EBM: Societe Generale, one of the largest European financial services groups, reports results for the third quarter of 2022. Frédéric Oudéa, hello.
Frédéric Oudéa: Hello.
EBM: You are the CEO of Societe Generale. How do you analyse the Group's results for this third quarter of 2022?
Frédéric Oudéa: In an environment which is becoming more and more complex and uncertain, we are posting very strong results for the third quarter, in line actually with previous quarters. Across the board, good performances of our businesses, growth of the net revenue, it’s true for Retail, Wholesale, all Financial Services activities. Good monitoring of our costs, so improvement of the cost/income ratio. Very importantly, low cost of risk and in particular, very low cost of risk related to defaults, which enables us to further enhance our reserves, our ex ante provisioning for the future. All in all, very strong results, €1.5 billion of net profit, good profitability on capital and also a core tier 1 ratio which is increasing compared with the 30th of June this year. So overall, very strong results which are satisfying.
EBM: More specifically, what were the dynamics of your main businesses?
Frédéric Oudéa: Let’s look at the different businesses. French Retail; first let me highlight, we have a growth in revenue, but it’s more moderate than the other activities because this market is a little bit specific and does not benefit immediately from the increase of interest rates. We have inventories of fixed rate loans, in particular for mortgages, more than in other European countries. We have regulated products, we increase the rates which is delivered, it’s remuneration to our clients. So it’s fair to say we don’t benefit immediately from the change of interest rate environment. Nevertheless, good activity, good level of commissions in particular which are growing well, good level of activity in Private Banking and in Life Insurance, so that’s structurally very positive. International Retail is very different, it benefits much more directly, much more quickly from the interest rate environment and whether it’s Romania, Czech Republic, Africa or Consumer Credit it’s strong across the board, with good growth of loans in particular. And it’s true also for Financial Services, Insurance and in particular Car Fleet Management which carries on in a market which remains very favourable. And regarding Wholesale activities, we have also a growth of revenues, in Capital Markets, compared with a high reference base last year and also in the Financing and Cash Management activities. So across the board it’s really a very solid performance.
EBM: The Group continues to progress on its major strategic projects. Where do you stand and what are your priorities for the next quarters?
Frédéric Oudéa: It’s fair to say that aside from delivering these performances on a daily basis, we are of course focusing on very structural strategic projects. First one, Retail in France, merger of our two French networks, we have got all the regulatory authorisations, so the legal merger will take place on the 1st of January 2023. The challenge now, of course, is to succeed in the IT migration into one system. That’s for the first half. Second, acquisition of Lease Plan by ALD. The process is moving ahead in terms of authorisation by DSSM and the European Commission and we have now more visibility on the time frame for our equity issue which will take place before year-end and the closing which should take place in the first quarter of 2023. Things are moving ahead also in that direction. Boursorama/ING we have completed the migration of the clients and it’s a success, 2/3rds of the eligible clients have decided to migrate their accounts to Boursorama. That’s 315 thousand clients. So, all in all, good progress in these projects and on top of that, we focus on structural transformation. ESG, we have just announced an acceleration of the transformation, an alignment of our credit portfolio. We had an objective to reduce in particular the amount of money that we dedicate to the production and exploration of fossil energy between 2019-2025 -10%. We have decided to accelerate and to double this reduction and have a -20% reduction. This is something very concrete, and you see that we look at short-term objectives, not just very long-term ones. So, very intense months, but we want to succeed, we want to complete these milestones in due course, and on top of that, I have in mind a smooth and efficient succession with my successor, Slawomir Krupa, which will lead us to the 23rd of May 2023.
EBM: Frédéric Oudéa, thank you very much.
Frédéric Oudéa: You’re welcome.
