EuroBusiness Media (EBM): Société Générale, one of the largest European financial services groups, reports first quarter results for 2015. Frédéric Oudéa, welcome. You are the Chairman and CEO of Société Générale. To begin, what are your comments on the first quarter results? Are you experiencing in your activity the first signs of the pickup in growth in Europe?
Frédéric Oudéa: Well we had a very good start for the beginning of this year, the first quarter. All our businesses are growing with a very strong dynamism, from a commercial point of view. Revenues are up significantly. We have also of course carried on monitoring strongly, with a lot of discipline, our costs and the cost of risk is also going down, as expected, but it shows the quality of the portfolio of our credit. In terms of balance sheets also very good capital ratio – the total capital ratio is up. All in all a very good start above, I would say, all our expectations. Of course it is on the back of an environment which is improving, in particular in Europe. for example in France we see an improvement, an increase of the new loan production for corporates as well as mortgages. So probably an improvement which should carry on in the coming quarters.
EBM: French retail banking is showing strong commercial momentum and has returned to revenue growth. What are the drivers of this performance?
Frédéric Oudéa: That’s one of the great satisfactions, I would say, of the quarter. The economy is doing a little bit better and on the back of that economy our three brands, our three networks, are performing extremely well. New account openings – 100,000 in the quarter; Boursorama, with 650 000 clients, today the leading online bank in France. Good deposit growth. As I’ve said, an improvement in the new loan production. Good life insurance collections also. Overall everything is moving in the right direction. Strong increase of NBI: +4%. Good monitoring of costs and a cost of risk which is going down, so a contribution which is improving: again it’s very satisfying.
EBM: In international retail banking, the situation has deteriorated in Russia but all the while you’re stepping up your development plans in Africa. What is the overall evolution of earnings in this division?
Frédéric Oudéa: In this division we are also moving forward, in line with our expectations. You mentioned Russia; yes, Russia as expected had a difficult quarter but something absolutely manageable from a net contribution point of view. And more importantly we were able to preserve the quality of the balance sheet in terms of capital and liquidity, and we’ve seen a progressive normalization - if I may say – of the situation with the Ruble vs. Euro or Ruble vs. US Dollar improving, the interest rate going down, so things should progressively I would say normalize compared with the initial impact of the crisis on the household.
Beyond Russia, a good growth everywhere, in particular for example in Africa. Africa is, as you know, a strategic development for us; we are one of the three leading international banks, double-digit growth in terms of NBI. But also in Europe, in the Czech Republic, we have very good results. Romania is back to the black as expected, thanks to a strong decrease of the cost of risk. And all of our financial services – insurance, financial services dedicated to corporates – are also growing very well. So overall a good panorama.
EBM: How has Société Générale benefitted from the favourable environment on the financial markets in the first quarter?
Frédéric Oudéa: Clearly we had overall a good environment for markets with a lot of flows to European equities, more volatility, a lot of volumes overall. And of course we benefitted from that with a business model which is geared towards equity investment solutions. But beyond this, asset management, private banking, financing activities did also very well. And I would say beyond the seasonality of the first quarter, beyond these evolutions, I would say structurally we have a very efficient business model, which is very profitable, client-driven, and I’m very positive about the development of this business.
EBM: And finally, what is your outlook for the rest of 2015?
Frédéric Oudéa: Well, I would say that beyond an environment which on the one hand is showing improvement, but at the same time remains uncertain with some risks which are sometimes difficult to assess, such as the Greek situation or certain geopolitical risks, I would say I’m confident for 2015. We have shown in the first quarter the quality of our business model. We are developing an integrated universal bank. The level of synergies, the revenues generated between our different businesses and geographies is 28% in 2014, so it’s an efficient way to grow. And we are growing with new clients everywhere. In Russia, as I’ve said, we have seen some signs of normalisation. So let’s wait, but again all that goes in the right direction. So, we are positive. We should see again good commercial development, growth of revenues. We will carry on monitoring the cost and our risk in a very disciplined way and overall I’m very positive about what we can achieve in 2015.
EBM: Frédéric Oudéa, Chairman and CEO of Société Générale, thank you very much.
Frédéric Oudéa: You’re welcome.