Société Générale Société anonyme (GLE) Earnings Call Transcript & Summary

Good morning, everyone. I'm very happy and proud to introduce this presentation of Société Générale's strategic orientations in French Retail. In late September, we started a study on the creation of a new retail bank in France through the combination of Société Générale and Crédit du Nord. During the last 2 months, more than 500 people work to design this new bank: executive, obviously, but also bankers who interact daily with customers, and experts who master new technologies. I would like to thank all of them. They work on this project with team spirit, sense of innovation and [ patience ]. Thanks to their hard work, we are here today to present a new retail bank in France, a bank with ambition for its clients and its teams, a bank efficient, profitable, a bank with character. The same dynamic has been in action in Boursorama to prepare the next step of the exciting trajectory of this bank. To begin with, I would like to remind you what is the retail banking franchise and what are the fundamentals of our strategy. Our 2 divisions, French Retail Banking and International Retail Banking are serving 25 million clients, corporates, professionals and individuals in Europe, including France, Russia and Africa. Retail Banking is a strategic asset for the group, accounting for 54% of its revenues. We aim for a leading position in the countries where we operate. We are in the top 3 positions in most cases. Our product lines are stronger, notably consumer finance, and we have developed important synergies with the other businesses of the group. As you know, this business is undergoing major changes. They are quite similar in all geographies and have been accelerated by the pandemic, changing clients' expectations, acceleration of the digital trends, new entrants, uncertain microeconomic environment and increasing regulation. In this context, our vision for the future is based on 5 key aspects: the structural actions in all our retail banks. First, it is critical to implement differentiated relationship models to address the diversity of our customers' needs and for each of them to deliver a best-in-class client experience. Simultaneously, we develop new business models organically or by acquisitions. Our most impressive success has been Boursorama, but I could mention many other initiatives: Shine in France, YUP in Africa and more to come. Of course, extending the range of products is also essential. We are as well very aware of the utmost importance to reduce the cost base. It is key to ensure the financing of a project and the profitability of our business. Finally, we act according to the highest standards in social and environmental issues, risk and compliance. 5 main levers are at service of this vision. First, expertise. It goes without saying, I mean financial expertise, but also talents and skills related to the new trends in technology and data science, digital tools. We are investing a lot in new technologies to deliver client satisfaction and internal efficiency. Use of data. We have built strong data hubs, for sure. Data management and artificial intelligence will be the spine of our new marketing, risk and compliance tools. Open architecture. To deliver to our clients the best offer, it is necessary to build strong partnerships with third parties. As such, the new open architecture for asset management products in France is very emblematic. Finally, sharing best practices and tools across the group. Our new governance with a unique supervision of all the Retail Banking activities will help us to go further in this direction. With this global framework in mind, we can focus now on France. All the challenges I have mentioned are present in France. Nevertheless, the competitive environment is specific with a presence of mutualist banks, which maintain a strong physical presence in the territory. On this slide, we provide with a snapshot of the French retail market. Let me just highlight 3 key messages. France is an attractive market with strong savings rate and dynamic corporate landscape. Trends are positive. The population is growing and funds attract significant amount of international investments. Last comment, the retail banking market is growing and sound. You know the group. We have 3 brands in France. Let's keep Boursorama aside for the moment. Société Générale and Crédit du Nord have achieved a lot in the context of the 2017-2020 strategic plan. Société Générale, with 7.3 million clients, has undertaken a profound transformation. I will focus on 3 points. First, we have made a huge effort to upskill the teams and recruit new talents to reinforce our expertise. A special attention has been given to the corporate and mass affluence segments. We have redesigned the setup, closing 20% of branches and 30% of back offices. We have digitalized most of the client journeys and internal processes. Crédit du Nord, a group of regional banks with 2.4 million clients has also significantly improved its relationship model. We have strengthened the setup dedicated to the professional segment. And for the individuals, we have differentiated customer approaches, relying on a new client segmentation. We have closed 15% of branches and defined new branches format. We have launched the Bank as a Platform initiative and implemented partnerships with third parties. In addition, we have increased cost synergies among the 2 networks. We have mutualized the IT infrastructure as well as a significant part of the systems, operations and transversal functions. Sebastien will elaborate on the next phase, the creation of a champion. I just want to mention 3 points. One, our assets are priceless, attractive and complementary client bases, strong brands, highly regarded franchises in some sectors and geographies, common values, last but not least, great teams; two, now is the right time to go further because the COVID context is pushing for an acceleration, but also because the transformation of our network has been successfully completed. Therefore, we can build on a strong starting point; three, our target is ambitious. Our main goals are to be on the podium in client satisfaction in our 3 core markets and to deliver a solid double-digit return on equity in 2025. Turning now to Boursorama. Benoit will disclose the details of our project, but let me mention that Boursorama has a powerful business model. Boursorama has more than 2.5 million clients. We propose to our clients a product offer which is both simple and comprehensive. The operating model is scalable. We can easily grow from there as we did during the last years. The client base has been multiplied by 2.5 since 2016 with only 100 additional staff. And obviously, we apply in Boursorama the group risk and compliance standards. Boursorama is a well-structured bank, a safe bank. In a nutshell, both the foundation and the momentum are strong. Therefore -- and because there is still an important potential in France for full online banking, our ambition is to reinforce our leadership. 2 main objectives: 4.5 million clients in 2025, around EUR 100 million net income in 2024, rising up to EUR 200 million in 2025, with a return on equity in excess of 25%. A word of conclusion before leaving the floor to Sebastien. I'm convinced that these 2 exciting initiatives, the creation of a new retail bank, combining the strength of Société Générale and Crédit du Nord and the new acceleration of the development of Boursorama will significantly reinforce our position on the French market. Actually, this position will be quite unique with these 2 complementary models. It will allow us to cope with the market changes, to better meet clients' expectation and to deliver a sustainable profitability. I look forward to share our future successes with you and all SG teams. Thank you for your attention. [Presentation]

Good morning, everyone. I'm very happy to be here today. As you know, on September 23, we announced the launch of a strategic study on the combination of Crédit du Nord and Société Générale. Before we go into the details, I would first like to thank all the people who have contributed to the study for their hard work and team spirit. Over the last 2 months, there have been an outstanding level of commitment and energy from all of the teams involved in the strategic dialogue. I'm here today to share with you the main conclusions. Let me get straight to the point. Our strategic decision today is to go ahead with the combination of the 2 networks. We have gone as far as we can with the mutualization. So this is the logical next step to fulfill 2 objectives: maximize client satisfaction, and establish a more efficient model. Today, I will share with you our vision of the bank that we are building. But before, I will address the main questions you have raised about this combination by discussing 5 points: the model for clients, the synergies, the IT, the staff and the execution process. Let me start with the central point first, the client. As Philippe mentioned, now it's time to enter a new phase and further shift the relationship model to offer a more personalized client experience and to improve the client journey. Digital is a cornerstone of our model. Wherever relevant, there will be a digital solution. Our bank will be fully digital for the day-to-day banking of both individuals and corporates, with more client autonomy for basic products and a higher share of digital sales. With more digital, branches will be centers of expertise, places where clients discuss their needs with relationship managers totally focused on providing value-added expertise and on finding the right products for clients. Our new bank will offer the wide setup and products offer to each client category. We will continue to develop tailormade solutions for corporates, leveraging on the expertise of an international group. For professionals, the new bank will be the trusted partner for both private and professional needs. We already have a strong market position in this segment, and we'll continue to offer the best digital tools with Shine, for instance. Affluent clients, which represent around EUR 150 billion of assets under management, must be treated differently. They have higher expectations in type of advice and more appetite for value-added products and services. There will be a dedicated setup for these clients with a truly differentiating approach on savings in open architecture. For the individual customers, we will fine-tune our dynamic client segmentation to better target their needs, leveraging on digital and data, while decreasing the cost to sale. This will enable us to maximize client satisfaction. Our objective is to be in the top 3 with our core client base. Corporates, professionals and affluent client. Let's hear what our teams say. [Presentation]

To achieve this objective, we will notably build on the strength of each brand and use the best of each proposition to offer more value to our clients wherever they come from. What is important to understand, as you can see on the slide, is that we are improving the value proposition for each client, whether on offer, on setup or on digital. This client experience will be notably improved, thanks to our capacity to make more focused investment. More specifically, we will also significantly enhance the savings journey of our affluent clients with our new innovative approach in open architecture. Obviously, this combination will generate cost synergies with a direct impact in terms of net cost reduction in 2025, totally in line with precedents from M&A transactions. First, we have a more efficient network, while remaining strong in the regions with the same local presence. More than 60% of Crédit du Nord branches are within 1 kilometer of an Société Générale branch. We will thus reduce the branch network by a further 30% by 2025. Second, we'll have 1 set of central and support functions, 1 headquarters, all central functions merged. And obviously, more efficient support functions, leveraging on best practices. Third, we will have 1 single IT system. Having only 1 platform to run and to upgrade will reduce our IT costs and focus IT development on a single system instead of diluting investment between 2 networks. Let's hear from our expert Bruno Delas on our IT strategy.

Our strategy is to build the new bank model by mobilizing all necessary IT resources and skills to create a unified platform. For the first step, we have chosen the Société Générale platform rather than the Crédit du Nord platform. This is because it is digitally advanced, has rich function with more features and is more advanced in terms of regulation. For the second step, we will consolidate the Crédit du Nord platform into the Société Générale platform in order to optimize our IT costs and to reduce our time to market. For the third step, we will concentrate our change investment more efficiently into 1 single platform. This will, on the one hand, enable us to accelerate the business opportunities of the new bank. And on the other hand, accelerate regulatory aspect and, of course, the digitalization of the platform. This strategy will get us to our ambition of building the next generation of the French Retail Banking IS by 2025. So zoom #1, how will we consolidate our platform? We will do that by a data migration in 3 steps. Step 1, extracting data from the 2.4 million customer of Crédit du Nord platform. Step 2, transcoding this Crédit du Nord source data to Société Générale format. Step 3, loading the data onto the target platform, which will, at that moment, total 10 million customers. These 3 steps will be repeated various times over several months in order to expand the perimeter and the quality of the transcoding data until we obtain the right quality check level. During all this time, there will be no impact for the client and for the adviser. Once we have obtained the right quality level, the adviser and the client will switch from Crédit du Nord platform to the target over the weekend. After this switch, they will benefit from all the new available services on the target platform. Within our IT team, we have the experience and the skill for such a consolidation project as we have already done this before successfully within our group, such as Société Marseillaise de Crédit. In the meantime, we will continue enriching the target platform. So what is our 2025 target? Our target is to build the next-generation of Retail Banking platform. Here are just 3 examples of major business requirements in the upcoming years. Example 1, we want to adapt our level of services, depending on the potential of the client, using the technology of our call center. We will then progressively leverage this technology to all our channels of interaction with our clients. Example 2, we want to pursue the rollout of our mobile and secure workstation for all employees of the new bank. They will have secure access to all collaborative tools and bank services while remaining, of course, in direct touch with clients at all times through various channels. And example 3, we have already started, and we will continue to provide new banking and nonbanking offers and services from third-party partners. This enables us to create a next-generation marketplace, like most big tech leaders have done before. We will also, in the meantime, keep building an open future using our fintech ecosystem, grow our relationship with major tech players and make some of the platform available at European Union.

Now what does this project mean for our employees? A new way of working with more autonomy, more expertise and better tools to help them create more value for clients. It will mean new development opportunities. We intend to invest more to develop the expertise of our staff. Continuous upskilling is essential, and it would enhance their career development. Advice, expertise and commitment are the cornerstones of our model. Needless to say, the transformation will be managed in a very responsible manner, as we have always done in the past. A dedicated human resources setup will be put in place to accompany our staff to adapt to the changes. As you can see, we are embarking with our staff in a project that creates value. Turning to the execution of our project. Let's be clear, we have the capacity to successfully execute. We have the experience, and we also have the right teams to execute. In addition, as it is an internal combination, we know the 2 entities perfectly, and we have mapped all the execution steps. Let's recap what is at stake here. First, on IT migration. You have heard it from Bruno. For all these questions, we have adapted answers with a clear and under control road map. Second, on human resources. We will make sure that our key talented staff are retained. Pertaining to our clients, we will constantly focus on improving their satisfaction, including in the transition period. And we have a clear road map on this point, too. Last, our organization and timetable are designed to ensure successful execution and get significant benefit from 2024 and full benefits from 2025 onwards. IT and legal projects are scheduled to be finalized by early 2023. This time frame is totally consistent with the usual standards to address all these points smoothly. We know that we can count on experienced and committed teams to make this combination a success while maintaining a safe, effective and efficient run. Now turning to financial targets. As you can see on slides, this combination will generate significant cost reduction with project costs in line with market standards. The 2025 RONE target is between 11% and 11.5% under Basel III, equivalent to 10% under Basel IV. Turning to the future. Let me share with you our vision of the clear journey of the bank of tomorrow. On this first slide, you see our clients as they stand today with a significant part of our revenues made with corporates, professionals and affluent clients. We have a diversified and attractive client base, and we are particularly strong in most dynamic regions. Within each category, subsegments have their own specificities and require our tailored advice and expertise. This is what drives our model. Moving on to our ambition. We want to be the winning universal retail bank. In our view, several factors will make the difference. We'll further shift our model to combine the best of digital and human expertise. Leveraging on digital to free up commercial time and focus experts on value-added advice is key to better serve our clients and to allow for accessibility, immediacy and expertise. We intend to maintain a strong regional presence with local expertise, and we will leverage on digital data and AI to further improve the client journey with innovation be it at the heart of our model, which strive to provide the best products and solution adapted to each client's category and subsegments, be it in-house or manufactured by partners. And obviously, we will deliver operational efficiency with an optimized cost base. Of course, we will keep our best-in-class compliance and risk standards. And last but not least, responsibility will be the DNA of our retail model. If we take one of the most important pieces of the model, the use of digital, data and artificial intelligence. We are already very well positioned. Many awards and rankings prove that. In Société Générale networks, digital penetration is already above European peers, thanks to a best-in-class app that we will keep enriching. More broadly and, just using some very illustrative examples, we aim to be the bank which knows its client better to personalize their experience. As an example, we have been the first bank to offer account aggregation with Fiduceo. It now provides personal finance management and aggregation of private banking client assets. These functionalities are strong differentiator in a context where affluent clients are keen to use more digital services. We also want to accelerate to have the best interactions with our clients. To do so, we have to handle the flows and use the right channel for each need. Our project, SG Talk, based on AI, will manage the flows and direct the client toward the best channel immediately. Today, 60% of the day-to-day banking, which can be done fully online, still goes through branches. We estimate that SG Talk it will help us to avoid 35% of incoming calls and emails in branches to focus our teams and expertise. This is also a way to improve experience with bankers. Predictability of client behaviors through machine learning will further help us on interactions. Overdraft predictability is already deployed on SG networks, saving each banker 40 minutes a day. Finally, digital will be used to integrate risk and efficiency standards. Just one example, we want to position the bank as a leader in security and digital protection. And we have the tools in-house like Mosaic, which needs less than 0.5 seconds to detect a fraud on instant payment. Our clients already make good use of digital. And we set ourselves target which reflect our vision of digital usage going forward. For 2025, we target to have more than 80% of eligible products combining physical and online. We aim to have around 30% of digital-only sales on eligible products. And we plan in 2025 to have more than 80% of the corporate offer available with electronic signature. Let's now have a look at the offer for clients. What matters is the value proposition for clients, be it in-house or, as I said, manufactured by partners. This is also the way our IT system is designed. You will find some selected examples on this slide. This illustrates our culture of innovation with many concrete initiatives already launched and more to come. On group expertise, for instance, we'll have local ESG experts to accompany SMEs with their energy transition. Another example is Shine for entrepreneur and very small businesses. A dedicated responsible neobank we acquired this year, which simplified the banking and administrative experience of our clients. We can also mention our internal start-up call and all the resulting initiatives and partnerships. There will be a lot to say as well. But for time's sake, let me focus on our value proposition for savings. Savings is at the core of our retail banking strategy. And we are piloting new business models here to offer our clients the best products available on the market. Therefore, in addition to Amundi, we have partnered with those who do it best. We have teamed up with BlackRock, DNCA, La Financière de l'Echiquier, Mirova and Primonial. Société Générale will be the first large French bank to offer an open architecture for savings with an innovative offer with 7 partners, enabling clients to access the best expertise on the French market and internationally with a systematic integration of ESG factors. We will also be the first retail bank to offer a complete range of SRI funds and environment solutions through open architecture. This will enable us to improve the value proposition for clients with its wide range of offers, combined with personalized advice based on the risk profile and client appetite. Let me now elaborate a bit of the setup. As mentioned, while moving from 2 networks to 1, we plan to remain as close as we have always been to our clients, not cutting any proximity. Regions will remain at the center of the model, bringing reactivity, proximity and understanding of local situations. As I said, we will optimize our network with the same local presence. We plan to decrease our network from around 2,100 branches in 2020 to 1,500 in 2025. And branches will be focused on expertise for clients. Teams will be empowered to better answer our client needs. Decision-making process will be made locally with an agile organization. Let's elaborate on the importance of the local footprint. [Presentation]

To conclude, this project is completely in line with our strategic priorities at group level. First, client centricity, totally embedded in our vision. Second, ESG, at group level, at business level of our clients. It's a key priority for us. And third, efficiency. We are building a more efficient model with significant recurrent synergies. We will be delivering sustainable profitability. Obviously, we could spend hours working through our various initiatives, disclosing our positioning by each category of clients and dedicated strategy. But my time is up, then I will be very happy to answer your questions in the session to come. Let's now turn to Boursorama. [Presentation]

Boursorama reached its position of leadership only 3 years ago and since then has left far behind its historical online banks and neobanks competitors despite a more and more competitive environment, and thanks to a strong growth acceleration. In 2017, our goal was to reach 2 million clients by 2020. With more than 2.5 million clients as of today, this goal has already been exceeded, and the customer base has been multiplied by 3.5 in the last 5 years. Today, in the French market, Boursorama is the leader among challenger banks. Boursorama is a leader in number of clients both in the volume of existing clients and in the flow of new clients. Boursorama is the #1 online broker and the first financial and economic portal in France. Boursorama is by far the most well-known brand among challenger banks, but has also made a name among large traditional banks. And Boursorama is the most appreciated bank by its clients with a high Net Promoter Score of plus 48 and a rate of recommendation of 90%. But beyond growth, our clients are mainly quality clients. They are the ones all banks want. They are young, 36 years old on average, wealthy and active. 84% use the bank every month. In addition and due to our rapid growth, most clients are still recent, and they have not yet fully utilized that potential. To make a long story short, Boursorama is the first challenger bank with the highest growth space in France. To understand Boursorama and its potential, it's key to understand its consistent and unique model. We succeed because we have a strong and powerful alternative banking model. All starts from a full client autonomy, clients become clients, buy products, use services, manage their accounts, take investment decisions by themselves. This is made possible, thanks to an operational model designed for automating all the steps from front to back office. This is the crucial point, the one company is focused every day on this central goal. How can we improve our efficiency to create the best user experience and to generate the best underlying profitability? Keep in mind that Boursorama is a full-fledged bank run by 800 people. The second huge strength compared to competitors is our offer. Boursorama is the only digital bank with a such full range of banking products, in open architecture to get best quality, allowing us to generate loyalty and revenues. In a nutshell, we could say that Boursorama has a full efficiency of a pure digital player with a full range of offers of a traditional bank. Our alternative model generates client satisfaction, recommendation, growth. And at the end, a high level of profitability.

As Benoit just mentioned, our relationship and operational model is our key asset, hard to replicate, it really constitutes our main competitive advantage. It is based on 3 totally aligned elements. First, it relies on our native and digital-only offer. We have no branches. Our clients can access to our full range of products and services through best-in-class mobile apps. We've been ranked top first in France in our mobile app. Second, it is based on our digitalized and automated processes, even on some complex products, 2 examples. In mortgage loan, we produce each year EUR 3 billion, which represents approximately 2% of the market, with only 60 people from front to back. On the consumer loan, already 20% of our production is done with no human touch. Third element of our efficiency is related to the way we manage client interaction. We invested in AI-based solution to be able to answer clients' questions 24 hours a day through our Chatbot Elliot. Elliot is already answering 30% of clients' question and represent from this year the first channel of interaction with our clients. This cost efficiency can be illustrated in 2020. We acquired more than 550,000 new clients with only 8 new people in Boursorama. All in all, the cost to serve our clients is EUR 70, and it has been divided by more than 2 since 2015. Boursorama is also able to equip the client and generate NBI. On average, a client in Boursorama have more than EUR 15,000 in terms of asset and loan, which is far beyond the EUR 500 of assets recorded by new banks. This level of activity can be explained by 2 things: the product themselves. We offer our clients the best value proposition in terms of pricing, performance and user experience, either by proposing our own products or by proposing open architecture, especially on the brokerage activity, or long term savings. It is also related to our ability to use data. We have no salespeople in Boursorama, so we use data to push the right product to the right clients. And more and more we develop solutions to digitally advise our clients, especially in the daily banking and in the saving spaces. We can see this level of activity at 2 levels: macro level and micro level. At a macro level, if you're looking at the evolution, we have EUR 30 billion in terms of assets and loan. This evolution is totally consistent with the evolution of the client base, and each product segment as an evolution beyond the market. At a micro level, if we look at the yearly evolution of assets of new clients, we can see that it is consistent by vintage and that it's been multiplied by more than 3 in the first 7 years of client relationship. Boursorama is best in class in terms of cost efficiency. We can generate NBI, and this powerful business model has been fully demonstrated in 2020. Despite the COVID crisis, in terms of commercial activity, we hit numerous records. First, we hit records in terms of the number of products subscribed by our clients, in the total amount of savings from our clients, in the amount of production of mortgage loans and in the brokerage activities. In the brokerage activity, we fully leveraged our leadership position, and we recorded already a number of trade that is twice the one that we had in 2019, with even a record day where we trade 100,000 trades a day. This tremendous commercial activity is reflected in the underlying NBI that rose by 35%. And at the same time, the operating expenses, including marketing costs, were nearly flat. And the cost of risk, including forward-looking add-ons declined by 6%. This outstanding year reflects the interesting profitability of Boursorama. If we look at the P&L of Boursorama, we really have to keep in mind that the pace of growth of Boursorama has nothing in common with any other competitors in France. The acquisition cost of our more than 550,000 new clients is taken for full the year of the acquisition. They are 90% viable, and they represent 40% of total costs. If we correct the P&L from this massive acquisition effect, Boursorama can be profitable at a touch of a button with a net result that exceeds EUR 40 million and that had double compared to 2019. We strongly believe that Boursorama is the online winning model.

So what about the coming years? As said by Aurore 2020 was a very positive year. And that's proved, if needed, the relevance of a full digital model. All economic studies confirm the fact that the crisis of the COVID has accelerated existing trends. 4 of them fit perfectly with the positioning of Boursorama: about digital acceleration, no comments, about buying power seg, we offer best prices on all the products in order to make -- save money to our clients. This is not magical. This is one of the consequence for having the best cost to serve. About a possible reshuffle of savings landscape due to low rate interest context, it seems that our clients start to think about a riskier and longer investment strategy in order to get some yield. It could lead to a revival of the brokerage activity and of new ways of investing. It's perfect, we are #1 in this field. To complete the picture, CSR is more and more important in clients' choice. Here again, Boursorama is natively a CSR firm, integrating this dimension in our no-paper processes and our clients' offers. For instance, we have dedicated CSR investment profiles, green consumer loans, solidarity leverage. Handling our staff organization. We have just signed last week an agreement with our trade union in order to put in place a very innovative new way of work. And we got a very clear road map on this matter. Thanks to its leading position, and because Boursorama is fully in line with the many learnings of the crisis, it's time to accelerate. What are our targets in the coming years? First, we want to become a bank of more than 4 million clients by 2023 in France. To get there, we plan to carry on a massive growth in the next 3 years. It doesn't mean a significant change versus our previous strategic plans that we have successfully implemented, but it means a strong support from Société Générale as we should generate EUR 230 million loss during the growth period to build up such bank. To achieve all this, we will not exceed 1,000 people, staying focused on efficiency. As soon as we stabilize growth after 2023, we will be able to generate a profit of about EUR 100 million by 2024 and about the double in 2025 with RONE above 25%, being so one of the most efficient bank on a financial point of view. To conclude, Boursorama want to be a major retail bank in France by 2025 with 4.5 million clients and with a EUR 200 million net profit. [Presentation]

Good morning to everyone. I'm delighted to say a few words of conclusion for this session. One thing we have nurtured in the last years is our culture of entrepreneurs, of pioneers able to build new business model, thinking forward and to disrupt if needed. And let's admit, the banking sector has not been that good at doing that. As we all know, perspective for retail activities in the Eurozone will remain challenging going forward. First, the health crisis has a significant impact on our economies. Second, we are probably in an environment of low interest rate for long, and we have to draw all the consequences on the business models. The need for cost efficiency is even more significant. Third, maybe more important, this crisis accelerates trends. We are in the middle of a technological and digital revolution. We see the development of new competition. Client behaviors are evolving quickly. And we have to anticipate. We have to be among the banks to take that technological wave. We have to think about the client needs in the next 5 to 10 years. And in particular, for individual clients, I've already shared with you my conviction that saving advisory will be at the heart of the relationship between individual clients. And let's admit that there is room for improvement in that field regarding the banking industry. Thanks to the transformations implemented in the last 5 years, our French retail networks have been able to post resilient profitability, including in that crisis. But we have to anticipate, we have to remain ahead of the competition. That's why we launched in September the study to combine our 2 French retail networks. We engaged during the last 2 months with our staff, in our branches. We engaged the discussion with our clients and our bankers. This was an intense and remarkable work led by Sebastien. Today, we confirm our ambition and capacity to further differentiate and build a unique dual model in French retail. First, build a new bank by combining our 2 networks, taking advantage of their respective leading expertise. This new bank will be best in class in saving advisory and in the quality of investment solutions for individual clients and will also enhance its leadership position with corporate and professional clients, fully leveraging our new technology. The second element of this dual model will be to bring Boursorama to maturity. Boursorama will not just remain the undisputed leader in online banking in France, but will become one of the leading banks for individual clients with 4.5 million clients and with a unique value proposition, number one in terms of client satisfaction, the cheapest bank in France and profitability on capital, which will be almost 3x higher than any traditional network. Client centricity, ESG responsibility, innovation and digital technology, will be at the heart of this dual model, which is the right one going forward. This is my conviction. And I'm fully confident that we have the right team to build it successfully in the coming years. Thank you, and let's now open the Q&A session. [Break]

Ladies and gentlemen, welcome to the Société Générale French Retail Banking event. Gentlemen, please go ahead.

Hello. Good morning to all of you. Thanks for attending this Q&A session following our presentations on our 2 strategic initiatives for our French retail activities. I hope you have been able to watch our different presentations. But with me today -- with all our management team to answer your questions. Let's start. Let's keep perhaps the discipline just 2 question per person, that would be nice. So let's turn to you for your -- the first question, please.

[Operator Instructions] We have one, first question from Mr. Jean-Francois Neuez from Goldman Sachs.

We can't hear you, Jean-Francois. [Technical Difficulty]

Sir, we have another question. Sir, we have from Mr. Stefan-Michael Stalmann from Autonomous Research.

Yes. I hope you can hear me well.

Yes, Stefan.

Thank you very much for hosting the event. My 2 questions are the following. You talk about net savings that you target by 2025. Can you give us any sense of how high the gross savings that you are generating during this period to get to your net savings number? And the second question relates to the cost to achieve these savings, the EUR 700 million to EUR 800 million. Could you maybe break those costs down into major buckets? In particular, how much of that relates to software impairment? How much relates to severance spending? And how much relates to the breakage-of-lease costs?

Yes. Thank you, Stefan. I will turn to Sebastien Proto to answer your 2 questions. Sebastien?

Yes, Stefan. So coming back to your first question, we are steering our trajectory on an absolute cost base. And in our view, that's what is important. And I guess that's also an important indicator for you the kind of indicators you are looking at. So is net reduction in the cost base in 2024 and 2025 includes, of course, the synergies from the project as well as investment in growth initiatives and other costs. When you compare with precedent in terms of M&A mergers and M&A transactions, the percentage of savings is totally in line with precedents. And regarding CTA, we gave a range between EUR 700 million and EUR 800 million. Again, that's totally in line with peers, this kind of amount, we don't give the break between the different components of the CTA. What is important is to keep in mind that the percentage is, again, totally in line with precedents.

Next question is from Mr. Jean-Francois Neuez from Goldman Sachs.

Can you hear me?

Yes. Now it's much better, Jean-Francois. Hello, I hope you are well. We could not hear you at the beginning.

Yes. Sorry, my bad. I just wanted to ask, not necessarily related straight to the financial target, but more operationally. So I just wanted to ask, when you think about the mergers as well as the IT integration, so for example, for having been clients of Crédit du Nord and so on. I know that when branch change, account number can change. For example, recipients of payments on the app can be removed and have to be reinstated. I just wanted to understand how you believe, how you see or how you measure the efficiency of your IT platform with regards to -- compared to that of competitors? And how you planned for the merger of the networks from a client transition perspective, if any? And the branch closure, which are very, very significant. And obviously, an acceleration from the past in order to minimize client attrition, as typically happens for all banks which merge networks. And the reason why I'm asking this is, I just wanted to understand what you baked in, in the 11% to 11.5% return on net equity revenue trajectory.

So yes. Thank you, Jean-Francois. Perhaps, we have the benefit of Bruno Delas on the IT, but I will turn again the floor to Sebastien, who will take globally your questions.

Okay. Thanks, Jean-Francois. Thank you very much for your question. So I will let Bruno the last comment on how we drove precisely on the IT side when a client has a change of branch. Regarding your question about the impact of the client and what we have embarked in our financial trajectory in terms of attrition due to the change in branches. So keep in mind that, first of all, we have an overlap between the 2 client bases, which is very, very limited, around 1%. Second point, what is important here is the fact that the branches of the 2 networks are very close to each other. Very, very close. So what does it mean? It means that clients will not be affected by branch changes. More than 60% of the branches of Crédit du Nord and Société Générale are less than 1 kilometer part. So it means that we can optimize the network while keeping the same local talents. It means also that, for the clients, his new brand, his new branch, if any, will be very, very close from the previous one, which is clearly something very positive because it limits to limit drastically as the attrition due to the change of branches. In our financial trajectory, obviously, we embarked prudent assumptions in terms of revenues, product assumptions also in terms of attrition. But even in a stressed scenario in terms of attrition, we are very confident with our targets between 11% and 11.5% under Basel III. Bruno, can you comment on the IT side?

Okay. [Foreign Language] Jean-Francois. Hello, everybody. You know that the IT strategy is based on 2 main topics. The first one, we have decided to choose the SG platform because this one is the more advanced in digitalization. And you know that, during all the projects, we want to continue to concentrate our investment on this platform to reach the target of the new model for the new bank. At the same time, we have decided to consolidate the Crédit du Nord platform into the Société Générale platform. And we will do that because we are used to do this kind of project within the group or outside group.

And maybe just to give you an example, when we talk about branches we have -- which are very close to each other, I take just one example in Paris in the 17th District of Paris, Crédit du Nord is located 45 Avenue des Ternes -- 45 -- Société Générale, 40 Avenue des Ternes. So just an example, but it explains why we are very confident that optimizing the networks will not increase or have a very important impact on attrition.

Next question is from Mr. Omar Fall from Barclays.

Thank you for the interesting presentation. So just firstly, just working it out, if there's a EUR 5 billion cost base for the networks and maybe another few hundred or so for Boursorama. If I take 30 bps cost of risk, which is the -- through-the-cycle level, to then get to your RONE target kind of implies a revenue decline from this year, like EUR 500 million or so. I know you don't want to give certain guidance on revenues, which is understandable, I think, in this environment. But I'm sure there's something wrong with that math. So maybe you could help me with that. Then the second question is just on Boursorama. Could you give us a sense of what the proportion of primary active clients at Boursorama what they are now. I think it suggests a 50% on Slide 58, but I'm not sure if I'm reading that right. And how conversion of effective primary clients plays into the strategy going forward? I know we discussed this quite a bit at this divisional presentation last year, so maybe just an update on that would be helpful.

Omar, I will turn to William first on your math and then to Benoit, who is the new Head of Boursorama. William?

Omar, happy to run you through and the bits and pieces that are behind the trajectory. But we have taken 3 assumptions. First is primary the gradual normalization in cost of risk. So at the end of the period, we'll come back to a more normal situation. And you have to factor in on top of that the -- what Sebastien has explained regarding costs. So overall, if you take some expansion in the RWA base in 2023 pertaining to Basel IV, you get fairly easily to the number we've articulated, but happy to go more in detail in the session afterwards.

Benoit, please.

Omar, thank you for the question. I think you have seen the figure, it's 50% of our clients, 5-0, which are in the primary bank with us. I think it's related to the fact that we put in place some new strategic actions. I'll just give you an example, that we have some inactivity fees right now regarding the EBIT costs. But as we explained it for a long time now, globally, our outstandings are growing exactly at the same pace than the growth of the client database. You have seen that we have multiplied by 3, 3.5, the number of clients in the last 5 years. The global outstandings of the bank, if you take deposits, for example, it's exactly the same. Our current accounts, on average, is EUR 2,800 per client, just the current account. And globally, it's EUR 15,000 if you take into account all the products we have with our clients. I mean credits, savings, investment products and so on. So we do something, which is the building up a very strong and very active bank with our clients.

Next question is from Madam Giulia Miotto from Morgan Stanley.

And 2 questions for me as well. So on Boursorama, you are targeting a very fast growth of 4.5 million customers by 2023. But aren't you afraid of some cannibalization? Boursorama is very efficient, but from my math, you make more or less EUR 120 of revenues per customer versus EUR 750 in the branches. So if you can comment on any potential for cannibalization, that would be the first one. And then second, so 2024 that's for the first cost synergies and then full by 2025. So can you comment on timing? Why so long versus some other mergers that we are seeing in the market, which are achieved in 2 to 3 years?

Yes. Hello, Giulia, I will turn the floor to Sebastien your 2 questions.

Yes, Giulia. So on your first question regarding potential or risk of cannibalization from Boursorama. So everything starts with our client base. And keep in mind that we have half of revenues coming from corporates and professionals. And if I add revenues coming from affluent clients, the total is above 70% of the revenues coming from these 3 categories of clients. So we clearly are not the most at risk regarding potential cannibalization. And let me also remind you that we aim to be at the forefront of digital for clients who want it and how we are convinced at some clients, and particularly within our client core base, want human expertise. That's something very important. At the end, we will cover all the spectrum of client needs with 2 different models: Boursorama digital-only and our more physical model, combining the best of human with the best of digital. So we will cover close to 15 million, 1-5 million, clients with 2 different models. It will be a unique setup on the French market and a very, very good one. Regarding the timing of cost savings, that's a fair question, obviously. But cost savings mainly come from IT and from optimization of networks and central functions. And the trigger -- what is the trigger? The trigger is the IT migration and the effective legal merger of the different entities. Everything will take place early 2023. And I want to go into the details. Regarding the IT migration. The timetable, 2023, is perfectly consistent with market standards. And I'll let Bruno elaborate a little bit on this. But that's market standard. And market standard with an execution risk, which is, in our view, more limited compared to precedents in terms of merger because we know by heart the 2 systems, the 2 IT systems, and we have a team with a very high level of experience for this kind of migration. Because they did exactly the same kind of migration at Crédit Agricole or BPCE in the past. Regarding the social timetable. Again, it's consistent with French flow. We have to respect the French social regulation, which is more demanding, more stringent than some in other countries. That's why you cannot compare merger outside of France and merger in France. The social law is different and, again, more stringent in the French market. Having said that, we said in the presentation you had this morning, 2023 -- early 2023. That's a maximum for us. Let's be clear, Giulia. And we will work hard to have the best timetable. So if we can move quicker, we will do it, and we are working hard on both sides, IT, legal merger, to have the best timetable, possible, but taking into account the social constraints. Bruno, do you want to say a word about timing?

Okay. On the market, the time frame to do this kind of job is, respectively, 24 months for the data migration and 6 months for switch the 9 banks from 1 platform to the other. If we could do better than that, we should. But for sure, we will know that only in 1 year, not now.

Yes. And perhaps the last comment from Benoit, given on the attrition and where we collect the new clients.

Now just to give you an idea of the cannibalization. Today, if you take the new clients who come in Boursorama, it's exactly the same level than the market share of Société Générale and Crédit du Nord. No more. So it means that around 85% to 90% of our new clients come from other banks. So I think that this is the first point to have in mind. The second point is the roughly 15% to 10% of clients coming from the Group Société Générale, did they leave or can they leave Société Générale without Boursorama? Because, as you know, there are a lot of competition on the digital point of view. So if you take the 2 elements, I think it's quite reassuring, and there is no specific effect between the different brands of Société Générale.

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

A couple of questions, please. First of all, if you can share with us what's the Net Promoter Score for SG networks and Crédit du Nord? You've disclosed the 1 for personnel, which is high, one of the highest, but just to see some comparison and we can see the evolution of that metric, which is very important. Same question on revenues. You had very nice stats or show basically the -- your ambition to grow the marketplace with partnerships and your own fintech and so on to build the fee component of the revenues. Is that -- would that be a big contributor to revenue growth in the coming years? Or will remain anecdotal for your 2025 horizon? And still on the revenues, last question. On Slide 24 for Boursorama, you showed that you would have delivered a strong growth. You would have EUR 230 million cumulative losses in the next 3 years. So I presume this client acquisition losses would be mostly in the revenue side. And is that -- actually, should we expect a pressure from the top line from that component in the next 3 years? Or is it split by costs within the EUR 700 million to EUR 800 million or mostly in revenues?

Yes. Hello, Tarik. I will first turn to Sebastien and then to Benoit on your specific question on Boursorama. Sebastien, on the NPS, what we can share qualitatively.

Okay, Tarik. So on your question regarding NPS. What I can say, what I can tell you is we have a different client satisfaction between Crédit du Nord and Société Générale. That's a fair comment with different strengths between the 2 brands. So what we have done when we have thought about model is take the strength of the different -- the 2 different brands. Let me give you an example. In terms of professional clients, client satisfaction for Crédit du Nord is significantly higher than Société Générale. So our decision, perfectly consistent with this a difference in terms of client satisfaction is to take Crédit du Nord's model to address professional clients. Regarding corporates for SMEs, again, Crédit du Nord is in terms of client satisfaction stronger than Société Générale. So we have adjusted the model to take this difference into approach. So we had a very granular analysis of the client satisfaction in order to build the best model for each client category. Regarding revenues. Again, as William said, we have a prudent approach in terms of revenues when we talk about projection. But we are determined very committed to increase fees and the contribution of this in our model. As far as fees are concerned, financial fees are obviously very important. And when you talk about partnerships, what is it doing in terms of revenues contribution of revenues. We expect a lot of our new setup in terms of savings. We will operate in an open architecture model. It will be a unique setup in the French market for large banks. And we'll obviously expect a lot of this new architecture, open architecture, with a commercial push in terms of financial fees, which would be significant. In terms of insurance coverage, again, we have different initiatives to increase the equipment rates which are still below what they should be for protection and cushions. So that's a lot of initiatives we are pushing very hard to increase the share of fees. At the end, our view is the following: we want to offer to our clients the best products. Again, be it in-house products or manufactured by partners because we think that this is the best way to get client satisfaction and more revenues.

Benoit, on the...

Yes, thank you for your question. You have to -- you have understand the fact that there are 2 periods of time. The first one is '21-'23 included where we want to grow as fast as possible and with a global loss of EUR 230 million. We don't disclose the breakdown between what is in revenues and what is in the operating cost as we don't disclose the client acquisition cost. But you're right, there are things which are in revenues I mean customer rebates for this part. And regarding operating cost, it's regarding expenses related to the market impact. But what is very important to understand is the fact that we are saying that we can acquire 2 million clients in 3 years. I think this figure is maybe important to have in mind. The second thing very important is the fact that 90% of the acquisition cost is variable. And all is a direct expense related to the plan. There is no amortization. So I mean, if we decide to not acquire clients, we are profitable directly without any delay.

Can I just follow up, sorry, on the first one? Maybe it wasn't clear to me in the presentation, but are you keeping the Crédit du Nord brand and SG network brands? Or are you merging towards SG network brands as well?

Okay. This question is also an important one. So regarding the brand strategy, we are still working on it, and so we don't give the detailed brand strategy today because we need more time to define precisely the brand strategy. Having said that, we launched a brand strategy, perfectly consistent with our ambition to be very unrooted in the different territory in the French market. So we will not have only 1 brand covering all the country as a whole. We will use a current component in terms of brand with another which would be more local. And obviously, we are analyzing the strength of the brands of Crédit du Nord. You know that Crédit du Nord has different brands, Société Marseilles de Crédit, Côte d’Ivoire. And so we are looking at all these different brands and to see what is exactly the impact in that territory.

Next question is from Madam Lorraine Quoirez from UBS.

Just 2 questions from me. So how much are customer rebates and marketing costs budgeted at Boursorama in 2021? And it would be interesting to know how this compares to 2019 and also have a view on whether these are actually down to 0 by 2025 in your budget. And then the next question is perhaps a bit more high level. I was wondering whether you have given some thoughts on the impact that the digital euro could have on your business in the coming year.

Yes. I will turn, Lorraine -- I will turn to Benoit for your question on the evolution, the cost of the acquisition. And then perhaps to Philippe Aymerich, who is monitoring our overall retail banking activities and particularly on the payment side. He follows the API initiative and also what the -- how the ECB thinks forward regarding the digital currency. Benoit?

Yes. Thank you for your question. Just we don't disclose the client acquisition cost, but you can -- I can just give you an example. If you take the basis EUR 100 million on 2020, it will decrease by around 10% next year. And I think that you said that the cost acquisition will be 0 in '25, but it's not the case. We continue to acquire clients in '24 and '25 in order to continue to grow at very lower pace than during '21 to '23 because the goal is really to have in mind this 2 period of time, '21-'23, we grow as fast as possible to reach the critical size because it's now that we can get this market share. And in '24 and '25, we continue to grow, but at a very low level. And we are in a stabilization period in order to monetize and to get the most profitability as possible.

And knowing, Lorraine, that, again, that's my guess. But with a brand which will be better and better known -- and already, Boursorama, as you know, it's 1 of the best-known brand, if you think forward in next 3, 4 years, with more than 4 million clients. I can't help thinking anyway that there will be also even further traction from the brand with limited cost for client acquisition. But we don't bet on this, but my conviction is that it will be the case. Philippe, perhaps on the long term.

Yes. Thank you for the question. There is still a lot of work on this topic about the digital euro. At this stage, it's not quite clear. Is it just a new payments capacity or is it more than that? Of course, we are part of all this discussion. You know that ECB has launched a study, and we have to submit our answers by mid-January. In addition to that, I would like to say that, of course, payments is a very important component of our strategy. I think that what is very important is to keep in mind what are the needs and expectations of the clients. We have invested a lot during the last year, both on the corporate side, on the individual side, on this topic. We will continue. It will be even easier because we will focus our investment in one platform. And regarding payments, we also believe in mutualization with our peers. As you know, we have Transactis, which is a platform we share for the moment with a bank but maybe with other partners in the future. And yes, as mentioned by Frédéric, we are also part of the EPI initiative with over 15 European banks.

Next question is from Madam Anke Reingen from RBC Capital Markets.

Yes. Thank you very much for the interesting presentation and the detail. Two questions, please. The first is on 2025. So obviously, it's a very long time from here. I just wondered how you got on about defining on how the customer relationships will look like in 2025. I saw on the slide you say 30% of digital-only sales and eligible products, I mean, couldn't it be higher? And then on the 2025, is that now what you should consider as where the group could aim to deliver good aim towards to is French retail just longer-dated? And then sort of like, sorry, second question is on the cost. So you say EUR 5 billion for the combined group to go down. What is the remaining EUR 600 million cost should we assume they stay flat to 2024, '25? Or will that be coming down as well?

Anke, Hello. Can you just perhaps rephrase the last sentence of your first question. I have not understood this concept of long-dated. Can you repeat, sorry, this part of your question?

Yes. I was just wondering, I mean, the past, obviously, as had the strategic plans out to, let's say, the last one was out to 2020. So it's now 2025, the year, I think the group will aim towards without predicting when -- what your next strategic update might say.

Okay. Okay, listen. On that, first, the bulk of the program and this combination will be completed basically in '24, let's say it, that 80% of the savings. So we've said 25% because there will be just a complement in terms of synergies. And I think, in retail, with the kind of transformation we are facing, probably, it's also good to take a slightly longer-term horizon for also projecting. On the client evolution, listen, to be frank, I think it's a little bit difficult to predict what the French will do. As you know, the French are probably the one which are the less sensitive and which are moving the slowest to digital channel. But nevertheless, we consider that the crisis will change that, is going to further change it. And perhaps from that perspective, Benoit and Sebastien can elaborate on what they see on the ground. So we are taking, if you wish, reasonable assumption. If it goes more quickly, we will have anyway the tool. And I always say when I speak to the people in charge, we have to build anyway the banks for 2030 and not for 2025 anyway in what we are doing. Regarding the bigger picture of the group as a whole, we will stick when we will communicate for the 3-year horizon financially. Again, I think it's good sometimes to look a little bit beyond when you think about strategic. I'm always very surprised that when I hear industrial companies they think about 2030 and beyond. And that, effectively, from a financial point of view, we are restricted to the year. So again, we will do the exercise of the financial projection for 3 years. But beyond for certain businesses, I think it's fine also to look a little bit beyond. Benoit wanted perhaps to react on the digital behaviors?

No, I just wanted to mention the fact that's -- the fact we have the 2 solutions, I mean Boursorama and the network is the best solution because whatever the speed of the change, we have the best position as a whole on the French market.

I think really we will be unique in that. I don't -- I think, in this industry, very few people in the industry have been able to build alternative models. Let's face it. And you look at alternative models, usually looking outside. For me, Boursorama has been our internal start-up. And what we are doing basically is bring that model to maturity. 2025 it's not the only leading online bank in France. It will be one of the major banks in France for individual clients. And it would be very complementary with new bank with network. I don't think personally in '25, whether or not we like it, that everybody will just go to online banking. There will be still people willing to meet with someone with digital channels, in particular, on the savings side. You know my conviction that when people will go in a branch in 2025, when I say an individual client, not a corporate, it's a very different story here. And Boursorama does not cover the TL. When you talk about individual clients, my personal conviction, a lot of the core of the relationship with be centered on savings. And here, we think it's good also to have this alternative model. Perhaps, Sebastien, to your second question, Anke.

Yes. Regarding client evolution and what we offer in terms of digital, as Frédéric said, usually, French clients are a little bit less keen to digital usage than peers. But things are changing rapidly because of the sanitary crisis and might accelerate the usage of digital. In our case, what does it mean? First of all, during the IT migration, we will keep enriching our IT platform in terms of digital functionalities. And so keep in mind that working on the IT migration doesn't mean we will stop our investment in terms of new functionalities and enrichment of the IT system. We will do both at the same time. Second point, what do we want to do to increase the digitalization of the physical model, so to speak? For individuals, we are already very well advanced, but we will continue to develop online sales and e-commerce with online-only purchasing for simple products and remote saving for more complex products. You mentioned in your question and peers, we should be very cautious in the comparisons with peers because sometimes, we mix our comparisons, mix digital-only and remote savings, which -- that's different. So we gave this morning in the presentation the 2 figures. Our objective in terms of digital-only products, 30% in 2025 is Neo. And our objective in terms of remote savings for more complex products with 80% for individual of products which would be -- or would be sold, thanks to remote interaction and electronic signature. So first objective for individuals, we will develop online sales and e-commerce. Second objective enable remote interaction and regulate flows by channel inflows and customer requests. That's project called SG. That's very, very important in terms of efficiency and client satisfaction. And it's also very important because we want our teams and our staff to be focused on commercial objectives. Third point, we will pursue customer empowerment and usage of self-care usage on the day-to-day banking, on savings and on administrative taxes. And on the corporate market, again, we want to offer our clients the global vision of their own relationship with Société Générale, in which the daily banking offer accelerate the materialization in health care against healthcare is very, very keen and improve commercial efficiency with better digital client journey in order to be -- to have more impact commercially and increase the cost saving.

There was also, I think, a question on cost, if I'm not wrong.

Yes. A question on cost. Again, one on the timing. Can you -- sorry, would you mind repeating your question, Anke on costs?

Yes. Sorry, it was hidden in there. Yes, in 2019, obviously, the banking cost base was more like EUR 5.6 billion with the combined entities making EUR 5 billion out of this. So I will just assume a question wondering what happens to the other EUR 600 million starting in 2019. Will that come down as well? Or should it remain flat?

Well, I think that -- well, again, I'm not sure to understand exactly what you say. It's the evolution, I think, in the transition of the cost base for the 2 networks. As we've said, it will not be a linear projection, but the idea is really to decrease the cost base, as we've said, in 2025 versus 2019 by the amount that we just said. So perhaps happy also to comment probably, if you wish on a bilateral basis, if you wish.

Next question is from Mr. Guillaume Tiberghien from Exane.

I have a clarification and 2 questions. The clarification is with regard to the Basel IV RWA. Does that include the flows or not? And if it's not, then I'm surprised it's such a big inflation of RWA. The 2 questions. One is a high level. Is there any interest in the long run to, for example, say to all your mass market clients in Société Générale that the only way going forward is to actually migrate to Boursorama? So is it realistic in the 2025 to 2030, for example, long-term vision? Or is it totally absurd? The second question relates to your return on notional equity target. What's your RWA assumption? And if you don't want to give a revenue target, which I don't understand why you don't, but if you don't want to give one, can you at least try to quantify for us the headwind to come on revenues from the right situation if rates don't move from here? Because that's what we can assume.

Yes, Guillaume, I hope you're well. I will turn to William on your 2 questions on the risk-weighted assets, both how we modeled with the impact of Basel IV, which is largely related to a personal risk. And again, it depends on the allocation we do in record, but more fundamentally. And then perhaps openly on the way we see beyond 2025 the behaviors of clients. But William, what can you say to Guillaume?

Hello, Guillaume. First of all, overall, with regards to Basel IV, we will make an update in the next quarter, so -- and there, we have taken the latest assumptions we have. The -- you're right to point out that there is an increase in capital allocated stemming from Basel IV, yet it is not included -- it is not including the output flow. As you know, output flow anyway for us as a whole is not that big number, and it's not before -- I think before 2028 for. So we didn't want to have sort of the pro forma adjusted from something that may happen in 2028. So there's a good EUR 1 billion uptick in the capital consumption, but the main factor behind it is the fact that we assume the rebalancing of operational RWA pertaining to operational risk, as you know, between businesses, taking the assumption of an ILM equal to 1.

And just, Guillaume, we have time to refine the allocation, but it's proportionate to revenues. And so the question is how do you allocate that? And to a certain extent, you get to the business, it will stay. So we tend to think at this stage we will allocate according to this proportionality of revenues. And in practice, today, it would mean more capital for that than in the current situation. So it's -- the way we think pro forma, if you wish, of Basel IV. Philippe, can we imagine Boursorama moving to 10 million clients in 2030? This is, I think, Guillaume's question, underlying question.

Yes. Thank you for the question. I will elaborate on what has already been said by Frédéric, Sebastien and Benoit. I think there is definitely the space for the 2 models. And I think that it's very important to let the clients decide. Because if suddenly you say to the client you move to Boursorama, to our mass market clients, they will not. Because as of today, they still expect dual experiments, digital and human interaction. So I think that we will have this capacity in the French market, which, again, will be unique to propose the 2 approaches. And I would like also to stress, as already said, that when you look at the future bank, a combination of Société Générale and Crédit du Nord, always keep in mind that 50% of the revenues are coming from corporates and professionals, which remain key priorities for us. And regarding the remaining 50%, 2/3 of it are coming for the mass affluent clients. So I mean that this model is clearly dedicated on the long term to this kind of clients. And regarding the mass market -- I'm sorry, I made a mistake, 2/3 of the remaining 50% are related to mass affluent. And regarding the mass market, the priority for the new bank, I mean the combination of Société Générale and Crédit du Nord will be both to increase the fees with these clients and to reduce, adjust on an ongoing approach the cost to serve.

Sorry, Frédéric. You have not answered my question on the RWA growth, your model and the revenue headwinds, if rates don't move.

Listen, Guillaume, again, we've commented qualitatively we -- you will have a further erosion of margin. It will stay for some time on the deposit. We keep assumptions of negative rates for the short term, alongside the whole period. So it will weigh on the erosion of margin, on deposits, as we've said now, we also think about the development of fees from different elements, savings, including the new partnership model and open sector we put in place. Some business model development with a new business model, as we've said, insurance. And again, we have put -- I would say, overall conservative figures on the revenue side. On the risk weighted asset, I think the bulk is really on the Basel IV, but there is a relatively lower increase. William?

Maybe if I can complement -- trying to think what is behind your question, as Frédéric said, in terms of rate assumption, I think we are pretty consistent. We don't see short-term rates crossing the negative, the 0 line, for the whole period. And for long-term rates, possibly towards the second half of 2022. So these are fairly conservative assumptions. And actually, well in check with forward rates. So you're right to point out that then, apart from fees, which Sebastien has already commented upon as well as Boursorama, we need to have some volume growth. And yes, there is some organic RWA growth over the period, consistent with some production on the credit side. Please remember that the weighting is not necessarily very high for individual clients, for example, related to RWA. But yes, there is some fuel given to the business over the period.

Next question is from Madam Delphine Lee from JPMorgan.

Yes. So I just have 2 quick clarification, actually. The first one is on the -- so going back to Boursorama. So if we like -- if we look at your Slide 32, I mean, if we were to understand a little bit the impact of client acquisition costs, I mean, is that -- just going back, I mean, without getting the exact numbers. Is it -- so it's mostly in -- so it mostly is the customer rebates impact on the revenues as opposed to the marketing costs? Or I mean, just to get a little bit of a feel of how they're split between revenues and costs at this point of this year. And then my second question is just on the timing of the cost savings. So from all that you said around the data migration and the social constraints. So is it fair to assume that it's actually almost no impact in the next 3 years until '23 included on cost saves in French retail from this merger?

Yes. Delphine, I will turn first to Benoit for the split. If I miss the qualitative as present to the split between revenues and cost of the acquisition of clients. And then to Sebastien, again, on what we will do in the transition. Benoit?

Yes. The goal of this Slide 32 was to show the underlying profitability of Boursorama. Because as we try to explain it, we are going to acquire around 560,000 clients this year. So it's not a pace of acquisition, which is a little pace. Even compared to all type of new banks, the neobanks, online banks and so on. So there is a huge acquisition of client this year. And as we said before, we do not amortize any client acquisition costs. So it costs during the year we acquire clients. So this slide explains the fact that on revenues, you have a part, which are the customer rebates, we could say that it's a major part of the client acquisition cost. And you have a part in the operating cost related to media, ad words and so on and partnerships related also to acquisition. So the goal is to show that with no acquisition, it's a theoretical view, you would have a profit of EUR 43 million during the 9 first months of 2020. I think what is interesting is maybe more of the fact that it's double than last year with the same kind of definition, rather than the total figure. I mean -- but if you come back to the profitability in the coming years, it's still showing the fact that if we have -- if we decide to reduce the acquisition, we will be profitable directly without any delay and with available client acquisition cost at 90%, 9-0. And I think very important to have in mind also the global efficiency of Boursorama. Because we talk a lot regarding client acquisition cost, but at the end of the day, it's a bank with 800 people internally, who are managing EUR 40 billion of outstandings in all the activity of the individual clients and with 2.5 million clients. So it's -- I think it's very important to understand this part of the story to have really in mind how we can be profitable.

Yes. Maybe I could add that, I mean, we are -- Boursorama has very strong foundations from an operating standpoint, compliance risk. There is also a strong momentum. And in addition to that, what has been demonstrated in 2020, as mentioned by Benoit, is really the flexibility, the agility of the model. And yes, during the second quarter and close of the third quarter, we were at the breakeven. So it demonstrates all the potential. So we want to capture this momentum because we think that the coming 2 years are critical and is a kind of magic moment, so we want to build this client base and after to fully leverage on it. And that's why we are making today for this net income for both online in 2024, 2025. Thank you. Sebastien?

Yes. Thank you very much, Delphine. Regarding your question on costs, let me start by saying that this is a very ambition for -- ambitious project. We are not talking about only one bank when we describe Crédit du Nord. We are talking about 9 different banks within Crédit du Nord. So we are -- we have a project where we will have legal mergers, taking into account the fact that we have 9 legal entities, different -- 9 different banks to be merged with Société Générale. I will not repeat what I said about social constraints, social French law, which is more stringent than in other countries. And regarding IT migration, as Benoit said, its timetable totally consistent with precedence and market practice. Having said that, we will get 80% of the net savings in 2024. And I will repeat what I said, we are working very hard to have a quicker timetable. And obviously, quicker timetables would mean a quicker timing as far as the synergies are concerned.

Next question is from Mr. Matthew Clark from Mediobanca.

Some more questions on costs, please. Firstly, a clarification. Could you just clarify whether the outer year cost reduction guidance assumes the fallout of the single resolution fund contribution that's attributable to the retail division. Secondly, could you give us some idea of what you think the normal cost inflation for the French retail business is if you were to do nothing? And then thirdly, could you just clarify, is this effectively hit on cost measures until 2025? I mean, once you've negotiated this with the unions, do you, therefore, have no more scope to implement any further measures until this project is complete? Because usually, you seem to do things every 2, 3 years, have a new plan for retail costs, but this would obviously be a longer period for a single project.

Hello, Matthew. William will answer on whether or not the decrease of the -- disappearance of the single reserve fund is increased and knowing that the amount is relatively limited. Can you answer that part of the question perhaps?

Yes, in 2020 -- in 2019 for French retail, the SRF contribution was about 70, so it went up 25% across the other business in 2020. And you can assume that we deduct -- we take the assumption that there is no more SRF contribution in 2024.

But that's included in practice that is appearance of the 70 ,which is included respectively in the calculation of the net decrease that we've given.

Yes, absolutely. We have the order of magnitude.

Second, I think we need to elaborate a little bit on what we can do, again, socially, Matthew. Because once we are embarked in this project, we cannot easily add first additional things, which could be seen by trade unions as an anticipation of the project. So there are -- if you wish constraint during the implementation of the project. How long will it take the project itself will be actually completed socially in practice around 2024. The bulk will be completed in practice. We will be, I think, able to potentially resume an additional thing. But I think if you wish, it's a little bit premature to anticipate what it could be based on what already we have in mind with the significant adjustment of our organization, business model, reduction of network. Yes, there will be also a story beyond probably, but I think it's a little bit difficult to anticipate. And personally, it seems to me that what we are going to be able to deliver here is the profitability on practice when you add the 2 components that very few players will be able to achieve in practice in the Eurozone retail and certainly, at least, in France. So I think, again, at this stage, we stick there. And we'll see how it goes. As we've said, we will maybe be able to anticipate the time frame. We don't factor that it be realistic. But if we can, we will do. But at this stage, at least, we think it's a pretty ambitious and attractive road map for Eurozone banking retail activity, which, as we all know, we faced the challenge of the current environment, including on the rates. Did we answer -- did we answer your question, Matthew? Or was there something else?

The only other one was on the kind of the normal cost inflation you would expect if you did nothing.

Normal -- if we did really nothing, not moving the staff, et cetera, when you have the fixed cost salary, which might be around 1.5% traditionally in the French labor market, so if we were to do nothing and the bulk of that -- of the cost, of course, the majority of the cost is staff. So I would say, 1.5%. And then on the rest, investment in IT, well, it could be flattish to 1% increase, but I don't know how to answer your question, to be frank, on the other expenditure. We might have next year. Let's just take into account that we have not traveled at all basically this year, so you might have some increase or back to normal next year on just traveling a little update, things like this, but it's a little bit complex. I would say it takes 1.5% if we were to do nothing, perhaps.

Next question is from Mr. Andrew Lowe from Berenberg.

My question just follows on from what you said about the revenue dissynergies from the merger being relatively limited. And I just wondered, if this is the case, what's prevented you from doing this merger earlier, i.e., why do it now or not 3 years ago?

Is it all, Andrew?

Yes. No, that's all.

Okay. Okay. So you have 1 question. Listen, first I will give Philippe Aymerich, who was before taking over the full retail, has been the Chairman and CEO of the Crédit du Nord. So we can elaborate on what we achieved in the last 5 years and why in a different world, and I stated also, I think we cannot all admit that this crisis is not an insignificant event and will effectively further trigger changes in client behavior on digital and further consolidate the low rate environment and the more difficult environment. But Philippe, please answer that question.

Yes. I think that the key part of the answer it's really the worsening of the situation and the acceleration of many trends by the pandemic, not only economic trends, but usage of digital behaviors of the clients. And the second point is that I do believe that we have not wasted the last 3 years because, as you know and as it was explained this morning, we have worked a lot, both Société Générale and in Crédit du Nord, we have continued to increase the cost synergies between the 2 entities, notably regarding IT. And I think that all this work is going to help us a lot for the additional step. So basically, additional steps are described by Sebastien are -- we will completely materialize the IT platform and therefore, operations. Two, we will have cost synergies related to the utilization of the networks of the branches, without leaving territories. And the third component is the merger of the head offices. And I think that what we have done again during the last 4, 3 years, are really useful for the additional steps we have in today.

And if I may, just at my level, add you 2 things. First, there was potentially a consolidation operation, which could have been considered for Crédit du Nord that we did not decide to pursue. And the second thing, I think that we did the maximum that we could in adapting the networks as we did, and we were in a market where most of the players do not adapt to networks, did not in the last 5 years. I think really pursuing that strategy would have had it -- we would have been in a deadlock for. Let's face it. Reducing further the network would have meant an issue. And I think that it's really the right time now to do something different because of the environment. As we've said, but beyond because the fourth ring, what we had done very efficiently in the last 5 years would not have functions. So when you add all the pieces, I think it is now the right time. And I think the job which has been done, which is remarkable, and I would like to insist because it's not a top-down decision. It's also work built with the teams and based on our decision to consider that option makes a lot of sense currently.

Next question is from Mr. Jacques-Henri Gaulard from Kepler Chevreux.

Two questions. First one on Boursorama, the expected cumulative losses between '21 and '23 of EUR 230 million. I think it's a delta over your own budgeted losses. If we can just have a view of how much extra losses that represents just for the modeling purposes. And then the second question, I guess, again, a little bit top-down. The cost savings are back-ended 2024, '25. There are going to be restructuring costs in 2021. So you can always imagine people panic and say, "Oh, that's it, we're going to have another couple of years of transitions for Société Générale." But in a way, when I look at what you've announced as well, it seems that, irrespective of revenue guidance, the P&L is going to be carried by your EUR 450 million cost savings in the investment bank in '22 and 2023 before that particular cost savings is taken over. Is it the right way to look at your long-term financial projection?

Hello, Jacques-Henri. I hope you are well. Let me perhaps answer your second question, and then we will go back to Boursorama. First, let me reiterate that in terms of dividend policy, how we calculate the dividend on underlying net profit, and we will not take into account this CTA. So if you wish, yes, of course, in terms of P&L, it will impact. But I think for the investor and given the kind of payback, and again, we -- I hope people understand the need to further transform the French retail and networks, given the environment and the risk of waiting will be enormous. So here, we have, I think, a real opportunity, first, to drive -- to conduct an internal consolidation, domestic consolidation, to be frank, listen, it's exactly what people do elsewhere. But we have the only opportunity in France, let's say it, at least the internal one and with benchmarks which are very similar. As we've said, we've taken into account the time frame, which has to factor at this stage the constraints of the French social environment, if we can anticipate with that. And we have CTA cost, which are exactly in line with what we've seen outside, including what we've said, IT investment, training and IT system amortization account. So I think, really, we are in line with anything that I've seen outside. And then we work, of course, on other businesses, projects. Let me just say, capital market. Yes, certainly. We will update you on that after the fourth quarter results with the new head of this activity. And I would like also to insist that, in terms of being able to reduce our cost base, we have also still cost of remediations. 2021 is an important year for you -- it's the end of the legal procedures and settlements. So we are working a lot on that. Of course, to put that behind us and which will help also to reduce the cost that we have and which are, for some of them allocated in the businesses or in the corporate center anyway beyond 2020 onwards. So I mean, yes, we will have these costs still to carry. But as I've said, in terms of dividend policy, we neutralize. And I think we have, of course, the capacity to finance and for the benefit of the longer-term profitability, which will be definitely much above, I think, what we can deliver today and sometimes expected by certain market participants. So I think it really makes sense. In terms of Boursorama, can you elaborate, Benoit?

Yes. Thank you, Frédéric. Thank you for your question. What we can say is the EUR 230 million during the period of '21 to '23, it's the cumulative losses we are going to implement in order to reach more than 4 million clients by the end of '23. And the level of losses will be more important than what we did previously. Why? Because we are going to acquire globally on the same number of clients, the same volume, but in 3 years compared to 5 years in the previous period. Because if we take into account the previous period, we have 5 years to get 2 million clients acquired, and it would be roughly the same for the period of '21 to '23. So it's really the idea to invest now in order to get the clients as soon as possible, which is the best manner to have the revenues as soon as possible also. So it's a question of market share, competition and capability to make revenues.

Yes, Philippe? You want to add something, Philippe Aymerich?

Yes. And why the timing is so critical. It's because Boursorama is a unique asset that it has a simple but comprehensive range of products. So that's very important. Boursorama, it's not only an account, a card, and an app. It's also full services regarding savings, financial services, credit, insurance. And these products, actually, we have demonstrated that we are selling them to our clients.

And this year has confirmed the validity of the business model. Let's take it. Of course, it was a very specific year, but it has confirmed the validity of the model.

Next question is from Madam Flora Bocahut from Jefferies.

Yes. And thank you from myself as well for the presentation today. The first question I wanted to ask given that you had kind of pre-announced this project of merger in September, I wanted to see if you could share maybe some client commentary that you received in the past 2 months. I'm thinking here especially about the midsized corporate clients that you have at Crédit du Nord, whether they have been supportive of the project or you feel it's not being very well received. You know what kind of client attrition commentary you can derive from, I guess, the discussions you've had with corporate clients over the past 2 months at Crédit du Nord. The second question, if I look at the deep dive that you did on French retail back in May 2019, I think back then you had planned for a phase of client acquisition at Boursorama until '21, with the target to have more than 3 million clients in '21. And then we are talking about Phase 2 of improved profitability. Now obviously, we get -- seeing a message, but just a different timing where we now target this client acquisition phase to be longer than previously expected to have more than 4 million in 2023. So the question I want to ask today is why the 2-year delay, the 2-year change in the timing of the phases? Isn't there a risk that in 2 years' time you could push further this profitability phase because you continue to see good client acquisition? And the reason why I'm asking is because, when I look at the Slide 34, when you showed us the swing in profitability for Boursorama, it seems it's going to be the bulk of the RONE improvement towards 2025.

Hello, Flora. I will turn to first Sebastien and then to Benoit. Sebastien, first.

Yes, Flora, thank you very much for your question. So as you said, in last September, 23rd September, we announced the study in the -- launch for the study. So we didn't describe the model. We are describing the model now, our objectives and how we will achieve a higher degree of term satisfaction perhaps today. So during the period of time of the study, we got the first very limited, very, very limited client feedback and client feedback from Crédit du Nord and especially SMEs clients was explained to us what will be the model. And will it be different from Crédit du Nord model as it is today. So that's what we will do starting now. Because today, we do describe some other. This model will still be based on proximity, which is one of the key values of Crédit du Nord's model and the value is very important for us, as we said, for SMEs. So we are very confident because all the choices made so far respect Crédit du Nord's strength and this proximity. Reactivity will be first capped. And the second point, enlarged to a broader client base of 10 million clients.

To you, Benoit.

Yes. Thank you Flora for your question. I think that you're right. Last year, the target was to reach 3 million clients in 2021, and the decision has been made to accelerate and to grow faster. Why? Because we are totally convinced in the fact that we are generating more and more net results with more clients. It's as simple as that. And we think that the depth of the volume of clients we can acquire is higher than what we expected 1 year -- 1 year and that has to go. So I think the goal is really to have a better RONE and to have to maximize also the volume of net results and profit we can do in 2025. And the most clients we get, the most result we get. So it's why we have changed the target and we have said that now it's more 4 million clients by 2023. It will be more than 4 million compared to 3 million in 2021.

And if I may, Flora, again, I think that the bank with 4.5 million clients, I guess, a brand awareness, which might be second to none. It's already, again, when you look at the brand awareness, Boursorama, it's very strong. It appears in the top 3 to 4 will be even different in terms of client acquisition. So I think that, first, even if you take a rhythm of 3%, 4%, multiplied by 4 million, 4.5 million, that leads to close to 200,000. So by nature, the bank will be very different, and we can go to something very different in terms of client acquisition, I think, and then fitting fully from the construction which might have taken a few years, but which will be unique in my view, in even in the Eurozone, I don't have in mind something, at least, a very few will be similar and certainly nothing in France. And it will be a way compared with all your questions on the client evolution blah-blah-blah. I think to be able to have all the tools to be ready to anticipate and answer evolutions that we might not be able to predict today, but which might happen, but at least we'll have the dual model, which will make sense potentially for all client needs.

Next question is from Madam Lorraine Quoirez from UBS.

Sorry. Another very quick one for me. Could you please tell us what the tax rate you assume in 2023, '24 for your calculation of return on normalized equity, please?

For pro forma, it's 25%.

Tax rate, I think we are...

For the whole, we haven't made any guidance for 2024. But overall, as we said, there's no reason that they would derive from what we have said for group level, which is around 24%.

Yes. And for France, anyway, the tax rate, which is coming down according to plan, this government has not changed that. So we have taken this progressive reduction of corporate tax. Any other questions, please?

We have one last question from Mr. Pierre Chedeville from CIC.

Just want to have some clarification regarding the project in the concrete aspect. Because you have given the example of 2 branches in Avenue des Ternes, which is, I would say, the simplest example in terms of rationalization...

I could have taken with that Pierre, is that we can -- I can tell you it's the same. Sorry.

I know the fact. But this is not -- this is not my point. I know very well the original network because I've been the auditor, as you know, during several years. And I know something is that clients are very attached to the name of the called bunkers are very excellent. As far as I understand, you are going to make legal mergers, but it's not very clear regarding the maintain or not of the name of the company. So my point is, I am in Marseille, and I have [indiscernible] a branch because I know you have a branch of Société Générale and [indiscernible] and you have, of course, a big branch of Société Marseilles de Crédit. Well, you legally merge. But at the end of the day, if I'm a client of Société Marseilles de Crédit, if I have only 1 branch, what would it be? It would be Asia branch? It would be Société Marseillaise de Crédit branch, would it be Asia Marseille branch? You see what I mean?

Yes.

And the corollary of my question is, out of the 600 branches you are going to close, which part will be in real province, I would say? And which part will be in the major acts of SG network, Lille après ceux de Bordeaux, Lyon, Marseilles, Bordeaux. You see what I mean?

Yes, yes, yes. Please, yes.

My last question is regarding the breakdown of restructuring costs, which is quite significant, I would say. You mentioned a lot IT. But what would be IT part of this restructuring cost? And what would be people part of this restructuring cost?

Yes. I will let Sebastien to elaborate again -- to come back to the brand and your question on branch. We don't disclose the breakdown. There are also social elements behind that. But as I said, is on the pure social thing, nothing very dissimilar to what it did previously. And again, we need to have first conversation with the trade unions on that story. So that's why we can't, at this stage, give more granularity. Sebastien [Foreign Language]

Yes. So Pierre, let me state having one single legal entity doesn't mean having only one brand in the French market, okay? So our objective is very clear. And as I said, we just are different. So brand strategy should be different depending on the regions. And in the south of France would be the same brand and then in the north of France or in the east of French because we are talking about different client expectations and different regions. We have to work -- we have to keep working on the brand strategy, but I summarized earlier today, the main principles and commitment. It will not be only 1 single brand on the entire territory. And regions will be treated differently by using the first part of the brand, which will be associated with Société Générale, whatever the final decision within Société Générale universe. And the second part of the brand will be regionalized. So you mentioned Société Marseilles de Crédit, Société Marseilles de Crédit is a strong brand. We are analyzing the different brands of Crédit du Nord in order to take into account clients' perception of the brand. We want to make no mistake. Because at the end of the day, the brand strategy is very important to demonstrate familiarity vis-à-vis the history of all these brands, but also be able to have a brand strategy perfectly consistent with the different factors which should be taken into account, such as an example, the fact that this brand strategy needs to be very efficient when we talk about digital.

And I think to answer your question on the branches, I'd like to insist, you will -- again, it's a little bit difficult to answer your question because what we would -- could have been doing going forward if we had kept the 2 networks separate is to just maybe 2 branches in -- because they might have been not the right scale at the end of the day. And maybe the 2 branches with high. And the whole purpose is to say, at the end of the day, we'll keep 1 branch in at both, whether it's national or plus Société Générale I don't know. But the idea is 1 brand there with scale, the mass benefit and then maybe close 1 of the branches within, whether it's the 1 close to more partner or not for the ambition. So the -- I think really, and it was reflected in Sebastien's workshops with all the people. It is something which is working very well. Sebastien?

Yes, yes. Keep in mind, Pierre, that, as we said, 60% of Crédit du Nord and Société Générale branches are close to each other -- from less than 1 kilometer. And this percentage, 60%, is true in all regions. In some regions, it's higher. In other regions, it's at least 60% so we have this flexibility to optimize the network without leaving cities. And that's something very, very different compared to what we did over the last years when DGF when Société Générale decided to cut branches in some cities and Crédit du Nord did the same in the same cities. So at the end, both brands left the cities. This kind of things won't happen again.

And again, last part of comment regarding this topic is that we are also working a lot on the format of the branches, which means that we'll probably have less small branches and with branches with the capacity to deliver the expertise of the right level of advice to the client. So that's also an important component to take into account because, yes, the clients are calling less and less to the branches. But when they come to the branches, they want a great experience from an advisory standpoint.

Thank you. I think there's no more question.

Yes, there is no more question, sir.

Okay. Well, we are perfectly on time. Thank you very much for your participation, and have a very nice day. And keep safe first in this still uncertain environment. Thank you. Bye-bye.

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.