BNP Paribas S.A.

Lars Machenil - Group CFO

Delphine Lee - JP Morgan Jon Peace - Crédit Suisse Tarik El Mejjad - Bank of America Merrill Lynch Jean-François Neuez - Goldman Sachs Maxence Le Gouvello - Jefferies Stefan Stalmann - Autonomous Research Anke Reingen - Royal Bank of Canada Omar Fall - Mediobanca Bruce Hamilton - Morgan Stanley Kiri Vijayarajah - HSBC Geoff Dawes - Société Générale Flora Benhakoun - Deutsche Bank Piers Brown - Macquarie Securities Pierre Chedeville - CM-CIC Market Solutions Lorraine Quoirez - UBS Nick Davey - Redburn Alex Koagne - Natixis

Thank you, operator. Good afternoon, fine ladies and gentlemen and welcome to our 2017 full year results presentation.

I hope you’ve all got the copy of the presentation slides in front of you. As in our usual way, I take you through the first three chapters, before handing over to you for the Q&A session.

So, starting with our key messages on slide three. You’ll see that our 2020 plan has got off to a promising start.

The business activity of the Group developed strongly, sustained by a gradually higher European growth. Revenues of the operating divisions evolved by 1.5%, despite an unfavorable ForEx effect.

They were up 2.6% like-for-like with good drive in all business lines but a still lackluster rate and market environment in the second half of 2017. Costs of the operating divisions progressed by 0.5%, hence less than revenues, reflecting good cost control, thanks to the operating efficiency plan with positive jaws effect in all the divisions.

At the same time, we we’ve been actively implementing the transformation plan with €0.9 billion of transformation costs booked in 2017. Cost of risk at Group level was significantly lower, standing at 39 basis points, driven by a reduction in most business lines.

The Group’s net results stood at €7.8 billion, progressing by 4.4% net of one-offs, which translates into a proposed dividend payment of €3.02 per share, in line with the 50% payout target of our 2020 plan and up 11.9% versus last year. In terms of financial structure, the Group is well-capitalized and fully loaded common equity Tier 1 ratio reached 11.8% at year-end, up 30 basis points versus last year.

Moving to the exceptional items of the quarter on slide five. You can see that they were more negative than last year.

After tax, they impacted 2017 results to the tune of €390 million where the impact had been of just €100 million a year before. Swiping to slide six.

You can see the performance of the Group and of the operating divisions. I draw your attention in particular on the good operating performance of the operating divisions, despite an unfavorable ForEx effect.

Like-for-like revenues progressed by 2.6%, instead of the 1.5. As I said, the Group delivered €7.8 billion of net income, up 0.7% year-on-year, which becomes plus 4.4%, excluding exceptional items.

This equates to an 8.9 return on equity or 9.4% net of one-offs and the return on tangible equity of 10.5 or again 11% net of one-offs. Having said that, and zooming on the revenues of the operating divisions, if you turn to slide seven, you can see that they progressed well despite an unfavorable interest rate and market environment in the second half.

They were also impacted by an adverse ForEx effect in 2017, as I mentioned. Domestic markets were essentially stable with healthy volume growth but still low rates.

International financial services revenues increased on the back of business development and CIBs pair up with corporate banking and security services making a good increase and global markets holding as well. If you can now flick to slide eight, you’ll see that costs of our operating divisions were only slightly higher and we showed positive jaws in all three divisions.

In particular, in domestic markets, costs were down 1.4% on average in our three retail networks Belgium, France, Italy. But they were up in the specialized businesses on the back of the continued development.

International financial services cost evolution reflected business growth while CIB cost recorded increased business of the division which was largely offset by cost savings, benefitting from the launch of the CIB transformation plan at the beginning of 2016. Shifting now to the cost of risk, slide nine.

I would kindly ask you to flick through actually 9 and 10, which are the slides on those topics. And you can see that cost of risk marked a significant reduction.

On the whole, most businesses were lower or at a low level. Taking the business one at a time.

In corporate banking, provisions were largely offset by write-backs, cost of risk was low in French retail, very low in Belgian retail, and continued to decrease at BNL in Italy. In the other retail businesses, personal finance saw a low cost of risk, benefiting from the low rate environment and a gradual shift towards products with a better risk profile.

Europe-Med’s cost of risk decreased and was positively impacted by a provision write-back, while BancWest was still low at the cost of risk. So, having looked at revenues, cost, and cost of risk evolution, please swipe to slide 11, which illustrates the evolution of the pretax income of the operating divisions.

You can see the strong increase of free tax income in the three operating divisions with domestic markets up 4.7%, IFS up 18.2% and CIB up 14.6%. Turning now to our financial structure which is on slide 12.

You can see the evolution over the year of our common equity Tier 1 ratio which increased 30 basis points to clocking in at 11.8%. It was essentially due to the 2017 results, net of 50% dividend payout for -- resulting in 60 basis points of increase and also the increase of the risk weighted assets, excluding the foreign exchange effect for 30 bps.

So, we increased by 60 bps on the back of the results and reduced 30 bps on the back of the increasing risk weighted assets. So, total plus 30 basis points.

Overall, the ForEx effects and other effects on the ratio were negligible. If we take other prudential metrics, like the Basel III leverage ratio, it stood at 4.6% and our liquidity coverage ratio stood at 121%.

The Group’s immediately available liquidity reserve totaled €285 billion at the year-end 2017. Now, if I can ask you to peruse the slide 13, which assesses the impact of the new IFRS 9 accounting standards that have taken effect on January 1, 2018 and therefore replaced IAS 39.

They basically set new classification and measurement criteria of financial instruments. From 2018, the credit risk impairment model will be based on expected loss rather than incurred loss.

And the value adjustment for the own credit risk, so called OCA will also be booked in equity rather than through P&L. Overall, we estimate the first-time adoption of IFRS 9 standards as of January 1, 2018 to have a limited impact for the Group in the region of 10 basis points of common equity Tier 1, in line with the guidance we have provided in the past.

If we look on slide 13, we show that our net book value per share continues to grow as it reached €75.1 at the end of the year 2017; and so since 2018, it has been growing at the compounded annual rate of 5.7%, which clearly illustrates the continued value creation through the cycle. If you now can advance to the next slide, which is number 15, you can see that our proposed dividend payment stands at €3.02 per share, up 11.9% versus last year.

It is stable, fully in cash and corresponds to a payout of 50%, in line with our 2020 plan, at current prices, a decrease to a dividend yield of 4.6%. I leave you now to peruse the slide of this introductory part on our reinforced internal control system and would now kindly ask you to advance to the results by division, which start on slide 18, with domestic markets.

As you can see, domestic market showed good business drive in 2017, on the back of robust economic growth in the Eurozone and good loan demand. In fact, we saw good loan growth of 5.9% on average in all networks and in the specialized businesses, as well as a continued increase in deposits in all countries.

The assets under management of our private banking confirmed a good trend, marking a 4.2% increase compared to the year before. And Hello bank!

has continued to grow its client base, which reached 2.9 million at the end of 2017. In terms of P&L, revenues were stable at €15.7 billion.

As mentioned, we saw good business drive in our domestic markets, but we continued to be impacted by low interest rate environment. Commission income was up with a positive contribution from all the networks.

Now, if we turn to operating costs, they were a tad lower. And looking at just the three large retail networks, so again, Belgium, France, Italy, costs were actually down 1.4%.

On the other hand, the specialized businesses continued their business development. Given the continued reduction in cost of risk in particular in BNL in Italy, pretax income topped €3.5 billion, marking a 4.7% increase year-on-year.

Looking at each country and business, I can mention in particular that France retail showed strong revenue resilience on the back of very good business drive; BNL bc’s revenues were down with a gradual improvement in business activity and a recoup of income generation. Belgian retail showed strong business drive, but was increasingly impacted by the low interest rate environment.

Finally, the specialized businesses continued to deliver strong business drive. To wrap up, quite a dynamic year for our domestic markets with good business drives and higher income, despite the headwind of low rate environment.

Still on domestic markets, if you now leap to slides 23 to 25, you see that in the first year of the plan, we have been actively implementing our digital transformation plan, successfully strengthening the commercial approach through new client experiences, improving the product offer and making available new services. We have adapted to client expectations by proposing diversified service models.

In France, for example, we have completed our offering to different banking users with the acquisition of Compte-Nickel, finalized last July. Compte-Nickel has continued to expand at an impressive pace, increasing the number of accounts opened by 29% versus 2015, to stand at 800,000 accounts at year end 2017.

We’ve also been speeding up clients’ use of mobile banking services by launching new mobile apps and expanding features. In fact, we’ve seen a 38% increase in the number of contacts via mobile apps, in the three networks and this to 51 million in the month of December 2017.

We’ve also been releasing innovative products such as the universal mobile payment solution, LyfPay; the online platform for individual customers Arval for me; and the B2B marketplace Kintessia for our leaning solutions clients. Finally, we’ve continued to upgrade the operational model in order to enhance efficiency and client service with the layering of the three networks and alongside this, the continued optimization of the branch network, as you can see on slide 25.

This basically sums up domestic markets. However, if we stay within retail banking and services and if you can advance to slide 26, you’ll see that our international financial services division showed dynamic business activity.

In particular, personal finance delivered very good business drives and completed the acquisition of General Motors Europe’s financing activities. International retail banking showed continued growth, and insurance, and wealth and asset management showed a rise of assets under management.

This division was affected by unfavorable ForEx effect in 2017, so taking results at constant scope and exchange rates, IFS revenues were up 4.8% with an increase in all the businesses while cost progressed by 3.7%, delivering positive jaws. Given the reduction in the cost of risk, IFS pretax income increased by over 12% to stand at €5.8 billion.

Now, zooming in to the different businesses one-by-one and if you flip to page 27 first on personal finance, which delivered another dynamic year with the signing of new partnerships and acquisition in particular of GM’s Europe’s financing business, as I just said. Outstanding loans were up over 12%, thanks to higher demand across Europe on the back of favorable economic backdrop and the positive effect of the new partnerships.

Personal finance continued to innovate its products offer and also forge ahead with a digital development as shown by the launch of the first Hello bank! by Cetelem in the Czech Republic in November, leveraging only sizeable client base.

In terms of results, revenues topped €4.9 billion, progressing by 5% at constant scope and exchange rate, this in connection with good volume growth and the positioning on products with a better risk profile. Revenues progressed particularly well in Italy, Belgium and Spain.

When turning to costs, they were up 4.4% at constant scope and exchange rates on the back of the increased level of activity. They progressed at the lesser pace than revenues, meaning positive jaws.

Cost of risk was at the low level and pretax income therefore reached €1.6 billion up 10.5% on last year at constant scope and exchange rate. To sum up, in a favorable context, in Europe, personal finance continued to show a very dynamic business drive with good growth and higher income generation.

If we now move to the other parts, and let’s move to international retail banking. And let’s look at Europe-Med first and this is on slide 28 where business activity continued to show good growth with loans up in all regions and deposits also making good progress.

In particular, our digital banks in this area confirmed the good development with Cepteteb in Turkey attaining 475,000 clients and BGZ Optima in Poland clocking up 210,000 clients. If we continue to look at constant scope and exchange rates, revenues were up 2.3% with an increase in all regions on the back of the volume growth, I mentioned.

They were still impacted by the higher rates on deposits in Turkey, which has not yet been fully offset by the gradual loans repricing as we discussed before. Costs increased as a result of the good business development.

And overall, given a lower cost of risk, Europe-Med’s pretax income was up 23.6% in 2017; at historical scope and exchange rates, it was up 8.9% due to the unfavorable ForEx evolution, that we discussed before. If you now leap to the U.S.

and go to slide 29 where we see BancWest, which confirmed a good business drive in 2017. As you can see, loans were up 6%, driven by both individuals and corporate lending, while deposits increased by close to 10% compared to the year before.

Like-for-like, the assets under management of our private banking were up 11.4%, and stand at 13.1 billion. At constant scope and exchange rates, revenues were up 2.4% which becomes over 5% excluding the gains on securities and loan sales which were significant, I remind you, in 2016.

Now, if we look to the other elements of the P&L and let’s start with costs. They were kept well under control and BancWest generated a positive jaws effect.

On the whole, giving a still very low but slightly higher cost of risk, BancWest pretax income was 1.5% lower than last year, and given the unfavorable ForEx effect, it was actually minus 3.7% at historical exchange rates. But, I remind you, if we look through the exceptional results in 2016, it is up 5.5%.

So, I would sum up by saying that BancWest showed a solid operating performance in 2017. If I can now ask you to flick to slide 30, on the last part in IFS, which is the insurance, and wealth and asset management businesses, which saw assets under management increase further to stand at €1,051 billion at the end of the year.

Assets under management were positively impacted by good asset inflows, since the beginning of the year in all our business lines and by a positive performance effect. This was partly offset by an unfavorable ForEx effect.

In fact, over the past three years, our assets under management has increased by €157 billion with nearly two-thirds coming from net asset inflows. If we now start by looking at insurance, and this is on page 31, it continued to show good business development, both in terms of savings and protection insurance.

In 2017, the insurance business finalized the IPO of SBI Life in India, to which we sold a 4% stake, and that was, I remind you, in the third quarter of 2017, which generated €326 million in capital gains. I remind you that we retain a 22% stake and which is worth €2 billion at current market price.

The contribution of this stake in 2017, which is accounted by the equity method, stood at €34 million. We also continued to foster the international expansion of Cardif, which is a brand name of insurance, by developing and strengthening partnerships with for example, Sumitomo Mitsui in Japan, Volkswagen in Europe, or Itau.

Insurance revenues were 5.6% higher, due to the good business development and the favorable markets. Costs accompanied the development of the business.

And overall, pretax income marked 36% increase to stand at nearly €1.9 billion in the year. This of course was boosted in particular by SBI Life, as I mentioned before.

At constant scope and exchange rates, pretax income progressed by 9%. To sum up, continued business progress with a sharp rise in income for our insurance businesses.

If we now move to wealth and asset management, the last part in IFS, and this is on slide 32. It also showed good business activity across the board.

In terms of P&L, wealth and asset management revenues progressed by a strong 7.3%, as a result of the development of the business. Costs were well contained, leading to a largely positive jaws effect.

As a result, pretax income marked a 31% improvement to stand at €0.9 billion. To sum up, a very good overall performance in our wealth and asset management business in 2017.

Wrapping up this part of the realization in 2017 on the IFS division, you also have on the slides 33 to 35, you can see what we’ve been actively implementing for our 2020 plan by continuing to strengthen the competitive positions of our specialized businesses, stepping up the development through new partnerships and new offers and growing our retail banking beyond the Eurozone. In a little more detail, we forged new growth-enhancing partnerships in personal finance, entering new sectors as --with Masmovil in Spain or TUI in France and new countries such as Austria.

The same is true for insurance. For example, extending the partnerships with Volkswagen Financial Services in creditor insurance and car protection.

So, we’ve optimized client experience with the release of new features in wealth management client portal and the expansion of the e-signature in personal finance. On top of, we’ve also continued to develop new technologies and business models as showed by the acquisition by asset management of Gambit, a leading European provider of robo-advisory investment solutions, and the launch by personal finance of new digital banks branded Hello bank!

by Cetelem. Finally, we pursued industrialization and operating efficiency improvements with for instance the implementation buy asset management of the new outsourcing solution, called Aladdin.

In 2017, IFS has also finalized several bolt-on acquisitions, and these bolt-on acquisitions will materially strengthen growth perspective of the businesses, as you can see on slide 35. The more sizable of these bolt-on acquisitions was the financing activities of GM Europe that our personal finance acquired jointly with PSA Group.

Moreover, personal finance got a foothold into Swedish customer credit market by acquiring SevenDay Finans, while the insurance business has bought the remaining 50% of Cargeas in Italy and real estate services purchased Strutt & Parker in the UK. To sum it up, these bolt-on acquisitions really provide a lever for growth.

These acquisitions should contribute an additional €720 million of revenues by 2020 and about €280 million of additional pretax income, so really important lever in our evolution. And in a nutshell, IFS delivered this year good business development and a strong rise in income, laying the foundation for further progress to the growth enhancing initiative finalized in 2017.

So, IFS, is the engine for growth for the Bank. If you could now cast your eyes on slide 36 on corporate and institutional banking, which continued to make good progress in the implementation of its transformation plan, strengthening competitive positions, reaping the benefit of cost saving measures and launching digital transformation initiatives.

If we start at the top of the P&L. Revenues stood at €11.7 billion, up 2.1%, despite an adverse foreign exchange effect.

At constant scope and exchange rates, revenues were up 3.8%; and this despite a challenging market environment in the second part of 2017. Total CIB costs were a tad lower and evolved by 1.8% at constant scope and exchange rates, resulting in a 2-point positive jaws effect.

They benefitted from the cost efficiency measures that we’ve been implementing in the CIB division since 2016. I remind you, CIB started a tad earlier than the retail activities and resulted so in a 1.7-point improvement of the cost to income ratio.

To end with the cost of risk which decreased sharply compared to last year despite the impacts of 2 files in the fourth quarter. So, overall CIB generated €3.4 billion of pretax income, making a strong 15.7% increase at constant scope and exchange rate compared to the year before.

If we now turn to the next three slides that’s basically 37 to 39, let’s take a closer look at each of the businesses within corporate and institutional banking. So, if we start with global markets on slide 37 whose revenues were up 0.8% at constant scope and exchange rate.

In particular, FICC client activity was affected by the challenging market conditions in the second half of the year, leading to an 8.6% revenue decrease in 2017. In this lackluster market context, with low volatility and limited client volumes, retained our top ranking on all bonds issued in euros and ranked number nine for all international bond issuance.

Equity revenues on the other hand showed strong growth of 20.9% on the back of a pickup in the equity derivative business and a good performance of prime services. So, overall, a good performance in a lackluster market context.

Advancing to the next slide, 38, where we have corporate banking. And the revenues were up 6.1% at constant scope and exchange rate on the back of good growth and strengthened commercial positions.

Transaction banking marked good growth, especially in Europe. The business consolidated its leading position in trade finance in Europe and entered the top-three in Asia for the first time.

Finally, to top it off on slide 39 where we have security services whose revenues progressed by 8.3% at constant scope and exchange rate on the back of strong growth in assets and under custody and under administration, and this in conjunction with higher transaction levels. Securities services continued to gain very significant new mandates in 2017, in particular, in the U.S.

it announced recently a major strategic partnership with Janus Henderson. So, we continued very good business development for that part of the business.

So, this is basically the 2017 results for CIB. And as we’ve done for the other two, if you look on the next slides 40 to 42, you can see noteworthy examples of the active implementation of the 2020 plan in our CIB division.

I’ll thrive and rapidly sum it up by saying that in 2017, CIB had successfully expanded its client base with corporates, especially in targeted markets, like Germany, onboarding across Europe over 125 new client groups, and the same is true with institutionals. In the course of 2017, CIB has entered into growth-enhancing initiatives, such as partnerships with GTS in the U.S.

to strengthen global markets offering. And we also entered into working relationship with Symphony, which is a secure and automated communication platform for institutional clients.

CIB has also accelerated a digital transformation with 150 digital projects identified and the continued development of digital client interfaces such as Centric. Centric, I remind you, which is our online platform for corporates, which is already used by more than 8,000 corporate clients.

And thanks to the continued implementation of a cost savings program, which led to the cost income ratio improvement, I mentioned before and a reduction of risk weighted assets, which led to a 4.9% reduction of its allocated equity, CIB improved its pretax return on equity by 2.8 points to clock in at 16.1%. So, to summit up, our CIB made good progress, with the implementation of its 2020 plan, showing solid business growth and operating efficiency improvement, and this leading to a strong rise in income in 2017, and all this, despite a lackluster market context in the second part of the year.

If you could now advance to the third and last chapter of today’s presentation, starting with slide 44. As you know, we are now evolving in gradually improving macroeconomic context on the back of robust GDP growth forecast in Europe and a rate environment that should improve gradually going forward.

In this gradually improving context, you can see on slide 45 that our plan centers on an ambitious transformation plan in all the operating divisions, together with differentiated development strategy by division, leveraging the Group’s integrated and diversified business model. I leave you read it at your leisure, as I’ve already illustrated the operating division strategies across all its business lines, the Group is implementing an ambitious program of new client experiences, digital transformation and operating efficiency improvement.

So, if you leap to slide 46, you see that we are actively implementing our transformation plan to all the five levers that we’ve identified. I will rapidly take them one at a time.

They are, first, rolling out new customer journeys with new services and digital experience. Example of this are the new universal payment solutions, LyfPay, and the acquisition of Compte-Nickel or the continued development of Centric.

Second, evolving the operating model by optimizing processes, simplifying the organization and developing shared platform, a meaningful example is the announcement of the rollout of Aladdin, in our asset management. Third, upgrading IT systems by integrating new technologies, as illustrated by the development of data hubs, which are providing an interface between banking and digital platforms.

Fourth, improving data usage. The acquisition of Gambit, in the robo-advisory context is an example of our initiatives in this area.

And finally fifth, developing more digital and agile working methods, which for example, the planned rollout of the innovative communication platform, Symphony. If you now swipe to slide 47, you’ll see that implementation of our ambitious transformation plan is well on track, and at Group level, we’ve identified some 150 significant programs to achieve it.

In 2017, transformation cost stood at €856 million with a gradual increase over the year and we generated €503 million of cost savings, in line with the defined timetable. The bulk of these cost savings were this year as expected in CIB, which launched its plan at the beginning of 2016 a tad before retail.

And the remainder is almost equally split between those divisions. On the whole, I remind you that at the Group level, we intend to invest €3 billion between 2017 and 2019 to achieve this program, which will generate €3.4 billion of cumulated cost savings over that same period and €2.7 billion of recurring cost savings from 2020 going forward, and this in a balanced contribution from all the operating divisions.

If we now have slides 48 and 49, which illustrate our commitment for a positive impact on society, thanks to an ambitious corporate social responsibility policy. I leave you to peruse them, but would draw your attention to our newly created Company Engagement Department in order to reinforce our action in this field which has had sitting in the Group’s executive committee.

This new department defines the Group commitments to civil society, strengthens CSR practices, and makes all the Company’s leaders convergence to meet the key challenges in society. So, to wrap up this chapter, on the first year of our plan, I would reiterate that our plan has got off to a promising start in 2017.

Hence, we’re confirming our 2020 Group targets with revenue growth of at least 2.5% per annum and recurrent cost savings of €2.7 billion from 2020, leading to an improvement of the cost income to 63%. In addition, as planned, the dividend payout ratio has been increased to 50% and this from 2017.

Moreover, the combination of stronger economic growth in Europe, higher implied interest rates and lower taxation in the U.S. and France, Belgium, mean that if confirmed, we are now expecting to beat the target of return on equity of 10% in 2020, based on a 12% common equity Tier 1 ratio.

Actually our ROE could reach 10.5%, if all of these elements were to materialize, and this of course, accompanied by a list in the bottom line target. This concludes my introductory remarks for the Group’s full year 2017 results.

As takeaways, there is a good performance of the group in 2017 with a new result of €7.8 billion, the sustained development of business activity in a more buoyant economic context in Europe, and our 2020 plan has got off to a promising start with business lines strengthening their commercial positions, the ongoing rollout of new customer experience, thanks to the accelerated pace of digital transformation and the Group’s commitment for a positive impact of society, and this allowing us to beat our ROE target. So, fine ladies and gentlemen, I thank you for your kind attention, and I’ll now be pleased to take your questions.

Yes, Delphine Lee from JP Morgan. Thanks for taking my questions.

If I may ask two questions, first of all, just wanted to understand little bit, your last comment on return on equity. If you would be kind of give us the effective tax rate that you would have in 2020 including all the reductions in tax rate in France, Belgium and U.S.?

The second question is regarding Basel IV. I don’t know if you could provide us an update maybe on the expected impact that you have at this point.

Thank you very much.

Delphine, thank you for your questions. So, the first one on the tax rate, implicitly.

So, when -- to make the link, when we talk about that we expect to beat our ROE, it’s a combination of things. It’s a combination of economic environment, it’s a combination of the interest rates, and therefore the tax.

But nevertheless, on tax rate, you now that we’ve always guided to have a tax rate between 30 and 31%. So, if we would take that, if the things which are announced, do materialize and the like, it’s possible that our tax rate would be between 28 and 29% in 2020.

So, when it comes to your Basel questions, honestly there is not much I can add. So, Basel, and we have done the communication in December, but they said there are still several levers on which they have to work.

So, for example, the market risk, the FRTB is still under development. And then, as always, these things have to be translated into local laws.

What it means is European Commission will have to translate that. So, all that will take a bit of time.

And let’s not forget, these things typically phase in by 2022. So, it’s a tad too early to give -- to have a sense about saying on the outcome.

And just if I can follow up on regulatory matters. Is there anything else apart from Basel IV that we should expect, TRIM or anything else?

No. I think, the other exercises are going on.

TRIM is more of a day-to-day kind of exercise to add supervisory board [ph] and analysis of the models, which is ongoing, and which is a good exercise. It basically provides the support; the advance models are well-operated and well-implemented.

So, no, there is nothing material to add.

Yes. Thanks very much.

My first question is on the outlook for French retail banking revenues. Did I see correctly this morning that you said that the outlook for 2018 revenues might be flat to down 0.8%?

So, I just wonder if you could talk a bit more about your outlook there. And then, the second thing is, as we consider the cost of risk run rate under IFRS9, how do you mention that would develop this next year and versus your business plan guidance?

Thank you.

Jon, thank you for your questions. Yes, on French topline, we expect 2018 to be a tad better than what we’ve seen in 2017.

But, yes, we expect that in the current interest rate environment, it will still be roughly flattish. So, a tad better maybe than what we saw in 2017, but still flattish in 2018.

When it comes to IFRS 9, so yes, IFRS9, there is of course the first time adoption, which we re-qualifies some products and which does align to switching from the incurred to the expected loss. But, then, going forward, roughly for a diversified group like BNP Paribas, I don’t expect there to be a material difference.

There can be some differences that for example, elements which we knew, they stock rapidly like personal finance, might go a little bid up, whereas those where it is a tad slower, like in Italy might be at tad slower. So, but all-in-all for PNB Paribas, as a whole, I don’t expect to have a material difference.

Hi. Good morning.

Just come back on the regulation question, and also asking for the Basel IV effect. Although I believe you cannot have an idea what will be the impact, but I guess you’re still discussing with the local relation what could be the offsets.

But maybe -- let’s say, and I think it’s fair to assume that the impact should be manageable at the end of the day, when we will know it. Do you think there is a possibility to have some negatives like higher countercyclical buffer, instruction of G-SIB [ph] or something just to offset the fact that actually Basel IV is not something that will be constraint for you in terms of overheating the economy and so on?

And my second question is on the RWAs for the CIB. I mean, clearly, you’ve been -- have RWA down 10 billion for -- 18 billion [ph] in this year, roughly.

And you’ve said that you’ll reinvest some of the RWAs, but so far it’s been only down. So, should we expect a less net reduction in RWAs in 2018, or you first deliver these and then see if there is any opportunity to follow-up?

Thank you.

Tarik, thank you for your questions. No.

As I said, let’s be fair. So, Basel, we have to wait in the end to what it means.

And therefore, as I said, the markets risk has to be still reviewed by Basel and then some other elements will have to be looked at by the European Commission. So, yes, so, it looks I expect and that’s what Europe has always said, and what U.S.

had always said that that Basel evolution should not have a material impact on the capitalistic requirement. And when it comes to the other elements, which are indeed evolutions of the countercyclical, yes, the countercyclical is at left right and center, depending on the evolution is stepping up a bit.

But now, let’s be very fair. These elements are not in the same region as what other people had on the reflection at some stage.

So, all of this, whatever we have with the Basel reflections, or the evolutions of what is currently in the text, it gives the impression that overall this is manageable. And let’s not forget, I mean, for a bank like us, with the profit that we generate, we basically accompany the growth in our business, and that is basically the most important driver.

And this basically makes me shift to your -- the second question where you talk about RWAs or CIB. So, yes, of course, we are optimizing.

So, it is true that we have some elements in our books, which are dated from before the Basel text, and therefore, today in the current regulatory environment are not as lucrative as they were in the beginning. So, those kind of products, we basically reduce them and get them out of the balance sheet and redeploy that into the new demanding business.

The speed at which we go from one to the other, it depends a bit; it depends a bit on the demand for one and on the demand for the other. So, we’ll have to see at what speed it finally goes.

Hi. Good afternoon.

I would just first like to ask about the investment bank, in particular on the CIB [ph] business, you’ve gained a lot of share in equities as is apparent from the results and also in corporate banking. I would have expected this to translate into maybe better comparisons versus pure play investment banking peers, also given the client mix towards the end of the year.

And I just wondered why that was in a sense that there was quite a strong correlation for FICC compared to the outperformance in the other business lines. And with this, I’d also like to know, given we’ve heard from other investment banks outlooks for the current quarter and they have been very varied where you stood, if that’s possible.

The second thing I would like to know is just for your retail businesses as a whole, there has been an improvement in jaws recently. We have seen from other banks in Europe also business plans, where essentially cost reductions have been amplified and so on.

Just wondered whether -- hearing to your business plan, whether the cost reduction or the cost optimization inside the retail network are proving to be either challenging or easily doable? So, I just want to understand the leeway that you have there to amplify those efficiencies or otherwise investments?

Thank you very much.

Jean-François, thank for your questions. The first one, when it comes to CIB, indeed, let’s not forget, CIB stands for corporate and institutional banking.

So, yes, we want to accompany our clients and we want to do this in a very diversified business model where we can help and provide several kind of services. And therefore, if you look at that CIB market share and if you look at it in EMEA or even worldwide, you clearly see that we have quarter after quarter have picked up on the market shares.

So, this is something that we will continue to do. We will continue to serve our client, even if the markets are a bit lackluster as they have been.

We are there to focus with all our services on that and strengthening of the customers franchise, and this is what we see. And when it comes to retail and your cost savings, let’s not forget that the plan that we launched ramping up to 2020 is a tad different than the plan we had before.

The plan that we did 2014-2016 was a pure cost reduction exercise, whereas this one, the one to do now is really adapt to the new customer journeys, digitalize. And as a consequence of that, we have cost optimization.

So that is why the ramping up or the stepping up of the cost reduction, it takes a bit of time. We have to introduce the new ways of doing interactions with our customers, but we feel very confident that they are well on track and that they will -- and they are ready already delivering the cost savings that we anticipate.

So that will be my two answers.

And year-over-year for the first quarter and foreseeable?

Sorry? Say it again.

Outlook.

The outlook. No.

As you know, I mean, we are here to discuss the 2017 results. So, for the first quarter results, I hope to see you back on May 4th.

Thank you very much. Will be there.

All right.

Yes. Good afternoon, Lars.

I have one question regarding Euro-Med and two questions regarding the investment bank. Can you explain us why the loan growth in the African business is flat this year when your competitors enjoy some good growth over there?

Are you optimizing some portfolio? Regarding the investment bank on the securities business, you have -- you made some great achievements in terms of growing new mandates.

Can we assume that you are going to continue on such a kind of growth rate or is it going to be a bit more organic going forward? And the last element is regarding your comment on the German expansion.

Two years ago, you made a clear point of getting some market share in SMEs in Germany and also with German corporate. Can you give us more color about it?

Thank you.

Maxence, thank you for your questions. First of all, when it comes to Europe-Mediterranean, as you know and in general, when we have the growth, we of course have company or clients, but the clients which are also in the domain where we are in that environment.

So, which is just -- we are [indiscernible] to that business and that’s basically the growth that we see. So, there is nothing more to read about that.

When you look at securities, so, indeed, securities had an interesting growth rate and has done some acquisitions. Now, let’s be very fair.

These large acquisitions, they are not always available every given year. And also, when we do these acquisitions, they basically lead to a growth going forward.

So, one can assume that next year there will still be a decent, very decent growth which will be on the back also of the acquisitions that we have done. And yes, let’s be very fair, if there are still acquisitions available and the price is right, that’s what you do on bolt-on acquisitions.

If we see things that can strengthen our business, like Janus Henderson, can really strengthen our presence in the U.S., if these things are available and if the price is right, we’ll definitely continue to look at it. So, yes, securities services remains an entity focused on growth.

When it comes to Germany, so in Germany, so as I said, our revenues are up in Germany 5.6%. So, let’s be very fair, in Germany, we’re focused on the specialized businesses.

So, we’re doing specialized retail, we’re also doing CIB. That’s the kind of activities we’re strong in and where we can capture we can strengthen ourselves and capture good growth as we’ve seen in the year 2017.

So that would be my three answers, Maxence.

Last, regarding securities, how long do we need to assume when sign the contract to get the benefits? Is it six months, because it’s a lot of IT, a lot of process, six, nine months, 12 months before seeing the real impact of revenues?

You’re absolutely right. It is not immediate.

So, it is more six to nine-month horizon before we start to see this.

Two questions please. The first is on costs.

I was wondering, in 2018, in which division should we see more of the cost savings coming through? And given the volatility we’ve seen in 2017 in the CIB base, do you think in 2018, you will be able to show us positive jaws in the investment bank?

And then, secondly, thank you for the detail on the contributions of your acquisitions, I was just wondering if you are willing to give us, how much these acquisitions cost you in terms of capital? Thank you.

Anke, when, it comes to evolution in 2018, as you know, I invite you back on May 4th and then the beginning of August and the likes. But intrinsically, what I can say about the cost evolution, as I said, in 2017, we saw a bit of a dominant impact of additional savings in CIB because CIB started in 2016.

And now, the other businesses have also started and are firing on all cylinders. So, in 2018, the savings, they will be more equal between the three businesses.

When it comes specifically on the capital by each business, we basically do not provide the breakdown for the acquisition. So that will be my two answers, Anke.

And to sum [ph] in terms of impact either, just to see the return of your investments?

We don’t publish that.

Good afternoon, Lars. I have a couple of numbers questions.

The first one, coming back to IFRS 9. Could you maybe add a bit more color to bridge the CET 1 impact, which is probably around 600 to 700 million from your guidance, to the book value rate of 2.5 billion?

I assume, your reducing your expected loss deductions, but the bridge there seems to be little bit too wide to be explained, only of expected loss deductions? Second question on your cost of AT1 or the remuneration of undated sub debt, that seems to be very low, the recurring element of it seems to be very low in the fourth quarter.

Was there anything special happening or is that a more recurring run rate that we are seeing in the fourth quarter? And finally, on taxes, I would have expected to see an impairment of the Belgian deferred tax assets, and from your annual account, it seems you have done that.

But, what have you done to offset this in the P&L? Have you capitalized unrecognized loss carry-forwards to offset this, or was anything else that has offset it?

Thank you very much.

Stefan, thank you for your three questions; and kudos for the third one. It will be my pleasure to answer them.

So, If you take the first one on IFRS 9. So, it is true that there is an impact, if you look at the update of the impairment.

So, if we switch the impairment from what was IAS 39, to the expected loss that we need under IFRS 9, that is that additional 2.5 billion. So, we switched into a provisioning in the accounts, on expected loss.

However, as you mentioned, the expected loss, the difference between the provisions and the expected loss was already deducted from the prudential capital. So, as it is now, going into the balance sheet from the accounts, we remove that reduction in the expected loss.

And so, then, there were also some other elements where some supervisors wanted us to take additional provisions, which were reflected typically through an add-on on the risk weighted assets, which now also fall, because they were also expecting this kind of IFRS 9 anticipation. So those two things, so the expected, really the technical expected loss minus provision which we recuperate and then some other add-ons that we recuperate, because they’re now into the IFRS 9 accounts, basically make that we fall from €2.5 billion to 10 basis points in the common equity Tier 1.

Okay.

On the cost of your AT1, as you know, I’ve also said and I’m looking at the person here, who is basically having this, what we see now is that -- and we’re falling back to pricing which is the more normal kind of level that we would see. So for me, that’s a positive evolution and that we will -- we expect to continue to back up on.

And then, when it comes to the tax impairment, so, it is true that -- and if you look at our total impact of the taxations that have been announced on the 2017 accounts, as you see, there is basically no impact for the Group. There is particularly no impact in the U.S.

because we basically had no losses there as others had. However, when it comes to Belgium, there was indeed still some deferred tax assets.

And so, these deferred taxes had somewhat of a correction, given the announced lowered tax rate. However, there was still an element of losses that weren’t activated and that now have been activated and therefore compensating the effects.

So, in Belgium, there is two effects which basically compensate each other, the impact of lower tax rate on the existing stock of DTAs and then activation of some remaining losses in the past. So, that’s basically ironing out the difference.

So, Stefan, that would be my three answers.

I have three questions. Firstly, in asset and wealth management, there’s a jump in revenues to touch over 900.

How much of this is Strutt & Parker, and is there sizeable amount of performance fees? And just trying to get a sense of how sustainable this level is because it’s a big change in the gross margin?

Secondly, even though you don’t disclose the revenue split, which is a shame, it seems like the prime services businesses had a big step up in its development this year as we know. How much of this is the effect of share gains from some of the obvious, the European investment bank candidates and does this process slow from here as that competition normalizes somewhat?

Also, if you could give a sense of the size of the prime brokerage balances at the moment, just the amount of balance sheet that’s allocated to that business? And then lastly, just on the Group’s total balance sheet, stupid question maybe, but it appears to be down 9% in a single quarter.

Why is that? I know that’s the usual year-end effect to deleveraging and it’s volatile quarter-on-quarter, it seems unusually large?

Thanks.

Omar, thank you for questions. So, if I’ll take the first one.

So, on asset -- so wealth and asset management, there is a deep and good business performance going on. And there are of course the equity markets; there is, of course, performance fees, and then indeed, there is real estate.

And let’s not forget real estate indeed, there are some acquisitions, but there is particularly the business which had a really good quarter and this is of course as we say, in this kind of business, you have the effect on the years, but between quarters it can be different. And now this time, real estate is a bit focused in the last quarter.

So, this is basically that. So that’s transactions, as it goes and therefore fees that is generated, and that is typically a bit spread through the years and this time it is in particularly focused in the fourth quarter and it’s also focused in particularly on some regions like for example Germany.

And if I then come to your question on planned services, there is two things. So, indeed the result is up for basically the fact that we continue to capture share gain, and I think that should still continue a bit at option.

The second thing, let’s not forget that on average our prime services in 2016 was a tad lower. So that is the reason why the pick-up is good because of the share gains, and this is probably to continue, and it was a bit on 2016 which was a bit subdued.

And then, on your third question on the balance sheet, the evolution in the last quarter of the drop in the balance sheet has in particularly to do with the ForEx. Let’s not forget, if you look at it, there is always a bit of less activity in December.

So that basically reduces a bit the balance sheet. But then on top of that if you look at how the dollar ended versus the euro at the year end and then versus the other sterling, that basically had an impact.

So, there is nothing particular to mention about this. That will be three answers, Omar.

Thanks. Good afternoon, Lars.

And three questions, if I may. Firstly, just looking at Belgium retail again.

I mean, you mentioned low rates pressuring, but there is quite a step down in Q4. So, I just wondered if you’re also seeing a step up in competitive pressures and how we should be thinking about the outlook for 2018.

You gave us some color on French retail, but how should we think about Belgium? Secondly, looking at the sort of rapid growth in Hello bank!

and Compte-Nickel, does that in any way change your view on the pace that you can change the domestic retail business in terms of driving through efficiencies? And what’s the level of profitability in those businesses today?

And then, slightly linked to that, your view on Orange Bank, how credible a competitor you view them as , given that they have the combination of technology and trust, which obviously is absent in some of the offerings out there? Thank you.

Bruce, thank you for your questions. So, if I go back to Belgium retail activity, so it is true that they have the impact of the continuous lowering in interest rates.

So that’s a bit of pressure that we see. Secondly, as you said, there is some stepping up in competition, for example, as there is some bank [ph] which will be made in a public and so forth.

So, all that is a bit of step up in the competitive environment. But again, we’ll have to see how that evolves over the year.

So for the moment, I would say we will watch this closely and we will see how that step up in competition and the pressure on the interest income will evolve over the years. So that is something to watch.

And then when it comes to the impacts of the Hello bank! and Compte-Nickel for example in France or in general, let’s not forget that these things are not brutal in change.

So, what I mean by that is we’re constantly changing our branch network. So it’s not that our branches are going to stay as they are and then one, they they’re not going to be there.

That’s not the way it goes. We really change them.

The things that we do in the branches is changes. Some branches are without staff, some branches are focused on some services and some branches are focused on full services.

So that’s a continuous shift that we do. So, we glide basically in our model approach.

So that is basically something that we continue to do. And the more we can step up, the speed at which it happen, we will be a bit flexible.

But that would be it, Bruce.

Yes. Good afternoon, Lars.

Really just a follow-up on that Belgium question, but more on the fees and commission side. So, I am really looking beyond 2018.

Are there really any kind of structural pressures on the fee margin in Belgium? Because when I look at the margin on asset management investment products in Belgium, they do look high in a European context.

You were kind of alluding to greater competition in the Belgium market. So, really looking kind of more medium term, do you see sort of fee margins compressing in your Belgium business?

Thanks.

Again, thank you for the follow-up question on Belgium. It is true that in generic, if you look at our domestic markets in Europe, we have a push into servicing around fee business, for example through private wealth.

I remind you for example, if you look in several of the countries, our market share for example in the private wealth activities are well above our pure retail kind of market share. So, this is an activity where we continue to guide and where we continue to push and to ensure that and also in our customer journeys we are aligned with the desires of customers and therefore can’t continue to have the fees always [ph] that.

So that will be my answer on Belgium.

Great. Good afternoon, everyone.

Hi. Good afternoon, Lars.

Coupe of questions from myself, first of all on volume growth. If I look at some of your biggest lending books across the various retail banking markets, you’re registering [ph] volume growth above the market, kind of 5%, 10% in some of the bigger books, which is great.

But, can you just give us an idea of how you are achieving that? Is it a pricing led decision, is it an active decision?

Is there anything to do with how much risk you are taking on, your product offering? Just a sense for how you are achieving those growth rates, would be great.

The second question is specifically on French retail. You’ve reported costs down that year-on-year, obviously an achievement.

But do you see that as some kind of cost cap [ph] now, the 4.5 billion that you reported in 2017, given your closing branches, cutting headcount et cetera, is that a level beyond which you will try not to go again? Those are two questions.

Thank you.

Thank you for your questions. So, the first is on the volumes.

Honestly, if you look at the majority of our businesses, our average volume growth in lending activities is around 5%. And that 5% is in line with what you normally see.

So, if you take the GDP growth and in that environment that growth is directly what we see. Now, indeed you might see in so some areas a difference.

For example, in France you might see more than 5%, but it’s more on the back that 2016 was a bit of a low point; the growth switched also and picked up in France basically at the beginning of 2017. So, overall, we see a volume growth which is around 5%, which is in line with the GDP growth.

And so, there is no particularly point that we are doing to push and to lower prices. So, we remain in a profitable growth environment, supporting the demand for loans.

So that’s the volumes. And when you look, in France or in general on the cost, as I said, of course, in the retail markets, we want to of course, contain our cost.

But as I said, at the same time, one of the elements for reducing the cost will come from the digitalization and therefore changing the way we do interactions with that. And then, of course on top of that, what we’ve seen is indeed that the layering of the management lines which basically reduced to two drops both in France, Belgium and in Italy and that is what we will continue to do.

So that will be my two answers, Geoff.

Great, thanks. Just a follow-up quickly, if I may, on the volume growth question.

Are you confident that that 5% volume growth is coming at above Group ROE levels, so compatible with your 10% target? So, everything you’re putting pressure on the books is above 10% ROE?

No. If you look at all of our businesses, which have this 5% growth, if you look at what we then call the RONE, which is the notional equity, which is a metric we use pretax, which we use for each of the businesses.

You do see that they continue to be at the right level and have a good evolution. So, from that point of view, we feel confident that the overall interface with the client is delivering the profitability as we step forward.

Thank you. I have three questions, please.

The first question is regarding the dividend. So far, you have been getting a 50% payout.

And I wanted to ask you, if your reported EPS would be down year-on-year, would that mean that it is possible to have an absolute decrease in the level of the dividend per share or you would consider increasing the payout above 50% in that case? The second question I have is regarding the comments that were made by the French regulator regarding the potential creation in France of countercyclical buffer.

I wanted to know whether your share the regulator’s worry regarding the pace of loan growth that we’ve had in France, especially in mortgages and loans to large corporates? And the third question is regarding the corporate center.

You have been providing us key revenue guidance, underlying revenue, and I was wondering whether you could also provide us with an underlying profit guidance, please? Thank you.

Flora, thank you. On the question of the dividend, let’s be very fair.

So, we said that in our plan, we have the ambition to pay 50% in dividend out of the bottom line, which is what you’ve seen for 2017. And then, you’ve also seen that in our plan and in the guidance in achieving and improving of the ROE, as I said, it basically comes with an accompanying of improving the bottom line.

So, that’s normally the way it works. So, the bottom line picks up, and therefore -- so will the dividend.

So, that’s basically what we said. And I want to stress it.

I mean, when we said that we believe that we will beat our ROE target in 2020 that if all the indicators stay as they are it will be 10.5%, that 10.5% is basically accompanied are on the back of a pickup of an additional growth on the bottom line. So, let me be very clear about that.

Then, when it comes to your question on the French regulator, listen, you should ask him. As I said earlier, we have a growth on average which is around 5%, and 5% is in an environment where the economy is picking up.

And for banks, it’s kind of -- a natural kind of evolution. So, does this include overheating?

I don’t think so. But, as I said, you should ask the guys who are in-charge of that.

And then, when it comes to the corporate centre. As I said, the corporate center, what we anticipate in 2020, we’ve guided that there will be a yearly cost basis of 450 million.

Now, what we said is that in 2017 and this would roughly be the same in 2018 is that there will be -- that cost will be still be around 550 and then there will be additional cost of 100 million for restructuring and 100 million related to IT cost that we are changing the infrastructure of it. So that will be the guidance for 2018.

And as I said, this is tapering off towards 450 in 2020.

Yes. Good afternoon, Lars.

Just one final question for me, it’s on the insurance business. I mean, you’ve had a pretty stable level of revenues now for many quarters.

I am just wondering how you think that business will fare, or at least the revenue level will fare if and when we move into a higher rate environment? And related to that, I wonder, can you give us some indication of the size of the policyholder reserve in the life business and whether that has increased over the last year or two?

Thank you.

Piers, thank you. As you know, I mean, in general, how the life’s business, in particular in insurance is managed is that these are very long-term kind of positions that we manage.

And therefore, it’s much more stable than what we’ve seen some of the banking activities. And that is why when the rates were evolving, like they have been over the last five years, the impact has been much more mitigated than what we’ve seen on some of the more banking kind of effects.

And that is why going forward, if the rates would go up, we would typically expect a bit of a similar kind of evolution going forward. So from that point of view, it’s relatively -- sorry the word, but it’s a bit of boring evolution.

It is less fickle, so to say as what we’ve seen on the banking side. So, that will be my guidance, Piers, on insurance.

Can you give us any indication of the size of the policyholder reserve?

I don’t have it with me, Piers. We will give you a call after this call.

Okay, thanks.

Hello, Lars. Quick question, first, regarding your reassessment of your target in 2020 of profitability.

Could we mention, when we see the objectives of [indiscernible] which is more or less a pure player in Italy? But, we have been too cautious regarding BNL and regarding the cost income of BNL in 2020, which is if I’m correct, around 58%.

Why is [indiscernible] at 45%. My second question is, could you give us a little bit more precedence regarding what is exactly Cetelem by hello!?

Is it a pure consumer online freight and does it mean that you have [indiscernible] regarding this franchise, what is exactly principal of Cetelem, is a test, [ph] is it suppose to be generalized? And my last question is about Centric.

We see a huge increase in the number of customers. Are they only French customers, is it something which is developing well in Europe or any other country?

It should be interesting to have more flash regarding the development -- financial development of Centric? Thank you very much.

Thank you for your questions. So, when it comes to your question on the return on equity, as I said, we guided towards this pickup, which is based on the evolutions as we basically see.

If we take in particularly your question then around Italy, let’s be very fair, that our BNL is maybe different from what is in this. What I mean by that, BNL does not represent fully for example our activities in Italy.

So, we have other parts that are active, that are booked within personal finance, that are booked within CIB. So that is why the comparison of BNL with another bank is not necessarily fully appropriate.

So that’s the first one. The second one, when it comes to your question of Hello bank!

by Cetelem. So, indeed when we have Hello bank!

in the five European countries, it’s basically a full-fledged bank. To be very frank, if you come into France and you go into the branch, you will get a software or an interface which is basically what you get in Hello bank!, but it’s blue.

Whereas in the other areas, like for example in Czech [ph] that we talked about, we don’t have a full banking presence. However, with Cetelem we have there activity being present.

And so, it’s logical that around the business that they have, we have the kind of basic banking transaction services and the like that we make into Hello bank! by Cetelem.

So, that is basically the extension that we do. So it’s a tad different in setup than from what we have in our real domestic markets.

And then, the third one is on Centric. So, Centric, yes, Centric is an important part of what we do.

It is part of really changing and adapting to the customer journeys while digitalizing and doing so also having cost efficiencies improvement. And so, that is why, indeed it is stepping up.

And if you see that we have more than 8,000 corporate clients, I can imagine that you see that increase is in several countries well beyond France; it’s actually 40 countries. And we will continue to have that rollout and to have it also additional products being added to it.

Hi, Lars. Thank you for the presentation.

Just a few questions from me, the first one is on Belgium. So correct me if I am wrong.

But, I think that the insurance products that are distributed by Fortis are actually manufactured by AG Insurance rather than Cardif SA. [Ph] And we’ve seen in the industry, a number of players basically closing partnerships to use their in general insurance subsidiary to manufacture all product distributed by the network.

I was wondering whether this would be something you would consider? Then my second question is on BancWest.

So, it looks like a number of companies in the U.S. have decided to increase salaries as a result of the tax reform.

I was wondering whether this is something you consider or something that could impact your operations? And finally, I would like to come back on the ROE target revision.

It looks like there are a number of explanatory factors including like the tax rates, better macro and the acquisitions. I would like to understand what for you is the main driver?

Is that really the taxes or is that more the macro or the acquisitions? Could you rank perhaps this contribution?

That would be helpful. And I have the final one.

On French retail, you’ve grown the loan book very fast this year on the low base. I was wondering that now you have regained a certain amount of market share, how much more hungry are you to increase market share from here?

Thank you.

Lorraine, thank you for your questions. So, first, on your question on Belgium.

Let’s be very fair, we’re pleased with working together with AG Insurance, so part of Ageas in providing the insurance products. So, we’re very pleased with that.

It works very well. And so, that’s what we look forward to continue.

And your second question on BancWest, on general taxations. Let’s not forget, I mean, we as a group, we pay €5.3 billion in taxes, of which €1.1 billion is basically recent bank taxes.

So, whatever we look at other elements are very marginal compared to this kind of situation. So, that’s basically where we stand.

And when it comes on your question, what are the drivers behind this ROE improvement, let’s be fair, if you look at the European economic environment as one, you look at rates environment and you look at taxation and the like. And I would basically put them all on the same level.

They will all have kind of the technical same impact; we’ll have to see which one, if all of them, realize the way they are forecasted or whatever. So, I would basically consider them equal level on that.

When it comes to your last question on France, listen, we are there to serve clients and basically have them served in the right moment. And that is basically how we see the evolution in market share.

We are not in the business to have a specific market share. We are serving our clients and that’s basically what we’ll continue to do.

So, Lorraine, that would be my question -- my answers, sorry, to your questions.

Yes. Good afternoon, everyone.

Two questions, please. The first one, just really on volatility.

As present and in the past, we’ve [indiscernible] the lack of volatility in financial markets. I just wondered if you could comment on the current trend in volatility.

I know you’re not going to give us guidance for Q1, but if you can just speak in general terms about, whether you welcome or see risks in the volatility, the volatility that we’re seeing? The second question, please, just back on French retail and the market share gains.

I take the answer you’ve just given that you’re here to serve your customers and it’s clear. But I suppose we all remember your attitude 12 months or 18 months ago about the risks of putting on 10 or 15-year mortgages at 1.5%.

And I just can’t help but notice that French mortgage rates are falling, swap [ph] rates are rising and that margin is shrinking again and yet still growing at twice the speed of the market. And I just wondered if there is any more detail you can give us about the central attitude to that because if there is demand at 1.4%, I just wonder when the supply will start to rationalize a bit.

Thank you.

Nick, thank you for your questions. So, yes, vol, there is not much I can add.

The only thing is indeed that it has been -- the volatility has been very low in the second half of 2017. So, it was to be assumed that there would be a kind of an evolution back to more normal territory, and that that transition could be a bit bumpy as may be what we are seeing today.

And on the market share, let’s be very fair. Of course, I mean as I said, we are here to serve our clients and when serving our clients, we of course keep in mind that there is minimum kind of client profitability that we have to generate in order to deliver on the return on equity that we set forth.

And that is something that we always continue to do. Of course, we have the blend of more traditional kind of products with more sophisticated feed and services.

And so that’s the overall kind of picture that we keep clearly in mind. So, Nick that will be two answers.

Okay. Thank you.

So, if understand the second one well, you’re happy to write unprofitable mortgages on the promise cross sell, is that the allusion there?

You’re misunderstanding my English. No, that’s not it.

What I just said is as we are looking overall to ensure that we serve the client in what he needs and that’s basically what we do. And so, we’re not going to have a profit with product which is not that profitable.

And as I said, when you see the pickup -- let’s not forget that we had a low base in 2015 because the pickup overall in France was more in the nature of 2017. And so, that’s why the pickup that we see in France is a bit higher.

And as I said more for us, the yardstick, the normal would be 5% and that is the kind of evolution that we expect for the year 2018.

Yes. Hi, Lars.

two questions from side as well. The first one is on the BNL revenue.

Can you just share the guidance for 2018, if any you have for BNL? We see that there is kind of increase in the revenue Q-on-Q.

So, I don’t -- this is a new trend or not. The second question is on asset management.

It seems to be more asset manager looking for partnership. Intesa just said that they are looking for partnership if there is any.

What is your view on your asset management? Are you also open to tie with another manger or not?

Thank you very much.

Alex, thank you for your quarter. So, BNL, which is part of the turnaround that we see in Italy in general, so we still expect given the lower rate environment, revenues to be stable.

So, let’s not forget, if we look at our domestic markets, if we look at our traditional or retail markets like Belgium, France and Italy, they are impacted still by the low interest rates. But if you look at the other domestic markets’ activities and how they are really picking up in Europe and growing, you can see that overall our domestic markets are doing well.

When it comes to asset management, asset management as we said, we’re basically happy with the setup. So, we believe that given the fact that it provides services to our clients, we like to have the ownership of it, and that’s what we keep.

And if you look at it, if you look at the growth that we have seen over the last couple of years, that basically doing very well, we keep on optimizing ,we keep on installing new IT services to serve the clients. So, we are very happy with that.

So that will be my two answers.

Thank you very much. One last question, if I may, is on the cost of [indiscernible] I think that you are guiding for something around 400 million at the full phase, now you are definitely below that guidance.

Should we consider that 400 is not valid anymore?

It’s probably, if you look at it, more 350ish will be the expectation.

Ladies and gentlemen, I thank you for your continued attention. You have seen that we had good results in an environment in Europe which is strengthening.

So, I thank you very much for your attention. Have a good day.