Understanding our 3rd Quarter 2018 Results
Frédéric Oudéa's editorial
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.
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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
Expert view
A thick fog of political uncertainty
As 2018 draws to a close, the global economic recovery is losing momentum, slowed by the headwinds of tighter financial conditions, pockets of capacity constraints and heightened policy uncertainty. The impact of these headwinds on individual economies, moreover, has been asymmetric with those suffering large external imbalances, such as Turkey and Argentina, hardest hit. On a more positive note, a strong impulse coming from fiscal expansion in the United States, targeted policy accommodation in China and still accommodating monetary policies in Europe and Japan are supportive factors looking ahead to 2019.
Innovation

Societe Generale ranked No.1 for digital maturity
After ranking fourth in 2014 and 2015, then third in 2016 and second last year, Societe Generale Group has been recognised most advanced company in terms of digital transformation, across all evaluation criteria: digital culture, technological expertise, relationships with the innovative ecosystem, security, external communication. The 5th annual eCAC40 Awards, organised by the editorial team of Les Echos Executives and Gilles Babinet, France’s Digital Champion at the European Commission, rewards French top 40 companies for their digital maturity. This first place did not happen by chance but owes everything to the extraordinary engagement of all our teams. Find out why in the dossier on the innovations serving our clients, the relations we build with the technology ecosystem and the benefits new technology is bringing.

Best French Bank in RobecoSAM’s CSR ranking
For the first time, Societe Generale has been classed Best French Bank in RobecoSAM’s CSR ranking 2018. The Group was ranked eighth out of the 133 European banks included in the study, and remained in the Top Ten in Europe for the third consecutive year.

"Home Field Advantage" season 2
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Annual General Shareholders Meeting 2019
The Societe Generale Annual General Meeting will be held on Tuesday 21 May, 2019 at 4pm at the Paris Expo centre, Grande Arche of Paris-La Défense, France. The Annual General Meeting is a key event for our shareholders. It provides them with direct information on the company's activity, and gives them the opportunity to take part in debates with General Management and vote on the resolutions submitted for approval by the Board of Directors.
Find below our previous Letters to Shareholders
Date | Title | Link |
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February 2020 | Letter to Shareholders #119 - Understanding our Annual Results 2019 | Go to the page |
May 2020 | Letter to Shareholders #120 - Understanding our Q1 2020 Results | Go to the page |
June 2020 | Letter to Shareholders #121 - Annual General Meeting held on 19 May 2020 | Download PDF |
Date | Title | Link |
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February 2019 | Letter to Shareholders #114 - Understanding our Annual Results 2018 | Go to the page |
Mai 2019 | Letter to Shareholders #115 - Understanding our Q1 2019 Results | Go to the page |
June 2019 | Letter to Shareholders #116 - Annual General Meeting held on 21 May 2019 | Download PDF |
August 2019 | Letter to Shareholders #117 - Understanding our Q2 2019 Results | Go to the page |
November 2019 | Letter to Shareholders #118 - Understanding our Q3 2019 Results | Go to the page |
Date | Title | Link |
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November 2018 | Letter to Shareholders #113 - Understanding our 2018 Q3 Results | Go to the page |
August 2018 | Letter to Shareholders #112 - Understanding our 2018 Q2 Results | Go to the page |
June 2018 | Letter to Shareholders #111 - Annual General Meeting held on 23 May 2018 | Download PDF |
May 2018 | Letter to Shareholders #110 - Understanding our 2018 Q1 Results | Go to the page |
February 2018 | Letter to Shareholders #109 - Understanding our 2017 Annual Results | Go to the page |
Date | Title | Link |
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November 2017 | Letter to Shareholders #108 - Understanding our 2017 Q3 Results | Go to the page |
August 2017 | Letter to Shareholders #107 - Understanding our 2017 Q2 Results | Go to the page |
June 2017 | Letter to Shareholders #106 - Annual General Meeting held on 23 May 2017 | Download PDF |
May 2017 | Letter to Shareholders #105 - Understanding our 2017 Q1 Results | Go to the page |
February 2017 | Letter to Shareholders #104 - Understanding our 2016 Annual Results | Go to the page |
Date | Title | Link |
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November 2016 | Letter to Shareholders #103 - Understanding our 2016 Q3 Results | Go to the page |
August 2016 | Letter to Shareholders #102 - Understanding our 2016 Q2 Results | Go to the page |
June 2016 | Letter to Shareholders #101 - Annual General Meeting held on 18 May 2016 | Download PDF |
May 2016 | Letter to Shareholders #100 - Understanding our 2016 Q1 Results | Go to the page |
February 2016 | Letter to Shareholders #99 - Understanding our 2015 Annual Results | Go to the page |
Date | Title | Link |
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November 2015 | Letter to Shareholders #98 - Understanding our 2015 Q3 Results | Go to the page |
August 2015 | Letter to Shareholders #97 - Understanding our 2015 Q2 Results | Go to the page |
June 2015 | Letter to Shareholders #96 - Annual General Meeting held on 19 May 2015 | Download PDF |
May 2015 | Letter to Shareholders #95 - Understanding our 2015 Q1 Results | Go to the page |
February 2015 | Letter to Shareholders #94 - Understanding our 2014 annual Results | Go to the page |
Date | Title | Link |
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November 2014 | Letter to Shareholders #93 - Understanding our 2014 Q3 Results | Go to the page |
August 2014 | Letter to Shareholders #92 - Understanding our 2014 Q2 Results | Go to the page |
June 2014 | Letter to Shareholders #91 - Annual General Meeting held on 20 May 2014 | Download PDF |
May 2014 | Letter to Shareholders #90 - Understanding our 2014 Q1 Results | Go to the page |
February 2014 | Letter to Shareholders #89 - Understanding our 2013 Q4 & annual Results | Go to the page |
Date | Title | Link |
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November 2013 | Letter to Shareholders #88 - 2013 Q3 Results (in French only) | Download PDF |
August 2013 | Letter to Shareholders #87 - 2013 Q2 Results (in French only) | Download PDF |
June 2013 | Letter to Shareholders #86 - 2013 Q1 Results (in French only) | Download PDF |
February 2013 | Letter to Shareholders #85 - 2012 Q4 & annual Results (in French only) | Download PDF |
Date | Title | Link |
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November 2012 | Letter to Shareholders #84 - 2012 Q3 Results (in French only) | Download PDF |
August 2012 | Letter to Shareholders #83 - 2012 Q2 Results (in French only) | Download PDF |
June 2012 | Letter to Shareholders #82 - 2012 Q1 Results (in French only) | Download PDF |
February 2012 | Letter to Shareholders #81 - 2011 Q4 & annual Results (in French only) | Download PDF |
Date | Title | Link |
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November 2011 | Letter to Shareholders #80 - 2011 Q3 Results (in French only) | Download PDF |
August 2011 | Letter to Shareholders #79 - 2011 Q2 Results (in French only) | Download PDF |
June 2011 | Letter to Shareholders #78 - 2011 Q1 Results (in French only) | Download PDF |
March 2011 | Letter to Shareholders #77 - 2010 Q4 & annual Results (in French only) | Download PDF |