Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — Q2 2008 Earnings Presentation
45 slides from Societe Generale S.a. Class A's earnings presentation, Aug 5, 2008
Slide 1: Second Quarter and First Half 2008 Results - Supplementary Data
05 / 08 / 2008 SECOND QUARTER AND FIRST HALF 2008 RESULTS SUPPLEMENTARY DATA
Slide 2: Contents
Contents Financial Services Societe Generale Group Results 23 First-half and quarterly income statement by core business 3 Specialised Financing: breakdown of NBI by businesses 24 Comparative income statement: Q2 08 vs. restated 5 and geographic zone Q2 07 and H1 08 vs. restated H1 07 Specialise
Slide 3: First-half income statement by core business
SUPPLEMENT - SOCIETE GENERALE GROUP First-half income statement by core business Global Investment Corporate & In EUR m French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group H1 08 H1 07 H1 08 H1 07 H1 08 H1 07 H1 08 H1 07 H1 0
Slide 4: Quarterly income statement by core business
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly income statement by core business Global Investment Corporate & In EUR m French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group Q2 08 Q2 07 Q2 08 Q2 07 Q2 08 Q2 07 Q2 08 Q2 07 Q2 08
Slide 5: Comparative income statement: Q2 08 vs. restated Q2 07 and H1 08 vs. restated H1 07
SUPPLEMENT - SOCIETE GENERALE GROUP Comparative income statement: Q2 08 vs. restated(a) Q2 07 and H1 08 vs. restated(a) H1 07 Group In EUR m Q2 07 H1 07 Q2 08 Chg H1 08 Chg Restated Restated Net banking income 6,622 5,584 (1,038) 12,668 11,263 (1,405) Operating expenses (3,817) (3,957) (140) (7,515)
Slide 6: Quarterly and first-half 2007 income statement: reported vs. restated, Group
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly and first-half 2007 income statement of reported historic vs. restated figures(a): Group In EUR m Group Q1 07 Q2 07 Q3 07 Q4 07 H1 07 Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated Net banking income 6,046 6,046
Slide 7: Quarterly and first-half 2007 income statement: Corporate and Investment Banking
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly and first-half 2007 income statement of reported historic vs. restated figures(a): Corporate and Investment Banking In EUR m Corporate and Investment Banking Q1 07 Q2 07 Q3 07 Q4 07 H1 07 Reported Restated Reported Restated Reported Restated Reported Res
Slide 8: Quarterly and first-half 2007 income statement: Corporate Centre
SUPPLEMENT - SOCIETE GENERALE GROUP Quarterly and first-half 2007 income statement of reported historic vs. restated figures(a): Corporate Centre In EUR m Corporate Centre Q1 07 Q2 07 Q3 07 Q4 07 H1 07 Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated Net bank
Slide 9: Impact of non-recurring items on pre-tax income
SUPPLEMENT - SOCIETE GENERALE GROUP Impact of non-recurring items on pre-tax income EUR m Q1 07 Q2 07 Q1 08 Q2 08 H1 07 H1 08 French Networks - 36 - - 36 - Euronext capital gain - 36 - - 36 - Global Investment Management and Securities - 165 - 274 - 165 - 274 Asset Management - - - 274 - - - 274 Liq
Slide 10: Group C/I ratio: 70.9% (vs. 57.6% in Q2 07)
SUPPLEMENT - SOCIETE GENERALE GROUP Group C/I ratio: 70.9% (vs. 57.6% in Q2 07) Change Operating expenses (in EUR bn) Q2 08 / Q2 07 Group C/I ratio at Corporate and Investment 4.0 +1.0%* Banking affected by non-recurring items 3.8 Corporate & 3.5 Investment Banking Improvement of C/I ratio at In
Slide 11: First-half Basel II/Basel I comparison
SUPPLEMENT APPLICATION OF THE BASEL II REFORM First-half Basel II/Basel I comparison Global In EUR m Investment Corporate & French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group Basel II Basel I Basel II Basel I Basel II Basel
Slide 12: Quarterly Basel II/Basel I comparison
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Quarterly Basel II/Basel I comparison Global In EUR m Investment Corporate & French International Financial Management & Investment Corporate Networks Retail Banking Services Services Banking Centre Group Basel II Basel I Basel II Basel I Basel II Basel
Slide 13: Change in risk-weighted assets (Basel I & II)
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Change in risk-weighted assets (Basel I & II) Average credit risk equivalent in EUR bn 337.1 356.2 334.8 320.7 325.4 308.8 311.3 293.0 93.3 268.2 275.1 281.4 91.1 Corporate & 259.1 95.0 92.3 123.8 93.1 Investment Banking 85.9 25.1 111.5 80.8 82.0 80.0 26
Slide 14: Consequences of the implementation of Basel II by core business
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Consequences of the implementation of Basel II by core business Risk-weighted assets at June 30, 2008 (in EUR bn) Basel II Change Basel I Basel II / Credit Market Operational Total Basel I French Networks 124.0 75.6 0.2 2.1 77.9 -37.2% International Reta
Slide 15: Calculation of ROE capital and the Tier One ratio
SUPPLEMENT APPLICATION OF THE BASEL II REFORM Calculation of ROE Capital and the Tier One ratio Data at end-June 2008 in EUR bn OCI Accounting adjustment 34.8 -0.1 Deeply Prudential adjustment Sub. Notes Additional prudential adjustment Undated Sub. Notes +4.4 -4.4 Basel II -0.8 29.5 Deeply 29.6 ded
Slide 16: Results – French Networks
SUPPLEMENT – FRENCH NETWORKS Results – French Networks Change Change In EUR m Q2 07 Q2 08 H1 08 Q2/Q2 H1/H1 Net banking income 1,789 1,754 -2.0% +0.9%(b) 3,493 -0.9% +1.4%(b) Operating expenses (1,126) (1,146) +1.8% (2,307) +1.6% Gross operating income 663 608 -8.3% -0.7%(b) 1,186 -5.4% +1.2%(b) Net
Slide 17: Changes in revenues
SUPPLEMENT – FRENCH NETWORKS Changes in revenues NBI: +0.9%(b) vs. Q2 07 1,789 1,746 1,787 1,739 1,754 NBI in EUR m NBI: -2.0% vs. Q2 07 223 Financial 211 214 203 193 commissions Commissions: -1.0% vs. Q2 07 Financial commissions: -13.5% vs. Q2 07 587 599 Service 583 604 609 Service commissions:
Slide 18: Customer deposits and savings
SUPPLEMENT – FRENCH NETWORKS Customer deposits and savings Change Q2 08/Q2 07 Average outstanding In EUR bn 209.0 207.6 205.6 203.0 204.4 -2.2% LIFE INSURANCE * 64.6 65.1 66.2 +2.6% 65.4 66.3 Managed savings -6.6% SHARE ACCOUNTS 53.6 50.6 -17.8% 47.0 45.1 44.1 MUTUAL FUNDS OTHERS 2.2 2.2 2.1 2.0 -4.
Slide 19: Customer loans
SUPPLEMENT – FRENCH NETWORKS Customer loans Average outstanding Change in EUR bn Q2 08/Q2 07 129.3 132.4 136.8 141.9 146.6 +13.4% INDIVIDUALS o.w. 65.7 64.3 +10.9% - Housing 62.5 59.2 61.1 - Consumer credit 9.5 9.5 -0.1% & overdrafts 9.5 9.5 9.5 BUSINESS 64.7 67.8 +18.2% 57.4 58.7 61.4 CUSTOMERS* BA
Slide 20: Interest margins of the French Networks
SUPPLEMENT – FRENCH NETWORKS Interest margins* of the French Networks The interest margin is an aggregate indicator dependent on three elements: Interest margin on loans As a % Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Structure effect, measured by the ratio Interest margin 2.93 2.82 2
Slide 21: Results – International Retail Banking
SUPPLEMENT – INTERNATIONAL RETAIL BANKING Results – International Retail Banking Change Change In EUR m Q2 07 Q2 08 H1 08 Q2/Q2 H1/H1 Net banking income 860 1,212 +40.9% +14.2%* 2,328 +17.9%* Operating expenses (498) (694) +39.4% +8.2%* (1,343) +11.3%* Gross operating income 362 518 +43.1% +22.4%* 9
Slide 22: Breakdown of NBI by geographic zone
SUPPLEMENT – INTERNATIONAL RETAIL BANKING Breakdown of NBI by geographic zone In EUR m 1,212 Sub-Saharan Africa & French 12% overseas territories 860 13% Mediterranean Basin 669 14% 23% Russia 572 18% 17% 17% 4% 19% 19% 3% 2% 64% 52% Central & Eastern Europe 61% 62% Q2 05 Q2 06 Q2 07 Q2 08 SECOND QU
Slide 23: Results – Financial Services
SUPPLEMENT – FINANCIAL SERVICES Results – Financial Services Change Change In EUR m Q2 07 Q2 08 H1 08 Q2/Q2 H1/H1 Net banking income 688 824 +19.8% +11.4%* 1,599 +11.9%* o.w. specialised financing 568 699 +23.1% +13.0%* 1,342 +12.8%* Operating expenses (372) (455) +22.3% +13.3%* (883) +13.0%* Gross
Slide 24: Specialised Financing: breakdown of NBI by businesses and geographic zone
SUPPLEMENT – FINANCIAL SERVICES Specialised Financing: breakdown of NBI by businesses and geographic zone Breakdown of Q2 08 NBI by activity Breakdown of Q2 08 NBI by geographic region Business Finance & Services Operational Vehicle Leasing & Fleet Management Equipment Germany Finance 15% IT Asset L
Slide 25: Specialised Financing: business indicators
SUPPLEMENT – FINANCIAL SERVICES Specialised Financing: business indicators Consumer credit loans** (in EUR bn) SG Equipment Finance loans*** (in EUR bn) +16.1%* 20.0 16.5 +8.8%* 3.4 Others 1.6 1.8 Russia 16.6 18.3 1.0 3.1 3.2 Germany 3.7 Others 3.0 5.1 5.4 Italy 2.1 2.2 France 2.4 2.6 Italy 5.7 6.2
Slide 26: SOGECAP: Embedded Value
SUPPLEMENT – FINANCIAL SERVICES SOGECAP: Embedded Value Calculating 2007 Embedded Value: EUR 3,201m Adjusted net asset value: EUR 1,199m Certainty equivalent present value of future profits: EUR 2,540m Time value of financial options and guarantees: EUR -272m Cost of capital and non-financial risk
Slide 27: Results – Global Investment Management and Services
SUPPLEMENT – GLOBAL INVESTMENT MANAGEMENT & SERVICES Results – Global Investment Management and Services Change Change In EUR m Q2 07 Q2 08 H1 08 Q2/Q2 H1/H1 Net banking income 1,116 870 -22.0% -22.9%* -6.3%*(1) 1,467 - 31.4%* -23.8%*(1) Operating expenses (677) (663) -2.1% +3.6%* (1,317) +5.5%* Gro
Slide 28: First-half income statement
SUPPLEMENT – GLOBAL INVESTMENT MANAGEMENT & SERVICES First-half income statement In EUR m SG SS & Online Asset Management Private Banking Total GIMS Savings H1 08 H1 07 Change H1 08 H1 07 Change H1 08 H1 07 Change H1 08 H1 07 Change Net banking income 246 685 -68%* 417 389 +8%* 804 961 -16%* 1,467 2
Slide 29: Quarterly income statement
SUPPLEMENT – GLOBAL INVESTMENT MANAGEMENT & SERVICES Quarterly income statement In EUR m SG SS & Online Asset Management Private Banking Total GIMS Savings Q2 08 Q2 07 Change Q2 08 Q2 07 Change Q2 08 Q2 07 Change Q2 08 Q2 07 Change Net banking income 264 345 -25%* 203 198 +4%* 403 573 -35%* 870 1,11
Slide 30: Breakdown of assets under management by product type
SUPPLEMENT – ASSET MANAGEMENT Breakdown of assets under management by product type EUR 309.2bn at June 30th 2008 June 08 June 07 393.4 374.6 357.7 319.2 309.2 Alternative (1) investment 73.6 68.5 65.7 Alternative (2) 16% Investment 19% Diversified 57.2 55.5 49.7 55.9 54.2 48.0 45.6 Equities & Equiti
Slide 31: Results – Corporate and Investment Banking
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Results – Corporate and Investment Banking (a) Change Change In EUR m Q2 07 Q2 08 H1 08 Q2/Q2 H1/H1 Net banking income 2,077 663 -68.1% - 66.6%* 2,226 - 42.3%* o.w. Financing & Advisory 449 (88) NM - 120.7%* NM 892 +16.8%* o.w. Fixed Income, Currencies & N
Slide 32: Change in risk-weighted assets (Basel I)
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Change in risk-weighted assets* (Basel I) In EUR bn Change over Change over 12 months 12 months like-for-like 96.3 95.4 +6.0% 93.7 91.3 -0.9% 89.8 90.8 81.9 82.0 79.6 -2.7% Counterparty risk +11.2%Market risk Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 0
Slide 33: Changes in NBI restated for non-recurring items
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Changes in NBI restated for non-recurring items Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 NBI at Corporate and Investment Banking 1,947 2,077 1,159 -661 1,563 663 restated for non-recurring items 1,953 2,017 1,428 1,472 1,532 1,886 Total non-recurring items -6 6
Slide 34: Assets at risk - Exposure at end-June 2008
SUPPLEMENT - CORPORATE & INVESTMENT BANKING Assets at risk - Exposure at end-June 2008 Net exposure: US RMBS: EUR 0.5bn ABS at risk UK RMBS: EUR 0.7bn; Spain RMBS: EUR 0.7bn CMBS: EUR 1.5bn (90% European) Unhedged super- Net exposure of EUR 2.78bn senior tranches of Depreciated using 10% loss rate
Slide 35: League Table
SUPPLEMENT - CORPORATE & INVESTMENT BANKING League Table Euro Capital Markets Structured Finance Debt Capital Markets (1) 2008 2007 2006 Export Finance 2008 2007 2006 Euro Bond House of the Year X Best Export Finance Arranger (1) #1 #1 #1 All international Euro-denominated Bonds #5 #3 #5 Global MLA
Slide 36: League Table: Highlights on New Awards & Rankings Q2 2008
SUPPLEMENT - CORPORATE & INVESTMENT BANKING League Table Highlights on New Awards & Rankings Q2 2008 Best Export Finance Arranger Derivatives #2 Best overall Commodity Finance bank Equity 2008 2007 2006 #4 Pan-European Equity House Equity derivatives House of the Year # 1 Leading pan-European sector
Slide 37: Corporate Centre
SUPPLEMENT - SOCIETE GENERALE GROUP Corporate Centre* GOI: EUR 216m (vs. EUR 60m) Income from the equity portfolio: EUR +259m vs. EUR +54m in Q2 07 Impact of revaluation of financial liabilities at In EUR m Crédit du Nord: EUR +44m Q2 08 Q2 07 Gross operating income 216 60 At June 30th, 2008 Net
Slide 38: Sector breakdown of SG Group commitments
SUPPLEMENT – RISK MANAGEMENT Sector breakdown of SG Group commitments at 31/12/2008 Corporate Personnel & domestic services Transport & logistics commitments: 2% Telecoms 6% Finance & insurance 3% 13% EUR 369bn* Collective services Real Estate 5% 7% Business services Public administration 7% 10% Hea
Slide 39: Geographic breakdown of SG Group commitments at 30/06/2008
SUPPLEMENT – RISK MANAGEMENT Geographic breakdown of SG Group commitments at 30/06/2008 On- and off-balance sheet* On-balance sheet* Corporates + Individuals: EUR 486bn Corporates + Individuals: EUR 351bn Japan / North America Australia North America South America Japan / 3% South America 3% 8% 1% A
Slide 40: Trading VaR
SUPPLEMENT – RISK MANAGEMENT Trading VaR* Quarterly average of 1-day, 99% Trading VaR (in EUR m) 47.9 46.0 40.8 36.4 36.6 Trading VaR 31.7 33.7 24.4 25.1 15.4 40.9 48.8 19.8 20.3 21.8 16.4 37.2 Credit 17.6 15.2 13.6 31.9 16.2 16.3 10.8 11.8 12.4 15.3 10.7 12.3 12.6 14.6 12.7 18.3 Fixed Income 11.6 1
Slide 41: The 4 least favourable SG stress tests
SUPPLEMENT – RISK MANAGEMENT The 4 least favourable SG stress tests at end-June 2008 and end-December 2007 (in EURm) 1 2 3 4 0 -200 -400 -600 -800 -1000 -1200 -1400 scenarios at end-December 2007 scenarios at end-June 2008 -1600 SECOND QUARTER AND FIRST HALF 2008 RESULTS - SUPPLEMENTARY DATA 05 / 08
Slide 42: Provisioning of doubtful loans
SUPPLEMENT – RISK MANAGEMENT Provisioning of doubtful loans 31/12/2007 31/03/2008 30/06/2008 Customer loans (in EUR bn) 326 339 351 Doubtful loans (in EUR bn) 11.4 12.5 13.0 Doubtful loans/customer loans 3.5% 3.7% 3.7% Provisions (in EUR bn) 6.8 7.5 7.7 Overall coverage ratio for 59% 60% 59% doubtfu
Slide 43: Determination of number of shares used to calculate EPS and book value per share
TECHNICAL SUPPLEMENT Determination of number of shares used to calculate EPS and book value per share Average number of shares (thousands) 2006 2007 H1 08 Existing shares 443,065 463,477 557,486 Deductions Shares allocated to cover stock options awarded to staff and 11,939 8,675 11,406 restricted sh
Slide 44: Economic and financial environment
TECHNICAL SUPPLEMENT Economic and financial environment Q2 07 Q1 08 Q2 08 Interest rates (quarterly average) (%) 10-year French government bond 4.38 4.04 4.40 3-month euribor 4.06 4.49 4.86 Indices (end of period) CAC 40 6,055 4,707 4,435 EuroStoxx 50 4,490 3,628 3,353 Nasdaq 2,603 2,279 2,293 Curre
Slide 45: Investor Relations
05 / 08 / 2008 Investor Relations Patrick SOMMELET, Louise DE L’ESTANG, Stéphane MARTY, Nathalie SAND Tel.: +33 (0)1 42 14 47 72 E-mail: investor.relations@socgen.com - Internet: www.investor.socgen.com