Societe Generale SA

Welcome to the Société Générale conference call. At any time during the presentation, you may press star and 1 to enter the queue for the Q&A session. Thank you for holding. The conference will begin shortly. © transcript Emily Beynon Music Music Music Music Welcome to the Societe Generale conference call. At any time during the presentation, you may press star and 1 to enter the queue for the Q&A session. Thank you for holding. The conference will begin shortly. Music Thank you for watching! Music Music Music Music Music Music Welcome to the Societe Generale conference call. At any time during the presentation, you may press star and 1 to enter the queue for the Q&A session. Thank you for holding. The conference will begin shortly. Thank you for watching! © transcript Emily Beynon ¶¶ ¶¶ © transcript Emily Beynon Thank you. Ladies and gentlemen, welcome to the CSP General Third Quarter 2026 Results Conference Call. I will now hand over to Mr. Slavomir Krupa, Chief Executive Officer. Sir, please go ahead.

Thank you. Good morning, everyone, and thank you for joining us today. Leo and I are very happy to present our results for the third quarter and the first nine months of the year. All organizations today operate in a complex and highly uncertain environment, but despite that, our strong momentum continues to accelerate. And today we are announcing a record group net income for both the quarter and the first nine months of the year. Our creative growth translates into a strong profitability, with a ROTI of 12.3% over the first nine months of the year compared to 10.5% last year. It is also significantly above our end-of-year target of around 11%. And specifically, our revenues are up by 4.1% versus 9 months 25 on a reported basis. This is more than twice our 2026 guidance. We remain disciplined on costs with operating expenses down 3.2% versus 9 months 25 despite the much higher pace of revenue growth. and this translates into a cost-to-income ratio of 58.8%, which is much better than our year-end target of a cost-to-income ratio below 60%. With a cost-of-risk of 27 basis points, we remain in the middle of our guidance range, indicating both our prudent risk management and the strong quality of our credit portfolio. All of this has substantially improved profitability with a royalty of 12.3% in the first nine months of 2026. Ultimately, our capital position remains high with a CH1 ratio standing at 13.4% after taking into account the completed extraordinary share buyback of 1.5 billion euros. So now let me hand over to Leo who will take you through our Q3 2026 financial performance.

Thank you, Slavomir, and good morning, everyone. Moving on now to our financial performance for the quarter. Overall, Q3 26 is another strong set of results. Our revenues are strongly increasing by 7.8% versus Q3 25. notably on the back of a continued solid momentum in French retail banking as well as in global banking and investor solutions, as we will see later. At constant perimeter and exchange rates, the revenue growth stands at 8.4% versus Q3 2025. Thanks to our continued cost discipline, which increased by only 0.8% this quarter despite provisioning for the increasing variable compensation linked to the strong evolution of revenues, We deliver a significant positive JAWS expansion of 7 percentage points. This results in further strengthening our operational leverage with a cost-to-income ratio of 57.1% in Q3, down by around 4 percentage points versus Q3 2025. From an asset quality perspective, the cost of risk remains well contained at 28 basis points. This is within the 25 to 30 basis points guidance range. The quarterly net income reaches a record high 1.9 billion euros and ROTI stands at 13%, a strong improvement versus Q3-25 level of 10.7%. The next slide highlights the key drivers behind our revenue growth in Q3. As previously stated, the group recorded a strong increase in reported revenues by 7.8%. The first item of the bridge reflects the impact of disposals, with an overall effect of minus 48 million euros, lower than previous quarters as anticipated. The impact is mainly related to the disposals of the activities in Cameroon and Equatorial Guinea. At constant perimeter and exchange rates, the increase is even higher, reaching 8.4% versus Q3 2025. Business-wise, Revenues in French retail, private banking and insurance showed a strong momentum with a growth of 10.9% on a reported basis, mainly supported by a high NII which grew 12.7%. Revenues at global banking and investor solutions increased by 12.5% versus Q3 2025 or 11.8% at constant perimeter and exchange rates, supported by a record performance in equities. On the other hand, revenues in mobility, international retail banking, and financial services decreased by 4.3% this quarter at constant perimeter and exchange rates, as revenues at AVENS declined, driven by lower used car sales results, which continued to normalize as guided. To conclude with Corporate Senator, revenues improved by €94 million, driven by revaluation effects. On the following slide, we can see the main drivers of cost development in Q3. In detail, our costs are moderately up by 0.8% versus Q3 2025 on a reported basis and by 1.1% at constant perimeter and exchange rates. The slight increase is primarily driven by higher costs on TBIS level, driven of course by the growing variable compensation, which reflect a stronger than expected financial performance. The remaining downward drivers are the disposals, which explain a variation of minus 20 million euros. Lower transformation charges is guided, which explain minus 39 million euros. And a net cost decrease of 31 million euros confirming our continued focus on cost discipline quarter after quarter. Restated for the disposal's impact and GBIS cost increase, total costs are down 1.7% versus Q3 2015. As you can see on the right-hand side of the slide, the cost-to-income ratio is falling by around 4 percentage points, from 61 in Q3 2025 to the current 57.1 in Q3 2026, which is better than our below 60% 2026 targets. And finally, one important point in this slide is that all pillars are below their end-of-the-year cost-to-income targets. Moving on to cost of risk on the next slide, we can see that the cost of risk for the quarter stands at 28 basis points and is fully in line with our target range between 25 and 30 basis points for the year. At business level, cost of risk stands at 33 basis points for RBPI, 11 for GBIS, and 47 for MIMS. The cost of risk this quarter mainly comprises estate street provisions, which account for 488 million euros and are slightly up versus Q3-25, driven by the normalization of defaults in MIBS from low levels observed in past quarters. In Stage 1 and Stage 2 provisions, we had a net reversal of €80 million, mainly related to some transfers to Stage 3 provisions. As a result, total outstanding Stage 1 and 2 provisions decreased by 2.6% while remaining at a high level of €2.9 billion, or two times the two years of cost of risk. NPL ratio stands at 2.75% in Q3, down versus last year. And finally, the net coverage ratio remains strong at 81%. Let's now turn to Slide 9, where we can see the evolution of our strong capital position. The Group CET1 ratio stands at 13.4% at the end of the quarter, representing a strong buffer over MDA of around 320 basis points. Now, going through the bridge in the slide from left to right, We see that retained earnings contributed to an increase of 21 basis points, even after accruing for 50% distribution payout. The Group Employee Share Ownership Program has a positive contribution of 9 basis points, and all in all, other impacts contribute to a net decrease of 3 basis points. Additionally, as you can see on the bottom right-hand side of the slide, all other capital ratios are comfortably above the regulatory requirements. On slide 10, we can see that liquidity reserves remain very high, at 358 billion euros in Q3, with a balanced mix between cash and securities. The liquidity profile of the group remains strong, with sound liquidity ratios. The LCR stands at 145, while the NSFR is 118, both well above regulatory requirements and in line with our steering targets. The 2026 Long-Term Funding Program is fully completed, with €16 billion issued, driven by a good access to liquidity in our currencies. And finally, the deposit base remains strong, granular, and highly diversified. And overall, the loan-to-depot stands at 74% at group level. In slide 11, we show a summary of the P&L for the group for Q3, which we will cover in more details in the following slides. Let's now move to the individual businesses, Starting with SoftGen Network, Private Banking and Insurance on slide 13. At SoftGen Network Q3-26, loans outstanding are stable compared to Q2-26 and fell by 2% versus Q3-25. Outstanding deposits are also stable compared to the previous quarter and fell 1% versus Q3-25. This took place within a context of growth of retail savings and investment products. which contributed to the continued robust momentum in overall asset gathering. On one hand, AUMs in private banking reached a record high of 150 billion euros at the end of September, up 10% versus Q3 2025. While on the other hand, life insurance outstandings stabilized at a record level of 167 billion euros, increasing by 9% versus Q3 2025. Moving on to BursaBank on slide 14, we can see that commercial performance remains strong within the asset under administration gathering, which continued to grow reaching 86 billion euros at the end of September. This represents a 13% increase versus Q3 2025, including the continued increase in deposits of 7% versus Q3 2025. Life insurance outstandings increased by 17% versus Q3 2025 with a high 51% proportion of unit linked products. The number of market orders increased substantially by 20% versus Q3 last year up to 3.4 million. On the lending side, total loans outstanding are up 7% versus Q3 2025. The number of customers reached 9.4 million after onboarding 446,000 new clients in Q3, with a churn rate which still remains at a very low level, below 4%. In Q3, Rousseau Bank's net income stands at 101 million euros, representing a total of 277 for the first nine months of the year. This is well on track to exceed its 26th target of more than 300 million euros. Finally, the revenue for BursaBank stood at 74%, illustrating the strong profitability of this model. Looking now at the whole pillar on slide 15. Revenues for French retail, private banking and insurance increased sharply by 10.9% versus Q3 2025, driven by a 12.7% growth in NII and an 8.3% growth in fees. At the same time, Operating expenses fell by 5.1% versus the same period last year. As a result, the gross operating income, GOI, increased by 41.7% versus Q3 2025, and the cost-to-income ratio stood at 56.1, representing a substantial improvement of 9.6 percentage points since Q3 2025. Overall, the net income lands at €682 million for the quarter, which is up 55% versus Q3 2025, with a high RONI at 14.6% versus 9.9% last year. Moving now to global markets and investor services. Global market revenues are significantly up by 18% versus Q3 2025. supported by the outstanding performance of our equities franchise. We reported a record quarter in equities with 1.2 Euro billion in Q3 26, growing by 45.9% versus Q3 25, driven by very strong business momentum in all key businesses and geographies. Revenues in fixed income and currencies declined by 20.6% versus Q3 25, and in line with previous quarters, performance continues to be influenced by low activity in rates. Finally, revenues from security services grew firmly by 9.1% versus Q3 2025 thanks to strong commercial momentum and deposit growth in key markets. Let's now turn to the evolution of financing and advisory. Revenues increased by 4.2% versus Q3 2025 on the back of strong business dynamics. Global banking and advisory revenues grew by 2.5%, driven by core franchises. Structured finance kept growing thanks to strong origination momentum and robust client activity across key sectors. We also had a strong quarter in transaction banking and payment services, where revenues increased by 8.8% versus Q3 2025. The strong commercial activity continued to drive growth in fee income and client deposits in most of our key markets. And now moving to the overall view on DBIS. At the pillar level, revenues are up by 12.5% versus Q325. In line with our discipline track record, efficiency is a key priority for the group and therefore also for the pillar. We generated 4.9 percentage points of positive jaws in the quarter. driving our gross operating income up by 19.8% versus Q3 2025. This translates into a cost-income ratio of 57.4% in the quarter or 2.6 percentage points better than Q3 2025. The cost of risk remains low at 11 basis points below the 13 basis points of Q3 2025 or 18 basis points average for the whole 2025. All in all, GBIS posted a net income of 899 million euros, up by 22.4% versus Q3 2025. As a result, GBIS reported another quarter with high RONI, which stands at 19.8%. This is 2.4 percentage points higher than in Q3 2025. Turning to international retail banking on slide 19, we see that in Czech Republic, KB continues to perform well. with revenues up by 4% versus Q3-25 at constant perimeter and FX underpinned by strong loans and deposit dynamics which grew by 9% and 7% versus Q3-25 respectively. BRD in Romania shows a strong increase in loans of 11% while deposits are up by 2%. This translates in NII up by 6% offsetting lower fees. Revenues are overall up by 2% versus Q3-25. Lastly, revenues in Africa and others were stable versus Q325, driven by growth in court franchises. Loans and deposits are up by respectively 1% and 3% versus Q325. Turning on to mobility and financial services, in slide 20, this quarter the businesses printed lower revenues of minus 7.8% versus Q325, driven by Aben's used car sales normalization. At Avons, the level of margins is high once again, at 620 basis points, 30 basis points above Q3 2025 numbers. On the US car sales front, results continued to decrease over Q3, landing at around €310 for the first nine months of 26, within the targeted range between €200 and €600 for the full year 26. All in all, the cost-to-income ratio improved to 49.2%, notably thanks to synergies. and this implies a ROTI of 13.2% for the quarter. Both cost-to-income and ROTI are fully in line with the target set for 2026. With regards to consumer finance, revenues increased by 7% versus Q3 2025, supported by high NII which benefits from continued proactive repricing policy. Overall, in slide 21, the pillar recorded lower revenues by 4.3% versus Q3 2025 at constant perimeter and FX. At the same time, MEBS continued to monitor strictly its costs, leading to a 2.6% decrease versus Q3 2025 at constant perimeter and efforts. All of this translates into a cost-income ratio of around 52%, which is below the 55% target set for 2026. Cost of risk this quarter stood at 47 basis points, slightly up versus 43 basis points in Q226, and roughly consistent with the 40 to 45 basis points through the cycle cost of risk estimated for the pillar. All in all, MIPS printed a net income of €349 million, down by 8.6% versus Q325 at constant perimeter and exchange rates, equivalent to a RONI of 12.9%. To conclude with the quarterly results, let's move quickly to slide 22 with the corporate center. Similar to previous quarters, revenues improved versus Q3-25, driven this time by positive revaluations of liabilities accounted at fair value through P&L. Overall, crypto net income is almost stable versus Q3-25. And let me now give back the floor to Slavomir.