Societe Generale SA Deep Dive into French Retail Banking and Global Banking and Investor Solutions Presentation Transcript

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

Question: Omar Fall - Barclays Bank PLC, Research Division - Analyst : Omar Fall from Barclays. Just a few questions. So firstly on the selective loan origination policy where you've grown less than peers for several years now. When and how will we actually see the benefits of that because so far all we've had is NII that's fallen more than peers in the last few years, and your starting point with deposit margin was always thicker than everyone else anyway because of the nature of your client base. So is it that when rates start to move up you have a better path on NII because you have a lower stock of low yielding assets? Or is it a credit quality issue? Secondly, just on the deposit margin point. You mentioned that you'd shorten the duration of the ALM. So what is the effective duration of the reinvestment portfolio today? And is it a case for us externally to track that to take like the moving average of that duration or something like that? And then last question. What is the amount of the 2 million clients at Boursorama? How many are primary clients where Boursorama is their main bank account, where they receive the salaries or whatever?

Question: Omar Fall - Barclays Bank PLC, Research Division - Analyst : Omar Fall from Barclays. I just have just 3 questions. Firstly, on private banking outside France. Is moving the headquarters enough because you have a EUR 50 billion of AUM? You haven't made money for several years, but these are businesses that other banks would love to take off your hands. So why is SocGen the right owner of these assets at the time when you need capital and this is a non-dilutive -- getting rid of these would be non-dilutive to you? And the second question is just on the repo business. You mentioned some of the positive elements of regulation. But all through last year, the regulator has been upset at French banks window dressing around leverage ratios. And they've made that pretty clear. I know the business has a good return on equity, but the return on assets is not very good. Is this is an area you will be looking at? And then lastly, just on Slide 46, you highlight you'd like to keep profitability above cost of capital, what do you think your cost of capital for this business is? Unidentified Company Representative So to come back to the private banking, International Retail Banking, private banking. In fact, our global private banking has 3 legs. The French one, which is a joint venture with the French Retail which is growing fast. We will extend the presence we want to have there. There is the U.K. situation where we just are in the process to merge between Hambros and Kleinwort's -- we made it. This is not profitable yet due to this process of integration. And there is the rest. And the rest is threefold: Luxembourg, Switzerland and Monaco. During the last 5 years, on those 3 specific area, we have been under deleveraging process to refocus on the client quality we want to serve. And we have divided by 2 the number of nationality we are serving. And the (inaudible) of this rationalization has been a decrease in asset under management, a very strong decrease. And today if I add all those different parts, we are around probably EUR 30 billion of asset under management. So what I am doing today is I am creating this international path with Luxembourg, Switzerland and Monaco under 1 roof which is a move I made in term of (inaudible). And there's a link with France on those specific [bond]. So for me, there is probably admitting I'm the wrong one to stay there. Everything is (inaudible). We can change our mind if we have to, but for the time being we have a plan. We have a plan in terms of restoring profitability. We'll use specific (inaudible) situation and will result in global French bond and will rise because the capital consumption there is limited. We have put the cap in terms of credit allocation to the total AUM. I am managing that cap and I can reduce it, in fact. Even if it's a (inaudible) product for the clients, we can reduce the capital consumption there and we will do the necessary. What I want is to restore the return as soon as I can. So on the repo business, we've not been in the case of window dressing at all. You are probably measuring some peers, not us. Unidentified Company Representative (inaudible) what we've said about this. First of all, the leverage ratio, as you know, is not mandatory as of yet, but we are -- we stand at 4.3%. And if it would -- when it would be mandatory is probably in the area of 3.5% as far as we are concerned. Second, we have an internal board-approved without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 07, 2019 / 7:30PM, GLE.PA - Societe Generale SA Deep Dive into French Retail Banking and Global Banking and Investor Solutions Presentation flow under which, including within a quarter, we don't want to go below so that which is set forth much above this future mandatory threshold. So I don't think we -- it's already in force today.