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Q1 2021 results

Q1 2021 results

Frédéric Oudéa
CEO

Paris, May 6, 2021 — Societe Generale, one of the largest European financial services groups, reports results for Q1 2021. CEO Frédéric Oudéa comments on the Group’s results.

Company website: www.societegenerale.com

 

 

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Transcript

EuroBusiness Media (EBM): Societe Generale, one of the largest European financial services groups, reports results for the first quarter of 2021. Frédéric Oudéa, hello and welcome.
Frédéric Oudéa: Hello.
EBM: You are the CEO of Societe Generale, so what is your analysis of the results for the first quarter of 2021?
Frédéric Oudéa: We had a very strong start of the year and we are posting very strong results, a very strong rebound of our financial performances.
First, a strong increase of our revenues, of course compared with the first quarter of 2020, with the first impacts of the sanitary and economic crisis. But nevertheless, across the board, a very strong rebound of revenues. 
We are keeping a very strong discipline on our costs, which means that despite this increase of revenues, costs are basically stable. 
And the very good news too regarding our P&L is the low cost of risk. You remember that we provisioned a lot in 2020 in a very conservative way. We have the confirmation this first quarter of the quality of the credit portfolio with this very low cost of risk across the board. 
All in all, a very strong increase of our net profit, a good profitability and on top of that, as during the previous quarters, a very strong capital ratio which is still increasing further, which is providing comfort to our investors and to our clients that yes, we can finance our businesses and of course, ensure the distribution of the remuneration of our shareholders. 
So, all in all, a very strong start of the year which gives me a strong confidence for 2021 as a whole.
EBM: More specifically, what were the trends in your main business lines?
Frédéric Oudéa: Let’s start with the Wholesale Business, the Capital Markets activities and the Wholesale Finance activities. A very, very strong performance, an even exceptional performance of the Capital Markets, of course benefitting from very, very good market conditions in the first quarter. For example, we are recording the best performance in our equity capital market since the first quarter of 2015. I think it’s important, because of course we had impacts of the crisis in 2020 and we are showing, we are demonstrating that effectively we took the right decisions, they were well executed and that we are able going forward to accompany our clients and effectively have sustainable and profitable growth there. On the financing activities, also good activity, Corporates are very active. They make acquisitions, they think about investing, they are issuing bonds, etc.  so good activity on the Corporate side. 
We had also very strong activities in the Financial Services, for example in our Fleet Management business and there are company cars, but the way to think about the usage of cars is also pivoting towards the use of electric cars and less ownership and more rental. We are benefitting, of course, from these trends, as a leader of the mobility sector. It’s true also in insurance. 
Regarding the Retail activities, of course here we have geographies, economies which were still impacted by certain lockdowns in certain geographies. So, the revenues are here resilient. The good news is that we are able to increase the financial commissions which are related to the management, the support to the savings by our clients. 
The efforts on the costs are across the board, it’s true for all the activities and again on the cost of risk, the very good news, it’s low everywhere, including in countries which are not benefitting from subsidies from the government or from guaranteed loans. It’s also true in our emerging market presence, geographies and it’s true in particular in wholesale, because we have a zero cost of risk. It illustrates also the liquidity on the markets, and that companies have access to liquidity. 
So, all in all, a pretty strong picture, again which gives me comfort for the full year in an environment which overall seems to improve. Of course, there are still geographies which are significantly impacted by the pandemic, but overall, globally at the worldwide level, we can imagine a progressive improvement, both from a health perspective and an economic one.
EBM: So what are your key priorities for the next quarters?
Frédéric Oudéa: We still have a lot of hard work ahead of us. 
The first priority is to carry on accompanying our clients. And I would like really to thank our teams, because they did an extraordinary job at the heart of the crisis in 2020 and now their duty is to accompany the clients in this progressive exit, if I may say, of the crisis and the resumption of activities. Clients will need to have access to funding, they will want to invest, they will want to transform and we have to be there and I’m sure we can do a great job, we have accumulated goodwill, positive goodwill with our clients, in the last quarters. 
The second one is that we have very ambitious strategic projects. 
  • For example, in French Retail, the combination of our two networks. It’s a long and heavy project. It’s moving forward at the right pace, with an intense dialogue with our trade unions, but again we have milestones and we have to focus on the right execution – I’m confident on that. We want, as you know, to create a new bank which will make a further difference in terms of quality of the service provided to our clients. The second element in French Retail is of course the acceleration of the development of Boursorama, which recorded a record quarter in terms of new clients, more than 200,000 in just three months. And I think Boursorama is an asset in the banking world which will make a big difference already and going forward. 
  • In International Retail and Financial Services take advantage of the recovery of the economies, of the geographies with all the transformations that you can imagine regarding digital etc. and again, new trends in the Fleet Management business. People are thinking differently about the usage of cars. We can take advantage of that. We have the right expertise and we are a leader in this sector. 
  • And regarding Wholesale Businesses, Capital Markets and Finance, first let me remind you that we will present our mid-term strategy on the 10th of May and of course the priority is to execute well this strategy. I have the conviction that we can carry on growing sustainably, profitably, we have high added value expertise which are exactly the ones which fit with this new world post-crisis, in particular when I think about the energy transition and more broadly everything regarding corporate social reasonability. 
And precisely the third priority is around that issue and in particular regarding the energy transition. We are one of the world leaders in the financing of renewable. We have taken very clear commitments to ensure that we again help our clients to transform and of course transform ourselves. These commitments are short-term, in the coming years, as well as long-term. And I’m happy that we were among the 43 international banks, just a few days ago, to create a new coalition with a clear commitment to be carbon neutral in 2050: the net zero banking association and group of banks which have committed to act concretely. And so it’s a long journey, but we have already designed the first steps, the first milestones of this journey. 
So, all in all, a lot of hard work, but again projects which will create a lot of added value for our societies and our clients. 
EBM:  Frédécric Oudéa, thank you very much. 
Frédéric Oudéa: Thank you. 
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