Good afternoon. This is the conference operator. Welcome, and thank you for joining the Crédit Agricole S.A. Second Quarter and First Half 2025 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions by pressing star and one on your telephone. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Clotilde L’Angevin, Deputy General Manager of Crédit Agricole S.A. Please go ahead, Madame.
Thank you. And hello, everyone. I'm very happy to be here with you today. I'm going to present the results for the second quarter, starting on page four. We're posting a record net income, this quarter at EUR 2.4 billion. It increased by 30.7%, this quarter. Part of this strong increase is linked to the capital gain, related to the deconsolidation of Amundi U.S., net of non-controlling interest. Excluding this impact, net income, grew by 14.1%, this quarter. This performance reflects the continued strength of our business model. This quarter, we witnessed dynamic activity across all the business lines and a steady flow of strategic transactions. We have integration processes well underway. Several operations concluded this quarter, and several projects initiated or announced. If we look at the figures, net income growth, share growth, stems from a strong revenue growth, EUR 7 billion, up 3.1%.
Expenses, under control, with a cost-to-income ratio, at the very competitive level of 53.9%, this half year. This allows us to post a very strong ROTE ratio, of 16.6%, this half year. Finally, solvency, is high at CASA, at 11.9, and of course, at the group level at 17.6. All of this bodes very well for our medium-term outlook, which we will discuss on our Capital Markets Day, which is planned on the 18th of November. I'm looking forward to seeing you there. If I move to the next slide, if we look a little bit more detail at the figures, for the group net income growth. Share is up sharply. 30.1%, this quarter, to EUR 2.6 billion. We have a very strong capital position and a stable and a low cost of risk, on outstandings. Very strong liquidity reserves, EUR 471 billion.
For CASA, net income growth share also grew sharply, 13.7%. Q2 over Q2, at EUR 2.4 billion, with a gross operating income up 4.1%. Again, this figure of ROTE, at 16.6%. Now, if I move on to activity, I'm going to dig into this activity a little bit here since I will not det ail the slides on business lines going forward. Let me just detail a little bit the activity, which feeds into our gross ope rating income, increase. Customer capture is strong at EUR 493,000, this quarter. This brings the total of customer ca pture for the first half year to more than EUR 1 million. Activity was very strong in all of the business lines. In retail banking, loan production was dynamic in France and in Italy. In France in particular, driven by home loans that grew 28%, and corporate loans 12%.
The loan outstanding, increased in all of our geographies, and we have on-balance sheet, customer access that also increased. Insurance also posted an excellent quarter. We had a record level of net inflows, EUR 4.2 billion this quarter in savings and retirement, which is well balanced between unit links and the Euro fund. Premium income, is also at a very high level, EUR 12.7 billion, in particular thanks to savings and retirement, up 22%, and P&C activities, up 9%. For the latter, we have both a volume effect, 16.9 million contracts in our portfolio, an increase of 2.8%, and a price effect, with an increase in average premium. As you can see, the equipment rates are still high and continue to increase in the Regional Banks, in LCL, and in Crédit Agricole Italia. In asset management, the net inflows are high, EUR 20 billion, again, balanced between medium to long-term assets and JV.
This brings the level of the total AUM, to the record level of EUR 2,266 billion, of which EUR 96 billion in the U.S. at the end of June. I'll come back to that. Also, we have an increase in AUMs, in wealth management. Production in personal finance, and mobility is also at a very high level, EUR 12.4 billion, this quarter, thanks to the traditional consumer finance activity, since the automobile activity, was stable in a market that's still complex in Europe and China. The gross managed loans, however, increased in all three segments, thanks in particular to car rental. Production in leasing, however, was down this quarter, mainly in France, but buoyant internationally, and factoring was very strong. Finally, the CIB, confirms its performance with a new record in half-year revenues, and strong Q2 revenues, thanks in particular to structured finance.
We maintain, of course, our leading positions on syndicated loans and on bond issuances. Finally, in asset servicing, assets under custody increased this quarter, benefiting from favorable market effects and new customer acquisitions. On the following slide, you see that we continue to roll out our growth model, which, as you saw with the activity, relies on organic growth naturally, but also on a steady flow of strategic transactions, acquisitions, or partnerships, or both. You see here on this slide a dozen operations that we wanted to put forward in front of you. Regarding the integration processes that are well underway, I wanted to talk about two, specifically the acquisition of the European, asset servicing activities of RBC, in 2024, which should generate EUR 100 million of net income. The cost and revenue synergies, are well underway, 60%, completion rate.
We also have the synergies that are well underway for the group Degroof Petercam by Indosuez. The acquisition in 2024 should generate EUR 150 million to EUR 200 million, net income in 2028. We already have about 25%, of synergies underway. We announced the integration on April 1 of Amundi U.S. and Victory Capital, in exchange for 26%, participation in the capital of Victory Capital, which will be equity accounted. This goes along with a reciprocal 15-year distribution agreement. You will see in these figures a capital gain, of EUR 453 million, in net income, which corresponds to EUR 304 million, in net income group share. We have also concluded several transactions this quarter, the purchase of Santander's, 30.5%, minority stake in CACEIS, which will be accounted for in the third quarter, with the retroactive cancellation at that date of the minority interest paid in 2025.
Of course, Banco BPM, which you've heard about quite a lot, the increase of our stake to 19.8%. We have also announced our intention to increase our stake just above the 20%, threshold in order to apply the equity accounting method. Other acquisitions, operations concluded this quarter, Merkle Leasing, acquisition, a majority stake by Crédit Agricole Transition Énergie in Commois. It's a specialist in production and optimization of solar energy. All of this bears witness to the development of our business lines. We have initiated or announced several projects. In July, the project for the acquisition by LCL and Crédit Agricole Assurance, of Milleis, which is a historical wealth management player in France. We've also announced the plan to acquire Solarbank, in Switzerland. We have projects on Crelan and Indosuez Wealth Management, in Monaco, which have been announced as well.
On the next slide, if I go into a little bit more detail on the revenues, the activity in these transactions translates into revenue growth, which is strong this quarter at 3.1%, to EUR 7 billion. This increase in particular stems from the increase in dividends received in respect to our participation in Banco BPM, since we increased our stake from 9.9%, to 19.8%. We have to add the impact of the higher valuation of securities on this, but it's relatively limited because, as you know, half of our stake is accounted for against equity for OCI, which does not impact P&L, directly. Besides this effect, we have the revenues of business lines that are stable at a very high level. You see the high level on the chart on the right, which has been increasing very strongly since 2017, 5.1%, growth rate per year.
Now, if we look at the business line, the revenues are increasing in asset gathering, in particular in insurance due to activity. We have stable revenues for Amundi, this quarter, excluding the scope effect in a volatile environment. We have scope effects, in fact, that are limited because we have a negative effect of the deconsolidation of Amundi U.S., which is more or less compensated by that of the group Degroof Petercam. Revenues are high at a very stable level in CIB and CACEIS. In CIB, we have a record half year in terms of revenue. In SFS, the revenues benefit from a favorable price effect. In personal finance and mobility, thanks to the increase in production market rates, margin rates, sorry. The revenues are penalized by the decrease in margins on factoring due to the recent decline in rates.
In retail banking, we have a very strong growth in fees and commissions income in France and Italy. There's an unfavorable base effect on net interest income in LCL. We have a competition impact in the housing market in the context of decreasing rates in Italy. We can come back to that, of course. Going forward, we're more optimistic regarding the net interest income than what we have seen with the base effects, in particular this quarter. All in all, we have high and growing revenues this quarter. Expenses, if we move on to slide 10, are under control, growing 2.2%. We have a very good cost-to-income ratio, 53.9%, this half year. Recall that cost-to-income ratio, decreased by 15 percentage points, between 2015 and 2024. This quarter, expenses are under control due to a strong negative impact of the scope effect on asset gathering.
On the other hand, we have a very strong positive impact of the scope effect in Italy, because we have a nationwide end last year of the contribution to the Italian deposit guarantee scheme, which took place. This is a positive effect. Besides that, we have. A very under control recurring expense development, in particular in CIB, due to IT investments. We have also development investments that are high in NCL, as was the case for the past few quarters. On the next slide, regarding loan loss reserves, which are high, we have a cost of risk that has increased by 4.2%. The cost of risk as share of outstandings is low and stable, both at CASA level, 32 bps annualized, and group level, 28 bps annualized.
Now, if we look at the split of the cost of risk, the stage three proven risk has increased, but remaining at a level very close to that of the fourth quarter 2024. A part of that is explained by personal finance and mobility, where we have had a relatively stable S3 risk, for several quarters with a slight deterioration on international subsidiaries. The rest is explained by self-employed professionals, LCL markets, and a few large corporates. We have a reversal of loan loss provisions in the first quarter. Despite the fact that we updated our economic scenario, we have favorable model effects in CASIB. All in all, as you can see, there's no increase in the loan loss provision.
What's important for us to stress is that we have a high level of loan loss reserves and among the best coverage ratios in Europe, loan loss reserves of EUR 9.4 billion in CASA, and EUR 21.6 billion at the level of the group, which shows that we have a quality of our balance sheet, which is very high. If we look on page 12, the cost of risk by business line, we have the slight increase in consumer finance that I was talking about after a few exceptional elements that were posted in the fourth quarter of 2024. You can see that there's a continuous decrease in Italy, and an improvement in asset quality and the coverage ratio. Elsewhere, everything is very, very stable with provision reversals in CALIF and CASIB, due to model effects.
On the next slide, we have a very high level of net income group share and of pre-tax income. If we look at the pre-tax income, you'll see that for asset gathering, we have benefited from the capital gain related to the deconsolidation of Amundi U.S., EUR 453 million, which becomes, on the right-hand side, EUR 304 million after deduction of non-controlling interest. We also have a positive contribution besides that. If I look into a little bit of detail, we have a limited negative contribution, of large customers due to the fact that revenues were stable and we have had a slight increase in expenses. For SFS, we have had a goodwill impairment at CALIF, and at Crédit Agricole Personal Finance and Mobility, we have had an impact on equity-accounted entities like Leasis, which are impacted by lower remarketing revenues.
The retail bank contributes positively, and you have the positive impact of Banco BPM, in the corporate center. This positive pre-tax income growth, feeds into the net income group share, with a strong gross operating contribution, increasing 4.1%. There is a limited impact of cost of risk. On taxes, there is an increase this quarter. In particular, we have a couple of positive elements, with infra annual adjustments, in business lines that contribute positively to this quarter and the capital gain, of the deconsolidation of Amundi U.S. All of this feeds into our capital ratio, with the retained results, which have increased by 28 basis points. Remember that our target is 11%. We still have a high level of CET1, this quarter at 11.9%. We do have natural organic growth, retained results, 28 basis points, and we have the natural organic growth in RWA, of business lines.
We have an M&A, effect. We were talking about that last quarter, and you can see that we have, as expected, about 30 basis points in M&A, effect for Banco BPM, due to the unwinding of our total return swaps to acquire a direct stake. For Victory, the impact of the deconsolidation and the acquisition of Victory Capital, and of 26%, sorry, of Victory Capital. These two operations, lead us to increase the number of significant participations held above the threshold of 10%. Below that threshold, we benefit from an exemption from deduction from CET1 items, and we can risk-weight, everything instead. There is a threshold, and we have crossed that threshold. We therefore have to deduct an additional 7 basis points, linked to the other participations other than Banco BPM, and Victory, in this franchise. We have a couple of positive methodology impacts, in particular in CIB.
This brings us to 11.9%, including a provision of EUR 0.65 per share, of dividend at the end of the half year. Do not lock these 11.9%, into your mind because next quarter, pro forma, we have about 30 basis points, impact of the closing of the transaction with Santander, in order to buy back their 30%, minority share, of CACEIS. This was finalized in July. The starting point for next quarter is 11.6%, which remains, of course, very high, and we have a very high today distance to stretch at 3.2 percentage points. Going on to group capital, we have a very similar evolution. We have a higher increase in RWAs, because the exemption threshold is not saturated at the level of the group.
As you see, all in all, we have a very high level of CET1, 7.7 percentage points, above the SREP level, very high leverage ratio, very high TLAC and REL ratios. On the next page on liquidity, we have a very comfortable liquidity position, with a very high level of liquidity reserves, at EUR 476 billion. LCR, NSFR ratios, are absolutely excellent, and the group has mobilized various levers to diversify our sources of liquidity. We have customer deposits that are abundant, stable, diversified, and granular. On the next page, page 17, an update on our transition plan, which continues to be organized around three pillars: the acceleration of development of financing to contribute to the development of renewables and low carbon energy sources.
We are also helping our customers in their own transitions by providing financing consistently with our sustainable assets framework, in particular real estate financing, but also for SMEs, or large corporates. Lastly, we are decreasing our financing to carbon-based energy sources. We're at very low levels today compared to the starting point of 2020, and we have been awarded the title of World's Best Bank, for sustainable finance by Euromoney. I'm going to conclude on slide 18, by saying that quarterly net income, is at a very high level thanks to the capital gain pertaining to Amundi U.S. Quarterly net income, group share is at 14.8% , growth, excluding this effect, thanks to, in particular, dynamic activity in all business lines and thanks to also a continuous flow in strategic operations.
We continue to roll out our development model, which allows us to generate high and increasing revenues, a very good cost-to-income ratio, low cost of risk, and therefore we post very strong profitability with an ROTE, of 16.6%. A strong capital and liquidity position. Of course, I'm going to be very happy, along with Olivier Gavalda, and the of Crédit Agricole , to discuss the strength of our model in length during our Capital Markets Day, which is scheduled for the 18th of November.
Excuse me, Madame , would you like to start the Q&A session?
Yes, please.
Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Giulia Aurora Miotto, of Morgan Stanley. Please go ahead.
Yes, hi. Good morning, Clotilde. Good afternoon, maybe. I have two questions, please. The first one is with respect to your Banco BPM, stake. 20%, is that it? Could you consider going for the full Banco BPM, or perhaps, I don't know, could you contribute Crédit Agricole Italia, into Banco BPM, and retain a stake of that listed entity? Any thoughts that you could share there would be very helpful. Secondly, I'm looking forward to your Capital Markets Day, on the 18th of November, but I'm wondering if there is any preview that you want to share with us, any thoughts on your strategic priorities or what we should expect. Thank you.
Thanks, Giulia. For Banco BPM, as you know, it's a long-standing partner. We now currently hold 19.8%, in capital. When we announced that we wanted to cross the 20%, threshold, we announced the fact that we wanted to move just above the 20%, threshold in order to fall under the significant influence regime, and that's to consolidate our stake using the equity method. This is because we want to limit the volatility, of our stake in Banco BPM, in our accounts in P&L, in OCI. All of this is very consistent with our role as a long-term shareholder and partner of Banco BPM. We are organizing ourselves to be the first shareholder of an autonomous Banco BPM, which we will help develop. There are many scenarios, of course, right now.
Most of them do not depend on us, and we are just going to try to make the best of each scenario. Maybe just adding a little point. When we equity account the Banco BPM stake, there will be a negative P&L, impact, and then we are going to have an equity accounting of 20%, of the results of Banco BPM. There is going to be a little bit of this effect, a switch between P&L, and equity accounting, and this should take place before the end of the year.
Got it. Would you be open to considering a combination with Crédit Agricole Italia?
It's not the only scenario. There are lots of different scenarios, and as of today, we're just going to try to make the best of each of these scenarios. Maybe on the Capital Markets Day, which is planned on the 18th of November, we are going to, of course, capitalize on our universal banking model, which is very strong. There is going to be a continuity in terms of our strategy, but of course, we want to develop further, capitalizing on our strengths. We're a French bank, but we're also a very European bank, with specialized business lines that have strengths in Europe. We also have an international scope with global activities like CIB, Amundi, CACEIS. We want to develop. We also, of course, have to adapt to the changing world and invest in technology.
All of these things are going to be discussed on the 18th of November, and we're going to be basing our medium-term plan on the strengths of our model.
Thank you.
The next question is from Tarik El Mejjad, of Bank of America. Please go ahead.
Hi. Good morning. Hi, Clotilde. Good to have you. Good morning again. Just a couple of questions. First, on the costs and specifically in LCL. We've seen some pickup in cost there driven by investments. My question is more related to your strategy in terms of developing online banking. You've done a few attempts with before banks and others. What's your strategy there? Is that refocused now? We've seen it with your competitors that are growing very fast. Their digital bank, is high profitability. Is that something you would focus on and you talk about in the Capital Markets Day, and maybe you can share some snippets now? The second question is on Italy, and more towards your distribution agreement with UniCredit. I've seen some headlines that would be already revised and also some headlines that it would not already be fulfilled as we speak. Can you comment on this?
Are you looking for other options as well for that part of the distribution? Thank you.
All right. For LCL, of course, expenses are slightly higher because we're continuing investments, as we had done so. We're going to talk about it more in detail during the Capital Markets Day, but it's true that for LCL, we want to develop on different dimensions and different segments. We have segments that are more sensitive to digital solutions, rapid digital solutions, and other segments that need to have stronger expertise and solutions that are more tailor-made to their needs, for example, the affluent and wealthy segments, or the professionals, the SMEs, the corporates. All of these are elements that we're going to focus on. Of course, we're going to have to think about the fact that we're a universal group, not necessarily each bank has to have a universal approach to every customer. We're going to have more detail on that regarding LCL, going forward.
For Amundi, we do have a long-standing partnership with UniCredit, that pertains to Italy, but also to Germany and Austria. Amundi, is not only partnered with UniCredit, in Italy. We have 80 partners. In fact, what's important to say is that in Italy, the way we want to develop is through our business lines, through partnerships with our network, with Crédit Agricole, which has been growing for the past 15 years, which now has 5%, market share, but also with other partners. We have UniCredit. We also have Banco BPM, where we have a partnership in insurance and consumer finance. The partnership between Amundi and UniCredit, runs to 2027, and today, the relationship and the activity is good.
Thank you.
The next question is from Delphine Lee, of JP Morgan. Please go ahead.
Yes. Thank you for taking my questions. I just wanted to follow up a little bit on Banco BPM. You're not ruling out the scenario where you could look to acquire Banco BPM. I'm just trying to understand a little bit why, in that case, you wouldn't go to maybe 25%, just below 25%. Could you give a bit more color on this? In terms of your Capital Markets Day, and your strategy in general, how are you thinking a little bit about your payout, given that your CET1 ratio, is, I would say, very comfortably above 11%, and you're obviously growing organically as well? How should we think about the dividend payout ratio, if any change to that level? Thank you.
All right. For Banco BPM, I really can't provide any additional information because we have all of these different scenarios that we're looking at. What we have announced today is really our intention to go just beyond 20%. We have announced in our press release that we had no intention to go beyond the threshold, which would require us to do a tender offer. In any case, we are today planning to go just above 20%. In terms of our capital ratio, it is true that we are above 11%. We have reaffirmed this target many times. Today, we're provisioning EUR 0.65, in terms of dividends, which corresponds to a payout ratio, on the conserved results without any type of change and adjustment in this result. This is what we're provisioning today.
Of course, the question of the payout, and what we could do with excess capital, is something that we would not discuss today and that we would have to discuss in our medium-term plan.
Great. Thank you, Clotilde.
Thank you.
The next question is from Pierre Chedeville, CIC. Please go ahead.
Yes. Good morning, Clotilde. Regarding the bottom line, even if we retrieve the capital gain on Amundi U.S., we are close to EUR 4 billion, EUR 3.9 billion, I would say. I wonder if it would be a good point to increase your guidance on net income, in 2025. As far as I remember, it was at least the level of 2024, but I guess that now it's obsolete. My second question, relates to LCL. It's a theoretical question. Of course, I'm not asking you a clear answer on that, but I was wondering if you could be interested by an asset like CCF, in the light of what you are doing with Milleis, and what you said regarding your wish to develop wealth and affluent customers.
My question is not if you want to buy CCF, of course, you would not answer, but if you could buy CCF, if interested, in terms of market share, which is high if we consider the group Crédit Agricole. Thank you.
All right. Thank you, Pierre. A couple of questions. On guidance, we have indicated that we would have a net income group share, that would be at least above the level of 2024, excluding the impact on corporate tax surcharge. There is a lot of uncertainties going forward, of course. I was talking about the negative impact that we would have on P&L, of the equity accounting of Banco BPM. That would be something around EUR 200 million, on our P&L results. On the other hand, depending on what date we equity account, we would have every quarter an additional EUR 100 million, in equity accounting, corresponding to our 20%, share in results. You see that we have this impact, of course, that we have to take into account.
Just recall that we have been consistently beating our MTP forecast, and what we want to provide for you is recurring, resilient, and stable results in this context of strong uncertainty. Our guidance is very solid. We today have a very strong ROTE, and we really want to insist upon this stability and recurring growth. On LCL, right now, our priority is going to be the integration of and the closing and the signing of Milleis, with LCL, and Crédit Agricole Assurance. We are also going to work on how we can develop organically within our medium-term plan for LCL, for our business lines in synergies with the regional banks, and for other businesses outside of France. We always like to—we have had a business model that has always been complementing organic growth and inorganic growth.
We are leaders in our domain, and as leaders, we are always looking at opportunities whenever they come up. In France, we would have to look at antitrust issues, that you were talking about naturally. These are elements that we're always looking at when we roll out our development strategy, antitrust considerations, of course, but also strategic considerations and financial criteria, strict financial criteria for any inorganic growth, bearing in mind that our priority is to grow organically, and inorganic growth is only something to complement this dimension.
Thank you.
Thank you, Pierre.
The next question is from Matthew Clark, of Mediobanca. Please go ahead.
Good afternoon, just about. Back to Banco BPM, I'm afraid. I understand there are many different scenarios which you don't want to comment about because they're out of your control, but the one specific scenario which is in your control that you have been clear about is that you don't intend to acquire or exercise control on Banco BPM, and will maintain the stake below the mandatory tender offer threshold. I just want to understand why you've made that statement. Why is it that you don't intend or are ruling that out, given that that's the one specific scenario that you have expressed your view on clearly, just to understand why? The second question is on the new CEO.
Should we imply from his absence today that he doesn't intend to participate in earnings calls and the Capital Markets Day, is going to be the first time we get to hear his outlook from his own mouth? Is that the right way to interpret this? Thank you.
All right. Thank you, Matt. I think you're going to have to come back to your second question because I'm not sure I understand the second question. Regarding your first question on BAMI, the announcement that we made was really to consolidate our position as a long-term partner of Banco BPM, as an autonomous Banco BPM. The reason why we have decided to increase our stake beyond 20%, is because it allows us to limit the volatility, of our stake in Banco BPM, and this requires us to have equity accounting since we don't have, as of today, a seat on the board. We need to be able to equity account. In order to do that, we need to go beyond 20%, since we don't have the seat at the board.
This is the reason why we insisted upon going just beyond 20%, because going just beyond 20%, is what is necessary for us to be able to equity account. That's all we wanted to communicate upon. As of today, there's lots of moving pieces, lots of scenarios, so we're not at all in a position to communicate on anything else going forward. Can you?
Can I come back on that? Because you don't just say that you intend to go just above 20%, today. You specifically rule out increasing beyond that. I want to understand why you're specifically ruling out increasing beyond that. Is this statement Crédit Agricole?
As of today, going beyond that would require specific authorizations from the different relevant authorities, which is not at all something that we wanted to discuss on this announcement, which really corresponds to an accounting, a stability in our results announcement.
Okay. Thank you. The other question was just really when we're going to get a chance to hear from the new CEO.
Oh, yes, from Olivier. Of course, you're going to be able to discuss with him extensively in the medium-term plan presentation on our Capital Markets Day on the 18th of November, of course.
Okay. He doesn't intend to participate regularly in earnings calls. Is that right?
Everything is open in any case.
Okay. Thank you.
Thank you, Matt.
The next question is from Alberto Artoni, in Intesa Sanpaolo . Please go ahead.
Hi. Thank you for taking my question. I just have a quick follow-up on Banco BPM. I apologize about that, but just a technical thing with regards to the change in accounting. First of all, what is the current accounting as of today with your 19.8%, stake that you currently hold? Secondly, assuming that you go ahead with your plan and you achieve just above the 20%, level that you aim to achieve, and then you can switch to the equity accounting, you mentioned that there will be a P&L loss. I was wondering what would be the regulatory capital, the CET1, impact of that P&L, and also if you can help us guiding how can we run the math to have a sense of what that figure can be, a billion, EUR 100 million? I don't know.
All right. As of today, we have half of our participation, EUR 300 million of stock in Banco BPM, which are fair value accounted in P&L. Part of that is hedged, and this is what is going to drive the volatility in our P&L. This quarter, it was more the variation in dividends because since part of that is hedged, the variations are stronger in terms of dividends. We have another half of these EUR 300 million shares, which is fair value through OCI. This other 9.9%. This has an impact on our CET1, limited, not on P&L, but it has an impact in terms of fluctuation on our CET1.
What we want to do when we equity account is we will have a consolidation which will cause us to carve out these two different fair value impacts, fair value on P&L, and fair value on OCI, since the beginning of our participation. We're going to carve that out, and it's going to have an income impact. How is that going to work? We're going to have this carving out, and that's a negative impact. Positively, we're going to integrate the badwill, and we're going to place ourselves at the equity value of our stake in Banco BPM. The negative P&L, impact is going to be the difference between the stock price today, which explains the fair value impact today, and the equity value because we're going to integrate the badwill.
We're going to take into account the difference between the price at which we bought the shares and the equity value. All in all, we're going to have a negative impact on our income. Why? Because the stock price of our share is above the equity value today. This negative impact on income will depend, of course, on the evolution of the share price. The evolution of the share price will also have a P&L, impact before we equity account. All in all, we can assume that this negative impact on P&L, is going to be around EUR 220 million, about today, with the estimation that we have. That's a negative impact on P&L. Afterwards, what we will do is we will equity account 20%, of Banco BPM's, result in our balance sheet.
20% of something that can generate roughly EUR 2 billion of income per year is about EUR 100 million per quarter. That's the math. With all of these impacts, the impact on CET1, would be very slightly positive.
Okay. Thank you very much. Just a quick one on the insurance. Just very strong quarter for the business. I was wondering if you had something to call out on that particular front.
All right. Strong quarter in insurance, but because of a lot of factors, we have in savings and retirement, record net inflows. These inflows were driven both by Unit-l inked, and Eurofund, in France, strong outstanding. We also have a very strong performance in property and casualty insurance. I was talking in the beginning about the 16.9, on contract. We also have dynamic activity in personal insurance. We have a strong activity. We also have strong financial results, which feed into the growth of revenues in the savings and the retirement lines and in the P&C line. We have this performance of debt and disability, which offsets a negative impact on margins and creditor insurance. All in all, this strong activity is really linked—the strong revenues, sorry—is very much linked to the strong activity in insurance this quarter, as we have seen previously.
What's interesting also, and this also bears witness to the strength of the activity, is the fact that in the CSM, we have new business that contributes more than the CSM, allocation. All of this bears witness to the fact that activity is strong, and that is what explains the strong results of insurance this quarter.
Thank you very much.
The next question is from Sharath Kumar, of Deutsche Bank. Please go ahead. Excuse me.
Good morning. Good afternoon. Sorry, I was on mute. Thank you for taking my question. Firstly, a clarification on the dividend accrual for the first half. I see from your CET1, schedule that you have accrued EUR 2 billion towards first half dividends. As per my understanding, this includes the extraordinary capital gains from the three, whereas the initial understanding was that that wouldn't have been eligible to receive dividends. If you could clarify on that point. Related to that, can you provide us your updated thoughts on interim dividend now? Both of the French banks have moved in that direction. What is stopping the board from moving in this direction? The second question is on other international retail. I wanted to understand the strategic rationale for holding some of the assets here outside of Italy.
They seem to be relatively low in terms of contribution to the group and add to the volatility. Just your thoughts on this would be helpful. Thank you.
All right. For the retained results for the 28 basis points, I was talking about before, yes, indeed, it includes the impact of the capital gain, on Amundi U.S. Why? Because we wanted to express here the fact that we are not making any choice yet in terms of dividends. The retained result is just the simple result with absolutely no retreatment at this stage of the year, neither capital gain, neither corporate surtax, nothing. This is what we have provisioned, the EUR 0.65 per share. Of course, we want to discuss the question of dividends at the end of the year because this is something that's important in the context of the medium-term plan. In terms of interim dividends, today, we are very agnostic about this issue. We have not taken any decision. As you know, it's not something that creates value for shareholders. It's a technical point.
Of course, we're open to discussion. We're going to have a look at the market practices. We know that there's been talk about this today. We're going to see. We can adapt easily. It doesn't represent a significant cost for us. It's just the technicality, and it doesn't change anything for the value creation. It's just a question of whether we decide to do it or not. Finally, for international retail, indeed, we have strong revenue performance in particular, for example, for Poland, positive net income group share for Ukraine. We have strong profitability regularly for Egypt. We have these positions in these business lines that some pertain to historical dimensions, but that create value for us over the long term, provide liquidity, that is very strong. In Poland, we have captured a number of 48,000 new customers, strong loan production, strong loans outstanding.
We have a very strong position in these countries. Of course, our international footprint is not just explained by the retail activity we're going to have in France, in Italy, in these countries. Our international footprint also stems from all the activities we developed in the business lines that you know very well about, in fact, that you see in the operations that we're talking about in this slide. I'm thinking, for example, about Degroof Petercam, with Indosuez, in Belgium. It's not strictly speaking retail activity, but it really allows us to become one of the top 10 in terms of wealth management. It really allows us to take on this European, size dimension for this type of business line. That's just one example. I could also talk about mobility and other examples. Our international setup is not only the sum of retail setups.
What's also important for us is the synergies that we're going to generate. In Poland, we have a lot of business lines, for example, that are present. We have synergies that we can do with them. In Egypt, our presence is interesting also because in synergy with CACIB, we can accompany our corporate customers in Europe in their development trade hedging solutions that they need to have for Egypt. This setup is really a universal setup in the different countries that we have.
Thank you. Very helpful.
The next question is from Stefan Stalmann, of Autonomous Research. Please go ahead.
Hi, Clotilde. Thanks for taking my questions. I would like to start with a question on the output floor. I appreciate it doesn't affect you from a regulatory perspective, but Crédit Agricole Group showed quite meaningful risk-weighted asset inflation, on a pro forma basis. I assume the group wants to mitigate that. The mitigation would then affect you, arguably, to the degree that the relevant assets are actually in your balance sheet and not in the regional banks. Could you give us any sense of how we should think about this mitigation exercise as it started and what may be the cost and which areas may it affect? The second question, sorry to come back to Banco BPM, just a technical one. Are you going to move the Banco BPM, at equity stake to Crédit Agricole Italia, or do you keep it in the corporate center? Thank you very much.
Thank you. Thank you, Stefan, for your questions. Now, on Output 4, just to take a step back, Output 4, as you know, for us, the impact is on the highest level of consolidation. As you, of course, know, Stefan, but we're calling it for everyone. It is not at the level of CASA, So there is no impact on CASA, of the Output 4. Secondly, these simulations that are being done are very theoretical because it's a static view of the balance sheet, and it doesn't take into account the mitigating measures we could implement by 2033, nor at the level of the group, the fact that we have a very strong capacity to generate capital because, as you know, we have about three-quarters of our income, which is retained every year at the level of the group.
Now, regarding more specifically your question on mitigation measures, these are mitigation measures, I agree, that could have an impact on CASA, For example, the fact that we could hedge capital-consuming exposures, the fact that we could ramp up securitization programs, capitalizing, by the way, on the Savings and Investment Union, which would have an impact on RWAs, at CIB, for example. We have to work on the quality of the standard model data. I'm thinking in particular of the fact that we could take into account new rating sources, but I'm also thinking of the standard method on loan-to-value, on home loa ns, which today penalizes us strongly. There could be impacts, but which would probably be, in fact, positive, these mitigating measures, if we have these impacts, for example, for CIB. If we have impact on the standard method, these will kick in.
If it becomes a hedge that's binding. As of today, it's not the case. Recall that CASA, in any case, is not subject to the Output 4. In terms of your second question, on Banco BPM, that's a good question. I think we're going to have to ask that question. I don't think it would necessarily have to be presented in Crédit Agricole Italia, but for sure, what we will try to do is present it in the presentation we do of the group in Italy. In terms of financial communication, it's going to be presented in the group in Italy. We have not yet decided where we're going to account it in terms of some of the parts.
Great, thank you very much.
The next question is from Flora Bocahut, of Barclays. Please go ahead.
Yes, thank you. Hello, Clotilde. Thank you for taking my questions. The first one is on the regional banks, which are doing this EUR 500 million buyback. I just wanted to know if it's over, if you know if it's over, and if there is any plan for that to be repeated. The second question is on slide 66 and 67, of your presentations where you discuss your ALM policy. First of all, thank you very much for having added this disclosure. The question is simply, can you maybe read us through the conclusions there? Is the conclusion that we should expect LCL, NII, to move simply with volume growth and not with margin anymore? Thank you.
Okay. Thanks, Flora, for your questions. Yes, as of today, this operation by the regional banks, which, of course, you're right, it's not, in fact, pertaining to me, but from what they tell me, this operation is over. We have not reached EUR 500 million because they had said that they could go up to EUR 500 million depending on the market conditions. In the end, it has been EUR 350 million, just about. It is over as of today. Regarding the slides on page 66 and 67, thank you, Flora. It was important for us to talk to you about this because we really wanted to insist upon the structural dimension of our ALM policy, and the more short-term dimension. In terms of structural dimension, if I can walk it through you, what we do is we quantify the global interest rate risk using these statistically static and dynamic measurements.
For example, for LCL, when the rates are rising, we're going to macro hedge, which will contribute positively to NII. Why? Because Crédit Agricole Group is structurally a fixed-rate receiver. We reduce these gaps by entering into fixed-rate payer swap contracts, and this contributes positively when the rates are rising. Therefore, this reduces the sensitivity of NII, changes in interest rates. What has been going on since 2021? On the asset side, we have been having, thanks to the increase in rates, a gradual repricing of the loan book. This is a positive effect, but it's slow, in particular due to the specificities of housing markets in France, the usury rate, etc. On the liability side, we have had a negative impact of the shift of deposit mix from demand deposits to time deposits. They have been multiplied by three in LCL's, balance sheet.
All of these impacts have been mitigated by these macro hedging solutions, that I talked to you about. Now, what happened in Q2? If we exclude the base effects, in this quarter in France, and in LCL, we have had a net interest income in LCL that has been increasing by 7.8%. It was stable in the regional banks. This positive movement is explained by what I was talking about, the repricing of loans, slow positive effect. On the liability side, we have a decrease in the cost of customer resources. This is positive. There's a negative effect because it's a less favorable effect than before of the contribution from macro hedging. This quarter, we have had a strong effect on deposits. What's going to happen going forward? The elements I was talking about on asset liabilities are slightly positive, with a slightly negative impact on macro hedging.
You could say that all in all, it's slightly positive. However, we really want to lean on the side of caution and be prudent for 2025 because, in fact, the deposit effect really depends on customer behavior. In the long term, if we move into 2026, we should have a favorable outlook for net interest income, but we want to remain prudent for 2025. What I want to guide you upon is the fact that it's going to be stable net interest income in LCL, in 2025.
Thank you.
Thank you, Flora.
The last question is from Chris Hallam, of Goldman Sachs. Please go ahead.
Good afternoon, everybody. First, I guess, another question on Banco BPM, but it's a bit broader. You have the stake there. You have some valuable partnerships with them. I suppose we can conclude that the partnerships you run with BAMI, are more secure or more productive, either directly or, I guess, indirectly because of the stake, i.e., that your collaboration is sort of enhanced by that proximity. My question is whether, having seen that play out, that's a model you'd now look to replicate somewhere else, i.e., stake building in other banks in other countries, because clearly the financials are favorable, but I guess what we're seeing is that the industrial collaboration and growth outlook, maybe also improves. Maybe that's a broader topic for the investor today, but I just thought I'd ask on that. The second question is sort of the opposite of the first.
Given the move lower in the market value of Worldline, since the last quarter, how have you changed your thinking regarding both the stake and the partnership with Worldline, if at all? Thank you.
All right. Thank you, Chris. It's true that our strong stake in Banco BPM, is something that naturally allows us to reinforce the strength of our partnerships. As you know, we have two partnerships in Banco BPM, one in the form of AGOS, with personal finance and mobility, and another one with Crédit Agricole Assurance, in particular, PNC Non-Life Insurance. These partnerships go on for many years, 2034, even longer for Crédit Agricole Assurance, 2043. They are strong partnerships. Naturally, the fact that we're the number one shareholder in Banco BPM, allows us to weigh on the length of these partnerships, that's for sure. This type of development, is a development that we have already, in fact, rolled out. If we look at the operations that we're talking about in our slides, the 26%, stake in Victory U.S., also goes along with a reciprocal partnership for many years.
We have talked about a project about a participation in Creval of less than 10%, but that also allows us to develop partnerships with Amundi. This is a project, but it's really the direction that we like to go in. It's interesting to have these partnerships that are reinforced by a minority stake. This is not the only way we want to develop. We can also develop organically through partnerships without any type of capitalistic stake, or through acquisitions. Everything is open for us. We have business lines that are leaders in their domain, and they can all decide to develop in these different directions. Yes, it's always interesting to have this capital share. For Worldline, it's an industrial partner for us today. We're satisfied in our partnership.
We have a JV, as you know, with them, which is developing our ideas to provide merchant payment solutions in acceptance in e-commerce for our customers. That's one dimension of our relationship with them. Another dimension is that we are a shareholder. Now, if we look at the financial dimension of this share, 7%, it is accounted in our P&L, by fair value by OCI. As a financial shareholder, the impact of the price variation is very limited. What's important for us is our industrial partnership, which is moving forward and which allows us to create value for our customers. This is why we signed this partnership with Worldline in the beginning.
Okay, thank you.
Clotilde L’Angevin, there are no more questions registered at this time.
Thank you. Thank you, everyone, for your time and for your questions. I'll talk to you for the next quarterly results.