• Revenue: Up by 10.5% compared to Q3 '23, nearly 6% excluding a EUR300 million one-off.
• Cost-to-Income Ratio: Down to 63.3% in Q3 '24, 7 percentage points lower than Q3 '23.
• Operating Income: Increased by nearly 40% compared to last year.
• Net Income: Rose 4.6 times to EUR1.4 billion in Q3 '24.
• Reported ROTE: 9.6% in Q3 '24, 7.8% excluding the one-off.
• CET1 Ratio: Up by around 10 basis points to 13.2% at the end of Q3 '24.
• Cost of Risk: Stable at 27 basis points.
• French NII: Up 43% year-over-year in Q3 '24.
• BoursoBank Client Base: Approximately 6.8 million clients at the end of September.
• Global Markets Revenue: Up 9% year-over-year in Q3 '24.
• International Retail Loans: Up by 6% in Europe, 1% in Africa.
• Corporate Center Net Result: Minus EUR67 million in Q3 '24.

• Warning! GuruFocus has detected 2 Warning Sign with SCGLF.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Societe Generale SA (SCGLF) reported a 10.5% increase in revenues compared to Q3 '23, driven by strong business performance in key areas.
• The cost-to-income ratio improved significantly, dropping to 63.3% in Q3 '24 from 70.3% in Q3 '23, indicating better cost management.
• The CET1 ratio increased by around 10 basis points to 13.2%, aligning with the company's end-of-year target.
• BoursoBank, a digital-only business, continues to show strong growth and profitability, with a positive net result for the second consecutive quarter.
• The company is ahead of its ESG targets, having reduced upstream oil and gas exposure by more than 50% and setting a new sustainable finance target of EUR500 billion for 2024-2030.

Negative Points

• Despite improvements, the French retail segment still faces challenges, with a need for better commercial and technological strategies.
• The cost of risk remains stable at 27 basis points, but there is a concern about potential increases due to economic uncertainties.
• The integration of LeasePlan within Ayvens is ongoing, with some pressure on revenues due to industry trends.
• The company faces potential regulatory impacts on its CET1 ratio, with 15 basis points of regulatory charges expected next year.
• There is uncertainty regarding the impact of the French budget on taxes and capital allocation, particularly concerning buyback taxes.

Q & A Highlights

Q: Can you explain the rationale behind appointing a non-French speaking, non-internal management member? A: Slawomir Krupa, CEO, explained that the decision was based on finding the best team composition to drive the company forward. He emphasized that language was not a barrier as everyone in the bank speaks English, and the focus was on bringing fresh perspectives and leveraging internal talent.

Q: What is the outlook for French retail volume growth, and how does it relate to BoursoBank's strategy? A: Krupa noted a stable outlook for corporate volumes and a readiness to support growth in retail, particularly in real estate. For BoursoBank, the strategy remains unchanged, focusing on optimizing growth and contribution to the bottom line, with no immediate changes due to management shifts.

Q: How do you view the impact of interest rates on your business, particularly in French retail? A: Krupa highlighted that while lower interest rates could negatively impact NII in the long run, they might also stabilize deposit behaviors and improve mortgage book repricing. The overall impact depends on market dynamics, but the bank is positioned to benefit from certain trends.

Q: With the current CET1 ratio ahead of targets, are there any regulatory impacts expected that could affect this trajectory? A: Krupa assured that while regulatory reviews are ongoing, the bank has built-in levers to manage capital effectively, ensuring that their committed trajectory remains on track. No immediate regulatory impacts are anticipated beyond what has been communicated.

Q: What are the strategic priorities for Societe Generale moving forward, especially with your new role overseeing French retail? A: Krupa emphasized the importance of cost management and improving French retail performance. He aims to enhance commercial and digital strategies to boost performance, while continuing to focus on capital allocation and efficiency across the group.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.