Founded in 1864 and based in Paris, Société Générale is one of the oldest French banks. For over 150 years, the group has remained a major player in the real economy with a strong presence in Europe and the rest of the world. The company has more than 138,000 employees in 66 countries worldwide. In 2020, the bank was not spared the adverse effects of the Covid-19 health crisis. It recorded its first annual loss for at least 30 years. However, the bank was able to recover from the start of the 2021 financial year.
In the fourth quarter of 2021, Societe Generale saw its net banking income (NBI) rise by 13% to €6.62 billion. Over the twelve months of this year, annual NBI reached EUR 25.8 billion. 25.8 billion, an increase of 17% compared to the previous year. Analysts were expecting an average annual net result of 4.18 billion euros. Revenues were then expected to amount to 25.23 billion euros.
In the fourth quarter of 2021 alone, Societe Generale was able to achieve a net profit of €1.79 billion, compared to €470 million in the same period in 2020. The underlying result was also almost doubled during this period to 1.23 billion euros. Similarly, for the whole of the 2021 financial year, the net result reached 5.64 billion euros. This is a significant improvement after the loss of €258 million in 2020.
In terms of revenues, between October and December 2021, Societe Generale recorded an increase of 8.4%. Growth is then increased to 4.8% in 2021. The recovery of the net interest margin and financial fees actively supported the business during this period.
Internationally, organic growth reached 9.9% for the year 2021 and 10.3% especially for the last quarter.
Between October and December 2021, the net cost of risk (corresponding to allocations to and reversals of provisions on all banking credit, counterparty and operational risks) fell by 6 basis points of outstanding loans, compared with 60 basis points at the end of 2020.
At the end of December 2021, the CET1 capital ratio is 13.7% of risk-weighted assets. This is 470 basis points above the regulatory requirements. For 2022, the bank announces a still low cost of risk. It will be less than 30 basis points after the average of 13 basis points in 2021.
Financial situation in the first quarter of 2022
According to the financial results released on 5 May 2022, Societe Generale is in good financial health. The company continues its growth momentum with a strong increase in revenues at the end of the first quarter of 2022. Revenues are up 16.6% compared to Q1-21. There was also a good performance across all business lines. These include market activities, financial services and financing activities.
Over this period, the cost/income ratio was 56.4%. The cost of risk was 39 basis points higher than forecast. It was expected to be between 30 and 35 basis points. However, excluding the Russian assets being sold, the cost of risk for the quarter was 31 basis points, in line with expectations.
Underlying net profit attributable to the group was €1.57 billion, up 21.3% on the same period last year. At the end of March 2022, the CET1 ratio was 12.9%, some 370 basis points above the regulatory requirement. The expected residual net capital impact is about -6 basis points once the bank's planned disposal of the Russian business is finalised.
Societe Generale's Annual General Meeting of Shareholders was held on 17 May 2022 at Paris-Expo - Porte de Versailles - Hall 5.1, chaired by Mr. Lorenzo Bini Smaghi. At this meeting, the Board of Directors of the bank proposed the distribution of a dividend of 1.65 euro per share in cash for the financial year 2021, compared to 0.55 euro in 2020.
In addition, an additional distribution equivalent to 1.10 euro per share will be made. This new distribution will come from a new share buy-back plan. The amount is approximately 915 million euros.
It must be acknowledged that in 2021, Societe Generale recorded its best financial results since its creation. Therefore, with the profitability achieved, it is normal to offer shareholders a good return.
Furthermore, Societe Generale has a strong presence in the financial markets. It is a very popular stock with investors on the stock markets. The company is listed on the Paris stock exchange. It is also included in the French CAC 40 stock market index. As of October 2021, its market capitalisation is estimated at €24.05 billion.
As a European financial services group, Societe Generale is one of the pioneers in its sector. As for its customers, more than 26 million trust the bank and benefit from its daily support. They are spread across 66 countries around the world.
The continents targeted by Société Générale are, in addition to Europe, Asia, America and Africa. Its strategic geographical position facilitates the development of services on an international scale. The group's main missions are: protection and management of savings, project financing and support for customers in their activities. Societe Generale stands out for the security of its exchanges with its employees and the technological solutions it offers.
To succeed in its missions, Societe Generale relies on 4 fundamental values. These are innovation, responsibility, commitment and team spirit. All these values are put into practice in each of the group's activities.
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