Jefferies sees French regulated savings outflows double in September

Investing.com -- French regulated savings accounts recorded outflows of €5.3bn in September, more than double the €2.6bn withdrawn in the same month last year, according to Jefferies. Total regulated savings balances stood at €687.1bn, down 0.1% year-over-year compared to growth of 3.9% in September 2025.

The investment bank noted that year-to-date outflows reached €12bn, contrasting with inflows of €2.2bn during the same period in 2025. September typically sees modest activity, with historical average inflows of just €355m over the 2016-2025 period.

French regulated savings accounts, including Livret A, LDDS, LEP, and Livret Jeune, offer tax-free interest with no fees and full liquidity. The French government sets their rates twice yearly in February and August using a formula based on the 12-month average of short-term rates and inflation.

The government raised the Livret A savings rate to 1.7% effective August 1. Based on current inflation and short-term rate forecasts, Jefferies expects the Livret A rate could increase by at least another 70 basis points to 2.4% in February 2027, assuming stable inflation around 3.1% and a 25 basis point European Central Bank rate hike in December.

The LEP rate, which has a floor of Livret A plus 0.5%, will remain at 2.5% effective August 1, despite the typical rule suggesting it should be around 2.2%.

Jefferies said higher Livret A rates would likely be negative for French banks, as they mechanically raise funding costs and could revive inflows into regulated savings at the expense of other deposits and investment products. Based on consensus numbers, a 50 basis point change in the Livret A rate would imply an average 4% impact to French retail unit 2027 pretax profit, or approximately 1% at group level.

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