Societe Generale: Second quarter 2023 earnings
RESULTS AT 30 JUNE 2023
Press releaseParis, 3 August
2023
QUARTERLY
RESULTS
Underlying
revenues of EUR 6.5
billion(1),
down
-5.4%
vs. Q2 22Underlying
cost-to-income ratio, excluding contribution to
the Single Resolution Fund, at
65.8%(1)
Low cost of risk at 12 basis
points in Q2 23, with limited defaults and a
level of provisions for performing loans of EUR 3.7 billion at
end-June 2023
Underlying Group net income of
EUR
1.2bn(1)
(EUR 900 million on a reported basis)
Underlying profitability (ROTE)
at
7.6%(1)
(5.6% on a reported basis)
FIRST HALF 2023
RESULTS
Underlying Group net income of
EUR 2.7
billion(1)
(EUR 1.8 billion on a reported basis)
Underlying profitability (ROTE)
at
9.1%(1)
(5.6% on a reported basis)
BALANCE SHEET AND LIQUIDITY
PROFILE
CET 1 ratio of
13.1%(2)
at end-June
2023, around 330 basis points
above the regulatory requirementLiquidity Coverage Ratio at
152% at end Q2 23 and
liquidity reserves at EUR 284 billion
SHARE BUYBACK
PROGRAMMELaunch of the
2022 share buyback
programme, for around EUR 440 million
MAJOR MILESTONES
ACHIEVED
Merger between the retail
banking networks in France, IT migration
completed
Boursorama, 5
million clients milestone reached early July 2023, net result of
EUR 47 million in Q2 23
Acquisition of
LeasePlan
by ALD, transaction closed on 22 May 2023
International Retail
Banking, agreements in place to sell subsidiaries
in Congo, Equatorial Guinea, Mauritania and Chad, and opening of
strategic review on the Tunisian subsidiary
Slawomir Krupa, the Group’s Chief
Executive Officer, commented:“During the quarter,
commercial activity was good in most businesses. Group revenues
contracted due to the decline in the net interest margin in France
and in market activities’ revenues against a backdrop of gradual
normalisation after some particularly favourable years. Operating
expenses were contained despite persistent inflationary trends. The
cost of risk was very low, reflecting the quality of our
origination and our loan portfolio. The Group shows a solid balance
sheet with a CET 1 ratio at 13.1% and a robust liquidity profile.
In addition, we pursued the execution of our ongoing strategic
projects, notably the closing of the LeasePlan acquisition by ALD.
The new management team has been fully operational since taking
office on 24 May this year and is working to prepare the next
chapter of the Group’s strategy. I will have the pleasure of
presenting the new strategic and financial roadmap on 18 September
at our Capital Markets Day to be held in London.”
-
GROUP CONSOLIDATED RESULTS
|
In EURm |
Q2 23 |
Q2 22 |
Change |
H1 23 |
H1 22 |
Change |
|
Net banking
income |
6,287 |
6,901 |
-8.9% |
-10.3%* |
12,958 |
13,944 |
-7.1% |
-6.8%* |
|
Underlying net banking income(1) |
6,527 |
6,901 |
-5.4% |
-6.8%* |
13,198 |
13,944 |
-5.3% |
-5.0%* |
|
Operating expenses |
(4,441) |
(4,325) |
+2.7% |
+1.1%* |
(9,498) |
(9,456) |
+0.4% |
+0.7%* |
|
Underlying operating expenses(1) |
(4,461) |
(4,450) |
+0.2% |
-1.3%* |
(8,662) |
(8,598) |
+0.7% |
+1.0%* |
|
Gross operating income |
1,846 |
2,576 |
-28.3% |
-29.6%* |
3,460 |
4,488 |
-22.9% |
-22.6%* |
|
Underlying gross operating income(1) |
2,066 |
2,451 |
-15.7% |
-16.8%* |
4,536 |
5,346 |
-15.2% |
-14.7%* |
|
Net cost of
risk |
(166) |
(217) |
-23.5% |
-23.2%* |
(348) |
(778) |
-55.3% |
-40.9%* |
|
Operating income |
1,680 |
2,359 |
-28.8% |
-30.2%* |
3,112 |
3,710 |
-16.1% |
-19.8%* |
|
Underlying operating income(1) |
1,900 |
2,234 |
-14.9% |
-16.2%* |
4,188 |
4,568 |
-8.3% |
-11.5%* |
|
Net profits or losses from other assets |
(81) |
(3,292) |
+97.5% |
+97.5%* |
(98) |
(3,290) |
+97.0% |
+97.0%* |
|
Underlying net profits or losses from other assets(1) |
(2) |
11 |
n/s |
+0. n/s* |
(19) |
13 |
n/s |
. n/s |
|
Income tax |
(425) |
(327) |
+29.9% |
+29.9%* |
(753) |
(660) |
+14.1% |
+7.8%* |
|
Net income |
1,181 |
(1,256) |
n/s |
n/s |
2,273 |
(236) |
n/s |
n/s |
|
O.w. non-controlling interests |
281 |
255 |
+10.2% |
+1.9%* |
505 |
454 |
+11.2% |
+6.9%* |
|
Reported Group net
income |
900 |
(1,511) |
n/s |
n/s |
1,768 |
(690) |
n/s |
n/s |
|
Underlying Group net
income(1) |
1,159 |
1,481 |
-21.7% |
-22.1%* |
2,667 |
3,019 |
-11.7% |
-14.5%* |
|
ROE |
4.9% |
-12.1% |
|
|
4.9% |
-3.5% |
+0.0% |
+0.0%* |
|
ROTE |
5.6% |
-13.7% |
|
|
5.6% |
-4.0% |
+0.0% |
+0.0%* |
|
Underlying
ROTE(1) |
7.6% |
10.2% |
|
|
9.1% |
10.5% |
+0.0% |
+0.0%* |
Societe Generale’s Board of Directors, which met
on 2 August 2023 under the chairmanship of Lorenzo Bini Smaghi,
examined the Societe Generale Group’s results for Q2 23 and for the
first half of 2023.
The various restatements enabling the transition
from underlying data to published data are presented in the
Methodology notes in Section 9.5.
Net banking
income
Net banking income decreased in Q2 23 by
-8.9%
(-10.3%*) vs. Q2 22,
largely due to the decline in the net interest margin in French
Retail Banking, a less conducive market environment in Global
Banking and Investor Solutions activities and the booking of
one-off items under Corporate Centre.
French Retail Banking revenues fell by -13.6%
vs. Q2 22 owing mainly to the decrease in the net interest margin,
despite solid momentum in fees, a record performance from Private
Banking and a strong increase in Boursorama’s revenues.
Revenues in International Retail Banking &
Financial Services grew by +6.3% (+0.9%*) vs. Q2 22, with a +3.3%*
increase in revenues vs. Q2 22 in International Retail Banking, a
strong performance by Financial Services that was driven by ALD
revenues, up +18.7% vs. Q2 22 following the integration of
LeasePlan, and by insurance revenues, which rose by +3.1%* vs. Q2
22.
Global Banking & Investor Services
registered revenues down -7.3% in Q2 23 relative to Q2 22 amid a
less favourable market environment. Global Markets & Investor
Services recorded solid revenues but which were down in comparison
to a very strong Q2 22 performance (-12.7%) owing to less conducive
market conditions, notably in Fixed Income and Currencies (lower
interest rate volatility and slower client activity), while
Financing and Advisory continued to post revenue growth,
registering an increase of +4.0% vs. Q2 22, driven by a solid
performance in the securitisation, investment banking and cash
management activities.
Over the first half of 2023,
net banking income fell by -7.1% vs. H1 22 (-5.3% on an underlying
basis).
Operating
expenses
On a reported basis, operating expenses
came to EUR 4,441 million in Q2
23, up
+2.7%
vs. Q2 22. It includes LeasePlan operating expenses for
EUR 111 million following its consolidation from 22 May 2023.
On an underlying basis, they totalled EUR
4,461 million (adjusted
for IFRIC 21 linearisation, transformation charges and one-off
expenses), i.e. stable relative to Q2 22.
One-off expenses totalled EUR 35 million and
included litigation payments.
Over the first half, operating
expenses came to EUR 9,498 million, up +0.4% vs. H1 22 (+0.7% on an
underlying basis).
Excluding the Single Resolution Fund
contribution, the underlying cost-to-income ratio(2) came to 65.8%
in Q2 23.
Cost of
risk
The cost of risk for
Q2 23
was low at
12 basis points, i.e.
EUR 166 million. It breaks down into a provision on non-performing
loans of EUR 204 million (~14 basis points) and a reversal on
performing loans for EUR -38 million (~-3 basis points).
At end-June 2023, the Group’s provisions on
performing loans amounted to EUR 3,713 million, down EUR -56
million relative to 31 December 2022.
The non-performing loans ratio amounted to
2.9%(2) at 30 June 2023. The gross coverage ratio on doubtful loans
for the Group stood at 46%(3) at 30 June 2023.
Furthermore, the disposal by ALD in April 2023
of its activities in Russia had a limited EUR -79 million impact
that was allocated under net losses from other assets in Corporate
Centre. The Group retained a residual exposure of around EUR 15
million in Russia relating to the integration of LeasePlan
activities by ALD.
Furthermore, the Group’s Exposure at Default
(EAD) on the Russian offshore portfolio was EUR 1.6 billion at 30
June 2023, i.e. a decrease of -50% since 31 December 2021. This
exposure is diversified by sector and in the majority of cases
secured by facilities as Pre-Export Finance facilities, facilities
that are guaranteed by an Export Credit Agency or Trade Finance
facilities. The maximum risk exposure on this portfolio is
estimated to be less than EUR 0.5 billion before provision and
total provisions stood at EUR 0.4 billion. The Group’s residual
exposure to Rosbank was extremely limited at less than EUR 0.1
billion.
Group net
income
|
In EURm |
|
|
|
|
Q2 23 |
Q2 22 |
H1 23 |
H1 22 |
|
Reported Group net income |
|
|
900 |
(1,511) |
1768 |
(690) |
|
Underlying Group net income(1) |
|
|
1,159 |
1,481 |
2,667 |
3,019 |
|
As a % |
|
|
|
|
Q2 23 |
Q2 22 |
H1 23 |
H1 22 |
|
ROTE |
|
|
|
|
5.6% |
-13.7% |
5.6% |
-4.0% |
|
Underlying ROTE(1) |
|
|
|
|
7.6% |
10.2% |
9.1% |
10.5% |
(2)
Earnings per share amounted to EUR 1.73 in H1 23
(EUR -1.17 in H1 22). Underlying earnings per share amounted to EUR
2.45 over the same period (EUR 2.81 in H1 22).
-
THE GROUP’S FINANCIAL
STRUCTURE
Group shareholders’ equity
totalled EUR 68.0 billion at 30 June 2023 (vs. EUR 67.0 billion at
31 December 2022). Net asset value per share was EUR 71.5 and
tangible net asset value per share was EUR 61.8.
The consolidated balance sheet totalled EUR
1,578 billion at 30 June 2023 vs. EUR 1,485 billion at 31 December
2022. The total funded balance sheet (see Methodology note 11)
stood at EUR 966 billion vs. EUR 930 billion at 31 December 2022.
The net amount of customer loan outstandings totalled EUR 501
billion. At the same time, customer deposits amounted to EUR 612
billion, up 3.0% vs. 31 December 2022.
At 18 July 2023, the parent company had issued
EUR 39.5 billion of medium/long-term debt, having an average
maturity of 4.9 years and an average spread of 79 basis points
(over 6-month midswaps, excluding subordinated debt). The
subsidiaries had issued EUR 1.9 billion. In all, the Group has
issued a total of EUR 41.4 billion in medium/long-term debt.
The Liquidity Coverage Ratio (LCR) was well
above regulatory requirements at 152% at end-June 2023 (158% on
average for the quarter), vs. 141% at end-December 2022. At the
same time, the Net Stable Funding Ratio (NSFR) stood at 113% at
end-June 2023 vs. 114% at end-December 2022.
The Group’s risk-weighted
assets (RWA) totalled EUR 385.0 billion at 30 June 2023
following LeasePlan integration (vs. EUR 362.4 billion at
end-December 2022) according to CRR2/CRD5 rules. Risk-weighted
assets in respect of credit risk account for 84.3% of the total,
i.e., EUR 324.6 billion, up by 7.3% vs. 31 December 2022.
At 30 June 2023, the Group’s Common
Equity Tier
1(3)
ratio stood at 13.1%, or around 330 basis points above the
regulatory requirement of 9.73%. The CET 1 ratio at 30 June 2023
includes an +6 basis-point impact from the phase-in of IFRS 9.
Excluding this impact, the fully-loaded ratio amounts to 13.0%. The
Tier 1 ratio stood at 15.9% at end-June 2023 (16.3% at end-December
2022), while the total capital ratio amounted to 18.7% (19.4% at
end-December 2022), which is above the respective regulatory
requirements of 11.63% and 14.16%.
The leverage ratio stood at
4.2% at 30 June 2023, which is above the regulatory requirement of
3.5%.
With an RWA level of 32.1% and leverage exposure
of 8.5% at end-June 2023, the Group’s TLAC ratio is significantly
above the respective Financial Stability Board requirements for
2023 of 22.0% and 6.75%. Likewise, MREL-eligible outstandings,
which stood at 33.1% of RWA and 8.75% of leverage exposure at
end-June 2023, are also far above the respective regulatory
requirements of 25.7% and 5.91%.
The Group is rated by four rating agencies: (i)
FitchRatings - long-term rating “A-”, positive outlook, senior
preferred debt rating “A”, short-term rating “F1” (ii) Moody’s -
long-term rating (senior preferred debt) “A1”, stable outlook,
short-term rating “P-1” (iii) R&I - long-term rating (senior
preferred debt) “A”, stable outlook; and (iv) S&P Global
Ratings - long-term rating (senior preferred debt) “A”, stable
outlook, short-term rating “A-1”.
-
FRENCH RETAIL
BANKING
|
In EURm |
Q2 23 |
Q2 22 |
Change |
H1 23 |
H1 22 |
Change |
|
Net banking income |
1,924 |
2,228 |
-13.6% |
3,850 |
4,393 |
-12.4% |
|
Net banking income excl. PEL/CEL |
1,920 |
2,157 |
-11.0% |
3,856 |
4,299 |
-10.3% |
|
Operating expenses |
(1,443) |
(1,490) |
-3.2% |
(3,101) |
(3,182) |
-2.5% |
|
Underlying operating expenses(1) |
(1,548) |
(1,548) |
+0.0% |
(3,078) |
(3,069) |
+0.3% |
|
Gross operating income |
481 |
738 |
-34.8% |
749 |
1,211 |
-38.2% |
|
Underlying gross operating income(1) |
376 |
680 |
-44.8% |
772 |
1,324 |
-41.6% |
|
Net cost of risk |
(109) |
(21) |
x 5.2 |
(198) |
(68) |
x 2.9 |
|
Operating income |
372 |
717 |
-48.1% |
551 |
1,143 |
-51.8% |
|
Net profits or losses from other assets |
(2) |
3 |
n/s |
3 |
3 |
+0.0% |
|
Reported Group net income |
277 |
534 |
-48.1% |
415 |
851 |
-51.2% |
|
Underlying Group net income(1) |
200 |
491 |
-59.4% |
433 |
934 |
-53.7% |
|
RONE |
9.0% |
17.4% |
|
6.7% |
14.1% |
|
|
Underlying
RONE(1) |
6.5% |
16.0% |
|
7.0% |
15.5% |
|
(2) SG networks
Average loan outstandings contracted by -2% vs.
Q2 22 to EUR 207 billion. Outstanding loans to corporate and
professional customers (excluding government-guaranteed PGE loans)
were +4.1% higher vs. Q2 22. Home loans decreased by -2.8% vs. Q2
22, in line with the Group’s selective origination policy.
Average outstanding deposits, which include all
deposits from corporates and professionals clients of the SG
network, declined by -2.9% vs. Q2 22 to EUR 239 billion (increase
in retail client deposits and decrease in corporate deposits).
The average loan to average deposit ratio stood
at 87% in Q2 23.
Life insurance assets under management totalled
EUR 111 billion at end-June 2023, which is a +1% improvement over
the year (with the unit-linked share accounting for 33%). Gross
life insurance inflows amounted to EUR 2.1 billion at Q2 23.
Property & Casualty insurance premiums were
up +9% vs. Q2 22, while Personal protection insurance premiums
increased +2% vs. Q2 22.
Boursorama
With 129,000 new clients during the quarter,
Boursorama strengthened its position as the leading online bank in
France, and reached nearly 5 million clients at end-June 2023.
Average loan outstandings were stable on the Q2 22
level at EUR 15 billion, which is consistent with the Group’s
selective loan production. Home loan outstandings were stable
relative to Q2 22, while consumer loan outstandings were down -6%
vs. Q2 22.
Average outstanding savings including deposits
and financial savings were +39% higher vs. Q2 22 at EUR 53
billion. Deposits stand at EUR 31 billion, a strong rise of +36%
vs. Q2 22, notably with continued dynamic collection during the
quarter (EUR +1.3 billion). Life insurance outstandings increased
by +70% vs. Q2 22 (including ING outstandings), with the
unit-linked share accounting for 42%.
Boursorama reinforced its day-to-day banking
operations, registering growth in volumes of +37% vs.
Q2 22.
In Q2 23, Boursorama posted positive net income
of EUR 47 million, recording solid profitability of 66%.
Private Banking
Private Banking activities cover Private Banking
activities in and outside of France. Assets under management
totalled EUR 143 billion at Q2 23, excluding activities formerly
managed by Lyxor. Private Banking’s net asset inflows amounted to
EUR 2.9 billion at Q2 23. Net banking income stood at EUR 381
million during the quarter, a historical high, representing a +6.7%
increase vs. Q2 22. Net banking income for the first half of the
year totalled EUR 747 million, up +4.5% vs. H1 22.
Net banking
income
Revenues for the quarter
totalled EUR 1,920 million, down -11.0% vs. Q2 22, excluding
PEL/CEL. Net interest income excluding PEL/CEL was down by -17.4%
vs. Q2 22 impacted by higher interest rates on regulated savings
schemes, the consequences of the usury rate and the end of the
benefit of the TLTRO. Fee income was up by +2.4% relative to Q2
22.
Revenues for the first half of the
year totalled EUR 3,856 million, down -10.3% vs. H1 22,
restated for the PEL/CEL provision. The net interest margin
excluding PEL/CEL was down by -17.9% vs. H1 22. Fee income was up
by +1.4% relative to H1 22.
Operating
expenses
Over the quarter, operating
expenses were EUR 1,443 million (-3.2% vs. Q2 22) and EUR 1,548
million on an underlying basis (flat compared to Q2 22). Reported
operating expenses include a EUR 60 million one-off provision
reversal. The cost-to-income ratio stood at 75% at Q2 23.
Over the first half, operating
expenses totalled EUR 3,101 million (-2.5% vs. H1 22). The
cost-to-income ratio stood at 80.5%.
Cost of
risk
Over the quarter, the cost of
risk amounted to EUR 109 million or 18 basis points, which was
slightly higher than in Q1 23 (14 basis points).
Over the first half of the
year, the cost of risk totalled EUR 198 million or 16
basis points, which was higher than in H1 22 (6 basis points).
Group net
income
For the quarter, the
contribution to the Group net income was EUR 277 million in Q2 23,
down -48% vs. Q2 22. RONE stood at 9.0% in Q2 23 (6.5% in
underlying).
Over the first half of the
year, the contribution to Group net income was EUR 415
million in Q2 23, down -51% vs. H1 22. RONE stood at 6.7% in H1
23.
-
INTERNATIONAL RETAIL BANKING & FINANCIAL
SERVICES
|
In EURm |
Q2 23 |
Q2 22 |
Change |
H1 23 |
H1 22 |
Change |
|
Net banking income |
2,363 |
2,222 |
+6.3% |
+0.9%* |
4,575 |
4,298 |
+6.4% |
+7.7%* |
|
Operating expenses |
(1,167) |
(976) |
+19.6% |
+11.3%* |
(2,281) |
(2,065) |
+10.5% |
+11.7%* |
|
Underlying operating expenses(1) |
(1,190) |
(1,000) |
+19.0% |
+10.9%* |
(2,235) |
(2,017) |
+10.8% |
+12.2%* |
|
Gross operating income |
1,196 |
1,246 |
-4.0% |
-7.1%* |
2,294 |
2,233 |
+2.7% |
+4.1%* |
|
Underlying gross operating income(1) |
1,173 |
1,222 |
-4.0% |
-7.1%* |
2,340 |
2,281 |
+2.6% |
+3.9%* |
|
Net cost of risk |
(83) |
(97) |
-14.4% |
-13.2%* |
(174) |
(422) |
-58.8% |
-24.3%* |
|
Operating income |
1,113 |
1,149 |
-3.1% |
-6.6%* |
2,120 |
1,811 |
+17.1% |
+7.4%* |
|
Net profits or losses from other assets |
0 |
8 |
n/s |
n/s |
(1) |
10 |
n/s |
n/s |
|
Reported Group net
income |
587 |
687 |
-14.6% |
-15.4%* |
1,151 |
1,047 |
+9.9% |
-0.6%* |
|
Underlying Group net income(1) |
575 |
674 |
-14.7% |
-15.6%* |
1,175 |
1,073 |
+9.5% |
-0.7%* |
|
RONE |
22.8% |
26.0% |
|
|
20.0% |
19.4% |
|
|
|
Underlying
RONE(1) |
22.3% |
25.5% |
|
|
20.4% |
19.9% |
|
|
International Retail Banking’s
outstanding loans posted growth of +6.5% vs. Q2 22 to EUR 90.6
billion. Outstanding deposits also advanced, and grew by +3.6% vs.
Q2 22 to EUR 83.0 billion. 4
In Europe, outstanding loans rose by +6.6%
compared with end-June 2022 to EUR 65.5 billion, driven by strong
momentum in all regions, and particularly in the Czech Republic
(+8.2% vs. Q2 22) and Romania (+7.4% vs. Q2 22). Outstanding
deposits rose by +2.8% vs. Q2 22 to EUR 55.7 billion, driven by
Romania (+7.9% vs. Q2 22) and stabilized over the quarter in the
Czech Republic vs. Q2 22.
Commercial performances continued to be steady
in Africa, Mediterranean Basin and French Overseas Territories,
where loan outstandings rose by +6.4% vs. in Q2 22 to EUR 25
billion. Deposits increased by +5.3% vs. Q2 22 to EUR 27.2 billion.
Corporate segment was particularly dynamic with a growth in loans
of +6.9% vs. Q2 22 and deposits of +7.3% vs. Q2 22.
In the Insurance activity, life
insurance outstandings rose by +1.8% on the Q2 22 level to
EUR 133.3 billion. The share of unit-linked products was
38%, up +2.8 points over the same period. Net inflows in life
insurance remained positive over the first half of the year at EUR
0.6 billion. Protection insurance saw a +5.3% increase vs. Q2 22,
with the activity continuing to be driven by a +11.7% rise in
P&C insurance over the same period.
Financial Services also posted
very robust growth. The acquisition of LeasePlan by ALD, the
long-term vehicle leasing and fleet management activity, closed on
22 May 2023. The new combined entity now has a fleet of around 3.4
million vehicles. The fleet posted annualised growth of +3.0% vs.
end-June 2022 (at constant perimeter and excluding entities held
for sale). Equipment Finance outstanding loans grew by +2.8%
relative to end-June 2022 to EUR 14.9 billion.
Net banking
income
Over the quarter, net banking
income amounted to EUR 2,363 million, up by +6.3% vs. Q2 22.
Over the first half of the year, revenues climbed
by +6.4% vs. H1 22 to EUR 4,575 million.
International Retail Banking’s
net banking income stood at EUR 1,268 million in Q2 23 and was
stable vs. Q2 22. Over H1 23, net banking income amounted to EUR
2,530 million, down -2.8% vs. H1 22 and up by +4.9%* at constant
scope and exchange rate vs. H1 22.
Revenues in Europe were stable over the second
quarter of 2023 vs. Q2 22. The rise in fee income offset mixed
trends for the net interest margin during the quarter amid a
context of high interest rates.
Revenues increased in all regions across Africa,
Mediterranean Basin and French Overseas Territories by +10.1% vs.
Q2 22, driven by a strong increase in net interest margin of +16%
vs. Q2 22.
The Insurance business
registered net banking income growth of +2.9% to EUR 175 million
vs. Q2 22 under IFRS 17. In H1 23, net banking income grew strongly
by +18.4% vs. H1 22 to EUR 328 million.
Financial Services’ net banking
income was significantly higher (+17.3%) vs. Q2 22 at EUR 920
million. This includes LeasePlan revenues which have been
integrated since end of May 2023, i.e. around EUR 200 million. At
constant perimeter, ALD reported a slight decrease in net banking
income, with an unfavourable base effect due to hyperinflation in
Turkey in Q2 22. At ALD, income from used-car sales stood at an
average EUR 2,614 per vehicle this quarter (excluding the
depreciation curve adjustment). In H1 23, Financial Services to
Corporates recorded net banking income of EUR 1,717 million, up by
+21.1% vs. H1 22.
Operating
expenses
Over the quarter, operating
expenses amounted to EUR 1,167 million, up by +19.6% vs. Q2 22
(+19.0% in underlying), impacted by LeasePlan operating expenses of
EUR 111 million following its consolidation since 22 May 2023 and
expenses related to its integration of around EUR 60
million.Over the first half, operating expenses
came to EUR 2,281 million, up +10.5% vs. H1 22.
At International Retail
Banking, the cost increase remained under control over the
quarter at +1.0% vs. Q2 22 despite an inflationary context.
In the Insurance business,
operating expenses increased by +14.8% vs. Q2 22.
At Financial Services,
operating expenses increased by +63.8% vs. Q2 22, including
LeasePlan costs and expenses related to the integration of
LeasePlan. At constant rate and perimeter, they increased by
+21.1%* on an underlying basis vs. Q2 22.
Cost of
risk
Over the quarter, the cost of
risk decreased to 24 basis points (or EUR 83 million) vs. 28 basis
points in Q2 22.
Over the first half of
the year, the cost of risk stood at 26 basis points vs. 60
basis points in H1 22.
Reported Group net
income
Over the quarter, the
contribution to Group net income was EUR 587 million in Q2 23, down
-14.6% vs. Q2 22. RONE stood at 22.8% in Q2 23 (22.3% in
underlying). RONE was 19.1% in International Retail Banking and
27.2% in Financial Services and Insurance at Q2 23.
Over the first half of the
year, the contribution to Group net income was EUR 1,151
million, up +9.9% vs. H1 22. RONE stood at 20% vs. 19.4% in H1 22.
RONE was 17.5% in International Retail Banking and 22.4% in
Financial Services and Insurance in H1 23.
-
GLOBAL BANKING & INVESTOR SOLUTIONS
|
In EUR m |
Q2 23 |
Q2 22 |
Variation |
H1 23 |
H1 22 |
Variation |
|
Net banking income |
2,375 |
2,563 |
-7.3% |
-6.2%* |
5,133 |
5,318 |
-3.5% |
-3.2%* |
|
Operating expenses |
(1,605) |
(1,565) |
+2.6% |
+3.8%* |
(3,648) |
(3,737) |
-2.4% |
-2.1%* |
|
Underlying operating expenses(1) |
(1,668) |
(1,755) |
-4.9% |
-3.9%* |
(3,271) |
(3,366) |
-2.8% |
-2.5%* |
|
Gross operating income |
770 |
998 |
-22.8% |
-21.9%* |
1,485 |
1,581 |
-6.1% |
-5.8%* |
|
Underlying gross operating income(1) |
707 |
808 |
-12.5% |
-11.2%* |
1,862 |
1,952 |
-4.6% |
-4.4%* |
|
Net cost of risk |
27 |
(69) |
n/s |
n/s |
22 |
(263) |
n/s |
n/s |
|
Operating income |
797 |
929 |
-14.2% |
-13.1%* |
1,507 |
1,318 |
+14.3% |
+14.8%* |
|
Reported Group net
income |
638 |
742 |
-14.0% |
-12.9%* |
1,203 |
1,044 |
+15.2% |
+15.6%* |
|
Underlying Group net income(1) |
590 |
596 |
-1.0% |
+0.6%* |
1,489 |
1,329 |
+12.0% |
+12.3%* |
|
RONE |
18.1% |
20.3% |
+0.0% |
+0.0%* |
16.8% |
14.5% |
+0.0% |
+0.0%* |
|
Underlying
RONE(1) |
16.7% |
16.3% |
+0.0% |
+0.0%* |
20.8% |
18.5% |
+0.0% |
+0.0%* |
Net banking
income
Global Banking & Investor
Solutions notched up a solid performance in the second
quarter, posting revenues of EUR 2,375 million, down -7.3% with
respect to a very high Q2 22. 5
Over the first half, revenues
dipped slightly by -3.5% vs. H1 22 (EUR 5,133 million vs. EUR 5,318
million).
Global Markets & Investor
Services recorded revenues of EUR 1,521 million in Q2 23,
down by -12.7% in comparison to a very high reference point in Q2
22. Over H1 23, revenues totalled EUR 3,452 million, which was
-6.9% vs. H1 22.
Global Markets recorded a good performance, with
revenues of EUR 1,342 million, down -11.5% vs. Q2 22 in a
slower market. Over H1 23, revenues decreased by -7.0% vs. H1 22 to
EUR 3, 063 million.
The Equities business recorded an overall good
level of activity, posting Q2 23 revenues of EUR 785 million, down
-5.8% vs. Q2 22. Market conditions were less favourable due to
lower volumes and weaker volatility. Over H1 23, revenues were down
-12.3% vs. H1 22 to EUR 1,616 million.
Amid less conducive market conditions due to
weaker interest rate and currency volatility, FIC activities
recorded a -18.4% decrease in revenues in Q2 23 vs. Q2 22, to EUR
557 million. Continued strong dynamics in Financing activities
despite lower client activity. Over H1 23, revenues remained stable
vs. H1 22 to EUR 1,447 million.
Securities Services’ revenues contracted by
-20.8% over the quarter to EUR 179 million. Excluding the impact of
several participations notably in Euroclear in Q2 22, business
activity advanced by +12.2% compared with Q2 22. Over H1 23,
revenues declined by -6.0% vs. H1 22 and rose by +6.2% excluding
participations. Assets under Custody and Assets under
Administration totalled EUR 4,702 billion and EUR 587 billion,
respectively.
Financing & Advisory
activities registered a solid performance with Q2 revenues
of EUR 854 million, up +4.0% vs. Q2 22. Over H1 23, revenues
totalled EUR 1,681 million, a +4.3% increase vs. H1 22.
The Global Banking & Advisory business
turned in a solid performance, with revenue decreasing slightly by
-4.6% vs. a very high Q2 22 reference point. The activity reaped
the benefit of robust momentum in Asset Backed Products and
Investment Banking, thanks notably to debt capital market
activities and telecommunications, media and technology (TMT)
sector financing. Asset Finance platform showed robust performance
and Natural Resources activities demonstrated sound resilience.
Over H1 23, revenues are down -4.8% vs. H1 22.
Global Transaction and Payment Services once
again posted an excellent performance, with revenue growth of
+42.4% vs. Q2 22 that took advantage of positive interest rates and
sound commercial performances. In H1 23, revenues advanced strongly
by +46.5% relative to H1 22.
Operating
expenses
Operating expenses came to EUR
1,605 million over the
quarter, up slightly by +2.6% vs. Q2 22, mainly due to
one-off items for a total amount of EUR 95 million. On an
underlying basis, excluding the contribution to the Single
Resolution Fund (SRF), they contracted by -3.2%. This brought the
underlying cost-to-income ratio, excluding the SRF contribution, to
65.2% in Q2 23.
Over the first half of 2023,
operating expenses fell by -2.4% vs. H1 22 and decreased by -0.8%
on an underlying basis excluding SRF, resulting in an underlying
cost-to-income ratio, excluding the SRF contribution, of 59.0% in
H1 23.
Cost of
risk
Over the quarter, the cost of
risk improved sharply to -7 basis points (or a reversal EUR -27
million) vs. 1 basis point in Q1 23, notably
due to reversals on provisions.
Over the first half of
the year, the cost of risk stood at -3 basis points vs. 30
basis points in H1 22.
Group net
income
The contribution to Group net income was EUR 638
million on a reported basis and EUR 590 million on an underlying
basis, respectively down by -14.0% and -1.0% vs. Q2 22.The
contribution was EUR 1,203 million on a reported basis and EUR
1,489 million on an underlying basis for the first half of the
year.
Global Banking & Investor Solutions posted
strong profitability with a reported RONE of 18.1% and 16.7% on an
underlying basis for the quarter (19.3% on an underlying basis,
restated for the impact of the SRF contribution).
Over the first half, reported
RONE stood at 16.8% and 20.8% on an underlying basis (23.3% on an
underlying basis excluding SRF).
-
CORPORATE CENTRE
|
In EURm |
Q2 23 |
Q2 22 |
H1 23 |
H1 22 |
|
Net banking income |
(375) |
(112) |
(600) |
(65) |
|
Underlying net banking income(1) |
(135) |
(112) |
(360) |
(65) |
|
Operating expenses |
(226) |
(294) |
(468) |
(472) |
|
Underlying operating expenses(1) |
(55) |
(148) |
(78) |
(145) |
|
Gross operating income |
(601) |
(406) |
(1 068) |
(537) |
|
Underlying gross
operating
income(1) |
(190) |
(260) |
(438) |
(210) |
|
Net cost of risk |
(1) |
(30) |
2 |
(25) |
|
Net profits or losses from other assets |
(79) |
(3,303) |
(100) |
(3,303) |
|
Underlying profits or losses from other assets(1) |
- |
- |
(21) |
- |
|
Income tax |
103 |
317 |
216 |
336 |
|
Reported Group net
income |
(602) |
(3,474) |
(1,001) |
(3,632) |
|
Underlying Group net
income(1) |
(205) |
(280) |
(430) |
(317) |
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 several costs incurred by the
Group that are not re-invoiced to the businesses. 6
The Corporate Centre’s net banking
income totalled EUR -375
million in Q2 23 vs. EUR -112 million in Q2 22. It
notably included the negative impact from the unwinding of hedges
taken out against the TLTRO scheme for around EUR -0.1 billion at
Q2 23 (approximately EUR -0.3 billion in 2023) and the negative
impact of one-off items for around EUR -240 million. The underlying
net banking income stood at EUR -135 million in Q2 23 vs. EUR -112
million in Q2 22.
Operating expenses totalled EUR
-226 million in Q2 23
vs. EUR -294 million in Q2 22. In particular, they included the
Group’s transformation costs for a total amount of EUR -184 million
relating to French Retail Banking activities (EUR -122 million),
Global Banking & Investor Solutions (EUR -8 million) and the
Corporate Centre (EUR -54 million). Underlying costs came to EUR
-55 million in Q2 23 vs. EUR -148 million in Q2 22.
Gross operating income totalled EUR -601
million in Q2 23 vs. EUR -406 million in Q2 22. Underlying
gross operating income totalled EUR -190 million in Q2 23 vs. EUR
-260 million in Q2 22.
The Corporate Centre’s contribution to
Group net income totalled EUR -602
million in Q2 23 vs. EUR
-3,474 million in Q2 22. It includes the negative impact from the
disposal of ALD’s activities in Russia for EUR -79 million, which
was recorded under Net profits or losses from other assets. The
Corporate Centre’s contribution to Group underlying net income
totalled EUR -205 million in Q2 23 vs. EUR -280 million in Q2
22.
-
2023 and 2024 FINANCIAL
CALENDAR
|
2023 and 2024 financial communications calendar 18 September
2023 Capital Markets Day
(London) |
|
3 November 2023 Third quarter and nine-month 2023 results 8
February 2024 Fourth quarter and full year 2023 results |
|
3 May 2024 First quarter 2024 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. |
-
APPENDIX 1:
FINANCIAL
DATA
GROUP NET INCOME BY CORE
BUSINESS
|
In EUR m |
Q2 23 |
Q2 22 |
Variation |
H1 23 |
H1 22 |
Variation |
|
French Retail Banking |
277 |
534 |
-48.1% |
415 |
851 |
-51.2% |
|
International Retail Banking and Financial Services |
587 |
687 |
-14.6% |
1,151 |
1,047 |
+9.9% |
|
Global Banking and Investor Solutions |
638 |
742 |
-14.0% |
1,203 |
1,044 |
+15.2% |
|
Core Businesses |
1,502 |
1,963 |
-23.5% |
2,769 |
2,942 |
-5.9% |
|
Corporate Centre |
(602) |
(3,474) |
+82.7% |
(1,001) |
(3,632) |
+72.4% |
|
Group |
900 |
(1,511) |
n/s |
1,768 |
(690) |
n/s |
CONSOLIDATED BALANCE
SHEET
|
In EUR m |
|
30.06.2023 |
31.12.2022 |
|
Cash, due from central banks |
|
215,376 |
207,013 |
|
Financial assets at fair value through profit or loss |
|
496,362 |
427,151 |
|
Hedging derivatives |
|
31,126 |
32,971 |
|
Financial assets at fair value through other comprehensive
income |
|
90,556 |
92,960 |
|
Securities at amortised cost |
|
27,595 |
26,143 |
|
Due from banks at amortised cost |
|
83,269 |
68,171 |
|
Customer loans at amortised cost |
|
490,421 |
506,635 |
|
Revaluation of differences on portfolios hedged against interest
rate risk |
|
(1,925) |
(2,262) |
|
Investments of insurance companies |
|
616 |
353 |
|
Tax assets |
|
4,385 |
4,484 |
|
Other assets |
|
73,792 |
82,315 |
|
Non-current assets held for sale |
|
3,590 |
1,081 |
|
Investments accounted for using the equity method |
|
209 |
146 |
|
Tangible and intangible fixed assets |
|
57,535 |
33,958 |
|
Goodwill |
|
5,523 |
3,781 |
|
Total |
|
1,578,430 |
1,484,900 |
|
In EUR m |
|
30.06.2023 |
31.12.2022 |
|
Due to central banks |
|
9,468 |
8,361 |
|
Financial liabilities at fair value through profit or loss |
|
380,821 |
304,175 |
|
Hedging derivatives |
|
44,156 |
46,164 |
|
Debt securities issued |
|
151,320 |
133,176 |
|
Due to banks |
|
119,923 |
133,011 |
|
Customer deposits |
|
546,655 |
530,764 |
|
Revaluation of differences on portfolios hedged against interest
rate risk |
|
(8,367) |
(9,659) |
|
Tax liabilities |
|
2,356 |
1,645 |
|
Other liabilities |
|
93,421 |
107,315 |
|
Non-current liabilities held for sale |
|
2,212 |
220 |
|
Insurance contract-related liabilities |
|
138,746 |
135,875 |
|
Provisions |
|
4,577 |
4,579 |
|
Subordinated debt |
|
15,158 |
15,948 |
|
Total liabilities |
|
1,500,446 |
1,411,574 |
|
Shareholders’ equity |
|
- |
- |
|
Shareholders’ equity, Group share |
|
- |
- |
|
Issued common stocks and capital reserves |
|
21,267 |
21,248 |
|
Other equity instruments |
|
10,136 |
9,136 |
|
Retained earnings |
|
34,485 |
34,479 |
|
Net income |
|
1,768 |
1,825 |
|
Sub-total |
|
67,656 |
66,688 |
|
Unrealised or deferred capital gains and losses |
|
351 |
282 |
|
Sub-total equity, Group share |
|
68,007 |
66,970 |
|
Non-controlling interests |
|
9,977 |
6,356 |
|
Total equity |
|
77,984 |
73,326 |
|
Total |
|
1,578,430 |
1,484,900 |
9. APPENDIX
2:
METHODOLOGY
1 - The financial information
presented for the second
quarter and first half
2023 was examined by the Board of
Directors on 2
August,
2023 and has been prepared in
accordance with IFRS as adopted in the European Union and
applicable at that date. The limited review procedures on the
condensed interim financial statements at 30 June 2023 carried by
the Statutory Auditors are currently underway.
2 - Net banking income
The pillars’ net banking income is defined on
page 41 of Societe Generale’s 2023 Universal Registration Document.
The terms “Revenues” or “Net Banking Income” are used
interchangeably. They provide a normalised measure of each pillar’s
net banking income taking into account the normative capital
mobilised for its activity.
3 - Operating expenses
Operating expenses correspond to the “Operating
Expenses” as presented in notes 5 and 8.2 to the Group’s
consolidated financial statements as at December 31st, 2022. The
term “costs” is also used to refer to Operating Expenses. The
Cost/Income Ratio is defined on page 41 of Societe Generale’s 2023
Universal Registration Document.
4 - 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 IFRIC 21 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 EURm |
Q2 23 |
Q2 22 |
|
H1 23 |
H1 22 |
|
Exceptional Net banking income (+) |
240 |
0 |
|
240 |
0 |
|
One-off items(1) |
240 |
0 |
|
240 |
0 |
|
Exceptional operating expenses (-) |
(20) |
(125) |
|
836 |
859 |
|
IFRIC linearisation |
(239) |
(284) |
|
435 |
557 |
|
Transformation costs(1) |
184 |
159 |
|
366 |
302 |
|
Of which related to French Retail Banking |
122 |
97 |
|
262 |
201 |
|
Of which related to Global Banking & Investor Solutions |
8 |
25 |
|
19 |
39 |
|
Of which related to Corporate Centre |
54 |
37 |
|
85 |
62 |
|
One-off items |
35 |
0 |
|
35 |
0 |
|
Exceptional Net profit or losses from other assets
(+/-) |
79 |
3,303 |
|
79 |
3,303 |
|
Net losses from the disposal of Russian activities(1) |
0 |
3,303 |
|
0 |
3,303 |
|
Net losses from the disposal of ALD Russia(1) |
79 |
0 |
|
79 |
0 |
|
Total exceptional items (pre-tax) |
299 |
3,178 |
|
1,155 |
4,162 |
|
Total exceptional items (post-tax) |
259 |
2,992 |
|
899 |
3,709 |
|
|
|
|
|
|
|
|
Reported Net income - Group Share |
900 |
(1,511) |
|
1,768 |
(690) |
|
Total exceptional items - Group share
(post-tax) |
259 |
2,992 |
|
899 |
3,709 |
|
Underlying Net income - Group Share |
1,159 |
1,481 |
|
2,667 |
3,019 |
7
6 - Cost of risk in
basis points, coverage ratio for doubtful
outstandings
The cost of risk is defined on pages 42 and 691
of Societe Generale’s 2023 Universal Registration Document. This
indicator makes it possible to assess the level of risk of each of
the pillars as a percentage of balance sheet loan commitments,
including operating leases.
|
In EURm |
|
Q2 23 |
Q2 22 |
H1 23 |
H1 22 |
|
French Retail Banking |
Net Cost Of Risk |
109 |
21 |
198 |
68 |
|
Gross loan Outstandings |
249,843 |
245,710 |
251,266 |
244,177 |
|
Cost of Risk in bp |
18 |
3 |
16 |
6 |
|
International Retail Banking and Financial
Services |
Net Cost Of Risk |
83 |
97 |
174 |
422 |
|
Gross loan Outstandings |
137,819 |
141,075 |
136,404 |
140,811 |
|
Cost of Risk in bp |
24 |
28 |
26 |
60 |
|
Global Banking and Investor Solutions |
Net Cost Of Risk |
(27) |
69 |
(22) |
263 |
|
Gross loan Outstandings |
165,847 |
176,934 |
171,719 |
173,842 |
|
Cost of Risk in bp |
(7) |
16 |
(3) |
30 |
|
Corporate Centre |
Net Cost Of Risk |
1 |
30 |
(2) |
25 |
|
Gross loan Outstandings |
18,873 |
14,943 |
17,705 |
14,678 |
|
Cost of Risk in bp |
2 |
79 |
(2) |
34 |
|
Societe Generale Group |
Net Cost Of Risk |
166 |
217 |
348 |
778 |
|
Gross loan Outstandings |
572,382 |
578,662 |
577,093 |
573,508 |
|
Cost of Risk in bp |
12 |
15 |
12 |
27 |
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 of Societe Generale’s 2023
Universal Registration Document. This measure makes it possible to
assess Societe Generale’s return on equity and return on tangible
equity.
RONE (Return on Normative Equity) determines the
return on average normative equity allocated to the Group’s
businesses, according to the principles presented on page 43 of
Societe Generale’s 2023 Universal Registration Document.
Group net income used for the ratio numerator is
book Group net income adjusted for “interest net of tax payable on
deeply subordinated notes and undated subordinated notes, interest
paid to holders of deeply subordinated notes and undated
subordinated notes, issue premium amortisations” and “unrealised
gains/losses booked under shareholders’ equity, excluding
conversion reserves” (see methodology note No. 9). For ROTE, income
is also restated for goodwill impairment.
Details of the corrections made to book equity
in order to calculate ROE and ROTE for the period are given in the
table below:ROTE calculation: calculation
methodology
|
End of period (in EURm) |
Q2 23 |
Q2 22 |
H1 23 |
H1 22 |
|
Shareholders' equity Group share |
68,007 |
65,023 |
68,007 |
65,023 |
|
Deeply subordinated and undated subordinated notes |
(10,815) |
(8,683) |
(10,815) |
(8,683) |
|
Interest payable to holders of deeply & undated subordinated
notes, issue premium amortisation(1) |
(28) |
(8) |
(28) |
(8) |
|
OCI excluding conversion reserves |
688 |
577 |
688 |
577 |
|
Distribution provision(2) |
(982) |
(1,193) |
(982) |
(1,193) |
|
Distribution N-1 to be paid |
(441) |
(914) |
(441) |
(914) |
|
ROE equity end-of-period |
56,430 |
54,801 |
56,430 |
54,801 |
|
Average ROE equity |
56,334 |
55,009 |
56,203 |
54,887 |
|
Average Goodwill |
(4,041) |
(3,646) |
(3,847) |
(3,636) |
|
Average Intangible Assets |
(3,117) |
(2,710) |
(2,997) |
(2,729) |
|
Average ROTE equity |
49,176 |
48,653 |
49,359 |
48,522 |
|
|
|
|
|
|
|
Group net Income |
900 |
(1,511) |
1,768 |
(690) |
|
Interest paid and payable to holders of deeply subordinated notes
and undated subordinated notes, issue premium amortisation |
(216) |
(159) |
(379) |
(278) |
|
Cancellation of goodwill impairment |
- |
- |
- |
2 |
|
Ajusted Group net Income |
684 |
(1,670) |
1,390 |
(966) |
|
Average ROTE equity |
49,176 |
48,653 |
49,359 |
48,522 |
|
ROTE |
5.6% |
-13.7% |
5.6% |
-4.0% |
|
|
|
|
|
|
|
Underlying Group net income |
1,159 |
1,481 |
2,667 |
3,019 |
|
Interest paid and payable to holders of deeply subordinated notes
and undated subordinated notes, issue premium amortisation |
(216) |
(159) |
(379) |
(278) |
|
Cancellation of goodwill impairment |
- |
- |
- |
2 |
|
Ajusted Underlying Group
net Income |
943 |
1,322 |
2,288 |
2,743 |
|
Average ROTE equity (underlying) |
49,435 |
51,645 |
50,257 |
52,231 |
|
Underlying ROTE |
7.6% |
10.2% |
9.1% |
10.5% |
RONE calculation: Average capital
allocated to Core Businesses (in EURm)
|
In EURm |
Q2 23 |
Q2 22 |
Change |
H1 23 |
H1 22 |
Change |
|
French Retail Banking |
12,338 |
12,296 |
+0.3% |
12,365 |
12,058 |
+2.5% |
|
International Retail Banking and Financial Services |
10,310 |
10,565 |
-2.4% |
11,510 |
10,795 |
+6.6% |
|
Global Banking and Investor Solutions |
14,132 |
14,644 |
-3.5% |
14,347 |
14,385 |
-0.3% |
|
Core Businesses |
36,780 |
37,505 |
-1.9% |
38,222 |
37,238 |
+2.6% |
|
Corporate Center |
19,554 |
17,504 |
+11.7% |
17,981 |
17,649 |
+1.9% |
|
Group |
56,334 |
55,009 |
+2.4% |
56,203 |
54,887 |
+2.4% |
8
8 - Net assets and
tangible net assets
Net assets and tangible net assets are defined
in the methodology, page 45 of the Group’s 2023 Universal
Registration Document. The items used to calculate them are
presented below:
|
End of period (in EURm) |
H1 23 |
Q1 23 |
2022 |
|
Shareholders' equity Group share |
68,007 |
68,747 |
66,970 |
|
Deeply subordinated and undated subordinated notes |
(10,815) |
(10,823) |
(10,017) |
|
Interest of deeply & undated subordinated notes, issue premium
amortisation(1) |
(28) |
(102) |
(24) |
|
Book value of own shares in trading portfolio |
134 |
130 |
67 |
|
Net Asset Value |
57,298 |
57,952 |
56,996 |
|
Goodwill |
(4,429) |
(3,652) |
(3,652) |
|
Intangible Assets |
(3,356) |
(2,878) |
(2,875) |
|
Net Tangible Asset Value |
49,513 |
51,423 |
50,469 |
|
|
|
|
|
|
Number of shares used to calculate
NAPS(2) |
801,471 |
801,471 |
801,147 |
|
Net Asset Value per Share |
71.5 |
72.3 |
71.1 |
|
Net Tangible Asset Value per Share |
61.8 |
64.2 |
63.0 |
9
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 44 of Societe Generale’s 2023 Universal Registration
Document). The corrections made to Group net income in order to
calculate EPS correspond to the restatements carried out for the
calculation of ROE and ROTE. As specified on page 45 of Societe
Generale’s 2023 Universal Registration Document, the Group also
publishes EPS adjusted for the impact of non-economic and
exceptional items presented in methodology note No. 5 (underlying
EPS).The calculation of Earnings Per Share is described in the
following table:
|
Average number of shares (thousands) |
H1 23 |
Q1 23 |
2022 |
|
Existing shares |
822,101 |
829,046 |
845,478 |
|
Deductions |
|
|
|
|
Shares allocated to cover stock option plans and free shares
awarded to staff |
6,845 |
6,899 |
6,252 |
|
Other own shares and treasury shares |
13,892 |
20,838 |
16,788 |
|
Number of shares used to calculate
EPS(1) |
801,363 |
801,309 |
822,437 |
|
Group net Income (in EUR m) |
1,768 |
868 |
1,825 |
|
Interest on deeply subordinated notes and undated subordinated
notes (in EUR m) |
(379) |
(163) |
(596) |
|
Adjusted Group net income (in EUR m) |
1,390 |
705 |
1,230 |
|
EPS (in EUR) |
1.73 |
0.88 |
1.50 |
|
Underlying EPS (in EUR) |
2.45 |
1.05 |
5.87 |
10 - The
Societe Generale Group’s Common Equity
Tier 1 capital is calculated in accordance with applicable
CRR2/CRD5 rules. The phased-in and fully loaded solvency ratios are
presented pro forma for current earnings, net of dividends, 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.
1011 – Funded balance sheet, loan to
deposit ratio
The funded balance sheet is
based on the Group financial statements. It is obtained in two
steps:
- A first step aiming at reclassifying
the items of the financial statements into aggregates allowing for
a more economic reading of the balance sheet. Main
reclassifications:
Insurance: grouping of the accounting items
related to insurance within a single aggregate in both assets and
liabilities.Customer loans: include outstanding loans with
customers (net of provisions and write-downs, including net lease
financing outstanding and transactions at fair value through profit
and loss); excludes financial assets reclassified under loans and
receivables in accordance with the conditions stipulated by IFRS 9
(these positions have been reclassified in their original
lines).Wholesale funding: Includes interbank liabilities and debt
securities issued. Financing transactions have been allocated to
medium/long-term resources and short-term resources based on the
maturity of outstanding, more or less than one
year.Reclassification under customer deposits of the share of
issues placed by French Retail Banking networks (recorded in
medium/long-term financing), and certain transactions carried out
with counterparties equivalent to customer deposits (previously
included in short term financing).Deduction from customer deposits
and reintegration into short-term financing of certain transactions
equivalent to market resources.
- A second step aiming at excluding
the contribution of insurance subsidiaries, and netting
derivatives, repurchase agreements, securities borrowing/lending,
accruals and “due to central banks”.
The Group loan/deposit ratio is
determined as the division of the customer loans by customer
deposits as presented in the funded balance sheet.
NB (1) The sum of values contained in the tables
and analyses may differ slightly from the total reported due to
rounding rules.
(2) All the information on the results for the
period (notably: press release, downloadable data, presentation
slides and supplement) is available on Societe Generale’s website
www.societegenerale.com in the “Investor” section.
10. APPENDIX
3 : PUBLICATION OF NEW QUARTERLY
SERIES
Societe Generale is releasing restated
quarterly statements reflecting the impacts from the merger of
Societe Generale and Credit du Nord in France to create a unique
brand name, SG.
Following the completion of the merger of French
networks in France, the Group proceeded to some non-material
adjustments in its organization with the transfer of Societe des
Banques de Monaco and the premium client base from Credit du Nord
to private banking operations in France and the transfer of
employee savings’ activities operated by Services Epargne
Entreprises(11) (“S2E”) from French networks in France to insurance
activities within International retail banking and financial
services in order to reinforce already existing synergies with
financial savings.
The historical quarterly financial reporting has
been restated in compliance with the following changes in
governance.
This organisational change comprises some
immaterial adjustments to the cost sharing of some activities of
Global Markets and Investor Services and Global Banking and
Advisory.All of the above items have no impact on the performance
of the Group nor on the Corporate Centre.
The series of 2022 and Q1 23 quarterly results have
been adjusted consequently and are available on the Societe
Generale website. (The figures included in this press release
are unaudited.)
Financial impact in FY
2022 on French
Retail Banking, International Retail Banking and Financial Services
and Global Banking & Investor Solutions
|
In EURm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
French Retail Banking |
|
|
|
|
|
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
|
|
|
|
Net Banking Income |
27,155 |
27,155 |
- |
|
8,706 |
8,684 |
-22 |
|
|
|
|
|
Operating expenses |
-17,994 |
-17,994 |
- |
|
-6,403 |
-6,380 |
23 |
|
|
|
|
|
Gross operating income |
9,161 |
9,161 |
- |
|
2,303 |
2,304 |
1 |
|
|
|
|
|
Group net income |
1,825 |
1,825 |
- |
|
1,399 |
1,400 |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Retail Banking & Financial
Services |
Global Banking & Investor Solutions |
Corporate Centre |
|
|
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
Net Banking Income |
8,595 |
8,617 |
22 |
|
10,082 |
10,082 |
- |
|
-228 |
-228 |
- |
|
Operating expenses |
-4,009 |
-4,032 |
-23 |
|
-6,634 |
-6,634 |
- |
|
-948 |
-948 |
- |
|
Gross operating income |
4,586 |
4,585 |
-1 |
|
3,448 |
3,448 |
- |
|
-1,176 |
-1,176 |
- |
|
Group net income |
2,226 |
2,225 |
-1 |
|
2,427 |
2,427 |
- |
|
-4,227 |
-4,227 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Markets & Investor Services |
Financing & Advisory |
|
Global Banking & Investor Solutions |
|
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
Reported12/05/2023 |
Reported 03/08/2023 |
Gap |
|
Net Banking Income |
6,708 |
6,708 |
- |
|
3,374 |
3,374 |
- |
|
10,082 |
10,082 |
- |
|
Operating expenses |
-4,705 |
-4,708 |
-3 |
|
-1,929 |
-1,926 |
3 |
|
-6,634 |
-6,634 |
- |
|
Gross operating income |
2,003 |
2,000 |
-3 |
|
1,445 |
1,448 |
3 |
|
3,448 |
3,448 |
- |
|
Group net income |
1,524 |
1,522 |
-2 |
|
903 |
905 |
2 |
|
2,427 |
2,427 |
- |
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 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.
(1) Underlying data (see Methodology note No. 5
for the transition from accounting data to underlying data), (2)
Including IFRS 9 phasing, or 13.0% fully-loadedAsterisks* in the
document refer to data at constant scope and exchange ratesNB: 2022
data in this document was restated, in compliance with IFRS 17 and
IFRS 9 for insurance entities(1) Underlying data (see Methodology
note No. 5 for the transition from accounting data to underlying
data)(2) Ratio calculated according to EBA methodology published on
16 July 2019(3) Ratio of S3 provisions on the gross carrying amount
of the loans before offsetting guarantees and collateral
(1) Underlying data (see Methodology note No. 5
for the transition from accounting data to underlying data)(3)
Pro-forma estimation, subject to ECB
notification(1) Underlying data (see Methodology
note No. 5 for the transition from accounting data to underlying
data)
(4) Underlying data (see Methodology note No. 5
for the transition from accounting data to underlying data)(5)
Underlying data (see Methodology note No. 5 for the transition from
accounting data to underlying data)(6) Underlying data (see
Methodology note No. 5 for the transition from accounting data to
underlying data)(1) Allocated to Corporate Centre(1) Interest net
of tax(2) The dividend to be paid is calculated based on a pay-out
ratio of 50% of the underlying Group net income, after deduction of
deeply subordinated notes and on undated subordinated notes(1)
Interest net of tax (2) 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. (1) 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(1) S2E manages all middle and back
office administrative processing of employee savings accounts on
behalf of its four custodial account holder clients (Societe
Generale, BNP Paribas, HSBC and AXA). Societe Generale holds a
39.92% stake in the capital of S2E.
- Societe-Generale_Q2-2023-Press-release_EN
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