Dear Shareholder,

During Q3 2018, our Group published solid results, with a good level of profitability. Our revenues increased due primarily to the growth in International Retail Banking & Financial Services, the rebound in Global Market activities and strong momentum in Financing & Advisory. We are therefore one of the few European banks to post an increase in revenues in Q3 2018. Finally, we pursued our strategy of refocusing the Group and continued to strengthen our balance sheet and risk profile

French Retail Banking’s three brands, Societe Generale, Crédit du Nord and Boursorama, enjoyed a solid commercial momentum this quarter, against the backdrop of a low interest rate environment and the transformation of the French networks. Boursorama consolidated its position as the leading online bank in France, with nearly 1.6 million clients at end-September 2018. The Societe Generale and Crédit du Nord networks strengthened their franchises on the Group’s target customers. As a result, the number of mass affluent and wealthy clients was up +5.1% year-on-year. The Group also continued to develop its expertise to serve its Business customers, with the rollout of four regional centres dedicated to businesses at the end of October. The number of business customers increased by 1% year-on-year. In the case of Professional customers, Societe Generale continued to strengthen its model based on expertise and proximity, with the opening of three new “Pro Corners” (Espaces Pro) this quarter. The number of professional customers grew by around 1% year-on-year. Margins were adversely affected by low interest rates. However, this impact was partially offset by dynamic commissions. Overall, French Retail Banking revenues increased by 2.3%* in Q3 2018 and declined slightly over nine months (-0.6%*).

International Retail Banking, one of the Group’s growth drivers, benefited from a strong commercial momentum and substantial revenue growth (+9.9%**  in Q3 2018 and +8.8%** over nine months) across all regions. As a result, outstanding loans in Western Europe rose by nearly +12% in the quarter. In the Czech Republic and Romania, the increase in outstanding loans and deposits, combined with a rise in interest rates, resulted in revenue growth of +8.5%** and +13.0%** respectively in Q3 2018. In Russia, there was further confirmation of commercial expansion in the individual customer segment, against the backdrop of the depreciation of the Rouble. Growth remained strong in Africa, the Mediterranean Basin and French Overseas Territories, with revenues up +8.1%** in the quarter.

The revenues of Insurance business also rose (+2.7%** in Q3 2018) due to the increase in life insurance inflows and the strong growth in Property/Casualty insurance, especially abroad. The revenues of Financial Services to Corporates (+4.8%**) were driven by the substantial growth in Equipment Finance volumes and the increase in ALD’s vehicle fleet.

The revenue growth in Global Banking & Investor Solutions (+7.5%** in Q3 2018) reflects the rebound in Global Markets and the strong momentum in Financing & Advisory activities (+9.3%). The higher revenues in Global Markets is underpinned by the substantial growth in the Equity business and Prime Services, due primarily to the good performance in the United States and in Structured Products. All Financing & Advisory activities benefited from robust new business and posted higher revenues. Despite unfavourable market conditions in Europe in the first half of the year, Global Banking & Investor Solutions’ revenues were stable in the first nine months of the year (-0.2%**).

Underlying Group net income came to €1.25bn in Q3 2018 (+16.1%) and €3.72bn in the first nine months (+2.9%). Accordingly, the third quarter provided further confirmation of the good level of profitability, with underlying ROTE of 11% over the period. Earnings per share amounts to €3.62 and the dividend provision to €1.81 over the first nine months of 2018.

We are pursuing the implementation of our strategic and financial plan “Transform to Grow”, announced in November 2017, which is reflected in the growth in our revenues and results. We are continuing to refocus on markets and activities with critical mass and potential synergies with the Group’s other businesses. As a result, on 5 November, we announced the signing of an agreement to sell our Polish subsidiary Euro Bank to Bank Millennium. We have further strengthened our balance sheet. The Group pursued its disciplined approach to cost management and the low cost of risk confirms the quality of our loan portfolio. The Group put an end this quarter to the financial impact of the major litigation issues with the US authorities relating to the pre-financial crisis period. Finally, we are continuing to engage in positive transformation processes and our commitment has been recognised through several rankings and awards.

On the back of these numerous developments, solid results and the commitment of our teams, Societe Generale is fully engaged in pursuing its strategic plan.

Once again, I would like to thank you for your loyalty and the trust you have placed in our Group.

Frédéric Oudéa,
Chief Executive Officer


(*) Excluding PEL/CEL provision
(**) When adjusted for changes in Group structure and at constant exchange rates