Société Générale reports high volumes of listed products

Société Générale has reported a good performance in structured products in the first quarter of 2020, after completing a redesign of its product range, first initiated in Q2 2020, to decrease the sensitivity of its revenues to market dislocations.

Listed products benefited from high volumes, particularly in Asia and Germany, according to the bank.

As of 16 April 2021, the group had completed 65% of its vanilla funding programme through the issuance of, among others, €8.8 billion (US$10.6 billion) of structured notes.

This is the best quarter for equities since 2015 - William Kadouch-Chassaing

The global markets business, which includes the group’s structured products franchise, enjoyed a record quarter, with the highest level of activity since Q1 2017. In equities, there was a significant rebound in revenues, which were up 44% from Q4 2020.

“This is the best quarter for equities since 2015,” said William Kadouch-Chassaing (pictured), deputy general manager, head of finance. “We have been benefiting from favourable tailwinds in the market, but it also reflects the strength of the franchises because the growth is measured across the board, both in terms of products and geographies.”

Société Générale issued more than 98,000 listed certificates in Germany during Q1 2021, up from 34,477 certificates in the first quarter of 2020.

In France, the bank confirmed that ESG is at the centre of its strategic thinking for all its businesses. It has committed itself to achieve carbon neutrality in banking portfolios by 2050, with 10 products out of a total of 51 public offers linked to ESG indices, of which the Euronext Euro 50 ESG EW Decrement 50 Points Index and SBF Top 50 ESG EW Decrement 50 Points, seen in five and four products, respectively, were the most frequently used.

Other European markets where it was active included Italy, Spain, Sweden, Ireland and Finland, while in the UK it collected £11m (US$15.3m) from 14 plans in the quarter, slightly down from £13m (from 13 products) in Q1 2020. The UK products, which were distributed via Tempo Structured Products (12 products), Idad and Causeway Securities (one product each), included 12 structures tied to the FTSE 100 Fixed Dividend Yield Equal Weight Custom Index.

In Asia Pacific, the bank was active in Hong Kong SAR, where it issued some 1,093 listed warrants and callable bull bear certificates (CBBCs) (Q1 2020: 2,053), Taiwan, and Japan. In the latter, it sold a combined US$320m from 27 products (Q1 2020: US$405m from 31 products) via local securities houses. The best-selling Japanese product was a reverse convertible on a worst-of basket comprising the Nikkei 225 and S&P 500. It was distributed via Gungin Securities and sold JPY3.4 billion (US$31.4m) during its subscription period.

Group revenues, at €6.2 billion, were up 21% versus Q1 2020, while its net banking income was up 20.8% compared to Q1 2020, confirming the rebound observed in H2 2020.

Private banking’s assets under management totalled €72 billion at the end of March 2021 with net inflow remaining buoyant at €1.3 billion. Private banking posted a slightly lower performance than in Q1 2020, impacted by pressure on the interest margin and despite strong commercial activity.

As of 31 March 2021, the group’s consolidated balance sheet included debt securities issued of €137.2 billion (end-December: €138.9 billion) and an outstanding for hedging derivatives of €10.8 billion (€12.4 billion).

Click the link to view the full Q1 2021 results and the presentation.