Societe Generale: Fourth quarter & 2022 full year results
RESULTS AT 31 DECEMBER 2022
Press releaseParis, 8 February
2023
EXCELLENT
PERFORMANCE ACROSS BUSINESS
LINES
Record
revenues
up by
+9.3%(1)
vs. 2021, driven by historical
highs in Financing & Advisory, Global Markets and ALD, sharp
growth in Private Banking and International Retail Banking, and a
solid performance by French Retail Banking
Strong improvement in the cost
to income ratio to
61.0%(1)
(vs. 64.4%(1) in 2021), excluding contribution to the Single
Resolution Fund
Cost of risk at 28 basis
points, with a low level of defaults at 17 basis
points and continued prudent provisioning resulting in provisions
on performing loans of EUR 3.8bn at end-December 2022
Underlying Group net income of
EUR
5.6bn(1)
(EUR 2.0bn on a reported basis including the impact of the disposal
of Rosbank and its Russian subsidiaries),
underlying profitability
of
9.6%(1)
(ROTE)
SOLID QUARTERLY
RESULTS
In Q4 22, underlying gross
operating income came to EUR
2.2bn(1)
+14.9% vs. Q4 21
Underlying Group net
income at
EUR
1.1bn(1)
(EUR 1.2bn on a reported basis), underlying
profitability
at
7.6%(1)
CET 1 ratio of
13.5%(2)
at end-2022,
around
420
basis points above the regulatory requirement
DISTRIBUTION TO
SHAREHOLDERS
Distribution of
EUR
1.8bn,
equivalent to EUR
2.25
per
share(3)
(4),
i.e.:
-
a cash dividend
of EUR
1.70 per
share to be proposed at the General Meeting
- a share buyback
programme, of
approximately EUR 440m, equivalent
to around
EUR 0.55
per share
FINANCIAL
TARGETS
2025: financial targets
confirmed, notably a cost to income ratio below
62%, expected profitability of 10% (ROTE) based on a CET1 ratio
target of 12% post Basel IV
2023: a transition
year, with the
negative impacts related to the end of the TLTRO benefit and to the
specific functioning of the French retail banking
marketUnderlying
cost to income
ratio (1),
excluding contribution to the Single Resolution Fund,
expected
at between
66% and
68%Cost
of risk is
expected
at between 30 and
35 basis points
(1) Underlying data (see methodology note No. 5
for the transition from accounting data to underlying data), (2)
Phased-in ratio (fully-loaded ratio of 13.3%), (3) Based on the
number of shares in circulation at 31/12/2022, (4) Subject to usual
approvals from the General Meeting and the ECB
MAJOR
ACHIEVEMENTS IN
STRATEGIC INITIATIVES
Decisive
milestones
achieved in the
merger of the retail banking networks in France,
resulting in the legal merger - on schedule - of the Societe
Generale and Crédit du Nord networks on 1 January 2023 and the
launch of a new retail bank in France
Accelerated development
of
Boursorama, with
record annual new client growth of 1.4 million, taking the total
number of clients to 4.7 million at end-2022
Plans
on track to
create global leaders in sustainable mobility and
equities with the acquisition of LeasePlan by ALD
and the creation of the Bernstein joint venture
Rapid and successful adaptation
amid a complex and uncertain environment,
particularly as regards the Rosbank disposal, which had limited
capital impact
Upscaled ESG actions and
commitments by the Group, notably by integrating
ESG considerations across all Group activities and a reinforcement
of our decarbonisation ambitions
Ongoing rollout of digital
transformation initiatives and operational efficiency improvement
actions
Fréderic
Oudéa, the Group’s Chief Executive
Officer, commented:
“2022 marked a decisive stage for the Group,
which was able to deliver record underlying performances while
adapting itself swiftly and efficiently to an uncertain and complex
environment. Throughout the year, the Group made major strategic
progress that has unlocked value. We launched the new SG retail
bank resulting from the merger of our networks in France and pushed
further ahead at Boursorama. The planned acquisition of LeasePlan
by ALD in the mobility sector and the planned Bernstein joint
venture deal for our Equities business will create global leaders.
We also defined the Group’s new CSR ambitions with the aim of
supporting our clients in responsible energy transition. Building
on the commercial momentum of the businesses and the strength of
the balance sheet, the Group is confident of being able to reap the
benefit of ongoing projects and business developments, confirms its
financial guidance for 2025, and is embarking with determination on
2023, a year of transition in many respects.”
-
GROUP CONSOLIDATED RESULTS
|
In EURm |
Q4 22 |
Q4 21 |
Change |
2022 |
2021 |
Change |
|
Net banking income |
6,885 |
6,620 |
+4.0% |
+6.2%* |
28,059 |
25,798 |
+8.8% |
+9.7%* |
|
Underlying net banking income(1) |
6,885 |
6,503 |
+5.9% |
+8.1%* |
28,059 |
25,681 |
+9.3% |
+10.2%* |
|
Operating expenses |
(4,610) |
(4,565) |
+1.0% |
+3.3%* |
(18,630) |
(17,590) |
+5.9% |
+7.5%* |
|
Underlying operating expenses(1) |
(4,718) |
(4,617) |
+2.2% |
+4.5%* |
(17,991) |
(17,211) |
+4.5% |
+6.1%* |
|
Gross operating income |
2,275 |
2,055 |
+10.7% |
+12.5%* |
9,429 |
8,208 |
+14.9% |
+14.4%* |
|
Underlying gross operating income(1) |
2,167 |
1,886 |
+14.9% |
+16.9%* |
10,068 |
8,470 |
+18.9% |
+18.4%* |
|
Net cost of risk |
(413) |
(86) |
x 4.8 |
x 6.3* |
(1,647) |
(700) |
x 2.4 |
+93.0%* |
|
Operating income |
1,862 |
1,969 |
-5.4% |
-4.7%* |
7,782 |
7,508 |
+3.6% |
+5.3%* |
|
Underlying operating income(1) |
1,754 |
1,800 |
-2.6% |
-1.7%* |
8,421 |
7,770 |
+8.4% |
+10.1%* |
|
Net profits or losses from other assets |
(4) |
449 |
n/s |
n/s |
(3,290) |
635 |
n/s |
n/s |
|
Income tax |
(484) |
(311) |
+55.5% |
+55.5%* |
(1,560) |
(1,697) |
-8.1% |
-5.8%* |
|
Net income |
1,381 |
1,995 |
-30.8% |
-30.2%* |
2,947 |
6,338 |
-53.5% |
-53.2%* |
|
O.w. non-controlling interests |
221 |
208 |
+6.3% |
+7.6%* |
929 |
697 |
+33.3% |
+32.3%* |
|
Reported Group net income |
1,160 |
1,787 |
-35.1% |
-34.5%* |
2,018 |
5,641 |
-64.2% |
-64.0%* |
|
Underlying Group net
income(1) |
1,126 |
1,226 |
-8.1% |
-7.2%* |
5,616 |
5,264 |
+6.7% |
+7.9%* |
|
ROE |
6.9% |
12.1% |
|
|
2.6% |
9.6% |
+0.0% |
+0.0%* |
|
ROTE |
7.8% |
16.6% |
|
|
2.9% |
11.7% |
+0.0% |
+0.0%* |
|
Underlying
ROTE(1) |
7.6% |
9.2% |
|
|
9.6% |
10.2% |
+0.0% |
+0.0%* |
(1) Underlying data (see methodology note No. 5 for
the transition from accounting data to underlying data)
Societe Generale’s Board of Directors, which met
on 7 February 2023 under the chairmanship of Lorenzo Bini Smaghi,
examined the Societe Generale Group’s results for Q4 and FY
2022.
The various restatements enabling the transition
from underlying data to published data are presented in the
methodology notes (section 9.5).
Net banking
income
Underlying
net banking
income(1)
grew strongly in 2022
at +9.3%
(+10.2%*) vs. 2021,
fuelled by record performances in Financing & Advisory, Global
Markets and ALD, strong growth in Private Banking and International
Retail Banking and a solid performance by the French Retail
Bank.
French Retail Banking revenues grew +4.1% vs.
2021 fuelled notably by robust service fee growth and a very solid
showing by Private Banking.
International Retail Banking & Financial
Services’ revenues rose +12.4% (+17.9%*) vs. 2021, driven by a
record performance at ALD and strong growth at International Retail
Banking whose revenues grew +11.5%* vs. 2021. Financial Services’
net banking income was significantly higher by +35.8%* vs. 2021,
while Insurance net banking income increased by +6.5%* vs.
2021.
Global Banking & Investor Solutions’
revenues were up +14.3% (+12.9%*) vs. 2021. Global Markets &
Investor Services’ revenues posted a +18.7% increase in revenues
(14.1%*) vs. 2021, while Financing & Advisory activities
increased by +15.2% (+10.7%*) vs. 2021.
In Q4
22, the Group continued to post robust revenue
growth of +5.9% (+8.1%*) vs. Q4 21.
Operating
expenses
In 2022, operating expenses totalled EUR
18,630 million on a reported basis and EUR 17,991 million on an
underlying basis (restated for transformation costs),
i.e., an increase of +4.5% vs. 2021 (on an underlying basis).
The rise can be mainly attributed to the EUR 864
million contribution to the Single Resolution Fund, and increase of
EUR 278 million, currency effects, notably in US dollars and a rise
in the variable components of employee remuneration associated with
higher revenues. Underlying(1) gross operating income increased by
+18.9% to EUR 10,068 million in 2022, while the underlying(1) cost
to income ratio (excluding the Single Resolution Fund) posted a 3.4
point improvement to 61.0% (vs. 64.4% in 2021).
In Q4 22, operating expenses totalled
EUR 4,610 million on a reported basis and EUR
4,718 million on an underlying basis (restated for the
linearisation of IFRIC 21 and transformation costs), i.e., a
limited increase of +2.2% vs. Q4 21.
Excluding the Single Resolution Fund,
the
underlying(1)
cost to income ratio is expected to range between 66% and
68% in 2023, based
notably on normalised revenues in Global
Markets.
Cost of
risk
The cost of risk remained moderate at 28
basis points in Q4 22, or EUR 413 million. It breaks down
into a provision on non-performing loans which remains limited at
EUR 346 million (23 basis points), and an additional provision on
performing loans of EUR 67 million (5 basis points).
Over the full year, the cost of risk amounted to
28 basis points, landing below the guidance of between 30 and 35
basis points.
Offshore exposure to Russia was reduced to EUR
1.8 billion of EAD (Exposure At Default) at 31 December 2022, i.e.,
a decrease of around -45% since 31 December 2021. Exposure at risk
on this portfolio is estimated at less than EUR 0.6 billion,
compared with less than EUR 1 billion for the previous quarter.
Total associated provisions stood at EUR 427 million at
end-December 2022.
Moreover, at end-December 2022, the Group’s
residual exposure to Rosbank amounted to less than EUR 0.1 billion,
corresponding mainly to guarantees and letters of credit.
The Group’s provisions on performing loans
amounted to EUR 3,769 million at end-December, an increase of EUR
414 million in 2022.
The non-performing loans ratio amounted to
2.8%(2) at 31 December 2022, down 10 basis points vs. 31 December
2021. The gross coverage ratio on doubtful loans for the Group
stood at 48%(3) at 31 December 2022.
The cost of risk in 2023 is expected to
range between 30 and 35 basis points.
(1) Underlying data (see
Methodology note No.5 for the transition from accounting data to
underlying data)(2) NPL ratio calculated according
to EBA methodology published on 16 July
2019(3) Ratio of S3 assets calculated on the gross
carrying amount of the loans before offsetting guarantees and
collateral
Group net
income
|
In EURm |
|
|
|
|
Q4 22 |
Q4 21 |
2022 |
2021 |
|
Reported Group net income |
|
|
1,160 |
1,787 |
2,018 |
5,641 |
|
Underlying Group net income(1) |
|
|
1,126 |
1,226 |
5,616 |
5,264 |
|
As a % |
|
|
|
|
Q4 22 |
Q4 21 |
2022 |
2021 |
|
ROTE |
|
|
|
|
7.8% |
16.6% |
2.9% |
11.7% |
|
Underlying ROTE(1) |
|
|
|
|
7.6% |
9.2% |
9.6% |
10.2% |
Earnings per share amounts to EUR 1.73 in 2022
(EUR 5.97 in 2021). Underlying earnings per share amounts to EUR
6.10 over the same period (EUR 5.52 in 2021).
Shareholder
distribution
The Board of Directors approved its distribution
policy to an equivalent of EUR 2.25 per share(2). A cash dividend
of EUR 1.70 per share will be proposed at the General Meeting of
Shareholders on 23 May 2023. The dividend will be detached on 30
May 2023 and paid out on 1 June 2023.
The Group is also planning to launch a share
buyback programme for a total of around EUR 440 million, i.e.,
equivalent to EUR 0.55 per share. The rollout of the programme is
conditional on receiving the usual clearances from the ECB.
Considering the strong financial performance in
2022 and an exceptional year, this distribution level ensures on
one hand a fair remuneration of shareholders, and on the other
hand, further strengthens the Group CET 1 ratio.
Upscaled ESG actions and
commitments by the Group
The Group defined its new CSR ambition in 2022
and committed to accelerating the decarbonisation of its business
portfolios. It also adopted a global approach to preserve
biodiversity, enhance positive local impact and deploy an ESG
culture to support clients in responsible social and energy
transition.
On this score, Societe Generale strengthened its
ambitions to reduce finance for the most carbon-emissive sectors by
setting new targets for upstream oil and gas. We are committed to
reducing our exposure by -20% out to 2025 vs. 2019 and to scaling
down scope 3 carbon emissions by -30% out to 2030 vs. 2019.
Likewise, Societe Generale is targeting power generation emission
intensity of 125g of Co2/KWh out to 2030. During 2022, the Group
fixed a new sustainable finance contribution target of EUR 300
billion out to 2025. At end-2022, the bank had already exceeded the
EUR 100 billion mark.
The bank has also implemented several sectorial
initiatives such as playing an active role in market coalitions
destined to establish a common financing framework on aluminium,
steel and aviation, and being at the forefront of rapid-growth
economies, such as hydrogen. Societe Generale also increased
the weight of biodiversity concerns when managing new commitments
involving agriculture and logging operations by giving them greater
prominence in its activities, and by taking active part in market
initiatives to create common frameworks.
Last, to integrate ESG considerations within the
Group, Societe Generale launched a vast internal programme to make
ESG culture second nature among its employees, notably by rolling
out an extensive training programme and making ESG transformation
operational as part of the “ESG by Design” strategic project.
(1) Underlying data (see
methodology note No.5 for the transition from accounting data to
underlying data)(2) Subject to usual approvals
from the General Meeting and the ECB
-
THE GROUP’S FINANCIAL STRUCTURE
Group shareholders’ equity
totalled EUR 66.5 billion at 31 December 2022 (vs. EUR 65.1 billion
at 31 December 2021). Net asset value per share was EUR 70.5 and
tangible net asset value per share was EUR 62.3.
The consolidated balance sheet totalled EUR
1,487 billion at 31 December 2022 (EUR 1,464 billion at 31 December
2021). The net amount of customer loan outstandings, including
lease financing, was EUR 496 billion at 31 December 2022 (EUR 488
billion at 31 December 2021) – excluding assets and securities
purchased under resale agreements. At the same time, customer
deposits amounted to EUR 524 billion vs. EUR 502 billion at 31
December 2021 (excluding assets and securities sold under
repurchase agreements).
At 31 December 2022, the parent company had
issued EUR 44 billion of medium/long-term debt, having an average
maturity of 4.9 years and an average spread of 59 bps (over 6-month
midswaps, excluding subordinated debt). The subsidiaries had issued
EUR 2.7 billion. In total, the Group had issued EUR 46.7 billion of
medium/long-term debt.
The LCR (Liquidity Coverage Ratio) was well
above regulatory requirements at 141% at end-December 2022 (145% on
average in Q4), vs. 129% at end-December 2021. At the same time,
the NSFR (Net Stable Funding Ratio) was at a level of 114% at
end-December 2022.
The Group’s risk-weighted
assets (RWA) amounted to EUR 360.5 billion at 31 December
2022 (vs. EUR 363.4 billion at end-December 2021) according to
CRR2/CRD5 rules. Risk-weighted assets in respect of credit risk
represent 83.4% of the total, at EUR 300.7 billion, down 1.4% vs.
31 December 2021.
At 31 December 2022, the Group’s Common
Equity Tier 1 ratio stood at 13.5%, or around 420 basis
points above the regulatory requirement. The CET1 ratio at 31
December 2022 includes an effect of +17 basis points for phasing of
the IFRS 9 impact. Excluding this effect, the fully-loaded ratio
amounts to 13.3%. The Tier 1 ratio stood at 16.3% at end-September
2022 (15.9% at end-December 2021) and the total capital ratio
amounted to 19.4% (18.8% at end-December 2021).
The leverage ratio stood at
4.4% at 31 December 2022 (4.9% at end-December 2021, including ~40
basis points for the European Central Bank’s transitional measures
which ended in March 2022).
With a level of 33.7% of RWA and 9.0% of
leverage exposure at end-December 2022, the Group’s TLAC ratio is
above the Financial Stability Board’s requirements for 2022. At 31
December 2022, the Group also exceeded its 2022 MREL requirements
of 25.31% of RWA and 5.91% of leverage exposure.
The Group is rated by four rating agencies: (i)
Fitch Ratings - long-term rating “A-”, stable rating, 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
|
In EURm |
Q4 22 |
Q4 21 |
Change |
2022 |
2021 |
Change |
|
Net banking income |
2,219 |
2,221 |
-0.1% |
8,839 |
8,489 |
+4.1% |
|
Net banking income excl. PEL/CEL |
2,174 |
2,200 |
-1.2% |
8,647 |
8,450 |
+2.3% |
|
Operating expenses |
(1,717) |
(1,688) |
+1.7% |
(6,473) |
(6,248) |
+3.6% |
|
Underlying operating expenses(1) |
(1,773) |
(1,731) |
+2.4% |
(6,473) |
(6,248) |
+3.6% |
|
Gross operating income |
502 |
533 |
-5.8% |
2,366 |
2,241 |
+5.6% |
|
Underlying gross operating income(1) |
446 |
490 |
-9.0% |
2,366 |
2,241 |
+5.6% |
|
Net cost of risk |
(219) |
20 |
n/s |
(483) |
(125) |
x 3.9 |
|
Operating income |
283 |
553 |
-48.8% |
1,883 |
2,116 |
-11.0% |
|
Net profits or losses from other assets |
51 |
21 |
x 2.4 |
57 |
23 |
x 2.5 |
|
Reported Group net income |
250 |
414 |
-39.6% |
1,445 |
1,550 |
-6.8% |
|
Underlying Group net income(1) |
208 |
383 |
-45.6% |
1,445 |
1,550 |
-6.8% |
|
RONE |
7.9% |
14.0% |
|
11.6% |
12.9% |
|
|
Underlying
RONE(1) |
6.6% |
12.9% |
|
11.6% |
12.9% |
|
(1) Including PEL/CEL provision
and adjusted for the linearisation of IFRIC 21NB: excluding Private
Banking activities as per Q1 22 restatement (France and
International). Includes activities transferred after the disposal
of Lyxor
Societe Generale and
Crédit du Nord networks
Average loan outstandings were +1.6% higher than
in Q4 21 at EUR 213 billion. Home loan outstandings rose +1.2% vs.
Q4 21. Outstanding loans to corporate and professional customers
were +2.4% higher than in Q4 21.
Average outstanding balance sheet deposits
including BMTN (negotiable medium-term notes) contracted by -2.6%
vs. Q4 21 to EUR 235 billion.
As a result, the average loan/deposit ratio
stood at 91% in Q4 22 vs. 87% in Q4 21.
Life insurance assets under management totalled
EUR 109 billion at end-December 2022, unchanged year-on-year (with
the unit-linked share accounting for 32%). Gross life insurance
inflow amounted to EUR 1.8 billion in Q4 22.
Personal protection insurance premiums were up
+4% vs. Q4 21 and property/casualty insurance premiums were up +3%
vs. Q4 21.
On 1 January 2023, Societe Generale Group
performed the legal merger of its two French retail banking
networks, Societe Generale and Crédit du Nord. SG is henceforth the
Group’s new retail bank in France. SG bank’s ambition is to create
a top-tier banking partner, serving 10 million clients in the
French market and ranking among the Top 3 for customer
satisfaction.
Boursorama
The bank enjoyed a new client acquisition
record, attracting more than 1.4 million new clients in 2022 (2x
the 2021 level), including nearly 396,000 in Q4 22 alone. The bank
consolidated its position as the leading online bank in France,
with almost 4.7 million clients at end-December 2022, and a target
of more than 5.5 million clients at the end of 2023. In the
meantime, the acquisition cost per client contracted by around -20%
relative to 2021.
Average outstanding loans rose +14.4% vs. Q4 21
to EUR 16 billion. Home loan outstandings were up +14.0% vs. Q4 21,
while consumer loan outstandings climbed +18.0% vs. Q4 21.
Average outstanding savings including deposits
and financial savings were +38.1% higher than in Q4 21 at EUR 49
billion, with deposits rising by a sharp +43.3% vs. Q4 21 on back
of organic growth and the onboarding of ING clients. Brokerage
recorded more than 1.5 million transactions in Q4 22 alone.
Boursorama reinforced its day-to day banking
operations with a +44% growth notably in payments vs. Q4 21.
Private Banking
Private Banking activities, which were
transferred to French Retail Banking at the beginning of 2022,
cover private banking activities in France and internationally.
Assets under management totalled EUR 147 billion at Q4 22. Asset
inflow growth rose +4% in 2022 relative to end-2021. Net banking
income amounted to EUR 296 million in Q4 22 (+7.6% vs. Q4 21) and
EUR 1,278 million over the full year (+15.9% vs. 2021).
Net banking
income
In Q4
22, revenues totalled EUR 2,219 million,
stable vs. Q4 21, including PEL/CEL. Net interest income and other
revenues, including PEL/CEL, was down -1.8% vs. Q4 21, impacted
primarily by the higher interest rate on regulated savings and the
usury rate, which was partly offset by TLTRO benefits. Fees
increased by +1.9% vs. Q4 21, driven by the +5% rise vs. Q4 21 in
service and financial fees in the Societe Generale and Crédit du
Nord networks.
In 2022,
revenuestotalled EUR 8,839 million, up +4.1% vs. 2021, including
PEL/CEL. Net interest income and other revenues, including PEL/CEL,
were up +2.9% vs. 2021. Fees were +5.6% higher than in 2021,
benefiting from strong growth in service and financial fees.
In respect of the outlook, 2023 will be a
transition year with decreased revenues due to the negative impacts
of the end of the TLTRO benefit for around EUR 0.3bn vs. 2022, the
specific functioning of the French market that will continue to
curb loan production due to the usury rate, as was also the case in
2022, and the continued rise in the regulated savings rate that
will have an impact on net banking income of around EUR 50m for
each 25 basis point increase. Furthermore, net interest margin
hedges that will gradually mature as of 2024 will deprive us in
2023 of the benefit of increased savings.
Operating
expenses
Quarterly
operating expenses totalled EUR 1,717 million (+1.7% vs. Q4 21) and
EUR 1,773 million on an underlying basis (+2.4% vs. Q4 21).
Operating expenses, which were adjusted for the Value Sharing
Premium (PPV) provision, contracted by -0.7% vs. Q4 21. The cost to
income ratio stood at 77% for Q4 22.
In 2022, operating expenses
came to EUR 6,473 million (+3.6% vs. 2021). The cost to income
ratio stood at 73%, down 0.4 points vs. 2021.
Cost of
risk
In Q4
22, the commercial cost of risk amounted
to EUR 219 million or 35 basis points. It was higher than in Q4 21
(by 3 basis points).
In 2022, the
commercial cost of risk amounted to EUR 483 million or 20 basis
points, higher than in 2021 (by 5 basis points).
Contribution to Group net
Income
In Q4
22, the contribution to Group net income
was EUR 250 million in Q4 22, down -39.6% vs. Q4 21. RONE(1) stood
at 6.6% in Q4 22 (8.4% excluding Boursorama).
In
2022, the contribution to Group
net income was EUR 1,445 million, contracting to -6.8% vs. 2021.
Underlying normative RONE came to 11.6% in 2022 (13.4% excluding
Boursorama).
(1) Underlying data (see
methodology note No. 5 for the transition of accounting
data)4. INTERNATIONAL
RETAIL BANKING &
FINANCIAL SERVICES
|
In EURm |
Q4 22 |
Q4 21 |
Change |
2022 |
2021 |
Change |
|
Net banking income |
2,369 |
2,159 |
+9.7% |
+17.4%* |
9,122 |
8,117 |
+12.4% |
+17.9%* |
|
Operating expenses |
(1,100) |
(1,088) |
+1.1% |
+10.9%* |
(4,334) |
(4,203) |
+3.1% |
+10.0%* |
|
Underlying operating expenses(1) |
(1,131) |
(1,112) |
+1.7% |
+11.3%* |
(4,334) |
(4,203) |
+3.1% |
+10.0%* |
|
Gross operating income |
1,269 |
1,071 |
+18.5% |
+23.4%* |
4,788 |
3,914 |
+22.3% |
+26.0%* |
|
Underlying gross operating income(1) |
1,238 |
1,047 |
+18.3% |
+23.3%* |
4,788 |
3,914 |
+22.3% |
+26.0%* |
|
Net cost of risk |
(133) |
(96) |
+38.5% |
+68.3%* |
(705) |
(504) |
+39.9% |
+7.6%* |
|
Operating income |
1,136 |
975 |
+16.5% |
+19.7%* |
4,083 |
3,410 |
+19.7% |
+29.9%* |
|
Net profits or losses from other assets |
(1) |
8 |
n/s |
n/s |
11 |
18 |
-38.9% |
-36.8%* |
|
Reported Group net income |
658 |
584 |
+12.7% |
+16.1%* |
2,376 |
2,082 |
+14.1% |
+25.6%* |
|
Underlying Group net income(1) |
640 |
570 |
+12.3% |
+15.7%* |
2,376 |
2,082 |
+14.1% |
+25.6%* |
|
RONE |
25.0% |
22.2% |
|
|
22.4% |
20.3% |
|
|
|
Underlying
RONE(1) |
24.3% |
21.7% |
|
|
22.4% |
20.3% |
|
|
(1) Underlying data (see methodology note No. 5
for the transition from accounting data to underlying data)
International Retail Banking’s
outstanding loans posted healthy momentum of EUR 88.2 billion, up
+5.6%* for 2022. Outstanding deposits totalled EUR 78.5 billion, a
slightly +1.4%* than 2021.
For the Europe scope, outstanding loans were up
+4.9%* vs. 2021 at EUR 63.8 billion, driven by positive momentum on
the corporate segment in the Czech Republic (+11.0%* vs. 2021).
Outstanding deposits are stable* at EUR 51.6 billion. Robust
momentum in Romania (+8.3%* vs. 2021) offset the slowdown in the
Czech Republic notably due to a shift in some deposits towards
financial savings.
In Africa, Mediterranean Basin and French
Overseas Territories, outstanding loans confirmed their solid
commercial performances in Q4 22. Over the year, outstanding
deposits continued to enjoy positive momentum, up by +7.5%* and
+5.6%* respectively vs. 2021.
In the Insurance business, life
insurance outstandings showed resilience in 2022, totalling EUR
131.6 billion despite unfavourable market conditions. The
share of unit-linked products in outstandings remained high at 36%.
Gross life insurance savings inflow amounted to EUR 12,754 million
in 2022 (42% of unit-linked products in 2022).
Protection insurance saw an increase of +5.8%* vs. 2021, with good
momentum for personal protection premiums that rose +8.0%* and a
more minor +4.1%* increase for P&C insurance.
Financial Services also enjoyed
very solid momentum. Operational Vehicle Leasing and Fleet
Management posted growth of +3.1% vs. end-December 2021 and the
number of contracts totalled 1.8 million (excluding contracts
involving Russia, Belarus and remediation actions agreed with
anti-trust authorities, Portugal, Ireland and Norway, excepting NF
Fleet Norway). Equipment Finance outstanding loans were slightly
higher (+2.2%) than at end-September 2021, at EUR 15 billion
(excluding factoring).
Net banking
income
Net banking income amounted to EUR 9,122 million
over the full year, up +17.9%* vs. 2021. Net banking income came to
EUR 2,369 million in Q4 22, up +17.4%* vs. Q4 21.
International Retail Banking’s
net banking income stood at 5,153 million, up +11.5%* vs. 2021.
International Retail Banking’s net banking income totalled EUR
1,280 million in Q4 22, up +8.3%*.
Revenues in Europe climbed +13.5%* vs. 2021, due
primarily to substantial growth in net interest income (+15.7%*),
driven notably by the Czech Republic (+33.6%*) and Romania
(+17.5%*). These regions benefit from increased volumes and high
interest rates.
The Africa, Mediterranean Basin and French
Overseas Territories scope posted revenues up +8.7%* vs. 2021 on
back of net interest income (+5.0%*) and fees (+11.2%*).
The Insurance business posted
net banking income up +6.5%*, at EUR 1,012 million vs. 2021 driven
by stronger life insurance savings and protection activities. Over
the quarter, net banking income for the Insurance activity grew by
+10.6%* vs. Q4 21 to EUR 263 million.
Financial Services’ net banking
income was substantially higher (+37.9%*) than in Q4 21, at EUR 826
million. ALD benefited again last quarter from robust commercial
momentum, strong used-car sale results and the reduction of the
vehicle depreciation costs in line with the current increase in
vehicle values. Over the year, ALD’s net banking income was up
+43%* vs. 2021 driven by positive commercial dynamics and still
strong used car sales results (EUR 2,846 per unit in 2022).
In 2022, Financial Services’ net banking income
totalled EUR 2,957 million in 2022, up +35.8%* vs. 2021.
Operating
expenses
Operating expenses increased by +10.0%* vs. 2021
to EUR 4,334 million, generating a positive jaws effect that
produced a cost to income ratio that stood at 47.5% in 2022, which
was lower than in 2021 (51.8%). In Q4 22, operating expenses rose
(after linearisation of the IFRIC 21 charge) by +11.3%*(1) vs. Q4
21 to EUR 1,131 million(1) .
In International Retail
Banking, rising costs were kept contained over the year at
+5.9%* vs. 2021 despite spiking inflation.
In the Insurance business,
operating expenses were up +7.2%* vs. 2021, with a cost to income
ratio of 38.6%.
In Financial Services,
operating expenses increased by +22.1%* vs. 2021. The increase can
be attributed to the recognition of charges related to the
preparation of the LeasePlan acquisition.
Cost of
risk
In
2022, the cost of risk amounted
to 52 basis points (EUR 705 million). It was 38 basis points in
2021.
In Q4 22, the cost of risk was
higher at 40 basis points (EUR 133 million), vs. 28 basis points in
Q4 21.
Contribution to Group net
Income
The contribution to Group net income was EUR
2,376 million in 2021 (+25.6%* vs. 2021) and totalled EUR 640
million(1) in Q4 22, up 15.7%*(1) vs. Q4 21.
RONE stood at 22.4% in 2022 and 24.3%(1) in Q4
22. Underlying RONE(1) was 15.1% in International Retail Banking
and 30.6% in Financial Services and Insurance in 2022.
(1) Underlying data (see methodology note No. 5
for the transition from accounting data to underlying data)
-
GLOBAL BANKING & INVESTOR SOLUTIONS
|
In EURm |
Q4 22 |
Q4 21 |
Variation |
2022 |
2021 |
Variation |
|
Net banking income |
2,452 |
2,147 |
+14.2% |
+14.7%* |
10,082 |
8,818 |
+14.3% |
+12.9%* |
|
Operating expenses |
(1,469) |
(1,402) |
+4.8% |
+5.4%* |
(6,634) |
(6,250) |
+6.1% |
+6.2%* |
|
Underlying operating expenses(1) |
(1,654) |
(1,523) |
+8.6% |
+9.2%* |
(6,634) |
(6,250) |
+6.1% |
+6.2%* |
|
Gross operating income |
983 |
745 |
+31.9% |
+32.2%* |
3,448 |
2,568 |
+34.3% |
+28.8%* |
|
Underlying gross operating income(1) |
798 |
624 |
+27.8% |
+28.2%* |
3,448 |
2,568 |
+34.3% |
+28.8%* |
|
Net cost of risk |
(78) |
(3) |
x 26.0 |
x 102.8* |
(421) |
(65) |
x 6.5 |
x 6.1* |
|
Operating income |
905 |
742 |
+22.0% |
+21.9%* |
3,027 |
2,503 |
+20.9% |
+16.0%* |
|
Reported Group net income |
754 |
621 |
+21.4% |
+21.4%* |
2,427 |
2,018 |
+20.3% |
+15.6%* |
|
Underlying Group net income(1) |
611 |
528 |
+15.8% |
+15.7%* |
2,427 |
2,018 |
+20.3% |
+15.6%* |
|
RONE |
19.1% |
16.8% |
+0.0% |
+0.0%* |
16.3% |
14.4% |
+0.0% |
+0.0%* |
|
Underlying
RONE(1) |
15.5% |
14.3% |
+0.0% |
+0.0%* |
16.3% |
14.4% |
+0.0% |
+0.0%* |
(1) Underlying data (see
methodology note No. 5 for the transition from accounting data to
underlying data)NB: excluding Private Banking activities as per Q1
22 restatement (France and International). Excludes other
activities transferred after the disposal of Lyxor
Net banking
income
Global Banking & Investor
Solutions delivered record revenue in 2022(2), posting
revenue up by +14.3% vs. 2021 of EUR 10,082 million, driven by
robust momentum across all business lines. This very sound
financial performance is predominantly due to the highly successful
execution of the strategic plan unveiled in May 2021, the aim of
which is to create value continuously over the long term.In
Q4 22, revenues jumped by +14.2% vs. Q4 21, to EUR 2,452
million.
In Global Markets & Investor
Services, net banking income totalled EUR 6,708 million,
up +18.7% vs. 2021. In Q4 22, it amounted to EUR 1,496 million,
+19.1% vs. Q4 21.
Global Markets notched up a record
performance(2) of EUR 5,859 million, up +17.1% vs. 2021, benefiting
from robust commercial activity in a durably volatile environment,
particularly with regard to interest rates. In Q4 22, revenues
stood at EUR 1,222 million, +11.2% vs. Q4 21.
The Equity activity recorded its best-ever
year(2) in 2022, registering revenues of EUR 3,294 million , up
+4.7% vs. 2021. Over the quarter, revenues contracted by -11.5% vs.
Q4 21 revenues, which were comparatively very high.
Amid highly volatile interest rates, Fixed
Income and Currencies (FIC) posted a record year(2), generating EUR
2,565 million in revenues, up +38.2% vs. 2021. In Q4 22, revenues
rose to EUR 577 million, (+55.9% vs. Q4 21).
Securities Services’ revenues grew +31.2% in
2022 to EUR 849 million, including EUR 168 million from a 2022
revaluation of our stake in Euroclear. In Q4 22,
revenues climbed +74.5% vs. Q4 21 to EUR 274 million, including EUR
91 million from a revaluation of our stake in Euroclear. Assets
under Custody and Assets under Administration amounted to EUR 4,257
billion and EUR 580 billion, respectively.
Financing & Advisory
activities also posted an excellent performance, with
record annual revenues of EUR 3,374 million, up +15.2% vs. 2021. In
Q4 22, they amounted to EUR 956 million, significantly higher
(+16.6%) than in Q4 21.
(2) Using a comparable economic model in the
post-GFC (Global Financial Crisis) regulatory regime
The Global Banking & Advisory business grew
+9.3% in 2022 and continued to capitalise on solid market momentum
in Asset Finance and activities related to Natural Resources. The
Asset-Backed Products platform also turned in a solid performance
in 2022. By contrast, investment banking activities were negatively
impacted by market conditions and falling volumes. In Q4 22,
revenues grew +6.3%.
Global Transaction and Payment Services posted a
record performance, with revenue growth of 44.7% in 2022 on the
back of very strong performances across all activities that took
advantage of rising interest rates and excellent commercial
performances. Over the quarter, revenues surged by +67.9% vs. Q4
21.
Operating
expenses
In
2022, operating expenses
came to EUR 6,634 million (+6.1% vs. 2021). The increase can be
primarily explained by a negative currency effect owing to the
stronger US dollar and a rise in IFRIC 21 charges. Excluding the
contribution to the Single Resolution Fund, operating expenses rose
+2.8% vs. 2021.
Consistent with a positive jaws effect, the
underlying cost to income ratio excluding the contribution to the
Single Resolution Fund improved strongly to 59.6% vs. 66.3% in
2021.
In Q4 22, operating costs grew
+4.8% to EUR 1,469 million.
Cost of
risk
In
2022, the cost of risk amounted
to 23 basis points (EUR 421 million).
In Q4
22, the cost of risk came to 16 basis
points (EUR 78 million).
Contribution to Group net
Income
The contribution to Group net income grew
sharply by +20.3% to EUR 2,427 million in 2022. In Q4 22, the
contribution to Group net income was EUR 754 million on a reported
basis and EUR 611 million on an underlying basis(1) (+15.8% vs. Q4
21).
Global Banking & Investor Solutions posted
strong RONE of 16.3% in 2022 (19.5% restated for the impact of the
contribution to the Single Resolution Fund).The underlying RONE was
15.5% in Q4 22, and 18.5% excluding the contribution to the Single
Resolution Fund.
(1) Underlying data (see
methodology note No. 5 for the transition from accounting data to
underlying data)
-
CORPORATE CENTRE
|
In EURm |
Q4 22 |
Q4 21 |
2022 |
2021 |
|
Net banking income |
(155) |
93 |
16 |
374 |
|
Underlying net banking income(1) |
(155) |
(24) |
16 |
257 |
|
Operating expenses |
(324) |
(387) |
(1,189) |
(889) |
|
Underlying operating expenses(1) |
(160) |
(251) |
(550) |
(510) |
|
Gross operating income |
(479) |
(294) |
(1,173) |
(515) |
|
Underlying gross operating
income(1) |
(315) |
(275) |
(534) |
(253) |
|
Net cost of risk |
17 |
(7) |
(38) |
(6) |
|
Net profits or losses from other assets |
(60) |
429 |
(3,364) |
603 |
|
Income tax |
31 |
193 |
516 |
187 |
|
Reported Group net income |
(502) |
168 |
(4,230) |
(9) |
|
Underlying Group net
income(1) |
(333) |
(255) |
(633) |
(386) |
(1) Underlying data (see
methodology note No. 5 for the transition from accounting data to
underlying data)
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 as well as certain costs incurred by the
Group not re-invoiced to the businesses.
The Corporate Centre’s net banking
income totalled EUR +16
million in 2022 vs. EUR +374 million in 2021, and
EUR -155 million in Q4 22 vs. EUR +93 million in Q4 21. It includes
the negative revaluation of financial instruments to hedge the
equity portfolios of Group subsidiaries, in contrast to 2021, when
the Corporate Centre’s net banking income included the positive
revaluation of an asset valued at EUR 117 million.
Operating expenses
totalled EUR 1,189 million in
2022 vs. EUR 889 million in 2021. They include the Group’s
transformation costs for a total amount of EUR 639 million relating
to the activities of French Retail Banking (EUR 370 million),
Global Banking & Investor Solutions (EUR 117 million) and the
Corporate Centre (EUR 152 million). Underlying costs came to EUR
-550 million in 2022 compared to EUR -510 million
in 2021.
Gross operating income totalled EUR
-1,173 million in 2022
vs. EUR -515 million in 2021. Underlying gross operating income
came in at EUR -534 million in 2022, vs. EUR -253 million in
2021.
Net profits or losses from other
assets totalled EUR
-3,364 million in 2022
vs. EUR 603 million in 2021. It includes the EUR -3.3 billion
accounting loss from the disposal of Rosbank and insurance
activities in Russia recognised in H1 22. In Q4 22, net profits or
losses from other assets stood at EUR -60 million, vs. EUR 429
million in Q4 21, with an unfavourable base effect owing to the
disposal of Lyxor’s asset management activities for EUR 439
million recognised in Q4 21.
The Corporate Centre’s contribution to
Group net income totalled EUR
-4,230 million
in 2022 vs. EUR -9 million in 2021. The Corporate
Centre’s contribution to Group underlying net income was
EUR -633 million in 2022, vs. EUR -386 million in 2021.
7. 2023
FINANCIAL CALENDAR
|
2023 Financial communication calendar |
|
12 May 2023
First quarter 2023 results23 May 2023 2023 General Meeting 3 August
2023 Second quarter and first half 2023 results |
|
3 November 2023 Third quarter and nine months 2023 results |
|
|
|
The Alternative Performance Measures, notably the notions
of net banking income for the pillars, operating expenses, IFRIC 21
adjustment, cost of risk in basis points, ROE, ROTE, RONE, net
assets, tangible net assets, and the amounts serving as a basis for
the different restatements carried out (in particular the
transition from published data to underlying data) are presented in
the methodology notes, as are the principles for the presentation
of prudential ratios. This document contains
forward-looking statements relating to the targets and strategies
of the Societe Generale Group.These forward-looking statements are
based on a series of assumptions, both general and specific, in
particular the application of accounting principles and methods in
accordance with IFRS (International Financial Reporting Standards)
as adopted in the European Union, as well as the application of
existing prudential regulations.These forward-looking statements
have also been developed from scenarios based on a number of
economic assumptions in the context of a given competitive and
regulatory environment. The Group may be unable to:- anticipate all
the risks, uncertainties or other factors likely to affect its
business and to appraise their potential consequences;- evaluate
the extent to which the occurrence of a risk or a combination of
risks could cause actual results to differ materially from those
provided in this document and the related
presentation. Therefore, although Societe Generale believes
that these statements are based on reasonable assumptions, these
forward-looking statements are subject to numerous risks and
uncertainties, including matters not yet known to it or its
management or not currently considered material, and there can be
no assurance that anticipated events will occur or that the
objectives set out will actually be achieved. Important factors
that could cause actual results to differ materially from the
results anticipated in the forward-looking statements include,
among others, overall trends in general economic activity and in
Societe Generale’s markets in particular, regulatory and prudential
changes, and the success of Societe Generale’s strategic, operating
and financial initiatives. More detailed information on the
potential risks that could affect Societe Generale’s financial
results can be found in the section “Risk Factors” in our Universal
Registration Document filed with the French Autorité des Marchés
Financiers (which is available on
https://investors.societegenerale.com/en). 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. |
8. APPENDIX 1: FINANCIAL
DATA
GROUP NET INCOME BY CORE
BUSINESS
|
In EURm |
Q4 22 |
Q4 21 |
Variation |
2022 |
2021 |
Variation |
|
French Retail Banking |
250 |
414 |
-39.6% |
1,445 |
1,550 |
-6.8% |
|
International Retail Banking and Financial Services |
658 |
584 |
+12.7% |
2,376 |
2,082 |
+14.1% |
|
Global Banking and Investor Solutions |
754 |
621 |
+21.4% |
2,427 |
2,018 |
+20.3% |
|
Core Businesses |
1,662 |
1,619 |
+2.7% |
6,248 |
5,650 |
+10.6% |
|
Corporate Centre |
(502) |
168 |
n/s |
(4,230) |
(9) |
n/s |
|
Group |
1,160 |
1,787 |
-35.1% |
2,018 |
5,641 |
-64.2% |
NB: Amounts restated in Q1 22 to take into
account the transfer of Private Banking activities (French and
international) to the French Retail Banking. Includes other
activities transferred after the disposal of Lyxor
CONSOLIDATED BALANCE
SHEET
|
In EUR m |
31.12.2022 |
31.12.2021 |
|
Cash, due from central banks |
207,013 |
179,969 |
|
Financial assets at fair value through profit or loss |
329,437 |
342,714 |
|
Hedging derivatives |
32,850 |
13,239 |
|
Financial assets at fair value through other comprehensive
income |
37,463 |
43,450 |
|
Securities at amortised cost |
21,430 |
19,371 |
|
Due from banks at amortised cost |
66,903 |
55,972 |
|
Customer loans at amortised cost |
506,529 |
497,164 |
|
Revaluation differences on portfolios hedged against interest rate
risk |
(2,262) |
131 |
|
Investments of insurance companies |
158,415 |
178,898 |
|
Tax assets |
4,696 |
4,812 |
|
Other assets |
85,072 |
92,898 |
|
Non-current assets held for sale |
1,081 |
27 |
|
Deferred profit-sharing |
1,175 |
- |
|
Investments accounted for using the equity method |
146 |
95 |
|
Tangible and intangible fixed assets |
33,089 |
31,968 |
|
Goodwill |
3,781 |
3,741 |
|
Total |
1,486,818 |
1,464,449 |
|
In EUR m |
31.12.2022 |
31.12.2021 |
|
Due to central banks |
8,361 |
5,152 |
|
Financial liabilities at fair value through profit or loss |
300,618 |
307,563 |
|
Hedging derivatives |
46,164 |
10,425 |
|
Debt securities issued |
133,176 |
135,324 |
|
Due to banks |
132,988 |
139,177 |
|
Customer deposits |
530,764 |
509,133 |
|
Revaluation differences on portfolios hedged against interest rate
risk |
(9,659) |
2,832 |
|
Tax liabilities |
1,638 |
1,577 |
|
Other liabilities |
107,553 |
106,305 |
|
Non-current liabilities held for sale |
220 |
1 |
|
Insurance contracts related liabilities |
141,688 |
155,288 |
|
Provisions |
4,579 |
4,850 |
|
Subordinated debts |
15,946 |
15,959 |
|
Total liabilities |
1,414,036 |
1,393,586 |
|
Shareholder's equity |
- |
- |
|
Shareholders' equity, Group share |
- |
- |
|
Issued common stocks and capital reserves |
21,248 |
21,913 |
|
Other equity instruments |
9,136 |
7,534 |
|
Retained earnings |
34,267 |
30,631 |
|
Net income |
2,018 |
5,641 |
|
Sub-total |
66,669 |
65,719 |
|
Unrealised or deferred capital gains and losses |
(218) |
(652) |
|
Sub-total equity, Group share |
66,451 |
65,067 |
|
Non-controlling interests |
6,331 |
5,796 |
|
Total equity |
72,782 |
70,863 |
|
Total |
1,486,818 |
1,464,449 |
9. APPENDIX
2:
METHODOLOGY
1 –The financial information
presented for the fourth quarter
and full year 2022 was examined by the Board of
Directors on 7 February
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 2022 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 note 8.1 to the Group’s consolidated
financial statements as at 31 December 2021 (pages 482 et seq. of
Societe Generale’s 2022 Universal Registration Document). The term
“costs” is also used to refer to Operating Expenses. The
Cost/Income Ratio is defined on page 41 of Societe Generale’s 2022
Universal Registration Document.
4 - IFRIC 21 adjustment
The IFRIC 21 adjustment corrects the result of
the charges recognised in the accounts in their entirety when they
are due (generating event) so as to recognise only the portion
relating to the current quarter, i.e. a quarter of the total. It
consists in smoothing the charge recognised accordingly over the
financial year in order to provide a more economic idea of the
costs actually attributable to the activity over the period
analysed.
The contributions to Single Resolution
Fund (« SRF ») are part of IFRIC21 adjusted
charges, they include contributions to national resolution funds
within the EU.
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:
|
in EUR m |
Q4-22 |
Q4-21 |
|
2022 |
2021 |
|
Exceptional Net banking income (+) |
0 |
(117) |
|
0 |
(117) |
|
Revaluation gain |
0 |
(117) |
|
0 |
(117) |
|
Exceptional operating expenses (-) |
(108) |
(52) |
|
639 |
379 |
|
IFRIC linearisation |
(285) |
(199) |
|
0 |
0 |
|
Transformation costs(1) |
177 |
147 |
|
639 |
379 |
|
Of which related to French Retail Banking |
69 |
91 |
|
370 |
201 |
|
Of which related to Global Banking & Investor Solutions |
54 |
30 |
|
117 |
92 |
|
Of which related to Corporate Centre |
54 |
26 |
|
152 |
86 |
|
Exceptional Net profit or losses from other assets
(+/-) |
54 |
(439) |
|
3,357 |
(624) |
|
Goodwill impairment
(-)(1) |
0 |
114 |
|
0 |
114 |
|
Total exceptional items (pre-tax) |
(54) |
(494) |
|
3,996 |
(248) |
|
DTA recognition
(+)(1) |
0 |
(130) |
|
0 |
(130) |
|
Total exceptional items (post-tax) |
(34) |
(561) |
|
3,598 |
(377) |
|
|
|
|
|
|
|
|
Reported Net income - Group Share |
1,160 |
1,787 |
|
2,018 |
5,641 |
|
Total exceptional items - Group share
(post-tax) |
(34) |
(561) |
|
3,598 |
(377) |
|
Underlying Net income - Group Share |
1,126 |
1,226 |
|
5,616 |
5,264 |
(1) Allocated to Corporate Centre
NB: Amounts restated in Q1 22 to take into account the
transfer of Private Banking activities (French and international)
to the French Retail Banking. Includes other activities transferred
after the disposal of Lyxor
(2) 6 -
Cost of risk in basis points, coverage ratio for
doubtful outstandings
The cost of risk is defined on pages 43 and 663
of Societe Generale’s 2022 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 |
|
Q4 22 |
Q4 21 |
2022 |
2021 |
|
French Retail Banking |
Net Cost Of Risk |
219 |
(20) |
483 |
125 |
|
Gross loan Outstandings |
250,175 |
237,305 |
246,249 |
235,220 |
|
Cost of Risk in bp |
35 |
(3) |
20 |
5 |
|
International Retail Banking and Financial
Services |
Net Cost Of Risk |
133 |
96 |
705 |
504 |
|
Gross loan Outstandings |
133,756 |
137,018 |
135,743 |
133,321 |
|
Cost of Risk in bp |
40 |
28 |
52 |
38 |
|
Global Banking and Investor Solutions |
Net Cost Of Risk |
78 |
3 |
421 |
65 |
|
Gross loan Outstandings |
190,079 |
160,333 |
182,110 |
148,426 |
|
Cost of Risk in bp |
16 |
1 |
23 |
4 |
|
Corporate Centre |
Net Cost Of Risk |
(17) |
7 |
38 |
6 |
|
Gross loan Outstandings |
16,363 |
14,574 |
15,411 |
13,835 |
|
Cost of Risk in bp |
(41) |
16 |
25 |
4 |
|
Societe Generale Group |
Net Cost Of Risk |
413 |
86 |
1,647 |
700 |
|
Gross loan Outstandings |
590,373 |
549,229 |
579,513 |
530,801 |
|
Cost of Risk in bp |
28 |
6 |
28 |
13 |
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 43 and 44 of Societe Generale’s
2022 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 44 of
Societe Generale’s 2022 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) |
Q4-22 |
Q4-21 |
2022 |
2021 |
|
Shareholders' equity Group share |
66,451 |
65,067 |
66,451 |
65,067 |
|
Deeply subordinated notes |
(10,017) |
(8,003) |
(10,017) |
(8,003) |
|
Undated subordinated notes |
- |
- |
- |
- |
|
Interest of deeeply & undated subodinated notes, issue premium
amortisations(1) |
(24) |
20 |
(24) |
20 |
|
OCI excluding conversion reserves |
1,279 |
(489) |
1,279 |
(489) |
|
Distribution provision(2) |
(1,803) |
(2,286) |
(1,803) |
(2,286) |
|
Distribution N-1 to be paid |
0 |
- |
0 |
- |
|
ROE equity end-of-period |
55,886 |
54,310 |
55,886 |
54,310 |
|
Average ROE equity* |
55,889 |
53,878 |
55,164 |
52,634 |
|
Average Goodwill |
(3,660) |
(3,776) |
(3,650) |
(3,890) |
|
Average Intangible Assets |
(2,835) |
(2,687) |
(2,760) |
(2,584) |
|
Average ROTE equity* |
49,394 |
47,415 |
48,754 |
46,160 |
|
|
|
|
|
|
|
Group net Income |
1,160 |
1,787 |
2,018 |
5,641 |
|
Interest on deeply subordinated notes and undated subordinated
notes |
(192) |
(151) |
(596) |
(590) |
|
Cancellation of goodwill impairment |
- |
337 |
3 |
337 |
|
Ajusted Group net Income |
968 |
1,973 |
1,425 |
5,388 |
|
Average ROTE equity* |
49,394 |
47,415 |
48,754 |
46,160 |
|
ROTE |
7.8% |
16.6% |
2.9% |
11.7% |
|
|
|
|
|
|
|
Underlying Group net income |
1,126 |
1,226 |
5,616 |
5,264 |
|
Interest on deeply subordinated notes and undated subordinated
notes |
(192) |
(151) |
(596) |
(590) |
|
Cancellation of goodwill impairment |
- |
- |
3 |
- |
|
Ajusted Underlying Group
net Income |
934 |
1,075 |
5,023 |
4,674 |
|
Average ROTE equity (underlying) (h)* |
49,360 |
46,854 |
52,352 |
45,783 |
|
Underlying ROTE |
7.6% |
9.2% |
9.6% |
10.2% |
(1) Interest net of tax, payable or paid to
holders of deeply subordinated notes & undated subordinated
notes, issue premium amortisations(2) Based on the 2022 proposed
distribution subject to usual approvals from the General meeting
and the ECB(*) Amounts restated compared with the financial
statements published in 2020 (See Note1.7 of the financial
statements)
RONE calculation: Average capital
allocated to Core Businesses (in EURm)
|
In EURm |
Q4 22 |
Q4 21 |
Change |
2022 |
2021 |
Change |
|
French Retail Banking |
12,673 |
11,847 |
+7.0% |
12,417 |
12,009 |
+3.4% |
|
International Retail Banking and Financial Services |
10,531 |
10,523 |
+0.1% |
10,619 |
10,246 |
+3.6% |
|
Global Banking and Investor Solutions |
15,806 |
14,745 |
+7.2% |
14,916 |
14,055 |
+6.1% |
|
Core Businesses |
39,009 |
37,115 |
+5.1% |
37,951 |
36,310 |
+4.5% |
|
Corporate Center |
16,880 |
16,763 |
+0.7% |
17,213 |
16,323 |
+5.4% |
|
Group |
55,889 |
53,878 |
+3.7% |
55,164 |
52,634 |
+4.8% |
NB: Amounts restated in Q1 22 to take into
account the transfer of Private Banking activities (French and
international) to the French Retail Banking. Includes activities
transferred after the disposal of Lyxor
8 - Net assets and
tangible net assets
Net assets and tangible net assets are defined
in the methodology, page 46 of the Group’s 2022 Universal
Registration Document. The items used to calculate them are
presented below:
|
End of period (in EURm) |
2022 |
2021 |
2020 |
|
Shareholders' equity Group
share* |
66,451 |
65,067 |
61,710 |
|
Deeply subordinated notes |
(10,017) |
(8,003) |
(8,830) |
|
Undated subordinated notes |
0 |
0 |
(264) |
|
Interest of deeeply & undated subodinated notes, issue premium
amortisations(1) |
(24) |
20 |
19 |
|
Bookvalue of own shares in trading portfolio |
67 |
37 |
301 |
|
Net Asset Value* |
56,477 |
57,121 |
52,936 |
|
Goodwill |
(3,652) |
(3,624) |
(3,928) |
|
Intangible Assets |
(2,882) |
(2,733) |
(2,484) |
|
Net Tangible Asset Value* |
49,943 |
50,764 |
46,524 |
|
|
|
|
|
|
Number of shares used to calculate
NAPS** |
801,147 |
831,162 |
848,859 |
|
Net Asset Value per Share |
70.5 |
68.7 |
62.4 |
|
Net Tangible Asset Value per Share |
62.3 |
61.1 |
54.8 |
(1) Interest net of tax, payable or paid to
holders of deeply subordinated notes & undated subordinated
notes, issue premium amortisations(*) Amounts restated compared
with the financial statements published in 2020 (See Note1.7 of the
financial statements)(* *) The number of shares considered is the
number of ordinary shares outstanding as at end of period,
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 45 of Societe Generale’s 2022 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 2022 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) |
2022 |
2021 |
2020 |
|
Existing shares |
845,478 |
853,371 |
853,371 |
|
Deductions |
|
|
0 |
|
Shares allocated to cover stock option plans and free shares
awarded to staff |
6,252 |
3,861 |
2,987 |
|
Other own shares and treasury shares |
16,788 |
3,249 |
0 |
|
Number of shares used to calculate EPS* |
822,437 |
846,261 |
850,385 |
|
Group net Income |
2,018 |
5,641 |
(258) |
|
Interest on deeply subordinated notes and undated subordinated
notes |
(596) |
(590) |
(611) |
|
Adjusted Group net income (in EURm) |
1,422 |
5,051 |
(869) |
|
EPS (in EUR) |
1.73 |
5.97 |
(1.02) |
|
Underlying EPS** (in EUR) |
6.10 |
5.52 |
0.97 |
(*) Calculated on the basis of underlying Group
net income (excluding linearisation of IFRIC 21). (**) The number
of shares considered is the average number of ordinary shares
outstanding during the period, 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
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.
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
GeneraleSociete 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 117,000 members of staff in 66 countries
and supports on a daily basis 25 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 with the SG bank, resulting from the merger of the
two Societe Generale and Crédit du Nord networks, and Boursorama.
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, with networks in Africa, 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 (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
Societe Generale’s newsroom page 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
@societegenerale or visit our website societegenerale.com.
- Societe-Generale_PR_Q4-and-FY-2022
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