Good morning, everyone. I'm very happy and proud to introduce this presentation of Societe Generale's strategic orientations in French Retail. On late September, we started a study on the creation of a new retail bank in France through the combination of Societe Generale and Credit Unor. During the last 2 months, more than 500 people worked to design this new bank, executive obviously, but also bankers who interact daily with customers and experts who master new technologies. I would like to thank all of them.
They work on this project with team spirit, sense of innovation and passion. Thanks to the hard work, we are here today to present a new retail bank in France, a bank with ambition for its clients and its teams, a bank efficient and profitable, a bank with character. The same dynamic has been in action in Boursorama to prepare the next step of the exciting trajectory of this bank. To begin with, I would like to remind you what is the AG Retail Banking franchise and what are the fundamentals of our strategy. Our 2 divisions, French Retail Banking and International Retail Banking, are serving 25,000,000 clients, corporates, professionals and individuals in Europe, including France, Russia and Africa.
Retail Banking is a strategic asset for the group, accounting for 54% of its revenues. We aim for leading position in the countries where we operate. We are in the top three positions in most cases. Our product lines are strong, notably consumer finance, and we have developed important synergies with the other businesses of the group. As you know, this business is undergoing major changes.
They are quite similar in all geographies and have been accelerated by the pandemic: changing clients' expectations, acceleration of the digital trends, new entrants, uncertain microeconomic environment and increasing regulation. In this context, Our vision for the future is based on 5 key axis: the structural actions in all our retail banks. 1st, it is critical to implement differentiated relationship models to address the diversity of our customers' needs and for each of them to deliver a best in class client experience. Simultaneously, we developed new business models organically or by acquisitions. Our most impressive success has been Boursorama, but I could mention many of our initiatives: CHIME in France, Europe in Africa and more to come.
Of course, extending the range of products is also essential. We are as well very aware of the utmost importance to reduce the cost base. It is key to ensure the financing of our project and the profitability of our business. Finally, we act according to the highest standards in social and environmental issues, risk and compliance. Five main levers at our service of this vision.
1st, expertise. It goes without saying, I mean financial expertise, but also talents and skills related to the new trends in technology on data science. Digital tools. We are investing a lot in new technologies to deliver client satisfaction and internal efficiency. Use of data.
We have built strong data hubs. For sure, data management and artificial intelligence will be the spine of our new marketing, risk and compliance tools, open architecture. To deliver to our clients the best offer, it is necessary to build strong partnerships with third parties. As such, The new open architecture for asset management products in France is very emblematic. Finally, sharing best practices and tools across the group.
On new governance with a unique supervision of all the retail banking activities will help us to go further in this direction. With this global framework in mind, we can focus now on France. All the challenges I have mentioned are present in France. Nevertheless, The competitive environment is specific with the presence of mutualist banks, which maintain a strong physical presence in the territory. On this slide, we provide with a snapshot of the French retail market.
Let me just highlight 3 key messages. France is an attractive market with strong savings rate and dynamic corporate landscape. Trends are positive. The population is growing, and France attracts significant amount of international investments. Last comment, the retail banking market is growing on sound.
You know the group? We have 3 brands in France. Let's keep Boursorama aside for the moment. Societe Generale and Credit Unions have achieved a lot in the context of the 2017 2020 strategic plan. Societe Generale, with 7,300,000 clients has undertaken a profound transformation.
I will focus on 3 points. 1st, We have made a huge effort to upskill the teams and recruit new talents to reinforce our expertise. A special attention has been given to the corporate on mass affluent segments. We have redesigned the setup, closing 20% of branches and 30% of back offices. We have digitalized most of the client journeys on internal processes.
Credit Unor, a group of regional banks with 2,400,000 clients, has also significantly improved his relationship model. We have strengthened the setup dedicated to the professional segment. And for individuals, we have differentiated customer approaches relying on a new client segmentation. We have closed 50% of branches on different new branches format. We have launched the bank as a platform initiative and implemented partnerships with 3rd parties.
In addition, we have increased cost synergies among the 2 networks. We have mutualized the IT infrastructure as well as a significant part of the systems, operations and traversal functions. Sebastian will elaborate on the next phase, the creation of a champion. I just want to mention 3 points. 1, our assets are priceless.
Attractive and complementary client basis, strong brands, highly regarded franchises in some sectors and geographies, common values, last but not least, great teams. 2, now is the right time to go further because the COVID context is pushing for an acceleration, but also because the transformation of our network has been successfully created. Therefore, we can build on a strong starting point. 3, our target is ambitious. Our main goals are to be on the podium in client satisfaction in our 3 core markets and to deliver a solid double digit return on equity in 2025.
Turning now to Boursorama. Benoit will disclose the details of our project, but let me mention that Boursorama as a powerful business model. Prosorama has more than 2,500,000 clients. We propose to our clients a product offer, which is both simple and comprehensive. The operating model is scalable.
We can easily grow from there as we did during the last years. The client base has been multiplied by 2.5 since 2016 with only 100 additional staff. And obviously, we apply in BOSORAMA the group risk and compliance standards. BOSORAMA is a well structured bank, a safe bank. In a nutshell, both the foundation and the momentum are strong.
Therefore and because there is still an important potential in France for full online banking, our ambition is to reinforce our leadership. 2 main objectives: 4,500,000 clients in 2025, around €100,000,000 net income in 2024, rising up to €200,000,000 in 2025 with a return on equity in excess of 25%. A word of conclusion before leaving the floor to Sebastien. I'm convinced that these two exciting initiatives, The creation of a new retail bank combining the strength of Societe Generale and Credit D'Nord and the new acceleration of the development of Boursorama will significantly reinforce our position on the French market. Actually, this position will be quite unique with these 2 complementary models.
It will allow us to cope with the market changes, to better meet clients' expectation and to deliver a sustainable profitability. I look forward to share our future successes with you and all AG teams. Thank you for your attention.
Good morning, everyone. I'm very happy to be here today. As you know, on September 23, we announced the launch of a strategic study the combination of Credit Union and Societe Generale. Before we go into the details, I would first like to thank all the people who have contributed to the study for their hard work and team spirit. Over the last 2 months, there have been an outstanding level of commitment and energy from all the teams involved in the strategic dialogue.
I'm here today to share with you the main conclusions. Let me get straight to the point. Our strategic decision today is to go ahead with the combination of the 2 networks. We have gone as far as we can with the mutualization. So this is the logical next step to fulfill 2 objectives: maximize client satisfaction and establish a more efficient model.
Today, I will share with you our vision of the banks that we are building. But before, I will address the main questions you have raised about this combination by discussing 5 points: the model for clients the synergies, the IT the staff and the execution process. Let me start with the central point for us, the client. As Philippe mentioned, now it's time to enter a new phase and further shift the relationship model to offer a more personalized client experience and to improve the client journey. Digital is a cornerstone of our model.
Wherever relevant, there will be a digital solution. Our bank will be fully digital for the day to day banking of both individuals and corporates with more client autonomy for basic products and a higher share of digital sales. With more digital, branches will be centers of expertise. Places where clients discuss their needs with relationship managers totally focused on providing value added expertise and on finding the right products for clients. Our new bank will offer the right setup and product offer to each client category.
We will continue to develop tailor made solutions for corporates, leveraging on the expertise of an international group. For professionals, the new bank will be the trusted partner for both private and professional needs. We already have a strong market position in this segment, And we'll continue to offer the best digital tools with Shine, for instance. Our Fluent clients, which represent around €150,000,000,000 of assets The management must be treated differently. They have higher expectations in terms of advice and more appetite for value added products and services.
There will be a dedicated setup for these clients with a truly differentiating approach on savings in open architecture. For the individual customers, we'll fine tune our dynamic client segmentation to better target their needs, Leveraging on digital and data while decreasing the cost to serve. This will enable us to maximize client satisfaction. Our objective is to be in the top 3 with our core client base: corporate, professionals and affluent client. Let's hear what our teams say.
To achieve this objective, we will notably build on the strength of each brand and use the best of each proposition to offer more value to our clients wherever they come from. What is important to understand? As you can see on the slide is that we are improving the value proposition for each client, whether on offer, on setup or on digital. This client experience will be notably improved, Thanks to our capacity to make more focused investments. More specifically, we will also significantly enhance the savings journey of our affluent clients with our new innovative approach in open architecture.
Obviously, this combination will generate cost synergies with a direct impact in terms of net cost reduction in 2025, totally in line with precedence from M and A transactions. First, we'll have a more efficient network while remaining strong in the regions with the same local presence. More than 60% of Credit Union branches are within 1 kilometer of an Societe Generale branch. We will thus reduce the branch network by a further 30% by 2025. 2nd will have one set of central and support functions, 1 headquarters, all central functions merged and, obviously, more efficient separate functions, leveraging on best practices.
3rd, we will have one single IT system. Having only one platform to run and to upgrade will reduce our IT costs and focus IT development on a single system instead of diluting investment between 2 networks. Let's hear from our expert Bruno Delas on our IT strategy.
Our strategy is to build the new bank model by mobilizing all necessary IT resources and skills to create a unified platform. For the first step, we have chosen the Societe Generale platform rather than the Credit Unor platform. This is because it is digitally advanced, has richer function with more features and is more advanced in terms of Regulation. For the 2nd step, we will consolidate the Credit Union Platform into the Societe Generale Platform in order to optimize our IT costs and to reduce our time to market. For the 3rd step, We will concentrate our change investment more efficiently into one single platform.
This will, On the one hand, enable us to accelerate the business opportunities of the new bank and on the other hand, accelerate regulatory aspects and of course, the digitalization of the platform. This strategy will get us to our ambition of building the next generation of the French Retail Banking IS by 2025. So zoom number 1, how will we consolidate our platform. We will do that by a data migration in 3 steps. Step 1, Extracting data from the 2,400,000 customer of Credit Unions platform.
Step 2, Transcoding this credit union source data to Societe Generale format. Step 3, loading the data onto the target platform, which will, at that moment, total 10,000,000 customers. These three steps will be repeated various times over several months in order to expand the perimeter and the quality of the transcoding data until we obtain the right quality check level. During all this time, there will be no impact for the client and for the adviser. Once we have obtained the right quality level, the adviser and the client We'll switch from Credit Union Platform to the Target over the weekend.
After this switch, they will benefit from all the new available services on the Target platform. Within our IT team, We have the experience and the skill for such a consolidation project as we have already done this before successfully within our group, such as Societe Marcie de Credi. In the meantime, we will continue enriching the target platform. So What is our 2025 target? Our target is to build the next generation of retail banking platform.
Here are just three examples of major business requirements in the upcoming years. Example 1, we want to adapt Our level of services, depending on the potential of the client using the technology of our Call center. We will then progressively leverage this technology to all our channels of interaction with our client. Example 2, we want to pursue the rollout of our mobile and secure workstation for All employees of the new bank, they will have secure access to all collaborative tools and bank services while remaining, of course, in direct touch with clients at all times through various channels. On example 3, we have already started and we will continue to provide new banking and non banking offers and services from 3rd party partners.
This enables us to create a next generation marketplace like most big tech leaders have done before. We will also, in the meantime, keep building an open future using Our fintech ecosystem, grow our relationship with major tech players and make some of the platform available at European level.
Now what does this project mean for our employees? A new way of working with more autonomy, more expertise and better tools To help them create more value for clients, it will mean new development opportunities. We intend to invest more to develop the expertise of our staff. Continuous upskilling is essential and it will enhance their career development. Advice, expertise and commitment are the cornerstones of our model.
Needless to say, the transformation will be managed in a very responsible manner as we have always done in the past. A dedicated human resources setup will be put in place to accompany our staff to adapt to the changes. As you can see, We are embarking with our staff in a project that creates value. Turning to the execution of our project. Let's be clear.
We have the capacity to successfully execute. We have the experience, and we also have the right teams to execute. In addition, as it is an internal combination, we know the 2 entities perfectly, and we have mapped all the execution steps. Let's recap what is at stake here. 1st, on IT migration.
You have heard it from Bruno. For all these questions, we have adapted answers with a clear and under control warm up. 2nd on human resources, we will make sure that our key talented staff are retained. Pertaining to our clients. We will constantly focus on improving their satisfaction, including in the transition period, and we have a clear roadmap on this point, too.
Last, our organization and timetable are designed to ensure successful execution and get significant benefits from 2024 and full benefits from 2025 onwards. IT and legal projects are scheduled to be finalized by early 2023. This time frame is totally consistent with the usual standards to address all these points smoothly. We know that we can count on experienced and committed teams to make this combination a success while maintaining a safe, effective and efficient run. Now turning to financial targets.
As you can see on slides, this combination will generate significant cost reduction with project costs in line with market standards. The 2025 runner target is between 11% and 11.5% under Basel III, equivalent to 10% under Basel IV. Turning to the future, let me share with you our vision of the client journey of the Bank of Tomorrow. On this first slide, you see our clients as they stand today with a significant part of our revenues made with corporates, professionals and affluent clients. We have a diversified and attractive client base, and we are particularly strong in most dynamic regions.
Within each category, sub segments have their own specificities and require our tailored advice and expertise. This is what drives our model. Moving on to our ambition. We want to be the winning universal retail bank. In our view, several factors will make the difference.
We'll further shift our model to combine the best of digital and human experiences. Leveraging on digital to free up commercial time and focus experts on value added advice is key to better serve our clients and to allow for accessibility, immediacy and expertise. We intend to maintain a strong regional presence with local expertise, and we will leverage on digital, data and AI to further improve the client journey with innovation bid at the heart of our model. We strive to provide the best products and solution adapted to each client's category and sub segments, be it in house or manufactured by partners. And obviously, we will deliver operational efficiency with an optimized cost base.
Of course, we will keep our best in class compliance and risk standards. And last but not least, responsibility will be the DNA of our retail model. If we take one of the most important pieces of the model, the use of digital, data and artificial intelligence, We are already very well positioned. Many awards and rankings prove that in Societe Generale Networks, digital penetration is already above European peers, thanks to a best in class app that we will keep enriching. More broadly And just using some very illustrative examples.
We aim to beat the bank which knows its client better to personalize their experience. As an example, we have been the 1st bank to offer a cont aggregation with Fidiceo. It now provides personal finance management and aggregation of private banking client assets. These functionalities are a strong differentiator in a context where affluent clients are keen to use more digital services. We also want to accelerate to have the best interactions with our clients.
To do so, we have to handle the flows and use the right channel for each need. Our project, AG Talk, based on AI, We manage the flows and direct the client towards the best channel immediately. Today, 60% of the day to day banking, which can be done fully online, still goes through branches. We estimate that AG Talk will help us to avoid 35% of incoming calls and emails in branches to focus our teams on expertise. This is also a way to improve experience with bankers.
Predictability of current behavior through machine learning will further help us on interactions. Overdraft predictability is already deployed on AG Networks, saving each banker 40 minutes a day. Finally, Digital will be used to integrate risk and efficiency standards. Just one example. We want to position the bank as a leader in security and digital protection.
And we have the tools in house like Mosaic, which needs less than 0.5 seconds to detect a fraud on instant payment. Our clients already make good use of digital, and we set ourselves target which reflect our vision of digital usage going forward. For 2025, we target to have more than 80% of eligible products combining physical and online. We aim to have around 30% of digital only sales and eligible products. And we plan in 2025 to have more than 80% of the corporate offer available with electronic signature.
Let's now have a look at the offer for clients. What matters is the value proposition for clients, be it in house or, as I said, manufactured by partners. This is also the way our IT system is designed. You will find some selected example on this slide. This illustrates our culture of innovation with many concrete initiatives already launched and more to come.
On group expertise, for instance, we'll have local ESG expert to accompany SMEs with their energy transition. Another example is Shine for Entrepreneur and Very Small Businesses, a dedicated responsible neobank we acquired this year, which simplifies the banking and administrative experience of our clients. We can also mention our internal start up call and all the resulting initiatives and partnerships. There will be a lot to say as well, but for time's sake, let me Focus on our value proposition for savings. Savings is at the core of our retail banking strategy, and we are pioneering new business models here to offer our clients the best products available on the market.
Therefore, in addition to Amundi, we have partnered with those who do it best. We have teamed up with BlackRock, Dnca, La Financier de Leciquier, Mirova and Primonial. Societe Generale will be the 1st large French bank to offer an open architecture for savings with an innovative offer with 7 partners enabling clients to access the best expertise on the French market and internationally with a systematic integration of ESG Factors. We will also be the 1st retail bank to offer a complete range of SRI funds and environment solutions through open architecture. This will enable us to improve the value proposition for clients with its wide range of offers combined with personalized advice based on the risk profile and client appetite.
Let me now elaborate a bit of the setup. As mentioned, while moving from 2 networks to 1, we plan to remain as close as we have always been to our clients, not cutting any proximity. Regions will remain at the center of the model, bringing reactivity, proximity and understanding of local situations. As I said, we will optimize our network with the same local presence. We plan to decrease our network from around 2,100 branches in 2020 to 1500 in 2025.
And branches will be focused on expertise for clients. Teams will be empowered to better answer client needs. Decision making process will be made locally with an agile organization. Let's elaborate on the importance of the local footprint. To conclude, this project is completely in line with our strategic priorities at group level.
1st, client centricity, totally embedded in our vision. 2nd, ESG, at group level, at business level of our clients. It's a key priority for us. And third, efficiency. We are building a more efficient model With significant recurrent synergies, we will be delivering sustainable profitability.
Obviously, We could spend hours working through our various initiatives, discussing our positioning by each category of clients and dedicated strategy. But my time is up, and I will be very happy to answer your questions in the session to come. Let's now turn to Bostorama.
Bonsoirama Reached its position of leadership only 3 years ago and since then has left far behind its historical online banks and neobanks competitors Despite more and more competitive environment and thanks to a strong growth acceleration, in 2017, our goal was to reach 2,000,000 clients by 20 With more than 2,500,000 clients as of today, this goal has already been exceeded and the customer base has been multiplied by 3.5 in the last 5 years. Today in the French market, Boursorama is the leader among challenger banks. Boursorama is a leader in number of clients, both in the volume of existing clients and in the flow of new clients. Boursorama is the number one online broker and the 1st financial and economic portal in France. Boursorama is by far the most well known brand among challenger banks, But has also made a name among large traditional banks.
And Boursorama is the most appreciated bank by its clients with a high Net Promoter Score of +48 and a rate of recommendation of 90%. But beyond growth, our clients are mainly quality clients. They are the ones all banks want. They are young, 36 years old on average, wealthy and active. 84% use the bank every month.
In addition and due to a rapid growth, most clients are still recent And they have not yet fully realized their potential. To make a long story short, Boursorama is the 1st challenger bank with the highest growth pace in France. To understand Boursorama and its potential, it's key to understand its consistent and unique model. We succeed because we have a strong and powerful alternative banking model. All starts from a full client autonomy.
Clients become clients, by products, use services, manage their accounts, take investment decisions by themselves. This is made possible thanks to an operational model designed for automating all the steps from front to back office. This is the crucial point. The world company is focused every day on this central goal. How can we improve our efficiency to create the best user experience and to generate the best underlying profitability.
Keep in mind that Boursorama is a full fledged bank run by 800 people. The 2nd huge strength compared to competitors is our offer. Boursorama is the only digital bank with a such full range of banking products in open architecture to get best quality, allowing us to generate loyalty and revenues. In a nutshell, we could say that Boursorama has a full efficiency of a pure digital player with a full range of offers of a traditional bank. Our alternative model generates client satisfaction, Recommendation, growth and at the end a high level of profitability.
As Benoit just mentioned, Our relationship and operational model is our key asset. Hard to replicate, it reconstitutes our main competitive advantage. It is based on 3 totally aligned elements. First, it relies on our native and digital only offer. We have no branches.
Our clients can access to our full range of product and services through best in class mobile apps. We've been ranked top 1st in France in our mobile app. 2nd, it is based on our digitalized and automated processes even on some complex products. Two examples. In mortgage loan, we produce each year €3,000,000,000 Which represents approximately 2% of the market with only 60 people from front to back.
On the consumer alone, already 20% of our production is done with No human touch. 3rd element of our efficiency is related to the way we manage client interaction. We invested in AI based Solution to be able to answer clients' question 24 hours a day through our chatbot Elliott. Elliott is already answering 40% of clients' question and represent from this year the first channel of interaction with our clients. This cost efficiency can be illustrated in 2020.
We acquired more than 550,000 new clients with only 8 new people in Botsorama. All in all, the cost to serve our client is €70, And it has been divided by more than 2 since 2015. Boursorama is also able to equip the client and generate NBI. On average, the clients in Boursorama have more than €15,000 in terms of assets and loan, which is far beyond the €500 of assets recorded by Neobanks. This level of activity can be explained by 2 things: the product themselves.
We offer our clients The best value proposition in terms of pricing, performance and user experience, either by proposing our own products or by proposing open architecture, especially on the brokerage activity or long term savings. It is also related to our ability to use data. We have no salespeople in Boursorama. So we use data to prove the right product to the right clients. And more and more, we develop solutions to digitally advise our clients, especially in the daily banking and in the saving spaces.
We can see this level of activity at 2 levels, macro level and micro level. At a macro level, if you're looking at the evolution, we have €30,000,000,000 In terms of asset and loan, this evolution is totally consistent with the evolution of the client base and each product segment as an evolution beyond the market. At a micro level, if we look at the yearly evolution of assets of new clients, we can see that it is consistent by vintage And that it's been multiplied by more than 3 in the 1st 7 years of client relationship. BOSSARAMA is best in class in terms of cost efficiency. We can generate NBI, and this powerful business model has been fully demonstrated in 2020 despite the COVID crisis.
In terms of commercial activity, we hit numerous records. First, we hit records in terms of the number of products subscribed by our clients in the total amount of savings from our clients, in the amount of production of mortgage loans and in the brokerage activities. In the brokerage activity, we fully leverage our leadership position and we recorded already a number of trade that is Twice the one that we had in 2019 with even a record day where we trade 100,000 trades a day. This tremendous commercial activity is reflected in the underlying NBI that rose by 35%. And at the same time, the operating expenses, including marketing costs, were nearly flat and the cost of risk, including forward looking add ons, declined by 6%.
This outstanding year reflects The intrinsic profitability of Boursorama. If we look at the P and L of Boursorama, we really have to keep in mind that the pace of growth of Boursorama has nothing in common with any other competitors in France. The acquisition costs of Our more than 550,000 new clients is taken for full the year of the acquisition. They are 90% variable and they represent 40% of total costs. If we correct the P and L from this massive acquisition effect, Bostorama can be profitable at a touch of a button with a net result That exceeds €40,000,000 and that had doubled compared to 2019.
We strongly believe that Boursorama is the online winning model.
So what about the coming years? As said by our heart, 2020 was a very positive year and as proved if needed the relevance of a full digital model. All economic studies confirm the fact that the crisis of the COVID has accelerated existing trends. 4 of them fit perfectly with the positioning of Boursorama. About digital acceleration, no comment.
About buying PowerSeq, we offer best prices on all the products in order to make save money to our clients. This is not magical. This is one of the consequence for having the best cost to serve. About a possible reshuffle of savings landscape due to low rate interest context, it seems that our clients start to think about a riskier and longer investment strategy in order to get some yield. It could lead to a revival of the brokerage activity and of new ways of investing.
It's perfect we are number 1 on this field. To complete the picture, CSR is more and more important in clients' choice. Here again, Boursorama is natively a CSR firm integrating this dimension In our no paper processes, in our clients' offers, for instance, we have dedicated CSL investment profiles, green consumer loans, Solidarity Liberates and in our staff organization. We have just signed last week an agreement with our Trade Union in order to put in place a very innovative new way of work. And we got very clear roadmap on this matter.
Thanks to its leading position and because Boursorama is fully in line with the main learnings of the crisis, it's time to accelerate. What are our targets in the coming years? First, we want to become a bank of more than 4,000,000 clients by 2023 in France. To get there, we plan to carry on a massive growth in the next 3 years. It doesn't mean a significant change versus our previous strategic plans that we have successfully implemented.
But it means a strong support from Societe Generale as we should generate a €230,000,000 loss during the growth period to build up a such bank. To achieve all this, we will not exceed 1,000 people, staying focused on efficiency. As soon as we stabilize growth after 2023, we will be able to generate a profit of about €100,000,000 by 2024 and about double in 2025 with a RONI above 25%, Being so one of the most efficient bank on a financial point of view. To conclude, Boursorama want to be A major retail bank in France by 2025 with 4,500,000 clients and with a €200,000,000 net profit.
Good morning to everyone. I'm delighted to say a few words of conclusion for this session. One thing we have nurtured in the last years It's our culture of entrepreneurs, of pioneers able to build new business model thinking forward and to disrupt if needed. And let's admit, the banking sector has not been that good at doing that. As we all know, perspective for retail activities in the eurozone will remain challenging going forward.
First, the health crisis has a significant impact on our economies. 2nd, We are probably in an environment of low interest rate for long, and we have to draw all the consequences on the business models. The need for cost efficiency is even more significant. 3rd, maybe more important, This crisis accelerates trends. We are in the middle of a technological and digital revolution.
We see the development of new competition. Client behaviors are evolving quickly. And we have to anticipate, we have to be among the banks to take that technological wave. We have to think about the client needs in the next 5 to 10 years. And in particular, for individual clients, I've already shared with you my conviction that saving advisory will be at the heart of the relationship between individual clients.
And let's admit that there is room for improvement in that field regarding the banking industry. Thanks to the transformations implemented in the last 5 years, our French retail networks have been able to post resilient profitability including in that crisis. But we have to anticipate, we have to remain ahead of the competition. That's why We launched in September the study to combine our 2 French retail networks. We engaged during the last 2 months with our staff in our branches.
We engaged the discussion with our clients and our bankers. This was an intense and remarkable work led by Sebastien. Today, we confirm our ambition and capacity to further differentiate and build a unique dual model in French retail. 1st, built a new bank by combining our 2 networks taking advantage of their respective leading expertise. This new bank will be best in class in saving advisory and in the quality of investment solutions for individual clients and will also enhance its leadership position with corporate and professional clients, fully leveraging on new technology.
The second element of this dual model will be to bring Boursorama to maturity. Boursorama will not just remain the undisputed leader in online banking in France, but will become one of the leading banks for individual clients with 4,500,000 clients and with a unique value proposition. Number 1 in terms of client satisfaction, the cheapest bank in France and the profitability on capital, which will be almost 3 times higher than any traditional network. Client centricity, ESG and responsibility, Innovation and digital technology will be at the heart of this dual model, which is the right one going forward. This is my conviction.
And I'm fully confident that we have the right team to build it successfully in the coming years. Thank you. And let's now open the Q and A session.
Hello. Good morning to all of you. Thanks for attending this Q and A session following our presentations on our 2 strategic initiatives for our French retail activities. I hope you've been able to watch our different presentations. But we will be there with all our management team to answer your Let's start.
Let's keep perhaps the discipline, just 2 questions per person. That would be nice. So let's turn to you for the first question, please.
We have one first question from Mr. Jean Francois Neill from Goldman Sir, please go ahead. So we have another question, sir. We have from Mr. Stefan Michael Thalmann from Autonomous Research.
Sir, please go ahead.
Yes. Good morning, gentlemen. I hope you can hear me well.
Yes. Good morning, Stefan. How are you?
Fine. How are you? Thank you very much for hosting the event. My two questions are the following. You talk about Net savings that you target by 2025, can you give us any sense of how high the gross savings that you are generating during this period to get to your net savings number?
And the second question relates To the cost to achieve these savings, the €700,000,000 to €800,000,000 Could you maybe break those costs Down into major buckets, in particular, how much of that relates to software impairment, how much relates to severance spending and how much relates to the breakage of lease costs. Thank you very much.
Yes. Thank you, Stefan. I will turn to Sebastien Pierre Poteau to answer your two questions. Sebastien?
Yes. Good morning, Stephane. So coming back to your first question, we are steering our trajectory on an absolute cost base. And in our view that's what is important. And I guess that's also an important indicator for you, the kind of indicator you are looking at.
So this net reduction, the cost base in 2024 2025 Yes, includes, of course, the synergies on the project as well as investment in growth initiatives and the costs. When you compare with Croixellence in terms of M and A, mergers and M and A transactions, Percentage of savings is totally in line with precedents. And regarding CTA, We gave a range between €700,000,000 €800,000,000 Again, That's totally in line with peers, this kind of amount. We don't give The break between the different components of CTA, what is important is to keep in mind that percentage is again Totally in line with President.
Thank you. Next question.
Next question is from Mr. Jean Francois Noel from Goldman Sachs. Sir, please go ahead.
Hi, good morning. Can you hear me?
Yes. Now it's much better, Francois. Hello. I hope you're well. Yes.
Thank you very much. We could not hear you at the beginning, yes.
Sorry, my bad. I just wanted to ask, not necessarily related straight to the financial target, but more operationally. So I just wanted to ask, when you think about the mergers as well as the IT integration, so for example, for having been clients Of Credit Union and so on. I know that when branch change, account number can change. For example, recipients of payments on the app can be removed and have to be reinstigated.
I just wanted to understand how you believe, how you see or how you measure The efficiency of your IT platform with regards to compared to that of competitors and How you planned for the merger of the networks from a client transition perspective, if any, and the branch closure, which are very, very significant and Obviously, an acceleration from the past in order to minimize client attrition as typically happens for all banks With Merge Networks. And the reason why I'm asking this is I just wanted to understand what you baked in, in the 11% to 11.5% Return on net equity revenue trajectory.
So yes, thank you, Jean Francois. Perhaps we have the benefit of Bruno De Leste on the AI team, but I will turn again the floor to Sebastien, who
will take globally your questions. Okay. Thanks, Jean Francois, thank you very much for your question. So I will let Bruno to last comment on how it works Precisely on the IT side when a client has a change of branches. Regarding Your question about the impact for the client and what we have embarked in our financial trajectory in terms of attrition due to the changes of branches.
So keep in mind that, first of all, We have an overlap between the 2 client basis, which is very, very limited, around 1%. 2nd point, what is important here is the fact that the branches of the two networks are very close to each other, very, very close. So what does it mean? It means that clients will not be affected by branch changes. More than 60% of the branches of Credit Union and Societe Generale are less than 1 kilometer far.
So it means that we can optimize the network while keeping the same local trends. It means also that for the clients, Its new brand its new branch, if any, will be very, very close from the current one, which is clearly Something very positive because it limits to limit drastically the attrition due to the change of brand shift. In our financial trajectory, obviously, we embarked prudent assumptions in terms of revenues, Assumptions also in terms of attrition. But even in a stressed scenario in terms of attrition, We are very confident with our targets between 11 and 11.5 under Basel III. Bruno, can you comment on the IT side?
Okay. Hello, everybody. You know that the IT strategy is based on 2 main topics. The first one, we have decided to choose the SJ platform because this one is the more advanced in digitalization. And you know that during all the projects, we want to continue to concentrate our investment on this platform to reach the target of the new model for the new bank.
At the same time, We have decided to consolidate the Credit Unor platform into the Societe Generale platform. And we will do that because we are used to do this kind of project within the group or outside group.
And maybe just to give you an example, when we talk about branches we are which are very close to each other. I'll take just one example in Paris. In the 17th District of Paris, Credit Union is located 45 as we detailed, 45. Societe Generale, 40 as we detailed. So it's just an example, but it explains why we are very confident that optimizing the networks will not increase or have a very important impact on attrition.
Thank you. Next question?
Next question is from Mr. Omar Fall from Barclays. Sir, please go ahead.
Hi. Thank you for taking my questions and for the interesting presentation. So Just firstly, just working it out, if there's €5,000,000,000 cost base for the networks and Maybe another €200,000,000 or so for Boursorama. If I take 30 bps at cost of risk, which is the Through the cycle level, to then get to your RONI targets, it kind of implies a revenue decline from this year like €500,000,000 or so. I know you don't want to give certain guidance on revenues, which is understandable in this environment, but I'm sure there's something wrong with that math.
So maybe you could help me with that. Then the second question is just on Axorama. Could you give us a sense of what that proportion of Primary active clients at Vossohama were what they are now. I think it suggests 50% on Slide 58, but I'm not sure if I'm reading that right. And how conversion of active To primary clients plays into the strategy going forward.
I know we discussed this quite a bit at this Divisional presentation last year. So maybe just an update on that would be helpful. Thank you.
Hello. Good morning, Omar. I will turn to William first on your maps and then to Benoit, the new Head of ProSORM. William?
Hello, Omar. Happy to run you through the bits and pieces that Behind the trajectory, but we have taken 3 Assumptions, yes? First, it's very prudent assumptions on revenues, but it doesn't mean that we are seeing declining revenues. Then we take an assumption of normalize a gradual normalization in cost of risk. So at the end of the period, We come back to a more normal situation.
And you have to factor in, on top of that, what Sebastien As explained regarding cost. So overall, if you take some expansion in the RWA phase in 2020 It's pertaining to Basel IV. You get fairly easily to the number we've articulated, but happy to go more in detail
In the session afterwards. Benoit, please.
Good morning, Ramon. Thank you for the question. I think you have seen the figure. It's 50% of our clients, 5 0, which are in the primary bank with us. I think it's related to the fact that we put in place some new strategic actions.
I'll just give you an example that we have some inactivity fees right now regarding debit cards. But as we explained it for a long time now, Globally, our outstandings are growing exactly at the same pace than the growth of the client database. You have seen that we have multiplied by 3, 3.5 the number of clients in the last 5 years. The global outstandings of the bank, if you take deposits, for example, it's Exactly the same. Our current accounts on average is €2,800 per client, Just the current account.
And globally, it's €15,000 if you take into account all the products We have with our clients, I mean, credits, savings, investment products and so on. So we do something which is the building up very strong and very active bank with our clients.
Thank you. Next question?
Next question is from Madam Julia Miotto from Morgan Stanley. Madam, please go ahead.
Yes. Hi, good morning. Two questions for me as well. So on Boursorama, You're targeting a very fast growth of 4,500,000 customer by 2023. But Aren't you afraid of some cannibalization?
Boursorama is very efficient, but From my math, you make more or less €120,000,000 of revenues per customer versus €750,000,000 in the branches. So If you can comment on any potential for cannibalization, that would be the first one. And then second, so 20 24 For the first cost synergies and then full by 2025. So can you comment on timing? I mean, why So long versus some other mergers that we're seeing in the market, which are achieved in 2 to 3 years?
Thank you.
Yes. Hello, Julia. I will turn the floor to Sebastien on your two questions.
Yes. Good morning, Julia. So on your first question regarding potential or risk of cannibalization from Boursorama. So everything starts with our client base. And keep in mind that we have half of revenues coming from corporates and professional.
And if I add revenues coming from Aptiom clients, the total is above 70% of revenues coming from these 3 categories of clients. So we clearly are not the most at risk regarding potential cannibalization. And let me also remind you that we aim to be at the forefront Of digital clients who want it, and we are convinced that some clients And particularly within our client cloud base, want human expertise. That's something very important. At the end, we will cover All the spectrum of client needs with 2 different models, both so am I digital only and our more physical model, Combining the best of human with the best of digital.
So we will cover close to 15,000,000, 1,500,000 clients with 2 different models. It will be a unique setup on the French market and a very, very good one. Regarding timing of cost savings, That's a fair question, obviously. But cost savings mainly come from IT and from optimization of Networks and Central Functions. And the trigger, what is the trigger?
The trigger is the IT migration and the effective Legal merger of the different entities. Everything will take place early 2023. And I want to go into the details. Regarding the IT migration, the timetable 2023 is perfectly consistent with market standards. And I will let Bruno elaborate a little bit on this.
But that market standard and market standard With an execution risk, which is in our view more limited compared to Precedence in terms of merger because we know by heart the 2 systems, the 2 IT systems, And we have a team with very high level of experience for this kind of migration because they did exactly the same kind of migration at Credit Agricole or at BPCU in the past. Regarding The social timetable. Again, it's consistent with French law. We have to respect the French social regulation, which is more demanding, more stringent than in other countries. That's why You cannot compare merger outside of France and merger in France.
The social law is different and again more stringent in the French market. Having said that, we said in the presentation You have this morning, 2023, early 2023, that's the maximum for us. Let's be clear, Julia. And we will work hard to have the best timetable. So if we can move quicker, we will do it.
And we are working hard on both sides, IT, legal merger to have the best timetable possible, but taking into account the social constraints. Bruno, do you want to say a word about TriG?
Okay. On the market, the time frame to do this kind of job It's respectively 24 months for the data migration and 6 months for switch the 9 banks from 1 platform to the other. If we could do better than that, we should. But for sure, we know that only in 1 year, not now. And perhaps the last comment from Benoit Ghazani on the attrition and where we collect new clients.
Now just to give you an idea of the cannibalization today, If you take the new clients who come in for Ramon, it's exactly the same level than the market share of Societe Generale and Mercedes Benz, No more. So it means that around 85% to 90% of our new clients come from other banks. So I think that this is the first point to have in mind. The second point is roughly 15% to 10% of clients coming from the group, Societe Generale. Did they leave or can they leave Societe Generale without Because as you know, there are a lot of competition on the digital point of view.
So if you take the 2 elements, I think it's quite We are assuring and there is no specific effect between the different brands of Societe Generale. Thank you. Next question?
Thank you. Next question is from Mr. Tarik Ennijet from Bank of America. Sir, please go ahead.
Hi, good morning, everyone. A couple of questions, please. First of all, if you can share with us what's the net promoting score For SG and A Networks and Credit Dunard, you've disclosed the one for Bostroma, which is very high, one of the highest. But just See some comparison and then we can see the evolution of that metric, which is very important. Second question on revenues.
You had very nice chart where you show basically the your ambition to grow the marketplace with partnerships and your own FinTech and so on to build the fee component of the revenues. Is that would that be a big contributor to revenue growth in the coming years? Or It will remain anecdotal for your 2020, 2020 5 horizon. And still on the revenues, last question. On Slide 34 for Boursorama, you showed that you would have delivered a strong growth, you would have EUR 230,000,000 cumulative losses in the next 3 years.
So I presume this client's acquisition losses will be mostly in the revenue side. And is that actually should we expect Pressure from the top line from that component in next 3 years? Or is it split by costs within the €700,000,000 to €100,000,000 or mostly in revenues?
Yes. Hello, Tariq. I will first turn to Sebastien and then to Benoit on your specific questions on both formats. Sebastien on the NPS, what we can share, tell you qualitatively.
Okay. Good morning, Tariq. So on your question regarding NPS, what I can say what I can tell you is we have different Current satisfaction between Credit Union and Societe Generale, that's a fair comment with different trends between the two brands. So what we have done when we Our thought about the model is take the strength of the different the 2 different brands. Let me give you an example.
In terms of professional clients, client satisfaction for Credit Uno It's significantly higher than Societe Generale. So our decision, perfectly consistent with this Difference in terms of current satisfaction is to take credit union's model to address professional clients Regarding corporates for SMEs, again, as you know, It's in terms of client satisfaction, stronger than Societe Generale. So we have adjusted the model to take the difference into account. So we had a very granular analysis of the client satisfaction in order to build The best model for each client category. Regarding revenues, again, As William said, we have a prudent approach in terms of revenues when we talk about projection.
But we are determined and very committed to increase fees and contribution of fees in our model. As far as fees are concerned, Financial fees are obviously very important. And when you talk about partnerships, what does it bring in terms of Revenues contribution of revenues. We expect a lot of our new setup in terms of savings. We will operate in an open architecture model.
It will be a unique setup on the French market for large banks, And we will obviously expect a lot of this new architecture, open architecture with A commercial push in terms of financial fees, which will be significant. In terms of insurance products, Again, we have different initiatives to increase the equipment rates, which are still below what they should be for protection and casualties. So that's a lot of initiatives we are pushing very hard to increase the share of fees. At the end, our view is the following. We want to offer to our clients The best products.
Again, be it in house products or manufactured by partners because we think that This is the best way to get client satisfaction and more revenues. Benoit
Yes, thank you for your question. You have to you have understood the fact that there are 2 periods of times. The first 21, 2023 included where we want to grow as fast as possible and with a global loss of €230,000,000 We don't disclose the breakdown between what is in revenues and what is in the operating cost as we don't Disclose the client acquisition cost. But you're right, there are things which are in revenues, I mean customer rebates for this part. And regarding operating costs, it's regarding expenses related to the marketing part.
But What is very important to understand is the fact that we are saying that we can acquire 2,000,000 clients in 3 years. I think this figure is maybe important to have in mind. The second thing very important is the fact that 90% of the acquisition cost is variable And all is a direct expense related to the plan. There is no amortization. So I mean, if we decide to not acquire clients, we are directly without any delay.
Thank you. Can I just follow-up Sorry, on the first one, maybe it wasn't clear to me in the presentation, but are you keeping the traditional brand and SG and A network brands? Or are you merging towards As you look at brands as well.
Okay. This question is also an important one. So regarding the brand strategy, We are still working on it. And so we don't give the detailed brand strategy today because we need more time to define precisely the brand strategy. Having said that, we want a brand strategy perfectly consistent with our ambition To be very enrooted in the different territory in the French market.
So we will not have only one grant covering all the country as a whole. We will use a current component in terms of brands with Another, which would be more local. And obviously, we are Analyzing the strength of the brands of Credit Union. You know that Credit Union has different brands, Societe Mercier du Credit, Courtois, D'Arnaud. And so we are looking at all these different brands and to see What is exactly the impact in that territory.
Thank you. Next question?
Next question is from Madame Borean Quirell from UBS. Ma'am, please go ahead.
Yes, hello. Good morning. Just two questions for me. So how much are customer rebates and marketing costs budgeted at Bostorama in 2021. And it would be interesting to know how this compares to 2019 and also have a view on whether these are actually down to 0 by 20 5 in your budget.
And then the next question is perhaps a bit more high level. I was wondering whether you have given some thoughts on the impact that the digital euro could have on your business in the coming years. Thank you.
Yes. I will turn hello, Lauren. I will turn to Benoit for your question on Under the cost of acquisition. And then back to Philippe Henrique, who is monitoring our overall retail banking activities and Particularly on the payment side, he follows the SEPI initiative and also what the how the ECB thinks forward regarding the digital currency. Benoit?
Yes. Thank you for your question. Just we don't disclose the client Acquisition cost, but you can I can just give you an example? If you take the basis 100 on 2020, It will decrease by around 10% next year. And I think that you said that cost acquisition will be 0 In 2025, but it's not the case.
We continue to acquire our clients in 2024 and 2025 in order to continue to grow, but that's a Very lower pace than during 2021 to 2023 because the goal is really to have in mind these two periods of time, 'twenty one, 'twenty three, we grow as fast as possible to reach the critical size because it's now that we can Get this market share. And in 2024 and 2025, we continue to grow, but that's a very low level. And We are in a stabilization period in order to monetize and to get the most profitability as possible.
And knowing, Lauren, that's again, that's my guess. But with a brand which will be Better and better known and already Boursorama, as you know, is one of the best known brand. You should think forward in next 3, 4 years with More than 4,000,000 clients. I can't help thinking any way that there will be also even further traction from the brand We've limited cost for client acquisition. But we don't bet on this, but my conviction is that it will be the case.
Philippe, perhaps on Long term. Yes. Hello. Thank you for the question. There is Still a lot of work on this topic about the digital euro.
At this stage, it's not quite clear. Is it just a new Payments, capacity or is it more than that? Of course, we are part of all this discussion. You know that ECB has launched a study, and we have to submit our answers by mid January. In addition to that, I would like to say that, of course, payments, it's a very important component of our strategy.
I think that what is very important is to keep in mind what The needs and expectations of the clients. We have invested a lot during the last Sure, both on the corporate side and the individual side on this topic. We will continue. It will be even easier because we will focus for investment in one platform. And regarding payments, we also believe in mutualization with our peers.
As you know, we have Trondractes, which is a platform share for the moment with the Banco style, Maybe with other partners in the future. And yes, as mentioned by Frederic, we are also part of the API initiative with over 15 European banks. Thank you. Next question?
Next question is from Madam Annke Reingen from RBC Capital Markets. Madam, please go ahead.
Yes, thank you very much for the interesting presentation and the detail. Two questions, please. The first is on 2025. So obviously, it's a very long time from here. I just wondered how you Gordon, about defining on how the customer relationships would look like in 2025.
I saw on the slide, you say 30% of digital only sales of eligible products. I mean, couldn't it be higher? And then on the 2025, is that now What we should consider as where the group could aim to deliver more could aim towards to or is French retail just Longer dated. And then sort of like sorry, second question is on the cost. So you say €5,000,000,000 for the combined group To go down, what is the remaining €600,000,000 cost?
Should we assume they stay flat to 2024, 25 or will they be coming down as well? Thank you very much.
Thank you. Hello. Good
morning. Can you just perhaps rephrase the last sentence to your first question?
I have not understood this Concept of long dated.
Can you repeat, sorry, this part of your question?
Yes. I was just wondering, I mean, the path, obviously, you always had the strategic plans out to, let's say, The last one was out to 2020. So is now 2025 the year that you think the group will aim towards Without predicting when what your next strategic update might say. Thank you very much.
Okay. Listen, on that first, the belt Of the program and the combination will be completed basically in 24%, let's face it, the 80% of the savings. So we've said 20 Fine, because there will be just a complement in terms of synergies. And I think in retail, With the kind of transformation we are facing and probably it's also good to take a slightly longer term horizon for also projecting. On the client division, listen, to be frank, I think it's It's a little bit difficult to predict what the French will do.
As you know, the French are probably the one which are the less sensitive and Which are moving the slowest to digital channel. But nevertheless, we consider that the crisis will change that. It's going to further change it. And perhaps From that perspective, Benoit and Sebastien can elaborate on what they see on the ground. So we are taking, if you wish, A reasonable assumption.
If it goes more quickly, we will have anyway the tool. And I always say when I Speak to the people in charge. We have to build anyway the banks for 2,030 and not for 2025 anyway in what we are doing. Regarding the bigger picture for the group as a whole, we will stick when we will communicate for the 3 year horizon financially. Again, I think it's good sometimes to look a little bit beyond when you think about strategy.
I'm always very surprised that when I hear Industrial companies, they think about 2030 and beyond and that effectively from a financial point of view, we are restricted to 3 years. So Again, we will do the exercise for the financial projects for 3 years. But beyond for certain businesses, I think it's fine also to look a little bit beyond. Benoit, I wanted to react on the digital behaviors. No,
I just wanted to mention the fact that's the The fact was the 2 solutions, I mean, both for Armand and the networks is the best solution because whatever the speed of the change, We have the best position as a whole on the French market.
I think really, we will be unique in that. I don't I think in this industry, very few people in the industry have been able to build alternative models, Let's face it, and you look at alternative models, you're usually looking outside. For me, Boursorama has been our internal startup. And what we are doing basically is bring that model to maturity. 2025 is not the only leading Online bank in France.
It will be one of the major banks in France for individual clients. And it would be very complementary with our new bank with network. I don't think personally in 2025 whether or not We like it that everybody will just go to online banking. They will just see people willing to meet with someone with digital Channel, in particular, on the savings side. You know my conviction that when people will go in the branch in 2020 When I say an individual client, not a corporate, it's a very different story here.
And Boursorama does not cover the TL. When you talk about individual clients, my personal A lot, a lot of the core of the relationship will be centered on savings. And here, we think it's Good also to have this alternative model. But Sebastien, to your second question, Angel. Yes,
regarding Client evolution and what we offer in terms of Digico. As Frederic said, usually, French clients are a little bit less keen to digital usage and peers. But things are changing rapidly because of the sanitary crisis, and They might accelerate the usage of digital. In our case, what does it mean? 1st of all, during the IT migration, we will keep enriching our IT platform in terms of digital functionalities.
And so keep in mind that working on the IT migration Doesn't mean we will stop our investment in terms of new functionalities and enrichment of the IT system. We will do both at the same time. 2nd point, What do we want to do to increase the digitalization of The physical model, so to speak. For individuals, we are already very well advanced, but we will continue to develop online sales and e commerce with online only purchasing for simple products and remote saving for more complex products. You mentioned in your question, Anchor, peers, We should be very cautious in the comparisons with peers because sometimes We mix our components and mix digital only and remote saving, Which that sounds different.
So we gave this morning in the presentation the 2 figures. Our objective in terms of digital only products, 30% in 2025 with you all. And our objective in terms of remote savings for more complex products with 80% for individual of products which would be or would be sold thanks to remote interaction and electronic signature. So first objective for individuals developed Online sales and e commerce. 2nd objective, enable remote interaction and regulate flows by channeling flows and customer requests.
That's our project called as you thought, that's very, very Important in terms of efficiency and client satisfaction. And it's also very important because we want Our teams and our staff to be focused on commercial objectives. 3rd point, we will pursue customer empowerment and usage of self care usage on the day to day banking, on savings and on administrative tax. And on the corporate market, Again, we want to offer our clients a global vision of their own relationship with Societe Generale and reach the daily banking offer Accelerate dematerialization in self care. Again, self care is very key.
And improve Commercial efficiency with better digital talent journey in order to be to have more impact commercially and increase the cost saving.
Well, so I think a question on cost, if I'm not wrong.
Yes. A question on cost, again, was On the timing, can you sorry, would you mind repeating your question, Anke, on costs?
Yes. Sorry, it was hidden in there. Yes, in 2019, see the French retail banking cost base was more like EUR 5,600,000,000 with the combined entities making EUR 5,000,000,000 out of this. I was just assume a question wondering what happens to the other €600,000,000 starting base in 2019, will that come down as well or should it remain flat? Thank you.
Well, I think that well, again, I'm not sure to understand exactly what you say. It's the whole issue, I think, is the transition of the top eight of the 2 networks. As we've said, it will not be a linear projection, but the idea is really to decrease the cost base, as we've said, In 2025 versus 2019 by the amount that we just said. So perhaps happy also to comment on the issuance on the bilateral basis, the issuance.
Thank you very
much. Next question?
Next question is from Mr. Guillaume Tiburon from Exane. Please go ahead.
Thank you. Good morning, gentlemen. I have a clarification and two questions. The clarification is with regard to the Basel IV RWA, does that include the floors or not? And if it's not, then I'm surprised it's such a big inflation of RWA.
The two questions. 1 is high level. Is there any interest in the long run To, for example, say to all your mass market clients in Societe Generale that the only way Going forward is to actually migrate to Boursorama. So is it realistic in the 2025 to 2,030, for example, Long term vision or is it totally absent? The second question relates to your return on notional equity target.
What's your RWA assumption? And if you don't want to give a revenue target, which I don't understand And why you don't, but if you don't want to give one, can you at least try to quantify for us the headwinds to come on revenues From the right situation if rates don't move from here because that's what we can assume. Yes.
Hello, Guillaume. I hope you're well. I will turn to William on your two questions on risk weighted assets, both How we model, if you wish, the impact of Basel IV, which is largely related to a personal risk and again depends on the allocation we'll be doing in due course, But more fundamentally. And then the way we see billion to 25 the behaviors of clients. But, William, what can you say to Guillaume?
Hello, Guillaume. First of all, overall with regards to Basel IV, We will make an update in the next quarter. So from there, we
have taken the latest assumptions we have. You're right to point out that is an increase in capital allocated stemming from Basel IV, Yet it is not included it is not including the output flow. As you know, output flow anyway for us as a whole You know that's a big number and it's not before biting before 20.28. So we didn't want to have some of the pro form a adjusted from something that may happen in 2028. So there's a good €1,000,000,000 uptick in the capital consumption.
The main factor behind it is the fact that we assume the rebalancing Of operational RWA, RWA pertaining to operational risk. As you know, between businesses, taking under the assumption of an ILM equal to 1.
And you know just Guillaume, we have time to refine the allocation, but it's proportionate to revenues. And so the question is how do you allocate that? And to a certain extent, you get the business, it will stay. So we tend to think at this stage, we will allocate according to this proportionality of revenues. And in practice today, it would mean more Capital for that than in the current situation.
So it's the way we think of pro form a situation of Basel IV. Philippe, can we imagine Bostorama moving to 10,000,000 clients in 2030? Yes. This is the I think Guillaume's question, underlying question. Yes.
Thank you for the question. I will Elaborate on what has already been said by Frederic, Sebastien on Benoit. I think there is definitely the space for the 2 models. And I think that it's very important to let the clients decide because if suddenly you said to a client, You move to both for a month to our mass market clients. They will not move because as of today, they still expect dual experiments, digital and human interaction.
So I think that we will have this Capacity in the French market, which again will be unique to propose the 2 approaches. And I would like also to stress, As already said that when you look at the future bank, the combination of Societe Generale and Credit Uno, Always keep in mind that 50% of the revenues are coming from corporates and professionals, which remain key priorities for us. And regarding the remaining 50%, 2 third of it are coming for the massive client clients. So I mean that this model is clearly dedicated on the long term to this kind of clients. And regarding the mass market, I'm sorry, I made a mistake.
2 thirds of the remaining 50% are related to mass appeals. And regarding the mass market, the priority for the new banks, I mean the combination of Tejeral and trade dinner will be both to increase the fees with these clients and to reduce, Adjust on an ongoing approach, the call is over. Thank you. Next question?
Sorry, Frederic, you have not answered my question on the RWA growth you model and the revenue headwinds if rates Don't move.
Listen, Guillaume, again, we've commented qualitatively. We would you will have further erosion of margin will stay for some time on the deposit. We keep Assumptions of negative rates for the short term alongside the whole period. So it will weigh on the erosion of margin. On Deposits, as we've said, now we also think about the development of fees from different elements, Savings, including with the new partnership model and open architecture we've put in place, some business model development with New business model, as we've said, insurance.
And again, we have put, I would say, overall conservative Figures on the revenue side. On the risk weighted asset, I think the bulk is really on the Basel IV, but there is a relatively lower increase. William, maybe if I can complement,
try to think what is behind your question. As Frederic said, in terms of Rate assumption, I think we are pretty consistent. We don't see short term rates crossing the negative, the zero line for the whole period and for long term rates, possibly towards the second half of twenty twenty two. So These are fairly conservative assumptions and actually well in check with forward rates. So you're right to point out that then apart from fees, which Sebastien has already commented upon as well as Boursorama, We need to have some volume growth.
And yes, there is some organic RWA growth over the period Consistent with some production on the credit side. Please remember that the weighting It's not necessarily very high for individual clients, for example, related RWAs. But yes, there is some fuel given to the business over the period.
Thank you. Next question?
Next question is from Madame Duncan Lee from JPMorgan. Madame, please go ahead.
Yes. Thank you for the presentation. So I just have 2 quick clarifications actually. The first one is on So going back to Borforama, so if we look at your Slide 32, I mean, if we were To understand a little bit the impact of client acquisition costs, I mean, is that just going back, I mean, without getting the exact numbers, is it so it's mostly in So it mostly is the customer rebates impact on the revenues as opposed to the marketing costs? Or I mean, Just to get a little bit of a feel of how they are split between revenues and costs at least for this year.
And then my second question is just on the timing of the cost So from all that you said around the data migration and the social constraint. So is it fair to assume that there's actually almost no impact In the next 3 years until 23 included on cost saves in French retail from this merger.
Yes. Bastien, hello. I will turn first to Benoit for the split, if I may say qualitative estimate, please a split of The revenues and cost of the acquisition of clients and then to Sebastien again on what we will do in the transition. Benoit?
Yes. The goal of this slide 32 was to show the underlying profitability of pro form a because as we try to Playing it, we are going to acquire around 560,000 clients this year. So it's That's a pace of acquisition, which is a little pace even compared to all type of new banks, So the neobanks, after banks and so on. So there is a huge acquisition of Clariant this year. And as we said before, We do not amortize any client acquisition cost.
So it costs during the year we acquire clients. So this slide explains the fact that on revenues, you have a part which are the customer rebates. We could say that it's a major part of the client acquisition cost. And you have a part in the operating cost related to media, AdWords and so on and partnerships related also to acquisition. So the goal is To show that with no acquisition, it's a theoretical view, you would have a profit of €43,000,000 during the nine 1st month of 2020.
I think what is interesting is maybe more of the fact that it's a double than last year with the same kind of Definition rather than the total figure. I mean but if you come back to the profitability in the coming years, It's still showing the fact that if we decide to reduce the acquisition, we will be profitable directly without any delay And with a variable client acquisition cost at 90%, nine-zero. And I think very important to have in mind also the global efficiency of Bofana because we talk a lot regarding client acquisition cost. But At the end of the day, it's a bank with 800 people internally who are managing 40,000,000,000 euros of outstanding in all the activity of the individual clients and with 2,500,000 clients. So it's I think it's very important to understand this part of the story to have really in mind how we can be profitable.
Yes. Maybe I could add that. I mean, we are Boursorama has very strong foundation from an operating standpoint, compliance risk. There is also a strong momentum. And in addition to that, what has been demonstrated in 2020, as mentioned by Benoit is really the flexibility, the agility of the model.
And yes, during the Q2 and close of the Q3, we were at the breakeven. So it demonstrates all the potential. So we want to capture this momentum because we think that the coming 2 years are critical And it's a kind of magic moment. So we want to build this client base and after to fully leverage on it, and that's why we are committing today for this net income to Boursorama in 2024 2025. Thank you.
Sebastien?
Yes. Thank you very much, Geraldine. Regarding your question on costs, let me Start by saying that this is a very ambitious project. We are not talking about Only one bank when we describe Credit Union. We are talking about 9 different banks within Guadivino.
So we are we have a project where we will have Legal mergers, taking into account the fact that we have 9 legal entities, different 9 different banks to be merged with Societe Generale. I will not repeat What I said about social constraints, social French law, which is more stringent found in other countries. And regarding IT migration, as Bruno said, it's Tangible, totally consistent with precedents and market practice. Having said that, we will get 80% of the net savings in 2024. And I will repeat what I said.
We are working very hard to have quicker timetable And obviously, quicker timetables would mean a quicker timing as far as the synergies are concerned.
Thank you. Next question?
Next question is from Mr. Moccikrok from Bank of America. Sir, Go ahead.
Good morning. So some more questions on costs, please. Firstly, a clarification. Could you just clarify whether The outer year cost reduction guidance assumes the fallout of the single resolution fund Contribution that's attributable to the Retail division. Secondly, could you Give us some idea of what you think the normal cost inflation for the French retail business is if you were to do nothing?
And then thirdly, could you just clarify, is this effectively it on cost measures until 2025? And once you've negotiated this with the unions, do you therefore have no more scope to implement any further measures until this project is complete? Because usually you seem to do things every 2, 3 years, have a new plan for retail costs, But this would obviously be a longer period for a single project. Thanks.
Hello, Matthew. William will answer on whether or not the decrease or the disappearance of the single results of 20%. Not knowing that the amount Can you answer that part of the question perhaps? Yes. In
In 2019, for French Retail, the SRF contribution was about 70%, So it went up 25% for the other business in 2020. And you can assume that We deduct we take the assumption that there is no more a fair contribution in 2024.
But that included in practice the disappearance of the In the calculation of the net decrease that we've given.
Yes, absolutely. So we have the order of magnitude.
2nd,
I think we need to deliberate a little bit on what we can do again socially, Matthew, because Once we are embarked in this project, we cannot easily add First, additional things which could be seen by trade unions as an anticipation of the project. So they are, if you wish, constrained during the implementation of the project. How long will it take? The project itself will be actually completed socially in practice around 2024, the bulk will be completed in practice. We will be, I think, able To potentially resume an additional thing.
But I think if you wish, it's a little bit premature to anticipate what it could be Based on what already we have in mind with the significant adjustment of our organization, business model, Reduction of network. Listen, there will be also a story beyond probably, but I think it's a little bit difficult to anticipate. And personally, it To me that what we are going to be able to deliver here is the profitability on practice when you add the 2 components That very few players will be able to achieve in practice in the eurozone, retail and certainly at least in France. So I think, again, at We will stick there and we will see how it goes. As we've said, we may be able to anticipate the timeframe.
We don't factor that, let's be realistic. But if we can, we will do. But at this stage, at least we think it's a pretty Ambitious and attractive roadmap for Eurozone Banking Retail Activity, which as we all know, we face the challenge of the current and environments including on the rates. Did we answer your question, Matthew? Or was there something else?
The only other one was on the kind of the normal cost inflation you would expect if you did nothing.
Normal If we did really nothing, not moving the staff, etcetera, when you have the fixed cost salary, which might be around 1.5 It's done traditionally in the French labor market. So if we were to do nothing and the bulk of that of the cost of the maturity of the cost Yes. So I would say 1.5%. And then on the rest, investment in IT, well, it could be Flat is to 1% increase, but it's a little I don't know how to answer your question, to be frank, on the expenditure. We might have next year, let's just take into account that we have not traveled at all basically this year.
So you might have Some increase or back to normal next year on just the traveling a little bit, things like this, but it's a little bit complex. I would say to take 1.5 if We were to do nothing, perhaps.
Okay. Thank you very much.
Next question?
Next question is from Mr. Andrew Lowe from Berenberg. Sir, please go ahead.
Hi, thanks very much. My question just followed on from what you said about the revenue dis synergies From the merger being relatively limited. And I just wondered, if this is the case, what's prevented you from doing This merger earlier, I. E, why do it now and not 3 years ago? Thanks.
Is it all, Andrew?
Yes. That's all.
Okay. Okay. So you have one question. Listen, first, I will leave Philippe Emery, who was before taking over the full retail, Has been the Chairman and CEO of Axitibunort. So we can elaborate on what we achieved in the last 5 years and why.
In a different world, I'll take it also. I think we cannot all admit that this crisis is not an insignificant event and will effectively further 3 good changes in client behavior on digital and further consolidate the low rate environment and the more difficult environment. But Philippe, please answer that question. Yes. I think that the key part of the answer, it's really the worsening of the And the acceleration of many trends by the pandemic and not only economic trends, but usage of digital, DFOs of of the clients.
And the second point is that I do believe that we have not wasted the last 3 years because as you know and as it was And this morning, we have worked a lot both on Societe Generale and in tribunal. We have continued to increase the cost synergies between the 2 entities, notably regarding IT. And I think that all this work is going to help us a lot for the additional steps. So basically, the additional steps are described by Sebastien are we will completely neutralize the IT platform and therefore operations. 2, we will have cost synergies related to the mutualization of the networks of the branches We thought leading territories and the 3rd component is the merger of the head offices.
I think that what we have done again during the last 4, 3 years are really useful for the additional steps we are doing today. And if I may, I'll just at my level add 2 things. First, There was potentially a consolidation operation, which could have been Considered for Credit Union that we did not decide to pursue. And the second thing, I think that we did the maximum that we could in Adapting the networks as we did and that we were in a market where most of the players do not adapt the networks, It's a lot in the last 5 years. I think really bolstering that strategy would have had it we would have been in the deadlock Let's face it, reducing further the network would have meant an issue.
And I think that It's really the right time now to do something different because of the environment, as we've said, but beyond because the fostering What we have done very efficiently in the last 5 years would not have functions. So when you add all the I think it is now the right time. And I think the job which has been done, which is remarkable, I would like to insist because It's not a top down decision. It's also a work built with the teams and based on our decision to consider that option Makes a lot of sense currently.
Next question?
Thank you.
Next Question is from Mr. Jacques Henri Gaulard from Kepler Cheuvreux. Please go ahead.
Yes. Good morning, gentlemen. Two questions. The first one on Boursorama, The expected cumulative losses between 2021 and 2023 of €230,000,000 I think it's a delta over Your own budgeted losses. If we can just have a view of how much extra losses that represents just for modeling purposes?
And then the second question, I guess, again, a little bit top down. The cost savings are back ended 20 'twenty four, 'twenty five, there are going to be restructuring costs in 2021. So you can always imagine people panicking and say, oh, that's it. We're going to have another couple of years of transitions Societe Generale. But in a way, when I look at what you've announced as well, it seems that irrespective of revenue guidance, the P and L is going to be carried by your EUR 4 €50,000,000 cost savings in the Investment Bank in 20 2, 2023 before that particular cost savings is taking over.
Is it the right way to look at your long term financial projection? Thank you.
Hello, Jean Pierre. I hope you're well. Let me perhaps answer your second question and then we will go back to both for Amar. First, let me reiterate that in terms of dividend policy, we calculate the dividend on underlying net profit, we will not take into account this CTA. So if you wish, yes, of course, in terms of P and L, it will impact.
But I think for the investor and given the kind of payback, and again, I hope people understand the need to To further transform the French retail networks given the environment and the risk of waiting would be enormous. So here we have, I think a real opportunity first to drive to conduct an internal consolidation, domestic Consolidation, to be frank, it's exactly what people do elsewhere. But we have the only opportunity in France, let's say, that is The internal one and with benchmarks which are very similar. As we've said, we've taken into account the timeframe which Has to factor at this stage the constraints of the French social environment, if we can And we have CTA costs, which are exactly in line with what we've seen outside, including what we've said, IT, investments, Training and IT system amortization. So I think really we are in line with anything that I've seen outside.
And then we work, of course, on other businesses, projects. Let me just say capital markets, yes, certainly. We will update you on that after the Q4 results with the new head of this activity. And I would like also to insist that in terms of solution, being able to reduce our cost base, We have also still cut off remediation. 2021 is an important year for a year where You know it's the end of the legal procedures and settlements.
So we are working a lot on that. Of course, we put that behind us and which will help also to reduce the cost that we have and which are for some of them allocated in the businesses or in the Present anyway beyond 2020 onwards. So I mean, yes, we will have this cost Still to carry. But as I said, in terms of dividend policy, we neutralize. And I think we have, of course, the capacity to finance and for Benefit of the long term profitability, which will be definitely much above, I think, what we can deliver today and sometimes Except by certain market participants.
So I think it really makes sense. In terms of Porcelain, can you elaborate, Benoit?
Yes. Thank you for your question. What we can say is the €230,000,000 during the period of 2021 to 23. It's the cumulative losses we are going to implement in order to reach more than 4,000,000 clients by the end of 2023. And the level of losses will be more important than what we did previously.
Why? Because we are going to acquire globally the same Number of clients, the same volume, but in 3 years compared to 5 years in the previous period. Because If we take into account the previous period, we have 5 years to get 2,000,000 clients acquired, and it It would be roughly the same for the period of 2021 to 2023. So it's really the idea to invest now in order to get the clients as soon as possible, which is the best mania to have the revenues as soon as possible also. So It's a question of market share, competition and capability to make revenues.
Okay. Very clear. Thank you.
Yes. Philippe, you want to add something, Philippe and I? Yes. Yes. And why timing is so critical?
It's because Bouffs Arna has this unique asset that it has a simple but comprehensive range of products. So that's very important. Bouffs Arna is not only An account, a card on an app is also full services regarding savings, financial services, credit, insurance. And these products, actually we have demonstrated that we are selling them to our clients. And this year Has confirmed the validity of the business model.
Now let's face it. Of course, it was a very specific year, but it has confirmed the validity of the model. Next question?
Next question is from Madame Flora Bocayu from Jefferies. Please go ahead.
Yes, good morning, and thank you from myself as well for the presentation today. The first question I wanted to ask you is, given that you had kind of We announced this project of merger in September. I wanted to see if you could share maybe some client commentary that you in the past 2 months. I'm thinking here especially about the midsized corporate clients that you have at Credit Union, whether they have been supportive of the project? Or you feel it's not been very well received?
What kind of client attrition commentary you can derive from, I guess, the discussions you've had with corporate clients over the past 2 months, actually, as you know. The second question, if I look at the deep dive that you did on French retail back in May 2019. I think back then you had planned for a phase of client acquisition at Boursorama in 2021 with the target to have more than 3,000,000 clients in 2021. And then you were talking about Phase 2 of improved profitability. Now obviously, We get seen in our message, but just a different timing where you now target this client acquisition phase to be longer than previously expected, towards More than €4,000,000 in 2023.
So the question I want to ask today is why the 2 year delay, the 2 year change in the timing of the phases? Isn't there a risk that in 2 years' time you could push further this profitability phase because you continue to see good client acquisition? And the reason why I'm asking is because when I look at the Slide 34, where you show us the swing in profitability for Boursorama, It seems it's going to be the bulk of the rolling improvement towards 2025. Thank you.
Hello, Florent. Good morning. I will turn to first Sebastien and then to Benoit Sebastien first.
Yes, Laura, thank you very much for your question. So as you said, this last September, 2017 September, we announced The study and the launch of the study. So we didn't describe the model. We are describing model now, our objectives and how we will achieve Higher degree of term satisfaction, but that's today. So during the period of time of the study, We got the first very limited, very, very limited client feedback.
And the client feedback from Credit Union and especially semi's clients was explain to us what would be the model. And will it be different from the trade in North model as it is today? So that's what we will do starting now Because today, we do describe the model. This model will still be based On proximity, which is one of the key values of Credit Union's model and value which is very important for, As we said, for SMEs. So we are very confident because all the choices Mad, so far, respect Credit Union's strength and this proximity Reactivity will be, 1st, kept and second point, enlarge to a broader client base of 10,000,000 clients.
Benoit?
Yes. Thank you for your question. I think that you're right. Last year, the target was to reach 3,000,000 clients in 20 21, and the decision has been made to accelerate and to grow faster. Why?
Because we are Totally convinced in the fact that we are generating more and more net results with more clients. It's as simple as that. And we think that the depth of the volume of clients we can acquire is higher than what we I think it's a goal is really to have a better running and To maximize also the volume of net result and profit we can do in 2025. And the most clients we get, the most results we get. It's why we have changed the targets, and we have said that now it's more 4 1,000,000 clients by 2023.
It will be more than 4,000,000 compared to 3,000,000 in 2021.
And if I may, Florent, again, I think that the bank with 4,500,000 clients, I guess, Brand awareness, which might be second to none. It's already again when you look at the brand awareness, the overall format is very strong. It It appears in the top 3, top 4, will be even different in terms of client acquisition. So I think that first, even if you take the rhythm of 3%, 4% multiplied by €4,500,000 that leads to close to 200,000. So by nature, the bank will be very different and we can go to something very different in terms of client acquisition, I think.
And then getting fully from the construction, which might have taken a few years, but which will be unique, In my view, even in the eurozone, I don't have in mind something at least very few will be similar and certainly nothing in France. And it will be a way compared with all your questions on the client evolution, I think to be able to have all the tools To be ready to anticipate and answer evolutions with that. We might not be able to predict today, but which might happen, but at least we'll have the dual model, Which will make sense potentially for all client needs. Next question?
Next question is from Madame Laurence Quares from UBS. Ma'am, please go ahead.
Hi, hello. Sorry, another Very quick one for me. Could you please tell us what's the tax rate you've assumed in 2023, 2024 For your calculation of return on normalized equity, please? Thank you.
For performance, 25%.
That's right. I think we are For
the whole, we haven't made any guidance for 2024. But overall, as we said, there is no reason That they would derive from what we have said for group level, which is around 24.
Yes. And for France anyway, you know that The tax rate which is going down according to plan. This government has not changed that. So we have taken Progressive reduction of corporate tax.
Thank you.
Any other question, please? Next question.
We have one last question from Mr. Pierre Cheuvreux from CIC. Please go ahead.
Hello. Good morning. Just want to have some clarification regarding the project in the concrete aspect Because you have given the example of 2 branches in Avenue Daterne, which is, I would say, the simplest Example in terms of rationalization. I could have taken Reparen, I could have
just taken Reparen, yes. I just even have you determined. Reparen, I can tell you it's the same. Sorry, sorry, interrupt.
I know the This is not my point. I know very well the original That's because I have been the auditor, as you know, during several years. And I know something is that clients are very attached To the name of the it's called bank call, As far as I understand, you are going to make legal mergers, but it's not very clear regarding The maintain or not of the name of the company. So my point is, I am in Marseille, And I have Rue de Paradis, a branch because you know I know you have a branch of Societe Generale, Rue de Paradis, General, I'm Ruede Paradi and you have, of course, a big branch of Societe Marcese Credit. You legally merge.
But at the end of the day, if I'm a client of Societe Marcere du Credit, if I have only one branch, what would it be? It would be a HJ branch. It would be Societe Mercier's Credit branch. Would it be HJ Marseille branch? You see what I mean?
Yes.
And the corollary of my question is, out of the 600 branches you are going to close, which part Will be in real Provence, I would say. And which part will be the major acts of Edge Network, Lille Paris, Bordeaux, Lille Paris, Lyon, Mercedes, Bordeaux, and gentlemen.
You see
what I mean?
Yes. Yes, please.
My last question is regarding the breakdown of restructuring costs, which are quite significant, I You mentioned a lot IT, but what would be IT part of these restructuring costs and what would be a people part of these restructuring costs? Thank you.
I will let Sebastien to elaborate again to come back to the brand and your question on We don't disclose the breakdown. There are also social elements behind that. But as I said, on the pure social thing, nothing very dissimilar to what you did previously. And again, we need to have first conversation with the trade unions on that situation. That's why we can't at this stage give more granularity.
Yes,
yes, so Pierre, no mistake, Having one single legal entity doesn't mean having only one branch on the tenant in the French market, Okay. So our objective is very clear. And as I said, regions are different. So brand strategy should be different depending on the regions. And in the south of France, it won't be the same blend than In the north of France or in the east of France because we are talking about different client expectations Yes, and different regions.
We have to work we have to keep working on the brand strategy, But I summarized earlier today the main principles and commitments. It will not be only one single branch on the entire territory. And Regent will be treated differently by using The first part of the brand, which will be associated with Societe Generale, whatever the final decision within Societe Generale's universe. And the second part of the brand will be regionalized. So you mentioned Societe Mercier du Credit is a strong brand.
We are analyzing The different brands of Credit Union. In order to take into account client's perception of the brand, We want to make no mistake because at the end of the day, the brand strategy is very important to demonstrate fidelity visavis the history of all these brands, But also be able to have a brand strategy perfectly consistent with the different factors Which should be taken into account, such as an example, the fact that this brand strategy Needs to be very efficient when we talk about dividend.
And I think to answer your question on the branches, I'd like you to insist, You will again, it's a little bit difficult to answer your question because what we would could have been doing going forward if we had kept The 2 networks separate is to cut maybe 2 branches in as route because they might have been not the right Scale at the end of the day and keep maybe the 2 branches with Renault. And the whole purpose At the end of the day, we'll keep one branch in approach, whether it's Grenache National or Plus General Du Bois, I don't know. But the idea is one branch there with scale, the mass benefit and then maybe close one of the branches we drain Whether it's the one close to Montparnasse or the Napoleon Duchamp. So I think really and it was reflected in Sebastien's
workshop with all the It is something which is working very well. Yes. Keep in mind Pierre that as we said, 60 percent of Credit Union and Societe Generale branches Are close to each other from less than 1 kilometer. And this percentage, 60 percent is true in all regions. In some regions, it's higher.
In other regions, it's at least 60%. So we have this flexibility to optimize network without Living Cities. And that's something very, very different compared to what we did over the last year When the DTF when Societe Generale decided to cut branches in some cities and Credit Nord did the same in the same cities, So at the end, both brands left the cities. This kind of things won't happen again.
And again, a last part of comment regarding this topic is that we are also working a lot on the format of the branches, Which means that we probably have less some of branches and with branches with the capacity to deliver the expertise The right level of advice to the clients. So that's also an important component to take into account Because yes, the clients are coming less and less to the branches, but when they come to the branches, they want a great experience from an advisory standpoint. Thank you. I think there's no more question.
Yes, there is no more question, sir.
Okay. Well, we are perfectly on time.
Thank you very much for your participation and have a very nice day and keep safe of course in this still and certain environments. Thank you, Farag.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.