Societe Generale: Third Quarter Results 2020
Q3 20 KEY INFORMATION: CONFIRMED REBOUND
Substantial improvement in gross operating income +14.6%* vs. Q3 19
Rebound in revenues in all activities: revenues +9.7% vs. Q2 20 (+0.5%* vs. Q3 19)
Operating expenses down -8.2% vs. Q3 19 (-5.6%*) and -6.5% vs. 9M 19 (-4.5%*)
Positive jaws effect at Group level
Q3 20 cost of risk substantially lower than in Q2 20 at 40 basis points
Reported Group net income of EUR 862m (+9.8%* vs. Q3 19) - underlying Group net income of EUR 742m in Q3 20 and EUR 803m in 9M 20
SIGNIFICANT INCREASE IN CET1 RATIO AT 13.2%(1)
Dividend provision of EUR 0.21 per share(2) included in CET1
High level of capital (~420bp buffer over regulatory requirement) giving the Group flexibility in terms of shareholders’ return
2020 OBJECTIVES
Objective of underlying operating expenses of around EUR 16.5bn
Cost of risk of around 70bp
Objective of a CET1 ratio above 12% at end-2020
SOCIETE GENERALE GROUP FULLY MOBILISED TO SERVING THE ECONOMY
More than EUR 20bn of State Guaranteed Loan applications at Group level
NEW ENERGY TRANSITION COMMITMENTS
Target to reduce overall exposure to the oil and gas extraction sector by 10% by 2025:
- by supporting the energy transition of our clients, through a priority of financing renewable energies and gas in the transition phase
- by stopping new financing of onshore oil & gas extraction in the US (Reserve Based Lending)
Frédéric Oudéa, the Group’s Chief Executive Officer, commented:
“The Societe Generale Group’s Q3 results illustrate the ability of all our businesses to rebound, after the exceptional lockdown period that we have experienced, and to adapt to a still very uncertain environment. The performances reflect our efforts in terms of commercial development, cost control and rigorous risk management. The solidity of the balance sheet, both in terms of asset quality and level of capital, enables us to approach the coming months with confidence and build our new strategic roadmap on sound foundations. With the exceptional commitment of our teams, we have the ambition to support our customers both in the current crisis and in the longer term with their energy and digital transition, and we are confident of our ability to enhance the added value and competitiveness of our different businesses.”
______________________________________________________________________________
The footnote * in this document corresponds to data adjusted for changes in Group Structure and at constant exchange rates
(1) Including +19bp of IFRS 9 phasing and ~+10bp impact of closing of SG Finans dated 1 October 2020
(2) Corresponding to 50% of underlying Group net income in 9M 20, after deducting interests on deeply subordinated notes and undated subordinated notes