QUARTERLY FINANCIAL INFORMATION

Paris, August 2nd, 2017

Q2 17: SOUND RESULTS

  • Stable net banking income for the businesses (EUR 6,392m, -0.5% vs. Q2 16), with the substantial growth in International Retail Banking & Financial Services offsetting the decline in

    Global Banking & Investor Solutions (-4.3% vs. Q2 16) compared with the high level in Q2 16, and the slight fall (-1.8%(1) vs. Q2 16) in French Retail Banking.

  • Group book net banking income, including non-economic items, of EUR 5,199m, down -25.6% vs. Q2 16 (base effect in Q2 16 related to the capital gain on the Visa sale (EUR 725m) and the impact of the settlement with the Libyan Investment Authority (LIA) signed in Q2 17 for EUR -963m, booked in the Corporate Centre).

  • Operating expenses under control, +1.2% vs. Q2 16.
  • Commercial cost of risk(2) of 15bp in Q2 17 (38bp in Q2 16) reflecting the improvement in the Group's risk profile. Net cost of risk including a net write-back of EUR 450m in respect of the provision for disputes.

  • Book Group net income of EUR 1,058m in Q2 17 (EUR 1,461m in Q2 16).

  • Underlying Group net income(3) up +11.0% at EUR 1,165m in Q2 17 (EUR 1,050m in Q2 16).

  • Fully-loaded CET1 ratio of 11.7% (11.6% at March 31st, 2017)

    H1 17: GOOD HALF-YEAR RESULTS
  • Net banking income for the businesses of EUR 12.9bn (+1.7% vs. H1 16)
  • Operating expenses contained (+2.2% vs. H1 16 excluding Euribor fine refund in Q1 16)

  • Book Group net income of EUR 1,805m (EUR 2,385m in H1 16)

  • Underlying Group net income(3) of EUR 2,551m, up +32.6% in H1 17 (EUR 1,924m in H1 16)
  • Underlying ROE(3) of 9.5% (7.5% in H1 16)
EPS(4): EUR 2.12 in H1 17 (EUR 2.77 in H1 16). Provision for dividend of EUR 1.10/share

The Alternative Performance Measures, notably the notions of net banking income for the pillars, operating expenses, IFRIC 21 adjustment, (commercial) cost of risk in basis points, ROE, RONE, net assets, tangible net assets, EPS excluding non-economic items, and the amounts serving as a basis for the different restatements carried out (in particular the transition from accounting data to underlying data) are presented in the methodology notes, as are the principles for the presentation of prudential ratios. The footnotes * and ** in this document are specified below:

* When adjusted for changes in Group structure and at constant exchange rates.

** Excluding non-economic items.

  1. Excluding PEL/CEL provision.

  2. Excluding disputes, in basis points for assets at the beginning of the period, including operating leases. Annualised calculation.

  3. See methodology note 5 for the transition from accounting data to underlying data.

  4. Excluding non-economic items (gross EPS in H1 17: EUR 1.94 and EUR 2.71 in H1 16)

S oc i et e Ge ne ral e pr es s c ont ac t - f r - r e l a t i o n s - m e d i a s @ s o c g e n . c o m - + 33 ( 0 ) 1 4 2 14 67 02

1 A F R E N C H C O R P O R A T I O N W I T H S H A R E C A P I T A L O F E U R 1 , 0 0 9 , 6 4 1 , 9 1 7 . 5 0 - 5 5 2 1 2 0 2 2 2 R C S P A R I S

Societe Generale's Board of Directors, which met on August 1st, 2017 under the chairmanship of Lorenzo Bini Smaghi, examined the results for H1 and Q2 2017.

Book Group net income amounted to EUR 1,058 million in Q2 2017 (EUR 1,461 million in Q2 2016) and EUR 1,805 million in H1 2017 (EUR 2,385 million in H1 2016).

These results include non-economic items and exceptional items whose impact on the different components of the results is detailed in note 5. When corrected for these items and the additional

charge in respect of the linearisation of the impact of IFRIC 21, underlying

Group net income

totalled EUR 1,165 million in Q2 2017, up +11.0% vs. Q2 2016. Underlying Group net income was up

+32.6% at EUR 2,551 million in H1 2017 (EUR 1,924 million in H1 2016), as was underlying ROE (9.5% in H1 2017 vs. 7.5% in H1 2016).

The Societe Generale Group

delivered a good performance in all its businesses in Q2 2017.

International Retail Banking & Financial Services enjoyed strong revenue growth (NBI up +6.2% vs. Q2 2016), whereas French Retail Banking, still adversely affected by the low interest rate environment, saw a moderate decline (-1.8% excluding PEL/CEL provision vs. Q2 2016) and Global Banking & Investor Solutions a limited decline of -4.3% vs. Q2 2016 which benefited from a more favourable market environment than in Q2 2017.

Book net banking income totalled EUR 5,199 million in Q2 2017 (EUR 6,984 million in Q2 2016) and EUR 11,673 million in H1 2017 (EUR 13,159 million in H1 2016). Underlying net banking income amounted to EUR 6,389 million in Q2 2017 (down -1.3% vs. Q2 2016) and EUR 12,841 million in H1 2017 (up +2.7% vs. H1 2016).

Operating expenses were up +1.2% in Q2 2017, reflecting on the one hand, the acceleration of investments in the transformation of French Retail Banking and efforts to support the rapid growth of International Retail Banking & Financial Services and, on the other, the effects of Global Banking & Investor Solutions' cost savings plans. Underlying operating expenses increased in a controlled manner to EUR -8,500 million in H1 2017 (up +1.7% vs. H1 2016).

The net cost of risk (excluding net change in the provision for disputes) was at the low level of EUR -191 million in Q2 2017, a substantial decline vs. Q2 2016 (EUR -464 million). The commercial cost of risk stood at the very low level of 15 basis points in Q2 2017 (38 basis points in Q2 2016). The provision for disputes was the subject of a net write-back in the income statement of EUR 450 million consisting of a write-back of EUR 750 million intended to cover, in Group net income, the impact of the LIA settlement, and an additional allocation of EUR 300 million.

The Common Equity Tier 1 (fully-loaded CET1) ratio was 11.7% at June 30th, 2017 (11.6% at March 31st, 2017). It includes, in particular, the impact of operations to optimise the portfolio (primarily the stock market floatation of ALD, disposal of Splitska Banka and acquisition of 50% of the capital of Antarius) and a provision for dividend of EUR 1.10 per share.

Earnings Per Share, excluding (EUR 2.77 at end-June 2016).

non-economic items, amounts to EUR 2.12

at end-June 2017

Commenting on the Group's results for H1 2017, Frédéric Oudéa - Chief Executive Officer - stated:

"In a mixed economic and financial environment, Societe Generale posted sound Q2 results, confirming the good commercial and operating performances achieved by the businesses at the beginning of the year and the relevance of its diversified and integrated banking model. The Group's revenues were driven in particular by the growth in International Retail Banking & Financial Services, while profitability increased due to cost and risk control. The Group also continued to optimise its portfolio of activities with, in particular, the acquisition of 50% of the capital of Antarius and the stock market floatation of ALD. Societe Generale is actively preparing the next stage of its strategy which will be presented in November, based on the Group's new governance, both more agile customers, implemented as from September." and closer to our

Q

1

1. GROUP CONSOLIDATED RESULTS

In EUR m

Net banking income

2 17

Q2 16 Change

H1 17

H1 6 Change

5,199

6,984 -25.6% -26.0%*

11,673

13,159 -11.3% -12.1%*

Net banking income(1)

5,426

7,195 -24.6% -25.0%*

11,878

13,225 -10.2% -11.0%*

Operating expenses

(4,169)

(4,119) +1.2% +1.5%*

(8,813)

(8,403) +4.9% +4.4%*

Gross operating income

1,030

2,865 -64.0% -65.2%*

2,860

4,756 -39.9% -40.9%*

Gross operating income(1)

1,257

3,076 -59.1% -60.2%*

3,065

4,822 -36.4% -37.5%*

Net cost of risk

259

(664) n/s n/s

(368)

(1,188) -69.0% -71.7%*

Operating income

1,289

2,201 -41.4% -42.9%*

2,492

3,568 -30.2% -30.5%*

Operating income(1)

1,516

2,412 -37.1% -38.4%*

2,697

3,634 -25.8% -26.1%*

Net profits or losses from other assets

208

(16) n/s n/s

245

(12) n/s n/s

Impairment losses on goodwill

0

0 n/s n/s

1

0 n/s n/s

Income tax

(302)

(627) -51.8% -53.5%*

(691)

(1,011) -31.7% -32.2%*

Reported Group net income

1,058

1,461 -27.6% -28.3%*

1,805

2,385 -24.3% -24.3%*

Group net income(1)

1,218

1,599 -23.8% -24.4%*

1,951

2,428 -19.7% -19.6%*

ROE (after tax)

.8%

11.7%

6.5%

9.4%

Adjusted ROE(2)

.1%

11.0%

7.4%

10.1%

7 7

  1. Adjusted for revaluation of own financial liabilities and DVA

  2. Corrected for the effect of the implementation of IFRIC 21 and the refund of the Euribor fine in Q1 16 amounting to EUR 218 million

Net banking income

The Group's book net banking income totalled EUR 5,199 million in Q2 17 (EUR 6,984 million in Q2 16) and EUR 11,673 million in H1 17 (EUR 13,159 million in H1 16).

Underlying net banking income

was slightly lower (-1.3%) at EUR 6,389 million in Q2 2017. It

amounted to EUR 12,841 million in H1 17 (EUR 12,500 million in H1 16).

Net banking income for the businesses was stable at EUR 6,392 million in Q2 17 (EUR 6,426 million in Q2 16).

  • French Retail Banking's net banking income was slightly lower (-1.8% excluding PEL/CEL provision) in Q2 17 than in Q2 16. This trend reflects the decline in net interest income (-6.6% vs. Q2 16), still adversely affected by a low interest rate environment, and the continued increase in commissions illustrating the gradual transition to a more fee-generating model (+5.0% vs. Q2 16).

  • International Retail Banking & Financial Services' net banking income increased +6.2% (+5.5%*) in Q2 17, driven by the growth of activities in all businesses and geographical regions. In Q2 17, International Retail Banking revenues climbed +5.1% (+7.1%*) underpinned by a strong commercial momentum, Insurance revenues rose +4.9%* and Financial Services to Corporates' revenues were slightly higher (+1.5%*).

  • Global Banking & Investor Solutions' revenues were down -4.3% in Q2 17 vs. Q2 16, which represented a high comparison base. Global Markets and Investor Services declined -3.1%, with a contrasting trend between Fixed Income, Currencies & Commodities adversely affected by an unfavourable environment (-6.8% vs. Q2 16) and Equity activities which proved more resilient (-3.3% vs. Q2 16). Financing & Advisory revenues declined compared to the high level in Q2 2016. In Asset and Wealth Management, net banking income rose +5.5% due primarily to the healthy growth of Lyxor's assets under management.

Société Générale SA published this content on 02 August 2017 and is solely responsible for the information contained herein.
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