EuroBusinessMedia (EBM): Société Générale, one of the largest European financial services groups, reports results for the third quarter of 2016. Frédéric Oudéa, hello and welcome. You are the CEO of Société Générale. Now, in the third quarter, your group achieved a solid commercial and financial performance, what are the main factors that contributed to these positive results?
Frédéric Oudéa: As you say, I think these good performances, both commercial and financial, reflect the capacity of this group to transform and to adapt to the challenges of an uncertain and difficult environment. First thing, revenues are growing and it is our ambition, and I think it reflects the balance of our business model between different activities and different geographies.
Second, we are able effectively to monitor well our cost as well as the cost of risk which is at a very low level that reflects the quality of the origination of credit as well as the portfolio of assets. Overall, we have a strong increase of our net profit, a profitability which is good, at 9.7%, a return on equity, and I think that also we benefit from the further enhancement of our balance sheet. That’s also something that we implement, step by step, quarter after quarter, there is a strong increase of our Core Tier 1 ratio, and it stands at 11.4% at the end of the third quarter of 2016. All in all, very strong commercial performances and good financial performances.
EBM: And how have Retail Banking activities here in France managed the current environment of low, even negative, interest rates?
Frédéric Oudéa: Among the different activities in this well-balanced business model, the French Retail is the business which is impacted for some part of its revenues by the very low rate environment and even negative rate environment That should not hide the very good commercial performances. We are conquering new clients, both individual clients as well as business clients. For example, Boursorama has now 920,000 clients, and it is growing fast. But we are also getting new clients in our traditional networks and I think it reflects the quality of our business model, the quality of our services and the commitment of our teams.
Beyond this, we show also our capacity to transform. We are implementing new projects with new digital technologies. I’m very happy that we were able to secure a number 3 position among the CAC 40 companies in France and the number 1 position among financial institutions.
I think it reflects the capacity of the group to innovate, which is particularly important for the French Retail. All in all, we have yes, a revenue which is impacted by the negative rates, but the profitability, thanks to this capacity to adapt, is resilient.
EBM: International Retail Banking and Financial Services posted a strong performance for the second quarter. Has that trend been confirmed?
Frédéric Oudéa: Absolutely. And this is a great satisfaction for me, because we are showing, quarter after quarter, the potential of growth of this pillar and of profitability. May I say again, the revenues are growing because these activities are in countries that generally have better economic activities, GDP growth, with overall a different situation on the rates, more normal if I may say so, not negative because it’s not in the Euro Zone. Third, with overall banking markets which are less mature, so more potential for growth. And thanks to the quality of our franchises, we are capturing again, new development, new clients. We are able to secure also a good monitoring of the cost and the cost of risk which is also low. Very symbolically, but importantly, Russia is back to the black, we have profit this quarter for our Russian operations.
All in all, very strong contribution, good profitability and I think that’s what we can expect in the coming quarters from that division.
EBM: And how did Global Banking and Investor Solutions perform in a mixed market environment?
Frédéric Oudéa: Quarter after quarter, our wholesale activities demonstrate their resilience and capacity to adapt and to conquer market share in as you say an environment which is not that clear on markets. Our revenues are growing both for market activities as well as for financing activities. We are delivering, I think, a good service to our clients. We are able again to convince more of these clients to further develop their business with us. Same thing, same discipline in terms of cost, very low cost of risk.
All in all, this pillar contributes to the group significantly and I think it’s a good sign for the coming quarters and years.
EBM: So, according to you, these results demonstrate the efficiency of the group’s transformation?
Frédéric Oudéa: I think so, you know we can’t expect a miracle. The banking sector is facing very structural challenges, the need to adapt is for today and the coming years, but I think that these quarterly results, as well as the previous ones, show the capacity of that group to embrace the transformation and to move forward. And I believe that we are building on solid foundations, good business models, both for our clients, we are making sense to our clients, we are relevant for our clients, as well for the new regulatory framework which is being implemented so yes, I am confident for our perspectives going forward.
EBM: Frédéric Oudéa CEO of Société Générale, thank you very much.
Frédéric Oudéa: You’re welcome.
