EBM: Societe Generale, one of the largest European financial services groups, reports second quarter results for 2018. Frédéric Oudéa, hello, you are the CEO of Societe Generale, what are the main takeaways this quarter for your key businesses?
Fréderic Oudéa: I would say that in a still contrasted financial environment in Europe, we post very solid performances. When I look at the Group level: our revenues are growing by more than 2% on a like for like basis and at a constant exchange rate. We show our discipline in cost monitoring as well as risk. We have a very low cost of risk reflecting the quality of our credit origination. And all in all we post a net profit of 1.26 billion euros with an encouraging profitability of more than 11 per cent on a tangible asset basis. When we look at each business, each division, all the businesses contribute to that. In the French Retail, we pursue the transformation but we show a good level of credit development; we conquer new clients; we monitor in a disciplined way our cost; and all in all we have a resilient profitability showing the capacity to adapt to this new business model, in particular Boursorama, showing more than 1.5 million clients, and the ability to reach the 2 million target one year ahead. All our International Retail activities and our Financial Services confirm their capacity to grow strongly and be profitable. It’s across all the geographies, it’s for credit as well as deposits, and it’s true again for all the activities. That’s very positive and with good profitability across the geographies. When we look at the Corporate and Investment Banking businesses, we post strong results in the financing activities which is one of the core activities of our Group, in structured finance. Regarding capital markets, we show a rebound of our revenues, in a difficult environment in Europe overall compared with the first quarter. That’s again very encouraging I think. So as you can see, a pretty consistent set of results across our businesses.
EBM: You’ve announced several changes concerning the scope of your business activities. What’s the thinking behind these deals?
Fréderic Oudéa: We are completing the refocusing of the Group, the optimisation of the capital allocation to our core businesses; the ones which have the critical size in the long term to compete effectively and which have enough synergies with the rest of the businesses of the Group. As part of that process, we have announced, as part of these results, the disposal of our private banking activities in Belgium, as well as the sale of two subsidiaries in Central and Eastern Europe, in Bulgaria and in Albania. And just a few days ago we announced the acquisition of the equity market and commodity activities of Commerzbank which will reinforce our overall global market activities. As you can see, something very consistent with our overall strategic plan ”Transform to Grow”, which has as an objective to give all the resources to our core businesses, to develop, to grow and of course to transform.
EBM: Since you just mentioned it, what’s the latest on your strategic plan?
Fréderic Oudéa: I think these results and the first achievements show how determined we are in the implementation of this three-year strategic plan. It’s the first step of course, half a year, but let me just remind you we have five main priorities. First, grow the revenues, and the revenues are growing by more than 2% organically. Second, pursue the profound transformation of our businesses and functions. It’s true across the board, in particular embracing the new technologies and our profound changes to implement with benefits for our clients going forward. Third, carry on monitoring with discipline our costs and risks. Clearly it’s reflected in our figures. Fourth, complete the refocusing of the Group optimising the capital allocation. And fifth, really anchor a culture of responsibility across our businesses at all levels. That means, of course, putting the litigation of the past behind, but also very importantly with our global program around culture and conduct, ensure that everyone in the Group shares this sense of culture and responsibility to remain this loyal partner and keeping the trust of our clients and of course the reputation of our Group. As you can see, pretty encouraging first achievements and of course we’ll carry on going forward.
EBM: Fréderic Oudéa, CEO of Societe Generale, thank you very much.
Fréderic Oudéa: Thank you, you’re welcome.
