EuroBusinessMedia (EBM): Société Générale, one of the largest European financial services groups reports results for 2014. Frédéric Oudéa, welcome. You are the Chairman and CEO of Société Générale. To begin, what are your comments on the 2014 results?
Frédéric Oudéa: I’m happy with the performance of the group. We are in line with our expectations for this first year of the implementation of our strategic plan, and in particular our businesses have shown their capacity to grow and deliver better performances. We have an increase of their net contribution of 3.5%. It’s a mix of good commercial development, good monitoring of the costs, decrease of the cost of risk. All in all, we are in line with what we wanted to achieve, and on top of that with a very robust balance sheet. So I think we are well equipped to deliver in 2015 and 2016 on these solid foundations.
EBM: At the end of 2014 you had a core Tier 1 ratio of 10.1%. Do you feel that is enough in the current environment?
Frédéric Oudéa: Absolutely, it is a level which complies very well with the requirements of the new European regulator. It’s also a level which should take into account the quality of our capital, the quality of the portfolio, and I must say we have been able to use our strong capital generation to finance a dividend in line with what we said to the market, 40% pay-out ratio, a dividend which is increasing. I think we are absolutely fine in terms of balance sheet and capital ratio in particular.
EBM: You mentioned a growing contribution in all your businesses, can you tell us some more about that?
Frédéric Oudéa: Yes, again, I’m happy with the overall performances. French retail, yes, in a difficult environment, a slight decrease of the revenues, but good monitoring of the costs and a decrease of the cost of risk, hence an increase of the contribution. In the international retail, the growth was driven by Europe and the financial services to corporates and insurance, which are very dynamic businesses. And in the Global Banking and Investor Solutions business, the Corporate Banking and Investment Business, we had again a very good year, a third year in a row with good profitability, good commercial momentum and I think a good performance compared with our peers. So all in all, a positive picture across the group.
EBM: How has the situation in Russia impacted the group in 2014? And what is your outlook for that country in 2015?
Frédéric Oudéa: First of all, I think we did a good job in 2014, in particular in balance sheet management, with a decrease of the liquidity provided by the parent company to the business, and good liquidity on the ground, strong capital ratio, a decrease also of the non-performing loans. So we are entering into 2015, which will be a more difficult year - with as we know an economy which might face a recession - in good shape.
In 2015 what are our objectives? Of course, to pursue the transformation of the bank, put the emphasis on the development of services to our client, in particular the cash services to the retail, of course carry on reducing the cost. And in terms of the cost of risk, we know that the cost of risk should increase - we have in mind something between 400 and 500 basis points - but this is manageable for the group. And I think again we have a good operation to face this difficult environment currently.
EBM: And finally, what are your priorities for 2015? Are you on track with your 2016 strategic plan?
Frédéric Oudéa: 2015 is the second year of our strategic plan and I would like really for us to take advantage of the momentum in the businesses currently. In the French Retail, with - again - more clients, the benefit of certain developments in the digital technology as well as in private banking, all in all I expect a slight but nevertheless an increase of the NBI and good monitoring of cost and risk
In international retail, beyond the Russian situation that I’ve just described, I expect all the businesses to do better, with better performances and more growth and, of course, also the decrease of the cost of risk which should help in improving the contribution.
And then I expect for the GBIS business a fourth year of a steady, profitable growth. Again the momentum is good, clients are happy with our service, we have a focused business but which is very efficient.
So I’m confident for 2015, and of course for 2016 I see no reason to change our objective - for the time being we stick to it - and I think we’ll deliver.
EBM: Frédéric Oudéa, Chairman and CEO of Société Générale, thank you very much.
Frédéric Oudéa: You’re welcome.
