Credit Agricole S A : Transcript of the fourth quarter and full year results 2021

Crédit Agricole SA

Fourth Quarter and Full

Year 2021 Results

Thursday, 10th February 2022

Usage Interne

Crédit Agricole SA Fourth Quarter and Full Year 2021 Results

Thursday, 10th February 2022

Welcome

Philippe Brassac

CEO, Crédit Agricole

Thank you so much and good afternoon everyone. Philippe Brassac speaking. First of all, thank you so much for being connected with us. We are very pleased to comment and to present our main set of results and figures for both the fourth quarter and the whole 2021. It will be very interesting for me to listen to your questions and I shall attend the whole meeting, but my only takeaway message is simply the fact that we succeeded to get as many bangs in this very interesting and very excellent results, thanks to the fact that they were absolutely linked to this huge operation - a successful operation - to preserve and to save the economy from the consequences of this crisis of the COVID crisis. Naturally, in the next years we shall have to drive the shift from mobilising in the face of the crisis, to mobilising in favour of the transitions that are useful and necessary all around us.

I will stop at this point and I naturally give the floor to Jérôme Grivet to sum up our different results and try of course to answer your relevant questions. Jérôme, please.

Fourth Quarter and Full Year Performance

Jérôme Grivet

CFO, Crédit Agricole

Thank you, Philippe. Good afternoon to everyone. I will start directly with the figures.

Crédit Agricole Group key figures

Starting with the group figure, you can see on this page that we are posting this quarter and for the full year 2021 the highest result we ever published for Crédit Agricole Group. We have stated a net income which is above €9 billion for the full year on again a stated basis. When it comes to the underlying net income figures, the net profit for the full year is €8.5 billion and €2.3 billion for the quarter. Interestingly, we see that both for the quarter and for the full year, we managed to keep a very significant positive jaws effect, with revenues much more sharply up than the cost base, and the cost of risk is significantly down.

Lastly, the cost/income ratio at group level improved by close to 2.5 percentage points and the solvency at group level further improved with a CET-1 ratio which is now at 17.5%.

CASA key figures

If I go now to CASA's figures on the following page, you see more or less the same trends, with a stated net profit for the full year which is above €5.8 billion and above €1.4 billion for the quarter, and on an underlying basis close to €5.4 billion for the full year and again €1.4 billion for the quarter.

Just a word on the specific items this quarter, which are close to nil actually - minus €7 million, but it is a combination of large positive one-offs which were more or less all linked to the quarter's positive effect of the Creval acquisition in Italy, badwill recognition and DTA recognition, and to put it in a nutshell we have invested the biggest part of these positive

2

Usage Interne

Crédit Agricole SA Fourth Quarter and Full Year 2021 Results

Thursday, 10th February 2022

one-offs into improving the future and recurring profitability of Crédit Agricole Italia. We will come back to this later on. This is leading to almost nil globally in terms of specific items. Again, we have a very positive jaws between revenues and costs, be it on an underlying basis and also restated from scope effects, we have a strong reduction in the cost of risk and all in all a sharp improvement in the net profit. Cost/income ratio is down, solvency is down - we will come back also to this later on, but significantly above SREP requirements - and profitability is very strong, above 13% in terms of return on tangible equity.

MTP targets reached a year ahead of schedule

On page 7, I think there are two main messages. The first one is that having met the 2022 medium-term plan financial targets, we are now ready to provide new targets for the market and we will hold an Investor Day on 22nd June this year in order to update the market with new 2025 medium-term targets. The second important element is that we are going to propose to the General Assembly Meeting the adoption of a level of dividend of €1.05 per share. Again, I will describe a little bit more how this figure has been reached.

Revenues

Let me go now to page 8 with an analysis of the evolution of our revenues.

I think there are two or three main ideas on this page. The first idea is that revenues are sharply up, both in the full year and in the quarter as compared to 2020, but interestingly, it is also significantly up and even more up as compared to 2019. Bear in mind that actually 2020 was, revenue-wise, also a very good year.

The second interesting item on this page is that if we restate the evolution of the revenues from the scope effect, the main element of this restatement being the fact that Creval was only integrated in the middle of 2021, we continue to see a sharp increase in the evolution of the topline, of the revenue line.

The last interesting point is the fact that this revenue improvement for the full year is spread across all business lines. All business divisions have been able to improve their revenues in 2021 as compared to 2020.

Expenses

If I go now to page 9 with the cost evolution, what you can see is that the cost evolution is less important than the revenue evolution I just presented on the previous page, and it is even more moderate if we restate the cost evolution again from the scope effect. What you can see is that actually restated from the scope effect the costs are up only 4.3% Q4 on Q4 and 3.5% full year on full year. The explanation of this increase is spread between IT investment and expenses, increase in variable compensation, forex impact and other items. Nevertheless, both with and without scope effects, we managed to post a very significantly positive jaws effect in the quarter and the full year.

Gross operating income

Going now to page 10, we wanted to give a slightly broader horizon in terms of our capacity of generating revenues and we looked back on the last five years. What we see is that regularly on each quarter we have been able year after year to improve the level of the revenues. That is the first point, and actually, the average growth in the last five years of the revenues was around 5%, when at the same time the cost increase was on average 2.5%.

3

Usage Interne

Crédit Agricole SA Fourth Quarter and Full Year 2021 Results

Thursday, 10th February 2022

This means that we have managed to improve the gross operating income by 7.5% year- after-year and of course to decrease very significantly the cost/income ratio, which is down 5 percentage points between 2017 and 2021.

Risks

Going now to the risks. I am talking about the underlying cost of risk, i.e. excluding the one- off items that we have posted in Italy through this reinvestment of the capital gains and badwill recognition that we had with the Creval acquisition.

Talking about the underlying risk, what you can see on this page is that actually the level of risk is very significantly down, both for the quarter and for the full year as compared to 2020. It is the case both for Crédit Agricole SA and Crédit Agricole Group.

The level of risk is also significantly lower than the assumption that we had made when we presented the last medium-term plan. These assumptions were 40 basis points on the perimeter of Crédit Agricole SA and 25 basis points on the perimeter of Crédit Agricole Group globally.

Maybe the last and interesting point is that every quarter this year we have continued to increase a little bit the stage one and stage two provisions, i.e. we have avoided writing back provisions simply on the back of a better macroeconomic scenario. As you know, we have a methodology that combines the effect of the macroeconomic scenario and some local forward-looking aspects, and actually, each quarter, when the macroeconomic scenario was generating some writebacks of stage one and stage two provisioning, we have offset these writebacks by increasing the local forward looking.

Asset quality

This leads to the situation which is described on page 12, where we have improved, over the year, the coverage of our non-performing loans with provisions, when the level of non- performing loans was decreasing as compared to last year. Within the global stock of provisions that we have, we have significantly increased between 2019 and 2021 the component linked to stage one and stage two. Actually, for the perimeter of CASA, one-third of the €8.9 billion of provision is made of bucket one and bucket two provision. This amount increased by €1 billion since 2019. On the perimeter of the group globally, the increase is €2 billion between 2019 and 2021 and the amount is close to 40% of the €18.9 billion of provisions, i.e. we have close to €7.5 billion of bucket one and bucket two provision on the perimeter of the whole group.

Net income group share

This leads to the evolution of the net profit that is described on page 13. Again, what you can see is that there is a sharp increase of the net profit, both on the quarter and on the full year, between 2020 and 2021, but there is also a significant increase if you compare 2021 to 2019.

Maybe the last point on this page is that interestingly, this improvement of the total profit is more or less fuelled by two engines. The first one is of course the decrease in the cost of risk, but the second one - almost as important as the first one - is the increase in the gross operating income. For the full year, it is €1.2 billion of increase of the gross operating income, and €1.4 billion in decrease in the cost of risk, leading all in all to a €1.5 billion of improvement of the net profit.

4

Usage Interne

Crédit Agricole SA Fourth Quarter and Full Year 2021 Results

Thursday, 10th February 2022

Profitability

On page 14, we again provide this comparison between our return on tangible equity - 13.1% for the full year 2021 - and the average of our peers in Europe, and again we have managed to maintain a very, very significant margin above the average of our competitors.

Expansion of the universal customer-focused banking model

Let me go on now to some highlights of what we have been achieving in 2021 and since the beginning of this medium-term plan, starting on page 16 with a few highlights on the further developments of our business model, the customer-focused banking business model.

We have continued to improve our offers, and there are a lot of examples provided on this page. We have continued to improve the digital experience of our customers and we have continued to develop our human project, i.e. empowering all the teams locally as close to the ground as possible. This is all in all leading to a further improvement of the customer satisfaction and we have again provided some examples for the regional banks of Crédit Agricole, for LCL and for CACF. This improvement in the customer satisfaction itself is fuelling our further growth.

Societal commitment for energy transition and social inclusion

In terms of commitment to our societal project for the group globally, again, we provide here on page 17 a few examples of the different actions that we have been taking, both for supporting the efforts of our customers in their own energy transition, be it corporate or individual customers, in also reallocating our own financing books from I would say brown assets to a greener set of assets. I am pleased to say that a study by Bloomberg stated that we were the only amongst 30 big banks globally to have arranged more "green" financing than "brown" financing. This study was published a little bit earlier last year.

Lastly, we provide some examples of our commitment towards inclusivity and support to all the population that needs support, be it the families, the over-indebted customers or the young.

Ten ambitious societal commitments

On page 18, just a reminder of what we presented to the press on 1st December last year. We presented a series of markers of our commitments towards the climate, towards the agricultural and agri-food transitions and towards the strengthening of the social cohesion and inclusion. On this page, we provide the list of these items. What is interesting is that we are committed to give regular updates on the way we progress on the achievements that are described on this page.

Transformational moves through the MTP

On page 19, just a few reminders of all the achievements of this medium-term plan. First, as I said in the beginning of this meeting, we have now met all the financial targets that we had initially set for 2022. This is the case for the net income, which is now well above the €5 billion threshold. This is the case and this has been the case for the cost/income ratio since now several quarters. It is also the case for the return on tangible equity above 11%. The distribution policy sticks strictly to our 50% commitment, despite the fact that in 2019 we had to skip the dividend, and finally the CET-1 ratio is well above the 11% target.

5

Usage Interne