Dear shareholder,

2017 was another important and positive milestone in Societe Generale group’s transformation: ongoing adaptation of the business model, strengthening of the businesses’ capacity for innovation, definition of the new strategic plan “Transform to Grow” and implementation of a new, more agile organisation. In addition to the effects of a number of exceptional items, the 2017 financial results reflect the healthy commercial momentum of all our business lines, disciplined management of our costs and risks and the improvement in our underlying profitability.

Frédéric Oudéa, Executif Chief Officer

When corrected for the effect of exceptional non-economic items, underlying Group Net Income stood at €4,491 million in 2017 (up +8.4% vs. 2016). These results reflect the good revenue performance by the business lines in a mixed environment (underlying Net Banking Income of €25,062 million in 2017, +0.5% vs. 2016), with a positive commercial momentum in French Retail Banking, the record contribution from International Retail Banking & Financial Services and a resilient performance from Global Banking & Investor Solutions. The Group also benefits from continued cost discipline across all its activities, while continuing to invest in its digital transformation and the growth of its businesses, and a very low net cost of risk confirming the quality of the asset portfolio.

Against a backdrop of low interest rates and the acceleration in the transformation of the French networks, French Retail Banking maintained a healthy commercial momentum and a satisfactory level of profitability. French Retail Banking’s three brands continued their commercial expansion,with the number of mass affluent and wealthy clients increasing by 4.7% in 2017 for the Societe Generale and Crédit du Nord networks. Additionally, Boursorama saw the number of its customers increase by 30% vs. 2016 to 1.3 million at the end of 2017, strengthening its position as the leading online bank in France. In parallel with the growth of the customer franchise, the Group promoted the development of growth drivers, the contribution of fee generating activities and, of course, continued to support its customers in financing their projects (average loan outstandings increased by 1.4% vs. 2016), while remaining selective in terms of origination in order to protect the level of margins and its risk appetite.

International Retail Banking & Financial Services continued to benefit from a good commercial momentum following the improvement in the macroeconomic environment and risk management efforts. International Retail Banking’s outstanding loans rose by 5.6% vs. 2016, with a particularly strong increase in Western Europe and Africa. The life insurance savings business saw outstandings increase by 2.3% in 2017, and by 16.1%, including Antarius’ life insurance outstandings. It also benefited from a stronger trend towards unit linked products. ALD Automotive, full service leasing and fleet management solutions, experienced another substantial increase in its vehicle fleet (up 9.8% in 2017), exceeding the threshold of 1.5 million vehicles, mainly through organic growth. The company continued to consolidate its leadership position in the mobility market. Finally, Equipment Finance’s outstanding loans were up 3.8% vs. 2016 in a highly competitive environment adversely affecting new business margins.

In a market characterised by historically low volatility, Global Banking & Investor Solutions managed to gain market share thanks to dynamic new client growth and substantial expertise, recognised by both clients and the industry. Revenues proved resilient, underpinned by the good momentum of certain franchises, in particular structured market products, Prime Services, Securities Services, Financing (particularly natural resources financing), Private Banking, structured products and Lyxor Asset Management activities. In addition, costs remained under control, with stable operating expenses reflecting efforts to  control costs and improve operational efficiency, and with a very low net cost of risk.

Overall, taking into account exceptional items related in particular to decisions to adjust corporate tax rates in the United States and Europe, and the impact of litigation  (the provision for disputes amounted €2.32 billion at the end of 2017, following an additional allocation of -€200 million in the fourth quarter of 2017), Societe Generale generated book Group Net Income of €2,806 million in 2017 compared with €3,874 million in 2016. The Group maintains a good level of capital (a CET1 ratio of 11.4%), which means it is compliant  with all its prudential obligations.

Societe Generale’s Board of Directors has decided to propose a dividend payment of €2.20 per share (identical to the dividend paid in 2017) to the General Meeting on 23rd May, 2018.

We begin 2018 with confidence, sustained by the ambition to seize the growth opportunities of our activities, in an economic and financial environment that should gradually be more favourable. We will focus on the disciplined execution of the first year of our new strategic plan. With globally recognised expertise, the exceptional commitment of our teams and a solid balance sheet, we are resolutely aiming to be the trusted partner of our customers, committed to the positive transformation of our societies and economies.

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