Understanding our first quarter 2023 results

Dear shareholders, 

Societe Generale has posted again this quarter solid results which confirm the quality of the Group’s franchises as well as the strength of our balance sheet and liquidity profile, amid a complex and demanding environment. 

Our businesses have maintained robust commercial performances with revenues up slightly by +0.3%, driven by strong growth at Boursorama, ALD and International Retail Banking, and an excellent contribution by Global Banking and Investor Solutions, while French Retail Banking has been temporarily impacted by a decrease in the net interest margin. Amid spiking inflation, we have maintained a disciplined approach to our costs, resulting in an underlying cost-to-income ratio of 60.5%⁽¹⁾, and kept the cost of risk low at 13 basis points of our outstandings⁽²⁾. The cost of risk in 2023 is expected to be below 30 basis points given the quality of our asset portfolio. Underlying Group net income totalled EUR 1.5 billion⁽³⁾ in the first quarter, equivalent to underlying profitability of 10.7%⁽³⁾. Group net income stood at EUR 868 million on a reported basis, up +5.7% compared with the first quarter of 2022. 

The Group’s financial structure is solid – our CET1 ratio is 13.5%, which is comfortably above regulatory requirements – with a very robust liquidity profile that was reinforced during the quarter by growth in deposits and liquidity reserves, the latter standing currently close to EUR 300 billion. It is also well worth noting that the ECB gave its approval to the Group for the 2022 share buyback programme of around EUR 440 million. 

We have also successfully executed some major strategic projects currently under way by meeting new important milestones in the creation of our new retail bank SG in France, which saw its first successful IT migration in March, according to schedule, the second IT migration being planned for 13 and 14 May. Meanwhile, Boursorama reached profitability breakeven during the first quarter while maintaining a high acquisition rate, thereby consolidating its position as the leading online bank in France with more than 4.9 million clients at end-March 2023. Last, we have accomplished the key stages in the finalisation of ALD’s acquisition of LeasePlan planned on 22 May, that will create a mobility leader, and have signed the acquisition agreement to create Bernstein, a top-tier global equity research and cash equity franchise.

There still remains much to be achieved in the next two years to reap the benefits of the value-creating projects that are in progress, but the execution risk has now eased considerably. 

In addition, I am proud that the transition process went very smoothly, enabling Slawomir Krupa, my successor, and his team to take over in the best possible conditions and without wasting time.

Last, I would like to express my gratitude for having placed your trust in me and for your commitment throughout these past few years. Your faith inspired me to strive even harder and fuelled my determination to act – over and above crisis situations – in the long-term interests of the Group’s stakeholders. I look forward to seeing you again at our General Meeting on 23 May.

Frédéric Oudéa
Chief Executive Officer

(1) Excluding contribution to the Single Resolution Fund
(2) Based on Gross loans outstanding at the beginning of the period (annualised)
(3) Underlying data