EBM: Societe Generale reports results for the second quarter of 2022. Frédéric Oudéa, hello and welcome.
Frédéric Oudéa: Hello.
EBM: You are the CEO of Societe Generale Group, what is your assessment of those results for the second quarter in a world still marked by the invasion of Ukraine by Russia and by inflation?
Frédéric Oudéa: In this difficult environment we are recording very strong commercial and financial performances. Of course, we are recording as anticipated the impact of the disposal of our subsidiary in Russia, Rosbank, around €3 billion. But putting that aside, which has a very limited impact as anticipated on capital, when we look at our underlying profit and the results, it’s great across the board. All businesses are doing great, the revenues are growing very strongly, we monitor well our costs and we have a cost of risk which is low, which reflects the quality of the portfolio. Overall, we are able to record, again, for now the 6th quarter in a row, a double digit underlying profitability. In terms of capital, it’s stable versus the end of March which shows again the capacity we have to generate capital. So, overall very strong underlying results.
EBM: Could you come back in greater detail about the performance of the Group’s businesses?
Frédéric Oudéa: What is really remarkable in the second quarter is that all the businesses are doing great. If I start with the French Retail, good activity on the credit, the deposit collection, good level of fees. Boursorama has now more than 4 million clients and is offering, as you know, an alternative offer to the ING clients. It works well, this mechanism. Private Banking is recording a record level of revenues, a very strong new flow of money. If I look at International Retail, strong growth in the different geographies, whether it’s in Europe or in Africa. A stellar performance of our Mobility business, ALD, which is growing but also benefits from still this very specific situation on the car market with residual values and profit from the sales of second hand cars. Very strong activity on Insurance, a good level of activity in Leasing and, regarding Wholesale, again for 8 quarters in a row a very strong performance of the capital markets which are growing compared with last year which was already a very strong base. We’ve managed very well the volatility and the movements on the markets that we have observed, and also a record level for Financial and Advisory. So really, across the board, very strong performances, both from a commercial and financial perspective, which is very positive and which is in line with the dynamic that we have observed in 2021.
EBM: The second quarter results publication is the opportunity to put into perspective your strategic roadmap and also to disclose financial targets for 2025. Can you tell us more about this?
Frédéric Oudéa: Yes indeed. Despite the uncertainty in the short term regarding the economic and political, geopolitical environment, we felt it would be useful to give to the market a longer term perspective, our objectives for 2025 and putting together our different initiatives, confirming our objectives. So, yes we have, first of all, a certain number of strategic projects that we want to implement and then certain dimensions which will be enshrined in all the strategies of the businesses such as client satisfaction, where we want to make further progress and be a leader, the preferred bank of our clients. Second, in terms of ESG we have in mind the formidable opportunities but also requirements of this, in particular energy transition and beyond all the other aspects of ESG. More specifically regarding sustainable finance we have updated our objectives and we have now a target of €300 billion of financing between 2022 and 2025. And of course, to pursue the digitalisation and the transformation of our IS system. So we have put together all these plans, confirmed the objectives, we have in mind effectively also to make progress in terms of operational efficiency, thanks in particular to the optimisation of the IT spending. We want to pursue the investment, but at the same time optimise the spending, to diminish the intensity of IT spending out of the total of our costs, and we have in mind to improve the cost/income ratio. All in all, we feel comfortable to deliver a 10% return on tangible equity, double digit, sustainable profitability, growth of revenues and also a level of capital which I think is standard on the market but is well suited to our business model, a 12% Core Tier 1 post-Basel IV at the end of 2025. So all these figures will be presented, put in perspective, and I think we will meet the expectations of our shareholders.
EBM: Finally, what are the main strategic initiatives underway in your various businesses?
Frédéric Oudéa: In the very short term, in the next 6 to 9 months, we have as a priority to complete the job, to implement this new business model and then in the next 2 years we will reap the fruits of precisely the integration, these new commercial offers etc. Priority number 1, the merger of the 2 French networks, Societe Generale/ Crédit du Nord. We are entering into a critical phase. We want to have the legal merger on the 1st of January 2023 and then the IT migration in the first half of next year. Boursorama, we will complete the job with the ING clients in the second half of this year, and we will start to think about the second phase of development. Boursorama being, I think, a differentiating asset in our business model. Regarding the acquisition of LeasePlan in car fleet management, we have the ambition to try to close this acquisition before year-end and again then integrate. Beyond these different projects, all our other businesses have embarked into, if I may say “organic transformation” which we will also deliver. So very busy short-term plan, priorities are very clear, and then as I’ve said, in 2023 and beyond we will reap the fruit of all these strategic projects which I’m sure will land smoothly.
EBM: Frédéric Oudéa thank you.
Frédéric Oudéa: You’re welcome.
