Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — Debt Investor Presentation (September 2022)
50 slides from Societe Generale S.a. Class A's debt investor presentation, September 2022
Slide 1: SG SFH & SG SCF Société Générale Covered Bond Programs Investor Presentation
SEPTEMBER 2022 SG SFH & SG SCF SOCIETE GENERALE COVERED BOND PROGRAMS INVESTOR PRESENTATION
Slide 2: Contents
CONTENTS 1. SOCIÉTÉ GÉNÉRALE GROUP 2. SG SFH & SG SCF STRUCTURE OVERVIEW 3. SG SFH COVERED BOND PROGRAM 4. SG SCF COVERED BOND PROGRAM 5. APPENDICES 2
Slide 3: Société Générale Group
1 SOCIÉTÉ GÉNÉRALE GROUP Group Results
Slide 4: Q2 22: Excellent performance across all businesses
Q2 21 : EXCELLENT PERFORMANCE ACROSS ALL BUSINESSES DOUBLE-DIGIT IMPROVING ATTRACTIVE EARNINGS GROWTH 2021 OUTLOOK SHAREHOLDER RETURN (1) Underlying data: adjusted for exceptional items (see Supplement) (2) Underlying and excluding the contribution to the Single Resolution Fund (3) Including IFRS9 p
Slide 5: Second quarter and first half 2022 results
(1) Underlying data: adjusted for exceptional items (see Supplement) (2) Single Resolution Fund SECOND QUARTER AND FIRST HALF 2022 RESULTS 3 AUGUST 2022 5
Slide 6: Second quarter and first half 2022 results
(1) Calculated based on Gross loans outstanding at the beginning of period (annualised) (2) According to new EBA methodology published on 16 July 2019. The NPL rate calculation was modified in order to exclude the net accounting value of the tangible assets for operating lease from the gross exposur
Slide 7: Second quarter and first half 2022 results
(1) Quarterly variation of provisions for S1/S2 is not strictly matching the net S1/S2 cost of risk mainly due to FX impact. SECOND QUARTER AND FIRST HALF 2022 RESULTS 3 AUGUST 2022 7
Slide 8: Presentation to debt investors August 2022
(1) Requirements are presented as of today’s status of regulatory discussions (NSFR and leverage requirements applicable since mid 2021) (2) Based on CRR2/CRD5 rules , with the P2R increase from 1,75% to 2,12%, effective from 1st March 20222 (3) Including counter cyclical buffer ( 4bps as of 31.12.2
Slide 9: Second quarter and first half 2022 results
SECOND QUARTER AND FIRST HALF 2022 RESULTS 3 AUGUST 2022 9
Slide 10: French Retail Banking results
FRENCH RETAIL BANKING RESULTS Revenues +5.9%(2) vs. Q2 21 Net interest margin and other +5.0%(2) vs. Q2 21 driven notably by good commercial activity despite negative effect of the TLA(3) and still negative rates Fees +7.1% vs. Q2 21 strong growth in service fees Operating expenses +5.5%(1) vs. Q2 2
Slide 11: International Retail Banking and Financial Services results
INTERNATIONAL RETAIL BANKING AND FINANCIAL SERVICES RESULTS Revenues +21.4%* vs.Q2 21 International Retail Banking revenues +12.7%* vs. Q2 21 Insurance and Financial Services revenues +33.7%* vs. Q2 21 Operating expenses +9.5%* vs. Q2 21 Robust positive jaws (1) Underlying data: adjusted for excepti
Slide 12: Global Banking and Investor Solutions results
GLOBAL BANKING AND INVESTOR SOLUTIONS RESULTS Revenues +18.3% vs.Q2 21 driven by strong performance across businesses Operating expenses +8.1%(1)vs. Q2 21, +4.7%(1) excl. SRF(2) C/I ratio(1)excl. SRF(2) 62.2% High positive jaws (1) Underlying data: adjusted for exceptional items and IFRIC 21 lineari
Slide 13: Presentation to debt investors August 2022
(1) After deduction of interest on deeply subordinatednotes and undated subordinatednotes (2) Subject to General Meeting of Shareholders and regulatory approval PRESENTATION TO DEBT INVESTORS AUGUST 2022 13
Slide 14: SG SFH & SG SCF Structure Overview
2 SG SFH & SG SCF STRUCTURE OVERVIEW
Slide 15: SG SFH & SG SCF structure overview: European Covered Bond Premium label
SG SFH & SG SCF STRUCTURE OVERVIEW European Covered Bond ‘Premium’ Label delivered Two issuers under a strict regulation with similar structure since July 8th, 2022 Set a new standard in covered bonds’ market Many points in common Legal framework Collateral strategy Organization & governance Strict
Slide 16: Strong legal and regulatory framework for investor protection
SG SFH & SG SCF STRUCTURE OVERVIEW A very strong legal and regulatory framework for a highest level of investors’ protection Supervision Exclusive legal purpose Direct supervision by the European Central Bank Business purpose limited by law to the sole refinancing of eligible Monitoring of the
Slide 17: Preferential regulatory treatment of covered bonds for bank investors
SG SFH & SG SCF STRUCTURE OVERVIEW A preferential regulatory treatment of covered bonds for bank investors European Covered Bond ‘Premium’ Label delivered since July 8th, 2022, guarantees the respect of CRR Art. 129 SG SFH (Art 129.1.e) 10% Risk Weight Residential loans all fully guaranteed by Cré
Slide 18: Structure overview and governance
STRUCTURE OVERVIEW AND GOVERNANCE Structure Overview Servicers Société Générale Servicer (Borrower) Cover Pool SG SFH Cover Pool SG SCF (French Home loans (Public sector loans) including Positive Impact home loans) Principal Collateralised and loans interest Société Générale Collection Loss Reserve
Slide 19: Risks and structural mitigants
STRUCTURE OVERVIEW AND GOVERNANCE Risks and Structural Mitigants RISKS FACTORS STRUCTURAL MITIGANTS DUAL RECOURSE COUNTERPARTY RISK MINIMUM RATING REQUIREMENTS OVER-COLLATERALIZATION INTEREST RESERVE * INTEREST RATE RISK HEDGING STRATEGY (ASSET & LIABILITY SWAPS) ** ALL RISKS SOFT BULLET LIQUIDITY R
Slide 20: Dedicated governance with a strong control environment
SG SFH & SG SCF STRUCTURE OVERVIEW A dedicated governance with a strong control environment CHIEF EXECUTIVE OFFICER & BOARD OF DIRECTORS CHIEF FINANCIAL OFFICER DEPUTY CHIEF EXECUTIVE OFFICER NOMINATION COMMITTEE AUDIT COMMITTEE RISK COMMITTEE • Proposals for Directors’ • Overall risk monitoring app
Slide 21: SG SFH
5 SG SFH COVERED BOND PROGRAM SOCIETE GENERALE
Slide 22: Collateral investment policy in line with SG Group business strategy
SG SFH COVERED BOND PROGRAM A collateral investment policy in line with SG Group business strategy Strategic • SG SFH is the main refinancing entity for the French Home Loan business originated by the integration in the SG Group French Retail Network Group • Provides lower cost of funding to increas
Slide 23: Positive Impact Covered Bond Framework & Issuance
SG SFH COVERED BOND PROGRAM Integrating SG Group environmental strategy : Positive Impact Covered Bond Framework & Issuance POSITIVE IMPACT COVERED BOND FRAMEWORK USE OF PROCEEDS & TARGET IMPACT SELECTION OF POSITIVE IMPACT MORTGAGES Use of proceeds: to refinance mortgages on residential Criteri
Slide 24: Diversified home loans origination & sources of collateral
SG SFH COVERED BOND PROGRAM Strategic integration in SG Group : diversified home loans origination & sources of collateral THREE STRONG AND COMPLEMENTARY BRANDS REFINANCED THROUGH SG SFH A solid universal 8 regional banks N°1 online bank in bank at the service of France the economy Leading player of
Slide 25: French home loan market: attractive and resilient (1/2)
SG SFH COVERED BOND PROGRAM The French home loan market : an attractive and resilient market (1/2) MARKET CONTEXT French home loan market • 64% ownership rate (6% below EU average) allowing further growth of the market 300 Housing loans origination (France, EUR Billions) 150 140 • 30.6% of French ho
Slide 26: French home loan market: attractive and resilient (2/2)
SG SFH COVERED BOND PROGRAM The French home loan market : an attractive and resilient market (2/2) HOME LOANS MAIN CHARACTERISTICS A PRIME HOME LOAN MARKET • Loan amounts are based on borrower’s capacity to repay • Loan purpose : a stable distribution between new & old properties • Security type : g
Slide 27: Concentration on core competencies: SG French home loan business
SG SFH COVERED BOND PROGRAM Concentration on core competencies : Société Générale French home loan business SG loans customer base : over-representation of private sector SG loans structure : breakdown by loan purpose 7% 80% Liberal professions 7% 69% 69% 70% Retail self-employed 5% 5% 60% 3% 50% Ot
Slide 28: Benefits of Crédit Logement's guarantee (1/2)
SG SFH COVERED BOND PROGRAM The French home loan market : Benefits of Credit Logement’s guarantee(1/2) CREDIT LOGEMENT PERFORMANCE •“Guaranteed loans” market share in home loan market : in 2021, guaranteed loans represented 62,5%(*) of the overall residential loans granted in France, a decrease of 1
Slide 29: Benefits of Crédit Logement's guarantee (2/2)
SG SFH COVERED BOND PROGRAM The French home loan market : Benefits of Credit Logement’s guarantee(2/2) OTHER CREDIT LOGEMENT CREDENTIALS 6,0% 3,0% • Crédit Logement is backed by all larger French banks: Crédit Agricole LCL - Long term rating : Aa3 (stable outlook) by Moody’s 16,0% BNP Paribas SG Gro
Slide 30: High quality and well diversified cover pool (1/3)
SG SFH COVERED BOND PROGRAM A high quality and well diversified cover pool (1/3) Main regional distribution As at 30 June 2022 100% prime French residential loans Collateral guaranteed by Crédit Logement Pool Size € 52,9 bn 36,9% Number of 384,248 borrowers Number of loans 435,455 Average loan € 121
Slide 31: High quality and well diversified cover pool (2/3)
SG SFH COVERED BOND PROGRAM A high quality and well diversified cover pool (2/3) 1. Loan Purpose 2. Loan purpose by contributor 3. Loan to Income ratio 30% % Number of loans % Loan amount 25% 20% 15% 10% 5% 0% 4. Occupancy Type 5. Occupancy type by contributor 6. Region by contributor Source: NCBS a
Slide 32: High quality and well diversified cover pool (3/3)
SG SFH COVERED BOND PROGRAM A high quality and well diversified cover pool (3/3) 1. Original LTV-band 2. Original LTV-band by contributor 3. Professional social categories 4. Professional social categories by contributor 32
Slide 33: Dynamic, projective and cautious ALM monitoring
SG SFH COVERED BOND PROGRAM A dynamic, projective and cautious ALM monitoring • Covered bonds fully backed up to their final maturities • The structure has been set up to take into account best ALM practice - Tight projective monitoring of ALM metrics - Definition and strict monitoring of a coverage
Slide 34: Funding strategy: balanced mix of Group needs and issuance capacity
SG SFH COVERED BOND PROGRAM Funding strategy : well balanced mix between Group funding needs and issuance capacity • Last public benchmark issuances in May 2022 : 3 Bn€, 6 and 12 years maturity in soft bullet format • The SG group funding strategy increased significantly for both SG covered bonds pr
Slide 35: SG SCF
4, SG SCF COVERED BOND PROGRAM SOCIETE GENERALE
Slide 36: Collateral investment policy in line with SG Group business strategy
SG SCF COVERED BOND PROGRAM A collateral investment policy in line with SG Group business strategy Strategic • SG SCF is the main refinancing entity for the Public Sector financing originated by the SG Group French integration in the Retail Network and the Investment Bank Group • Provides lower cost
Slide 37: Financing new innovative projects supporting economic growth
SG SCF COVERED BOND PROGRAM Financing new innovative projects supporting economic growth and development CULTURE LORRAINE UNIVERSITY GRENOBLE UNIVERSITY SPORT MUCEM - MARSEILLE HYBRID BUS – DIJON INFRASTRUCTURES PHILHARMONIE DE PARIS VELODROME – SAINT QUENTIN EN Y. 37
Slide 38: Contributing to financing the French public economy sector
SG SCF COVERED BOND PROGRAM Contributing to financing the French public economy sector LOCAL SUPPORTING INVESTMENTS GOVERNMENTS IN TRANSPORTATION, ENERGY AND RESOURCES SECTOR LOCAL PUBLIC ENTITIES CONTRIBUTING TO CONSTRUCTION PROJECTS FOR ALL CITIZENS SOCIAL HOUSING COMMITTED FOR THE DEVELOPMENT AND
Slide 39: Contributing to promoting Export & Development finance
SG SCF COVERED BOND PROGRAM Contributing to promoting Export & Development finance SG CIB is a global leader in delivering export Australia (EFIC) Luxembourg (ODL) and import financial solutions together with Austria (OeKB) * Netherlands (Atradius) * development financing Belgium (ONDD) * Norway (GI
Slide 40: High quality and well diversified cover pool (1/2)
SG SCF COVERED BOND PROGRAM A high quality and well diversified cover pool (1/2) Main regional distribution in France As at 30 June 2022 Exposures to / or guaranteed by eligible public Collateral entities Pool Size € 16.29 bn Number of borrowers 1,502 15.8% Number of loans 4,152 Origination by 65% S
Slide 41: High quality and well diversified cover pool (2/2)
SG SCF COVERED BOND PROGRAM A high quality and well diversified cover pool (2/2) Exposure Type Exposure Rating Export credit agencies country Geographic exposure 41
Slide 42: Dynamic, projective and cautious ALM monitoring
SG SCF COVERED BOND PROGRAM A dynamic, projective and cautious ALM monitoring • Covered bonds fully backed up to their final maturities • The structure has been set up to take into account best ALM practice - Tight projective monitoring of ALM metrics - Definition and strict monitoring of a coverage
Slide 43: Funding strategy: balanced mix of Group needs and issuance capacity
SG SCF COVERED BOND PROGRAM Funding strategy : well balanced mix between Group funding needs and issuance capacity • Last Club Deal issuance in August 2015: 500M€ 18years maturity in soft bullet format • Issuance capacity of EUR 10,55 bn as of 30 of June 2022 As of 30/06/2022 43
Slide 44: Appendices
5 APPENDICES SOCIETE GENERALE
Slide 45: SG SFH cover pool: eligibility criteria
SG SFH COVER POOL : ELIGIBILITY CRITERIA • Loans granted in Euros • Loans governed by French law • The financed property is a residential property, located in France • Loans are secured by a guarantee granted by Crédit Logement • At the date on which the loan is selected to enter into the pool: - pr
Slide 46: SG SCF cover pool: eligibility criteria
SG SCF COVER POOL : ELIGIBILITY CRITERIA • Loans to or guaranteed by public entities : - Central or local governments - Central banks - Public sector entities - Supranational institutions • Minimum exposure rating : - BBB-/Baa3 and/or internal rating equivalent (within European Union) - AA-/Aa3 and/
Slide 47: Crédit Logement mechanisms (1/2)
CREDIT LOGEMENT MECHANISMS (1/2) BUSINESS MODEL • Crédit Logement provides guarantees of home loans in case of non repayment by borrowers, as an alternative to the traditional registration of a mortgage : - Each home loan granted by SG and guaranteed by Crédit Logement has to satisfy both Crédit Log
Slide 48: Crédit Logement mechanisms (2/2)
CREDIT LOGEMENT MECHANISMS (2/2) MUTUAL GUARANTEE FUND PROCESSES • The guarantee provided by Crédit GRANTING PROCESS Logement is based on the contribution of each borrower to the Mutual Guarantee • When receiving a guarantee request, through electronic transmission or its Fund (MGF) which is a dedic
Slide 49: Publications and contacts
PUBLICATIONS AND CONTACTS PUBLICATIONS Link to the SOCIETE GENERALE’s website : https://www.societegenerale.com/en/measuring-our-performance/investors/debt-investors Link to the SOCIETE GENERALE prospectus’ website : http://prospectus.socgen.com/ Link to the Covered Bond Label’s website : https://ww
Slide 50: Disclaimer
DISCLAIMER This presentation contains forward-looking statements relating to the targets and strategies of the Société Générale Group. These forward-looking statements are based on a series of assumptions, both general and specific, in particular the application of accounting principles and methods
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