Understanding our 2013 Q4 & annual results
Frédéric Oudéa's editorial
2013 provided confirmation of the robustness of Societe Generale’s universal banking model, which was both resilient and a generator of growth, in a still challenging environment. Net banking income amounted to EUR 22.8 billion, an increase of +4.3% compared with 2012. The cost savings plan already helped secure EUR 350 million in 2013. Group net income amounted to EUR 2.2 billion and virtually trebled compared with 2012.
2013 provided confirmation of the robustness of Societe Generale’s universal banking model, which was both resilient and a generator of growth, in a still challenging environment.
Net banking income amounted to EUR 22.8 billion, an increase of +4.3% compared with 2012. The cost savings plan already helped secure EUR 350 million in 2013. Group net income amounted to EUR 2.2 billion and virtually trebled compared with 2012. When restated for non-economic items, non-recurring items and legacy assets, underlying Group net income amounted to EUR 3.9 billion, generating a return on equity of 8.4%. In view of these results, the Board of Directors has decided to propose the payment of a cash dividend of EUR 1.00 per share to the Annual General Meeting, taking the dividend payout ratio to 27%, in accordance with our commitment.
The Group produced a good operating performance in all its businesses, with a solid revenue base that is evenly balanced between its three strategic pillars. Business revenues rose +2.8% between 2012 and 2013. French Retail Banking turned in a good commercial performance that demonstrates the solidity of its franchise and the Group’s commitment to financing the economy. The Group also benefited from the improved revenues of Russian activities and a still buoyant performance from the Insurance business and Financial Services to Corporates. There was a significant increase in the revenues of Global Banking & Investor Solutions, particularly in Corporate and Investment Banking and in Asset Management and Private Banking activities. This favourable trend testifies to the relevance of a model focused on the client and providing innovative solutions.
The structural transformation of the balance sheet is complete, enabling the Group to achieve robust capital and liquidity ratios, exceeding regulatory requirements. The Common Equity Tier 1 ratio stands at 10.0% under Basel 3, exceeding the target announced at the beginning of the year. The rise is underpinned by the Group’s solid earnings generation and was reinforced, in particular, by the completion of the legacy asset disposal programme and asset disposals.The Group’s financing structure has been fundamentally remodelled and is reinforced by a strong deposit inflow in all its activities, and the extension of its financing sources. Benefiting from a particularly strong liquidity situation, the Group has fully repaid the financing lines granted by the European Central Bank under the LTRO programme implemented at the end of 2011, beginning of 2012.
Our balanced and agile universal banking model is well-suited to meet the new economic, regulatory and technological challenges. In 2014 and beyond, the Group’s priority will be to seize growth opportunities by capitalising on our two key differentiating factors: customer satisfaction and innovation. On May 13th, Societe Generale will present its strategic plan aimed at increasing the return on equity to 10% by end-2015. The Group aims to increase the dividend payout ratio to 40% for the 2014 financial year.
This new year also marks the celebration of the Group’s 150th anniversary. We want to seize this opportunity to draw on our roots in order to build the bank of the future, demonstrating an innovative, entrepreneurial approach and team spirit in the service of our customers and the economy.
I would like to thank you for your loyalty to the Group and the trust you have shown in the women and men who work at Societe Generale. It is an additional source of motivation for carrying out to the best of our ability the fascinating and demanding business of banker.
Chairman and CEO
2013 Annual Results: key figures
EUR 22.8bn (+4.3%* vs. 2012)
EUR 3.9bn** (+15.4% vs. 2012)
Group net income
EUR 2.2bn (x 2.8 vs. 2012)
Book Group net income
* When adjusted for changes in Group structure and at constant exchange rates. The variations for revenues excluding the effect of the revaluation of own financial liabilities disregard any currency impact of this revaluation.
EUR 1.00 per share
Proposed dividend, paid in cash
Return on equity (ROE)
10.0% Basel 3 Common Equity Tier 1 Ratio
End-2013 target exceeded
** Excluding non-economic items (revaluation of own financial liabilities), legacy assets, and non-recurring items.
Results by business
The Group produced a good operating performance in all its businesses, with a solid revenue base that is evenly balanced between its three strategic pillars.
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