As with all French and European banks, certain indicators will be monitored, such as Societe Generale's ability to meet the Basel 3 solvency ratio, which corresponds to 9% of shareholders' equity, as well as its control of its commitments in investment banking, centralisation of derivative compensation, cost of risk and return on equity or ROE.
Of course, the economic environment in which the banking group operates will have an impact on its profitability and all relevant economic data will be monitored.
In addition to this, important decisions and communications from the European Central Bank or ECB, which will of course have a direct influence on the price of this stock as well as on those of other European banks, will be closely monitored.
The development of the online bank Boursorama Banque, created and owned by Societe Generale, will also be an element to be followed with great interest. We therefore advise you to take a closer look at it.
Finally, it is important to keep an eye on the various major competitors of this banking company.
To help you carry out your analysis and with the aim of selling or buying Societe Generale shares, here is a detailed presentation of this company and its activities.
Founded in 1864, Société Générale is one of the major French banking groups. The group offers a wide range of banking and financial services for individuals, businesses and financial institutions. Société Générale's Net Banking Income (NBI) is divided into five major activities.
Corporate and investment banking is Société Générale's major source of income, accounting for 35.9% of NBI. This activity includes specialised financing such as acquisition and project finance, equity, interest rate, foreign exchange and commodity market interventions, equity transactions, as well as M&A advisory.
Retail banking in France is Société Générale's second most important activity, with a 31.5% share of NBI. This activity includes commercial banking services such as current accounts, credit cards and personal loans, as well as online banking and online brokerage services through the subsidiary Boursorama Banque.
International retail banking represents 18.4% of Societe Generale's NBI. This activity includes commercial banking services for individuals and companies in several foreign countries.
Specialised financial and insurance services abroad represent 14.1% of Société Générale's NBI. This activity includes consumer credit, leasing, car fleet management, equipment financing and insurance services in several foreign countries.
Finally, other activities represent a marginal 0.1% of NBI.
At the end of 2022, Société Générale managed €523.9 billion in deposits and €495.6 billion in loans. The geographical breakdown of NBI is as follows: 48.4% in France, 32.4% in Europe, 7.2% in America, 6.6% in Africa and 5.4% in Asia and Oceania.
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We now propose that you take a look at the environment in which the Société Générale group operates and, above all, at its main competitors on the market with the list of the major banking players in France:
First of all, the BNP Paribas banking group is a French bank and the country's leading bank in terms of profitability. It also ranks tenth internationally and operates in 71 countries. It is listed on the Euronext market and is part of the French benchmark CAC 40 stock index. The group was created by the merger in 2000 of Banque Nationale de Paris and Paribas.
The Crédit Agricole Group, formerly known as the Green Bank, is currently the largest network of cooperative and mutual banks in the world. In France, Crédit Agricole is composed of 39 Crédit Agricole regional banks. Since 1990, it is also an international generalist banking group which is listed on the Euronext Premier Marché and is included in the CAC 40 stock market index.
This group is the joint body of the Banque Populaire and the Caisse d'Epargne in France. It was created by the merger in 2009 of the Caisse Nationale des Caisses d'Epargne and the Banque Fédérale des Banques Populaires. The BPCE group is currently the world's second largest cooperative banking institution after Crédit Agricole and includes all the companies that made up these two banking groups.
Crédit Mutuel is a French group that operates in the fields of banking, insurance, electronic banking, telephony, remote surveillance and media. It is a mutualist company made up of 2,100 local cooperative and mutualist banks, grouped into 18 regional federations, which in turn form a national confederation. The group employs 83,000 people and has 5,535 sales outlets.
This French public bank was created in January 2006 and is a subsidiary of the La Poste group. Its distribution network consists of post offices throughout France. It is also the transformed successor of the former CCP, which was created in 1918. Today and for several years, Banque Postale has been gaining more and more market share in France and can therefore represent a threat to Société Générale.
Finally, the HSBC Continental banking group is the last serious competitor of Société Générale in France. It is a French subsidiary of the HSBC banking group which constitutes an international network and a local banking service grouping together all the banks of the former CCF group with UBP, Banque Hervet, Banque Brière, Banque de Baecque Beau among others. While HSBC Continental's head office used to be located on the Champs Elysées, it is now located on rue Kleber in Paris since the end of 2020.
Of course, the Société Générale group does not only have to fear competition but can also count on its partners. Indeed, the banking group regularly sets up strategic alliances with other companies in order to gain in profitability or innovation and we propose to discover two specific examples of this type of partnership:
First and foremost and in 2021, the group signed a strategic partnership with Proparco, a subsidiary of the AFD group with the aim of meeting the needs of VSEs and SMEs affected by the crisis on the African continent. Proparco has put in place an exceptional guarantee for the financing that can be granted. As a long-standing partner of AFD and a key player in private sector financing in Africa, Société Générale is the first financial institution to deploy this mechanism as a partner of Proparco. The guarantee made possible with the support of the French government allows Société Générale's subsidiaries on the African continent to increase their support to entrepreneurs. Cameroon, Côte d'Ivoire, Madagascar and Senegal will be the first countries to benefit from this loan offer guaranteed at 80% by AFD Group.
Earlier in 2020, Société Générale also signed a new 5-year partnership agreement with Amundi to further develop their relationship in the distribution of investment solutions and Securities Services activities. The agreement came into effect in November 2020. Amundi will remain the Group's leading partner for the provision of savings and investment solutions for its retail banking and insurance networks, in an arrangement whose architecture will be open to other asset management companies, and Societe Generale will remain one of Amundi's leading providers of Securities Services.
Knowing the ability of a company to face the future and to face any threats and opportunities that will present itself is undoubtedly essential to study the price of its stock on the stock market. We therefore suggest that you take the time to discover in a little more detail the strengths and weaknesses of the Societe Generale group, in other words, the advantages and disadvantages of its stock market share which should be taken into account before buying or selling Societe Generale shares.
Let's begin this comparative analysis by taking a closer look at the main assets available to the Société Générale group which are all elements likely to support this share in the years to come.
After having toured the main advantages of the Societe Generale group and therefore its strengths for its growth and future development, check out what its main weaknesses are and therefore the disadvantages of its stock market value:
The analysis of these current strengths and weaknesses of Societe Generale should be rechecked whenever needed as these elements may change over time. You will then be able to compare these elements with the threats and opportunities that will present themselves to the group in the years to come and which could influence the evolution of its share price to a greater or lesser extent.
While Societe Generale is part of the CAC 40 stock market index, it also includes other benchmark stock market indices. Its capitalisation is also included in the calculation of the CAC All Shares, CAC All-Tradable, CAC Large 60, Euro Stoxx 50, Euronext 100, Euronext CDP Environnement France EW, Euronext CDP Environnement France Ex Oil, PEA and Stoxx France 50 indices. The price of this share is, of course, listed on compartment A of the Euronext Paris stock exchange.
Currently, in 2020 and based on figures published at the end of 2019, the Societe Generale banking group manages nearly €418.6 billion in outstanding deposits and €450.2 billion in outstanding loans. These data are of course important for your fundamental analyses of this value as they provide indications of the risk incurred by this bank.
Société Générale's share price can be affected by various factors. Like all banks, Société Générale is sensitive to the state of the global economy. If the global economy is in a recession or slowdown, investors may be less inclined to invest in the bank's shares, which may cause the share price to fall. Interest rates have a significant impact on Société Générale's banking business. If interest rates rise, this can make loans more expensive for customers and thus reduce demand for credit, which can affect the bank's profitability and lower its share price. Investors are keeping a close eye on Société Générale's financial results. If the bank publishes results that are below market expectations, this can negatively affect its share price. Finally, any financial or regulatory scandal involving Société Générale can have a negative impact on its share price and tarnish its reputation among investors.
The price of a Société Générale share depends on supply and demand on the stock market. Societe Generale is a publicly traded company, which means that its share price can fluctuate depending on various factors, such as the company's performance, economic conditions, political and geopolitical events, competition in the sector, etc. To find out the current Societe Generale share price, you can consult online stock exchange sites, financial newspapers or your stockbroker. The share price is usually expressed in euros or in the currency of the stock market where it is listed. In recent years, Société Générale shares have cost less than €30. It is important to note that investing in shares involves risks and it is recommended that you consult a professional financial adviser before making any investment decisions.
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