Societe Generale: Changes in the Times-May 19, 2022 12:17

(AOF) – This week marks the beginning of a change in the era of Societe Generale. Societe Generale has announced the resignation of its CEO Frederick Udea a year later and his withdrawal from Russia. In the stock market, the actions of La Defense banks recorded one of only two increases at CAC 40. The other is Engie. Societe Generale’s title was up 0.67% to € 24.15, while competitors BNP Paribas and Crédit Agricole fell by more than 2%. The final decision to sell the activity in Russia removes the last uncertainty about this operation in a highly uncertain geopolitical context.

Societe Generale announced last night that it would sell Russia’s Rosbank and its insurance subsidiary to Interros Capital. The disposal will take place in the second quarter of 2022 by influencing the capital ratio by approximately -7 basis points, taking into account exchange rate fluctuations since the announcement of the transaction on April 11, 2022. As of March 31, 2022, the Group’s core capital ratio (CET1) was 12.9%, which exceeds regulatory requirements by approximately 370 basis points.

The business will result in a net loss of approximately € 3.2 billion on the income statement.

These announcements do not reserve an unpleasant surprise compared to the group’s latest communication on this subject.

Twenty-four hours ago, the bank of La Defense announced its resignation a year after its general manager, Frederick Udea, served as chief for 15 years. According to analysts, he is preparing to leave the bank in good health. “The withdrawal from Russia and the acquisition of Lease Plan by ALD actually significantly reduced the company’s risk profile,” emphasizes Kepler Cheuvreux.

There is already speculation about his succession. Although Elizabeth Borne has just been appointed Prime Minister, Societe Generale could be the first major French bank to be headed by a woman.

to be continued…

AOF-Details

Key Point

1864 Bank, one of Europe’s leading financial services groups.

-Net banking revenue of € 25.8 billion generated by retail banking in France – Societe Generale, Crédit du Nord, Brusolama brand, international retail banking, financial services, insurance and retail banking solutions for customers and investors.

-A business model that claims to be a pioneer of positive transformation: 100% digital banks, open platforms and architectures, winners in the European leadership competition.

-Capital characterized by the presence of employee shareholders (6.65% and 11.9% of voting rights), 16 board of directors chaired by Lorenzo Bini Sumagi, managing director Frederick Udea.

-Equity of € 65.1 billion, CET 1 ratio of 13.7%, liquidity coverage ratio of 129%, leverage ratio of 4.9%, and therefore a solid balance sheet with debt rating A.

Task

-Vision 2025 Strategy Based on Merger with Crédit du Nord, Local Roots, Responsiveness, Adaptation to Customer Needs and Responsibilities:

-Group DNA-based innovation strategy focused on the emergence of data-driven banks with artificial intelligence: $ 200 million annual value creation with data and AI / 8/10 of servers in the cloud (2025 “2nd” Generation “cloud) Goals including 50% for private clouds and 25% for public clouds / new business models-Shine for individual customers, Forge for digital obligations, reezocar for vehicle and treezor rentals, payment platforms, digital currency.

-Environmental Strategy Aiming to Become a Global Leader in Sustainable Finance on Two Axis: Integration of Standards in All Businesses: Providing 100% Responsible Savings, Supporting Customers in Energy Transition, Building Hydrogen Solutions … / Sustainable Transition Initiatives: 10% reduction in global exposure to oil and gas mining by 2025, complete withdrawal from steam coal by 2030-40, ready by 2023 Completely withdraw from the money-guaranteed loan.

-Continuous integration of Crédit du Nord completed in 2023.

-Financial availability to refocus on mobility after refocusing on activities (discussion on the purchase of Lease Plan by subsidiary ALD and the provision of alternative banking services by Boursorama to ING’s French customers).

Task

-Net assets per share of 68.7 euros compared to the stock market price.

-Impact of the war between Russia and Ukraine: The disposal of Rosbank shares reduced the CET ratio to about 13.5% and net income to fall by about 2 billion euros.

-The 2022 goal is to sharply increase the cost / revenue ratio by 66-68% and reduce the cost of risk by 30 basis points.

-The dividend for 2021 is 1.65 euros and the stock program, that is, the total distribution rate is 50%.

..