Societe Generale: Third quarter 2023 earnings
RESULTS AT 30 SEPTEMBER
2023
Press releaseParis, 3 November
2023
The results are for the first time published and
commented under the reported view, as announced during the Capital
Markets Day
QUARTERLY
RESULTS
Quarterly revenues of EUR 6.2
billion, down by -6.2% vs. Q3 22, mainly as a
result of the peak of the impact of short-term hedges on the net
interest income reached in Q3 23 in French
retailCost-to-income ratio at 70.4% in Q3
23, with operating expenses increasing by less
than +1% vs. Q3 22, at constant perimeter
Low cost of risk at 21 basis
points in Q3 23, now on expected to be below 20
basis points for FY 2023
Exceptional net
income impact of EUR
-610m1 due to
the goodwill impairment of the African, Mediterranean basin and
Overseas activities and Equipment Finance activities for a total
amount of around EUR -340 million, and also, the booking of a
provision for Deferred Tax Assets for a total of around
EUR -270 million
Group net income of EUR 295
million (EUR 905 million excluding exceptional
items1)
Reported ROTE at
3.8% (6.0% excluding exceptional items1)
9M 23
RESULTS
Revenues of EUR 19.1
billionCost-to-income ratio at
72.4%2,
68.9% excluding contribution to the Single Resolution Fund
Cost of risk at 15 basis
points
Group net income of EUR 2.1
billion, vs. EUR 755 million in 9M-22
Reported ROTE at
5.0%2,
vs. 1.0% in 9M-22
BALANCE SHEET AND LIQUIDITY
PROFILECET 1 ratio of
13.3%3 at end-Q3 23,
around 350 basis points above the regulatory
requirementLiquidity Coverage Ratio at 147% at end-Q3
23Stable deposit base vs. Q2
23Provision for distribution of EUR
1.334 per share, at
end-September 2023
MAJOR MILESTONES
ACHIEVEDRecord quarter for client
acquisition at BoursoBank, with 412,000
new clients
Creation of the brand
Ayvens, following the completion
of the LeasePlan acquisition by ALD
Completion of the 2022 share
buy-backs for a total of around EUR 440 million
Slawomir Krupa, the Group’s Chief
Executive Officer, commented:“This quarter was marked by a
good commercial performance in most businesses, limited increase in
operating expenses and a low cost of risk. Global Banking and
Investor Solutions notably posted stable revenues compared to a
high level last year, and International Retail Banking maintained a
solid performance. The Group’s net result was penalized by the
negative effect of short-term hedges on net interest income in
French retail, the impact of which peaked in Q3 23. It also
includes, as announced during our Capital Markets Day, exceptional
accounting items, with no impact on the capital ratio, or on
shareholder distribution. Finally, in line with previous quarters,
the balance sheet is very solid with a CET 1 ratio of 13.3%, up 20
basis points, and a robust liquidity profile.”
-
GROUP CONSOLIDATED RESULTS
In EURm |
Q3 23 |
Q3 22 |
Change |
9M 23 |
9M 22 |
Change |
Net banking income |
6,189 |
6,600 |
-6.2% |
-9.2%* |
19,147 |
20,544 |
-6.8% |
-7.4%* |
Operating expenses |
(4,360) |
(4,083) |
+6.8% |
+2.0%* |
(13,858) |
(13,539) |
+2.4% |
+0.9%* |
Gross operating income |
1,829 |
2,517 |
-27.3% |
-27.5%* |
5,289 |
7,005 |
-24.5% |
-23.7%* |
Net cost of risk |
(316) |
(456) |
-30.7% |
-33.1%* |
(664) |
(1,234) |
-46.2% |
-37.4%* |
Operating income |
1,513 |
2,061 |
-26.6% |
-26.2%* |
4,625 |
5,771 |
-19.9% |
-21.3%* |
Net profits or losses from other assets |
6 |
4 |
+50.0% |
+50.2%* |
(92) |
(3,286) |
+97.2% |
+97.2%* |
Impairment losses on goodwill |
(338) |
0 |
n/s |
n/s |
(338) |
0 |
n/s |
n/s |
Income tax |
(624) |
(369) |
+69.1% |
+69.1%* |
(1,377) |
(1,029) |
+33.8% |
+30.7%* |
Net income |
563 |
1,700 |
-66.9% |
-67.1%* |
2,836 |
1,464 |
+93.7% |
+87.4%* |
O.w. non-controlling interests |
268 |
255 |
+5.1% |
+2.5%* |
773 |
709 |
+9.0% |
+6.3%* |
Reported Group net income |
295 |
1,445 |
-79.6% |
-79.5%* |
2,063 |
755 |
x 2.7 |
x 2.6* |
ROE |
0.9% |
9.5% |
|
|
3.6% |
0.9% |
+0.0% |
+0.0%* |
ROTE |
3.8% |
10.8% |
|
|
5.0% |
1.0% |
+0.0% |
+0.0%* |
Cost to income |
70.4% |
61.9% |
|
|
3.6% |
0.9% |
+0.0% |
+0.0%* |
Asterisks* in the document refer to data at
constant perimeter and exchange rate
Societe Generale’s Board of Directors, which met
on 2 November 2023 under the chairmanship of Lorenzo Bini Smaghi,
examined the Societe Generale Group’s results for Q3 23 and for the
first nine months of 2023.
Net banking
income
Net banking income decreased in Q3 23 by
-6.2% (-9.2%*) vs. Q3 22 largely due to the decline in the
net interest income in French Retail, Private Banking and
Insurance, and to negative revenue in the Corporate Centre (in
particular, impacts from the unwinding of hedges on TLTRO
operations and other volatile items).
Revenues recorded by French Retail, Private
Banking and Insurance decreased by -16.4% vs. Q3 22 owing to the
decline in the net interest income which continues to be impacted
by short-term hedges that were taken until 2022. Insurance’s
revenues climbed by +11% vs. Q3 22.
Global Banking & Investor Solutions recorded
lower revenues, down by a slight -0.4% in Q3 23 vs. a very good Q3
22, thanks to sustained level of activity. Global Markets &
Investor Services posted solid revenues compared with a strong
reference point in Q3 22 (-1.7%), driven by robust commercial
activity in equity derivatives and a good performance in fixed
income activities. Financing & Advisory activities posted a
robust performance, with increased revenues in the asset finance
platform. The securitisation and natural resources finance
activities also turned in a solid performance. Investment banking
activities rebounded during the quarter, particularly in the
acquisition finance segment and for primary bond market activities.
Global Transaction & Payment Services’ activities continued to
grow on back of high interest rates.
International Retail, Mobility and Leasing
Services’ revenues climbed by +12.0% (-0.8%*) vs. Q3 22, in
particular following the integration of LeasePlan by ALD.
Corporate Centre recorded revenues of EUR -231m
in Q3 23 which included around EUR -63 million euros due to the
unwinding of hedges on TLTRO operations, in addition to impacts
from the change in fair value of the swaps used for the replacement
of equity stakes in subsidiaries.
Over 9M 23, net banking income
decreased by -6.8% vs. 9M 22.
Operating
expenses
In Q3 23, operating expenses came to EUR
4,360 million, up by +6.8% vs. Q3 22.
They include around EUR 230 million for the
integration of LeasePlan’s activities in ALD excluding
transformation charges, and EUR 145 million in transformation
costs. At constant perimeter, operating expenses are increasing by
less than +1% vs. Q3 22.
Over 9M 23, operating expenses
totalled EUR 13,858 million, up by +2.4% vs. 9M 22.
They include EUR 339 million for the integration
of LeasePlan’s activities in ALD, excluding transformation charges
and EUR 627 million in transformation costs.
The cost-to-income ratio came to 72.4% in 9M 23
(68.9% excluding the contribution to the Single Resolution
Fund.
Cost of
risk
The cost of risk for Q3 23 was moderate
at 21 basis points, i.e., EUR 316 million. It breaks down
into a provision on non-performing loans of EUR 419 million (28
basis points) and a reversal of provision on performing loans for
EUR -103 million (around -7 basis points). The Group now estimates
that the cost of risk for FY 2023 will be lower than 20 basis
points.
At end-September 2023, the Group’s provisions on
performing loans amounted to EUR 3,612 million.
The non-performing loans ratio amounted to 2.9%5
at 30 September 2023. The gross coverage ratio on stood at 46%6 at
30 September 2023 (80% after taking into account guarantees and
collateral).
At 30 September 2023, the Group sharply reduced
its offshore exposure to Russia to around EUR 1.0 billion of EAD
(Exposure at Default) compared with EUR 1.6 billion at 30 June 2023
(-38%). The maximum risk exposure on this portfolio is estimated at
around EUR 0.3 billion before provision. Total provisions stands at
EUR 0.2 billion. The onshore residual exposure is very limited at
around EUR 15 million and relates to the integration of LeasePlan
activities in Russia.
Group net
income
Group net income stood at EUR 295 million in Q3
23, i.e., a Return on Tangible Equity (ROTE) of 3.8%.
It was negatively impacted by EUR -610m of
exceptional items, which include on the one hand, the goodwill
impairment of the African, Mediterranean basin and Overseas
activities and Equipment Finance activities for a total of around
EUR -340 million, and on the other hand, the booking of a provision
for Deferred Tax Assets of around EUR -270 million.
Group net income for 9M 23 came to EUR 2,063
million, i.e., a reported ROTE of 5.0%; and of 6.5% excluding the
contribution to the Single Resolution Fund contribution.
ESG
Accelerating the decarbonisation of our
businesses with new targets
Société Générale is committed to a process of
aligning its financing with trajectories compatible with the
objectives of carbon neutrality in 2050, starting with the most
CO2-emitting activities, as defined by the Net Zero Banking
Alliance (NZBA).The Group has set new targets, announced for the
most at the Capital Markets Day on 18 September 2023:
- Accelerate the reduction of
upstream Oil & Gas exposure, reaching -80% by 2030 vs. 2019,
with an intermediary 2025 step of -50% (vs. the previous commitment
of -20%);
-
Stop providing7 financial products and services dedicated to
upstream Oil & Gas greenfield projects;
-
Phase-out exposure8 on upstream Oil & Gas private pure players
and reinforce engagement with energy sector clients, particularly
on their climate strategy;
-
New target on Oil & Gas financed GHG emissions of -70% by 2030
vs. 20199;
-
New Automotive sector10 target of -51% carbon emission intensity by
2030 vs. 2021;
-
New Steel sector target for an alignment score of 0 by 2030, based
on the Sustainable Steel Principles for the 1.5°C scenarios of the
IEA11 and MPP12;
-
New Cement sector target of -20% carbon emission intensity by 2030
vs. 2022.
Investing in innovation and developing
partnerships to generate more impact
-
Launch of a EUR 1 billion transition new investment fund. The
fund’s objective is to support clients on energy transition, green
technologies, nature-based solutions and impact-driven
opportunities which support the UN’s Sustainable Development
Goals;
-
Create an independent scientific advisory board composed of experts
covering climate, nature, social issues and sustainable development
that will enrich the Group’s ESG reflections, bringing long-term
perspectives and scientific views;
-
Explore new areas of cooperation with the International Finance
Corporation (IFC), a member of the World Bank Group, in sustainable
finance projects.
Being a responsible employer of
choice
-
The Group is seeking to further strengthen its commitment to gender
diversity, allocating EUR 100 million to
reduce the pay gap and targeting more than 35% of
women in senior leadership roles by 2026.
-
THE GROUP’S FINANCIAL STRUCTURE
Group shareholders’ equity
totalled EUR 68.1 billion at 30 September 2023 (vs. EUR 67.0
billion at 31 December 2022). Net asset value per share was
EUR 71.6 and tangible net asset value per share was EUR 62.1.
The consolidated balance sheet totalled EUR
1,599 billion at 30 September 2023 vs. EUR 1,485 billion at 31
December 2022. The total funded balance sheet (see Methodology note
9) stood at EUR 967 billion vs. EUR 930 billion at 31 December
2022. The net amount of customer loan outstandings totalled
EUR 497 billion vs. EUR 516 billion 31 December 2022. At
the same time, customer deposits amounted to EUR 612 billion,
up around 3% vs. 31 December 2022.
At 30 September 2023, the parent company had
issued EUR 46.5 billion of medium/long-term debt, having an average
maturity of 4.9 years and an average spread of 78 basis points
(over 6-month midswaps, excluding subordinated debt). The
subsidiaries had issued EUR 3.9 billion. In all, the Group has
issued a total of EUR 50.4 billion in medium/long-term debt.
The Liquidity Coverage Ratio (LCR) was well
above regulatory requirements at 147% at end-September 2023 (155%
on average in Q3), vs. 141% at end-December 2022. At the same time,
the Net Stable Funding Ratio (NSFR) stood at 117% at end-September
2023 vs. 114% at end-December 2022.
The Group’s risk-weighted
assets (RWA) were down vs. end of June 2023, at EUR 384.2
billion at 30 September 2023 according to CRR2/CRD5 rules.
Risk-weighted assets in respect of credit risk account for 84.4% of
the total, i.e., EUR 324.2 billion, up by 7.8% vs. 31 December
2022.
At 30 September 2023, the Group’s Common
Equity Tier 1 ratio(13) stood at 13.3%, or around 350
basis points above the regulatory requirement of 9.76%. The Group’s
Common Tier 1 ratio (CET 1) at 30 September 2023 includes an
+6 basis-point impact from the phasing of IFRS 9. Excluding this
impact, the fully-loaded ratio amounts to 13.2%. At end-September
2023, the Tier 1 ratio stood at 15.9% while the total capital ratio
amounted to 18.6%, above the respective regulatory requirements of
11.66% and 14.20%.
The leverage ratio stood at
4.2% at 30 September 2023, above the regulatory requirement of
3.5%.
With a RWA level of 32.5% and leverage exposure
of 8.5% at end-September 2023, the Group’s TLAC ratio is
significantly above the respective Financial Stability Board
requirements for 2023 of 22.1% and 6.75%. Likewise, MREL-eligible
outstandings, which stood at 34.0% of RWA and 8.9% of leverage
exposure at end-September 2023, are also far above the respective
regulatory requirements of 25.7% and 5.91%.
The Group is rated by four rating agencies: (i)
FitchRatings - long-term rating “A-”, positive outlook, senior
preferred debt rating “A”, short-term rating “F1”, (ii) Moody’s -
long-term rating (senior preferred debt) “A1”, stable outlook,
short-term rating “P-1”, (iii) R&I - long-term rating (senior
preferred debt) “A”, stable outlook and (iv) S&P Global Ratings
- long-term rating (senior preferred debt) “A”, stable outlook,
short-term rating
“A-1”.3. FRENCH RETAIL
BANKING, PRIVATE BANKING AND INSURANCE
In EURm |
Q3 23 |
Q3 22 |
Change |
9M 23 |
9M 22 |
Change |
Net banking income |
1,883 |
2,253 |
-16.4% |
6,070 |
6,931 |
-12.4% |
Net banking income excl. PEL/CEL |
1,877 |
2,200 |
-14.7% |
6,070 |
6,784 |
-10.5% |
Operating expenses |
(1,591) |
(1,635) |
-2.7% |
(5,036) |
(5,090) |
-1.1% |
Gross operating income |
292 |
618 |
-52.8% |
1,034 |
1,841 |
-43.8% |
Net cost of risk |
(144) |
(196) |
-26.5% |
(342) |
(264) |
+29.5% |
Operating income |
148 |
422 |
-64.9% |
692 |
1,577 |
-56.1% |
Net profits or losses from other assets |
0 |
3 |
-100.0% |
3 |
6 |
-50.0% |
Reported Group net income |
110 |
317 |
-65.3% |
518 |
1,177 |
-56.0% |
RONE |
2.8% |
7.9% |
|
4.5% |
10.1% |
|
Cost to income |
84.5% |
72.6% |
|
83.0% |
73.4% |
|
(2) SG network, Private Banking and
Insurance
Average loan outstandings contracted by -4% on
the Q3 22 level to EUR 204 billion. Loan outstandings to corporate
and professional clients excluding government-guaranteed PGE loans
rose by +1% vs. Q3 22 and were driven by short-term credits. Home
loan outstandings contracted by -5% vs. Q3 22 owing to the Group’s
strict lending policy implemented since mid-2022.
Average outstanding balance sheet deposits of SG
network clients declined by -5% vs. Q3 22 to EUR 238 billion
(shift from sight deposits to interest-bearing deposits).
As a result, the average loan/deposit ratio came
to 86% in Q3 23.
Private Banking activities
cover Private Banking activities in and outside of France. Assets
under management totalled EUR 143 billion in Q3 23. Private
Banking’s net asset inflows amounted to EUR 0.6 billion
at Q3 23. Net banking income for the quarter stood at EUR 367
million, up +5.2% vs. Q3 22 (EUR 1,115 million for 9M 23, up +4.7%
vs. 9M 22).
Insurance, which covers
activities in and outside of France, has been consolidated in the
French Retail Banking, Private Banking and Insurance core business
as of this quarter. Life insurance outstandings stood at EUR 132
billion at end-September 2023. The unit-linked share accounted for
37% at a high level, and was up 2.7 points vs. the end-September
2022 level. Gross life insurance inflows amounted to EUR 2.6
billion in Q3 23. Protection insurance premiums were by +4% vs. Q3
22, with solid commercial momentum in property and casualty
premiums (+9% vs. Q3 22).
BoursoBank
BoursoBank is riding high on its new ambition,
having registered 412,000 new clients, which is a quarterly record,
and with a stable profile. Totally, it acquired 838,000 new clients
over the first nine months of 2023. The leading online bank in
France reached 5.4 million clients at the end of September 2023,
with a low churn rate14, which is decreasing and lower than the
market’s.
Assets under management continue to rise at a
consistent pace by vintage.
Average loan outstandings dipped by -4.3% on the
Q3 22 level to EUR 15 billion. Home loan production gradually
picked up over the quarter.
Average outstanding savings including deposits
and financial savings were +20.5% higher vs. Q3 22 at EUR 55
billion. Deposits outstanding rose strongly by +24% vs. Q3 22 on
back of robust collection over the quarter (EUR 1.4 million),
notably on interest-bearing products. Life insurance outstandings
increased by +9.5% vs. Q3 22, with the unit-linked share accounting
for 43%. Net inflows were slightly positive over the quarter.
BoursoBank strengthened its day-to-day banking,
posting a +25% rise in number of transactions vs. Q3 22 and a
record number of credit card operations.
Net banking
income
In Q3 23, revenues totalled EUR
1,877 million, down -15% vs. Q3 22, excluding PEL/CEL. Net interest
income excluding PEL/CEL contracted by -27% vs. Q3 22, mainly due
to the impact of the short-term hedges on the NII, the higher
interest rate on regulated savings schemes, the consequences of the
usury rate and the end of the TLTRO programme. Fee income decreased
by -2% relative to Q3 22.
Over 9M 23, revenues totalled
EUR 6,070 million, down by -11% vs. 9M 22, excluding PEL/CEL. The
net interest income excluding PEL/CEL was down by -21% vs. 9M 22.
Fee income rose slightly by +0.4% relative to 9M 22.
Based on latest assumptions consistent with the
current economic environment, the forecast of the net interest
income of French retail banking, Private Banking and Insurance is
expected to decrease by more than 20% in 2023 vs. 2022. In 2024,
based on the latest budget assumptions, the NII of the French
retail banking, Private Banking and Insurance is expected to be at
a level higher or equal to the 2022 amount.
Operating
expenses
In Q3 23, operating expenses
came to EUR 1,591 million (-2.7% vs. Q3 22) including
EUR 46 million in restructuring costs. The cost-to-income
ratio stood at 84.5% for Q3 23.
Over 9M 23, operating expenses
totalled EUR 5,036 million (-1.1% vs. 9M 22). The cost-to-income
ratio stood at 83.0%.
Cost of
risk
In Q3 23, the cost of risk
amounted to EUR 144 million or 24 basis points, which was slightly
higher than in Q2 23 (18 basis points).
Over 9M 23, the commercial cost
of risk totalled EUR 342 million or 18 basis points vs. 14 basis
points in 9M 22.
Group net
income
In Q3 23, Group net income came
to EUR 110 million, down -65.0% vs. Q3 22. RONE stood at 2.8% in
Q3 23.
Over 9M 23, Group net income
totalled EUR 518 million, down -56% vs. 9M 22. RONE stood at
4.5% in
9M 23.4. GLOBAL
BANKING & INVESTOR SOLUTIONS
In EUR m |
Q3 23 |
Q3 22 |
Variation |
9M 23 |
9M 22 |
Variation |
Net banking income |
2,309 |
2,318 |
-0.4% |
+2.1%* |
7,455 |
7,649 |
-2.5% |
-1.4%* |
Operating expenses |
(1,479) |
(1,470) |
+0.6% |
+3.4%* |
(5,188) |
(5,281) |
-1.8% |
-0.8%* |
Gross operating income |
830 |
848 |
-2.1% |
-0.1%* |
2,267 |
2,368 |
-4.3% |
-2.8%* |
Net cost of risk |
(13) |
(80) |
-83.8% |
-83.2%* |
9 |
(343) |
n/s |
n/s |
Operating income |
817 |
768 |
+6.4% |
+8.4%* |
2,276 |
2,025 |
+12.4% |
+14.3%* |
Reported Group net income |
647 |
601 |
+7.7% |
+9.6%* |
1,813 |
1,598 |
+13.4% |
+15.4%* |
RONE |
16.9% |
14.7% |
+0.0% |
+0.0%* |
15.6% |
13.4% |
+0.0% |
+0.0%* |
Cost to income |
64.1% |
63.4% |
+0.0% |
+0.0%* |
69.6% |
69.0% |
+0.0% |
+0.0%* |
Net banking
income
Global Banking & Investor
Solutions delivered a good performance in the third
quarter, posting revenues of EUR 2,309 million, stable in
comparison to a strong Q3 22.
Over the first nine months of the
year, revenues are slightly down by -2.5% vs. 9M 22 (EUR
7,455 million vs. EUR 7,649 million).
Global Markets & Investor
Services recorded revenues of EUR 1,482 million in Q3 23,
which was a minor -1.7% decrease in comparison to a high
reference point in Q3 22. Over 9M 23, revenues stood at EUR 4,940
million, a -5.4% decrease vs. 9M 22.
Global Markets turned in a
solid performance with revenues of EUR 1,314 million, down -2.4%
vs. Q3 22, which was a record third quarter result(15). Over 9M 23,
revenues decreased by -5.7% vs. 9M 22 to EUR 4,383 million.
The Equities business posted a
very solid performance overall, recording revenues of EUR 800
million for Q3 23, which was a minor -1.0% decrease vs. a very high
Q3 22, on back of a broadly robust commercial activity notably
driven by strong momentum in investment solutions despite less
conducive market conditions than in Q3 22, notably in the flow and
financing businesses. Over 9M 23, revenues decreased by -8.4% vs.
9M 22 to EUR 2,431 million.
Fixed income and Currencies
recorded a solid performance, notably on back of investment
solutions on rates despite a less favourable market environment,
particularly for flow businesses. In Q3 23, revenues decreased by
-4.6% vs. Q3 22 to EUR 514 million. Over 9M 23, revenues dipped
slightly by -2.0% vs. 9M 22 to EUR 1,952 million.
Securities Services’ revenues
were up by +4.3% over the quarter to EUR 168 million. Excluding the
impact of the valuation of various equity participations, business
activity decreased by -4.0% compared with Q3 22. Over 9M 23,
revenues fell by -3.1% vs. 9M 22, but rose by +2.9% excluding these
participations. Assets under Custody and Assets under
Administration amounted to EUR 4,671 billion and EUR 577 billion,
respectively.
The Financing and
Advisory business posted a record Q3 performance, with
revenues of EUR 827 million, up by +2.1% vs. Q3 22. Over
9M 23, revenues came to EUR 2,515 million, up by +3.6% vs. 9M
22.
The Global Banking & Advisory business
turned in a solid performance. Revenues decreased by -2.7% vs. Q3
22. Business benefited notably from the solid activity in
Asset-Backed Products. Investment Banking also reaped the benefit
of good commercial momentum that was driven by robust activity in
acquisition finance and continued strong performance in debt
capital markets activities. Meanwhile, the Asset Finance and
Natural Resources platforms had a sustained commercial performance
over the quarter. Over the first nine months of the year, business
contracted by -4.1% vs. 9M 22.
Global Transaction and Payment Services recorded
strong revenue growth of +18.3% vs. Q3 22, reaping the dual benefit
of high interest rates and increased fee income. Over 9M 23,
revenues advanced strongly by +35.3% vs. 9M 22.
Operating
expenses
Operating expenses for the quarter
totalled EUR 1,479 million, including EUR 41 million in
transformation charges, up by a slight +0.6% vs. Q3 22,
reflecting the tight rein on costs despite the inflationary
backdrop. Accordingly, the cost-to-income ratio came to 64.1% in Q3
23.
Over 9M 23, operating expenses
contracted by -1.8% vs. 9M 22. The cost-to-income ratio for 9M 23
consequently came to 69.6%. Excluding the contribution to the
Single Resolution Fund (SRF), the ratio was 63.1%.
Cost of
risk
In Q3 23, the cost of risk
remained at very low 3 basis points (or EUR 13 million) vs. -7
basis points in Q2 23.
Over 9M 23, the cost of risk
stood at -1 basis points vs. 26 basis points in 9M 22.
Group net
income
Group net income came to EUR 647
million, up by +7.7%. For the first nine months of the
year, it rose by a sharp +13.4% to EUR 1,813 million.
Global Banking and Investor Solutions again
reported strong RONE of 16.9% for the quarter.
Over the first nine months of the year, reported RONE came
to 15.6% and 18.8% excluding the contribution to the
SRF.5. INTERNATIONAL
RETAIL BANKING, MOBILITY AND LEASING SERVICES
In EURm |
Q3 23 |
Q3 22 |
Change |
9M 23 |
9M 22 |
Change |
Net banking income |
2,228 |
1,990 |
+12.0% |
-0.8%* |
6,492 |
6,028 |
+7.7% |
+4.6%* |
Operating expenses |
(1,237) |
(920) |
+34.5% |
+9.0%* |
(3,479) |
(2,940) |
+18.3% |
+10.5%* |
Gross operating income |
991 |
1,070 |
-7.4% |
-9.2%* |
3,013 |
3,088 |
-2.4% |
-1.0%* |
Net cost of risk |
(175) |
(150) |
+16.7% |
+8.4%* |
(349) |
(572) |
-39.0% |
-10.7%* |
Operating income |
816 |
920 |
-11.3% |
-12.1%* |
2,664 |
2,516 |
+5.9% |
+0.3%* |
Net profits or losses from other assets |
1 |
2 |
-50.0% |
-50.0%* |
0 |
12 |
-100.0% |
-100.0%* |
Reported Group net income |
377 |
511 |
-26.2% |
-26.0%* |
1,325 |
1,395 |
-5.0% |
-11.0%* |
RONE |
14.9% |
22.2% |
|
|
18.6% |
18.9% |
|
|
Cost to income |
55.5% |
46.2% |
|
|
53.6% |
48.8% |
|
|
International Retail Banking’s
outstanding loans rose by +5.0% vs. Q3 22 to EUR 66.3 billion.
Outstanding deposits increased by +3.5% vs. Q3 22 to EUR 81.6
billion.
In Europe, outstanding loans were up + 5.2% vs.
end-September 2022 to EUR 41.4 billion, with +4.2% vs. Q3 22 in the
Czech Republic and +12.5% vs. Q3 22 in Romania. Outstanding
deposits grew across all segments in the two countries, by +3.5%
vs. Q3 22 to EUR 54.2 billion.
In Africa, Mediterranean Basin and French
Overseas Territories, outstanding loans (EUR 25 billion in
Q3 23) and outstanding deposits (EUR 27.4 billion in Q3 23)
grew respectively by +3.7% and +3.4% vs. Q3 22. Commercial
performances were particularly robust in sub-Saharan Africa, which
posted loan outstandings growth of +12.7% vs. Q3 22 and deposit
outstandings of +5.8% vs. Q3 22.
Mobility and Leasing Services
also showed strong momentum. Earning assets grew by +14.1% to
EUR 50.2 billion at end-September 2023 vs. EUR 44.0 billion at
end-September 2022. Growth was driven by the increase in car
values.
Consumer Finance loan outstandings rose by +2.9%
vs. Q3 22 to EUR 24 billion at end-September 2023. Equipment
Finance posted leasing ouststandings of EUR 15 billion in Q3 23, up
by + 3.7% vs. Q3 22 on back of robust new production.
Net banking
income
In Q3 23, net banking income
amounted to EUR 2,228 million, up by +12% vs. Q3 22.
Over 9M 23, revenues grew by
+7.7% vs. 9M 22 to EUR 6,492 million.
International Retail Banking’s
net banking income was robust during the quarter, posting a steady
growth of +2.8% vs. Q3 22 to EUR 1,044 million in Q3 23. Over the
first nine months of 2023, net banking income was stable vs. 9M 22
at EUR 3,124 million.
Revenues in Europe were down in the third
quarter to EUR 506 million (-4.5% vs. Q3 22). Momentum in Romania
remained solid (+8.0% vs. Q3 22), while NII in Czech Republic,
which remains high vs. past years, is down compared to a high level
in Q3 22.
Net banking income for the Africa, Mediterranean
Basin and French Overseas Territories business unit reported a
strong increase of +10.7% vs. Q3 22 to EUR 538 million in Q3
23.
Mobility and Leasing Services
recorded net banking income growth of +21.6% vs. Q3 22 to EUR 1,184
million. Boosted by the integration of LeasePlan, Ayvens posted a
+37.2% increase, with stable margin revenues on leasing contracts
and services (excluding reduction in depreciation costs and
non-operating items). Regarding Used Car Sales (UCS) net result
(including the negative impact of reduction in depreciation costs),
it is normalising to an average of EUR 1,033 per unit vs EUR 3,014
in Q3 22. Excluding this reduction impact in depreciation costs,
UCS results per unit would have been EUR 2,346 in Q3 23 vs. EUR
3,607 in Q3 22.
In Q3 23, the contribution of LeasePlan’s
revenues was around EUR 300 million, impacted by negative
Marked-to-Market of hedging portfolio (EUR -82m) and consolidation
adjustments on UCS and depreciation costs (EUR ~-150m in
total).
Consumer Finance posted lower net banking
income, notably owing to the impact of the usury rate in
France.
Over 9M 23, Mobility and
Leasing Services recorded net banking income of EUR 3,368 million,
up by +16.6% vs. 9M 22.
Operating
expenses
In Q3 23, operating expenses
increased by +34.5% vs. Q3 22 to EUR 1,237 million (+9%*), impacted
by LeasePlan expenses excluding transformation charges, for around
EUR 230 million, and by around EUR 45 million in
restructuring costs related to the integration. The cost-to-income
ratio stood at 55.5% in Q3 23.
Over 9M 23, operating expenses
came to EUR 3,479 million, up by 18.3% vs. 9M 22
(+10.5%*).
Amid an inflationary backdrop,
International Retail Banking posted a +7.4%
increase in operating expenses during the quarter vs. Q3 22 to EUR
567 million.
Operating expenses for Mobility and
Leasing Services came to EUR 670 million, which was a
+70.9% increase vs. Q3 22. At constant scope and exchange rates,
these expenses rose by +9%* vs. Q3 22.
Cost of
risk
In Q3 23, the cost of risk fell
to 43 basis points (or EUR 175 million) vs. 47 basis points in Q3
22.
Over 9M 23, the cost of risk
stood at 32 basis points vs. 56 basis points in 9M 22.
Group net
income
In Q3 23, Group net income came
to EUR 377 million, down -26.2% vs. Q3 22. RONE stood at 14.9% in
Q3 23. RONE was 17.2% for International Retail Banking and
13.3% for Mobility and Leasing Services in Q3 23.
Over 9M 23, Group net income
totalled EUR 1,325 million, down -5% vs. 9M 22, while RONE stood at
18.6%. RONE for International Retail Banking was 17.3%, and 19.8%
for Mobility and Leasing Services.
-
CORPORATE CENTRE
In EURm |
Q3 23 |
Q3 22 |
9M 23 |
9M 22 |
Net banking income |
(231) |
39 |
(870) |
(64) |
Operating expenses |
(53) |
(58) |
(155) |
(228) |
Gross operating income |
(284) |
(19) |
(1,025) |
(292) |
Net cost of risk |
16 |
(30) |
18 |
(55) |
Net profits or losses from other assets |
4 |
(1) |
(96) |
(3,304) |
Impairment losses on goodwill |
(338) |
- |
(338) |
- |
Income tax |
(211) |
121 |
(80) |
391 |
Reported Group net income |
(839) |
16 |
(1,593) |
(3,415) |
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, as well as several costs incurred by the
Group that are not re-invoiced to the businesses.
Corporate Centre’s net banking income
totalled EUR -231 million in Q3 23 vs. EUR +39 million in
Q3 22. It notably included the negative impact from the
unwinding of hedges on TLTRO operations for around EUR -0.1 billion
at Q3 23 (approximately EUR -0.3 billion in 2023) and the negative
impact from the change in market value of replacement swaps of the
equity stakes in subsidiaries.
Operating expenses totalled EUR -53
million in Q2 23 vs. EUR -58 million in Q3 22.
Moreover, the Group recorded goodwill impairment
on the Africa, Mediterranean Basin and French Overseas Territories
activities and on Equipment Finance activities for a total amount
of around EUR 340 million16, and booked a provision for
deferred tax assets of around EUR 270 million1.
The Corporate Centre’s contribution to
Group net income totalled EUR -839 million in Q3
23 vs. EUR +16 million in Q3 22.
7. 2023 AND 2024
FINANCIAL CALENDAR
2023 and 2024 financial communications calendar |
8 February 2024 Fourth quarter and full year 2023 results3 May 2024
First quarter 2024
results |
01 August 2024 Second quarter and half year 2024 results |
|
Les Indicateurs Alternatifs de Performance, notamment les
notions de Produit net bancaire des piliers, Frais de gestion,
ajustement d’IFRIC 21, coût du risque en points de base, ROE, ROTE,
RONE, Actif net, Actif net tangible, et les montants servant de
base aux différents retraitements effectués (en particulier le
passage des données publiées aux données sous-jacentes) sont
présentés dans les notes méthodologiques, ainsi que les principes
de présentation des ratios prudentiels. Ce document
comporte des éléments de projection relatifs aux objectifs et
stratégies du Groupe Société Générale.Ces projections reposent sur
des hypothèses, à la fois générales et spécifiques, notamment
l’application de principes et de méthodes comptables conformes au
référentiel IFRS (International Financial Reporting Standards) tel
qu'adopté dans l'Union européenne, ainsi que l’application de la
réglementation prudentielle en vigueur à ce jour.Ces éléments sont
issus de scenarii fondés sur un certain nombre d'hypothèses
économiques dans un contexte concurrentiel et réglementaire donné.
Le Groupe peut ne pas être en mesure :- d’anticiper tous les
risques, incertitudes ou autres facteurs susceptibles d’affecter
son activité et d’en évaluer leurs conséquences potentielles ;-
d’évaluer avec précision dans quelle mesure la matérialisation d’un
risque ou d’une combinaison de risques pourrait entraîner des
résultats significativement différents de ceux projetés dans cette
présentation. Par conséquent, bien que Société Générale estime
qu’ils reposent sur des hypothèses raisonnables, ces éléments de
projection sont soumis à de nombreux risques et incertitudes, en
particulier dans le contexte de la crise du Covid-19, notamment des
sujets dont le Groupe ou sa direction n’ont pas encore connaissance
ou actuellement jugés non significatifs, et rien ne garantit que
les événements anticipés se matérialiseront ou que les objectifs
mentionnés seront atteints. Les facteurs importants susceptibles
d’entraîner une différence marquée entre les résultats réels et les
résultats anticipés dans les éléments de projection comprennent,
entre autres, les tendances de l’activité économique en général et
celles des marchés de Société Générale en particulier, les
changements réglementaires et prudentiels et le succès des
initiatives stratégiques, opérationnelles et financières de Société
Générale. Des informations détaillées sur les risques potentiels
susceptibles d’affecter les résultats financiers de Société
Générale sont consultables dans le Document d’enregistrement
universel déposé auprès de l’Autorité des Marchés Financiers.Il est
recommandé aux investisseurs de tenir compte des facteurs
d’incertitudes et de risque susceptibles d’affecter les opérations
du Groupe lorsqu’ils examinent les informations contenues dans les
éléments de projection. Au-delà des obligations légales en vigueur,
Société Générale ne s’engage aucunement à mettre à jour ou à
réviser ses éléments de projection. Sauf mention contraire, les
sources des classements et des positions de marché sont
internes. |
8. APPENDIX 1: FINANCIAL
DATA
GROUP NET INCOME BY CORE
BUSINESS
In EURm |
Q3 23 |
Q3 22 |
Variation |
9M 23 |
9M 22 |
Variation |
French Retail, Private Banking and Insurance |
110 |
317 |
-65.3% |
518 |
1,177 |
-56.0% |
Global Banking and Investor Solutions |
647 |
601 |
+7.7% |
1,813 |
1,598 |
+13.4% |
International Retail, Mobility and Leasing Services |
377 |
511 |
-26.2% |
1,325 |
1,395 |
-5.0% |
Core Businesses |
1,134 |
1,429 |
-20.6% |
3,656 |
4,170 |
-12.3% |
Corporate Centre |
(839) |
16 |
n/s |
(1,593) |
(3,415) |
+53.4% |
Group |
295 |
1,445 |
-79.6% |
2,063 |
755 |
x 2.7 |
CONSOLIDATED BALANCE
SHEET
In EUR m |
|
30.09.2023 |
31.12.2022 R |
Cash, due from central banks |
|
234,004 |
207,013 |
Financial assets at fair value through profit or loss |
|
490,511 |
427,151 |
Hedging derivatives |
|
32,050 |
32,971 |
Financial assets at fair value through other comprehensive
income |
|
89,527 |
92,960 |
Securities at amortised cost |
|
27,468 |
26,143 |
Due from banks at amortised cost |
|
87,404 |
68,171 |
Customer loans at amortised cost |
|
487,788 |
506,635 |
Revaluation differences on portfolios hedged against interest rate
risk |
|
(2,389) |
(2,262) |
Insurance and reinsurance contracts assets |
|
487 |
353 |
Tax assets |
|
4,302 |
4,484 |
Other assets |
|
82,243 |
82,315 |
Non-current assets held for sale |
|
1,591 |
1,081 |
Investments accounted for using the equity method |
|
208 |
146 |
Tangible and intangible fixed assets |
|
59,006 |
33,958 |
Goodwill |
|
5,247 |
3,781 |
Total |
|
1,599,447 |
1,484,900 |
In EUR m |
|
30.09.2023 |
31.12.2022 R |
Due to central banks |
|
10,828 |
8,361 |
Financial liabilities at fair value through profit or loss |
|
391,803 |
304,175 |
Hedging derivatives |
|
45,062 |
46,164 |
Debt securities issued |
|
154,010 |
133,176 |
Due to banks |
|
118,564 |
133,011 |
Customer deposits |
|
543,919 |
530,764 |
Revaluation differences on portfolios hedgedagainst interest rate
risk |
|
(9,248) |
(9,659) |
Tax liabilities |
|
2,436 |
1,645 |
Other liabilities |
|
105,466 |
107,315 |
Non-current liabilities held for sale |
|
1,583 |
220 |
Insurance contracts related liabilities |
|
137,621 |
135,875 |
Provisions |
|
4,322 |
4,579 |
Subordinated debts |
|
14,824 |
15,948 |
Total liabilities |
|
1,521,190 |
1,411,574 |
Shareholder's equity |
|
- |
- |
Shareholders' equity, Group share |
|
- |
- |
Issued common stocks and capital reserves |
|
21,110 |
21,248 |
Other equity instruments |
|
10,136 |
9,136 |
Retained earnings |
|
34,393 |
34,479 |
Net income |
|
2,063 |
1,825 |
Sub-total |
|
67,702 |
66,688 |
Unrealised or deferred capital gains and losses |
|
375 |
282 |
Sub-total equity, Group share |
|
68,077 |
66,970 |
Non-controlling interests |
|
10,180 |
6,356 |
Total equity |
|
78,257 |
73,326 |
Total |
|
1,599,447 |
1,484,900 |
9. APPENDIX 2:
METHODOLOGY
1 –The financial information presented
for the third quarter and nine months 2023 was examined by the
Board of Directors on November
2nd,
2023 and has been prepared in accordance with IFRS as
adopted in the European Union and applicable at that date. This
information has not been audited
2 - Net banking income
The pillars’ net banking income is defined on
page 41 of Societe Generale’s 2023 Universal 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, 2022. The
term “costs” is also used to refer to Operating Expenses. The
Cost/Income Ratio is defined on page 41 of Societe Generale’s 2023
Universal Registration Document.
4 - Cost of risk in basis points,
coverage ratio for doubtful outstandings
The cost of risk is defined on pages 42 and 691
of Societe Generale’s 2023 Universal 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 EURm |
|
Q3 23 |
Q3 22 |
9M 23 |
9M 22 |
French Retail, Private Banking and Insurance |
Net Cost Of Risk |
144 |
196 |
342 |
264 |
Gross loan Outstandings |
243,740 |
246,467 |
248,757 |
244,941 |
Cost of Risk in bp |
24 |
32 |
18 |
14 |
Global Banking and Investor Solutions |
Net Cost Of Risk |
13 |
80 |
(9) |
343 |
Gross loan Outstandings |
167,057 |
190,678 |
170,165 |
179,454 |
Cost of Risk in bp |
3 |
17 |
(1) |
26 |
International Banking, Mobility and Leasing
Solutions |
Net Cost Of Risk |
175 |
150 |
349 |
572 |
Gross loan Outstandings |
162,873 |
127,594 |
145,227 |
136,405 |
Cost of Risk in bp |
43 |
47 |
32 |
56 |
Corporate Centre |
Net Cost Of Risk |
(16) |
30 |
(18) |
55 |
Gross loan Outstandings |
22,681 |
15,924 |
19,364 |
15,093 |
Cost of Risk in bp |
(31) |
75 |
(13) |
49 |
Societe Generale Group |
Net Cost Of Risk |
316 |
456 |
664 |
1,234 |
Gross loan Outstandings |
596,350 |
580,663 |
583,512 |
575,893 |
Cost of Risk in bp |
21 |
31 |
15 |
29 |
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”).
5 - 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 43 of Societe Generale’s 2023
Universal 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 43 of Societe
Generale’s 2023 Universal Registration Document.
Group net income used for the ratio numerator is
book Group net income adjusted for “interest net of tax payable on
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:
ROTE calculation: calculation
methodology
End of period (in EURm) |
Q3 23 |
Q3 22 |
9M 23 |
9M 22 |
Shareholders' equity Group share |
68,077 |
66,835 |
68,077 |
66,835 |
Deeply subordinated and undated subordinated notes |
(11,054) |
(9,350) |
(11,054) |
(9,350) |
Interest payable to holders of deeply & undated subordinated
notes, issue premium amortisation(1) |
(102) |
(80) |
(102) |
(80) |
OCI excluding conversion reserves |
853 |
844 |
853 |
844 |
Distribution provision(2) |
(1,059) |
(1,916) |
(1,059) |
(1,916) |
Distribution N-1 to be paid |
- |
(334) |
- |
(334) |
ROE equity end-of-period |
56,715 |
56,000 |
56,715 |
56,000 |
Average ROE equity |
56,572 |
55,400 |
56,326 |
55,058 |
Average Goodwill(3) |
(4,279) |
(3,667) |
(3,991) |
(3,646) |
Average Intangible Assets |
(3,390) |
(2,720) |
(3,128) |
(2,726) |
Average ROTE equity |
48,903 |
49,013 |
49,207 |
48,686 |
|
|
|
|
|
Group net Income |
295 |
1,445 |
2,063 |
755 |
Interest paid and payable to holders of deeply subordinated notes
and undated subordinated notes, issue premium amortisation |
(165) |
(126) |
(544) |
(404) |
Cancellation of goodwill impairment |
338 |
1 |
338 |
3 |
Adjusted Group net Income |
468 |
1,320 |
1,858 |
354 |
ROTE |
3.8% |
10.8% |
5.0% |
1.0% |
RONE calculation: Average capital
allocated to Core Businesses (in EURm)
In EURm |
Q3 23 |
Q3 22 |
Change |
9M 23 |
9M 22 |
Change |
French Retail , Private Banking and Insurance |
15,898 |
16,104 |
-1.3% |
15,488 |
15,500 |
-0.1% |
Global Banking and Investor Solutions |
15,324 |
16,346 |
-6.3% |
15,486 |
15,865 |
-2.4% |
International Retail, Mobility and Leasing Services |
10,136 |
9,191 |
+10.3% |
9,505 |
9,816 |
-3.2% |
Core Businesses |
41,358 |
41,641 |
-0.7% |
40,479 |
41,181 |
-1.7% |
Corporate Centre |
15,214 |
13,759 |
+10.6% |
15,847 |
13,877 |
+14.2% |
Group |
56,572 |
55,400 |
+2.1% |
56,326 |
55,058 |
+2.3% |
2022 figures restated in compliance with IFRS 17
and IFRS 9 for insurance entities. 17
6 - Net assets and tangible net
assets
Net assets and tangible net assets are defined
in the methodology, page 45 of the Group’s 2023 Universal
Registration Document. The items used to calculate them are
presented below:
End of period (in EURm) |
9M 23 |
H1 23 |
2022 |
Shareholders' equity Group share |
68,077 |
68,007 |
66,970 |
Deeply subordinated and undated subordinated notes |
(11,054) |
(10,815) |
(10,017) |
Interest of deeply & undated subordinated notes, issue premium
amortisation(1) |
(102) |
(28) |
(24) |
Book value of own shares in trading portfolio |
86 |
134 |
67 |
Net Asset Value |
57,007 |
57,298 |
56,996 |
Goodwill(2) |
(4,128) |
(4,429) |
(3,652) |
Intangible Assets |
(3,423) |
(3,356) |
(2,875) |
Net Tangible Asset Value |
49,456 |
49,513 |
50,469 |
|
|
|
|
Number of shares used to calculate
NAPS(3) |
796,242 |
801,471 |
801,147 |
Net Asset Value per Share |
71.6 |
71.5 |
71.1 |
Net Tangible Asset Value per Share |
62.1 |
61.8 |
63.0 |
18 2022 figures restated in compliance with IFRS 17
and IFRS 9 for insurance entities.
7 - 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 44 of Societe Generale’s 2023 Universal 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 and ROTE. As specified on page 45 of Societe
Generale’s 2023 Universal 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 calculation of Earnings Per Share is described in the
following table:
Average number of shares (thousands) |
9M 23 |
H1 23 |
2022 |
Existing shares |
821,765 |
822,101 |
845,478 |
Deductions |
|
|
|
Shares allocated to cover stock option plans and free shares
awarded to staff |
6,818 |
6,845 |
6,252 |
Other own shares and treasury shares |
14,864 |
13,892 |
16,788 |
Number of shares used to calculate
EPS(1) |
800,083 |
801,363 |
822,437 |
Group net Income (in EUR m) |
2,063 |
1,768 |
1,825 |
Interest on deeply subordinated notes and undated subordinated
notes (in EUR m) |
(544) |
(379) |
(596) |
Adjusted Group net income (in EUR m) |
1,520 |
1,390 |
1,230 |
EPS (in EUR) |
1.90 |
1.73 |
1.50 |
19
8 - The Societe Generale Group’s Common
Equity Tier 1 capital is calculated in accordance with
applicable CRR2/CRD5 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 also calculated according to applicable CRR2/CRD5
rules including the phased-in following the same rationale as
solvency ratios.
209 – Funded balance sheet, loan to
deposit ratio
The funded balance sheet is
based on the Group financial statements. It is obtained in two
steps:
- A first step aiming at reclassifying
the items of the financial statements into aggregates allowing for
a more economic reading of the balance sheet. Main
reclassifications:
Insurance: grouping of the accounting items
related to insurance within a single aggregate in both assets and
liabilities.Customer loans: include outstanding loans with
customers (net of provisions and write-downs, including net lease
financing outstanding and transactions at fair value through profit
and loss); excludes financial assets reclassified under loans and
receivables in accordance with the conditions stipulated by IFRS 9
(these positions have been reclassified in their original
lines).Wholesale funding: Includes interbank liabilities and debt
securities issued. Financing transactions have been allocated to
medium/long-term resources and short-term resources based on the
maturity of outstanding, more or less than one
year.Reclassification under customer deposits of the share of
issues placed by French Retail Banking networks (recorded in
medium/long-term financing), and certain transactions carried out
with counterparties equivalent to customer deposits (previously
included in short term financing).Deduction from customer deposits
and reintegration into short-term financing of certain transactions
equivalent to market resources.
- A second step aiming at excluding
the contribution of insurance subsidiaries, and netting
derivatives, repurchase agreements, securities borrowing/lending,
accruals and “due to central banks”.
The Group loan/deposit ratio is
determined as the division of the customer loans by customer
deposits as presented in the funded balance sheet.
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.
10. APPENDIX 3: PRESS
RELEASE DATED NOVEMBER 2ND 2023 -
PUBLICATION OF THE NEW QUARTERLY RESULTS SERIES
Press release
Paris, 2 November 2023,
Societe Generale today reports new
quarterly series reflecting changes in the presentation of the
Group’s financial performance as announced on the Capital Markets
Day on 18 September 2023.
During the Capital Markets Day on 18 September
2023, the Group announced several changes in the financial
reporting of the Group and its businesses:
- Insurance business will from now on
be integrated into French retail, forming the French Retail
Banking, Private Banking and Insurance business.
- The Consumer Finance business in
Europe has been transferred to Mobility and Leasing Services in
International Retail Banking, Mobility and Leasing Services.
- Transformation charges, previously
accounted for at the Corporate Centre, will from now on be directly
borne by the businesses.
- Normative return of businesses is
now based on a 12% capital allocation vs. 11% previously
The historical quarterly series have been
restated in accordance with these changes in governance and
financial reporting.
None of the above items has any impact on the
Group’s financial results.
2022 quarterly series are restated accordingly
and are available on Societe Generale’s website (The data of this
press release have not been audited.)
Societe Generale
Societe Generale is a top tier European Bank
with 117,000 employees serving 25 million clients in more than 60
countries across the world. We have been supporting the development
of our economies for nearly 160 years, providing our corporate,
institutional, and individual clients with a wide array of
value-added advisory and financial solutions. Our long-lasting and
trusted relationships with the clients, our cutting-edge expertise,
our unique innovation, our ESG capabilities and leading franchises
are part of our DNA and serve our most essential objective - to
deliver sustainable value creation for all our stakeholders.The
Group runs three complementary sets of businesses, embedding ESG
offerings for all its clients:
- French Retail,
Private Banking and Insurance, with leading retail bank SG
and insurance franchise, premium private banking services, and the
leading digital Bank BoursoBank.
- Global Banking
and Investor Solutions, a top tier wholesale bank offering
tailored-made solutions with distinctive global leadership in
Equity Derivatives, Structured Finance and ESG.
- International
Retail, Mobility & Leasing Services, comprising
well-established universal banks (in Czech Republic, Romania and
several African countries), Ayvens (the new ALD I LeasePlan brand),
a global player in sustainable mobility, as well as specialized
financing activities.
Committed to building together with its clients
a better and sustainable future, Societe Generale aims to be a
leading partner in the environmental transition and sustainability
overall. The Group is included in the principal socially
responsible investment indices: DJSI (Europe), FTSE4Good (Global
and Europe), Bloomberg Gender-Equality Index, Refinitiv Diversity
and Inclusion Index, Euronext Vigeo (Europe and Eurozone), STOXX
Global ESG Leaders indexes, and the MSCI Low Carbon Leaders Index
(World and Europe).
In case of doubt regarding the authenticity of
this press release, please go to the end of the Group News page on
societegenerale.com website where official Press Releases sent by
Societe Generale can be certified using blockchain technology. A
link will allow you to check the document’s legitimacy directly on
the web page.
For more information, you can follow us on
Twitter/X @societegenerale or visit our website
societegenerale.com.
1 Non-cash items with no impact on 2023
shareholder distribution2 Cost-to-income ratio based on reported
figures (vs. underlying previously), cost-to-income ratio and ROTE
at 69.8% and 6.5% respectively excluding the contribution to the
Single Resolution Fund3 Phased-in ratio, pro-forma including Q3-23
results4 Based on a pay-out ratio of 50% of the Group net income,
at the high-end of the 40%-50% payout ratio, as per regulation,
restated from non-cash items and after deduction of interest on
deeply subordinated notes and undated subordinated notesNote: 2022
figures restated in compliance with IFRS 17 and IFRS 9 for
insurance entities, and in accordance with changes in performance
reporting mentioned in appendix 3 5 Ratio calculated according to
EBA methodology published on 16 July 20196 Ratio of S3 provisions
to gross book value of NPL before netting of guarantees and
collateral7 Effective from 1 January 2024. The new sectoral policy
detailing the terms is available on Societe Generale’s web page.8
Effective from 1 January 2024.9 Oil and Gas absolute financed GHG
Emissions on scope 1, 2 and 3 end use covering the broad value
chain from upstream, midstream to downstream.10 Concerning the
credit exposure to car manufacturers.11 International Energy
Agency.12 Mission Possible Partnership’s Technology Moratorium.(13)
Pro forma including Q3 23 results
14 Bain & Company study 2022(1) At
comparable business model in the post Global Financial Crisis (GFC)
regulatory regime 16 Non-cash items with no impact on 2023
shareholder distribution
(1) Interest net of tax (2) The dividend to be
paid is calculated based on a pay-out ratio of 50% of the Group net
income restated from non-cash items and after deduction of deeply
subordinated notes and on undated subordinated notes, (3) Excluding
goodwill arising from non-controlling interests.
(1) Interest net of tax, (2) Excluding goodwill
arising from non-controlling interests, (3) The number of shares
considered is the number of ordinary shares outstanding at end of
period, excluding treasury shares and buybacks, but including the
trading shares held by the Group (expressed in thousand of
shares)
(1) The number of shares considered is the
average number of ordinary shares of the period, excluding treasury
shares and buybacks, but including the trading shares held by the
Group.
- Societe-Generale_Q3-2023-Press-release_EN
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