Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — Q3 2008 Earnings Presentation
28 slides from Societe Generale S.a. Class A's earnings presentation, Nov 3, 2008
Slide 1: Third Quarter and 9 Month 2008 Results
03 / 11 / 2008 THIRD QUARTER AND 9 MONTH 2008 RESULTS
Slide 2: Disclaimer
Disclaimer The following presentation contains a number of forward- forward-looking statements relating to Societe Generale’s targets and strategy. These forecasts are based on a series of assumptions, both general and specific. As a result, there is a risk that these projections will will not be me
Slide 3: Group results; Results of core businesses; Conclusion
Group results Results of core businesses French Networks International Retail Banking Financial Services Global Investment Management & Services Corporate & Investment Banking Conclusion THIRD QUARTER AND 9 MONTH 2008 RESULTS 03 / 11 / 2008 3
Slide 4: Resilience in a deteriorated environment
SOCIETE GENERALE GROUP Resilience in a deteriorated environment Continued volume growth despite NBI: +2.4% vs. Q3 07 (excluding PEL/CEL) French Networks worsened economic conditions Deposits: +8.7% vs. Q3 07 Satisfactory financial performance Loans: +13.1% vs. Q3 07 International Retail Dynamic grow
Slide 5: Robust universal banking model
SOCIETE GENERALE GROUP Robust universal banking model Distribution of Group NBI(1) Q3 07: EUR 5.7bn Q3 08: EUR 6.3bn Corporate and Investment Corporate and Investment Banking Banking 27% 25% GIMS ROE: 35%(2) ROE: 34%(2) 16% GIMS 1.4 1.7 0.9 12% 0.8 Financial Financial Services Services 0.7 13% 13% 1
Slide 6: Q3 08: Net income of EUR 0.2bn (EUR 1.1bn excluding non-recurring items)
SOCIETE GENERALE GROUP Q3 08: Net income of EUR 0.2bn (EUR 1.1bn** excluding non-recurring items) 3rd quarter 9 months (a) (a) In EUR m Q3 07 Q3 08 Change Q3/Q3 9M 07 9M 08 Change 9M//9M Net banking income 5,375 5,108 -5.0% -8.2%* 18,043 16,371 -9.3% -12.3%* Operating expenses (3,374) (3,697) +9.6%
Slide 7: Moderate increase in cost of risk
SOCIETE GENERALE GROUP Moderate increase in cost of risk Allocation to provisions (in EUR m) French Networks Limited increase in cost of risk 105 93 116 33 bp French 25 bp 68 87 Networks International Retail Banking Cost of risk excluding Rosbank: 57 bp 127 71 bp International 88 78 Retail Banking 4
Slide 8: 9M 08 income EUR 1.9bn (3.3bn excluding non-recurring items)
SOCIETE GENERALE GROUP 9M 08 income EUR 1.9bn (3.3bn** excluding non-recurring items) Net income (in EUR m) Retail banking: Satisfactory performance of all the retail banking activities Global Investment and Non-recurring items Management Services: Global Investment and 175 Results affected by decli
Slide 9: Financial support for the economy: Eurogroup concerted action plan
SOCIETE GENERALE GROUP Financial support for the economy: application to France of the Eurogroup countries’ concerted action plan (October 2008) Measures to strengthen capital Equity or quasi-equity security issues by financial institutions subscribed by the Government up to a maximum of EUR 40bn -
Slide 10: Sound financial structure: proforma Basel II Tier One Ratio of 9.0%
SOCIETE GENERALE GROUP Sound financial structure: proforma Basel II Tier One Ratio of 9.0% Improvement in Tier One ratio of 35 bp Change in Basel II Tier One Ratio* vs. June 30th 2008 10.9% 11.7% 12.2% Solvency ratio(1) Provisions for dividends at Sept. 30th 2008 8.2% 8.5% 9.0% Tier One ratio ≈25 bp
Slide 11: Tier One Ratio appropriate to a scenario of intense credit stress in 2009
SOCIETE GENERALE GROUP Tier One Ratio appropriate to a scenario of intense credit stress in 2009 (All the data appearing in this slide correspond to stress-tests and are provided for information purposes. They should not be viewed as forecasts) Stress assumptions applied 2009 Gross Operating Income
Slide 12: Group results; Results of core businesses; Conclusion
Group results Results of core businesses French Networks International Retail Banking Financial Services Global Investment Management and Services Corporate & Investment Banking Conclusion THIRD QUARTER AND 9 MONTH 2008 RESULTS 03 / 11 / 2008 12
Slide 13: Revenues of core businesses
SOCIETE GENERALE GROUP Revenues of core businesses +14.9% ( 1) Chg Q3/Q3 Chg Q3/Q2 In absolute terms In EUR m 3,790 3,886 +0.6%(1) Retail Banking 3,535 3,630 +14.7%(1) 3,144 3,337 3,324 and Financial Services 1,739 1,754 1,781 +2.4%(1) +1.5%(1) 1,789 1,746 1,787 French Networks 1,736 International R
Slide 14: French Networks: Robust performance in a challenging environment
FRENCH NETWORKS Robust performance in a challenging environment 6.30 6.28 No. of personal 6.25 current accounts Satisfactory development of activity 6.20 6.23 (in millions) Individual customers: good resilience Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 • Personal current accounts: gradual return to a sustained
Slide 15: French Networks: Well-balanced loan portfolio
FRENCH NETWORKS Well-balanced loan portfolio Good risk profile of individual customer Average loan outstandings outstandings (in EUR bn) Housing loans: 45% of total outstandings 146.1 vs. 35% in 2001 Financial • Structurally low-risk activity 131.2 Institutions • Approval criteria based on solvency
Slide 16: International Retail Banking: Sustained growth in activity and results
INTERNATIONAL RETAIL BANKING Sustained growth in activity and results Continued franchise development Geographic distribution of Cooke- 12 million individual customers weighted assets and risks** • + 710,000 at constant structure vs. end-Sept. 2007 (at September 30th 2008) Network expansion: • More
Slide 17: Romania: development strategy appropriate to the new economic environment
INTERNATIONAL RETAIL BANKING Romania: development strategy appropriate to the new economic environment 3.8 RON / EUR parity Good medium-term macroeconomic prospects 3.6 Soft landing of the Romanian economy and lowering of inflation 3.4 (GDP* +4.8% in 2009, inflation* +6.6%) Resilient fundamentals de
Slide 18: Russia: sound fundamentals
INTERNATIONAL RETAIL BANKING Russia: sound fundamentals Inflation and growth of GDP (%) GDP Inflation Robustness of Russian financial system… 12 25 Rapid reaction of Russian authorities to the liquidity crisis: 10 20 support to financial sector of more than USD 200bn 8 (or 11.7% of GDP and 36% of fo
Slide 19: Financial Services: Sustained, diversified revenue growth
FINANCIAL SERVICES Sustained, diversified revenue growth Outstanding loans Diversified development of SG Equipment Finance (End of period data - in EUR bn ) Activity still growing: EUR 18.5bn of outstandings** at end-Sept. 2008, +10.8%* vs. end-Sept. 2007 Consumer credit 21.0 Continued growth of SG
Slide 20: Asset management: implementation of the recovery plan
GLOBAL INVESTMENT MANAGEMENT AND SERVICES Asset management: implementation of the recovery plan Assets under management at SGAM (in EUR bn) bn) Outflows of EUR 7.9bn in Q3 08 -7.9 -13.8 +10.5 Assets under management at end-Sept. 2008: EUR 298bn (vs. EUR 374.6bn at end-Sept. 2007) NBI: -24.8%* vs. Q3
Slide 21: Private Banking: satisfactory commercial activity
GLOBAL INVESTMENT MANAGEMENT AND SERVICES Private Banking: satisfactory commercial activity Net inflows: EUR 1.8bn (vs. EUR 2.4bn in Q3 07) Assets under management (in EUR bn) bn) 7.3% of assets on an annualised basis +1.8 -2.8 +1.0 +0.8 Assets under management at end-Sept. 2008: Net Market FX Acqui
Slide 22: Securities Services, Brokers and Online savings: continued development
GLOBAL INVESTMENT MANAGEMENT AND SERVICES Securities Services, Brokers and Online savings: continued development Assets under custody (in EUR bn) bn) Securities services A leading global player • Access to a single clearing and settlement point operating through all the 2,731 2,733 2,744 European pl
Slide 23: Corporate and Investment Banking: Good revenue levels
CORPORATE AND INVESTMENT BANKING Good revenue levels Impact of non- non-recurring items on total NBI (in EUR m) 1,159 -661 1,563 663 647 NBI restated for non-recurring items(1): 31 NBI excluding non-recurring EUR 1,726m 1,886 1,726 items 1,428 1,472 1,532 +20.9% vs. Q3 07 and -8.5% vs. Q2 08 Non-res
Slide 24: Good commercial performance and prudent management of market risks
CORPORATE AND INVESTMENT BANKING Good commercial performance and prudent management of market risks Change Distribution of NBI1) by division (in EUR m) Q3 / Q3 Q3 / Q2 Equities: solid quarter Equities Good commercial performance 681 771 660 -3.1% -14.4% 598 534 112 284 Resilient trading activities(1
Slide 25: Significant reduction of exposures at risk since Q1 08
CORPORATE AND INVESTMENT BANKING Significant reduction of exposures at risk since Q1 08 31/03/2008 30/06/2008 30/09/2008 ABS* Net exposure: -30% vs. end-March 2008* 11,5 (including ABS portfolio 9,7 bought from SGAM) • Disposals: EUR 0.6bn in Q3 08 8,0 Net exposure: -36% vs. end-March 2008 Unhedged
Slide 26: Group results; Results of core businesses; Conclusion
Group results Results of core businesses French Networks International Retail Banking Financial Services Global Investment Management and Services Corporate & Investment Banking Conclusion THIRD QUARTER AND 9 MONTH 2008 RESULTS 03 / 11 / 2008 26
Slide 27: Conclusion
SOCIETE GENERALE GROUP Conclusion Solid • Good activity level in a highly deteriorated environment Business Model • ROE: 14%**(1) in Q3 08 (1.7% including non-recurring items) Reduction of • Continued disposals & pro-active management of hedges exposures at risk • Conservative provisions for exposur
Slide 28: Investor Relations
03 / 11 / 2008 Investor Relations Patrick SOMMELET, Louise DE L’ESTANG, Stéphane MARTY, Nathalie SAND Tel.: +33 (0) 1 42 14 47 72 E-mail: [email protected] - Internet: www.investisseur.socgen.com