Crédit Agricole S.A. (ACA) Q3 FY2025 Earnings Call Transcript & Summary

Good afternoon, and good morning, everyone. Welcome to Credit Agricole Fixed Income Call focusing on the publication of the Medium-term Plan 2028. I am Romain Beillard, heading the Financial Institution Group DCM in Paris. I have the pleasure to have with us today Cecile Mouton, heading the Investor Relations and Head of the Financial Communication for Credit Agricole S.A. and Olivier Belorgey, Deputy CEO and CFO for Credit Agricole CIB and also heading the Treasury and funding for Credit Agricole Group. As usual, Cecile and Olivier will go through the presentation. As mentioned, focusing on the recent publication of the medium-term plan. If there are any questions on the Q3 results, we'll be more than happy to answer. And we'll also leave the floor for more questions at the end of the presentation. With no further ado, Cecile, I'll leave the floor.

Thank you. Good afternoon, everyone. I'm very happy to see you again. It's been quite a long time. But as you know, this was for a good reason. We were preparing our new strategic plan that we presented to the market last Tuesday. So it's now launched. It's called Act 2028, A for acceleration, C for cohesion and T for transformation. And I'm very pleased to share with you now the most emblematic strategic initiatives that it includes. But let me start with what we want to be. In fact, we are facing really 3 challenges as of today. First is Europe competitiveness. Europe is lagging behind the U.S. in terms of productivity, and it needs to invest massively in energy, in defense, in AI, et cetera. The banking sector is facing an intensified competition due to digital and AI. We are seeing this fragmentation of the relationship and this intermediation of banks taking more and more space. And we have a social and environmental transition that are going very fast. We are talking about climate, of course, but we're talking also about demographic transition with the aging of the population and the great wealth transfer that is coming soon. So what do we want to be? We want to be a leader in Europe. We want to leverage on our presence in several countries in Europe, in France and in Italy, of course, but not only we want to further develop in other countries. Two, we want to be a leader in new technologies. We do not want only to use them. We want to master them and it's very important for our security, efficiency and for the value proposal that we are making to our clients. And three, we want to be a leader in transitions. Transition bring challenges, but also opportunities, and we want to pave the way on those topics. So as a whole, I would say we want to be a concur group, a group that expands, that sizes opportunities and that is creating value for its clients, its shareholders and bondholders and for all the communities. If you were to really take away only 3 major strategic targets of this plan, it would be those ones. First, we want to have 60 million customers in 2028. We have 54 million in -- at the end of 2024. We want to generate nearly 60% of our revenues outside France, starting with 55% in 2024. This is for -- and we want our cost/income ratio to be below 55%, which is to be compared to a cost/income ratio pro forma in 2024 at just above 56%. And of course, those strategic targets go with ambitious financial targets that I will let now Olivier present.

Good afternoon, everyone. So in terms of the main financial targets, in terms of net income group share, we want to reach a level which is above EUR 8.5 billion, starting from EUR 6.9 billion in '24, which means almost plus 25% in terms of net income group share. In terms of revenues, the CAGR for the plan is -- has been targeted at plus 3.5%. It has been considered a little bit cautious by the market. And effectively, Credit Agricole generally delivers more, but we have to precise the fact that this is taking the hypothesis of only organic growth. And we will see further in the presentation that we have some strategic room of maneuver in order to deliver more than that. In terms of Cecile was mentioning that we want to transform. We want to be a leader in new technology, and we plan to improve the cost-income ratio. On a pro forma basis in 2024, the cost-to-income ratio is at 5.4%. So we intend to decrease it below 55%. It means that we clearly aim at delivering productivity gains. In terms of return on tangible equity, we are already delivering 14%. So what we want to do is expanding our footprint in terms of client base, in terms of product -- range of products and services, in terms of net income group share, keeping the very high level of return on tangible equity that we are currently delivering. Last time, we were targeting and committed to deliver more than 12%. We have effectively delivered 14%. And for this time, we are a little bit more ambitious because we commit to deliver at least 14% -- for Credit Agricole S.A. level, the CET1 ratio will -- the commitment in terms of CET1 ratio will remain to be above 11%. So no change in this regard. This is something which is well accepted by the market and which aims at optimizing both for equity holders that count on a good return and for bondholders, which anyway -- for which anyway the relevant perimeter is a group perimeter, and we will come back on that. So for Credit Agricole S.A., we stick commit to be above 11%. In terms of payout ratio, so this is a slide which is extracted from the equity presentation. For the payout ratio, once again, we will keep our current strategy, which is to pay a dividend, 50% in cash. We just adapted ourselves to some market practice, which become more and more common, and we commit to pay an interim dividend starting next year. So now Cecile, I give you the floor for further details concerning how we target to do that.

Thank you, Olivier. So as I was saying in the beginning, A is for acceleration, cohesion and transformation and really the 2 pillars of this plan are acceleration and transformation. And let me start with acceleration, and I'm going to go straight away to the next one and to explain to you how we're going to first accelerate in France. France is our domestic market. We have 3 brands in France. And really, what is the challenge here is to better articulate our 3 brands. First, with the Credit Agricole brand, so with the regional banks. The regional banks are universal banks serving everyone. This is how they were built at the beginning. And this is really what they are going to continue to do. So serve everyone at any moment everywhere with still maintaining this close link with territories and with a strong objective, in particular on young customer, which is a little bit detailed on the right-hand side of the slide. The idea is really to propose, and this is something that we expect to launch next year, a disruptive approach, digital approach tailored to the new trends, uses what young customers are expecting from a bank, in fact. SCL is completely reshaping its relationship model and is going to focus on 2 axes. First, is going to propose a fully digital service for clients that are independent and want to stay independent and with the objective to really optimize the cost to serve with this first relationship model. The second focus will be on affluent customers. And for affluent customers, what LCL wants to do is to propose a premium offer with wealth management services with enhanced advice, et cetera, et cetera. But really, the idea is for LCL to focus on those who are entrepreneur, those who move forward as I say. And last, our third brand, before Bank, so our digital bank has recently accelerated on its customer capture, which is now reaching something like 400,000 clients. But the idea for -- before Bank for the coming years, it's really to accelerate the development of its saving and investment platform. So it's a kind of pivot on a digital savings solution BforBank is going to propose to its clients. Altogether, our 3 brands in France have the objective to capture 8 million new customers in the coming 3 years, so until 2028. Acceleration in France, but also acceleration in Europe, and this will be the second. First, in Italy. So Italy is a country where we have already a long-time presence. We've been building setup in Italy over the past 25 years. It's now our second domestic market. We have 6 million customers as of today. It represents 16% of Credit Agricole S.A.'s results in 2024. But we have the objective to continue to develop, so to amplify this momentum -- growth momentum and to reach the 2 key figures that you can see here, 6.5 million customers and a contribution reaching 20% of Credit Agricole S.A.'s earnings in 2028. How are we going to do that? With the same growth levers already mobilized and really relying on the organic growth. So that means capturing customers across all strategic markets. And when we say capturing customers, it's not only we say Italia, it's through all the business lines that are present in Italy, so Agos, [indiscernible], Amundi, insurance, CIB also. We want to do that by creating a digital bank for professionals. And for that, we are going to capitalize on Blank, which is a platform that we have developed in France as we have space to become really a leader on that market in Italy. We want to increase the cross-selling and just to give you an example on how we want to do that is it's with a better use of data between the different business lines. And we want to strengthen Credit Agricole brand, which is already very well recognized in Italy. In fact, when you look at different surveys, we are already, for example, ranking #1 in terms of client satisfaction. So we want to strengthen that and to build upon that also. We will be also attentive to external growth opportunities in -- but the development in Europe is not only in Italy, we want to further develop also in other countries and we are going to start by Germany. So in Germany, in fact, it's not completely new. We are not starting from scratch. We already are present in Germany with 1 million customers, EUR 15 billion of savings outstanding and EUR 11 billion of consumer loans outstanding. We are present through essentially 2 business lines, and I'm talking about individual clients. We present with Credit, which is an entity of Personal Finance and mobility with 20 branches in Germany. we are present also a lot through Credit Agricole Auto. What we want to do in Germany is to create Credit Agricole Dutch. So Credit Agricole Dutch is not a new entity. It's, in fact, an umbrella brand that we're going to use and which is going to aggregate really all the activities that are already present in Germany. We are going to build upon our strong digital and data expertise and notably the one of Credit Agricole Personal Finance and Mobility. And the idea, what do we want to propose to clients is really a full range of products, but we will start with savings solutions and first with deposit solutions, something that we are already doing, as you can see with the EUR 15 billion savings outstanding that I was mentioning. And we are going also to propose everyday banking services. So this is something that we expect to launch quite quickly. It's next year, in fact, in 2026. And afterwards, we want to complement this offer with a full range of savings solution. And there, we will be able to bring all the solutions, products that we -- that our product factories within Crédit Agricole. can propose to all types of clients. And we want also to propose insurance products and all this is scheduled for 2027. And we will also, maybe last point, build all this upon the technological tool that has been developed by before. This is important that I mentioned this because it shows you that this is not something which is going to cost a lot to Crédit Agricole. We are talking about less than EUR 50 million because we are, as I mentioned previously, really building upon what we already have, which is was maybe separated, but we are going to put all this together to create this Crédit Agricole. And as we expect it to be a success and the objective that we set is to have 2 million customers at the end of 2028. We also have the intention to develop this model elsewhere in other countries, in neighboring countries of France, could be Spain, could be Portugal, Belgium, et cetera. We have also other initiatives in Europe. And I will highlight 2 in particular. The first one is the pan-European digital savings platform that we aim to launch, which is, in fact, completely linked with what I've just described with the adoption and the development in Germany and in other countries. This pan-European digital saving platform is something that we will be able to launch quite rapidly. It will start also in Germany, but with the objective to be developed in 8 countries in the end with this objective to have more than EUR 40 billion of outstandings at the end of 2028. And we have also a strong initiative with mid-caps in Europe. So of course, we already have a lot of clients within this population in France. But here, the idea is to develop outside France. And for that, we're going to focus on 2 axes. First, we're going to focus on 4 sectors in particular, sectors that are strategic for Europe, for its sovereignty and sectors in which we have really a recognized know-how and expertise. I'm talking about agri-food, defense, tech and energy. So this is the first axis. And the second one is that we are going to focus on 2 geographical areas. Those geographical areas were designed as there are areas where we have strong trade flows. So in fact, there are areas where those mid-caps are active at the moment. And it's also one of them is really linked to the potential as we can see with the future reconstruction of Ukraine. So those 2 areas will be France, Germany, Italy, the first one. And the second one will be Germany, Poland, Ukraine. Moving on to another initiative and another topic is -- which is about the transition. First topic, climate and environment transition. So this is something on which we have been already very present. We have a strategy in terms of climate that we have presented deeply in -- during 2 workshops in the past years. So what we want to do there, we just want to continue to be a leader in those transitions. What it means? It means that, for example, if you look at this green bond ratio, we wanted to move to 90-10. In other words, for every euro financing fossil fuel, we will finance EUR 9 for ecological transition in 2028. And we also commit to be very present in the financing of those transition and we commit to this figure of EUR 240 billion of financing in 2028 for those transition -- the second point is that we are also launching 2 strong initiatives for nature and which are detailed here. Capital Natural, which is a program to design nature-based solutions and ecosystem restoration. And we will also launch this climate and nature Force, which will be, in fact, an internal network of experts to develop innovative method and computation for climate and biodiversity. So that's what was climate and environment. And then other types of transition, but a very important one is the demographic transition with several topics, wealth transfer, retirement savings and aging well. In fact, on those topics, for example, the first one, wealth transfer, what we know is that in the 10 coming years, we will have EUR 3 trillion, which are expected to change hands in the next decade. This is what we call the great wealth transfer. And in terms of retirement savings, we know that people over 60 will double by 2050. And it's also something that we read in the survey, 3/4 of French people say they feel a deep concern about their retirements due to the pressure on pension reforms notably. So we think we have a role to play here, and we want to be very present and to become a trusted partner on all those topics. We want to deliver investment solutions for all schemes in France. We want to propose new offers in Italy. We want to strengthen also our leadership in individual retirement saving. And this is what will be the key objective here will be to be #1 in individual and group retirement outstanding in France by 2028. And Amundi, which is really creating a new business line for this aims at having more than EUR 75 billion of net inflows in retirement savings in Europe through this plan. All this, all what I've just presented, all the acceleration initiatives should lead us to an even more balanced and diversified model as shown in the different pie that you can see here, so be it split by business lines, by geographical areas or by types of customers. I'm now moving to the transformation. So as we already said, transformation is key. We aim to have a cost/income ratio below 55% in 2028. And in fact, we are really facing 3 challenges. We need to be to go faster. We need to be more efficient and we need to be more agile in the coming years to be able to face all the challenges and to deliver all the initiatives I was talking about. To make it simple, in fact, there are really 3 main axis for this transformation. First, we want to invest massively in new technologies, for example, in AI, of course. We want to build shared technological foundations. For example, we want to have an AI factory for the group, which will be able to provide assets and tools to all the entities of the group. We are going to create a data marketplace also, and this aims really for us being able to share data across all entities within the group. And for example, we want also to create common platforms. We want to create a KYC platform for the group, and this will enable us to gain 50% of efficiency gains on compliance in the coming years. And third point, we want to simplify, simplify our organization. So this is really important. This is not completely new. Of course, we've always been very attentive to simplification of processes, simplification of organization, but we want to intensify really this lever. And because we -- it's also the result of all our history, 140 years of history, we have accumulated layers and layers of maybe complexity due to regulation, due to evolution of product due to all the processes that we have implemented in the past to be able to have such a wide range of services and products to propose to our clients well, we want to simplify all this, and we want it to be really a core management principle for the coming years. Example, when you create a new product, you have to consult another one. When you create a committee, you have to consult another one, et cetera, et cetera. So this is going to be very key. And now how are we going to succeed in all that? How confident are we in such an uncertain environment? Many reasons, but I will leave the floor to Olivier to detail those...

Thank you. So of course, we will leverage on our strengths, meaning our, our decentralized model, our highly committed employees, but also, of course, on our strong financial KPIs, among which our very prudent risk management and starting from this point, we have made the hypothesis that during the course of the plan, so meaning for the next 3 years, the hypothesis in terms of cost of risk will remain the same one than for the previous plan. in terms of figure, 25 basis points across the cycle, could be a little bit higher, could be a little bit lower at Credit Agricole Group and 40 basis points for Credit Agricole S.A. I remind you that at the end of September for '25, we are at 27 basis points for Credit Agricole Group and 35 at Credit Agricole S.A. level. So despite the fact that there are some potential, I would say, weak signals that demonstrate or evidence of the fact that there is a slight deterioration of the economic situation, we are confident to keep these kind of figures. That being said, anyway, we have, as I was saying, a very cautious way of managing our exposure. And in terms of amount of provision that we have versus our impaired loan at group level, we have a total amount of provision, which represents 3 years of potential losses, taking into account this hypothesis of 25 basis points in terms of cost of risk year after year. And for Credit Agricole S.A. level, it's 1.6 year, once again, taking into account the 40 basis point potential cost of risk. As you can see, for Credit Agricole, this is the, I would say, safest position versus our European peers. In terms of financial commitment. We have, I would say, adapted, amended our previous commitment in some areas. First of all, in terms of liquidity, you probably remember that we were committed to be in terms of LCR above 110%, both at Crédit Agricole Group level and Crédit Agricole S.A. level and for NSFR above 100%, both at Credit Agricole S.A. level and Credit Agricole Group level. First of all, liquidity is perhaps the most fungible asset or liability across the group anyway due to the internal support mechanism due to the way potential liquidation or resolution could work. Liquidity is management of liquidity has to be performed at group level. So in order to simplify our financial communication, we have just kept a commitment at group level anyway for Credit Arico SA. It's our internal way to manage the buffers here and there between the different entities. In terms of commitment, we have more or less adapted to our actual management and/or to our peers, meaning for the LCR, we were effectively managing around 130, to be honest, 140, 130, depending on the way our competitors are managing. Our objective is not at all to goal plate the LCR. It's more or less to be within the bulk of our competitors. So here, once again, to reaffirm the fact that we don't need to go plate, but that obviously, we manage within the band of we manage it within the band. So we commit here to be within the 110%, 130%. In terms of NSFR, the last one we have published was 119%. So once again, we take into account our current management and the fact that we are structurally due to our business mix largely above the 110%. So more or less, we indicate here that we will manage between 110% and 120%. This is also possible in terms of management and the way we manage the buffer because we have, and we can come back on that if you have some questions, because we have a very, very ample level of reserves, not only HQLA reserves, which are effectively taken into account in the LCR calculation, but also reserves that are eligible to Central Bank, even already placed to Central Bank and which provide us with ample security on top of the LCR calculation. Concerning the capital I've already mentioned that for Credit Agricole S.A., we do not change and we keep to the commitment to be above 11%. But the real point is not there. The real point is the fact that at group level, we continue to keep and to take the commitment to remain above 17% despite the still headwind that we will have to face in terms of CRR3 implementation because FRTB, for example, is not yet enforced. The input floor concerning financing of real estate is still to come. So despite all these forward headwinds, we will continue to keep the 17% commitment. And on top of that, it has been indicated during the investor presentation that we also intend to keep 17% or above 17% when the output floor will be -- will enter into force. So this is a very, very strong element to have in mind. In terms of TLAC, once again, we have, I would say, adapted to reality. The former commitment was to remain above 26%. But in real fact, we were managing at 27% roughly. So we acknowledge the fact that we manage more or less at 27%, once again, in line with the bulk of our competitors. So for this plan, we commit to be above -- around 27% -- then next slide, sorry. perhaps one word about the way we appreciate or you can appreciate the evolution of our room of maneuver at Crédit Agricole S.A. level. So starting from the CET1 level in '24, 11.7%. Anyway, it's also the level at the end of September, 11.7%. What will be the main drivers of the evolution of the CET1 of Credit Agricole S.A. First of all, versus the situation in '24, we have benefited 1st of Jan this year of an improvement of our CET1 ratio due to the implementation of CRR 3. Part of it comes, we have already explained that from the fact that at the CIB level, for example, we have no internal model for credit conversion factor. We were using the standard factor under CR2, 75%. Now we use a standard factor 40% of CR3. It means lower capital requirement. So plus 50 bps, but you have also minus 40 bps for the other elements of the 3 that are not yet implemented, FRTB and the input floor for real estate financing. More or less, it will be balanced across this entire period, '24, '28. Of course, when you talk about the evolution, you have to take into account the net income that is generated minus the distribution, so 50% dividend in cash plus the AT1 coupon. Once again, we will pay an interim dividend. And then you have also the capital requirement, which increased naturally due to the fact that within this plan, we have taken the hypothesis of an organic growth. So organic growth, nevertheless, means more RWA in order to develop ourselves and to finance the economy and our clients. This is the 250 bps right-hand side. And then as you can see, we have still a room of maneuver, which represent, if you do the math, 150 bps. Our group CFO, Jerome Grivet, has mentioned during the investor presentation that -- it represents more or less EUR 6 billion to EUR 7 billion of capital, which is potentially there in order to finance some M&A operation. M&A operation that we do not have in the radar today, but that anyway are possible, but we will continue to meet the criteria we have for M&A operation, meaning return on investment above 10% and this is important and return on tangible equity above 14% in order not to dilute our target of having an ROTE above 14%. So this is some room of maneuver, which will help us anyway to potentially deliver more than what is today written in our KPI and make us pretty confident to at least deliver what we have disclosed. If it is not used because we do not find any M&A operation that meets our criteria, potentially we can distribute it as an extra dividend. So that was, I think, worth to mention. So next slide. In terms of funding. So let's come now to the funding plan. Perhaps 1 or 2 words concerning the funding plan of this year, '25. So we have -- the plan was to issue at Crédit Agricole S.A. level EUR 20 billion. As of now, we have issued EUR 21.5 billion roughly. So more or less very close to what was indicated end of last year. As you can see, and we are very proud of it, it is very diversified in terms of currency, for example. And if we have been awarded by IFR, it was clearly -- one of the reasons was clearly this diversification of our funding, a lot of currencies. As of now, and if you put apart the covered bond, which are effectively in euro because the assets are in euro, for the preferred senior, senior nonpreferred and Tier 2, we have only issued 25% of our funding plan in euro. Everything else, 75% has been made in other currencies with a premium for diversification, which is almost this year because we have taken some good opportunities in dollar at the beginning of the year in some other currencies afterwards. For next year, and we provide, I would say, perhaps very early in the process. For next year, given what we intend to do in terms of growth, what we intend to raise in terms of liquidity from our clients, our funding plan should be slightly lower at EUR 18 billion. The need for subordinated and TLAC debt should be roughly the same than this year, meaning EUR 12 billion. Thus, the adaptation comes from the covered and preferred senior space, where we should issue only EUR 6 billion. We continue -- we will continue to rely on diversification. And for example, this year, because of the market conditions, because of some different factors versus '24, we have not issued in CNY, but we have added a new currency with the Canadian dollar. So be sure that next year, we'll continue to have a lot of diversification in terms of currencies. This is the way we issue our public debt. So the debt issued by Credit Agricole is a debt which is framed within the pier. So EUR 21.5 billion roughly. This doesn't include AT1 issuances because we manage AT1 clearly with a capital requirement intention. And -- but we have also other entities that are issuing in the market, public debt for, once again, diversification purposes for consumer finance, the Autobank, for example, because we want our consumer finance business to be self-funded above 80%. Credit Agricole Italia, once again for [indiscernible] and to finance our activities in Italy in order to lower the Transform flows. Our insurance entity for their own needs, and we have decided to issue from this entity in the market, and we replaced progressively all the internal debt by external debt and so on and so forth. Overall, it's a plan of EUR 30 billion that has been issued in '25, 2/3 from Credit Agricole S.A. and 1/3 from the other entities. In terms of AT1, we have issued so twice this year. For next year, as you can see, there is no call date or for a very, very little amount, neither in '27. So we will see what are our potential needs given our growth and the development of the business, but do not really count on the potential call for us to issue new AT1. And as you can see, we have also a large bucket today in terms of AT1, 2% at group level without any shortfall, even with some windfall in terms of AT1. So we are very safe in this regard. One last word concerning our green issuances. First of all, I want to highlight the fact that we have issued this morning our social framework. So that's something which is new and will allow us at group level to be more comfortable to issue social bonds. But in terms of ESG, so either green, either social issuances, we are among and perhaps the biggest issuer of ESG bonds. Once again, 2/3 in green and 1/3 in social in terms of outstanding, so EUR 20 billion and EUR 10 billion, respectively. What's interesting here is to notice that we issue. It's clearly a group framework and that we issue across several entities, Credit Agricole SA as the legal entity, but also our SFH -- but we have also Autobank, Italia, Credit Agricole CIB through Green ETL. So it's clearly a comprehensive framework that we have established, and we are clearly involved in this market very intensively at every level of the group. For the social, it's more linked to our retail entities because of the way to redirect the proceed. It's clearly easier for us to downstream it to our retail entities. That's it for me. And now we are ready for questions with Cecile.

First question, are there any initiatives to expect in relations with stablecoins? That's a very interesting question. Thank you for that. I think that in terms of stablecoin or perhaps more broadly in terms of tokenized finance, we are all investing in it, at least, first of all, in terms of trying to understand what kind of ecosystem can be built around it. Concerning stablecoin, it's clearly a question of sovereignty for Europe to also have -- to also develop a stablecoin in euro. Credit Agricole is looking at it, is evaluating the pro and cons. But yes, it's probable that we will be part of one initiative at least. That being said, stablecoin are probably not the alpha and omega of all the tokenized finance. And we are also looking and analyzing some other initiatives, be it tokenized deposit, be it deposit token and so on and so forth.

Next one. So it's about the cost of risk. What factors inputs are you taking into account to come up with a 40 bps cost of risk forecast in your strategic plan? What sectors, countries you believe will underperform increase quality? So it's not really a forecast. It's more an assumption of what -- where could be the cost of risk on average through the cycle. And this is an assumption that is not new because we had the same one in the previous plan and the same one in the one before, et cetera. So why we are maintaining this assumption? Several reasons. First, in fact, it's really linked to the business mix that we have within Crédit Agricole S.A.. And this business mix has not changed dramatically. And when we were seeing the evolution of the revenue split by business line, in fact, it was very, very similar to what we have as of today, so the forecast that we had for 2028. So no change in the business mix. And I would say no new trend. In fact, it's not -- we are not -- we do not think that any sector or country in particular could underperform. It's more on average, taking into account all the sectors and all countries where we are present, we think it is still a good assumption. And we are even more comfortable when we look at the ratio that Olivier was describing just before, showing this ratio showing the Stage 1 and 2 loan loss reserves compared to the cost of risk assumption, 1.6 years for [indiscernible] it's quite comfortable. It's above the average when compared to our peer. And it shows our capacity to absorb shocks that could happen in the plan. So combining all this, we maintain this 40 basis points. And just maybe, one last point, remind -- just to remind that as of -- in 2024 or even more recently on the first 9 months of the year, we are at 34, 35 basis points, so around this level already. So this is why we are comfortable with this assumption.

I'll just come back and complement my answer concerning stablecoin. Well, in this regard, what we want to be at least is to be fast follower and to provide our clients the tools they need. And obviously, what is developing today is tokenized assets and some asset managers, for example, are developing tokenized funds. So as you may have noticed, CAS, our custodian unit has obtained the MiCA license and is able to accept and keep and record tokenized funds and stable coin. So clearly, this is an area where we want to be able to be in the market at least fast follower and provide our clients the tools and the product they need in order to develop their activity. Next question. Can you comment on any exposures to private credit that Credit Agricole has. So before answering this very precise question, one word. We have recently -- or Amundi has recently signed a partnership with ICG in order to be able to provide our clients investment assets that are originated by one of the leader in terms of private credit. So this is something where clearly, we consider either be it at retail level, be it for institutional investor level, we consider that our clients -- for our clients, we need that kind of offer, and we will try to provide that kind of investment for them. This is not I would say this is not exposure to private at Credit Agricole level. This is to provide our clients some access to these funds. In terms of exposure to private credit, it's very, very small today, almost negligible. Nevertheless, we also intend to develop our relationship with private debt funds either in order to finance them, either in order to sell them what we originate and potentially finance them also to do so. But of course, once again, we have a very prudent approach in terms of cost of risk. If we do so, we will only work with, I would say, funds that are already our clients that we know very well with whom we have multiple relationship and so on and so forth. So that's something which will continue to develop, but in a very cautious way.

So you have mentioned to target a cost-to-income ratio below 55% for Credit Agricole S.A. Can you explain what are the main measures? So yes, in fact, it's a combination of different types of initiatives. We have localized transformation plans that are led by each business line. We can take the example of Amundi because we already mentioned it in previous earnings publication. So Amundi at the moment has an optimization plan. It has cost EUR 80 million of restructuring costs during Q3, but this is going to lead to EUR 40 million of cost savings in the coming years. CACIB is also -- and you can comment on this, but has a significant and strong optimization plan for the coming years. LCL and Sa Italia also are reshaping their networks, and it will lead also to some cost savings in the future. localized plans. We have also still a lot -- quite a significant amount to come from the synergies that have to be materialized in the different integration processes that are undergoing. And I'm thinking about the group Petercam and still some cost savings to expect on the integration of the European activities of RBC within CA. And we will have also some cross-functional transformation axis. So the deployment at scale of AI, simplification program that I was talking about, this creation of a group KYC platform, all these initiatives, group initiatives will also bring cost savings in the future.

So I think the next one is for me. What measures do you plan to optimize your capital over RWA? What is your strategy on SRTs? So concerning SRTs more precisely, we already use SRTs, potentially less than some competitors, only some competitors, but we already use SRTs essentially at Credit Agricole CIB level. And we essentially do synthetic SRTs. In order -- within this plan, we have taken theothesis that we will increase our recourse to SRT either at citric CIB level, where we will continue to increase more and more the way we use that instrument, but also essentially at the consumer finance level because so far, the consumer finance unit was essentially issuing securitization for funding purposes. So they were selling the senior tranche and keeping the equity mezzanine and junior tranche. Because -- and why -- and because the cost of release in terms of RWA was not extremely attractive. Market conditions have changed. There are more and more investors interested in that product and the cost of release, the spread have decreased. So it's more and more interesting at this level to develop SRTs in order to enhance the return on tangible equity. So we will effectively use more and more SRTs. For the SME assets, first of all, at the regional banks level, there is no need absolutely to issue some SRTs in order to release capital. They have more than they need in terms of capital. So the scope could be either LCL or Credit Agricole Italia. But so far, we consider that the cost of release is not so attractive. So -- once again, we will remain open. We will look at the market. So if it's relative, why not? But so far, it's not so obvious. Next question. In your slide, you indicate a 1.8% AT1 bucket. Your previous target was 1.5%. What is your strategy in terms of AT1? Is AT1 included within your funding plan? So for the funding plan, we -- perhaps very bluntly, we never include AT1 in our funding plan. We consider AT1 or we manage AT1, I would say, separately, it's really a question of capital. Then how do we manage it? First of all, we manage the buffer versus MDA. So given our CET1 ratios at group level, if we were only looking at group level, no need of AT1 at all, to be honest, because we have ample buffers. But as AT1 are issued by the single point of entry by Crédit Agricole S.A., Crédit Agricole S.A. is also concerned by the buffers when talking about AT1. So we have to manage that. So we manage it in order to keep at least at Crédit Agricole S.A. level because at group level, anyway, there is no question to keep sufficient buffers versus MDA. So today, we are above 300%. So clearly, slightly above what could be seen as the optimum. But first of all, we still have -- we already have announced a call and it will be slightly lower at the end of the year. And we have also taken the opportunity of very good market conditions to issue AT1, having also in mind that we are in a development mode. We are growing -- we have growing businesses and that it was -- we were considering -- we have considered it was good to take that kind of good opportunities in terms of market conditions. Once again, it's indefinite maturity in terms of AT1 depending on market conditions. what are the potential impacts of France negative rating action on the CASA rating? So perhaps we can concentrate on the near future, I would say. So starting from the right-hand side of the slide, Fitch and S&P have very recently downgraded France. Now for these 2 agencies, the outlook is stable. So I consider that in the near future, there is no risk of further downgrade for France, so no risk for Credit Agricole in this regard. Concerning Moody's, France has recently been placed under a negative outlook. So negative outlook can lead perhaps not, but can effectively lead to downgrade. But Moody's has also, I would say, published and reaffirmed that despite the fact that the French sovereign is under negative outlook, the outlook for Credit Agricole is stable. So we have suffered last year or 18 months ago from a downgrade with Moody's because the French sovereign was downgraded, and we were not no more eligible to the implicit support of the sovereign. We are no more, I would say, linked to this element. We are not yet capped by the selling of the rating of the sovereign. So once again, I cannot speak on behalf of the Credit Committee of Moody's, but negative outlook for France, stable outlook reaffirmed for Crédit Ag S.A. I do not expect any consequence of a potential downgrade of the sovereign by Moody's in the near future.

Thank you, Cecile. Thank you, Olivier. I think we are ending the Q&A session or maybe the last one is coming or is there any further question on the investor call? Okay. So I think there is no more question.

Cecile. Cecile. A new one is...

Okay. You have 8 million gross customer capture target in France. Is it versus 2024? If yes, how much has been already captured? This amount is quite high considering the size of the country and the competition landscape. Still it doesn't translate that much in our revenue forecast. Does it mean that the bulk of the revenues gain will be at the [indiscernible] et cetera? So yes, it's very ambitious. It is really a target which is based on 2024 figures. How much we've already capture. I have not made the calculation just before, sorry, but it's in all our presentations and the quarterly presentation that we've published already this year. So -- and yes, it's going to be competitive. I mentioned quite quickly but the initiatives that we have with young customers, it's a very significant one. It's concerned in particular the regional banks, but it's -- and in fact, for example, young customers are type of customers for whom we've been not very good in terms of client capture recently because they were more attracted by the new bank and digital banks. So for example, with young customers, we have a very, very high ambition and this will be -- this will really rely on this new initiative, new approach that you will see next year. But when we say it's disruptive, it's become -- it's going to be completely different to a usual banking application with the new cost from the young customers, et cetera. But there are other different figures that are also presented in the presentation for affluent customers is plus EUR 1 million or so. And there, it's really leaning on regional banks, but also on for a lot with professionals, et cetera. So all in all, yes, it is ambitious. It's true. It's in our revenue forecast, yes. We haven't looked at it. But for example, for LCL, we are targeting an increase of revenues of plus 3% to 4% on average per year throughout the plan. We don't give any figure for the regional banks, but it's something that you can see also in the forecast revenues. So -- and this is the question [indiscernible].

And you have a last one. From a liquidity point of view, can you please explain what is the rationale of already having posted liquid assets not eligible to LCR at the Central Bank? So for me, it's really -- thank you for the question, and it's really key. Of course, one of the -- yes, one of the common metric between banks is the LCR ratio. and you have some banks at 130, some bank at 150 and so on and so forth. But well, is it really meaningful? Anyway, if you have a problem, if there is a crisis, if the market think or begin to see that your LCR ratio is decreasing, decreasing, decreasing, they will cut the lines. If you take another angle, Credit Suisse went bankrupt when its LCR ratio was still above 130%. So the LCR ratio is an interesting metric, and it helps to compare banks. But for me, it's not at all, not at all sufficient. And what we consider being very strong at Credit Agrico level is the fact that on top of the liquid assets, so in blue, starting from the bottom in blue, already taken into account in the LCR ratio, we have on top of that around EUR 150 billion of liquid assets that we can use if necessary, out of which the vast majority essentially self-retained covered bonds or some eligible loans to central banks that are already pledged to Central Bank so that we can have access to this amount, to this liquidity overnight. And when I talk to some people at ECB level, effectively, when you talk about liquidity, they can discuss about some points here and there, methodological here and there. But at the end of the day, when they see -- and they know the figures because they know what is already posted at ECB. -- when they see these figures, when they have these figures in mind, of course, end of the question, end of the discussion, there is no problem of liquidity atéitricle level. For me, it's something which is very, very important.

Perfect. I think that's probably now the end of the Q&A. So thanks, everyone, for joining. Maybe just reiterating what Olivier mentioned earlier about the fact that Credit Agricole has published this morning an updated framework on the social front. So if you have any question relating to the social framework, please come to the team. We'll be more than happy to answer any questions with the new categories that have been added to the framework. Thanks, everyone, for joining the call, and have a great day.

Thank you.

Thank you.