Good day, and thank you for standing by. Welcome to the Crédit Agricole fourth quarter and full year 2021 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Philippe Brassac, Group CEO. Please go ahead, sir.
Well, thank you so much, and good afternoon, everyone. Philippe Brassac speaking. First of all, thank you so much for being connected with us. We are very pleased to comment and to present our main set of results and figures for both the fourth quarter and the whole 2021. It will be very interesting for me to listen to your questions, and I shall attend the whole meeting. My only takeaway message is simply the fact that we succeeded to get as many banks this very interesting and very excellent results. Thanks to the fact that they were absolutely linked to this huge operation, a successful operation, to preserve and to save the economy from the consequences of this crisis of the COVID crisis.
Naturally, on the next years, we shall have to drive these ships from mobilizing about the crisis to mobilize about the transitions that are useful and necessary all around us. I stop on this point, and I naturally give the floor to Jérôme Grivet to sum up our different results and try, of course, to answer to your relevant questions. Jérôme, please.
Thank you, Philippe. Good afternoon to everyone. I will start directly with the figures. Starting with the group figure, you can say that you can see on this page that we are posting this quarter and for the full year of 2021, the highest result we ever published for Crédit Agricole Group. We've stated net income, which is above EUR 9 billion for the full year on again a stated basis. When it comes to the underlying net income figures, the net profit for the full year is EUR 8.5 billion and EUR 2.3 billion for the quarter.
Interestingly, we see that both for the quarter and for the full year, we managed to keep a very significant positive jaws effect with revenues much more sharply up than the cost base, and the cost of risk is significantly down. Lastly, the cost income ratio at group level improves by close to 2.5 percentage points, and the solvency at group level further improves with a CET1 ratio, which is now at 17.5%. If I go now to CASA's figures on the following page, you see more or less the same trends with a net profit, stated net profit for the full year, which is above EUR 5.8 billion and above EUR 1.4 billion for the quarter. On an underlying basis, close to EUR 5.4 billion for the full year and again EUR 1.4 billion for the quarter.
Just a word on the specific items this quarter, which are close to nil, actually, -EUR 7 million, it's almost nothing. It's a combination of huge positive one-offs, which were more or less all linked to the Creval acquisition in Italy, the last positive effect of the Creval acquisition in Italy, bad will recognition and DTA recognition. We've, to put it in a nutshell, invested the biggest part of this positive one-off into improving the future and recurring profitability of Crédit Agricole Italia. We'll come back on this later on. This is leading to almost nil globally in terms of specific items. Again, we have a very positive jaws between revenues and costs, be it on an underlying basis and also restated from scope effects.
We have a strong reduction in the cost of risk and all in all, a sharp improvement in the net profit. Cost income ratio is down. Solvency is down. We'll come back also on this later on, but significantly above SREP requirement. Profitability is very strong, above 13% in terms of return on tangible equity. On page seven, I think two main messages. The first one is that having met the 2022 medium-term plan financial target, we are now ready to provide new targets to the market, and we will have an investor day on June 22 this year in order to update the market with new medium-term target, 2025 medium-term target.
The second important element is that we are going to propose to the general assembly meeting to adopt a level of dividend of EUR 1.05 per share. Again, I will describe a little bit more how this figure has been reached. Let me go now on page eight with an analysis of the evolution of our revenues. I think two or three main ideas on this page. The first idea is that our revenues are sharply up, both on the full year and on the quarter as compared to 2020. Interestingly, it's also significantly up and even more up as compared to 2019. Bear in mind that actually 2020 was revenue-wise, also a very good year.
The second interesting item on this page is that if we restate the evolution of the revenues from the scope effect, the main element of this restatement being the fact that Creval has been integrated only in the middle of 2021, we continue to see a sharp increase in the evolution of the top line, of the revenue line. Then the last interesting point is that what you can see is the fact that this revenue improvement on the full year is spread on all business lines. All business divisions have been able to improve their revenues in 2021 as compared to 2020.
If I go now to page 9 with the cost evolution, what you can see is that the cost evolution is less important than the revenue evolution I just presented on the previous page, and it's even more moderate if we restate the cost evolution, again from the scope effect. What you can see is that, actually restated from the scope effect, the costs are up only 4.3% Q4- on- Q4, and 3.5% full year on full year. The explanation of this increase is spread between IT investment and expenses, increase in variable compensation, Forex impact, and other items.
Nevertheless, both with and without scope effect, we managed to post a very significantly positive jaws effect on the quarter and the full year. Going now on page 10, we wanted to give a little, you know, a broader horizon in terms of our capacity of generating revenues. We looked back on the last five years. What we see is that regularly on each quarter, we've been able, year- after- year, to improve the level of the revenues. That's the first point.
Actually, the average growth in the last five years of the revenues was around 5%, when at the same time, the cost increase was on average 2.5%, which means that we've managed to improve the gross operating income by 7.5% year- after- year, and of course, to decrease very significantly the cost to income ratio, which is down 5 percentage points between 2017 and 2021. Going now to the risks. I'm talking about the underlying cost of risk, i.e. excluding the one-off items that we've posted in Italy through this reinvestment of the capital gains and goodwill recognition that we had with the Creval acquisition.
Talking about the underlying risk, what you can see on this page is that actually the level of risk is very significantly down, both for the quarter and for the full year as compared to 2020. It's the case both for Crédit Agricole S.A. and Crédit Agricole Group. The level of risk is also significantly lower than the assumption that we had made when we presented the last medium-term plan. It was 40 basis points on the perimeter of Crédit Agricole S.A., and 25 basis points on the perimeter of Crédit Agricole Group globally. Maybe the last and interesting point is that every quarter this year, we've continued to increase a little bit the stage one and stage two provisions, i.e. we've avoided to write back provisions, simply on the back of a better macroeconomic scenario.
As you know, we have a methodology that combines the effect of the macroeconomic scenario and some forward-looking local aspect. Actually, each quarter when the macroeconomic scenario was generating some write-backs of stage one and stage two provisioning, we've offset these write-backs by increasing the forward-looking local. This is leading to the situation which is described on page 12, where we have improved over the year the coverage ratio of our non-performing loans with provisions when the level of non-performing loans was decreasing as compared to last year. Within the global stock of provisions that we have, we've significantly increased between 2019 and 2021, the component linked to stage one and stage two.
Actually, for the perimeter of CASA, 1/3 of the EUR 8.9 billion of provision is made of bucket one and bucket two provision. This amount has been increased by EUR 1 billion since 2019. On the perimeter of the group, globally, the increase is EUR 2 billion between 2019 and 2021, and the amount is close to 40% of the EUR 18.9 billion of provisions, i.e. we have close to EUR 7.5 billion of bucket one and bucket two provision on the perimeter of the whole group. This is leading to the evolution of the net profit that is described on page 13. Again, what you can see is that there is a significant increase, a sharp increase of the net profit, both on the quarter and on the full year between 2020 and 2021.
There is also a significant increase if you compare 2021 - 2019. Maybe last point on this page, interestingly, this improvement of the total profit is more or less fueled by two engines. The first one is, of course, the decrease in the cost of risk, but the second one, almost as important as the first one, is the increase in the gross operating income. For the full year, it's EUR 1.2 billion of increase of the gross operating income, EUR 1.4 billion in decrease in the cost of risk, leading all in all to a EUR 1.5 billion of improvement of the net profit.
On page 14, we provide again this comparison between our return on tangible equity, 13.1% for the full year 2021, and the average of our peers in Europe. Again, we've managed to keep a very, very significant margin above the average of our competitors. Let me go now to some highlights of what we've been achieving in 2021, and actually since the beginning of this medium-term plan, starting on page 16 with a few highlights on the further developments of our business model, the customer-focused banking business model. We've continued to improve our offers, and there is a lot of examples provided on this page. We've continued to improve the digital experience of our customers, and we've continued to develop our Projet Humain, i.e.
empowering all the teams locally as close to the ground as possible. This is all in all leading to a further improvement of the customer satisfaction, and we've again provided some examples for the regional banks of Crédit Agricole, for LCL, and for CACF. This improvement in the customer satisfaction itself is fueling our further growth. In terms of commitment to our societal project for the group globally, again, we are providing here on page 17 a few examples of the different actions that we've been taking, both for supporting the effort of our customer in their own energy transition, be it corporate or individual customers. In also reallocating our own financing books from, I would say, brown assets to a greener set of assets.
I'm pleased to say that a study of Bloomberg stated that we were the only amongst 30 big banks globally to have a bigger green loan book than a brown loan book. This study has been published a little bit earlier last year. Lastly, we provide also some examples of our commitment towards inclusivity and support to all the population that needs support, be it the families, the over-indebted customers, or the young. On page 18, just a reminder of what we've presented to the press on December the first last year.
We've presented a series of markers of our commitments towards the climate, towards the agricultural and agri-food transitions, and towards the strengthening of the social cohesion and inclusion. We're giving on this page the list of this item. What is interesting is that we are committed to give regular updates on the way we progress on the achievements that are described on this page. On page 19, just a few reminder of all the achievements of this medium-term plan. First, as I said in the beginning of this meeting, we've met now all the financial targets that we had initially set for 2022. This is the case for the net income, which is now well above the EUR 5 billion threshold.
This is the case, and this has been the case for the cost-income ratio since now several quarters. It's also the case for the return on tangible equity above 11%. The distribution policy sticks strictly to our 50% commitment, despite the fact that in 2019, we had to skip the dividend. Then the CET1 ratio is well above the 11% target. We've fully unwound the switch mechanism. The initial commitment was to unwind it half by end 2022, but actually, our financial capacity allowed us to do it more completely and earlier, and this is going to help fuel the future profitability of CASA next year.
Taking a look at all the strategic operations that we did in the last three years, I think we can say that we've been quite agile in adapting our setup to all the opportunities and to all the necessities. We concluded eight new significant strategic partnerships. We've made a significant number of acquisitions for a total of EUR 4.3 billion, but we've been also able to dispose of certain assets for a total of EUR 2.3 billion. All in all, the impact of this acquisition, net of the disposal, represented 50 basis points of capital consumption in the course of the medium term plan.
On page 20, you have a wrap-up of all the initiatives that we've been taking last year in order to adapt our car financing business to the new behavior of the customer and to the new, I would say, standard in this business. We've completely restructured the partnership with Stellantis. This is going to be up and running beginning of 2023, but the principles are now clear. CACF is going to be and to become the exclusive partner of Stellantis for the development of their long-term leasing in all their branches across Europe.
We are going to become the 100% shareholder of FCA Bank, and we are going to develop a new model through FCA Bank of multi-brand car finance across Europe. We've also started from scratch a business of long-term rental offer dedicated to the group's retail banking customers, targeting 100,000 vehicles by 2026. If I go now to the main highlights regarding every business line specifically, let me start with the asset gathering and insurance activities on page 22, excuse me. Just two important items on this page.
The very sharp increase in the assets under management globally triggered both by, of course, the acquisition of Lyxor, but also a positive market effect and significant inflows. The profitability of this business division continues to progress for the full year and for the quarter. Looking at the insurance activities on page 23, it's been a very active quarter from a commercial viewpoint, with a record premium income in Q4 2021. A very good activity both in life insurance activities and non-life activities, and also a very strong quarter in terms of profitability, despite the fact that the revenues were impacted by two phenomena.
The first one is the declassification of La Médicale de France, which is now accounted for under IFRS 5, considering its imminent disposal. The second element is that again this quarter, we've had a significant amount of capital gains with a low corporate tax rate, and this allowed us to reduce our financial margin to continue to strengthen the different provisions that we have in our books, while generating at the same time the targeted level of profit. On page 24, we are giving some longer view elements of evolution of the profitability of the insurance business.
What is interesting to note is that in the last 8 years, we've been able to grow the net profit by around 4.5%-5% a year, despite a revenue growth, which was only 2% a year. This is perfectly illustrating the fact that actually considering insurance activities, it's not sufficient to assess only its profitability through the top line. You really need to go to the bottom line in order to fully acknowledge the profitability.
In the upper side of this chart, what we show is that we've been able, in the life insurance activity, to continue to keep a very important margin between the yield of the asset books that we have and the profit-sharing rate that we pay to our customers, fueling at the same time the profit of the insurance company. Also a sharp increase in the policyholder participation reserve that is helping us for the future. In the asset management, Amundi published its results yesterday, so you've been probably able to take a look at them. I think we can stick to a few comments. The first one is that the threshold of 2 trillion of assets under management has been exceeded.
It's due at the same time to very strong inflows, plus of course, the integration of Lyxor end of 2021. From a financial viewpoint, the net profit is very significantly up, despite some kind of normalization of the performance fees this quarter. If I go now to the large customers division on page 26, maybe just a few highlights regarding the asset servicing business. We have a strong growth of assets under custody and assets under administration, a sharp increase in the top line, and so a good evolution of the net profitability of CACEIS. On page 27, some highlights regarding CACIB. I think that once again, this quarter illustrates the very good resilience of CACIB.
You know that globally, for all participants in this market, FICC business was weaker this quarter as compared to the same quarter in 2020. It was to a certain extent less the case for CACIB than for some of its competitors. But nevertheless, this slight decrease in revenues in the capital market activities was more than compensated by a very buoyant level of activity in the financing businesses of CACIB. All in all, considering the fact that the cost of risk has been almost pushed down to zero this quarter, the net profit of CACIB is at a very high level and increasing sharply as compared to 2020.
I should add to that that this very low level of cost of risk this quarter has been reached despite the fact that we've been taking a kind of overlay bucket one and bucket two provision across the board, and especially at CACIB. CACIB represents close to EUR 50 million of overlay provision this quarter. In the specialized financial services division, so consumer credit and leasing and factoring activities, we see more or less the same trends, i.e., a very good commercial momentum in the fourth quarter. It's been the case despite some headwinds. The first headwind regarding the consumer credit activities is the fact that the car market in Europe continues to be a little bit penalized by these bottleneck issues.
All that is connected to the financing of new cars is penalized. Despite this, in fact, production is up and outstandings are up as compared to end of last year. Regarding leasing and factoring activities, the level of activity was also very dynamic this quarter. This is leading all in all to revenues which are significantly up, cost of risk which is down, and the net profitability which is quite significantly up for all these businesses. If I go now to French retail banking activities, LCL, we've got a good quarter again in terms of commercial activity with customer capture for the full year which is above 300,000 new customers.
Books are up both for loans and for customer assets, leading to a revenue which is quite significantly up, 4.5% for the full year and 3% for the quarter. The cost base continues to be very well managed, more or less flat, as compared to 2020. The cost of risk is down and thus the profitability is sharply increasing. In Italy, of course, this quarter is a little bit hard to read, considering the fact that we are in the process of integrating Creval within our setup. The last quarter was really the history of integrating Creval from a commercial viewpoint, i.e., progressively training all the Creval staff to sell the different products and services manufactured by the group.
The figures are of course impacted by the integration of Creval. If we try to read across these figures and to assess the performance of the historical perimeter of Crédit Agricole Italia, what you would see is that revenues were down, clearly, impacted amongst other elements by the sale of a very significant portfolio of non-performing loans, EUR 1.5 billion. So of course, this is leading to a lower level of revenues, all things being equal. We continue to see in Italy globally, a certain pressure on the interest margin. Nevertheless, the fees and commissions are positively oriented. The cost base is apparently up, but actually restated from a high contribution to the Italian Deposit Guarantee Fund, the cost base is flat.
The cost of risk is improving and so the net profit on the historical perimeter is more or less flattish this quarter and is sharply improving for the full year. Crédit Agricole globally in Italy, on page 31, again, these activities in Italy continue to represent a very strong contribution to the net profit of Crédit Agricole S.A., around 13% of the net profit of Crédit Agricole S.A., and this is an amount of EUR 750 million of net profit generated in Italy. We provide on this page a summary of all these, the elements that were linked to the acquisition and to the integration of Creval.
What you can see is that, in two steps, the second quarter and fourth quarter of this year, we've recognized all in all a net goodwill of close to EUR 500 million, plus certain positive DTA adjustments. This financed a series of operations that were designed to boost the future profitability of Crédit Agricole Italia going forward with the launch of next generation HR plan. It's a redundancy plan that is going to help us reduce and improve the staff in Italy and the financing of this NPL sale, plus a strengthening of the provision related to the remaining loan book that we have in Italy.
The rest of the international banking, retail banking activities excluding Italy, the four entities that we have. What we can see on this page is that the normalization continues to be up and running after the year 2020, which was earmarked with the pandemic consequences. We are now reaching back levels of profitability that we had before the pandemic with the net profit, which is at 40% on the full year for this business division. The corporate center is significantly up this quarter, reaching a very low level of losses of EUR 26 million for the quarter only.
It's linked to a further improvement of the structural components of the corporate center with an improvement of the management of the balance sheet of CASA and CASA Holding, with also the businesses accounted for within the corporate center posting better performances. It's the case for the private equity business, for example. With also an increase of the revenues coming from the payment services entity. The non-recurring or the more volatile part of the corporate center is also improving this quarter with some inflation swaps generating positive revaluation, plus dividends that we've received from entities outside the group.
Let me finish this review of the different businesses with the regional banks of Crédit Agricole and where we will see more or less the same trends as the one we've seen with LCL, with a significant level of customer capture, + 1.2 million new customers this year only. A sharp increase in the balance sheet with customer assets up 6% and customer loans up 5%. Almost all categories of loans being significantly up. The equipment rate of the customers of the regional banks continue to be up in insurance products and amongst other non-life insurance products. This is leading to a very strong improvement of the contribution of the regional banks to the results, the net results of the group.
Let me go now to the solvency. You can see on page 37 the evolution of the solvency of the group and the evolution of the solvency of Crédit Agricole S.A. At group level, the solvency improves further this quarter, going from 17.4% - 17.5%. At CASA level, the solvency is quite significantly down, but in a very explainable manner. It's down from 12.7% to 11.9%. It's a decrease of around 80 basis points. This decrease is completely explained by two elements, which are first, the swaps unwinding, which represents around 60 basis points of impact on the CET1 ratio, and the extra distribution above the normal dividend that is regularly provisioned quarter after quarter.
This quarter, we have also the consequences of two elements. First, the share buyback that we did in the quarter, around EUR 500 million of share purchase that are going to be canceled, and also the extra 20 cents a share dividend that is in connection with the 2019 dividend repayment. This quarter, we also have some negative impacts of the different M&A transactions that we have concluded on the quarter, namely the acquisition of Olinn by CAL&F, plus the acquisition of Lyxor. Going now to the dividend on page 38, we reiterate the commitment that we have to pay 50% of the net attributable results in cash.
This quarter, we add to that, this year, excuse me, we add to that, another EUR 0.20 in order to continue to repay the skipped 2019 dividend. We've paid EUR 0.30 in 2020. We are going to pay EUR 0.20. This means that there is still another EUR 0.20 to go before we have fully repaid this 2019 skipped dividend. I think that regarding liquidity on page 39, there's nothing much to say. The situation continues to be very ample and very comfortable.
Simply note that we are starting to study the end of the TLTRO mechanisms and all the consequences of the progressive exit from the different quantitative easing monetary policies in order to make sure that we continue to have a very good liquidity position going forward. On page 40, market funding, what I can say is that the market funding program has been completed without any difficulty in 2021, and we continue to be ahead of the curve in 2022 with a significant amount of different categories of debt that have been already issued on the market since the beginning of the year in very good conditions.
Let me now conclude by reiterating the fact that this year results were very good results with a high profitability, a high solvency, but we need to assess those results in a series actually of good performances that we've had in the last at least five or six years, with a very regular set of very regular capacity of growing the top line, a very good cost discipline, and all in all, a very prudent risk management. Thanks again, and let me now take your questions.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound hash key. Your first question today comes from the line of Giulia Miotto from Morgan Stanley. Please go ahead, your line is open.
Yes. Hi, good morning, Jérôme.
Morning, Giulia.
Hi. Two questions, please. The first one, if I'm not mistaken, I saw some headlines this morning from an interview talking about potential further involvement in Italy M&A consolidation. Could you please update us on that, yeah, that topic, basically if anything has changed, if you see any opportunity, if you are looking at any file at the moment, et cetera. My second question is on asset quality. I think all banks are saying that asset quality is really way better than they had expected, you know, at the beginning of COVID. Why are Stage one and Stage two still increasing? In your view, when can we expect to see, you know, some reversal of the COVID overlays, if at all? Is that a 2022 or maybe 2023 topic? Thank you.
Thank you. Let me start with your first questions. Actually, you, I think you're referring to some headlines that were published after an interview I gave on Bloomberg TV this morning. If I want to quote myself precisely, what I said is that the bulk of our strategy in Italy was to continue to grow organically, but that we were ready, as we did in the past, to take advantage of opportunities. Nothing has changed from this viewpoint. We continue to focus on organic growth, and this is working, and we continue to be available for opportunities if they arise and if they meet all our criteria. I think nothing has changed. Asset quality, yes. The asset quality continues to be very good.
You've seen the reduction in the proportion of NPLs in our balance sheets. You know, we are, I would say structurally, identically prudent. This is why we've done everything we could in order to avoid to write back stage one and stage two provision this year. Actually, the intention is not to fuel our future results by writing back this EUR 3 billion, excuse me, stage one and stage two provision that we have in our books at CASA and EUR 7.5 billion at group level.
The intention is to keep this stage one and stage two provision to be able to use them, if at a certain point in time there is a necessity to cover higher losses. That's really the way we see it. Of course, we will perfectly comply with all accounting regulation and standards, but every time we can have some margin of maneuver, we are going to use it in the sense of prudence.
Thank you.
Thank you.
Thank you. Your next question comes from the line of Jacques-Henri Gaulard from Kepler. Please go ahead, your line is open.
Yes. Good afternoon, gentlemen. You are obviously completing the plan. It's been a great success. I have more of a question on the, I would say ESG pillars of that plan. You remember, of course you would remember the fact you had three pillars, which were human, society, clients. I would say within that, are we gonna roll that for 2022? Are those pillars which, you know, were our priorities, are we gonna continue that way, or are they gonna sort of like evolve somehow? Maybe, if you can give a view about what has been the most successful and maybe the area where you believe, you know, you could have done potentially better. The first question around that. The second would be on the dividend and on the payouts.
It has to be said, you've been the most innovative and loyal of all the French banks in terms of capital distribution, particularly during this pandemic. In broad terms, without obviously giving anything away, because we'll have things in June, what is your philosophy about capital returns? Thank you.
Well, thank you, Jacques-Henri. I'm afraid I will disappoint you a little bit in my answers and probably every time your questions are going to address, I would say, medium-term issues, I will postpone the answers to the June twenty-second meeting. Because, of course, we need to wrap up all our ideas and to provide a full-fledged plan at this date. Nevertheless, let me try to provide some elements of answer. First, regarding the three pillars. The medium-term plan that we are going to update, it's not a change of the group project. The group project is here to stay.
It's I would say the structure of all our activities, and we are going to keep it this way. It means that we are going to stick to our raison d'être. We are going to stick to at least three pillars, as you call them. Projet Humain, Projet Sociétal, et Projet Client. That's for sure. We need to regularly fuel these three pillars with new ideas, new initiatives, and a new action plans. This is what is going to be presented on June 20, 2022. More importantly, maybe, I think that this is a time where we need to accelerate massively on certain of those items. I'm talking especially about energy transition and climate transition.
Because definitely what we see is that it can no longer be just the nice thing that you add to all the rest. It must be now fully embedded in the way we develop our activities, and probably if anything is to change, this is going to be this way. This is going to be by transforming a little bit these priorities into really the engine of the future development of our businesses. But again, we will give much more detail in June. When it comes to the dividend, again, for the time being, we stick to our policy, which is 50% payout, plus as we want to be loyal to our shareholders, all our shareholders, plus the repayment of the skipped dividend of 2019.
We stick to that, which means that in 2021, regarding 2020 performances, we've paid EUR 0.50 + 0.30. In 2022, regarding 2021, we are going to pay EUR 0.85 + 0.20. Normally, in 2023 regarding 2022, we'll pay something + 0.20. That, for the time being, is going to be our dividend policy. If we have anything else or in addition to say regarding this policy, it's going to be for June.
Thank you, Jérôme.
Thank you. Your next question comes from the line of Tarik El Mejjad from Bank of America. Please go ahead. Your line is open.
Hi. Good afternoon, everyone. Two questions for me, please. The first one on IFRS 17, if you can give us some first indication on potential impacts, hopefully we can have some idea before June. Would you use some of the PPE to smooth the impact, and what kind of capital impact for the first application will we be looking for? Are we below what other banks already announced or same magnitude? Just on first elements, please. Then second question on sensitivity to rates. When I look at your reporting, and you've been quite consistent with showing very limited sensitivity to rates as a 100 basis points shift, parallel shifts.
In your Pillar 3 first half results, 2021, you showed some significant increase, EUR 1.3 billion, placing you, like, one of the highest in Europe in terms of sensitivity. Can you explain what's the change in terms of. Is it methodology change? Is it just like, one off and maybe you have a provisional number to give us for the full year? Very much.
Difficult questions that you're asking. IFRS 17, to start with. You know that in 2022, we are producing our accounts both under IFRS 4 and under IFRS 17. IFRS 17, simply for internal use. We are going quarter after quarter to be able to have a better idea of the differences between the accounts under IFRS 4 and IFRS 17. Maybe to put it in a nutshell. First, in the long term, there's no difference. It simply is about the time differences in the recognition of the profits linked to the insurance activities. At the end of the day, there should be no difference between the assessment of the profitability of an insurance business in under IFRS 4 and under IFRS 17.
Second point, as we fine-tune our hypothesis and as we fine-tune our capacity that we have to make the best usage of all the technicalities and all the optionalities that are embedded in this new regulation, we concur to say that revenue-wise or profit-wise, should I say, we should be with a profile that could be very close to the profile that we have presently under IFRS 4. This will have a certain cost in terms of capital initially, because this would need us to put aside some future results in this famous contractual service margin or contractual service margin. This may have a certain impact on our solvency, but which would be perfectly manageable considering the level where we stand now.
Definitely it's going to be a big, big affair, this IFRS 17 transition from an operational viewpoint. Actually, we have lots of teams working on this issue for two or three years now, and we are spending a lot of money on that. That's probably not the best usage of our funds, but that's the name of the game. They shouldn't be too big an impact in our overall profitability, and this should be very manageable. Going now to the rates. Actually giving rate sensitivity for the future is always a very, I would say, hazardous calculation.
What we've provided in the Pillar 3 document is an assessment with very strong assumptions. The first one is that it's the result of the evolution in three years' time, it's not tomorrow morning, it's in three years' time. The second very strong assessment is that there is a 100% pass-through of all the rate evolution into the different assets, 100% and immediate, which is also a strong assumption. What you should keep in mind is that all in all, we should be able to manage the increase in rates as we've been able to manage the decrease in rates.
In 2022, it's sure that for the time being, we have already embedded a negative impact of the rate increase, which is the increase in the remuneration of the regulated savings accounts. For LCL, this is going to represent around EUR 50 million of impact on the NBI for the full year of 2022, which is not massive.
The rest will depend on our capacity to preserve the average cost of our liabilities besides the regulated costs and to progressively reprice the new loans that we are going to book with higher rates, because for the time being, long-term rates have increased by 60-70 basis points in the last six months, when home loan rates have continued to decrease. This must stop, and we have good signs saying that we are at this inflection point, and then everything is going to depend on the capacity of progressively repricing these new loans.
Okay. I mean, thank you. I didn't realize it was a three years impact. I thought it was like first year impact.
No, no.
Pillar 3.
Three years.
Okay. Thank you.
Thank you. Your next question comes from the line of Guillaume Tiberghien from Exane. Please go ahead, your line is open.
Yes, good morning or good afternoon. Thank you for your presentation. Two questions. One is on the resolution fund. One of your competitor in France seems to suggest 10%-15% increase in 2022, and another one, about 30%-40% increase in 2022. What guidance would you give us? And the second one is on the SFS and the Stellantis JV. Is it naive to say that, between the time you stop the existing partnership and run off part of the book, and the time when you grow a new book from scratch, there's gonna be a bit of a period in 2022 where revenues might not be that great and costs will pick up to set up the new partnerships. Thank you.
Thank you for your two questions. As far as the resolution fund is concerned, it's an area in which we regularly have bad surprises, so I will be very prudent. I think I don't have the precise figure in mind, but I think we've embedded in our budget a slight increase in the contribution for 2022 as regards 2021, but not in the magnitude that you are stating. I really don't understand why this should be of this magnitude this year. Again, this is an area in which the surprises are generally on the bad side.
Regarding the SFS Stellantis and the restructuring of the partnership, don't forget that day one, the perimeter of the long-term leasing activities will increase because the former long-term lessor of PSA will be combined with Leasys, which was the former long-term lessor of FCA. Day one, this is going to be a bigger activity. The name was Free2move. Day one, the long-term leasing activity will be bigger, and the book of loans within FCA, so the traditional financing book within FCA is and continues even this year, to be maintained and to possibly increase.
It means that the run-off is going to start only beginning of 2023, with an average duration of the book, which is three or four years. I'm not saying that we won't have maybe in the very first quarter some slight negative impact, but it's not going to be very significant. The vision that we have is that actually the business of long-term leasing is going to grow much faster than the business of traditional car financing. We are betting on that also.
Okay, thank you.
Globally, it's going to represent a higher growth engine in the future.
Thank you. Your next question comes from the line of Delphine Lee from JP Morgan. Please go ahead. Your line is open.
Hi, good afternoon, Jérôme. Two questions from me. My first question is on French retail. You mentioned the impact from Livret A. Just wondering in terms of all the moving parts, you know, like how we should think about the outlook for LCL revenues in 2022. If you could give some color, that would be great. My second question is on capital and your 11% CET1 target for 2022. You clearly have quite a bit of buffer above that. I mean, do you intend to do anything about this, or, you know, basically you'll just keep that buffer for now, and we have to wait for the new plan to see how you could redeploy the excess capital. Thank you.
Yeah, let me start with the second question, Delphine. Obviously you're right, we have a buffer above 11%, that's for sure. We are going to wait for the new medium-term plan to exactly explain the new trajectory. Bear in mind that we still have some moving pieces from a regulatory viewpoint ahead of us. We still have a few impact from TRIM that are due in 2022, probably around 20-25 basis points of impact. There's still the impact of the transition to IFRS 17, I was just referring to a little bit earlier, which is going to hopefully also impact a little bit our solvency. There is the final text on Basel IV.
The initial text on Basel IV is, I would say, digestible for Crédit Agricole S.A., with the strong assumption that the output floor is going to bite only at the highest consolidated level. Of course, we are cautious until we see the final version. All these moving pieces, plus the fact that we intend to publish this new medium-term plan on June twenty-second, is leading me to postpone a precise answer. On French retail, what we can say is that we know a negative impact from Livret A, that's for sure. It's already embedded, and it's going to be in the region of EUR 50 million net from the benefits of the different hedges that we have, but which do not fully cover the impact.
We know that starting July 1st, we will lose also the benefit of the 50 basis points on the TLTRO. LCL is one of the beneficiaries of this TLTRO premium. Globally for CACEIS, we are going to lose between 21 and 22, around EUR 200 million of revenues in connection with the TLTRO. That's absolutely mechanical and cannot be avoided. On the perimeter of LCL, what is going to be here to offset these negative elements? It's the volume effect. Are we going to continue to see a sharp increase in the volumes? For the time being, there is no slowdown.
The second element is, as I said before, the repricing pace of the new home loans that we're going to grant to our customers. The third point is, of course, the continuation of the increase, the improvement of the equipment rate of our customers with a broader range of products and services and offers. Keep in mind that, in the last quarter, for example, the increase in the revenues at LCL was more triggered by fees and commissions than by the interest margin. This is, of course, going to be a very important element. At CACEIS level globally, keep in mind that ahead of us for 2022, we have those negative impacts linked to the Livret A and to TLTRO.
We have positive elements that are also already embedded. We are going to have the full year effect of the integration of Creval. So this may represent as much as, let's say EUR 300 million of additional revenues. We will have also the full year effect of the unwinding of the switch mechanism. As compared with 2021, this may represent another EUR 120 million-EUR 130 million of additional revenues. Then, of course, we have a full year of Lyxor, which is going to be integrated with Amundi, and which is also going to represent around EUR 200 million of additional revenues. All these elements to say that 2022 is going to be what we are going to make of it.
We start the year with certain headwinds, but also some tailwinds, significant tailwinds, and so now, it's up to us to deliver another good operational performance.
The total decline in 2022 for LCL or let's say CASA level, but how much would that be?
For CASA globally, it's going to represent around EUR 200 million, which is spread between LCL, CASA itself and the corporate center, CACIB, CACF, and Crédit Agricole Italia also. It's spread around all businesses depending on their contribution to the eligible credit. Really it's you have that spread over all businesses, almost all businesses.
Great. Thank you very much.
Thank you.
Thank you. Your next question comes from the line of Matthew Clark, Mediobanca. Please go ahead. Your line is open.
Hello.
Hiya. A couple of questions. Firstly, a question on CACIB's loan portfolio. You know, you went into the COVID crisis with relatively high exposures to oil, aircraft, et cetera, and other perceived risky sectors. In practice you've had very low cost of risk there through the crisis. How do you view that in retrospect? Do you think that this proves that your risk management was correct and you just carry on as usual? Do you think that it was a bit of a lucky escape and maybe you need to think about de-risking or changing your exposures over the medium term? That's the first question. Second question, just to come back to Stellantis. For 2024, do you see these transactions as being net positive or net negative?
Excuse me, which transaction?
The Stellantis.
Stellantis.
Once that FCA runoff starts, because I'd have thought, you know, losing significant volume when you need to maintain the franchise to grow with independent partners would mean maintaining the cost base, would mean there'd be some quite steep adverse operating leverage there. I get that your 2023 target isn't affected, but would it be net positive or net negative for the consumer division in 2024? Thank you.
Okay. Let me start with your question regarding the oil and gas exposure. There's two aspects in your question, actually. The first aspect is regarding the risk management. The history that we have in this business is that, considering the expertise of the teams, considering the way we structure our operations, we never had a significant level of cost of risk in this business. So of course it's definitely not a matter of luck. It's a matter of expertise. It's a matter of know-how. It's a matter of really being able to understand which are the good counterparties and how to structure a transaction.
All in all, across 2012 - 2019, the average cost of risk in this business was in the region of 7 basis points on a yearly basis. The cost of final losses, not the cost of risk in terms of provision book, but the real cost of final losses. This business is now facing not an issue of risk, but an issue of transformation, and that is the most important. We are here to accompany our customers, as I said before, in their energy transition.
What we intend to do in this business is really to be an engine, to be a factor of a promotion of the energy transition of all the counterparts regarding the energy consumption and regarding the capacity of providing energy to the clients with a decarbonated method. That's really the point. It's a huge transformation, but it's not a matter of risk. Again, risk-wise, we're not really concerned. Regarding Stellantis, the business of the new FCA Bank, i.e., this new bank that is going to develop its activity targeting small car makers that don't have their own captive financing entity or targeting independent car dealers across Europe.
The development of this new business model actually has indeed started. You may have seen that FCA Bank has already signed a new partnership with VinFast, which is, I think, a Thai carmaker or Vietnamese, excuse me, Vietnamese carmaker, which is making electric cars competing with Tesla. We are going to be the exclusive provider of car loans to the clients of VinFast in Europe. We are going to make use of this setup of FCA Bank setup, which we know very well, because we've been contributing to the construction of this setup in order to develop the business.
Maybe another example, you may have seen that we've taken a share in the capital of a dealer, a car dealer, which is an independent car dealer, which is called BYmyCAR, a French one with a European prospect. The purpose was, of course, not to become a car dealer ourselves, but to conclude with this car dealer an exclusive partnership in order to be the only provider of car loans to its customers. Definitely we are working already on, I would say, building up the books of the new FCA Bank, starting beginning of 2023, and we are really confident on the development of this business.
Am I wrong to just think in big picture terms, though? You're losing a very successful mature business and gaining a lot of kind of quasi start-ups? I mean, just from a timing perspective, that would imply-
No, no. That's for sure. There is a very profitable and good business that is going to start its run-off, and we are going to be interested in the run-off beginning of 2023. At the same time, actually with a start that is going to be earlier than that, we are building up the new business, not on a blank sheet, because actually there is already a whole series of partnerships which are kept within FCA Bank, which existed before the restructuring of the partnerships and which we are going to keep. It's really more a transformation than really a start-up.
Okay. Thank you.
Sure.
Thank you. Your next question comes from the line of Pierre Chédeville from CIC. Please go ahead. Your line is open.
Yes. Good afternoon. I have one first question, quite boring, but it's page 39. I would like to understand better what you said on your interest rate sensitivities and what could be the future. When I look at your excess of stable resources at EUR 279 billion, and I deduct the TLTRO, you are currently, as you say, above EUR 100 billion of excess, which is your target. Can you remind us why did you choose this target, EUR 100 billion, to what it corresponds? I am quite surprised that with EUR 100 billion of excess, your NSFR at group level or Crédit Agricole S.A. is just above 100%. Is it much above 100% or just above?
Why don't you give the perfect figure? Could we imagine that, because we know that it's a kind of sterilization in the current rates environment to have such excess, could you imagine that you could lower this leeway? When we look at the figure on the left, your deposits at central banks, and when you know that you are penalized by 50 basis points on more than EUR 200 billion, if we imagine that in your scenario of an increase of 100 basis points, it would be, in my view, a significant increase in your net interest margin, much more significant than the negative impact on Livret. I'm not very clear on that regarding your sensitivities. Could you clarify a little bit? I know it's boring.
Well, I think that, Pierre, we should maybe take some time globally on the balance sheet of the group and not only on the liquidity reserves, because here we are only assessing the liquidity reserves. Just a few elements to answer your question. First element, it's one of the characteristics of the group. We have to deal with that. We are made of several entities, and for example, in terms of NSFR, we need to comply with the NSFR at group level, at CASA level, at CACIB level, so at different levels. It means that on a consolidated basis, we are, I would say, induced towards having higher reserves than would be the case if we were only made of one single legal entity with one single requirement to meet. That's the reason why we may sometimes appear to have too wide excess of reserves everywhere.
Second point, of course, the idea is that once the TLTRO is not going to represent this benefit of 50 basis points that we have for the time being, the intention is not to continue to have such a high level of reserves, because for the time being, when you have EUR 160-something billion of TLTRO drawings, and when you deposit the same amount at the ECB, you have a benefit of 50 basis points. Of course, as soon as end of H1 2022, the situation is going to change. Of course these figures are going to be adapted at the end of the TLTRO premium. These are the main elements.
We are definitely preparing the new paradigm that will be the case after the end of the TLTRO benefit. With possibly, we've heard about it, we've heard the ECB talking about it, with possibly the implementation of a higher level of tiering, which would also benefit us. Don't forget that within the cash and central bank deposit, there is a certain amount that is not penalized because it benefits from the tiering.
Of course.
It's actually more complicated than only a matter of EUR 240-something billion or EUR 227 billion of deposits. It's a more complex, I would say, management. But definitely you're right in pointing the fact that this balance sheet and this type of reserves are adapted to the present period of time, and it's going to change after the ending of the TLTRO benefit.
If I may, I have a second question, a business question.
Yeah, sure.
Regarding Sofinco in Spain.
Yes.
Because it made sense when you had a JV with Bankia, in my view, to create a JV in consumer credit, because you may benefit from its network. I don't really understand why, as Molière said, in a standalone way, in a very mature banking sector in Spain, as you know, very competitive. I don't know what is your competitive advantage to gain market share here? I'm quite surprised by your ambition, because when I read your press release, you say that you want to be a leader in Spain in consumer credit in front of BBVA, CaixaBank, Santander. I'm quite surprised by this ambition.
Can you explain me exactly what you want to do there, and what do you think you are pertinent on this market? Thank you.
Let me go back on the origins and the history of this initial partnership. The starting point was that we have some partners, retail partners, not banking partners, but retail partners with a European scope, like Apple, for example. We needed to have a setup and operation in Spain in order to fully cover the perimeter on which they were ready to work with us. The starting point is that we needed to have an operation in Spain. We found this possible partnership. For the reasons that you know, the partnership was early terminated because of the change of control in our partner.
We've decided that actually the startup that we've started to build was sufficient to be the starting point of an entity of our own in Spain. For the time being, it's not absolutely massive. It's a few million EUR of revenues and a few million EUR of costs every quarter. It's absolutely tiny. We think that we have the capacity to develop and to reach quite rapidly the breakeven and then to develop properly the business. We have for the time being around EUR 300 million of outstanding, and we think that reaching EUR 1.5 billion in a few years time is very reachable.
at the same time, we will be able to develop a business on our own in Spain, making use of our know-how, because the main asset that we have is the know-how of CACF teams, and this know-how can be deployed in Spain. Making use also of this setup to better serve our Pan-European partners in retail activities in the long channel businesses.
Thank you. Very clear.
Thank you.
Thank you. Your next question comes from the line of Kiri Vijayarajah from HSBC. Please go ahead. Your line is open.
Thanks. Yes. Good afternoon, Jérôme. A couple of questions from my side. Firstly, on the capital, now that you've unwound the switch, is there kind of a greater incentive to maybe leverage up the insurance company and optimize the RWA consumption there? Or do you feel it's kind of more, you know, pretty well optimized already and maybe the insurance supervisor may not look too favorably on you changing the capital structure of the insurance company too much. The second question, going back to the whole Stellantis thing, slide 20, and specifically that 1 million target you've got for the fleet in the long-term leasing business by 2026. Is 700,000, I think I saw in the pitch, the right starting point pro forma today for the size of that fleet?
Is all of that to get to 1 million, is that all gonna come from organic growth? Because, of course, you know, some of your competitors in that field, they've also got some quite ambitious growth targets there. Just trying to understand how you're gonna get to that 1 million fleet size, please. Thank you.
Yes. Let me start with the capital of Crédit Agricole Assurances. It's true that Crédit Agricole Assurances has a very strong level of solvency. It's far above the 200% threshold, and it's true that we could leverage a little bit more this level of solvency in order to optimize the RWA consumption at CASA. You know that this high level of solvency at CAA has been reached, amongst other elements, by the fact that since two or three years now, the participating reserve I was mentioning earlier is now taken into account in the computation of the solvency. It means that it's not exactly neither capital nor subordinated debt, but it's internal reserve that it represents part of the solvency.
We don't want to, you know, go too low in terms of solvency. We definitely are going to continue to optimize the capital structure of the insurance activities. We are going also probably to use a little bit of this solvency in order to adapt the portfolio of assets of Crédit Agricole Assurances, of Predica, to the present context in order to optimize the yield of the asset book, and to adapt to the evolution of rates. Nevertheless, it's true that we have a certain margin of maneuver at this level.
When it comes to Stellantis and to the long-term leasing entity, the starting point is that we have already around 650,000 cars, which is about half and half coming from Leasys on the one hand, and from Free2move on the other hand. What we have to do in four or five years' time is to increase by 50% this portfolio, which is going to be made organically. It's not easy, but considering the pace at which this business is growing, it seems to us perfectly reachable.
Great. Thank you.
Thank you.
Thank you. Your next question comes from the line of Flora Bocahut from Jefferies. Please go ahead. Your line is open.
Yes, thank you. Good afternoon. I'd like to ask you two questions on slide 10, you know, which is a pretty impressive evolution. I'd like to ask regarding the next 12 months, you know, considering the other side of this is that obviously we get starting here from a high base. Without going, you know, into the next plan and the 2025 horizon, just thinking here about the next 12 months, the two questions are first regarding the level of activity. You know, you talk in the slide pack about a buoyant activity in many of the businesses. Do you see any sign at this stage that there could be a slowdown in the growth in some of the businesses or anything that you know shows signs of deterioration there?
On the cost side of the equation, is there any reason to believe that we could get negative surprises on costs specifically this year in 2022, you know, given in particular the inflation we are seeing, or you are confident that you can continue on this path with cost savings productivity gains? Thank you.
Well, Flora, of course, it's very difficult to predict the future. Maybe just a few elements to comfort you in our capacity to continue to grow. First, as I said, we start this year with some negative elements, but with some very positive elements that are going to materialize in 2022, which are going to boost the top line and which are already embedded, all the scope effects that I was mentioning earlier. These positive elements represent much more than the negative elements. We start the year, I would say, with the benefit of these operations that we've undertaken in 2021 and that are going to benefit us in 2022.
Regarding first the level of activity that we see nowadays, i.e., after the end of 2021, I don't have precise figures. It's way too early, but I'm not seeing any real sign of deterioration. I'm not seeing any sign of slowdown in the credit appetite. I'm not seeing any sign of decrease in the will of people to consume and to invest. There's no reason why we shouldn't continue to have a good level of activity.
Of course, we are aware of the fact that 2021 was a catch-up year with this very high growth in France, +7%, and what we foresee in 2022 is a more moderate 4% growth in the GDP in France, for example. After a catch-up, you certainly have a certain slowdown. Going back from 7% growth to 4%, it's not a recession. It's not a distressed situation. We are full of hope in terms of the continuation of the development of our activities. Regarding the cost base, of course there is a certain level of inflation. We see it everywhere. We see it in all our purchases and so on and so forth.
For the time being, we've been able to, I would say, keep it under control and avoid any kind of loop that would really penalize our profitability. Of course the jury is still out in terms of how the inflation is going to evolve. If you believe in the theory of a one-off inflation that is not starting and fueling a loop between wages and prices, then we can be confident that we will be able to continue to monitor closely the cost base. If there is a real loop between wages and prices, then it's going to be more difficult, and then the question will be about our capacity to preserve a certain balance between the evolution of the top line and the evolution of the cost line. But for the time being, we don't see that loop.
Excellent. Thank you.
Sure.
Thank you. Your next question comes from the line of Amit Goel from Barclays. Please go ahead, your line is open.
Good afternoon. Thanks for taking my
Hello, Amit
My question. Just a couple of things. Just if I take your answer to, I think it was Delphine's question on the scope effects on revenues, and then, you know, you remove Livret A and TLTRO, and, you know, you're kind of above EUR 23 billion of revenue for 2022, you know, et cetera as part of this for kind of anything else. What are the scope effects similarly on the OpEx side, you know, from the scope effects that are left, just to help us with our modeling? The second question was just to discuss the performance in Italy, please. And sorry if I missed this, but how much was the NPL disposal impact?
It seems to me, you know, even ex that, it looks a bit of a slowdown on both, NII and fees, yes, I mean, versus last quarter. Any thoughts there and, you know, perhaps an outlook for that business specifically would be fantastic.
Okay. If I take the three main scope effects that we have, the first one, which is the switch unwinding, there's no cost related to that. The 130, more or less, million euros of NBI is not generating any additional cost. As far as Creval is concerned, I think that they had a cost-to-income ratio in the region of 60%-65%, if I remember correctly. It means that the starting point is maybe an additional EUR 200 million of cost compared to the EUR 300 million of revenues.
Of course, we're already working on all the synergies, and we've taken some restructuring costs in the PPA in order to finance this cost synergies. We are going to generate cost synergies. As far as Lyxor is concerned, it's more or less the same. The idea clearly from Amundi's point of view is to integrate Lyxor without having to integrate fully or definitely all the costs linked to Lyxor. This is. Again, if I remember correctly, the cost-to-income ratio of Lyxor was in the region of 65%-70%, which compares to the 50 more or less of Amundi. The idea is to go back to 50 as soon as possible.
At Lyxor it was 72, to be precise. I was a little bit below the reality. Clearly this is going to be dilutive in terms of gross operating income as soon as 2022. Coming to the NPL, your question was regarding the revenue dynamic in Italy. Is that right?
That's right, yes.
Clearly the fourth quarter was a little bit weaker compared to the fourth quarter of 2020, which was really a rebound quarter, if you remember the sequence of the lockdown in Italy. The fourth quarter was a rebound quarter in terms of activity in 2020. The comparison between the revenues in 2020 and 2021 is a little bit challenging. Of course, we have had this impact of the disposal of the NPL. All in all, we had in the fourth quarter of 2021 a decrease in the net interest income, and a slight increase, but an increase in the fees and commissions.
Thanks.
Thank you.
Thank you. Your next question comes from the line of Guillaume Tiberghien from Exane. Please go ahead. Your line is open.
Thank you. Sorry for a follow-up. I want to come back to the TLTRO, and it be a bit provocative, because when the TLTRO arrived, the bank said we should not assume that this is a net benefit to revenues because it feeds through to a group's overall funding cost, which is then used to derive the revenue margin that you want to generate with your customers. Why is it so mechanical on the way out when it was not so mechanical on the way in? Thank you.
It's very simple, you know, Guillaume. 'Cause if you use the cheap resource that has a one and a half or two years maturity to finance the loan that is going to last five, six, or seven years, when the cheap resource disappears, you end up with the loan. You're happy to have the loan, to have the customer of the loan, but nevertheless, mechanically, the cheap resource is terminated and you have to replace the cheap resource by a one that is going to be more expensive. I confirm what I've said regarding the implementation of the TLTRO. It was part of the funding, and globally it helped us decrease our overall cost of funding.
The end of the TLTRO premium is going to increase our overall cost of funding without any mechanical effect on the yield of our loan book, so that's why it's a very mechanical effect. But of course, the idea is that we will try and replace this TLTRO resource going forward by other resources that we are going to try to optimize in terms of cost. The idea is that as soon as we have this perspective of seeing an increase in the cost of our resources, average cost of our resources, we need in order to balance the two to work on the repricing of the loan books progressively.
Thank you.
Thank you.
Thank you. Your next question comes from the line of Tarik El Mejjad from Bank of America. Please go ahead. Your line is open.
Sorry, Jérôme, to drag the call, but very, very quickly, I'm surprised about your comments on the management provisions or overlay for COVID. I think in Q3 you mentioned that now you're ready to release some of them and not accumulate and build on coverage ratio, and now you seem to say that you want still to be prudent and use them for future losses. Did I understand that wrongly or you changed your mind?
No, absolutely not. You are aware, Tarik, that between the publication of Q3 accounts and today, there has been a new variant of the disease and some further developments that really pushed us to be prudent when I
We are back. We're all back to office, and we're all back to our lives, so normally I was, no?
It's not the case everywhere and definitely when we took the different decisions regarding the end of Q4 2021 accounts a few weeks ago, there were still lots of questions about the evolution of Omicron and what was going to happen and so on and so forth. Keep in mind the fact that really when we closed the accounts, the uncertainties were quite high, and we were talking in France of several hundred thousand new contamination every day. We
What's your view now? I mean, the outlook then. Are you releasing some of them or-
It's clear that the outlook is improving from a pandemic viewpoint. Nevertheless, we continue to have a significant number of people in the hospitals. In my point of view, it's not completely over, even if some restriction measures have been relaxed. Really, we are prudent. You know that we are prudent. You shouldn't be surprised if we take prudent measures.
Okay. Thank you.
Okay? Thank you.
Yeah.
I think it was the last question, if I understood correctly, and the indication of that was that we were having a second round of questions with the same participant. I think I'm going to thank you for all your questions and your attention this afternoon, and we are going to talk or see each other quite rapidly now. Bye-bye. Thank you.
Thank you. That concludes today's conference call. Thank you for participating. You may all disconnect.