Societe Generale: Second quarter and half-year 2021 results

RESULTS AT JUNE 30TH 2021
 
   

Press releaseParis, August 3rd 2021

EXCELLENT PERFORMANCE IN ALL THE BUSINESSES IN Q2 21 AND H1 21

In Q2 21, revenues up +18.2% vs. Q2 20 (+20.5%*), with a strong quarter in Global Banking & Investor Solutions, substantial growth in Financial Services and a rebound in Retail Banking

Strong positive jaws effect in all the businesses

Underlying gross operating income of EUR 2 billion(1), up 55%(1) vs. Q2 20

Low cost of risk at 11 basis points in Q2 21; continued prudent approach in terms of provisioning

Underlying Group net income of EUR 1.35 billion(1), reported Group net income (including IFRIC 21 charges and exceptional items) of EUR 1.44 billion in Q2 21

Profitability (ROTE) at 10.4%(1) and 11.2% in Q2 21

In H1 21, underlying gross operating income of EUR 4.2 billion(1), up +83.4%(1) vs. H1 20

Revenues strongly up +19.5% (22.8%*) and costs contained up 1.7%(1) (3.6%(1)*)

Underlying Group net income of EUR 2.65 billion(1), up +13.5%(1) vs. H1 19, reported Group net income of EUR 2.25 billion

Profitability (ROTE) at 10.2%(1) and 8.6% in H1 21

IMPROVEMENT IN THE OUTLOOK FOR 2021Expected increase in revenues in all the businessesIncrease of the positive jaws effect with continued disciplined management of costsDownward revision, between 20 and 25 basis points, in the full-year forecast for the net cost of risk

STRONG CAPITAL POSITION

Solid CET 1 level at 13.4%(2) at end-June 2021, well above the target, due to strong organic capital generation of 44 basis points in H1 21 after dividend provision

Attractive shareholder return

  • Confirmation of the launch, in Q4, of a share buyback programme, for an amount of around EUR 470m3(3)
  • H1 21 dividend per share provision of EUR 1.2, consistent with a payout ratio of 50% of underlying Group net income4(4)

Frédéric Oudéa, the Group’s Chief Executive Officer, commented: “Once again, Societe Generale enjoyed an excellent quarter, with a solid commercial and financial performance by all its businesses. Q2 was marked by the strong revenue momentum, continued cost discipline and a very low cost of risk resulting from very few loan defaults. The results for H1 2021 are the best for 5 years, illustrating the strength of the business model and the Group’s capacity to rebound. On these bases, the Group is raising its full-year forecasts for 2021. These results are the fruit of extensive work undertaken for several years to enhance the intrinsic quality of the franchises by effectively anticipating the needs of customers, improve the operational efficiency of the Group and maintain the excellent robustness of the loan portfolio and risk management. Thanks to the exceptional commitment of its teams and a very solid balance sheet, the Societe Generale Group will continue the far-reaching transformation of its businesses related to ESG issues and the growing use of the new digital technologies, in a constant effort to support its customers and provide them with added value.”

  1. GROUP CONSOLIDATED RESULTS
In EURm Q2 21 Q2 20 Change H1 21 H1 20 Change
Net banking income 6,261 5,296 +18.2% +20.5%* 12,506 10,466 +19.5% +22.8%*
Operating expenses (4,107) (3,860) +6.4% +7.9%* (8,855) (8,538) +3.7% +5.6%*
Underlying operating expenses(1) (4,225) (3,984) +6.1% +7.5%* (8,322) (8,185) +1.7% +3.6%*
Gross operating income 2,154 1,436 +50.0% +55.2%* 3,651 1,928 +89.4% x 2.0*
Underlying gross operating income(1) 2,036 1,312 +55.1% +61.0%* 4,184 2,281 +83.4% +94.8%*
Net cost of risk (142) (1,279) -88.9% -88.6%* (418) (2,099) -80.1% -79.4%*
Operating income 2,012 157 x 12.8 x 13.6* 3,233 (171) n/s n/s
Underlying operating income(1) 1,894 33 x 57.2 x 80.4* 3,766 182 x 20.7 x 31.0*
Net profits or losses from other assets 5 4 +25.0% +26.4%* 11 84 -86.9% -86.9%*
Impairment losses on goodwill 0 (684) n/s n/s 0 (684) n/s n/s
Income tax (404) (658) -38.6% -38.3%* (687) (612) +12.3% +15.4%*
Net income 1,615 (1,180) n/s n/s 2,562 (1,378) n/s n/s
O.w. non-controlling interests (176) (84) x 2.1 x 2.1* (309) (212) +45.8% +45.6%*
Reported Group net income 1,439 (1,264) n/s n/s 2,253 (1,590) n/s n/s
Underlying Group net income(1) 1,349 8 x 163.1 n/s 2,647 0 n/s n/s
ROE 9.8% -10.9%     7.5% -7.2%    
ROTE 11.2% -6.5%     8.6% -5.3%    
Underlying ROTE(1) 10.4% -1.3%     10.2% -1.3%    

(1)   Adjusted for exceptional items and linearisation of IFRIC 21Societe Generale’s Board of Directors, which met on August 2nd, 2021 under the chairmanship of Lorenzo Bini Smaghi, examined the Societe Generale Group’s results for Q2 and H1 2021.

The various restatements enabling the transition from underlying data to published data are presented in the methodology notes (section 10.5).

Net banking incomeThe rebound in the Group’s activity continued in Q2 21, with net banking income increasing by +18.2% (+20.5%*) vs. Q2 20 and all the businesses contributing to this strong momentum.

French Retail Banking experienced a significant improvement in Q2 21, with net banking income (excluding PEL/CEL provision) increasing by +8.0% vs. Q2 20 driven by the recovery in net interest income and commissions, which were considerably affected by lockdown measures in Q2 20.

International Retail Banking & Financial Services enjoyed strong revenue growth of +17%* vs. Q2 20, underpinned by the excellent momentum of Financial Services (+49%* vs. Q2 20) and Insurance (+13%* vs. Q2 20). International Retail Banking saw a rebound in activity of +7.9%* vs. Q2 20.

Global Banking & Investor Solutions also turned in an excellent performance, with revenues up +28%* vs. Q2 20, driven by Global Markets and Financing & Advisory.

In H1, the Group posted strong growth of +19.5% (+22.8%*) vs. H1 20, with a positive contribution from all the businesses, and returned to a revenue level close to that of H1 19 (EUR 12.5 billion).

In 2021, the Group is aiming for positive revenue growth in all the businesses.

Operating expenses In Q2 21, operating expenses totalled EUR 4,107 million on a reported basis and EUR 4,225 million on an underlying basis (restated for the linearisation of IFRIC 21 and transformation costs), representing an increase of +6.1% vs. Q2 20.

The Group therefore generated a very positive jaws effect in all its businesses, resulting in an increase in underlying gross operating income of +55% to EUR 2,036 million and an improvement in the underlying cost to income ratio of nearly 8 points (67% vs. 75% in Q2 20).

In H1, costs amounted to EUR 8,855 million on a reported basis and EUR 8,322 million on an underlying basis, up +1.7% vs. H1 20. This limited growth can be explained primarily by the rise in variable costs linked to the growth in revenues and the increase in the IFRIC 21 charge (EUR +44 million).

Thanks to this good performance in H1, the Group plans to increase its positive jaws effect in 2021 while maintaining disciplined cost management.

Cost of risk

In Q2 21, the commercial cost of risk stood at a low level of 11 basis points (EUR 142 million), lower than in Q1 21 (21 basis points) and Q2 20 (97 basis points). It breaks down into a provision on non-performing loans of EUR 164 million, a decline compared to recent quarters, and a provision write-back on performing loans of EUR 22 million.

The Group’s provisions on performing loans currently amount to EUR 3,548 million.

As part of the support provided to its customers during the crisis, the Group granted repayment moratoriums and State Guaranteed Loans. At June 30th 2021, the residual amount of repayment moratoriums still in force represented around EUR 0.5 billion and State Guaranteed Loans, around EUR 18 billion. In France, the total amount of State Guaranteed Loans (“PGE”) is around EUR 16 billion and net exposure amounts to around EUR 2 billion.

The gross doubtful outstandings ratio amounted to 3.1%5(2) at June 30th 2021, an improvement vs. end-March 2021 (3.3%(2)). The Group’s gross coverage ratio for doubtful outstandings stood at 52%6(3) at June 30th 2021 (51% at March 31st 2021).

With a commercial cost of risk of 16 basis points in H1, the Group has revised its full-year forecast downwards and therefore anticipates a cost of risk of between 20 and 25 basis points in 2021 (vs. 30 to 35 basis points initially).

Group net income

In EURm Q2 21 Q2 20 H1 21 H1 20
Reported Group net income 1,439 (1,264) 2,253 (1,590)
Underlying Group net income7(1) 1,349 8 2,647 0
         
         
In % Q2 21 Q2 20 H1 21 H1 20
Reported ROTE 11.2% -6.5% 8.6% -5.3%
Underlying ROTE(1) 10.4% -1.3% 10.2% -1.3%

Earnings per share amounts to EUR 2.29 in H1 21 (EUR -2.25 in H1 20). Underlying earnings per share amounts to EUR 2.408(2) over the same period (EUR -0.59(2) in H1 20).

  1. THE GROUP’S FINANCIAL STRUCTURE

Group shareholders’ equity totalled EUR 63.1 billion at June 30th, 2021 (EUR 61.7 billion at December 31st, 2020). Net asset value per share was EUR 63.6 and tangible net asset value per share was EUR 56.0.

The consolidated balance sheet totalled EUR 1,493 billion at June 30th, 2021 (EUR 1,462 billion at December 31st, 2020). The net amount of customer loan outstandings at June 30th, 2021, including lease financing, was EUR 455 billion (EUR 440 billion at December 31st, 2020) – excluding assets and securities purchased under resale agreements. At the same time, customer deposits amounted to EUR 470 billion, vs. EUR 451 billion at December 31st, 2020 (excluding assets and securities sold under repurchase agreements).

At July 16th, 2021, the parent company had issued EUR 26.1 billion of medium/long-term debt, having an average maturity of 5.5 years and an average spread of 42 basis points (vs. the 6-month midswap, excluding subordinated debt). The subsidiaries had issued EUR 1.4 billion. In total, the Group had issued EUR 27.5 billion of medium/long-term debt. Excluding structured issuances, the parent company had completed its annual financing programme.

The LCR (Liquidity Coverage Ratio) was well above regulatory requirements at 133% at end-June 2021, vs. 149% at end-December 2020, and at 136% on average in Q2 2021, vs. 153% on average in Q4 2020. At the same time, the NSFR (Net Stable Funding Ratio) was over 100% at end-June 2021.

The Group’s risk-weighted assets (RWA) amounted to EUR 361.5 billion at June 30th, 2021(vs. EUR 351.9 billion at end-December 2020) according to CRR2/CRD5 rules. Risk-weighted assets in respect of credit risk represent 82.5% of the total, at EUR 298.2 billion, up 3.8% vs. December 31st, 2020.  

At June 30th, 2021, the Group’s Common Equity Tier 1 ratio stood at 13.4%, or around 430 basis points above the regulatory requirement. The CET1 ratio at June 30th, 2021 includes an effect of +20 basis points for phasing of the IFRS 9 impact. Excluding this effect, the fully-loaded ratio amounts to 13.2%. The Tier 1 ratio stood at 15.8% at end-June 2021 (16.0% at end-December 2020) and the total capital ratio amounted to 19.2% (19.2% at end-December 2020).

The leverage ratio stood at 4.6% at June 30th, 2021 (4.8% at end-December 2020).

With a level of 30.5% of RWA and 8.9% of leveraged exposure at end-June 2021, the Group’s TLAC ratio is above the FSB’s requirements for 2021. At June 30th, 2021, the Group was also above its 2022 MREL requirements of 25.2% of RWA and 5.91% of leveraged 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”.

  1. FRENCH RETAIL BANKING
In EURm Q2 21 Q2 20 Change H1 21 H1 20 Change
Net banking income 1,906 1,754 +8.7% 3,753 3,634 +3.3%
Net banking income excl. PEL/CEL 1,889 1,749 +8.0% 3,748 3,654 +2.6%
Operating expenses (1,297) (1,233) +5.2% (2,750) (2,683) +2.5%
Gross operating income 609 521 +16.9% 1,003 951 +5.5%
Gross operating income excl. PEL/CEL 592 516 +14.7% 998 971 +2.8%
Net cost of risk (6) (442) -98.6% (129) (691) -81.3%
Operating income 603 79 x 7.6 874 260 x 3,4
Reported Group net income 438 60 x 7.3 641 279 x 2,3
Underlying Group net income (1) 398 40 x 9.9 693 339 x 2
RONE 15.6% 2.1%   11.4% 4.9%  
Underlying RONE(1) 14.2% 1.4%   12.3% 6.0%  

(1)   Adjusted for the linearisation of IFRIC 21 and PEL/CEL provision Societe Generale and Crédit du Nord networks:

Average loan outstandings rose +1% vs. Q2 20 to EUR 208 billion. Average medium/long-term outstanding loans to corporate and professional customers climbed 8%, bolstered by the 20% growth in loan production excluding State Guaranteed Loans vs. Q2 20. Home loan production was up +34% vs. Q2 20.

Average outstanding balance sheet deposits9(2) increased by +9% vs. Q2 20 to EUR 234 billion, still driven by sight deposits, whose rate of growth decelerated.

As a result, the average loan/deposit ratio stood at 89% in Q2 21 vs. 96% in Q2 20.

Insurance assets under management totalled EUR 92 billion at end-June 2021. Gross life insurance inflow amounted to EUR 2.2 billion in Q2 21, with the unit-linked share accounting for 38%.

Private Banking’s assets under management totalled EUR 75 billion at end-June 2021. Net inflow remained buoyant at EUR 1.3 billion in Q2 21.

The number of protection policies was up +4%, while property and casualty premiums were 3% higher than in Q2 20.

Boursorama:

The bank consolidated its position as the leading online bank in France, with more than 2.9 million clients at end-June 2021, thanks to the onboarding of 168,000 new clients in Q2 21 (+40% vs. Q2 20).

This quarter, the bank distinguished itself by being classified No. 1 in France in the “World’s best Banks 2021” rankings established by Forbes & Statista. Boursorama was also classified No. 1 bank in France in terms of customer recognition by Isoskèle in 2021. The bank was classified No. 1 in the rankings for best banking application in France (Selectra 2021). Finally, Boursorama was classified No. 1 in the 2021 rankings of cheapest banks according to the Capital-Panorabanques study.

Outstanding loans rose +24% vs. Q2 20 to EUR 12 billion. Home loan and consumer loan production reached a record level of EUR 1.4 billion. Home loan outstandings were up +26% vs. Q2 20.

Outstanding savings including deposits and financial savings were 30% higher than in Q2 20 atEUR 33 billion, while outstanding deposits were up +29% vs. Q2 20. The number of stock market orders increased by +7% vs. H1 20 and x3.3 vs. H1 19.

Net banking income excluding PEL/CEL

Q2 21: revenues (excluding PEL/CEL) totalled EUR 1,889 million, up +8% vs. Q2 20. Net interest income (excluding PEL/CEL) was up +1.6% vs. Q2 20, still impacted by the increase in deposits in a low interest rate environment. Commissions were 9.7% higher than in Q2 20 owing particularly to an increase in financial commissions against the backdrop of an exit from the lockdown.

H1 21: revenues (excluding PEL/CEL) totalled EUR 3,748 million, up +2.6% vs. H1 20. Net interest income (excluding PEL/CEL) was down -2.1% vs. H1 20. Commissions were 5.1% higher than inH1 20, benefiting from the strong increase in financial commissions.

Operating expenses

Q2 21: operating expenses totalled EUR 1,297 million (+5.2% vs. Q2 20). The cost to income ratio (after linearisation of the IFRIC 21 charge and restated for the PEL/CEL provision) stood at 70.7%, an improvement of 1.2 points vs. Q2 20.

H1 21: operating expenses totalled EUR 2,750 million (+2.5% vs. H1 20). The cost to income ratio (after linearisation of the IFRIC 21 charge and restated for the PEL/CEL provision) stood at 71.3%, an improvement of 0.3 points vs. H1 20.

Cost of risk

Q2 21: the commercial cost of risk amounted to EUR 6 million or 1 basis point, substantially lower than in Q2 20 (85 basis points), impacted by the crisis, and Q1 21 (23 basis points).

H1 21: the commercial cost of risk amounted to EUR 129 million or 12 basis points, a substantial decline compared to H1 20 (68 basis points).

Contribution to Group net income

Q2 21: the contribution to Group net income was EUR 438 million vs. EUR 60 million in Q2 20. RONE (after linearisation of the IFRIC 21 charge and restated for the PEL/CEL provision) stood at 14.2% in Q2 21 (1.4% in Q2 20) and 15.1% excluding Boursorama.

H1 21: the contribution to Group net income was EUR 641 million (x2.3 vs. H1 20). RONE (after linearisation of the IFRIC 21 charge and restated for the PEL/CEL provision) stood at 12.3% in H1 21 (6.0% in H1 20).

  1. INTERNATIONAL RETAIL BANKING & FINANCIAL SERVICES
In EURm Q2 21 Q2 20 Change H1 21 H1 20 Change
Net banking income 1,989 1,750 +13.7% +17.0%* 3,851 3,714 +3.7% +8.2%*
Operating expenses (1,011) (979) +3.3% +6.0%* (2,100) (2,125) -1.2% +2.8%*
Gross operating income 978 771 +26.8% +30.9%* 1,751 1,589 +10.2% +15.4%*
Net cost of risk (121) (418) -71.1% -69.6%* (263) (647) -59.4% -57.1%*
Operating income 857 353 x 2.4 x 2.5* 1,488 942 +58.0% +64.6%*
Reported Group net income 522 226 x 2.3 x 2.4* 914 591 +54.7% +63.4%*
Underlying Group net income (1) 508 213 x 2.4 x 2.4* 942 619 +52.1% +60.3%*
RONE 20.6% 8.4%     18.2% 11.0%    
Underlying RONE(1) 20.0% 7.9%     18.7% 11.6%    

(1)   Adjusted for the linearisation of IFRIC 21 International Retail Banking’s outstanding loans totalled EUR 89.3 billion. They rose +3.8%* vs. end-June 2020 when adjusted for changes in Group structure and at constant exchange rates, illustrating the healthy commercial momentum in all the regions. Outstanding deposits were 8.6%* higher than in June 2020, at EUR 87.5 billion.

For the Europe scope, outstanding loans were up +4.3%* vs. June 2020 at EUR 57.1 billion, driven by all the regions: +3.5%* in Western Europe, +4.0%* in the Czech Republic and +8.6%* in Romania. Outstanding deposits were substantially higher (+10.8%*), with a healthy momentum in the Czech Republic (+10.7%*) and Romania (+11.0%*).

In Russia, outstanding loans rose +2.7%* at constant exchange rates, with a robust performance in car and home loans, up +11%* and +19%* respectively vs. Q2 20. Outstanding deposits increased by +1.6%*.

In Africa, Mediterranean Basin and French Overseas Territories, activity was buoyant, both in the individual and corporate customers segments. Outstanding loans were 2.8%* higher than in June 2020. Outstanding deposits, up +7.4%*, also enjoyed a healthy momentum.

In the Insurance business, the life insurance savings business posted a very good performance, with outstandings increasing +7%* vs. June 2020. The share of unit-linked products in outstandings was 35% at end-June 2021, an increase of 5 points vs. June 2020. Protection insurance rose +8%* vs. Q2 20, with an increase in property/casualty premiums (+11%*) and personal protection premiums (+7%*).

Financial Services to Corporates enjoyed a healthy momentum. Operational Vehicle Leasing and Fleet Management’s vehicle fleet was stable vs. end-June 2020, with 1.8 million vehicles. Equipment Finance’s new leasing business was up +24% vs. Q2 20, while outstanding loans were stable* vs. end-June 2020, at EUR 14.3 billion (excluding factoring).

Net banking income

Net banking income amounted to EUR 1,989 million in Q2 21, up +17.0%* vs. Q2 20. Revenues amounted to EUR 3,851 million in H1 21, up +8.2%* vs. H1 20.

International Retail Banking’s net banking income totalled EUR 1,231 million, an increase of +7.9%* vs. Q2 20. Net banking income totalled EUR 2,418 million in H1 21, an increase of +1.9%* vs. H1 20.

Thanks to a healthy commercial momentum and an increase in commissions (+15%* vs. Q2 20), revenues in Europe were 3.3%* higher, despite net interest income pressure in an environment of lower interest rates than in Q2 20 (the effects of recent rate increases in the Czech Republic and Russia not yet being fully reflected in the revenues). Specialised consumer finance benefited from a strong momentum (+5.0%* vs. Q2 20). Revenues were also higher (+4.0%*) for the SG Russia10(1) scope, benefiting from robust activity in the individual customers segment (car and home loans). The Africa, Mediterranean Basin and French Overseas Territories scope posted revenues up +16.5%* vs. Q2 20, benefiting from a healthy commercial momentum in all regions and a rebound in the Mediterranean Basin. When restated for the impact of repayment moratoriums in Tunisia, revenue growth for the Africa, Mediterranean Basin and French Overseas Territories scope was 8.2%*.

The Insurance business posted net banking income of EUR 238 million, up +12.8%* vs. Q2 20. Net banking income was 8.0%* higher in H1 21 than in H1 20 at EUR 474 million.

Financial Services to Corporates’ net banking income was higher (+49.1%*) and amounted to EUR 520 million, driven in particular by ALD which posted an increase in leasing margins (+17%*11(2) vs. Q2 20) and the used car sale result (EUR 740 per unit in H1). Financial Services to Corporates’ net banking income was EUR 959 million in H1 21, up +28.5%*.

Operating expenses

Operating expenses totalled EUR 1,011 million, an increase of +6.0%* on a reported basis and +6.1%* on an underlying basis vs. Q2 20, in conjunction with the recovery in activity. As a result, the quarter generated a significant positive jaws effect. The cost to income ratio stood at 50.8% in Q2 21. H1 reflected the good cost discipline. At EUR 2,100 million, costs were 2.8%* higher than in H1 20.

In International Retail Banking, operating expenses were up +4.0%* vs. Q2 20 and up +1.4%* vs.H1 20.

In the Insurance business, operating expenses were in line with the commercial expansion ambitions and rose +6.5%* vs. Q2 20 and +4.2%* vs. H1 20.

In Financial Services to Corporates, operating expenses increased by +7.7%* vs. Q2 20 and increased by +5.1%* vs. H1 20.

Cost of risk

Q2 21: the cost of risk amounted to 37 basis points vs. 125 basis points in Q2 20. H1 21: the cost of risk amounted to 40 basis points vs. 96 basis points in H1 20.

Contribution to Group net income

The contribution to Group net income totalled EUR 522 million (x2.4* vs. Q2 20), and EUR 914 million in H1 21 (+63.4%* vs. H1 20).

Underlying RONE stood at 20.0% in Q2 21, vs. 7.9% in Q2 20, and 18.7% in H1 21 vs. 11.6% inH1 20.In International Retail Banking and in Insurance and Financial Services to Corporates, underlying RONE stood at 16.8% and 24.1% respectively in Q2 21.

  1. GLOBAL BANKING & INVESTOR SOLUTIONS
In EURm Q2 21 Q2 20 Change H1 21 H1 20 Change
Net banking income 2,340 1,880 +24.5% +27.7%* 4,849 3,507 +38.3% +42.8%*
Operating expenses (1,648) (1,570) +5.0% +6.9%* (3,699) (3,547) +4.3% +6.3%*
Gross operating income 692 310 x 2.2 x 2.4* 1,150 (40) n/s n/s
Net cost of risk (17) (419) -95.9% -95.8%* (26) (761) -96.6% -96.4%*
Operating income 675 (109) n/s n/s 1,124 (801) n/s n/s
Group net income 522 (67) n/s n/s 878 (604) n/s n/s
Underlying Group net income (1) 424 (120) n/s n/s 1,070 (433) n/s n/s
RONE 14.4% -1.9%     12.2% -8.6%    
Underlying RONE(1) 11.7% -3.3%     14.9% -6.2%    

(1)   Adjusted for the linearisation of IFRIC 21

Net banking income

In Q2 21, Global Banking & Investor Solutions posted a very good performance, with revenues ofEUR 2,340 million, substantially higher (+24.5%) than in Q2 20 (+27.7%* when adjusted for changes in Group structure and at constant exchange rates), with a strong momentum in the Equity businesses and in Financing & Advisory activities.

In H1 21, revenues rose +38.3% vs. H1 20 (EUR 4,849 million vs. EUR 3,507 million, +42.8%*), to a higher level than in H1 19.

In Global Markets & Investor Services, net banking income totalled EUR 1,388 million, +40.1% vs. a Q2 20 impacted by the health crisis (+44.3%*). It amounted to EUR 3,039 million in H1 21, +72.8% vs. H1 20 (+80.7%*).

Market conditions in the Equity businesses remain favourable, in an environment in a normalisation phase versus Q1 21. Accordingly, the business posted revenues of EUR 758 million in Q2 21, up +21% vs. the average level in 2019. This good performance is reflected in each of the regions. Commercial activity was very buoyant, especially in Investment Solutions products (and more particularly in listed products) and in the retail and large corporates segments. Structured products also performed well. Revenues were higher at EUR 1,609 million in H1 21.

Fixed Income & Currency activities posted a performance down -33% vs. a strong Q2 20, driven by very dynamic fixed income markets. At EUR 470 million, these Q2 revenues were 6% lower than the average level in 2019. Commercial activity was buoyant in Rate activities and average in Credit and Currency activities.Revenues were 16% lower in H1 21 than in H1 20 and 10% higher than the average level in 2019.

Securities Services’ revenues were also substantially higher (+7.4% vs. Q2 20), at EUR 160 million. They were up +12.0% in H1 21 vs. H1 20, at EUR 335 million.Securities Services’ assets under custody amounted to EUR 4,446 billion at end-June 2021, an increase of +2.4% vs. end-March 2021. Over the same period, assets under administration were up +3.4% at EUR 661 billion.

Financing & Advisory revenues totalled EUR 720 million in Q2 21, up +12.9%* vs. Q2 20 (+9.6% at current structure and exchange rates). They amounted to EUR 1,353 million in H1 21, significantly higher (+7.9%*) than in H1 20.

Asset and Natural Resources and Infrastructure Financing activities enjoyed a good quarter, benefiting from a healthy commercial momentum. The expansion of the Asset-Backed Products platform continued in Q2, with in particular an acceleration in Asia.

Investment Banking revenues were lower compared to the very high level in Q2 20 due to a record level of issues last year. While debt capital markets are returning to normal, equity capital markets and Leveraged Buyout markets are more active.

Global Transaction and Payment Services continued to deliver strong growth, up +25%* vs. Q2 20.

Asset and Wealth Management’s net banking income totalled EUR 232 million in Q2 21, stable* vs. Q2 20. It was down -0.9%* (-1.1% at current change and perimeter) in H1 21.

Private Banking posted a performance down -8.8%* vs. Q2 20 (at EUR 171 million) and up +8%* when Q2 20 is restated for an exceptional impact of EUR +29 million related to an insurance payout. The business benefited from strong commercial activity combined with net inflow amounting to EUR +2.1 billion. Assets under management were up +4.2% vs. end-March 2021, at EUR 126 billion.Private Banking posted net inflow of EUR 4.5 billion in H1 21, positive in all the regions. Net banking income amounted to EUR 344 million, down -5.1%* vs. H1 20.

Lyxor’s net banking income amounted to EUR 57 million, an increase of EUR 17 million vs. Q2 20. Lyxor’s assets under management were higher (+7.1%) than at end-March 2021, at EUR 165 billion. Net inflow was EUR +5.3 billion in Q2 21. Revenues were up +16.1%* in H1 21 vs. H1 20, with net inflow of EUR +11.5 billion.

Operating expensesQ2 21: operating expenses totalled EUR 1,648 million and EUR 1,777 million on an underlying basis. Higher underlying costs (+10.5%* vs. Q2 20) can be explained by the rise in variable costs related to the increase in revenues and the IFRIC 21 charge, generating a very positive jaws effect. There was an improvement in the cost to income ratio of 13 points (70.4% vs. 83.5% inQ2 20).H1 21: operating expenses were up +6.3%* on a reported basis and +5.7%* on an underlying basis.

Net cost of risk Q2 21: the commercial cost of risk amounted to 4 basis points (or EUR 17 million), well below the level of 95 basis points in Q2 20, which was adversely affected by the health crisis.H1 21: it was at a low level of 3 basis points.

Contribution to Group net income The contribution to Group net income was EUR 522 million on a reported basis and EUR 424 million on an underlying basis (after linearisation of IFRIC 21) in Q2 21 and EUR 878 million and EUR 1,070 million respectively in H1 21.

Global Banking & Investor Solutions posted a significant underlying RONE of 11.7% in Q2 21 and 14.9% in H1 21.

  1. CORPORATE CENTRE
In EURm Q2 21 Q2 20 H1 21 H1 20
Net banking income 26 (88) 53 (389)
Operating expenses (151) (78) (306) (183)
Underlying operating expenses (1) (78) (90) (149) (158)
Gross operating income (125) (166) (253) (572)
Underlying gross operating income (1) (52) (178) (96) (547)
Net cost of risk 2 - - -
Impairment losses on goodwill - (684) - (684)
Income tax 124 (598) 160 (450)
Reported Group net income (43) (1,483) (180) (1,856)
Underlying Group net income (1) 7 (129) (62) (510)

(1) Adjusted for the linearisation of IFRIC 21

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 and not re-invoiced to the businesses.

The Corporate Centre’s net banking income totalled EUR +26 million in Q2 21 vs. EUR -88 million in Q2 20 and EUR +53 million in H1 21 vs. EUR -389 million in H1 20.

Operating expenses totalled EUR 151 million in Q2 21 vs. EUR 78 million in Q2 20. They include the Group’s transformation costs for a total amount of EUR 85 million relating to the activities of French Retail Banking (EUR 38 million), Global Banking & Investor Solutions (EUR 26 million) and the Corporate Centre (EUR 21 million). Underlying costs came to EUR 78 million in Q2 21 compared to EUR 90 million in Q2 20.Operating expenses totalled EUR 306 million in H1 21 vs. EUR 183 million in H1 20. Transformation costs totalled EUR 135 million (EUR 60 million related to the activities of French Retail Banking, EUR 43 million related to Global Banking & Investor Solutions and EUR 32 million related to the Corporate Centre). Underlying costs came to EUR 149 million in H1 21 compared to EUR 158 million in H1 20.

Gross operating income totalled EUR -125 million in Q2 21 vs. EUR -166 million in Q2 20 and EUR -253 million in H1 21 vs. EUR -572 million in H1 20. Underlying gross operating income came to EUR 96 million in H1 21.

In Q2 20, the review of the financial trajectory of Global Markets & Investor Services led to the impairment of the associated goodwill for EUR -684 million and deferred tax assets for EUR -650 million.

The Corporate Centre’s contribution to Group net income was EUR -43 million in Q2 21 vs. EUR -1,483 million in Q2 20 and EUR -180 million in H1 21 vs. EUR -1,856 million in H1 20.

  1. CONCLUSION

The Group enjoyed an excellent H1 2021, combining a very good performance by all the businesses with a significant improvement in their cost to income ratio, while maintaining disciplined management of its costs, risk policy and capital position.

On the strength of H1, the Group has improved its full-year targets, now anticipating an increase in revenues in all its businesses and a cost of risk revised downwards in a still uncertain environment but with an improving economic outlook.

The Group also remains fully committed to the execution of its strategic initiatives, the integration of the CSR dimension in all its regions and businesses and the expansion of its growth drivers.

  1. 2021 FINANCIAL CALENDAR
2021 Financial communication calendar November 4th, 2021 Third quarter and nine-month 2021 resultsFebruary 10th, 2022 Fourth quarter and FY 2021 resultsMay 5th, 2022 First quarter 2022 resultsAugust 3rd, 2022 Second quarter and first half 2022 results November 4th, 2022 Third quarter and nine-month 2022 results
 
The Alternative Performance Measures, notably the notions of net banking income for the pillars, operating expenses, IFRIC 21 adjustment, (commercial) cost of risk in basis points, ROE, ROTE, RONE, net assets, tangible net assets, and the amounts serving as a basis for the different restatements carried out (in particular the transition from published data to underlying data) are presented in the methodology notes, as are the principles for the presentation of prudential ratios. This document contains forward-looking statements relating to the targets and strategies of the Societe Generale Group.These forward-looking statements are based on a series of assumptions, both general and specific, in particular the application of accounting principles and methods in accordance with IFRS (International Financial Reporting Standards) as adopted in the European Union, as well as the application of existing prudential regulations.These forward-looking statements have also been developed from scenarios based on a number of economic assumptions in the context of a given competitive and regulatory environment. The Group may be unable to:- anticipate all the risks, uncertainties or other factors likely to affect its business and to appraise their potential consequences; - evaluate the extent to which the occurrence of a risk or a combination of risks could cause actual results to differ materially from those provided in this document and the related presentation. Therefore, although Societe Generale believes that these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to it or its management or not currently considered material, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among others, overall trends in general economic activity and in Societe Generale’s markets in particular, regulatory and prudential changes, and the success of Societe Generale’s strategic, operating and financial initiatives. More detailed information on the potential risks that could affect Societe Generale’s financial results can be found in the 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.
  1. APPENDIX 1: FINANCIAL DATA

GROUP NET INCOME BY CORE BUSINESS

In EURm Q2 21 Q2 20 Change H1 21 H1 20 Change
French Retail Banking 438 60 x 7.3 641 279 x 2.3
International Retail Banking and Financial Services 522 226 x 2.3 914 591 54.7%
Global Banking and Investor Solutions 522 (67) n/s 878 (604) n/s
Core Businesses 1,482 219 x 6.8 2,433 266 x 9.1
Corporate Centre (43) (1,483) n/s (180) (1,856) n/s
Group 1,439 (1,264) n/s 2,253 (1,590) n/s

CONSOLIDATED BALANCE SHEET

  30.06.2021 31.12.2020
Cash, due from central banks 160,801 168,179
Financial assets at fair value through profit or loss 440,774 429,458
Hedging derivatives 15,306 20,667
Financial assets measured at fair value through other comprehensive income 49,068 52,060
Securities at amortised cost 18,922 15,635
Due from banks at amortised cost 61,733 53,380
Customer loans at amortised cost 464,622 448,761
Revaluation differences on portfolios hedged against interest rate risk 222 378
Investment of insurance activities 172,016 166,854
Tax assets 4,601 5,001
Other assets 69,473 67,341
Non-current assets held for sale 368 6
Investments accounted for using the equity method 96 100
Tangible and intangible assets 30,786 30,088
Goodwill 3,821 4,044
Total 1,492,609 1,461,952
  30.06.2021 31.12.2020
Central banks 5,515 1,489
Financial liabilities at fair value through profit or loss 376,762 390,247
Hedging derivatives 10,170 12,461
Debt securities issued 137,938 138,957
Due to banks 147,938 135,571
Customer deposits 478,774 456,059
Revaluation differences on portfolios hedged against interest rate risk 5,214 7,696
Tax liabilities 1,365 1,223
Other liabilities 87,805 84,937
Non-current liabilities held for sale 104 -
Liabilities related to insurance activities contracts 151,119 146,126
Provisions 4,595 4,775
Subordinated debts 16,673 15,432
Total liabilities 1,423,972 1,394,973
SHAREHOLDERS' EQUITY    
Shareholders' equity, Group share    
Issued common stocks and capital reserves 22,354 22,333
Other equity instruments 8,930 9,295
Retained earnings 30,962 32,076
Net income 2,253 (258)
Sub-total 64,499 63,446
Unrealised or deferred capital gains and losses (1,363) (1,762)
Sub-total equity, Group share 63,136 61,684
Non-controlling interests 5,501 5,295
Total equity 68,637 66,979
Total 1,492,609 1,461,952
  1. APPENDIX 2: METHODOLOGY

1 – The financial information presented in respect of Q2 and H1 2021 was examined by the Board of Directors on August 2nd, 2021 and has been prepared in accordance with IFRS as adopted in the European Union and applicable at that date. The limited review procedures carried out by the Statutory Auditors are in progress on the condensed interim consolidated financial statements as at June 30th, 2021.

2 Net banking incomeThe pillars’ net banking income is defined on page 41 of Societe Generale’s 2021 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 December 31st, 2020 (pages 466 et seq. of Societe Generale’s 2021 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 2021 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.

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:

Q2 21 (in EURm) Operating Expenses Net profit or losses fromother assets Impairment losses on goodwill Incometax Group net income Business
Reported (4,107) 5 0 (404) 1,439  
(+) IFRIC 21 linearisation (203)     49 (151)  
(+) Transformation charges* 85     (24) 61 Corporate Center(1)
Underlying (4,225) 5 0 (379) 1,349  
             
Q2 20 (in EURm) Operating Expenses Net profit or losses fromother assets Impairment losses on goodwill Incometax Group net income Business
Reported (3,860) 4 (684) (658) (1,264)  
(+) IFRIC 21 linearisation (124)     58 (62)  
(-) Goodwill impairment*     (684)   (684) Corporate center
(-) DTA impairment *       (650) (650) Corporate center
Underlying (3,984) 4 0 50 8  

(1)   Transformation and/or restructuring charges in Q2 21 related to RBDF (EUR 38m), GBIS (EUR 26m) and Corporate Center (EUR 21m)*exceptionals items

H1 21 (in EURm) Operating Expenses Net profit or losses fromother assets Impairment losses on goodwill Incometax Group net income Business
Reported (8,855) 11 0 (687) 2,253  
(+) IFRIC 21 linearisation 398     (92) 297  
(+) Transformation charges* 135     (38) 97 Corporate Center(2)
Underlying (8,322) 11 0 (817) 2,647  
             
H1 20 (in EURm) Operating Expenses Net profit or losses fromother assets Impairment losses on goodwill Incometax Group net income Business
Reported (8,538) 84 (684) (612) (1,590)  
(+) IFRIC 21 linearisation 353     (166) 179  
(-) Group refocusing plan   (77)   0 (77) Corporate center
(-) Goodwill impairment*     (684)   (684) Corporate center
(-) DTA impairment *       (650) (650) Corporate center
Underlying (8,185) 161 0 (128) 0  

(2)   Transformation and/or restructuring charges in H1 21 related to RBDF (EUR 60m), GBIS (EUR 43m) and Corporate Center (EUR 32m)*exceptionals items

6 - Cost of risk in basis points, coverage ratio for doubtful outstandings

The cost of risk or commercial cost of risk is defined on pages 43 and 635 of Societe Generale’s 2021 Universal Registration Document. This indicator makes it possible to assess the level of risk of each of the pillars as a percentage of balance sheet loan commitments, including operating leases.

  (In EUR m) Q2 21 Q2 20 H1 21 H1 20
French Retail Banking Net Cost Of Risk 6 442 129 691
Gross loans Outstanding 217,710 207,517 217,658 204,328
Cost of Risk in bp 1 85 12 68
International Retail Banking and Financial Services Net Cost Of Risk 121 418 263 647
Gross loans Outstanding 131,344 133,475 130,770 134,941
Cost of Risk in bp 37 125 40 96
Global Banking and Investor Solutions Net Cost Of Risk 17 419 26 761
Gross loans Outstanding 162,235 175,673 158,443 166,868
Cost of Risk in bp 4 95 3 91
Corporate Centre Net Cost Of Risk (2) 0 0 0
Gross loans Outstanding 13,561 10,292 13,262 10,001
Cost of Risk in bp (4) 3 0 3
Societe Generale Group Net Cost Of Risk 142 1,279 418 2,099
Gross loans Outstanding 524,849 526,958 520,133 516,138
Cost of Risk in bp 11 97 16 81

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 2021 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 2021 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 Q2 21 Q2 20 H1 21 H1 20
Shareholders' equity Group share 63,136 60,659 63,136 60,659
Deeply subordinated notes (8,905) (8,159) (8,905) (8,159)
Undated subordinated notes (62) (283) (62) (283)
Interest net of tax payable to holders of deeply subordinated notes & undated subordinated notes, interest paid to holders of deeply subordinated notes & undated subordinated notes, issue premium amortisations (1) 20 (1) 20
OCI excluding conversion reserves (699) (834) (699) (834)
Dividend provision (1,021)   (1,021)  
ROE equity end-of-period 52,448 51,403 52,448 51,403
Average ROE equity 52,161 52,388 51,849 52,830
Average Goodwill (3,927) (4,270) (3,928) (4,416)
Average Intangible Assets (2,542) (2,417) (2,524) (2,393)
Average ROTE equity 45,692 45,701 45,397 46,021
Group net Income (a) 1,439 (1,264) 2,253 (1,590)
Underlying Group net income (b) 1,349 8 2,647  
Interest on deeply subordinated notes and undated subordinated notes (c) (165) (161) (309) (321)
Cancellation of goodwill impairment (d)   684   684
Ajusted Group net Income (e) = (a)+ (c)+(d) 1,274 (741) 1,944 (1,227)
Ajusted Underlying Group net Income (f)=(b)+(c) 1,184 (153) 2,338 (321)
         
Average ROTE equity (g) 45,692 45,701 45,397 46,021
ROTE [quarter: (4*e/g), 6M: (2*e/g)] 11.2% -6.5% 8.6% -5.3%
         
Underlying ROTE 45,602 46,973 45,791 47,611
Underlying ROTE [quarter: (4*f/h), 6M: (2*f/h)] 10.4% -1.3% 10.2% -1.3%

RONE calculation: Average capital allocated to Core Businesses (in EURm)

In EURm Q2 21 Q2 20 Change H1 21 H1 20 Change
French Retail Banking 11,237 11,460 -1.9% 11,289 11,321 -0.3%
International Retail Banking and Financial Services 10,158 10,820 -6.1% 10,058 10,708 -6.1%
Global Banking and Investor Solutions 14,462 14,453 0.1% 14,366 14,024 2.4%
Core Businesses 35,857 36,733 -2.4% 35,713 36,053 -0.9%
Corporate Center 16,304 15,655 4.1% 16,136 16,777 -3.8%
Group 52,161 52,388 -0.4% 51,849 52,830 -1.9%

8 - Net assets and tangible net assets

Net assets and tangible net assets are defined in the methodology, page 46 of the Group’s 2021 Universal Registration Document. The items used to calculate them are presented below:

End of period H1 21 Q1 21 2020
Shareholders' equity Group share 63,136 62,920 61,684
Deeply subordinated notes (8,905) (9,179) (8,830)
Undated subordinated notes (62) (273) (264)
Interest, net of tax, payable to holders of deeply subordinated notes & undated subordinated notes, interest paid to holders of deeply subordinated notes & undated subordinated notes, issue premium amortisations (1) (51) 19
Bookvalue of own shares in trading portfolio (46) (25) 301
Net Asset Value 54,122 53,391 52,910
Goodwill (3,927) (3,927) (3,928)
Intangible Assets (2,556) (2,527) (2,484)
Net Tangible Asset Value 47,639 46,937 46,498
       
Number of shares used to calculate NAPS** 850,429 850,427 848,859
Net Asset Value per Share 63.6 62.8 62.3
Net Tangible Asset Value per Share 56.0 55.2 54.8

** The number of shares considered is the number of ordinary shares outstanding as at June 30th, 2021, 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 2021 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 2021 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 21 Q1 21 2020
Existing shares 853,371 853,371 853,371
Deductions      
Shares allocated to cover stock option plans and free shares awarded to staff 3,466 3,728 2,987
Other own shares and treasury shares      
Number of shares used to calculate EPS** 849,905 849,643 850,385
Group net Income 2,253 814 (258)
Interest on deeply subordinated notes and undated subordinated notes (309) (144) (611)
Adjusted Group net income 1,944 670 (869)
EPS (in EUR) 2.29 0.79 (1.02)
Underlying EPS* (in EUR) 2.40 0.83 0.97

(*) Calculated on the basis of underlying Group net income excluding linearisation of IFRIC 21. Or EUR 2.75 taking into account the linearisation of IFRIC 21 in H1 21. (**) The number of shares considered is the number of ordinary shares outstanding as at June 30th, 2021, 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 follows 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 Generale

Societe Generale is one of the leading European financial services groups. Based on a diversified and integrated banking model, the Group combines financial strength and proven expertise in innovation with a strategy of sustainable growth, aiming to be the trusted partner for its clients, committed to the positive transformations of society and the economy.

Active in the real economy for over 150 years, with a solid position in Europe and connected to the rest of the world, Societe Generale has over 133,000 members of staff in 61 countries and supports on a daily basis 30 million individual clients, businesses and institutional investors around the world by offering a wide range of advisory services and tailored financial solutions. The Group is built on three complementary core businesses:

▪     French Retail Banking which encompasses the Societe Generale, Crédit du Nord and Boursorama brands. Each offers a full range of financial services with omnichannel products at the cutting edge of digital innovation; ▪       International Retail Banking, Insurance and Financial Services to Corporates, with networks in Africa, Russia, Central and Eastern Europe and specialised businesses that are leaders in their markets;   ▪     Global Banking and Investor Solutions, which offers recognised expertise, key international locations and    integrated solutions.

Societe Generale is included in the principal socially responsible investment indices: DJSI (World and Europe), FTSE4Good (Global and Europe), Bloomberg Gender-Equality Index, Refinitiv Diversity and Inclusion Index, Euronext Vigeo (Europe and Eurozone), STOXX Global ESG Leaders indexes and MSCI Low Carbon Leaders Index (World and Europe).

In the event of any doubt regarding the authenticity of this press release, go to the bottom of the newsroom of societegenerale.com. Press releases from Societe Generale are certified by blockchain technology. A link will enable you to verify the integrity of this information.

For more information, you can follow us on twitter @societegenerale or visit our websit www.societegenerale.com.

(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 13.2%(3) It should be noted that, pursuant to Regulation (EU) 2019/876 (CRR2), share buyback is subject to the ECB approval(4) After deducting interest on deeply subordinated notes and undated subordinated notesThe footnote * in this document corresponds to data adjusted for changes in Group Structure and at constant exchange rates

(2) NPL ratio calculated according to the EBA methodology published on July 16th, 2019(3) Ratio between the amount of provisions on doubtful outstandings and the amount of these same outstandings(1) Adjusted for exceptional items and linearisation of IFRIC 21(2) Underlying EPS calculated based on an underlying Group net income excluding IFRIC 21 linearisation. EUR 2.75 including IFRIC 21 linearisation in H1 21 and EUR -0.38 in H1 20.(2) Including BMTN (negotiable medium-term notes)

(1) SG Russia encompasses the entities Rosbank, Rusfinance Bank, Societe Generale Insurance, ALD Automotive and their consolidated subsidiaries(2) Based on ALD local data

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