Societe Generale SA at Bank of America Financials CEO Conference Transcript

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

Question: Tarik El Mejjad - BofA Global Research - Analyst : So a year ago, I remember at this same stage, we've discussed your plan, which was perceived as quite downbeat. And we discussed whether it was just a kind of a reset to then surprise positively the market or actually it was a proper work and a lot of work to do. So I think given the tough year you've been through and maybe you shall, maybe you didn't feel it this way, but that's, I think, market sentiment. It's clear that you've been dealt a bad hand. Can you briefly first go through the progress made in this first year of you as CEO and in your plan? And then we'll go into -- deeper into different topics, I mean.

Question: Tarik El Mejjad - BofA Global Research - Analyst : Very good. I mean, let's now dig into details on all these aspects you've described, and maybe the first one is on the French retail. And maybe this is the area where markets felt a bit more disappointment there, and you had to walk away from your net interest income guidance in Q2. And can you tell us what has been a surprise for you to actually see lower NII than initially expected? And do you think the market's focus on this line is disproportionate? Or is it fair?

Question: Tarik El Mejjad - BofA Global Research - Analyst : That's clear. But if I can come back on the deposit migration, one of the areas mentioned by Banque de France and Bercy is that the consumption coming from still a high level of savings in France is one of the drags to the growth, and the level of savings in France is still above pre-COVID levels. So do you think this deposit migration was stabilizing from here? Or given the uncertainty domestically and maybe, can even call it, globally, that trend of combination of uncertainty on the macro, but also high savings, will still drive that deposit migration that hurts you this year?

Question: Tarik El Mejjad - BofA Global Research - Analyst : And on -- promise, last question on deposit migration. The -- I mean, the impact has been felt as well at other French banks, but proportion of French retail is much, much lower. Do you -- can you clearly answer, there is no deposit franchise issue with SocGTn as such in terms of deposit transfer? And also, how do you think about the idea of avoiding some clients to move into [Livrea], for example, rather going into some off-balance sheet products that will generate you fees and so on? Something that actually has been less and less in your revenue mix over the last few years. How do you tackle that aspects of higher revenues from (inaudible)?

Question: Tarik El Mejjad - BofA Global Research - Analyst : Thank you. And then on lending growth, you mentioned that was a combination of obviously lower demand, given higher rates, but also a bit of cautiousness from your side, given the margins and the economic perspectives. Now given the economic backdrop and political backdrop in France and globally, are you now willing to -- and the margins are slightly improving, are you willing to open a bit more the growth pipes or is still on the conservative side?

Question: Tarik El Mejjad - BofA Global Research - Analyst : Very good. Thank you. Still on France in terms of costs, so you've now working into the actual integration of SG network and CrTdit du Nord. Can you update us on where are you in the process on the migration and when can we start to see the actual cost savings feeding through?

Question: Tarik El Mejjad - BofA Global Research - Analyst : And in terms of cost to achieve, majority has been booked this year?

Question: Tarik El Mejjad - BofA Global Research - Analyst : It is really -- I mean, it's small next year, but you are confident that there won't be overspending on that, no?

Question: Tarik El Mejjad - BofA Global Research - Analyst : Good. Last point on French retail, asset quality. I know it's less concern to the market as it was probably couple of years ago. But we've seen some flare-ups in the French retail. You guys like to call them files, but it's --

Question: Tarik El Mejjad - BofA Global Research - Analyst : But actually, it's actual losses. So can you comment? Is it just some specific cases? Or are we seeing some small trend there?

Question: Tarik El Mejjad - BofA Global Research - Analyst : Very good. I will take, first, opportunity to open questions to the floor, if there are any. One in the front here, please. Unidentified Participant Good morning and thank you. Let me ask some question. I have two for you. First of all is on capital. So over the past 12 months, you did a very good job on CET1. So -- I mean, how are you now your vis-a-vis the ECB, et cetera, so the supervisors? So do they now accept the fact that you have done a good job and that there is no more problem going inside? The second question is on the French budget, which is, at the moment, noisy, I would say, on the French banking sector. So what do you expect the normal increase in income tax and the banking tax? Or what can you say about that? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 24, 2024 / 9:15AM, SOGN.PA - Societe Generale SA at Bank of America Financials CEO Conference

Question: Tarik El Mejjad - BofA Global Research - Analyst : There's another question here. Unidentified Participant So you are selling assets, as planned. But on the opposite, you have your competitors adding scale, capabilities. So in a way, you are a bit like at (spoken in French). How do you make sure that you protect your franchise and stay relevant going forward, please? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 24, 2024 / 9:15AM, SOGN.PA - Societe Generale SA at Bank of America Financials CEO Conference

Question: Tarik El Mejjad - BofA Global Research - Analyst : On capital, you've raised your guidance within Q2 to above 13% by the full year. How confident you are to deliver that target, given the still uncertainties around -- been talked to a lot of the markets about this on-site inspections, the tail of TRIM? And also, what's your take on FRTB? If you have to make a bet, is that something that will disappear or just keep postponed?

Question: Tarik El Mejjad - BofA Global Research - Analyst : And then I mean, if -- I mean, you seem confident to be above 13% Basel III at the year-end.

Question: Tarik El Mejjad - BofA Global Research - Analyst : Yes. I mean, I will include it to my follow-up, please. And then let's assume FRTB is pushed with some confidence that this is something could be potentially canceled or not happening. One or two small disposals, and you can all be already pro forma Basel IV CET1 ratio by Q1, Q2 next year. Given your capital-light strategy, would you be confident to actually go into capital adjustment in a sense will lock in at 13% our CET1 because now we control our business, it's derisked, capital regulatory is behind us and do some share buybacks as extra distribution above 13% and, obviously, back to 50% payout as well? Or is it too premature and you want to see longer period of stability and capital build before going into that investment case?

Question: Tarik El Mejjad - BofA Global Research - Analyst : So it's encouraging to start to hear the word excess from your --

Question: Tarik El Mejjad - BofA Global Research - Analyst : It's encouraging to start to hear the word excess from -- we have 4 minutes. I'm aware it's very short, but I would like to hear you very quickly on two topics quickly. First, on Ayvens. Are we close to the trough from used car sales value and so we start to see now a gradual growth again in revenues? That's question one. And secondly, on Boursorama. Are you still in the trajectory into client acquisition versus back to profitability there? I know it's a short time to answer those, but --

Question: Tarik El Mejjad - BofA Global Research - Analyst : Fantastic. Thank you very much, Slawomir. Thank you very much.