Societe Generale Group Snapshot, December 2006
As 2006 turned into 2007, Societe Generale's business performance appeared to be riding the crest of a wave. Compared to 2005, net income for 2006 increased 18.6 percent to €5.2 billion, net banking income increased faster than operating expenses (16 percent versus 12 percent), and all business units delivered higher returns. In 2006, Societe Generale raised €2.4 billion of new capital, and Standard & Poor's and Fitch raised their long-term debt ratings from AA- to AA. Over the preceding seven years, the number of Societe Generale's retail customers had increased 2.4 times, the assets under management by its wealth management business had increased 2.8 times, and the number of Societe Generale employees had increased 1.9 times worldwide. As of December 31, 2006, Societe Generale's
Exhibit 23.2 Highlights of Societe Generale's 2006 Performance
* GIMS' AuM do not include EUR 110bn of assets held by customers of the French Networks (investable assets exceeding EUR 150,000) or EUR 61bn of assets managed by Lyxor AM, whose results are consolidated in the Equity & Advisory business line (EUR 61bn).
** Excluding Rosbank (Russia).
Source: Societe Generale.
total group assets amounted to 6869 billion, its risk-weighted assets amounted to €285 billion, and its shareholders' equity amounted to €22.3 billion. Selected 2006 group performance highlights published in Societe Generale's annual shareholder filing are shown in Exhibit 23.2.
Measured by 2006 net investment banking income, Societe Generale's CIB ranked #3 in the Euro-zone. Compared to 2005, its net income increased by 27 percent to €2.3 billion, bolstered by trading revenue that increased 37.5 percent and worldwide front office head count, which increased by 490 (+11 percent). The CIB reported that its fixed income desk had been ranked #2 in corporate eurobond issuance and its equity derivatives business named global equity derivatives house of the year by the International Financing Review. Forecasting continued capital markets growth for 2007-2010, the CIB's leadership saw no subprime mortgage clouds on the horizon, while its 2006 provisions for credit and trading losses declined from their 2005 level. Selected 2006 CIB performance highlights published in Societe Generale's annual shareholder filing are shown in Exhibit 23.3.
For a more complete picture of Societe Generale's financial profile, see its 2006 and 2007 income statements and balance sheets, presented later in this chapter.
Exhibit 23.3 Highlights of CIB's 2006 Performance * When adjusted for changes in Group structure and at constant exchange rates.
Source: Societe Generale.