies, I was very interested also by the business line. Is it safe to assume that some portfolios on fossil fuels are going to be transferred to that division? Or did I miss that completely, Eric? And lastly, one comment. I think the contact and access of phenomenal executive women at this group has been obviously much, much higher than peers [indiscernible] and bank.

About the mind of supervisors about mature structure, let me tell you that nowadays, now this question is surprising me. I mean there is no special concern about this. Our structure is special, of course, but German structure is special with some kind of organization, too. So I don't feel any kind of threat or misunderstanding about our organization. Let me just remind you that we are a group. On the last years, we succeeded to restate, to explicit many things and mainly the project of the group with different pillars for the customer project, the societal project and the human project. That is a rule. And on top of this, you have a central body for Credit Agricole Group. And the central body is, at the same time, Credit Agricole as a listed company. Now I think there's no concern about this point. Fortunately, this is set to be a little bit more complex for some observers. Of course, this is not our mind when we are inside the group. But we think that it is stabilized. And when you look at the weight of cooperative banks, just like in France, more than 66% of financing the economy in France is made by cooperative banks. Really, this is not a matter. And as we succeeded once again to prove and to organize to the supervisor the ability for equity and equity to circulate within the group, we don't have any more questions with them. The last question was about switch. This is a question of the past, and now we are comfortable on this topic. So there was a question about payments within or not the corporate center.

Well, regarding payments as well as real estate activities, what we show is that actually those 2 businesses generate revenues which are mainly sitting within the regional banks and within LCL and within all the banks of the group. So globally, the idea is that there is a central, I would say, structure, an entity in both cases, actually. And for the real estate activities, several entities, but they operate with a very low level of profit. And this very low level of profit is indeed accounted for within the corporate center. But most of the revenues sit, at least for the time being, within the retail banks.

I will have maybe a common word for these 2 items, but I will also be more detail on each of them. This common word is you have to be patient because in both cases we will present more detailed features about what we want to do in this regard. For BforBank, we are indeed planning to present a new structure, new ideas. I have mentioned also the ambition we have to develop it internationally, at least in Europe. And the idea behind it is to try to find out a way out because, indeed, we all know that digital banks are very numerous. Well, some of them are experiencing some headwinds. We do think that it is possible to create a new kind of offer in which we will have, at the same time, a very good digital service, and we are working hardly on that because, indeed, without that, it makes no sense. But also, we do think that it's worth trying to combine that with some kind of human presence, and that will be at the art of the model we will try to build. For more details, you will have to wait for a full-fledged presentation, which will come in the next ahead. On Energy and Transition, I would say that the name of the game is not to transfer assets from 1 pocket to another pocket, it wouldn't mean nothing, but indeed to create new services. So let's be very clear about that. All the business lines now are developing, I would say, green project, green offers, et cetera, et cetera. And during the course of the presentation of today, we mentioned repeatedly some of the initiatives which have been taken. So the idea is not simply to transfer again and to revamp what we are doing and just to make some trick of communication by this new structure but rather to think in depth about what is needed for the client. And what is needed for the client in both health and energy is indeed, for example, advice is -- once again, advisory services. It's maybe also that some part of the group, which are the mean to do that, invest in these new businesses. It is to create through platforms a connection between ourselves and other partners because indeed what we see is that we have not in-house all the competencies. But our role here is also to be an architect of the relationship between the customer, either the new customer or the companies and all the people intervening in this field. So what we want to be through these initiatives, and I'm here talking at the same time about health and about energy, is to create some kind of environment in which we would manage to offer a full-fledged service to our clients in which we will aggregate our own competencies but also the competencies of people which would be our partners. So that's the idea. It's not once again to just reclassify what we are doing yet. Thank you. Other question, please.

Tarik El Mejjad, Bank of America. I have 2 questions, please. First, for you, maybe Mr. Brassac, it's on your vision for growth in retail banking in Europe. And we repeated a few times that you are the largest bank in Europe, and you're clearly not afraid of adding branches as maybe other competitors are and you're a product factory. So is your model really to leverage on the banking union, on lower G-SIB, but for you not an issue, capital is so highly capitalized -- sorry, group is highly capitalized. Is that not a benefit really? But would you be open to grow faster in retail outside France and Italy? And maybe on that, I mean, in Italy and the Banco BPM transaction recently, could you explain me really why a 9% stake in the bank will strengthen your partnership with Danske Bank. I'm really interested to understand that point. And secondly, on capital, you reiterated 50% cash payout, it's not above 50%, it's 50%. So you will have a bump this year with the EUR 0.20 from 2019 skip dividend. But do you -- would you open the door to grow the DPS year-after-year? Or mechanically, given your EPS growth and so on, we would have DPS going down in '23 versus '24?

Well, the first question about our ambitions for retail banking in Europe, let me restate your question differently. I don't know what is retail banking. Really, I don't know what it is. I tried to explain to you that what you call retail banking is a special part of our entities linking the global relationship with our customers. Thanks to that, we needed to create business lines. Thanks to that, they are able to have a complementary development. So when you are speaking of retail banking, it seems to look simply directly at this piece of the puzzle, simply this piece of the puzzle. So the group never expressed any ambitions about retail banking, neither in France nor in Europe. But global banking, universal bank, it seems to be probably -- it seems to you probably too much theoretical, but within Credit Agricole, it's very concrete, it's very practical. So when many people ask me about this kind of bank that can be called a retail bank in Germany, in Spain or -- they are looking at it as on a solo appreciation, not in a global appreciation with global approaches with the different business lines that could serve it as ranging all the range of solutions, the global to the local, to be very simple. So we already said it's a long time ago but it is always true. We already said in 2000, during our main congress in Montpelier, where we decided to list as National Credit Agricole, Credit Agricole S.A. The target was not to be on the market. The target was to be able to expand our successful model of universal bank with bank of the relation and business lines to the dimension of Europe, European Union that was growing. Of course, we reported that this shift of building in Europe was so much difficult compared to the ambition 20 or 30 years ago. But the natural expansion of Credit Agricole Group is really on the very long term to expand this model, not retail banking in this country than asset management in this country. But this model that really works not only for French people, not only for Italian people, not for Italy but for households, for companies, give us the support of the global approach of the net. So we are in this mind. But I did tell you that our main priority was organic growth. External growth was just a matter of opportunities. Opportunities may exist, but we can decide, of course, at this point. And if we had opportunities above that, it will be to link that to the universal approach as we succeed to make this in the North of Italy. I would like to add that times have changed, of course. And now when we are speaking of bank. Let's just say bank of the global relationship. We are not just speaking of bank with branches but bank with the full range of channels to have a global relationship with their customers. So I think, for example, but this is just an example, that the new ambition of BforBank, just giving the global model of supporting customers with all the projects of the group in a global relationship, in a remote position is a kind of new universal bank that we can contemplate in any kind of territories in Europe even if some territories are probably most -- easier to be contemplated by the group. So I'm aware that my answer is not precise enough for you, but I would like today to share with you this global view on the very long term. Our view is not inside us, is not as an Excel dashboard with asset management, with insurance activity, with retail banking. We don't know well. Unfortunately, this so sophisticate global approach is quite unknown today by many of our competitors because it is very difficult to manage. Don't think that acting and stating a group project in a group with our level of complexities is so easy. But this is a formula to win as we won in the past, and this is the way we contemplate new territories on the very long term, yes, mainly within European Union. So everything will be looked by Credit Agricole. Each time somebody at me, could you look at this kind of entity, always we said, yes, we look to. But the condition is to be able to create this universal relationship that give the global efficiency to our job to take this world. So I'm sure that you are disappointed by my question because I'm not precise enough, but this allows me to go to the second question now. What about -- the second question was about the dividend policy. You are perfectly able to answer to this question. Well, let me go on, on this question. For quarters, for years, we are asked about the level of percentage of dividend. It's surprising not to ask the level of dividend. I mean distributing 50%, 60% or 40%, it depends on the basis. How is the basis? How are the expectation to go on expanding the group? I've already answered, I'm aware that it was not so nice from my part that many banks announcing a higher level of dividend ratio probably are explaining the story is ended. They give back the capital. When you have really an ongoing process in terms of development, and our process is on more than 1 century, and you can look at the fact that when you look at our revenues, they are all always increasing, including during the crisis, including during 2020. Our ambition is to go on with clarity, with stability for our shareholders, but not with this idea that now I don't know where I have to invest and so I give back the capital. So the most important point for us is to be very stable in terms of promise for our shareholders and to be very dynamic in terms of ability to grow the group as it grew in the past and including, of course, for the benefits of our shareholders. More precisely on the EPS...

No, just maybe one point that I can add to that, which is that we've decided starting this year to offset the dilution linked to a capital increase that we reserve to our employees by dedicated share buybacks operations. So we are going at least to improve a little bit, all things being equal, what you deem not sufficient, which is the remuneration of our shareholders. We are going to eliminate going forward this dilution that was linked to this capital increase that we propose to our employees. We are -- there is one operation that is going to take place in the coming weeks. And again, before the end of the year, we are going to eliminate the shares created for this operation, and we will do that year-after-year.

And we have not forgotten, we can at this point, I think the EUR 0.20, we never paid for time being on the dividends of 2019. This is a very important point of being loyal with shareholders is never to forget what we could pay, what we couldn't pay and what we shall pay on the next incremental repayment of dividend for the future. So we said that we shall manage as to be able to pay completely the dividend we couldn't pay for 2019 year. And so the rate of dividend will be higher than the normal policy. But this is something we said and, of course, that we shall do.

There was also a question on BPM. Just to mention the fact that we have, together with BPM, as you know, Agos, which is a very profitable company with a return on equity which is around 17%, which is among the 3 biggest players in the Peninsula in consumer credit. We want to preserve this subsidiary. And we thought that it was a way to stabilize the situation to take this 9.10% in BPM has to solidify this partnership with BPM. And I say it was also a way to testimony the confidence we had in the actual management and tell them that we are prepared to further cooperation if they feel that the need arise and that the proposition we could make to them fit with their own purposes. So that was a way once again to support the company. I would add that at the moment, we invested in BPM, the conditions were particularly favorable. And we thought that on top of this strategy, Candeva, it was a good financial operation.

Delphine Lee from JPMorgan. So I have 3 questions. If I start with the first one on Slide 5 and your market shares in insurance, life insurance and P&C. If we look at that slide, it's not that different from the old plan, so I'm just wondering if you could just elaborate a little bit of what are the challenges in progressing on those market shares. I mean you're already, a very big player but to increase that further. My second question is on energy transition and the impact it has on -- well, in terms of revenues for your CIB. I mean CACIB has ambitious targets in terms of revenue growth of 4% to 5%. I'm just wondering how much of that is impacted to certain extent to some portfolios being run off because of transitioning. And my last question is on interest rate sensitivity. So you have conservative assumptions for the plan, but you do have a little bit of slight increase in your IBOR. I just want to understand kind of how that impacts your top line and what if we were to have much more interest rate increases, if you could elaborate on how that impacts the top line.

To take the first question about our ambitions about insurance on the very long term, you were surprised by the chart, probably. But yes, market shares are not so high, and we are yet very big in terms of insurer. The conclusion is that we will be bigger and bigger simply because when you look at our momentum, the pace of our activity, when you link our retail bank, as you said, I mean, bank of the global relationship and our market share in insurance, you can see that no reason not to go up and higher, notably, within our domestic markets. But no reason to find on another way new partnerships and including at the international level, as we made, for example, with Abanca in Spain to develop on the international point -- of international level our insurance activities. So I think that, yes, when you are a very important bank with all the use we provided to our country, you may become a bank insurer from scratch in 1988. And then to develop bigger and bigger and probably, we do feel this point, this evolution is absolutely not ended for the future. And when you add the second level I tried to explain in terms of development for the business line on themselves, which is notably ability to deal partnerships outside of the group, outside of France, with banks that have decided not to keep all the different business lines necessary and useful for the relationship with our customer, there's a room for this development. So the answer is very simple. Yes, we succeeded and so much the better to become the first ensurer in France when you aggregate life insurance activity and PC activities, but we shall become bigger and bigger. That's our destiny as a bank insurer. For the next question, on energy, there was a question about energy.

No. The idea is are we going to see an impact on CACIB credit outstandings linked to this transition. I think that actually, going forward, there is going to be an increase in credit demand linked to the energy transition. So definitely, even though there are some reductions in certain portfolios in CACIB, we will see globally this energy transition, fueling actually the development of CACIB going forward. That's absolutely certain. And then there is this question regarding interest rate sensitivity, which is a permanent question that we've been -- that we've addressed several times during the calls on the results. It's -- we are providing a sensitivity analysis in the reference document. But it's very difficult to integrate in those sensitivity analysis the behavior of our customers. So if -- and the context in which an increase in rates would appear actually. And so of course, if rates happen to be higher than what they are now or what they -- what we have integrated in our plans, it's going to be, as I said, mechanically better after a certain period of time. But then we have to fully take into account the impact on the credit demand, which is not clear cut; the impact on the cost of risk, which is not either a clear cut; the impact on different elements like that. So globally, we think that we've been prudent in our assumptions. We think that possibly, if rates are a little bit higher, there is a potential of additional revenues going forward. But I think it wouldn't be relevant really to translate mechanically another assumption in terms of rates or yield curve into a determined number or determined amount of additional top line or bottom line.

Perhaps let me reexplain something I very often explained, but it was not of use for me to convince people asking me this question. When you are a universal bank with all the range of our activities, when you look on the long term, there's no correlation between our profitability and the level of rates, no correlation. The best proof that our highest level of profitability was in 2021 with the lowest level of interest rate. The fact is that we are sensitive to the move of interest rates either when they are lowering or what they are increasing. And it depends on the quality of your ability to master what we call the ALM management, asset liability management, to adapt this period of transition. But when you look on the very long term with interest rates very high or very low, and unfortunately, I'm old enough to have faced all this kind of situation, there's no correlation because this is not our job, to be this kind of intermediation between savers and borrowers. The real matter is between savers and borrowers. It's not so simple to adapt, but this is simply a matter of adaptation to a period of transition. So we never said that with very low interest rates it could be catastrophic for us. It is not right to say if rates are very high, it could be paradise because many things can offset the situation. When interests are low, you have much more loans, lower level of cost of risk. And when interest rates are very high, you have lower level of loans and higher level of cost of risk. But at the end of the day, what you must manage is the gap between the liability side and the asset side. So the most important question, the most precise question is about ALM, our ability to be prudent to face at the short term when rates are moving, decreasing up or -- I hope it was useful for you.

But we provide data in our document, and it's -- I think it's EUR 700 million for 50 bps increase. If it is parallel, it is a 3-year time horizon. But for all the reasons, which we explain these figures in itself is just an exercise, I would say, an academic exercise because, in fact, the way translating exactly. I suppose that everything is stable. It doesn't look at the way the increase of rates translate between asset and liabilities, et cetera, et cetera. So it gives you some kind of the fact that overall the impact should be positive, but we have to be cautious on that for all the reasons which has been explained.

Next question. Please, you can.

Yes. It's Stefan Stalmann from Autonomous Research. Thank you very much for hosting the event. I have 2 questions, please. The first one, on insurance, the risk weighting of the insurance business under the Danish Compromise is supposed to come down quite noticeably under the current implementation proposals for Basel IV to 250%. The first question on that is do you see any risk from where you stand today that this may not be implemented and that the outcome will be different from the 250%. And the second question on that is do you think you can make larger acquisitions in insurance on the basis of this risk weighting? Or do you think prudential regulators will be quite defensive on that? And the second question relates to the energy transition issue, which has already been mentioned repeatedly, that clearly will generate quite a lot of extra borrowing for a lot of households and corporates in particular and not necessarily more cash flows for these households and corporates. Do you expect that this will lead to a generally weaker credit quality of corporate borrowers in particular as you have to shoulder these additional investments? And maybe as a function of that, do you expect significant government intervention in this process, let's say, through guarantees, maybe also through incentives on the risk-weighting side?

Thank you. Insurance. And Rich...

Yes. The ratio -- the weighting of the insurance activities. Well, until the regulation is definitely approved, we cannot be sure 100%, but definitely, this seems to be a point that is completely agreed upon at the level of the European Union simply because, actually, 250% is, I would say, a meeting point between people like us that were risk weighting their assets at 370% and some that were risk weighting at 100%. So 250% may look to a certain extent as a medium point, which is acceptable for everyone. So in this regard, we do not take into account risk of seeing the 250% translating into a maintaining of 370%, that's absolutely certain. Do you think -- do we think that an acquisition would be more difficult to conclude because precisely this would allow us to take advantage of this more favorable risk weighting by the ECB? Well, I don't know what -- but actually, if any acquisition were to be made in the field of insurance, we would much more take into account the strategic interest and the business prospects and simply the risk weighting. The risk weighting is clearly component of the financial equation, but it's not because of the risk weighting that we would, I would say, aggressively develop acquisition in insurance that wouldn't make sense.

And if you allow me, there is something which surprised me in your question, which is that supposedly, you give the feeling that the ECB should be reluctant with the fact that we would develop in bank insurance through the contact we have with them, we have not at all this sentiment. So I have not the feeling that if we were to decide to develop in this area, they should have any problem because they perfectly see it contributes to the soundness and stability of our model. But more generally, we are not contemplating at that stage to make any significant acquisition in the insurance market. For one simple reason, which is not stemming from the position of supervisors or regulators, but just about our model, which is based on organic growth and which is based on the fact that we are bank insurance, and we are not seeing the interest of buying at least as this stage, I would say, companies -- insurance companies that would not fit with our model. But it's a question of model. It's not a question of position of regulators and supervisors. Don't be reassured there is no reluctance of supervisors and regulators on the so-called Danish compromise and on the development of bank insurance. On the issue of the credit quality deterioration, which could be one and one of the consequences of the development of the green. I would say that on the long run, it goes, obviously, the opposite way because if you suppose that the rise of the carbon price will materialize in the fact that we start earlier, investing in low carbon energy should reinforce the position of the borrowers. That's the first element. The second is that -- in any case, we are looking at the quality of credit, obviously. The third element is that, as mentioned by the predecessor, we do think that the development of this transition ambition for the whole society in Europe is essential. It is essential for all the reasons you know from a climate point of view. It is essential for question of energy independence, and we clearly see that today. So I'm convinced that for both these reasons, there will be if the need arise, some kind of public support because of this willingness of governments to ensure independence and long-term sustainability. And finally, for all these reasons, we are very much confident and we have the feeling that we have a role to play and market's shares to gain because I mentioned, we have teams, which are very much experienced and we have proven that. So we can also take the best part of the market. and our expertise will help us develop quicker than others in those fields.

Thank you. Next question.

This is Máté Nemes from UBS. I have 2 questions, please. The first one is on cost of risk guidance. I think you alluded to this being a fairly conservative guidance. I'm just wondering if you could give us a sense of the underlying assumptions off of this number. And I would be interested in specifically 2 things. One is the budgeted cost of risk or assumptions around Russia and Ukraine related provisions. And secondly, you talked about some of the macroeconomic assumptions. I'm just wondering if you could give us a sense what sort of, if any, potential rise in unemployment in your core markets are assumed in this number? The second question is on IT investments and digital transformation. I think on Slide 32, you gave a EUR 20 billion total IT and digital transformation budget. Are you able to split that out for us and to run the bank and change the bank numbers if possible? Because clearly, when I look at your digital agenda, some of these aims are quite ambitious. So clearly, you'll need an adequate budget for that.

Cost of risk...

Yes. On the cost of risk, first, we don't provide guidance. So it means that the assumption that we make is not a guidance. We don't say that we foresee a cost of risk as high as 40 bps in 2025 or over the duration of the plan. Simply, we say that the target of profitability that we set is compatible with such a level of cost of risk. That's the way you should look at it. Second point, do we embed in this assumption, a specific element regarding Russia and Ukraine. We haven't made specific assumptions regarding specific subjects in this conservative assumption. But regarding Russia and regarding Ukraine, I think that, of course, we are going to talk again about it when we publish Q2 results. But what I've said when we published Q1 results was regarding Russia, that if the situation was not materially evolving, we shouldn't be led to an increase in the prudential provisions that we've taken. And the only move that we could be facing would be simply a default of 1 of the names of the portfolio. And regarding Ukraine, what we've said is that with the complementary, I would say, provision that we've taken centrally in addition to the local provisions on credits in Ukraine. We've covered as of now, as of end Q1, the total economic exposure that we have in Ukraine. So no specific assumption regarding those 2 areas of risks, but no reason why we should do differently.

Let me add, [indiscernible], if you want that we had very often this kind of question on the next -- the last 2 years, of course, and restate the fact that cost of risk is not solely linked to the level of risk, but it is linked to the level of your previous outstandings in terms of provisions, and the rates of provisions compared to the level of your risk. And when you look at this kind of ratio, we are better than many other competitors that simply prove that we are more able than others to face a worst situation all around us. This is very important because we are always asked about the link with world situation around us. Never the rationale is starting from the level of provisions both for Credit Agricole itself or Group Credit Agricole. And as you probably know, the culture, the tradition of Credit Agricole is to be very prudent notably within clear regional banks, of course, but including Credit Agricole because you saw that in the last 2 years that we never decided to get back provisions on which we were not so sure for the future. So we can say, of course, that the future won't be worse. We can say that but we are probably more able than others to face it, if it was the case.

If you allow me Philippe as far as I know, the coverage ratio is now at 74.7% to be compared with something around 70% before the crisis. So we have increased the coverage ratio, which shows the prudence you are alluding to.

IT budget between more than changing. Jean-Paul, you can take okay? Microphone for responsible for digital IT within the executive committee, Jean-Paul Mazoyer.

As Jerome mentioned before, the total amount for IT technology during this plan is EUR 20 billion in comparison with EUR 15 billion for the last plan is significant increase in terms of investment in technology. Out of this EUR 20 billion, we plan to invest at least EUR 1 billion to modernize and to build up capacities in terms of cloud, data digital workplace with both objectives of resilience, quality of service, security, digital capacities, as I mentioned, green IT and also to reduce the cost of the -- run cost of the IT for the group. Currently, the ratio between change and build -- and [ RoNE ], I'm sorry, is 40%, 60%. 60% for [ RoNE ]. It's a little bit higher than what we can expect. And during this period of time, we plan to reduce this -- the cost of -- the running cost for the bank, at least by 5% away to have more capacities to change the bank and change the technology.

Thank you, Jean-Paul. Other questions in the room?

This is Omar from Barclays. Two quick questions. The first one, sorry to focus on the short term. But as Jerome -- last results, I think you mentioned that in your internal capital planning, you saw capital rising in every quarter from now. Does that still apply? Because I guess the language today in the presentation is a bit nuanced with this to 250 bp flow that suggests that maybe capital can come down a bit before going back up? So that's the first question. And then the second question is just on large customers. Maybe I've misunderstood, but I don't really know why you think you should grow so far ahead of GDP. Everywhere else, you're quite conservative. SFS, if you strip out Stellantis, it's low single digits, CreVal, low single digits and LCL low, but I'm not sure I understand the large customers target.

Well, on the first question, I don't think, but maybe I'm wrong that said the CET1 ratio was supposed to grow quarter after quarter. I think that what I had in mind at least was that the CET1 by the end of the year, with the capital trajectory, I was able to make when we publish Q1 accounts was to be above the one that we've stated and published for end of Q1. So of course, since then, the situation has evolved a little bit in terms of rates. But nevertheless, we continue to stick to this ID that 11% as a target is a relevant target. I've explained why when I presented the financial targets of the medium-term plan, again, what I've said is that -- and I already said it before, target is a target, meaning that you can be slightly above or even slightly below, it's not an issue as long as you keep within a decent range around the target, and we've simply provided a little bit more color on what we deem would be a decent range around the target when we presented these figures a little bit earlier.

On the second question -- on the second question, talking under the control [indiscernible], who maybe want to complement my answer. We mentioned a few minutes ago, I think it was Jerome that the growth in risk-weighted assets will be lower in the case of CACIB than the revenues. For the right of reasons. The number # is something related to regulation and the application of Basel IV in 2025, which will have a positive effect on risk-weighted assets. So part of the risk-weighted assets generated by the organic growth of CACIB will be absorbed by this modification of regulation. The second element I mentioned myself was the fact that we want to develop CACIB in segments like mid-caps, which are quite profitable, but also in businesses we do not generate by themselves with what he said. We are talking in particular to supply chain financing, cash management with a growth of 15% per year. And all these reasons on top of the fact that during the past 3 years, we have prepared for new engines for growth in the case of CACIB, notably the development of all the green business makes us confident on the capacity to grow quite strongly during this period and at least in a very profitable way.

Thank you. Other questions? Clotilde are there remote questions?

We have text questions from the chat. So we have a question by Tom Hallett of KBW, who was talking about the expected growth in the SFS division, which is considerable over the next few years and material different to current market expectations. How do you close -- do you expect to close the gap in this division in terms of income, considering the extensive competitive markets like in car leasing?

To be honest, for once, part of it is a scope effect. The fact that we reintegrate 100% FCA Bank in the scope, which indeed makes a difference. While in the past, it was equity accounted. So that makes a first element of difference. The second element is justified by the fact that we have the feeling that we have a capacity to grow quicker than the market. Let's give you a few examples. All the regional banks, who noted the case, will join the FCA system during the course of this medium-term plan. We are developing BNPL with market shares, which is 11% nowadays in France, which is quite significant. So we are confident that we will continue on the same trend. We will also develop consumer credit activities in the different geographies. I'm thinking about Portugal, about Spain, in which at least in Spain, we have just started. And finally, all we have said about leasing will also support the growth. And that's why because we have very big ambition in this field in which we were quite late because we have to recognize it. Our market shares in car financing was lower than the one of our competitors. We have the feeling that through the new organization we have described during the course of this day, we will be able to grow faster than our competitors.

Another question by Guillermo Ibañez from UBS. How open is the group to exit noncore international operations such as Egypt?

You commented that, I think, already. Yes, I think that -- well, the answer is very simple. I think that the way we look at different businesses and not only about Egypt. It's -- constantly, we are looking at all our divisions, in all the businesses, all the banks and asking us, first of all, -- is it aligned with the objectives of the group? Does it bring synergy with the rest of the group? For the time being, the answer in the case of Egypt is yes, because Egypt has a lot of synergies with CACIB. A lot of clients of CACIB are willing to be present in Egypt. So that's the first item. The second element is the question of prudence, every business, which is managed in a prudent way. The answer is, again, yes. Even in the worst moment in the past, in the case of Egypt, we were profitable. And we are not financing our Egyptian operation through Paris. It's 100% financed locally. And the third element is profitability. And the answer is, again, yes. So there is no prospect of going outside Egypt. But as we have demonstrated in the past, we are always reviewing at each and every moment in all the businesses, what is adopted or not. We went out, for example, consumer credit in the Netherlands a few months ago, went out from Romania, Serbia, et cetera, et cetera. And once again, we apply the same analysis to all our activities, whatever the location is.

Now we have a question from Anke Reingen from RBC. She's asking about the acquisitions that have been mentioned a few times, and she's wondering how they fit into the capital path shown on your slides? The path, does it include a buffer for deals? Or if not, where do you make room for deals even if they're small through the dividend?

Sure. Well, what we've said is that our capital trajectory has a margin of maneuver, I would say, of around 170 bps to fuel the growth. So if there is any acquisition to be made and Xavier explained that we would be very strict regarding the financial conditions of such an acquisitions -- of such an acquisition, it should be integrated into this margin of maneuver. But keep in mind that in the last medium-term plan period, we've made more than EUR 4 billion of acquisition and half of it was financed through disposals. So clearly, we have global flexibility, and we've been able to really finance all the acquisitions that we've made within our normal trajectory. So what we intend to do in the future is exactly to maintain this stance.

I'd like to add on this point, something we very often repeat. We are not concerned, and we are not linked to a matter about critic size. Of course, opportunities -- critical size, sorry, critical size. Of course, opportunities can appear. We can look at this point. But differently from many other competitors, we are no matter about critical size, we are the tenth large rank in the world. And thanks to this special organization, I tried to explain to you, we can say that each of our entity as a critical size because they don't work in solo. They were supported by all the different business lines of the group, and this is very comfortable for Credit Agricole Group, really to be able simply to look at opportunities without any strategical constraints on the group.

There's a last question from the chat regarding the short term, regarding the fact that there was a target of 2022 net income of EUR 5 billion. Can you please advise how you can achieve the EUR 5 billion this year? Sorry, this was from [ Tony Christ ] from Millennium Capital.

Special question about the guidance for the current year. So this is for you, Jean.

To a certain extent, actually, what we are publishing today is a reset of all our financial targets. So we forget the previous targets that we have actually met last year, 1-year ahead. And we reset our targets for 2025 now is the new horizon. To be more serious, what is important in our mind is to continue to stick to the ratios that we had set for as targets for 2022 and the cost income target, the return on tangible equity target continue to be our drivers and will continue to stick as much as possible to those targets. When it comes to the net income of the year, as Philippe just mentioned, we don't like the idea of giving a guidance for the current year. So I'm not going to comment on this last issue.

That's all from the chat. That's all for this room too. Okay. So thank you so much. I hope this meeting was clear and useful for each of you. Thank you so much for having been present and connected. I hope to see you soon. I invite you to a friendly lunch. I hope to see you soon once again. Thank you so much.