(AOF) – Societe Generale’s Board of Directors will submit four appointments of directors to the vote of the combined general meeting of shareholders of May 23, 2023. These appointments will take place while the directorships of Frédéric Oudéa, Kyra Hazou, Gérard Mestrallet and Juan Maria Nin Génova will end. The Board of Directors proposes to appoint Slawomir Krupa as a director for a term of four years. Once elected, Slawomir Krupa will be appointed Managing Director by the Board of Directors.
The functions of Chairman and Chief Executive Officer will continue to be separated.
The Board of Directors proposes to appoint Béatrice Cossa-Dumurgier as an independent director, for a period of four years. Aged 49 and of French nationality, Béatrice Cossa-Dumurgier will bring retail banking and digital expertise to the Board. She is an independent director of Casino and Peugeot Invest. She is currently Deputy CEO of Believe.
It also proposes to appoint Ulrika Ekman as an independent director, for a period of four years. Aged 60, of Swedish and American nationality, Ulrika Ekman will bring her legal expertise to the Board. She was previously a partner at the US law firm Davis Polk & Wardwell LLP. She then held various positions at Greenhill & Co, an American investment bank, including General Counsel. She is currently a member of the Board of Directors of Greenhill & Co.
Finally, the Board of Directors proposes to appoint Benoît de Ruffray as an independent director, for a period of four years. Aged 56 and of French nationality, he will bring international and industry expertise to the Board. Benoît de Ruffray has been Chairman and CEO of Eiffage since January 2016.
AOF – LEARN MORE
Key points
– Bank born in 1864, one of the leading European financial services groups;
– Net banking income of €25.8 billion generated by retail banking in France – Societe Generale, Crédit du Nord and Boursorama brands, international retail banking, financial services and insurance, then wholesale banking clientele and investor solutions;
– Capital characterized by the presence of employee shareholders (6.65% and 11.9% of voting rights), with a board of 16 directors chaired by Lorenzo Bini Smaghi, the general management being ensured by Frédéric Oudéa until May 23 2023 then by Slawomir Krupa;
– Solid balance sheet with €66.5 billion in equity, a CET 1 ratio of 13.5%, a liquidity coverage ratio of 141%, a leverage ratio of 4.4%.
Challenges
– Vision 2025 strategy, based on the merger with Crédit du Nord, local roots, responsiveness, adaptation to customer needs and responsibility: annual revenue growth of at least 3%, operating ratio raised to 62% and return on capital employed at 10% based on a target CET 1 ratio of 12%;
– Innovation strategy rooted in the group’s DNA, focused on the emergence of a data-driven bank via artificial intelligence:
– 200 M€ of annual value creation via data and AI,
– 8/10ths of servers in the cloud (2025 “second generation” cloud objectives, including 50% in private cloud and 25% in public cloud,
– new business models – Shine for individual customers, Forge for digital bonds, reezocar for vehicle rental and treezor, payment platform and digital currencies;
– 2025 environmental strategy aiming to become the world leader in sustainable finance with 3 axes:
– integration of environmental criteria in all businesses: 100% responsible savings offer, support for customers in their energy transition, etc.,
– commitment to sustainable transition: financing of €300 million, assets of €150 billion, reduction in 2025 to less than 20% of global exposure to oil & gas extraction (vs 2019) and complete exit from thermal coal from by 2030-40,
– 30% reduction in CO2 emissions by 2030 vs 2019 for the entire value chain;
– Acceleration of the development of Boursorama (4.7 million customers) and birth of global players in mobility (purchase of LeasePlan by the subsidiary ALD) and equity businesses (purchase of Bernstein).
Challenges
– Net assets per share of €62.3, to be compared with the market price;
– Impact of the Russia-Ukraine war: disposal of the stake in Rosbank resulting in an impact of €3.6 billion on net income (€5.6 billion underlying);
– Expectations for 2023: a year of transition with a sharp increase in the cost/income ratio between 66 and 68% and a cost of risk of 30 to 35 basis points;
– 2022 dividend of €1.7 and action program of €44O million.
The negative effects of rising interest rates
The rise in interest rates normally causes an increase in bank income through the loans granted. In Europe, according to a survey conducted by S&P among 85 banking establishments, the sector expects an average increase of 18% in its net interest income. However, this new inflationary context also has undesirable effects, in particular an increase in refinancing costs. It is also accompanied by the fear of a new recession, which would then affect all the bank’s businesses, ranging from loans to asset management, whose income is correlated to market valuations. Reassuring element: the banks of the euro zone are sufficiently solid to face a deterioration of their environment.