Societe Generale 2021 1st quarter results commented by Frederic Oudea - YouTube

Societe Generale, one of the largest European financial services groups,

reports results for the first quarter of 2021.

Frederic Oudea, hello and welcome.

Hello.

You are the CEO of Societe Generale, so what is your analysis

of the results for the first quarter of 2021?

We had a very strong start of the year

and we are posting very strong results, a very strong rebound of our financial performances.

First, a strong increase of our revenues,

of course compared with the first quarter of 2020,

with the first impacts of the sanitary and economic crisis.

But nevertheless, across the board, a very strong rebound of revenues.

We are keeping a very strong discipline on our costs,

which means that despite this increase of revenues, costs are basically stable.

And the very good news too regarding our P&L is the low cost of risk.

You remember that we provisioned a lot in 2020

in a very conservative way.

We have the confirmation this first quarter of the quality of the credit portfolio

with this very low cost of risk across the board.

All in all, a very strong increase of our net profit, good profitability

and on top of that, as during the previous quarters,

a very strong capital ratio which is still increasing further,

which is providing comfort to our investors and to our clients

that yes, we can finance our businesses

and of course, ensure the distribution of the remuneration of our shareholders.

So, all in all, a very strong start of the year which gives me

a strong confidence for 2021 as a whole.

More specifically, what were the trends in your main business lines?

Let’s start with the Wholesale Business, the Capital Markets activities

and the Wholesale Finance activities.

A very, very strong performance, an even exceptional performance of the Capital Markets,

of course benefitting from very, very good market conditions in the first quarter.

For example, we are recording the best performance in our equity capital markets

since the first quarter of 2015.

I think it’s important, because of course we had impacts of the crisis in 2020 and we are showing,

we are demonstrating that effectively

we took the right decisions, they were well executed

and that we are able going forward to accompany our clients

and effectively have sustainable and profitable growth there.

On the financing activities, also good activity,

corporates are very active. They make acquisitions,

they think about investing, they are issuing bonds, etc... so good activity on the corporate side.

We had also very strong activities on the Financial Services,

for example in our Fleet Management business and there are the company cars,

but the way to think about the usage of cars is also pivoting

towards the use of electric cars and less ownership and more rental.

We are benefitting, of course, from these trends

as a leader of the mobility sector. It’s true also in insurance.

Regarding the Retail activities, of course here we have geographies,

economies which were still impacted by certain lockdowns in certain geographies.

So, the revenues are here resilient.

The good news is that we are able to increase the financial commissions which are related

to the management, the support to the savings by our clients.

The efforts on the costs are across the board, it’s true for all the activities

and again on the cost of risk, the very good news, it’s low everywhere,

including in countries which are not benefitting from subsidies from the governments

or from guaranteed loans.

It’s also true in our emerging market presence, geographies

and it’s true in particular in wholesale, because we have a zero cost of risk.

It illustrates also the liquidity on the markets,

and that companies have access to liquidity.

So, all in all, a pretty strong picture,

again which gives me comfort for the full year

in an environment which overall seems to improve.

Of course, there are still geographies which are significantly impacted by the pandemic,

but overall, globally at the worldwide level,

we can imagine a progressive improvement,

both from a health perspective and an economic one.

So what are your key priorities for the next quarters?

We still have a lot of hard work ahead of us.

The first priority is to carry on accompanying our clients.

And I would like really to thank our teams, because they did an extraordinary job

at the heart of the crisis in 2020

and now their duty is to accompany the clients in this progressive exit,

if I may say, of the crisis and the resumption of activities.

Clients will need to have access to funding, they will want to invest,

they will want to transform and we have to be there

and I’m sure we can do a great job, we have accumulated goodwill,

positive goodwill with our clients, in the last quarters.

The second one is that we have very ambitious strategic projects.

For example, in French Retail, the combination of our two networks.

It’s a long and heavy project. It’s moving forward at the right pace,

with an intense dialogue with our trade unions,

but again we have milestones and we have to focus on the right execution, I’m confident on that.

We want, as you know, to create a new bank

which will make a further difference in terms of quality of the service provided to our clients.

The second element in French Retail

is of course the acceleration of the development of Boursorama,

which recorded a record quarter in terms of new clients,

more than 200,000 in just three months.

And I think Boursorama is an asset

in the banking world which will make a big difference already and going forward.

In International Retail and Financial Services

we take advantage of the recovery of the economies,

of the geographies with all the transformations

that you can imagine regarding digital, etc... and again, new trends

in the Fleet Management business.

People are thinking differently about the usage of cars.

We can take advantage of that. We have the right expertise

and we are a leader in this sector.

And regarding Wholesale Businesses, Capital Markets and Finance,

first let me remind you that we will present

our mid-term strategy on the 10th of May

and of course the priority is to execute this strategy well.

I have the conviction that we can carry on growing profitably sustainably,

we have high added value expertise

which are exactly the ones which fit

with this new world post-crisis,

in particular when I think about the energy transition and more broadly

everything regarding corporate social responsibility.

And precisely the third priority is around that issue and in particular regarding

the energy transition.

We are one of the world leaders in the financing of renewables.

We have taken very clear commitments

to ensure that we again, help our clients to transform

and of course transform ourselves.

These commitments are short-term, in the coming years,

as well as long-term. And I’m happy that we were

among the 42 international banks,

just a few days ago, to create a new coalition

with a clear commitment to be carbon neutral in 2050:

the net zero banking association and group of banks which have committed to act concretely.

And so it’s a long journey,

but we have already designed the first steps, the first milestones of this journey.

So, all in all, a lot of hard work, but again projects which will create a lot of added value

for our societies and our clients.

Frederic Oudea, thank you very much.

Thank you.