I think we can start with this meeting. So good afternoon, everyone.

Philippe Brassac speaking. Well, thank you very much for being there for some of you and for being connected for many others.

I'm with Jerome Grivet, we are very pleased to meet you once again for commenting and then explaining all the different results for these annual financial figures for Credit Agricole Group and Credit Agricole S.A. So let me start if you want to by some key messages, I would like to share with you about our main figures on 2017.

Well, we do think that we reached great [ percentages ] during the last year, during 2017. Even of course, and you have already seen that even if those results have been little mitigated by an exceptional tax surcharge in France, exceptional but unfair too because we think that this tax was really too much concentrated on some entities, but this tax not only mitigated our results but had another effect, we'd like simply to tell you that of course, on the last quarter in this kind of environment and in this kind of [ paradigm ], well, how can I say that we didn't try to maximize all the results in this kind of environment.

I think I'm clear enough with that, and I think that Jerome will be able to explain you for example, on insurance -- we took some decisions, not to maximize taxes in this size. But, and this is the very important point I would like to highlight, despite this you can see that on Slide #5, despite for Credit Agricole Group, this tax surcharge of EUR 343 million for Credit Agricole Group, we had sharp increase in our net income group share, you can see on the slide that for the fourth quarter, the result of Credit Agricole Group reached EUR 922 million, an increase of 37%, I'm speaking about stated income.

And for the full-year 2017 EUR 6,536 million plus 36%. I'm very pleased to highlight that these are the highest results we have done for the last 10 years, you can check that on the next slide, Slide #6, where you can see the chart of our different result.

But let us come back to Slide #5, if you want. This was the comment for Credit Agricole Group, I would like now to say that despite both the tax surcharge and then the Eureka capital gain in 2016 that absolutely increased the basis for Credit Agricole S.A., I would like to highlight that for Credit Agricole S.A., the fourth quarter reached EUR 387 million, which is an increase of 33%, and for the full year we reached EUR 3,649 million, an increase of 3.1%, and of course it's very important if you consider that on last year we had this very important capital gain on Eureka more than EUR 1,250 million.

I would like to highlight that always in stated income this result has been reached with revenues increasing above 10.5% for Credit Agricole S.A. So I did comment about the first line of Slide #5, I shall let Jerome -- I shall let Jerome explain underlying results of course, but I would like to highlight some of the points in the management performance.

First, and I am speaking on underlying results. First, it's a pleasure for us to do this report, I think being able to reach the cost/income ratio of more than 2 points, you can see that the cost/income ratio for Credit Agricole S.A.

at the end of 2017 was 62.8% then and it is a very important point of course, we went on measuring the cost of risk in each of our business lines only 29 basis points for the cost of risk of Credit Agricole S.A., and we reached in terms of return on tangible equity 11.1%, and I will remind you that when we presented the new medium-term plan, we said that after Eureka, our target will be to come back above 10% at the end of 2019. And of course, it's a satisfaction to reach 11.1% at the end of last year.

In terms of solvency results are good too, for the CET1 of Credit Agricole S.A. the result is 11.7%.

I like that this includes acquisitions of entities that have always been self-financed by Credit Agricole S.A., and this quarter 1 is included in the quarter 1 of Group Credit Agricole, where that reached 14.9%. I shall let Jerome speak about the TLAC, but as you can see that the TLAC is very high yet, very high for us at 20.6%, and I [ appreciate ] that this number exclude eligible senior preferred debt.

To conclude with this introduction, perhaps the most important point for any of our shareholders, the Board decided yesterday to neutralize the impact of the tax surcharge in terms of dividend for our shareholders, and that means that we pay our payout ratio of 50% excluding the charges about this tax and the result is EUR 0.63, it is an increase of 5% compared to last year, and we can say that for this year including this rational the payout ratio is of 56%, compared to the stated net income. So these are the main messages, I would like -- I wanted to give you in terms of introduction, and I immediately give the floor to Jerome to be of course more precise, more complete than me, and together we shall try to answer to all your relevant questions.

Thanks. Jerome, I give you the floor.

Thank you, Philippe. I'm going to go directly on Page 8 because I think that up to Page 8, Phillippe has given the most important comments.

Maybe before we start to analyze the different figures, some update on the advancement of our medium-term plan and we start with the acquisition of the 3 regional banks that we finalized in the fourth quarter last year, which is as we already said, which is going to significantly increase our footprint in the retail banking activities in Italy and which we expect to generate some additional revenues for us as soon as 2018, because we expect our restructuration efforts to produce their first results this year, and as an indication of the speed we are trying to impose on the integration of those 3 banks, we published last week actually a press release stating that our intention was to merge the 3 regional banks within Cariparma as soon as the first half of this year in order to be able then to generate all the cost synergies that we are targeting. On this slide, you have also some additional information on the quality of the balance sheet of those banks, as you may have seen, they have an impaired loans ratio which is below 10% at 9.2% when it was for Cariparma a little bit above 10% before the acquisition, which was already good considering the Italian market, and they show also a coverage ratio of the NPLs, which is above 50%, again it's above what we had within Cariparma, which was above the average of the Italian market.

So, we expect, as I said, to reach the breakeven in 2018 and to have the full effect of group synergies, both costs and revenues in 2020, when we expect to generate an EPS accretion for Credit Agricole S.A. by at least 1% in connection with this acquisition.

On the next page, we have some information on the improvement of the revenue synergies within the group. Again, this was a key element of the medium-term plan that we had presented in 2016, because we think that one of the ways we have to grow more rapidly than the GDP of the markets where we are is to further increase the capacity of the different business lines of the group to work together and I'm happy to say that considering all the new initiatives that we have launched in this respect.

We are on track to reach this EUR 8.8 billion of internal revenue synergies by the end of the medium-term plan. On Page 10, just a few highlights on the progresses that Credit Agricole is making from, I would say, a digital viewpoint, just a few figures.

If we take all the group brands in terms of attendance on our different online sites, we have 18 million unique visitors per month for a total of 124 million visits. In terms of apps and mobile usage of our different banking services, we have more than 5 million users of our apps every month.

In terms of digitalization of our processes, last year we were around 50% digitalized, we are now at the end of 2017, 70% digitalized, and we are on the way to reach the target of 100% digitalization of the customer [genres] in the different banks of the group, by the end of the medium-term plan. And of course, we are progressively developing the online and distance selling strategies.

In terms of innovation on Page 11, I think that there is 1 new device that I want to highlight, which is the creation of La Fabrique by CA, which is the launching of a start-up studio designed to generate and to accelerate, I would say, innovation for this specific organization. For the rest, I think we can keep you know perfectly well Le Village by CA, which was launched already 4 or 5 years ago, and which is rolling out different regional banks within the French territory.

We don't forget the cost basis and we'll work on it. We have launched in 2017 a very significant initiative, which is the creation of a single entity for all IT production centers within the group both for Credit Agricole S.A.

and for the regional banks, which is going to consume significant amounts of investments, EUR 260 million, but which is going to generate very significant savings. Of course, considering the time scale of those investments is not going to be fully productive in terms of cost cutting before the end of the medium-term plan, but life doesn't end in 2019 actually and we are still and already working on initiatives that are going to generate cost cuts after 2019.

So, we target in 2021, 2022 to generate as much as EUR 185 million of savings in connection with this initiative. We are also working on all different purchasing programs and we have already secured more than EUR 100 million of cost savings by the end of 2017 and we target to double more or less this amount by 2019, and we have launched also a series of savings programs within the support functions of the group and within the back offices of the group.

Last but not least, we are progressing in terms of client offers and you have, on Slide 13, many, many initiatives that we have recently taken. Let me just highlight 2 of them.

We have launched eko, which is an additional offer. We access offer to bank account and to the whole group's retail banking services within the -- under the brand name of Credit Agricole, and it's working well.

We have 100,000 visits on the site per week and 70% of the new customers that we've gained through this offer are actually new customers. So, there is no cannibalization.

And the second initiative I want to highlight is the initiative taken by Credit Agricole leasing and factoring Cash in Time, which is a full online and almost immediate offer in terms of factoring with more than 1,000 customers in less than 3 months and with the degree of satisfaction, which is at 100%. So, it cannot improve further.

Financially, I think we are also on track to deliver all our commitments that we've taken under the medium-term plan. As you can see on Page 14, in terms of revenue growth, I think we are at or above target.

In terms of cost-income ratio, we are improving, we still have some work to do. In terms of cost of risk, it was not a target, it was an assumption, but both for the group and for Credit Agricole S.A., we are below the assumption.

In terms of underlying net income, we still have again some way to go, but we are, I think, on track to reach the target. In terms of solvency, as you can see, we have progressed at group level in 2017.

It's an increase of 40 bps as compared to the end of 2016. For Credit Agricole S.A., the commitment is to be at or slightly above 11% and we are already far above 11%, so there is no issue.

In terms of return on tangible equity, Philippe commented it earlier. We wanted to come back above 10% after the sale of the 25% stake that we had in the capital of each regional bank.

It was quite demanding and actually we are now above this target and we think that it's very satisfactory. In terms of TLAC, we are, as Philippe said, at 20.6% excluding any element of eligible senior debt, we continue to target 22%.

And in terms of dividend, as Philippe said, we are at or even a little bit above our commitment of distributing 50% of the attributable earnings. Let's come now to the financial performances.

And I think it's fair to say that those performances reached to a very good commercial momentum in all business lines. So, obviously, I'm not going to read all those figures on Slide 15, but what you can see is that in retail banking activities both in France and Italy, in the savings management and insurance business division, in the specialized financial services division and in the large customers division, I would say that all indicators are in the green, which is obviously helping to generate a good level of profitability.

Let me go now to Page 17, this is a page I hope every quarter to be as little as possible, but obviously this quarter we have had several one-offs, as you are fully aware of, and frankly it was not from our side, and we would have preferred to skip most of those one-offs. The biggest chapter on the one-off issue is in connection with the taxes.

And as far as taxes are concerned, there are 2 main elements, the first one, Philippe mentioned it, we have to bear corporate tax surcharge in France, which is costing the group EUR 343 million and which is costing Credit Agricole S.A. in terms of net income group share EUR 326 million.

Of course, we've tried as much as possible to reduce when it was possible this level of taxation, but there was an uncompressible level and it's quite heavy for the group. It's even more heavy, because this tax has been put in place by the French government in order to offset the cost of the repayment of a former tax that was declared illegal by a court, and contrary to what happens with the surcharge, we are only a very small beneficiary from the repayment of the illegal tax.

So, the net between the surcharge and the repayment is probably for Credit Agricole Group and for Credit Agricole S.A., one of the highest in the landscape of French corporates. The only good thing with that is that it's a one-off, and it's not going to be repeated this year.

Then, from the tax viewpoint, we have another element, which is probably less annoying even if it's costly again this quarter. It is in connection with new tax laws in France and in the U.S., which are reducing for the future the level of corporate taxes.

So, we have to write-off partially our deferred tax assets and this represents roughly EUR 50 million of write-off net in France and EUR 80 million in the U.S. So, all in all, 130 -- close to EUR 130 million of deferred tax asset write-offs.

Besides we have some integration costs linked to the very positive acquisition that we made in 2017, mainly the acquisition of Pioneer and the acquisition of the 3 Italian banks for a total of EUR 54 million. We have as all French -- all other French banks to pay for the Check Image Exchange penalty.

So, it's an impact of EUR 58 million at the level of Credit Agricole SA, and close to EUR 100 million at the level of the group globally. We also had to and we modified some goodwill values in our books, 2 elements from this point.

First, we have had the recognition of the badwill of the acquisition of the 3 Italian banks. It's a total badwill of a little bit above EUR 400 million with EUR 312 million of group share, and this is more than offsetting a full goodwill impairment on our Polish activities.

I will go back on the evolution of the Polish business, which is good, but not as good as we expected. So this is right why we have to impair this goodwill.

And last point and this should be in the normal time, the only remaining line on this page, which are the recurring specific items linked to the issuer spread, DVA, hedging of loan portfolios, et cetera. If I go now on Page 18, what you can see is that the underlying net income group share increased, as Phillippe said, by 23% between 2016 and 2017 and all business lines contributed very significantly to this overall improvement.

On the last quarter, we apparently had a slight decrease in the net income group share on an underlying basis, but actually if you drill down a little bit more precisely, what you can see is that the gross operating income, again on an underlying basis, is at 1.5%. The cost of risk is down 15%.

So, the profit before tax is actually up 4%. And what is driving the net income group share a little bit down is first, the equity accounted line in connection, obviously, with the deconsolidation of BSF, which took place at the end of third quarter, and then the tax level, which increased, even if I leave aside the exceptional tax surcharges, we have had actually on the fourth quarter of 2016 a very low running level of corporate tax and we are going back to more normal level.

So this is leading to an increase in the level of taxation. If I go to Page 19, what you can see is that both on the quarter and on the full year, we have had a very dynamic level of evolution of revenues, they're up 7.2% on an underlying basis for the full year, and 5.5% for the quarter.

But on the full year, all business lines were up excluding marginally the retail banking activities, especially in connection actually with non-euro retail banking activities abroad, where we have had a significant Forex effect, but besides, all the top lines were up. On the quarter, the level of revenue was significantly up within the asset gathering business division and within the large customers division.

It was more or less stable within retail banking and SFS, I will come back on those performances later on. As far as the cost line is concerned, it's well kept under control 3.5 -- 3.7% actually for the full year, 7.5% on the last quarter, it's in connection, first, with the integration of Pioneer within Amundi; and 2, with what Phillippe said kind of incentive that we had to try to book some costs on the last quarter of the year, considering the level of taxation that we had.

Cost of risk, Phillippe said it already, it's another decrease, 29 bps for Credit Agricole S.A., 17 bps for the group, down 22% for the S.A. and 33% for the group, so very low levels and no sign of significant deterioration going forward.

By business line, what you can see is that we have had a further decrease within the consumer credit business. Retail banking in Italy, it's apparently up, but actually it's only a scope effect.

You know that, in 2017, we changed the location of the leasing activities in Italy from SFS to retail banking activities and so this is simply the reason why apparently the cost of risk in Italy is increasing a little bit, but on the simple perimeter of Cariparma, it's stable to slightly negative -- slightly decreasing. Financing activities of CACIB, it's significantly down despite some specific sides.

And as far as other business lines are concerned, it's more or less stable at low level. So, all in all, the EUR 335 million of cost of risk for the quarter, it's down EUR 60 million as compared to 2016.

Page 23, again we insist on this idea, but it's very important to note it, the business model of Credit Agricole S.A. is a) very diversified and b) focused on retail banking customers.

And what you can see is that we are progressing in terms of return on normalized equity business line by business line even though we are not always already at the target that we have set for the medium-term plan. If I go now to Page 24 with some additional indications business line by business line.

In the asset gathering activities, the most important information on this page is that the asset under management increased by 24% between the end of '16 and end of '17. Obviously, there was a scope effect, which is significant, but besides in the asset management business, in the life insurance business, and in the wealth management business, there is also a strong organic growth.

The contribution of this division is very solid, up 4% on the quarter, 7% on the full year. On Page 25, insurance activities, if we start with savings and retirements, what you can see is that we have had a certain slowdown in the net inflows, but actually it's a very sound production that we had in 2017, because it's only made of unit-linked products all in all.

And we have -- we are in a very healthy financial situation in the savings and retirement business because the portfolio yield is significantly above the average of our peers, close to 3%. The average crediting rate is slightly below peers and we have the highest ever level of policyholder participation reserve.

So it's a very, I would say sound situation. In the protection and in the P&C space, we have had in the last 5 years a continuous increase in the equipment rate of our customers in both networks, regional banks, and LCL.

This is leading to a growth of premium income, which is far above market, above 7% for the full-year of 2017. And so this is translating into new gains in market share in all business lines in the protection and P&C businesses.

So all in all Credit Agricole S.A. is confirming again its position of #1 insurer on the French market.

In terms of financials for the insurance business, what you can see on the left-hand side of this page is the evolution of the revenues. Of course, the lion's share of the revenues is coming from life insurance activities, and there is obviously a sharp increase in Q4, as compared to Q3, which is in connection with the finalization of the yearly profit sharing rate, and there is a slight decrease Q4-on-Q4, which is obviously in connection with the high tax rate that we have to stand in 2017.

The rest of the revenues is coming from the protection and P&C businesses. There are 2 elements, there is an improvement, which is in connection with the development of the business, strong development of the business, but there is in the other way round, a slight impact of a decrease or deterioration of the combined ratio in connection with the weather-related events that we have had in France, especially by the end of last year.

But all in all a good level of revenues for Credit Agricole S.A. Then on the cost basis, we took an impairment of EUR 32 million on some intangible IT assets, which is preparing the future in terms of further integration of IT platform within the different insurance companies, excluding that the cost basis would be increasing by only 2.5% year-on-year and less than 1% quarter-on-quarter.

Finally, the net income group share is up 2% between '16 and '17 on a very high basis in 2016. Amundi on Page 27, I can be very quick, because Amundi published its results by the end of last week actually.

So what you can see is that revenues are up and it is not only linked to the integration of Pioneer, because at constant scope it's up 12% Q4-on-Q4. The costs are under control up less than 3% between Q4 and Q4 again at constant scope.

And the cost income ratio at 52.9%, it's again a slight improvement of a little bit around 0.5 percentage point. So net income is up 53% on the quarter and more than 25% for the full-year, even though we have decreased a little bit our stake between 2016 and 2017.

Retail banking activity in France, LCL, very good commercial momentum as we already pointed out, both in customer savings and in loans outstanding as well as in the sale of insurance policies. As you say -- as you saw earlier, in terms of contribution it's a little bit down Q4-on-Q4, but actually if you drill down a little bit on the P&L, what you can see is that the decrease in revenues is completely explained by the normalization of the home loan business, because actually we no longer have the early repayment and renegotiation commissions that we had in Q4, 2016.

If we leave that alone, the level of revenues is more or less stable. Costs are a little up in the last quarter, but actually, for the full-year, they are still down more than 2%.

The different cost-cutting programs are well underway. We said for example, that we intended to merge 250 branches in the -- remaining branches in the urban areas of LCL, the program is almost completed now.

And all in all we have a return on normalized equity for LCL, which is above 12%. On Page 29, you can see this trend of normalization of the home loan market with a level of renegotiation, which is now absolutely marginal around EUR 100 million a month where it was more than EUR 2 billion in January last year.

Last point, on the right-hand side bar chart of the slide, you can see that we have now kind of a circle in terms of underlying revenues, i.e., outside the early repayment and renegotiation fees. In Italy, again, a very good commercial momentum and you can see on this slide that the integration of the 3 savings banks is going to increase significantly the size of the balance sheet of our activities in Italy.

The net income group share of Cariparma for the full year is more or less stable if we exclude the scope effect linked to the integration of Calit this year. Revenues, there was a slight increase Q4-on-Q4, thanks to the scope effect.

Operating expenses are almost stable. The cost of risk, as I said already is stable excluding scope effects and actually, this stability translates into an increase of the coverage ratio in the context of the trend of declining -- further declining of the risks linked to the portfolio of loans.

And actually, the new defaults are down 32% for the full year. This is leading to a further decrease in the impaired loans ratio and another improvement of the coverage ratio a bit above 50%.

Globally in Italy, the group generated a net profit close to EUR 550 million last year and 100 -- close to EUR 130 million in the last quarter of the year, it's up 13% for the full-year and 8% for the last quarter. So Italy represents between 14% and 15% of the net income group share of Credit Agricole S.A.

and we are developing our universal bank model with the development of revenue synergies, we are actually above EUR 750 million of revenue synergies for the full-year 2017. The rest of retail banking activities, so in non-euro countries, I think the most important information is that despite a very negative exchange rate between 2016 and 2017, we managed to generate a net profit, which is close to EUR 100 million for the full year, up 7.5% close to 8%.

So, it illustrates the very good dynamic of the different banks that we have abroad. Just one additional comment on Poland, we have had last year a good improvement of the development of our business, but despite that, it doesn't -- the pace of transforming our initial consumer credit operation into a real and full-fledged retail bank is a little bit slower than what we expected, so this is leading us to write-down the EUR 220 million of goodwill that we had on this operation.

Specialized financial services, very good development of the business. It's the case for the consumer credit and car financing, it's the case also for leasing and factoring activities.

Actually, net income before tax and before the depreciation of the partnership that we had in the Nordic countries with Ford, which is called Forso. We have a net income, which is up 2.5% Q4-on-Q4 and 22.5% full year-on-full year.

So actually what is impacting a little bit the results of the last quarter is mainly the tax issue and also the depreciation of Forso, which is the introduction of a small joint venture, which was managing more or less EUR 1 billion of credit outstanding and return on equity, which was below our standards, so we decided not to continue this business. Large customer division, very good, I think quarter and full year for CACIB and CACEIS.

If I start with CACIB, revenues actually are up close to 4% between '16 and '17, and up close to 5% between Q4 and Q4. So, it's a very good performance, I think compared to many peers actually, in a context where costs are kept under control, where the cost of risk is declining by 64% on the quarter and by 55% on the full year.

And so despite the fact that we no longer take into account any contribution from the BSF, CACIB managed to have more or less a stable level of profits between Q4 and Q4 and an increase of 4% between 2016 and 2017 in a context where there has been a very sharp decrease in the capital consumption, risk-weighted assets were down almost 15% between the end of 2016 and end of 2017. I go now to CACEIS, again very good level of activity.

It's the case for the assets under custody and the assets under administration. There is also a good development of the additional businesses in listed derivatives and private equity, real estate, and securitization services.

Revenues are very significantly up, 15% on the quarter and 8% on the full year, and considering the cost basis, we have actually an increase of the net income group share by 25% on the quarter and 28% on the full year. So, it's a very solid 17% return on normalized equity.

So, in this context, we were happy to announce the finalization of the acquisition of the 15% stake initially held by Natixis in the capital of CACEIS. If I go to the corporate center.

Net profit or net loss, which is above the one we had on the last quarter, but again including significant one-offs. We didn't take into accounting in the restatement of the underlying level of revenues, but what we can mention is the fact that we no longer take into account any contribution from Eurazeo, obviously.

We also have had, in 2016, net profit in an internal reorganization of the capital of Credit Agricole Immobilier. And again, this quarter, we tried to book some extra costs, especially in connection with tax controls in order to try to reduce a little bit the level of taxation -- the overall taxation that we had to support with the surcharge.

So, all-in-all, after a global improvement of close to EUR 400 million, year-on-year, we continue to confirm our target of EUR 700 million for 2019. If I go now to the activity of the regional banks, I think that it's not a surprise to say that the activity is working very well.

Improvement in the development in the customer savings business and in the loans outstandings. And maybe in addition to that, what we can say is that the regional banks altogether opened more than 500 new bank accounts in 2017, gross figure, which is a 17.5% of market share, which is obviously the biggest market share of all the French market and this is translating into a net figure of 100,000 new customers for the regional banks.

Let's go now to the solvency situation of the group. So, Philippe already gave you the figures.

For CASA, there is a decrease in the level of CET1 ratio this quarter, which is perfectly understandable in a context where we finalized several acquisitions actually in the last quarter of the year. What maybe is important to note is that we continue to manage the risk-weighted assets very cautiously because as you can see, the level-wise, a little bit above EUR 300 billion at the end of 2016.

It's now a little bit below EUR 300 billion at the end of 2017. So it's a decrease of EUR 5 billion for the full year 2017.

Maybe just an element that we are going to again repeat several times this year, the impact of the translation to IFRS-9 is going to represent around 30 bps of CET1 ratio for Credit Agricole SA, which is going to take place beginning of 2018. So you will see that in the figures of the first quarter.

And in addition to that, as again all French banks, we have now to deduct the payment engagements we have taken towards the resolution funds, and this is going to represent a cost of around 8 bps for Credit Agricole SA in addition to the 30 bps in connection with IFRS-9. At the level of the group, which is obviously the most important level to assess our solvency, an increase of 40 bps of the capital ratio between end of 2016 and end of 2017, so 14.9% of CET1 ratio, RWA is a little bit up, EUR 1 billion from EUR 521 billion to EUR 522 billion.

So, obviously, this is in connection with the development of the business of the regional banks. Maybe just another element, because we are very strongly committed to present a level of TLAC by the end of 2019, which is going to be indeed at 22%.

And so in order to secure fully this level, we are going to increase a little bit in the context where the spreads are quite cheap. We are going to increase a little bit our issuance program of TLAC eligible debt and we are going to replace a little bit of the senior unsecured debt that we intended initially to issue by some senior nonpreferred for a marginal cost, but in order to secure this TLAC ratio level.

On Page 42, another specificity of Credit Agricole SA, excuse me for that, but we had already the occasion to mention that we were constraint by the ECB and the EBA to dismantle loyalty dividend that we had put in place in 2010. It's in connection with the specific reading of the CRR regulation, so I think the best [for us] was to comply to this inspection.

So we are putting in place the mechanisms in order to dismantle effectively this loyalty dividend scheme. This is going to lead to the creation of small number of new shares, that's around 6.5 million new shares that we are going to give in compensation to the beneficiaries of the loyalty dividend scheme.

It's going to be a ratio of 1 for 26, and it's going to be probably done by the end of the first half of this year. On Page 43, you have some, I'd say, preliminary information on IFRS-9.

I think, I'm not going to comment them in depths because we are going to come back to that in the end of the first quarter. So again, what you have to have in mind is that the cost of the translation to IFRS 9 is around 30 bps for Credit Agricole S.A., as well as for the group.

Page 44, the market funding program is completed for last year, there is absolutely no issue. What we even can say is that we have already started the 2018 program, which is already completed by 20%.

Liquidity and funding, no issue, I think that figures are more or less the same quarter-after-quarter, so I can, I think, go rapidly to the conclusion. And as a conclusion, I think I can only repeat what Philippe said as an introduction, 2017 was a very, very good year both for the group and for Credit Agricole S.A., and this good result was not, I would say, changed by these tax surcharge we already mentioned.

Thank you.

Thank you so much, Jerome. I give you the floor for the question and be kind to me and ask your questions very distinctly and as slowly as you can.

Thanks.

Hi. Good afternoon.

Tarik El Mejjad from Bank of America Merrill Lynch. I have three questions please.

The first one is on the earnings in the quarter, I mean, you commented a few times in the call today that you've tried to optimize the fact that tax was elevated, hence booking less revenues at higher costs. So we can identify 2 costs, which is one, international retail banking EUR 32 million, then another one in SFS, I think, but if roughly, I mean if you have to say how much basically you could -- I mean -- because I mean I can't really see you where, really what, how much that would really have changed the numbers, that's my -- the base of my question.

Second question is on tax [ deal ], I mean this government in France has this 3% deficit as a golden rule, and are you not worried that in -- supposed to be companies or invest -- I mean economy friendly government to do like, give you EUR 69 million and take back EUR 328 million, is it not something that could repeat in other occasions if there is any gap in a budget in any year, because it's completely rational what's happened, I agree with you, and bit frustrating. And my last question is on the dividend, I think it's fair to clean the bottom line for this one-offs to penalize the shareholders, but let's suppose the year where you have a very high positive one-offs, which happened, for example, last year, would you be keen to like guide for now a payout on the sustainable net profits, because then you can actually buy a lot better your progressive dividend per share growth year-after-year?

Thank you.

Jerome, you can start with the first question.

Well, it's very difficult and more than difficult I would say, it's impossible to answer precisely to your question. What we can say is that everywhere we had the opportunity to try to not book a profit this year and book it rather next year or on the contrary, book a charge this year and not book it later on.

We reasonably did it, but reasonably we did [indiscernible] game with the tax controllers because we know them, they are quite active and quite accurate. So it's simply a matter of optimization, we didn't try not to massively change the profile of profitability of the quarter and of the full-year.

So when it was possible and when it makes sense to take some extra charge like the write-off of certain IT investment within Credit Agricole S.A. It makes sense from an operational viewpoint because we are on the process of merging different IT platforms, so it was relevant to do so.

When we had some costs, for example, in several entities we had already some tax controllers with us and sometimes they don't point out, they point out not only the corporate tax, but also the VAT, and the VAT is deductible charge, so we leave some provisions in terms of avoiding for the future and having an extra cost with lower level of deductibility, but it's only marginal, it's not a massive change. But, and to answer the second question, I would like to tell you that of course, it was a very bad news for us to have to pay this very special tax, but you have to understand that the government didn't decide this tax to offset new deficits, simply because they -- they had to face the decision at the very end of the last year that the former tax was irregular, so they had to reimburse very high level of amount to some companies and immediately to find something to offset that.

We said it was normal for companies doing benefits to be in this kind of situation, but the fact is that the rule that has been decided was not fair, that was the point. The rule was 2 steps above EUR 1 billion of revenues than [EUR 3 million] of revenues and a progressive tax, and so the result was that this tax was very, very concentrated on simply the very profitable companies, not from the banks, but many banks in France.

So that was something very hard for us, and of course, I do believe that this can't be repeated, because I do repeat that the fact is that the decision has not to be taken for new deficits, but simply to offset immediately something that has been withdrawn by court. For those dividends, I think your question is of course very important, but it's something on which we have been very often asked for in the last month.

[indiscernible] on dividend that only less than 2 years ago, we announced a new medium-term plan and we stated [indiscernible] policy in terms of commercial development, in terms of financial targets, in terms of payout policy, decided and it was a new and good move for shareholders, a 50% payout policy in cash, and you don't have to forget that the target for us is that this dividend can increase, thanks to the fact that our result must increase. And I do think, let me tell you that because this is something very strange.

I do think that if banks or companies goes in an ongoing process of increasing the payout policy that means that they are at the end of the cycle, and today Agricole is not at the end of the cycle. When you look at the targets for benefits for 2019 and probably in several quarters, I should present you a new medium-term plan, we do think that we have a good development still in front of us.

So we think that first, 50% was a good decision, it was a fair decision to neutralize the impacts of this very special tax, of course, and now our job is to increase the benefit so that shareholders can get dividends higher and higher. So I think this is the very important point.

And I would like to highlight another point is that in the global policy, I do [promise] you to be very prudent and towards [indiscernible] in driving the group. The fact is that in the balance sheet of Credit Agricole S.A., we have still this very special mechanism that is called switching insurance, that means we can use excess of capital when we want so that if -- of course, we reimbursed gradually, for example, the switch, we could increase our revenues, so that I think that the good deal is not to sell --to say to investors, well, I don't believe that my benefits will increase, but I do show that they will increase and give you a dividend higher and higher.

So, it's very important for us, not only to promise an ongoing process of increasing our dividend but to increase results of the group at the same time. And for time being, I think this is simply fair to promise 50%, and in this very special case, to give 56% neutralizing this special tax.

I hope I've answered your question? Next question?

Thank you, good afternoon, Jerome Grivet. First of all -- actually I have 3.

One is more a remark. I really understand what you're trying to do about -- trying to put aside as much things as possible in Q4.

That has been done by French bank 2 years ago. Some of us were in the room actually at that point and the stock price went down by 12%, that they're not [ 3% ].

And even a little bit dangerous thing to do in a way considering that, there is a lot of opportunities you have. But at some point, it's a bit -- just like your comment on that, because it showed that there was a bit of a gap between, it seems, the expectations and what was delivered.

But I understand where you're coming from. The second point would be some of the one-offs you isolated, take them onboard.

But some of the them you did not effectively isolate the integration costs from HSBC Monaco, from CMC, Asia, I think even you could argue the depreciation of the IT expenses and insurance. The restructuring of the lower tier 2 in Italy, you could argue were also things that were effectively one-offs and were not bound to recur.

And the third question, more strategically is the group has undergone massive transformation over the year, and is it different to steer now as an entity, and as a bank, than it was before or do you find it reasonably similar, knowing that you have less stakes and more core businesses than you had before. Thank you.

Well, I don't think that you can say that we have been putting things aside on the fourth quarter of this year. Actually what we said is that some things have been imposed to us, which are the tax issues actually, because we are not the master of the calendar of the different lawyers or law makers be it in France or in the U.S., it happens that both in France and in the U.S.

lawmakers have decided new corporate tax rates, which is decreasing our -- the value of our deferred tax assets. We have to take them this quarter.

It's not possible, you need to postpone or to just forget those modification. Same thing with the surcharge.

So, I don't think we can say we have tried to make things as heavy as possible this quarter. What we've tried to do is, as I said, to optimize as much as possible, the context where the tax rate was high, that's true.

But the tax rate was high in France. So, it means that in many countries, nothing was changed in terms of policy.

And I think it's really what we did. So -- and this is why actually the underlying level of profitability if you look at the level before tax is up Q4-on-Q4 by 4%.

So really I think if it's a quarter where you think we've been washing the sink in every year, in every corner, generating a profit before tax, which is up in those contexts not so bad actually if I may say so. In terms of restatement between the published stated figures and underlying figures, what we tried to do is to limit as much as possible the number of elements that we restate, because otherwise we would spend half of this conference to explain all the restatements.

So, obviously, when [ Indosuez ] Wealth Management is making some acquisitions, it's increasing slightly their cost basis, it's a temporary increase. They are going to go back to a more normal trend.

We mention it, but we don't restate it, because otherwise again nobody will understand anything between the stated and the underlying figures. As far as your last question is concerned, maybe I'm going to hand the floor to Philippe, because he is doing the work.

Well, I would like to answer your question on a more general point of view. When we try to give some colors on the future from Credit Agricole Group, of course.

First, let us tell that -- say that the landscape is not too bad for us. When you look at that, of course, a high level of percentage, but the environment is stable as -- for the interest rates, for example, they are increasing, they have already increased for more than 100 basis points from [ half of 2016 through ] to now.

And this is the best model we could hope, that means a slow increase of rate. And you spoke about our core business, and the fact that we did some transformation in the group.

I do think that first our core business is not probably exactly what you think. Our core business is exactly the [ rules ] group of the financial needs of our customers, loans, savings, insurance, real estate solutions.

Then, we simplify the group that's right, but mainly we organized it on 2 various special models of distribution, that first one has been called universal customer focused model, that means that retail bank chains are very important, but they are linked by all the business lines, so that -- do bring the global to the local at each customer and the second one is a very special choice that it means -- and for me, it's of course the relevant choice, is the full multi-channel distribution, not simply by digital, but by branches, by phones, by internet, by mobiles and so on. And I do think that now we are just accelerating.

That means that the group really fits well. We had this very bad surprise at the end of 2017.

Despite of that, our results were not so bad, since they have increased compared to 2016. But what I feel today is that we are really well within the group, facing our competitors and that we are really able to accelerate.

So, I'm very easy -- comfortable within our medium-term plan, as we announced it -- as we promise it and I do think that we shall be able to deliver all the commitments we took with that. So the simplification of the group was a very important point both for [ this provisions ], and on an internal point of view and a very special thing is that since Eureka, it's even easier than in the past to work together in the group.

It's probably difficult to explain, but now it's really easier than in the past, because we have clearly the business lines in Credit Agricole S.A., we have the regional banks, we have the banks of Credit Agricole S.A., and we have a clear strategy in terms of commercial development. And once again, I think that if not surprised [indiscernible] we are able really to accelerate both in commercial development and profitability results.

Delphine Lee from JPMorgan. So 3 questions on my side.

First of all, I just wanted to get a bit of color on the 3 Italian banks acquisition. Just to understand a little bit, if you can give us a bit of figures in terms of revenues, revenue growth or cost-income ratio or cost of risk, which I assume is quite low.

Just we have some estimates. Secondly, just wanted to ask on the tax rate, so you've taken the DTA impairment.

Does it change in anyway, the tax rate you had assumed in your business plan, what should we expect in 2020, because I assume France is decreasing. So how much benefits would you get from that?

And then the last question is on capital. So, you're going to take the 30 basis points from IFRS9.

But what about the remaining 40 basis points from [ trim and loaded folded ] -- the folded assets, which I assume is coming this year? Thank you.

Very first point, the main figure I can give you is first that we reached a very good badwill, that was the first figure where we had the benefit. Even if we made some provisions, thanks to this badwill, and so the badwill we had at the end of the day was the result of the first badwill and the fact that we added provisions in this Italian bank.

So I'm very optimistic, first in the fact that these banks are really clean now, and the ability of the management [indiscernible] to transfer them to Cariparma group, as we succeeded that, for example, [indiscernible] 5 or 6 years later, getting it from a deficit position to a benefit position, but I don't know if you have something more to add.

We can go to Slide 8 because we have some information on Slide 8. And I skipped most of them when I presented introduction and we can maybe drill down a little bit on this one.

What you can see is that actually, there is going to be an increase in our balance sheet, which is going to be 19% in terms of customers assets and 13% for off-balance sheet customers assets. And then in terms of loans, it's an increase of 13% of what we are now, an 18% in terms of RWA because it's not exactly the same type of loans.

As I said, the quality of this portfolio of loans is very good because the impaired loan ratio below 10%, it's a very good level for Italy to be frank. And a coverage ratio, which is close to 55%, again it's a good level for Italy.

In the last quarter of last year, the cost/income ratio was far above 100%, which shows the room of improvement that we have. And when we said that we expect a first positive contribution to our results in 2018, it supposes that we are able to reduce massively the cost/income ratio, obviously for the integration on our platforms.

And this is why actually, we target to generate 20% of the revenue synergies in the integration plan, the 25% of cost synergies meaning that we want to cut 25% of the cost basis of those banks, and obviously it's already on track. As Philippe said we used part of the initial acquisition badwill in order to provision certain risks of certain costs and one of those costs is redundancy plan costs, which has been provisioned actually for the [ PPA ] initially.

So I think quarter-after-quarter, we will give you some information on the progresses that we make on this integration plan, but obviously, we have already our roadmap. In terms of tax rate going forward, as you know, in France, the corporate tax rate is going to decrease progressively.

So it's going to be a moving target, the normalize I would say corporate tax rate. So what we can say is that it's the normalized corporate tax rate for Credit Agricole S.A.

is going progressively to go down from let's say 27%, 28% down to close to 25%. As the official corporate tax rate is going to decrease, so we are going to accompany actually the evolution of the corporate tax rate.

And your last question was on capital, you are right mentioning that we allocated in the medium-term plan 70 bps of regulatory costs, so obviously IFRS [ standard ] was the biggest and most precisely identified cost. The 3 missions are underway nowadays, and it's a split between different missions, inspections, which are conducted by the ECB in the different entities of the group.

So when each inspection is going to publish its results, we are going to take those results into consideration and this may lead in certain entities going forward to a certain increase in RWA's, which will not be organic, the growth of RWA but simply regulatory goals, I would say. So and of course, we will have going forward to be clear, if there is a growth in RWA's if it comes from organic growth or from regulatory strengthening.

Well, as you have said that we had questions in phone, let us take the first phone if you like.

Hello. Thank you for the presentation.

Just a few questions from me. The first one for Mr.

Brassac, so France is your first domestic market, Italy looks to be the second one, and I was wondering whether you consider you already have a third domestic market perhaps Poland or would you like to basically have a third domestic market. It's true you have a well-balanced business model today, but equally, you could be more diversified geographically and the group generates a lot of capital, so acquisition could well be the way to grow at some point in time.

And my second question is on insurance, you have been boosting reserves this year, do you expect to increase reserves further to match competitors. Also I was wondering whether you see competition picking up in insurance both life and non-life, so we see that the [indiscernible] euro contracts yielding more than the industry average for the first time in a year, so I was just wondering why this is the case.

And my last question is regarding tax integration rules, it looks like the French government could be thinking about changing these rules, I was wondering whether this could have any impact on Credit Agricole S.A.? Thank you.

Thank you. You're asking a question about our domestic markets, well, let me tell you that this is not a simple definition, of course, we have a global model in France, we have a global model in Italy since we have all the business lines linked working together in Italy.

But in each country, we try to organize more and more the fact to work together, and for example, you are not speaking about Germany, but we have all the business lines in Germany, except the retail banking, of course, it's an important exception. But we have at least 5 or 6 business lines in Germany.

And in each country, in Poland, in Germany, in Italy, but the same thing in Japan, for example, we try to coordinate at the highest level possible all of this business, so that to create what I called this very special model of the universal customer focused model. So that means that we didn't decide that we shall have only 1 or 2 or 3 domestic markets, but in each main country in which where we work, we try to be stronger by getting all the synergies, already is, and of course, we can get, and I can tell you this really works.

But for the time being, I would like to highlight that in Italy the results are really very good, more than EUR 0.5 billion of net income group share for Credit Agricole, it's a very good result. And we would like to highlight this is right for each business lines.

Once again, thanks to the fact that they are all coordinated in a unique management on this territory. So [ France ] is an important [indiscernible] for us, Germany 2, but all the countries are important for us, and sometimes we should speak to you about, for example, Asia, in Japan, in China, where we have some important activities, and at each time we try once again to coordinate that, so not to have any silos, but to have really a global bank linking all its offers for the customers.

Perhaps for insurance Jerome, [multiple speakers].

So in terms of reserve, it's true that between -- I think 2012, we wanted to increase the policyholder participation reserve, because we thought it was relevant to prepare for a more difficult context in terms of revenue generation of the asset portfolio. We think that now we have a level of policyholder participation reserve, which around EUR9 billion and so it represents 4.5% of the total liabilities, which is very, very comfortable.

So this provision may move in the future going forward but it's more going to be the consequence of the, I would say, the setting of the participation rate of the year for the customer and the difference between the revenue generated by the book of assets and the yield that we want to serve to the customer harder than coming from the deliberate policy of trying to increase further the level of policyholder participation reserves. So, the competition is indeed fierce in insurance in France, that's obvious, but certainly we are not going to play the game where we want to compete with others by pushing up the yield, the participation rate on certain contracts.

So, it happens that due to the decisions taken by some of our competitors, [Florian] happens to be on the upper, I would say, side of the market of equivalent contracts, but we don't have a deliberate policy again which would lead us to try to boost the remuneration of the type of contract like [Florian] in order to attract new customers. This is absolutely not our policy.

What we want to do is to serve rightly our customers, i.e., to be prudent for the future and to be able to have a decent level of remuneration in the long run. We are not playing the game, I would say, to boost the yield on the specific [hearing], although, to attract new customer and then to, I would say, deceive them in the future.

Tax integration rules. The rules in terms of tax integration are changing regularly and we know that the French Ministry of Finance has always considered that the French regime is very, I would say, generous.

So, obviously, we regularly have to augment and discuss with them. When I'm saying we, not only Credit Agricole, obviously many, many French corporates belong to tax integration group.

So, we try to defend as much as possible the different benefits that we take out of the tax integration regime. We know that there are some discussions presently for the time being, nothing very concrete.

So [indiscernible]. Next question in the room?

Thank you, it's Kiri Vijayarajah from HSBC. So first question on capital, you said previously, this was before the Basel paper was published that the output floor that 72.5% wouldn't be applied at CASA level, but only at Credit Agricole group level and I wondered since the publication of the document, has that actually been confirmed potentially by the ECB?

That to be decided by the European Commission, this is not a rule of the Basel Committee, but of the transposition indirectly for Europe. So, we have been said that the rule will be this one, but of course we shall have to check this point.

So, it's still -- still needs to be finalized, and then secondly turning to Italy, I just wondered, when would the integration team is going to be ready to maybe contemplate the next kind of bolt-on acquisitions. It sounds like progress, momentum is going well, so kind of timing wise, when do you think you could maybe look at what's on the market?

I think we have to respect our medium-term plan and to be able to take opportunities, that's very simple as a rule, what I can say is something else for that. Your question [indiscernible].

This is Alex from Natixis. A few questions from my side as well, Philippe, I don't really understand one thing, I mean the group has changed, you have made good acquisition, your business is performing quite well, but still you are not upgrading your RoTE target.

I'm trying to understand why not giving that the landscape is getting better and that you are extremely confident on what you're doing so far? This is the first question.

The second question is on Poland, would you look at any external group given that, I guess, the new regulatory tax has reflected your performances out there to increase your size? The third question is on the revenue in the corporate center.

I'm just wondering whether you can give any kind of run rate guidance given that things are more, let's say, more predictable right now. And last thing is on the AT1 coupon.

I feel that there is a growth year on year. I'm just wondering if we should consider the 2017 number as [indiscernible]?

Thank you very much.

Thank you. On the first point, to be on track and to be [indiscernible] can be, it can't become a default.

That means that for the target on the return on tangible equity, it's very important for us to be at this level today. We said we had to be at more than 10%, but I don't think it's useful perhaps any longer, but I don't think it's useful to say something more today, because I do think that the most important thing for investors is to be really clear on medium term.

And when I present you the medium-term plan, I take some new commitments about development, about income -- cost-income ratio, in terms of profitability and the most important point for me is to be able to deliver all these points. So, well, you can tell me that I'm true, prudent, but we said that one of the characteristics of Credit Agricole group of new Credit Agricole group will be to be very prudent and to be as clear as possible on the medium term.

For Poland, the issue today is just to look how we can accelerate our development, because as you probably know, we are quite many years ago a bank that was a specialized bank for customer loans, the banks was called Lukas. And we decided only 5 years or 6 years ago to transforming in universal bank adding even [seg-b] activities within this bank.

And it's more, it's slower that -- than what we could hope, so we are just looking how we could accelerate this development, because we have all -- we have many business lines in Poland and the real issue we have to address is to manage differently probably this territory, so that to accelerate our development. Once again, our priority is organic growth that we prove that when there are opportunities, we are able to take opportunities of course, if they are present.

On the corporate center, I think as I said earlier, we have confirmed our target to be at minus EUR 700 million in 2019. So, this is the run rate that we wanted to reach.

Next question, no more question on floor, last question in the room, there was a question from my left on the AT1 coupons, is that right? We didn't issue new AT1 since few years now.

So the level of AT1 coupons is the run rate of AT1 costs. So, we have to end with this, and we thank you so much for listening to us.

And thank you very much for your confidence.