Understanding our third quarter 2017 results
Frédéric Oudéa's editorial
Despite an unfavourable financial environment, Societe Generale generated resilient Q3 results, driven in particular by International Retail Banking & Financial Services. The Group continued to improve its risk profile and pursued its investments, in order to meet the needs of its customers and respond to changes in the methods of using banking services.
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Dear shareholder,
Despite an unfavourable financial environment, Societe Generale generated resilient Q3 results, driven in particular by International Retail Banking & Financial Services. The Group continued to improve its risk profile and pursued its investments, in order to meet the needs of its customers and respond to changes in the methods of using banking services.
In Q3 2017, French Retail Banking continued to enjoy a good commercial momentum and solid profitability against a backdrop of low interest rates and the transformation of the business model. Revenues continued to be adversely affected by the low interest rate environment but continue their transition to a more fee-generating model. In the individual customer segment, Boursorama maintained a robust customer acquisition momentum and strengthened its position as the leading online bank in France. In the business segment, various initiatives, in particular, SG Entrepreneurs (which aims to offer a comprehensive range of products and services to entrepreneurs) have enabled French Retail Banking to enter into relationships with more than 3,500 new companies in the first nine months of the year. Lastly, in the professional customer segment remains dynamic.
As in previous quarters, International Retail Banking & Financial Services enjoyed robust growth in activity in all regions and businesses: steady increase in outstanding loans in International Retail Banking, in particular in Europe and Africa, increase in outstanding in life insurance savings business and also outstanding loans in financial services to corporate. Operational Vehicle Leasing and Fleet Management experienced another substantial increase in its vehicle fleet in Q3 17.The division Global Banking & Investor Solutions has evolved in a sluggish environment penalising its revenues from market activities. The first signs of a slowdown observed in Q2 intensified. Q3 was marked primarily by the “wait-and-see” attitude of investors, in conjunction with historically low volatility.
Operating expenses were slightly lower in Q3 2017 (-0.4%). There was a further decline in costs in Global Banking & Investor Solutions while the Group continued with its investments in the transformation of French Retail Banking and efforts to support the growth in International Retail Banking & Financial Services.
The net cost of risk (excluding the variation in the provision for disputes) continued with the downward momentum observed in previous quarters, against a backdrop of an improvement in the Group’s risk profile. It amounted to EUR -212 million in Q3 2017. The provision for disputes was the subject of an additional allocation of EUR 300 million in Q3 17.
Book Group net income amounted to EUR 932 million in Q3 2017 and EUR 2,737 million in the first nine months of 2017.
Our CET1 capital ratio stood at 11.7% over the quarter. It includes, in particular, a provision for dividend of EUR 1.65 per share, corresponding to three quarters of the dividend of EUR 2.20 paid in 2017 for the whole year of 2016.
With increased underlying profitability in the first nine months of the year, a solid capital base and the commitment of its teams, Societe Generale is ready to embark on a new phase of its development and will present its strategic plan on 28th November.
Once again, I would like to thank you for your loyalty and the trust you have placed in our Group.
Frédéric Oudéa,
Chief Executive OfficerChanges indicated are in relation to Q3 2016
Key figures
Viewpoint
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Innovation
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Engagements
New exhibition "Miroirs de l'homme" by Fahamu Pecou
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