Quarterly Financial Information - Q1 2015


Paris, May 6th, 2015

  • Net banking income: EUR 6.4bn, +12.3% vs. Q1 14 and +4.4% vs. Q1 14 excluding non-economic items and corrected for the implementation of IFRIC 21
  • Good commercial momentum and solid growth in all the businesses
  • Operating expenses under control, accompanying business growth: +1.6% when adjusted for changes in Group structure and at constant exchange rates, excluding the effect of the introduction of new regulatory and accounting obligations (SRF and IFRIC 21)
  • Continued decline in the cost of risk: -5.0% vs. Q1 14 to 55bp
  • Book Group net income: EUR 868m in Q1 15 (EUR 169m in Q1 14, x5.1 vs. Q1 14)
  • Group net income excluding non-economic items**, IFRIC and SRF adjustment: EUR 1,078m in Q1 15 (EUR 415m in Q1 14)
  • CET1 ratio: 10.1%, in line with the Group’s strategy

Societe Generale’s Board of Directors examined the results for Q1 2015 on May 5th, 2015.

The Group’s net banking income totalled EUR 6,353 million in Q1 2015 (vs. EUR 5,656 million in Q1 14) and Group net income amounted to EUR 868 million (vs. EUR 169 million in Q1 14). When restated for non-economic items (revaluation of own financial liabilities and debt value adjustment) first quarter net banking income was EUR 6,300 million (and EUR 5,809 million for Q1 2014, +4.4%), and Group net income pro forma for the effect of the new accounting and regulatory rules EUR 1,078 million (and EUR 415 million in Q1 2014, which included a goodwill write-down amounting to EUR -525 million).

The first quarter was marked by strong activity in all the businesses. French Retail Banking continued to enjoy dynamic commercial activity despite an environment of historically low interest rates. In International Retail Banking & Financial Services, net banking income was generally higher (+2.5%) than in Q1 2014; although revenues were affected by the crisis in Russia, there was further confirmation of the growth in Africa and Eastern Europe, as well as in Financial Services to Corporates and Insurance. Finally, there was an increase in Global Banking & Investor Solutions’ revenues in a more favourable environment (+7.9% vs. Q1 2014). These results provide further evidence of the Group’s growth capacity with the strengthening of synergies between businesses, which represented 28% of the Group’s revenues in 2014.

The introduction of new regulatory obligations (contribution to the European Single Resolution Fund) and accounting obligations (implementation of the IFRIC 21 standard) resulted in a normative increase in Q1 operating expenses which was not material economically. The increase would have been smoothed over the year according to previous rules. When restated for these items and exchange rate and structure effects, the increase in operating expenses was limited at +1.6% vs. Q1 2014, reflecting good cost control and support for business growth.

The net cost of risk continued on its downtrend, at -5.0% between Q1 2014 and Q1 2015 while the cost of risk stood at 55 basis points at end-March 2015 vs. 65 basis points at end-March 2014.

Finally, the Group provided further evidence of the robustness of its balance sheet, with a “Basel 3” Common Equity Tier 1 (CET1) ratio of 10.1% – in line with the Group’s targets. Strong capital generation during the quarter helped finance the growth in the businesses and the dividend.

Commenting on the Group’s results for Q1 2015, Frédéric Oudéa – Chairman and CEO – stated:

“Societe Generale enjoyed a good first quarter, marked by strong growth in commercial revenues and Group net income, testifying to our business model’s potential for profitable growth, in line with our strategic objectives.

Supported by the good commercial momentum observed in all the businesses and the development of synergies within the Group, Societe Generale was able to capitalise on the initial signs of recovery in Europe.

Revenues were higher in all the businesses, both in French Retail Banking in a mixed environment of low interest rates where credit demand is starting to pick up, and within International Retail Banking & Financial Services where growth in Africa, Eastern Europe and in Financial Services to Corporates offset the anticipated deterioration in Russia. Global Banking & Investor Solutions delivered a strong performance in a more favourable environment.

We continued to rigorously manage our costs and risks, while at the same time supporting the development of our businesses. The Group’s balance sheet has been further strengthened, with solid solvency ratios in line with our targets and with regulators’ requirements.

In an environment that looks set to remain mixed and uncertain over the medium/long-term, we are continuing with the determined and disciplined execution of our strategic plan aimed at serving our customers and the economy, confident in our ability to adapt and transform accordingly.”

For more detailed information, please find the complete press release below: