Financial reports
18.02.10 - Group Full-year and Q4 results 2009
A transitional year: realignment of the businesses and reduction of the risk profile
- Revenues of core businesses: EUR 24.9bn (+26.8% vs. 2008)
- Cost to income ratio: 72.6%
- Cost of risk: 117 bp**
- Tier 1 Ratio (Basel II): 10.7% o/w 8.4% Core Tier 1
- Earnings per share: EUR 0.45 (vs. EUR 3.20(1) in 2008)
- Proposed dividend: EUR 0.25 per share (vs. EUR 1.2 per share in 2008)
- Scrip dividend option
Fourth quarter 2009: Positive net income despite losses on legacy assets
- Revenues of core businesses: +29.9% vs. Q4 08
- Cost of risk: 119 bp**
- Gross operating income: EUR 1.1bn
- Group net income: EUR 0.22bn
At its February 17th 2010 meeting, the Board of Directors of Societe Generale approved the Group’s financial statements for the 2009 financial year, with Group net income of EUR 0.68 billion (EUR 0.22 billion in Q4).
Against the backdrop of an historic economic and financial crisis in terms of its scale and duration, 2009 will have been a year of very severe recession in virtually all the developed economies. The swift reaction of governments and central banks helped alleviate the negative effects of the recession and stabilise the level of activity from mid-2009.
Acknowledging the new economic and banking environment in the process of taking shape, Societe Generale adopted 4 priorities:
1. Maintaining a high level of commitment to its customers, particularly in France where, during a year of recession, the Group grew its loans to the economy by +3.1%. Accordingly, Societe Generale posted generally satisfactory commercial performances in all its core businesses: approximately 100,000 new current accounts opened for individual customers in France, 2.0%2 revenue growth in the French Networks, resilience of International Retail Banking, market share gains in Corporate and Investment Banking. These good performances are guarantees of the Group’s future development.
2. Realigning the businesses most directly affected by the crisis: retail banking platform in Russia, peripheral consumer credit operations, asset management with the setting up of the Amundi JV with Crédit Agricole, reduction of Corporate and Investment Banking risks.
3. Implementing changes to its management bodies and strengthening its balance sheet primarily through the successful EUR 4.8 billion capital increase in autumn 2009.
4. Establishing the milestones for a far-reaching plan to transform the company, made necessary by the crisis and the new requirements that will affect the banking sector.
The cost of the crisis had a significant impact in 2009:
- The commercial cost of risk amounted to EUR 4.4 billion in 2009. It increased significantly for SME customers in France and in emerging countries but remained at remarkably low levels for individual customers in France and for multinational corporates.
- EUR 4.3 billion of losses, write-downs and provisions were recorded in 2009 on assets acquired by Corporate and Investment Banking between 2005 and 2007. They were due primarily to the deterioration in US residential real estate.
The Board of Directors has decided to propose a dividend of EUR 0.25 per share for 2009 to the Annual General Meeting. It has also decided to propose a scrip dividend.
Commenting on the Group’s full-year results, Frédéric Oudéa – Chairman and CEO – stated: “Societe Generale’s 2009 operating results testify to its ability to deal with a serious financial and economic crisis. The Group has adopted a proactive approach to support its customers and finance the French economy. It has initiated the transformation of its businesses and operating methods. With its diversified business portfolio (on both a geographical and sector basis), a robust financial structure and the realignment measures implemented in 2009, the Group has strengthened its universal banking model and prepared itself to seize any development opportunities. Confident of its ability to bounce back, the Group will continue during 2010 with the process of transforming and adapting the company to a changing economic and regulatory environment.”
* When adjusted for changes in Group structure and at constant exchange rates
** Cost of risk excluding litigation issues and Legacy assets
(1) Restated by the adjustment coefficient, in accordance with IAS 33.
(2) Restated for the PEL/CEL provision and Visa capital gain recorded in 2008
