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Banks
www.fitchratings.com 6 April 2018
France
Societe Generale S.A. Full Rating Report
Key Rating Drivers
Diversified Universal Bank: Societe Generale S.A.’s (SG) ratings reflect the bank’s sound
company profile, which benefits from franchise strengths across selected products and
geographies that result in well-diversified and resilient earnings. SG has a broad retail and
corporate banking network across France, several countries in central and eastern Europe
(CEE) and Africa, as well as Russia, a leading global equity derivatives franchise and a sound
presence in euro-denominated debt capital markets.
Asset Quality Weaker than Peers: SG’s asset quality remains weaker than peers, despite
material improvements since end-2013. Impaired loans represented 5% of gross loans at end-
2017, reflecting higher-risk pockets than Global Trading and Universal Bank (GTUB) peers in
SG’s domestic retail portfolios and certain international retail markets, as well as slower write-
off practices in France aiming to maximise recoveries. Loan impairment charges (LICs) can
therefore accrue through time, which in our view exposes the group to unexpected shocks.
Sound Profitability: SG’s earnings are sound and resilient thanks to the group’s
diversification. Market activities and exposure to emerging economies introduce some earnings
volatility, which has been well managed. Product and geographical diversification provides
cross-selling opportunities and results in stronger revenue per client. Delivering cost savings
will be important to improve operating profit. We expect French retail revenue to stabilise in
2018 as the proportion of renegotiated housing loans falls to negligible levels.
Strong Internal Capital Generation: SG’s strong internal capital generation mitigates the
group’s adequate regulatory capital ratios, which are at the lower end of GTUB peers. SG
targets a 12% fully loaded common equity Tier 1 (CET1) ratio by end-2020 and expects to
operate with a CET1 ratio of about 11.5% by end-2018, about 2pp above its expected end-
state regulatory capital requirement. We expect internal capital generation to be sufficient to
fund organic growth and potential bolt-on acquisitions.
Diversified Funding: SG has a well-diversified funding, consisting mainly of customer
deposits. The group has an established access to wholesale capital markets. Subsidiaries are
increasingly self-funded. The bank’s buffer of unencumbered liquid assets is equal to about
290% of unsecured short-term wholesale funding.
Senior Preferred Debt Uplift: Long-term senior preferred debt, deposits and derivative
counterparties are rated one notch above SG’s Long-Term Issuer Default Rating (IDR)
because of their preferential status over the bank’s large buffer of additional Tier 1, Tier 2 and
senior non-preferred debt, which was about 8.5% of risk-weighted assets (RWAs) at end-2017.
Rating Sensitivities
Weaker Earnings: A structural deterioration in profitability that weakens the bank’s internal
capital generation would put pressure on the ratings, as would higher gross impaired loans or a
material change in risk appetite. Sizeable litigation losses could result in a downgrade if they
durably reduce capitalisation without a credible plan to restore it to current levels.
Limited Upside: An upgrade would be contingent on a substantial strengthening of the bank’s
company profile and a material improvement in asset quality while maintaining sustainable
earnings, sound capitalisation and an unchanged risk appetite.
Ratings
Societe Generale S.A.
Long-Term IDR A
Short-Term IDR F1 Viability Rating a Support Rating 5 Support Rating Floor NF Derivative Counterparty Rating A+(dcr)
Compagnie Generale de Location d’Equipements Long-Term IDR A Short-Term IDR F1 Support Rating 1
Sovereign Risk Long-Term IDR AA
Outlooks
Long-Term IDRs Stable Sovereign Long-Term IDR Stable
Financial Data
Societe Generale S.A.
31 Dec
17 31 Dec
16
Total assets (USDbn) 1,529 1,457 Total assets (EURbn) 1,275 1,382 Total equity (EURbn) 55.5 56.0 Operating profit (EURm) 5,209 6,172 Published net income (EURm)
3,430 4,338
Operating profit/risk-weighted assets (%)
1.5 1.7
Impaired loans/gross loans (%)
5.0 5.7
Fitch Core Capital/risk-weighted assets (%)
12.6 12.7
Fully applied Basel III CET1 ratio (%)
11.4 11.5
Loans/customer deposits (%)
105.7 105.2
Related Research
Societe Generale S.A. - Ratings Navigator (October 2017)
European GTUBs Quarterly Update (January 2018)
Fitch 2018 Outlook: Global Trading and Universal Banks (December 2017)
Analysts
Christian Scarafia +44 20 3530 1012 christian.scarafia@fitchratings.com Luis Garrido, CFA +44 20 3530 1631 luis.garrido@fitchratings.com Rafael Quina, CFA +33 1 44 29 91 81 rafael.quina@fitchratings.com
Banks
Societe Generale S.A.
April 2018 2
Operating Environment
SG mainly operates in very stable and advanced economies, with typically high sovereign
ratings, developed and transparent regulatory frameworks, and robust financial markets.
Nonetheless, the bank has some exposure to more volatile countries, mainly in CEE and
Russia. We expect the recovery in economic conditions in Russia to help sustain the bank’s
return to profitability in the region. SG’s presence in the US and Asia (largely in corporate and
investment banking) provides some diversification benefits.
We expect France’s strong cyclical recovery will help sustain real GDP growth at 2.1% in 2018.
The high level of unemployment is a weakness for the sovereign rating level, but has been
falling. We expect SME lending to be more sensitive to changes in macroeconomic factors,
including unemployment. We believe the impact of high unemployment to be contained for
housing loans as household indebtedness is modest (58% of GDP) and lending is mainly
extended to borrowers in stable employment.
Concentrated Banking Market
The major French banks are large and banking sector assets are significant at about 3.5x GDP.
The sector is concentrated, and the six largest banks account for about 85% of banking sector
assets. Three French banks are classified as global systemically important banks (G-SIBs) by
the Financial Stability Board. Fitch Ratings considers barriers to entry into the French market
as high.
French banks have limited flexibility to reduce remuneration rates on deposits, as interest rates
paid on widely held regulated savings deposits are defined by the state and are higher than
market rates. Remuneration on the Livret A, which acts as a benchmark for other savings
products, is at 0.75%.
Company Profile
SG is a universal bank and the third-largest French bank by total assets. Retail banking
generates about half of revenue and pre-tax profit, both through three brands in France and
through operations in several countries in Europe and Africa, as well as Russia. In investment
banking, SG has a sound presence in euro-denominated debt capital markets and a leading
equity derivatives franchise. Structured equity derivatives account for less than 4% of group
revenue. Within International Retail Banking and Financial Services (IBFS), the bank is the
80% shareholder of ALD Automotive, Europe’s largest fleet management company by fleet
size. The group operates across three divisions: French retail banking, Global Banking and
Investor Solutions (GBIS), and IBFS.
Sound client, product and geographic diversification have supported resilient profitability,
despite pockets of higher risk. The breadth of SG’s product offering and geographical presence
provides cross-selling opportunities, mainly in corporate and investment banking, and
bancassurance. Revenue synergies, as measured by the bank, represented 30% of group
revenue in 2016. Revenue from sales and trading is typically more volatile, and accounted for a
manageable 18% of revenue in 2017, which is lower than at peers.
Moderate Franchise in French Retail
SG’s domestic retail franchise generates high revenue per customer, as it focuses on France’s
wealthier urban areas. The group’s deposit and loan market share of about 7% is significantly
lower than that of the dominant cooperative banking groups, which limits its pricing power. SG
operates in French retail banking through different brands: SG’s own network of about 2,000
branches; Credit du Nord (A/Stable/bbb+), which focuses on small- and medium-sized
enterprises through a network of eight regional banks; and the online bank Boursorama. The
multi-channel model allows the group to target different groups of clients. SG aims to reduce its
branch network to 1,700 by 2020, as it aims to fully digitise simple products and focus on
advisory activity in the remaining branches.
Economic Data (%) 2017 2018f 2019f
France: Real GDP growth
1.9 2.1 1.8
France: Unemployment rate
8.9 9.1 8.9
Source: National Institute of Statistics and Economic Studies (INSEE) end-2017 data, Fitch forecasts
France 44%
APAC5%
MEA 4% LatAm
1%
Exposure by RegionEnd-2017
Total: EUR872bn. Includes off-balance sheet exposuresSource: SG, Fitch
Other W Europe 23%
N America 13%
E Europe (EU) 7%
Other E Europe 3%
21% 27%
32% 22%
23%18%
7%13%
9% 11%9%
0%
20%
40%
60%
80%
100%
Revenue Pre-tax profit
Earnings Contribution2017
International retail French retailGM & IS Financial servicesFinancial advisory InsuranceAWM
Source: SG, Fitch
Related Criteria
Bank Rating Criteria (March 2018)
Global Non-Bank Financial Institutions Rating Criteria (March 2018)
AWM: Asset and wealth management
(booked in GBIS). GM & IS: global
markets and investor services
Banks
Societe Generale S.A.
April 2018 3
Broad International Retail Network
IBFS includes international retail banking, financial services to corporates and insurance. The
division’s contribution to group pre-tax profit increased to 49% in 2017 from 37% in 2016,
largely as a result of lower LICs in international retail.
In international retail, SG is active in several countries in Europe, mostly in CEE, the
Mediterranean basin, sub-Saharan Africa, French overseas territories and Russia. The group’s
largest international subsidiaries by assets are the 61%-owned Komercni Banka, the third-
largest bank in the Czech Republic, the 99.95%-owned Rosbank in Russia, one of the
country’s leading privately owned banks; the 60%-owned BRD-Groupe Société Générale S.A.,
the third-largest Romanian bank by total assets, and the fully owned SGMB in Morocco, the
country’s fourth-largest bank. Apart from these subsidiaries, international retail operates in 33
countries through subsidiary banks.
In CEE, SG has market shares of between 8% and 15%. These operations are jointly
strategically important for the group. We consider retail operations in CEE and Russia as
higher risk, given the large cyclical variations in profitability and LICs observed historically,
notably in Russia and Romania. Nonetheless, SG has managed its exposures well and
international retail banking generated a sound return on allocated capital of 16% in 2017.
Within IBFS, financial services to corporates cover equipment finance (through SG Equipment
Finance) and fleet financing (through ALD Automotive). At end-2017, ALD managed the largest
vehicle fleet in Europe with 1.4 million vehicles and EUR16 billion rental fleet assets.
Equipment finance accounted for an additional EUR17 billion loans. SG’s insurance business
mainly focuses on France and other European countries, offering life (about two-thirds of 2016
insurance revenue) and non-life insurance products. At end-2017, SG managed EUR114 billion
client assets invested in life insurance policies.
Targeted Investment Banking Strategy
SG’s GBIS division includes global markets and investor services, financing and advisory
(F&A), and asset and wealth management. The group’s franchise is stronger in Europe, which
generated about 70% of GBIS revenue in 2016, with smaller contributions from the Americas
and Asia Pacific.
Global markets (18% of 2017 group revenue and 16% of group RWAs at end-2017) includes
SG’s sales and trading operations in fixed income, currencies and commodities (FICC), and in
equities. SG has the world’s second-largest market share by revenue in equity derivatives,
highlighting its sound franchise in the segment. This strength has allowed it to grow
internationally, including in Asia Pacific. SG is also Europe’s second-largest custodian (EUR3.9
trillion assets under custody at end-2017). Its securities services business, which also includes
clearing, trade finance and payment services, derives close to three-quarters of revenue from
retail banking networks, highlighting the value of the integrated group. The integration of
Newedge, a clearing, execution and prime brokerage specialist fully owned since 2014, has
expanded SG’s business in the US and helped increase its institutional client base.
F&A accounted for 9% of group revenue in 2017. Half of F&A’s revenue in 2016 came from
natural resources and asset financing. F&A also deals with corporate lending and advisory.
While revenue is fairly stable, LICs can be lumpy, due to the size of certain underwriting
commitments.
SG’s asset management operations are undertaken by Lyxor (EUR112 billion assets under
management (AuM) at end-2017), which specialises in alternative investments and has a good
franchise in exchange-traded funds. SG’s strong equity derivatives franchise supports Lyxor’s
activity. Private banking (EUR118 billion AuM at end-2017) remains predominantly European,
with part of the revenue generated through a joint-venture agreement with the French retail
network. The bank is repositioning its client franchise in certain European markets, notably
Switzerland and Belgium, which weighs on profitability.
GBIS35%
IBFS33%
French retail29%
Corp. centre
3%
RWA SplitEnd-2017
Total: EUR353bnSource: SG, Fitch
26%
19%15%
15%
9%
8%4%
55%
Fin serv corp Insurance
Czech Republic Africa & others
Romania W Europe
Other Europe Russia
IBFS Operating Profit2017
Right hand side: International retail. Fin serv corp: financial services to corporatesSource: SG, Fitch
Banks
Societe Generale S.A.
April 2018 4
Management and Strategy
SG’s strategy concentrates on selected growth opportunities and on improving the efficiency of
its operations. We view the bank’s 2020 strategic plan as a natural evolution of prior objectives.
SG has largely delivered on its 2014-2016 plan, with the exception of return on equity and
revenue growth targets, which were not met, partly because of the low-interest-rate
environment. Between 2015 and 2017, SG delivered EUR1.2 billion in cost savings, higher
than its EUR1.1 billion target, and at lower implementation costs than planned.
Meeting the revenue growth objective of above 3% will be important for SG to meet its financial
targets, as the group plans to contain the rise in operating expenses to 1.2% between 2016
and 2020. Sound or improving economic growth in many of the bank’s key markets and the
planned 3% growth in RWAs should help the bank generate revenue.
Increasing revenue faster than operating expenses will be challenging in French retail, where
strong competition erodes margins and changing client behaviour requires investment in
digitisation. SG plans to close some back offices and reduce its branch network by 15% by
2020 while increasing its digital offering. Sound economic growth in France should help the
bank expand its franchise with corporates. The group’s universal banking model offers cross-
selling opportunities, particularly in private banking and insurance. These initiatives should help
grow revenue at a cumulative growth rate of above 1% between 2016 and 2020, but revenue
fell 3% in 2017 following high rates of housing loan renegotiations.
SG’s revenue growth target of above 5.5% for IBFS reflects its presence in fast-growing
markets, including Russia and Africa, and in fleet leasing. We expect IBFS to continue driving
profit growth for the group. The planned fall in GBIS’s cost/income ratio (from 76% in 2016 to
about 68% for 2020) partly relies on recurring savings of about EUR0.35 billion financing
investments in digitalisation, maintaining and expanding the equity derivatives and natural
resources franchises and targeting selective growth, for instance in advisory and prime
brokerage.
SG’s executive and senior management teams have been generally stable with the exception
of some key departures, allowing a smooth implementation of the group’s strategy. SG’s board
of directors has 14 members, of whom 10 are independent and two are elected by employees.
The chairman and chief executive roles are split. SG applies the AFEP-MEDEF Corporate
Governance Code, which provides best practice recommendations to listed French companies.
Risk Appetite
Strengthened Underwriting Standards
We view SG’s risk appetite as moderate. The group has a good record in managing and
controlling credit and market risk, and exposure to higher-risk asset classes or products has
remained limited.
SG’s main exposure is to credit risk (82% of end-2017 RWAs). Underwriting standards in its
French loan book are conservative. A large portion of retail banking assets relates to housing
loans, where underwriting criteria largely rely on client affordability rather than on collateral
value. SG favours originating housing loans that qualify to be guaranteed by Crédit Logement.
The high proportion of new French retail loans that benefit from this guarantee underscores the
bank’s conservative underwriting.
The bank also has material exposure to emerging markets in CEE, Russia and Africa.
Origination in Russia has focused on larger corporates for a number of years, which has helped
reduce credit risk. Better economic conditions and underwriting standards in Russia and
Romania led the 55% fall in LICs for the bank’s international retail business in 2017.
Key Financial Targets (%) 2017 2020T
Cost/income 75a <63
Return on equity
4.9a ≥10
b
Basel III CET1 ratio
11.4 ≥12.0
Total capital ratio
17.1 ~16.5 – 17.0
Basel III Tier 1 leverage ratio
4.3 4.0 – 4.5
LICs/average gross loans
0.19 0.35 – 0.40
2016-2020 revenue growth (%)
2c >3
LICs: Loan impairment charges a Excluding non-recurring items, notably
EUR1.4bn litigation charges: 8.3% return on equity and 69% cost/income ratio
b Corresponding to a 11.5% return on
tangible equity c Shows 2013-2016 cumulative average
revenue growth rate Source: SG, Fitch
Banks
Societe Generale S.A.
April 2018 5
We believe SG has a fairly conservative approach to credit risk in the corporate and investment
bank compared with GTUB peers. The bank’s appetite for riskier asset classes is generally
below peers’, but SG is willing to continue operating in businesses where it has a relatively
limited presence and a sound record of risk management. SG’s leveraged finance operations
are predominantly European and focus on smaller transactions, which results in acceptably
sized underwriting positions and a granular portfolio.
Sound Risk Controls
SG’s risk reporting framework includes a comprehensive set of internal limits, with risk systems
consistently applied throughout the group’s international subsidiaries. The independent control
function reports directly to a deputy chief executive. Internal and financial reporting is based on
uniform definitions across the whole group, including on asset impairment, and risk-
management divisions are segregated from business units. The group’s centralised risk-
management unit monitors key risk indicators and limits as defined by management, including
credit, market, operational but also liquidity, business and insurance risks.
Significant Legal Cases and Provisions
Operational risk (14% of RWAs at end-2017) is significant for SG as for peers, given its broad
international presence and its large capital market operations. The bank remains exposed to
conduct and litigation risk, and is facing several investigations that could result in material fines.
SG’s sound earnings and significant litigation provisions should provide a sufficient buffer to
absorb further litigation costs. At end-2017, litigation provision was EUR2.3 billion, of which
about EUR1 billion was allocated to the Libyan Investment Authority (LIA) and interbank offered
rates cases.
We believe the most material legal cases for the bank relate to investigations by US authorities
into the setting of interbank offered rates and to the LIA case. On 19 March, SG said that it
expected to have resolved these cases “within the coming weeks”. Civil litigation in the UK
brought by the LIA in relation to the bank’s investments entered into on behalf of the LIA was
settled for EUR963 million in 1H17, but an investigation launched by the US Department of
Justice and the Securities and Exchange Commission on the matter is continuing. A third
relevant case relates to alleged violations of US embargoes and is still outstanding.
The French tax authorities have recently confirmed they intend to question the tax deductibility
of the EUR4.9 billion losses that resulted from Jérôme Kerviel’s unauthorised trading in 2008. A
potential deferred tax asset (DTA) write-down would not affect the bank’s regulatory capital,
which already deducts DTAs.
Major settled litigation cases related to Euribor rigging (EUR446 million fine in 2013, of which
EUR218 million refunded in 2016) and the US mortgage market (EUR100 million settlement
with the US Federal Housing Finance Agency in 2014).
Well-Controlled Growth
We expect growth to be largely organic and within the bank’s internal capital generation
capacity, complemented by selected bolt-on acquisitions. SG’s capital planning targets organic
capital generation of about 25bp a year, with 3% RWA growth and a 50% dividend pay-out
ratio.
Small-scale acquisitions are typically made to strengthen strategic activities. The bank acquired
the 50% stake in insurer Antarius that it did not already own in 2Q17. SG also purchased
Parcours (vehicle leasing) and Kleinwort Benson (private banking). SG has some flexibility to
partly finance these acquisitions by streamlining businesses.
-300-200-1000100200300400500600
0
500
1,000
1,500
2,000
2,500
3,000
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
Litigation provisions (LHS)
Litigation charges (RHS)
1Q16: Euribor fine refund. 1H17 litigation charges largely refer to LIA settlement Source: SG, Fitch
Litigation Provisions Rise
(EURm) (EURm)
n.d
.
n.d
.
Banks
Societe Generale S.A.
April 2018 6
In French retail, SG focuses on premium clients in a highly competitive market with low margins
and has grown below the market in 2017. SG expects to invest in growing its consumer finance
operations, while growth in SME loans is sound and in line with peers. In GBIS, continuing to
invest in asset finance and asset-backed products remains a priority for the bank.
Material but Well-Controlled Market Risk
SG’s exposure to market risk arises principally through traded market risk, where the bank has
a strong risk-management record, and through interest-rate risk in the banking book, where the
bank has a sound limit system.
The impact of a 1% parallel shift of the yield curve on the net present value of future residual
fixed-rate positions is monitored and subject to an internal limit of EUR1 billion (about 1.6% of
group equity). During 2017, the sensitivity remained below 0.6% of the group’s regulatory
capital. The net interest margin sensitivity is also measured through various stress scenarios
on interest-rate curves.
Interest-rate risk in the banking book is managed using macro hedges and mainly arises from
fixed-rate housing loans net of fixed-rate liabilities. The main challenge to hedge this risk is to
maintain robust assumptions around housing loan prepayment rates and sight deposit
stickiness to model the net asset duration. In 3Q17, SG took a manageable EUR88 million
charge (1% of 2017 French retail revenue) to adjust its swaps hedging housing loans. Higher-
than-expected prepayments resulted in the amount of assets hedged becoming lower than the
sum of the hedging swaps. As the proportion of housing loans being renegotiated has fallen
significantly, we do not expect further hedging adjustments. However, prospects for sight
deposits in a rising rate environment after a long period of low interest rates remain untested.
We believe SG’s traded market risk appetite is lower than most of its GTUB peers’, but trading
operations are significant relative to its size. The bank expects market activities to keep making
up about a fifth of group revenue and RWAs. SG assesses its market risk using several risk
indicators, including value-at-risk (VaR; 99% confidence interval, one-day holding period, one-
year horizon using the historical simulation method) and stress tests, and a wide range of limits
are in place. About 90% of SG’s market risk capital requirement is assessed through internal
models.
The bank’s average trading VaR was a moderate EUR25 million in 2017. Overall, traded
market risk has declined in recent years, reflecting both a lookback period with lower market
volatility and structurally lower inventory, partly due to stricter regulatory capital requirements.
Higher market volatility seen in 1Q18 could lead to higher market-risk RWAs, but we believe
that this could also help the bank generate more revenue in client flow-based activities.
SG hedges a large part of its balance sheet so that there is limited volatility in its CET1 ratio as
a result of foreign-exchange fluctuations. Equities in the banking book amounted to EUR6.1
billion at end-2017 for those in the prudential scope (excluding insurance activities), which
included minority stakes in corporates and financial institutions and private equity investments.
Financial Profile
Asset Quality
SG’s asset quality is weaker than domestic and GTUB peers, despite material improvements
since end-2013. SG’s impaired loan ratio was still a relatively high 5.0% at end-2017 (end-
2016: 5.7%), despite a 13% yoy decline in the stock of impaired loans. At end-2017, 51% of
impaired loans were in France, 17% related to eastern Europe, 12% to western Europe, with a
combined 14% to Africa and the Middle East. SG’s French loan book includes Credit du Nord’s
SME-focused portfolio, with higher impaired loan ratios compared with SG’s average, and
consumer finance activities. We estimate loans in Russia, which account for 2% of the group’s
loan book, account for just under 10% of group impaired loans.
Other assets mainly include guarantee deposits paid on financial instruments Source: SG, Fitch
Fair valued assets 33%
Customer loans 33%
AFS assets 11%
Cash and central banks
9%
Due from banks
5%
Fixed assets
2%
Other 7%
Asset SplitEnd-2017
Banks
Societe Generale S.A.
April 2018 7
SG’s comparatively high gross impaired loan ratio partly reflects slower write-off practices in
the French banking sector, as well as international operations in higher-risk markets. In line
with French peers, the bank typically aims to fully resolve problem loans instead of writing them
off at an early stage. Despite the group’s sound record in impaired loan recoveries, slow write-
offs can result in LICs accruing through time. The relatively high volume of unreserved impaired
loans, which amounted to 19% of Fitch Core Capital (FCC) at end-2017, leaves the group’s
capital more exposed to unexpected shocks, in our view.
SG’s exposure at default (EaD) including off-balance-sheet commitments was EUR872 billion
at end-2017. About 80% of the bank’s credit risk is calculated using the internal ratings-based
method. Corporate clients are an important component of the bank’s European franchise and
accounted for 37% of the group’s EaD (at end-2017). Commitments to corporates were well
diversified by industry, generally well collateralised and largely to investment-grade corporates,
with a small percentage of poorly rated counterparties.
LICs have continued to benefit from improving macroeconomic conditions in key markets,
which resulted in loan-loss provision reversals in Romania and the Czech Republic in 2017.
The supportive economic environment in France also contributed to reduce loan and other
impairment charges to 19bp of gross loans for 2017, down from 37bp in 2016 according to the
bank. We expect LICs to increase slightly and SG expects LICs to account for between 35bp
and 40bp of gross loans by 2020 (between 25bp and 30bp for 2018).
Balanced Mix in French Retail
SG’s French retail accounts for about 40% of total loans at end-2017 and is evenly balanced
between lower-risk housing loans and loans to business clients, which includes higher-risk
loans to SMEs and self-employed professionals, including through Credit du Nord’s network.
SG’s underwriting standards in French housing loans have proven conservative, in line with
other French banks that focus on debt repayment capacity rather than collateral values. We
believe this leads to limited credit risk. Housing loan performance is mainly sensitive to
employment and household debt capacity.
Consumer finance activities globally included at end-2017 a small loan book (EUR11 billion) as
part of French retail, and EUR18 billion consumer loans in the rest of western Europe, notably
including Germany and Italy. Impairment charges in consumer finance can be high, but are
compensated by healthy margins. Fleet leasing (including ALD) and factoring loans were a
further EUR33 billion at end-2017. These loans generally perform well, but require
management of residual value risk.
International Retail Remains a Vulnerability
IBFS’s loan book (about 30% of total loans) is in our view SG’s main asset-quality challenge.
Exposure to emerging markets in eastern Europe, Russia and Africa can suffer from sharp
changes in economic conditions and therefore lead to more volatile LICs. Strong GDP growth
0
2
4
6
8
10
12
BNPP SG GBPCE Credit Mutuel CreditAgricole
DB BARC HSBC
SME Corps ex SME Households Total
BNPP: BNP Paribas S.A.; SG: Societe Generale S.A. GBPCE: Groupe BPCE; Credit Mutuel: Groupe Credit Mutuel; Credit Agricole: Groupe Credit Agricole; DB: Deutsche Bank AG; BARC: Barclays plc; HSBC: HSBC Holdings plc. HSBC SME exposure: 0 (EBA disclosure) Source: EBA Transparency Exercise
Non-Performing Exposures(% gross exposures, end-1H17)
(%)
0
2
4
6
8
10
-50
0
50
100
150
200
2013 2014 2015 2016 2017
(bp)
Impaired loans/gross loans (RHS)French retail (LHS)IBFS (LHS)GBIS (LHS)Group (LHS)
Source: SG, Fitch
(%)
Falling Loan Impairment Charges
Banks
Societe Generale S.A.
April 2018 8
in Romania and a stabilising economic environment in Russia contributed to LICs halving in
international retail in 2017. Overall, IBFS’s LICs accounted for 29bp of gross loans in 2017,
which we consider as being at a cyclical low and flattered by provision reversals.
SG’s loan portfolio in the Czech Republic (EUR24 billion at end-2017) is the largest of its
international retail operations and we do not expect it to be a major driver of LICs as the
economy approaches full employment. Economic stabilisation and the focus on larger
corporates in Russia resulted in more sustainable LICs, which fell 70% yoy. Exposure at default
net of provisions in Russia was about EUR16 billion (37% of FCC) at end-2017, of which 35%
related to retail clients and 25% to large corporates. Foreign-currency mortgage loans have
reduced significantly in Russia, and portfolios in Poland and the Czech Republic are small.
Low but Volatile Credit Provisions in GBIS
SG’s sizeable corporate finance activities are reflected in GBIS’s loan book of EUR136 billion
at end-2017. Exposures are typically well-managed. LICs are a smaller proportion of average
loans compared with other divisions, but large corporate exposures can lead to lumpy LICs and
reversals: the division released 1bp of average gross loans in loan loss reserves in 2017. This
partly reflects recoveries on counterparties sensitive to oil prices, which have recovered since
2016 and accounted for a limited 6% of EaD at end-2017. Higher provisioning in metals and
mining (4% of EaD) have reduced risks, in our view.
SG’s overall exposure to higher-risk sectors remains moderate. Leveraged finance is not an
area of strong focus and mainly relates to the European market, which is less exposed to rising
interest rates in the US. Underwriting exposures are comparatively small and well diversified.
Exposure to securitisations is moderate compared with that at most GTUB peers and is
declining as SG is running down its now small legacy asset portfolio. SG mainly acts as a
sponsor for asset-backed securities transactions and to a much lesser extent as an originator
to manage its own credit risk and create securities eligible for repo transactions. At end-2017,
SG’s exposure to consolidated ABCP conduits, for which the group provides liquidity lines, was
EUR18 billion.
Significant Equity and Reverse Repo Books
Fair valued assets accounted for a material 33% of assets at end-2017. SG’s sizeable trading
portfolio mainly reflects large derivative replacement values and reverse repurchase
agreements, but also sizeable equity and bond holdings. Of the EUR420 billion fair-valued
financial assets, EUR51 billion related to the insurance business. Derivative counterparty risk is
mitigated by master netting agreements and cash collateral, which bring the net trading
derivative exposure to a still significant EUR41 billion at end-2017, from EUR134 billion positive
replacement values. Two-thirds of these were interest rate instruments. Reverse repos are
broadly match-funded by repo borrowings (EUR4 billion net borrowing position, less than 1% of
total funding excluding derivatives).
Assets measured using the fair value option include structured bonds and loans fair-valued to
reduce accounting asymmetries with the hedging instruments. Level 3 financial assets, whose
valuation is based on financial models with unobservable inputs, were EUR6.6 billion at end-
2017 (a manageable 16% of CET1 capital) and included less liquid derivatives and long-term
equity investments.
Most of SG’s exposure to sovereigns and financials is to well-rated counterparties. Close to
80% of banking client exposure at default was rated ‘A’ and above at end-2017, with less than
10% being sub-investment grade.
Fair Valued Assets (EURbn) 2017 (% equity)
Trading portfolio 343 535 Bonds 27 42 Shares 80 125 Derivatives 134 210 Reverse repo 101 158
Fair value option 77 120 Bonds 27 42 Shares 28 44 Loans, others 22 35
Total fair value assets
420 655
Source: SG, Fitch
Banks
Societe Generale S.A.
April 2018 9
Earnings and Profitability
SG’s sound earnings capacity benefits from its universal banking model. Client, product and
geographical diversification mitigate shocks in single regions or businesses, while also
benefitting from growing businesses, particularly in international retail and fleet management.
More volatile capital market activities account for a lower share than GTUB peers, but higher
than most European universal banks. Profitability in retail banking is helped by SG’s presence
in recovering or fast-growing emerging markets, and well-integrated insurance and consumer
finance operations.
Unusually large litigation expenses (including allocations to provisions and the LIA settlement),
totalling EUR1.4 billion, weighed on SG’s results in 2017. Excluding litigation, SG’s operating
return on RWAs would have improved 40bp to 1.9% for 2017. SG’s reported 4.9% return on
equity (RoE) in 2017 was also dented by a EUR390 million restructuring charge in French retail
banking, the tax impact of French tax reform and other exceptional items, without which SG
would have generated a 8.3% RoE, 40bp higher than in 2016. We expect SG’s operating
profitability to remain sound.
SG targets a cumulative average growth rate in revenue of above 3% by 2020, enabled by
RWA growth of about 3%, with higher growth targeted in international retail and specialised
financial services. At the same time, SG plans to generate about EUR1.1 billion in recurring
savings from 2020, funded by about EUR1.5 billion in investments, EUR0.5 billion of which
were expensed in 2017. Delivering cost savings will be important to improve operating leverage
and meet the group’s expected 1.2% operating expense growth between 2016 and 2020.
French Retail Revenue to Stabilise in 2018
We expect SG’s French retail division to generate adequate returns in 2018, despite pressure
on costs from investments in digitisation. Revenue pressure should ease into 2018, as the rate
of housing loan renegotiations fell to a low 3% in 4Q17 and SG expects revenue to be broadly
unchanged in 2018.
The favourable interest-rate environment for borrowers in France had resulted in a high
proportion of housing loans being renegotiated at lower interest rates, which has put pressure
on banks’ net interest income. Early repayments resulted in early redemption fees, which
temporarily boosted revenue, mostly in 2015 and 2016. About 21% of SG’s loan book was
renegotiated in 2016, with a further 11% in 2017. Net interest income, which accounted for 56%
of revenue in 2017, fell 6% yoy and led to a 3% revenue decline. Pre-tax income in the division
fell 12% yoy to EUR1.9 billion in 2017, excluding restructuring charges and a small fine.
SG has positioned itself conservatively in the French market, aiming to favour client profitability
over client acquisition, even at the expense of market share losses. Competition has eroded
net interest margins, and SG’s approach is to minimise balance-sheet risks from low-margin
products. Fee generation will therefore be key to grow revenue, and SG’s integrated insurance
+38%-33%
-21%+6% +18%
+14%+54%
0500
1,0001,5002,0002,500
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
Internationalretail
French retail Global markets& investorservices
Financialservices tocorporates
Financialadvisory
Insurance Wealth & assetmanagement
27% 22% 18% 13% 11% 9% 1%
(EURm) Reported pre-tax profit French retail restructuring costs
Excluding 'other' in IBFS and the corporate centre. Bold: yoy % change. Percentages below the x-axis show the business' contribution to group pre-tax profit (excluding corporate centre) and may not add up due to rounding.Source: SG, Fitch
Retail Banking Drives Group Pre-Tax ProfitPre-tax profit by business
0% 50% 100%
GBPCE
CA
CM11
SG
BNPP
French retail and commercial banking
Corporate & investment bankingª
Financial services and international retailᵇ
Simplified Pre-Tax Profit Split2017 pre-tax profit
CA: Credit Agricole; CM11: Groupe Credit Mutuel-CM11.a Includes financing, global markets, investor and securities services, trade financeb Includes insurance, asset management, specialised financial services and international retailSource: SG, Fitch
-1.5-1.0-0.50.00.51.01.52.02.53.03.5
20
12
20
13
20
14
20
15
20
16
20
17
Operating Profit/RWAsSG vs. peers
Green line: SG. Red dot: GTUB peer median. Blue dots: GTUB peer rangeSource: Fitch
('a'earn
ings im
plie
d f
acto
r score
)(%)
Banks
Societe Generale S.A.
April 2018 10
and consumer finance offering should help. Investments in digitalisation will result in a growing
cost base, making revenue growth even more important.
Significant Contribution from International Retail
International retail banking’s contribution to pre-tax profit increased to 27% in 2017 from 19% in
2016, excluding the corporate centre. The 25% pre-tax profit increase in IBFS was mainly
attributable to international retail, which benefitted from very low LICs and favourable economic
conditions in most regions. Economic growth is cyclically strong in Romania and is
accompanied by rapid loan growth in Africa. The Czech Republic’s is the second-largest
contributor to international retail’s net income, and the country benefits from low
unemployment. Recovery in Russia led to loan growth and significantly lower LICs. This
demonstrates the benefits of SG’s presence in faster growing economies, but at the same time
highlights the variability of income in more volatile regions.
We expect consumer finance operations to continue to perform well. In western Europe, loan
growth was a strong 15% at constant scope and exchange rates, buoyed by car loans.
Financial services to corporates accounted for a meaningful 13% of pre-tax profit excluding the
corporate centre and saw a 6% pre-tax profit rise, reflecting new equipment finance business
and ALD’s growing vehicle fleet, despite its lower contribution following the initial public offering
of a 20% stake in 2Q17. Insurance premium growth helped pre-tax profit, with an increase in
the share of more remunerative unit-linked policies to 26% at end-2017.
Some Volatility from Market Activities
Muted client activity and market volatility in 2017 resulted in a 5% yoy revenue fall for GBIS.
Revenue was 7% lower in fixed-income sales and trading, 6% lower in equity sales and trading
and 6% lower in financing and advisory, resulting in GBIS’s 9% yoy pre-tax profit fall.
Financing and sales and trading revenue are largely determined by changing client activity and
therefore introduce some earnings volatility. This is mitigated by the bank’s relatively well-
balanced mix between fixed-income and equity activities, and fairly resilient revenue historically
for market activities. The contribution from sales and trading (18% of group revenue in 2017)
and financing activities (9%) was manageable and towards the lower end of GTUB peers.
Higher market volatility should increase clients’ hedging and portfolio rebalancing, boosting
GBIS’s revenue.
Capitalisation and Leverage
SG’s capitalisation is adequate, but sensitive to a structural weakening in the group’s earnings
generation. The bank’s diversified business model results in strong internal capital generation,
while capital ratios are at the lower end of GTUB peers’. SG targets a 12% Basel III fully loaded
CET1 ratio by end-2020, and expects to operate with a CET1 ratio of about 11.5% by end-
2018. The group’s 11.4% CET1 ratio at end-2017 fell 10bp yoy, reflecting the commitment to a
minimum 50% dividend pay-out ratio amid significant litigation charges, restructuring costs and
negative tax effects in 2017. Excluding these items and an operational risk RWA add-on (14bp
negative impact), SG would have generated 41bp of RWAs in capital organically in 2017, net of
dividend provision (50bp negative impact), which we view as strong.
We expect organic growth and bolt-on acquisitions to be funded by internal capital generation
or business sales. In 2017, the sale of a 20% stake in ALD more than offset the negative
capital impact of the acquisition of the remaining 50% stake in Antarius and the disposal of
SG’s Croatian subsidiary. SG’s capital remains sensitive to unexpected litigation costs in
excess of the bank’s strong earnings and provisions for litigation, which increased to what we
view as a material EUR2.4 billion at end-2017. More challenging than expected collateral
realisation or impaired loan recoveries could also weigh on capital, as unreserved impaired
loans accounted for a comparatively high 19% of FCC at end-2017.
0
5
10
15
20
25
30
0.0
0.5
1.0
1.5
2.0
2.5
FIC
C
F&
A
Equ
ity
AW
M
SS
Prim
e
Th
ou
san
ds
Average revenue (LHS)2017 revenue (LHS)Volatility (RHS)
GBIS' Revenue Variability
(EURbn) (%)
Equity: Equity sales and trading. SS: Securities services. Average revenue: Average yearly revenue 2014-2017. Volatility: Quarterly standard deviation/average revenue, 2014-2017 Source: Fitch
Banks
Societe Generale S.A.
April 2018 11
We expect SG will execute on its plan to sell up to 5% of RWAs in non-core businesses by
2020, which will help it reduce its CET1 capital generation needs. This is because SG would
have to increase its CET1 capital by about EUR7 billion by end-2020 to meet its 12% CET1
target and its 3% RWA growth target for its businesses, excluding the corporate centre and
non-core business reductions. Between end-2014 and end-2017, SG’s CET1 capital increased
by EUR4.5 billion.
a Illustrative figure based on SG’s 2020 target capital structure of ≥12% CET1, about 1.5% - 2% AT1, about 3% Tier 2,
about 7% senior non-preferred and maximum 2.5% senior preferred debt.
SG’s 2020 CET1 ratio target of at least 12.0% is well above its 2019 9.5% CET1 requirement
(excluding 0.1% in respect of the counter-cyclical buffer) pursuant to the ECB’s Supervisory
Review and Evaluation Process (SREP), assuming no changes to the 1% G-SIB buffer and
2.5% capital conservation buffer the bank will be subject to in 2019. We expect the bank to
keep solid buffers above regulatory minima. At end-2017, SG had a buffer of about EUR10
billion over its 8.7% SREP CET1 requirement applicable in 2018, which is the relevant
threshold under which discretionary payments (dividends, coupons, bonuses) can be restricted.
Focus on Senior Non-Preferred Debt
SG’s 2020 implied total capital ratio target of about 17% is lower than its previous 18% target,
as the bank optimises its cost of complying with total loss-absorbing capacity (TLAC)
requirements, favouring senior non-preferred (SNP) debt rather than Tier 2 subordinated debt.
At end-2017, SG had issued around EUR7 billion of SNP debt (1.9% of RWAs). Together with
17.1% in total capital, the bank’s TLAC-eligible instruments amounted to 19% of RWAs, close
to the 19.5% TLAC requirement by 2019. We believe the bank can reach the 2019 target with
further SNP issuance, which could potentially rise up to 4.5% of RWAs in 2022 if the bank
chooses not to use senior preferred debt to meet its 21.5% TLAC requirement from 2022. This
is feasible, given the bank’s plans to issue around EUR6 billion-EUR7 billion SNP debt annually
between 2018 and 2020. The TLAC term sheet allows the inclusion of up to 2.5% of RWAs in
senior preferred debt, giving SG further flexibility.
SG’s Basel III fully loaded Tier 1 leverage ratio of 4.3% at end-2017 was within its targeted
range of between 4.0% and 4.5% by 2020 and was broadly in line with European GTUB peers.
TLAC-eligible instruments accounted for 6.6% of leverage exposure at end-2017, well above
the 6% 2019 requirement and just shy of the 6.75% 2022 requirement.
Limited Impact of Regulatory Revisions
Following the finalisation of the Basel III framework in December 2017, we believe the impact
on SG’s capital ratios will be manageable. The bank estimates that the proposed revisions to
credit and operational risk measurement would increase end-2016 RWAs by 10% based on the
end-2016 balance sheet. We expect SG will adjust its business model to mitigate the actual
impact, which will only be visible once the revisions to the capital framework become binding,
likely from 2022. The fundamental review of the trading book could significantly increase
12.011.411.510.910.1
2.53.02.62.5
3.23.42.8
1.7
0
4
8
12
16
20
20202017201620152014
TargetActual
CET1 AT1 T2 AT1/T2 Total capital
Basel III fully-loadedSource: Fitch, SG
17.1 17.0a
SG's Total Capital(% RWAs)
4.5 4.5 4.5
1.5 1.5 1.51.3 1.9 2.5
1.0
0
2
4
6
8
10
Jan 17 Jan 18 Jan 19
G-SIB bufferCapital conservation bufferPillar 2RPillar 1
Graph does not show additional Tier 1 and total capital requirements (= CET1 + 1.5% AT1 + 2% Tier 2). Including countercyclical buffer (0.1% in 2019)Source: SG, Fitch
(% RWAs)
SG's SREP CET1 Capital Requirements
7.8 8.79.6
Banks
Societe Generale S.A.
April 2018 12
market risk RWAs, but these accounted for a limited 4% of total RWAs at end-2017.
SG indicated that the implementation of IFRS9 should have a limited impact on the CET1 ratio
of around 15bp upon adoption of the accounting standard in January 2018.
Funding and Liquidity
SG’s long-term funding profile is well diversified by source, with customer deposits accounting
for 46% of total funding excluding derivatives. Client deposits covered about 65% of funding
excluding derivatives, repos and trading liabilities, which are broadly matched on the asset
side. Wholesale funding of about EUR205 billion remains material and accounted for the
remainder. It includes deposits from banks (around half of which are matched by interbank
assets), senior unsecured and subordinated debt, and short-term borrowings. The group is a
regular issuer in the market and has a granular and well-diversified investor base. Long-term
funding maturities are fairly well distributed over the next four years.
Structured senior notes account for a material 31% of total long-term funding at end-2017
(which also includes certificates of deposit and commercial paper with remaining maturity
greater than a year). These structured notes are beneficial to the group in terms of cost of
funding and are distributed to institutional investors, private banks and retail networks,
domestically and internationally, which provides for a sufficiently diversified funding base for
these instruments, which are, however, not TLAC eligible.
Subsidiaries accounted for 9% of total long-term funding, consistent with SG’s strategy to
increasingly self-fund foreign subsidiaries. The group has made notable progress in this
respect, as retail banking subsidiaries outside France raise funds from customer deposits and
local issuances. Funding provided by the group to international retail banking subsidiaries
(excluding consumer finance) was EUR1.8 billion at end-2017, higher yoy but on a longer
downward trend (EUR3.9 billion at end-2014).
Short-term wholesale funding of EUR60 billion at end-2017 contributed only 8% of the funded
balance sheet, which compares well with European peers, and has declined materially since
2013 (15%). The bank has implemented a nominal internal limit on short-term wholesale
funding since end-2014. The group’s liquid asset buffer, around half of which typically relates to
deposits with central banks, more than covers short-term wholesale funding (around three
times at end-2017 and end-2016).
US dollar-denominated assets typically account for between 20% and 25% of group assets,
with US dollar funding in excess of assets. SG has reduced the funding from US money market
funds, which fell to USD5.9 billion at end-2017, compared with USD6.4 billion at end-2016 and
USD15.1 billion at end-2015. Access to short-term US dollar funding for SG is largely provided
by deposits from central banks, corporate deposits and asset managers.
Sound Liquidity Management
SG’s liquidity management is prudent and its liquidity buffer is ample and of good quality. The
group’s liquidity coverage ratio (LCR) was comfortably above regulatory minima, at 124% on
average in 4Q17. SG disclosed that its net stable funding ratio was above regulatory
requirements (more than 100%). The bank actively manages the size and composition of its
liquid asset buffer ahead of idiosyncratic events. The vast majority of high-quality liquid assets
(HQLA) included in the bank’s liquid asset buffer qualified as level 1 HQLA.
The bulk of the liquidity buffer is held by the parent company. We believe liquidity is largely
fungible across the group, given that deductions from the LCR’s numerator due to fungibility
restrictions are small.
Total: EUR168bn. Totals may not add up due to roundingSource: SG, Fitch
Structured notes 31%
Senior preferred
15%
Subordinated debt 14%
Secured 14%
Interbank & TLTRO
14%
Subsidiaries 9%
Senior non-preferred
4%
Long-Term FundingEnd-2017
0
5
10
15
20
25
30
35
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
> 2
02
7
As of end-2017Source: SG, Fitch
Long-Term FundingMaturities
(EURbn)
Banks
Societe Generale S.A.
April 2018 13
Support
Similar to peers, SG's Support Rating of ‘5’ and Support Rating Floor of ‘NF’ reflect Fitch’s view
that senior creditors can no longer rely on receiving full extraordinary support from the French
sovereign if the group becomes non-viable. In Fitch’s view, the EU’s Bank Recovery and
Resolution Directive (BRRD) and the Single Resolution Mechanism now provide an effective
resolution framework that is likely to require senior creditors to participate in losses, if
necessary, instead of, or ahead of, a bank receiving sovereign support.
The BRRD has been effective in EU member states since 1 January 2015, including minimum
loss-absorption requirements before resolution financing or alternative financing (such as
government stabilisation funds) can be used. The BRRD was transposed into French law in
August 2015, and implementation of the bail-in tool under the BRRD has been effective since 1
January 2016.
Debt Ratings
SG’s Derivative Counterparty Rating and long-term senior preferred debt and deposit ratings
are one notch above the bank’s Long-Term IDR because derivatives, deposits and structured
notes have preferential status over the bank’s buffer of qualifying junior debt (which includes
additional Tier 1 and Tier 2 instruments) and senior non-preferred debt.
We estimate that SG’s buffer of QJD and senior non-preferred debt at end-2017 was equal to
about 8.5% of RWAs, which we expect to be sufficient to recapitalise the bank after a resolution
without causing losses to senior preferred creditors. We expect the bank to issue further senior
non-preferred debt, which should result in a further increase of the buffer, and which we view
as sustainable since SG will have to meet TLAC requirements.
Subordinated debt and other hybrid capital issued by SG and some of its subsidiaries are all
notched down from SG’s Viability Rating (VR) in accordance with our assessment of each
instrument’s respective non-performance and relative loss severity risk profiles.
Additional Tier 1 instruments are rated five notches below the VR. The issues are notched
down twice for loss severity, reflecting poor recoveries as the instruments can be written down
well ahead of resolution. In addition, they are notched down three times for very high non-
performance risk, reflecting fully discretionary coupon omission.
Legacy Tier 1 securities are rated four notches below the VR, made up of two notches for high
loss severity relative to average recoveries, and two further notches for non-performance risk,
reflecting that coupon omission is partly discretionary.
Subordinated Tier 2 debt is rated one notch below the VR for loss severity, reflecting below-
average recoveries.
Rated Subsidiary
The Long- and Short-Term IDRs and Support Rating of SG’s French specialist financing
subsidiary Compagnie Generale de Location d’Equipement are based on institutional support
from SG. The subsidiary is rated under Fitch’s Global Non-Bank Financial Institutions Criteria.
Compagnie Generale de Location d’Equipements’ Long- and Short-Term IDRs are equalised
with those of SG and the Outlook on the Long-Term IDR is the same as the parent’s. This is
because we view this entity as a key and integral part of the group given its importance and
integration with its parent.
Banks
Societe Generale S.A.
April 2018 14
Peer Group Analysis
Societe Generale S.A. (a)
BNP Paribas S.A.
(a+)
Barclays plc
(a) Deutsche Bank AG
(bbb+) Credit Suisse Group AG (a-)
UBS Group AG
(a+)
HSBC Holdings plc
(aa-)
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Structural indicators Total assets (EURbn) 1,275 1,382 1,960 2,077 1,277 1,416 1,521
a 1,591 680 764 782 872 2,103 2,253
Total equity (EURbn) 55 56 99 97 62 72 66a 60 36 39 44 51 145 155
Fitch Core Capital (EURbn) 43 43 81 78 52 61 54a 47 32
a 33 34
a 37 109 125
Net income (EURm) 3,430 4,338 8,207 8,115 -1,007 3,300 -497 -1,356 -810 -2,523 1,060 3,158 9,905 3,269 Asset quality
Impaired loans/gross loans (%) 5.0 5.7 5.0 5.7 1.6 1.6 1.7a 1.8 0.8
a 0.9 0.3 0.3 1.6 2.1
Reserves for impaired loans/impaired loans (%) 60.7 62.7 65.8 64.7 77.6 71.2 60.5a 61.0 42.0
a 37.9 61.6 61.3 48.4 43.1
Loan impairment charges/average gross loans (%) 0.2 0.4 0.4 0.5 0.6 0.6 0.1a 0.3 0.1 0.1 0.0 0.0 0.2 0.4
Growth of gross loans (%) -0.3 4.1 1.9 4.9 -6.8 -1.7 -3.2a -4.5 0.8 1.1 4.3 -1.8 11.6 -6.9
Earnings & profitability Operating profit/RWAs (%) 1.5 1.7 1.7 1.7 1.1 0.8 0.5 0.1 0.7 -1.0 2.2 1.7 2.0 1.7 Return on equity (%) 5.8 7.5 8.1 8.3 -1.5 4.7 3.6
a -2.2 -2.2 -6.1 2.3 6.1 7.0 2.0
Return on assets (%) 0.3 0.3 0.4 0.4 -0.1 0.2 0.1a -0.1 -0.1 -0.3 0.1 0.4 0.5 0.1
Cost/income ratio (%) 74.7 69.0 69.2 68.4 73.3 76.0 91.9 95.5 89.4 114.2 81.8 86.1 67.8 68.9 Capitalisation & leverage
Fitch Core Capital/RWAs (%) 12.1 12.7 12.6 12.2 14.8 14.2 15.1a 13.2 13.7
a 12.9 16.5
a 17.5 15.0 15.4
CET1 ratio (fully loaded) (%) 11.4 11.5 11.8 11.5 13.3 12.4 14.0 11.9 12.8 11.5 13.8 13.8 14.5 13.6 Basel III leverage ratio (fully loaded) (%) 4.3 4.2 4.6 4.4 4.5 4.6 3.8 3.5 5.2 4.4 4.7 4.7 5.6 5.4 Unreserved impaired loans/FCC (%) 19.0 20.3 15.9 18.9 2.9 3.6 4.9
a 6.2 3.5
a 4.4 1.1
a 1.0 6.1 7.9
Funding & liquidity Loans/customer deposits (%) 105.7 105.2 98.2 96.6 86.3 93.9 69.7
a 75.2 77.3 77.8 78.3 72.4 71.1 68.3
Customer deposits/total funding (%) 46.0 44.1 58.3 57.4 51.9 57.9 63.2a 61.3 53.2 51.6 59.4 64.1 69.9 72.0
Liquidity coverage ratio (%) 124 142 121 123 154 131 140 128 185 202 143 132 142 136 a End-9M17 or 9M17
Viability Rating shown in parenthesis after the bank’s name. LCR: As at end-quarter/average for the last quarter in the period for CS, SG, UBS Source: Fitch, banks’ disclosure
Banks
Societe Generale S.A.
April 2018 15
Societe Generale S.A.
Income Statement31 Dec 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014
Year End Year End As % of Year End As % of Year End As % of Year End As % of
USDm EURm EURm EURm EURm
Audited -
Unqualified
(Emphasis
of Matter)
Audited -
Unqualified
(Emphasis of
Matter)
Audited -
Unqualified
Audited -
Unqualified
Audited -
Unqualified
1. Interest Income on Loans 15,523 12,943 1.2 13,134 1.1 14,062 1.2 15,100 1.3
2. Other Interest Income 12,876 10,736 1.0 11,526 1.0 11,369 1.0 9,432 0.8
3. Dividend Income 603 503 0.0 460 0.0 722 0.1 432 0.0
4. Gross Interest and Dividend Income 29,001 24,182 2.3 25,120 2.1 26,153 2.3 24,964 2.2
5. Interest Expense on Customer Deposits 5,875 4,899 0.5 4,769 0.4 5,721 0.5 6,118 0.5
6. Other Interest Expense 10,031 8,364 0.8 10,424 0.9 10,404 0.9 8,415 0.7
7. Total Interest Expense 15,906 13,263 1.2 15,193 1.3 16,125 1.4 14,533 1.3
8. Net Interest Income 13,095 10,919 1.0 9,927 0.8 10,028 0.9 10,431 0.9
9. Net Fees and Commissions 8,183 6,823 0.6 6,699 0.6 6,678 0.6 6,475 0.6
10. Net Gains (Losses) on Trading and Derivatives 11,106 9,260 0.9 5,669 0.5 4,488 0.4 6,817 0.6
11. Net Gains (Losses) on Assets and Liabilities at FV (4,800) (4,002) (0.4) 445 0.0 2,116 0.2 (2,235) (0.2)
12. Net Gains (Losses) on Other Securities 639 533 0.1 507 0.0 385 0.0 307 0.0
13. Net Insurance Income 353 294 0.0 294 0.0 212 0.0 428 0.0
14. Other Operating Income 714 595 0.1 1,695 0.1 1,219 0.1 1,440 0.1
15. Total Non-Interest Operating Income 16,194 13,503 1.3 15,309 1.3 15,098 1.3 13,232 1.1
16. Total Operating Income 29,289 24,422 2.3 25,236 2.2 25,126 2.2 23,663 2.0
17. Personnel Expenses 11,692 9,749 0.9 9,455 0.8 9,476 0.8 9,049 0.8
18. Other Operating Expenses 10,199 8,504 0.8 7,689 0.7 8,121 0.7 7,339 0.6
19. Total Non-Interest Expenses 21,891 18,253 1.7 17,144 1.5 17,597 1.5 16,388 1.4
20. Equity-accounted Profit/ Loss - Operating 110 92 0.0 129 0.0 231 0.0 213 0.0
21. Pre-Impairment Operating Profit 7,509 6,261 0.6 8,221 0.7 7,760 0.7 7,488 0.6
22. Loan Impairment Charge 1,120 934 0.1 1,764 0.2 2,361 0.2 2,595 0.2
23. Securities and Other Credit Impairment Charges 142 118 0.0 285 0.0 126 0.0 33 0.0
24. Operating Profit 6,247 5,209 0.5 6,172 0.5 5,273 0.5 4,860 0.4
25. Equity-accounted Profit/ Loss - Non-operating n.a. n.a. - n.a. - n.a. - n.a. -
26. Goodwill Impairment n.a. n.a. - n.a. - n.a. - 525 0.0
27. Non-recurring Income (17) (14) (0.0) 490 0.0 165 0.0 141 0.0
28. Non-recurring Expense n.a. n.a. - 0 0.0 0 0.0 0 0.0
29. Change in Fair Value of Own Debt (68) (57) (0.0) (355) (0.0) 671 0.1 (101) (0.0)
30. Other Non-operating Income and Expenses 0 0 0.0 n.a. - n.a. - n.a. -
31. Pre-tax Profit 6,162 5,138 0.5 6,307 0.5 6,109 0.5 4,375 0.4
32. Tax expense 2,048 1,708 0.2 1,969 0.2 1,714 0.1 1,384 0.1
33. Profit/Loss from Discontinued Operations n.a. n.a. - n.a. - n.a. - n.a. -
34. Net Income 4,114 3,430 0.3 4,338 0.4 4,395 0.4 2,991 0.3
35. Change in Value of AFS Investments (261) (218) (0.0) (321) (0.0) 425 0.0 636 0.1
36. Revaluation of Fixed Assets n.a. n.a. - n.a. - n.a. - n.a. -
37. Currency Translation Differences (2,504) (2,088) (0.2) 389 0.0 797 0.1 402 0.0
38. Remaining OCI Gains/(losses) (55) (46) (0.0) (82) (0.0) (83) (0.0) (215) (0.0)
39. Fitch Comprehensive Income 1,293 1,078 0.1 4,324 0.4 5,534 0.5 3,814 0.3
40. Memo: Profit Allocation to Non-controlling Interests 748 624 0.1 464 0.0 394 0.0 299 0.0
41. Memo: Net Income after Allocation to Non-controlling Interests 3,365 2,806 0.3 3,874 0.3 4,001 0.3 2,692 0.2
42. Memo: Common Dividends Relating to the Period 2,131 1,777 0.2 2,005 0.2 1,854 0.2 1,170 0.1
43. Memo: Preferred Dividends and Interest on Hybrid Capital Accounted
for as Equity Related to the Period
n.a. n.a. - 771 0.1 726 0.1 721 0.1
Exchange rate USD1 = EUR0.83382 USD1 = EUR0.9487 USD1 = EUR0.9185 USD1 = EUR0.8237
Earning
Assets
Earning
Assets
Earning
Assets
Earning
Assets
Banks
Societe Generale S.A.
April 2018 16
Societe Generale S.A.
Balance Sheet31 Dec 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014
Year End Year End As % of Year End As % of Year End As % of Year End As % of
USDm EURm Assets EURm Assets EURm Assets EURm Assets
AssetsA. Loans
1. Residential Mortgage Loans 149,102 124,324 9.7 119,547 8.6 115,689 8.7 106,618 8.2
2. Other Mortgage Loans n.a. n.a. - n.a. - n.a. - n.a. -
3. Other Consumer/ Retail Loans 287,558 239,772 18.8 240,842 17.4 232,930 17.5 205,830 15.7
4. Corporate & Commercial Loans n.a. n.a. - n.a. - n.a. - n.a. -
5. Other Loans 63,150 52,656 4.1 57,495 4.2 52,868 4.0 59,407 4.5
6. Less: Reserves for Impaired Loans 15,021 12,525 1.0 14,815 1.1 15,366 1.2 16,014 1.2
7. Net Loans 484,789 404,227 31.7 403,069 29.2 386,121 28.9 355,841 27.2
8. Gross Loans 499,811 416,752 32.7 417,884 30.2 401,487 30.1 371,855 28.4
9. Memo: Impaired Loans included above 24,756 20,642 1.6 23,639 1.7 24,411 1.8 25,689 2.0
10. Memo: Specific Loan Loss Allowances 13,449 11,214 0.9 13,281 1.0 13,978 1.0 14,758 1.1
B. Other Earning Assets
1. Loans and Advances to Banks 53,155 44,322 3.5 46,612 3.4 47,983 3.6 48,659 3.7
2. Reverse Repos and Securities Borrowing 166,657 138,962 10.9 189,125 13.7 178,987 13.4 165,446 12.6
3. Derivatives 178,401 148,754 11.7 201,682 14.6 207,590 15.6 232,587 17.8
4. Trading Securities and at FV through Income 154,012 128,418 10.1 134,502 9.7 152,917 11.5 174,537 13.3
5. Available for Sale Securities 64,149 53,489 4.2 61,646 4.5 59,314 4.4 60,926 4.7
6. Held to Maturity Securities 4,273 3,563 0.3 3,912 0.3 4,044 0.3 4,368 0.3
7. Other Securities n.a. n.a. - n.a. - n.a. - n.a. -
8. Total Securities 222,434 185,470 14.5 200,060 14.5 216,275 16.2 239,831 18.3
9. Memo: Government Securities included Above n.a. n.a. - n.a. - n.a. - n.a. -
10. Memo: Total Securities Pledged n.a. n.a. - n.a. - n.a. - n.a. -
11. Equity Investments in Associates 840 700 0.1 1,096 0.1 1,352 0.1 2,796 0.2
12. Investments in Property 765 638 0.1 630 0.0 657 0.0 n.a. -
13. Insurance Assets 170,189 141,907 11.1 122,664 8.9 116,803 8.8 110,146 8.4
14. Other Earning Assets 16 13 0.0 4,252 0.3 171 0.0 866 0.1
15. Total Earning Assets 1,277,246 1,064,993 83.5 1,169,190 84.6 1,155,939 86.6 1,156,172 88.4
C. Non-Earning Assets
1. Cash and Due From Banks 137,205 114,404 9.0 96,186 7.0 78,565 5.9 57,065 4.4
2. Memo: Mandatory Reserves included above n.a. n.a. - n.a. - n.a. - n.a. -
3. Foreclosed Assets n.a. n.a. - n.a. - n.a. - n.a. -
4. Fixed Assets 26,672 22,240 1.7 19,436 1.4 17,144 1.3 16,326 1.2
5. Goodwill 5,982 4,988 0.4 4,535 0.3 4,358 0.3 4,331 0.3
6. Other Intangibles 2,327 1,940 0.2 1,717 0.1 1,620 0.1 1,591 0.1
7. Current Tax Assets 1,482 1,236 0.1 1,091 0.1 1,439 0.1 1,264 0.1
8. Deferred Tax Assets 5,715 4,765 0.4 5,330 0.4 5,928 0.4 6,183 0.5
9. Discontinued Operations n.a. n.a. - n.a. - n.a. - n.a. -
10. Other Assets 72,632 60,562 4.7 84,756 6.1 69,398 5.2 65,238 5.0
11. Total Assets 1,529,261 1,275,128 100.0 1,382,241 100.0 1,334,391 100.0 1,308,170 100.0
Liabilities and EquityD. Interest-Bearing Liabilities
1. Total Customer Deposits 472,797 394,228 30.9 397,357 28.7 360,178 27.0 327,764 25.1
2. Deposits from Banks 105,507 87,974 6.9 82,678 6.0 90,355 6.8 72,257 5.5
3. Repos and Securities Lending 153,982 128,393 10.1 155,225 11.2 172,766 12.9 187,156 14.3
4. Commercial Paper and Short-term Borrowings 54,798 45,692 3.6 52,068 3.8 50,221 3.8 58,719 4.5
5. Customer Deposits and Short-term Funding 787,085 656,287 51.5 687,328 49.7 673,520 50.5 645,896 49.4
6. Senior Unsecured Debt 69,011 57,543 4.5 50,134 3.6 56,191 4.2 49,939 3.8
7. Subordinated Borrowing 16,367 13,647 1.1 14,103 1.0 13,046 1.0 8,834 0.7
8. Covered Bonds n.a. n.a. - n.a. - n.a. - n.a. -
9. Other Long-term Funding n.a. n.a. - n.a. - n.a. - n.a. -
10. Total LT Funding 85,378 71,190 5.6 64,237 4.6 69,237 5.2 58,773 4.5
11. Memo: o/w matures in less than 1 year 2,173 1,812 0.1 386 0.0 1,436 0.1 1,013 0.1
12. Trading Liabilities 144,448 120,444 9.4 140,546 10.2 123,488 9.3 123,553 9.4
13. Total Funding 1,016,911 847,921 66.5 892,111 64.5 866,245 64.9 828,222 63.3
14. Derivatives 186,244 155,294 12.2 206,692 15.0 207,816 15.6 236,300 18.1
15. Total Funding and Derivatives 1,203,155 1,003,215 78.7 1,098,803 79.5 1,074,061 80.5 1,064,522 81.4
E. Non-Interest Bearing Liabilities
1. Fair Value Portion of Debt n.a. n.a. - n.a. - n.a. - n.a. -
2. Credit impairment reserves n.a. n.a. - n.a. - n.a. - n.a. -
3. Reserves for Pensions and Other 7,336 6,117 0.5 5,687 0.4 5,218 0.4 4,492 0.3
4. Current Tax Liabilities 1,193 995 0.1 984 0.1 1,108 0.1 990 0.1
5. Deferred Tax Liabilities 800 667 0.1 460 0.0 463 0.0 426 0.0
6. Other Deferred Liabilities n.a. n.a. - n.a. - n.a. - 1,558 0.1
7. Discontinued Operations n.a. n.a. - n.a. - n.a. - n.a. -
8. Insurance Liabilities 157,058 130,958 10.3 112,777 8.2 107,257 8.0 103,298 7.9
9. Other Liabilities 82,918 69,139 5.4 97,824 7.1 83,609 6.3 74,071 5.7
10. Total Liabilities 1,452,461 1,211,091 95.0 1,316,535 95.2 1,271,716 95.3 1,249,357 95.5
F. Hybrid Capital
1. Pref. Shares and Hybrid Capital accounted for as Debt n.a. n.a. - n.a. - n.a. - n.a. -
2. Pref. Shares and Hybrid Capital accounted for as Equity 10,273 8,566 0.7 9,680 0.7 8,772 0.7 9,069 0.7
G. Equity
1. Common Equity 61,714 51,458 4.0 50,603 3.7 48,671 3.6 45,572 3.5
2. Non-controlling Interest 5,594 4,664 0.4 3,753 0.3 3,638 0.3 3,645 0.3
3. Securities Revaluation Reserves 1,232 1,027 0.1 1,199 0.1 1,495 0.1 1,027 0.1
4. Foreign Exchange Revaluation Reserves (2,017) (1,682) (0.1) 397 0.0 12 0.0 (757) (0.1)
5. Fixed Asset Revaluations and Other Accumulated OCI 5 4 0.0 74 0.0 87 0.0 257 0.0
6. Total Equity 66,526 55,471 4.4 56,026 4.1 53,903 4.0 49,744 3.8
7. Memo: Equity plus Pref. Shares and Hybrid Capital
accounted for as Equity 76,800 64,037 5.0 65,706 4.8 62,675 4.7 58,813 4.5
8. Total Liabilities and Equity 1,529,261 1,275,128 100.0 1,382,241 100.0 1,334,391 100.0 1,308,170 100.0
9. Memo: Fitch Core Capital 51,293 42,769 3.4 43,408 3.1 42,232 3.2 38,090 2.9
Exchange rate USD1 = EUR0.83382 USD1 = EUR0.9487 USD1 = EUR0.9185 USD1 = EUR0.8237
Banks
Societe Generale S.A.
April 2018 17
Societe Generale S.A.
Summary Analytics31 Dec 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014
Year End Year End Year End Year End
A. Interest Ratios
1. Interest Income/ Average Earning Assets 2.1 2.1 2.2 2.2
2. Interest Income on Loans/ Average Gross Loans 3.1 3.2 3.6 4.2
3. Interest Expense on Customer Deposits/ Average Customer Deposits 1.2 1.3 1.6 1.9
4. Interest Expense/ Average Interest-bearing Liabilities 1.2 1.4 1.5 1.4
5. Net Interest Income/ Average Earning Assets 1.0 0.8 0.9 0.9
6. Net Int. Inc Less Loan Impairment Charges/ Av. Earning Assets 0.9 0.7 0.7 0.7
7. Net Interest Inc Less Preferred Stock Dividend/ Average Earning Assets 1.0 0.8 0.8 0.9
B. Other Operating Profitability Ratios
1. Operating Profit/ Risk Weighted Assets 1.5 1.7 1.5 1.4
2. Non-Interest Expense/ Gross Revenues 74.7 67.9 70.0 69.3
3. Loans and securities impairment charges/ Pre-impairment Op. Profit 16.8 24.9 32.1 35.1
4. Operating Profit/ Average Total Assets 0.4 0.4 0.4 0.4
5. Non-Interest Income/ Gross Revenues 55.3 60.7 60.1 55.9
6. Non-Interest Expense/ Average Total Assets 1.4 1.2 1.3 1.3
7. Pre-impairment Op. Profit/ Average Equity 10.5 14.1 14.0 14.7
8. Pre-impairment Op. Profit/ Average Total Assets 0.5 0.6 0.6 0.6
9. Operating Profit/ Average Equity 8.8 10.6 9.5 9.5
C. Other Profitability Ratios
1. Net Income/ Average Total Equity 5.8 7.5 7.9 5.9
2. Net Income/ Average Total Assets 0.3 0.3 0.3 0.2
3. Fitch Comprehensive Income/ Average Total Equity 1.8 7.4 10.0 7.5
4. Fitch Comprehensive Income/ Average Total Assets 0.1 0.3 0.4 0.3
5. Taxes/ Pre-tax Profit 33.2 31.2 28.1 31.6
6. Net Income/ Risk Weighted Assets 1.0 1.2 1.2 0.9
D. Capitalization
1. FCC/ FCC-Adjusted Risk Weighted Assets 12.6 12.7 12.3 10.8
2. Tangible Common Equity/ Tangible Assets 3.7 3.5 3.4 3.2
3. Equity/ Total Assets 4.4 4.1 4.0 3.8
4. Basel Leverage Ratio 4.3 4.2 4.0 3.8
5. Common Equity Tier 1 Capital Ratio 11.6 11.8 11.4 10.9
6. Fully Loaded Common Equity Tier 1 Capital Ratio 11.4 11.5 10.9 10.1
7. Tier 1 Capital Ratio 14.0 14.8 14.0 12.6
8. Total Capital Ratio 17.2 18.2 16.8 14.3
9. Impaired loans less Reserves for Impaired Loans/ Fitch Core Capital 19.0 20.3 21.4 25.4
10. Impaired Loans less Reserves for Impaired Loans/ Equity 14.6 15.8 16.8 19.5
11. Cash Dividends Paid & Declared/ Net Income 51.8 64.0 58.7 63.2
12. Risk Weighted Assets/ Total Assets 27.7 25.7 26.7 27.0
13. Risk Weighted Assets - Standardised/ Risk Weighted Assets 28.9 28.3 33.3 34.6
14. Risk Weighted Assets - Advanced Method/ Risk Weighted Assets 71.1 71.7 66.7 65.4
E. Loan Quality
1. Impaired Loans/ Gross Loans 5.0 5.7 6.1 6.9
2. Growth of Gross Loans (0.3) 4.1 8.0 3.5
3. Reserves for Impaired Loans/ Impaired Loans 60.7 62.7 63.0 62.3
4. Loan Impairment Charges/ Average Gross Loans 0.2 0.4 0.6 0.7
5. Growth of Total Assets (7.8) 3.6 2.0 5.9
6. Reserves for Impaired Loans/ Gross Loans 3.0 3.6 3.8 4.3
7. Net Charge-offs/ Average Gross Loans n.a. 0.0 0.0 n.a.
8. Impaired Loans + Foreclosed Assets/ Gross Loans + Foreclosed Assets 5.0 5.7 6.1 6.9
F. Funding and Liquidity
1. Loans/ Customer Deposits 105.7 105.2 111.5 113.5
2. Liquidity Coverage Ratio 116.0 142.0 124.0 n.a.
3. Customer Deposits/ Total Funding (excluding derivatives) 46.0 44.1 41.2 39.2
4. Interbank Assets/ Interbank Liabilities 50.4 56.4 53.1 67.3
5. Net Stable Funding Ratio n.a. n.a. n.a. n.a.
6. Growth of Total Customer Deposits (0.8) 10.3 9.9 2.4
Banks
Societe Generale S.A.
April 2018 18
Societe Generale S.A.
Reference Data31 Dec 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014
Year End Year End As % of Year End As % of Year End As % of Year End As % of
USDm EURm Assets EURm Assets EURm Assets EURm Assets
A. Off-Balance Sheet Items
1. Managed Securitized Assets Reported Off-Balance Sheet n.a. n.a. - n.a. - n.a. - n.a. -
2. Other off-balance sheet exposure to securitizations n.a. n.a. - n.a. - n.a. - n.a. -
3. Guarantees 81,151 67,665 5.3 68,904 5.0 64,204 4.8 69,873 5.3
4. Acceptances and documentary credits reported off-balance sheet n.a. n.a. - n.a. - n.a. - n.a. -
5. Committed Credit Lines 242,243 201,987 15.8 182,820 13.2 175,371 13.1 132,270 10.1
6. Other Contingent Liabilities n.a. n.a. - n.a. - n.a. - n.a. -
7. Other Off-Balance Sheet items 30,835 25,711 2.0 31,063 2.2 30,015 2.2 n.a. -
8. Total Assets under Management 275,839 230,000 18.0 222,000 16.1 217,000 16.3 192,000 14.7
B. Average Balance Sheet
1. Average Loans 501,993 418,572 32.8 412,479 29.8 388,410 29.1 363,502 27.8
2. Average Earning Assets 1,359,346 1,133,450 88.9 1,190,331 86.1 1,186,197 88.9 1,138,174 87.0
3. Average Total Assets 1,618,453 1,349,498 105.8 1,389,935 100.6 1,356,534 101.7 1,284,710 98.2
4. Average Managed Securitized Assets (OBS) n.a. n.a. - n.a. - n.a. - n.a. -
5. Average Interest-Bearing Liabilities 1,277,750 1,065,413 83.6 1,114,764 80.6 1,096,275 82.2 1,057,317 80.8
6. Average Common equity 66,074 55,094 4.3 53,653 3.9 51,336 3.8 48,051 3.7
7. Average Equity 71,422 59,553 4.7 58,165 4.2 55,618 4.2 51,078 3.9
8. Average Customer Deposits 479,106 399,488 31.3 382,999 27.7 351,075 26.3 325,794 24.9
C. Maturities
Asset Maturities:
Loans & Advances < 3 months 89,963 75,013 5.9 82,926 6.0 0 0.0 n.a. -
Loans & Advances 3 - 12 Months 79,479 66,271 5.2 58,473 4.2 0 0.0 n.a. -
Loans and Advances 1 - 5 Years 224,518 187,208 14.7 163,147 11.8 0 0.0 n.a. -
Loans & Advances > 5 years 90,829 75,735 5.9 98,523 7.1 0 0.0 n.a. -
Debt Securities < 3 Months n.a. n.a. - n.a. - n.a. - n.a. -
Debt Securities 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. -
Debt Securities 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. -
Debt Securities > 5 Years n.a. n.a. - n.a. - n.a. - n.a. -
Loans & Advances to Banks < 3 Months 38,855 32,398 2.5 29,346 2.1 n.a. - n.a. -
Loans & Advances to Banks 3 - 12 Months 4,737 3,950 0.3 4,264 0.3 n.a. - n.a. -
Loans & Advances to Banks 1 - 5 Years 8,186 6,826 0.5 11,299 0.8 n.a. - n.a. -
Loans & Advances to Banks > 5 Years 1,377 1,148 0.1 1,703 0.1 n.a. - n.a. -
Liability Maturities:
Retail Deposits < 3 months 364,434 303,872 23.8 313,044 22.6 0 0.0 n.a. -
Retail Deposits 3 - 12 Months 25,907 21,602 1.7 29,867 2.2 0 0.0 n.a. -
Retail Deposits 1 - 5 Years 23,915 19,941 1.6 29,134 2.1 0 0.0 n.a. -
Retail Deposits > 5 Years 58,541 48,813 3.8 25,312 1.8 0 0.0 n.a. -
Other Deposits < 3 Months n.a. n.a. - n.a. - n.a. - n.a. -
Other Deposits 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. -
Other Deposits 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. -
Other Deposits > 5 Years n.a. n.a. - n.a. - n.a. - n.a. -
Deposits from Banks < 3 Months 57,041 47,562 3.7 50,686 3.7 0 0.0 n.a. -
Deposits from Banks 3 - 12 Months 14,488 12,080 0.9 9,699 0.7 0 0.0 n.a. -
Deposits from Banks 1 - 5 Years 27,420 22,863 1.8 20,225 1.5 0 0.0 n.a. -
Deposits from Banks > 5 Years 6,559 5,469 0.4 2,068 0.1 0 0.0 n.a. -
Senior Debt Maturing < 3 months 37,810 31,527 2.5 31,005 2.2 0 0.0 n.a. -
Senior Debt Maturing 3-12 Months 16,988 14,165 1.1 21,063 1.5 0 0.0 n.a. -
Senior Debt Maturing 1- 5 Years 45,336 37,802 3.0 35,437 2.6 0 0.0 n.a. -
Senior Debt Maturing > 5 Years 23,675 19,741 1.5 14,697 1.1 0 0.0 n.a. -
Total Senior Debt on Balance Sheet 123,810 103,235 8.1 102,202 7.4 0 0.0 n.a. -
Fair Value Portion of Senior Debt n.a. n.a. - n.a. - n.a. - n.a. -
Subordinated Debt Maturing < 3 months 878 732 0.1 296 0.0 0 0.0 n.a. -
Subordinated Debt Maturing 3-12 Months 1,295 1,080 0.1 90 0.0 n.a. - n.a. -
Subordinated Debt Maturing 1- 5 Year 760 634 0.0 2,302 0.2 n.a. - n.a. -
Subordinated Debt Maturing > 5 Years 13,433 11,201 0.9 11,415 0.8 0 0.0 n.a. -
Total Subordinated Debt on Balance Sheet 16,367 13,647 1.1 14,103 1.0 13,046 1.0 8,834 0.7
Fair Value Portion of Subordinated Debt n.a. n.a. - n.a. - n.a. - n.a. -
D. Risk Weighted Assets
1. Risk Weighted Assets 423,713 353,300 27.7 355,478 25.7 356,725 26.7 353,196 27.0
2. Fitch Core Capital Adjustments for Insurance and Securitisation Risk
Weighted Assets (16,941) (14,126) (1.1) (14,219) (1.0) (12,994) (1.0) n.a. -
3. Fitch Core Capital Adjusted Risk Weighted Assets 406,771 339,174 26.6 341,259 24.7 343,731 25.8 353,196 27.0
4. Other Fitch Adjustments to Risk Weighted Assets n.a. n.a. - n.a. - n.a. - (11,800) (0.9)
5. Fitch Adjusted Risk Weighted Assets 406,771 339,174 26.6 341,259 24.7 343,731 25.8 341,396 26.1
E. Fitch Core Capital Reconciliation
1. Total Equity as reported (including non-controlling interests) 66,526 55,471 4.4 56,026 4.1 53,903 4.0 49,744 3.8
2. Fair-value adjustments relating to own credit risk on debt issued 503 419 0.0 275 0.0 281 0.0 513 0.0
3. Non-loss-absorbing non-controlling interests 0 0 0.0 0 0.0 0 0.0 0 0.0
4. Goodwill 5,982 4,988 0.4 4,535 0.3 4,358 0.3 4,331 0.3
5. Other intangibles 2,327 1,940 0.2 1,717 0.1 1,622 0.1 1,591 0.1
6. Deferred tax assets deduction 2,599 2,167 0.2 2,123 0.2 2,367 0.2 2,641 0.2
7. Net asset value of insurance subsidiaries 4,800 4,002 0.3 4,484 0.3 3,512 0.3 3,482 0.3
8. First loss tranches of off-balance sheet securitizations 29 24 0.0 34 0.0 93 0.0 122 0.0
9. Fund for general banking risks if not already included and readily
convertible into equity 0 0 0.0 0 0.0 0 0.0 0 0.0
10. Fitch Core Capital 51,293 42,769 3.4 43,408 3.1 42,232 3.2 38,090 2.9
Exchange Rate USD1 = EUR0.83382 USD1 = EUR0.9487 USD1 = EUR0.9185 USD1 = EUR0.8237
Banks
Societe Generale S.A.
April 2018 19
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