Societe Generale, 160 years of global financial leadership

Societe Generale (SocGen), a global banking conglomerate, boasts a 160-year history, dating back to its 1864 founding in France. Established by industrialists and financiers to boost trade and industry, its founding decree was signed by Napoleon III on 4 May 1864. Today, Societe Generale stock reflects its enduring legacy and influence in global finance.

Societe Generale’s main focus was transforming the economy, creating a banking enterprise driven by modernity and financial innovation. From 1870 to 1940, the bank’s network of branches grew rapidly across the country, increasing from 46 branches to 1500.

Notably, the bank emerged as the foremost French credit institution in terms of deposits during the period between the two world wars. SocGen also moved to advance its international presence by funding critical infrastructure for the economic progress of countries in Latin America, North Africa, and Europe.

Together with this expansion, Societe Generale established a global retail network. It was among one of the first French banks to open a branch in London in 1871, and in Russia, before expanding into the Maghreb, New York, Latin America, Senegal and the Ivory Coast. It also acquired stakes in various financial institutions across Central Europe.

On 2 December 1945, the French government nationalised SocGen and the bank played a crucial role in rebuilding the country after WW2.

SocGen achieved great success during the post-war era, especially by embracing new banking technologies and introducing a variety of innovative products and services for businesses.

These included medium-term discountable credit and lease financing agreements, through which it established itself as the market leader.

It was in 1987 that SocGen became privatised, with a successful stock market launch, offering Societe Generale stocks to Group staff. A universal banking strategy was implemented, with a focus on the bank’s Corporate and Investment Banking division, and in France, it expanded its retail banking networks through the founding of Fimatex in 1995 and acquiring Crédit du Nord in 1997.

SocGen also became operational in Central and Eastern Europe, more specifically in the Czech Republic through Komerční Banka, in Romania via BRD, and in Russia through Rosbank. It also expanded further in Morocco, Côte d’Ivoire, Cameroon and other countries in Africa.

Today, SocGen has 126k employees in 65 countries serving 25 million clients daily.

Market capitalisation and shareholding

Societe Generale is listed on the Euronext Paris under the ticker symbol #SOGN. The bank’s market cap as of 20 September stands at €18.07 billion, with revenue of €24.01 billion and a net income of €2.52 billion.

As of 31 December 2023, the breakdown of capital for shareholders is as follows: Employee shareholding through savings plans accounts for 9.84% of the capital stock. BlackRock, Inc. owns 5.80% of the capital stock, while The Capital Group Companies, Inc. holds 2.27%. Amundi controls 3.42% of the capital, and Caisse des Dépôts et Consignations has a 2.46% stake. BNPP AM holds 2.91% of the capital stock. The free float represents the majority, with 72.44% of the capital stock, and share buybacks account for 0.84%. This totals 100% of the capital stock.

SocGen also operates an American Depositary Receipt (ADR) program, effective since 1 July 1993. Under this program, 5 ADRs represent 1 Societe Generale stock, and the ADRs are traded on the New York market, specifically in the OTC segment. The ADRs are identified by the ticker symbol “SCGLY” and have a Cusip number of 83364L109. The Bank of New York serves as the authorised agent for the program.

Quarterly results on 30 June 2024

The company reported quarterly revenues of €6.7 billion, marking a 6.3% increase compared to Q2 2023. This growth was fuelled by a strong performance in Global Markets and Transaction Banking, along with rising margins at Ayvens and a recovering net income in France, despite challenges from deposit beta and slower loan origination.

Operating expenses grew modestly by 2.9%, or 0.7% when adjusted for perimeter and exchange rates, leading to positive jaws. The cost-to-income ratio improved to 68.4%, a 2.2 percentage point enhancement capered to Q2 2023.

The cost of risk rose to 26 basis points, with provisions on performing loans standing at €3.2 billion. The group’s net income surged by 24% to €1.1 billion, achieving a return on tangible equity (ROTE) of 7.4%.

Half-year results

For the half-year results, net banking income reached €13.33 billion, up 2.9% from H1 2023, while operating expenses remained relatively flat at €9.55 billion. The gross operating income increased by 9.2%, though the net cost of risk more than doubled. Group net income for H1 2024 stood at €1.79 billion, showing a slight increase of 1.4%. The return on equity (ROE) for the quarter was 5.1%, while the cost-to-income ratio improved to 71.6%.

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