Societe Generale: Second quarter and half-year 2021 results
RESULTS AT JUNE
30TH
2021 |
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|
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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.”
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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).
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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”.
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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).
-
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.
-
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.
-
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.
-
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.
-
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. |
-
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 |
-
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
- Societe Generale_ PR Q2-21
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