ANNUAL GENERAL MEETING, 18 MAY 2016 LETTER TO SHAREHOLDERS_JUNE 2016 | 5 continued its expansion, and had over 800,000 customers at the end of March 2016. Our second core business, International Retail Banking and Financial Services, is our main growth driver and its profitability is improving. Societe Generale is benefiting in particular from dynamic markets in Africa and Central and Eastern Europe, as well as from the development of financial services. Our third core business, Global Banking and Investor Solutions, will continue its transformation and pursue its efforts to reduce costs, enhance risk management and adjust its business model. We already have one of the best performances in Europe in these activities, are well positioned in relation to our competitors and can further increase our market share. In 2015 we also continued to develop synergies between our businesses, which allows us to grow our revenues while also giving our clients full access to all of our areas of expertise. The transformation is under way Over the past five years, we have improved the coherence of our business model, disposing of 70 activities and acquiring 27. Beyond this reorganisation of our portfolio of activities, we will continue the in-depth transformation of each of our businesses and of the Group as a whole. At the end of 2015 we announced a major transformation of French Retail Banking (see opposite). This includes a five-year programme with the development of an omni-channel distribution model, the optimisation of the branch network and our support functions, and the target of 2 million customers for Boursorama by 2020. International Retail Banking and Financial Services is also undertaking important transformations, with the optimisation of all Retail Banking platforms, the harmonisation of processes, a review of organisational structures and, of course, digital initiatives. Global Banking and Investor Solutions will also change and significant transformations are under way in terms of activities, products and services. Our central functions are also evolving - efforts are being made to optimise their organisation and staff are being equipped with digital and collaborative working tools. Around fifty innovation projects are underway across our businesses. We have reviewed 600 start-ups and are constantly building relationships with the digital world. A strong corporate culture To make this wide-sweeping transformation a success we need the support of our staff, of our teams. As such, we have put in place a “Leadership Model” based on our four shared values in the service of our clients: team spirit, innovation, responsibility and commitment. We have also begun an intensive programme to enhance compliance and conduct, because loyal and transparent behaviour towards customers and compliance with regulations are at the very centre of the relationship of trust we want to build with our customers, employees and shareholders. Outlook for 2016 Following on from the solid performance achieved in 2015, we will continue to create value for our shareholders in 2016. Despite the uncertain business environment, Societe Generale will execute the final stages of our strategic plan for 2014-2016 with dedication and discipline. The Group will pursue the major transformations that are under way in each of our business lines, drawing on our capacity to adapt. Transformation of French Retail Banking: a new relationship model We are living in a world where digital technologies have changed society and transformed our daily lives, with the proliferation of mobile technologies, smartphones, tablets, social media, big data, an explosion in computing power with the cloud, among others examples. Societe Generale is transforming the organisation of its French Retail Banking activities to accompany its customers’ changing behaviour and new expectations. 86% of contact with customers is already made electronically. The objective is to create an omni-channel distribution model that allows customers to choose when and how they contact us - using a mobile app, in a branch, via our website, etc. We aim to reduce the number of everyday transactions currently carried in our branches, so that the time spent in them is devoted to value-added activities, advising and serving customers. The Societe Generale retail banking network is set to change, with a 20% reduction in the number of branches by 2020, and a shift towards larger branches. At the same time we are transforming our back office operations by increasing automation and digitisation. This will have two main consequences: improving the quality and security of transactions, and reducing processing costs.
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