Good morning to every one of you. It's a real pleasure indeed for me to comment the results of Crédit Agricole Group and Crédit Agricole S.A.

for this first quarter of 2017, because as probably most of you have already acknowledged it or noted it, these results are indeed good results. Let me start with Page 7 on the slide deck.

Just as a remainder for the main figures, the net income group share as stated is at EUR 1.6 billion. It's a multiplication by nearly 2, as compared to the first quarter 2016.

For Crédit Agricole S.A., the figure is EUR 845 million. It compares to a level of EUR 227 million of net income group share, as stated in the first quarter 2016.

If we go to the underlying performance, the net income group share stands at EUR 1,654 million for the group, it's an increase of nearly 1/3. And for Crédit Agricole S.A., the net profit stands at EUR 895 million, it's a multiplication by 2.3 as compared to the first quarter 2016.

If I go to Page 8, I just want to stress that these results are not only excellent by themselves, but they are also obtained through a combination of a very sharp increase in the top line with a very strong momentum in all business line. And indeed, we have an underlying revenue growth of 14% quarter-on-quarter for Crédit Agricole S.A.

The second key element is a very firm grip on cost with an increase of 0.7% Q1-on-Q1, if we exclude the effect of the small increase in the single resolution fund contribution. And this leads to an improvement in the cost/income ratio of 8 points as compared to the first quarter of 2016.The cost of credit risk is further down by more than 10%, and it stand at 37 bps in average.

We have also booked an additional provision for legal risk of EUR 40 million this quarter. And finally, our financial robustness is fully confirmed with a full-loaded CET1 ratio of 14.5% for the group and 11.9% for Crédit Agricole S.A.

before the acquisition of Pioneer which will be completed probably middle of this year, and which will lead to an impact of 60 bps on the CET1 ratio of Crédit Agricole S.A. as we already stated.

If I go to Page 9, I will not comment all the figures which are on this page, but you will notice that these strong commercial and operational momentum was the case for all business clients. It's the case for retail banking activities in France with the regional banks and LCL.

It's also the case for retail banking activities in Italy. It's the case for all the asset gathering activities with a very good momentum in life and nonlife insurance activities, with a very sharp increase in the assets under management with Amundi with also a significant increase in wealth management, international wealth management.

It's also the case for specialized financial services, be it consumer finance or leasing activities. And lastly, it's been also the case for the large customers division with significant -- further significant improvement of CASIBs positioning toward its customers.

And with assets under custody or under administration at CACEIS increasing by more than 11%.If we go now to Page 11 we can note, as I already said, that this very good increase in the level of profitability of Crédit Agricole S.A., the underlying profitability is well spread across all business clients with the asset gathering improving its profitability by EUR 19 million. The retail banking activities improving the profitability by EUR 62 million.

SFS, plus EUR 72 million, large customers division plus nearly EUR 200 million. And lastly, the corporate center itself improved its profitability or decreased its losses by EUR 150 million.

It's the effect of the beneficial effect of the implementation of the Eureka transaction in the middle of 2016. So all-in-all, as I said, it's a multiplication by 2.3 of the underlying net profit of Crédit Agricole S.A.

If we go to Page 12 you will see that the good momentum in all activities translated into an improvement of the net banking income in all business divisions. It's the case for asset gathering, retail, specialized financial services, large customers division and the corporate center.

Again it's the beneficial effect of the Eureka transaction. As I said, the underlying net banking income increased by 14% at Crédit Agricole S.A.

this quarter. And if we leave aside the corporate center, it is still an improvement of 10% of the underlying top line for the business line in average, so it's a very good momentum in all business lines.

If I go to Page 13, and I switch to costs, what you will see is that the underlying cost basis remained almost stable between the first quarter of 2016 and the first quarter of 2017. What you can see is that we have had a further decrease in the retail banking activities with a decrease of the cost basis by more than EUR 30 million.

We have had small increases in some other divisions like asset gathering and large customers which is perfectly in connection with the development of the different investments that we have planned when -- that we have presented when we unveiled our medium-term plan in March 2016. So as a result of this good combination of a sharp increase in the top line and the very good cost control, we improved our cost-income ratio by more than 8 points leading to a very good cost-income ratio especially for first quarter which was below 63% this year.

Switching now to the cost, what you can see on Page 14 is that we have had a further decline in the cost of risk of credit risk both at group level and at CASA level. At group level we now stand at 26 bps, in average over the last 4 quarters.

So it's a very low level, far below the assumption that we made for the medium-term plan of 35 bps. And as far as Crédit Agricole S.A.

is concerned, the figures stand at 37 bps, which again is far below the assumption made for the medium-term plan of 50 bps. In addition to that, we can mention the fact that the coverage ratio of the unpaid loans was stable between the first quarter of 2016 and the first quarter of 2017, close to 68%.If we zoom now on the cost of credit risk on the different business lines on Page 15, you will see that it continues to decline within the consumer credit space at 134 bps in average over the last 4 quarters.

It continued also to decline significantly in Italian retail banking activities. It's now below 90 bps at 87 bps.

And we see further improvements ahead of us considering the fact that net new inflows, net new entries into default continue to decline. In the financing activities of the CACIB and in LCL, the cost of risk remains more or less stable at low level.

If we go now on Page 16, starting with the asset gathering division, what you can see is that we have had a very good momentum in all business lines with net -- positive net new inflows both for asset management activities, for life insurance activities and for wealth management which linked to a very positive market effect led to an increase, global increase of more than 11% of the assets under management in this division. The profitability of this division remains high.

It improved even a little further, plus 5%, and it stands now close to EUR 400 million across the whole division. If we now zoom on the insurance activities, it's on Page 17, what you can see is that we have had a good activity both in life and nonlife insurance businesses.

If we start with nonlife insurance businesses, I mean P&C and protection businesses, we have had an overall gross premium growth of 8.5%. And it was the case both for property and casualty activities and for death disability creditor and group insurance activities.

In savings and retirement, indeed the net new inflows decreased a little bit as compared to the first quarter of 2016, but the breakdown of this net new inflows significantly improved because actually more than 100% of the net new inflows were made of unit-linked contracts, which means that actually we have had small outflows in euro denominated contracts which considering the interest rate context cannot seen as bad news. In terms of profitability, the profitability of the insurance division remains stable at a very high level, close to EUR 270 million of net profit for the quarter, despite a small deterioration of the combined ratio in the P&C activities in connection with significant weather events that we have had in the first quarter.

Going now to Amundi, I can go, I think, rather quickly as Amundi published already its own results a few days ago. But you have seen it's -- not only did it manage to significantly improved its assets under management but it also improved its profitability with revenues up 9.5%, gross operating income up to 10% and the net income group share at CASA level up close to a close to a 9% with a net contribution a little bit over EUR 100 million.

In addition to that, we can mention that Amundi successfully completed its capital increase in preparation of the acquisition of Pioneer, which is again going to take place probably middle of this year. If we go now to retail banking activities and if we start with LCL, I think LCL has had a very good quarter for the beginning of this year, and I want to maybe spend a few minutes on that.

First, if we start with activity indicators. We continue to have a very good level of activities and very good development of the business within LCL.

With customer assets globally increasing by close to 3% and loans outstanding increasing by 8.5% but also we have had a strong new business activity in home, motor and health insurance. The number of in-force contracts within LCL customers increased by close to 10% between March '16 and March '17.

If we go now to the P&L of LCL, what you can see is that we have had very sharp increase in the top line, plus 8%. I will come back to this one later on.

Further decrease in the expenses, minus 4%, and thus this is leading to a very sharp increase in the gross operating income plus 57%. And considering the fact that the cost of risk remains at low level, we have had net income group share increasing by 64%, reaching the very good level of EUR 140 million for the quarter.

If we zoom on the top line, the 8% increase in the top line represents more or less an improvement of EUR 70 million, 7-0, of net banking income. This is spread between a significant increase in early repayment and renegotiation fees in connection with a very high level of credit renegotiation for this quarter.

But also the positive impact of the liability management operation we undertook in the third quarter of last year for EUR 18 million, and also a very good level of fees and commissions plus EUR 14 million as compared to the first quarter 2016. So all-in-all, this good level of activity starts to translate into a good level of revenue.

If we go to Page 20, it's just some additional information on what happened in the home loan space. In the first quarter of this year, what we saw was, as I said, a very high level across the quarter of the home loan renegotiation, EUR 4.7 billion for the quarter, which is a little bit above the third quarter of 2016 and a little bit below the fourth quarter of 2016.

But interestingly, you can see that this very high level when you analyze a little bit more in-depth, the monthly sequence across the quarter translates into a significant decrease between January, February and March, and we can add to that that in April indeed it continued to decrease. As far as customer rates are concerned, they continued to progressively improve a little bit across the quarter, reaching 1.51% in March and actually 1.55% in April as we have had the information lately.

So the situation is globally improving slowly but globally improving, even though, of course, this specific situation of the first quarter led to significant contribution to the net banking income of LCL which is not going to repeat in the coming quarters. So all-in-all, this explains the very good situation of the first quarter for LCL which is not going probably to be repeated across the following quarter of this year.

But all-in-all, we expect the level of revenues of LCL for the full year 2017 to be close to the one we had in 2016.If we go to Italy now, we have had also a good quarter again in a quite challenging environment, but loans outstanding improved, customer assets improved, the top line was more or less stable, the cost of risk, as I said, continues to decline significantly reaching now EUR 76 million for the quarter. And all-in-all, this led to the further improvement of the net income group share of the retail banking activities in Italy reaching EUR 40 million this quarter.

On Page 22 you have additional information of the global P&L of all Crédit Agricole S.A. activities in Italy.

This is the first time we provide a full P&L. Up to now we were only disclosing the net profit generated by our activities in Italy.

And what you can see is that with EUR 138 million of net profit this quarter in Italy, it's an improvement of close to 15% as compared to the first quarter of 2016 with all business clients that we have in Italy contributing positively to this improvement. As far as the rest of the international retail banking activities are concerned, I think that what we can note is a further improvement of the net income group share, EUR 20 million, plus 27% as compared to last year.

And this result has been obtained despite a very challenging ForEx environment because one of our most important retail banking activities abroad is in Egypt. And you know that by the end of 2016 the Egyptian pound was significantly depreciated as compared to the euro.

So it means that actually an underlying performance, the underlying performance of those activities in local currencies are actually far better than what we see in the euro-denominated P&L. We continue, of course, to manage those international retail banking activities with a very prudent approach.

And we keep surplus of deposits of our loans which is far above EUR 1 billion at the end of March 2017.If we go to specialized financial services, again the same comments. First, a very good commercial activity.

And actually an increase of 12% of the new loan installation in the quarter, which leads to an improvement, an increase of nearly 10% of the managed loan book with a very good contribution of the partnership we have between the group retail banks in France and CACF, but also a very good development in the car finance partnerships. And also a good momentum in the French direct business of CACF.

It's been also the case for the leasing and factoring activities with further improvement in the leasing book and in the factored receivables. And in connection with these very good commercial momentum, we have a sharp improvement of the net income group share, which is also linked of course to the further decline in the cost of credit risk.

I can mention that the results of this quarter were also boosted by the sale of a portfolio of NPL in France, which contributed both to the net banking income and to the decrease in the cost of risk. If we go now to the large customers division, we have had again a significant growth in revenues Q1-on-Q1, plus nearly 24%, and if we exclude xVA effects, it's an increase of nearly 14% Q1-on-Q1 with all business division contributing to this increase.

Capital markets plus 17%, in particular in credit and ForEx businesses. Investment banking plus nearly 3%, structured finance plus 4%, and commercial banking more than 30% of increase which is in particular due to a positive impact of deal restructuration in this division, which contributed to nearly around EUR 50 million of net banking income.

Asset servicing, plus 4.5 –- plus 4.4% in revenues. So all-in-all, again a very sharp increase in the contribution of this business division to the net profit of Crédit Agricole S.A.

It reaches EUR 350 million of net profit this quarter in a context where the operating expenses are kept under control because the biggest part or a significant part of the increase is due to an increase in the single resolution fund contribution. And again, as I already mentioned, we have had a decline in the cost of credit risk, decline by nearly 13% at EUR 106 million this quarter.

If we go now to Page 27, just a rapid comment on the activities of the Regional Banks. You note that they no longer belong to the perimeter -– financial perimeter of Crédit Agricole S.A., but they nevertheless represent a significant and a key element in the global functioning of the group for many reasons.

And so it's good to note that they also have had a very good commercial momentum with an increase in loans outstandings, with an increase in customer assets and with a further increase in the sale of P&C insurance policies. All-in-all, their revenues were almost stable.

But actually, if we exclude the Eureka effects that they have now to stand since the completion of the transaction in the middle of last year, their revenues -– underlying revenues are up nearly 4%, and their underlying net income group share is up nearly 9%. If we go now to Page 29, you can see that the fully loaded CET1 ratio of Crédit Agricole S.A.

stands at 11.9%, which is way above our target of 11%. It's before the completion of the acquisition of Pioneer, which is going -– we can confirm it to lead to a 60 bps impact when it's going to be completed.

It's not fully decided yet if it's going to be end of Q2 or very beginning of Q3. The CET1 ratio declined actually by 15 bps this quarter.

The recurring activity generated an improvement of 8 bps. It's the difference between retained earnings and the distribution of dividends and AT1 coupons that we have provisioned.

But we have had a decrease in the AFS reserves by 12 bps and some other technical effects that led to an 11 bps hit on the CET1 ratio. What you can note is that we have had a very good stability of the risk weighted assets at Crédit Agricole S.A.

level. They stand perfectly stable, actually it's even a small decrease between the end of 2016 and the end of Q1 2017.

Jumping now to the solvency of Crédit Agricole Group on Page 30, which you can see is that the CET1 ratio remained stable at 14.5%, actually it's a small increase of 40 bps. The retained earnings after distribution represented an improvement of 22 bps, but we have had also to take into account the effects of the AFS reserves decrease for 8 bps at group level and these technical effects I just mentioned for 10 bps at group level.

The different ratios remain way above any regulatory requirements, and I can mention that the TLAC ratio remains at 20.5%, already significantly above the further, the coming regulation, which is going to be applied in 2019, excluding any element of eligible senior preferred debt. As far as liquidity and funding is concerned, on Page 31, what we can mention is that our funding plan for 2017 is well underway with EUR 14.1 billion of different categories of debt issued by the group by the end of the first quarter, EUR 7.3 billion for Credit Agricole SA specifically.

And actually, if we update this by the end of April, it's more than EUR 11 billion of different categories of debt that we have issued actually EUR 11.3 billion, which we present 70% of our annual medium and long term market trending program of EUR 16 billion. We issued EUR 2.5 billion of traditional senior preferred debt.

EUR 4.5 billion of covered bonds, EUR 1 billion of true sale securitization and EUR 3.5 billion of senior non-preferred debt this quarter or this first 4 months of the year. In terms of liquidity, nothing much to say.

Our liquidity position remains very solid with surplus of stable funds, which remains far above the EUR 100 billion threshold, in according to the target that we have set in the medium-term plan. The short-term debt net of central bank deposits continue to cover by far -- it continue to be covered by far by HQLA securities, nearly 300%, and the liquidity coverage ratio remains again well above our 110% target both at group level and at Crédit Agricole S.A.

level. If we go now to Page 34, and as a conclusion before trying to answer your questions, I think we can insist on the fact that we have had a very good quarter both from a business and activity viewpoint and from a financial viewpoint.

And this good financial performance, while reached in a very sound manner with top line growing significantly with cost and cost of risk remaining stable or decreasing and all-in-all providing with a very good and sound financial robustness both for the group and for Crédit Agricole S.A. And now I'm ready for your questions.

Two quick question actually, because globally it's very clear for me. But regarding Italy, when I compare your cost of risk with the one on Intesa and UniCredit, your cost of risk is around 25, 20 -- 10 basis points above the one of the banks I mentioned.

And I'm quite surprised as analysts you are used to hear about Cariparma and we know that is located in the wealthiest regions of Italy. And so I don't really understand why your cost of risk is somehow 15%, 20% above the one of these two banks?

Is this because you still have some cleanings to do to Cariparma? You are more conservative regarding your coverage ratio, I'm not sure.

But for me the cost of risk of Cariparma should be below the one of this international network. And I'm talking about the cost of risk in Italy of these banks, not a group cost of risk, of course.

My second question is relating to your activity in your commercial banking. And I would like to know, it's not an information that you give, but I like to have some flavor regarding that.

What is your view regarding the coverage and the activity regarding cross-selling? Because that is something that you mentioned in your strategic plan you -- regarding the cross selling between your retail network and the CIB activity in all departments of course.

And I wanted to know if you think that it could be something that could be developed with LCL notably?

Thank you, Pierre. As far as Italy is concerned, I didn't do the same comparison as the one you did with UniCredit and Intesa, so I will try to imagine the reasons why we are in this situation.

But I guess that is probably due to the fact that they have a different scope of business even inside the Italian market, because they probably book much more loans to big corporates in their Italian activities. When we are talking about our retail banking activities, we are more or less excluding loans to big Italian corporate, because they are booked within the CIB.

So these may be a significant element of explanation for the difference in the cost of risk between those two banks and Cariparma. Because indeed, when we compare our asset quality with the asset qualities of different Italian retail banks, we indeed have to note that we have a better asset quality with lower level of NPL, with a better in average coverage ratio.

And at the end of the day cost of risk, which is not only declining, but which is now standing at as a low level as compared to the Italian market. And indeed, we continue to foresee a potential for further decline in the cost of risk in Cariparma.

We now stand at 87 bps. We have stated, if I remember well in the medium-term plan, that we were targeting 60 bps and we see no reason why we couldn't reach this level of 60 bps by year 2019 if the situation does not deteriorate significantly.

In addition to that again, when we are talking about our 87 bps level, keep in mind that it's rolling average across the last 4 quarters. So actually the [ win ] level in the -- only the first quarter of 2017 is lower than that.

If I go to your question about commercial banking and cross-selling, of course cross-selling between CIB and retail networks that we have, be it in Italy or in France, it's one of the key elements of the cross-selling efforts we want to promote inside the group. So we are working on the capacity for CACIB to improve and increase the number of services and products that it can sell to corporate customers of the retail network that we have in France, be it regional banks or LCL.

So we don't have precise target in terms of figures, but we are working on that and we have indeed dedicated a specific workshop on this issue in the process of implementing the medium-term plan target.

Thank you. But is that something that you are going to follow more closely or give information regarding that in the coming quarters or do you think --

We are going to update regularly the market on the advancement of the targets of the medium-term plan. We are going to zoom on the cross-selling improvements.

So we will provide information if relevant on this in the coming quarters.

Two questions from my side. The first one is on the Corporate Centre.

Could we consider that the level of underlying revenue we have this quarter to be taken as a run rate for the coming quarter? Number two, is we see a very nice performance in SFS.

Is there any chance to think that at the end of the day you can upgrade your medium and long –- I mean your target, the target you get on your medium and long-term plan?

Okay. Let's start with the Corporate Centre.

We have had a significant improvement of the underlying level of revenues in the Corporate Centre in connection with the implementation of the Eureka transaction. So this is why you see a very significant improvement between the Q1 '16 underlying level of revenues and the Q1 '17.

We continue to target further improvements of the Corporate Centre at the top line level and also at the cost level. As far as the top line is concerned, we expect further improvement coming from the progressive replacement by maturing Tier 2 debt by this new senior non-preferred debt.

And actually by the end of 2019 this will be around EUR 12 billion of Tier 2 debt that is going to be replaced by senior non-preferred. So you can make any assumption you want on the difference of cost between the Tier 2 debt and the senior non-preferred.

I think that an assumption of 60 bps, maybe 70 bps of discount in terms of price is something which is fair. At least, this is something we can see nowadays.

So this is going also to contribute progressively to the improvement of the top line of the Corporate Centre. And we also have further improvement on the structure of the Corporate Centre because as we are going to accumulate results after distribution of course and after the financing of transaction like the acquisition of Pioneer in terms of cash, I'm not talking about own fund but cash, we are going progressively to reduce the amount of debt that we continue to keep in the Corporate Centre in order to finance the different participations of Crédit Agricole S.A.

And so we will have also further improvements coming from this phenomenon. The last point is that cost cutting are going to be spread across all the group.

And so some cost cutting are going to take place within CASA as a holding. So the cost line of the Corporate Centre is going also to be progressively reduced.

As far as the specialized financial services are concerned, yes, indeed, we see a very good level of profitability of this business division again this quarter, but I think we are not going to update the target that we have set globally for the medium-term plan. We have set a level of profitability of EUR 4.2 billion in 2019 globally.

And I think it's not -– it would not be relevant after only 1 year of implementation of the medium-term plan to update and modify our target. So we are dedicated to this level of profitability.

We do all we can in order to reach those goals, but we are not going to modify as time passes by the different targets of the different business activities.

All right. Thank you very much.

If I could just add one more question? Your cost base in the French retail banking is pretty on the -- as cost are down something like 4% this quarter.

It was down 3% last quarter and 5.4% in Q3 '16. This is –- the trend is ahead of 1.5% you get minus on annual basis.

Also there do you think that it is going to normalize or you just think that you are doing better than expected when it comes to cost [indiscernible] in this division?

I think what we did last year and what we decided last year, when we saw that the top line was probably going to be a little bit behind what we expected we decided to accelerate our cost cutting efforts in within LCL, but we are not going to again modify our target LCL as any retail bank in France has also to invest. So we have been accelerating our efforts in order to reduce the, I would say, recurring cost basis, but we are also going through a loss phase for LCL to invest and to develop.

So we are not willing to take a path of improving the bottom line at LCL only by cutting cost.

So I've got two questions, please, on the asset gathering business, and it's great to see that getting more prominence in the slides. So firstly on Amundi, after the very strong inflows you saw in the first quarter, how are things tracking in the second quarter?

Is it still positive or did you see any volatility around the French elections? And the second question was on the life insurance business and the strong increase in the unit linked policies.

And what do you think is the main sort of driver behind that? Is it the environment?

Is it specific policies you are following? And as you think of the result of the French elections about some of the policies Mr.

Macron has been talking about, how do you feel that might change if at all your business plan and your revenue growth outlook?

Well, in asset gathering, I think that Amundi itself when it published its results of the first quarter stated that inside the EUR 32 billion of net new inflows there was a significant portion of that which was in money market assets. Nearly around EUR 20 billion if I remember correctly.

So we know that these assets are volatile and that there is a kind of a seasonality some corporate clients, for example, store some money in money market funds in the first quarter in order to prepare for the payment of their dividends. Some other are also piling up money in money market funds in order to prepare for some acquisition.

So we know that this part of the net inflows are volatile, but what is important is to see the I would say the underlying trend and the underlying capacity of Amundi to be able to attract continuously new medium and long-term amounts which was the case again this quarter. As far as the life insurance business is concerned, I think that the improvement in the proportion of unit-linked products as compared to euro products in the net new inflows, it's linked to many factors.

The first factor is that we've been improving the proposals that we make to our clients in terms of unit-linked products and we are permanently trying to adapt the offer to market circumstances in order to be as attractive as possible. The second element is that customers having did noted that there is a decrease in the remuneration of euro denominated policies and that's only natural.

This is not only the case for us. It's the case for the whole market.

And so they are making their own arbitrage. The last point is that I would say the global feeling around risk taking has been improving in the French market in the beginning of this year.

And so some customers are indeed ready to take maybe a little more risk than they wanted to take 1 year ago. So it's a combination of different factors.

And in this landscape for the time being there is no, I would say, macro effect because we don't know what the government will exactly do in terms of policy for individual savings. So we have to wait a little bit before the government is installed, before the first measures are announced in order to see if they are going to be positive or not for the development of our businesses.

But globally what we can say is that the atmosphere, the feeling, the business feeling in France is improving as it is globally in the Eurozone.

I've got three questions. The first one relates to the French retail outlook.

Not so much for this year but actually for next year because if I am not wrong there will be a headwind of about EUR 50 million for renegotiation fees next year over this year and maybe EUR 20 million headwind also coming from less beneficiary impact of ALM. So that EUR 70 million headwind, and I'm wondering whether you think in '18 versus '17 you think you can offset this EUR 70 million.

The other question relates to the cost base at Cariparma. I know your ongoing investment plan is significant, and I was wondering whether in the rest of the year versus Q1 we should expect an acceleration of the investment so that whether the current cost base reflects the run rate.

And the final question relates to the potential acquisitions you are considering in Italy. I was wondering whether you had a bit of an update on the timing and whether it actually make sense to expand a lot in Italy right now given the potential political risk next year in Italy?

Okay. First question, Guillaume on LCL.

You are right mathematically. We have the headwinds that you mentioned.

On the other hand, we have some positive factors. As you have seen, the loan book is developing.

So we are going to have a positive volume effect on the development of our business if the loan book continues to develop by 8% year-on-year, which was the case in the first quarter of this year. This is all things being equal generating an improvement of the net interest margin.

We have also seen in the first quarter that fees and commission revenues are picking up a little bit in connection with the development of the cross selling on the customer basis that we have gained through home loans and with the development of, for example, the portfolio of P&C insurance policies. So we have headwinds, we know that, but we hope that we will have also tailwinds in order to alleviate or compensate for the first ones.

So we think that the profitability of LCL is going to continue to improve. We are of course, not talking about an increase of 64% of the bottom line every quarter, but we continue to target an improvement for LCL next year.

Even though it's of course a little bit early to talk about 2018, we are only completing the first quarter of 2017. As far as the cost basis of Cariparma, you may remember that in the last quarter of last year we booked specific one-off cost in order to finance a social plan which is going to develop and to be implemented in Cariparma starting on Q2.

So this is going to help a little bit the management of the cost basis in Cariparma starting in Q2. But you are right on the other hand, we want to continue to develop the different digital and IT investments within Cariparma in order to continue to accelerate the development of the business.

So I'm not giving you a precise guidance on the cost basis for the following quarters, but we will have and this is I would say the philosophy of our medium-term plan. We try to cut in the recurring cost basis in order to make room to finance the necessary investments to adapt our platforms and our networks.

Last point on the potential acquisitions in Italy. No update that we can give you as compared to the press release that we published I think 3 or 4 weeks ago.

As we said at that time, this is a potential operation. Nothing binding has been made yet and we will update the market with any relevant information when relevant.

But you are also questioning I would say the opportunity of that type of operation. Again, we have had a good quarter for our Italian activities globally beginning of this year.

We continue to be positive on not necessarily on the globally Italian markets in financial services activities. But as far as our activities are concerned considering the type of business that we have, considering the type of location where we are, considering the type of customers that we have, we are positive on the development of those businesses.

And we think it's relevant to continue to invest be it, I would say organically which is the baseline or be it, opportunistically through acquisition which might be the case under the operation you were mentioning.

I have just 2 questions regarding the CET1 development. Could you maybe add a little bit more color on what was driving this 11 basis point of other deterioration of the ratio during the quarter?

And more fundamentally, could you maybe clarify how you typically approach the dividend accrual? Do you basically accrue a fixed payout each quarter of profits or do you accrue a quarter of your budgeted full year dividend each quarter?

Starting with your last question. What we did in the first quarter was to indeed provision EUR 0.15 per share of dividend.

Because as of now we have no visibility on the final amount of the dividend that we will be able to pay for this year. But as we said, that our intention was to flow the dividend for 2017 at the level for 2016.

We thought it was relevant and fair to book -- to provision EUR 0.15 of dividend a share this quarter. I'm not pretending, this is what we are going to do every quarter till the end of the year.

It will depend on the level of profitability but this is what we did this quarter. As far as the 11 bps of others are concerned, I can name a few elements.

The first one is linked to the specific method of capitalization of our insurance activities. You know that the insurance activities are risk-weighted for the famous Danish compromise, which means that quarter after quarter we take into account the equity accounted value of our activities.

Then we weight them with a weighting factor of 370% and we allocate capital to this amount. So this quarter the insurance activities generated EUR 270 million of net profit, if I remember correctly, which leads to an additional RWA amount of EUR 1 billion, which is leading to a consumption of 3 to 4 bps of capital.

Once a year, when the insurance activities are paying their dividend to Crédit Agricole S.A., then we reduce the equity accounted value and this reduces the capital consumption linked to our insurance activities, but this happens only once a year. So in the intermediate quarters we have an increase of the capital consumption of the insurance activities in connection with this specific way of computing their capital consumption.

Then we have two elements which are linked to what I would call the clipping of minority interest. The first one is linked to the new SREP methodology that the ECB put in place starting January this year.

As you know, there is no longer a single Pillar 2 level, but we have SREP -- there is no longer, excuse me, SREP level but we have a Pillar 2 requirement level which is applying not only to the Group, not only to Crédit Agricole S.A. but also to some of our subsidiaries.

And then when we have minority interest, the minority interests are clipped above this P2R level. And as the P2R level is generally below the SREP level that we had before, this is the link to a small increase in the clipping of minority interest.

And we have also an effect which is in connection with the Amundi Pioneer transaction. Actually the capital increase of Amundi took place at, I would say, the junction of Q1 and Q2.

So in Q1, we had by the end of the first quarter this year, we have been diluted in the capital of Amundi. So this is leading to again an increase in the clipping of minority interest linked with our holding in Amundi.

So every time we are talking about this, only a few bps of CET1 ratio, but all-in-all this is leading to this 11 bps of hit this quarter.

A couple of questions. Firstly on France and then on Italy.

So just on the rapid growth in the SME, in the small business volumes running at 11% year-on-year. How is LCL able to do so much more than say the regional banks?

And how do we get kind of reassurance that may be lending standards on the SME, small business side, and the lending standards haven't been slipping there, how can you reassure us on that one? And then turning to Italy, just wondering what's driving the increase in RWAs at Cariparma that are rising faster than the loan growth in Italy.

So just wonder are you seeing some rating migration going on in Italy driving the RWA increase?

Okay. Let me start with LCL.

Actually what you have to have in mind is that LCL is, I would say, structurally SME and medium-size enterprise bank. It's been within DNA since a very, very long time.

So the network of LCL is used to dealing with SMEs and has indeed a very important and well-known customer basis of SMEs in France. What has been the case in the past few years is that probably we have been a little bit too tight in terms of allocating lending capacity to LCL for this segment of customers.

So they have the customers. They know them and they now have a little bit more capacity to lend to them.

So I am absolutely confident that this is not leading to deterioration of the credit standup at LCL. For Cariparma, the increase in the RWAs is probably linked to the fact that starting this quarter we have actually modified a little bit the perimeter of activities of Cariparma versus the activities of the specialized financial services businesses because we have transferred the leasing activities in Italy from the SFS business division to the retail banking in Italy division.

So this is I think the biggest part of the explanation of the increase in RWAs and actually also in the increase in loans outstanding globally for the division.

And I think I'll ask a couple of questions on my side. First is just following up a little bit on the French retail side.

We've talked a relatively large amount about pricing on the mortgage book and refinancing and everything else. Can you talk a little bit about pricing in some of the other segments?

So maybe a little bit following up on a curious point on the SME lending, has that been pricing-led that you are gaining so much and lending volume there? And also when you kind of link the now and look at the larger corporate division, how is pricing levels holding up there?

So that’s the first question on French margins outside of mortgages. Second question, coming back a little bit more towards the Italian strategy.

Obviously, I understand you can't talk in detail about the acquisitions as you said. But just strategically, are you happy being a local bank, a regional bank in Italy, or do you see a more nationwide footprint as the way that you need to develop the business there because obviously those acquisitions would be in areas where you are not really present at the moment?

Those would be the two questions.

As far as your first question is concerned, pricing pressure on SME and corporate lending, indeed we are in a context where interest rates are low. And we are in a context where [ ET ] is provided in very large amounts by the ECB.

So we are in a context globally of the interest rate pressure. This interest rate pressure I would say translates differently into the different business segments.

It's very direct and very hard on the home loan segments for many reasons that we have already discussed. In SME businesses it's not that hard, even though we have felt an increased pressure in connection with the last TLTRO operation of the ECB.

But I can really confirm that the increase in the lending of LCL to this segment is not linked to a specific pricing policy. It's much more linked to the increase capacity of LCL to lend to this segment of customer.

As far as the large corporates are concerned, it's different because actually the large corporates are much more borrowing on the spread basis. So spreads are narrowing from time to times, and actually they are presently not very wide but they are much more on a spread basis rather than on a pure interest rate basis.

And so they benefited in the global interest rate from the decrease in market rates since 2 to 3 years. As far as the Italian strategy in concerned, let me remind you what we said in our press release, we are talking about a very specific potential operation which is located precisely in the northern part of Italy where we want to develop.

We are not talking about an Italian wide strategy which would not be actually path of the medium-term plan that we unveiled 1 year ago. And we are talking also about something which would be very, I would say, incremental and even marginal in terms of capital consumption at CASA level because what we mentioned in the press release is that we were talking about potential operation which could translate into an overall impact on our CET1 ratio which would be below 10 bps.

So it's something which is very remote.

I just have two questions. The first is back to French retail.

So loan volumes up 9% year-on-year. The interest income number, if I strip out the early redemption and repayment fees, and I think there was also a swap gain in that number, looks like the NII is up less than 1% year-on-year, which implies the margin has taken actually quite a big step down even versus where it was in the fourth quarter.

Wonder if you can just confirm whether that is the case? And what we should be thinking in terms of the margin going forward from here, whether this is a new set of level we're going to base that or whether we should be expecting some further deterioration from here?

That's the first question. Second question is just back on to capital.

So at 11.9% CET1, we've got 60 bps from Pioneer to come off midyear. And then maybe the 20 bps guidance on IFRS 9, so we're down to sort of a 11.1% pro forma versus the 11% target.

And we haven’t really got much headroom there and we're talking about acquisitions in Italy. So I'm just sort of wondering, what your thinking is in terms of the adequacy of the CET1 position versus target?

And whether you, when you think about a buffer above and beyond the target whether you maybe just don't intend to run with one, whether 11% is pretty much a hard target, you'll just try to operate more or less at 11% going forward?

Well, let's start with your last point. 11% is our target.

We don't intend to manage and to monitor with a buffer above this target. 11% is our target.

It happens that in connection with the Eureka transaction we temporarily had CET1 ratio which was significantly above our target for all the reasons that you know. But the target remains 11%.

And we don't need any buffer, any management buffer above 11%, because all management buffer actually are between 8.5%, which is the Pillar 2 requirement and 11%. This is the first point.

Second point, you are calculating a pro forma which is close to 11%. You just forget that on a normal quarter, it was the case on the first quarter this year, we have a positive difference between the results and the distribution.

So we regenerate the normal course of business of Credit Agricole S.A. is generating a few bps of additional CET1 each quarter, and it's been the case again in the first quarter of this year.

So all-in-all, I think that -- and the last point, I want to insist on this point, we are managing very tightly the risk-weighted assets in the perimeter of Credit Agricole S.A., because this is exactly the -- I would say, asset-light model that we try to put in place within our medium-term plan. As you can see that between September 2016 and March 2017 we managed to keep the risk-weighted asset basis more or less stable.

Of course, we have plus and minuses within this global stability. And I'm not pretending it's going to remain perfectly stable quarter after quarter, but this is globally our philosophy.

So I think really Credit Agricole S.A. again is not in itself a systemic institution.

It has a Pillar 2 requirement level which stands at 8.5%. It's within the group which is at 14.5% of CET1 ratio and this ratio is going to continue to grow as time passes by.

We don't need to make room for additional management buffer above 11%. Talking back on LCL, this I think you're quite right in saying that the net interest margin remains under pressure because as we renegotiate loans we step down significantly in terms of net interest margin.

This is why it's very important from our viewpoint to have a positive volume effect and a positive fee and commission revenues effects in order to offset these pressure on net interest margin and to, as time passes by, progressively stabilize and further improve later on the top line at LCL. But indeed, if you analyze or break down the EUR 70 million of improvement of the net banking income within LCL, you have, I think, around EUR 30 million of increase linked to credit renegotiation and early repayment.

You have EUR 20 million in connection with the liability management transaction we did in September last year. And you have the rest which is the, I would say, underlying improvement linked to fees and commissions and links to the volume effect of the loan book.

And maybe in addition and to make, I would say, a connection between your two questions, home loans are relatively low risk-weighted asset.

Just more, three follow up questions. First is on French retail banking.

I'm sorry if I missed it, but have you given an indication of how the management, the liability management is split over the quarter in 2017? And then I was wondering in the -- you talked about risk-weighted asset management, and I was surprised to see that risk-weighted assets in the large corporate division remained flat in spite of the very strong volume or strong revenue momentum?

I was wondering if there was anything you could suggest in terms of what could have helped here? And then lastly, at your Investor Day last year you guided us to a decline in the annualized gains in the CET1 ratio to 35 basis points in 2019.

I was just wondering if that is still the case.

If we start -- excuse me, I was thinking about your last question. I just --

Liability Management.

Yes, the liability management, excuse me. For the liability management within LCL, we said that this was going to generate a EUR 70 million of improvement of the revenues for 2017.

And it's evenly split between the 4 quarters. So it explains why it is EUR 18 million, probably EUR 17.5 million, it's a rounded number, for the first quarter of this year.

And it's going to reduce a little bit in 2018. I think it was a little above EUR 50 million for 2018.

In the large corporate division, I think that what you have in -- to have in mind is that we tried to develop as much as possible non-lending revenues in the large customers division. And we increased actually significantly, since we launched this, originate to distribute policy a few years ago.

We increased significantly the share of primary distribution. It was 35% over the past 12 months, meaning that 35%, 35% of the new loans that we originate in terms of amount have been distributed.

It was only close to 25% a few years ago when we started to implement this policy. So it means that we manage or we try to manage to capture as much as possible of the origination fees and of the structuration fees of an operation.

And then we distribute a growing part of the assets in order to continue to monitor the risk-weighted asset basis. Last point on the CET1 ratio.

We actually stated that we were expecting a 70 bps reduction of the CET1 ratio or 70 bps consumption of the CET1 ratio in the course of the medium-term plan in connection with the time decay on AFS reserves. So it depends very much of course on the profile of the interest rates evolution year after year.

For the time being, we see no reason to modify significantly this target, even though the heat was 12 bps in a single quarter this year.

I've got a couple of follow up questions given a lot of the questions I had have been asked. Firstly, I don't know, you shoved away in the past, but then if you're willing to give any sensitivities around gearing sort of rates moving higher on the 1 and 3 year view?

And then secondly, I guess just on the latest of news flow on regulations and perhaps the U.S. is becoming engaged again on trying to get Basel over the line.

What's your thoughts on sort of timing and whether [indiscernible] in or out, if you have any further thoughts on that?

Well, it's difficult to really mathematically say what would be the evolution of our top line with a certain move of the yield curve because you have many, many moving pieces actually. And especially you have moving pieces which we don't control, which are linked the customer behavior.

We don't know what is going to happen. If rates increase significantly, we don't know what would be the borrowing behavior of our customers especially in retail banking activities.

So we don't know what the volumes would be. So it's very difficult.

But globally I can tell you that an increase in interest rates is going to be beneficial for the group even though CASA itself is now much less relying on retail banking activities than it was before in terms of profitability because you know that with the Eureka transaction we significantly decreased our exposure to French retail banking activity. So it's very difficult to give a mathematical indication.

But clearly an increase in rates is positive for our activities globally. In terms of regulation, I'm sorry for that, but it's also very difficult question to answer because actually we don't know exactly what is going to take place.

We are in a very rapidly moving environment. We have seen a significant modification in the way the Americans approach that kind of discussions.

We are in the process of a profound change in political governance in France. So many, many, again moving pieces in these discussions.

But probably what we can tell is that we French and we European are, we didn't change our mind. And our mind is that we can improve Basel III in order to make it more risk-sensitive.

But we wouldn't want to have, I would say, a comeback to Basel I or to Basel 1.5, which would be the case if a flow -- an output flow was implemented, especially the level of this output flow was implemented inside the framework. So we remain to be of this opinion and we think that we have the capacity to make this opinion prevail if and when the discussion will again start.

Just hoping you could give some guidance on the kind of run rate for the associate income line. Obviously very strong this quarter.

I guess the strength on Corporate Centre is probably a bit lumpy, but it was strong in the other divisions as well. Has anything materially changed?

And should we be looking to last year as a kind of run rate or could it be significantly better?

Well, in the equity accounted entities you have actually three different buckets. First you have the cost financing partnerships of the SFS business division.

And in this division I think the momentum is good. The quality of assets continues to improve.

So all-in-all I think we are on a positive trend and we are going to remain on this positive trend. Then we have the BSF, which is part of the CIB large customer division.

And it's also quite stable, positively oriented, but stable level of profitability. We have had a significant heat in the last quarter of 2016 in connection with some credit risk event in this perimeter.

But it was typically a one-off. So again this is something which is a quite steady.

Then you have a third component which is the stake that CASA has in the capital of [ Perazio ] which is a listed entity in France. And there the results are more volatile.

Actually the equity accounted contribution is more volatile. And so I believe you make the relevant assumption on that, but I must admit that it's more volatile level of contribution.

Okay. And can I just follow up on the BSF stake?

Obviously, there has been some press speculation that you might be considering a sale. Is there anything you can say there or when you might have to make decision?

No, nothing we can say on that.

My question is on your CIB revenues. So we have seen a strong growth in your investment banking and financing revenues, but also at other investment banks, which are part of larger commercial banks.

So could you please give us some color on the drivers of this market share gain? Is it geographical mix, or client mix, is it pricing, or is it balance sheet capacity?

I think again the momentum that we have had is linked to two main elements. I think our customers have been more active in the first quarter of this year than they were in the first quarter of last year.

And second element which is also very important. Our positioning, our rankings in the different activities that we have chosen and in which we want to be active, our positioning have been improving.

Meaning that we have improved our capacity to the top tier bank for our customers in those activities. I can mention, for example, Eurobond origination.

I can mention equity issuance especially in France. I can mention green bonds.

I can mention project finance. In all those activities we have been able to improve our rankings, improve our, I would say, recognition.

And thus we have been improving our positioning towards our customers. So when you have the combination of an improvement of your positioning towards your customers and an increase in your customer appetite in engaging into new operations, you have the results that you have there.

These results are not connected to a balance sheet increase, and they are not connected to an increase in the level of market risks that we take.

I would have two questions for you. Can you give us little bit more color of what your customer clients in both retail are buying in term of a financial product please?

That would be for the first question. My second one is regarding specialized financial services.

First, the decrease of the revenues on the leasing part partly is due to the change of scope, but also the trend seems to be quite low compared to some of the peers. And then also I'm surprised of how you have been able to reduce the RWAs of the full consumer credit business.

Is it already some partnership that you [ made the ] implement with some of your joint venture in term of sharing risk, or is it just the impact of the Italian leasing business?

If we start with the last question, I think that, as you know, our specialised financial services division is developing alongside two I would axis. The first one is to have a consolidated loan book which is linked to the direct lending operations that they have in France and in many other European countries.

And this consolidated loan book is actually very, very stable in terms of size, because you can see on Page 24 it's been around EUR 32 billion in the last 5 quarters. So this is really what represents the basis for the risk-weighting of this activity.

And then you have managed loan books. And in those managed loan books you have the car finance partnerships on the one hand and you have mainly the I would say retail banking partnerships on the other hand.

And these are increasing much more rapidly than the consolidated loan book. So this explains why you can see a difference between the consumption of RWA division and of the overall business dynamic.

But the move backward of the RWAs is due to the move of the Italian leasing into Italy or is it some optimization that you are putting in place?

Yes, yes.

Yes, yes to what?

Yes, it's linked to the fact that we have modified a little bit perimeter of the two businesses between Italy and the SFS division. CALIT, it's names CALIT.

Okay. And excuse me, your first question was about --

Can you give us some of color of what…

Yes, French retail. Excuse me.

Maybe again two element. One element which I'm regularly mentioning but it's -- because it's a very important one.

We are gaining year after year market shares in P&C insurance. We are significantly improving in these businesses.

And this is leading to significant increase in the number of policies sold both to LCL customers and to regional banks customers. And this is leading to an increase in the amount of fees.

And the second element within LCL is the increase of different, I would say, services like the account management fee which led to a significant increase in the fees, linked to this specific category of service. But if I go back to the P&C insurance, and just to give you some figures.

In terms of market shares on French market, we had a 6% market share in car insurance by the end of 2015. It's now 6.8% in the end of 2016.

We had a 9% market share in home insurance by the end of 2015. We are now at 10.1% at the end of 2016.

So you can see that these are very sharp market share gains. And this is translating not only into an acceleration of the development of the insurance business but it's also translating into incremental fees for the retail distribution networks.

Congrats on the new presentation. By the way, it's really good, reminds me the day that I was covering UBS a while back.

Two questions, I appreciate you can't really talk about [indiscernible] but let's theoretically put the situation where by you are selling your non-core asset or perceived as such, because I think that was mentioned in your strategic plan. Would the idea be to effectively finance some of the big acquisitions you have done, for example, Pioneer?

Would the idea would be simply to really refocus the business model towards a European thing much more focus there? That's the first question.

And the second, very simply, Michel Mathieu joined LCL in April 2016, exactly a year ago. If you forget about everything related to interest rate, et cetera, what difference has he brought to the organization at LCL?

And you as CFO, what have us seen that would make it different from how this division was managed previously?

Again on BSF, I don't want to comment speculation and press remorse. So I have nothing much to say beside that BSF is a bank in which we are committed since many, many years.

We have a significant share of the capital of this bank. It's very active in a single country, which is not a core country for us in terms of retail banking activities.

But again, it belongs to the scope of activities of the group since now many, many years. I'm not going to elaborate more on that.

As far as LCL is concerned, I think that, what improved [ greatly ], and you have around 20,000 people working within LCL, so it's not a matter only of one person, but what has probably accelerated in the last quarter within LCL is the capacity of focusing not only to answering to customer request about credit renegotiation but also to try to take advantage of the situation of a credit renegotiation in order to increase additional sales of other products and services. And I think that what we have seen, which is very important in commercial business, whatever the business, is an acceleration of the sale that we proposed to the customers and not only a position where you answer to the customer request.

I understand this was the last question. So again, thank you very much for having attended this meeting.

And I'm looking forward to talking to you again in 3 months. Bye-bye, have a good day.