Deutsche Bank Conference Philippe Brassac CEO June 1 st 2016
DISCLAIMER This presentation may include prospective information on the Group, supplied as information on trends. This data does not represent forecasts within the meaning of European Regulation 809/2004 of 29 April 2004 (chapter 1, article 2, 10). This information was developed from scenarios based on a number of economic assumptions for a given competitive and regulatory environment. Therefore, these assumptions are by nature subject to random factors that could cause actual results to differ from projections. Likewise, the financial statements are based on estimates, particularly in calculating market value and asset depreciation. Readers must take all these risk factors and uncertainties into consideration before making their own judgement. The figures presented are not audited. The figures presented have been prepared in accordance with IFRS as adopted in the European Union and applicable at that date, and with prudential regulations currently in force. This financial information does not constitute a set of financial statements for an interim period as defined by IAS 34 Interim Financial Reporting and it has not been audited. Throughout the document, data on 2015 results is presented pro forma: transfer of CACEIS from Asset Gathering to Large Customers, transfer of Insurance Switch from the Corporate centre to Insurance and reclassification of the contribution of the Regional Banks under IFRS5. Within Crédit Agricole S.A., Retail banking now covers only LCL and International retail banking. Note: The Crédit Agricole Group scope of consolidation comprises: the Regional Banks, the Local Banks and Crédit Agricole S.A. and their subsidiaries. This is the scope of consolidation that has been privileged by the competent authorities to assess the Group s situation, notably in the 2015 Balance sheet assessment exercise Crédit Agricole S.A. is the listed entity. It notably owns the subsidiaries of its business lines (French retail banking, International retail banking, Asset gathering, Specialised financial services, and Corporate and investment banking). Crédit Agricole S.A. also owns circa 25% of the Regional Banks up to the completion of the intragroup reclassification of CCI/CCAs held by Crédit Agricole S.A. in the Regional Banks, expected in the third quarter of 2016. 2
A STRATEGIC AMBITION EMBEDDED IN FOUR PRIORITIES 1 Simplify the Group's capital structure Roll out an ambitious Strengthen the Group's Customer Project, 2 growth momentum in its 3 enhanced by the digital core business lines transformation 4 Transform the Group to sustainably improve our industrial efficiency 3
PROJECT TO SIMPLIFY THE GROUP S STRUCTURE Change in the Crédit Agricole Group structure Current Crédit Agricole Group structure New Crédit Agricole Group structure mutual shares (with voting right) and CCAs (no voting right) Local Banks of Crédit Agricole and other members 75% of capital Holders of CCI/CCAs CCIs (no voting right) Local Banks of Crédit Agricole and other members Holders of CCI/CCAs SACAM Mutualisation ~25% (through CCI/CCAs (4) ) 100% (2) 43.3% (3) Float RB 1 RB 2 100% RB 3 SAS Rue la Boétie RB 38 38 Regional Banks (excl. RB of Corsica) (2) 56.7% (3) Mutual share(s) (1) 25% of capital under the form of CCI/CCAs (no voting right) + Switch Guarantee RB 1 RB 2 RB 3 100% SAS Rue la Boétie RB 38 38 Regional Banks (excl. RB of Corsica) (2) Float 56.7% (3) 43.3% (3) Crédit Agricole S.A. Crédit Agricole S.A. (1) CASA holds at least one mutual share (or a limited number of mutual shares) in each of the Regional Banks, conferring it the status of mutual shareholder and therefore the right to hold CCAs (2) RB of Corsica, fully owned by Crédit Agricole S.A., will also be a shareholder of SACAM Mutualisation (3) As of December 31 2015 (4) The scope of the transaction includes all CCI/CCAs held by CASA except for (i) securities held by Predica, (ii) the portion of CCI/CCAs held in excess of 50% of the capital of 4 Regional Banks (Brie Picardie, Loire Haute-Loire, Nord de France and Toulouse31). This excess part will be retained by Crédit Agricole S.A. to comply with regulations regarding the capital structure of the Regional Banks, which authorise the issuance of CCI/CCAs above 50% only if they are held by the Central body (in total, residual value of 0.5bn) and (iii) CCIs potentially detained through liquidity schemes 4 4
PROJECT TO SIMPLIFY THE GROUP'S STRUCTURE Impacts on the financial situation of the Group and CASA Transaction overall neutral at Crédit Agricole Group level On net income On regulatory ratios On liquidity position (Intragroup funding of the transaction) No change in the scope of tax consolidation Immediate positive impact on the capital position of Crédit Agricole S.A. Positive impact of 41bps Pro forma fully-loaded 2015 CET1 ratio 11%: target achieved one year ahead of schedule, with better quality of capital Limited effect on net EPS of Crédit Agricole S.A Impact on net income, excluding one-time items, of around - 470m Elimination of the dilutive effect of scrip dividend, around 5% annually 1 Limited impact for the Regional Banks Regulatory situation sufficiently strong to largely absorb the impact of the transaction (average pro forma 2015 CET1 ratio of 17.3%) 1. Relative to a situation in which an option to pay a scrip dividend would have been proposed with respect to the 2016 annual result. Earnings-enhancement calculation based on the assumption that the take-up rate for the scrip dividend would be the same as that observed in 2015 5
PROJECT TO SIMPLIFY THE GROUP'S STRUCTURE Stability of Crédit Agricole S.A. business mix A balanced business mix which remained very largely dominated by retail banking activities until now and this will not significantly change between 2015 (pro forma) and 2019 Revenues: CASA business mix (excluding Corporate Centre) in % (excluding Regional Banks 1 ) Net income Group share: CASA business mix (excluding Corporate Centre) in % (including Regional Banks in 2015 underlying) 14% 14% 14% 27% 27% 27% 9% 13% 13% 22% 29% 30% 26% 25% 26% 33% 38% 35% 33% 34% 33% 36% 20% 22% 2015 underlying 2015 underlying pro forma 2019 2015 underlying 2015 underlying pro forma 2019 Retail banking Asset gathering Specialised financial services Large customers (CACIB and CACEIS) 1. The share of Crédit Agricole S.A. in the Regional Banks was equity-accounted until 2015 6
THE GROUP'S DNA A Customer-focused Universal banking model Recognised ability to distribute products created by our specialised business lines through our retail banking networks to meet our customer needs 7.8bn of revenue synergies in 2015 for Crédit Agricole Group An average of 9 products per demand deposit account 1 for Regional Bank customers at end 2015 Asset gathering Retail banking Specialised financial services Large customers 1. Source: Regional Bank customer database 7
ROLL OUT AN AMBITIOUS CUSTOMER PROJECT, ENHANCED BY THE DIGITAL REVOLUTION A Customer-Focused Universal banking model A model based on the expertise of all our business lines, on the excellence and the know-how required to meet the financial and wealth management needs of our customers A «Full Multi-Channel» distribution model A model that enables our customers to choose how and when they interact with their bank and switch easily between the various channels % of customers 1 BRANCH Prefers to have a face-to-face relationship with his adviser MULTI-CHANNEL Attached to the simplicity of digital for some transactions and the extra value provided by an adviser DIGITAL Attached to the freedom and simplicity of digital banking ~10% ~70% ~20% 1. source: McKinsey Retail distribution 2015: full digitalisation with a human touch ; estimation of banking customer behaviours on complex operations A strategic investment in customer relationships An acceleration of the digital transformation and foster innovation A new wealth advisory approach with a renowned sales/advisory method of customer advisers New products and services 8
STRENGTHEN THE GROUP'S GROWTH MOMENTUM Business line strategies RONE 2019 1 >16% Retail Banking RONE 2019 1 >25% Asset gathering Accelerate the pace of customer capture Continue our multi-product strategy Reinforce business in specialised markets Digital transformation and branch network upgrade Cost control Growth in the capital allocated to the Asset gathering business line Pursuit of value-creating acquisitions Primarily in asset management And, to a lesser extent, in wealth management Increase in costs to support growth, mainly in insurance :~ +2% p.a. business line costs RONE 2019 1 >13% Specialised financial services Further integration with the Group's retail banks Support the Group s networks Increase sales of insurance product at CACF Selectively relaunch profitable production in standalone business Direct channel Partnerships and car finance joint ventures Operating optimisation with sustained cost-cutting efforts RONE 2019 1 >11% Large customers A coherent business line serving the Group generating additional synergies Support the development of the Regional Banks and Cariparma in the mid-corp segment Develop market activities with corporate and local authority customers of the Regional Banks and LCL Servicing on market transactions for other Group entities whilst maintaining a low risk profile 1. RoNE calculated as the net income (post tax) on normative equity, on the basis of a capital allocation tailored to the need and risks of each business line 9
TRANSFORM THE GROUP TO SUSTAINABLY IMPROVE OUR INDUSTRIAL EFFICIENCY A 900m operational efficiency programme for Crédit Agricole S.A. An ambitious investment programme of 7.7bn over 4 years 1 to prepare for the future Annual cost savings by 2019 ( m) Cumulative investment over the plan period ( bn) 900 37% 16% 10% 26% 11% CASA cost savings by business line Retail Banking Asset gathering Specialised financial services Large customers Corporate Centre 900 36% 35% 16% 13% CASA cost savings by lever - 6 pts of Crédit Agricole S.A. s cost/income ratio by 2019 i.e. a cost/income ratio < 60% in 2019 IT transformation Operational optimisation and efficiency Control of non IT purchase Simplification of organisation structures 3.3 Regional Banks Industrial efficiency 4.4 Crédit Agricole S.A. Regulatory 7.7 Total Developing the business line and digital transformation 1.8bn in improving industrial efficiency and cutting costs in all business lines ~ 1bn in strengthening the Group's compliance and risk mitigation 4.9bn in developing the business lines and digital transformation (of which ~80% for Retail banking) 1. Cumulative investments. Investments on a cash-out basis 10
2019 FINANCIAL TARGETS Crédit Agricole Group Of which Crédit Agricole S.A. Revenue growth 1 2019 cost / income ratio >+1.5% >+2.5% <60% <60% Cost of risk / outstandings <35bps <50bps 2019 Net income Group share 2019 RoTE > 7.2bn > 4.2bn >10% Fully-loaded CET1 16% 11% TLAC excl. eligible senior debt 22% Pay-out ratio 50%, in cash 1. 2019 CAGR vs 2015 underlying pro forma for Crédit Agricole Group simplification transaction Q1 to Q3-2016 are impacted by the implementation of the project to simplify the Group s capital structure. These atypical quarters are fully taken into account in the financial trajectory of the MTP 11
Q1-16: Good resilience of the business lines in a difficult operating environment, reflecting the relevance of Crédit Agricole S.A.'s business model Change in Crédit Agricole S.A. s underlying NIGS ( m) (9.3%) 435 (15) +36 +61 (175) 394 Of which (41) for LCL +52 Underlying Q1-15* Retail Asset gathering SFS Large Customers Corp. Centre Underlying Q1-16* Stable level of AuM reflecting a satisfactory commercial performance in an adverse market environment Record origination, contribution to NIGS almost doubled Market fall and strong increase in volatility leading to wait-and-see attitude of corporate clients Fall in oil prices, reducing the volume of trade finance operations Decrease of LCL revenues, expenses and cost of risk being well oriented Strong business momentum in the last 2 years, with a deliberate policy to increase individual customer market share: growth in home loans outstanding at LCL almost twice that of the market Exceptional wave of renegotiations and early repayments since 2014: since the beginning of the decrease in interest rates in 2014, almost half of home loans outstanding have been renegotiated or repaid early Strong impact on net interest margin, with pressure expected to remain in 2016; turnaround point expected in 2017 Fees impacted in Q1-16 by market conditions, but healthy growth in insurance commissions and commissions on account management, services and payment instruments MTP targets confirmed: further potential to increase customer loyalty thanks to the implementation of MTP Group synergies * Excluding balance sheet optimisation, Regional Banks dividend, accounting items (DVA running, issuer spread, loan hedges) 12
OUR COMMITMENT TO INVESTORS PRUDENCE and PERFORMANCE Clarify the Group s organisation Project to simplify the Group s structure implemented in 2016 Immediately normalise our regulatory situation A 2019 CET1 target already achieved January 1 st, 2016 1 A TLAC-compliant Group Implement a realistic, but ambitious Medium Term Plan Main targets for 2019 NIGS: 4.2bn for Crédit Agricole S.A. RoTE: >10% Conservative assumptions within a controlled business mix Affirm our dividend policy 50% pay-out (as of 2015) In cash (as of 2016) 1. On a pro forma basis 13
Appendix
PROJECT TO SIMPLIFY THE GROUP S STRUCTURE Scope of the project to simplify the Group s structure One-off impacts for CASA Recurring impacts for CASA The intragroup reclassification of CCI/CCAs (1) held by CASA in the Regional Banks to an entity wholly owned by the Regional Banks, SACAM Mutualisation Capital gain: + 725m (2) Dividend on 2015 result: + 287m Q3-16 Q1-16 mainly Deconsolidation of the contribution from CCI/CCAs: - 1072m on an annual basis From Q1-16 The unwinding of the guarantee mechanism ("Switch 1") associated with the holding of the CCI/CCAs + 461m in revenues on an annual basis From Q3-16 The initiation of a loan granted to the Regional Banks to finance the transaction + 261m in revenues on an annual basis From Q3-16 Optimisation of the balance sheet - 683m in revenues Q1-16 In revenues: + 160m in 2016 + 190m in 2017 + 128m in 2018 From Q2-16 Total impact in Net income Group share ~+ 560m (2) In 2016 ~- 470m on an annual basis (1) The scope of the transaction includes all CCI/CCAs held by CASA except for (i) securities held by Predica, (ii) the portion of CCI/CCAs held in excess of 50% of the capital of 4 Regional Banks (Brie Picardie, Loire Haute-Loire, Nord de France and Toulouse31). This excess part will be retained by CASA to comply with regulations regarding the capital structure of the Regional Banks, which authorise the issuance of CCI/CCAs above 50% only if they are held by the Central body (in total, residual value of 0.5bn) and (iii) CCIs potentially held through liquidity schemes. This does not include the Regional Bank of Corsica, which is 99.9% owned by CASA (2) Not taking into account the price adjustment. As an indication, based on the first half of 2015, the adjustment would have been ~+ 0.5bn 15
2019 FINANCIAL TARGETS Business line indicators Revenues 2015-2019 CAGR 1 2019 Cost / income 2019 RoNE 2 Retail banking LCL Cariparma ~+0.5% ~+3% ~65% ~55% >16% >16% Asset gathering Insurance Asset management Wealth management >+3% <45% >25% Specialised financial services Large customers Consumer credit Leasing & Factoring Corporate & investment banking Asset servicing >+2.5% <46% >13% ~+2% <60% >11% 1. 2019 CAGR vs 2015 underlying pro forma for Crédit Agricole Group simplification transaction and analytical transfer of the cost of the Switch 2 guarantee to Insurance activity 2. RoNE calculated on the basis of a capital allocation tailored to the needs and risks of each business line (see Profitability - Risk weighted assets and capital allocated by business line ). 16
SOLVENCY PLANNING Fully-loaded CET1 ratio of Crédit Agricole S.A. A capital planning reconciling a cash dividend policy in a constrained regulatory environment and capital allocation favouring high profitability business lines Fully-loaded CET1 ratio - Crédit Agricole S.A. +4.6% -2.3% -0.7% -0.7% +0.7% -0.6% -1.0% 11% 11% 31-Dec-15 Net income after AT1 coupons payment Distribution AFS reserve Regulatory impacts 1 Selectivity & 1 optimisation Expansion of each business line Flexibility 31 Dec 2019 Target 50% dividend pay-out ratio, based on net income after AT1 coupon payments, paid in cash as of 2016 results Downward trend in AFS reserves expected in the context of rising interest rates Selectivity and optimisation actions, mainly on CIB Expansion of business lines with strong added value driven mainly by retail banking Leeway allowing flexibility in the solvency monitoring 1. Regulatory impacts, including IFRS 9 17
Crédit Agricole S.A.: Q1 impacted by the implementation of the project to simplify the Group s capital structure Readability of Q1-16 results is made difficult by different specific items: It includes non-recurring negative impacts of the project to simplify the Group s capital structure* (Liability management) for - 448m It does not include recurring positive impacts of implementation of the project to simplify the Group s capital structure, for ~ 150m per quarter*, which will be accounted for from Q3-16 Includes the annual contribution to the Single Resolution Fund (SRF) of 201m Crédit Agricole S.A. From stated NIGS to underlying NIGS ( m) Q1-15 Q1-16 Stated NIGS 784 227 O/w specific accounting items (15) +25 O/w Regional Banks +364 contribution +256 dividends O/w Liability management 0 (448) Underlying NIGS 435 394 O/w SRF (175) (201) 18
Q1 impacted by the implementation of the project to simplify the Group s capital structure Reclassification of the Regional Banks' contribution under IFRS 5 as of 01/01/2016 Final approval obtained from the Autorité des Marchés Financiers (AMF) on 06/04/2016 19