Societe Generale SA Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tarik El Mejjad - Bank of America Corporation - Analyst : First on the management change. I mean, yes, the first time in my career I see French banks appointing a non-French speaker, noninternal management. So it would be interesting to hear more from your perspective what's the incentive for that and what's the added value you should see in that. Second part is on the French retail. Do you see volume growth in France picking up? What's the level of applications you see. And more importantly, are you still in the wait and see stance or you are ready to grow and expand your benefit on the French retail. And still in there in BoursoBank, is the management change means that we could expect a change in the strategy of client acquisition in BoursoBank. So now you're already at 7 million by the year end, would you stick at 8 million? Would you actually aim for a higher number, or you would limit yourself to the current level and start to book positive contribution? So I will limit my questions to that.

Question: Delphine Lee - JPMorgan Chase & Co. - Analyst : So just two on my side. So if I go back to French retail. I just wanted to see if you could -- I mean we have a decent momentum, clearly, with Q4, and your full year basically implies a significant decline in NII in the fourth quarter. I mean, is that just conservatism on your side? Or how should

Question: Guillaume Tiberghien - BNP Paribas Exane - Analyst : Two, please. One is on cost. And it's a bit of a vague question, and I apologize. But number one, your costs were very well controlled in Q3. So we always have the concern of a true-up in Q4. And I know Q4 is always more volatile or there's always a pickup in cost. So should we expect a worse pickup in cost? And on that same subject of cost. I'm a bit concerned that you're shrinking, which is good for the capital, but then we're going to end up with more corporate center costs, structural costs and allocated costs. And I know you did a bit of a cost-cutting exercise in the corporate center last year. Should we expect another such cost-cutting exercise? Otherwise, I'm a bit concerned you're going to have to reallocate some of those losses to the other divisions. The second question is on French retail. Could you quantify how much NII and fees we will lose from the disposals of the Swiss and U.K. private banks? And is it going to be spread over H2 '25 and H1 '26?

Question: Giulia Miotto - Morgan Stanley & Co LLC - Analyst : I'll ask two questions, please, both on French retail. So the first one is strategic. Today, you're assuming direct provision of retail banking activities in France. And I'm wondering if there is something from a strategic perspective that you would like to change? For example, one thing that I keep wondering is about the merger with Credit we essentially had the merger. And we can barely see it on the cost line because it keeps going up. So I don't know if there are some strategic measures that you're thinking about? So that's my first question. The second question is about and or any other sort of political development because sometimes in France, we have been surprised by changes. Do you foresee any changes to the way the deposit rate is calculated or any new instruments in the market or any new savings instruments that could be introduced that can affect the profitability there?

Question: Joseph Dickerson - Jefferies - Analyst : Just a couple of quick things from me. On the relationship with Brookfield, I think about a year ago, this relationship was formed, I think you talked about scaling into a 10 billion fund relationship. Is this starting to contribute to GBIS revenue? Because I noticed you called it out in your slide. So any color there would be helpful. And then second, just in terms of the implications of the French budget, any commentary on where you see the tax impact landing, but perhaps more importantly, how you think about capital allocation if things like buyback taxes are going to be a permanent feature? And you're pretty soon in 12 months' time, you'll be in a pretty attractive capital position I would have thought, so any commentary around implications of the budget would be welcome.

Question: Joseph Dickerson - Jefferies - Analyst : You're on point three of book. So I would hope.

Question: Flora Bocahut - Barclays PLC - Analyst : Yes. So two questions also on my side. The first is talking about actually the CET1 trajectory from here. Obviously, you're ahead of the target. You're ahead of consensus expectations also today. So just wanted to check if there's any regulatory charges or anything else that could come undermine this in the coming quarters, obviously, beyond the disposals that you have already communicated. So anything else that we need to be aware of in terms of CET1 trajectory from today's standpoint? The second question is actually on French retail revenues, talking about the fees here because the fee growth has been quite lackluster in previous quarters, which had to do with the client acquisition cost at Boursorama. And this quarter, you have like 5% year-on-year growth in your fees despite both Boursorama having over 300,000 new clients despite the seasonality of Q3 as well. So anything you could tell us on why the strength increase and how sustainable that is? And just one clarification, if I may. On Boursorama profitability, you mentioned it's a slight profit. Are you okay to give us a number there?

Question: Pierre Chedeville - CM-CIC Securities SA - Analyst : Question. First question is regarding your strategy on private banking. We can see that it's quite dynamic in France. But I would like to know what is your view globally on this business following the sales of U.K. and Switzerland. Do you want to only be in France? Or do you have any other plans there? My second question relates to cross-selling. Cross-selling between divisions of your business model. I wanted to know if you, as a manager, is something that you look at carefully? Do you think that your business model has a strength there in terms of cross-selling potential between the 3 pillars? Or do you think that it could be a weakness in the future regarding organic growth?

Question: Pierre Chedeville - CM-CIC Securities SA - Analyst : Okay. Just a follow-up, could you give us -- with synergies or it's something you don't want to communicate.

Question: Pierre Chedeville - CM-CIC Securities SA - Analyst : Sorry, I just wanted to know if you could give us a number of sales made based on synergies within the 3 pillars? Or is it something that you don't want to give?

Question: Anke Reingen - RBC Capital Markets - Analyst : The first one is on the payout ratio, new 50%. Are you already able or willing to give an indication where you were considering to land for this year is at 40% or 50%? And if you -- you're not quite confident yet about moving to the 50%. What is the area of uncertainty? And then secondly, on Global Markets, you come -- your result coming -- continue to come in very strongly. Is there -- are you sort of like over earning? Or are there structural factors why previous guidance is too conservative now?

Question: Chris Hallam - Goldman Sachs Group, Inc. - Analyst : So just two quick, I guess, clarification is really for me left over. So first, and it's a follow-up to anchor's question just now. So would you say that repositioning of the markets franchise is now effectively sort of complete, right, the platform sort of in the right place. You talked about the sort of conducive backdrop that's been there over the last few years, but actually, performance was super strong in the quarter. So is that repositioning complete and this is the kind of base level that we can move forward with? That's the first question. And then second, super simple housekeeping point. Are there any changes on the anticipated closing timings or capital tailwinds on any of the disposals that you've announced over the last couple of quarters?

Question: Matthew Clark - Mediobanca SpA - Analyst : Two questions from me. Firstly, on interest rates, I mean, is interest rates, the short end coming down faster than was maybe expected good for you? Is it bad for you? How do you think about that just in big picture terms? And if it is good or bad, which parts of the group determined the balance of that? And then second question on French retail costs and the integration synergies. I mean, how far through that process are we? Is there still much left to come through? Or should we think that the synergies benefit is now embedded in the third quarter numbers. And from here, we should be back to more normal levels of cost inflation going forward?

Question: Azzurra Guelfi - Citigroup Inc. - Analyst : What is the (inaudible) I see a lot have been done since the presentation of the plan. Now you have a new also additional role, if you want, as a head of the French retail. May I ask you what is high up in your to-do list at the moment in terms of initiative at group level in addition to the French retail? And the second question, if I may, is on the Mobility division. That is the division where we are still seeing pressure on revenue because of the industry trend. Can you give us some color on when you expect this to have an inflection point, if possible?

Question: Jacques-Henri Gaulard - Kepler Capital - Analyst : Just one observation and one question. On the observation, I just wanted to thank Claire for her out work over the years. It's been fun, good interactions. And having followed Spanish banks for about 5 years. Congratulations on the hiring of Leopoldo who is absolutely great. Just one question. I mean I find you really fighting today fantastic, very enthusiastic. And it reminds me, when you announced your -- the area of capital for your capital growth, which were exclusively, if I remember well, Ayvens than BoursoBank, at this point in time, would you be happy to -- you mentioned it a little bit in French retail but not officially, to redeploy the balance sheet a little bit more aggressively and viewing that, your cash generation, which is more important than you thought?