Societe Generale: Third quarter 2021 earnings
RESULTS AT SEPTEMBER 30TH
2021 |
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Press releaseParis, November
4th 2021,
Q3 21:
EXCELLENT QUARTER,
UNDERLYING GROUP NET INCOME OF EUR
1.4
BILLION(1)
(EUR 1.6 BILLION ON A REPORTED
BASIS)
Revenues
up
+14.9%
vs. Q3 20
(+15.0%*)
driven by growth in all the businesses, in particular a very strong
momentum in Financial Services and Financing & Advisory, a very
good performance by Global Markets, and continued growth in Retail
Banking
Underlying gross operating
income:
EUR 2.4
billion(1),
up 32.8%(1) vs. Q3 20, with a positive jaws effect
Still low cost of
risk: 15 basis
points in Q3 21, with no significant provision write-back
Profitability
(ROTE):
10.9%(1)
on an underlying basis and 12.7%
on a reported basis in Q3 21
9M 21:
UNDERLYING GROUP NET INCOME OF EUR
4.0
BILLION(1)
(X5 VS.9M
20)
Underlying gross
operating
income:
EUR 6.6
billion(1),
+61% vs. 9M 20, driven by revenue growth combined with continued
good cost discipline
Cost of
risk: 16 basis
points
Profitability
(ROTE):
10.4%(1)
on an underlying basis and 10.0%
on a reported basis in 9M 21
SOLID CAPITAL
POSITION
Solid
CET 1
ratio:
13.4%2(2)
at end-September 2021, after provision for distribution and
including the impact of the share buyback programme, or around 440
basis points above the regulatory requirement
Organic capital
generation: 61 basis
points in the first 9 months of 2021
Attractive shareholder
return
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Launch of the share
buyback programme, for an amount of
around EUR 470 million, scheduled for November 4th, with the
programme expected to be finalised by end-2021
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Provision for
distribution per share of
EUR 2.03 in 9M 21
(financing both dividend and share buyback) consistent with a
payout ratio of 50% of underlying Group net income3(3)
SUCCESSFUL
EXECUTION OF OUR
STRATEGIC
PROJECTS Detailed
presentation
of the new French Retail Banking
operation (a full merger project
progressing as scheduled)Very satisfactory
implementation of the strategy in Global Banking & Investor
SolutionsDevelopment of
our
differentiating
assets (Boursorama, ALD, KB)
Frédéric
Oudéa, the Group’s Chief Executive
Officer, commented: “The Societe Generale group enjoyed an
excellent quarter, with strong commercial and financial
performances in all the businesses and improvement of the
cost-income ratio. The group also continued to benefit from the
quality of its loan portfolio, with a low cost of risk combined
with a continued very prudent provisioning policy. Thanks to the
unfailing commitment of the teams, the different strategic projects
announced, in particular the creation of a new French Retail Bank
resulting from the merger of the Societe Generale and Crédit du
Nord networks, are all progressing in line with the objectives set.
The group is already starting to prepare its new strategic plan
2022-2025, drawing on its strong, innovative and fast-growing
businesses and its recognised leadership in terms of corporate
social responsibility.”
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GROUP CONSOLIDATED RESULTS
In EURm |
Q3 21 |
Q3 20 |
Change |
9M 21 |
9M 20 |
Change |
Net banking
income |
6,672 |
5,809 |
+14.9% |
+15.0%* |
19,178 |
16,275 |
+17.8% |
+20.0%* |
Operating expenses |
(4,170) |
(3,825) |
+9.0% |
+9.0%* |
(13,025) |
(12,363) |
+5.4% |
+6.6%* |
Underlying operating expenses(1) |
(4,272) |
(4,002) |
+6.8% |
+6.7%* |
(12,594) |
(12,186) |
+3.3% |
+4.6%* |
Gross operating income |
2,502 |
1,984 |
+26.1% |
+26.7%* |
6,153 |
3,912 |
+57.3% |
+63.4%* |
Underlying gross operating income(1) |
2,400 |
1,807 |
+32.8% |
+33.5%* |
6,584 |
4,089 |
+61.0% |
+67.0%* |
Net cost of
risk |
(196) |
(518) |
-62.2% |
-62.4%* |
(614) |
(2,617) |
-76.5% |
-76.0%* |
Operating income |
2,306 |
1,466 |
+57.3% |
+58.7%* |
5,539 |
1,295 |
x 4.3 |
x 4.6* |
Underlying operating income(1) |
2,204 |
1,289 |
+70.9% |
+72.7%* |
5,970 |
1,472 |
x 4.1 |
x 4.3* |
Net profits or losses from other assets |
175 |
(2) |
n/s |
n/s |
186 |
82 |
x 2.3 |
x 2.3* |
Impairment losses on
goodwill |
- |
- |
n/s |
n/s |
- |
(684) |
n/s |
n/s |
Income tax |
(699) |
(467) |
+49.7% |
+50.9%* |
(1,386) |
(1,079) |
+28.4% |
+31.4%* |
Net income |
1,781 |
992 |
+79.5% |
+80.9%* |
4,343 |
(386) |
n/s |
n/s |
O.w. non-controlling interests |
(180) |
(130) |
+38.5% |
+38.7%* |
(489) |
(342) |
+43.0% |
+43.5%* |
Reported Group net
income |
1,601 |
862 |
+85.7% |
+87.3%* |
3,854 |
(728) |
n/s |
n/s |
Underlying Group net
income(1) |
1,391 |
742 |
+87.4% |
+89.3%* |
4,038 |
803 |
x 5.0 |
x 5.5* |
ROE |
11.1% |
5.7% |
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|
8.7% |
-3.0% |
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|
ROTE |
12.7% |
6.5% |
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|
10.0% |
-1.4% |
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Underlying
ROTE(1) |
10.9% |
5.5% |
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|
10.4% |
1.0% |
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(1) Adjusted for exceptional
items and linearisation of IFRIC 21
Societe Generale’s Board of Directors, which met
on November 3rd, 2021 under the chairmanship of Lorenzo Bini
Smaghi, examined the Societe Generale Group’s results for Q3 and 9M
2021.
The various restatements enabling the transition
from underlying data to published data are presented in the
methodology notes (section 10.5).
Net banking
incomeNet banking
income increased by
+14.9%
(+15.0%*) vs. Q3
20, driven by a very strong momentum in all the businesses
and the beginning of the recognition of the second TLTRO allowance
for around EUR 0.1 billion.
French Retail Banking continued the progress
initiated for several quarters. As a result, net banking income
(excluding PEL/CEL provision) increased by +5.7% vs. Q3 20, driven
by the recovery in net interest income and commissions.
International Retail Banking & Financial
Services enjoyed strong revenue growth (+12.8%* vs.Q3 20), driven
by the excellent momentum in Financial Services to Corporates
(+39.9%* vs. Q3 20) and Insurance (+10.2%* vs. Q3 20).
International Retail Banking also continued to progress (+4.0%* vs.
Q3 20).
Global Banking & Investor Solutions also
turned in an excellent performance, with revenues up +16.1% vs. Q3
20. Financing & Advisory enjoyed very strong growth (+30.7% vs.
Q3 20) while Global Markets activity remained robust (+8.4% vs. Q3
20).
In 9M 21, the
Group posted strong growth of +17.8% (+20.0%*) vs. 9M 20, with a
positive contribution from all the businesses, and returned to a
higher revenue level than in 9M 19 (EUR 18.5 billion).
Operating
expenses In Q3 21, operating expenses totalled
EUR 4,170 million on a reported basis and EUR 4,272 million on an
underlying basis (restated for the linearisation of IFRIC 21 and
transformation costs amounting to EUR 97 million), representing an
increase of +6.8% vs. Q3 20.
Driven by a
positive jaws effect, underlying
gross operating income rose +32.8% to EUR 2,400 million and the
underlying cost to income ratio improved by nearly 5 points (64%
vs. 69% in Q3 20).
In 9M 21,
costs amounted to EUR 13,025 million on a reported basis and EUR
12,594 million on an underlying basis, up +3.3% vs. 9M 20. This
limited growth can be explained by the rise in variable costs
linked to the growth in revenues (EUR +595 million) and the
increase in the IFRIC 21 charge (EUR +67 million). The other
operating expenses declined by EUR 207 million, excluding structure
effect.
Cost of
risk
In Q3 21, the commercial cost of risk
stood at a low level of 15 basis points, or EUR 196
million, lower than in Q3 20 (40 basis points) and slightly higher
than in Q2 21 (11 basis points). It breaks down into a provision on
non-performing loans of EUR 266 million and a provision write-back
on performing loans of EUR 70 million.
The Group’s provisions on performing loans
currently amount to EUR 3,486 million.
As part of the support provided to its customers
during the crisis, the Group granted State Guaranteed Loans. At
September 30th 2021, the residual amount of State Guaranteed Loans
represented around EUR 17 billion. In France, the total amount of
State Guaranteed Loans (“PGE”) amounts to aroundEUR 15 billion and
net exposure is less than EUR 2 billion.
The gross doubtful outstandings ratio amounted
to 3.1%4(1) at September 30th 2021, stable vs. end-June 2021. The
Group’s gross coverage ratio for doubtful outstandings also
remained stable at 52%5(2) at September 30th 2021 vs. June 30th
2021.
The cost of risk is not expected to exceed 20
basis points in 2021.
Group
net income
In EURm |
Q3 21 |
Q3 20 |
9M 21 |
9M 20 |
Reported Group net income |
1,601 |
862 |
3,854 |
(728) |
Underlying Group net income6(1) |
1,391 |
742 |
4,038 |
803 |
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In % |
Q3 21 |
Q3 20 |
9M 21 |
9M 20 |
ROTE |
12.7% |
6.5% |
10.0% |
-1.4% |
Underlying ROTE(1) |
10.9% |
5.5% |
10.4% |
1.0% |
Earnings per share amounts to EUR 4.02 in 9M 21
(EUR -1.38 in 9M 20). Underlying earnings per share amounts to EUR
4.06 over the same period (EUR 0.42 in 9M 20).
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THE GROUP’S FINANCIAL STRUCTURE
Group shareholders’ equity totalled EUR 63.6
billion at September 30th, 2021 (EUR 61.7 billion at December 31st,
2020). Net asset value per share was EUR 65.5 and tangible net
asset value per share was EUR 57.8.
The consolidated balance sheet totalled EUR
1,526 billion at September 30th, 2021 (EUR 1,462 billion at
December 31st, 2020). The net amount of customer loan outstandings
at September 30th, 2021, including lease financing, was EUR 468
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 487 billion, vs. EUR 451 billion
at December 31st, 2020 (excluding assets and securities sold under
repurchase agreements).
At October 20th, 2021, the parent company had
issued EUR 31.5 billion of medium/long-term debt, having an average
maturity of 5.4 years and an average spread of 38 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 32.9
billion of medium/long-term debt. As a result, the parent company
had completed its 2021 annual financing programme on both vanilla
debt and structured issuances.
The LCR (Liquidity Coverage Ratio) was well
above regulatory requirements at 130% at end-September 2021, vs.
149% at end-December 2020. At the same time, the NSFR (Net Stable
Funding Ratio) was at a level of 105% at end-September 2021, above
the regulatory requirement of 100%.
The Group’s risk-weighted
assets (RWA), including IFRS9 phasing, amounted to EUR
363.5 billion at September 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 300.0 billion, up 4.4% vs. December 31st, 2020.
At September 30th, 2021, the Group’s
Common Equity Tier 1 ratio stood at 13.4%, or
around 440 basis points above the regulatory requirement. The CET1
ratio at September 30th, 2021 includes an effect of +19 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
15.6% at end-September 2021 (16% at end-December 2020) and the
total capital ratio amounted to 18.6% (19.2% at end-December
2020).
The leverage ratio stood at
4.5% at September 30th, 2021 (4.8% at end-December 2020).
With a level of 29.9% of RWA and 8.6% of
leverage exposure at end-September 2021, the Group’s TLAC ratio is
above the FSB’s requirements for 2021 and 2022. At September 30th,
2021, the Group was also above its 2022 MREL requirements of 25.2%
of RWA and 5.91% of leverage 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 |
Q3 21 |
Q3 20 |
Change |
9M 21 |
9M 20 |
Change |
Net banking income |
1,976 |
1,836 |
+7.6% |
5,729 |
5,470 |
+4.7% |
Net banking income excl. PEL/CEL |
1,963 |
1,857 |
+5.7% |
5,711 |
5,511 |
+3.6% |
Operating expenses |
(1,351) |
(1,292) |
+4.6% |
(4,101) |
(3,975) |
+3.2% |
Gross operating income |
625 |
544 |
+14.9% |
1,628 |
1,495 |
+8.9% |
Gross operating income excl. PEL/CEL |
612 |
565 |
+8.3% |
1,610 |
1,536 |
+4.8% |
Net cost of risk |
5 |
(130) |
-103.8% |
(124) |
(821) |
-84.9% |
Operating income |
630 |
414 |
+52.2% |
1,504 |
674 |
x 2.2 |
Net profits or losses from other assets |
(2) |
3 |
-166.7% |
2 |
139 |
-98.6% |
Reported Group net
income |
451 |
283 |
+59.4% |
1,092 |
562 |
+94.3% |
Underlying Group net income (1) |
414 |
274 |
+50.9% |
1,107 |
613 |
+80.6% |
RONE |
16.4% |
9.5% |
|
13.0% |
6.5% |
|
Underlying
RONE(1) |
15.0% |
9.2% |
|
13.2% |
7.1% |
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(1) Adjusted for the
linearisation of IFRIC 21 and PEL/CEL provision
Societe Generale and
Crédit du Nord networks:
Average loan outstandings were 2% lower than in
Q3 20 at EUR 207 billion. They were 9% higher than in Q3 19.
Average outstanding loans to individuals were up +1%, bolstered by
the growth in home loan production (+58% vs. Q3 20). The production
of medium/long-term loans to corporate and professional customers
climbed +48% excluding State Guaranteed Loans vs. Q3 20.
Average outstanding balance sheet deposits7(2)
increased by +7% vs. Q3 20 to EUR 240 billion, still driven by
sight deposits, whose rate of growth nevertheless decelerated.
As a result, the average loan/deposit ratio
stood at 87% in Q3 21 vs. 95% in Q3 20.
Insurance assets under management totalled EUR
91 billion at end-September 2021. Gross life insurance inflow
amounted to EUR 1.9 billion in Q3 21, with the unit-linked share
accounting for 36%.
Private Banking’s assets under management
totalled EUR 76 billion at end-September 2021. Net inflow remained
buoyant at EUR 1.1 billion in Q3 21.
Property/casualty insurance premiums were up +3%
vs. Q3 20, as were personal protection insurance premiums (+3% vs.
Q3 20).
Boursorama:
The bank consolidated its position as the
leading online bank in France, with more than 3.1 million clients
at end-September 2021, thanks to the onboarding of 163,000 new
clients in Q3 21 (+26% vs. Q3 20). Boursorama has exceeded 3
million clients ahead of its onboarding plan.
This quarter, Boursorama distinguished itself by
obtaining 2022 award in the rankings for best online bank awarded
by Moneyvox. Boursorama was also classified No. 1 in the rankings
for best bank for students in France 2021 awarded by Selectra. The
bank also received an award for its retirement savings plan
(“MATLA”) from the business magazines Challenges and Le Particulier
(Victoire d’or). In addition, the bank received the 2022 Excellence
Label for personal loans awarded by Les Dossiers de l’Epargne
magazine.
Average outstanding loans rose +28% vs. Q3 20 to
EUR 13 billion. Home loan outstandings were up +30% vs. Q3 20.
Average outstanding savings including deposits
and financial savings were 30% higher than in Q3 20 at EUR 35
billion, while outstanding deposits were up +29% vs. Q3 20. Life
insurance outstandings were 14% higher than in Q3 20 while assets
under management in UCITS increased by +35% vs. Q3 20.
Net banking income
excluding
PEL/CEL
Q3 21: revenues (excluding
PEL/CEL) totalled EUR 1,963 million, up +5.7% vs. Q3 20. Net
interest income (excluding PEL/CEL) was up +5.9% vs. Q3 20.
Commissions were 5.2% higher than in Q3 20 owing particularly to an
increase in financial commissions against the backdrop of
recovery.
9M 21: revenues (excluding
PEL/CEL) totalled EUR 5,711 million, up +3.6% vs. 9M 20. Net
interest income (excluding PEL/CEL) was stable (+0.5%) vs. 9M 20.
Commissions were 5.1% higher than in 9M 20, benefiting from the
strong growth in financial commissions.
Operating
expenses
Q3 21: operating expenses
totalled EUR 1,351 million (+4.6% vs. Q3 20) and EUR 1,390 million
on an underlying basis. The cost to income ratio (after
linearisation of the IFRIC 21 charge and restated for the PEL/CEL
provision) stood at 68.8%, an improvement of 0.8 points vs. Q3
20.
9M 21: operating expenses
totalled EUR 4,101 million (+3.2% vs. 9M 20) and EUR 4,062 million
on an underlying basis. The cost to income ratio (after
linearisation of the IFRIC 21 charge and restated for the PEL/CEL
provision) stood at 71.8%, an improvement of 0.3 points vs. 9M
20.
Cost of
risk
Q3 21: the commercial cost of
risk represented a write-back of EUR 5 million or -1 basis point, a
significant improvement vs. Q3 20 (24 basis points), and virtually
stable vs. Q2 21 (1 basis point).
9M 21: the commercial cost of
risk amounted to EUR 124 million or 8 basis points, a substantial
decline compared to 9M 20 (52 basis points).
Contribution to Group net
income
Q3 21: the contribution to
Group net income was EUR 451 million vs. EUR 283 million in Q3 20
(+59% vs. Q3 20). RONE (after linearisation of the IFRIC 21 charge
and restated for the PEL/CEL provision) stood at 15.0% in Q3 21
(9.2% in Q3 20) and 16.1% excluding Boursorama.
9M 21: the contribution to
Group net income was EUR 1,092 million (+94% vs. 9M 20). RONE
(after linearisation of the IFRIC 21 charge and restated for the
PEL/CEL provision) stood at 13.2% in 9M 21 (7.1% in 9M 20) and
14.2% excluding Boursorama.
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INTERNATIONAL RETAIL BANKING & FINANCIAL
SERVICES
In EURm |
Q3 21 |
Q3 20 |
Change |
9M 21 |
9M 20 |
Change |
Net banking income |
2,107 |
1,891 |
+11.4% |
+12.8%* |
5,958 |
5,605 |
+6.3% |
+9.8%* |
Operating expenses |
(1,015) |
(999) |
+1.6% |
+2.3%* |
(3,115) |
(3,124) |
-0.3% |
+2.6%* |
Gross operating income |
1,092 |
892 |
+22.4% |
+24.7%* |
2,843 |
2,481 |
+14.6% |
+19.0%* |
Net cost of risk |
(145) |
(331) |
-56.2% |
-56.7%* |
(408) |
(978) |
-58.3% |
-57.0%* |
Operating income |
947 |
561 |
+68.8% |
+75.0%* |
2,435 |
1,503 |
+62.0% |
+69.0%* |
Net profits or losses from other assets |
4 |
(2) |
n/s |
n/s |
10 |
9 |
+11.1% |
+11.1%* |
Reported Group net
income |
584 |
337 |
+73.3% |
+80.0%* |
1,498 |
928 |
+61.4% |
+69.4%* |
Underlying Group net income (1) |
570 |
323 |
+76.5% |
+83.7%* |
1,512 |
942 |
+60.5% |
+68.3%* |
RONE |
22.6% |
12.9% |
|
|
19.7% |
11.6% |
|
|
Underlying
RONE(1) |
22.1% |
12.3% |
|
|
19.9% |
11.8% |
|
|
(1) Adjusted for the
linearisation of IFRIC 21International Retail
Banking’s loan and deposit production experienced an
increase in all geographical regions. Outstanding loans totalled
EUR 90.9 billion. They rose +4.3%* vs. end-September 2020.
Outstanding deposits were 9.6%* higher than in September 2020, at
EUR 90.1 billion.
For the Europe scope, outstanding loans were up
+5.1%* vs. September 2020 at EUR 58.1 billion, driven by all the
regions: +4.4%* in the Czech Republic, +7.5%* in Romania, and
+5.2%* in Western Europe. Outstanding deposits increased by
+12.1%*.
In Russia, outstanding loans enjoyed healthy
growth (+8.0%*), with a robust performance in home loans and in the
corporate customers segment with outstanding loans up +15%* and
+7%* respectively vs. Q3 20. Outstanding deposits also rose
(+3.6%*).
In Africa, Mediterranean Basin and French
Overseas Territories, outstanding loans rose +0.9%*. Outstanding
deposits, up +7.2%*, enjoyed a healthy momentum.
In the Insurance business, the
life insurance savings business saw outstandings increase +8%* at
end-September 2021 vs. September 2020 to EUR 132 billion. The share
of unit-linked products in outstandings was 35%, an increase of +5
points vs. September 2020.
Financial Services to
Corporates also enjoyed a healthy momentum. Operational
Vehicle Leasing and Fleet Management had 1.7 million contracts,
including 1.4 million financed vehicles, an increase of 0.6% vs.
end-September 2020. Equipment Finance’s new leasing business was up
+11%* vs. Q3 20 (+12%* in 9M 21), while outstanding loans were
stable vs. end-September 2020, at EUR 14.3 billion (excluding
factoring).
Net banking
income
Net banking income amounted to EUR 2,107 million
in Q3 21, up +12.8%* vs. Q3 20. Revenues amounted to EUR 5,958
million in 9M 21, up +9.8%* vs. 9M 20.
International Retail Banking’s
net banking income totalled EUR 1,271 million in Q3 21, an increase
of +4.0%* vs. Q3 20. Thanks to a healthy commercial momentum and an
increase in commissions (+17%* vs. Q3 20), revenues in Europe were
6.2%* higher than in Q3 20. Activity in the individual customers
segment remained particularly robust in specialised consumer
finance, with revenues up +14%* vs. Q3 20. For the SG Russia8(2)
scope, revenues were down -4.8%* (-1.4%* vs. 9M 20) despite a
healthy momentum in the corporate customers and home loan segments.
The Africa, Mediterranean Basin and French Overseas Territories
scope posted revenues up +4.4%* vs. Q3 20. International Retail
Banking’s net banking income totalled EUR 3,689 million in 9M 21,
up +2.6%* vs. 9M 20.
The Insurance business posted
net banking income up +10.2%* vs. Q3 20, at EUR 246 million inQ3
21. The gross premiums of the life insurance savings business were
59%* higher in Q3 21 than in Q3 20, with an attractive share of
unit-linked products (43%). Protection insurance saw an increase of
+7%* vs. Q3 20. Property/casualty premiums rose +10%* (including
+8%* in France and +17%* internationally), as did personal
protection insurance (+5%* vs. Q3 20). The Insurance business’ net
banking income was 8.8%* higher in 9M 21 than in 9M 20 at EUR 720
million.
Financial Services to
Corporates’ net banking income was substantially higher
(+39.9%*) than inQ3 20, at EUR 590 million. This performance was
driven primarily by the activities of ALD which posted an increase
in leasing margins (+12%9(1) vs. Q3 20) and the used car sale
result (EUR 1,126 per unit in 9M 21). Financial Services to
Corporates’ net banking income totalled EUR 1,549 million in 9M 21,
up +32.6%* vs. 9M 20.
Operating
expenses
Operating expenses totalled EUR 1,015 million,
an increase of +2.3%* on a reported basis and +2.3%* also on an
underlying basis vs. Q3 20, in conjunction with the growth in
revenue. As a result, the quarter generated a positive jaws effect.
The cost to income ratio stood at 48.2% in Q3 21. Operating
expenses amounted to EUR 3,115 million in 9M 21, an increase of
+2.6%* vs. 9M 20.
In International Retail
Banking, operating expenses were up +3.4%* vs. Q3 20.
Operating expenses were slightly higher (+2.0%*) in 9M 21 than in
9M 20.
In the Insurance business,
operating expenses were in line with the expansion ambitions and
rose +4.5%* vs. Q3 20 and +4.3%* vs. 9M 20.
In Financial Services to
Corporates, operating expenses increased by +2.0%* vs. Q3
20 and +4.1%* vs. 9M 20.
Cost of
risk
Q3
21: the commercial cost of risk amounted to 43
basis points (EUR 145 million), vs. 37 basis points in Q2 21 and
102 basis points in Q3 20.
9M 21: the
cost of risk amounted to 41 basis points (EUR 408 million). It was
98 basis points in 9M 20.
Contribution to Group net
income
The contribution to Group net income totalled
EUR 584 million in Q3 21 (+80.0%* vs. Q3 20) and EUR 1,498 million
in 9M 21 (+69.4%* vs. 9M 20). Underlying RONE stood at 22.1% in Q3
21 (vs. 12.3% in Q3 20) and 19.9% in 9M 21 (11.8% in 9M 20).
-
GLOBAL BANKING & INVESTOR SOLUTIONS
In EURm |
Q3 21 |
Q3 20 |
Change |
9M 21 |
9M 20 |
Change |
Net banking income |
2,361 |
2,034 |
+16.1% |
+15.4%* |
7,210 |
5,541 |
+30.1% |
+32.5%* |
Operating expenses |
(1,608) |
(1,478) |
+8.8% |
+8.2%* |
(5,307) |
(5,025) |
+5.6% |
+6.9%* |
Gross operating income |
753 |
556 |
+35.4% |
+34.5%* |
1,903 |
516 |
x 3.7 |
x 4* |
Net cost of risk |
(57) |
(57) |
- |
- |
(83) |
(818) |
-89.9% |
-89.5%* |
Operating income |
696 |
499 |
+39.5% |
+38.4%* |
1,820 |
(302) |
n/s |
n/s |
Group net income |
563 |
381 |
+47.8% |
+46.6%* |
1,441 |
(223) |
n/s |
n/s |
Underlying Group net income (1) |
467 |
295 |
+58.0% |
+56.4%* |
1,537 |
(137) |
n/s |
n/s |
RONE |
14.7% |
10.3% |
|
|
13.1% |
-2.1% |
|
|
Underlying
RONE(1) |
12.2% |
7.9% |
|
|
14.0% |
-1.3% |
|
|
(1) Adjusted for the
linearisation of IFRIC 21Net banking
income
In Q3 21, Global Banking & Investor
Solutions enjoyed a healthy momentum in its businesses,
with revenues of EUR 2,361 million, substantially higher (+16.1%)
than in Q3 20.In 9M 21, revenues rose +30.1% vs. 9M 20 (EUR 7,210
million vs. EUR 5,541 million), and were higher than 9M 19 revenues
(EUR 6,518 million).
In Global Markets &
Investor Services, net banking income
totalled EUR 1,349 million (+8.4% vs. Q3 20). It amounted to
EUR 4,388 million in 9M 21 (+46.1% vs. 9M 20).
The Equity market was active, driven by
commercial activity that remained buoyant throughout the quarter.
The business posted revenues of EUR 814 million, up +53% vs. Q3 20,
with a good performance in all activities. Volumes were
particularly high on investment solutions products (structured
products and listed products) and on prime services
products.Revenues totalled EUR 2,423 million in 9M 21 (vs. EUR 682
million in 9M 20).
Market conditions were less favourable for the
Fixed Income franchise model: substantial spread compression on
financing, coupled with reduced client demand in Fixed Income
markets. The environment was also unfavourable in Asia. However,
commercial activity remained resilient on the Corporates franchise.
Fixed Income & Currency activities posted revenues of EUR 380
million inQ3 21, down -33% vs. a good Q3 20. Revenues were 21%
lower in 9M 21 compared to the exceptionally high level in 9M
20.
Securities Services’ revenues saw a further
increase, with revenues up +6.9% vs. Q3 20, at EUR 155 million.
They were 10% higher in 9M 21 than in 9M 20, at EUR 490
million.Securities Services’ assets under custody amounted to EUR
4,475 billion, slightly higher than at end-June 2021. Over the same
period, assets under administration were up +2.9%, at EUR
680 billion.
Financing & Advisory
delivered the best historical performance, with revenues ofEUR 757
million in Q3 21, up +31% vs. Q3 20. They amounted to EUR 2,110
million in 9M 21, significantly higher (+13%) than in 9M 20 (+15%*
when adjusted for changes in Group structure and at constant
exchange rates).
Investment Banking enjoyed an excellent quarter,
driven by the strong momentum of advisory, M&A and Leveraged
Buyout activities. Revenues from Asset Finance, Natural Resources
and Infrastructure activities and the Asset-Backed Products
platform also showed a substantial increase.
Global Transaction and Payment Services
continued to enjoy strong growth, up +23% vs. Q3 20.
Asset and Wealth Management’s
net banking income totalled EUR 255 million in Q3 21 (+21% vs.Q3
20). It was 6% higher in 9M 21.
Private Banking posted a substantial increase in
its revenues (+20% vs. Q3 20) to EUR 184 million. The business
benefited from a favourable market environment and strong
commercial activity. Net inflow amounted to EUR +2.2 billion during
the quarter. Net banking income totalled EUR 528 million in 9M 21,
up +2.3% vs. 9M 20 (when restated for an exceptional impact of EUR
+29 million related to an insurance payout received in 2020, it is
up +8.4%). Net inflow was high (EUR +6.8 billion in the first nine
months) and positive in all geographical regions.Assets under
management totalled EUR 127 billion. They rose +11% vs.
end-September 2020.
Lyxor’s net banking income amounted to EUR 64
million, an increase of +21% vs. Q3 20. Assets under management
were up +28% vs. end-September 2020, at EUR 169 billion. Revenues
were 17% higher in 9M 21 than in 9M 20, with net inflow of EUR
+14 billion.
Operating
expenses Q3 21: operating
expenses totalled EUR 1,608 million and EUR 1,733 million on an
underlying basis. Higher underlying costs (+9.3% vs. Q3 20) can be
explained by the rise in variable costs related to the increase in
earnings and IFRIC 21 charges. Thanks to a very positive jaws
effect, there was an improvement in the cost to income ratio of 5
points (68% vs. 73% in Q3 20).9M 21: operating
expenses were up +5.6% on a reported basis and +5.4% on an
underlying basis.
Net cost of
riskQ3
21: the commercial cost of risk amounted to 14
basis points (or EUR 57 million), the same level as in Q3
20.9M 21: it was at a low level of 7 basis points,
well below 9M 20 (66 basis points) which was adversely affected by
the health crisis.
Contribution to Group net
income Q3 21: the contribution
to Group net income was EUR 563 million on a reported basis (+48%
vs. Q3 20) and EUR 467 million on an underlying basis (+58% vs. Q3
20). 9M 21: it was EUR 1,441 million and EUR 1,537
million respectively.
Global Banking & Investor Solutions posted a
significant underlying RONE of 12.2% in Q3 21 and 14.0% in 9M
21.
-
CORPORATE CENTRE
In EURm |
Q3 21 |
Q3 20 |
9M 21 |
9M 20 |
Net banking income |
228 |
48 |
281 |
(341) |
Operating expenses |
(196) |
(56) |
(502) |
(239) |
Underlying operating expenses (1) |
(110) |
(69) |
(259) |
(226) |
Gross operating income |
32 |
(8) |
(221) |
(580) |
Underlying gross operating income (1) |
118 |
(21) |
22 |
(567) |
Net cost of risk |
1 |
- |
1 |
- |
Impairment losses on goodwill |
- |
- |
- |
(684) |
Income tax |
(166) |
(84) |
(6) |
(534) |
Reported Group net
income |
3 |
(139) |
(177) |
(1,995) |
Underlying Group net income (1) |
(69) |
(137) |
(132) |
(586) |
(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
228
million in Q3 21 vs. EUR +48 million in Q3 20 and
EUR +281 million in 9M 21 vs. EUR -341 million in 9M 20.
Operating expenses
totalled EUR 196
million in Q3 21 vs. EUR 56 million in Q3 20. They
include the Group’s transformation costs for a total amount of EUR
97 million relating to the activities of French Retail Banking (EUR
46 million), Global Banking & Investor Solutions (EUR 23
million) and the Corporate Centre (EUR 28 million). Underlying
costs came to EUR 110 million in Q3 21 compared to EUR 69 million
in Q3 20.
Operating expenses totalled EUR 502 million in
9M 21 vs. EUR 239 million in 9M 20. They include the Group’s
transformation costs for a total amount of EUR 232 million relating
to the activities of French Retail Banking (EUR 106 million),
Global Banking & Investor Solutions (EUR 66 million) and the
Corporate Centre (EUR 60 million). Underlying costs came to EUR 259
million in 9M 21 compared to EUR 226 million in 9M 20.
Gross operating income
totalled EUR 32
million in Q3 21
vs. EUR -8 million in Q3 20 and EUR -221 million in 9M 21 vs. EUR
-580 million in 9M 20. Underlying gross operating income came to
EUR +22 million in 9M 21.
The Corporate Centre’s contribution to
Group net income was EUR 3
million in Q3 21 vs. EUR -139 million in Q3 20 and
EUR -177 million in 9M 21 vs. EUR -1,995 million in 9M 20. It
includes a capital gain on a property sale amounting to EUR 185
million, before tax is taken into account (EUR 132 million net of
tax).
-
CONCLUSION
The Group delivered an excellent performance in
the first 9 months of 2021. All the businesses experienced healthy
revenue growth, compared to the first 9 months of 2020, and a
improvement in their cost to income ratio due to disciplined cost
management.
At end-September 2021, the Group’s CET1 ratio
stood at 13.4%10(1) comfortably above its regulatory requirement,
after taking account of the distribution provision of EUR 2.0311(2)
(financing both dividend and share buyback) and the capital impact
of the announced share buyback programme of around EUR 470 million.
Authorised by the ECB on September 30th 2021, the Group intends to
implement the programme as from November 4th and by end-2021.
During this period, the group will suspend the liquidity
contract.
Furthermore, the Group continues to execute its
strategy with the achievement, this quarter, of a new key
milestone. On October 12th, the Group provided information on the
model and the detailed organisational structure of its new French
Retail Bank. The project to merge the networks is therefore
progressing according to the announced timetable. The other
businesses are successfully rolling out their strategy presented at
the dedicated Investor Days.
-
2021 FINANCIAL CALENDAR
2021 Financial communication calendar |
February 10th, 2022 Fourth
quarter and FY 2021 resultsMay 5th, 2022 First quarter
2022 resultsMay 17th, 2022 2022 General MeetingAugust 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 |
Q3 21 |
Q3 20 |
Change |
9M 21 |
9M 20 |
Change |
French Retail
Banking |
451 |
283 |
59.4% |
1,092 |
562 |
94.3% |
International Retail Banking and Financial
Services |
584 |
337 |
73.3% |
1,498 |
928 |
61.4% |
Global Banking and Investor Solutions |
563 |
381 |
47.8% |
1,441 |
(223) |
n/s |
Core Businesses |
1,598 |
1,001 |
59.6% |
4,031 |
1,267 |
x 3.2 |
Corporate Centre |
3 |
(139) |
n/s |
(177) |
(1,995) |
91.1% |
Group |
1,601 |
862 |
85.7% |
3,854 |
(728) |
n/s |
CONSOLIDATED BALANCE
SHEET
|
30.09.2021 |
31.12.2020 |
Cash, due from central banks |
176,531 |
168,179 |
Financial assets at fair value through profit or loss |
436,594 |
429,458 |
Hedging derivatives |
14,021 |
20,667 |
Financial assets measured at fair value through other comprehensive
income |
45,780 |
52,060 |
Securities at amortised cost |
18,687 |
15,635 |
Due from banks at amortised cost |
66,144 |
53,380 |
Customer loans at amortised cost |
475,923 |
448,761 |
Revaluation differences on portfolios hedged against interest rate
risk |
172 |
378 |
Investment of insurance activities |
174,240 |
166,854 |
Tax assets |
4,307 |
5,001 |
Other assets |
78,469 |
67,341 |
Non-current assets held for sale |
390 |
6 |
Investments accounted for using the equity method |
95 |
100 |
Tangible and intangible assets |
31,180 |
30,088 |
Goodwill |
3,821 |
4,044 |
Total |
1,526,354 |
1,461,952 |
|
30.09.2021 |
31.12.2020 |
Central banks |
6,684 |
1,489 |
Financial liabilities at fair value through profit or loss |
386,465 |
390,247 |
Hedging derivatives |
9,576 |
12,461 |
Debt securities issued |
133,194 |
138,957 |
Due to banks |
148,430 |
135,571 |
Customer deposits |
497,155 |
456,059 |
Revaluation differences on portfolios hedged against interest rate
risk |
4,250 |
7,696 |
Tax liabilities |
1,683 |
1,223 |
Other liabilities |
96,568 |
84,937 |
Non-current liabilities held for sale |
125 |
- |
Liabilities related to insurance activities contracts |
152,619 |
146,126 |
Provisions |
4,491 |
4,775 |
Subordinated debts |
15,826 |
15,432 |
Total liabilities |
1,457,066 |
1,394,973 |
SHAREHOLDERS' EQUITY |
|
|
Shareholders'
equity, Group
share |
|
|
Issued common stocks and capital reserves |
22,364 |
22,333 |
Other equity instruments |
7,534 |
9,295 |
Retained earnings |
30,866 |
32,076 |
Net income |
3,854 |
(258) |
Sub-total |
64,618 |
63,446 |
Unrealised or deferred capital gains and losses |
(980) |
(1,762) |
Sub-total equity, Group share |
63,638 |
61,684 |
Non-controlling interests |
5,650 |
5,295 |
Total equity |
69,288 |
66,979 |
Total |
1,526,354 |
1,461,952 |
-
APPENDIX 2: METHODOLOGY
1 –The financial
information presented in respect of Q3 and 9M
2021 was examined by the Board of
Directors on November
3rd,
2021 and has been prepared in accordance
with IFRS as adopted in the European Union and applicable at that
date. This information has not been audited.
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:
Q3 21 (in
EURm) |
Operating Expenses |
Net profit or losses fromother
assets |
Impairment losses on
goodwill |
Incometax |
Group net income |
Business |
Reported |
(4,170) |
175 |
0 |
(699) |
1,601 |
|
(+) IFRIC 21 linearisation |
(199) |
|
|
46 |
(149) |
|
(+) Transformation charges12(*) |
97 |
|
|
(27) |
70 |
Corporate Center13(1) |
(+) Capital gains on Haussmann office disposal(*) |
|
(185) |
|
53 |
(132) |
Corporate Center |
Underlying |
(4,272) |
(10) |
0 |
(627) |
1,391 |
|
|
|
|
|
|
|
|
Q3 20 (in
EURm) |
Operating Expenses |
Net profit or losses fromother
assets |
Impairment losses on
goodwill |
Incometax |
Group net income |
Business |
Reported |
(3,825) |
(2) |
0 |
(467) |
862 |
|
(+) IFRIC 21 linearisation |
(177) |
|
|
53 |
(120) |
|
Underlying |
(4,002) |
(2) |
0 |
(414) |
742 |
|
9M 21 (in
EURm) |
Operating Expenses |
Net profit or losses fromother
assets |
Impairment losses on
goodwill |
Incometax |
Group net income |
Business |
Reported |
(13,025) |
186 |
0 |
(1,386) |
3,854 |
|
(+) IFRIC 21 linearisation |
199 |
|
|
(46) |
149 |
|
(+) Transformation charges(*) |
232 |
|
|
(65) |
167 |
Corporate Center14(2) |
(+) Capital gains on Haussmann office disposal(*) |
|
(185) |
|
53 |
(132) |
Corporate Center |
Underlying |
(12,594) |
1 |
0 |
(1,444) |
4,038 |
|
|
|
|
|
|
|
|
9M 20 (in
EURm) |
Operating Expenses |
Net profit or losses fromother
assets |
Impairment losses on
goodwill |
Incometax |
Group net income |
Business |
Reported |
(12,363) |
82 |
(684) |
(1,079) |
(728) |
|
(+) IFRIC 21 linearisation |
177 |
|
|
(53) |
120 |
|
(+) Group refocusing plan |
|
77 |
|
|
77 |
Corporate center |
(-) Goodwill impairment(*) |
|
|
684 |
|
684 |
Corporate center |
(-) DTA impairment (*) |
|
|
|
650 |
650 |
Corporate center |
Underlying |
(12,186) |
159 |
0 |
(482) |
803 |
|
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) |
Q3 21 |
Q3 20 |
9M 21 |
9M 20 |
French Retail
Banking |
Net Cost Of Risk |
(5) |
130 |
124 |
821 |
Gross loans Outstanding |
217,332 |
217,156 |
217,549 |
208,604 |
Cost of Risk in bp |
(1) |
24 |
8 |
52 |
International Retail Banking and Financial
Services |
Net Cost Of Risk |
145 |
331 |
408 |
978 |
Gross loans Outstanding |
134,725 |
129,838 |
132,088 |
133,240 |
Cost of Risk in bp |
43 |
102 |
41 |
98 |
Global Banking and Investor Solutions |
Net Cost Of Risk |
57 |
57 |
83 |
818 |
Gross loans Outstanding |
167,410 |
162,429 |
161,432 |
165,389 |
Cost of Risk in bp |
14 |
14 |
7 |
66 |
Corporate Centre |
Net Cost Of Risk |
(1) |
0 |
(1) |
0 |
Gross loans Outstanding |
14,244 |
12,400 |
13,589 |
10,800 |
Cost of Risk in bp |
(1) |
(1) |
(1) |
1 |
Societe Generale Group |
Net Cost Of Risk |
196 |
518 |
614 |
2,617 |
Gross loans Outstanding |
533,711 |
521,822 |
524,659 |
518,033 |
Cost of Risk in bp |
15 |
40 |
16 |
67 |
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 |
Q3 21 |
Q3 20 |
9M 21 |
9M 20 |
Shareholders'
equity Group
share |
63,638 |
60,593 |
63,638 |
60,593 |
Deeply subordinated notes |
(7,820) |
(7,873) |
(7,820) |
(7,873) |
Undated subordinated notes |
|
(274) |
|
(274) |
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 |
(34) |
(4) |
(34) |
(4) |
OCI excluding conversion reserves |
(613) |
(875) |
(613) |
(875) |
Dividend provision (1) |
(1,726) |
(178) |
(1,726) |
(178) |
ROE equity end-of-period |
53,445 |
51,389 |
53,445 |
51,389 |
Average ROE
equity |
52,947 |
51,396 |
52,215 |
52,352 |
Average Goodwill |
(3,927) |
(3,928) |
(3,927) |
(4,253) |
Average Intangible Assets |
(2,599) |
(2,464) |
(2,549) |
(2,417) |
Average ROTE
equity |
46,421 |
45,004 |
45,739 |
45,682 |
Group net Income
(a) |
1,601 |
862 |
3,854 |
(728) |
Underlying Group net income (b) |
1,391 |
742 |
4,038 |
803 |
Interest on deeply subordinated notes and undated subordinated
notes (c) |
(130) |
(127) |
(439) |
(447) |
Cancellation of goodwill impairment (d) |
|
|
|
684 |
Ajusted Group net Income (e) = (a)+
(c)+(d) |
1,471 |
735 |
3,415 |
(491) |
Ajusted Underlying Group net Income
(f)=(b)+(c) |
1,261 |
615 |
3,599 |
356 |
|
|
|
|
|
Average ROTE
equity (g) |
46,421 |
45,004 |
45,739 |
45,682 |
ROTE [quarter: (4*e/g), 9M: (4/3*e/g)] |
12.7% |
6.5% |
10.0% |
-1.4% |
|
|
|
|
|
Underlying ROTE |
46,210 |
44,884 |
45,923 |
47,213 |
Underlying ROTE [quarter: (4*f/h), 9M: (4/3*f/h)] |
10.9% |
5.5% |
10.4% |
1.0% |
RONE calculation: Average capital
allocated to Core Businesses (in EURm)
In EURm |
Q3 21 |
Q3 20 |
Change |
9M 21 |
9M 20 |
Change |
French Retail
Banking |
11,025 |
11,879 |
-7.2% |
11,201 |
11,507 |
-2.7% |
International Retail Banking and Financial
Services |
10,340 |
10,468 |
-1.2% |
10,154 |
10,627 |
-4.5% |
Global Banking and Investor Solutions |
15,327 |
14,868 |
3.1% |
14,687 |
14,306 |
2.7% |
Core Businesses |
36,693 |
37,215 |
-1.4% |
36,042 |
36,440 |
-1.1% |
Corporate Center |
16,254 |
14,180 |
14.6% |
16,173 |
15,912 |
1.6% |
Group |
52,947 |
51,396 |
3.0% |
52,215 |
52,352 |
-0.3% |
((1) The provision is calculated on a payout
ratio of 50% of underlying Group net income, excluding
linearisation of IFRIC 21, after deducting interest on deeply
subordinated notes and undated subordinated notes
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 |
9M 21 |
H1 21 |
2020 |
Shareholders'
equity Group
share |
63,638 |
63,136 |
61,684 |
Deeply subordinated notes |
(7,820) |
(8,905) |
(8,830) |
Undated subordinated notes |
- |
(62) |
(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 |
(34) |
(1) |
19 |
Bookvalue of own shares in trading portfolio |
(45) |
(46) |
301 |
Net Asset Value |
55,739 |
54,122 |
52,910 |
Goodwill |
(3,927) |
(3,927) |
(3,928) |
Intangible Assets |
(2,641) |
(2,556) |
(2,484) |
Net Tangible Asset Value |
49,171 |
47,639 |
46,498 |
|
|
|
|
Number of shares used to calculate NAPS* |
850,430 |
850,429 |
848,859 |
Net Asset Value per Share |
65.5 |
63.6 |
62.3 |
Net Tangible Asset Value per Share |
57.8 |
56.0 |
54.8 |
* The number of shares considered is the number
of ordinary shares outstanding as at September 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) |
9M 21 |
H1 21 |
2020 |
Existing shares |
853,371 |
853,371 |
853,371 |
Deductions |
|
|
|
Shares allocated to cover stock option plans and free shares
awarded to staff |
3,335 |
3,466 |
2,987 |
Other own shares and treasury shares |
|
|
|
Number of shares used to calculate EPS** |
850,036 |
849,905 |
850,385 |
Group net Income |
3,854 |
2,253 |
(258) |
Interest on deeply subordinated notes and undated subordinated
notes |
(439) |
(309) |
(611) |
Capital gain net of tax on partial buybacks |
|
|
|
Adjusted Group net
income |
3,415 |
1,944 |
(869) |
EPS (in EUR) |
4.02 |
2.29 |
(1.02) |
Underlying EPS* (in EUR) |
4.06 |
2.40 |
0.97 |
(*) Calculated on the basis of underlying Group
net income excluding linearisation of IFRIC 21. Or EUR 4.23 taking
into account the linearisation of IFRIC 21 in 9M 21.(**) The number
of shares considered is the number of ordinary shares outstanding
as at September 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 following 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 website
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) 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(1) NPL ratio calculated according to the
EBA methodology published on July 16th, 2019(2) Ratio between the
amount of provisions on doubtful outstandings and the amount of
these same outstandings(1) Underlying data (see methodology note
No. 5 for the transition from accounting data to underlying
data) (2) Including BMTN (negotiable medium-term
notes)(2) SG Russia encompasses the entities Rosbank, Rosbank
Insurance, ALD Automotive and their consolidated subsidiaries(1)
Based on ALD local data(1) Phased-in ratio; fully-loaded ratio of
13.2%(2) Based on a payout ratio of 50% of underlying Group net
income after deducting interest on deeply subordinated notes and
undated subordinated notes(*) Exceptional
item(1) Transformation and/or restructuring
charges in Q3 21 related to French Retail Banking (EUR 46m), Global
Banking & Investor Solutions (EUR 23m) and Corporate Centre
(EUR 28m) (2) Transformation and/or restructuring
charges in 9M 21 related to French Retail Banking (EUR 106m),
Global Banking & Investor Solutions (EUR 66m) and Corporate
Centre (EUR 60m)
- Societe Generale_ Q3-2021-Financial-Results-Press-Release
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