Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — Debt Investor Presentation (September 2023)
46 slides from Societe Generale S.a. Class A's debt investor presentation, September 2023
Slide 1: SG SFH & SG SCF Société Générale Covered Bond Programs Investor Presentation
SEPTEMBER 2023 SG SFH & SG SCF SOCIETE GENERALE COVERED BOND PROGRAMS INVESTOR PRESENTATION
Slide 2: Contents
CONTENTS 1. SG SFH & SG SCF STRUCTURE OVERVIEW 2. SFH COVERED BOND PROGRAM 3. SG SCF COVERED BOND PROGRAM 4. APPENDICES A. ELIGIBILITY CRITERIA: SG SFH and SG SCF COVER POOLS B. CREDIT LOGEMENT MECHANISMS C. SOCIETE GENERALE GROUP: 2nd QUARTER and 1st HALF 2023 FINANCIALS RESULTS 2
Slide 3: SG SFH & SG SCF Structure Overview
1 SG SFH & SG SCF STRUCTURE OVERVIEW
Slide 4: European Covered Bond Premium Label delivered
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 5: A very strong legal and regulatory framework for investors' 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 6: A 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 7: Structure Overview and Governance
STRUCTURE OVERVIEW AND GOVERNANCE Structure Overview Servicers Servicer Société Générale (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 8: 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 TIMELY PAYM
Slide 9: A 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 AUDIT COMMITTEE RISK COMMITTEE COMMITTEE • Proposals for Directors’ • Overall risk monitoring • F
Slide 10: SG SFH Covered Bond Program
2 SG SFH COVERED BOND PROGRAM SOCIETE GENERALE
Slide 11: A 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 12: 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 13: Diversified home loans origination & sources of collateral
SG SFH COVERED BOND PROGRAM Strategic integration in SG Group : diversified home loans origination & sources of collateral TWO STRONG AND COMPLEMENTARY BRANDS REFINANCED THROUGH SG SFH A solid universal N°1 online bank in bank at the service of France the economy Leading player of the brokerage and
Slide 14: French home loan market: resilient despite tightening environment (1/2)
SG SFH COVERED BOND PROGRAM The French home loan market : a resilient market despite a tightening economic environment (1/2) MARKET CONTEXT French housing market : loans origination and price index • 63% ownership rate (6 percentage points below EU average) Housing loans origination (France, EUR Bil
Slide 15: French home loan market: resilient despite tightening environment (2/2)
SG SFH COVERED BOND PROGRAM The French home loan market : a resilient market despite a tightening economic environment (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 prop
Slide 16: 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 : strong presence on key segments SG loans structure : breakdown by loan purpose like public sector employees and executives 80% 75% 7% 71% Liberal professions 6% 70% Re
Slide 17: 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 2022, guaranteed loans represented more than 62%(*) of the overall residential loans granted in France, stable
Slide 18: 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 • Crédit Logement is backed by all larger French banks: - Long term rating : Aa3 (stable outlook) by Moody’s & Aa low (stable outlook) by DBRS - Shareholders are
Slide 19: A 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 2023 100% prime French residential loans Collateral guaranteed by Crédit Logement Pool Size € 55,8 bn 36,9% Number of 395,119 borrowers Number of loans 445,545 Average loan € 125
Slide 20: A 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 % Loan amount % Number of loans 30% 25% 20% 15% 10% 5% 0% 4. Occupancy Type 5. Occupancy type by contributor 6. Region by contributor Source: NCBS a
Slide 21: A 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. Indexed LTV-band 2. Indexed LTV-band by contributor 3. Professional social categories 4. Professional social categories by contributor Source: NCBS as of June 30th, 2023 21
Slide 22: A 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 23: Funding strategy: balance between Group funding 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 July 2023 : 2,5 Bn€, 3 and 7 years maturity in soft bullet format • The SG group funding strategy remains significant for both SG covered bonds prog
Slide 24: SG SCF Covered Bond Program
5 SG SCF COVERED BOND PROGRAM SOCIETE GENERALE
Slide 25: SG SCF collateral investment policy in line with SG Group 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 26: 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. 26
Slide 27: Contributing to financing the French public sector entities
SG SCF COVERED BOND PROGRAM Contributing to financing the French public sector entities 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 AN
Slide 28: 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 (EK
Slide 29: A 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 2023 Exposures to / or guaranteed by eligible public Collateral entities Pool Size € 16.57 bn Number of borrowers 1,463 15.8% Number of loans 4,004 Origination by 62% S
Slide 30: A 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 Source: NCBS as of June 30th, 2023 30
Slide 31: A 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 32: Funding strategy: balance between Group funding 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€ 18 years maturity in soft bullet format • Issuance capacity of EUR 11,35 bn as of 30 of June 2023 As As of of 30/06/2023 30/06/2022 32
Slide 33: Appendices
4, APPENDICES SOCIETE GENERALE
Slide 34: A. Eligibility Criteria: SG SFH Cover Pool
A. ELIGIBILITY CRITERIA: SG SFH COVER POOL • 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: -
Slide 35: A. Eligibility Criteria: SG SCF Cover Pool
A . ELIGIBILITY CRITERIA: SG SCF COVER POOL • 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 a
Slide 36: B. Crédit Logement Mechanisms (1/2)
B. 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
Slide 37: B. Crédit Logement Mechanisms (2/2)
B. 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, in mostly cases through electronic Fund (MGF) which is a dedica
Slide 38: C. Société Générale Group Results
C. SOCIÉTÉ GÉNÉRALE GROUP RESULTS (1) Underlying data: adjusted for exceptional items (see Supplement), (2) Underlying and excluding the contribution to the Single Resolution Fund, (3) Including IFRS 9 phasing, 13.0% fully-loaded NB: 2022 figures have been restated, in compliance with IFRS 17 and IF
Slide 39: C. Société Générale Group Results
C. SOCIÉTÉ GÉNÉRALE GROUP RESULTS (1) Underlying and excluding the contribution of the Single Resolution Fund 2ND QUARTER AND 1ST HALF 2023 RESULTS 3 AUGUST 2023 39
Slide 40: C. Société Générale Group Results
C. SOCIÉTÉ GÉNÉRALE GROUP 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 ope
Slide 41: C. Société Générale Group Results
C. SOCIÉTÉ GÉNÉRALE GROUP 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 2ND QUARTER AND 1ST HALF 2023 RESULTS 3 AUGUST 2023 41
Slide 42: C. Société Générale Group Results
C. SOCIÉTÉ GÉNÉRALE GROUP RESULTS (1) Requirements are presented as of today’s status of regulatory discussions (2) Based on CRR2/CRD5 rules, with the P2R increase from 2.12% to 2,14%, effective from 1st January 2023 (3) Including counter cyclical buffer (53 bp as of 30.06.23) (4) On average in the
Slide 43: C. Société Générale Group Results
C. SOCIÉTÉ GÉNÉRALE GROUP RESULTS 2ND QUARTER AND 1ST HALF 2023 RESULTS AUGUST 2023 43
Slide 44: C. Société Générale Group Results
C. SOCIÉTÉ GÉNÉRALE GROUP RESULTS 2ND QUARTER AND 1ST HALF 2023 RESULTS AUGUST 2023 44
Slide 45: Publications and Contacts
PUBLICATIONS AND CONTACTS PUBLICATIONS Link to the SOCIETE GENERALE’s website : https://investors.societegenerale.com/fr/informations-financieres-et-extra-financiere/investisseurs-dette Link to the SOCIETE GENERALE prospectus’ website : https://prospectus.socgen.com/ Link to the Covered Bond Label’s
Slide 46: 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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