EuroBusiness Media (EBM): Société Générale, one of Europe’s largest financial services groups, reports results for the third quarter of 2018. Frédéric Oudéa, hello.
Frédéric Oudéa: Hello.
EBM: You are the CEO of Société Générale. What’s your take on the Group’s 2018 third quarter results?
Frédéric Oudéa: We post, in the third quarter of 2018, very solid results and I would say significant progress aligned with our strategic objectives.
First of all, a progression of our net banking income, our revenues. They are growing, in particular in the International Retail Banking and Financial Services activities as well as in the Wholesale activities.
Second, we show how disciplined we remain regarding our cost management and our risks. And I think these are pillars to sustain profitable growth in the mid-term. Third, we are also making significant progress in the litigation, we are effectively putting behind the financial impact of our litigation coming from the past with the US authorities this quarter.
And fourth, we are also announcing the disposal of our Retail Banking activity in Poland in line with our objective of optimising the capital allocation.
All in all, we post a significant improvement of our net profit, a sound profitability, 11% return on tangible equity and I think again very significant progresses compared with our strategic goals.
EBM: More specifically, could you tell me what trends you’ve seen in your key business lines?
Frédéric Oudéa: If we look at our three business lines, first of all the Retail Banking activities in France, we post again strong and sound development of our credit activities, of our portfolio of clients, it’s true both for corporate and individual clients. And importantly, we pursue the transformation of our business and we are able to show resilient contribution to our net profit.
We have the confirmation regarding our International Retail Banking activity and Financial Services of their very strong growth potential as well as profitability. And this very strong growth – high single digit revenue growth, good profitability - is true across the board. Across the geographies for our Retail Banking activities, whether they are in Western Europe, Central and Eastern Europe, Russia or Africa or regarding our Financial Services activity both targeting individual clients as well as corporate clients and I’m very confident that, going forward, we will see these performances very sustainable .
Regarding our Wholesale activities, whether they are Market activities in a still relatively difficult environment, in particular in Europe, or the Financing activities we have here also good progress of revenues, even more in the Financing activities in particular in Asset Finance and I think again its encouraging regarding the quality of the franchise. So, as you can see, pretty consistent performance regarding commercial and financial results.
EBM: And how are you progressing on the priorities of your strategic plan?
Frédéric Oudéa: You probably know we have five main objectives in our strategic plan and again these third quarter results I think are well aligned with the delivery.
The first objective is growth of revenues. It’s not obvious for a European bank to grow the revenues and as I’ve said, this quarter we grow the revenues and I think it’s a good thing and it reflects the quality of the businesses.
Second, pursue successfully the transformation of our businesses, in particular the French Retail Banking business which is particularly impacted by new technology. We are in line in the delivery of our operational objective regarding this transformation and again that means better performances, better client satisfaction going forward.
Third, pursuing the discipline on costs and risk, it’s obvious in this quarter, the cost of risk remains very low reflecting the quality of the origination of credit and of our credit portfolio and we pay a lot of attention to cost management.
Fourth, the optimisation of the capital allocation, we have announced some disposals, the ambition to dispose of a certain number of assets. We have been able to communicate on the sale of our Polish retail bank, and the benefit of this disposal will support the profitability of the Group, but also increase the capital base. We have a target of 12% of Core Tier One in 2020. We are confident to reach this target through organic generation, like this third quarter where we increased the core-tier-one ratio by 8 basis points, as well as with the benefit of these disposals.
And fifth, last but not least, anchor a culture of responsibility in the bank. This is related to the compliance and the litigation and beyond putting behind the financial impact it’s to ensure that we are at the best standards of the industry.But also, to be a very active contributor, partner of our clients in the positive transformations of our societies, of our economies, in different fields, whether it concerns climate change and the financing of renewable energies, whether it’s the responsible transformation regarding digital technology, whether it’s also for example gender equality and being a loyal employer. We are showing good results on this front too and I’m very proud of that.
So, all in all, as you can see, good progress in the delivery of this plan and we are confident to meet our objectives.
EBM: Frédéric Oudéa, CEO of Société Générale, thank you very much.
Frédéric Oudéa: Thank you.
