Societe Generale SA

Good morning, everyone. Thank you for joining us today. It has been an intense quarter, several important first steps in the execution of our strategic roadmap. As explained last September, we are, we shape our business model, make it simpler, more efficient, and more robust. In support of the strategy and the implementation of that strategy, we recently announced the planned disposals of our equipment finance and Moroccan activities, which will generate 40 basis points of capital in total at close. Those came after the announcement in February, the streamlining project of the French head office. We have also officially launched Bernstein on April 1st, which creates a new global leader in cash equities and research. At the same time, we have an operating performance which is improving in line with our trajectory. Revenues are stable compared to Q1-23 on the back of an overall robust commercial performance for most businesses, global banking and investment solutions in particular, and an improvement in French NII by the high deposit beta in France. Claire will go through the details in a few minutes. On costs, they are down 1.5 percent since last year. Note that we have already accounted this quarter for a large part of the transformation charge for the year. This leads to a reported cost-to-income ratio of 74.9 percent to 1. Cost of risk is in line with guidance at 27 basis points for the quarter. And overall, the group's income stands at €680 million in Q1, and the quarterly OTC is at 4.1%. On capital, the CET1 ratio is up by 10 basis points versus previous quarter, at 13.2% post-distribution provision. Claire will now comment on the quarter's financial performance. Claire?

Thank you, Sébastien. So, turning on slide five on Q1-24 operating performance. In Q1, total revenues stood at 6.6 billion euros. In French retail, NIA is up by 3 percent, that is Q4 last year. It's down 3 percent versus last year, mostly due to the remaining impact of short-term hedges, as well as deposit beta in French markets and outflows in savings products. At the same time, the pillar recorded elevated financial fees on the back of record AUM for both private banking and interest. Regarding Orsobon, it continues to acquire a high number of clients with around 160,000 more clients acquired during the quarter than last year, which weighs on service fees on year-to-year comparison. On global banking and investor solutions, With more than 2.6 billion revenues in Q1, the businesses once again performed very well this quarter in a less conducive environment. Revenues are down by only 140 million euros compared with a very strong performance in Q1 last year, particularly in global markets. Last, international retail banking contribution is solid. and revenue increased by 8% on mobility and living services, plus integration of Lisplon, which represents €417 million additional revenues in Q1. On costs, operating expenses land below €5 billion. They are down by minus 1.5%, that is Q1 last year, with various one-offs in opposite directions. Excluding these items, the underlying growth base increases by a moderate plus 3.4% versus last year, a level well below inflation. This rise is mostly related to the increase in compensation, notably due to the salary increase validated in 2022, which came into effect on the 1st April last year. Let's now move on the next slide on the cost of risk, slide six. At group level, The cost of risk remains low at 27 basis points, in line with guidance, despite the impact of specific market highs in France this year. For the quarter, the cost of risk amounts to €400 million, of which €499 million in Stage 3, and a reversal of €99 million in Stage 1 and 2, mainly related to the decrease of the Russian exposure offshore. The NTL ratio remains low at 2.85%, fast application of IFRS 5 on entities for sale. The net coverage ratio is high and slightly up at 82%. Last, provisions on stage 1 and 2 assets remain elevated at 3.3 billion euros, fast application of IFRS 5 norm on assets classified as healthy sales. Regarding capital, slide seven. The core tier one ratio increases to 13.2% at the end of March. It's around 300 basis points above MDA. The quarterly earnings generate 17 basis points of capital this quarter before distribution, and the organic RWA decrease this quarter for an equivalent of eight basis points in line with our strategy towards a more capitalized model. Regulatory impact accounts nine basis points this quarter. All in all, risk-weighted assets amount to 388 billion euros at the end of March, and the other capital ratios remain some relatively low requirements. I will not comment. Slide eight. We can now begin into the business performance. starting with French retail on slide 10. Within SG network, loans outstanding decreased by 5% compared with last year. The activity with corporate remained good with loans up plus 1.2% as is true for last year, excluding state grant loans still driven by short-term loans. On individual, home loan production is rebounded to quarterly levels doubling in Q1 compared to the previous quarter, for admittedly a low level. On deposits, outstanding are stable versus Q4, but with a continued shift from site deposits to both interest-bearing deposits and financial savings. In private banking, AUM reached a record level of €149 billion at the end of March, assets are up 6% compared with last year, thanks to robust inflows of €2.1 billion in the first quarter. On interest, life insurance outstanding are up 6% as of last year, to a record €141 billion. Growth inflows amounting to €6.1 billion, which represents an increase of 68% compared with Q1 last year. On protection interest, Premier increased by 4% versus last year, driven by P&C Premier. Let's now have an update on the evolution of the NII in French retail, slide 11. As expected, the NII has further increased by 3% in Q1 compared to previous quarter, with still an impact of €217 million of the short-term hedging, which will mature in Q2. Deposits are stable overall, but with a shift from side deposits to interest-bearing deposits and savings. Given the Q1 deposit beta and client behavior, we are today at a lower range of our projections and guidance. At the same time, loans and spending are down by around 1% versus Q4, mostly driven by home loans, with overall a slight increase in margins by minus 1.5 basis points. Moving on to next slide, 12. During the first quarter, Borsogon continued to acquire new clients at high pace, reaching 6.3 million clients at the end of March 24, with a term which remains low and which is decreasing. In terms of client satisfaction, Borsogon remains number one in France for the fifth consecutive year with the highest net promoter score. On the commercial front, assets under administration further improved by just 14,000 versus 2,123 at 68 billion euros, thanks to a strong increase in deposits and a record organic growth correction in life instance with a share of unit-linked products that remains very high at 46%. With regard to loans, like in LG Network, we note a rebound in production, both in home loans and consumer loans, but also from low points. Let's now move to the financial performance on price routine. Total revenues are down minus 3.5%, as if you won last year, and costs are around minus 6%, including around €80 million of transformation charges. At 247 billion euros, the cost of risk is impacted this quarter by the comfort to default of specific market signs. Excluding those signs, the cost of risk in France would have been around 27 basis points into one. Overall, the reported group net income in the pillar amounts to 27 billion euros into 1.24. Turning to global markets, and investor services slide 14. Starting with global market, it was a solid quarter with revenue at €1.6 billion, down minus 7% in comparison to a high Q1 last year. Equity activities performed very well in Q1, with revenues up 3% at €870 million, benefiting notably from supportive rise in equity markets. In addition, The demand in derivative products remained strong in Q1. On fixed income, revenues landed at €733 million in Q1, down compared with last year, which was the record first quarter for fixed income for the last 10 years. Q1 performance is solid in absolute terms, as this is around 9% of the average performance between 2019 and 2023 for the first quarter. Momentum is still positive in investment solutions, while flow and hedging were impacted by lower volatility on rates. Security services revenues are decreasing by 23% on a reported basis, but only by 5% if we exclude the exceptional items in Q1 2023, notably linked to the rate valuation of our holding in Euroclear. Regarding financing and advisories by the team, This is the best first quarter ever with a strong performance in both global banking and advisory and transaction banking. Revenues are at 3% at €859 million. In details, global banking and advisory posted once again a solid performance with an increase by 2% in revenues. The activity benefited from very strong momentum in asset-backed products and a good level of activity in natural results here. In investment banking, it's a mixed-fact performance with a strong contribution of debt-capped markets, while volumes remain low in M&A and equity capital markets. In transaction banking, the performance remains strong with revenues up just 8% thanks to both still favorable market conditions and a very active commercial activity. Overall, GBA has delivered once again an excellent quarter, slide 16. Revenue stands at €2.6 billion into one, down only minus 5% compared with last year, while costs decreased by 15% at €1.8 billion. These translates were reported customer ratio of 67%, customer rates being positive this quarter, notably due to the further reversal of provisions of the Russian exposure, GBIS delivered overall a very small quarter with an error of a new close of 19%. Let's now turn to international retail banking on slide 17. Business dynamics remain solid in both regions. In Europe, loans were up by 6% versus 2% last year, had constant change in perimeters, and deposited by 9%. In Africa, performance remains dynamic across regions, with a 5% increase in loans and deposits overall. We can, for instance, highlight a 15% growth in loans in Ivory Coast, or the increase is comprised between 15% and 20% of loans and deposits in both Algeria and Senegal. Overall, international retail banking delivered a solid level of revenues in Q1, up by 3% compared with last year, at constant change and perinatal. Turning now to mobility and leasing services, and in particular on havens. Revenues are up by 14% just last year, following the integration of Lisplon, which is progressing as planned with, for instance, the first revenue synergies crystallizing for a total amount of 20 million euros into one. Contrary to last year, the revenue base is impacted by a limited impact on free trade valuation and reduction in depreciation costs, while they accounted for 174 million euros of revenue in Q1 last year. From a commercial standpoint, margins are stabilised and even slightly up compared to Q4 23 at 522 base points. These are the initial benefits of the actions we initiated to improve margins over time. Regarding fuel car sales, we are still expecting a normalization of the market in line with our guidance. In Q1, the reserve per unit remained high at 1,661 euros on average, excluding the impact of reduction in depreciation costs, 28. When it comes to consumer finance, commercial performance remain subdued due to the inflationary and uncertain economic context. Fees are improving, whereas margin is still negatively impacted from by the impact of the back of the usual rate on the loans granted until the second half of 2023. Last, despite a good commercial performance, revenue in equipment finance slightly decreased by 2%, that is to one last year. Overall, on slide 19, the international retail mobility and living services contributed to the group net income for €272 million with a cash income ratio of 62.9%, including around €70 million of transformation charges. And to conclude on the financial performance, let's now move on to slide 20. This quarter, the Corporate Centre is impacted by two main specific items. First, the accounting of transformation charges for a certain amount of around €50 million. Second, a negative impact of €84 million in net profit or losses from other assets, mostly linked to the announcement of the sale of the American activities. Overall, the net contribution in Q1 for the Corporate Centre is around 300 million, minus 300 million euros. I will now let the floor, for ESG and then inclusion.

Thank you, Claire. A few words on ESG before concluding. It is an important central part of our strategic roadmap. Once again, we are here delivering on our agenda. We continue to decarbonize our portfolios with another target Today, on the aviation sector, using the Pegasus guideline methodology, we co-launched by General in support of the transformation of this sector. We continue to work in partnerships selected by clients for our capacity to deliver expertise and technical value in milestone transactions, such as North Pole's $5 billion project finance to mass-produce the world's greenest batteries. We have also closed the landmark synthetic risk transfer transaction in Romania, part of the IFC agreement, cooperation agreement that we signed earlier this year, freeing up the capital to reallocate on projects with strong developmental impact. Lastly, and a testament to our ESG leadership and capacity to transform, we continue to be recognized across the board by new awards, including as Best Bank Sustainability and best plan for transition strategy. Last, you will find on slide 23 our now recurring slide showing our progress towards our 2026 financial targets. And I suggest we now launch the Q&A. And please stick to our usual rule of two questions per person. The floor is yours.