SOCIETE GENERALE SFH HOME LOAN COVERED BOND PROGRAMME INVESTOR - PowerPoint PPT Presentation

SOCIETE GENERALE SFH HOME LOAN COVERED BOND PROGRAMME INVESTOR PRESENTATION MAY 2011

DISCLAIMER This document may contain a number of forecasts and comments relating to There is a risk that these projections will not be met. Investors are advised to the targets and strategies of the Societe Generale Group. These forecasts take into account factors of uncertainty and risk likely to impact the are based on a series of assumptions, both general and specific, notably - operations of the Group when basing their investment decisions on unless specified otherwise - the application of accounting principles and information provided in this document. methods in accordance with IFRS as adopted in the European Union, as Unless otherwise specified, the sources for the rankings are internal. well as the application of existing prudential regulations. The Group’s quarterly results at 31 March 2011 were reviewed by the Board This information was developed from scenarios based on a number of of Directors on 4 May 2011. economic assumptions for a given competitive and regulatory environment. The financial information presented for the first quarter 2011 has been The Group may be unable: prepared in accordance with IFRS as adopted in the European Union and - to anticipate all the risks, uncertainties or other factors likely to affect its applicable at this date. This financial information does not constitute a set of business and to appraise their impact on its operations; financial statements for an interim period as defined by IAS 34 "Interim - to precisely evaluate the extent to which the occurrence of a risk or a Financial Reporting". Societe Generale’s management intends to publish combination of risks could cause actual results to differ materially from those condensed half-yearly consolidated financial statements for the six-month provided in this presentation. period ending 30 June 2011. | P.2

CONTENTS CHAPTER 01_ EXECUTIVE SUMMARY CHAPTER 02_ SG GROUP CHAPTER 03_ SG’s FUNDING STRATEGY CHAPTER 04_ FRENCH HOME LOAN BUSINESS CHAPTER 05_ SG SFH COVERED BOND PROGRAMME ���������� �� ����������������������������� �� ������������������������������� �� ��������������� | P.3

EXECUTIVE SUMMARY • SG Group: a major player in the French retail banking market � SG Retail Network has 8.5 millions of clients � EUR 52.3bn home loans outstanding to individuals, i.e. about 7% of the French home loan market SG SFH: a new covered bond issuer for SG Group • � Expected AAA (Fitch) / Aaa (Moody’s) rated issuances with hard bullet maturities � Full recourse obligations against Société Générale long term rated Aa2 / A+ / A+ and a high quality cover pool � Robust legal framework: SG SFH is a credit institution licensed and regulated by the Autorité de Contrôle Prudentiel (the French banking supervisor) – articles L.515-14 to L.515-32-1 and L.515-34 to L.515-39 from the Code Monétaire et Financier � Under supervision of a Specific Controller � EUR 25bn program, listed in Paris • SG SFH: high quality cover pool � Only French Home Loans originated by SG Retail Network and guaranteed by Crédit Logement � Cover Pool with highly seasoned with WA current LTV lower than 60% � Geographic concentrations in the wealthiest French regions (Ile de France, Provence-Alpes-Côte d’Azur and Rhône-Alpes) | P.4

CONTENTS CHAPTER 01_ EXECUTIVE SUMMARY CHAPTER 02_ SG GROUP CHAPTER 03_ SG’s FUNDING STRATEGY CHAPTER 04_ FRENCH HOME LOAN BUSINESS CHAPTER 05_ SG SFH COVERED BOND PROGRAMME ���������� �� ����������������������������� �� ������������������������������� �� ��������������� | P.5

GOOD START TO THE YEAR • Solid overall performance of business lines � French Networks: good quarter � International Retail Banking: contribution reduced by EUR -59m in Q1 11 due to the situation in Sub- Saharan Africa and the Mediterranean Basin � Corporate and Investment Banking: revenues up reflecting solidity of business model � Specialised Financial Services and Insurance, Global Investment Management and Services: on-going recovery in results • Impact linked to the improvement of credit spread: EUR -362m on NBI, EUR -238m on Group Net Income • Cost of risk continues to fall across all businesses • Strong capital generation +30bp vs. Q4 10: Tier 1 ratio of 10.8% (a) , Core Tier 1 of 8.8% � Group Net Income of EUR [0.9]bn, GNI excluding non-economic items of EUR [1.2]bn (a) Excluding floor effects (additional capital requirements with respect to floor levels) NB: Excluding non-economic items: revaluation of credit derivative instruments used to hedge corporate loan portfolios and revaluation of own financial liabilities | P.6

SG GROUP CONSOLIDATED RESULTS Q1 2011 Change Q1 vs Q1 In EUR m Q1 10 Q4 10 Q1 11 +0.6% -0.9%* Net banking income 6,581 6,857 6,619 • Excluding non-economic items Net banking income and PEL/CEL: (excl. non-economic items 6,485 6,722 6,988 +7.8% and PEL/CEL) � Good NBI momentum +7.8% � C/I ratio under control 62.6% +9.4% +9.2%* Operating expenses (4,001) (4,440) (4,376) � ROE 11.4% -13.1% -16.4%* Gross operating income 2,580 2,417 2,243 � Strong Group Net Income -22.4% -23.3%* Net allocation to provisions (1,132) (1,100) (878) growth: +16.0% vs. Q1 10 -5.7% -11.0%* Operating income 1,448 1,317 1,365 Group net income 1,063 874 916 -13.8% -19.3%* Group net income (excl. non-economic items 1,000 785 1,160 +16.0% and PEL/CEL) ROE (after tax) 11.1% 8.4% 8.8% ROE (after tax and excl. non-economic items 10.4% 7.5% 11.4% and PEL/CEL) * When adjusted for changes in Group structure and at constant C/I ratio exchange rates Excluding non-economic items: revaluation of credit derivative (excl. non-economic items 61.7% 66.0% 62.6% instruments used to hedge corporate loan portfolios and revaluation of and PEL/CEL) own financial liabilities | P.7

NBI INCREASING ACROSS ALL THE BUSINESSES ∆ ∆ ∆ ∆ Q1 11 vs. Q1 10 At constant structure and exchange rates NBI* in EUR bn +7.8%* 6.0 4.4 5.3 6.5 7.0 Total FRENCH NETWORKS +7.3%* 2.0 INTERNATIONAL RETAIL 1.9 BANKING 1.7 1.8 CORPORATE AND 1.2 +0.5% 1.2 INVESTMENT BANKING 0.8 1.8 1.2 SPECIALISED FINANCIAL +6.3% SERVICES AND INSURANCE 1.9 2.3 2.1 1.1 1.2 PRIVATE BANKING, GLOBAL 0.2 0.6 INVESTMENT MANAGEMENT & +2.8% 0.8 0.9 0.8 0.7 SERVICES 0.9 0.7 0.6 +15.1% 0.6 0.5 CORPORATE CENTRE 0.0 0.0 -0.1 -0.1 (EXCLUDING NON-ECONOMIC ITEMS) -0.3 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 * Excluding non-economic items: revaluation of credit derivative instruments used to hedge corporate loan portfolios and revaluation of own financial liabilities and PEL/CEL Note: Q1 07 for reference (no “non-economic” items), reclassification was carried out starting Q1 08 | P.8

LOWER COST OF RISK ACROSS ALL THE BUSINESSES • French Networks Cost of risk (in bp)* � Marked fall Q2 10 Q3 10 Q4 10 Q1 10 Q1 11 • International Retail Banking: 54 52 49 significant drop 46 40 FRENCH NETWORKS � EUR -50m provision established for countries 225 194 in Sub-Saharan Africa and the Mediterranean 192 174 174 Basin INTERNATIONAL RETAIL BANKING � Reduction in Russia and in Czech Republic � Stabilisation in Romania 8 12 10 4 0 CORPORATE AND � Level remains high in Greece INVESTMENT BANKING (excluding legacy assets) • Corporate and Investment Banking 237 234 221 193 � Low cost of risk 155 SPECIALISED FINANCIAL SERVICES 91 87 AND INSURANCE 77 77 • Specialised Financial Services and 70 Insurance GROUP** � Strong improvement Net allocation to provisions • Group doubtful loan coverage ratio** (in EUR m) (72% in Q1 11 stable vs.Q4 10) GROUP** 918 913 810 823 782 * Annualised, excluding disputes CIB legacy assets 214 97 108 277 96 ** Excluding CIB legacy assets | P.9

ROBUST FINANCIAL STRUCTURE (1/2) Change in Tier 1 Ratio* +33 bp -9 bp 10.8% +7 bp -9 bp +7 bp • Substantial capital generation driven by 10.6% Provision Internal Legacy asset for 2.0% strong income: +33bp in Q1 11 Net income Other portfolio growth of dividend 2.1% businesses • Risk-Weighted Assets: EUR 333.3bn 8.5% (-0.5% vs. end-2010) � Strict management of volumes 8.5% 8.8% • Legacy asset portfolio optimised Core Tier 1 � Disposals and amortisations totalling Hybrid capital EUR 1.9bn in Q1 11 31 Dec. 2010 31 March 2011 � Restructurings of CDO of RMBS representing Change in RWA and Tier 1 (in EUR bn) a cumulative capital relief of up to EUR 0.8bn(**) under Basel III 36.1 35.4 335 333 13 RWA 15 6.9 6.8 � Tier 1 ratio of 10.8%* and 47 47 MARKET Core Tier 1 of 8.8% at end-March 2011 OPERATIONAL CREDIT 29.4 275 272 28.5 Capital HYBRID CORE TIER 1 * Excluding floor effects (additional floor capital requirements): -11 bp on Tier 1 ratio 31 March 2011 31 Dec. 2010 ** Net of negative P&L impact and assuming all underlying asset in the CDOs are sold | P.10