Understanding our annual results 2018
Frédéric Oudéa's editorial
After this first year in the execution of our 3-year plan, we have confirmed our long-term strategic ambition: delivering profitable and responsible growth thanks to a robust, diversified, more compact banking Group resolutely focused on its customers, in order to assist them in their positive transformation projects.
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Dear shareholder,
After this first year in the execution of our 3-year plan, we have confirmed our long-term strategic ambition: delivering profitable and responsible growth thanks to a robust, diversified, more compact banking Group resolutely focused on its customers, in order to assist them in their positive transformation projects.
We successfully achieved several major milestones in our transformation during 2018. The digital transformation process continued with success and there was considerable progress in the growth initiatives in French and International Retail Banking, as well as Financing & Advisory. However, market activities experienced a more mixed performance, below our expectations.
In an economic, financial and regulatory environment that looks set to be less favourable and even more complex over the next few years than anticipated a year ago, we have decided to adapt the execution of our plan and our financial trajectory.
The creation of value for shareholders remains at the heart of our strategy. We have reaffirmed our target of a 50% payout ratio with a dividend floor of €2.20. At the same time, we will continue to strengthen our capital and have confirmed our CET1 ratio target of 12% for 2020.
We will be even more selective in our capital allocation, prioritising the Group’s areas of excellence. Moreover, in a more uncertain economic environment, we will continue to work on our operating efficiency with an additional plan to reduce costs by around €500 million in Global Banking & Investor Solutions and we are further prioritising cost control. All these measures and the Group’s transformation will enable us to improve our operational profile and pursue the improvement in the structural profitability of our businesses.
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
Adaptation in the execution of the 2020 strategic and financial plan “Transform to Grow”Given a geopolitical environment marked by substantial uncertainty, a still low interest rate environment in the eurozone, the relative performance of its businesses and improved visibility on regulatory constraints, the Group has adapted the execution and targets of its Transform to Grow strategic plan.
The Group’s financial targets for 2020 are as follows:
- Group ROTE * of between 9%-10%
- RONE* for French Retail Banking revised to 11.5%-12.5%
- RONE* for International Retail Banking & Financial Services increased to 17.0%-18.0%
- RONE* for Global Banking & Investor Solutions ranging from 11.5% to 12.5%
- CET1 ratio of 12%
- 50% payout ratio, with a dividend per share of at least €2.20
2018 results in briefIn 2018, revenues (+0.6%*) were driven by the good performance of International Retail Banking & Financial Services, resilient French Retail Banking activities and the strong momentum in Financing & Advisory
The excellent commercial momentum of International Retail Banking & Financial Services in all regions and businesses resulted in revenues rising 6.6%** in 2018 to €8.3 billion.
International Retail Banking revenues were 9.1%** higher in 2018, the result of growth in all regions (Western Europe, Czech Republic, Romania, Russia, Africa, etc.).
The growth in outstandings for life insurance savings and Personal Protection led to Net Banking Income increasing 4.9%** for the Insurance business in 2018. Financial Services to Corporates maintained a good commercial momentum in 2018.French Retail Banking enjoyed a solid commercial momentum. In a low interest rate environment, revenues totalled €7.8 billion, -1.8% *** vs. 2017, in line with the Group’s expectations.
The Group’s three brands (Societe Generale, Crédit du Nord and Boursorama) pursued their commercial expansion, particularly for their growth drivers. With nearly 1.7 million clients, Boursorama confirmed its position as the leading online bank. French Retail Banking continued to develop its growth drivers: increase its mass affluent and wealthy client base, open of “Pro Corners” dedicated to professionals and create new regional business centres.
The banking network transformation plan continued, with the move towards a model combining digital and human expertise.Despite the strong growth in Financing & Advisory, Global Banking & Investor Solutions’ revenues fell -3.6% in 2018 to €8.8 billion, due to the decline in revenues for Global Markets & Investor Services.
In an unfavourable market environment, impacted by political tensions in Europe and the trade war between the United States and China, Global Markets & Investor Services saw its revenues fall -8.3% in 2018.
Financing & Advisory enjoyed a record year, with revenues climbing 7.1% in 2018 and 19.1% in Q4 2018.Good control of operating expenses (+2%*) and risks
The increase in operating expenses is in line with the full-year target in French Retail Banking and reflects cost control in Global Banking & Investor Solutions. Efforts to support growth in International Retail Banking & Financial Services resulted in a positive jaws effect between revenue growth and the increase in costs.
The Group continued to strengthen its risk profile with a commercial cost of risk that remained low at 21 basis points (19 basis points in 2017), towards the bottom end of the expected range. This low cost of risk reflects both our strict discipline in loan origination and the quality of our loan portfolio.The Group is continuing with the refocusing of its businesses
Over the last few weeks, we announced the disposal of Societe Generale Serbia, Mobiasbanca Societe Generale in Moldavia and our stake in La Banque Postale Financement. These will help strengthen our capital.
Group book net income totalled €3.9 billion in 2018 (+37.7%) and underlying net income €4.5 billion (-0.5%)
In 2018, the Group’s profitability was 9.7% (underlying ROTE), slightly higher than in 2017 (9.6%).
On this basis, the Board of Directors has decided to propose the payment of a dividend of €2.20 per share to the General Meeting of Shareholders, with the possibility of opting for the payment of the dividend in shares. This represents a payout ratio of 51.8%. The dividend will be detached on 27 May, 2019 and paid on 14 June, 2019.
(*) Underlying data
(**) data adjusted for changes in Group structure and at constant exchange rates
(***) Excluding PEL/CEL provision
Expert View
3 key questions for 2019
2018 ended on a challenging note for the global economy with a significant loss of growth momentum in China and Europe, and the United States caught in a government shutdown. Combined with the uncertainty headwinds from ongoing trade tensions and Brexit negotiations, it’s no wonder that financial markets suffered a year-end slump. Entering 2019, investors have taken some comfort from the re-opening of the US government, positive rhetoric on the US-China trade talks and a more dovish tone from the major central banks, indicating that further monetary policy tightening is on hold for now. Equally important, the Unites States is now joined by China and France in delivering a more substantial fiscal boost to their respective economies. Nonetheless, important questions remain open and just how these unfold over the coming weeks will be key for the outlook of 2019.

The digital transformation of Societe Generale
Digital transformation is a key challenge for the banking sector. In addition to being an industrial revolution, digital transformation is a cultural revolution. Clients increasingly expecting value-added, personalised services, available anytime, anywhere, on any device, and staff want more empowerment, autonomy, agility and skill acquisition to innovate and reinvent the bank of tomorrow.
OUR IDENTITY

The new Societe Generale brand platform
One year after the launch of the Transform to Grow strategic plan, Societe Generale has lanuched a new brand platform. Under the engaging promise "The future is you", this signature marks the bank's ambitions for sustainable growth in the service of customers, the economy and society. " The future is in your hands " Our specialists consultants help more than 2,000 startups to develop their projects. Startups are key players in the economy. Fintech, Medtech, Cloud, Mobility, Retail, HR... they innovate in all sectors of the economy.
AFRICA
A growth plan for the entire African continent
The Grow with Africa initiative contributes to the sustainable development of Africa, in partnership with territories and local actors as well as international experts, by establishing dialogue, listening and sharing innovative means and approaches.
Societe Generale has identified four development areas that can become growth drivers for broader sectors in the future, mutually enriching each other in operational efficiency.

Playing for Philharmonie
For this fourth year, three concerts have been scheduled, including one as part of the Philharmonie de Paris' annual programme and so open to the general public for the first time. This musical and human adventure brings together Societe Generale staff, amateur musicians and singers from France, Romania and Senegal alongside professional musicians from the Orchestre Les Siècles, as well as children from the Démos association.
Watch the stories of three of our members of staff
Adina's incredible day
The great day of Sandrine
André and his choir project
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 |