On 4 May 1864, Napoleon III signed Societe Generale’s founding decree. Founded by a group of industrialists and financiers driven by the ideals of progress, the Bank’s mission has always been “to promote the development of trade and industry in France”.

Since its beginnings, Societe Generale has worked to modernise the economy, following the model of a diversified bank at the cutting edge of financial innovation. Its retail banking branch network grew rapidly throughout the French territory, increasing from 46 to 1,500 branches between 1870 and 1940. During the interwar period, the Bank became the leading French credit institution in terms of deposits.

At the same time, Societe Generale began to build its international reach by financing infrastructure essential to the economic development of a number of countries in Latin America, Europe and North Africa. This expansion was accompanied by the establishment of an international retail banking network. In 1871, the Bank opened its London branch. On the eve of World War I, Societe Generale was present in 14 countries, either directly or through one of its subsidiaries. The network was subsequently expanded by the opening of branches in New York, Buenos Aires, Abidjan and Dakar, and by acquiring stakes in financial institutions in Central Europe.

Societe Generale was nationalised by the French law of 2 December, 1945 and played an active role in financing the reconstruction of France. The Bank thrived during the prosperous post-war decades and contributed to the increased use of banking techniques by launching innovative products for businesses, including medium-term discountable credit and lease financing agreements, for which it held the position of market leader.

Societe Generale demonstrated its ability to adapt to a new environment by taking advantage of the banking reforms that followed the French Debré laws of 1966-1967. While continuing to support the businesses it partnered, the Group lost no time in focusing its business on individual clients. In this way, it supported the emergence of a consumer society by diversifying the credit and savings products it offered private households.

In June 1987, Societe Generale was privatised with a successful stock market launch and shares offered to Group staff. The Group developed a universal banking strategy, notably through its Corporate and Investment Banking arm, to support the worldwide development of its customers. In France, it expanded its networks by founding Fimatex in 1995, which later became Boursorama, now France’s leading online bank, and by acquiring Crédit du Nord in 1997. Internationally, it established itself in Central and Eastern Europe through Komerční Banka in the Czech Republic and BRD in Romania, and in Russia with Rosbank, while consolidating its growth in Africa in Morocco, Côte d’Ivoire and Cameroon, among other countries. The Group has more than 131,000 members of staff⁽¹⁾ active in 66 countries. It continues its process of transformation by adopting a sustainable growth strategy driven by its core values of team spirit, innovation, responsibility and commitment. Firmly focused on the future by helping our clients bring their projects to life, Societe Generale has embraced with conviction the opportunities of the digital age to best anticipate the needs of clients and staff members, and embody the bank of the 21st century. Drawing on more than 150 years of expertise at the service of its clients and the development of the real economy, in January 2020 Societe Generale group defined its purpose as “Building together, with our clients, a better and sustainable future through responsible and innovative financial solutions”.

Societe Generale is one of the leading European financial services groups. Leveraging a diversified and integrated banking model, the Group combines financial strength and proven expertise in innovation with a strategy of sustainable growth, aiming to be the trusted partner for its clients, committed to the positive transformations of the world. Active in the real economy for over 150 years, with a solid position in Europe and connected to the rest of the world, Societe Generale employs over 131,000 members of staff⁽¹⁾ in 66 countries and supports on a daily basis 26 million individual clients, businesses and institutional investors⁽²⁾ around the world. The Group offers a wide range of advisory services and tailored financial solutions to secure transactions, protect and manage assets and savings, and help its clients finance their projects. Societe Generale seeks to protect them in both their day-to-day life and their professional activities, offering the innovative services and solutions they require. The Group’s mission is to empower each and everyone who wants to make a positive impact on the future and defines its purpose as “Building together, with our clients, a better and sustainable future through responsible and innovative financial solutions”.   ⁽³⁾

Societe Generale follows a strategy of responsible growth, fully integrating its CSR engagements and commitments to all its stakeholders: clients, staff, investors, suppliers, regulators, supervisors and representatives from civil society. The Group strives to respect the cultures and environment of all the countries where it operates.

The Group is built on three complementary core businesses:

Additional information on the Group’s organisation and key figures is provided from page 10.

The Group has an agile organisation based on 16 Business Units (business lines and regions) and 9 Service Units (support and control functions) to encourage innovation and synergies, and best meet the evolving requirements and behaviours of its clients. In a European banking sector undergoing radical industrial change, the Group is entering a new phase of its development and transformation.

Societe Generale is included in the principal socially responsible investment indices: DJSI Europe, FTSE4Good (Global and Europe), Bloomberg Gender Equality Index, Refinitiv Diversity and Inclusion Index, Euronext Vigeo (Europe and Eurozone), STOXX Global ESG Leaders indices and MSCI Low Carbon Leaders Index (World and Europe).

The Societe Generale Group has built a solid diversified banking model suited to the needs of its 26 million⁽¹⁾ corporate, institutional and individual clients. It is structured around three complementary and diversified businesses, all benefiting from strong market positions:

In the Retail Banking businesses, the Group focuses on development in European markets selected for their growth potential (France, Czech Republic and Romania) and Africa, where it has an historic presence, a refined understanding of the markets and top-tier positions. In International Financial Services, Societe Generale relies on franchises benefiting from leadership positions worldwide, notably in the operational vehicle leasing and fleet management businesses, and in equipment finance. In the Global Banking and Investor Solutions businesses, the Group provides high value-added solutions to its clients in the EMEA region, the US and Asia. Focused on Europe yet connected to the rest of the world, the Societe Generale Group capitalises on leadership positions driven by cross-business synergies to create value for stakeholders. The Group leverages its diversified model to meet the needs of its corporate and professional clients as well as its individual clients.

The rebound witnessed in the second half of 2020 continued throughout 2021, with all the Group’s businesses posting strong commercial and financial performances. As a result, the Group recorded its best results in history, enabling it to post strong profitability and offer shareholders an attractive dividend.

These financial performances reflect the Group’s efforts over recent years to strengthen the inherent quality of its businesses, improve operational efficiency, preserve the excellent robustness of the credit portfolio and manage its risks.

In 2021, the Group pushed ahead with its major strategic priorities, including in particular:

The Group continued to pursue its selective resource allocation strategy and its focus on achieving the optimal region/offer/client mix for both itself and its clients, and confirmed its strong resolve to keep costs firmly in check. The adjustments that have been made are designed to mark out growing, high-margin businesses that enjoy strong commercial franchises.

Looking forward, the Group is preparing its 2025 trajectory, which is built on three pillars:

One of the Group’s priorities is to press on with its commercial development, focusing on quality of service, added value and innovation to deliver client satisfaction. Its goal is to become a trusted partner for its clients, making sound use of its digital capabilities to provide them with responsible and innovative financial solutions.

Organic growth will continue to be driven by unlocking internal synergies not only within each business but also between businesses. This will entail greater cooperation between Private Banking and the Retail Banking networks, cooperation along the entire Investor Services chain, cooperation between the Insurance business and the French and International Retail Banking networks, and cooperation between regions and Global Transaction Banking’s activities, among others.

The Group has made certain changes to its Corporate Social Responsibility (CSR) governance. Since 1 January 2022, the Sustainable Development Department has reported directly to General Management, underscoring the Group’s decision to make CSR a core strategic concern. In keeping with its previous goals, Societe Generale has set its CSR targets for 2021 based on four development priorities, defined in light of the results from the materiality survey conducted at the end of 2020.

Two of these priorities involve being a responsible bank: fostering a culture of responsibility and being a responsible employer. The other two concern how the Group’s actions as a responsible bank can drive positive change: supporting the environmental transition and contributing to growth in local communities.

To guide its actions as a responsible bank, the Group has set itself the goal of embedding a culture of responsibility and applying the strictest control and compliance framework in the banking sector. It focuses on complying with all applicable ethics obligations and regulations, as well as with its own voluntary commitments, and on ensuring robust E&S risk management, channelling its efforts into specific actions to deliver a positive impact on the environment whilst remaining attentive to and working hand in hand with the various stakeholders in its global ecosystem.

For Societe Generale, being a responsible employer means providing a sound working environment and promoting diversity and professional development. This policy is key in boosting both employee engagement and overall performance. More specifically, the Group has identified five priority areas for action in human resources: Corporate Culture and Ethics Principles, Professions and Skills, Diversity and Inclusion, Performance and Compensation, and Occupational Health and Safety.

The Group draws on its own exemplary conduct and exceptional resources to help its clients with their environmental transition and support sustainable local communities.

Conscious of the challenges its clients face when addressing global warming, Societe Generale has made the environmental transition a priority issue. Its goal is to be at the forefront of the energy transition. The core priorities of its climate change strategy, which has been approved by the Board of Directors, are as follows:

In response, the Group’s expertise in these areas has earned recognition from Dealogic, which ranked it No. 1 for financing renewable energies in EMEA at the end of June 2021. Societe Generale was also the recipient of one of the sector’s most prestigious awards when it was singled out as Best Bank in Sustainability in 2021 by International Financing Review (IFR).

Last, alongside its climate and environmental actions, Societe Generale also promotes sustainable regional development and strong local economies. It supports entrepreneurs, participates in projects to build sustainable cities and infrastructures and promotes clean mobility solutions in the regions in which it operates. Its actions in this respect are particularly noticeable in France, where they constitute one of the strategic objectives for the Group’s new retail banking network, and in Africa, through the Grow with Africa initiative.

Societe Generale’s efforts to achieve sustainable development have not gone unnoticed by the ratings agencies. Following on from its excellent ESG ratings in 2020, the Group again rated highly in 2021 across the board with all rating agencies in the three Environmental, Social and Governance segments, reflecting the depth of its commitment and the quality of its actions to promote sustainability.

The Group’s extra-financial ratings for the year were among the best in the banking sector: in the top 1% of all companies worldwide (out of 4,881 companies) in Moody’s ESG Solutions’ universe; in the top 3% banks worldwide (out of 190 banks) in MSCI’s universe; in the top quartile in the Sustainalytics universe out of a panel of 408 banks worldwide; and in the top 7% worldwide in the S&P Global Corporate Sustainability Assessment, placing the Group 8th in Europe and 26th worldwide out of 242 banks.

Societe Generale continues to foster a group-wide culture of responsibility and to strengthen its internal control framework, especially its Compliance operations, to meet the banking industry’s highest standards. It has also completed the rollout of its Culture and Conduct programme, embedding rules of conduct and strong shared values throughout the entire company.

Societe Generale announced in 2021 the end of two separate legal proceedings brought by the US Departmentof Justice, one relating to Societe Generale’s IBOR submissions and certain transactions involving Libyan counterparties, and the other relating to US economic sanctions compliance. In requesting the courts to dismiss the legal proceedings, the DOJ confirmed that the Bank had fully complied with its obligations under the related deferred prosecution agreements (DPA).

Last, the Group is determined to press ahead with its stringent and disciplined approach to risk management - maintaining credit portfolio quality, continuing efforts regarding operational risk control and compliance - and to its capital allocation management.

In line with its strategy to fully address its clients’ needs and in consideration of the new, more demanding regulatory environment, the Group’s focus will remain on optimising its consumption of scarce capital and liquidity resources and maintaining a highly disciplined approach to costs and risk management.

Outlook

In 2022, the Group intends to build on the commercial momentum already embedded in its businesses and strengthen the resilience of its financial performance amid a more uncertain environment.

Excluding the Single Resolution Fund contribution, the underlying cost to income ratio is expected to range between 66% and 68% in 2022, and improve thereafter thanks to the cost reductions initiatives announced in 2021.

The cost of risk is expected to be below 30 basis points in 2022, i.e. slightly higher than the 2021 level. In the wake of recent developments in Ukraine and Russia, the Group announced on 3 March that it was not changing its cost of risk target and would update it, if necessary, at the time of its Q1 22 results publication.

The Group is aiming for a CET1 ratio at least between 200-250 basis points above the regulatory requirement, including after the entry into force of the regulation finalising the Basel III framework.

The Board of Directors approved an attractive shareholder distribution of the 2021 financial results equivalent to EUR 2.75 per share. A cash dividend of EUR 1.65 per share will be proposed to the General Meeting of Shareholders on 17 May 2022.

The Group is also envisaging a share buyback programme of approximately EUR 915 million, i.e. equivalent to EUR 1.10 per share. It has been decided to exceptionally split the pay-out as 60% in cash and 40% through a share buy-back. In future, the Group intends to maintain a dividend policy based on a 50% pay-out ratio of underlying Group net income with up to 20% of the pay-out in the form of a share buyback.

French Retail Banking

Societe Generale is the fourth-largest retail bank in France.

The French Retail Banking business has made sweeping changes to its model, in particular on the back of rapid changes in client behaviours and demand for ever-increasing convenience, expertise and customised products and services. The pace of transformation accelerated in 2020, with two major strategic initiatives: the planned merger of Crédit du Nord and Societe Generale, and moves to ramp up growth at Boursorama. These initiatives are designed to cement the Group’s winning combination of a fully online banking model coupled with a network banking model offering both digital and human expertise – a combination that stands out in the French market. Over the course of 2021, the Group successfully moved ahead with the first stages of its merger project, the key principles of which are as follows:

The ambition is to rank among the leaders for client satisfaction for our core client base and to create a banking model that increases profitability and conforms to the most stringent standards of responsibility. From a financial perspective, the merger will unlock considerable cost synergies, with a net cost-base reduction target of more than EUR 350 million by 2024 and around EUR 450 million by 2025, compared with 2019. The cost of the tie-up has been estimated at between EUR 700 million and EUR 800 million. The return on normative equity under Basel III is expected to range between 11% and 11.5% in 2025, equating to more than 10% under Basel IV.

French Retail Banking also aims to build on its existing growth drivers. Specifically, this means:

In Asset & Wealth Management and Private Banking, the disposal of Lyxor to Amundi forms part of Societe Generale’s strategy of operating in open architecture, distributing savings solutions to clients across both of its networks. By offering its clients investment and asset management solutions through partnerships with external asset managers, Societe Generale gives its savers access to the best investment expertise in France and internationally, while at the same time responding to their growing demand for socially responsible investment. The new Wealth & Investment Solutions Division within Private Banking focuses on structuring savings, asset management and investment solutions for the Group’s private banking and retail banking networks, as well as structured asset management solutions for its Global Markets clients.

Last, the Group continues to support the development of its online bank Boursorama, which has consolidated its leadership position in France with a bumper year in terms of client acquisition: more than 800,000 new clients in 2021, bringing their total number to 3.3 million. Over the next few years, Boursorama intends to press ahead with investments to win over new clients and is targeting more than 4 million clients by the end of 2022, one year ahead of schedule. Societe Generale also announced that Boursorama had signed a Memorandum of Understanding with ING with a view to offering its online banking clients in France the best possible alternative banking solution that furnishes dedicated client experience and support features. The two banks intend to sign a definitive agreement by the end of April 2022. The Group has confirmed its aim of taking Boursorama to maturity, targeting 4.5 million clients and a return on normative equity of more than 25% by 2025.

International Retail Banking and Financial Services

International Retail Banking and Financial Services is a profitable growth driver for the Group thanks to its leading positions in high-potential markets, its operational efficiency and digital transformation initiatives, and its ability to unlock synergies with other Group activities. These businesses have undergone a major transformation over the last few years to fully refocus the portfolio, introduce a more optimised model and improve the underlying risk profile.

International Retail Banking activities are mainly located outside the Eurozone and benefit from positive long-term growth fundamentals, although the Covid-19 pandemic and associated economic crisis have somewhat slowed their historical trajectory of continuous growth. The Group nevertheless plans to press on with its strategy of consolidating leadership positions and pursuing responsible growth within its international banking activities in Europe and Africa. Its capacity to meet its clients’ needs, coupled with its innovative, unique and efficient platforms, will serve it well in this undertaking:

As part of the Grow with Africa programme developed in partnership with a panel of international and local partners, Societe Generale has announced several sustainable growth initiatives to foster positive transformation across the continent. Accordingly, the Group is concentrating on providing multidimensional support to African SMEs, funding infrastructure, supporting the energy transition and developing innovative financing solutions.

Financial Services and Insurance enjoy competitive positions and strong profitability, in particular with ALD and Insurance, both of which have robust growth potential. These are the businesses that best withstood the economic shock of 2020. Incidentally, they are continuing to roll out their programmes to innovate and transform their operational model.

Societe Generale also plans to continue moving forward with its strategy of unlocking synergies between the activities of the various businesses in this division and elsewhere within the Group, with Private Banking and the regional Corporate and Investment Banking platforms, by developing its commercial banking services such as trade finance, cash management, payment services and factoring, and by pursuing the development of its bancassurance model.

Global Banking and Investor Solutions

Global Banking and Investor Solutions stands on broad and diversified foundations: it has built up a solid and stable diversified client base and benefits from high value-added product franchises and recognised sector expertise backed by a global network. It serves the financing and investment needs of a broad and diversified client base spanning corporates, financial institutions and public-sector entities. Having undergone a considerable transformation in recent years - reducing its breakeven point and de-risking the Global Markets business, and adjusting the size of its businesses - GBIS is focused on delivering value to all its stakeholders through sustainable and profitable growth.

Its growth strategy is consistent with the position of current economic growth opportunities, i.e. in increased financing needs for infrastructure and the energy transition, greater investment in private debt and the growing demand for investment solutions. At the same time, it is gradually and coherently adjusting the size of its businesses, particularly between Global Markets and Investor Services and Financing and Advisory, making targeted capital allocations to identified growth initiatives for particular client segments, businesses and regions.

The Group has also made it a priority to develop “ESG by design” businesses, setting itself the target of doubling ESG-related revenues by 2025 in both Global Markets and Investor Services and Financing and Advisory.

Tied in with this objective is the Group’s unrelenting focus on:

The latest wave of the epidemic has incurred a proportionally lower death toll compared to the very high contamination levels. The economy’s greater adaptability has mitigated the impact on business, but the withdrawal of temporary support measures is only partly being offset by the economic reopening and recovery support measures.

Prevailing uncertainty over events in Ukraine and Russia is making it difficult to forecast the impact on the global economy and the Group, and has furthermore sparked a return of volatility in financial markets. We expect energy prices (notably oil and gas) to remain high in 2022 on back of supply chain disruptions and the consequences of the situation in Ukraine. These factors are likely to contribute to a slowdown in eurozone growth during 2022 and 2023.

Tensions in the job market are playing out in wage adjustments and specifically a rise in the minimum wage. We forecast that these gains, combined with rising energy prices, may trigger short-term inflation spikes in Europe and the US. Further out, new monetary policy strategies on both sides of the Atlantic should drive inflation closer to target, contrary to the past decade during which inflation undershot central bank targets.

The US Federal Reserve (Fed) could tighten its monetary policy in light of the increased risk of heightened inflation expectations and a wage-price spiral taking hold in the US. Emerging markets are expected to continue the monetary tightening started in early 2021, while China has already begun its measured easing cycle. Low to negative real interest rates should help trigger a global deleveraging process. That said, uncertainties persist over market expectations as consensus on the ability of central banks to keep inflation under control could shift suddenly and lead to sharper tightening of financial conditions. The 2021 regulatory landscape was marked by stimulus and easing measures in line with those of 2020 to enable banks to support the economy. Some of these measures will continue in 2022. Governments have lent massive support to the financing of companies. In France, support measures were implemented by way of government-backed loan schemes totalling EUR 14.3 billion at end-December 2021, and recovery loans.

These measures will most likely be maintained or even strengthened in 2022 in light of the continued health crisis and against the backdrop of the French elections.

The European Commission (EC), the European Central Bank (ECB) in its capacity as prudential supervisor, the European Banking Authority (EBA) and the High Council for Financial Stability (HCSF) have used the flexibility of prudential regulations to act on the liquidity and solvency of banks. These regulatory adjustments included:

The trend is now towards normalisation. The ECB decided not to extend its recommendation on dividend pay-outs and share buybacks beyond 30 September 2021. This recommendation involved limiting divident payment and share buyback amounts for all banks under its direct supervision. Last, the flexibility measure taken by the ECB to allow banks to have a Liquidity Coverage Ratio (LCR) below the regulatory threshold of 100% ended on 31 December 2021.

Beyond the prevailing economic conditions, several structural regulatory projects aim to strengthen the prudential framework, support environmental and digital transitions, protect consumers and develop European capital markets.

The year 2021 put the spotlight back on finalising the implementation of the Basel III prudential agreements in the European Union. In October 2021, the European Commission published its new banking rules - the proposed CRR3 regulation and the CRD6 directive - which will enter into force on 1 January 2025. The timetable for rolling out the reforms in the main non-EU jurisdictions remains uncertain and is not expected to coincide with the Basel timetable of 1 January 2023.

In accordance with the European Green Deal proposed by the European Commission in December 2019, environmental and sustainability issues took centre stage in 2021. The financial sector is facing highly ambitious expectations, the aim being to rapidly mobilise capital flows to achieve carbon neutrality and lay the groundwork for a sustainable economy. Work on the EU taxonomy for sustainable activities is ongoing; activities are classified as “sustainable”, “harmful” or “social”. Accordingly, banks and large companies are poised to publish their first climate reports in 2022.

Banks are expected to better integrate their climate risk exposure when managing risks and be more transparent about disclosing ESG risks in their prudential publications. The ECB will organise climate stress testing on top of climate pilot exercises run by the French Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution - ACPR) and the European Banking Authority (EBA). Debate is intensifying over the prudential treatment of assets that are harmful to the climate and will be the topic of an EBA report in 2023. The European Union was a trailblazer for ESG-related topics, so the issue of harmonising European standards with those introduced in other jurisdictions will be a key consideration in 2022.

Concomitantly, digital transformation will continue to be a priority. The Commission proposed:

The year 2021 was also marked by in-depth work on significant topics related to payments, i.e. the EPI project and ECB’s study of a central bank digital currency (CBDC) and of an acceleration in the spread of instant payments. These projects will continue in 2022 and should be supplemented by Open Finance proposals for which the DSP2 Directive assessment will be an important step.

In order to finance these environmental and digital transitions, regulated savings may be reformed with the introduction of national and European financial regulations fostering the redirecting of these savings.

Consumer issues is also set to attract considerable attention in both France and Europe. In particular, plans to revise MiFID, PRIIPS and consumer credit directives are under way at European level. Many issues related to the pricing and transparency of banking products are also being debated at the national level: protection for the self-employed (pricing, assets, financing) will continue to take centre stage, and developments in insolvency procedures and the regulation of securities will affect the mechanisms at work in the financing of the economy for the smallest businesses.

Last, in a post-Brexit environment and as part of developing its strategic autonomy plan announced in January 2021, the European Commission gave new momentum to the development of the Capital Markets Union (CMU).

At the end of 2021, the Commission proposed practical steps towards a real CMU following the European action plan published in 2020 with (i) the publication of legislative proposals for the revision of MIFIR, (ii) the publication of the directive relating to alternative management and that of the regulation on long-term investment funds, and (iii) the establishment of a European single access point (ESAP) for financial and non-financial information publicly disclosed by companies.

At the same time, the Commission launched a targeted consultation to possibly amend the Listing Act, with the aim of ensuring the attractiveness of capital markets for EU companies and facilitating access to capital for small and medium-sized enterprises.

These initiatives play a part in the ongoing work related to Brexit and address the issues of equivalences, the gradual relocation of compensation for euro products within the Union, potential regulatory differences and competitive conditions.

French Retail Banking offers a wide range of products and services suited to the needs of a diversified base of individual and professional clients, businesses, non-profit associations and local authorities.

Leveraging the expertise of its teams and an efficient multi-channel distribution system, the pooling of best practices, and the optimised and digitalisation of processes, French Retail Banking combines the strengths of three complementary brands: Societe Generale, the renowned national bank, Crédit du Nord, a group of regional banks, and Boursorama Banque, a major online bank.

The Retail Banking networks are innovating to build the relationship-focused banking group of tomorrow. French Retail Banking is exemplified by its:

On 7 December 2020, the Societe Generale Group announced the launch of merger plans for the Societe Generale and Crédit du Nord banking networks and for Boursorama to enter a new phase of maturity, with a goal of 4.5 million clients by 2025.

French Retail Banking strives to improve client satisfaction across all segments and to further develop value-added services and assist businesses with their expansion in France and worldwide. It capitalises on synergies with the specialised business lines, notably with Insurance, Private Banking, and Corporate and Investment Banking. For example, French Retail Banking markets insurance products developed by Sogécap and Sogessur, subsidiaries operating in the International Retail Banking and Financial Services Division.

Life insurance outstandings amounted to EUR 98 billion at the end of 2021, compared with EUR 93.6 billion in 2020.

* Average quarterly outstandings.

The networks continue to support the economy and help clients finance their projects, with growth in average loan outstandings up from EUR 217 billion in 2020 to EUR 221 billion in 2021. At the same time, and amid rife competition, deposit inflows showed resilience and resulted in a loan-to-deposit ratio of 86.8% in 2021, down 7 points on 2020.

France network

SOCIETE GENERALE NETWORK

The Societe Generale network offers solutions tailored to the needs of its 6.7 million individual clients as well as almost 430,000 professional clients, non-profit associations and corporate clients, representing EUR 108 billion in outstanding deposits and EUR 84 billion in outstanding loans in 2021.

To achieve this, the network leverages three major strengths:

Societe Generale continued to expand its network and increase its service offering in 2021 in response to its clients’ requirements and with a view to enhancing customer satisfaction. It notably improved its digital offering, focusing especially on professional and corporate clients - introducing a revamped the app and websites, promoting electronic signature services and other advantages - added Corporate and Investment Banking’s SME/mid-cap services to the range of expertise available to corporate clients, and developed Shine, its 100% online banking subsidiary for professionals and VSBs. It also announced plans to look into the option of sharing ATMs with Crédit du Nord, BNP Paribas and Crédit Mutuel, with a view to improving accessibility for the clients of all four banks.

Societe Generale has made sustainable development the linchpin of its strategy. It took further steps last year to limit its direct environmental impact by reducing waste and shrinking its carbon footprint, and to address social issues. It also developed a new range of services designed to help clients achieve their own sustainable development and energy transition goals: 2021 saw the introduction of social and environmental loans for corporates, as well as a new range of 100% SRI savings vehicles for individual clients.

In 2021, Societe Generale and Crédit du Nord confirmed plans to merge, combining their two networks to form a new retail bank serving 10 million clients. Four key principles have been defined for this new entity: it will be a bank with local roots, a bank that is more responsive, accessible and efficient, a bank better adapted to the specific needs of each client category, and a bank that is responsible. The two networks will officially merge on 1 January 2023, with a progressive rollout of the new organisation culminating in 2025.

CRÉDIT DU NORD NETWORK

The Crédit du Nord group consists of nine regional banks – Courtois, Kolb, Laydernier, Nuger, Rhône-Alpes, Société Marseillaise de Crédit, Tarneaud, Société de Banque Monaco and Crédit du Nord – and an investment services provider, the brokerage firm Gilbert Dupont.

Crédit du Nord entities are characterised by a large degree of autonomy in managing their activities, which is chiefly expressed by rapid decision-making and responsiveness to client demands.

The quality and strength of the results of the Crédit du Nord group have been recognised by the market and are confirmed by the long-term A- rating attributed by Fitch.

Crédit du Nord serves 1.8 million individual clients⁽¹⁾, 213,000 professional clients and non-profit associations and 47,000 corporate and institutional clients. In 2021, its average outstanding deposits totalled EUR 57 billion, compared with EUR 52 billion in 2020, while average loan outstandings stood at EUR 52 billion, compared with EUR 50 billion in 2020.

Boursorama

Boursorama is a subsidiary of Societe Generale and a pioneer and leader in France for its three main businesses: online banking, online brokerage and online financial information at boursorama.com, ranked No. 1 for economic and stock market news. An online bank accessible to all, without any revenue or financial wealth prerequisites, Boursorama’s promise is the same as it was when it was first created, i.e. simplify clients’ lives at the most competitive price and furnish the best service possible in order to boost their purchasing power.

Boursorama currently serves over 3.3 million clients – a figure it has quadrupled in the last five years. This rapid growth has been matched by an increase in the bank’s outstandings (in excess of EUR 48 billion at end-December 2021), demonstrating the appeal of its fully online model based on client autonomy and a comprehensive range of banking products and services with automated processes.

In 2021, Boursorama extended its range, particularly as regards investment solutions (such as its MATLA retirement savings plan: a 100% SRI solution and the least expensive on the market) and life insurance and brokerage products (its new PrimeTime offer gives clients access to Accelerated Book Building (ABB) transactions through the PrimaryBid platform). It also launched a warranty extension insurance and made changes to its Freedom package for 12-17 year olds.

As in 2020, Boursorama was acclaimed the least expensive bank for the 14^th consecutive year at the Customer Relationship Podium Awards in 2021, taking 6^th position all sectors included. It continues to boast an excellent recommendation rate of 86%, coupled with a Net Promoter Score of +40. Buoyed by these results, it is confident of achieving its targets of more than 4 million clients by 2023 and profitability of over 25% by 2025.

Launched over 20 years ago, its online portal, www.boursorama.com, is consistently ranked the No. 1 website for financial and economic news and receives 47 million visits a month (Source ACPM – December 2021).

International Retail Banking and Financial Services (IBFS) combines:

Leveraging this pillar, the Group’s ambition is to better serve all its individual and corporate customers by adapting to changes in the economic and social environments, in addition to supporting the international growth of the Group’s customers by drawing on the strength of its network in fast-growing regions. IBFS bases its strategy on the relationship-focused universal banking model, the enhancement of its customer base through an extended range of products, and the distribution and pooling of expertise aimed at improving revenues while continually seeking to optimise the allocation of scarce resources and manage risks. With around 57,000 employees⁽¹⁾ and commercial operations in 66 countries, IBFS is dedicated to offering a wide range of products and services to its clients (individuals, professionals and corporates). Boasting a complementary range of expertise, IBFS enjoys solid and recognised positions in its different markets.

International Retail Banking

International Retail Banking combines the services of the international banking networks and consumer finance activities. These networks are forging ahead with their growth policy and currently hold leading positions in their various regions of operation, such as Europe, Russia, the Mediterranean Basin and sub-Saharan Africa. They help finance the economies in the different regions where they operate. In this way, the Group continues to support the development of its activities through these high-potential geographic regions.

EUROPE

The Group operates in Western Europe exclusively through its consumer finance and car finance businesses (CGI in France, BDK and Hanseatic Bank in Germany, and Fiditalia in Italy). Outstanding loans rose by 5% to EUR 23.7 billion in 2021, mainly on back of strong growth in car finance markets.

Komerčni banka (KB) is the Czech Republic’s third-ranked bank in terms of balance sheet size, with outstanding loans of EUR 29.3 billion, 242 branches and 7,376 full-time employees (FTE) in December 2021. KB, which was founded in 1990 and became a subsidiary of Societe Generale in 2001, has developed its universal banking activities for individual customers and expanded its traditionally significant presence among corporate customers and municipalities. The KB Group also offers a suite of products intended for individual customers with ESSOX (consumer loans and car financing), Modra Pyramida (mortgage facilities), as well as a range developed in collaboration with Private Banking.

In 2021, Komerční banka was acclaimed Top Corporate Bank of the Year and Sustainable Bank of the Year. Industry magazine The Banker awarded it Best Private Banking in the CEE and Best Bank in the Czech Republic. The bank also received the Best Treasury and Cash Management Bank prize from Global Finance.

In Romania, BRD is the No. 3 bank in terms of balance sheet size, with market share of approximately 11% in loans and deposits at end-November 2021. Societe Generale Group became BRD’s main shareholder in 1999. The BRD Group’s activity is divided into three major business lines: Retail Banking (individual and professional customers, SMEs), Corporate and Investment Banking, and Consumer Finance with BRD Finance. Outstanding loans and deposits totalled respectively EUR 6.9 billion and EUR 10.6 billion.

In 2021, BRD took the Best Treasury and Cash Management Bank prize from Global Finance.

RUSSIA

The Group is developing its universal banking model and has established itself as the No. 1 international banking group in terms of individual outstandings in Russia. At end-2021, loan and deposit outstandings totalled EUR 10.5 billion and EUR 13.1 billion, respectively. Societe Generale operates in Russia covering the different activities of corporate and individual client segments, and displayed brisk momentum in the mortgage loans activity in 2021.

In 2021, Rosbank ranked amongst Forbes’ Top 3 Most Reliable Russian Banks, received a Gold Rating in Forbes’ Best Employer Ranking and, for the second consecutive year, won Best Transactional Bank for Financial Institutions in Europe and CEE from EMEA Finance magazine.

AFRICA, MEDITERRANEAN BASIN AND OVERSEAS FRANCE

Societe Generale boasts leading positions in these geographic regions, the result of a long history and a strong strategic ambition.

In the Mediterranean Basin, the Group has been present in Morocco since 1913, in Algeria since 1999, and in Tunisia since 2002. In all, this business unit covers 653 branches and has more than 2 million customers. At 31 December 2021, outstanding deposits totaled EUR 11.0 billion and outstanding loans stood at EUR 11.5 billion.

In sub-Saharan Africa, the Group has an historic presence in 14 countries, with solid local positions, particularly in Côte d’Ivoire (No. 1 for loans and deposits), and in Senegal and Cameroon (both No. 2 for loans and deposits). In 2021, the region showed outstanding loans of EUR 7.2 billion and deposits of EUR 10.2 billion. Societe Generale is Western Africa’s leading international bank.

The Group is supporting the continent in a fair, environmentally friendly and inclusive transition, drawing its strength from one conviction, namely, that the demographics and economic development of this continent – with its talent, natural resources and infrastructure projects – are key issues for this millennium. Societe Generale in particular supports local economies through the Grow with Africa programme, which demonstrates the Group’s commitment to long-term performance. This initiative operates in partnership with local territories and actors, in addition to international experts. It establishes dialogue, two-way receptiveness and the sharing of innovative resources and approaches. It places the focus on four areas of development: supporting the development of African SMEs, taking part in the infrastructure financing, offering services that promote financial inclusion and developing innovative financing for renewable energies and agribusiness.

In 2021, Societe Generale received Best Investment Bank in Africa from The Banker, and also took out the Outstanding Leadership in Sustainable Finance in Africa prize awarded by Global Finance. Industry magazine EMEA Finance acclaimed Societe Generale Cameroun (for the seventh consecutive year) and Societe Generale Côte d’Ivoire Best Bank and Best Investment Bank in their respective countries. EMEA Finance also bestowed on Societe Generale Maroc (Morocco) the Best Foreign Bank and Best Investment Bank prizes. It also conferred the Best Foreign Bank award on Societe Generale Maroc. Rounding off the awards tally, Tunisia, Guinea, Madagascar and Congo all received the Best Bank award in their respective countries.

In Overseas France, the Group operates in Reunion and Mayotte, French Polynesia and New Caledonia, where it has been present for more than forty years. Societe Generale offers the same services for individual and corporate customers in these regions as in mainland France.

Insurance and Financial Services

INSURANCE (SOCIETE GENERALE ASSURANCES)

Societe Generale Assurances lies at the core of Societe Generale Group’s development strategy, in synergy with all its retail banking, private banking and financial services businesses. Societe Generale Assurances also pursues the expansion of its distribution model through the development of external partnerships. Societe Generale Assurances offers a full range of products and services to meet the needs of individual, professional and corporate clients in Life Insurance Savings, Retirement Savings and Personal Protection businesses. Thanks to the expertise of its 2,800 employees (FTE), Societe Generale Assurances combines financial strength with dynamic innovation and a sustainable development strategy to be a trusted partner for its clients. Gross premiums written rose by 50% over the year, with the share of unit-linked (UL) funds totalling 43%. Outstandings in life insurance investment solutions reached EUR 135 billion, up by 7%, of which UL funds stand at 37%. Business is growing in the personal protection and property and casualty lines, with growth accelerating by 5% compared to 2020.

In 2021, Societe Generale Assurances pushed ahead with its bid to assist and protect the customers of Group networks by stepping up the development of digital sales tools and its phygital dimension. It also accelerated the pace of digital customer journeys by optimising data and customer behaviour knowledge.

Societe Generale Assurances also continued diversifying its business model, which is a proven high-potential growth driver in both the life insurance and personal protection areas, in synergy with the Group’s other businesses, such as ALD (strengthened partnerships in and outside France), Boursorama (launch of Matla, an individual, accessible, modular and fully digital retirement savings scheme, rounded off by a suite of 100% Socially Responsible Investment supports) and with external partners.

Societe Generale Assurances has vowed to make Corporate Social Responsibility (CSR) a key, differentiating factor in its strategy and is active in expanding its CSR commitments. It has divided its policy into three areas: Responsible Insurer, Responsible Investor and Responsible Employer. Numerous actions have been taken both in relation to the Group’s investment policy - the end of financial collaboration with tobacco companies, ending investment in coal-fired power, signing the internationally-recognised Principles for Responsible Investment (PRI) and the Montreal Carbon Pledge, limiting non-conventional oil and gas funding and developing green investments - and in relation to the products on offer. On that score, the Group is developing its responsible UL offering, which is eight times larger than that of 2018, and has unveiled a new 100% responsible suite of investment solutions, while Sogelife in Luxembourg launched the first 100% SRI product. In addition, the Group has embedded the ESG dimension into all its activities making it the bedrock underpinning all its activities and processes (“ESG by design”). This pledge goes hand in hand with the objective to increase employees’ involvement in these actions by acting as a force for good with sponsorships and increasing environment-related actions.

OPERATIONAL VEHICLE LEASING AND FLEET MANAGEMENT (ALD AUTOMOTIVE)

ALD Automotive offers mobility solutions centered on operational vehicle leasing and fleet management for businesses of all sizes in both local and international markets. It also serves individual customers. The business combines the financial benefits of operational leasing with a complete range of upscale services, including maintenance, tyre management, fuel consumption, insurance and vehicle replacement. The ALD Automotive Group employs more than 6,500 people (FTE).

ALD Automotive boasts the largest geographical coverage of any leasing company (43 countries) and manages more than 1,726 million vehicles. It has unique knowledge of emerging markets and has established partnerships with Wheels in North America, FleetPartners in Australia and New Zealand, Absa in South Africa, AutoCorp in Argentina, and Arrend Leasing in Central America. In 2021, the business ranked No. 1 in Europe for multi-brand operational vehicle leasing and fleet management, and No. 2 worldwide.

A pioneer in mobility solutions, ALD Automotive is constantly innovating to provide unparalleled support to its customers, fleet managers and drivers, and offer customised services that are tailored to their needs.

ALD has been listed on the Euronext Paris stock exchange since June 2017, with the floatation of 20.18% of its shares. Societe Generale is ALD’s controlling shareholder and, as such, ALD continues to benefit from the Group’s financing capacity.

On 6 January 2022, ALD announced the signing of an agreement under which ALD would acquire 100% of LeasePlan to create a leading global player in mobility solutions with a total combined fleet of around 3.5 million vehicles. The proposed transaction is expected to close by the end of 2022.

VENDOR AND EQUIPMENT FINANCE (SGEF)

Societe Generale Equipment Finance specialises in vendor and professional equipment finance. The business is conducted through partnership agreements with international vendors (professional equipment manufacturers and distributors), and also directly with local manufacturers and distributors. SGEF has established its expertise in four major sectors spanning the transport, industrial equipment, technology and healthcare and environmental sectors.

An equipment finance leader in Europe, SGEF operates in over 35 countries, employs over 1,400 people (FTE), and manages a portfolio of EUR 24.2 billion⁽¹⁾ in outstandings. It has a broadly diverse customer base, ranging from large international companies to SMEs, to which it offers an extensive array of products such as financial leasing, loans, rentals, purchase of receivables, as well as insurance and marketing services.

A regular recipient of leasing industry honours, Societe Generale Equipment Finance was singled out for the Best Leasing Company prize in Italy, the Top Employer SMI Sector award in Germany and was ranked No. 1 in the Annual Asset Finance Europe 50 rankings in 2021.

Global Banking and Investor Solutions (GBIS) is tasked with providing Global Markets and Investor Services, Financing and Advisory, and Asset Management and Private Banking to a global customer base of businesses, financial institutions, investors, wealth managers and family offices, as well as private clients.

GBIS employs over 19,000 people located in 39 countries and fields operations⁽¹⁾ in more than 60 countries. It boasts extensive European coverage and representative offices in Central and Eastern Europe, the Middle East, Africa, the Americas and the Asia-Pacific region.

The linchpin of economic flows between issuers and investors, GBIS supports its customers over the long term, offering them a variety of services and integrated solutions tailored to their specific needs. The Group has forged strong and long-lasting ties with a large base of loyal clients thanks to the value-added of its franchises and the globally recognised extensive expertise of its businesses.

GBIS’ experts provide their issuer customers - large corporates, financial institutions, sovereigns and the public sector - with strategic advisory on their development, as well as access to capital markets to address their funding requirements and hedge their risks. They also furnish services to investors who manage savings according to defined risk/return targets.

A pioneer in sustainable and positive-impact finance and one of the global leaders in renewable energy financing, the Group furnishes advisory to its clients and offers concrete financing and investment solutions aimed at transitioning to a fairer and greener economy. It ranks among the leaders for the financing of renewable energies. The Group places social and environmental responsibility at the core of GBIS businesses and Societe Generale’s expertise was once again recognised by The Banker and Global Finance in 2021 when it took home the Best Bank in Sustainability award. The Group was rated AAA by MSCI, placing it in the Top 3% of banks worldwide.

Societe Generale Group unveiled in May 2021 the medium-term strategy for its Global Banking & Investor Solutions core business and underscored the key feature of these activities in its diversified banking model. Societe Generale’s goal is to consolidate its position as a top-tier European corporate and investment bank. It is ideally positioned to tap the major trends for the coming years, such as sharp growth in infrastructure and energy transition financing.

The roadmap set three priorities on which the Group already delivered in 2021:

Societe Generale also intends to increase its ESG commitments and hold a top-ranking position in this field. It will make this major strategic pillar the bedrock underpinning both the Corporate and Investment Banking arm’s actions and those of the entire Group.

Global Markets and Investor Services

The Global Markets and Investor Services (GMIS) Division includes Global Markets’ activities formed by the Fixed Income and Currencies, Equities and Securities Services arms. As such, the division combines the strength of a leading financial institution offering global access to markets with the customer-oriented approach of a broker positioned as a market leader in its activities, delivering value-added services and innovative solutions.

The teams - financial engineers, salespeople, traders and specialist advisors - use SG Markets, a unique integrated digital platform, to furnish tailored solutions designed to address each customer’s needs and specific risks. On 15 April 2021, Societe Generale pioneered by issuing the first structured product as a Security Token directly registered on the Tezos public blockchain. This transaction completes a new step in Societe Generale’s growth - Forge - a regulated subsidiary of Societe Generale Group, which aims to offer crypto asset structuring, issuance, exchange and custody services to the Group’s professional clients from 2022. Innovation is key to GBIS’ strategy and this operation illustrates the Group’s willingness to use the most innovative technologies and to create disruptive business models to better serve its clients.

In addition, work performed by Societe Generale’s Cross Asset Research Department provides insight into the impact of major events on the various asset categories and analyses the relationship between asset categories. This key information is drafted into strategic fact sheets. Since January 2020, the Bank has systematically included Environmental, Social and Governance (ESG) analyses in its equities publications, alongside its fundamental financial analysis. The Research teams won the ESG Research House of the Year award for 2021 at the Sustainable Investment Awards.

FIXED INCOME AND CURRENCIES

Fixed Income and Currencies (FIC) activities cover a comprehensive range of products and services ensuring the liquidity, pricing and hedging of risks related to the fixed income, credit, forex and emerging market activities of Societe Generale clients.

Teams operate in London, Paris, Madrid and Milan, as well as in the US and the Asia-Pacific region, and offer a wide range of flow and derivative products. Underpinned by in-depth research, engineering, trading and e-commerce expertise, they furnish strategic advisory, flow data and competitive prices.

The teams assist corporate clients and financial institutions with their investments and risk management, providing advisory on the most appropriate opportunities depending on each client’s protection and return of capital objectives. Leveraging 15 years’ experience in structured finance hedging, FIC teams are able to furnish customised solutions for each financing transaction, including risk hedging where required. Drawing on solid expertise underpinned by cutting-edge technology and algorithmic trading, clients also have access to a wide array of instruments, technologies and liquidities in fixed-income markets, credit markets via single broker platforms to execute spot trading and derivatives transactions.

EQUITIES

Boasting its historic presence in the world’s major primary and secondary equity markets and its long-standing tradition of calculated innovation, Societe Generale is a leader in a comprehensive suite of varied solutions covering the full spectrum of cash equity, equity finance, derivative-based services, equity structured products, strategic equity transactions and Prime Services activities.

Drawing on more than 30 years’ experience in this field, the Group has an undisputed leading position in derivatives and investment solution products, and continues to constantly innovate by offering tailored advisory and innovative solutions that are adapted to its clients’ needs. The Group has succeeded in maintaining this global top position despite the strategic review on the most complex products by developing the next generation of investment solution products and by remaining a pioneer in innovation, in particular for CSR.

This innovative approach is applied to the full array of equities-related activities, spanning equity research, trading, equity financing and listed products.

Clients voted the Equities arm the best issuer of listed products in Germany while Golden Bull awarded it Certificate House of the Year for 2021.

The Equities business also took out Best House, Equity 2021 at the SRP Europe Awards and was named 3Best Bank for New Financial Products by Global Finance.

SECURITIES SERVICES

The Societe Generale Security Services (SGSS) business offers a comprehensive range of solid and effective securities services, including:

With EUR 4,586 billion in assets under custody at end-December 2021 (versus EUR 4,315 billion at end-December 2020), SGSS ranks second among European custodians. It offers custodian services to more than 3,325 mutual funds and provides valuation services to more than 4,561 mutual funds, with EUR 697 billion in total assets under management in Europe.

Financing and Advisory

Financing and Advisory is responsible for covering and developing global relationships with the Bank’s strategic clients. The Department houses:

The GLBA platform operates on a worldwide scale with expert teams located in France and Europe, the CEEMEA region, the Americas and in Asia. The teams’ knowledge of clients and local regulations are key to conducting domestic, international and cross-border activities due to the international dimension of their business. Leveraging this global expertise and sectoral knowledge, the Group received the IB of the Year for Sustainability award from industry publications The Banker and Global Finance. It was ranked No. 1 worldwide for project finance advisory by IJ Global for 2021 and No. 2 for acquisition finance in EMEA by Dealogic in 2021.

Global Banking & Advisory teams provide issuer clients with a comprehensive suite of products and integrated solutions, products and advisory, and are housed in three divisions:

The Investment Banking teams offer customers, businesses, financial institutions and the public sector an integrated, comprehensive and tailored approach, leveraging its in-depth sectoral knowledge and recognised execution capacity. The offer relies on an extensive strategic advisory services, covering mergers and acquisitions and IPO structurings, as well as secondary share offerings. Societe Generale holds a leading position in the equity capital markets and on euro-denominated issues for corporate and financial institutions. Societe Generale’s Investment Bank notched up several awards in 2021, particularly for its lending franchise (The Banker and Global Finance) and for its equity capital markets franchise, winning ECM Bank of the Year for Green Equity Deals (Global Capital) and TMT Financing Bank of the Year – EMEA (TMT M&A Awards 2021). Rounding off the awards honours, the Acquisition Finance franchise ranks No. 1 in Europe (source: Dealogic 2021).

The Global Transaction & Payment Services (GTPS) teams focus on economic and financial operators and in particular domestic and international financial institutions, medium and large companies with international and multinational activities that require flow management assistance for their banking, commercial, corporate flows and/or payment flow assistance.

Operating in more than 40 countries, the business line offers a comprehensive and integrated range of solutions and services, leveraging the expertise of the Transaction Banking businesses. It houses five transactional banking activities:

Global Transaction Banking teams are regular recipients of industry awards. The Group was acclaimed in 2021 for its Green Trade Finance - Outstanding Innovation in Trade Finance. It was named Best Bank for Cash Management in Western Europe and CEE 2021, and Best Trade Finance Provider by Global Finance. It was also singled out for The Banker’s Best Transaction Bank of the Year award.

Asset and Wealth Management

This business unit encompasses asset management through Lyxor Asset Management and Private Banking, which operates under the Societe Generale Private Banking banner. Lyxor has in the process added a retail segment to its institutional offering and furnishes a differentiating asset management service for Societe Generale clients.

On 31 December 2021, Amundi and Societe Generale announced the closing of Amundi’s acquisition of Lyxor from Societe Generale. The transaction with Amundi, the European asset management leader which Societe Generale helped create, will enable Lyxor teams to actively participate in building an undisputed European leader in passive asset management amid a consolidating market.

Under the plan, Societe Generale announced the project to create a Wealth & Investment Solutions Division, which will be housed in the Wealth Management division. The division would provide expertise on structuring investment and wealth management solutions for the Wealth Management arm and for the Group’s Retail Banking Networks, in addition to furnishing structured wealth management solutions to Global Markets clients.

For the purposes of governance and financial communications, SG Private Banking will report to French Retail Banking from 1 January 2022.

SOCIETE GENERALE PRIVATE BANKING

Societe Generale Private Banking has an extensive foothold in Europe and offers global financial engineering and wealth management solutions, in addition to global expertise in structured products, hedge funds, mutual funds, private equity funds and real estate investment solutions. It also offers clients access to the capital markets.

Since January 2014 and in conjunction with the French Retail Banking core business, Societe Generale Private Banking has extensively modified its relationship banking model in France by extending its services to all individual customers with more than EUR 500,000 in their accounts. These customers reap the benefit of close-hand service provided by 80 regional franchises and the know-how of Private Banking’s expert teams.

Societe Generale Private Banking’s offering is available from three main centres: SGPB France, SGPB Europe (Luxembourg, Monaco and Switzerland) and Kleinwort Hambros (London, Jersey, Guernsey and Gibraltar). At the end of 2021, Private Banking held EUR 130 billion in assets under management.

Societe Generale’s Private Banking expertise is regularly singled out at industry awards. In 2021, the Bank was acclaimed Best Private Bank for Structured Products, Best Private Bank in Monaco, Best Private Bank in Luxembourg, Best Private Bank in the UK for Kleinwort Hambros at the Global Private Banking Innovation Awards, and was also named Best Private Bank affiliated to a Network in France at the Wealth and Performance Summit.

LYXOR ASSET MANAGEMENT

Lyxor Asset Management (Lyxor) was founded in 1998 and is a European asset management specialist with expertise in the full array of investment styles (active, passive and alternative). From ETFs to multi-management, Lyxor creates innovative investment solutions to meet the challenges of sustainable investment and pays particular attention to the fight against climate change.

On 31 December 2021, Amundi and Societe Generale announced the closing of Amundi’s acquisition of Lyxor from Societe Generale.

Definitions and details of methods used are provided on page 41 and following.

Information followed by an asterisk (*) is indicated as adjusted for changes in Group structure and at constant exchange rates.

The reconciliation of reported and underlying data is provided on page 42.

ANALYSIS OF THE CONSOLIDATED INCOME STATEMENT

Net banking income

Net banking income was substantially higher in 2021, up +16.7% (+17.7%*) vs. 2020, and +16.1% (+17.2%*) vs. 2020 on an underlying basis, with a very strong momentum in all businesses.

French Retail Banking posted a solid performance in 2021. As a result, net banking income (excluding PEL/CEL provision) increased by +4.8% vs. 2020, driven by the recovery in net interest income and by buoyant fee income, particularly in respect of financial fees.

International Retail Banking & Financial Services enjoyed strong revenue growth (+9.9%* vs. 2020), underpinned by the excellent momentum in Financial Services (+32.0%* vs. 2020) and Insurance (+8.6%* vs. 2020). International Retail Banking benefited from a rebound in its activities (+2.8%* vs. 2020).

Global Banking & Investor Solutions delivered a remarkable performance, with revenues up +25.2% (+26.1%*) vs. 2020. Financing & Advisory posted a record performance, with growth of +14.8% (+15.8%*) vs. 2020, while Global Markets & Investor Services posted substantially higher revenues than in 2020, up +35.6% (+36.9%*).

Operating expenses

In 2021, operating expenses totalled EUR 17,590 million on a reported basis and EUR 17,211 million on an underlying basis (adjusted for transformation costs), i.e. an increase of +4.3% vs. 2020.

The increase can be explained primarily by the rise in variable costs associated with revenue growth (EUR +701 million) and the increase in the contribution to the Single Resolution Fund (EUR +116 million). The other operating expenses declined by EUR 70 million, excluding structure effect.

Driven by a very positive jaws effect, underlying gross operating income grew substantially (+51.0%) to EUR 8,470 million and the underlying cost to income ratio improved by nearly 8 points (67.0% vs. 74.6% in 2020).

Excluding the contribution to the Single Resolution Fund (SFR), the underlying cost to income ratio is expected to be between 66% and 68% in 2022 and improve thereafter. This aggregate, excluding the contribution to the SRF, amounts to 64.7% in 2021, bearing in mind that SFR contribution totalled EUR 586 million in 2021.

The contribution to the Fund is expected to rise until the end of 2023.

The radical transformations that were announced for the Group in 2021 have led to changes in the 2023 cost outlook. The various initiatives in progress will help push down the Group’s underlying cost-to-income ratio beyond 2022, excluding the Single Resolution Fund contribution year after year. 

Cost of risk

In 2021, the cost of risk declined to a low 13 basis points, which was lower than the 2020 level of 64 basis points, i.e. EUR 700 million (vs. EUR 3,306 million in 2020). The amount breaks down to a provision on non-performing loans of EUR 949 million and a provision write-back on performing loans of EUR 249 million.

The Group’s provisions on performing loans amounted to EUR 3,355 million at end-2021.

The Group granted government-guaranteed loans (“PGE”) to support its clients during the crisis. At 31 December 2021, the residual amount of government-guaranteed loans represented around EUR 17 billion. In France, this loan category totalled approximately EUR 14 billion, while net exposure stood at around EUR 1.5 billion.

The doubtful loan ratio stood at 2.9% at 31 December 2021, a decline on the end-September 2021 level of 3.1%. The gross coverage ratio on doubtful loans for the Group was 51% at 31 December 2021.

The cost of risk is expected to be below 30 basis points in 2022.

Operating income

Book operating income totalled EUR 7,508 million in 2021 compared with EUR 2,093 million in 2020. Underlying operating income came to EUR 7,770 million compared with EUR 2,323 million in 2019.

Net profits or losses from other assets

Net profits or losses from other assets totalled EUR 635 million in 2021, of which EUR 439 million from the disposal of Lyxor’s asset management activities and EUR 185 million in capital gains from the disposal of real estate.

Impairment losses on goodwill

On back of the review of International Retail Banking’s financial trajectory, the Group recorded an impairment loss on goodwill of EUR 114 million in 2021 relating to the acquisition of the CGU Africa, Mediterreanean Basis and Overseas.

Income tax

The Group recognised EUR 130 million in deferred tax assets in 2021.

Net income

Activity and net banking income

French Retail Banking’s commercial performance surged in 2021 after being heavily impacted by the pandemic in 2020.

The brands continued to grow their activity in core businesses.

French Retail Banking maintained its support for the economy, accompanying individual, corporate and professional clients.

In insurance activities, property and casualty premiums and protection insurance delivered sound performances, with premiums up +1.8% vs. 2020. The number of personal protection policies grew +6.7% vs. 2020.

Private Banking’s net inflow was very robust at EUR 4.1 billion in 2021.

Boursorama consolidated its position as France’s leading online bank, with more than 3.3 million clients at end-December 2021. Client onboarding at Boursorama reached a record level, with around 800,000 new clients added to the books in 2021.

Average loan outstandings were -1% lower than in Q4 20 at EUR 210 billion and were 9% higher than in Q4 19. Average outstanding loans to individuals were up +2%, bolstered by growth in home loan production (+33% vs. Q4 20). The production of medium/long-term loans to corporate and professional customers climbed +45% excluding State Guaranteed Loans vs. Q4 20.

Private Banking’s assets under management totalled EUR 78 billion at end-December 2021.

Average outstanding balance sheet deposits⁽¹⁾ increased by +7% in Q4 21 vs. Q4 20 to EUR 241 billion, still driven by sight deposits. As a result, the average loan/deposit ratio stood at 87% in Q4 21 vs. 94% in Q4 20.

Revenues (excluding PEL/CEL) totalled EUR 7,738 million in 2021, up +4.8% vs. 2020. Net interest income (excluding PEL/CEL) was up +2.1% vs. 2020, underpinned by catch-up effects related to the TLTRO allowance and to State Guaranteed Loans. Commissions enjoyed a healthy momentum (+5.1% vs. 2020) against the backdrop of a recovery in activity following the lockdowns in 2020.

Operating expenses

Operating expenses were higher at EUR 5,635 million (+4.0% vs. 2020). The cost to income ratio (adjusted for the PEL/CEL provision) stood at 72.8%,an improvement of 0.6 points vs. 2020.

Cost of risk

The cost of risk amounted to EUR 104 million or 5 basis points in 2021, a substantial decline compared to 2020 (EUR 1,097 million or 52 basis points), which is broken down between -EUR 166 million of provision reversal in Stage 1/Stage 2 and EUR 270 million provision on Stage 3 (non performing outstandings).

Contribution to Group net income

The contribution to Group net income was EUR 1,492 million in 2021 (x2.2 vs. 2020). RONE (adjusted for the PEL/CEL provision) stood at 13.1% in 2021.

Revenues totalled EUR 8,117 million in 2021, up +9.9%* (+7.9%) vs. 2020.

Operating expenses totalled EUR 4,203 million, an increase of +3.1%* on an underlying basis (+1.5% on a reported basis) vs. 2020. The cost to income ratio stood at 51.8% in 2021.

The cost of risk stood at 38 basis points for a total o EUR 504 million) in 2021, compared with 96 basis points in 2020.

The contribution to Group net income totalled EUR 2,082 million in 2021 (+64.4%*, +59.7% vs. 2020). Underlying RONE stood at 20.3% in 2021 (vs. 12.4% in 2020).

International Retail Banking

International Retail Banking’s loan and deposit production provided confirmation in Q4 21 of its rebound in all geographical regions. Outstanding loans totalled EUR 93.6 billion and rose +6.0%* vs. end-December 2020. Outstanding deposits were 8.5%* higher than in December 2020, at EUR 89.5 billion.

For the Europe scope, outstanding loans were up +6.6%* vs. December 2020 at EUR 59.9 billion, driven by all the regions: +6.5%* in the Czech Republic, +11.1%* in Romania, and +5.4%* in Western Europe. Outstanding deposits increased by +6.0%* to EUR 50.8 billion.

In Russia, outstanding loans rose +13.3%* vs. end-December 2020, with a robust commercial performance particularly in home loans (+15%* year-on-year) and in the corporate customers segment (+22%* year-on-year). There was a significant increase in outstanding deposits (+20.8%*).

In Africa, the Mediterranean Basin and Overseas, outstanding loans rose +1.6%* year-on-year. Outstanding deposits continued to enjoy solid momentum, up +7.7%*.

In International Retail Banking, net banking income totalled EUR 5,000 million in 2021, an increase of +2.8%* vs. 2020 thanks to a rise in interest rates and robust commercial momentum.

In International Retail Banking, operating expenses were slightly higher (+2.5%*, +1.5%) than in 2020.

Insurance

In the Insurance business, the life insurance savings business saw outstandings increase +7%* to EUR 135 billion at end-December 2021 vs. end-December 2020. The share of unit-linked products in outstandings was 37%, an increase of +4 points vs. December 2020.

Protection insurance registered growth of +5%* vs. December 2020. Property/casualty premiums rose +8%* in 2021, as did personal protection insurance (+3%* vs. 2020).

The Insurance business posted net banking income up +8.6%* vs. 2020, at EUR 963 million in 2021.

Operating expenses were in line with the planned growth trajectory and rose +4.8%* vs. 2020.

Financial Services

Financial Services also posted robust growth. Operational Vehicle Leasing and Fleet Management registered 1.7 million contracts, including 1.4 million financed vehicles, i.e. an increase of +4.0% vs. end-December 2020. Equipment Finance’s new leasing business was up +12.1%* vs. 2020, while outstanding loans rose +1.1% vs. end-December 2020, to EUR 14.7 billion (excluding factoring).

Financial Services’ net banking income grew strongly (+32.0%*) to EUR 2,154 million compared with 2020. This performance was driven primarily by ALD’s activities which posted strong fleet growth and by the vehicle resale business (EUR 1,422 per vehicle in 2021).

Operating expenses in Financial Services increased by +4.4%* vs. 2020.

In 2021, Global Banking & Investor Solutions posted substantially higher revenues (+25.2%) than in 2020 at EUR 9,530 million, driven by a very strong momentum in all businesses. Revenues rose +9.5% compared to 2019. This solid financial performance reflects the successful execution of the strategic plan presented in May 2021.

Operating expenses totalled EUR 6,863 million in 2021, an increase of +2.2% vs. 2020 on a reported basis, and +4.7% on an underlying basis (operating expenses included a restructuring charge of EUR 157 million in Q4 20). This increase can be explained by the rise in variable costs related to the increase in earnings and IFRIC 21 charges. Thanks to a very positive jaws effect, the cost-to-income ratio improved significantly by 14 points (72% vs. 86% on an underlying basis in 2020).

The cost of risk was 5 basis points (or EUR 86 million) vs. 57 basis points in 2020, including a EUR -44 million provision for H1/H2 and another EUR 130 million provision for non-performing loans in H3.

The underlying contribution to Group net income came to EUR 2,076 million for 2021.

Global Banking & Investor Solutions registered very substantial RONE of 13.9% in 2021 (16.1% when adjusted for the impact of the Single Resolution Fund contribution).

Global Markets and Investor Services

Global Markets and Investor Services turned in a very strong performance, registering EUR 5,001 million, up +40.2% on 2020 which was heavily impacted by the health crisis. Market conditions were favourable in the Equities market and more complex in the fixed income markets in 2021. The reduction in the risk profile of structured products was completed in the first half of the year, ahead of schedule.

The Equities activity enjoyed its best year since 2009 (EUR 3,150 million vs. EUR 1,275 million in 2020 and EUR 2,502 million in 2019), driven by buoyant market conditions and the successful repositioning of the Investment Solutions product offering.

Fixed Income and Currency activities posted revenues of EUR 1,851 million in 2021, down -19.2% compared to 2020 which was dominated by exceptional market conditions in the first half of the year.

Securities Services’ revenues grew significantly to EUR 4,586 billion in 2021, up EUR 271 billion year-on-year. Over the same period, assets under administration increased by EUR 59 billion to EUR 697 billion in 2021.

Securities Services’ revenues increased strongly over the year, with the division posting revenue growth of EUR 647 million, up +8.4% relative to the 2021 performance.

Financing and Advisory

Financing and Advisory delivered its best historical annual performance, with revenues of EUR 2,924 million, up +14.8% vs. 2020. First, the business capitalised on strong market momentum, particularly in Investment Banking, by playing key roles in our clients’ large-scale transactions and second, it benefited from additional capital allocation.

Asset and Wealth Management

Asset and Wealth Management’s net banking income totalled EUR 958 million in 2021 (+6.1% vs. 2020).

In 2021, Private Banking posted a revenue increase of +3.1% vs. 2020, to EUR 699 million. Adjusted for an exceptional impact of EUR +29 million related to an insurance payout received in 2020, revenues were up +7.7%. The business benefited from strong commercial momentum in all regions. Net inflow totalled EUR +7.7 billion in 2021. Assets under management stood at EUR 130 billion, a +12% increase on 2021.

In 2021, Lyxor’s net banking income totalled EUR 239 million, an increase of +15.5% vs. 2020. Assets under management were up +27% in 2021, to EUR 178 billion.

The Corporate Centre includes:

The Corporate Centre’s net banking income totalled EUR +374 million in 2021 vs. EUR -339 million in 2020.

Operating expenses totalled EUR 889 million in 2021 vs. EUR 441 million in 2020. They include the Group’s transformation costs for a total amount of EUR 379 million relating to the activities of French Retail Banking (EUR 194 million), Global Banking & Investor Solutions (EUR 99 million) and the Corporate Centre (EUR 86 million). Underlying costs came to EUR 510 million in 2021 compared to EUR 388 million in 2020. 

Gross operating income totalled EUR -515 million in 2021 vs. EUR -780 million in 2020. Underlying gross operating income came in at EUR -253 million in 2021, vs. EUR -727 million in 2020.

Net profits or losses from other assets totalled EUR +603 million in 2021 vs. EUR -185 million in 2020 and included proceeds from the disposal of Lyxor’s asset management activities for EUR +439 million and those of the Crédit du Nord head office for EUR +185 million.

The Group recognised EUR 130 million of deferred tax assets in 2021. Furthermore, the review of International Retail Banking’s financial trajectory resulted in goodwill impairment of EUR -114 million.

The Corporate Centre’s contribution to Group net income was EUR -9 million in 2020 vs. EUR -2,285 million in 2020.

Framework

The financial information presented in respect of the financial year ended 31 December 2021 was reviewed by the Board of Directors on 9 February 2022 and was prepared in accordance with IFRS as adopted in the European Union and applicable at that date.

Capital allocation

In 2020, the allocation of normative capital to the businesses on the basis of their capital consumption was determined in accordance with CRR rules, i.e. 11% of their risk-weighted assets, supplemented by the consumption of Common Equity Tier 1 capital chargeable to each business after taking into account non-controlling interests and the adjustment of capital consumption in insurance activities. Accordingly, the capital allocation rule applies to the Group’s three pillars - French Retail Banking, International Retail Banking and Financial Services, and Global Banking and Investor Solutions - and enables each activity’s capital consumption and profitability to be calculated by activity on a standalone and uniform basis, taking into account the Group’s regulatory constraints.

Net banking income

Net banking income (NBI) for each business division includes:

Moreover, capital gains and losses generated by the business divisions on the disposal of shares in non-consolidated entities, and income from management of the Group’s industrial and bank equity portfolios, are booked under NBI as these securities are classified as available-for-sale financial assets.

Operating expenses

Operating expenses for the business divisions correspond to the information reported in Note 8.1 to the Group’s consolidated financial statements at 31 December 2020 (see pages 483 to 485) and include their direct expenses, their management overheads, and a share of the head-office expenses, which are in principle almost fully redistributed between the business divisions. The Corporate Centre only books costs related to its own activity, along with certain technical adjustments.

Cost-to-income ratio

The cost-to-income ratio indicates the operating expenses of a business in relation to its net banking income. This indicator provides a measure of a system’s effectiveness (see glossary).

IFRIC 21 adjustment

The IFRIC 21 adjustment corrects the result of the charges recognised in the accounts in their entirety when they fall due (generating event) in order to recognise only the portion concerning the current quarter, i.e. a quarter of the total. It consists of smoothing the charge recognised over the financial year to provide a more reliable economic picture of the costs actually attributable to the activity over the period under review. By applying the IFRIC 21 adjustment, the expense – previously recognised progressively if the generating event occurs over a period of time – is instead recognised once and in its entirety. The contributions to Single Resolution Fund “SRF”) are part of IFRIC21 adjusted charges; they include contributions to national resolution funds within the EU.

Underlying indicators

The Group may be required to present underlying indicators to gain a clearer understanding of its actual performance.

Underlying data is obtained from reported data by restating the latter and taking into account exceptional items and the IFRIC 21 adjustment.

Moreover, the Group restates the allocations or reversals of PEL/CEL provisions on French Retail Banking’s revenues and income. This adjustment provides a clearer picture of revenues and income by excluding volatile items related to commitments on regulated savings.

The reconciliation of underlying data obtained from reported data appears in the table below:

Cost of risk

Net cost of risk is charged to each business division to reflect the cost of risk inherent in their activity during each financial year. Impairment losses and provisions concerning the whole Group are booked by the Corporate Centre.

Societe Generale’s commercial net cost of risk is expressed in basis points. It is calculated by dividing the net annual allocation to provisions for commercial risks by average loan outstandings at the end of the four quarters preceding the closing date. This indicator reveals the level of risk borne by each of the pillars as a percentage of balance sheet loan commitments, including operating leases. The key items used in this calculation are indicated in the table below.

Gross coverage ratio for doubtful outstandings

“Doubtful outstandings” are outstandings that are in default pursuant to the regulations.

The gross doubtful outstandings ratio measures the doubtful outstandings recognised in the balance sheet compared with gross loan outstandings.

The gross coverage ratio for doubtful outstandings is calculated as the ratio of provisions recognised in respect of the credit risk to gross outstandings identified as being in default pursuant to the regulations, without taking into account any guarantees provided. The coverage ratio measures the maximum residual risk associated with outstandings in default, otherwise referred to as “doubtful”.

Net income/expense from other assets

Net income or expense from other assets essentially comprises capital gains and losses on operating fixed assets, or when the Group ceases to control a consolidated subsidiary, as well as goodwill immediately written down when the Group takes control of an entity and recalculates the stake previously held by the Group in entities that have been fully consolidated during the year.

Income tax

The Group’s tax position is managed centrally.

Income tax is charged to each Business Division on the basis of a normative tax rate which takes into account the local tax rate of the countries in which it conducts its activities and the nature of its revenues. The difference between the income tax charged to the Group’s consolidated companies and the sum of normative taxes of the strategic pillars is assigned to the Corporate Centre.

ROE, ROTE

Group ROE and ROTE is calculated on the basis of average Group shareholders’ equity under IFRS.

It excludes:

It deducts:

For the ROTE, the following items are also excluded:

Net income used to calculate ROE is based on Group net income adjusted for interest to be paid to holders of deeply subordinated notes for the period and, since 2006, holders of adjusted deeply subordinated notes and undated subordinated notes.

Net income used to calculate ROTE is based on Group net income excluding the goodwill impairment loss but reinstating interest on deeply subordinated notes for the period (including issuance fees paid, for the period, to external parties and the discount charge related to the issue premium for deeply subordinated notes) and interest on undated subordinated notes (including issuance fees paid, for the period, to external parties and the discount charge related to the issue premium for undated subordinated notes).

RONE

RONE (Return on Normative Equity) determines the return on average normative equity allocated to the Group’s businesses (see “capital allocation” above). The allocation principle in force since 1 January 2016 consists of allocating to each business normative equity corresponding to 11% of its risk-weighted assets.

The key items used in this calculation are indicated in the tables below.

Earnings per share

In accordance with IAS 33, to calculate earnings per share, “Group net income” for the period is adjusted by the amount (net of tax, capital gains/losses on partial buybacks of securities issued and classified as equity) of costs pertaining to these equity instruments and the interest paid on them.

Earnings per share is therefore calculated as the ratio of corrected Group net income for the period to the average number of ordinary outstanding shares, excluding own shares and treasury shares, but including:

The Group also reports its underlying earnings per share, i.e. corrected for exceptional items and the IFRIC 21 adjustment.

Net Asset, Net Tangible Asset Value

Net assets comprise Group shareholders’ equity, excluding:

Tangible net assets are corrected for net goodwill in the assets, goodwill under the equity method and intangible assets.

In order to calculate Net Asset Value Per Share or Net Tangible Asset Value Per Share, the number of shares used to calculate book value per share is the number of shares issued at the end of the period, excluding own shares and treasury shares, but including:

Prudential capital and solvency ratios

The Societe Generale Group’s Common Equity Tier 1 capital is calculated in accordance with applicable CRR/CRDIV rules.

The fully-loaded solvency ratios are presented pro forma for current earnings, net of dividends, for the current financial year, unless specified otherwise.

Where reference is made to phased-in ratios, the latter include the earnings for the current financial year, unless otherwise specified.

The leverage ratio is calculated according to applicable CRR/CRDIV rules, including the provisions of the Delegated Act of October 2014.

On 15 April 2021, Societe Generale issued the first structured product⁽¹⁾ as a Security Token directly registered on the Tezos public blockchain. The securities were fully subscribed by Societe Generale Assurances. The operation follows in the footsteps of a first covered bond Security Token issuance worth EUR 100 million on the Ethereum blockchain, settled in euros in April 2019, and of a second covered bond Security Token issuance worth EUR 40 million, this time settled in Central Bank Digital Currency (CBDC) and issued by Banque de France in May 2020. This latest transaction completes a new step in the development of Societe Generale – Forge, a regulated subsidiary of Societe Generale Group, which aims to offer crypto assets structuring, issuing, exchange and custody services to the Group’s professional clients by 2022.

This new experimentation, performed in accordance with best market practices, demonstrates the legal, regulatory and operational feasibility of issuing more complex financial instruments (structured products) on public blockchain. It leverages this disruptive technology which enables increased efficiency and fluidity of financial transactions: unprecedented product structuration capacity, shortened time-to-market, automated corporate actions, increased transparency and transaction and settlement speeds, as well as reduced cost and fewer intermediaries.

Thanks to Societe Generale – Forge’s innovative operating model, Security Tokens can be directly integrated into conventional banking systems interfaced with the SWIFT format. Innovation is key to Societe Generale Group’s digital transformation. The Group has been involved for several years in numerous initiatives based on blockchain and distributed ledger technologies, using the most innovative technologies and creating disruptive business models, with the aim of better serving its clients.

Societe Generale’s clients will have access to a complete treasury management solution (monitoring, payments and fraud management) based on Kyriba’s global cloud platform.

On 11 June 2021, Societe Generale, one of the leading European financial services groups particularly in the field of transaction banking, and Kyriba, a global leader of cloud-based finance and IT solutions, announced in London a strategic partnership to launch a new treasury management solution. This solution will include payment automation and fraud management functionalities, and will be dedicated to the Bank’s corporate clients and their subsidiaries. Fully hosted in the cloud, this solution will be based on Kyriba’s global platform and distributed by Societe Generale. The objective was to facilitate daily treasury management for corporate clients, so Kyriba and Societe Generale pooled their expertise to offer the following functionalities:

Since it is fully hosted in the cloud, the solution facilitates implementation and seamless updates. It will be available on SG Markets, the Bank’s digital client portal for corporates.

Based on Kyriba’s global cloud platform, the functionalities of this solution will offer the same level of quality as those offered to the world’s largest companies in terms of data management, cybersecurity, business processes and innovation.

It was launched during the fourth quarter of 2021 starting with the French market.

Alexandre Maymat, Head of Global Transaction and Payment Services at Societe Generale commented: “Treasury management is a key area of focus for companies and we believe it is essential to make this easier through simple, efficient and secure tools. This is even more important as we exit the current crisis and, depending on their size, some companies are poorly equipped in this area. With our open architecture model allowing us to offer our clients the best solutions on the market, it seemed natural to partner with Kyriba, whose solutions are known for their robustness and adaptability. This partnership also inaugurates other collaborations that we will be keen to develop with Kyriba to ensure we can always better anticipate and meet the needs of our clients.”

“We are very proud to join this strategic partnership with Societe Generale. The recent crisis has underlined the need for companies to manage liquidity as closely as possible and to control and secure their payments. We believe this joint solution will improve the way they leverage their cash and liquidity and become more resilient, more scalable and more competitive. The technological advance of Kyriba’s Active Liquidity Management Platform in terms of Artificial Intelligence and real-time will help those businesses to better withstand and take advantage of every opportunity offered by the market. It is also an important step in Kyriba’s development, which will contribute to our growth in this market,” added Edi Poloniato, co-Head of Banking Solutions for Kyriba.

Faced with growing environmental and social challenges, clients want to give meaning to their investments. To meet this need, Societe Generale Private Banking France offers a new discretionary management solution, “29 Haussmann Signature ISR”.

With this pioneering initiative, clients have the assurance that at least 90% of their mandate will be invested in funds or ETFs with the SRI label at all times.

With the “29 Haussmann Signature SRI” mandate, clients invest in Societe Generale Group funds with SRI certification, which select companies based on both traditional financial criteria and environmental, social and governance criteria.

This approach makes it possible to better assess certain risks (climate and health risks, etc.) and to identify the sources of opportunities represented by the challenges of sustainable development in the medium and long term (renewable energies, waste treatment, new technologies, etc.).

A solution designed by the managers of SG 29 Haussmann

With “29 Haussmann Signature ISR”, clients delegate the management of their investments to the SG 29 Haussmann teams, experts in the financial markets, who steer their investments with the aim of generating sustainable performance over time.

To build their portfolios, SG 29 Haussmann’s managers rely on the Societe Generale group funds and SRI-labelled ETFs covering different asset classes, geographical areas, capitalisation segments and investment themes.

“We have chosen to complement the expertise of our managers by delegating the management of certain strategies to external partners to whom we have set specifications that reflect our SRI approach,” explained Guillaume de Martel, Executive Chairman of SG 29 Haussmann. This new offering benefits from SG 29 Haussmann’s allocation expertise and provides access to recognised SRI investment strategies through its teams, as well as through major asset management companies such as Mirova (Natixis Investment Managers), DNCA Finance, La Financière de l’Échiquier, Amundi and BlackRock^®.

“By offering our clients the opportunity to contribute to a more virtuous and sustainable economy, this new SRI-labelled mandate management - a pioneer in France - is fully aligned with our strategy of being a positive-impact private bank and completes one of the most innovative and comprehensive responsible investment packages on the market,” added Mathieu Vedrenne, Head of Societe Generale Private Banking France.

BNP Paribas, Crédit Mutuel⁽¹⁾ and Societe Generale⁽²⁾ are studying a plan to pool their network of ATMs in France in order to together guarantee, on a long-term basis, the best access to automated banking services and strengthen service offerings to their customers. This sharing would allow customers of the three banks to benefit from enhanced access to all the services they offer to their customers free of charge, on common ATMs, including cash deposit and withdrawal, cheque deposit, account consultation and RIB printing services.

The pooling plan comes amid rapid changes in the use of banking services, and where the use of cheques and cash is declining constantly. These trends, which accelerated with the health crisis⁽³⁾, has led to an explosion in the number of contactless payments (+53% in 2020) and a sharp drop in cash withdrawals (-23% in 2020)⁽⁴⁾. The pooling of ATMs could help ensure access to cash across France in the long term. Currently, 99% of France’s population must drive at least 15 minutes to reach an ATM machine⁽⁵⁾.

The study will pay particular attention to the establishment of ATMs in rural and isolated territories, thereby reaffirming the commitment by the three banks to be local and relational banks. Project analysis will continue until the end of the year amid consultation and dialogue with key stakeholders, i.e. employee representative bodies, local authorities, etc. The plan will be subject to the required approvals from the relevant regulatory bodies.

Oradea Vie, a Societe Generale Assurances’ life insurance company dedicated to partnerships, offers an accessible, modular and 100% digital individual retirement savings plan (PERin) exclusively for Boursorama Banque customers.

Oradea Vie furnishes its expertise to Boursorama Banque customers by offering them a new innovative product aligned with the Pacte Law to assist them with their retirement plan.

MATLA offers “retirement horizon management”, a management style adapted to all investor profiles. Through three profiles, clients can delegate their allocation choices to experts to take advantage of financial market opportunities by accessing a selection of 100% SRI products (the Socially Responsible Investment certification was created by the Ministry of Economy and Finance). These profiles benefit from an annual reallocation between investments depending on the economic outlook and the financial environment to ensure that saving management evolves.

When choosing retirement horizon management, clients also benefit from progressive investment security as they approach retirement, gaining from all the advantages of life insurance.

MATLA includes the following differentiating factors:

Philippe Perret, Chief Executive Officer of Societe Generale Assurances stated: “MATLA represents a new key step in our partnership with Boursorama and a real innovation in the insurance market in France. This digital retirement savings plan developed by Oradea Vie illustrates the ability of Societe Generale Assurances to develop innovative offers which respond to changing customer habits by offering an exceptional customer experience.”

Note that unit-linked products present a risk of capital loss.

ALD Automotive, the leading vehicle leasing company in Europe, has launched operational leasing services for corporates and small- to medium-sized companies on Tesla’s electric vehicles in 16 countries^** across Europe.

ALD Automotive is Tesla’s preferred operational leasing partner in Europe and clients may now benefit from ALD Automotive’s full-service leasing packages for Model 3, Model Y, Model S and Model X passenger cars. All models benefit from tyre change, breakdown assistance, insurance and vehicle registration, as well as maintenance provided through Tesla’s locations throughout Europe, as well as mobile service. Vehicles are available with flexible durations and mileage and can be customized directly on Tesla’s website. The lease is managed by ALD Automotive for the duration of the contract.

Private individuals also have access to full-service leasing services on Tesla’s full range of passenger car models in France, Finland, Ireland, the Netherlands and Denmark.

“We are proud to launch this new accessible and flexible leasing offering on Tesla’s range of electric vehicles to customers across Europe,” confirmed John Saffrett, Deputy Chief Executive Officer of ALD. “This contributes to our sustainable growth strategy as a key player in the energy transition, as well as fully supports our commitment to providing innovative mobility solutions.”

The main changes to the consolidation scope at 31 December 2021 compared with the scope applicable at the closing date of 31 December 2020 are as follows:

On 31 December 2021, the Group finalised with Amundi the transfer of the asset management activities performed by Lyxor. This transfer concerns the passive (ETF) as well as active (including alternative) asset management activities performed by Lyxor on behalf of institutional customers in France and abroad; it includes the commercial and support functions dedicated to these activities.

This transfer resulted in a EUR 0.4 billion decrease in the Group’s total balance sheet including the EUR 223 million decrease in goodwill allocated to the Asset and Wealth Management CGU.

A pre-tax capital gain of EUR 439 million is recognised under Net Income on other assets in the 2021 Income statement.

Cash, due from central banks increased by EUR 11.9 billion (+7.1%) compared to 31 December 2020, mainly resulting from the business recovery.

Due to central banks increased by EUR 3.7 billion (+246.7%) compared to 31 December 2020 mainly as a result of the growth in overnight deposits and borrowings.

Financial assets at fair value through profit or loss decreased by EUR 69.2 billion (-16.8%) compared to 31 December 2020. This change is the result of a EUR 37.9 billion decrease in repurchase agreements, a EUR 33.6 billion decrease in trading derivatives, a EUR 7.8 billion decrease in bonds and other debt securities, a EUR 3.6 billion decrease in loans, receivables and other trading assets, and a EUR 2.3 billion decrease in financial assets compulsorily measured at fair value through profit or loss, offset by a EUR 16 billion increase in shares and other equity instruments.

Financial liabilities as fair value through profit or loss decreased by EUR 65.1 billion (-17.5%) compared to 31 December 2020. This change is mainly due to a EUR 36 billion decrease in borrowings and repurchase agreements, a EUR 35 billion decrease in trading derivatives, a EUR 5.9 billion decrease in financial instruments at fair value through profit or loss on options, partially offset by a EUR 13.7 billion increase in debts on borrowed securities.

Financial assets at fair value through other comprehensive income decreased by EUR 8.6 billion (-16.8%) compared to 31 December 2020, due to a decrease in debt securities (of which EUR -5.3 billion related to public bills and EUR -3.3 billion related to bonds).

Customer loans at amortised cost increased by EUR 48.4 billion (+10.8%) compared to 31 December 2020, mainly explained by a EUR 36.6 billion increase in customer loans (of which EUR 11 billion in cash loans, EUR 9.6 billion in housing loans and EUR 8.3 billion in loans to financial customers) and a EUR 10.6 billion increase in ordinary accounts receivable.

Customer deposits increased by EUR 53 billion (+11.6%) compared to 31 December 2020, due to a EUR 39.5 billion increase in customer sight deposits, a EUR 8.9 billion increase in special savings accounts and a EUR 3.5 billion increase in customer term deposits.

Investments of insurance companies increased by EUR 12 billion (+7.2%) compared to 31 December 2020, due to a EUR 13.9 billion increase in financial assets measured at fair value through profit or loss.

Insurance contracts related liabilities increased by EUR 9.2 billion (+6.3%) compared to 31 December 2020, due to an increase in insurance companies’ technical provisions in line with the market conditions.

Other assets increased by EUR 25.6 billion (+38%) compared to 31 December 2020, mainly due to an increase in guarantee deposits paid.

Other liabilities increased by EUR 21.4 billion (+25.2%) compared to 31 December 2020. This change is explained by a EUR 16.9 billion increase in guarantee deposits received, a EUR 1.2 billion increase in securities settlement accounts payable and a EUR 2.3 billion increase in other sundry creditors.

Groupe shareholders’ equity amounted to EUR 65.1 billion at 31 December 2021 vs. EUR 61.7 billion at 31 December 2020. The variation is primarily attributable to the following factors:

After taking into account the non-controlling interest (EUR 5.8 billion), the Group shareholders’ equity totalled EUR 70.9 billion at 31 December 2021.

The objective of the Group’s financial policy is to optimise the use of shareholders’ equity in order to maximise short- and long-term return for shareholders, while maintaining a level of capital ratios (Common Equity Tier 1, Tier 1 and Total Capital ratios) consistent with the market status of Societe Generale and the Group’s target rating.

Since 2010, the Group has launched a major realignment programme, strengthening capital and focusing on the rigorous management of scarce resources (capital and liquidity) and proactive risk management to apply the regulatory changes related to the implementation of new Basel III regulations.

Group shareholders’ equity totalled EUR 65.1 billion at 31 December 2021. Net asset value per share was EUR 68.72 and net tangible asset value per share was EUR 61.08 using the new methodology disclosed in Chapter 2 of this Universal Registration Document, on page 46. Book capital includes EUR 8.0 billion in deeply subordinated notes.

At 31 December 2021, Societe Generale held, directly or indirectly, 22.2 million Societe Generale shares, representing 2.61% of the capital (excluding shares held for trading purposes). In 2021, no transaction was executed on purchases and sales under the liquidity contract concluded on 22 August 2011 with an external investment services provider.

The information concerning the Group’s capital and shareholding structure is available in Chapter 7, on page 617 and following.

When managing its capital, the Group ensures that its solvency level is consistently compatible with its strategic targets and regulatory obligations.

The Group also ensures that its Total Capital Ratio (Common Equity Tier 1 + hybrid securities recognised in additional Tier 1 and Tier 2) provides a sufficient safety buffer for unsecured senior lenders.

The phased-in Common Equity Tier 1 (CET1) ratio stood at 13.7%⁽¹⁾ at 31 December 2021, compared to 13.4% at 31 December 2020.

The leverage ratio, calculated according to the CRR2 rules in force since June 2021, stood at 4.9% at 31 December 2021.

At end-2021, the Tier 1 ratio was 15.9%⁽²⁾ and the Total Capital Ratio stood at 18.8%⁽²⁾, i.e. above the regulatory requirements.

The TLAC (Total Loss-Absorbing Capacity) ratio of RWA was 31.1%⁽²⁾ with the option of Senior Preferred Debt limited to 2.5% of RWA. Furthermore, the TLAC of the leverage ratio stood at 9.5% at end-2021. The Group also placed above its MREL requirements at 31 December 2021.

The Group’s debt policy is based on two principles:

These resources also include:

Accordingly, the Group’s long-term financing plan, implemented gradually and in a coordinated manner during the year and based on a non-opportunistic issuance policy, is designed to maintain a surplus liquidity position over the medium to long term.

At end-2021, liquidity raised under the 2021 financing programme amounted to EUR 39.1 billion in senior and subordinated debt. Liquidity raised at parent company level amounted to EUR 35.3 billion at 31 December 2021. The breakdown of refinancing sources is as follows: EUR 7.1 billion in senior vanilla non-preferred unsecured issues, EUR 2.1 billion in senior vanilla preferred unsecured issues, EUR 19.9 billion in senior structured issues, EUR 1.5 billion in secured issues (SG SFH), EUR 2.4 billion in subordinated Tier 2 debt and EUR 2.2 billion in subordinated undated debt. At subsidiary level, a total of EUR 3.8 billion was raised at 31 December 2021.

Below is a summary of Societe Generale’s counterparty ratings and senior long-term and short-term ratings at 31 December 2021:

During the 2021 financial year, on 24 June, Standard & Poor’s revised the outlook on the Group’s long-term rating to stable from negative and affirmed the ratings at A/A-1. As a result of the rating action, the outlook of SG core subsidiaries changed to “stable”.

The group maintained a targeted acquisition and disposal policy, in line with its strategy focused on its core businesses and the management of scarce resources.

Ongoing investments will be financed using the Group’s usual sources of funding.

On 6 January 2022, the Group announced the signing by Societe Generale and ALD of two Memorandums of Understanding under which ALD would acquire 100% of LeasePlan. The proposed transaction is expected to close by the end of 2022.

On 1 February 2022, Societe Generale announced that Boursorama had signed a Memorandum of Understanding (MOU) with ING to offer ING’s online banking customers in France the best alternative banking solution, with a dedicated customer journey and support conditions. A final agreement should be concluded by April 2022.

The gross book value of Societe Generale Group’s tangible operating fixed assets amounted to EUR 45.7 billion at 31 December 2021. The figure comprises land and buildings (EUR 5.4 billion), the right of use (EUR 3.2 billion), assets leased by specialised financing companies (EUR 31.1 billion) and other tangible assets (EUR 6 billion).

The net book value of tangible operating assets and investment property amounted to EUR 29.2 billion, representing only 2% of the consolidated balance sheet at 31 December 2021.

Accordingly, due to the nature of Societe Generale’s activities, property and equipment are not material at Group level.

On 6 January 2022, the Group announced the signing by Societe Generale and ALD of two Memorandums of Understanding under which ALD would acquire 100% of LeasePlan from a consortium led by TDR Capital. The proposed transaction is expected to close by the end of 2022.

On 1 February 2022, Societe Generale announced that Boursorama had signed a Memorandum of Understanding (MOU) with ING to offer ING’s online banking customers in France the best alternative banking solution, with adedicated customer journey and support conditions. The two parties intend to reach a final agreement by April 2022.

On 3 March 2022, Societe Generale issued an update on the Group’s situation in Ukraine and Russia. Societe Generale continues a detailed monitoring of the situation in Russia and Ukraine and is supporting its clients and all its employees to the highest degree possible.

Societe Generale is also rigorously complying with all applicable laws and regulations and is diligently implementing the measures necessary to strictly enforce international sanctions as soon as they are made public.

At the time of writing, the Group states that: