Societe Generale SA

Ladies and gentlemen, welcome to the Société Générale conference call. Gentlemen, please go ahead.

Good morning, everyone. Welcome to our nine-month 2025 financial results presentation. I am pleased you could join us today. In line with previous quarters, we are once again achieving a solid performance. The financial indicators remain above our annual financial targets. Our quarterly and nine-month revenues have grown significantly compared to last year. This is happening while we continue to demonstrate discipline with regards to RWA organic growth, strict cost control, and risk management. Over the first nine months of the year, revenues were up by 6.7% compared to last year, reaching €20.5 billion, at the end of September, excluding asset disposals. This highlights the strength and relevance of our commercial franchises and validates our strategic decision to be a more compact and synergistic group that focuses on its strengths. At the same time, we remain committed to reducing our cost base in a structural and sustainable manner. costs are down by more than 2% for the first nine months of the year, excluding asset disposals versus nine months 24. The result, very strong positive draws and the cost-to-income ratio of 63.3% over the first nine months of the year. That's better than our 2025 target of below 65%. In terms of credit risk, For the first nine months, the cost of risk remains in line with our guidance at 25 basis points. Asset quality remains sound as we continue to navigate the macro environment. Overall, the group net income reached €4.6 billion in nine months 25 and a group return on tangible equity of 10.5%. That represents an increase by 3.4 percentage points versus nine months 24. And it puts us well on track to meet our 2025 target of a ROTI around 9%. These solid earnings contribute to the further strengthening of our capital position. The CET1 ratio is up by 20 basis points this quarter, despite a slight increase in organic RWA. And ultimately, the CET1 ratio stands at 13.7% at the end of September 2025. As mentioned last quarter, it takes into account the €1 billion additional share buyback program, which was completed this month. This performance keeps us above the updated targets we set for 2025. It marks another step in the right direction, but our goal is to do better, and we will. Making the bank even stronger will require continued focus, perseverance and determination. A little more than two years ago, we held our CMD, and since then, we have made tangible progress. First and foremost, the bank has a much stronger capital base. This is a cornerstone of our strategic roadmap to ensure greater stability amid the inherent fluctuations of the macro environment. And with a CT1 ratio of 13.7% in the Basel IV regulatory environment, The Group is well above its target of 13%. This allows us to successfully pursue our dual ambitions of supporting our sustainable growth and providing additional returns to shareholders. With regards to operational efficiency, there is certainly more to do. But to date, the Group has already significantly improved its operating leverage. That is reflected in the sharp drop in the cost-to-income ratio, which improved from more than 70% on average over the five years before the CMD to 63.3% over the first nine months of 2025. Again, this is primarily the result of our relentless and successful execution of our cost-saving initiatives across all businesses. This is also the result of the solid and improving commercial performance of our core businesses. Consequently, the group significantly increased its profitability, its ROTI, which almost doubled despite a higher denominator as it rose from 5.8% on average over the 2018-2022 period to 10.5% in 9 months 25. Coupled with the implementation of share buyback programs, which have been increasing for two years, this has resulted in a substantial boost in EPS. When you compare the nine month 2025 with the average nine month period during the five years preceding the CMD, that EPS rose almost 180%. Increasing profitability in a sustainable manner and ensuring greater value creation for shareholders are at the heart of our commitments. In this, we are at the beginning of a rewarding journey. There is still a lot to do to get where we want to be, but real tangible results have pointed us in the right direction. Now, let me hand over to Leo, who is going to take you through our Q3 25 performance.

Thank you, Slavomir, and good morning, everyone. As usual, let's now dig into the financial performance for the third quarter. The group results once again are a very solid set of results this quarter, with a group net income of 1.5 billion euros, second highest third quarter since 2006, leading to a quarterly return on tangible equity at 10.7% versus 9.6% in the same quarter last year. This excellent performance is the result of sustained strong commercial activity, which led to another solid increase in revenues, combined with continued strict cost discipline, leading to a strong positive Joe evolution. In details, revenues were up by 3% versus Q3-24 excluding disposals, and even by 7.7% when excluding also, the circa 300 million euros exceptional income booked in Q3-24 to close out our past presence in Russia. At the same time, costs continue to decrease in absolute terms and are down by 1.1% excluding asset disposals, demonstrating our ongoing strict cost discipline. This consequently translates into further improvement in operational leverage with a cost-to-income ratio of 61% in Q3-25 versus a 63.3% in Q3-24, and below our annual target of 65%. Regarding asset quality, the cost of risk remains contained at 26 basis points and within the lower range of our annual guidance. We've also made further progress in streamlining our business portfolio, with the closing of the disposals in Guinea-Conakry and in Mauritania. As I move to slide seven to go through the revenue bridge, which you may now be familiar with. Excluding other disposals for comparison purposes, which generated around 400 million euros of NBI in Q3 24, group revenues increased by 3% in Q3 25 compared with last year. And as I just mentioned, by 7.7% if we were also to restate the exceptional income recorded last year in the corporate center in connection with the closeout of our remaining exposure in Russia. As illustrated in the chart, all businesses contributed positively to this solid increase. French retail, private banking and insurance, the revenues grew by 4.5% in Q3 25 versus Q3 24 excluding disposals. The rise is mostly driven by both NII and insurance revenues, which are up by 4.7% and 6.9% respectively. On global banking and investor solutions, revenues increased by 1.6% compared to a very strong Q3-24, thus consolidating a high revenue base around €2.5 billion this quarter, thanks to solid performance in FIC and financing and advisory. The commercial performance of the businesses within mobility, international retail banking and financial services are also strong, with a 9.1% increase in revenues in Q3-24, excluding asset disposals. Finally, if we exclude the exceptional income of €287 million related to the exit of Russia, revenues at corporate centres increased by €175 million, mainly due to sound and improved liquidity management. On the cost front, on slide 8, we can see that operating expenses fell further in Q3 compared with last year, not only at group level, but also across all pillars. It perfectly illustrates how the new cost policy launched since the CMD has spread throughout the bank. Overall, on a year-on-year basis, costs are down by 1.1% this quarter, excluding disposals, and by 6.2% on a reported basis. Similarly, the cost-to-income ratio declined further in the third quarter compared with last year, as did the ratios for all the pillars. The group cost-to-income ratio landed at 61% in Q3, a level well below the annual target. After the first nine months of 2025, the group reports a cost-to-income ratio of 63%, which makes us very confident in our ability to achieve our 2025 adjusted target for a cost-to-income ratio below 65%. Let's now have a look at the asset quality evolution on slide nine. The cost of risk stands at 26 basis points this quarter and 25 for the first nine months of 2025. In both cases, in the lower range of our annual guidance. This quarter's cost of risk mainly comprises stage three provisions, which account for 437 million euro with notably a transfer of provisions from Stage 2 to Stage 3, which contribute to a net reversal of €68 million in S1 and S2 provisions. On the later, total outstanding Stage 1 and Stage 2 provisions remain high at €2.9 billion, or two times 2024's cost of risk. Asset quality remains robust, as illustrated by the NPL ratio at 2.77, stable from the last quarter. It is important to highlight that the group is not exposed to the recent U.S. defaulted companies, which made the headlines, and we have a negligible exposure to U.S. regional banks. Finally, the net coverage ratio remains high at 82% in Q3, up one percentage point from Q2-25. Let's now turn on to capital on slide 10. Thanks to very strong earnings, which contributed with 18 basis points in Q3, after accruing 50% payout, the CT1 ratio of the group increased further to reach 13.7% at the end of September 25, versus 13.5% at the end of June, which represent a level around 340 basis points above MDA. The other moving parts have a global minimal net impact of 3 basis points and are split between, on the one hand, positive impact of seven basis points related to the group employee share ownership, as stated in a dedicated press release published on 24 July. And on the other, limited negative impacts related to the RWA variation for around five basis points, and some regulatory impacts for four basis points, which come after a positive contribution of eight basis points on that topic in Q2-25. while other items have a limited one basis point net impact this quarter. Last, as you can see at the bottom right-hand side of the slide, all the other capital ratios remain comfortably above the regulatory requirements. On slide 11, we can see that liquidity reserves remain high at €328 billion, with a relatively balanced mix between cash and securities. Regarding the liquidity profile of the group, we maintained strong liquidity ratios with an LCR at 147% this quarter and a NSFR ratio of 117, which in both cases represent a buffer around €90 billion. We completed the 2025 long-term funding program in Q3 on very competitive terms and have even began the pre-funding of 26 program with a new senior non-preferred debt in US dollars successfully issued in September. Access to liquidity remains very good in our currencies and the deposit base remains strong, granular and highly diversified, having grown by 10 billion euros in the quarter. Overall, the loan-to-depot ratio stands at 75% at group level. In slide 12, we show a summary of the P&L for the group for Q3, which we will cover in more detail in the following slides. So let's move now to business performances on slide 14, starting as usual with software network, private banking, and insurance. In Q3 2025, loans outstanding increased by 1% compared to last year, with both retail and corporate loans growing, excluding for the later state-guaranteed loans, BGEs. Home loan production continues to increase strongly this quarter, by 74% versus Q3-24. Volumes of deposits are down by 5% versus last year, or by 2% versus Q2-25, in a context of continued strong growth of retail saving and investment products, which are off-balance sheet products, and contribute to the continued strong momentum in asset gathering, as we can see on one side, AUMs in private banking increased by 7% versus Q3-24, if we're just for disposals, and reached 135 billion euros at the end of September, 3 billion more than at the end of June 25. On the other side, life insurance outstandings reached 153 billion euros, increasing by 6% versus Q3-24, and representing 3 more billion euros than in June 25, thanks to continued strong net inflows. Moving on to BursoBank. As highlighted last quarter, thanks to a sustained growth pace of acquisition over the last two years, BursoBank has reached its CMT targets of 8 million clients, nearly 18 months ahead of its initial objective. In Q3, BursoBank gained nearly 400,000 new clients. In Q3-24, it represents an increase of 1.5 million clients, or 22%. with a consistently low churn rate below 4%. Asset standard administration continued to grow steadily. They reached 76 billion euros at the end of September, or circa 10,000 euros per client, which represents an 18% increase versus Q3 24, thanks in particular to the continued strong increase in deposits of 17% versus Q3 24. Similarly, life insurance outstanding increased by 11% versus Q3 24, with net inflows four times higher than in Q3-24, while market orders grew by 38% compared to last year. On the lending side, total loans outstanding are 8% up versus Q3-24. Looking at the whole pillar on slide 16, we can see that net income lands at 439 million euros for this third quarter, or 18% higher than in Q3-24. with a RONI close to 10% under Basel IV requirements, which compares to an 8.2% last year under the previous Basel III standards. This is driven by, on the one hand, a solid increase in revenues by 4.5% versus Q3-24, excluding disposals, largely linked to a 4.7% increase in NII, despite the absence this quarter of positive base effect impact related to short-term hedges. And on the other hand, cost improvement. This is a decrease of minus 0.3% of operating expenses compared to Q3-24 excluding disposals. Both movements lead to a cost-to-income ratio of 65.7% in Q3 versus 70.1% in Q3-24. On the asset side, cost of risk lands at 38.3 basis points in Q3-25. Let's move now to global markets and investor services on slide 17. Starting with global markets, market activities continue to generate high level of revenues, above 1.4 billion during this quarter. They are up by 0.5% in Q3 25 versus an already very strong Q3 24, despite unfavorable FX impact and one day accounting base effects. Note that restated from this day one P&L impact, global markets revenues would have grown by double digit. The increase in reported revenues was mostly driven this quarter by our FIC platform, whose performance improved by 12% versus last year, thanks in particular to a strong momentum in derivatives and financing with growing activity in FX and rates. With regards to equity activities, revenues remain high at 824 million in Q3-25. Year-on-year comparisons show a 7% decrease due to both a very strong basis for comparison, where Q3-24 was the highest third quarter in 16 years in this activity, and the aforementioned FX and Day 1 accounting impacts. In security services, revenues eased by minus 1% versus Q3-24, as a result of a decrease in interest rate, despite steady commercial momentum in the quarter in SGSS. Let's turn now to slide 18 to comment on the evolution of our financing and advisory platform, which performed very well in Q3-25 with a 4.2% increase in revenues versus the same period last year. This strong outcome is driven by a solid growth in global banking and advisory by nearly 7% versus Q3-24, thanks in particular to both solid performance of financing activities overall with continued strong momentum in terms of regeneration and distribution. In addition, our DCM and ECM platforms benefited from solid dynamics in the market. With regards to transaction banking services, revenues slightly declined by 2.5% in Q3 versus Q3-24 due to lower rates, which mask the good overall commercial performance illustrated by the continued increase in deposits. Overall, GBIS delivers another solid performance as illustrated on slide 19. with revenues reaching 2.5 billion in Q3 25, up 1.6%, versus a very high Q3 24, making this quarter the best Q3 for GBIS since 2009. We continue to drive costs down, with expenses decreasing by 0.8% in the quarter, and the cost-to-income ratio declined 1.5 percentage points, from 61.5% in Q3 24 to 60% in Q3 25. while the cost of risk remained moderate at 13 basis points this quarter. As a result, GBIS posted a net income of €734 million in Q3 2025, translating into a high RONI of 17.4% under Basel IV. Moving on to the international retail banking on slide 20. We can see that both Europe and Africa posted good performance this quarter, with revenues up by 4.6% compared to Q3-24 at constant exchange rate and perimeter. In Europe, loans are up by 6% and deposits by 2% versus Q3-24 at constant exchange rate and perimeter, while revenues increased by 4% versus the same quarter last year at constant exchange rate and perimeter, supported by higher net interest income in both KB and BRD. In Africa, loans are resilient with a slight decrease of 1% versus last year at constant exchange rate and perimeter, while deposits continue to increase by 4% in Q3-25 versus Q3-24. When we look at revenues, they increased strongly this quarter by 5% at constant exchange rate and perimeter, largely driven by a solid level of peace across most regions. Turning now to mobility, financial services, the combined business posted another strong increase in revenues this quarter, by 12.4% at constant exchange rate and perimeter. AVEN's revenues contribution to sub-gen is increasing by 13.2% versus Q3-24, benefiting from positive base effect related to depreciation adjustments and non-recurrent items. When adjusted for those on inspects, Revenues are stable, with two opposite trends largely anticipated. First, a continued increase in margin, which reaches 593 basis points in Q3, versus 521 in Q3-24, which is basically driven by the strategy implemented, but comprises this quarter some non-recurrent elements. On the contrary, as expected and guided, an ongoing normalization of used car sales results per unit, at €1,100 this quarter versus €1,500 1,420 in Q3-24. Together with a tight monitoring of costs, the customer income improved strongly this quarter to 53% excluding UCS and non-recurrent items versus 63% in Q3-24. Finally, regarding consumer finance, business delivered a good quarter with revenues up by 6.6% versus Q3-24, still benefiting from margin expansion mainly in France. So in terms of the overall financial performance at the pillar on slide 22, we see very strong positive jaws again this quarter, thanks to a solid increase in revenues of 8.7% on one hand, while on the other, a decreasing cost by 3.9% in Q3 2025 versus Q3 2024, both at constant perimeter and exchange rate. And this is naturally driven by mobility and financial services. The cost of risk is also down at 37 basis points in the quarter, versus 48 in Q3-24. Overall, the whole pillar posted a net income of 393 million euros, up 19.2% versus Q3-24, adjusting for the perimeter and exchange rates. Finally, the RONI improved by 1.7 percentage points versus last year, and reaches 14.9% under Basel IV in Q3-25. To conclude with the quarterly results, let's move now to slide 23 with Corporate Center. Year-on-year revenues are down by circa 100 million euros due to the base effect linked to the circa 300 million euros of exceptional income accounting in Q3-24 related to the closing of the remaining exposure that we had in Russia. Excluding this one-off, revenues continue to improve this quarter thanks to continued efficient liquidity management. In addition, the closing of the sale of our subsidiary in Guinea-Conakry generated a positive impact accounted in net profit or losses from other assets. Let me now give back the floor to Slavo Man.