The French banking group reported strong revenue growth across all its business units but swung to a second-quarter net loss from its disposal of Russian assets.
Société Générale has reported net banking income, at €7.1 billion, increased by 12.8% year-on-year (YoY) in the second quarter of 2022.
In global markets & investor services, net banking income totalled €1.7 billion in Q2 2022 – up 25.3% compared the prior year period.
Global markets’ revenues, at €1.5 billion, were up 23.3% YoY, benefiting from dynamic commercial activity in all the businesses and regions in a volatile environment.
The equity activity posted revenues of €833m, an increase of 7.5% versus Q2 2021. “Equities continued to sell, supported by high client demand in equity derivatives and prime services,” said Claire Dumas (pictured), chief financial officer, during the Q2 results webcast on 3 August.
Fixed income & currency (FIC) activities and securities services both posted substantially higher revenues at €683m (+50% vs. Q2 2021) and €226m (+41%), respectively.
Securities services’ assets under custody and assets under administration amounted to €4.3 trillion and €627 billion respectively.
On 18 May 2022, the group withdrew from Russia with the finalisation of the disposal of Rosbank and its insurance subsidiaries in Russia. This disposal resulted in the accounting of a loss in income statement of €3.3 billion before tax.
Offshore exposure to Russia was reduced to €2.6 billion of exposure at default (EAD) at 20 June 2022. The group estimates exposure at risk on this portfolio is less than €1 billion. The total associated provisions were €377m at end-June 2022.
Some 880 publicly offered structured products (excluding flow- and leverage) were issued by the bank in Q2 2022, according to SRP data. They were launched across 12 different jurisdictions and worth an estimated US$6 billion (Q2 2021: US$4.5 billion from 881 products).
The highest activity was seen in the bank’s home market France where it collected an estimated US$5.1 billion from 340 products. Almost half of the French volumes, at US$2.5 billion, came from products linked to single indices, of which the proprietary SBF Top 50 ESG EW Decrement 50 Points Index was the most frequently used (US$663m across 35 products).
Products linked to mutual funds were also in demand (US$1.7 billion from 57 products) with an estimated US$1.2 billion tied in products linked to the Solys Quadrant Europe Fund.
Outside of Europe, SG was the manufacturer behind 111 products that were targeted at private banking clients in Taiwan. They were mainly callables and autocalls linked to either worst-of basket of shares or the interest rate. Local banks and securities houses were responsible for the distribution.
The French group was the number two provider of listed leverage products (by issuance) in Q2 2022, behind J.P. Morgan only, according to SRP data. The bank issued some 144,046 turbo certificates in the quarter, an increase of 38% compared to the same quarter last year (Q2 2021: 104,519 turbos).
Most turbos issued during the quarter were targeted at investors in Germany (129,376). Other countries where turbos were marketed in Q2 2022 include France (9,903), Belgium (3,327), and the Netherlands (2,867).
A further 1,129 warrants and callable bull bear certificates were listed in Hong Kong SAR during this period by the French bank while another 92 leverage products were available for trading in Singapore.
At end-June, the group’s consolidated balance sheet included debt securities issued of €133.7 billion (end-December 2021: €135.3 billion) and an outstanding for hedging derivatives of €32.1 billion (€10.4 billion).
As of 18 July 2022, €33.7 billion of the parent company’s 2022 long term funding programme had been raised, including €14.1 billion of structured notes issuance and €19.6 billion of vanilla debt.
Funding conditions were competitive, and the average maturity was 5.2-years. An additional €1.2 billion was issued by SG subsidiaries. There was an active diversification of the investor base across different currencies (EUR, USD, AUD, CHF, HKD, NOK, CNY, SGD), maturities and types.
Click the link to read the Société Générale Q2 and H1 2022 results, presentation and consolidated financial statements.