RESULTS AT 30 SEPTEMBER 2024
Press release
Paris, 31 October 2024
SOLID BUSINESS PERFORMANCE IN Q3 24,
GROUP NET INCOME OF EUR 1.4 BILLION
Revenues of EUR 6.8 billion, up +10.5% vs. Q3 231, driven notably by the strong rebound in net interest income in France, in line with end of year estimate, and by another solid performance of Global Banking and Investor Solutions, in particular in Equities and Transaction Banking
Strong positive jaws, control of operating expenses, down by -0.8% vs. Q3 23
Cost-to-income ratio at 63.3% in Q3 24, improved by 7.1 points vs. Q3 23
Stable cost of risk at 27 basis points in Q3 24
Profitability (ROTE) at 9.6% vs. 3.8% for Q3 23
9M 24 NET INCOME UP 53% VS. 9M 23 AT EUR 3.2 BILLION,
DRIVEN BY THE IMPROVEMENT IN OPERATING PERFORMANCE
Revenues of EUR 20.2 billion, up +5.3% vs. 9M 23
Stable operating expenses, +0.1% vs. 9M 23
Cost-to-income ratio at 68.8%, improved by 3.6 percentage points vs. 9M 23
Profitability (ROTE) at 7.1% vs. 5.0% for 9M 23
SOLID CAPITAL AND LIQUIDITY RATIOS
CET 1 ratio of 13.2%2 at end of Q3 24, around 300 basis points above the regulatory requirement
Liquidity Coverage Ratio at 152% at end of Q3 24
Distribution provision of EUR 1.663 per share at end-September 2024
DECISIVE EXECUTION OF THE STRATEGIC PLAN
Capital build-up ahead of Capital Markets Day trajectory
Continuous improvement in efficiency and profitability
Reshaping of the business portfolio well underway
Slawomir Krupa, the Group's Chief Executive Officer, commented:
"We are publishing solid quarterly results that continue to show strong improvement. It demonstrates that we are executing our strategic plan which is impacting our results in a positive and tangible way. Our revenues are up thanks to the solid performance of our businesses with a strong rebound of the net interest income in France and another remarkable contribution from Global Banking and Investor Solutions. Operating expenses are stable and cost of risk is contained. We are posting a clear improvement of cost-to-income ratio and profitability, and our capital ratio continues to strengthen.
For the past year we have been working relentlessly. Our teams are mobilized and we have made progress in three fundamental areas: capital build-up, improvement of profitability, and the reshaping of our business portfolio. We continue to implement our various strategic initiatives such as BoursoBank's development, LeasePlan's integration within Ayvens and the acceleration of our contribution to the energy transition. Our goal remains unchanged: a sustainable performance that will create long-term value.”
- GROUP CONSOLIDATED RESULTS
| In EURm | Q3 24 | Q3 23 | Change | 9M 24 | 9M 23 | Change | ||
| Net banking income | 6,837 | 6,189 | +10.5% | +11.8%* | 20,167 | 19,147 | +5.3% | +6.5%* |
| Operating expenses | (4,327) | (4,360) | -0.8% | -0.3%* | (13,877) | (13,858) | +0.1% | +0.5%* |
| Gross operating income | 2,511 | 1,829 | +37.3% | +41.0%* | 6,290 | 5,289 | +18.9% | +22.4%* |
| Net cost of risk | (406) | (316) | +28.4% | +30.5%* | (1,192) | (664) | +79.6% | +81.0%* |
| Operating income | 2,105 | 1,513 | +39.1% | +43.2%* | 5,098 | 4,625 | +10.2% | +13.9%* |
| Net profits or losses from other assets | 21 | 6 | x 3.5 | x 3.4* | (67) | (92) | +27.5% | +27.3%* |
| Income tax | (535) | (624) | -14.3% | -12.7%* | (1,188) | (1,377) | -13.7% | -11.3%* |
| Net income | 1,591 | 563 | x 2.8 | x 3.0* | 3,856 | 2,836 | +35.9% | +41.3%* |
| O.w. non-controlling interests | 224 | 268 | -16.5% | -16.1%* | 696 | 774 | -10.1% | -11.2%* |
| Reported Group net income | 1,367 | 295 | x 4.6 | x 5.1* | 3,160 | 2,062 | +53.2% | +62.2%* |
| ROE | 8.4% | 0.9% | 6.2% | 3.6% | +0.0% | +0.0%* | ||
| ROTE | 9.6% | 3.8% | 7.1% | 5.0% | +0.0% | +0.0%* | ||
| Cost to income | 63.3% | 70.4% | 68.8% | 72.4% | +0.0% | +0.0%* | ||
Net banking income
Net banking income stood at EUR 6.8 billion, up by +10.5% vs. Q3 23.
Revenues of French Retail, Private Banking and Insurance were up by +18.7% vs. Q3 23 and totalled EUR 2.3 billion in Q3 24. Net interest income continued its rebound in Q3 24 (+43% excluding PEL/CEL provision vs. Q3 23), in line with latest estimates, in the context of a still muted loan environment and the pursuit of increasing interest-bearing deposits. Assets under management in the Private Banking and Insurance businesses continued to rise, respectively recording a growth of +8% and +10% in Q3 24 vs. Q3 23. Last, BoursoBank continued its controlled client acquisition, onboarding once again more than 300,000 new clients over the quarter, reaching close to 6.8 million clients at end-September 2024. Likewise, assets under administration rose by over 14% vs. Q3 23. As in Q2 24, BoursoBank posted a positive contribution to Group net income in Q3 24.
Global Banking and Investor Solutions registered a +4.9% increase in revenues relative to Q3 23. Revenues totalled EUR 2.4 billion over the quarter, still driven by strong dynamics of Global Markets' and Global Transaction & Payment Services' activities, with revenues increasing by a respective +7.6% and +9.0% in Q3 24 vs. Q3 23. Within Global Markets, revenues of Equity businesses grew by +10.1%. This is the second best third quarter ever. Fixed income and Currencies also recorded a solid performance, with a +6.1% increase in revenues amid a falling interest rates. Financing and Advisory's revenues totalled EUR 843 million, stable vs. Q3 23. The commercial momentum in the securitisation businesses remained very solid and the performance of financing activities continued to be good, albeit slower relative to an elevated Q3 23. Likewise, Global Transaction & Payment Services' activities posted an +9.0% increase in revenues vs. Q3 23, driven by a favourable market environment and sustained commercial development in the cash management and correspondent banking activities.
Mobility, International Retail Banking and Financial Services' revenues were down by -5.4% vs. Q3 23 mainly owing to base effects at Ayvens. International Retail Banking recorded a +1.4% increase in revenues vs. Q3 23 to EUR 1.1 billion, driven by favourable momentum across all regions. Mobility and Financial Services' revenues contracted by -11.4% vs. Q3 23 owing to an unfavourable non-recurring base effect on Ayvens.
The Corporate Centre recorded revenues of EUR +54 million in Q3 24. They include the booking of exceptional proceeds of approximately EUR 0.3 billion4.
Over 9M 24, net banking income increased by +5.3% vs. 9M 23.
Operating expenses
Operating expenses came to EUR 4,327 million in Q3 24, down -0.8% vs. Q3 23.
The cost-to-income ratio stood at 63.3% in Q3 24, a sharp decrease vs. Q3 23 (70.4%) and Q2 24 (68.4%).
Over 9M 24, operating expenses were stable (+0.1% vs. 9M 23) and the cost-to-income ratio came to 68.8% (vs. 72.4% for 9M 23), which is lower than the 71% target set for FY 2024.
Cost of risk
The cost of risk was stable and contained over the quarter at 27 basis points, i.e., EUR 406 million. This comprises a EUR 400 million provision for doubtful loans (around 27 basis points) and a provision on performing loan outstandings for EUR +6 million.
At end-September 2024, the Group's provisions on performing loans amounted to EUR 3,122 million, down by a slight EUR -56 million relative to 30 June 2024 notably as per the application of IFRS5 accounting standards on activities under disposal. The EUR -450 million contraction relative to 31 December 2023 is mainly owing to the application of IFRS 5 accounting standards for activities under disposal.
The gross non-performing loan ratio stood at 2.95%5,6 at 30 September 2024, down vs. end of June 2024 (3.03%). The net coverage ratio on the Group's non-performing loans stood at 84%7 at 30 September 2024 (after netting of guarantees and collateral).
Net profits from other assets
In Q3 24, the Group booked net profit of EUR 21 million driven, on the one hand, by the sale of the headquarters of KB in the Czech Republic and, on the other hand, by the accounting impacts mainly owing to the current sale of assets.
Group net income
Group net income stood at EUR 1,367 million in Q3 24, equating to a Return on Tangible Equity (ROTE) of 9.6%.
Over 9M 24, Group net income came to EUR 3,160 million, equating to a Return on Tangible Equity (ROTE) of 7.1%.
2. STRATEGIC PLAN FULLY ON TRACK
Since announcing its strategic plan in September 2023, the Group has made significant progress in its implementation, the benefits of which are starting to materialise, including on financials aspects. Fundamental milestones have notably been reached in three major areas: capital build-up, the continuous improvement in efficiency and profitability and the reshaping of the business portfolio.
Regarding the business portfolio, the Group has been proactive in recent months, announcing the disposal of several non-core and non-synergistic assets. These latest divestments not only contribute to simplifying the Group but will also reinforce the capital ratio by around 60 basis points, of which around 15 basis points are expected by year-end.
At the same time, the Group is preparing the future by investing in our core franchises, as demonstrated by the development of BoursoBank, the integration of LeasePlan in Ayvens, the creation of Bernstein, the partnership with Brookfield, the merger of our networks in France and the digitalization of our networks in the Czech Republic.
The rollout of our ESG roadmap is also progressing well, particularly on the alignment of our portfolio. The Group has already reduced by more than 50% its upstream Oil & Gas exposure at Q2 24 compared to 20198.
Last quarter, the Group reached its EUR 300 billion sustainable finance target set between 2022-2025. Societe Generale announces today a new sustainable finance target to facilitate EUR 500 billion over the 2024-2030 period that breaks down as follows:
- EUR 400 billion in financing and EUR 100 billion in sustainable bonds9
- EUR 400 billion in environmental activities and EUR 100 billion in social
A major portion of financing will be for dedicated transactions in clean energy, sustainable real estate, low carbon mobility, and other industry and environmental transition topics.
3. THE GROUP'S FINANCIAL STRUCTURE
At 30 September 2024, the Group's Common Equity Tier 1 ratio stood at 13.2%10, around 300 basis points above the regulatory requirement. Likewise, the Liquidity Coverage Ratio (LCR) was well ahead of regulatory requirements at 152% at end-September 2024 (156% on average for the quarter), and the Net Stable Funding Ratio (NSFR) stood at 116% at end-September 2024.
All liquidity and solvency ratios are well above the regulatory requirements.
| 30.09.2024 | 31.12.2023 | Requirements | |
| CET1(1) | 13.2% | 13.1% | 10.22% |
| CET1 fully loaded | 13.2% | 13.1% | 10.22% |
| Tier 1 ratio (1) | 15.5% | 15.6% | 12.15% |
| Total Capital(1) | 18.2% | 18.2% | 14.71% |
| Leverage ratio (1) | 4.25% | 4.25% | 3.60% |
| TLAC (% RWA)(1) | 27.8% | 31.9% | 22.29% |
| TLAC (% leverage)(1) | 7.6% | 8.7% | 6.75% |
| MREL (% RWA)(1) | 32.2% | 33.7% | 27.56% |
| MREL (% leverage)(1) | 8.8% | 9.2% | 6.23% |
| End of period LCR | 152% | 160% | >100% |
| Period average LCR | 156% | 155% | >100% |
| NSFR | 116% | 119% | >100% |
| In EURbn | 30.09.2024 | 31.12.2023 |
| Total consolidated balance sheet | 1,580 | 1,554 |
| Group shareholders' equity | 67 | 66 |
| Risk-weighted assets | 392 | 389 |
| O.w. credit risk | 331 | 326 |
| Total funded balance sheet | 948 | 970 |
| Customer loans | 453 | 497 |
| Customer deposits | 608 | 618 |
The Group is rated by four rating agencies: (i) FitchRatings - long-term rating "A-”, stable outlook, senior preferred debt rating "A”, short-term rating "F1” (ii) Moody's - long-term rating (senior preferred debt) "A1”, negative outlook, short-term rating "P-1” (iii) R&I - long-term rating (senior preferred debt) "A”, stable outlook; and (iv) S&P Global Ratings - long-term rating (senior preferred debt) "A”, stable outlook, short-term rating "A-1”.
4. FRENCH RETAIL, PRIVATE BANKING AND INSURANCE
| In EURm | Q3 24 | Q3 23 | Change | 9M 24 | 9M 23 | Change |
| Net banking income | 2,254 | 1,900 | +18.7% | 6,390 | 6,090 | +4.9% |
| Net banking income excl. PEL/CEL | 2,259 | 1,895 | +19.2% | 6,392 | 6,090 | +5.0% |
| Operating expenses | (1,585) | (1,608) | -1.4% | (4,962) | (5,073) | -2.2% |
| Gross operating income | 669 | 292 | x 2.3 | 1,428 | 1,017 | +40.5% |
| Net cost of risk | (178) | (144) | +23.4% | (597) | (342) | +74.7% |
| Operating income | 491 | 148 | x 3.3 | 831 | 675 | +23.1% |
| Net profits or losses from other assets | (1) | 0 | n/s | 7 | 4 | x 2.1 |
| Reported Group net income | 368 | 109 | x 3.4 | 631 | 506 | +24.8% |
| RONE | 9.4% | 2.8% | 5.4% | 4.4% | ||
| Cost to income | 70.3% | 84.7% | 77.7% | 83.3% |
SG Network, Private Banking and Insurance
Average outstanding deposits of the SG Network amounted to EUR 236 billion in Q3 24, up by +0.6% vs. the previous quarter (-1% vs. Q3 23), with a continued rise in interest-bearing deposits and financial savings.
The SG Network's average loan outstandings contracted by -5% vs. Q3 23 to EUR 195 billion. Outstanding loans to corporate and professional clients were stable vs. Q3 23 (excluding government-guaranteed PGE loans), with the share of medium to long-term loans increasing relative to Q2 24. Home loan production continued its recovery (2.4x vs. Q3 23 and +15% vs. Q2 24).
The average loan to deposit ratio came to 82.5% in Q3 24, down by -3.3 percentage points relative to Q3 23.
Private Banking activities saw their assets under management11 reach a new record of EUR 154 billion in Q3 24, up by +8% vs. Q3 23. Net gathering stood at EUR 5.9 billion in 9M 24, the net asset gathering pace (net new money divided by AuM) has risen by +5.5% since the start of the year. Net banking income stood at EUR 368 million over the quarter, stable vs. Q3 23. Over 9M 24, net banking income came to EUR 1,121 million, a +1% increase vs. 9M 23.
Insurance, which covers activities in and outside France, posted a very strong commercial performance. Life insurance outstandings increased sharply by +10% vs. Q3 23 to reach a record EUR 145 billion at end-September 2024. The share of unit-linked products remained high at 40%. Gross life insurance savings inflows amounted to EUR 3.6 billion in Q3 24, up by +35% vs. Q3 23.
Personal protection and P&C premia were up by +5% vs. Q3 23.
BoursoBank
BoursoBank registered almost 6.8 million clients at end-September 2024, a +27% increase vs. Q3 23 (an increase of around 1.4 million clients year on year). The pace of new client acquisition (around 310,000 new clients in Q3 24) is fully in line with the target of 7 million clients by the end of 2024. BoursoBank can build on an active, loyal and high-quality client base. The brokerage activity registered two million transactions, up by +18% vs. Q3 23. Last, proof of the efficiency of the model and of the very high client satisfaction level, the churn rate has remained low at around 3% and below the market rate.
Average loan outstandings rose by +4,2% compared to Q3 23, at EUR 15 billion in Q3 24.
Average outstanding savings including deposits and financial savings were +13.8% higher vs. Q3 23 at EUR 63 billion. Deposits outstanding totalled EUR 38 billion at Q3 24, posting another sharp increase of +16.2% vs. Q3 23. Life insurance outstandings came to EUR 12 billion in Q3 24 and rose by +7.3% vs. Q3 23 (o/w 47% unit-linked products, a +3.3 percentage points increase vs. Q3 23). The activity continued to register strong gross inflows over the quarter (+55% vs. Q3 23, around 53% unit-linked products).
For the second quarter in a row, BoursoBank recorded a positive contribution to Group net income in Q3 24.
Net banking income
Over the quarter, revenues came to EUR 2,254 million, up +19% vs. Q3 23 and up +6% vs Q2 24. Net interest income grew by +43% vs. Q3 23 (excluding PEL/CEL) and +19% (EUR 169 million) vs. Q2 24. Fee income rose by +5.0% relative to Q3 23.
Over 9M 24 revenues came to EUR 6,390 million, up by +4.9% vs. 9M 23. Net interest income excluding PEL/CEL was up by +15.9% vs. 9M 23. Fee income increased by +1.7% relative to 9M 23.
Operating expenses
Over the quarter, operating expenses came to EUR 1,585 million, down -1.4% vs. Q3 23. Operating expenses for Q3 24 include EUR 12 million in transformation costs. The cost-to-income ratio stood at 70.3% for Q3 24, improving by more than +14 percentage points vs. Q3 23.
Over 9M 24, operating expenses came to EUR 4,962 million (-2.2% vs. 9M 23). The cost-to-income ratio stood at 77.7% and improved by +5.7 percentage points vs. 9M 23.
Cost of risk
In Q3 24, the cost of risk amounted to EUR 178 million or 30 basis points stable on Q2 24
(29 basis points).
Over 9M 24, the cost of risk totalled EUR 597 million or 34 basis points.
Group net income
Over the quarter, Group net income totalled EUR 368 million. RONE stood at 9.4% in Q3 24.
Over 9M 24, Group net income totalled EUR 631 million. RONE stood at 5.4% in 9M 24.
5. GLOBAL BANKING AND INVESTOR SOLUTIONS
| In EUR m | Q3 24 | Q3 23 | Variation | 9M 24 | 9M 23 | Change | ||
| Net banking income | 2,422 | 2,309 | +4.9% | +5.2%* | 7,666 | 7,457 | +2.8% | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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