Understanding our 2021 annual results
Letter to shareholders N°129
2021 marks a milestone for Societe Generale. The Group achieved the best financial results in its history, enabling it to generate a good level of profitability and offer its shareholders an attractive return.
2021 marks a milestone for Societe Generale. The Group achieved the best financial results in its history, enabling it to generate a good level of profitability and offer its shareholders an attractive return. All the businesses have contributed to this excellent performance.
There was a substantial increase in our revenues in 2021 (+16%1), with a historically high level of Financing & Advisory and Financial Services activities, very solid Global Markets activities throughout the year, and a healthy momentum in Retail Banking. At the same time, we maintained our cost discipline and our gross operating income increased substantially (51%1). As a result, our cost to income ratio improved by nearly 8 points1 to 67%1. While maintaining a prudent provisioning policy, we continue to have a low cost of risk (13 basis points); and this is due to the quality of our loan portfolio. Overall, the Group delivered the best annual financial performance in its history, with reported Group net income of EUR 5.6 billion, and EUR 5.3 billion excluding exceptional items.
With a solid capital base (CET1 of 13.7%), the Group has reaffirmed its intention to offer its shareholders an attractive distribution policy, amounting to 50% of underlying Group net income. The Board of Directors will therefore propose to the General Meeting of Shareholders on May 17th 2022, a distribution equivalent to EUR 2.75 per share breaking down into a dividend in cash of EUR 1.65 per share and a share buyback programme for around EUR 915 million, equivalent to EUR 1.1 per share.
The last few months have also been marked by an acceleration in our strategic developments. We therefore announced the proposed acquisition of LeasePlan by our subsidiary ALD to create a leading global player in mobility solutions. Boursorama entered into exclusive talk with the ING group with a view to offering ING’s customers in France the best alternative banking solution. We also successfully continued advancing on major projects such as the merger of the two retail banking networks Societe Generale and Crédit du Nord.
Engaged for several years in a digital transformation, we continued to make progress throughout 2021. Our aim is to continue to increase the satisfaction of our customers, support the development of our businesses, increase our operational efficiency and build the Bank of tomorrow.
In accordance with our raison d’être, we place ESG issues2 at the heart of our businesses. Accordingly, our French retail banking networks propose an E&S loan offer3, our subsidiary ALD is a global leader in sustainable mobility and our corporate and investment bank is addressing client needs across the energy transition value chain. The Group has mobilised more than EUR 150 billion since 2019 to support the energy transition, exceeding its target of EUR 120 billion over the period 2019-2023 two years ahead of schedule.
The Group is therefore entering 2022 with confidence, with the priority objective of the disciplined execution of this high value-creating roadmap and the finalisation of its outlines by accelerating the transformations around ESG issues and new technologies.
I would like to thank you again for your loyalty and the trust you have placed in our Group as well as your long-term commitment alongside us.
Chief Executive Officer
2 ESG issues: environmental, social and gouvernance issues
3E&S loan offer: environmental and social loan offer