28 / 03 / 2007 SOCIETE GENERALE STRATEGY AND KEY FIGURES. Daniel Bouton, Chairman and CEO. Morgan Stanley Conference,, 28/03/07

28 / 03 / 2007 SOCIETE GENERALE STRATEGY AND KEY FIGURES Daniel Bouton, Chairman and CEO Morgan Stanley Conference,, 28/03/07 2 Disclaimer The following presentation may contain a number of forward-looking
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28 / 03 / 2007 SOCIETE GENERALE STRATEGY AND KEY FIGURES Daniel Bouton, Chairman and CEO Morgan Stanley Conference,, 28/03/07 2 Disclaimer The following presentation may contain a number of forward-looking statements relating to Société Générale s targets and strategy. These forecasts are based on a series of assumptions, a both general and specific. As a result, there is a risk that these projections will not be met. Readers are 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. Investors should take into i account elements of uncertainty and risk when basing their investment decisions on information provided in this presentation. The Group s consolidated financial statements were approved by the t Board of Directors on February 13th The financial statements for 2006 and 2005 comparative data have been prepared in accordance with IFRS (International Financial Reporting Standards) adopted by the European Union and applicable at these dates. These principles and accounting methods have been applied constantly ntly across 2005 and 2006, with the exception of the change in the accounting method for the acquisition of minority interests of controlled subsidiaries and of puts granted to minority shareholders of controlled subsidiaries, and the reclassification of undated subordinated notes as Group shareholders equity. 3 Group overview Results of core businesses Retail Banking & Financial Services Global Investment Management & Services Corporate & Investment Banking Conclusion Supplements SOCIETE GENERALE GROUP 2006: another year of strong growth for Société Générale Group 22.5 million individual clients in Retail Banking and Financial Services 10.5 million individual customers in France 12.0 million individual customers outside France** Change since end-1999 over 1 year x % x % x % Global Investment Management and Services AuM: EUR 422bn (+ EUR 110bn* + EUR 61bn*) Assets under custody: EUR 2,262bn Corporate and Investment Banking No. 3 bank in the euro zone in terms of NBI: EUR 7.0bn in 2006 One of the most profitable platforms: ROE in excess of 30% for 4 years in a row Around 120,000 staff** in 77 countries 51% outside mainland France Around 15,000 staff recruited in 2006, incl. 5,350 in France x % x % x % x % * 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) 4 SOCIETE GENERALE GROUP Dynamic management of a growth-oriented business portfolio Increase in capital allocated to the growth drivers Allocation of capital to the core businesses in EUR bn,, based on 6% of RWA + non amortised goodwill, excluding minority y interests Progressive reduction in capital allocated to the French networks SG CIB s RWAs limited to 1/3 of total RWAs allocated to core businesses 37% 4% 44% 11% 4% 19% Allocated capital in 1999: EUR 10.2 bn GIMS French Networks Retail Banking outside France Financial Services Growth drivers 28% 17% 20% 46% 24% 11% Allocated capital 2006: EUR 20.4 bn CIB 5 6 Group overview Overview of businesses Retail Banking & Financial Services Global Investment Management & Services Corporate & Investment Banking Conclusion Supplements 7 FRENCH NETWORKS Strategy of continued customer acquisition and increase in loyalty Long-standing strengths Over-representation of higher socio-professional categories and young people in the customer base Major market share in richest and/or most promising regions Attractive brands with high rate of referrals % Personal current accounts (in millions) % +2.1% +2.6% % +3.1% % Strong customer focus Comprehensive and attractive range of products Well-positioned prices, with only moderate rises Regular branch openings to cater for the customer base Roll-out of an effective multi-channel platform Continued gains in market share on strategic products Gains in market share (as a %) sept Personal current a/c Business investment loans Life insurance Sources: Société Générale Group (based on data from Banque de France and FFSA) FRENCH NETWORKS Focused expansion of Société Générale and Crédit du Nord networks 2,953 points of sale in the wealthiest and/or most promising regions (of which 97 net branch openings in 2006) 90 branch openings planned for 2007, mainly in areas with strong economic and demographic growth prospects Expected increase in the French population between 2006 and 2015 : +2.3%* * Source: INSEE higher growth than national average growth close to national average growth almost nil or negative main areas where branches were opened between 2001 and FRENCH NETWORKS Strong potential of the retail customer base A high-quality franchise Young people (1) represent 28% of French networks customers vs 26% for the French population High number of executives and senior executives in customer base compared to national average*** Outstanding households deposits* (base 100 Q1-98) 130 SG Group ** Market ** T1 98 T1 99 T1 00 T1 01 T1 02 T1 03 T1 04 T1 05 T1 06 Development potential ahead Important savings needs fueled by concerns on pension financing Soft-landing of the mortgage loan market Cross-market synergies (business / individuals) Residential mortgage loans (base 100 Q1-98) SG Group ** Market ** (1) Between 15 and 34 years old * except cash vouchers (residents) ** including outstandings of Private Banking France *** Source: OPERBAC T1 98 T1 99 T1 00 T1 01 T1 02 T1 03 T1 04 T1 05 T1 06 Source : Banque de France 9 FRENCH NETWORKS Capturing business sector growth A valuable customer base Constant targeting of high quality large SMEs and Corporates Steady growth in business customers deposit volumes (CAGR : +7%) Growth acceleration in investment loans : +15.6% in 2006 vs CAGR % Outstanding business investment loans (base 100 Q1-00) SG Group Market T1 00 T1 01 T1 02 T1 03 T1 04 T1 05 T1 06 Going forward SMEs: targeting very small, well managed enterprises Local authorities: integrated solutions to address sophistication of financing requirements Structured finance and capital markets offering, jointly with SG CIB Source : Banque de France Business customers outstandings in EUR bn Average outstanding loans CAGR +5,9% Average outstanding deposits CAGR +7,2% 11 FRENCH NETWORKS Productivity gains In-depth restructuring of back-offices : regrouping of Société Générale backoffices (136 in 2000) into 23 regional platforms Stable headcount Sales force increased by 15.9% since 1999 Administrative staff reduced by 14.5% since Productivity indicators CAGR GOI ex PEL/CEL +9.0% per employee Nb of current +2.8% accounts Going forward Optimisation of business procedures Flexible cost base 100 Total staff +0.6% Administrative -2.2% 80 staff C/I : -1pt annual decline on average between 2004 and % 17.8% 18.9% 19.3% 19.7% 19.8% 21.4% 21.3% ROE ex. PEL/CEL after tax RETAIL BANKING OUTSIDE FRANCE A growth model combining acquisitions and organic investments Key stages in external growth 1999: Romania, Bulgaria, Madagascar 2001: Czech Republic, Slovenia 2003: Ghana, Reunion, Tunisia 2004: Greece 2005: Egypt (MIBank) 2006 : Splitska (Croatia), Modra Pyramida (Czech Rep.), Bank Republic (Georgia), 20% de Rosbank (Russia) Acceleration in investments to drive future growth branches yoy at constant structure i.e. 2,300 branches at end planned in 2007 at constant structure + 2,800 staff yoy at constant structure NBI x6 in 8 years Number of individual customers: 7.8 million, x5.5 since Breakdown of NBI (in EUR m) % 24.2% 26.6% 17.5% 30.0% 32.1% 32.1% 40.3% 35.8% Acquisitions & launch of new initiatives Mediterranean Basin & Africa Central & Eastern Europe Lebanon Argentina 1998 scope CAGR 98-06*: +7.9% ROE after tax : French standards 2004: IFRS (excl. IAS and IFRS 4) 2005: IFRS (incl. IAS and IFRS 4) * Change excluding Argentina 12 RETAIL BANKING OUTSIDE FRANCE Stronger growth at emerging vs maturing countries 100% BSGV+Deltacredit (Russia) 80% NSGB (Egypt) NBI growth 06/05 60% 40% SGYB (Serbia) Emerging countries BRD (Romania) Komercni Banka (Czech Rep) 20% Expressbank (Bulgaria) SKB (Slovenia) 0% SGMB (Morocco) UIB (Tunisia) Splitska Banka * (Croatia) Geniki Bank (Greece) GDP / head 2006 ($ at PPP) Net banking income Maturing countries * 6 months NBI annualised ; yoy NBI growth on the basis of local statements of accounts 13 RETAIL BANKING OUTSIDE FRANCE Rosbank and Société Générale in Russia Rosbank 1 Universal bank Rusfinance 2 Consumer Finance & car financing 2.9m individual clients 705 branches Loan portfolio: EUR 3,300m ~18,000 employees 800,000 clients Over 3,600 agents Loan portfolio: over EUR 800m 6,770 employees Partnership agreement with DeltaCredit on mortgage loans Technical assistance: 84,000 clients 34 branches Loan portfolio: EUR 1bn 1,240 employees Moscow Centre Volga 7,800 clients Ural 6 branches Loan portfolio: EUR 317m 210 employees Siberia ALM, risk management, IT, finance Far East Procurement Access to off-the-shelf SG CIB products and expertise BSGV Universal bank DeltaCredit Mortgage loans Note: figures as at 31/12/2006 unless specified otherwise (1) As at 31/12/2005 except branches as at July 2006 (2) Including SKT Bank as of July 06 14 FINANCIAL SERVICES Fast pace of growth in consumer credit Breakdown of outstanding loans in EURbn A significant player present in 20 countries Strong positions in Western Europe (France, Italy, Germany) as well as in CEE (Poland and Russia) High-growth countries : increased contribution in 2006 (13% in outstandings) Numerous initiatives in 2006 Western Europe: acquisition in Greece and launch of operations in Portugal and Cyprus Central and Eastern Europe: acquisitions in Russia, Hungary and Latvia and launch of operations in Bulgaria and Slovakia Acquisitions in India and Brazil and launch of operations in Kazakhstan Sustained activity New lending**: EUR 9.2bn (+10.8%* vs. 2005) Outstanding at period-end**: EUR 15.0bn (+12.9%* vs. 2005) x % 31% 21% 58% 35% 42% Other Italy Germany France * When adjusted for changes in Group structure and at constant exchange rates ** Excl. French Networks Kazakhstan. BRAZIL INDIA 15 16 Group overview Overview of businesses Retail Banking & Financial Services Global Investment Management & Services Corporate & Investment Banking Conclusion Supplements 17 Asset Management: a well balanced business model 4 specialised platforms: USA, Asia, Continental Europe & United Kingdom Covering 99% of global stock market capitalisation Ensuring the necessary local relationship management with clients of all sizes Among the top global asset managers AuM : EUR 354 bn as at end 2006 ; net new money : EUR 34.2 bn (10% of AuM) A balanced business mix (as at end 2006) : Retail 46%, 54% Institutional Investors Product-mix 62% Europe, 31% USA, 7% Asia Strategic partnerships in Asia (JVs China, India, South Korea) TCW and other US: US equities US bonds Alternative management 2001 Total AUM: 258MdEUR Alterna tive Diversi 9% fied 18% Equity 29% Breakdown of AuM by platform (EUR 354 bn at end ) Fixed income 44% GLOBAL INVESTMENT MANAGEMENT AND SERVICES SGAM UK: 13 International & European equities UK equities and bonds SGAM Paris: European bonds French equities Diversified management Alternative management SGAM Japan and JVs: 23.9 Asian equities and bonds 2006 Total AUM: 354MdEUR Alternative 17% Diversified 16% Equity 24% Fixed income 43% GLOBAL INVESTMENT MANAGEMENT AND SERVICES Private Banking: strong organic growth in Europe and Asia SG Private banking in the top 15 players worldwide : EUR 67.8 bn AuM at end 06 84% of assets under management concentrated in Europe EUR 7.7 bn inflows in 2006 (13% of AuM) reflecting strong asset gathering in all platforms Assets under management* at end-2006 (in EUR bn) Regularly rewarded expertise Best private bank in France and Luxembourg, Best worldwide private bank for structured products (Euromoney, January 2007) Best private bank in Europe (Private Banker International, September 2006) Increased sales force in all platforms Over 125 CRM recruited in 2006 (+10.4% vs. end- 2005) Asia : EUR 10.9 bn Continued development in Asia Extended geographical coverage AuM: EUR 10.9bn at end-2006 Other Europe : EUR 0.5 bn * Reminder: these figures do not include around EUR 110bn of assets held by customers of the French networks (investible assets exceeding EUR 150,000). 18 GLOBAL INVESTMENT MANAGEMENT AND SERVICES Dynamic development of Securities Services Securities Services for Institutional Investors and Fund Administration No. 3 custodian in Europe** Assets under custody: EUR 2,262bn (+17.7%* vs. end-2005) Confirmation of 2S Banca s potential FIMAT Global market share*** of 6.7% (vs. 5.3% in 2005) Sharp increase in trading volumes: 974 million lots traded (+35.4%* vs. 2005) Very strong development of Cube Financial (purchased in July 2006) Joint venture project with Calyon Financial Boursorama Executed orders: +33.4%* vs Outstanding online savings: +28.7%* vs. end-2005 Completed integration of CaixaBank France and launch of a new comprehensive banking offering * At constant structure ** Globalcustody.net, January 2007 *** Annual market share of the main markets of which FIMAT is a member Assets under custody (EUR bn) 2, ,669 1,418 1,023 1, FIMAT*** 6.7% 4.8% 5.0% 5.3% S Banca SG SS Global market share No. of lots traded (in millions) 19 20 Group overview Overview of businesses Retail Banking & Financial Services Global Investment Management & Services Corporate & Investment Banking Conclusion Supplements CORPORATE & INVESTMENT BANKING Ongoing development of the franchise Sustained increase in revenues from 2004 to 2006: +23%* per year Equity Derivatives: global leadership confirmed Global Equity Derivatives House of the year (The Banker, IFR) World No.1 in warrants with a market share of 18.4% 40 new ETFs launched in 2006 Fixed Income: a recognised player in the European market No.5 bookrunner in all euro bond issues for the third year in a row, and No.2 in corporate euro bond issues Increased presence in local markets: in the top 3 in Spain since 2004 and No.1 in Corporate issuance in Italy in 2006 Structured finance: leading positions Best Commodity Bank in 2006 and Best structured Commodity Bank for the last 4 years Best Export Finance arranger for the fifth year running (Trade Finance) * Excluding Cowen ** Albourne Awards Equity Derivatives Bank of the Year for Equity Derivatives Lyxor: Best Managed Account Platform** SGCIB NBI in EUR bn +23%*/yr Fixed Income Euro Capital Markets Top 5 position Best Debt House in France 21 CORPORATE & INVESTMENT BANKING : profitable growth strategy SG CIB well positioned in its three areas of excellence: Derivatives, Euro capital markets, Structured Finance n 3 bank in the euro zone with NBI of EUR 7.0bn in 2006 SG CIB one of the best profitability over the cycle A platform focused on growing markets Double-digit growth expected in capital markets between 2007 and 2010 Europe: closing the gap on the US markets due notably to ongoing disintermediation Emerging markets: potential medium-term development Strong potential of new asset classes Development of new client categories The new organisation will strengthen our clients/solutions approach A client relationship division (CORI) now including M&A activities A new, issuer-focused division: Capital Raising and Financing (CAFI) Two new investor-focused divisions: Fixed Income, Currencies and Commodities (FICC) and Global Equities and Derivatives Solutions (GEDS) Pre-tax Average ROE SGCIB s relative performance * 2006* SG CIB 70% 60% 50% 40% UBS BNPP 30% Deutsche Bank 20% BARCAP 10% 0% 10% 15% 20% 25% 30% 35% 40% Pre-tax profit CAGR * Excluding Cowen 22 23 CORPORATE & INVESTMENT BANKING Active risk management to continuously improve the risk profile SG CIB portfolio management In-depth forward-looking counterparty risk analysis Proactive credit portfolio management Management of risk concentration by counterparty and by sector Hedging policy or asset sales Guarantees covering 9% of SG CIB Corporate exposure Nominal value of hedges at end 2006: EUR 26.4 bn Market risk under control SG CIB NBI/stress tests ratio remained in a stable range over the period Only 2 negative monthly P&Ls in the past 15 years in the equity derivatives business Top 25 weighted exposures: % of total SGCIB corporate credit portfolio, as at end of period 19% % % % % 2006 SG CIB NBI / Stress test (2004: base 100) 24 Group overview Overview of businesses Retail Banking & Financial Services Global Investment Management & Services Corporate & Investment Banking Conclusion Supplements 25 SOCIETE GENERALE GROUP Going forward: continuing our clear and focused growth strategy Retail banking Domestic retail banking : pursuit of the regular growth, further improvement in C/I ratio International retail banking : further development of existing investments, selective acquisitions Financial Services : acceleration of growth, notably in consumer finance GIMS Continue growth and reach critical mass in selected businesses Corporate and Investment Banking Enhance client franchise in our three core businesses Targets confirmed : Organic growth in RWA: +10 to15% per year After tax Group ROE objective: 20% Dividend pay out: 45% in the medium term Corporate & Investment Banking Breakdown of risk-weighted assets (in EUR bn) 29% Dec 2006: EUR 286bn Retail in France 35% Financial CC 3% Services 13% GIMS International 7% retail 13% Corporate & Investment Banking ~30% 2008: ~EUR 370bn Retail in France ~33% CC Growth drivers: 33% Growth drivers: ~36% 26 Group overview Overview of businesses Retail Banking & Financial Services Global Investment Management & Services Corporate & Investment Banking Conclusion Supplements FRENCH NETWORKS French indebtedness and savings vs European levels Private sector loans / nominal GDP ratio Mortgage loans / nominal GDP ratio 200% 150% 100% NL UK Spain Germany 80% 60% 40% UK Spain 50% France Italy 20% France 0% Insurance reserves and pension funds 0% Business sector average Debt / nominal GDP ratio % UK 100% France 80% 1500 Italy 60% Spain 40% Germany 20% 0 0% Q Source: OEE (Observatoire de l Epargne Européenne), Eurostat UK Spain France 27 FRENCH NETWORKS French networks: high natural attrition to come Expected retirements and early retirements at Société Générale and Crédit du Nord networks (out of a total of approximately staff* at end December 2006) 2000 Expected retirements Early retirements Retirements 5.1% 4.8% 5.0% % 4.4% 4.4% % 3.6% 3.0% 2.2% 2.4% % 0.7% 1.4% * ex. head office staff 28 RETAIL BANKING OUTSIDE FRANCE CEE: a high-potential banking market 120% 100% 80% 60% 40% 20% 0% Loans/GDP in % Deposits/GDP in % 80% 70% % 50% 40% 30% 20% 10% 0% Georgia Serbia Romania Russia Poland Czech Republic Bulgaria Hungary Slovenia Croatia Greece France Eurozone Romania Russia Georgia Croatia Poland Hungary Bulgaria Slovenia Czech Republic France Greece Eurozone Note : 2005 figures for Romania, Bulgaria and Serbia Note: 2005 figures for Bulgaria, 2004 for Hungary, Poland and the Czech Republic Source: Eurostat 29 30 RETAIL BANKING OUTSIDE FRANCE Komercni Banka (Czech Republic) 2001: Acquisition of majority stake (60.35%) in Komercni Banka Universal bank, also active in life and non life insurance, asset management, pension funds, leasing and factoring Main long-term ambitions of KB: Be a leading retail bank in the country Strengthen further its position in SME segment Maintain its prime position in the local market of large corporations and investment banking Implementation of a new business model based on Société Générale s know how and Komercni Banka strengths: New customer segmentation Optimisation and expansion of the distribution network, focus on a multi-channel
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