Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — Q3 2008 Earnings Presentation
43 slides from Societe Generale S.a. Class A's earnings presentation, Nov 3, 2008
Slide 1: Third Quarter and 9 Month 2008 Results - Supplementary Data
03 / 11 / 2008 THIRD QUARTER AND 9 MONTH 2008 RESULTS SUPPLEMENTARY DATA
Slide 2: Contents
Contents Societe Generale Group Financial Services 9 month and quarterly income statement by core business 3 Quarterly and 9 month results 24 Comparative income statement: Q3 08 vs. restated 5 Specialised Financing: breakdown of NBI by business 25 Q3 07 and 9M 08 vs. restated 9M 07 and geographi
Slide 3: 9 month income statement by core business
SUPPLEMENT - SOCIETE GENERALE GROUP 9 month income statement by core business Global Investment Corporate & In EUR m French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group 9M 08 9M 07 9M 08 9M 07 9M 08 9M 07 9M 08 9M 07 9M 08 9
Slide 4: Quarterly income statement by core business
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly income statement by core business Global Investment Corporate & In EUR m French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group (a) (a) Q3 08 Q3 07 Q3 08 Q3 07 Q3 08 Q3 07 Q3 08 Q3
Slide 5: Comparative income statement: Q3 08 vs. restated Q3 07 and 9M
SUPPLEMENT - SOCIETE GENERALE GROUP Comparative income statement: Q3 08 vs. restated(a) Q3 07and 9M 08 vs. restated(a) 9M 07 In EUR m Group Q3 07 9M-07 Q3 08 Chg 9M-08 Chg Restated Restated Net banking income 5,375 5,108 (267) 18,043 16,371 (1,672) Operating expenses (3,374) (3,697) (323) (10,889) (
Slide 6: Quarterly and 9M 07 income statement reported vs. restated: Group
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly and 9M 07 income statement of reported historic vs. restated figures(a): Group In EUR m Group Q1 07 Q2 07 Q3 07 Q4 07 9M 07 Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated Net banking income 6,046 6,046 6,622 6,6
Slide 7: Reported vs. restated figures: Corporate and Investment Banking
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly and 9M 07 income statement of reported historic vs. restated figures(a): Corporate and Investment Banking In EUR m Corporate and Investment Banking Q1 07 Q2 07 Q3 07 Q4 07 9M 07 Reported Restated Reported Restated Reported Restated Reported Restated Repo
Slide 8: Reported vs. restated figures: Corporate Centre
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly and 9M 07 income statement reported historic vs. restated figures(a): Corporate Centre In EUR m Corporate Centre Q1 07 Q2 07 Q3 07 Q4 07 9M 07 Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated Net banking income 36
Slide 9: Impact of non-recurring items on pre-tax income
SUPPLEMENT - SOCIETE GENERALE GROUP Impact of non-recurring items on pre-tax income EUR m Q1 07 Q2 07 Q3 07 Q1 08 Q2 08 Q3 08 9M 07 9M 08 French Networks - 36 - - - - 36 - Euronext capital gain - 36 - - - - 36 - International Retail Banking - - - - - 75 - 75 Asiban capital gain - - - - - 75 - 75 Glo
Slide 10: Group C/I ratio: 72.4% (vs. 62.8% in Q3 07)
SUPPLEMENT - SOCIETE GENERALE GROUP Group C/I ratio: 72.4% (vs. 62.8% in Q3 07) Changes Operating expenses in (EUR bn) Q3 08 / Q3 07 Corporate and Investment Banking C/I ratio 3.7 Group affected by non-recurring items +8.0%* 3.4 3.2 0.8 Corporate and Improvement of International Retail 0.7 Inves
Slide 11: 9 month Basel I / Basel II comparison
SUPPLEMENT APPLICATION OF THE BASEL II REFORM 9 month Basel I / Basel II comparison Global In EUR m Investment Corporate & French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group Basel II Basel I Basel II Basel I Basel II Basel
Slide 12: Quarterly Basel I / Basel II comparison
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Quarterly Basel I / Basel II comparison Global In EUR m Investment Corporate & French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group Basel II Basel I Basel II Basel I Basel II Base
Slide 13: Change in risk-weighted assets (Basel I & II)
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Change in risk-weighted assets (Basel I & II) Average credit risk equivalent in EUR bn 370.4 356.2 337.1 334.8 340.3 320.7 325.4 311.3 Corporate and 308.8 96.3 293.0 93.3 Investment 275.1 281.4 91.1 95.0 92.3 123.8 122.9 Banking 93.1 24.4 111.5 85.9 25.1
Slide 14: Consequences of the implementation of Basel II by core business
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Consequences of the implementation of Basel II by core business Risk-weighted assets at September 30th 2008 (in EUR bn) Basel II Change Basel I Basel II / Credit Market Operational Total Basel I French Networks 126.4 75.2 0.1 2.1 77.4 -38.8% Internationa
Slide 15: Calculation of ROE Capital and the Tier One ratio
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Calculation of ROE Capital and the Tier One ratio Data at end-Sept. 2008 in EUR bn OCI 34.4 Accounting adjustment +0.8 Deeply Prudential adjustment Sub. Notes Additional prudential adjustment Undated Sub. +4.5 -4.5 Notes Basel II -0.9 29.8 Deeply 29.9 de
Slide 16: Results – French Networks
SUPPLEMENT - FRENCH NETWORKS Results – French Networks In EUR m Q3 07 Q3 08 Change Q3/Q3 9M 08 Change 9M/9M Net banking income 1,746 1,781 +2.0% +2.4%(b) 5,274 +0.1% +1.8%(b) Operating expenses (1,108) (1,128) +1.8% (3,435) +1.7% Gross operating income 638 653 +2.4% +3.5%(b) 1,839 -2.8% +2.0%(b) Net
Slide 17: Change in net banking income
SUPPLEMENT - FRENCH NETWORKS Change in net banking income 1,746 1,787 1,739 1,754 1,781 NBI in EUR m NBI: +2.4%(b) vs. Q3 07 Financial 214 193 179 NBI: 2.0% vs. Q3 07 211 203 commissions Commissions: +3.5% /Q3 07 583 Service 599 604 609 643 Financial commissions: -15.2% vs. Q3 07 commissions Ser
Slide 18: Customer deposits and savings
SUPPLEMENT - FRENCH NETWORKS Customer deposits and savings Change Q3 08/Q3 07 Average outstandings 208.0 207.6 205.6 203.0 204.4 +0.2% in EUR bn LIFE INSURANCE* 65.1 66.3 66.2 65.4 66.3 +1.8% Savings managed SHARE ACCOUNTS -6.3% 50.6 47.0 44.1 42.2 -16.5% MUTUAL FUNDS 45.1 2.0 -8.0% OTHERS 2.2 2.2 2
Slide 19: Customer loans
SUPPLEMENT - FRENCH NETWORKS Customer loans Average outstandings Change in EUR bn Q3 08/Q3 07 136.8 141.9 146.6 149.8 +13.1% 132.4 INDIVIDUALS o/w: 67.2 +10.1% 65.7 - Housing 64.3 62.5 61.1 - Consumer credit 9.5 9.5 -0.5% 9.5 9.5 & overdrafts 9.5 BUSINESS 67.8 69.4 +18.2% 58.7 61.4 64.7 CUSTOMERS* B
Slide 20: Interest margins of the French Networks
SUPPLEMENT - FRENCH NETWORKS Interest margins* of the French Networks The interest margin is an aggregate indicator dependent on three elements: Net interest income on loans in % Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Structure effect, measured by the ratio Interest margin 2.82 2.72
Slide 21: Results - International Retail Banking
SUPPLEMENT - INTERNATIONAL RETAIL BANKING Results - International Retail Banking In EUR m Q3 07 Q3 08 Change Q3/T3 9M 08 Change 9M/9M Net banking income 871 1,301 +49.4% +26.5%* 3,629 +20.9%* Operating expenses (494) (668) +35.2% +11.6%* (2,011) +11.5%* Gross operating income 377 633 +67.9% +46.2%*
Slide 22: Indicators of subsidiaries
SUPPLEMENT - INTERNATIONAL RETAIL BANKING Indicators of subsidiaries C Ownership r Loan to deposit CWA* Loans* Deposits* Net position* percentage ratio Czech Republic 60.35% 13,806 14,586 22,359 65.2% 870.9 (KB) Russia 57.57% 11,885 9,739 7,934 122.8% 648.0 (Rosbank) Romania (BRD) 58.32% 11,573 8,28
Slide 23: Breakdown of NBI by geographic zone
SUPPLEMENT - INTERNATIONAL RETAIL BANKING Breakdown of NBI by geographic zone In EUR m In EUR m 1,301 Sub-Saharan Africa & French 10% overseas territories 13% Mediterranean Basin 871 19% Russia 695 14% 576 16% 17% 18% 4% 18% Central & Eastern 20% 3% 58% Europe 2% 65% 63% 60% Q3 05 Q3 06 Q3 07 Q3 08
Slide 24: Results - Financial Services
SUPPLEMENT – FINANCIAL SERVICES Results - Financial Services In EUR m Q3 07 Q3 08 Change Q3/Q3 9M 08 Change 9M/9M Net banking income 707 804 +13.7% +7.7%* 2,403 +10.2%* o.w. specialised financing 589 685 +16.3% +9.1%* 2,027 +11.3%* Operating expenses (375) (454) +21.1% +12.8%* (1,337) +12.9%* Gross
Slide 25: Specialised Financing: breakdown of NBI by business and geographic zone
SUPPLEMENT – FINANCIAL SERVICES Specialised Financing: breakdown of NBI by business and geographic zone Q3 08 NBI by business Q3 08 NBI by geographic zone Business Finance & Services Operational Vehicle Leasing Equipment & Fleet Management Finance Germany IT Asset Leasing and Italy 19% 14% & Managem
Slide 26: Specialised Financing: business indicators
SUPPLEMENT – FINANCIAL SERVICES Specialised Financing: business indicators Consumer credit loans** (EUR bn) SG Equipment Finance loans*** (in EUR bn) +20.5%* +10.8%* 21.0 16.8 Others 16.7 18.5 3.9 1.8 2.1 3.7 Others Russia 3.1 1.2 France 3.1 3.3 Germany 2.1 2.3 2.4 2.7 Italy 5.0 5.5 3.0 3.1 Scandina
Slide 27: Results – Global Investment Management and Services
SUPPLEMENT – GLOBAL INVESTMENT MANAGEMENT & SERVICES Results – Global Investment Management and Services In EUR m Q3 07 Q3 08 Change Q3/Q3 9M 08 Chg 9M/9M Net banking income 854 746 -12.6% -7.8%* 2,213 - 25.0%* Operating expenses (638) (640) +0.3% +10.1%* (1,957) +7.0%* Gross operating income 216 10
Slide 28: 9 month income statement
SUPPLEMENT – GLOBAL INVESTMENT MANAGEMENT & SERVICES 9 month income statement In EUR m Asset Management Private Banking SG SS & Online Total GIMS Savings 9M 08 9M 07 Change 9M 08 9M 07 Change 9M 08 9M 07 Change 9M 08 9M 07 Change Net banking income 427 928 -57%* 615 590 +5%* 1,171 1,371 -11%* 2,213
Slide 29: Quarterly income statement
SUPPLEMENT – GLOBAL INVESTMENT MANAGEMENT & SERVICES Quarterly income statement SG SS & Online In EUR m Asset Management Private Banking Savings Total GIMS Q3 08 Q3 07 Change Q3 08 Q3 07 Change Q3 08 Q3 07 Change Q3 08 Q3 07 Change Net banking income 181 243 -25%* 198 201 -1%* 367 410 +4%* 746 854 -
Slide 30: Assets under management by product type
SUPPLEMENT - ASSET MANAGEMENT Assets under management by product type EUR 298bn at September 30th 2008 374.6 357.7 319.2 309.2 298.0 (1) Alternative 47.4 45.0 (2) Diversified 55.9 44.2 54.2 40.9 41.4 48.0 45.6 Equities 84.5 43.7 78.4 62.0 61.0 54.4 CDO 47.4 45.1 31.3 29.6 28.1 Bonds 81.3 81.4 80.3 7
Slide 31: Results – Corporate and Investment Banking
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Results – Corporate and Investment Banking (a) In EUR m Q2 07 Q3 08 Change Q3/Q3 9M 08 Change 9M/9M Net banking income 1,159 647 -44.2% - 43.2%* 2,873 - 42.6%* o.w. Financing & Advisory 375 518 +38.1% +42.3%* 1,410 +24.9%* o.w. Fixed Income, Currencies & n
Slide 32: Changes in risk-weighted assets (Basel I)
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Changes in risk-weighted assets* (Basel I) Change over In EUR bn Change over 12 months like-for-like 12 months 96.3 95.4 97.1 93.7 91.3 89.8 90.8 +3.6% +5.1% 81.9 82.0 +6.2% Counterparty risk -10.5% Market risk Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar
Slide 33: Changes in NBI restated for non-recurring items
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Changes in NBI restated for non-recurring items Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 NBI at Corporate and Investment Banking 1,947 2,077 1,159 -661 1,563 663 647 restated for non-recurring items 1,953 2,017 1,428 1,472 1,532 1,886 1,726 Total non-recu
Slide 34: Active management of risk profile
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Active management of risk profile Distribution of SG CIB’s Corporate Corporate counterparties outstandings at 30/09/08 • Pro-active management of concentrations (individual, by rating (% gross risky assets*) sectoral and geographic) 50 • 73% of counterpa
Slide 35: Operating risk: improving and tightening of control procedures
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Operating risk: improving and tightening of control procedures Implementation of the remediation plan according to the timetable, methods and expected scope (all market activities worldwide) 1st priority: monitoring of transaction nominals and transmissi
Slide 36: League Table
SUPPLEMENT - CORPORATE & INVESTMENT BANKING League Table Euro Capital Markets Structured Finance Debt Capital Markets (1) 2008 2007 2006 Export Finance 2008 2007 2006 Euro Bond House of the Year X Best Export Finance Arranger (1) #1 #1 #1 Global MLA of ECA-backed Trade Finance Loans (2) #2 #2 #1 All
Slide 37: League Table: new awards and rankings Q3 2008
SUPPLEMENT - CORPORATE & INVESTMENT BANKING League Table Highlights on New Awards & Rankings Q3 2008 Derivatives #1 Global Provider in Equity Derivatives Equity 2008 2007 2006 #2 IR Caps/Floors - Euro #3 Exotic IR products- Binary/digital #5 Inflation swap - Euro Equity Derivatives House of the Year
Slide 38: Corporate Centre
SUPPLEMENT - SOCIETE GENERALE GROUP Corporate Centre* GOI Recording of provisions for long-term write-down on equity portfolio In M EUR Q3 08 Q3 07 At September 30th 2008 Gross operating income (201) 22 IFRS book value of industrial equity portfolio Net income from other 12 (1) excluding unreali
Slide 39: Change in trading VaR
SUPPLEMENT - RISK MANAGEMENT Change in trading VaR* Quarterly average of 1-day, 99% Trading VaR (in EUR m) 47.9 46.0 40.8 Trading VaR 36.4 36.6 35.6 33.7 31.7 25.1 15.4 40.9 48.8 21.8 16.4 Credit 20.3 37.2 33.7 17.6 13.6 31.9 16.2 15.2 16.3 10.8 11.8 12.4 Fixed Income 12.6 14.6 12.7 15.3 18.3 13.2 1
Slide 40: Provisioning of doubtful loans
SUPPLEMENT - RISK MANAGEMENT Provisioning of doubtful loans 31/12/2007 31/03/2008 30/06/2008 30/09/2008 Customer loans in EUR bn 326 339 351 368 Doubtful loans in EUR bn 11.4 12.5 13.0 13.8 Doubtful loans 3.5% 3.7% 3.7% 3.8% / Customer loans Provisions in EUR bn* 6.8 7.5 7.7 8.0 Overall coverage rat
Slide 41: Determination of number of shares used to calculate EPS and book value per share
TECHNICAL SUPPLEMENT Determination of number of shares used to calculate EPS and book value per share Average number of shares (thousands) 2006 2007 9M 08 Existing shares 443,065 463,477 565,796 Deductions Shares allocated to cover stock options awarded to staff and 11,939 8,675 9,904 restricted sha
Slide 42: Economic and financial environment
TECHNICAL SUPPLEMENT Economic and financial environment Q2 07 Q1 08 Q2 08 Interest rates (quarterly average) % 10-year French government bond 4.44 4.40 4.48 3-month euribor 4.49 4.86 4.98 Indices (end of period) CAC 40 5,716 4,435 4,032 EuroStoxx 50 4,382 3,353 3,038 Nasdaq 2,701 2,293 2,082 Currenc
Slide 43: 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