Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — Debt Investor Presentation (September 2018)
45 slides from Societe Generale S.a. Class A's debt investor presentation, September 2018
Slide 1: Societe Generale Covered Bond Programs SG SFH & SG SCF
INVESTOR PRESENTATION SOCIETE GENERALE COVERED BOND PROGRAMS SG SFH & SG SCF September 2018
Slide 2: Disclaimer
DISCLAIMER This document may contain a number of forecasts and comments relating to the targets and strategies of the Societe Generale Group. These forecasts are based on a series of assumptions, both general and specific, notably - unless specified otherwise - the application of accounting principl
Slide 3: Contents
CONTENTS SOCIETE GENERALE GROUP RESULTS (1st HALF 2018) GENERAL PRESENTATION: SG SFH & SG SCF 1. SG SFH COVERED BOND PROGRAM 2. SG SCF COVERED BOND PROGRAM | P.3
Slide 4: Q2 18: Main Takeaways
SOCIETE GENERALE GROUP Q2 18: Main Takeaways (1) Adjusted for exceptional items, IFRIC 21 linearisation and non-economic items (for Q2 17 and H1 17). (2) Annualised, in basis points. Outstandings at the beginning of period. Excluding litigation (3) Fully-loaded, based on CRR/CRD4 rules, including th
Slide 5: Dynamic Business Performance
SOCIETE GENERALE GROUP Dynamic Business Performance | |P.5 P.5
Slide 6: Low cost of risk
SOCIETE GENERALE GROUP Low cost of risk (1) Cost of risk in basis points including IFRS 9 effects for Q1 18 and Q2 18. Outstandings at beginning of period. Annualised. (2) Excluding provisions for CIB legacy assets up to 2013, and provisions for disputes | |P.6 P.6
Slide 7: Balance sheet ratios above regulatory requirements
SOCIETE GENERALE GROUP Balance sheet ratios above regulatory requirements (1) Refer to p.12 : the TLAC ratio in the presentation of debt investors Société Générale (2) TOLF : Total Liabilities & Own Funds, after full recognition of netting rights on derivatives. Requirements subject to regulatory an
Slide 8: 2018 Long term funding programme well advanced at competitive conditions
SOCIETE GENERALE GROUP 2018 Long term funding programme well advances at competitive conditions | |P.8 P.8
Slide 9: Long term funding breakdown
SOCIETE GENERALE GROUP Long term funding breakdown (1) See Methodology (2) Including undated subordinated debt (3) Including CD & CP >1y (4) Including CRH (5) Including IFI | |P.9 P.9
Slide 10: Contents
CONTENTS SOCIETE GENERALE GROUP RESULTS (1st HALF 2018) GENERAL PRESENTATION: SG SFH & SG SCF 1. SG SFH COVERED BOND PROGRAM 2. SG SCF COVERED BOND PROGRAM | P.10
Slide 11: Two issuers with similar structure, centralized and strict monitoring
GENERAL PRESENTATION : SG SFH & SG SCF Two issuers with similar structure, a centralized and strict monitoring SG SCF & SG SFH have many Legal Licensed as French credit Double recourse on SG Bankruptcy remote from SG framework institutions and on the cover pool points in common Collateral Homogeneou
Slide 12: Very strong legal and regulatory framework for highest level of investors' protection
GENERAL PRESENTATION : SG SFH & SG SCF Very strong legal and regulatory framework for a highest level of investors’ protection • Direct supervision by the European Central Bank Supervision • Monitoring of the cover pool and certification of the legal ratios by an independent statutory auditor (Speci
Slide 13: Covered bonds provide preferential regulatory treatment for bank investors
GENERAL PRESENTATION : SG SFH & SG SCF Covered bonds provide preferential regulatory treatment for bank investors •SG SFH (Art 129.1.e) •Residential loans all fully guaranteed by Crédit Logement (Aa3/AA for Moody’s/DBRS) •Loan to Income (LTI) lower or equal to 33% •No mortgage liens on the residenti
Slide 14: Comprehensive and simple structures compliant with Rating Agencies criteria
GENERAL PRESENTATION : SG SFH & SG SCF Comprehensive and simple structures compliant with Rating Agencies criteria Current Structure Société Générale Société Générale (Servicer) (Borrower) Société Générale Cover Pool SG SFH Cover Pool SG SCF (Servicer) Crédit du Nord (Servicer) French Home Loans Pub
Slide 15: Risks are rigorously managed and strongly mitigated
GENERAL PRESENTATION : SG SFH & SG SCF Risks are rigorously managed and strongly mitigated DUAL RECOURSE COUNTERPARTY RISK MINIMUM RATING REQUIREMENTS PREMATURITY TEST * TIMELY PAYMENT RISK ACCESS TO ECB REFINANCING** RISKS FACTORS SOFT BULLET AVERAGE LIFE MISMATCH TEST * STRUCTURAL MITIGANTS COLLEC
Slide 16: Dedicated governance and strong control environment
GENERAL PRESENTATION : SG SFH & SG SCF Dedicated governance and strong control environment CHIEF EXECUTIVE Chief Financial DIRECTORY BOARD OFFICER Officer DEPUTY CEO AUDIT COMMITTEE RISK COMMITTEE -Overall risk monitoring -Financial Statements Review -Asset and Liabilities Management Policy -Relevan
Slide 17: Contents
CONTENTS SOCIETE GENERALE GROUP RESULTS (1st HALF 2018) GENERAL PRESENTATION: SG SFH & SG SCF 1. SG SFH COVERED BOND PROGRAM 2. SG SCF COVERED BOND PROGRAM | P.17
Slide 18: Collateral investment policy in line with SG Group Business Strategy
SG SFH COVERED BONDS PROGRAMME Collateral investment policy in line with SG Group Business Strategy • SG SFH is the main refinancing entity for the French Home Loan business originated by the SG Group French Retail Network • Realizes funding advantages to increase SG Group competitiveness • Low home
Slide 19: Strategic Integration in SG Group: diversified home loans origination
SG SFH COVERED BONDS PROGRAMME Strategic Integration in SG Group: Diversified home loans origination and sources of collateral THREE STRONG AND COMPLEMENTARY BRANDS REFINANCED THROUGH SG SFH A solid universal bank in 8 regional banks N°1 in the online bank in the service of the economy France Leadin
Slide 20: French home loan market context
SG SFH COVERED BONDS PROGRAMME Attractive and resilient market segment : French home loan market context French home loan market • 65% ownership rate (among the lowest in EU) • 30.8% of French households bearing residential loans in 2017 • Home prices resilient (very limited impact during financial
Slide 21: French home loans main characteristics
SG SFH COVERED BONDS PROGRAMME Attractive and resilient market segment: French home loans main characteristics • Amounts lent are based on the borrower’s capacity to repay • Guaranteed rather than mortgage loans • Mostly fully fixed rate loans with constant instalments • No home equity loan market T
Slide 22: A prime home loan market
SG SFH COVERED BONDS PROGRAMME Attractive and resilient market segment: A prime home loan market • The French home loan market is a prime home loan market Mainly on existing properties (+/- 2/3) • Default rates remain at low level At national level Especially when guaranteed by Crédit Logement Frenc
Slide 23: Société Générale French Home Loan Business
SG SFH COVERED BONDS PROGRAMME Concentration on core competences: Société Générale French Home Loan Business Société Générale French Home Loan Business Breakdown as of end of 2017 Type of loan purpose Type of clients Existing 79% Annual SG Retail Home loans origination–Breakdown by type of security
Slide 24: Advantages of Crédit Logement's guarantee (1/2)
SG SFH COVERED BONDS PROGRAMME Strict selection criteria: advantages of Crédit Logement’s guarantee (1/2) CREDIT LOGEMENT PERFORMANCE • “Guaranteed loans” market share in home loan market : in 2017, guaranteed loans represented 60%(*) of the overall residential loans granted in France • Crédit Logem
Slide 25: Advantages of Crédit Logement's guarantee (2/2)
SG SFH COVERED BONDS PROGRAMME Strict selection criteria: The advantages of Crédit Logement’s guarantee (2/2) OTHER CREDIT LOGEMENT CREDENTIALS Crédit Agricole LCL • Crédit Logement is owned by all largest French banks: 3,0% BNP Paribas Long term rating 6,0% SG Group 16,5% Crédit Foncier Aa3 by Mood
Slide 26: High quality and well diversified cover pool (1/3)
SG SFH COVERED BONDS PROGRAMME High quality and well diversified cover pool (1/3) 100% prime French residential Collateral loans & guaranteed by Crédit Logement Geographical distribution Pool size - EUR 36,4bn Number of borrowers 311,809 Ile de France 37,3% Number of loans 376,214 Average Loan Balan
Slide 27: High quality and well diversified cover pool (2/3)
SG SFH COVERED BONDS PROGRAMME High quality and well diversified cover pool (2/3) Figures as of end of July 2018 Figures as of end of June 2018 | P.27
Slide 28: Well diversified and homogeneous sub-cover pools (3/3)
SG SFH COVERED BONDS PROGRAMME Well diversified and homogeneous sub-cover pools (3/3) Figures as of end of July 2018 | P.28
Slide 29: Dynamic, projective and cautious ALM monitoring
SG SFH COVERED BONDS PROGRAMME Dynamic, projective and cautious ALM monitoring • Covered Bonds fully backed up to their final maturities • The structure has been set up taking into account best ALM practice • Tight projective monitoring of ALM metrics • Definition and strict follow-up of a coverage
Slide 30: Funding Strategy: balanced mix of Group funding needs and issuance capacity
SG SFH COVERED BONDS PROGRAMME Funding Strategy: well balanced mix between Group funding needs and issuance capacity • Last issuance in September 2018: EUR 750M, 5y maturity, soft bullet format • The SG Group funding strategy allocated around EUR 1.5bn per year to the SFH programme • Strong issuance
Slide 31: Contents
CONTENTS SOCIETE GENERALE GROUP RESULTS (1st HALF 2018) GENERAL PRESENTATION: SG SFH & SG SCF 1. SG SFH COVERED BOND PROGRAM 2. SG SCF COVERED BOND PROGRAM | P.31
Slide 32: Collateral investment policy in line with SG Group Business Strategy
SG SCF COVERED BONDS PROGRAMME Collateral investment policy in line with SG Group Business Strategy • SG SCF is the main refinancing entity for the Public Sector financing originated by the SG Group French Retail Network and the Investment Bank • Municipalities and Local Governments financing • Publ
Slide 33: Financing new innovative projects supporting economic growth
SG SCF COVERED BONDS PROGRAMME Collateral investment policy in line with SG Group Business Strategy: Financing new innovative projects supporting economic growth and developement CULTURE STADE DE NICE LGV TOURS-BORDEAUX SPORT MUCEM - MARSEILLE BUS HYBRIDES – DIJON INFRASTRUCTURES PHILHARMONIE DE VEL
Slide 34: High quality and well diversified cover pool (1/2)
SG SCF COVERED BONDS PROGRAMME High quality and well diversified cover pool (1/2) Collateral Exposures to / or guaranteed by eligible public entities Geographical distribution in France (88% of the Cover Pool) Pool size - EUR 11.09bn Number of borrowers 791 Ile de France 17,72% Number of loans 1,996
Slide 35: High quality and well diversified cover pool (2/2)
SG SCF COVERED BONDS PROGRAMME High quality and well diversified cover pool (2/2) Figures as of end of June 2018 | P.35
Slide 36: Dynamic, projective and cautious ALM monitoring
SG SCF COVERED BONDS PROGRAMME Dynamic, projective and cautious ALM monitoring • Covered Bonds fully backed up to their final maturities • The structure has been set up taking into account best ALM practice • Tight projective monitoring of ALM metrics • Definition and strict follow-up of a coverage
Slide 37: Funding Strategy: balanced mix of Group funding needs and issuance capacity
SG SCF COVERED BONDS PROGRAMME Funding Strategy: well balanced mix between Group funding needs and issuance capacity • Last Club Deal issuance in August 2015: EUR 500M, 18y maturity, soft bullet format • Issuance capacity (Retained issuances: EUR 0.5Bn) | P.37
Slide 38: Contents: Appendices
CONTENTS APPENDICES Appendix 1 : Focus on Crédit Logement Appendix 2 : Focus on SG SFH Eligibility Criteria Appendix 3 : Useful Links Appendix 4 : Main Contacts | P.38
Slide 39: Crédit Logement / Mutual Guarantee Fund (MGF)
APPENDIX 1 Crédit Logement / Mutual Guarantee Fund (MGF) • The guarantee provided by Crédit Logement is based on the contribution of each borrower to the Mutual Guarantee Fund (MGF) which is a dedicated guarantee on residential loans • How does the MGF work and where the money comes from? Initial pa
Slide 40: Crédit Logement business model
APPENDIX 1 Crédit Logement 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 Logement and
Slide 41: Crédit Logement processes
APPENDIX 1 Crédit Logement processes Granting process • When receiving a guarantee request, in mostly cases through electronic transmission or its extranet, the process works as follows: Internal review of its own register to assess Crédit Logement exposure on this borrower, Automated analysis by th
Slide 42: Focus on SG SFH Eligibility Criteria
APPENDIX 2 Focus on SG SFH Eligibility Criteria a) The home loan from which it arises is denominated in Euros and is governed by French law, b) the tax residence of the home loan debtor is located in France, c) the underlying property is located in France, d) on the relevant Selection Date, the outs
Slide 43: Useful Links
APPENDIX 3 Useful Links Covered Bonds Label website Société Générale website: http://www.societegenerale.com/fr/mesurer- notre-performance/investisseurs/investisseurs-dette https://www.coveredbondlabel.com/ Prospectus website : http://prospectus.socgen.com/ | P.43
Slide 44: Main Contacts
APPENDIX 4 Main Contacts Chief Executive Officer Deputy Chief Executive Officer Agathe ZINZINDOHOUE Vincent ROBILLARD Group Treasurer Head of Group Funding SG SFH and SG SCF CEO SG SFH and SG SCF Deputy CEO +33 1 42 14 77 90 +33 1 57 29 53 35 Agathe.zinzindohoue@socgen.com vincent.robillard@socgen.c
Slide 45: 16 March 2011
BUILDING TOGETHER TEAM SOCIETE SPIRIT GENERALE
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