Good morning and good afternoon, everyone. Welcome to Crédit Agricole S.A. Fixed Income Investor Call for the first quarter 2026 results. I am Romain Bellard. I am heading the FI DCM business in Paris, and I have the pleasure to have with us two Crédit Agricole S.A. representative with us today. Cécile Mouton, she's heading the Investor Relations and Financial Communication for Crédit Agricole S.A.
Olivier Bélorgey, Deputy CEO and CFO for Crédit Agricole CIB and Group Head of Treasury and Funding for Crédit Agricole Group. I think you are all familiar with this exercise. We will shortly leave the floor to Cécile to go through the results, and we will open the floor for Q&A at the end of the presentation. Thank you very much again for joining. Cécile, I leave you the floor.
Thank you, Romain. Good afternoon and good morning, everyone. Let me go straight away to the key highlights of this quarter. You see here the key figures and some key comments for this first quarter of 2026, where we have been able to post solid results in the face of turbulence. What I want to highlight just right now is, first, the fact that it was driven by a sustained activity. I will go into more details just after.
Thanks to this activity and also the past activities that were in the previous quarters, we were able to reach a very high level of revenues. You see the figure here, EUR 10 billion precisely this quarter.
This is a record level for the group as a whole, and it benefit in particular from a very, very significant upturn in the French NII. We had also an improved operational efficiency, and you'll see that we are posting positive jaws of close to 3 percentage points this quarter.
Risk were well controlled also in a context where we have posted some prudent provisioning in the context of the conflict in the Middle East, but we will see also all the figures just after. All this is leading to strong profitability with the net income group share of EUR 2.1 billion this quarter, increasing by close to well, more than 5% over the year.
I must precise here maybe that all the comparison and variations that we are presenting Q1 over Q1 are in fact comparing with Q1 figures in 2025, which are in a pro forma basis. What it means, it means that we are looking at figures last year as if we already had equity-accounted Banco BPM with a contribution of 20.1%.
This is really something that we have decided to do in order to make all figures comparable in 2026 compared to 2025. More than +5% using this convention for 2025 figures in net income group share. Of course, our financial position also is still very, very strong. You have here the CET1 ratio for the group above 17%, which is our commitment for the strategic plan, 17.1% precisely.
In terms of liquidity also, it's very strong and among different figures that we will see after, I can just mention here that 2/3 of the funding plan has already been completed during Q1. Last point on this slide, some strategic developments also that I want to mention here. The first one is the fact that we have launched CA Savings.
CA Savings is a digital savings platform that we want to launch in Europe, starting in Germany. We have launched it very recently. It was in April, and it's only five months after we announced this strategic development during the presentation of our strategic plan in last November. Other point also, we have agreed for the acquisition of a bank in Ukraine, Bank Lviv. This was also during Q1.
Last point, but which is, of course, of very high interest, is the fact that we have raised our stake in Banco BPM this quarter. It has increased to 22.9%. We were at 20.1% at the beginning of this quarter, and we have increased it, really taking the opportunity of the decrease in the share price during the month of March. Let me go now through the activity in more details. I'm moving to this page 25. Shoot. Here it is. Lots of information and figures on this slide.
In a nutshell, what I would like to highlight is the fact that this quarter, we really saw the impact of all the digitalization initiatives that we have launched recently and the new ones that we have launched this quarter.
First point is, for example, the client capture this quarter was of 600,000 new clients, and it was really enhanced and boosted by this digitalization. First example, we have launched L by LCL Pro, which is a new hub for professionals at LCL. Thanks to that, 20% now of the client acquisition in LCL for professionals is coming from the digital channel. We have also, now in Italy, I can mention the fact that 40% of the client capture is coming from digital acquisition.
We have also summed up again all the new digital journeys that we have launched in Regional Banks. We talked about that already in the annual results in February. You see the list of all the new digital journeys that we have launched for Regional Banks.
Looking at the figures in terms of activity, first point on the Loan Production in Retail Banking, it was strong in France. You have here the figures, plus 6% on Home Loan Production, plus 7% on Corporate Loan activity. It was also very strong for Italy, in particular with corporates, where the activity was doubled compared to last year. It was very strong for all the Asset gathering division, with Insurance posting a record level of premium income.
Comparing to a year 2025, where it was already very high, so increasing again on Insurance. In particular, we can notice also the record net inflows that we had this quarter of EUR 5.7 billion. Asset Management also saw a very high net inflows of +EUR 32 billion, and inflows of quality because it's driven by medium and long-term assets.
Despite the negative market impact that we had in March, the level of Asset under Management is increasing again for Amundi. It's more mixed for CAPFM, where the production is resilient. It's good for personal finance. It's under a little of pressure for mobility, which is really impacted by the unfavorable automotive market.
We will see also that we had an increase in the stock of used vehicles that has some consequences on the revenues, but also on the equity accounted lines in the P&L. CIB did its second-best quarter in Q1 2026. In comparison of Q1 2025, which was in fact the record level of revenues for CIB, and in fact, we had a negative FX impact this over the year. In fact, excluding this, it's roughly the same level.
CACEIS, I wanted to mention also the fact that they benefited in particular from the volatility that we saw in the market in March. This has led to more volumes, more flows, and in particular in terms of settlement and deliveries, and this is also positively impacting the revenues of CACEIS this quarter.
Having said that, I'm moving to the revenues to explain a little bit more the evolution of the revenues Q1 compared to last Q1. It's an increase by +2.8%, but in fact, it's even higher on the like-for-like basis, +4.5%. What is this like-for-like basis? It's explained on this slide, in fact, is with some retreatments that concern Amundi, in fact.
The first one is that we have to make things comparable here, we have to retreat Amundi U.S. activities that were still in the scope in Q1 2025, but as we deconsolidated Amundi U.S. at the beginning of Q2 last year, to make this comparable, we have to retreat the contribution of Amundi U.S. last year. It was EUR 90 million in revenues.
The other point is that we had this quarter, the negative impact of the valuation of ICG Securities that we had in portfolio because you know, we entered into ICG, a capital at the end of last year. It accounted for minus EUR 68 million. We are retreating it because it's the only time where we will see this impact because at the, on the very last day of the Q1, we consolidated, in fact, ICG, now we will no longer have any impact on revenues linked to this mechanism.
Having said that, +5, +4.5% on a like-for-like basis, with this very, very strong increase in Retail Banking, which is in particular linked to the increase in revenues for French Retail Banking with this upturn in NII, as I was mentioning before. You have here the figure. It's +34% for Regional Banks and +13% for LCL over the year, so very, very significant impact.
On NII, it's also interesting to see that for Italy, it is stabilized, and it's not decreasing with the evolution of rate, which was something that we could feel at the end of last year. On fees and commissions, we are progressing in all the geographies of our Retail Banking activities. Asset gathering, I said already some specific things that concern Amundi.
Without taking this apart, in fact, Amundi is performing very well in terms of revenues. It's increasing on all types and all components of their revenues, so management fees, performance fees also, which are exceptionally high, but also revenues coming from technology, the technology activity of Amundi. In insurance, it was a little bit impacted by climate-related claims this quarter because we had quite significant weather event during Q1 in France. We had storms, we had flows.
We, I have the nicknames of all those events. It's Pedro, Nils, and Goretti. It was very significant. It impacted the revenues of insurance in Q1. We were able to offset almost all of it with some absorption mechanisms, but also with the reversals of provisions that we have taken in the past.
Large customers, I already mentioned the fact that we had this unfavorable FX impact. Excluding this, it's a very high quarter, in fact, very high for CACEIS. Also, very high for CACEIS with what I mentioned before, the very good level of activities we had on flows and a stable NII.
On SFS, which will be my last point on this slide, it's stable. In fact, it's mixed because it's improving in terms of margins, the price effect is positive. What we had this quarter is for CA Auto Bank, and more precisely for Drivalia, which is one of its sub-subsidiary in this mobility activity, which is doing leasing for lots of different partners and car makers.
Because the condition of the Car market are quite difficult, because we are seeing drop in sales, and in particular on Electric Vehicles. We had, well, the car makers are adjusting the prices at the moment, so we had to revise the residual values on the cars that are leased by Drivalia this quarter.
This is, in fact, this is offsetting completely the improvement in margins that I was talking about just before. On costs. Positive jaws, as I was saying at the beginning, precisely plus 2.7 percentage point on a like-for-like basis. In fact, costs seems to improve in most of the business lines. In fact, we have some specific positive effects.
We have this scope effect that I was mentioning for Amundi, which was negative for revenues, is now positive on expenses linked to Amundi U.S. We have the FX impact, which is now positive for CIB. These are some, it's good news, but it's some specific, positive effects.
What is more interesting is to see that for CACEIS, that concerns also the Large Customers division, we are really benefiting this year from the full effect of the synergies linked to the integration of the European activities of RBC that we purchased almost three years ago now, and we will have this all, during all the years, and we can now confirm the guidance that we had given of an additional net income of EUR 100 million in 2026.
Last point that I can mention here is on Retail Banking, because here it's increasing, but it's an increase which is normal, I would say, for Regional Banks, really lower than the increase in revenues that we are seeing this quarter. It's increasing more steadily for, more importantly, for LCL, this is what we have mentioned several times already, the fact that LCL is really conducting a transformation plan, and has to do some significant amounts of investment, this is what we are seeing again this quarter.
Moving cost of risk, it's a little bit less than EUR 1 billion this quarter. In fact, it's decreasing compared to Q4, increasing compared to Q1.
The increase is for more than 2/3, it's about 3/4 of the increase, is really linked to, as I was saying at the beginning, to the conflict in Middle East with several mechanisms. The first one is that we have reviewed the IFRS 9 scenarios on the Stage 1 and Stage 2 provisions.
We are not changing the scenarios, but we are changing the weights that we are applying on the different scenarios, and we have moved 10 percentage point from the central scenario to the moderate adverse scenario, really to reflect the fact that there are higher uncertainties in this context of this conflict in Middle East, and so higher uncertainties on macroeconomy in the coming months.
This is for EUR 80 million. We had also an additional provision, so an overlay, linked to some of the area, in fact, the geographical area of this conflict, and to some sectors in particular, and this was for CACEIS, and this is for, this is accounting for EUR 28 million.
One other specific point cost of risk is the fact that we have adjusted a little bit the provisions that we have on the UK Motor Finance topic. We had already provisioned more than EUR 80 million in previous quarters. We are adding EUR 17 million, this is linked to the fact that the FCA has now published the conclusions of its consultation that it had launched end of last year.
Looking at those conclusions, we thought we should increase a little bit this provision by EUR 17 million. Having said that, on the different business lines, there is no specific new trends that should be mentioned. We are still monitoring closely some sectors, in particular on Retail, on Distribution, on Real Estate also, on farmers also.
Nothing new compared to the previous quarters. We are still also, monitoring very closely the professional clients, where we had an increase in past quarters, but it seems to be stabilizing now. There is no sign of any negative evolutions that we could see in the coming quarters. On the cost of risk out of outstanding is at 30 basis points for, on four rolling quarters at the end of this Q1 for the group.
We have an NPL ratio, which is stable at 2.2%, and we have increased again the coverage ratio and the Loan loss reserves this quarter. Still a very prudent provisioning on this risk. Last slide for me. Putting all this together, here is a evolution of the net income over the year.
Maybe looking at the right-hand side of the slide, what is interesting is to see that so the increase of 5.5% is coming essentially from an increase of the gross operating income of plus 8.7% on a like-for-like basis, always still the same treatments that I was talking about before. Significant and very high increase of the gross operating income. We have this cost of risk that i've just described.
On Equity Accounting, maybe a few explanations are needed. It's increasing, but it's increasing also linked to this first-time consolidation of ICG, so on the last day of Q1, which is contributing for EUR 85 million. Why? Because, in fact, we are here canceling notably the negative impact on revenues that I was talking about just before.
In this Equity Accounting line also, what we have is a scope effect linked to the contribution of Victory Capital, which is now, we don't have anymore Amundi U.S., but now we have this contribution of Victory Capital in this line for a little bit more than EUR 30 million, which is the run rate as we have from Victory Capital now.
We had also, and this is explained on the left-hand side, an impact, a negative impact and decrease in the contribution of Leasys. What happened at Leasys? Remember last time we talked about the fact that we had revised the remarketing values of the stock of used vehicles that Leasys has.
This quarter, again, we have a negative impact. It's, in fact, we are posting losses linked to the sales of used vehicles this quarter. What happened is that, again, linked to the unfavorable car market at the moment, we had a stock of used vehicles that increased quite significantly during the quarter, so we have to clear it, and it had an impact on the price at which we were able to sell all those vehicles.
This is negatively impacting again, the net income this quarter. Maybe on this point, we are really confident for the future. We have levers to restore the profitability. We are working really on processes, on the diversification of distribution channels for those used vehicles, and we think we can do synergies also with our different entities. Negative this quarter, but confident for the future and for the profitability of this business. I can now give you the floor for the next part of the presentation.
Thank you, Cécile, and good evening, good afternoon, and good morning, everyone. Sorry for that. Concerning capital and liquidity, first of all, I want to remind that our strategy has not changed. We still want clearly to be best-in-class in terms of CET1 ratio among European G-SIBs and to have an adequate position versus peers in terms of liquidity position, meaning the LCR and NSFR ratios.
Nothing has changed in terms of strategy, of course. It means over, as Cécile was mentioning, 17% in terms of CET1 ratio for the group level, which is a relevant one for credit investors and for Crédit Agricole S.A., above or around 11%. We are at 11.4%, so clearly above target for Crédit Agricole S.A. as well.
In terms of evolution of the CET1 ratio, perhaps some more details than usually, because there was some question during the equity global call. The CET1 ratio at group level remained, of course, above 17%, has decreased a little bit to 17.1%, and I will explain each box of the waterfall starting from right-hand side.
For the OCI impact, - 4 basis points, it's a small impact. It comes from the fact that since the implementation of IFRS 17, the sensitivity of the bond portfolio that is held by our Insurance company has largely decreased, but there is a remaining sensitivity of this portfolio versus the commitment towards the policyholders.
Given the very high movement of the market this quarter, it accounts for -4 basis points. That's the only significant element for this bucket. We have -7 basis points, which are linked to a methodological effect, and clearly, this comes from the fact that under the standard approach for operational risk, we have to apply a risk factor, which is linked to the evolution of the NBI.
As our NBI has increased versus last year, we had to take that into account and to adjust the capital requirements for operational risk, which we do or have done only once over the whole year, so applying the first movement and the first evolution first quarter this year, - 7 basis points.
We have M&A operations, some M&A operations. Cécile has spoken about it, meaning the CGI and, sorry, the increase of Banco BPM and the acquisition of the bank in Ukraine. It's totally in line with our strategy within the medium-term plan, where we have indicated that we could make some M&A operations, so - 7 basis points.
We come to the organic growth, which account for -24 basis points, sorry. To explain that, we have to switch to the RWA evolution. Overall, +25 basis points, out of which 10 basis points are linked to what has already been described or accounted as methodological element coming from the evolution of the capital requirement for operational risk.
We remain with EUR 15 billion increase of our RWA, which is clearly linked to the commercial dynamism. If you discount the EUR 10 billion of operational risk, you have for Retail Banking something around +EUR 2 billion or EUR 3 billion, which clearly is in line with the very great performance of the Retail Banking, especially in France for this quarter.
For the other one, it's clearly, I would say, something which is totally in line and coherent with the evolution of the that we have accounted for the medium term plan. Perhaps with some explanation concerning the large corporate business line. EUR 6.8 billion, out of which EUR 1 billion is linked to the dollar evolution. Because the dollar has appreciated between December and end of March, while has depreciated versus Q1 last year. The impact is not totally, I would say, natural, in terms of impact on RWA end of year versus end of quarter, versus NBI, which is usually made Q1 versus Q1.
An impact of EUR 1 billion coming from the FX effect, from the evolution of the dollar, which has not no real meaning because we are hedge, and it has not real impact on the CET1 ratio. We remain with EUR 5.8 billion, out of which around EUR 3 billion comes from the evolution of the capital requirement for market operation, be it due to the volatility of the market or to the increase of the credit risk of market operation, which is something or both element, being essentially temporary, elements.
When markets either comes back to lower volatility or converge in terms of level, this mark-to-market that we have with the counterpart that are not collateralized, of course, converge back to the previous level. This is more temporary. It should come back in the next 1, 2, 3 quarters. This is not something that you have to take into account as a trend for the next quarters, clearly not. On top of that, we had, once again, commercial dynamism, essentially at the end of the quarter, which account for some billion here, and is a good news for the evolution of the NBI for the next quarters.
I won't repeat the explanation for Crédit Agricole S.A. perimeter, because if some figures are slightly different, the rationale and the explanation are exactly the same. I just want to highlight the fact that the CET1 ratio at Crédit Agricole S.A. level is 11.4%. It has, I would say, oscillated over the last years around 1.5%, 1.4%, 1.6%. Nothing strange here. The 11.8% was perhaps a little bit high versus the long-term trend that we manage for Crédit Agricole S.A. In terms of buffer versus requirement, once again, nothing have materially changed.
Always, more or less above EUR 40 billion buffer for Crédit Agricole Group, and always, around, more than EUR 10 billion for Crédit Agricole S.A. The only thing that we have actualized here is the fact that we are now in the bucket of 1.5% in terms of G-SIB buffer.
We had made a pro forma last quarter and for the end of year results. Now it's fully integrated, though the G-SIB buffer has increased by 50 basis points to 1.5%. As well, the, I would say, correlated impact on the leverage ratio requirement that increased by half of it. Once again, no real and significant impact on our buffers, which remains very large and clearly best in class versus the other G-SIB.
To be noted, no impact of any evolution of the O-SII buffer, on a contrary to some, to another competitor. In terms of the capital structure, once again, I will be very quick just to remind here that we are totally in line with our target and our commitment, and that the AT1 bucket that we manage at Crédit Agricole S.A. level, which is a listed company, and we do not manage a group, the AT1 bucket at group level, due to the large retained earning that we managed to keep at the Regional Banks level.
We have here 1.8% buffer versus 1.8% theoretical requirement for this buffer, no specific needs to move from this situation right now.
In terms of TLAC, exactly at the target, 27%. Nothing very specific to add, unless to remind once again that the TLAC constraint is the binding constraint versus the subordinated MREL constraint, which is perhaps a little bit complex and specific to Europe. Just remind and keep in mind the TLAC constraint, which is more binding for us and for which we are completely in line with our target. In terms of liquidity position, an adequate level in terms of regulatory ratios, LCR and NSFR, and totally in line with some peers.
More important than that, we keep very ample liquidity reserves, still close to EUR 500 billion, with a slight decrease this quarter, essentially linked, we will see that in the next slide, essentially linked to the once again, the commercial dynamism and the evolution of the commercial asset that have been originated by our different businesses during the quarter.
In terms of customer deposits. Totally stable, be it in terms of total outstanding. It's, we have a EUR 4 billion difference over EUR 1,176 with the previous quarter, totally stable. The split be it by nature or by customer is also totally stable versus last quarter.
I was saying that we had a strong origination this quarter. As you can see, left-hand side in the blue bar, the customer assets have increased by EUR 14 billion, so that's why our liquidity reserves have decreased slightly this quarter. The good news comes also from the fact that as we have been very dynamic in our Insurance program and the realization of this program, most of it for this quarter have been financed through the evolution of medium and long-term funding.
We reach a record high or very near record high, I don't have all the figures in mind, but above EUR 200 billion seems to be a record high for me in my memory, in terms of stable resources position. Very, very, secure liquidity position.
As I was mentioning, an evolution of our medium and long-term debt plus EUR 13 billion, the vast majority of it coming from the dynamism of our funding issuances at Crédit Agricole S.A. level, so the public issuances, also coming for part of it from the issuances of our other entities, of some other entities, and from the distribution of short-term EMTN at Crédit Agricole CIB level.
Cécile has mentioned it, we have already performed for our public issuances program at Crédit Agricole S.A. level, around 2/3 of our issuances plan, and we are very comfortable with this position. 2/3 means versus medium and term plan, which is the lowest over the last five years.
You can see it at the bottom right-hand side, EUR 18 billion for this year. With a split between debt for capital purposes and debt for liquidity purposes, which remains with similar amount in terms of capital needs. Like last year, EUR 12 billion for senior and preferred or Tier 2, and the adjustment versus last year has been made on the funding part, be it either covered, either preferred senior debt. EUR 18 billion.
2/3 of EUR 18 billion means roughly EUR 12 billion, EUR 11.6 billion to be precise. Which, for which I want to continue to highlight our clear and assumed strategy of diversification because being, if you put apart the covered bond, which is essentially, of course, in EUR, we have a very strong and large euro-based investor for this kind of assets, and also the collateral consist in home loans, which are in EUR, so it's clearly a euro market.
For the other part, be it preferred senior non-preferred, and Tier 2, we have like last year, more or less, and so far, 1/3 of EUR issuances, 1/3 of USD issuances, and 1/3 of other currency issuances.
Our strategy, I repeat, is to continue to be present and to issue in each market where we are present and where we have taken commitment to come regularly, meaning the Swiss franc market, the sterling market, the Aussie market, the Samurai market, and now the Maple and Canadian market. Also, do not forget the Panda market and the Chinese market. Clearly a very strong diversification of our funding, which help us to perform it in very good and interesting situation and cost price.
You can see that on top of the public issuances, which refers to the dotted frame here, we also have very strong diversification in terms of some other entities that are allowed to issue for Crédit Agricole. Once again, there is also a diversification for these entities in terms of type of asset, be it capital or be it, I would say, secured funding. A very strong diversification in every area of our funding program. Perhaps one word here concerning the AT1.
As I was mentioning, we are at the optimum level in terms of AT1 bucket, despite a very small amount that we have announced to be called in June, the next call comes at not before one year at least, so no immediate needs in terms of in terms of AT1. Perhaps one last word in terms of ESG strategy and ESG policy. Overall, we have an outstanding of ESG bond, which is above EUR 30 billion. We have still issued this year already almost EUR 3 billion of ESG bonds.
We continue to commit to our ESG policy and being strong and dynamic either on the origination part in order to refinance the energy transition and the social transition, and a bit in order to issue and to tap the all the investors that have pocket to invest in these bonds. Thank you for that, and now we are ready for Q&A.
First question maybe cost of risk. "What's your view cost of risk evolution in 2026? Have you noticed any material changes since the end of March?" As I was saying, there is no specific new trend cost of risk in Q1 compared to the previous quarter, except the fact that the level of uncertainty has risen because of this conflict in Middle East. This is why we have decided to be very cautious because we are always very cautious, and to have this prudent provisioning, so of more than EUR 100 million with those two different parts that I already described before.
Otherwise, no, it's nothing very, really new, and maybe something that I've not mentioned previously is if you look at the incurred risk or the Stage 3 provisions that we had during Q1, the level of it is, in fact, lower than what we had seen in the previous quarter. Really, even if we are always very cautious, monitoring some sectors, watching at everything very carefully, there is no sign of any surge in defaults that could arrive soon, in fact. We're going to be, to continue to monitor, but nothing specific to add to this.
There was another question, which was, "given all the uncertainties, are you still confident in your capacity, capabilities to deliver the commitment, or what you have disclosed in your medium-term plan?" The answer is clearly yes. Clearly, yes, for several reasons. First of all, I would say.
Track record.
Track record.
It's a little bit difficult to switch very quickly.
Between the different slide of this presentation. If you look at the slide 14, you will see that we have, over the last 10 years, a constant increase of the top line, including 2025, where I remind you that we had the Liberation Day.
Already very, very strong, I would say, impact on the market, something that has surprised everyone, and so on and so forth. In terms of track record, we have been able to deliver a constant growth despite many, many different macroeconomic situation. We have also to remind the fact that within the medium-term plan, we have a buffer of capital that has not been taken into account in any NBI or net income, I would say, assumption. We have this buffer that we can reinvest or potentially distribute if we don't have any idea, any additional idea to reinvest.
We have this buffer, which is a buffer that will clearly or is clearly there to assure you that we are confident in the fact that we can deliver the return on capital that we have mentioned.
After that, if there is a total blowout in the market, nobody knows. In the, I would say, all the consensus scenario that are described or that are published by all the analysts, we are very confident to be able to deliver what we have disclosed. And, yes, thank you. So, two question. Funding plan. You have issued over EUR 4 billion in secured and senior preferred debt. Where should we expect the remaining EUR 2 billion to come from?
I don't know. No, to be honest, this is a question where we want to keep flexibility. You know, in fact, we want to keep flexibility to be able to adapt to market conditions. Nevertheless, in order to give you a first indication, as I mentioned, we are committed to issue regularly in every market that we have open. You know that some markets are more, have more appetite for preferred senior rather than Tier 2. Some other market have the other kind of appetite. To simplify, if you go east, you have on average more appetite for senior debt.
If you go west to east, if you go to Japan, if you go west to the U.S., you have more appetite for Tier 2 or AT1. We have if you look at our once again, at our track record, it's not at all an indication of what we are doing. If you look at our track record, you could imagine that we still have Samurai issuance to do this year.
It indicates the fact that potentially it will provide some secured preferred senior demand in the market. More or less, more or less the same idea with the Panda program. That's an indication. Once again, we want to be and to remain flexible.
Second part of the question, "on Tier 2, should we expect a euro CASA issuance this year?" Well, once again, it's a question which is too, I would say, too specific and too precise. We want to continue to keep our adaptability, and to continue to be very diversified in terms of currency.
I don't have any specific target, so we are not saying to the team, "I exactly want 1/3 in euro overall," in apart from a covered bond. Can be plus or minus 5%. More or less, we have, I would say, additional needs for Tier 2 and senior non-preferred, around EUR 5 billion, as you can see.
To which it means that clearly we have room to issue once more, at least in euro, in this in this space.
There was maybe one last question in the previous one-
Uh-
...which was about private credit.
Oh, sorry.
I think it's a, it's a topic which the market is very interested in. We have disclosed some figures on our exposure to private credit. This is on this page 48. This is the last line on the left-hand side of this slide. What it shows is that when we look at our whole commercial lending portfolio at the end of March, so which amounts to nearly EUR 2,000 billion, we have only EUR 2.9 billion, which is exposed to those debt funds at the end of March. It's very, very small.
When we look even more closely to, into the portfolio, which is, mostly at CACEIS, it's really focused on a few number of solid investment funds with equity bridge financing representing, half of the portfolio. It's very, very small, and really, not, of concern, for those exposure at CACEIS level.
There is one question, at least, at least one which is disclosed on the screen, concerning AT1, or a dual question. "You have mentioned the possibility of an opportunistic AT1. Is it still part of your thinking?" Yes.
Once again, we want to remain flexible. I'm not saying we will issue, but there is always a possibility that we take advantage of some interesting market condition. I let you imagine the kind of probability that we go that direction because we also have to take into account the potential cost of double carry, but we remain open. And the second part of this question is about our view of the six-month par call on AT1.
As you have noticed, we have removed that feature from our last issuance, and we will continue to remove it from the next issuances. First of all, we have heard you, and we wanted for this feature to be investor-friendly. We have heard that it was a concern for you. It was difficult for you to manage it, to hedge it. We have removed it. For the issuances where we have integrated this six-month par call, I cannot say, of course, about our call policy.
What I can say is that the idea behind this feature is not at all to take advantage of some basis points of arbitrage, but to, if we are in this kind of situation, to potentially avoid a too low double carry cost. That's it. Once again, idea is not to arbitrate the market for some basis points, but to avoid potential some double carry. It appears that cost of risk currently at 30 basis point is above the 25 basis point target. Do you expect to converge back to this target? Cécile?
Well, we maintain that our assumption is that we should be around 25 basis points through the cycle, this has not changed. Yes, 30 basis points is above this 25 level. As I said before, there are some exceptional items this quarter, be it linked to the U.K. Motor Finance, but also there are also legal provisions that I've not detailed just before, and I'm not going to, but which are quite exceptional.
There is this context of in the Middle East and this prudent provisionings that we decided to implement this quarter. If you put all this apart, in fact, we are closer to 25 basis points than than really at 30 basis points this quarter.
Maybe last point I could mention also, again, because this, you know, this is these KPIs that we show during the strategic plans, the ratio between the level of the Stage 1 and 2 provisions and cost of risk that we could see each year, so 25 basis points for you.
We have three years of so loan loss reserves on Stage 1 and 2 compared cost of risk assumption. it's very high. It's the highest ever when we compare to our peers, and it shows that, in fact, we have such a high level of reserves that, in fact, we would be able to cost of risk, we are able to cost of risk in coming quarters.
I cannot say when we are going to converge precisely to 25 basis points, but the idea is, but not only the idea, the best assumptions that we can make is that we are going to converge to it in coming quarters and years.
You want to take the next one?
Sorry. "Can you please clarify the sectors, industries that you have been closely monitoring in the current context where supply chain bottlenecks and oil price have increased?" This maybe refers to the overlay I was mentioning.
Yes.
... EUR 28 million at CA-CIB, maybe you can answer that precisely.
Yes. At least at CA-CIB level, what we monitor is are the sectors that can be impacted by either the macro, meaning petrochemical, meaning airlines company, more specifically, to be honest, U.S. airlines company, for which we know that they do not hedge their business versus the evolution of the oil market, whereby European companies more or less have a strategy to hedge. We monitor closely, more closely this kind of sectors, plus potentially as well, of course, the software sector, which is impacted by the AI evolution.
Well, that's plus of course, because there is a question mark around the maritime route due to the closure of the Strait of Hormuz. I would say that it's. It's very, I would say very common sense for us. Once again, it's we have made some, we have stressed some forward-looking scenario for these sectors, but at the end of the day, EUR 28 million of stress for this sector is a very, very reasonable amount versus the size of the portfolio of CA-CIB. We are not really worried, but of course, we look closely at the situation.
On French NII, can you elaborate on the NII sharp increase plus 34% at the Caisse régionale, which is much higher than peers? Yes, it's much higher, but the decrease was much higher also, or much lower.
I don't know how to say it. In fact, it's also because we had a more significant drop that now we are able to rebound, but very significantly. In fact, what happened at Caisse régionale is that and what impacted really the French NII for, both for LCL and for Caisse régionale, is the fact that we saw a change, a significant change in the mix of deposits during the very sharp rise in rates that we had in 2022, 2023.
Now that it's stabilizing and even a little bit normalizing, this mix of deposits that we have in the balance sheet, this is why we have this rebound now. What it was precisely, it was, we saw, in fact, side deposits transferring to term deposits or to regulated savings accounts. In fact, we were really well-hedged against moves in rates, and we had really completely canceled the sensitivity that we can have to the move in interest rates.
The, the change was so it was a shock, in fact, that we had in 2022 and 2023 that the macrohedge that we had in the, in both LCL and Regional Banks was not covering. In fact, this transformation of the mix of deposits of the balance sheet. No, the real answer is this. It's because it has been so strongly, significantly, deformed that tonight it's rebounding very high.
Perhaps, an interesting question, because this is the first time I see it, to be honest, so thank you for that. "Would you change your CASA CET1 target if AT1 triggers were raised as part of a broader regulatory reform?"
First of all, let's say that it's a very theoretical question because so far there is no, I would say, concrete project to raise the trigger. That being said, the question is interesting because it allows me to point one fact, to highlight one point, which is if we look page 35. 35. Yes. Thank you. What we manage essentially are the MDA buffers.
The trigger for the AT1 so far, of our AT1, we have dual trigger. The first one is at group level, 7%, and the second one, CASA level, because we were obliged to do so, and because CASA is the issuing entity of our AT1 at 5.18%.
We have explained that anyway, it's impossible, given the French law, the French internal support mechanism and so on, so forth, it's impossible for CASA to go below 7% as long as the group remains above 7%. We have to maintain each of our legal entity being part of the affiliated perimeter above regulatory requirement. Which means that, at least, as long as the AT1 trigger is not forced above 7%, we have nothing to change.
Being below 7% for Crédit Agricole S.A. level is a totally theoretical situation or an impossible situation. Even if the trigger was set at 8%, nevertheless, it won't impact or it won't reduce the buffer that we have versus MDA restriction. I think that once again, versus peers, the fact that up to 8.75%, which is a CET1 SREP requirement, up to 10.56% or 12.95%, unless there is a trigger would force higher requirement than that, the buffer that we have today at Crédit Agricole S.A. level above or around 250 basis points is clearly at least in line with competitors.
In for more, for several competitors anyway, above their kind of buffer, having also in mind that Crédit Agricole S.A., at the end of the day, operate also under the umbrella of the group. Without, once again, without taking a commitment to protect at any cost the investor of Crédit Agricole S.A., there is a room of maneuver, there are levers of action that some competitors do not have.
I think that once again, unless there is a complete, I would say, a change of mind of the regulators, forcing the trigger for AT1 at a very high level, I think that we are perfectly, I would say, safe, and you are perfectly safe with the current target of CET1 of Crédit Agricole S.A..
I think it's time for conclusion. Maybe before you conclude, Romain, I will say that maybe you remember that during the strategic plan, we announced that we would hold several workshops in coming quarters, two in 2026. The first one on LCL, and it is going to happen and to be held on the 26th of May. Precisely, it will be in Paris, but it will be webcasted, so you will be able to follow it live during the presentation. It's in the afternoon.
I'm sure you will find all the details on the website. We will follow up with invitation also to be sure that you have the right timing for this workshop, which is going to be very interesting, I'm sure, on LCL, and more precisely, its transformation plan that I referred to just before. 26th of May, LCL workshop in Paris.
Thank you, Cécile. Thank you, Olivier. Do you, Olivier, want to say a final word?
Final word. Thank you for attending this session. Always a great pleasure to meet you. For this first fixed income call, of course, it's not so much interactive, but we will still be on the road very quickly. Very pleased to see you in the coming weeks, at least some of you. Thank you. Thank you so much.
Thank you very much everyone for the very good question that were raised. It was not so much interactive as mentioned by Olivier, but still a lot of very good questions. Thanks a lot for that. I hope to see you very soon in the fixed income call or physically as mentioned by Olivier. Thanks everyone.