Jefferies sees French regulated savings outflows double in September

French regulated savings accounts saw a sharp €5.3bn outflow in September, nearly double the €2.6bn withdrawn in the same period last year, according to investment firm Jefferies. By the end of September, total regulated savings balances fell to €687.1bn, a 0.1% decline year-on-year, contrasting with a 3.9% increase in September 2025.

The bank reported total outflows of €12bn for the year to date, compared to inflows of €2.2bn during the same period in 2025. September usually experiences minimal activity, with an average of just €355m inflows over the 2016-2025 timeframe. These accounts, including Livret A, LDDS, LEP, and Livret Jeune, provide tax-free interest with no fees and full liquidity.

The French government adjusts their rates twice a year, in February and August, using a formula that combines the 12-month average of short-term rates and inflation. The Livret A rate was raised to 1.7% from January 1, 2027. Jefferies anticipates the rate could rise by another 70 basis points to 2.4% in February 2027, if inflation stabilizes around 3.1% and the European Central Bank hikes rates by 25 basis points in December.

The LEP rate, with a minimum of Livret A plus 0.5%, remains at 2.5% as of August 1, despite the typical expectation of around 2.2%. Higher Livret A rates could negatively impact French banks by increasing funding costs and potentially drawing inflows away from other deposits and investment products. According to consensus estimates, a 50 basis point change in the Livret A rate would affect French retail units' 2027 pretax profit by about 4%, or roughly 1% at the group level.