Societe Generale: Results at September 30th 2020
RESULTS AT SEPTEMBER 30TH 2020 |
|
|
|
Press releaseParis, November
5th 2020
Q3 20 KEY INFORMATION: CONFIRMED
REBOUND
Substantial improvement in gross operating
income +14.6%* vs. Q3 19Rebound in revenues in all
activities: revenues +9.7% vs. Q2 20 (+0.5%* vs. Q3 19)Operating
expenses down -8.2% vs. Q3 19 (-5.6%*) and -6.5% vs. 9M 19
(-4.5%*) Positive jaws effect at Group levelQ3 20
cost of risk substantially lower than in Q2 20 at 40 basis
pointsReported Group net income of EUR 862m
(+9.8%* vs. Q3 19) - underlying Group net income of EUR
742m in Q3 20 and EUR 803m in 9M 20
SIGNIFICANT INCREASE IN CET1 RATIO
AT 13.2%(1)Dividend provision of EUR 0.21 per
share(2) included in CET1High level of capital (~420bp buffer over
regulatory requirement) giving the Group flexibility in terms of
shareholders’ return
2020
OBJECTIVES
Objective of underlying operating expenses of around EUR 16.5bnCost
of risk of around 70bpObjective of a CET1 ratio above 12% at
end-2020
SOCIETE GENERALE GROUP FULLY
MOBILISED TO SERVING THE ECONOMYMore than EUR
20bn of State Guaranteed Loan applications at Group level
NEW ENERGY TRANSITION
COMMITMENTSTarget to reduce overall exposure to
the oil and gas extraction sector by 10% by 2025:
- by supporting the energy transition of our clients, through a
priority of financing renewable energies and gas in the transition
phase
- by stopping new financing of onshore oil & gas extraction
in the US (Reserve Based Lending)
Frédéric Oudéa, the Group’s Chief
Executive Officer, commented: “The Societe Generale
Group’s Q3 results illustrate the ability of all our businesses to
rebound, after the exceptional lockdown period that we have
experienced, and to adapt to a still very uncertain
environment. The performances reflect our efforts in terms of
commercial development, cost control and rigorous risk management.
The solidity of the balance sheet, both in terms of asset quality
and level of capital, enables us to approach the coming months with
confidence and build our new strategic roadmap on sound
foundations. With the exceptional commitment of our teams, we have
the ambition to support our customers both in the current crisis
and in the longer term with their energy and digital transition,
and we are confident of our ability to enhance the added value and
competitiveness of our different businesses.”
______________________________________________________________________________The
footnote * in this document corresponds to data adjusted for
changes in Group Structure and at constant exchange rates(1)
Including +19bp of IFRS 9 phasing and ~+10bp impact of closing of
SG Finans dated 1 October 2020(2) Corresponding to 50% of
underlying Group net income in 9M 20, after deducting interests on
deeply subordinated notes and undated subordinated notes
1. GROUP
CONSOLIDATED RESULTS
In EURm |
Q3 20 |
Q3 19 |
Change |
9M 20 |
9M 19 |
Change |
Net banking income |
5,809 |
5,983 |
-2.9% |
+0.5%* |
16,275 |
18,458 |
-11.8% |
-9.4%* |
Operating expenses |
(3,825) |
(4,165) |
-8.2% |
-5.6%* |
(12,363) |
(13,224) |
-6.5% |
-4.5%* |
Underlying operating expenses(1) |
(4,002) |
(4,317) |
-7.3% |
-4.8%* |
(12,186) |
(12,816) |
-4.9% |
-2.8%* |
Gross operating income |
1,984 |
1,818 |
+9.1% |
+14.6%* |
3,912 |
5,234 |
-25.3% |
-22.3%* |
Underlying gross operating income(1) |
1,807 |
1,666 |
+8.5% |
+14.4%* |
4,089 |
5,642 |
-27.5% |
-24.9%* |
Net cost of risk |
(518) |
(329) |
+57.4% |
+67.7%* |
(2,617) |
(907) |
x 2.9 |
x 3.0* |
Operating income |
1,466 |
1,489 |
-1.5% |
+2.9%* |
1,295 |
4,327 |
-70.1% |
-69.6%* |
Underlying operating income(1) |
1,289 |
1,337 |
-3.6% |
+1.3%* |
1,472 |
4,753 |
-69.0% |
-68.6%* |
Net profits or losses from other assets |
(2) |
(71) |
+97.2% |
+97.2%* |
82 |
(202) |
n/s |
n/s |
Underlying net profits or losses from other assets(1) |
(2) |
42 |
n/s |
n/s |
159 |
47 |
X3.4 |
X3.3* |
Impairment losses on goodwill |
0 |
0 |
n/s |
n/s |
(684) |
0 |
n/s |
n/s |
Income tax |
(467) |
(389) |
+20.1% |
+20.1%* |
(1,079) |
(1,034) |
+4.4% |
+23.0%* |
Reported Group net income |
862 |
854 |
+0.9%* |
+9.8%* |
(728) |
2,594 |
n/s |
n/s |
Underlying Group net income(1) |
742 |
855 |
-13.2% |
-5.9%* |
803 |
3,183 |
-74.8% |
-74.7%* |
ROE |
5.7% |
5.3% |
|
|
-3.0% |
5.5% |
|
|
ROTE |
6.5% |
6.1% |
|
|
-1.4% |
6.7% |
|
|
Underlying ROTE (1) |
5.5% |
6.1% |
|
|
1.0% |
8.1% |
|
|
(1) Adjusted for exceptional
items and linearisation of IFRIC 21
Societe Generale’s Board of Directors, which met
on November 4th, 2020 under the chairmanship of Lorenzo Bini
Smaghi, examined the Societe Generale Group’s results for Q3 and 9M
2020.
The various restatements enabling the transition
from underlying data to published data are presented in the
methodology notes (section 10.5).
Net banking
incomeQ3 was marked by a general rebound in all
the Group’s activities in an environment still characterised by the
global health crisis. There was a significant improvement in the
Group’s net banking income (+9.7%) vs. Q2 20 to EUR 5,809 million.
It was stable (+0.5%* when adjusted for changes in Group structure
and at constant exchange rates) vs. Q3 19 (-2.9% on a reported
basis). It was down -9.4%* in 9M 20 vs. 9M 19 (-11.8% in 9M 20 vs.
9M 19).
Net banking income (excluding PEL/CEL provision)
for French Retail Banking was up +6.2% vs. Q2 20 and down -4.5% vs.
Q3 19. The dynamic rebound was also observed on International
Retail Banking & Financial Services’ revenues (+9.9%* vs. Q2
20, -2.6%* vs. Q3 19).
Global Banking & Investor Solutions’ net
banking income was up +8.2% vs. Q2 20 and +1% vs. Q3 19. Global
Markets experienced a sharp rebound, particularly in the Equity
businesses, against the backdrop of the normalisation of market
conditions.
Operating
expensesOperating expenses were significantly
lower in Q3 20 at EUR 3,825 million (-8.2% vs. Q3 19 and -5.6%*
when adjusted for changes in Group structure and at constant
exchange rates), resulting in a positive jaws effect in the
quarter, and in 9M 20 at EUR 12,363 million (-6.5% vs. 9M 19 and
-4.5%* when adjusted for changes in Group structure and at constant
exchange rates). Underlying operating expenses totalled EUR 4,002
million in Q3 20, down -7.3% vs. Q3 19, and EUR 12,186 million in
9M 20, down -4.9% vs. 9M 19, after including the linearisation of
the IFRIC 21 impact.
All the Group’s businesses contributed to this
decline: French Retail Banking’s costs were down -6.0% in Q3 20 vs.
Q3 19, those of International Retail Banking & Financial
Services were down -8.4% in Q3 20 vs. Q3 19 and those of Global
Banking & Investor Solutions were down -9.8% in Q3 20 vs. Q3
19.
The Group expects underlying operating expenses
of around EUR 16.5 billion for 2020. In addition, the Group is
already working on reducing its costs beyond 2020: expected decline
of EUR 450 million by 2022/2023 in Global Markets, study under way
on French Retail Banking, ongoing optimisation of cross-functional
processes, gradual benefit of the finalisation of remediation
efforts as from 2022, ramping up of digitalisation.
Cost of
riskThe commercial cost of risk amounted to 40
basis points in Q3 20, substantially lower than in the last quarter
(97 basis points in Q2 20 and 26 basis points in Q3 19), and 67
basis points in 9M 20.
The net cost of risk amounted to EUR 518 million
in Q3 20 and breaks down into EUR 382 million in respect of loans
classified in Stage 3 (credit-impaired) and EUR 136 million in
respect of loans classified in Stage 1 (performing) and Stage 2
(underperforming), o/w EUR 123 million impact of macroeconomic
scenarios review in International Retail Banking & Financial
Services.
In the first nine months, the net cost of risk
amounted to EUR 2,617 million, with EUR 1,617 million in respect of
loans classified in Stage 3 and EUR 1,000 million in respect of
loans classified in Stage 1 and Stage 2.
As of September 30th, the total amount of
repayment moratoriums was around EUR 35 billion, o/w EUR 9 billion
already expired. The end of these moratoriums has a limited impact
on the Group’s cost of risk.
The Group expects a 2020 commercial cost of risk
of around 70 basis points.
The gross doubtful outstandings ratio amounted
to 3.4%(1) at September 30th 2020, up +20bp vs. September 30th
2019. The Group’s gross coverage ratio for doubtful outstandings
stood at 52%(2) at September 30th 2020 (54% at June 30th 2020).
Net profits or losses from other
assets
Net profits or losses from other assets totalled
EUR -2 million in Q3 20 and EUR +82 million in 9M 20.
Group net
income
In
EURm |
Q3
20 |
Q3
19 |
9M
20 |
9M
19 |
Reported Group net income |
862 |
854 |
(728) |
2,594 |
Underlying Group net income(1) |
742 |
855 |
803 |
3,183 |
In
% |
Q3
20 |
Q3
19 |
9M
20 |
9M
19 |
ROTE (reported) |
6.5% |
6.1% |
-1.4% |
6.7% |
Underlying ROTE(1) |
5.5% |
6.1% |
1% |
8.1% |
Earnings per share is negative and amounts to
EUR -1.38 in 9M 20 (EUR 2.49 in 9M 19). Underlying earnings per
share amounts to EUR 0.42 (EUR 3.21 in 9M 19). The dividend
provision, corresponding to 50% of underlying net income after
deducting interest on deeply subordinated notes and undated
subordinated notes for 9M 20, amounts to EUR 0.21 per share.
2. THE GROUP’S
FINANCIAL STRUCTURE
Group shareholders’ equity
totalled EUR 60.6 billion at September 30th, 2020 (EUR 63.5 billion
at December 31st, 2019). Net asset value per share was EUR 62.0 and
tangible net asset value per share was EUR 54.45.
The consolidated balance sheet
totalled EUR 1,472 billion at September 30th, 2020 (EUR 1,356
billion at December 31st, 2019). The net amount of customer loan
outstandings at September 30th, 2020, including lease financing,
was EUR 440 billion (EUR 430 billion at December 31st, 2019) –
excluding assets and securities purchased under resale agreements.
At the same time, customer deposits amounted to EUR 440 billion,
vs. EUR 410 billion at December 31st, 2019 (excluding assets and
securities sold under repurchase agreements).
At end-September 2020, the parent company had
issued EUR 26.9 billion of medium/long-term debt, having an average
maturity of 5.6 years and an average spread of 61 basis points (vs.
the 6-month mid-swap, excluding subordinated debt). The
subsidiaries had issued EUR 765 million. At September 30th, 2020,
the Group had issued a total of EUR 27.6 billion of
medium/long-term debt. The LCR (Liquidity Coverage Ratio) was well
above regulatory requirements at 179% at end-September 2020, vs.
119% at end-December 2019. At the same time, the NSFR (Net Stable
Funding Ratio) was over 100% at end-September 2020.
The Group’s risk-weighted
assets (RWA) amounted to EUR 352.3 billion at September
30th, 2020 (vs. EUR 345.0 billion at end-December 2019) according
to CRR/CRD4 rules. Risk-weighted assets in respect of credit risk
represent 80.7% of the total, at EUR 284.4 billion, up 0.7% vs.
December 31st, 2019.
At September 30th, 2020, the Group’s
Common Equity Tier 1 ratio stood at 13.1% (13.2%
pro forma for the impact of the disposal of SG Finans which was
finalised on October 1st, 2020, i.e. around 420 basis points above
the regulatory requirement). The CET1 ratio at September 30th, 2020
includes an effect of +19 basis points for phasing of the IFRS 9
impact. Excluding this effect, the fully-loaded ratio amounts to
12.9%. The Tier 1 ratio stood at 15.1%(1) at end-September 2020
(15.1% at end-December 2019) and the total capital ratio amounted
to 18.2%(1) (18.3% at end-December 2019).
The CET1 ratio is expected to be above 12% at
end-2020, taking into account all the regulatory developments
related to the review of internal models (TRIM).
With a level of 29.6%(1) of RWA and 8.7%(1) of
leveraged exposure at end-September 2020, the Group’s TLAC ratio is
above the FSB’s requirements for 2020. At September 30th, 2020, the
Group was also above its MREL requirements of 8.51% of the TLOF(2)
(which, in December 2017, represented a level of 24.4% of RWA),
which were used as a reference for the SRB calibration.
The leverage ratio stood at
4.4%(1) at September 30th, 2020 (4.3% at end-December 2019).
The Group is rated by four rating agencies: (i)
FitchRatings - long-term rating “A-”, stable 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”, negative
outlook, short-term rating “A-1”.
FRENCH RETAIL BANKING
In EURm |
Q3 20 |
Q3 19 |
Change |
9M 20 |
9M 19 |
Change |
Net banking income |
1,836 |
1,879 |
-2.3% |
5,470 |
5,789 |
-5.5% |
Net banking income excl. PEL/CEL |
1,857 |
1,945 |
-4.5% |
5,511 |
5,894 |
-6.5% |
Operating expenses |
(1,292) |
(1,375) |
-6.0% |
(3,975) |
(4,209) |
-5.6% |
Gross operating income |
544 |
504 |
+7.9% |
1,495 |
1,580 |
-5.4% |
Gross operating income excl. PEL/CEL |
565 |
570 |
-0.9% |
1,536 |
1,685 |
-8.8% |
Net cost of risk |
(130) |
(95) |
+36.8% |
(821) |
(318) |
+158.2% |
Operating income |
414 |
409 |
+1.2% |
674 |
1,262 |
-46.6% |
Net profits or losses from other assets |
3 |
41 |
-92.7% |
139 |
43 |
+223.3% |
Reported Group net income |
283 |
311 |
-9.0% |
562 |
901 |
-37.6% |
RONE |
9.5% |
11.0% |
|
6.5% |
10.6% |
|
Underlying RONE (1) |
9.2% |
12.0% |
|
7.1% |
11.7% |
|
(1) Adjusted for the
linearisation of IFRIC 21 and PEL/CEL provision
After the substantial impact of the lockdown on
activity in Q2, French Retail Banking’s commercial performance
improved in Q3 20.
The brands continued to expand their
activity on their core target customers.Boursorama
consolidated its position as the leading online bank in France,
with around 2.5 million clients at end-September 2020 (around
450,000 new clients in one year) while maintaining its No. 1
position in terms of client satisfaction(1). The number of stock
market orders doubled compared to Q3 19.Net inflow for wealthy
clients remained robust at EUR 919 million in Q3 20 (EUR 2.2
billion over 9 months 2020), taking assets under management to EUR
67.4 billion (including Crédit du Nord) at end-September 2020. Life
insurance outstandings totalled EUR 93.4 billion, with the
unit-linked share accounting for 25.9% of outstandings. The
unit-linked share of outstandings increased by 126bp vs. Q3 19.The
brands continued to develop their insurance business, with
Property/Casualty insurance premiums up 6.4% vs. Q3 19.
Average investment loan
outstandings (including leases) rose 25.7% vs. Q3 19 to
EUR 88.3 billion (+5.5% excluding State Guaranteed Loans). Average
outstanding loans to individuals were up 4.5% at EUR 122.3 billion,
bolstered by housing loans. As a result, average loan outstandings
climbed 12.2% (+5.0% excluding State Guaranteed Loans) vs. Q3 19 to
EUR 222.4 billion.
French Retail Banking continued to support the
economy, accompanying individual, corporate and professional
customers. As of October 16th, 2020, around 91,800 applications had
been received for State Guaranteed Loans for a total amount of EUR
19.7 billion at Group level in France.
Average outstanding balance sheet
deposits(2) were 14.1% higher than in Q3 19 (+4.9% vs. Q2
20) at EUR 239.9 billion, still driven by sight deposits (+19.8%
vs. Q3 19)(3).
As a result, the average loan/deposit ratio
stood at 92.7% in Q3 20.
Net banking income excluding
PEL/CEL
Q3 20: revenues (excluding
PEL/CEL) totalled EUR 1,857 million, down -4.5% vs. Q3 19 but up
6.2% vs. the low point in Q2 20. Net interest income (excluding
PEL/CEL) was 5.1% lower than in Q3 19 against a backdrop of low
interest rates and a sharp rise in deposits. However, it picked up
compared to Q2 20 (+2.8%), bolstered in particular by loan
production and TLTRO effects. Commissions were 4.0% lower than in
Q3 19 but picked up compared to Q2 20 (+6.6%), with financial
commissions down compared to the high level in Q2 20 and stable
compared to Q3 19 (-3.0% vs. Q2 20, +0.8% vs. Q3 19), and a gradual
recovery in service commissions (+7.8% vs. Q2 20, -7.5% vs. Q3
19).
9M 20: revenues (excluding
PEL/CEL) totalled EUR 5,511 million, down -6.5% vs. 9M 19,
reflecting the effects of the Covid-19 crisis. Net interest income
(excluding PEL/CEL) was 3.3% lower and commissions were down -6.9%
(-4.7% excluding adjustment for tax related to commissions in Q2
19).
Operating
expenses
Q3 20: French Retail Banking
generated a positive jaws effect, thereby improving its operating
leverage. Operating expenses were substantially lower at EUR 1,292
million (-6.0% vs. Q3 19), illustrating the Group’s work on costs.
The cost to income ratio (after linearisation of the IFRIC 21
charge and restated for the PEL/CEL provision) was lower at 71.4%.
9M 20: operating expenses were
lower at EUR 3,975 million (-5.6% vs. 9M 19). The cost to income
ratio (after linearisation of the IFRIC 21 charge and restated for
the PEL/CEL provision) stood at 71.5%.
Cost of
risk
Q3 20: the commercial cost of
risk amounted to EUR 130 million or 24 basis points, returning to
normal after peaking in Q2 20 (85bp). It includes EUR 55 million of
S1/S2 (performing/underperforming loans) provisioning and EUR 75
million of S3 (credit-impaired loans) provisioning.
9M 20: the commercial cost of
risk amounted to EUR 821 million or 52 basis points, higher than in
9M 19 (22bp, EUR 318 million). It includes EUR 411 million of S1/S2
provisioning and EUR 410 million of S3 (non-performing loans)
provisioning.
Net profits or losses from other
assets
Q3 20: “Net profits or losses
from other assets” amounted to EUR 3 million vs. EUR 41 million in
Q3 19.9M 20: “Net profits or losses from other
assets” amounted to EUR 139 million, including a capital gain of
EUR 130 million relating to the Group's property disposal programme
realised in Q1 2020.
Contribution to Group net
income
Q3 20: the contribution to
Group net income totalled EUR 283 million (-9.0% vs. Q3 19). RONE
(after linearisation of the IFRIC 21 charge and restated for the
PEL/CEL provision) stood at 9.2% in Q3 20 (vs. 12.0% in Q3 19).
9M 20: the contribution to
Group net income totalled EUR 562 million (-37.6% vs. 9M 19). RONE
(after linearisation of the IFRIC 21 charge and restated for the
PEL/CEL provision) stood at 7.1% in 9M 20 (vs. 11.7% in 9M 19).
4. INTERNATIONAL
RETAIL BANKING & FINANCIAL SERVICES
In EURm |
Q3 20 |
Q3 19 |
Change |
9M 20 |
9M 19 |
Change |
Net banking income |
1,891 |
2,096 |
-9.8% |
-2.6%* |
5,605 |
6,296 |
-11.0% |
-4.0%* |
Operating expenses |
(999) |
(1,091) |
-8.4% |
-0.2%* |
(3,124) |
(3,440) |
-9.2% |
-1.4%* |
Gross operating income |
892 |
1,005 |
-11.2% |
-5.1%* |
2,481 |
2,856 |
-13.1% |
-7.0%* |
Net cost of risk |
(331) |
(169) |
+95.9% |
x 2.2 |
(978) |
(430) |
x 2.3 |
x 2.4 |
Operating income |
561 |
836 |
-32.9% |
-29.4%* |
1,503 |
2,426 |
-38.0% |
-34.2%* |
Net profits or losses from other assets |
(2) |
1 |
n/s |
n/s |
9 |
2 |
x 4.5 |
x 3.4 |
Reported Group net income |
337 |
513 |
-34.3% |
-29.3%* |
928 |
1,492 |
-37.8% |
-32.5%* |
RONE |
12.9% |
18.7% |
|
|
11.6% |
17.8% |
|
|
Underlying RONE (1) |
12.3% |
18.1% |
|
|
11.8% |
18.2% |
|
|
(1) Adjusted for the
linearisation of IFRIC 21 and the restructuring provision of EUR 29
million in Q2 19.
International Retail Banking
saw a rebound in loan and deposit production in all regions from
June. Outstanding loans totalled EUR 84.6 billion. They rose +3.7%*
vs. end-September 2019 ; they were down -5.5% at current structure
and exchange rates, given the disposals finalised since September
2019 : SKB in Slovenia, OBSG in Macedonia and Societe Generale de
Banque aux Antilles. Outstanding deposits climbed +9.3%* (-2.3% at
current structure and exchange rates) vs. September 2019, to EUR
79.0 billion.
For the Europe scope, outstanding loans were up
+3.1%* vs. September 2019, at EUR 53.7 billion (-5.1% at current
structure and exchange rates), driven by the Czech Republic
(+4.6%*, -0.8%) and to a lesser extent Western Europe (+2.3%).
Outstanding deposits were up +7.1%* (-4.3% at current structure and
exchange rates), with a healthy momentum in the Czech Republic
(+7.4%*, +1.8%) and Romania (+9.5%*, +6.7%).
In Russia, there was a significant increase in
outstanding loans (+7.5%* at constant exchange rates, -17.1% at
current exchange rates) while outstanding deposits climbed +19.5%*
(-7.9% at current exchange rates).
In Africa, Mediterranean Basin and French
Overseas Territories, outstanding loans rose +3.6%* (or -0.9%) vs.
September 2019, including +2.3%* in the Mediterranean Basin and
+3.1%* in Sub-Saharan Africa. Outstanding deposits enjoyed a strong
momentum, up +9.5%* (+5.1%).
In the Insurance business, the
life insurance savings business saw outstandings increase +1%*
vs. September 2019. The share of unit-linked products in
outstandings was 30% at end-September 2020, up 2 points vs.
September 2019. Protection insurance fell -1.1%* vs. Q3 19. The
8.2%* increase in Property/Casualty premiums was offset by a
decline in personal protection insurance (-6.8%* vs. Q3 19).
Financial Services to
Corporates delivered a resilient commercial
performance. Operational Vehicle Leasing and Fleet Management
saw an increase in its vehicle fleet (+2% vs. end-September 2019)
to 1.76 million vehicles at end-September 2020. Equipment Finance’s
outstanding loans were up +0.7%* vs. end-September 2019, at EUR
17.8 billion (excluding factoring).
Net banking
income
Net banking income amounted to EUR 1,891 million
in Q3 20, down -2.6%* (-9.8%) vs. Q3 19. The increase of +9.9%* vs.
Q2 20 illustrates the recovery in activity. Revenues totalled EUR
5,605 million in 9M 20, down -4.0%* (-11.0%) vs. 9M 19.
In International Retail
Banking, net banking income totalled EUR 1,216 million in
Q3 20, down -3.9%* (-13.2%) vs. Q3 19, marked in particular by a
fall in net interest income in the Czech Republic and Romania, in
conjunction with the decline in rates. Net banking income was 6.5%*
higher than in Q2 20. Net banking income amounted to EUR 3,666
million in 9M 20, down -3.3%* (-12.7%) vs. 9M 19.
The Insurance business saw a
slight fall in net banking income (-1.6%* vs. Q3 19) to EUR 223
million in Q3 20 (-1.8%), but an increase of +5.5%* vs. Q2 20. Net
banking income was down -3.1%* (-3.5%) in 9M 20, at EUR 663
million.
Financial Services to
Corporates’ net banking income was up +1%* (-3.4%) vs. Q3
19 and +22.1%* vs. Q2 20, at EUR 452 million. ALD posted a used car
sale result of EUR 333 per vehicle in Q3 20 and has revised its
full-year target between EUR -50 and EUR 150 per vehicle for 2020.
Financial Services to Corporates’ net banking income came to EUR
1,276 million in 9M 20, down -6.4%* (-9.4%) vs. 9M 19.
Operating
expenses
Operating expenses were down -0.2%* (-8.4%), at
EUR -999 million, vs. Q3 19, reflecting control of costs. They fell
-1.4%* (-9.2%) in 9M 20, to EUR 3,124 million. The cost to income
ratio stood at 52.8% in Q3 20 and 55.7% in 9M 20.
In International Retail
Banking, operating expenses were down -1.4%* (-11.1%) vs.
Q3 19 and down -0.5%* (-10.1%) vs. 9M 19.
In the Insurance business,
operating expenses were slightly higher (+0.7%*, stable at current
structure) than in Q3 19. They were up +3.1%* (+2.6%) vs. 9M
19.
In Financial Services to
Corporates, operating expenses were down -0.3%* (-6.2%)
vs. Q3 19 and -1.7%* (-6.8%) vs. 9M 19.
Cost of
risk
Q3 20: the commercial cost of
risk amounted to 102 basis points (or EUR 332 million), vs. 125
basis points in Q2 20 and 49 basis points in Q3 19, which included
a net provision write-back incorporating insurance payouts in
Romania. The Q3 cost of risk includes EUR 120 million for the
estimate of expected credit losses in Stage 1 and Stage 2,
including EUR 123 million for the impact related to the review of
macro-economic scenarios.9M 20: the cost of risk
amounted to 98 basis points (EUR 978 million); it was 42 basis
points in 9M 19. The estimate of expected credit losses in
Stage 1 and Stage 2 amounted to EUR 310 million.
Contribution to Group net
income
The contribution to Group net income totalled
EUR 337 million in Q3 20 (-34.3% vs. Q3 19) and EUR 928 million in
9M 20 (-37.8% vs. 9M 19). Underlying RONE stood at 12.3% in Q3 20
(vs. 18.1% in Q3 19), and 11.8% in 9M 20 (vs. 18.2% in 9M 19).
5. GLOBAL BANKING
& INVESTOR SOLUTIONS
In EURm |
Q3 20 |
Q3 19 |
Change |
9M 20 |
9M 19 |
Change |
Net banking income |
2,034 |
2,013 |
+1.0% |
+2.5%* |
5,541 |
6,518 |
-15.0% |
-14.9%* |
Operating expenses |
(1,478) |
(1,638) |
-9.8% |
-8.3%* |
(5,025) |
(5,579) |
-9.9% |
-9.7%* |
Gross operating income |
556 |
375 |
+48.3% |
+49.4%* |
516 |
939 |
-45.0% |
-45.4%* |
Net cost of risk |
(57) |
(65) |
-12.3% |
-7.8%* |
(818) |
(140) |
x 5.8 |
x 5.9 |
Operating income |
499 |
310 |
+61.0% |
+60.7%* |
(302) |
799 |
n/s |
n/s |
Reported Group net income |
381 |
253 |
+50.6% |
+50.2%* |
(223) |
667 |
n/s |
n/s |
RONE |
10.3% |
6.9% |
|
|
-2.1% |
5.7% |
|
|
Underlying RONE (1) |
7.9% |
5.1% |
|
|
-1.3% |
7.7% |
|
|
(1) Adjusted for the
linearisation of IFRIC 21
Net banking
income
Q3 20: Global Banking &
Investor Solutions’ revenues were up +1.0% (+2.5%* when adjusted
for changes in Group structure and at constant exchange rates) at
EUR 2,034 million and rebounded +8.2% (+10.8%*) compared to Q2
20.9M 20: net banking income was down -12.7% vs.
9M 19 when adjusted for the impact of restructuring, the
revaluation of SIX securities (EUR +66 million) and the disposal of
Private Banking in Belgium. On a reported basis, the decrease is
-15.0%.
In Global Markets & Investor
Services, net banking income totalled EUR 1,245 million,
up +4.5% (+6.3%* when adjusted for changes in Group structure and
at constant exchange rates) vs. Q3 19.
Fixed Income & Currencies delivered another
solid performance, with revenues of EUR 569 million, up +9.4% vs.
Q3 19. Market conditions have normalised compared to H1 20. The
solid Q3 performance was driven in particular by healthy activity
with European corporate clients, higher revenues in the Americas
region and in flow & hedging activities.
There was a sharp rebound in Equity activities,
with net banking income 3.7 times higher than in Q2 20, and up
+5.1% vs. Q3 19. Flow & hedging activities performed well in
Q3, and the Asia and Americas regions enjoyed strong volumes. There
was a gradual recovery in equity structured product revenues vs. Q2
20, impacted by the current reduction in the risk profile. The good
performance of listed products helped offset this impact.
The implementation of decisions following the
strategic review of equity and credit structured products is under
way:
- Reducing the risk profile of these products in line with the
plan with, in particular, a decrease in the exposure to the most
complex products
- Maintaining the leadership position on the investment solutions
franchise
Securities Services’ assets under custody
amounted to EUR 4,328 billion at end-September 2020, up +2.1% vs.
end-June 2020. Over the same period, assets under administration
were up +2.3% at EUR 613 billion. Securities Services’ revenues
totalled EUR 145 million in Q3 20 and were down -12.7% vs. Q3
19.
Financing & Advisory
revenues totalled EUR 579 million in Q3 20, down -2.8%* vs. Q3 19
(-4.1% at current structure and exchange rates). Investment banking
enjoyed a healthy activity in Q3 20, albeit slower in the debt
market compared to Q2 which saw a record number of issues.
Acquisition financing activity was sustained. Financing activities
were adversely affected by the slowdown in aircraft and property
financing.After a second quarter marked by the crisis and a decline
in volumes, Global Transaction and Payment Services posted a better
performance than in Q2 20, benefiting from a rebound in
commissions.
Asset and Wealth Management’s
net banking income totalled EUR 210 million in Q3 20, down -3.7%
vs. Q3 19 (-3.7%* when adjusted for changes in Group structure and
at constant exchange rates).
Lyxor’s net banking income amounted to EUR 53
million, up +10.4% vs. Q3 19. It rebounded by +32.5% vs. Q2 20,
driven by the ETF segment and the rebound in equity markets.
Lyxor’s assets under management totalled EUR 133 billion at
end-September 2020. Lyxor’s varied ESG ETF offering contributed to
the increase in net inflow in the first nine months.
Private Banking posted a performance that was
7.3% lower in Q3 20 than in Q3 19, with net banking income of EUR
153 million. Revenues were hit by market conditions and
weaker activity. Assets under management were stable in Q3
20, at EUR 114 billion. Net inflow totalled EUR 1.8 billion in the
first nine months of the year, driven by France.
Operating
expensesQ3 20: operating
expenses were substantially lower (-9.8%) than in Q3 19.The pillar
generated a positive jaws effect in Q3 20.
9M 20: operating expenses,
restated for the restructuring provision recorded in Q2 19 for EUR
227 million, were down -7.3%.
Net cost of
riskQ3 20: the commercial cost
of risk amounted to 14 basis points (or EUR 57 million), vs. 95
basis points in Q2 20 and 16 basis points in Q3 19. It includes EUR
-34 million of S1/S2 (performing/underperforming loans)
provisioning and EUR 92 million of S3 (credit-impaired loans)
provisioning.9M 20: the cost of risk amounted to
66 basis points (EUR 818 million), including EUR 284 million of
S1/S2 provisioning and EUR 534 million of S3 (non-performing loans)
provisioning.
Contribution to Group net
incomeThe contribution to Group net income
amounted to EUR 381 million in Q3 20, an increase of +50.6% vs. Q3
19, and EUR -223 million in 9M 20.RONE (after linearisation of the
IFRIC 21 charge) stood at 7.9% vs. 5.1% in Q3 19. It was negative
in the first nine months.
6. CORPORATE
CENTRE
In EURm |
Q3 20 |
Q3 19 |
9M 20 |
9M 19 |
Net banking income |
48 |
(5) |
(341) |
(145) |
Operating expenses |
(56) |
(61) |
(239) |
4 |
Gross operating income |
(8) |
(66) |
(580) |
(141) |
Net cost of risk |
0 |
0 |
0 |
(19) |
Net profits or losses from other assets |
(3) |
(115) |
(80) |
(249) |
Impairment losses on goodwill |
0 |
|
(684) |
|
Income tax |
(84) |
7 |
(534) |
70 |
Reported Group net income |
(139) |
(223) |
(1,995) |
(466) |
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 Corporate Centre’s net banking income
totalled EUR 48 million in Q3 20 vs. EUR -5 million in Q3 19 and
EUR -341 million in 9M 20 vs. EUR -145 million in 9M 19.
Operating expenses totalled EUR -56 million in
Q3 20 vs. EUR -61 million in Q3 19. They amounted to EUR -239
million in 9M 20 vs. EUR +4 million in 9M 19.
Gross operating income totalled EUR -8 million
in Q3 20 vs. EUR -66 million in Q3 19 and EUR -580 million in 9M 20
vs. EUR -141 million in 9M 19.
Net profits or losses from other assets amounted
to EUR -3 million in Q3 20 vs. EUR -115 million in Q3 19 and EUR
-80 million in 9M 20 vs. EUR -249 million in 9M 19, related to the
application of IFRS 5 as part of the implementation of the Group’s
refocusing plan.
The Corporate Centre’s contribution to Group net
income was EUR -139 million in Q3 20 vs. EUR -223 million in Q3 19
and EUR -1,995 million in 9M 20 vs. EUR -466 million in 9M
19.
7. CONCLUSION
The Group posted gross operating income up
+14.6%* in Q3 20 vs. Q3 19, demonstrating its ability to rebound
while at the same time improving its operating leverage. At the
same time, the balance sheet has been further strengthened, with a
CET1 level of 13.2%(1), i.e. around 420 basis points above the
regulatory requirement, giving the Group flexibility in terms of
shareholders’ return
The Group posted a dividend provision of EUR
0.21 per share(2).
In 2020, the Group anticipates:
- underlying operating expenses of around EUR 16.5 billion
- an expected cost of risk of around 70 basis points
- a CET1 ratio above 12.0% at end-2020 assuming full trim
regulatory impact
The Group continues to develop its value
proposition while working to strengthen the profitability of its
businesses:
- Global Banking & Investor Solutions has demonstrated its
ability to support its clients while improving its operational
efficiency
- French Retail Banking is accelerating the expansion of
Boursorama and entering a new phase with the study on the merger
between its two networks, Societe Generale and Crédit du Nord
- International Retail Banking & Financial Services has
confirmed its position as a resilient and profitable business
In particular, the Group will present the
conclusion of its strategic study on the merger of Crédit du Nord
and Societe Generale to the market on December 7th, 2020. The
Global Banking & Investor Solutions’ strategy will be presented
in Q1 2021.
8. 2020 FINANCIAL
CALENDAR
2020 Financial communication calendar |
February 10th, 2021 Fourth quarter
and FY 2020 resultsMay 6th,
2021
First quarter 2021 results August 3rd,
2021
Second quarter and first half 2021 resultsNovember 4th,
2021 Third quarter and nine-month 2021
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, in particular in the
Covid-19 crisis context, 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 Universal 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 BY CORE
BUSINESS
In EURm |
Q3 20 |
Q3 19 |
Change |
9M 20 |
9M 19 |
Variation |
French Retail Banking |
283 |
311 |
-9.0% |
562 |
901 |
-37.6% |
International Retail
Banking and Financial Services |
337 |
513 |
-34.3% |
928 |
1,492 |
-37.8% |
Global Banking and Investor Solutions |
381 |
253 |
50.6% |
(223) |
667 |
n/s |
Core Businesses |
1,001 |
1,077 |
-7.1% |
1,267 |
3,060 |
-58.6% |
Corporate Centre |
(139) |
(223) |
+37.6% |
(1,995) |
(466) |
n/s |
Group |
862 |
854 |
+0.9% |
(728) |
2,594 |
n/s |
CHANGES Q3 20/Q2 20 – NET BANKING INCOME,
OPERATING EXPENSES AND GROSS OPERATING INCOME
Net
Banking Income (in EURm) |
Q3 20 |
Q2 20 |
Change |
French Retail Banking |
1,836 |
1,754 |
+4.7% |
+4.7%* |
International Retail Banking and Financial Services |
1,891 |
1,750 |
+8.1% |
+9.9%* |
Global Banking and Investor Solutions |
2,034 |
1,880 |
+8.2% |
+10.8%* |
Corporate Centre |
48 |
(88) |
n/s |
n/s |
Group |
5,809 |
5,296 |
9.7% |
11.4%* |
Operating Expenses (in EURm) |
Q3 20 |
Q2 20 |
Change |
French Retail Banking |
(1,292) |
(1,233) |
+4.8% |
+4.8%* |
International Retail Banking and Financial Services |
(999) |
(979) |
+2.0% |
+3.1%* |
Global Banking and Investor Solutions |
(1,478) |
(1,570) |
-5.9% |
-4.2%* |
Corporate Centre |
(56) |
(78) |
-28.2% |
-28.3%* |
Group |
(3,825) |
(3,860) |
-0.9% |
+0.1%* |
Gross
operating income (in EURm) |
Q3 20 |
Q2 20 |
Change |
French Retail Banking |
544 |
521 |
+4.4% |
+4.4%* |
International Retail Banking and Financial Services |
892 |
771 |
+15.7% |
+18.7%* |
Global Banking and Investor Solutions |
556 |
310 |
+79.4% |
+90.0%* |
Corporate Centre |
(8) |
(166) |
+95.2% |
+95.3%* |
Group |
1,984 |
1,436 |
+38.2% |
+42.3%* |
CONSOLIDATED BALANCE SHEET
|
30.09.2020 |
31.12.2019 |
Cash, due from central banks |
165,215 |
102,311 |
Financial assets at fair value through profit or loss |
435,295 |
385,739 |
Hedging derivatives |
21,657 |
16,837 |
Financial assets measured at fair value through other comprehensive
income |
53,511 |
53,256 |
Securities at amortised cost |
15,094 |
12,489 |
Due from banks at amortised cost |
52,119 |
56,366 |
Customer loans at amortised cost |
453,930 |
450,244 |
Revaluation differences on portfolios hedged against interest rate
risk |
422 |
401 |
Investment of insurance activities |
164,533 |
164,938 |
Tax assets |
4,862 |
5,779 |
Other assets |
68,188 |
68,045 |
Non-current assets held for sale |
3,775 |
4,507 |
Investments accounted for using the equity method |
100 |
112 |
Tangible and intangible assets |
29,590 |
30,652 |
Goodwill |
4,046 |
4,627 |
Total |
1,472,337 |
1,356,303 |
|
30.09.2020 |
31.12.2019 |
Central banks |
4,958 |
4,097 |
Financial liabilities at fair value through profit or loss |
411,727 |
364,129 |
Hedging derivatives |
12,409 |
10,212 |
Debt securities issued |
133,084 |
125,168 |
Due to banks |
137,676 |
107,929 |
Customer deposits |
445,226 |
418,612 |
Revaluation differences on portfolios hedged against interest rate
risk |
8,338 |
6,671 |
Tax liabilities |
1,330 |
1,409 |
Other liabilities |
90,218 |
85,062 |
Non-current liabilities held for sale |
791 |
1,333 |
Liabilities related to insurance activities contracts |
141,687 |
144,259 |
Provisions |
4,415 |
4,387 |
Subordinated debts |
14,768 |
14,465 |
Total liabilities |
1,406,627 |
1,287,733 |
SHAREHOLDERS' EQUITY |
|
|
Shareholders' equity, Group share |
|
|
Issued common stocks, equity instruments and capital reserves |
30,157 |
31,102 |
Retained earnings |
32,362 |
29,558 |
Net income |
(728) |
3,248 |
Sub-total |
61,791 |
63,908 |
Unrealised or deferred capital gains and losses |
(1,198) |
(381) |
Sub-total
equity, Group share |
60,593 |
63,527 |
Non-controlling interests |
5,117 |
5,043 |
Total equity |
65,710 |
68,570 |
Total |
1,472,337 |
1,356,303 |
10. APPENDIX 2: METHODOLOGY
1 – The financial
information presented in respect of Q3 and 9M 2020 was examined by
the Board of Directors on November 4th, 2020 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 incomeThe
pillars’ net banking income is defined on page 43 of Societe
Generale’s 2020 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 expensesOperating
expenses correspond to the “Operating Expenses” as presented in
note 8.1 to the Group’s consolidated financial statements as at
December 31st, 2019 (pages 423 et seq. of Societe Generale’s 2020
Universal Registration Document). The term “costs” is also used to
refer to Operating Expenses. The Cost/Income Ratio is defined on
page 43 of Societe Generale’s 2020 Universal Registration
Document.
4 - IFRIC 21
adjustmentThe 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 – Exceptional items – Transition from
accounting data to underlying data
It may be necessary for the Group to present
underlying indicators in order to facilitate the understanding of
its actual performance. The transition from published data to
underlying data is obtained by restating published data for
exceptional items and the IFRIC 21 adjustment. 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.The reconciliation enabling the transition from
published accounting data to underlying data is set out in the
table below:
Q3 20 (in EURm) |
Operating Expenses |
Net cost of risk |
Net profit or losses from other assets |
Impairment losses on goodwill |
Income Tax |
Group net income |
Business |
Reported |
(3,825) |
(518) |
(2) |
0 |
(467) |
862 |
|
(+) IFRIC 21 linearisation |
(177) |
|
|
|
53 |
(120) |
|
Underlying |
(4,002) |
(518) |
(2) |
0 |
(414) |
742 |
|
|
|
|
|
|
|
|
|
9M 20 (in EURm) |
Operating Expenses |
Net cost of risk |
Net profit or losses from other assets |
Impairment losses on goodwill |
Income Tax |
Group net income |
Business |
Reported |
(12,363) |
(2,617) |
82 |
(684) |
(1,079) |
(728) |
|
(+) IFRIC 21 linearisation |
177 |
|
|
|
(53) |
120 |
|
(-) Group refocusing plan* |
|
|
(77) |
|
0 |
(77) |
Corporate Centre |
(-) Goodwill impairment* |
|
|
|
(684) |
0 |
(684) |
Corporate Centre |
(-) DTA impairment* |
|
|
|
|
(650) |
(650) |
Corporate Centre |
Underlying |
(12,186) |
(2,617) |
159 |
0 |
(482) |
803 |
|
Q3 19 (in EURm) |
Operating Expenses |
Net cost of risk |
Net profit or losses from other assets |
Group net income |
Business |
Reported |
(4,165) |
(329) |
(71) |
854 |
|
(+) IFRIC 21 linearisation |
(152) |
|
|
(110) |
|
(-)Group refocusing plan* |
|
|
(113) |
(111) |
Corporate Centre |
Underlying |
(4,317) |
(329) |
42 |
855 |
|
|
|
|
|
|
|
9M 19 (in EURm) |
Operating Expenses |
Net cost of risk |
Net profit or losses from other assets |
Group net income |
Business |
Reported |
(13,224) |
(907) |
(202) |
2,594 |
|
(+) IFRIC 21 linearisation |
152 |
|
|
110 |
|
(-) Restructuring provision* |
(256) |
|
|
(192) |
GBIS (EUR -227m) / IBFS (EUR -29m) |
(-) Group refocusing plan* |
|
(18) |
(249) |
(287) |
Corporate Centre |
Underlying |
(12,816) |
(889) |
47 |
3,183 |
|
(*) exceptional item
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 45 and 574 of Societe Generale’s 2020 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 EUR m) |
Q3 20 |
Q3 19 |
9M 20 |
9M 19 |
French Retail Banking |
Net Cost
Of Risk |
130 |
95 |
821 |
318 |
Gross
loan Outstandings |
217,156 |
195,305 |
208,604 |
193,208 |
Cost of Risk in bp |
24 |
19 |
52 |
22 |
International Retail Banking and Financial
Services |
Net Cost
Of Risk |
331 |
169 |
978 |
430 |
Gross
loan Outstandings |
129,838 |
138,493 |
133,240 |
135,996 |
Cost of Risk in bp |
102 |
49 |
98 |
42 |
Global Banking and Investor Solutions |
Net Cost
Of Risk |
57 |
64 |
818 |
140 |
Gross
loan Outstandings |
162,429 |
160,906 |
165,389 |
163,310 |
Cost of Risk in bp |
14 |
16 |
66 |
11 |
Corporate Centre |
Net Cost
Of Risk |
0 |
1 |
0 |
19 |
Gross loan Outstandings |
12,400 |
9,944 |
10,800 |
9,299 |
Cost of Risk in bp |
(1) |
2 |
1 |
27 |
Societe Generale Group |
Net Cost
Of Risk |
518 |
329 |
2,617 |
907 |
Gross loan Outstandings |
521,822 |
504,647 |
518,033 |
501,813 |
Cost of Risk in bp |
40 |
26 |
67 |
24 |
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 45 and 46 of Societe Generale’s
2020 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 46 of
Societe Generale’s 2020 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 |
Q3 20 |
Q3 19 |
9M 20 |
9M 19 |
Shareholders' equity Group share |
60,593 |
63,715 |
60,593 |
63,715 |
Deeply subordinated notes |
(7,873) |
(9,739) |
(7,873) |
(9,739) |
Undated subordinated notes |
(274) |
(290) |
(274) |
(290) |
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 |
(4) |
(16) |
(4) |
(16) |
OCI excluding conversion reserves |
(875) |
(741) |
(875) |
(741) |
Dividend provision |
(178) |
(1,402) |
(178) |
(1,402) |
ROE equity end-of-period |
51,389 |
51,527 |
51,389 |
51,527 |
Average ROE equity |
51,396 |
51,243 |
52,352 |
50,309 |
Average Goodwill |
(3,928) |
(4,562) |
(4,253) |
(4,600) |
Average Intangible Assets |
(2,464) |
(2,259) |
(2,417) |
(2,215) |
Average ROTE equity |
45,004 |
44,422 |
45,682 |
43,494 |
Group net Income (a) |
862 |
854 |
(728) |
2,594 |
Underlying Group net income (b) |
742 |
855 |
803 |
3,183 |
Interest on deeply subordinated notes and undated subordinated
notes (c) |
(127) |
(180) |
(447) |
(537) |
Cancellation of goodwill impairment (d) |
0 |
7 |
684 |
115 |
Adjusted Group net Income (e) = (a)+ (c)+(d) |
735 |
681 |
(491) |
2,172 |
Adjusted Underlying Group net Income
(f)=(b)+(c) |
615 |
675 |
356 |
2,646 |
|
|
|
|
|
Average ROTE equity (g) |
45,004 |
44,422 |
45,682 |
43,494 |
ROTE [quarter: (4*e/g), 9M: (4/3*e/g)] |
6.5% |
6.1% |
-1.4% |
6.7% |
|
|
|
|
|
Average ROTE equity (underlying) (h) |
44,884 |
44,422 |
47,213 |
43,693 |
Underlying ROTE [quarter: (4*f/h), 9M: (4/3*f/h)] |
5.5% |
6.1% |
1.0% |
8.1% |
RONE calculation: Average capital
allocated to Core Businesses (in EURm)
In EURm |
Q3 20 |
Q3 19 |
Change |
9M 20 |
9M 19 |
Variation |
French Retail Banking |
11,879 |
11,321 |
+4.9% |
11,507 |
11,294 |
+1,9% |
International Retail Banking and Financial
Services |
10,468 |
10,946 |
-4.4% |
10,627 |
11,196 |
-5,1% |
Global Banking and Investor Solutions |
14,868 |
14,739 |
+0.9% |
14,306 |
15,622 |
-8,4% |
Core Businesses |
37,215 |
37,006 |
+0.6% |
36,440 |
38,112 |
-4,4% |
Corporate Centre |
14,180 |
14,237 |
-0.4% |
15,912 |
12,197 |
+30,5% |
Group |
51,395 |
51,243 |
+0.3% |
52,352 |
50,309 |
+4,1% |
8 - Net assets and tangible net
assets
Net assets and tangible net assets are defined
in the methodology, page 48 of the Group’s 2020 Universal
Registration Document. The items used to calculate them are
presented below:
End of period |
9M 20 |
H1 20 |
2019 |
9M 19 |
Shareholders' equity Group share |
60,593 |
60,659 |
63,527 |
63,715 |
Deeply
subordinated notes |
(7,873) |
(8,159) |
(9,501) |
(9,739) |
Undated
subordinated notes |
(274) |
(283) |
(283) |
(290) |
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 |
(4) |
20 |
4 |
(16) |
Bookvalue of own shares in trading portfolio |
302 |
335 |
375 |
348 |
Net Asset Value |
52,744 |
52,572 |
54,122 |
54,018 |
Goodwill |
(3,928) |
(3,928) |
(4,510) |
(4,577) |
Intangible Assets |
(2,469) |
(2,458) |
(2,362) |
(2,292) |
Net Tangible Asset Value |
46,347 |
46,186 |
47,250 |
47,149 |
|
|
|
|
|
Number of shares used to calculate NAPS** |
851,134 |
851,133 |
849,665 |
849,665 |
Net Asset Value per Share |
62.0 |
61.8 |
63.7 |
63.6 |
Net Tangible Asset Value per Share |
54.5 |
54.3 |
55.6 |
55.5 |
** The number of shares considered is the number
of ordinary shares outstanding as at September 30th, 2020,
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 47 of Societe Generale’s 2020 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 47 of Societe
Generale’s 2020 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 20 |
H1 20 |
2019 |
9M 19 |
Existing shares |
853,371 |
853,371 |
834,062 |
829,235 |
Deductions |
|
|
|
|
Shares
allocated to cover stock option plans and free shares awarded to
staff |
2,606 |
2,728 |
4,011 |
4,087 |
Other own shares and treasury shares |
|
|
149 |
187 |
Number of shares used to calculate EPS** |
850,766 |
850,643 |
829,902 |
824,961 |
Group net Income |
(728) |
(1,590) |
3,248 |
2,594 |
Interest
on deeply subordinated notes and undated subordinated notes |
(447) |
(320) |
(715) |
(537) |
Capital gain net of tax on partial buybacks |
|
|
|
|
Adjusted Group net income |
(1,175) |
(1,910) |
2,533 |
2,057 |
EPS (in EUR) |
(1.38) |
(2.25) |
3.05 |
2.49 |
Underlying EPS* (in EUR) |
0.42 |
(0.38) |
4.03 |
3.21 |
(*) Excluding exceptional items and including
linearisation of the IFRIC 21 effect. (**) The number of shares
considered is the number of ordinary shares outstanding as at
September 30th, 2020, 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 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.
Committed to the positive transformations of the world’s societies
and economies, Societe Generale and its teams seek to build, day
after day, together with its clients, a better and sustainable
future through responsible and innovative financial solutions.
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 138,000 members of staff in 62
countries and supports on a daily basis 29 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) NPL ratio calculated according to the new
EBA methodology
(2) Ratio between the amount of provisions on
doubtful outstandings and the amount of these same outstandings
(1) Adjusted for exceptional items and the
linearisation of IFRIC 21
- Excluding IFRS 9 phasing
- TLOF: Total Liabilities and Own Funds
(1) Source: Bain & Company 2020
(2) Including BMTN (negotiable medium-term
notes)
(3) Including currency deposits
(1) including +19 basis points for IFRS9 phasing
and pro-forma for the capital impact of the disposal of SG Finans
which was finalised on October 1st, 2020 (around + 10 basis
points)
(2) corresponding to 50% of underlying Group net
income in 9M 20, after deducting interests on deeply subordinated
notes and undated subordinated notes
- Societe Generale_Press Release Q3-2020
Societe Generale (EU:GLE)
Gráfico Histórico do Ativo
De Fev 2024 até Mar 2024
Societe Generale (EU:GLE)
Gráfico Histórico do Ativo
De Mar 2023 até Mar 2024