Société Générale (OTCPK:SCGL.F) Conference Transcript

Summary of Société Générale Conference Call - November 21, 2025 Company Overview - Company: Société Générale (OTCPK:SCGL.F) - Date of Conference: November 21, 2025 Key Points Capital Management and Share Buybacks - Société Générale's Common Equity Tier 1 (CT1) ratio is well above the target of 13%, achieving this ahead of the 2026 schedule [6][12] - The company announced a EUR 1 billion share buyback, following a previous buyback in July [6][10] - The bank aims to return excess capital to shareholders, balancing between organic growth, inorganic acquisitions, and capital distribution [7][10] - The ordinary payout policy has been increased from 40-50% to 50% due to achieving capital targets and increased profitability [7][10] Profitability and Cost Management - The cost-income ratio target is set below 60% by 2026, with current performance around 64% [13][16] - Cost reductions of 2% year-on-year have been achieved, with a commitment to further reduce costs through restructuring and operational efficiencies [13][16] - The bank plans to invest EUR 1 billion in restructuring to achieve cost-income targets, with significant investments already made [18][19] - The management is focused on maintaining discipline in costs and improving profitability through revenue growth in French retail and financial advisory [17][21] French Retail Banking - Net interest income (NII) in French retail increased by 3.5% from Q2 to Q3, indicating positive trends in lending volumes [25][26] - Factors contributing to NII growth include stabilization of deposit mixes, decreasing costs of deposits, and repricing of fixed assets like mortgages [26][27] - The bank does not foresee significant impacts from political uncertainties on asset quality or loan demand [29][30] Boursorama Banque - Boursorama Banque has exceeded its target of 8 million clients, reaching approximately 8.3 million by the end of Q3 [31][32] - The bank aims to achieve EUR 300 million in net profits by 2026, with a focus on monetizing its client base [31][36] - The client retention rate is low, indicating strong engagement and satisfaction among customers [32][36] Global Banking and Investment Solutions (GBIS) - GBIS is on track for a strong year, with revenues up 2% and costs down 1% in the latest quarter [37][38] - The equities business has underperformed compared to peers, attributed to market conditions and a focus on secure financing [40][41] - Exposure to private credit is minimal, with a focus on top-tier players and a cautious approach to risk [44][45] Ayvens and Fleet Management - Ayvens has seen margin expansion, with a current margin of 570 basis points, while the fleet remains stable at around 3.2 million cars [48][49] - The merger of ALD and LeasePlan is ongoing, with expectations for improved operational leverage and cost-income ratios in the future [49][50] Political Landscape and Regulatory Environment - The political landscape in France is fragmented, with proposals that may not materialize, including potential caps on bank fees [52][54] - The bank remains disciplined in capital management and is cautious about the impact of political changes on operations [11][54] Future Outlook - The bank does not anticipate immediate benefits from AI in achieving cost-income targets but recognizes its potential for long-term efficiency improvements [58][60] - The commitment to achieving profitability targets remains strong, with a focus on sustainable growth and operational efficiency beyond 2026 [21][60] Additional Insights - The bank's strategy emphasizes shareholder value through disciplined capital management and a focus on core business areas [12][13] - The management is optimistic about future growth opportunities in both retail and investment banking sectors, despite current market challenges [24][37]