Business

Societe Generale: First quarter 2022 earnings


RESULTS AT MARCH 31ST 2022

Press launch
Paris, May 5th 2022

VERY GOOD FIRST QUARTER

Strong enhance in revenues of +16.6% vs. Q1 21 (+16.1%*) with a strong efficiency by all the companies notably in Global Markets, Financial Services and Financing & Advisory

Cost to revenue ratio of 56.4%(1), excluding contribution to the Single Resolution Fund, with a constructive jaws impact in all the companies

Cost of threat at 39 foundation factors, round 31 foundation factors excluding the Russian property presently being offered

2022 value of threat anticipated between 30 and 35 foundation factors

Underlying Group internet revenue of EUR 1.57 billion(1) (EUR 0.84 billion on a reported foundation), a rise of +21.3% vs. Q1 21

Underlying profitability (ROTE) of 11.9%(1) (6.0% on a reported foundation)

CAPITAL POSITION

CET 1 ratio of 12.9%(2) at end-March 2022, round 370 foundation factors above the regulatory requirement

Residual internet impression on capital at closing of round 6 foundation factors from the contemplated disposal of our actions in Russia(3)

Confirmation of the distribution coverage for 2021

CET 1 ratio 200-250 foundation factors minimal above the regulatory requirement, together with after entry into drive of the regulation finalising the Basel III reform

        

FURTHER PROGRESS IN OUR STRATEGIC INITIATIVES

Planned acquisition of LeasePlan by ALD: signing of the framework settlement

Partnership between Boursorama and ING: signing of the definitive settlement

Planned merger of the retail banking networks in France: new branding of French networks and conclusion of key agreements when it comes to human sources

Sustainable finance: new goal elevated to EUR 300 billion for the interval 2022-2025

Fréderic Oudéa, the Group’s Chief Executive Officer, commented:

This first quarter confirms the robustness and resilience of our business model, with a strong performance by all our businesses in a more uncertain environment, improved operating leverage and a contained cost of risk. The planned disposal, currently being finalised, of our activities in Russia, following the abrupt change in this country’s outlook, will enable the Group to withdraw in an effective and orderly manner, ensuring continuity for both its employees and its customers. With new milestones achieved this quarter, the Group is determinedly pursuing the implementation of its strategic initiatives and remains focused on its ambition of sustainable and profitable growth, combined with an attractive shareholder distribution.
1. GROUP CONSOLIDATED RESULTS

In EURm Q1 22 Q1 21 Change
Net banking revenue 7,281 6,245 +16.6% +16.1%*
Operating bills (5,329) (4,748) +12.2% +12.5%*
Underlying working bills(1) (4,325) (4,097) +5.6% +5.8%*
Gross working revenue 1,952 1,497 +30.4% +27.3%*
Underlying gross working revenue(1) 2,956 2,148 +37.6% +35.3%*
Net value of threat (561) (276) x 2.0 x 2.0*
Operating revenue 1,391 1,221 +13.9% +10.6%*
Underlying working revenue(1) 2,395 1,872 +27.9% +25.5%*
Net earnings or losses from different assets 2 6 -66.7% -64.8%*
Income tax (353) (283) +24.8% +24.8%*
Net revenue 1,040 947 +9.8% +5.7%*
O.w. non-controlling pursuits 198 133 +48.9% +48.2%*
Reported Group internet revenue 842 814 +3.4% -0.9%*
Underlying Group internet revenue(1) 1,574 1,298 +21.3% +18.1%*
ROE 5.3% 5.2% +0.0% +0.0%*
ROTE 6.0% 5.9% +0.0% +0.0%*
Underlying ROTE(1) 11.9% 10.1% +0.0% +0.0%*

(1)   Adjusted for distinctive objects and linearisation of IFRIC 21

Societe Generale’s Board of Directors, which met on May 4th, 2022 below the chairmanship of Lorenzo Bini Smaghi, examined the Societe Generale Group’s outcomes for Q1 2022. The numerous restatements enabling the transition from underlying knowledge to printed knowledge are offered within the methodology notes (part 10.5).

As introduced on April 11th, 2022, an settlement has been signed to promote Rosbank and its Russian insurance coverage subsidiaries. This operation is anticipated to be closed within the few coming weeks.

As a reminder the impression of the disposal of Rosbank and the Group’s Russian insurance coverage actions on the Group’s CET1 ratio is anticipated to be round -20 foundation factors(2), together with round – 6 foundation factors of residual internet impression anticipated at closing after reversal of ranking migrations recorded in Q1 22 on the associated Russian property. This contemplated disposal would result in the accounting within the Group’s revenue assertion(3) of the write-off of the web ebook worth of the divested actions (~EUR 2 billion(4) and an distinctive non-cash merchandise with no impression on the Group’s capital ratio (~EUR 1.1 billion(4)), which corresponds to the normative reversal of the conversion reserve within the Group’s revenue assertion.

Net banking revenue
Net banking revenue was considerably larger in Q1 22, up +16.6% (+16.1%*) vs. Q1 21, pushed by an excellent momentum in all the companies.

French Retail Banking’s efficiency was considerably larger, with internet banking revenue (excluding PEL/CEL provision) up +6.4% vs. Q1 21, reflecting an upward momentum on internet curiosity revenue in addition to monetary and repair commissions.

International Retail Banking & Financial Services loved sturdy income development (+19.3%* vs.
Q1 21). Financial Services (+43.6%* vs. Q1 21) and Insurance (+6.0%* vs. Q1 21) loved a wonderful momentum. International Retail Banking additionally benefited from a robust rebound in its actions (+13.1%* vs. Q1 21).

Global Banking & Investor Solutions delivered a wonderful efficiency, with revenues up +18.1% (+16.9%*) vs. Q1 21. Financing & Advisory loved an excellent momentum, with revenues up +24.4% (+20.9%*) vs. Q1 21, whereas the revenues of Global Markets & Investor Services had been considerably larger (+19.1%, +15.4%*) than in Q1 21.

Operating bills 
In Q1 22, working bills totalled EUR 5,329 million on a reported foundation and EUR 4,325 million on an underlying foundation (restated for transformation prices and the linearisation of IFRIC 21), a rise of +5.6% vs. Q1 21. This enhance could be defined primarily by the rise in variable prices linked to the expansion in revenues (EUR +93 million), the rise within the contribution to the Single Resolution Fund (EUR +69 million), foreign money results and the rise in different bills (EUR +31 million).

Driven by a really constructive jaws impact, underlying gross working revenue grew considerably (+38%) to EUR 2,956 million and the underlying value to revenue ratio, excluding the Single Resolution Fund, improved by almost 7 factors (56.4% vs. 63.3% in Q1 21).

Cost of threat

In Q1 22, the price of threat stood at 39 foundation factors, a rise vs. Q1 21 (21 foundation factors) due primarily to the results of the disaster in Ukraine on Russian publicity, or EUR 561 million (vs. EUR 276 million in Q1 21). It breaks down right into a provision on non-performing loans of EUR 313 million and a provision on performing loans of EUR 248 million.

Excluding Russian actions that are presently being offered, the price of threat stays restricted at 31 foundation factors and breaks down right into a provision on non-performing loans of EUR 277 million and a provision on performing loans of EUR 148 million.

Moreover, the Societe Generale Group has offshore worldwide publicity (publicity at default) to Russian counterparties amounting to EUR 2.8 billion at March 31st, 2022. Exposure in danger on this portfolio is estimated at lower than EUR 1 billion. The related value of threat was EUR 218 million in
Q1 2022.

There is barely negligible market publicity to Russian exterior counterparties.

The Group’s provisions on performing loans amounted to EUR 3,614 million at end-March, a rise of EUR 259 million vs. This fall 21.

The non-performing loans ratio amounted to 2.9%(3) at March 31st 2022, steady vs. end-December 2021 (2.9%). The Group’s gross protection ratio for uncertain outstandings stood at 49%(4) at March 31st 2022.

The value of threat is anticipated to be between 30 and 35 foundation factors in 2022.

Group internet revenue

In EURm Q1 22 Q1 21
Reported Group internet revenue 842 814
Underlying Group internet revenue(1) 1,574 1,298
In EURm Q1 22 Q1 21
ROTE 6.0% 5.9%
Underlying ROTE(1) 11.9% 10.1%

(1)   Adjusted for distinctive objects and linearisation of IFRIC 21

Earnings per share quantities to EUR 0.87 in Q1 22 (EUR 0.79 in Q1 21). Underlying earnings per share quantities to EUR 1 over the identical interval (EUR 0.83 in Q1 21).

  1. THE GROUP’S FINANCIAL STRUCTURE

Group shareholders’ fairness totalled EUR 65.9 billion at March 31st, 2022 (EUR 65.1 billion at December 31st, 2021). Net asset worth per share was EUR 69.23 and tangible internet asset worth per share was
EUR 61.53.

The consolidated steadiness sheet totalled EUR 1,609 billion at March 31st, 2022 (EUR 1,464 billion at December 31st, 2021). The internet quantity of buyer mortgage outstandings at March 31st, 2022, together with lease financing, was EUR 495 billion (EUR 488 billion at December 31st, 2021) – excluding property and securities bought below resale agreements. At the identical time, buyer deposits amounted to
EUR 523 billion, vs. EUR 502 billion at December 31st, 2021 (excluding property and securities offered below repurchase agreements).

At April 26th, 2022, the father or mother firm had issued EUR 19.7 billion of medium/long-term debt, having a median maturity of 5.9 years and a median unfold of 43 foundation factors (vs. the 6-month midswap, excluding subordinated debt). The subsidiaries had issued EUR 0.7 billion. In complete, the Group had issued EUR 20.4 billion of medium/long-term debt.

The LCR (Liquidity Coverage Ratio) was properly above regulatory necessities at 140% at end-March 2022 (137% on common in Q1), vs. 129% at end-December 2021. At the identical time, the NSFR (Net Stable Funding Ratio) was at a stage of 112% at end-March 2022.

The Group’s risk-weighted property (RWA) amounted to EUR 376.6 billion at March 31st, 2022 (vs.
EUR 363.4 billion at end-December 2021) based on CRR2/CRD5 guidelines. Risk-weighted property in respect of credit score threat characterize 84.1% of the entire, at EUR 316.8 billion, up 3.9% vs. December 31st, 2021.

At March 31st, 2022, the Group’s Common Equity Tier 1 ratio stood at 12.9%, or round 370 foundation factors above the regulatory requirement. The CET1 ratio at March 31st, 2022 contains an impact of +12 foundation factors for phasing of the IFRS 9 impression. Excluding this impact, the fully-loaded ratio quantities to 12.8%. The Tier 1 ratio stood at 15.1% at end-March 2022 (15.9% at end-December 2021) and the entire capital ratio amounted to 17.9% (18.8% at end-December 2021).

The Group is aiming for a CET 1 ratio between 200-250 foundation factors above the regulatory requirement together with after the entry into drive of the regulation finalising the Basel III reform.

The leverage ratio stood at 4.3% at March 31st, 2022 (4.9% at end-December 2021).

With a stage of 30.5% of RWA and eight.7% of leverage publicity at end-March 2022, the Group’s TLAC ratio is above the Financial Stability Board’s necessities for 2022. At March 31st, 2022, the Group was additionally above its 2022 MREL necessities of 25.2% of RWA and 5.91% of leverage publicity.

The Group is rated by 4 ranking businesses: (i) Fitch Ratings – long-term ranking “A-”, steady ranking, senior most popular debt ranking “A”, short-term ranking “F1” (ii) Moody’s – long-term ranking (senior most popular debt) “A1”, steady outlook, short-term ranking “P-1” (iii) R&I – long-term ranking (senior most popular debt) “A”, steady outlook; and (iv) S&P Global Ratings – long-term ranking (senior most popular debt) “A”, steady outlook, short-term ranking “A-1”.

  1. FRENCH RETAIL BANKING
In EURm Q1 22 Q1 21 Change
Net banking revenue 2,188 2,023 +8.2%
Net banking revenue excl. PEL/CEL 2,165 2,035 +6.4%
Operating bills (1,720) (1,611) +6.8%
Underlying working bills(1) (1,550) (1,483) +4.5%
Gross working revenue 468 412 +13.6%
Underlying gross working revenue(1) 615 552 +11.4%
Net value of threat (47) (129) -63.6%
Operating revenue 421 283 +48.8%
Net earnings or losses from different property 0 3 -100.0%
Reported Group internet revenue 313 212 +47.6%
Underlying Group internet revenue(1) 422 312 +35.2%
RONE 10.6% 6.9%  
     Underlying RONE(1) 14.3% 10.2%  

(1)   Adjusted for the linearisation of IFRIC 21 and PEL/CEL provision

Note: together with Private Banking actions following the restatement in Q1 22 (France and International operations). Including actions transferred after the disposal of Lyxor

Societe Generale and Crédit du Nord networks

Average mortgage outstandings had been 1% larger than in Q1 21 at EUR 211 billion. Loan manufacturing grew +36% vs. Q1 21, with house loans rising +39% vs. Q1 21 and medium/long-term loans to company {and professional} clients (excluding State Guaranteed Loans) climbing +68% vs. Q1 21.

Average excellent steadiness sheet deposits together with BMTN (negotiable medium-term notes) continued to rise (+5% vs. Q1 21) to EUR 241 billion.

As a outcome, the common mortgage/deposit ratio stood at 88% in Q1 22 vs. 92% in Q1 21.

Insurance property below administration totalled EUR 91 billion at end-March 2022, up +2% year-on-year. Gross life insurance coverage influx amounted to EUR 2.7 billion in Q1 22, with the unit-linked share accounting for 39%.

Property/casualty insurance coverage premiums and private safety insurance coverage premiums had been up +2% vs. Q1 21.

Boursorama 

The financial institution consolidated its place because the main on-line financial institution in France, with greater than 3.7 million purchasers at end-March 2022, because of the onboarding of 388,000 new purchasers in Q1 22 (+90% vs.
Q1 21). Boursorama is aiming to have between 4 million and 4.5 million purchasers at end-2022, one 12 months forward of schedule relative to its plan.

Average excellent loans rose +29% vs. Q1 21 to EUR 14 billion. Home mortgage outstandings had been up +30% vs. Q1 21.

Average excellent financial savings together with deposits and monetary financial savings had been 19% larger than in Q1 21 at EUR 37 billion, whereas excellent deposits had been up +24% vs. Q1 21. Life insurance coverage outstandings had been 7% larger than in Q1 21, with the unit-linked share accounting for 45%. Brokerage recorded greater than 2 million transactions in Q1 22.

Private Banking

Private Banking actions had been transferred to French Retail Banking in Q1 2022. The scope contains France and worldwide operations in addition to the actions transferred on the time of the disposal of Lyxor. The enterprise loved sturdy business exercise in all of the areas. Assets below administration totalled EUR 150 billion, up +8% vs. Q1 21. Net influx was buoyant at EUR 2.7 billion in Q1 22, regardless of the volatility of the monetary markets. Net banking revenue totalled EUR 322 million in Q1 22, up +21.2% vs. Q1 21.

Net banking revenue excluding PEL/CEL

Revenues (excluding PEL/CEL) totalled EUR 2,165 million, up +6.4% vs. Q1 21. Net curiosity revenue (excluding PEL/CEL) was up +2.8% vs. Q1 21, pushed by loans to company clients and Private Banking however partially impacted by the impact of the upper charge on the Livret A passbook financial savings account. Commissions elevated by +6.9% vs. Q1 21, pushed by the nice efficiency of monetary commissions and the rebound in service commissions.

Operating bills

Operating bills amounted to EUR 1,720 million (+6.8% vs. Q1 21) and EUR 1,550 million on an underlying foundation (+4.5% vs. Q1 21). The value to revenue ratio (after linearisation of the IFRIC 21 cost and restated for the PEL/CEL provision) stood at 71.6%, an enchancment of 1.3 factors vs. Q1 21, representing a constructive jaws impact.

Cost of threat

The value of threat amounted to EUR 47 million or 8 foundation factors in Q1 22, a considerable decline in comparison with Q1 21 (22 foundation factors). In This fall 21, the price of threat represented a write-back of three foundation factors.

Contribution to Group internet revenue

The contribution to Group internet revenue was EUR 313 million in Q1 22 vs. EUR 212 million in Q1 21. RONE (after linearisation of the IFRIC 21 cost and restated for the PEL/CEL provision) stood at 14.3% in Q1 22 (16.1% excluding Boursorama).

  1. INTERNATIONAL RETAIL BANKING & FINANCIAL SERVICES
In EURm Q1 22 Q1 21 Change
Net banking revenue 2,223 1,862 +19.4% +19.3%*
Operating bills (1,183) (1,089) +8.6% +8.3%*
Underlying working bills(1) (1,091) (1,017) +7.3% +7.0%*
Gross working revenue 1,040 773 +34.5% +35.0%*
Underlying gross working revenue(1) 1,132 845 +34.0% +34.4%*
Net value of threat (325) (142) x 2.3 x 2.3*
Operating revenue 715 631 +13.3% +13.8%*
Net earnings or losses from different property 2 2 +0.0% +11.0%*
Reported Group internet revenue 400 392 +2.0% +2.6%*
Underlying Group internet revenue(1) 453 434 +4.4% +5.0%*
RONE 14.5% 15.7%    
Underlying RONE(1) 16.5% 17.4%    

(1)   Adjusted for the linearisation of IFRIC 21

International Retail Banking’s excellent loans totalled EUR 92.7 billion, up +5.4%* vs. Q1 21. Outstanding deposits elevated by +6.5%* vs. Q1 21, to EUR 92.4 billion.

For the Europe scope, excellent loans had been up +6.0%* vs. end-March 2021 at EUR 60.6 billion, pushed by a constructive momentum in all of the areas: +8.3%* within the Czech Republic, +9.1%* in Romania, and +2.3%* in Western Europe. Outstanding deposits rose +3.1%* to EUR 54.3 billion.

In Africa, Mediterranean Basin and French Overseas Territories, excellent loans elevated by +1.6%* when adjusted for adjustments in Group construction and at fixed change charges. Outstanding deposits continued to get pleasure from a wholesome momentum, up +6.2%*.

In the Insurance enterprise, the life insurance coverage financial savings enterprise continued to profit from momentum, with outstandings up +4%* at end-March 2022 vs. end-March 2021 at EUR 134 billion. The share of unit-linked merchandise in outstandings was 36%, a rise of +2 factors vs. March 2021. Gross life insurance coverage financial savings influx was 7%* larger in Q1 22 than in Q1 21, with the share of unit-linked merchandise remaining at a excessive stage of 43%, up 3 factors vs. March 2021. Protection insurance coverage noticed a rise of +7%* vs. Q1 21, bolstered by property/casualty premiums up +12%*.

Financial Services additionally loved a really wholesome momentum. Operational Vehicle Leasing and Fleet Management posted document internet banking revenue, up +53%*, because of the enterprise’ good efficiency and continued very sturdy demand for used automobiles. The fleet consisted of 1.7 million contracts, together with 1.4 million financed autos, a rise of +4.8% vs. end-March 2021. Equipment Finance continued to develop, with new leasing enterprise up +3.1%* vs. Q1 21. Outstanding loans rose +1.4% vs. end-March 2021, to EUR 14.5 billion (excluding factoring).

Net banking revenue

Net banking revenue amounted to EUR 2,223 million in Q1 22, up +19.3%* vs. Q1 21.

International Retail Banking’s internet banking revenue totalled EUR 1,343 million in Q1 22, a rise of +13.1%*.

Revenues in Europe climbed +15.6%* vs. Q1 21, due primarily to substantial development in internet curiosity revenue because of the rise in charges (+17%* vs. Q1 21), notably within the Czech Republic (+34%* vs. Q1 21).

The Africa, Mediterranean Basin and French Overseas Territories scope posted revenues up +7.2%* vs. Q1 21 at EUR 466 million, with exercise that remained buoyant in Sub-Saharan Africa (+9%* vs.
Q1 21).

The Insurance enterprise posted internet banking revenue up +6.0%* vs. Q1 21, at EUR 250 million.

Financial Services internet banking revenue was considerably larger (+43.6%*) than in
Q1 21, at EUR 630 million. This efficiency benefited primarily from the actions of ALD which continued to submit sturdy development within the used automotive sale outcome (EUR 3,101 per automobile in Q1 22).

Operating bills

Operating bills rose by solely +8.3%* on a reported foundation (+7.0%* on an underlying foundation) vs.
Q1 21 to EUR 1,183 million, leading to a constructive jaws impact. The underlying value to revenue ratio stood at 49.1% in Q1 22, decrease than in Q1 21 (54.6%).

In International Retail Banking, working bills had been 7.4%* larger than in Q1 21.

In the Insurance enterprise, working bills rose +7.4%* vs. Q1 21, with a value to revenue ratio of 47.2% (39.3% on an underlying foundation).

In Financial Services, working bills elevated by +11.4%* vs. Q1 21, producing a really constructive jaws impact.

Cost of threat

In Q1 22, the price of threat amounted to 92 foundation factors (EUR 325 million), vs. 44 foundation factors in Q1 21. Excluding Russian actions that are presently being offered, the rise in the price of threat remained restricted with a stage of 59 foundation factors.

Contribution to Group internet revenue

The contribution to Group internet revenue totalled EUR 400 million in Q1 22, a rise of +2.6%* vs.
Q1 21.

Underlying RONE stood at 16.5% in Q1 22 (vs. 17.4% in Q1 21) and round 23% excluding Russian actions that are presently being offered. In International Retail Banking, underlying RONE was 7.3% (round 18% excluding Russian actions that are presently being offered) and 28.0% in Financial Services and Insurance.

  1. GLOBAL BANKING & INVESTOR SOLUTIONS
In EURm Q1 22 Q1 21 Variation
Net banking revenue 2,755 2,333 +18.1% +16.9%*
Operating bills (2,172) (1,893) +14.7% +15.7%*
Underlying working bills(1) (1,611) (1,526) +5.6% +6.7%*
Gross working revenue 583 440 +32.5% +21.7%*
Underlying gross working revenue(1) 1,144 807 +41.7% +35.2%*
Net value of threat (194) (3) x 64.7 x 76.7*
Operating revenue 389 437 -11.0% -18.4%*
Reported Group internet revenue 302 347 -13.0% -19.9%*
Underlying Group internet revenue(1) 734 629 +16.6% +11.3%*
RONE 8.6% 10.4% 0 +0.0%*
Underlying RONE(1) 20.8% 18.8% 0 +0.0%*

(1)   Adjusted for the linearisation of IFRIC 21

Note: excluding Private Banking actions following the restatement in Q1 22 (France and International operations). Including actions transferred after the disposal of Lyxor

Net banking revenue

Global Banking & Investor Solutions delivered a outstanding efficiency in Q1 pushed by all the companies, with revenues of EUR 2,755 million, considerably larger (+18.1%) than the already excessive stage in Q1 21. The sharp enhance in Q1 22 illustrates the relevance of the technique offered in May 2021 and the standard of its execution.

In Global Markets & Investor Services, internet banking revenue totalled EUR 1,965 million in Q1 22 (+19.1% vs. Q1 21), in a unstable surroundings, pushed by good shopper exercise and the rise in charges.

Global Markets turned in a wonderful efficiency in Q1 22 (EUR 1,777 million), up +20.5% vs.
Q1 21, benefiting from a robust business momentum in all segments. This excellent outcome could be seen in all the companies (Equities, Fixed Income, Currency), merchandise (Flow&Hedging, Investment Solutions and financing) and geographical areas.

The Equity exercise loved a wonderful quarter (EUR 1,010 million, +19.5% vs. Q1 21), pushed by sturdy shopper exercise in all the companies, notably in listed merchandise and prime providers. The structured merchandise portfolio remained steady, with good threat administration.

Fixed Income & Currency actions posted considerably larger revenues (+21.7% vs. Q1 21) at
EUR 767 million in a beneficial market surroundings. Very buoyant shopper exercise benefited all the companies, and notably Fixed Income actions.

There was a major enhance in Securities Services’ revenues in Q1, up +7.4% vs.
Q1 21, at EUR 188 million, reflecting the rise in charges in addition to the next stage of commissions. Securities Services’ property below custody and property below administration amounted to EUR 4,375 billion and EUR 676 billion respectively.

Financing & Advisory posted revenues of EUR 790 million, up +24.4% vs. Q1 21.

The Global Banking & Advisory enterprise, up +24.1% vs. Q1 21, capitalised on the nice market momentum, notably in actions associated to Natural Resources, Trade Commodity Finance and Infrastructure in addition to in property financing.

The Asset-Backed Products platform continued to develop, with a constructive return from initiatives carried out on the Financial Sponsors shopper phase.

Investment Banking loved quarter, regardless of a pointy slowdown in major market exercise since end-February.

Global Transaction and Payment Services continued to expertise sturdy development, up +26.2% vs.
Q1 21, totally on the again of the rise in charges and volumes.

Operating bills

Operating bills totalled EUR 2,172 million in Q1 22, a rise of +14.7% vs. Q1 21 on a reported foundation, and +5.6% on an underlying foundation. This enhance could be defined by the rise in variable prices, associated to the rise in earnings, and IFRIC 21 costs (the contribution to the Single Resolution Fund amounted to EUR 622 million in Q1 22 vs. EUR 411 million in Q1 21 for Global Banking & Investor Solutions). There was a major enchancment in the price to revenue ratio of seven factors (58.5% vs. 65.4% in Q1 21 on an underlying foundation), with a constructive jaws impact.

Cost of threat

The value of threat amounted to 45 foundation factors (or EUR 194 million) in Q1 22, together with EUR 152 million associated to offshore publicity to Russia.

Contribution to Group internet revenue

The contribution to Group internet revenue was EUR 302 million on a reported foundation and EUR 734 million on an underlying foundation (+16.6% vs. Q1 21).

Global Banking & Investor Solutions posted a major underlying RONE of 20.8% in Q1 22 (24.1% when restated for the impression of the contribution to the Single Resolution Fund), an enchancment in comparison with RONE of 18.8% in Q1 21.

  1. CORPORATE CENTRE
In EURm Q1 22 Q1 21
Net banking revenue 115 27
Operating bills (254) (155)
Underlying working bills(1) (73) (71)
Gross working revenue (139) (128)
Underlying gross working revenue(1) 42 (44)
Net value of threat 5 (2)
Net earnings or losses from different property 1
Income tax 12 36
Reported Group internet revenue (173) (137)
Underlying Group internet revenue(1) (52) (69)

(1)   Adjusted for the linearisation of IFRIC 21

The Corporate Centre contains:

  • the property administration of the Group’s head workplace,
  • the Group’s fairness portfolio,
  • the Treasury operate for the Group,
  • sure prices associated to cross-functional initiatives in addition to sure prices incurred by the Group not re-invoiced to the companies.

The Corporate Centre’s internet banking revenue totalled EUR 115 million in Q1 22 vs. EUR 27 million in
Q1 21. It contains particularly the constructive worth adjustments of monetary devices equivalent to the financial hedging of the Group’s fairness securities.

Operating bills totalled EUR 254 million in Q1 22 vs. EUR 155 million in Q1 21. They embrace the Group’s transformation prices for a complete quantity of EUR 143 million regarding the actions of French Retail Banking (EUR 104 million), Global Banking & Investor Solutions (EUR 14 million) and the Corporate Centre (EUR 25 million). Underlying prices got here to EUR 73 million in Q1 22 in comparison with EUR 71 million in Q1 21.

Gross working revenue totalled EUR -139 million in Q1 22 vs. EUR -128 million in Q1 21. Underlying gross working revenue got here to EUR +42 million in Q1 22 vs. EUR -44 million in Q1 21.

The Corporate Centre’s contribution to Group internet revenue was EUR –173 million in Q1 22 vs. EUR
-137 million in Q1 21. The Corporate Centre’s contribution to Group internet revenue on an underlying foundation was EUR -52 million.

7.   2022 FINANCIAL CALENDAR

2022 and 2023 Financial communication calendar
May 17th, 2022 2022 General Meeting
May 25th, 2022 Dividend detachment
May 27th, 2022 Dividend cost
August 3rd, 2022 Second quarter and first half 2022 outcomes
November 4th, 2022 Third quarter and nine-month 2022 outcomes
February 8th, 2023 Fourth quarter and FY 2022 outcomes
 
The Alternative Performance Measures, notably the notions of internet banking revenue for the pillars, working bills, IFRIC 21 adjustment, value of threat in foundation factors, ROE, ROTE, RONE, internet property, tangible internet property, and the quantities serving as a foundation for the completely different restatements carried out (particularly the transition from printed knowledge to underlying knowledge) are offered within the methodology notes, as are the rules for the presentation of prudential ratios.

This doc comprises forward-looking statements regarding the targets and techniques of the Societe Generale Group.

These forward-looking statements are primarily based on a sequence of assumptions, each normal and particular, particularly the applying of accounting rules and strategies in accordance with IFRS (International Financial Reporting Standards) as adopted within the European Union, in addition to the applying of present prudential laws.

These forward-looking statements have additionally been developed from situations primarily based on quite a few financial assumptions within the context of a given aggressive and regulatory surroundings. The Group could also be unable to:

– anticipate all of the dangers, uncertainties or different components prone to have an effect on its enterprise and to appraise their potential penalties;

– consider the extent to which the prevalence of a threat or a mixture of dangers might trigger precise outcomes to vary materially from these offered on this doc and the associated presentation.

 

Therefore, though Societe Generale believes that these statements are primarily based on cheap assumptions, these forward-looking statements are topic to quite a few dangers and uncertainties, together with issues not but recognized to it or its administration or not presently thought of materials, and there could be no assurance that anticipated occasions will happen or that the goals set out will really be achieved. Important components that would trigger precise outcomes to vary materially from the outcomes anticipated within the forward-looking statements embrace, amongst others, total developments basically financial exercise and in Societe Generale’s markets particularly, regulatory and prudential adjustments, and the success of Societe Generale’s strategic, working and monetary initiatives.

More detailed info on the potential dangers that would have an effect on Societe Generale’s monetary outcomes could be discovered within the part “Risk Factors” in our Universal Registration Document filed with the French Autorité des Marchés Financiers (which is out there on https://traders.societegenerale.com/en).

Investors are suggested to consider components of uncertainty and threat prone to impression the operations of the Group when contemplating the data contained in such forward-looking statements. Other than as required by relevant legislation, Societe Generale doesn’t undertake any obligation to replace or revise any forward-looking info or statements. Unless in any other case specified, the sources for the enterprise rankings and market positions are inside.

8.   APPENDIX 1: FINANCIAL DATA

GROUP NET INCOME BY CORE BUSINESS

In EURm Q1 22 Q1 21 Variation
French Retail Banking 313 212 +47.6%
International Retail Banking and Financial Services 400 392 +2.0%
Global Banking and Investor Solutions 302 347 -13.0%
Core Businesses 1,015 951 +6.7%
Corporate Centre (173) (137) -26.3%
Group 842 814 +3.4%

NB: Amounts restated in Q1 22 to consider the switch of Private Banking actions (French and worldwide) to the French Retail Banking. Includes actions transferred after the disposal of Lyxor

CONSOLIDATED BALANCE SHEET

In EURm 31.03.2022 31.12.2021
Cash, due from central banks 230,086 179,969
Financial property at truthful worth by means of revenue or loss 419,946 342,714
Hedging derivatives 13,683 13,239
Financial property at truthful worth by means of different complete revenue 40,342 43,450
Securities at amortised value 19,748 19,371
Due from banks at amortised value 74,490 55,972
Customer loans at amortised value 501,542 497,164
Revaluation variations on portfolios hedged towards rate of interest threat 172 131
Investments of insurance coverage corporations 172,741 178,898
Tax property 4,647 4,812
Other property 95,796 92,898
Non-current property held on the market 16 27
Investments accounted for utilizing the fairness methodology 115 95
Tangible and intangible mounted property 32,139 31,968
Goodwill 3,739 3,741
Total 1,609,202 1,464,449
In EURm 31.03.2022 31.12.2021
Due to central banks 12,618 5,152
Financial liabilities at truthful worth by means of revenue or loss 391,805 307,563
Hedging derivatives 17,839 10,425
Debt securities issued 135,384 135,324
Due to banks 157,560 139,177
Customer deposits 528,620 509,133
Revaluation variations on portfolios hedged towards rate of interest threat (1,631) 2,832
Tax liabilities 1,683 1,577
Other liabilities 122,461 106,305
Non-current liabilities held on the market 1
Insurance contracts associated liabilities 150,098 155,288
Provisions 5,047 4,850
Subordinated money owed 16,101 15,959
Total liabilities 1,537,585 1,393,586
Shareholder’s fairness
Shareholdersfairness, Group share
Issued widespread shares and capital reserves 21,836 21,913
Other fairness devices 7,534 7,534
Retained earnings 36,270 30,631
Net revenue 842 5,641
Sub-total 66,482 65,719
Unrealised or deferred capital positive factors and losses (630) (652)
Sub-total fairness, Group share 65,852 65,067
Non-controlling pursuits 5,765 5,796
Total fairness 71,617 70,863
Total 1,609,202 1,464,449
  1. APPENDIX 2: METHODOLOGY

1 –The monetary info offered for the quarter ending 31 March 2022 was examined by the Board of Directors on May 4th, 2022 and has been ready in accordance with IFRS as adopted within the European Union and relevant at that date. This info has not been audited.

2 – Net banking revenue

The pillars’ internet banking revenue is outlined on web page 41 of Societe Generale’s 2022 Universal Registration Document. The phrases “Revenues” or “Net Banking Income” are used interchangeably. They present a normalised measure of every pillar’s internet banking revenue considering the normative capital mobilised for its exercise.

3 – Operating bills

Operating bills correspond to the “Operating Expenses” as offered in word 8.1 to the Group’s consolidated monetary statements as at December 31st, 2021 (pages 482 et seq. of Societe Generale’s 2022 Universal Registration Document). The time period “costs” can also be used to seek advice from Operating Expenses. The Cost/Income Ratio is outlined on web page 41 of Societe Generale’s 2022 Universal Registration Document.

4 – IFRIC 21 adjustment

The IFRIC 21 adjustment corrects the results of the fees recognised within the accounts of their entirety when they’re due (producing occasion) in order to recognise solely the portion regarding the present quarter, i.e. 1 / 4 of the entire. It consists in smoothing the cost recognised accordingly over the monetary 12 months with the intention to present a extra financial thought of the prices really attributable to the exercise over the interval analysed.

The contributions to Single Resolution Fund (« SRF ») are a part of IFRIC21 adjusted costs, they embrace contributions to nationwide decision funds inside the EU.

5 – Exceptional objects – Transition from accounting knowledge to underlying knowledge

It could also be needed for the Group to current underlying indicators with the intention to facilitate the understanding of its precise efficiency. The transition from printed knowledge to underlying knowledge is obtained by restating printed knowledge for distinctive objects 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 simpler to establish the revenues and earnings regarding the pillar’s exercise, by excluding the unstable part associated to commitments particular to regulated financial savings.

The reconciliation enabling the transition from printed accounting knowledge to underlying knowledge is ready out within the desk beneath:

Q1 22 (In EURm) Operating

Expenses

Cost of threat Net revenue or

losses from

different property

Income

tax

Group internet

revenue

Business    
Reported (5,329) (561) 2 (353) 842      
(+) IFRIC 21 linearisation 860     (218) 626      
(+) Transformation costs* 143     (37) 106 Corporate Center(1)    
Underlying (4,325) (561) 2 (608) 1,574      
               
Q1 21 (In EURm) Operating

Expenses

Cost of threat Net revenue or

losses from

different property

Income

tax

Group internet

revenue

Business    
Reported (4,748) (276) 6 (283) 814      
(+) IFRIC 21 linearisation 601     (141) 448      
(+) Transformation costs* 50     (14) 36 Corporate Center(2)    
Underlying (4,097) (276) 6 (438) 1,298      

(*) Exceptional merchandise
(1) Q1 22 transformation costs associated to French Retail Banking (EUR 104m), Global Banking & Investor Solutions (EUR 14m) and Corporate Centre (EUR 25m)
(2) Q1 21 transformation costs associated to French Retail Banking (EUR 38m), Global Banking and Investor Solutions (EUR 1m) and Corporate Center (EUR 11m)

6 – Cost of threat in foundation factors, protection ratio for uncertain outstandings

The value of threat is outlined on pages 43 and 663 of Societe Generale’s 2022 Universal Registration Document. This indicator makes it potential to evaluate the extent of threat of every of the pillars as a proportion of steadiness sheet mortgage commitments, together with working leases.

In EURm   Q1 22 Q1 21
French Retail Banking Net Cost Of Risk 47 129
Gross mortgage Outstandings 242,645 233,953
Cost of Risk in bp 8 22
International Retail Banking and Financial Services Net Cost Of Risk 325 142
Gross mortgage Outstandings 140,547 130,196
Cost of Risk in bp 92 44
Global Banking and Investor Solutions Net Cost Of Risk 194 3
Gross mortgage Outstandings 170,749 138,305
Cost of Risk in bp 45 1
Corporate Centre Net Cost Of Risk (5) 2
Gross mortgage Outstandings 14,413 12,963
Cost of Risk in bp (12) 4
Societe Generale Group Net Cost Of Risk 561 276
Gross mortgage Outstandings 568,354 515,416
Cost of Risk in bp 39 21

The gross protection ratio for uncertain outstandings is calculated because the ratio of provisions recognised in respect of the credit score threat to gross outstandings recognized as in default inside the that means of the laws, with out taking account of any ensures offered. This protection ratio measures the utmost residual threat related to outstandings in default (“doubtful”).

7 – ROE, ROTE, RONE

The notions of ROE (Return on Equity) and ROTE (Return on Tangible Equity), in addition to their calculation methodology, are specified on web page 43 and 44 of Societe Generale’s 2022 Universal Registration Document. This measure makes it potential to evaluate Societe Generale’s return on fairness and return on tangible fairness.

RONE (Return on Normative Equity) determines the return on common normative fairness allotted to the Group’s companies, based on the rules offered on web page 44 of Societe Generale’s 2022 Universal Registration Document.

Group internet revenue used for the ratio numerator is ebook Group internet revenue 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 word No. 9). For ROTE, revenue can also be restated for goodwill impairment.

Details of the corrections made to ebook fairness with the intention to calculate ROE and ROTE for the interval are given within the desk beneath:

ROTE calculation: calculation methodology

End of interval (in EURm) Q1 22 Q1 21
Shareholdersfairness Group share 65,852 62,920
Deeply subordinated notes (8,178) (9,179)
Undated subordinated notes (273)
Interest of deeeply & undated subodinated notes, situation premium amortisations(1) (65) (51)
OCI excluding conversion reserves 120 (723)
Dividend provision(2) (415) (353)
ROE fairness end-of-period 55,029 52,340
Average ROE fairness 54,669 51,771
Average Goodwill (3,624) (3,928)
Average Intangible Assets (2,753) (2,506)
Average ROTE fairness 48,292 45,337
     
Group internet Income (a) 842 814
Underlying Group internet revenue (b) 1,574 1,298
Interest on deeply subordinated notes and undated subordinated notes (c) (119) (144)
Cancellation of goodwill impairment (d) 2
Ajusted Group internet Income (e) = (a)+ (c)+(d) 725 670
Ajusted Underlying Group internet Income (f)=(b)+(c) 1,457 1,154
     
Average ROTE fairness (g) 48,292 45,337
ROTE [quarter: (4*e/g)] 6.0% 5.9%
     
Average ROTE fairness (underlying) (h) 49,024 45,821
Underlying ROTE [quarter: (4*f/h)] 11.9% 10.1%

(1) Interest internet of tax, payable or paid to holders of deeply subordinated notes & undated subordinated notes, situation premium amortisations
(2) The dividend to be paid is calculated primarily based on a pay-out ratio of fifty% of the underlying Group internet revenue, after deduction of deeply subordinated notes and on undated subordinated notes

RONE calculation: Average capital allotted to Core Businesses

In EURm Q1 22 Q1 21 Change
French Retail Banking 11,822 12,208 -3.2%
International Retail Banking and Financial Services 11,018 9,963 +10.6%
Global Banking and Investor Solutions 14,128 13,404 +5.4%
Core Businesses 36,968 35,576 +3.9%
Corporate Center 17,701 15,975 +10.8%
Group 54,669 51,550 +6.1%

NB: Amounts restated in Q1 22 to consider the switch of Private Banking actions (French and worldwide) to the French Retail Banking. Includes actions transferred after the disposal of Lyxor

8 – Net property and tangible internet property

Net property and tangible internet property are outlined within the methodology, web page 46 of the Group’s 2022 Universal Registration Document. The objects used to calculate them are offered beneath:

End of interval (in EURm) Q1 22 2021 2020
Shareholders’ fairness Group share* 65,852 65,067 61,710
Deeply subordinated notes (8,178) (8,003) (8,830)
Undated subordinated notes (264)
Interest of deeeply & undated subodinated notes, situation premium amortisations(1) (65) 20 19
Bookvalue of personal shares in buying and selling portfolio (78) 37 301
Net Asset Value* 57,531 57,121 52,936
Goodwill (3,624) (3,624) (3,928)
Intangible Assets (2,773) (2,733) (2,484)
Net Tangible Asset Value* 51,134 50,764 46,524
       
Number of shares used to calculate NAPS** 831,044 831,162 848,859
Net Asset Value per Share 69.2 68.7 62.4
Net Tangible Asset Value per Share 61.5 61.1 54.8

(*) Amounts restated in contrast with the monetary statements printed in 2020 (See Note1.7 of the 2021 monetary statements)
(* *) The variety of shares thought of is the variety of unusual shares excellent as at finish of interval, excluding treasury shares and buybacks, however together with the buying and selling shares held by the Group. In accordance with IAS 33, historic knowledge per share previous to the date of detachment of a preferential subscription proper are restated by the adjustment coefficient for the transaction
(1) Interest internet of tax, payable or paid to holders of deeply subordinated notes & undated subordinated notes, situation premium amortisations

9 – Calculation of Earnings Per Share (EPS)

The EPS printed by Societe Generale is calculated based on the foundations outlined by the IAS 33 customary (see web page 45 of Societe Generale’s 2022 Universal Registration Document). The corrections made to Group internet revenue with the intention to calculate EPS correspond to the restatements carried out for the calculation of ROE and ROTE. As specified on web page 45 of Societe Generale’s 2022 Universal Registration Document, the Group additionally publishes EPS adjusted for the impression of non-economic and distinctive objects offered in methodology word No. 5 (underlying EPS).
The calculation of Earnings Per Share is described within the following desk:

Average variety of shares (hundreds) Q1 22 2021 2020
Existing shares 845,248 853,371 853,371
Deductions      
Shares allotted to cowl inventory possibility plans and free shares awarded to employees 6,021 3,861 2,987
Other personal shares and treasury shares 8,124 3,249
Number of shares used to calculate EPS* 831,103 846,261 850,385
Group internet Income 842 5,641 (258)
Interest on deeply subordinated notes and undated subordinated notes (119) (590) (611)
Capital acquire internet of tax on partial buybacks
Adjusted Group internet revenue 723 5,051 (869)
EPS (in EUR) 0.87 5.97 (1.02)
Underlying EPS** (in EUR) 1.00 5.52 0.97

(*) The variety of shares thought of is the common variety of unusual shares excellent through the interval, excluding treasury shares and buybacks, however together with the buying and selling shares held by the Group
(**) Calculated on the idea of underlying Group internet revenue (excluding linearisation of IFRIC 21)

10 – The Societe Generale Group’s Common Equity Tier 1 capital

It is calculated in accordance with relevant CRR2/CRD5 guidelines. The totally loaded solvency ratios are offered professional forma for present earnings, internet of dividends, for the present monetary 12 months, until specified in any other case. When there may be reference to phased-in ratios, these don’t embrace the earnings for the present monetary 12 months, until specified in any other case. The leverage ratio can also be calculated based on relevant CRR2/CRD5 guidelines together with the phased-in following the identical rationale as solvency ratios.

NB (1) The sum of values contained within the tables and analyses could differ barely from the entire reported because of rounding guidelines.

(2) All the data on the outcomes for the interval (notably: press launch, downloadable knowledge, presentation slides and complement) is out there on Societe Generale’s web site www.societegenerale.com within the “Investor” part.

Societe Generale

Societe Generale is without doubt one of the main European monetary providers teams. Based on a diversified and built-in banking mannequin, the Group combines monetary power and confirmed experience in innovation with a technique of sustainable development. Committed to the constructive transformations of the world’s societies and economies, Societe Generale and its groups search to construct, day after day, along with its purchasers, a greater and sustainable future by means of accountable and progressive monetary options.

Active in the actual economic system for over 150 years, with a strong place in Europe and related to the remainder of the world, Societe Generale has over 131,000 members of employees in 66 nations and helps every day 26 million particular person purchasers, companies and institutional traders world wide by providing a variety of advisory providers and tailor-made monetary options. The Group is constructed on three complementary core companies:

  • French Retail Banking, which encompasses the Societe Generale, Credit du Nord and Boursorama manufacturers. Each gives a full vary of monetary providers with omnichannel merchandise on the slicing fringe of digital innovation;
  • International Retail Banking, Insurance and Financial Services, with networks in Africa, Russia, Central and Eastern Europe and specialised companies which might be leaders of their markets;
  • Global Banking and Investor Solutions, which gives recognised experience, key worldwide places and built-in options.

Societe Generale is included within the principal socially accountable funding indices: DJSI (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 the MSCI Low Carbon Leaders Index (World and Europe).

In case of doubt relating to the authenticity of this press launch, please go to the tip of Societe Generale’s newsroom web page the place official Press Releases despatched by Societe Generale could be licensed utilizing blockchain know-how. A hyperlink will help you verify the doc’s legitimacy instantly on the internet web page.

For extra info, you possibly can observe us on Twitter @societegenerale or go to our web site www.societegenerale.com.


(1) Underlying knowledge (see methodology word No. 5 for the transition from accounting knowledge to underlying knowledge)    
(2) Phased-in ratio (fully-loaded ratio of 12.8%)
(3)   NPL ratio calculated based on the EBA methodology printed on July 16th, 2019
(4) Ratio between the quantity of provisions on uncertain outstandings and the quantity of those similar outstandings



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