Societe Generale : Fourth quarter and full year 2018 Results
Paris, February 7th 2019
PRESS RELEASE |
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FOURTH QUARTER AND FY 2018 RESULTS
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2018
ROTE(1) OF 9.7% AND
INCREASE IN GROUP NET INCOME. ADAPTATION OF THE EXECUTION AND
FINANCIAL TARGETS OF THE 2020 STRATEGIC PLAN
KEY FINANCIAL DATA
- Revenues(1) up +0.6% in 2018 at EUR 25,205
million (EUR 5,927 million or -4.8% in Q4
18) due to the good performance of International Retail
Banking & Financial Services, resilient French Retail Banking
activities and the strong momentum in Financing &
Advisory.
- 2018 operating expenses(1): EUR 17,595 million
(+2% vs. 2017); Q4 18: EUR 4,627million (+0.9% vs. Q4 17.
- Still low cost of risk at 21 basis points in
2018, reflecting the quality of the loan portfolio.
- 2018 Group book net income: EUR 3,864
million (+37.7% vs. 2017); Q4 18: EUR 624 million (EUR 69
million in Q4 17). Group ROTE(1) of 9.7% in 2018
(5.9% in Q4 18).
- Continued refocusing of the business model on
core regions and businesses (announced disposals representing an
equivalent impact of +37 basis points on the CET1 ratio).
- Group commitment to positive transformation
initiatives recognised through further awards in 2018.
- On the three main litigation issues, agreement
reached with the US and French authorities.
- Fully-loaded CET1 ratio: 10.9% (11.2%(2) with
the effect of the option of a dividend payment in shares subject to
approval by the Combined General Meeting on May 22nd, 2019).
- 2018 Earnings Per Share: EUR 4.24 –
Proposed dividend stable at EUR 2.20, with option
of payment in shares.
ADAPTATION OF THE EXECUTION AND
FINANCIAL TARGETS OF THE “TRANSFORM TO GROW” PLAN
- Confirmation of the long-term strategic focus:
a diversified, more compact Group
resolutely focused on its customers, delivering
profitable and responsible growth.
- Inclusion of the new interest rate scenario in the eurozone,
with an impact of around EUR -500 million on Group
revenues in 2020.
The footnote * in this document corresponds to
data adjusted for changes in Group structure and at constant
exchange rates.
- Underlying data. See methodology note 5 for the transition from
accounting data to underlying data.
- Taking into account the assumption of a 50% subscription rate
for the dividend in shares.
- Adaptation of the operational set-up in Global
Markets resulting in a reduction in risk-weighted assets
of around EUR 8 billion between now and 2020.
- Additional plan to reduce costs by around EUR 500
million in 2020 in Global Banking & Investor
Solutions.
- Acceleration in the refocusing of the regional and
business portfolio taking the disposal programme target to
a positive effect of +80-90 basis points on the
CET1 ratio by 2020 (the Group’s initial target being 50-60 basis
points).
The Group’s financial targets
for 2020 are as follows:
- Group ROTE([1]) of between 9%-10%
- RONE(1) for French Retail Banking revised to
11.5%-12.5%
- RONE(1) for International Retail Banking &
Financial Services increased to
17.0%-18.0%
- RONE(1) for Global Banking & Investor
Solutions ranging from 11.5% to
12.5%
- CET1 ratio of 12%
- 50% payout ratio, with a dividend per share of
at least EUR 2.20
Fréderic Oudéa, the
Group’s Chief Executive Officer, commented:
“After this first year in the execution of our
3-year plan, we have confirmed our long-term strategic ambition:
delivering profitable and responsible growth thanks to a robust,
diversified, more compact banking Group resolutely focused on its
customers, in order to assist them in their positive transformation
projects. We successfully achieved several major milestones in our
transformation during 2018. The digital transformation process
continued with success and there was considerable progress in the
growth initiatives in French and International Retail Banking, as
well as Financing & Advisory. However, market activities
experienced a more mixed performance, below our expectations. In an
economic, financial and regulatory environment that looks set to be
less favourable and even more complex over the next few years than
anticipated a year ago, we have decided to adapt the execution of
our plan and our financial trajectory.Our first priority is, and
will remain, to increase value for shareholders while consolidating
our capital trajectory. We will be even more selective in our
capital allocation, prioritising the Group’s areas of excellence.
Moreover, in a more uncertain economic environment, we will
continue to work on our operating efficiency with an additional
plan to reduce costs in Global Banking & Investor Solutions and
we are further prioritising cost control. All these measures and
the Group’s transformation will enable us to improve our
operational profile and pursue the improvement in the structural
profitability of our businesses.”
GROUP CONSOLIDATED RESULTS
In EUR m |
Q4 18 |
Q4 17 |
Change |
2018 |
|
2017 |
|
Change |
Net banking income |
5,927 |
|
6,323 |
|
-6.3 |
% |
-5.8%* |
25,205 |
|
23,954 |
|
+5.2 |
% |
+6.4%* |
Underlying net banking income(1) |
5,927 |
|
6,228 |
|
-4.8 |
% |
-4.4%* |
25,205 |
|
25,062 |
|
+0.6 |
% |
+1.7%* |
Operating expenses |
(4,458 |
) |
(5,024 |
) |
-11.3 |
% |
-11.1%* |
(17,931 |
) |
(17,838 |
) |
+0.5 |
% |
+1.6%* |
Underlying operating expenses(1) |
(4,627 |
) |
(4,586 |
) |
+0.9 |
% |
+1.2%* |
(17,595 |
) |
(17,243 |
) |
+2.0 |
% |
+3.1%* |
Gross operating income |
1,469 |
|
1,299 |
|
+13.1 |
% |
+15.0%* |
7,274 |
|
6,116 |
|
+18.9 |
% |
+20.8%* |
Underlying gross operating income(1) |
1,300 |
|
1,642 |
|
-20.8 |
% |
-20.1%* |
7,610 |
|
7,819 |
|
-2.7 |
% |
-1.6%* |
Net cost of risk |
(363 |
) |
(469 |
) |
-22.6 |
% |
-22.3%* |
(1,005 |
) |
(1,349 |
) |
-25.5 |
% |
-23.4%* |
Underlying net cost of risk (1) |
(363 |
) |
(269 |
) |
+34.9 |
% |
+35.8%* |
(1,005 |
) |
(949 |
) |
+5.9 |
% |
+10.1%* |
Operating income |
1,106 |
|
830 |
|
+33.3 |
% |
+36.9%* |
6,269 |
|
4,767 |
|
+31.5 |
% |
+33.2%* |
Underlying operating income(1) |
937 |
|
1,373 |
|
-31.8 |
% |
-31.2%* |
6,605 |
|
6,870 |
|
-3.9 |
% |
-3.2%* |
Net profits or losses from other assets |
(169 |
) |
(39 |
) |
n/s |
n/s |
(208 |
) |
278 |
|
n/s |
n/s |
Income tax |
(136 |
) |
(558 |
) |
-75.7 |
% |
-76.0%* |
(1,561 |
) |
(1,708 |
) |
-8.6 |
% |
-8.0%* |
Reported Group net income |
624 |
|
69 |
|
x 9,0 |
x 15,5 |
3,864 |
|
2,806 |
|
+37.7 |
% |
+42.7%* |
Underlying Group net income(1) |
744 |
|
877 |
|
-15.2 |
% |
-13.8%* |
4,468 |
|
4,491 |
|
-0.5 |
% |
+1.8%* |
ROE |
4.1 |
% |
-0.4 |
% |
|
|
7.1 |
% |
4.9 |
% |
|
|
ROTE |
6.5 |
% |
-0.5 |
% |
|
|
8.8 |
% |
5.7 |
% |
|
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Underlying ROTE (1) |
5.9 |
% |
7.4 |
% |
|
|
9.7 |
% |
9.6 |
% |
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|
- Adjusted for non-economic items, exceptional items and
linearisation of IFRIC 21
Societe Generale’s Board of Directors, which met
on February 6th, 2019 under the chairmanship of Lorenzo Bini
Smaghi, examined the Societe Generale Group’s results for Q4 and
approved the results for full-year 2018.The various restatements
enabling the transition from underlying data to published data are
presented in the methodology notes (section 10.5).
Net banking income: EUR 5,927m (-6.3%
vs. Q4 17), EUR 25,205m (+5.2% vs. 2017)
Book net banking income totalled EUR 25,205
million in 2018, up 5.2% compared to 2017 (EUR 23,954 million). In
2017, net banking income included several exceptional items, i.e.
the impact of the settlement agreement with the LIA (EUR -963
million) and the adjustment of hedging costs in French Retail
Banking (EUR -88 million). When restated for these items and
non-economic items, underlying net banking income came to EUR
25,062 million in 2017. Underlying net banking income grew by 0.6%
in 2018.
In 2018,
- French Retail Banking’s net banking income, excluding PEL/CEL
provision, declined -1.8% vs. 2017, in line with the Group’s
expectations. French Retail Banking continued with its
transformation and developed its growth drivers in an environment
still characterised by low interest rates.
- International Retail Banking & Financial Services’ revenues
were significantly higher (+5.1%, +6.6%*), impacted by the robust
commercial dynamism across all businesses and geographical regions.
Accordingly, International Retail Banking revenues increased by
+6.3% (+9.1%*), Insurance revenues by +6.6% (+4.9%*) and Financial
Services to Corporates’ revenues by +1% (+0.2%*).
- Global Banking & Investor Solutions’ net banking income
fell -3.6%. Financing & Advisory revenues were 7.1% (8.6%*)
higher due to the healthy commercial momentum. In contrast, the
revenues of Global Markets and Investor Services were 8.3% (6.6%*)
lower than in 2017 in a challenging market environment.
In
Q4 18, Group book net banking income declined by -6.3% to EUR 5,927
million (vs. EUR 6,323 million in Q4 17) and underlying net banking
income by -4.8% (EUR 6,228 million in Q4 17). French Retail Banking
revenues fell -6.8% (-5.5% vs. Q4 17 excluding changes in the
PEL/CEL provision). International Retail Banking & Financial
Services’ net banking income was significantly higher (+5.1%,
+7.3%*). Global Banking & Investor Solutions’ revenues were
6.9% lower.
In accordance with IFRS 9, the variation in the
revaluation of the Group’s own financial liabilities is no longer
recognised in profit or loss for the period. Consequently, in 2018,
the Group no longer restates its earnings for non-economic
items.
Operating expenses: EUR -4,458m (-11.3%
vs. Q4 17), EUR -17,931m (+0.5% vs. 2017)
Underlying operating expenses amounted to EUR
-17,595 million in 2018, representing a contained increase of 2%
compared to 2017 (EUR -17,243 million). In Q2 18 and Q3 18, the
provision for disputes was the subject of a total additional
allocation of EUR -336 million. Note that 2017 underlying operating
expenses included a EUR 60 million restructuring provision
write-back. In Q4 17, three exceptional expenses were
recognised in operating expenses: an exceptional expense related to
the acceleration in the adaptation of French Retail Banking
networks amounting to EUR -390 million, an expense related to the
receipt of a tax rectification proposal following a tax control by
the French authorities regarding various operating taxes amounting
to EUR -145 million and a charge related to the consequences of the
judgment of the Paris Court of Appeal of December 21st, 2017
confirming the fine regarding the dematerialisation of cheque
processing amounting to EUR -60 million.
Operating expenses totalled EUR -4,458 million
in Q4 18, down -11.3% vs. Q4 17. When restated for the
above-mentioned exceptional items and the effect of the
linearisation of IFRIC 21, there was a slight increase in
underlying operating expenses to EUR -4,627 million in Q4 18 vs.
EUR -4,586 million in Q4 17 (+0.9%).
The increase in operating expenses is in line
with the full-year target in French Retail Banking and reflects
cost control in Global Banking & Investor Solutions. Efforts to
support growth in International Retail Banking & Financial
Services resulted in a positive jaws effect between revenue growth
and the increase in costs.
In 2018, the Group reached agreements on the
litigation issues with the US authorities relating to the LIBOR and
to economic sanctions and anti-money laundering, and with the US
and French authorities on Libya. These agreements provided for
commitments by the Group with respect to these authorities and the
payment of fines, which correspond to the provisions booked for
this purpose.
The balance of the provision for disputes was
EUR 0.3 billion at December 31st, 2018.
Gross operating income: EUR 1,469m
(+13.1% vs. Q4 17), EUR 7,274m (+18.9% vs. 2017)
Book gross operating income totalled EUR 7,274
million in 2018 (vs. EUR 6,116 million in 2017) and underlying
gross operating income EUR 7,610 million (vs. EUR 7,819 million in
2017).
Book gross operating income totalled EUR 1,469
million in Q4 18 (EUR 1,299 million in Q4 17) and underlying gross
operating income EUR 1,300 million (EUR 1,642 million in Q4
17).
Cost of
risk(1): EUR
-363m in Q4 18, EUR -1,005m in 2018
The net cost of risk amounted to EUR -1,005
million in 2018, 25.5% lower than in 2017 (EUR -1,349 million). The
underlying net cost of risk was 5.9% higher.
The Group’s underlying net cost of risk amounted
to EUR -363 million in Q4 18, up +34.9% vs. Q4 17, i.e. EUR -269
million.
The Group’s commercial cost of risk (expressed
as a fraction of outstanding loans) amounted to 21 basis points in
2018, very slightly higher than in 2017 (19 basis points), at the
bottom end of the expected range (between 20 and 25 basis
points).
- In French Retail Banking, the commercial cost of risk amounted
to 26 basis points (30 basis points in 2017) due to a selective
origination policy.
- International Retail Banking & Financial Services’ cost of
risk stood at a still low level of 30 basis points (vs. 29 basis
points in 2017) due to further provision write-backs in the Czech
Republic and Romania.
- Global Banking & Investor Solutions’ cost of risk amounted
to 6 basis points, an increase compared to the historically low
level of -1 basis point in 2017.
The commercial cost of risk was higher in Q4 18
at 29 basis points (vs. 22 basis points in Q4 17).
The Group expects a cost of risk of between 25
and 30 basis points in 2019.
The gross doubtful outstandings ratio stood at
3.6% at end-December 2018 (vs. 4.4% at end-December 2017). The
Group’s gross coverage ratio for doubtful outstandings stood at
54%([2]) at end-December 2018 (stable vs. September 30th,
2018).
Operating income: EUR 1,106m
(+33.3% vs. Q4 17), EUR 6,269m (+31.5% vs.
2017)Book operating income totalled EUR 6,269
million in 2018, 31.5% higher than in 2017. Underlying operating
income came to EUR 6,605 million (vs. EUR 6,870 million in
2017).
Book operating income amounted to EUR 1,106
million in Q4 18, up +33.3% vs. Q4 17. Underlying operating income
was EUR 937 million (vs. EUR 1,373 million in Q4 17).
Net profits or losses from other
assets: EUR -169m in Q4 18, EUR -208m in 2018Net
profits or losses from other assets include primarily the capital
loss recognised under IFRS 5 in respect of disposals currently
being finalised by the Group amounting to EUR -268 million in 2018
(EUR -241 million in Q4 18), with EUR -202 million corresponding to
the disposals already announced (Societe Generale Albania, Societe
Generale Serbia, Mobiasbanca Societe Generale in Moldavia) and
Societe Generale’s stake in La Banque Postale Financement.
Net income
In EURm |
Q4 18 |
Q4 17 |
2018 |
2017 |
Reported Group net income |
624 |
69 |
3,864 |
2,806 |
Underlying Group net income(1) |
744 |
877 |
4,468 |
4,491 |
In % |
Q4 18 |
Q4 17 |
2018 |
|
2017 |
|
ROTE (reported) |
6.5 |
% |
-0.5 |
% |
8.8 |
% |
5.7 |
% |
Underlying ROTE(1) |
5.9 |
% |
7.4 |
% |
9.7 |
% |
9.6 |
% |
Earnings per share amounts to EUR 4.24 in 2018
(EUR 2.98 in 2017)(2).
On this basis, the Board of Directors has decided
to propose the payment of a dividend of EUR 2.20 per share to the
Combined General Meeting of Shareholders, with the possibility of
opting for the payment of the dividend in shares. This represents a
payout ratio of 51.8%. The dividend will be detached on May 27th,
2019 and paid on June 14th, 2019.
- Adjusted for non-economic items (in 2017), exceptional items
and effect of the linearisation of IFRIC 21.
- Excluding non-economic and exceptional items (gross EPS of EUR
2.92 in 2017)
THE GROUP’S FINANCIAL STRUCTURE
Group shareholders’ equity
totalled EUR 61.0 billion at December 31st, 2018 (EUR 59.4 billion
at December 31st, 2017). Net asset value per share was EUR 64.63
and tangible net asset value per share was EUR 55.81.
The consolidated balance sheet
totalled EUR 1,309 billion at December 31st, 2018 (EUR 1,274
billion at January 1st, 2018(1), EUR 1,275 billion at December
31st, 2017). The net amount of customer loan outstandings at
December 31st, 2018, including lease financing, was EUR 421 billion
(EUR 396 billion at January 1st, 2018, EUR 404 billion at December
31st, 2017) – excluding assets and securities sold under repurchase
agreements. At the same time, customer deposits amounted to EUR 399
billion, vs. EUR 395 billion at January 1st, 2018 and December
31st, 2017 (excluding assets and securities sold under repurchase
agreements).
At end-December 2018, the parent company had
issued EUR 39.2 billion of medium/long-term debt, having an average
maturity of 4.5 years and an average spread of 27.5 basis points
(vs. the 6-month mid-swap, excluding subordinated debt). The
subsidiaries had issued EUR 3.8 billion. At December 31st, 2018,
the Group had issued a total of EUR 43 billion of medium/long-term
debt. The LCR (Liquidity Coverage Ratio) was well above regulatory
requirements at 129% at end-December 2018 vs. 131% at end-September
2018. At the same time, the NSFR (Net Stable Funding Ratio) was
over 100% at end-December 2018.
The Group’s risk-weighted
assets (RWA) amounted to EUR 376.0 billion at December
31st, 2018 (vs. EUR 353.3 billion at end-December 2017) according
to CRR/CRD4 rules. Risk-weighted assets in respect of credit risk
represent 80.5% of the total, at EUR 302.7 billion, up +4.6% vs.
December 31st, 2017.
At December 31st, 2018, the Group’s fully-loaded
Common Equity Tier 1 ratio stood at 10.9%(2),
11.2%([3]) taking into account the option of a dividend payment in
shares subject to approval by the Combined General Meeting on May
22nd, 2019, and 11.5% pro forma for transactions signed (disposals
and acquisitions). The Tier 1 ratio stood at 13.7% at end-December
2018 and the total capital ratio amounted to 16.7%.
With a level of 22.9% of RWA and 7.1% of
leveraged exposure at end-December 2018, the Group’s TLAC ratio is
already above the FSB’s requirements for 2019. At December
31st, 2018, the Group was also above its MREL requirements of 8% of
the TLOF(4) (which, in December 2016, represented a level of 24.36%
of RWA), which were used as a reference for the SRB calibration.
The leverage ratio stood at 4.3% at December 31st,
2018 (4.3% at end-December 2017).
The Group is rated by five rating agencies: (i)
DBRS - long-term rating (senior preferred debt) “A (high)”,
positive trends, short-term rating “R-1 (middle)”; (ii)
FitchRatings - long-term rating “A”, stable outlook, senior
preferred debt rating “A+”, short-term rating “F1”; (iii) Moody’s –
long-term rating (senior preferred debt) “A1”, stable outlook,
short-term rating “P-1”; (iv) R&I - long-term rating (senior
preferred debt) “A”, stable outlook; and (v) S&P Global Ratings
- long-term rating (senior preferred debt) “A”, positive outlook,
short-term rating “A-1”.
FRENCH RETAIL BANKING
In EUR m |
Q4 18 |
Q4 17 |
Change |
2018 |
|
2017 |
|
Change |
Net banking income |
1,912 |
|
2,051 |
|
-6.8 |
% |
7,860 |
|
8,014 |
|
-1.9 |
% |
Net banking income excl. PEL/CEL |
1,925 |
|
2,036 |
|
-5.5 |
% |
7,838 |
|
7,982 |
|
-1.8 |
% |
Operating expenses |
(1,430 |
) |
(1,828 |
) |
-21.8 |
% |
(5,629 |
) |
(5,939 |
) |
-5.2 |
% |
Gross operating income |
482 |
|
223 |
|
+116.1 |
% |
2,231 |
|
2,075 |
|
+7.5 |
% |
Gross operating income excl. PEL/CEL |
495 |
|
208 |
|
+137.3 |
% |
2,209 |
|
2,043 |
|
+8.1 |
% |
Net cost of risk |
(143 |
) |
(184 |
) |
-22.3 |
% |
(489 |
) |
(547 |
) |
-10.6 |
% |
Operating income |
339 |
|
39 |
|
+769.2 |
% |
1,742 |
|
1,528 |
|
+14.0 |
% |
Reported Group net income |
282 |
|
38 |
|
+642.1 |
% |
1,237 |
|
1,059 |
|
+16.8 |
% |
RONE |
10.1 |
% |
1.3 |
% |
|
11.0 |
% |
9.6 |
% |
|
Underlying RONE (2) |
9.9 |
% |
12.2 |
% |
|
10.9 |
% |
13.0 |
% |
|
(1) Adjusted for the effect of the linearisation
of IFRIC 21, PEL/CEL provision, adjustment of hedging costs in 2017
and the adaptation of the French network and the “Echange Image
Chèque” fine in Q4 17 and in 2017.
French Retail Banking enjoyed a solid commercial
momentum and delivered a resilient financial performance in 2018,
against the backdrop of persistently low interest rates and the
transformation of the French networks.
Activity and net banking
income
French Retail Banking’s three brands, Societe
Generale, Crédit du Nord and Boursorama, pursued their commercial
expansion, particularly for their growth drivers.
With nearly 460,000 new clients in 2018,
Boursorama set a new client onboarding record (+45% vs. 2017) and
consolidated its position as the leading online bank in France with
nearly 1.7 million clients at end-December 2018.
At the same time, the Societe Generale and
Crédit du Nord networks strengthened their franchises on the
Group’s target customers.
Supported by a solid private banking platform,
French Retail Banking continued to expand its mass affluent and
wealthy client base (up +3% at end-December 2018 vs. end-December
2017) and recorded net inflow of EUR 3.3 billion in 2018.
This robust performance was masked by a challenging market
environment, resulting in assets under management declining -1.2%
vs. Q4 17, to EUR 61 billion (including Crédit du Nord) at
end-December 2018.
Bancassurance enjoyed buoyant activity, with net
inflow of EUR 1,730 million. In Q4 18, outstandings amounted to EUR
92.3 billion, with the unit-linked share accounting for 24%.
In the Business customer segment, French Retail
Banking continued with the rollout of its regional business
centres, with five units at end-December, thereby strengthening its
expertise in this segment where the number of customers increased
1% in 2018.In the case of Professional customers, Societe Generale
now has eight new “Pro Corners” (espaces pro) with 103 “corners”
dedicated to professionals rolled out in branches, as at
end-December 2018. The number of professional customers in French
Retail Banking grew by nearly 1% vs. Q4 17.
In a low interest rate environment, the Group
confirmed its selective origination strategy.
Housing loan production totalled EUR 4.6 billion
in Q4 18 (+0.3% vs. Q4 17) and EUR 18.7 billion in 2018. Consumer
loan production remained dynamic in Q4 18, with an increase of
+17.4% vs. Q4 17 and +12.7% in 2018.Outstanding loans to
individuals totalled EUR 111 billion and rose +3.1% in Q4 18 vs. Q4
17.
Corporate investment loan production was very
robust in Q4 18, up +21.1% at EUR 4.7 billion (+12.4% in 2018 at
EUR 14.2 billion). Accordingly, average investment loan
outstandings rose +5.0% vs. Q4 17.
Overall, the momentum accelerated in Q4 18, with
average loan outstandings rising +4.0% vs. Q4 17 to EUR 189
billion. Average outstanding balance sheet deposits came to EUR
201.7 billion in Q4 18, up +3.8% vs. Q4 17, underpinned by sight
deposits (+8.1%). As a result, the average loan/deposit ratio stood
at 93.5% in Q4 18 (stable vs. Q4 17).
French Retail Banking posted net banking income
(after neutralising the impact of PEL/CEL provisions) of EUR 1,925
million in Q4 18, down -5.5% vs. Q4 17 and -1.8% over 12 months (at
EUR 7,838 million), in line with Group expectations (decline of
between -1% and -2% in 2018).
The healthy fee momentum (+0.5% in Q4 18 and
+1.4% in 2018), particularly for service commissions (+2.8% in Q4
18 and +2.6% in 2018) was more than masked by the fall in net
interest income adversely affected by the low interest rate
environment (decline of -8.2% in Q4 18 and -5.4% in 2018).
Operating expenses
French Retail Banking’s underlying operating
expenses totalled EUR 1,430 million, up +3.8% vs. Q4 17 (restated
for exceptionals recognised in Q4 17) and +2.6% in 2018 (at EUR
5,629 million), in line with the expected increase in underlying
operating expenses of less than 3% for the year. This increase
reflects the acceleration of investments in the digital
transformation process and the development of growth drivers.As
part of its transformation plan, the Group notably closed more than
100 branches over twelve months, thereby achieving between 2016 and
2018 nearly 60% of its 2020 target (-500 branches). At the same
time, the Group continued to digitalise the banking networks, with
the ongoing dematerialisation of the offering.
The cost to income ratio stood at 71.6% in
2018.
Operating income
The net cost of risk declined by 22.3% in Q4 18
vs. Q4 17 (-10.6% in 2018). Operating income came toEUR 339 million
in Q4 18 and EUR 1,742 million in 2018 (EUR 1,528 million in
2017).
Contribution to Group net
income
French Retail Banking’s contribution to Group
net income amounted to EUR 282 million in Q4 18 (EUR 38 million in
Q4 17). The return on normative equity after linearisation of the
IFRIC 21 charge and restated for the PEL/CEL provision stood at
9.9%(1) (vs. 12.2%(1) in Q4 17). The contribution to Group
net income and return on normative equity proved resilient in 2018
and came to EUR 1,237 million (EUR 1,059 million in 2017) and 10.9%
respectively (13.0%(1) in 2017).
INTERNATIONAL RETAIL BANKING & FINANCIAL SERVICES
In EUR m |
Q4 18 |
Q4 17 |
Change |
2018 |
|
2017 |
|
Change |
Net banking income |
2,161 |
|
2,057 |
|
+5.1 |
% |
+7.3%* |
8,317 |
|
7,914 |
|
+5.1 |
% |
+6.6%* |
Operating expenses |
(1,145 |
) |
(1,168 |
) |
-2.0 |
% |
+0.3%* |
(4,526 |
) |
(4,404 |
) |
+2.8 |
% |
+4.7%* |
Gross operating income |
1,016 |
|
889 |
|
+14.3 |
% |
+16.6%* |
3,791 |
|
3,510 |
|
+8.0 |
% |
+8.9%* |
Net cost of risk |
(114 |
) |
(119 |
) |
-4.2 |
% |
-2.9%* |
(404 |
) |
(400 |
) |
+1.0 |
% |
+10.3%* |
Operating income |
902 |
|
770 |
|
+17.1 |
% |
+19.7%* |
3,387 |
|
3,110 |
|
+8.9 |
% |
+8.7%* |
Net profits or losses from other assets |
2 |
|
3 |
|
-33.3 |
% |
-33.3 |
% |
8 |
|
36 |
|
-77.8 |
% |
-78.4%* |
Reported Group net income |
563 |
|
450 |
|
+25.1 |
% |
+25.7%* |
2,065 |
|
1,939 |
|
+6.5 |
% |
+9.3%* |
RONE |
19.7 |
% |
16.2 |
% |
|
|
18.1 |
% |
17.4 |
% |
|
|
Underlying RONE (1) |
19.0 |
% |
15.6 |
% |
|
|
18.1 |
% |
17.4 |
% |
|
|
- Adjusted for the effect of the linearisation of IFRIC 21
The division’s net banking income totalled EUR
8,317 million in 2018, up +5.1% vs. 2017, driven by an excellent
commercial momentum in all regions and businesses. Operating
expenses remained under control, amounting over the same period to
EUR -4,526 million (+2.8%), resulting in a positive jaws effect
despite a EUR 60 million restructuring provision write-back in
2017. Gross operating income totalled EUR 3,791 million in 2018
(+8.0%).
The net cost of risk remained at a low level of
EUR 404 million in 2018. It included provision write-backs in the
Czech Republic and Romania as well as the receipt of an insurance
payout in Romania in 2017 and Q1 18. The virtual stability of the
net cost of risk (+1%) reflects rigorous risk management. The
contribution to Group net income totalled EUR 2,065 million in
2018, a record level (up +6.5% vs. 2017).
Net banking income totalled EUR 2,161 million in
Q4 18 (+5.1% vs. Q4 17). Gross operating income came to EUR 1,016
million (+14.3%) and the contribution to Group net income was EUR
563 million, up +25.1% vs. Q4 17.
Underlying RONE stood at 18.1% in 2018 (17.4% in
2017) and 19.0% in Q4 18 (vs. 15.6% in Q4 17).
International Retail
Banking
International Retail Banking’s outstanding loans
rose +5.0% (+6.4%*) in Q4 18 vs. Q4 17 to EUR 93 billion at
end-December 2018, with uniform growth across the three regions.
Deposit inflow also remained dynamic. Outstanding deposits totalled
EUR 83.3 billion at end-December 2018, up +4.4% (+5.8%*)
year-on-year.
International Retail Banking revenues were 6.3%
(9.1%*) higher than in 2017 at EUR 5,608 million, while operating
expenses were up +2.1% (+5.0%*) at EUR -3,238 million. Gross
operating income came to EUR 2,370 million, up +12.5% (+15.2%*) vs.
2017. International Retail Banking’s contribution to Group net
income amounted to a record level of EUR 1,187 million in 2018
(+13.9% vs. 2017).
In Q4 18, International Retail Banking posted
revenues of EUR 1,477 million, gross operating income of EUR 665
million and a contribution to Group net income of EUR 332 million,
up +35.0% vs. Q4 17.
In Western Europe, outstanding loans were up
+10.4% vs. Q4 17, at EUR 20.1 billion. Car financing remained
particularly buoyant over the period. Revenues totalled EUR 836
million in 2018, up +9.7% vs. 2017, while operating expenses were
3.5% higher. Consequently, gross operating income was 15.6% higher
in 2018. The contribution to Group net income came to EUR 242
million, up +16.3% vs. 2017.
In the Czech Republic, the Group delivered a
solid commercial performance in 2018: outstanding loans rose +3.9%
(+4.6%*) and outstanding deposits increased +4.2% (+5.0%*).
Revenues were higher (+7.2%, +4.4%*) and amounted to EUR 1,119
million in 2018, driven by a positive volume effect, combined with
a rise in rates. Over the same period, operating expenses
were 4.2% (1.8%*) higher at EUR -594 million, including in
particular a EUR 11.5 million restructuring provision in Q2 18.
There was a net write-back in the net cost of risk of EUR 23
million compared with a net write-back of EUR 11 million in 2017.
Against this backdrop, the contribution to Group net income came to
EUR 266 million, up +4.7% compared to 2017 when the first quarter
benefited from a capital gain on a property disposal following the
sale of the historic headquarters.
In Romania, outstanding loans totalled EUR 6.8
billion at end-December 2018, up +3.9% (+4.0%*) vs. end-December
2017. Over the same period, deposits amounted to EUR 9.7 billion,
up +2.2% (+2.3%*). Against a backdrop of rising interest
rates, net banking income climbed +9.5% (+11.6%*) in 2018.
Operating expenses were down -1.2% (+0.5%*) with, in particular, a
reduction in the contribution to deposit guarantee and resolution
funds and after a 2017 impacted by investments in the network’s
transformation. There was a net write-back in the net cost of
risk of EUR 56 million in 2018 compared with a net write-back of
EUR 86 million in 2017. The contribution to Group net income
was EUR 149 million, up 9.6% vs. 2017.
In other European countries, outstanding loans
were up +6.0% (+6.5%*) and outstanding deposits were up +6.6%
(+6.5%*) in 2018. Revenues increased +5.9% (+10.5%*) in 2018, while
operating expenses were 11.1% (17.1%*) higher than in 2017 given
the EUR 60 million restructuring provision write-back in 2017. The
net cost of risk remained under control, resulting in a significant
decline of -57.1% (-43.1%*) compared to 2017. The contribution to
Group net income totalled EUR 181 million (vs. EUR 147 million in
2017).
In Russia, there was further confirmation of
commercial expansion in the individual customer segment.
Outstanding loans were up +6.2%* at constant exchange rates (-3.8%
at current exchange rates) in 2018. Outstanding deposits increased
+8.5%* at constant exchange rates (-0.5% at current exchange rates)
benefiting from the surplus liquidity in the market. Net banking
income for SG Russia(1) came to EUR 815 million in 2018, up +9.1%*
(-3.2% at current exchange rates). Operating expenses were up
+5.5%* (-5.4% at current exchange rates). The net cost of risk
increased by EUR 19 million at constant exchange rates and remained
at a generally low level. SG Russia made a positive contribution to
Group net income of EUR 144 million vs. EUR 147 million in
2017.
In Africa and the other regions where the Group
operates, commercial activity was generally healthy in both
Sub-Saharan Africa and the Mediterranean Basin. Outstanding loans
rose +5.6% (+5.8%*) in 2018 to EUR 21.2 billion. Outstanding
deposits were also higher (+7.3%, +7.4%*) at EUR 20.9 billion. Net
banking income totalled EUR 1,641 million in 2018, an increase of
+7.1% (+10.3%*) compared to 2017. Over the same period, operating
expenses rose +2.4% (+4.6%*). The contribution to Group net
income came to EUR 237 million in 2018, up +27.4% vs. 2017.
Insurance
The life insurance savings business saw
outstandings increase +1.1%* in 2018 in a challenging market
environment. The share of unit-linked products in outstandings was
stable at end-December 2018 compared to 2017, at 26%.
There was further growth in Personal Protection
insurance (premiums up +7.2%* vs. Q4 17). Likewise,
Property/Casualty insurance continued to enjoy strong growth
(premiums up +11.7%* vs. Q4 17). International activity was
particularly dynamic.
The Insurance business posted a good financial
performance in 2018, with net banking income increasing +6.6% to
EUR 887 million (+4.9%*) and the cost to income ratio remaining at
a low level (37.5%). The contribution to Group net income was 7.3%
higher at EUR 368 million in 2018. It amounted to EUR 95 million in
Q4 18, up +3.3% vs. Q4 17.
Financial Services to
Corporates
Financial Services to Corporates maintained a
good commercial momentum in 2018.
Operational Vehicle Leasing and Fleet Management
experienced a substantial increase in its vehicle fleet (+10.1% vs.
2017) to 1.663 million vehicles at end-December 2018, driven by the
strategy of ramping up distribution channels.
Equipment Finance’s outstanding loans were up
+4.5% (+4.7%*) in 2018 vs. 2017 at EUR 17.9 billion (excluding
factoring).
Financial Services to Corporates’ net banking
income rose +1.0% in 2018 to EUR 1,822 million (+0.2%*), with ALD’s
revenues impacted by a reduction in the average residual value of
used vehicles sold. Operating expenses increased +3.2% (+2.9%*)
compared to 2017 and amounted to EUR -955 million. The net cost of
risk amounted to EUR 69 million, an increase of EUR 18 million
compared to 2017. The contribution to Group net income was EUR 510
million in 2018, down -7.9% compared to 2017, reflecting primarily
the consolidation of ALD for around 80% since its stock market
flotation.
In Q4 18, Financial Services to Corporates’
revenues totalled EUR 460 million (-2.7%, +0.8%* vs. Q4 17) and
operating expenses came to EUR -254 million (+1.6%, +6.3%* vs. Q4
17). The contribution to Group net income amounted to EUR 136
million in Q4 18 vs. EUR 112 million in Q4 17.
GLOBAL BANKING & INVESTOR SOLUTIONS
In EUR m |
Q4 18 |
Q4 17 |
Change |
2018 |
|
2017 |
|
Change |
Net banking income |
2,041 |
|
2,193 |
|
-6.9 |
% |
-7.6%* |
8,846 |
|
9,173 |
|
-3.6 |
% |
-2.1%* |
Operating expenses |
(1,779 |
) |
(1,743 |
) |
+2.1 |
% |
+1.3%* |
(7,241 |
) |
(7,121 |
) |
+1.7 |
% |
+3.2%* |
Gross operating income |
262 |
|
450 |
|
-41.8 |
% |
-42.0%* |
1,605 |
|
2,052 |
|
-21.8 |
% |
-20.3%* |
Net cost of risk |
(98 |
) |
35 |
|
n/s |
n/s |
(93 |
) |
(2 |
) |
x 46,5 |
n/s |
Operating income |
164 |
|
485 |
|
-66.2 |
% |
-66.3%* |
1,512 |
|
2,050 |
|
-26.2 |
% |
-25.0%* |
Reported Group net income |
179 |
|
374 |
|
-52.1 |
% |
-52.3%* |
1,197 |
|
1,593 |
|
-24.9 |
% |
-23.6%* |
RONE |
4.5 |
% |
10.3 |
% |
|
|
7.8 |
% |
10.6 |
% |
|
|
Underlying RONE (1) |
2.7 |
% |
8.5 |
% |
|
|
7.8 |
% |
10.6 |
% |
|
|
- Adjusted for the effect of the linearisation of IFRIC 21
Global Banking & Investor Solutions posted
net banking income of EUR 8,846 million in 2018, down -3.6%
compared to 2017, in an unfavourable market environment and despite
the healthy momentum in Financing & Advisory.
The division’s net banking income totalled EUR
2,041 million in Q4 18, down -6.9% vs. Q4 17.
Global Markets & Investor
Services
Global Markets & Investor
Services’ revenues were down -8.3% in 2018, in an
unfavourable market environment, impacted by political tensions in
Europe and the trade war between the United States and China.
However, performances remained resilient in the United States and
Asia.
Net banking income came to EUR 1,093 million in
Q4 18, down -18.7% vs. Q4 17, with markets having been hit this
quarter primarily by widening credit spreads and reduced liquidity
in the equity market.
At EUR 1,975 million, the revenues of
Fixed Income, Currencies &
Commodities were down -16.8% in 2018 compared to 2017.
They were down -28.8% in Q4 18 vs. Q4 17 and amounted to EUR 366
million. Despite resilient commercial activity, Rate activities
were hit by an unfavourable environment. Credit was impacted by
widening spreads in line with previous quarters. At the same time,
commodities enjoyed a good quarter, with buoyant commercial
activity in the energy and carbon market.
Equities and Prime Services
posted net banking income of EUR 2,498 million in 2018, down -4.4%
vs. 2017, impacted by a declining equity market. In Q4 18, net
banking income amounted to EUR 550 million, down -15.5% vs. Q4 17,
hit by lower commercial activity. Management of structured product
portfolios was affected by sharp market movements. Prime Services
continued to turn in a good performance while cash equities
remained resilient, with an increase in trading volumes.
However, this performance failed to offset the fall in derivative
revenues.The Equity Derivatives franchise was once again voted
“Structured Products House of the Year” by Risk Awards.
Securities Services’ assets
under custody amounted to EUR 4,011 billion at end-December 2018,
up +2.8% vs. end-December 2017. Over the same period, assets under
administration were down -6.5% at EUR 609 billion. Revenues rose
+6.2% in 2018 compared to 2017, to EUR 734 million. This sharp rise
reflects the continued healthy commercial momentum.Revenues were
slightly lower (-0.6%) in Q4 18 than in Q4 17.
Financing & Advisory
Financing & Advisory’s
revenues totalled EUR 2,673 million in 2018, 7.1% higher than in
2017. 2018 was a record year, driven by the successful
implementation of the businesses’ different initiatives.
Net banking income came to EUR 716 million in Q4
18, up +19.1% vs. Q4 17. Asset Financing (especially aircraft,
shipping and real estate) continued to benefit from a good level of
origination activity and commissions. The natural resources
division enjoyed a healthy momentum in energy project financing.
The Asset Backed Products platform saw further expansion.
Global Transaction Banking’s earnings were
significantly higher in Q4 18, with good commercial activity in
Cash Management and Correspondent Banking despite the low interest
rate environment.
Asset and Wealth Management
The net banking income of the Asset and
Wealth Management business line totalled EUR 966 million
in 2018, down -3.4% compared to 2017, with revenues remaining
resilient in a low interest rate environment. Net banking income
amounted to EUR 232 million in Q4 18, down -6.5% vs. Q4 17.
Private Banking’s assets under
management totalled EUR 113 billion at end-December 2018, 4% lower
than in December 2017, impacted by the decline in the markets. 2018
net banking income was 4.2% lower than in 2017 at EUR 756 million,
impacted by the decline in international activities in 2018.
Revenues fell -4.7% in Q4 18 vs. Q4 17.
Lyxor’s assets under management
came to EUR 118 billion at end-December 2018, 5.4% higher than in
December 2017. Revenues totalled EUR 191 million in 2018, the same
level as 2017 revenues. Good inflow offset margin pressure in ETF
activity. Lyxor’s market share stood at 9.7% in 2018. Revenues
amounted to EUR 47 million in Q4 18, down -6.0% vs. Q4 17, with a
sluggish market.
Operating expenses
Global Banking & Investor Solutions’
operating expenses were up +1.7% compared to 2017 and amounted to
EUR 7,241 million, reflecting cost control and investment in the
growth of Financing activities and Global Transaction Banking.
Operating expenses were up +2.1% in Q4 18 vs. Q4 17.
Operating income
Gross operating income came to EUR 1,605 million
in 2018, down -21.8% compared to 2017, and EUR 262 million in Q4
18, down -41.8% vs. Q4 17. The net cost of risk amounted to EUR -93
million in 2018 (compared to a very low net cost of risk in 2017 of
EUR -2 million due to provision write-backs).Global Banking &
Investor Solutions’ operating income totalled EUR 1,512 million in
2018, 26.2% lower than in 2017, and EUR 164 million in Q4 18, down
-66.2%.
Net income
The pillar’s contribution to Group net income
came to EUR 1,197 million in 2018, a decrease of -24.9%, and EUR
179 million in Q4 18.The pillar’s RONE stood at 7.8% in 2018.
CORPORATE CENTRE
In EUR m |
Q4 18 |
Q4 17 |
2018 |
|
2017 |
|
Net banking income |
(187 |
) |
22 |
|
182 |
|
(1,147 |
) |
Net banking income (1) |
(187 |
) |
(71 |
) |
182 |
|
(1,094 |
) |
Operating expenses |
(104 |
) |
(285 |
) |
(535 |
) |
(374 |
) |
Gross operating income |
(291 |
) |
(263 |
) |
(353 |
) |
(1,521 |
) |
Gross operating income (1) |
(291 |
) |
(263 |
) |
(353 |
) |
(1,468 |
) |
Net cost of risk |
(8 |
) |
(201 |
) |
(19 |
) |
(400 |
) |
Net profits or losses from other assets |
(243 |
) |
(42 |
) |
(274 |
) |
237 |
|
Reported Group net income |
(400 |
) |
(793 |
) |
(635 |
) |
(1,785 |
) |
Group Net Income (1) |
(400 |
) |
(857 |
) |
(635 |
) |
(1,746 |
) |
(1) Adjusted for revaluation of own financial liabilities in Q4
17 and 2017
The Corporate Centre includes:
- the property management of the Group’s head office,
- the Group’s equity portfolio,
- the Treasury function for the Group,
- certain costs related to cross-functional projects and certain
costs incurred by the Group and not re-invoiced to the
businesses.
The revaluation of the Group’s own financial
liabilities is no longer recognised in profit or loss for the
period due to the implementation of IFRS 9 as from January 1st,
2018. Consequently, earnings are no longer restated for this
non-economic item.
The Corporate Centre’s net banking income
totalled EUR 182 million in 2018 vs. EUR -1,094(1) million in 2017
and EUR -187 million in Q4 18 vs. EUR -71(1) million in Q4 17.
Operating expenses totalled EUR -535 million in
2018 vs. EUR -374 million in 2017. They included an allocation to
the provision for disputes of EUR -336 million in 2018. Operating
expenses amounted to EUR -104 million in Q4 18 vs. EUR -285 million
in Q4 17. In Q4 18, operating expenses included a EUR 1.2 billion
charge for the settlement of the US Sanctions Case, fully covered
by a write-back of the provision for disputes.At December 31st,
2018, the provision for disputes amounted to EUR 0.3 billion.
Gross operating income amounted to EUR -291
million in Q4 18 vs. EUR -356(1) million in Q4 17. In 2018,
gross operating income totalled EUR -353 million vs. EUR -1,468(1)
million in 2017. Gross operating income came to EUR -288 million in
2018 excluding the impact of exceptional items and after
restatement of the Euroclear capital gain.
The net cost of risk amounted to EUR -19 million
in 2018 vs. EUR -400 million in 2017, which included a net
additional allocation of EUR -400 million to the provision for
disputes. The net cost of risk was EUR -8 million in Q4 18 vs. EUR
-201 million in Q4 17.
Net profits or losses from other assets include
primarily the capital loss recognised under IFRS 5 in respect of
disposals currently being finalised by the Group amounting to EUR
-268 million in 2018 (EUR -241 million in Q4 18), with EUR -202
million corresponding to disposals already announced (Societe
Generale Albania, Societe Generale Serbia, Mobiasbanca Societe
Generale in Moldavia) and Societe Generale’s stake in La Banque
Postale Financement.
The Corporate Centre’s contribution to Group net
income was EUR -635 million in 2018 vs. EUR -1,746(1) million in
2017 and EUR -400 million in Q4 18 (EUR -857(1) million in Q4
17).
7. CONCLUSION
Adaptation in the execution of the 2020
strategic and financial plan “Transform to Grow”
In 2018, Societe Generale achieved several major
milestones in the implementation of the “Transform to Grow”
strategic plan with:
- The success of the majority of growth initiatives,
- The disciplined execution of the EUR 1.1 billion cost savings
plan, with EUR 0.4 billion already achieved over the period
2017/2018, for efficiency investments of EUR 0.7 billion over the
same period,
- The rigorous management of the cost of risk at 21 basis points
in 2018, towards the bottom end of the expected range of 20-25
basis points,
- The removal of financial uncertainty related to the settlement
of litigation issues,
- The refocusing of the Group, with eight disposals already
announced resulting in an overall positive impact of around +37
basis points(2) on the CET 1 ratio (representing a contribution to
net income of around EUR 125 million in 2018).
Given a geopolitical environment marked by
substantial uncertainty, a still low interest rate environment in
the eurozone, the relative performance of its businesses and
improved visibility on regulatory constraints, the Group has
adapted the execution and financial targets of its
“Transform to Grow” plan. In particular, the Group expects
the revision of interest rate assumptions used in its estimates to
have an impact of around EUR 500 million on the
Group’s revenues in 2020.
The adaptations are aimed at a more
selective capital allocation, prioritising
fast-growing and highly profitable businesses,
combined with an increased ambition to reduce
costs, especially in Global Banking & Investor
Solutions. They will help consolidate the CET1 target
of 12% in 2020.
Within Global Banking & Investor
Solutions, the Group has adjusted the operational set-up
in Global Markets, which will be more focused on leadership and
profitable franchises, in which it has competitive advantages. This
refocusing will result in a reduction in risk-weighted assets of
around EUR 8 billion between now and 2020. The Group will
implement an additional plan to reduce costs by around EUR
500 million in Global Banking & Investor Solutions and
is now aiming for a decline of -6.5%(3) in the division’s operating
expenses in 2020, rather than stability. The Group is aiming
for a RONE(1) in 2020 for Global Banking &
Investor Solutions ranging from 11.5% to
12.5%.
International Retail Banking &
Financial Services is expected to benefit from a still
favourable environment and confirm its status as a profitable
growth driver. The target RONE(1) for these
activities in 2020 is increased to
17.0%-18.0%(4).
French Retail Banking has
demonstrated substantial resilience, with activities in line with
the execution of the transformation plan. Given the new interest
rate assumptions and the effects on revenues of the measures
recently adopted by the French banking sector (around EUR 70
million in 2019), the outlook for French Retail Banking revenues is
expected to improve in 2019. The target RONE(1) is
revised to 11.5%-12.5% for 2020.
Finally, the Group is accelerating the
refocusing of the regional and business portfolio, taking
the disposal programme target to a positive effect of
+80-90 basis points on the CET1 ratio by 2020 (the
Group’s initial target being 50-60 basis points).
The Group has confirmed the CET1 ratio
target of 12% in 2020 and consolidated the capital
trajectory through the implementation of additional measures:
- Rigorous control of the allocation of risk-weighted assets by
prioritising the most profitable activities (estimated impact on
the CET1 ratio limited to around 50 basis points of organic growth
when adjusted for changes in Group structure and at constant
exchange rates in risk-weighted assets in 2019/2020)
- Reduction in risk-weighted assets allocated to Global Markets
(estimated impact on the CET1 ratio of 25 basis points)
- Dynamic optimisation of the stock of risk-weighted assets
(estimated impact on the CET1 ratio of 10-20 basis points in
2020)
- Stepping up of the disposal programme taking the overall impact
on the CET1 ratio to 80-90 basis points in 2020 (vs. an initial
target of 50-60 basis points).
To date, the Group believes that the first-time
application of IFRS 16 would have a negative impact on the CET1
ratio of -5 basis points in 2019. Likewise, the consequences of the
ECB’s model review (including the “Targeted Review of Internal
Models”) would have an impact of between -30 and -50 basis points
in 2019/2020.
In conclusion, the Group’s financial targets for
2020 are as follows:
- Group ROTE(1) of between 9%-10%
- RONE(1) for French Retail Banking revised to
11.5%-12.5%
- RONE(1) for International Retail Banking &
Financial Services increased to
17.0%-18.0%
- RONE(1) for Global Banking & Investor
Solutions ranging from 11.5% to
12.5%
- CET1 ratio of 12%
- 50% payout ratio, with a dividend per share of
at least EUR 2.20
8. 2018/2019 FINANCIAL CALENDAR
2018/2019 Financial
communication calendar
May 3rd,
2019
First quarter 2019 resultsAugust 1st,
2019
Second quarter and first half 2019 resultsNovember 6th,
2019
Third quarter 2019 results
The Alternative Performance Measures, notably the notions
of net banking income for the pillars, operating expenses, IFRIC 21
adjustment, (commercial) cost of risk in basis points, ROE, ROTE,
RONE, net assets, tangible net assets, and the amounts serving as a
basis for the different restatements carried out (in particular the
transition from published data to underlying data) are presented in
the methodology notes, as are the principles for the presentation
of prudential ratios. This document contains
forward-looking statements relating to the targets and strategies
of the Societe Generale Group.These forward-looking statements are
based on a series of assumptions, both general and specific, in
particular the application of accounting principles and methods in
accordance with IFRS (International Financial Reporting Standards)
as adopted in the European Union, as well as the application of
existing prudential regulations.These forward-looking statements
have also been developed from scenarios based on a number of
economic assumptions in the context of a given competitive and
regulatory environment. The Group may be unable to:- anticipate all
the risks, uncertainties or other factors likely to affect its
business and to appraise their potential consequences;- evaluate
the extent to which the occurrence of a risk or a combination of
risks could cause actual results to differ materially from those
provided in this document and the related presentation.Therefore,
although Societe Generale believes that these statements are based
on reasonable assumptions, these forward-looking statements are
subject to numerous risks and uncertainties, including matters not
yet known to it or its management or not currently considered
material, and there can be no assurance that anticipated events
will occur or that the objectives set out will actually be
achieved. Important factors that could cause actual results to
differ materially from the results anticipated in the
forward-looking statements include, among others, overall trends in
general economic activity and in Societe Generale’s markets in
particular, regulatory and prudential changes, and the success of
Societe Generale’s strategic, operating and financial initiatives.
More detailed information on the potential risks that could affect
Societe Generale’s financial results can be found in the
Registration Document filed with the French Autorité des Marchés
Financiers.Investors are advised to take into account factors of
uncertainty and risk likely to impact the operations of the Group
when considering the information contained in such forward-looking
statements. Other than as required by applicable law, Societe
Generale does not undertake any obligation to update or revise any
forward-looking information or statements. Unless otherwise
specified, the sources for the business rankings and market
positions are internal. |
9. APPENDIX 1: FINANCIAL DATA
GROUP NET INCOME AFTER TAX BY CORE
BUSINESS
|
|
|
|
|
|
|
In EUR m |
Q4 18 |
Q4 17 |
Change |
2018 |
|
2017 |
|
Change |
French Retail Banking |
282 |
|
38 |
|
x7,4 |
1 237 |
|
1 059 |
|
+16,8 |
% |
International Retail Banking and Financial
Seervices |
563 |
|
450 |
|
+25,1 |
% |
2 065 |
|
1 939 |
|
+6,5 |
% |
Global Banking and Investor Solutions |
179 |
|
374 |
|
-52,1 |
% |
1 197 |
|
1 593 |
|
-24,9 |
% |
Core Businesses |
1024 |
|
862 |
|
+18,8 |
% |
4 499 |
|
4 591 |
|
-2,0 |
% |
Corporate Centre |
(400 |
) |
(793 |
) |
+49,6 |
% |
(635 |
) |
(1 785 |
) |
+64,4 |
% |
Group |
624 |
|
69 |
|
x9 |
3 864 |
|
2806 |
|
+37,7 |
% |
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEET
(ASSETS - In millions of euros) |
31.12.2018 |
01.01.2018 |
Central banks |
96,585 |
114,404 |
Financial assets at fair value through profit or loss |
365,550 |
369,112 |
Hedging derivatives |
11,899 |
12,718 |
Financial assets measured at fair value through other comprehensive
income |
50,026 |
50,468 |
Securities at amortised cost |
12,026 |
11,592 |
Due from banks at amortised cost |
60,588 |
53,656 |
Customer loans at amortised cost |
447,229 |
417,391 |
Revaluation differences on portfolios hedged against interest rate
risk |
338 |
663 |
Investment of insurance activities |
146,768 |
147,611 |
Tax assets |
5,819 |
6,292 |
Other assets |
67,446 |
60,449 |
Non-current assets held for sale |
13,502 |
13 |
Investments accounted for using the equity method |
249 |
659 |
Tangible and intangible assets |
26,751 |
24,200 |
Goodwill |
4,652 |
4,988 |
Total |
1,309,428 |
1,274,216 |
(LIABILITIES - In millions of euros) |
31.12.2018 |
|
01.01.2018 |
|
Central banks |
5,721 |
|
5,604 |
|
Financial liabilities at fair value through profit or loss |
363,083 |
|
368,550 |
|
Hedging derivatives |
5,993 |
|
6,146 |
|
Debt securities issued |
116,339 |
|
103,235 |
|
Due to banks |
94,706 |
|
88,621 |
|
Customer deposits |
416,818 |
|
410,633 |
|
Revaluation differences on portfolios hedged against interest rate
risk |
5,257 |
|
6,020 |
|
Tax liabilities |
1,157 |
|
1,608 |
|
Other liabilities |
76,629 |
|
69,139 |
|
Non-current liabilities held for sale |
10,454 |
|
|
Liabilities related to insurance activities contracts |
129,543 |
|
131,717 |
|
Provisions |
4,605 |
|
6,345 |
|
Subordinated debts |
13,314 |
|
13,647 |
|
Total liabilities |
1,243,619 |
|
1,211,265 |
|
SHAREHOLDERS' EQUITY |
|
|
Shareholders' equity, Group share |
|
|
Issued common stocks, equity instruments and capital reserves |
29,856 |
|
29,427 |
|
Retained earnings |
28,342 |
|
27,698 |
|
Net income |
3,864 |
|
2,806 |
|
Sub-total |
62,062 |
|
59,931 |
|
Unrealised or deferred capital gains and losses |
(1,036 |
) |
(1,503 |
) |
Sub-total equity, Group share |
61,026 |
|
58,428 |
|
Non-controlling interests |
4,783 |
|
4,523 |
|
Total equity |
65,809 |
|
62,951 |
|
Total |
1,309,428 |
|
1,274,216 |
|
NB. Customer loans include lease financing.
10. APPENDIX 2:
METHODOLOGY
1 - The Group’s consolidated results as
at December 31st, 2018 were
approved by the Board of Directors on February
6th, 2019.
The financial information presented in respect
of the fourth quarter and 2018 has been prepared in accordance with
IFRS as adopted in the European Union and applicable at that date.
The audit procedures carried out by the Statutory Auditors on the
consolidated financial statements are in progress.
2 – Net banking income
The pillars’ net banking income is defined on
page 44 of Societe Generale’s 2018 Registration Document. The terms
“Revenues” or “Net Banking Income” are used interchangeably. They
provide a normalised measure of each pillar’s net banking income
taking into account the normative capital mobilised for its
activity.
3 – Operating expenses
Operating expenses correspond to the “Operating
Expenses” as presented in notes 5 and 8.2 to the Group’s
consolidated financial statements as at December 31st, 2017 (pages
390 et seq. and page 410 of Societe Generale’s 2018 Registration
Document). The term “costs” is also used to refer to Operating
Expenses.The Cost/Income Ratio is defined on page 44 of Societe
Generale’s 2018 Registration Document.
4 – IFRIC 21 adjustment
The IFRIC 21 adjustment
corrects the result of the charges recognised in the accounts in
their entirety when they are due (generating event) so as to
recognise only the portion relating to the current quarter, i.e. a
quarter of the total. It consists in smoothing the charge
recognised accordingly over the financial year in order to provide
a more economic idea of the costs actually attributable to the
activity over the period analysed.
5 – Restatements and other significant
items for the period – Transition from accounting data to
underlying data
Non-economic items correspond
to the revaluation of the Group’s own financial liabilities and the
debt value adjustment on derivative instruments (DVA). These two
factors constitute the restated non-economic items in the analyses
of the Group’s results. They lead to the recognition of
self-generated earnings reflecting the market’s evaluation of the
counterparty risk related to the Group. They are also restated in
respect of the Group’s earnings for prudential ratio calculations.
In accordance with IFRS 9, the variation in the revaluation of the
Group’s own financial liabilities is no longer recognised in
earnings for the period but in shareholders’ equity. Consequently,
the Group will no longer present published information restated for
non-economic items. Moreover, the Group restates the revenues and
earnings of the French Retail Banking pillar for PEL/CEL
provision allocations or write-backs. This adjustment
makes it easier to identify the revenues and earnings relating to
the pillar’s activity, by excluding the volatile component related
to commitments specific to regulated savings.Details of these
items, as well as the other items that are the subject of a one-off
or recurring restatement (exceptional items), are provided below,
given that, in the table below, the items marked with one asterisk
(*) are the non-economic items and the items marked with two
asterisks (**) are the exceptional items.
The reconciliation enabling the transfer from
accounting data to underlying data is set out below:
In EUR m |
Q4 18 |
Q4 17 |
Change |
|
2018 |
|
2017 |
|
Change |
Net Banking Income |
5,927 |
|
6,323 |
|
-6.3 |
% |
|
25,205 |
|
23,954 |
|
+5.2 |
% |
(-)Reevaluation of own financial liabilities* |
|
93 |
|
|
|
|
(53 |
) |
|
(-)DVA* |
|
2 |
|
|
|
|
(4 |
) |
|
(-)Adjustment of hedging costs** |
|
0 |
|
|
|
|
(88 |
) |
|
(-)LIA settlement** |
|
|
|
|
|
(963 |
) |
|
Underlying Net Banking Income |
5,927 |
|
6,228 |
|
-4.8 |
% |
|
25,205 |
|
25,062 |
|
+0.6 |
% |
|
|
|
|
|
|
|
|
Operating expenses |
(4,458 |
) |
(5,024 |
) |
-11.3 |
% |
|
(17,931 |
) |
(17,838 |
) |
+0.5 |
% |
(+)IFRIC 21 linearisation |
(169 |
) |
(157 |
) |
|
|
|
|
|
(-)Adaptation of French retail network** |
|
(390 |
) |
|
|
|
(390 |
) |
|
(-)French tax audit/EIC** |
|
(205 |
) |
|
|
|
(205 |
) |
|
(-)Provision for disputes** |
0 |
|
|
|
|
(336 |
) |
|
|
Underlying Operating expenses |
(4,627 |
) |
(4,586 |
) |
+0.9 |
% |
|
(17,595 |
) |
(17,243 |
) |
+2.0 |
% |
|
|
|
|
|
|
|
|
Net cost of risk |
(363 |
) |
(469 |
) |
-22.6 |
% |
|
(1,005 |
) |
(1,349 |
) |
-25.5 |
% |
(-)Provision for disputes** |
|
(200 |
) |
|
|
|
(800 |
) |
|
(-)LIA settlement** |
|
|
|
|
|
400 |
|
|
Underlying Net Cost of Risk |
(363 |
) |
(269 |
) |
+34.9 |
% |
|
(1,005 |
) |
(949 |
) |
+5.9 |
% |
|
|
|
|
|
|
|
|
Net profit or losses from other assets |
(169 |
) |
(39 |
) |
n/s |
|
(208 |
) |
278 |
|
n/s |
(-)IFRS 5 effect on Group refocusing plan |
(241 |
) |
|
|
|
(268 |
) |
|
|
(-)Change in consolidation method of Antarius** |
|
|
|
|
|
203 |
|
|
(-)SG Fortune disposal** |
|
0 |
|
|
|
|
73 |
|
|
Underlying Net profits or losses from other
assets |
72 |
|
(39 |
) |
n/s |
|
60 |
|
2 |
|
n/s |
|
|
|
|
|
|
|
|
Group net income |
624 |
|
69 |
|
x9 |
|
3,864 |
|
2,806 |
|
+37.7 |
% |
Effect in Group net income of above restatements*** |
(120 |
) |
(808 |
) |
|
|
(604 |
) |
(1,685 |
) |
|
Underlying Group net income |
744 |
|
877 |
|
-15.2 |
% |
|
4,468 |
|
4,491 |
|
-0.5 |
% |
(*) Non-economic items(**) Exceptional
items(***) Including the effect of changes in tax laws in France
and the United States in 2017
6 – Cost of risk in basis points,
coverage ratio for doubtful outstandings
The cost of risk or commercial cost of risk is
defined on pages 46 and 564 of Societe Generale’s 2018 Registration
Document. This indicator makes it possible to assess the level of
risk of each of the pillars as a percentage of balance sheet loan
commitments, including operating leases.
|
(In EUR m) |
Q4 18 |
Q4 17 |
2018 |
2017 |
French Retail Banking |
Net Cost Of Risk |
144 |
177 |
|
489 |
546 |
Gross loan Outstandings |
189,034 |
184,649 |
|
186,782 |
182,058 |
Cost of Risk in bp |
30 |
38 |
|
26 |
30 |
International Retail Banking and Financial
Services |
Net Cost Of Risk |
114 |
109 |
|
404 |
366 |
Gross loan Outstandings |
137,172 |
128,015 |
|
134,306 |
125,948 |
Cost of Risk in bp |
33 |
34 |
|
30 |
29 |
Global Banking and Investor Solutions |
Net Cost Of Risk |
97 |
(30 |
) |
93 |
5 |
Gross loan Outstandings |
157,974 |
144,967 |
|
152,923 |
155,130 |
Cost of Risk in bp |
25 |
(8 |
) |
6 |
0 |
Corporate Centre |
Net Cost Of Risk |
8 |
1 |
|
19 |
0 |
Gross loan Outstandings |
8,591 |
7,657 |
|
7,597 |
7,833 |
Cost of Risk in bp |
37 |
4 |
|
25 |
0 |
Societe Generale Group |
Net Cost Of Risk |
363 |
256 |
|
1,005 |
918 |
Gross loan Outstandings |
492,771 |
465,288 |
|
481,608 |
470,968 |
Cost of Risk in bp |
29 |
22 |
|
21 |
19 |
The gross coverage ratio for doubtful
outstandings is calculated as the ratio of provisions
recognised in respect of the credit risk to gross outstandings
identified as in default within the meaning of the regulations,
without taking account of any guarantees provided. This coverage
ratio measures the maximum residual risk associated with
outstandings in default (“doubtful”).
7 – ROE, ROTE, RONE
The notions of ROE (Return on Equity) and ROTE
(Return on Tangible Equity), as well as their calculation
methodology, are specified on page 47 of Societe Generale’s 2018
Registration Document. This measure makes it possible to assess
Societe Generale’s return on equity and return on tangible equity.
RONE (Return on Normative Equity) determines the return on average
normative equity allocated to the Group’s businesses, according to
the principles presented on page 47 of Societe Generale’s
Registration Document.Group net income used for the ratio numerator
is book Group net income adjusted for “interest, net of tax payable
to holders of deeply subordinated notes and undated subordinated
notes, interest paid to holders of deeply subordinated notes and
undated subordinated notes, issue premium amortisations” and
“unrealised gains/losses booked under shareholders’ equity,
excluding conversion reserves” (see methodology note No. 9). For
ROTE, income is also restated for goodwill impairment.Details of
the corrections made to book equity in order to calculate ROE and
ROTE for the period are given in the table below:
End of period |
Q4 18 |
Q4 17 |
2018 |
|
2017 |
|
Shareholders' equity Group share |
61,026 |
|
59,373 |
|
61,026 |
|
59,373 |
|
Deeply subordinated notes |
(9,330 |
) |
(8,520 |
) |
(9,330 |
) |
(8,520 |
) |
Undated subordinated notes |
(278 |
) |
(269 |
) |
(278 |
) |
(269 |
) |
Interest net of tax payable to holders of deeply subordinated notes
& undated subordinated notes, interest paid to holders of
deeply subordinated notes & undated subordinated notes, issue
premium amortisations |
(14 |
) |
(165 |
) |
(14 |
) |
(165 |
) |
OCI excluding conversion reserves |
(312 |
) |
(1,031 |
) |
(312 |
) |
(1,031 |
) |
Dividend provision |
(1,764 |
) |
(1,762 |
) |
(1,764 |
) |
(1,762 |
) |
ROE equity end-of-period |
49,328 |
|
47,626 |
|
49,328 |
|
47,626 |
|
Average ROE equity |
49,016 |
|
47,981 |
|
48,138 |
|
48,087 |
|
Average Goodwill |
(4,946 |
) |
(4,999 |
) |
(5,019 |
) |
(4,924 |
) |
Average Intangible Assets |
(2,177 |
) |
(1,904 |
) |
(2,065 |
) |
(1,831 |
) |
Average ROTE equity |
41,893 |
|
41,078 |
|
41,054 |
|
41,332 |
|
Group net Income (a) |
624 |
|
69 |
|
3,864 |
|
2,806 |
|
Underlying Group net income (b) |
744 |
|
877 |
|
4,468 |
|
4,491 |
|
Interest, net of tax on deeply subordinated notes and undated
subordinated notes (c) |
(124 |
) |
(117 |
) |
(462 |
) |
(466 |
) |
Cancellation of goodwill impairment (d) |
176 |
|
0 |
|
198 |
|
0 |
|
Corrected Group net Income (e) = (a)+(c)+(d) |
676 |
|
(48 |
) |
3,600 |
|
2,340 |
|
Corrected Underlying Group net Income
(f)=(b)+(c) |
620 |
|
760 |
|
4,006 |
|
4,025 |
|
|
|
|
|
|
Average ROTE equity (g) |
41,893 |
|
41,078 |
|
41,054 |
|
41,332 |
|
ROTE [quarter: (4*e/g), 12M: (e/g)] |
6.5 |
% |
-0.5 |
% |
8.8 |
% |
5.7 |
% |
|
|
|
|
|
Average ROTE equity (underlying) (h) |
41,951 |
|
41,240 |
|
41,345 |
|
41,803 |
|
Underlying ROTE [quarter: (4*f/h), 12M: (f/h)] |
5.9 |
% |
7.4 |
% |
9.7 |
% |
9.6 |
% |
RONE calculation: Average capital
allocated to Core Businesses (in EURm)
In EUR m |
Q4 18 |
Q4 17 |
Change |
2018 |
2017 |
Change |
French Retail Banking |
11,158 |
11,475 |
-2.8 |
% |
11,201 |
11,027 |
+1.6 |
% |
International Retail Banking and Financial
Seervices |
11,417 |
11,111 |
+2.8 |
% |
11,390 |
11,137 |
+2.3 |
% |
Global Banking and Investor Solutions |
16,058 |
14,525 |
+10.6 |
% |
15,424 |
14,996 |
+2.9 |
% |
Core Businesses |
38,633 |
37,111 |
+4.1 |
% |
38,015 |
37,160 |
+2.3 |
% |
Corporate Centre |
10,383 |
10,870 |
-4.5 |
% |
10,123 |
10,927 |
-7.4 |
% |
Group |
49,016 |
47,981 |
+2.2 |
% |
48,138 |
48,087 |
+0.1 |
% |
8 – Net assets and tangible net
assets
Net assets and tangible net assets are defined
in the methodology, page 49 of the Group’s 2018 Registration
Document. The items used to calculate them are presented below.
End of period |
2018 |
|
2017 |
|
2016 |
|
Shareholders' equity Group share |
61,026 |
|
59,373 |
|
61,953 |
|
Deeply subordinated notes |
(9,330 |
) |
(8,520 |
) |
(10,663 |
) |
Undated subordinated notes |
(278 |
) |
(269 |
) |
(297 |
) |
Interest net of tax payableto holders of deeply subordinated notes
& undated subordinated notes, interest paid to holders of
deeply subordinated notes & undated subordinated notes, issue
premium amortisations |
(14 |
) |
(165 |
) |
(171 |
) |
Bookvalue of own shares in trading portfolio |
423 |
|
223 |
|
75 |
|
Net Asset Value |
51,827 |
|
50,642 |
|
50,897 |
|
Goodwill |
(4,860 |
) |
(5,154 |
) |
(4,709 |
) |
Intangible Asset |
(2,224 |
) |
(1,940 |
) |
(1,717 |
) |
Net Tangible Asset Value |
44,743 |
|
43,548 |
|
44,471 |
|
|
|
|
|
Number of shares used to calculate NAPS** |
801,942 |
|
801,067 |
|
799,462 |
|
Nest Asset Value per Share |
64.6 |
|
63.2 |
|
63.7 |
|
Net Tangible Asset Value per Share |
55.8 |
|
54.4 |
|
55.6 |
|
** The number of shares considered is the number
of ordinary shares outstanding as at December 31st, 2018, excluding
treasury shares and buybacks, but including the trading shares held
by the Group.In accordance with IAS 33, historical data per share
prior to the date of detachment of a preferential subscription
right are restated by the adjustment coefficient for the
transaction.
9 – Calculation of Earnings Per Share
(EPS)
The EPS published by Societe Generale is
calculated according to the rules defined by the IAS 33 standard
(see page 48 of Societe Generale’s 2018 Registration Document). The
corrections made to Group net income in order to calculate EPS
correspond to the restatements carried out for the calculation of
ROE. As specified on page 48 of Societe Generale’s 2018
Registration Document, the Group also publishes EPS adjusted for
the impact of non-economic and exceptional items presented in
methodology note No. 5 (underlying EPS).The number of shares used
for the calculation is as follows:
Average number of shares
(thousands) |
2018 |
|
2017 |
|
2016 |
|
Existing shares |
807,918 |
|
807,754 |
|
807,293 |
|
Deductions |
|
|
|
Shares allocated to cover stock option plans and free shares
awarded to staff |
5,335 |
|
4,961 |
|
4,294 |
|
Other own shares and treasury shares |
842 |
|
2,198 |
|
4,232 |
|
Number of shares used to calculate EPS** |
801,741 |
|
800,596 |
|
798,768 |
|
Group net Income |
3,864 |
|
2,806 |
|
3,874 |
|
Interest, net of tax on deeply subordinated notes and undated
subordinated notes |
(462 |
) |
(466 |
) |
(472 |
) |
Capital gain net of tax on partial buybacks |
|
|
|
Adjusted Group net income |
3,402 |
|
2,340 |
|
3,402 |
|
EPS (in EUR) |
4.24 |
|
2.92 |
|
4.26 |
|
Underlying EPS* (in EUR) |
5.00 |
|
5.03 |
|
4.60 |
|
* Excluding non-economic and exceptional items
and including linearisation of the IFRIC 21 effect.** The number of
shares considered is the number of ordinary shares outstanding as
at December 31st, 2018, excluding treasury shares and buybacks, but
including the trading shares held by the Group.
10 – The Societe Generale Group’s Common
Equity Tier 1 capital This is calculated in accordance
with applicable CRR/CRD4 rules. The fully-loaded solvency ratios
are presented pro forma for current earnings, net of dividends, for
the current financial year, unless specified otherwise. When there
is reference to phased-in ratios, these do not include the earnings
for the current financial year, unless specified otherwise. The
leverage ratio is calculated according to applicable CRR/CRD4 rules
including the provisions of the delegated act of October 2014.
NB (1) The sum of values contained in the tables
and analyses may differ slightly from the total reported due to
rounding rules.
(2) All the information on the results for the
period (notably: press release, downloadable data, presentation
slides and supplement) is available on Societe Generale’s website
www.societegenerale.com in the “Investor” section.
Societe Generale
Societe Generale is
one of the leading European financial services groups. Based on a
diversified and integrated banking model, the Group combines
financial strength and proven expertise in innovation with a
strategy of sustainable growth, aiming to be the trusted partner
for its clients, committed to the positive transformations of
society and the economy.
Active in the real
economy for over 150 years, with a solid position in Europe and
connected to the rest of the world, Societe Generale has over
147,000 members of staff in 67 countries and supports on a daily
basis 31 million individual clients, businesses and institutional
investors around the world by offering a wide range of advisory
services and tailored financial solutions. The Group is built on
three complementary core businesses:
- French Retail Banking, which encompasses the
Societe Generale, Crédit du Nord and Boursorama brands. Each offers
a full range of financial services with omnichannel products at the
cutting edge of digital innovation;
- International Retail Banking, Insurance and Financial
Services to Corporates, with networks in Africa, Russia,
Central and Eastern Europe and specialised businesses that are
leaders in their markets;
- Global Banking and Investor Solutions, which
offers recognised expertise, key international locations and
integrated solutions.
Societe Generale is
included in the principal socially responsible investment indices:
DJSI (World and Europe), FTSE4Good (Global and Europe), Euronext
Vigeo (World, Europe and Eurozone), four of the STOXX ESG Leaders
indices, and the MSCI Low Carbon Leaders Index.
For more information,
you can follow us on twitter @societegenerale or visit our website
www.societegenerale.com
([1]) Underlying data. See
methodology note 5 for the transition from accounting data to
underlying data.
(1) 2018 figures established according to IFRS
9, 2017 figures established according to IAS 39, figures restated
for the transfer of Global Transaction and Payment Services from
French Retail Banking to Global Banking & Investor
Solutions.
(2) Ratio between the amount of provisions on
doubtful outstandings and the amount of these same
outstandings.
(1) Balances at January 1st, 2018 after
first-time application of IFRS 9 except for subsidiaries in the
insurance sector
(2) The phased-in ratio, including earnings for
the current financial year amounts to 11.0% at end-December 2018
vs. 11.6% at end-December
2017.
(3) Taking into account the assumption of a 50%
take-up, having an impact of +23bp on the CET1 ratio
(4) TLOF: Total Liabilities and Own Funds
(1) Adjusted for non-economic items, exceptional
items and the effect of the linearisation of IFRIC 21
(1) SG Russia encompasses the
entities Rosbank, Delta Credit Bank, Rusfinance Bank, Societe
Generale Insurance, ALD Automotive and their consolidated
subsidiaries
(1) Excluding non-economic items
(1) Underlying data. See methodology note 5 for
the transition from accounting data to underlying data.(2) O/w 11bp
on transactions already carried out.
(3) Versus 2016 restated for EURIBOR/RMBS
exceptional items and including Global Transaction Banking.(4) This
trajectory includes the impact of the implementation of the new
bank tax in Romania (estimate of around EUR 50 million).
(1) Underlying data. See methodology note 5 for
the transition from accounting data to underlying data.
- Societe Generale_ Press release Results Q4 18
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