27 / 09 / 2004 SOCIETE GENERALE INVESTOR DAY. Introduction. Daniel Bouton

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1 27 / 09 / 2004 SOCIETE GENERALE INVESTOR DAY Introduction Daniel Bouton

2 Disclaimer The following presentation contains a number of forecasts and comments relating to our targets and strategies. These forecasts are based on a series of assumptions, both general and specific. As a result, there is a risk that these projections will not be met. Readers are therefore advised not to rely on these figures more than is justified as the Group s future results are liable to be affected by a number of factors and may therefore differ from current estimates. Readers should take into account elements of uncertainty and risk k when basing their investment decisions on information provided in this presentation. 2

3 Société Générale: increased capital efficiency Over the past 13 years: Capital efficiency: NBI/CWA, GOI/CWA, Cost of risk, and Operating income/cwa NBI: +10% per year Cooke weighted assets: +5% per year GOI/CWA: +70% Cost of risk: stable at a weighted average of around 60 bp 9% 8% 7% 6% 5% 4% 3% 2% NBI/CWA GOI/CWA Capital efficiency has increased 1% steadily over the years 0% Operating income/cwa Cost of risk H1 04 3

4 Société Générale: growth, synergies and diversification Allocation of capital to the business lines In EUR bn,, based on amount of normative capital allocated + non-amortised goodwill, excluding minority interests Strong cash flow generation Selective use of capital in CIB Increase in capital allocation to Retail Networks, Financial Services and GIMS: Organic growth in domestic Retail Banking and Retail Banking outside France Acquisitions in Retail Banking outside France, GIMS and Financial Services: EUR 4.2bn from 2001 to H Corporate & Investment Banking GIMS Financial Services Retail Banking outside France French Networks 25% 42% 34% H1 04 4

5 Rapid development of a balanced business mix Operating income* * (in EUR m) Profitable and sustained growth in the French Networks Retail Banking outside France Focus and efficiency in Corporate & Investment Banking Financial Services 34% Significant contribution from the Group s 3 new growth drivers Active management of capital Since 1999: generation of EUR 13.3bn of Tier-one capital, allocated to: 26% 39% GIMS Corporate & Investment Banking 32% Organic growth + acquisitions: EUR 6bn Share buybacks + dividends: EUR 7.3bn 35% French Networks 34% Operating income: x1.6 since * Excl. Corporate Centre 5

6 FRENCH NETWORKS French Networks: An effective banking model An efficient distribution platform Leading non-mutual retail bank in France Two complementary networks, one national, one regional Good quality franchise Favourable positioning in high potential customer segments and geographical regions Exploitation of synergies between the three main market segments (individuals, self-employed professionals and businesses) Steady rise in number of products per individual customer current a/c Future growth drivers A more favourable interest rate environment Increased commercial efficiency thanks to a complete range of direct banking channels Rationalisation of middle- and back-office functions (creation of centralised regional offices) Indicators for French Networks Total staff Administrative staff Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 GOI NBI No. customers 15.7% 17.8% 19.0% 19.3% 19.7% 19.4% Annualised rate of growth since 1999 June % +5.5% +4.1% +0.6% -1.1% ROE after tax 6

7 RETAIL BANKING OUTSIDE FRANCE Retail banking outside France: rapid and profitable growth NBI of EUR 1.7bn: 11% of Group NBI in 2003 vs. 4% in 1999 Individual customer base: 5.1m 5.1 million customers vs. 1.4 m in 1999 Year Individual customers Deposits (in EUR bn) m m 11.2 CAGR +35% +21% H m 13.5 Growth in number of individual customers since 1999 Loans (in EUR bn)) % m (net) through organic growth +2.0 m through acquisitions Businesses + professionals 0.2m 0.6m +40% 0.6m Customer deposits: Deposits (in EUR bn) % 13.4 EUR 26.9bn : x 3.2 since 1999 Customer loans: Individual customers: EUR 4.7bn ( x 2.9 since 1999) Loans (in EUR bn) Branches , % +24% ,468 Business customers: EUR 12.0bn (x 2.5 since 1999) Employees 12,100 27, % 29,600 Average number of products per current a/c: 2.5 at end-june 2004 Strong rise in customer contact via direct banking channels and Internet in 2003 and 2004 Net Banking Income (EUR m) Gross Oper. Income (EUR m) ROE Share of Group NBI % 4% 1, % 11% +41% +42% % 12% 7

8 FINANCIAL SERVICES Specialised Financing*: rapid and profitable growth Year CAGR H Outstanding loans (in EUR bn) % 18.9 NBI of EUR 1.3bn: 8% of Group NBI in 2003 vs. 4% in 1999 Individual cust. (cons. loans) Businesses + professionals % +52% Outstanding loans: EUR 18.4bn at end-2003 No. Vehicles under managmt 31, , % 541,469 x 3.4 between 1999 and 2003 No. of countries Number of vehicles under management has almost doubled each year between 1999 and 2004 Employees Net Banking Income (EURm) o/w outside France 3, % 7,580 1,296 60% +25% +29% 7, % 24 countries at end-2003, vs. 7 at end-1999 Gross Oper. Income (EURm) ROE % % +38% % Share of Group NBI 4% 8% 8% * Specialised Financing: includes business finance and services (IT asset leasing and management, equipment finance, operational leasing and fleet management) and consumer finance. 8

9 Today s programme 09:15-09:30 Global Investment Management Services 09:30-11:00 Alternative Investment: A complete offering and complementary frameworks at SG AM and LYXOR 11:15-12:45 SG Global Securities Services for Investors: A response to the evolution of the securities market 14:00-16:45 International Accounting Standards: Standards and qualitative impacts ALM and macro-hedging 16:45-17:00 Conclusion 9

10 A tradition of innovation, a key factor in our success Products and services created by the Société Générale Group 2002: 1964: 1 st SICAV in France 1987: 1 st umbrella fund in France 1992: 1 st futures fund 1994: 1 st capitalguaranteed equity fund in France 1996: UCITS derivative product 1997: 1 st correlated product, EVEREST 1997: Profiled funds of funds 1998: 1 st OCEANE (1) 1998: Hedge Fund derivative product 1998: Multimanagement in Europe 1 st OBSAR (2) Alternative Investment (1) Bonds convertible into new shares (2) Bonds with redeemable share warrants 10

11 Flexibility, ability to anticipate and adapt to change Success of the DEFI platform created in 2001 GSSI: A new organisation 130 DEFI: growth in client-driven revenues To take advantage of new growth opportunities in the securities markets 120 Change in regulatory environment Client demand for a more integrated service offering 110 To consolidate a fragmented organisation, and concentrate on high value-added segments DEFI: an example of successful integration A business model focused on clients in our target market segments 2001 as basis 100, figures at historical rate * DEFI: revenue synergies Concrete commercial successes 170 Significant increase in synergies between business lines, generating additional and recurring revenues * H annualised target 11

12 Societe Generale: a culture of growth Rise in GOI per share from 1999 to 2003 (compound annual growth rate) RBS Group* +25% NBI/share: +8% per year over 5 years GOI/share: +12% per year over 5 years Société Générale HSBC HBOS* Barclays BNPP +12% +12% +12% +10% +9% A solid, profitable and stable business model BBVA Average SCH Deutsche Bank ABN AMRO UBS Lloyds TSB +7% +7% +6% +4% +3% +3% +1% -10% Credit Suisse * Change

13 27 / 09 / 2004 Investor Relations Didier VALET, Valérie BOMPARD, Sayuri AOKI, Julien VANNIER Tel.: +33 (0) investor.relations@socgen.com - Internet: