Paris, February 6th, 2020 — Societe Generale, one of the largest European financial services groups, reports 2019 full year results. Frédéric Oudéa, hello. You are the CEO of Societe Generale.
EuroBusiness Media (EBM):
EBM: Frédéric Oudéa hello. You are the CEO of Societe Generale. How did Societe Generale perform in 2019?
Frédéric Oudéa: 2019 was a very intense year, with many projects to run at the same time. And I’m very happy that we have met all our objectives, whether commercial, operational or financial. In particular, of course, the main priority was to increase our core tier 1 ratio, our capital base. And we have exceeded our target, we end up 2019 with a core tier 1 of 12.7%. This is very good in terms of giving confidence, but also allowing to pay a dividend, as we committed, of 2.2 euros per share, in cash.
But beyond, in terms of P&L, I think we have also shown all the benefits of our efforts, in particular in terms of costs. Our costs are going down by 1%. In terms of cost of risk also, at the low range of our expectations. And a resilience of our revenues, because yes, certain businesses had to restructure and the business revenues remained stable, so I think it shows the quality of the model.
And I would like really to thank all the teams for all their efforts and commitment to meet all these objectives at the same time.
EBM: Focusing on your various business lines, what were the key trends?
Frédéric Oudéa: As you know, we have three major businesses.
First, let’s start with French Retail. In a difficult - as we know - environment with low rates and even sometimes negative rates, the performance is good. It’s very good commercially: strong production of credit, good activity in Private Banking and in Insurance. So, good activity with our clients. We conquer clients. In terms of cost: good monitoring of the cost at the low range also of our expectations. Low cost of risk, overall a profitability which has remained stable, which is pretty remarkable - again in this environment.
If we look at the International Retail Banking activities and the Financial Services, it’s our growth engine and it’s confirming our capacity to grow. We have growth of revenues, costs are growing less than revenues, and overall the profitability is at 17.9%, at the higher range of our expectations. And we are very positive about the perspective of these activities, which are not in the same rate environment than the Euro Zone.
And regarding our Global Banking and Investment Solutions activities, they went through significant restructuring. It’s been done very well, it’s completed. And after this restructuring, what is very positive, is that in terms of revenue, in the fourth quarter, we see an increase in revenues, good dynamism. And also, with a good management of costs, we have been able to maintain a pretty acceptable profitability, and we are confident that we can now focus on further taking advantage of good expertise, and good franchises.
EBM: Finally let’s look to 2020. What are your priorities going forward?
Frédéric Oudéa: Well, first of all, I look at 2020 with confidence. Because we’ve done so much in 2019, we can capitalise on all that, all these foundations.
The first priority is to pursue with the same discipline in terms of cost, in terms of management of risk, in terms of capital allocation, and of course take advantage of the restructuring which is behind, to show an improvement of the profitability of the Group.
But I would say beyond the very short-term objectives, the idea is also to start thinking about the next strategic phase - 2021-2025 - with three main axes, which will really be at the source of our reflections, in all activities and functions.
First, the obsession of the client satisfaction, the client experience. It’s absolutely crucial in a world of competition with newcomers, in this world of digital technology. We need to be at the top, and I think we can have an ambition. It will be with the benefit of the new business models that we’ve put in place, and of course with also the new technologies, which will help to improve the client experiences.
Second, the efficiency. In this world of constraints, where revenue generation is difficult, we need to make further progress. It’s true for businesses as well as functions, and, here again, with digital technologies, I think there are ways to do better and at a cheaper cost than in the past.
And then, it’s around the corporate and social responsibility. Here, we of course have in mind the climate change, the energy transition. I’m very happy that in 2019 we’ve been acknowledged as a leader, but beyond, we need to do more. It’s just the beginning of the journey. And beyond climate, there are also other directions. I have particularly in mind our staff. We care very much about the staff. With all these transformations I’ve mentioned, the idea to manage them in a socially responsible way is key.
Overall, we have just recently updated the expression of our Purpose, our “raison d’être” in French. And it’s “building together with our clients a better and sustainable future through responsible and innovative financial solutions”. I think it says a lot, and we will give a content, ambitions to this confirmation of what we want to be, what we have been, and what we want to be further in the future.
So, as you can see, 2020 will also be a very busy year. It’s a little bit like a match with two halves, I think we have played very well the first half, 2019, and now we need to pursue and win the match in the second half.
EBM: Frédéric Oudéa, thank you very much.
Frédéric Oudéa: You’re welcome.
